Clayton v Ebborn [2025] QCA 199

SUPREME COURT OF QUEENSLAND CITATION: Clayton v Ebborn [2025] QCA 199 PARTIES: BENJAMIN JOSEPH CLAYTON (first applicant) TK GLOBAL PTY LTD ACN 631 217 224 (second applicant) v DAVID JOHN EBBORN (first respondent) STREAMLINE PRO PTY LTD ACN 162 700 601 (second respondent) FILE NO/S: Appeal No 3723 of 2025 SC No 11976 of 2022 DIVISION: Court of Appeal PROCEEDING: Application for Stay of Execution ORIGINATING COURT: Supreme Court at Brisbane – Date of Orders: 7 March 2024 (Bradley J) DELIVERED ON: 23 October 2025 DELIVERED AT: Brisbane HEARING DATE: 23 October 2025 JUDGE: Doyle JA ORDERS: 1. The application made by the applicants to adjourn the application for stay is refused. 2. The application for a stay is refused. 3. The applicants are to pay the respondents’ costs of and incidental to the application for a stay including the costs reserved on 8 and 16 October 2025 fixed in the amount of $22,000. CATCHWORDS: APPEAL AND NEW TRIAL – PROCEDURE – QUEENSLAND – STAY OF PROCEEDINGS – where orders were made requiring the applicants disclose certain documents – where the applicants did not comply with those orders – where the respondents filed an application for judgment pursuant to r 374 of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR) – where orders were subsequently made requiring the applicants to file and serve an affidavit in relation to certain documents – where the respondents’ application came back on before Bradley J – where neither the applicants nor their legal representative attended that hearing – where -- 1 of 9 -- 2 judgment was entered – where the applicants seek a stay of enforcement of the orders made by Bradley J – where the applicants’ sole ground of appeal challenges the adequacy of the primary judge’s reasons – where the applicants submit there was a denial of procedural fairness by reason of the applicants not receiving adequate notice of the hearing and their former legal representatives failing to appear – where the applicants submit that they will suffer irreversible consequences if liquidation or bankruptcy proceedings occur before determination of the appeal – whether a stay should be granted Uniform Civil Procedure Rules 1999 (Qld), r 761 Barnes v The State of New South Wales [2017] NSWCA 254, cited Bresam Investments Pty Ltd v Shmee Pty Ltd [2008] VSCA 251, considered Built Qld Pty Limited v Pro-Invest Australian Hospitality Opportunity (ST) Pty Ltd (2022) 13 QR 148; [2022] QCA 266, cited Chapel of Angels Pty Ltd v Hennessy Building Pty Ltd (2019) 2 QR 334; [2019] QCA 229, cited Condo v Nguyen [2015] QCA 64, cited Cook's Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd (2009) 254 ALR 661; [2009] QCA 75, applied DL v The Queen (2018) 266 CLR 1; [2018] HCA 26, cited Greenslade v Hiew [2022] WASCA 47, cited Karabagias v Katopodis [2022] VSCA 191, cited Kleeman v The Star Entertainment Group Limited [2022] QCA 119, applied Stone v Copperform Pty Ltd [2002] 1 Qd R 106; [2001] QCA 7, cited West v Secure Funding Pty Ltd [2020] QCA 296, cited COUNSEL: The first applicant appeared on his own behalf and on behalf of the second applicant S W Trewavas for the respondents SOLICITORS: The first applicant appeared on his own behalf and on behalf of the second applicant Aitken Whyte Lawyers for the respondents [1] DOYLE JA: This is an application pursuant to rule 761 of the Uniform Civil Procedure Rules 1999 (Qld) for stay of an order of Bradley J and an order of Callaghan J pending resolution of the appeal. The appeal is listed for hearing on 2 February 2026. Background [2] The proceedings were commenced on 4 October 2022. The statement of claim alleges that the first applicant (Mr Clayton) breached his duties as a director of Streamline Pro Pty Ltd and otherwise acted improperly from January 2019 or from February -- 2 of 9 -- 3 2020 to denude it of its business and for that business to be taken over and operated by the second applicant (TK Global). Mr Clayton is the sole director and shareholder of TK Global. [3] It appears that – (a) On 2 August 2023 Justice Burns made an order requiring the applicants to disclose certain documents. (b) On 18 September 2023 the respondents filed an application for judgment under r 374 based on the applicants’ failure or refusal to comply with, inter alia, the order of 2 August 2023. (c) The respondents assert there were other instances of procedural non- compliance by the applicants, but it is unnecessary to further consider them. (d) On 30 October 2023 Justice Wilson made an order that the applicants file