McCracken v Phoenix Constructions (Qld) Pty Ltd
[2012] QCA 5
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- Unreported Judgment
- McCracken v Phoenix Constructions (Qld) Pty Ltd[2012] QCA 5
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McCracken v Phoenix Constructions (Qld) Pty Ltd[2012] QCA 5
McCracken v Phoenix Constructions (Qld) Pty Ltd[2012] QCA 5
SUPREME COURT OF QUEENSLAND
PARTIES: | |
FILE NO/S: | |
Court of Appeal | |
PROCEEDING: | Stay Application |
ORIGINATING COURT: | |
DELIVERED EX TEMPORE ON: | 9 February 2012 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 9 February 2012 |
JUDGES: | Fraser JA |
ORDER: | Delivered ex tempore on 9 February 2012: 1. Application for adjournment refused. 2. Costs of application to be reserved. |
CATCHWORDS: | APPEAL AND NEW TRIAL – APPEAL - PRACTICE AND PROCEDURE – QUEENSLAND – STAY OF PROCEEDINGS – where the respondent seeks to vacate the hearing date for the appeal – where respondent is concerned that appellant may be made bankrupt before the appeal hearing – where respondent is concerned about wasted costs in preparing and attending the hearing of the appeal if appellant made bankrupt prior to appeal hearing – where respondent has existing order as to security for costs – prejudice to appellant due to unavailability of counsel if adjourned – public interest in the litigation proceeding at an appropriate pace – whether the appeal hearing should be adjourned Phoenix Constructions (Qld) Pty Ltd v McCracken [2011] QCA 259, considered |
COUNSEL: | D D Keane for the appellant C D Coulsen for the respondent |
SOLICITORS: | Walsh Halligan Douglas for the appellant Connolly Suthers for the respondent |
FRASER JA: The respondent seeks to vacate the hearing date for this appeal, which is 29 February this year.
The respondent is concerned that the appellant may be made bankrupt in the near future, possibly at an adjourned hearing in the Federal Magistrates Court on 22 February, that is to say, one week before the date appointed for the hearing of this appeal. There is a dispute between counsel as to whether or not there might be an order for sequestration on that date or whether or not only some preliminary matter will be determined. It is not necessary for me to resolve that dispute.
The respondent is naturally concerned that it might waste substantial expenditure in preparing for and attending the hearing of the appeal in the event that the appellant is made bankrupt and the appeal does not proceed.
The respondent issued its bankruptcy notice in reliance upon the judgment challenged in the appeal, a judgment given on 15 June 2011, for more than $2 million. The respondent contends, and the untested evidence supports the contention, that in the bankruptcy proceedings in the Federal Magistrates Court the appellant misled that Court about the extent of the appellant's debts. In particular, there is evidence that the appellant claimed in an affidavit that its indebtedness was as he had disclosed, whereas a company known as Australian Unity Funds claims that the appellant owes it a debt of $18 million. That claim only became known to the respondent after the Federal Magistrate had reserved his decision concerning either an interlocutory application or the sequestration order sought, or both, on 22 November 2011. Australian Unity has indicated that it will now seek orders that the appellant be made bankrupt and a trustee appointed.
The respondent's evidence, if accepted, demonstrates a strong case that the appellant is in a parlous financial position and that there is an act of bankruptcy justifying the sequestration of the appellant's estate. However, I emphasise that the evidence is untested. It is no part of my function to form any judgment about whether or not the evidence should be accepted, whether or not there is any act of bankruptcy, and whether or not it is likely that the estate of the appellant will be sequestrated.
The prejudice which the respondent would suffer in the event that the appellant is made bankrupt and the appeal does not proceed is that the respondent will incur costs which are likely to be irrecoverable of preparing for and hearing the appeal. However, the respondent has the benefit of security for the costs of the appeal pursuant to the order of Margaret Wilson AJA made on 27 September 2011. The amount of the security is $40,000.
The respondent argues that this amount of security has proved insufficient, that it has already incurred more costs in preparing the appeal, and that it will incur yet further costs beyond the amount of security in preparing for and attending the hearing of the appeal. The anticipated estimated shortfall between the security and the costs which the respondent will incur, which I understand to be assessed on a solicitor/client or an indemnity basis, is in the order of $50,000 to $60,000.
I do not regard this potential prejudice as a sufficient ground for depriving the appellant of his day in Court. The appeal is, in all respects, ready to proceed and there is no suggestion that there is any need for an adjournment in order for the appeal to be duly disposed of.
According to the reasons for judgment of Margaret Wilson AJA in the decision concerning security and an application for stay (see [2011] QCA 259), the respondent has already spent more than about a million dollars in relation to the litigation.
The amount of the shortfall does not appear to be hugely significant in that context. More importantly, Margaret Wilson AJA fixed the amount of security at $40,000, appreciating, as appears from her Honour's reasons, that the likely costs incurred by the respondent would be more than that. At that point, the respondent claimed $53,000. If the circumstances have, in fact, changed markedly since that point, the respondent might have applied for an order for an increase in the amount of security, but it has not done so.
Furthermore, there is no certainty that the bankruptcy of the appellant will proceed on 22 February 2012. Nor is it known whether or not, if the appellant is made bankrupt, the trustee will elect to proceed with the appeal in any event. In that sense, I accept the submission made on behalf of the appellant that the application is premature.
The appellant would be prejudiced by an adjournment of the appeal for some unknown time, partly because the appellant's counsel does not have many available dates and he is available on the appointed hearing of the appeal. In any event, there is a public interest in the litigation proceeding at an appropriate pace.
In my opinion, insufficient has been shown to justify the Court making an order for the adjournment of the appeal at this stage. I refuse the application for an adjournment.
The costs of the application will be reserved.