FEDERAL COURT OF AUSTRALIA

Food Channel Network Pty Ltd v Television Food Network, GP

[2010] FCA 204

THE COURT ORDERS THAT:

1.                  The applicant’s application for an adjournment is refused.

2.                  The applicant’s application for a stay be dismissed.

3.                  The applicant pay the respondent’s costs of the stay application.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

ADJOURNMENT APPLICATION

1                     This matter was listed before me today as a matter of urgency because the applicant had been presented with a letter of demand in relation to the costs assessed under the costs order made by Collier J on 27 March 2009 and the applicant wished to seek a stay in relation to the further execution of that costs order.

2                     When the matter was called on at 10.15 am, the applicant’s counsel, Mr Stephens, sought an interim stay and directions for the hearing of the full application.  As I pointed out to him, directions had already been made on 4 December 2009 that the parties file affidavit material in support of the application for a stay.

3                     Indeed, the applicant has filed two affidavits setting out material that it proposes to rely upon in relation to the stay application.  It appeared that Mr Stephens did not have access to that material because his instructing solicitor had not provided it to him.  In the circumstances, I agreed to adjourn the matter to 2.15 pm today to allow him to obtain proper instructions from his instructing solicitor.

4                     Mr Stephens now informs me that he is instructed to apply for a further adjournment of this application.  He says that he has been able to obtain the affidavit material and consider the respondent’s outline of submissions.  The reason he gave for wanting an adjournment was that his instructing solicitor has been unable to prepare a written outline of submissions and, therefore, his submissions would have to be made orally.

5                     I do not consider that is a sufficient reason to grant a further adjournment of this application.  The matter was listed urgently at the applicant’s request for the purposes of considering the stay application.  It was the intention of the Court that the stay application would be considered once the parties had filed their material.  That was the intention on 4 December 2009 and it seems to me there is no reason why the matter cannot proceed to a hearing now that material has been filed.  I therefore refuse Mr Stephens’ adjournment application.

stay application

6                     This is an application brought by the applicant seeking to stay an order for costs made by Collier J on 27 March 2009.  That costs order has now been taxed and allowed at $99,713.53.  The respondent’s solicitors have recently sent a letter of demand to the applicant’s solicitors seeking a payment of that amount.  That demand prompted this application.  An appeal does not operate as a stay unless a judge orders otherwise.  The Court clearly has a power under O 52 r 17 of the Federal Court Rules to order a stay of Collier J’s order.

7                     On an application for a stay, as I explained in Ng v Van Der Velde [2010] FCA 89 (“Ng”), the applicant does not need to show special circumstances, but needs to show at least a sound reason for the exercise of the Court’s discretion.

8                     Mr Stephens, for the applicant, has put forward a number of reasons.  First, he says that this is a “David and Goliath” situation.  He says his client is a small family company and the respondent is a large US-based company.  In my view, this does not provide a sound reason for exercising my discretion to order a stay.  A party is generally entitled to the fruits of its victory and that is so whether or not that party is large or small.  The respondent has obtained the costs order against the applicant, and its size should not be a factor that should affect whether that order should be stayed.

9                     The second reason put forward by Mr Stephens is that it will be difficult, if not impossible, for the applicant to raise the funds necessary to pay the costs order.  The problem with that submission is that it is not supported by either the affidavit of Mr Hauff, the applicant’s solicitor, or the applicant’s sole director, Mr Lawrence.  In his affidavit, Mr Lawrence does not say that his company is not able to pay the costs order.  All he says is that the applicant company has limited cash flow and the payment of any costs order would put substantial financial strain upon it.

10                  He then goes on to express a concern about the money being repaid if the applicant is successful.  I will come to that in a moment.  I do not consider the affidavit material put before me supports any conclusion that there is any special hardship situation that should prompt me to exercise my discretion to grant a stay.  Therefore, I do not consider that this matter provides a sound reason to order a stay.

11                  Thirdly, Mr Stephens raised the question of the capacity of the respondent to repay the costs order if it is paid.  In response to that, Mr Bennett, for the respondent, offered an undertaking to the Court to hold the moneys in his firm’s trust account in an interest-bearing investment to abide the outcome of the appeal.  By that, I take him to mean the further order of either this Court or the Full Court.  Accepting that undertaking as I should, from an officer of the Court, I consider any concern that Mr Stephens’s client has about the repayment of the costs order, if paid, has been disposed of.  I do not, therefore, consider that this matter provides a sound reason to grant a stay.

12                  Mr Stephens also added that there would be no prejudice to the respondent if a stay order is made.  That, of course, ignores the fact that the respondent is, as I have already said, entitled to the fruits of its victory.  Mr Stephens also pointed to the fact that the appeal is due to be heard on 17 and 18 May 2010 and therefore it will be heard promptly.  I do not consider that factor, by itself, provides a sound reason to order a stay.  Finally, Mr Stephens pointed to my decision in Ng and sought to rely upon the fact that I had ordered a stay in that case.   Ng was a quite unusual case involving very different circumstances to the present one.  The applicant was in a situation where her appeal may have been rendered nugatory because, if the Court’s order was executed, she would have lost her home and have had little prospect of regaining it, even if she was successful on the appeal.  I do not consider the circumstances of this case remotely approaches those of Ng’s case.  So, in summary,  I do not consider that the applicant has demonstrated any sound reason for the Court to exercise its discretion in favour of a stay.  I therefore dismiss the applicant’s application for a stay.

Associate:

Dated:         15 March 2010