and serve an affidavit deposing in effect as to which relevant document had never existed, or the circumstances in which they had ceased to exist or passed out of the applicants’ possession or control. (e) It seems that this was not complied with. [4] On 7 March 2024 the respondents’ application for default judgment came back on before Bradley J who made the following declarations and orders the subject of the appeal, namely – “1. Pursuant to r. 374 of the Uniform Civil Procedure Rules 1999 (Qld), judgment is entered for the [respondents] against the First and Second [applicants] as follows: (a) It is declared that the First [applicant] contravened s. 181(1) of the Corporations Act 2001 (Cth) by, between 24 January 2019 and 24 February 2020, transferring the assets of the Second [respondent] to the Second [applicant] for no consideration. (b) It is declared that the Second [applicant] was involved in the First [applicant’s] contravention of s. 181(1) of the Corporations Act 2001 (Cth) and therefore contravened s. 181(2) of the Corporations Act 2001 (Cth). (c) It is declared that the First [applicant] contravened his fiduciary duties to the Second [respondent] as a director by transferring the assets as stated in order 1 (a) (d) The First and Second [applicants] pay the Second [respondent] an amount for damages, or alternatively equitable compensation, or alternatively a compensation order pursuant to s.1317H of the Corporations Act 2001 (Cth), in an amount to be assessed on a date to be fixed (Assessment Hearing), following which final judgment may be entered with respect to either of those measures at the election of the Second [respondent].” [5] The assessment of compensation took place before Justice Callaghan who, on 22 April 2025, entered judgment against the applicants for a total of $707,484.49 plus costs. None of that has been paid. -- 3 of 9 -- 4 [6] The affidavit material relied on by the respondents1 show that all of these steps took place on notice to the applicants by their then solicitors, though no appearance was made for the applicants on the hearings before Justice Bradley or Justice Callaghan. Notice of Appeal [7] On 21 August 2025, the applicants filed their Notice of Appeal. The appeal is against the whole of Bradley J’s order made on 7 March 2024 but not against the judgment of Callaghan J. That said one of the orders sought on appeal is the setting aside of the judgment of Callaghan J. [8] An application to extend time for filing that notice was filed. No affidavit material was filed in support of it and there has been no hearing of that application to date. [9] The sole ground of appeal is that Bradley J erred in law by failing to give adequate reasons for exercising the discretion to give judgment under rule 374 of the Uniform Civil Procedure Rules 1999 (Qld). [10] The applicants were required to file their outline on the appeal by 9 October (that being extended by consent from the original date of 2 October 2025) but have not done so. The Stay Application [11] The application for a stay was made on 22 September 2025. Directions were made on 8 October 2025 which required the applicants to file and serve their material including an outline of submissions by 4 pm on 16 October and also to file a notice of party acting in person with their address for service by 4 pm on 8 October 2025. A notification has been given by the second applicant only (albeit late). The time for the applicants to file and serve their material and submissions was extended to 10 am on 20 October 2025 but they were not served on the respondents until the morning of 21 October 2025.2 [12] While not raised as a ground of appeal, the applicants’ outline of submissions now filed in support of this application contends that there was a denial of procedural fairness by reason of the applicants not receiving adequate notice of the hearing and their former legal representatives failing to appear. [13] The affidavit filed in support by Mr Clayton – (a) swears that his solicitors (at some point) advised him that the “matter was ‘finalised’ and that no further action would be required unless I was contacted again”: at [9]. I interpret the ‘matter’ to mean the proceedings. (b) does not say when he became aware of the orders of Bradley J save to say after becoming aware he “immediately obtained new legal representation and filed an appeal to have the judgement set aside”: at [13] This suggests he was not aware of the judgment until perhaps early to mid-August 2025. (c) finally swears that prior to that judgment “I had fully complied with all disclosure requests made by the [respondents’] lawyers…”: at [8]. 