Federal Court of Australia

Scott (Trustee), in the matter of Stolyar (Bankrupt) v Stolyar (No 4) [2023] FCA 1555

ORDERS

THE COURT ORDERS THAT:

1.    The first respondent’s interlocutory application filed on 5 December 2023 be dismissed.

2.    The first respondent pay the applicant’s costs of the interlocutory application.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

(Revised from Transcript)

NICHOLAS J:

1    Before me is an interlocutory application filed by the first respondent (“Ms Stolyar”) seeking an order pursuant to r 41.11 of the Federal Court Rules 2011 (Cth) seeking to stay the enforcement of a writ of possession in respect of the property known as 27/26-30 Ocean Street, Bondi, New South Wales, (“27/26 Ocean Street”) until 31 March 2024 or until the determination of the appeal by the Full Court. I will say more about the appeal, or proposed appeal, shortly.

2    The orders in respect of which the stay is sought were made by Markovic J in a proceeding brought by the Trustee in Bankruptcy of the Estates of Ian Stolyar and Beth Ngoc Nguyen (“the Trustee”) against Ms Stolyar, the mother of Ian Stolyar, and a company, Fanchel Pty Ltd (“Fanchel”) of which Ms Stolyar is the sole director and shareholder. At the hearing of the interlocutory application today, Ms Stolyar appeared together with her son Mr Stolyar, who was granted leave to make submissions on her behalf.

3    The relevant orders were made by her Honour on 6 September 2022. Orders 9-13 made by her Honour on that date were as follows:

9.    The first respondent take all necessary steps and do all necessary things to enable title to 27/26 Ocean Street to be transferred to the applicant, including by:

(a)    executing a transfer without monetary consideration in registrable form, providing for the transfer of the title to 27/26 Ocean Street to the applicant; and

(b)    complying within 14 days with all and any request or requirement by or on behalf of the applicant relating to any PEXA or conveyancing requirement made for the purpose of causing the transfer the title to 27/26 Ocean Street to the applicant, including any request or requirement for the execution of any other documents that the applicant may reasonably require to effect the transfer of the title to 27/26 Ocean Street to the applicant.

10.    Upon the application of the applicant, if the first respondent fails within a reasonable time to comply with Order 9 above, a Registrar of the Court is to execute such transfer without monetary consideration in registrable form or other documents as the applicant may reasonably require to effect the transfer of the title to 27/26 Ocean Street.

11.    Within 90 days of the date of the lifting of the stay of execution in relation to this Order, the first respondent is to:

(a)    deliver up to the applicant vacant possession of 27/26 Ocean Street;

(b)    deliver up to the applicant the keys for all buildings and improvements on, or required to access, 27/26 Ocean Street; and

(c)    remove from 27/26 Ocean Street all vehicles, rubbish and any other chattels or personal property (Personal Property).

12.    In the event that the first respondent fails to comply with Order 11(c) above, the applicant is authorised to remove and dispose of any and all of the Personal Property as he sees fit.

13.    A writ of possession issue in respect of 27/26 Ocean Street, such writ to lie in the Registry of the Court until the filing by the applicant, not before 91 days from the date of the lifting of the stay of execution in relation to this Order, of an affidavit stating that the first respondent has not given vacant possession of 27/26 Ocean Street (if that be the case), whereupon after receipt of said affidavit, the Registry shall release the writ of possession to the applicant forthwith.

4    Her Honour also made an order staying (inter alia) orders 9-13 until the determination of any appeal. An appeal by Ms Stolyar and Fanchel was heard in February 2023. They were represented by senior and junior counsel. There were 19 grounds of appeal relied upon by them, all of which were rejected. On 27 April 2023 the Full Court (Banks-Smith, Downes and Jackman JJ) ordered that their appeal be dismissed with costs.

5    Pursuant to order 11 made on 6 September 2022, Ms Stolyar was required to deliver up to the Trustee vacant possession of 27/26 Ocean Street within 90 days of the date of the lifting of the stay of execution. The stay was lifted by reason of the appeal being dismissed on 27 April 2023 when the appeal was dismissed. Accordingly, the obligation to deliver up 27/26 Ocean Street to the Trustee vacant possession was enlivened on 26 July 2023.

6    It is apparent that Ms Stolyar proposes to seek leave to appeal orders made by Markovic J on 30 November 2023. On that date, her Honour heard an application by Ms Stolyar seeking to stay the orders of 6 September 2022 (Scott (Trustee), in the matter of Stolyar (Bankrupt) v Stolyar (No 3) [2023] FCA 1529). Mr Stolyar also appeared on behalf of Ms Stolyar at the hearing of that application with leave of the Court.

