Combined Property Holdings Pty Ltd v Galea [2024] QSC 79

SUPREME COURT OF QUEENSLAND CITATION: Combined Property Holdings Pty Ltd v Galea [2024] QSC 79 PARTIES: COMBINED PROPERTY HOLDINGS PTY LTD (Plaintiff) v PAUL WILLIAM EDWARD GALEA & ORS (Defendants) FILE NO/S: 660 of 2018 DIVISION: Trial PROCEEDING: Application ORIGINATING COURT: Supreme Court of Queensland DELIVERED EX TEMPORE ON: 9 February 2024 DELIVERED AT: Supreme Court of Queensland at Cairns HEARING DATE: 9 February 2024 JUDGE: Henry J ORDERS: 1. The action is stayed pending further order. 2. The further hearing of the defendants’ application for security for costs filed 3 October 2023 is adjourned. 3. The action is listed for review at 9.15 am 7 August 2024. 4. Liberty to apply on the giving of two business days’ notice in writing. 5. Costs reserved. 6. The transcript of my reasons is to be added by the Registrar to the Court file on its receipt. CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – SECURITY FOR COSTS – FACTORS RELEVANT TO EXERCISE OF DISCRETION – PLAINTIFF’S OR APPLICANT’S IMPECUNIOSITY – CAUSE OF PLAINTIFF’S OR APPLICANT’S IMPECUNIOSITY – where the Court previously ordered the payment of security for costs against the plaintiff up until the close of pleadings – where the defendants filed a further application for security for costs – where the defendant’s expenditure was materially in excess of the amount of security previously provided by the plaintiff – where the plaintiff seeks -- 1 of 4 -- 2 an order for the matter to go to mediation – where the plaintiff is impecunious and is unable to meet a further security for costs order PROCEDURE – STATE AND TERRITORY COURTS: JURISDICTION, POWER AND GENERALLY – INHERENT AND GENERAL STATUTORY POWERS – TO STAY OR DISMISS ORDERS OR PROCEEDINGS GENERALLY – where the plaintiff filed evidence of a related criminal proceeding – where a material component of the civil proceedings relates to issues in the criminal proceeding – whether the civil proceeding ought to be stayed pending the resolution of the criminal proceedings COUNSEL: M Steele KC for plaintiff J Jonsson KC for defendants SOLICITORS: Robert James Lawyers for plaintiff Miller Harris Lawyers for defendants [1] On 22 October 2022 the Court ordered the payment of security for costs up until the close of pleadings and disclosure in the amount of $75,000. The proceeding was stayed pending the provision of that security, which evidently occurred. Late last year, a further application for further security for costs was heard. The hearing was adjourned incomplete until today. [2] Briefly put, the equation presenting itself as at that time on the information before the Court was not radically different from that which the Court was seized of when it made its first security for costs order. It was at least likely, if that remained the case, that for the reasons given in my earlier security for costs decision, a further security for costs order would be made against the plaintiff. The matter, by that time, had reached the close of pleadings and disclosure. There was some correspondence suggesting a debate about whether that was so, but the position of the defendants at the hearing late last year was that they had complied with their disclosure obligations. Hence, so far as the party that was going to be disadvantaged by that order was concerned, we had really reached the point where it was quite legitimate for me to consider the need to make a further order. [3] There were a couple of issues that arose at that hearing late last year. One was that the defendants had not filed evidence of the extent of their expenditure so that I could be satisfied the equivalent of the $75,000 had, in effect, been exhausted by way of security. Whilst that was obviously an inference in light of the fact that the further application had been brought, it was appropriate that that be tended to, and as much was accepted, thus necessitating, if not the matter being stood down until later in the day to gather evidence, an adjournment to some later date. The reason the adjournment to some later date emerged as the better option is related to the other issue that arose. -- 2 of 4 -- 2 [4] In meeting the application, the plaintiff’s counsel was arguing that I ought order the matter go to mediation. The difficulty with that was that the murky quality of the case as understood by the Court – and, it seems, by the defendants – was something of a stumbling block to the probability that the defendants would be genuinely interested in mediating the matter. There was then some appeal in the notion that the plaintiff’s counsel could, given the inevitability of the adjournment for the technical point I have mentioned, settle a document that could more clearly articulate the nature of its case in the hope that would have the effect of persuading the defendants that there was reason to contemplate a mediation might be beneficial after all. Such a document would also have the fallback advantage for the plaintiff to better educate me as to that which I found murky about the state of the plaintiff’s case. The hearing was adjourned to today. [5] In the meantime, the additional evidence of the defendants was filed. It confirmed that, indeed, expenditure materially in excess of the amount of security has occurred. The