1 Affidavit of L J Rieck (sworn 21 October 2025). 2 Affidavit of L J Rieck (sworn 21 October 2025) at [5]-[7]. -- 4 of 9 -- 5 Other Processes [14] The respondents served a statutory demand dated 28 July 2025 on TK Global. An application was made to set that aside, which was filed on 21 August 2025. It has been adjourned to after the disposal of the present application for a stay. [15] A bankruptcy notice dated 30 July 2025 was served on Mr Clayton seemingly on 11 August 2025. He has applied in the Federal Court to have the time for compliance with it extended to 7 days after this Court determines the appeal proceedings and for the notice to be set aside. That application has not yet been determined. [16] Late yesterday the registry received an email from Mr Clayton advising that he had filed (but it had not as yet been accepted) his own debtor’s petition. He sought an adjournment of this application for a stay until his position was clarified. I do not see the utility in doing so. The application by the second applicant for a stay remains and in any event the overall position is better clarified by deciding this application as a whole. Jurisdiction [17] The respondents contend that, in circumstances where the notice of appeal is out of time and an extension of time has not yet been granted, this Court has no jurisdiction to grant a stay pursuant to r 761(2) as, there is presently no appeal on foot.3 [18] I do not accept that submission. There is a distinction between an appeal which only lies if leave is granted (such as under s 118(3) of the District Court of Queensland Act 1967 (Qld)) and one for which no leave to appeal is required. The former has been held not to be a decision ‘subject to an appeal’ unless and until that leave is granted: Stone v Copperform Pty Ltd [2002] 1 Qd R 106 at 107. The same cannot be said of an appeal for which leave is not required but filed out of time. It is not a nullity and there is no reason to read the language of r 761(2) which refers to “a decision subject to an appeal” as not including one where the Notice of Appeal has been filed late. [19] In any event the discussion is an arid one. The Court retains its inherent jurisdiction to consider and grant a stay: see West v Secure Funding Pty Ltd [2020] QCA 296 at [6]. Legal Principles [20] The applicable principles are well established.4 It is incumbent on the applicant to establish that this is an appropriate case for a stay. The factors which normally weigh upon the exercise of that discretion are: (a) whether there is an arguable case on the appeal, carrying out a preliminary assessment of the applicants’ prospects of success; (b) whether a refusal of the stay would render the appeal right nugatory; 3 Respondents’ outline of submissions at [12], citing West v Secure Funding Pty Ltd [2020] QCA 296 at [6]. 4 Cook’s Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd [2008] 2 Qd R 453 at [13]-[15]; Chapel of Angels Pty Ltd v Hennessy Building Pty Ltd [2019] QCA 229. -- 5 of 9 -- 6 (c) any prejudice to the applicants and competing prejudice to the respondent; (d) the entitlement of the successful party in litigation to the fruits of its judgment; and (e) what orders might ultimately be made and whether a stay is required to ensure that those orders are fully effective. [21] I shall deal with these issues briefly under a number of headings below. Prospects of success [22] On this application I will proceed, without undertaking any detailed analysis, on the basis that the applicants have arguable grounds of appeal. The Absence of Reasons [23] There would not seem to have been reasons given by Bradley J for his orders. However – (a) there was no challenge to the facts advanced by the respondents. (b) the content of any reasons need not be extensive in the circumstances.5 (c) the respondents would wish to submit that the nature of the applications jurisdiction is one in which it is “entirely usual for the Court not to give any reasons on uncontested matters”.6 (d) the applicants have not revealed the matter which they would wish to advance in opposition to the orders Bradley J made or why the Court of Appeal, if called upon, in any event would not disturb those orders on a reconsideration of the merits. The one factual matter Mr Clayton raises is that he had met all requests from the respondents’ solicitors for disclosure. That might be understood as intended to mean (but does not say) that he and the second applicant also