7    There were two grounds relied on by Ms Stolyar in support of her application for a stay made to Markovic J. The first ground was that the order to deliver up possession of 27/26 Ocean Street would cause her hardship.

8    Her Honour’s judgment recounts Ms Stolyar’s personal circumstances, including her age (she is 82 years old), and her financial circumstances (to the extent these were disclosed by Ms Stolyar). Her Honour noted that if the 6 September 2022 orders were not stayed, Ms Stolyar would lose access to her only habitable property and would have nowhere to live. Her Honour also noted that Ms Stolyar takes a range of medications to treat various conditions from which she suffers.

9    Her Honour accepted that Ms Stolyar will find herself in a difficult position in the event that the orders of 6 September 2022 are executed. Her Honour recognised that Ms Stolyar was upset and distressed by the prospect of having to vacate her home. Nevertheless, her Honour was not persuaded that the evidence justified the grant of a stay on the basis of hardship.

10    Her Honour referred to the procedural history of the matter, including the stay previously granted by her. Her Honour noted that the stay was granted until the determination of Ms Stolyar’s appeal and that under the terms of the order agreed between the parties she had three months until around 25 July 2023 to vacate 27/26 Ocean Street. Her Honour also had regard to the disadvantage that would be suffered by the Trustee and creditors in not obtaining the fruits of the judgment in circumstances where: (i) the 6 September 2022 orders had been made more than a year ago, (ii) Ms Stolyar’s appeal to the Full Court had been dismissed more than six months ago, and (iii) Ms Stolyar’s application for special leave to appeal had been refused.

11    The second ground on which her Honour was asked to grant a stay related to an allegation made by Ms Stolyar to the effect that the Trustee had obtained the orders of 6 September 2022 by fraud. Her Honour referred to some of the relevant authorities in that regard and noted the difficulties that confronted Ms Stolyar in proving actual fraud. It is apparent that her Honour did not consider that the evidence before her was capable of supporting any arguable case that the 6 September 2022 orders had been obtained by fraud.

12    Her Honour noted that the application before her was not an application to set aside the judgment for fraud, but merely to obtain a stay of enforcement of the relevant orders until a determination of an application in which that allegation could be fully ventilated had been determined. Her Honour referred to the particular matters that were relied upon by Ms Stolyar in support of the allegation that the judgment had been obtained by fraud. It is apparent that her Honour did not regard that material as pointing to the existence of any arguable basis for setting aside the judgment.

13    The present application is supported by an affidavit of Ms Stolyar affirmed on 4 December 2023. It includes details of her personal circumstances and the hardship which she says she will suffer if she is required to vacate 27/26 Ocean Street. The matters dealt with in her affidavit in relation to personal hardship are essentially the same as those matters that were canvassed in the affidavit evidence relied on by Ms Stolyar before her Honour.

14    It is clear that an appeal against the orders of 30 November 2023 is only available by leave. The decision to not grant the stay of execution sought by Ms Stolyar involved a discretionary judgment in relation to a matter of practice and procedure. Before leave to appeal that decision was granted, it would be necessary for the Court to find that there was some arguable basis for concluding that her Honour’s discretion had miscarried. The material before me, including Ms Stolyar’s affidavit and its annexures, does not include any proposed notice of appeal or any other information from which I can discern the basis on which it is asserted that her Honour erred in the exercise of her discretion.

15    The applicable principles are well settled and were enunciated in House v King (1936) 55 CLR 499. The plurality (Dixon, Evatt and McTiernan JJ) said at 504-505:

The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.

Moreover, it is well established that appellate courts exercise particular caution in reviewing decisions pertaining to practice and procedure: see the authorities referred to in the judgment of the Full Court in Melbourne City Investments Pty Ltd v Treasury Wine Estates Ltd (2017) 252 FCR 1 at [41]-[42].

16    There is nothing that has been said on behalf of Ms Stolyar in support of the present application which would suggest that any application for leave to appeal Markovic J’s orders of 30 November 2023 would have any reasonable prospects of success. Nor has my own consideration of her Honour’s reasons identified any arguable ground on which her Honour’s exercise of discretion might be said to have miscarried.

17    In these circumstances, I am not persuaded that this case warrants the grant of the stay sought. The interlocutory application seeking a stay of the 6 September 2022 orders will be dismissed.

Associate:

Dated:    7 December 2023