FEDERAL COURT OF AUSTRALIA

Parras Holdings Pty Ltd v Commonwealth Bank of Australia [1999] FCA 644

PRACTICE AND PROCEDURE – stay of orders – application for stay of orders made by Full Court of Federal Court of Australia pending application for special leave to appeal to High Court of Australia – refusal of stay where there is no substantial prospect of special leave being granted - balance of convenience also favours refusal of stay - irreparable loss to respondent if stay granted and appeal to High Court unsuccessful

Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No 1) (1986) 161 CLR 681 followed

PARRAS HOLDINGS PTY LIMITED & ORS V COMMONWEALTH BANK OF AUSTRALIA

NG 664 OF 1998

SPENDER, HILL and MERKEL JJ

11 MAY 1999

SYDNEY

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT

THE COURT ORDERS THAT:

The relief sought by the notice of motion filed 27 April 1999 be refused, with costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT

REASONS FOR JUDGMENT

SPENDER J:

1                     When the Court adjourned, the members of it had an opportunity to consider the extensive written submissions, amplified as they were this morning by oral submissions from counsel, on behalf of the applicants for a stay.  Notwithstanding those submissions, in my opinion, we ought not, in the application of accepted principle, grant a stay in this matter.

2                     The proper approach, at least insofar as a stay application in the High Court is concerned, was stated by Brennan J as he then was in Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No 1) (1986) 161 CLR 681,where at 685 his Honour said:

“In exercising the extraordinary jurisdiction to stay, the following factors are material to the exercise of this Court's discretion.  In each case when the court is satisfied a stay is required to preserve the subject-matter of the litigation it is relevant to consider: first, whether there is a substantial prospect that special leave to appeal will be granted; secondly, whether the applicant has failed to take whatever steps are necessary to seek a stay from the court in which the matter is pending; thirdly, whether the grant of a stay will cause loss to the respondent; and fourthly, where the balance of convenience lies.”

3                     In the circumstances of a stay application to this Court, of course, only the first, third and fourth considerations are relevant.

4                     Distilling the essence of the submissions on behalf of the applicants, there seem to be two primary grounds on which this Court is urged to grant a stay.  The first of those concerns what is said to be the practical problems that will flow in the preparation and prosecution of the special leave application were a stay not to be granted.  These practical problems contemplate personal bankruptcies and company liquidations.

5                     The second factor is said to be the inevitable loss of the family homes, and it is submitted, not without some force it seems to me, that mere monetary considerations are not always the only considerations relevant in circumstances where the assets concerned are of a familial kind.

6                     Associated with that is said to be the difficulties which will flow from the need to obtain further approval if the present building project, the Linsley property, is sold, and then on a successful appeal, a substitute property without approval has to be obtained, and the approval process recommenced.

7                     So far as the practical problems are concerned, it seems to me that they are not likely to be of a serious difficulty in the preparation and prosecution of the special leave application.  It is unlikely in my view that a successful creditor's petition will result in the making of sequestration orders prior to any grant of special leave.  Amongst other things, there is the opportunity of extending the time for compliance with the bankruptcy notice, or seeking the adjournment until the conclusion of at least the special leave application, of a creditor's petition, consistent with well-known authority.

8                     So far as company liquidations are concerned, it seems that creditors’ demands were made only on 27 or 28 April this year and, again, there seems to be no real cause for genuine alarm that any effective company liquidation will stifle the preparation and prosecution of the special leave application.

9                     Balanced against the difficulty of the loss of family properties is the irreparable loss that the bank will suffer.  That loss is of course in money's worth, but it is nonetheless irreversible in the event that an appeal is unsuccessful.  That seems to me to be a strong counter-balancing consideration.

10                  However, for my part, the primary reason for the refusal of a stay is the assessment of the prospects of gaining special leave.  It is always, of course, invidious for a court to be asked to assess the prospects of a successful appeal from its considered judgment, but in this case there is a further consideration.  There is not simply a question of whether the judgment is right or wrong.  Rather, it is a question of whether a grant of special leave to appeal that judgment is likely.

11                  Having regard to the personal circumstances involved here, the assessment of credibility, the documentation between the parties and the disputes as to the interpretation of evidence which is really confined to the consideration of the particular circumstances of the parties in the present matter, it seems to me that there is not that element of general application or public importance concerning the matters in dispute which would permit one realistically to say that there is a good chance or a real chance of special leave.

12                  Of course I may be wrong in that assessment, but on my view of the matter this is not a case where there is “a substantial prospect that special leave to appeal will be granted”. I recognise the disappointment and inconvenience and hurt that refusal of a stay will cause, but for the above reasons I would refuse the application.

HILL J:

13                  I also so agree.

MERKEL J

14                  I agree, I would only add that I also am of the view that on the balance of convenience the application should be refused.  Whilst one can appreciate the consequences of the refusal of a stay for the family homes the matters in issue in this litigation have now been in issue and understood to constitute a real risk to the parties involved since 1992.  It seems to me that the outcome of a refusal of a stay will not render the subject matter of the appeal nugatory but will cause severe inconvenience and irreparable harm to the bank because it cannot be compensated for the further losses it would incur pending any application for leave.  So on that ground also I would agree that the application should be refused.

SPENDER J:

15                  The relief sought by the notice of motion is refused, with costs.

Associate:

Dated:              11 May 1999