satisfied on time the orders of Burns J and of Wilson J. However, this cannot be so. The Notice of Appeal relied on in this matter seeks orders dismissing the respondents’ application for judgment conditionally on the applicants producing by the date of the hearing of the appeal, the documents “stated in the Orders made 2 August 2023 as varied by the Orders made on 27 October 2023”. It seems to therefore be accepted those orders have not been complied with to date. Non-appearance of legal representative [24] The applicants argue that they had no opportunity to defend or present submissions before judgment was entered.7 [25] That is not made out. 5 DL v The Queen (2018) 266 CLR 1, 12-13 [32]–[33]; Built Qld Pty Limited v Pro-Invest Australian Hospitality Opportunity (ST) Pty Ltd [2022] QCA 266 at [103]–[104]; Barnes v The State of New South Wales [2017] NSWCA 254 at [21]–[22]; Karabagias v Katopodis [2022] VSCA 191 at [10]–[14]; Greenslade v Hiew [2022] WASCA 47 at [42]–[49]. 6 Respondents’ Outline of Submissions at [33]-[34]. 7 Applicants’ Outline of Submissions at [14]. -- 6 of 9 -- 7 (a) Mr Clayton deposes that the applicants were represented by solicitors at all relevant times.8 (b) The affidavit of Mr Rieck, the solicitor for the respondents and its exhibits, filed 21 October 2025 shows that notice of the application which came before Bradley J was given to those representing the applicants. [26] Nevertheless, the non-appearance of the applicants’ solicitors and the troubling circumstance sworn to by Mr Clayton that they did not inform him the matter had been listed9 and indeed misled him as to the status of the proceedings10 may support an application to have the judgment set aside. I should record that there is no material from the solicitors themselves and nothing in these reasons should be read as indicating that they have in any way acted improperly. That remains to be examined. [27] The Court has an inherent power to set aside an order occasioned by a miscarriage of justice.11 This may arise where a person suffers “an adverse order in circumstances where his or her failure to appear is adequately explained unless it also appears that no different result would be reached on a re-hearing or that a re-hearing would work an irremediable injustice to the other side”.12 [28] Again, the applicants have not identified what might have been said on their behalf to suggest that a different result would have been reached. The applicants have not identified in their written submissions any defence they would have advanced that could have altered the outcome below. Delay [29] The notice of appeal was filed more than 1.5 years after judgment was entered. [30] An unexplained delay in applying to the Court may militate against the exercise of its inherent jurisdiction.13 [31] Mr Clayton deposed that upon becoming aware of the judgment, he “immediately obtained new legal representation and filed an appeal to have the judgment set aside”.14 [32] The precise timing of this is not clear. What does appear is that no affidavit was provided to support the application for an extension of time, no stay was sought for some 2 months and the applicants have not prosecuted the appeal or this application complying with the time frames set for them. [33] As Keane JA observed in Cook’s Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd,15 “courts should not be disposed to delay the enforcement of court orders”. 8 Affidavit of B J Clayton (sworn 20 October 2025) at [5]. 9 Affidavit of B J Clayton (sworn 20 October 2025) at [6]. 10 Affidavit of B J Clayton (sworn 20 October 2025) at [9]. 11 Kleeman v The Star Entertainment Group Limited [2022] QCA 119 at [47]. 12 Kleeman v The Star Entertainment Group Limited at [47], citing Allesch v Maunz (2000) 203 CLR 172, 182-183 [28] (Gaudron, McHugh, Gummow and Hayne JJ). 13 See generally, Kleeman v The Star Entertainment Group Limited at [59]. 14 Affidavit of B J Clayton (sworn 20 October 2025) at [13]. 15 [2008] 2 Qd R 453, 445 [12]. -- 7 of 9 -- 8 Prejudice [34] The applicants submit that “[i]f bankruptcy or winding-up enforcement proceeds before determination of the appeal, [they] will suffer irreversible consequences, including loss of control over assets and livelihood”.16 [35] There is no evidence that the applicants could not, if they chose to, obtain the funds sufficient to pay the judgment debt. However, a submission is made that “the Applicant is self-represented and of limited financial capacity”: Applicants’ Outline of Submissions at [20]. No details are provided. As mentioned, Mr Clayton has advised that he has presented his own debtor’s petition. [36] In any case, neither liquidation nor bankruptcy renders an appeal nugatory. They can be prospected by the liquidators or trustees and there is no evidence that there would not be funds available to them to do so. [37] As to prejudice other than that, the likelihood that refusal of a stay might lead to the liquidation of the second applicant should not weigh heavily in the balance. It is a corporate entity and whatever its rights they can be held and dealt with by a liquidator: Cook’s Constructions Pty Ltd v Stork Food Systems Australasia Pty Ltd [2008] 2 Qd R 453 at [18]. [38] The possibility of Mr Clayton becoming bankrupt is different. It is true that the appeal can be pursued by his trustee but even as to that Holmes JA in Condo v Nguyen [2015] QCA 64 described the possible bankruptcy of the applicant as “a powerful consideration in the balance of convenience that bankruptcy is likely to diminish the prospects of the appeal proceeding considerably”. Further, bankruptcy has broader implications than merely its impact on the appeal and both of these considerations need to be taken into account. [39] A similar issue arose for consideration in Bresam Investments Pty Ltd v Shmee Pty Ltd [2008] VSCA 251. There Dodds-Streeton JA (Kellam JA agreeing) said – “[48] Although, as recognised in Li & Anor v The Herald & Weekly Times Ltd & Anor, the effect of a bankruptcy order on the prosecution of an appeal may, in a particular case, render an appeal nugatory and constitute special circumstances, a threat of liquidation or bankruptcy is not a decisive factor in every case. The weight to be accorded to it may vary. [49] The bankruptcy or liquidation of the appellants would merely diminish, rather than destroy, the prospects that the appeal will be prosecuted… [50] Counsel for the appellants submitted that the prospect of bankruptcy was distinguishable, in the present context, from that of liquidation, because: (a) … (b) bankruptcy constituted an inexpungable stain upon the status of the individual. [51] Those submissions are, in my view, unpersuasive. 16 Applicants’ Outline of Submissions at [17]. -- 8 of 9 -- 9 [52] First, the impact of any adverse effect of bankruptcy on reputation may vary according to the circumstances of the particular case. [53] Secondly… [54] Thirdly, if bankruptcy notices were served, it would be open to the individual appellants to seek an extension of time for compliance pending the hearing and determination of the appeal.” [40] The present case was perhaps stronger in favour of the stay given that a bankruptcy notice has been served. But there is on foot an application in the Federal Court to extend the time for compliance with it until 7 days after this Court deals with the appeal. The ‘prejudice’ to Mr Clayton is in that sense nascent. If the Federal Court did not extend the time for compliance with the notice, and if it is not complied with, then in those different circumstances the balance may better favour the grant of a stay. [41] That said, this form of prejudice no longer seems to be something Mr Clayton seeks to avoid given he has presented his own debtor’s petition. [42] The prejudice to the respondents will be that they are kept out of the fruits of their judgment and indeed the interest on that is likely to continue to run so that the outstanding amount will be increasing. Nothing is offered by the applicants to meet this prejudice. [43] The applicants express a willingness to comply with any “reasonable timetable” for progressing the appeal and, “if required, an undertaking not to dispose of assets pending determination”: Applicants’ Outline of Submissions at [19]. In the absence of this being properly formulated and details of their current asset position provided, this is of limited value. [44] The asserted prejudice to the applicants does not constitute a proper basis to outweigh the consideration that judgments of the Trial Division should not be treated as merely provisional, and that a successful party in litigation is entitled to the fruits of its judgment.17 Disposition 1. The application made by the applicants to adjourn the application for stay is refused. 2. The application for a stay is refused. 3. The applicants are to pay the respondents’ costs of and incidental to the application for a stay including the costs reserved on 8 and 16 October 2025 fixed in the amount of $22,000. 17 Cook’s Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd [2008] 2 Qd R 453. -- 9 of 9 --