plaintiff, in the meantime, filed evidence dealing with the criminal prosecution of Mr Landry, a matter which is touched upon in my reasons in a decision handed down in 2020. [6] The upshot of that information – which demonstrates that at least a material component of the civil proceeding relates to issues in that criminal proceeding – is that there have been some false starts in the criminal prosecution which is occurring in New South Wales, but that the committal is likely to occur in the first half of this year. Whether that results in the committal of Mr Landry and, in turn, the presentation of an indictment against him and the continued criminal prosecution, time will tell. [7] The evidence filed on behalf of the plaintiff company is to the effect that Mr Landry claimed privilege in respect of information that would be relevant in the criminal matter. Mr Landry, of course, is not, at law, the plaintiff – the plaintiff being the company – but it seems obvious from the state of such evidence as I am familiar with in this case that he is a central source of such evidence as is likely to aid the plaintiff’s case. This is relevant in the short-term and in the longer term. In the longer term, it is obviously relevant because the continuation of the civil proceeding, the plaintiff would contend, becomes impractical when its main source of evidence would be claiming privilege. In reciting the nature of that problem, I express no concluded view as to the underlying force of it. [8] The question of whether or not a civil proceeding ought be stayed pending the resolution of a criminal proceeding is heavily influenced, of course, by the consideration that there is a substantial overlay of identical issues in each, for the inference of prejudice is more easily drawn in such a situation. However, the balance of justice between the parties in a stay application pending the resolution, first, of the criminal proceedings, requires consideration of a variety of often competing considerations, not the least of which includes the right of a litigant in the civil jurisdiction to the deployment of the Court’s ordinary processes to hear and dispose of the matter. [9] The more short-term temporal issue is that if the plaintiff had in mind laying on some extra evidence in order to better clarify the currently apparently murky state of its case, as understood by the Court, it became hamstrung in doing so by the position taken by Mr Landry in claiming privilege. So it is that on the information presently -- 3 of 4 -- 3 before me, I make plain I would have been disposed to make the further security for costs order, the only lingering issue being the precise quantum that I settled upon. However, in fairness to the position of the plaintiff, which, in effect, says it is unable to meet a security for costs order, thus making it likely the civil proceeding would be stayed, I am conscious that it is, for the reasons explained, disadvantaged in doing its best to answer the application for further security in light of Mr Landry’s position. [10] The further development today was the filing of an application by the plaintiff to stay the proceedings, pending the disposition of Mr Landry’s criminal matter. As I have mentioned, the mere existence of possible prejudice flowing from the circumstance of the criminal proceeding pending is not determinative, and none of these reasons suggest that, on a proper hearing on the merits of such an application, I would necessarily have stayed the proceeding. However, drawing all of these tendrils together, the equation from each party’s perspective is that, if they were right, I would be ordering, at least for the moment, the stay of the present proceeding – albeit for different reasons, depending on the perspective of which party is considered. [11] Accepting the inevitability of that equation, it seems to me the appropriate course is to simply make an order staying the proceeding but qualify such an order by a number of other orders that protect the respective positions of the parties. Naturally, there is a concern to protect the interests of the plaintiff, disadvantaged as it may be presently by the position of Mr Landry. But likewise, there are also relevant considerations in favour of the positions of the defendants, not the least of which is that they ought not be subject to the stress even of a stayed Supreme Court action against them indefinitely. Further to all of this, of course, from their point of view, the longer the matter is delayed, the more difficult it will become for them if the matter finally comes to trial, in dealing with the relevant marshalling of memory and materials from long ago. [12] This mix of considerations, it seems to me, can adequately be met by my orders, which necessarily would adjourn the further hearing of the application for security for further costs, being accompanied by a form of order regarding the stay that is accompanied by the words, “pending further order”, by a liberty to apply order, and also by fixing a review date some reasonable time ahead. These will, in combination, allow each party to be in a position to better protect its position should one or the other press for a change to the holding pattern that will result from the order I propose. [13] For all of those reasons, my orders are: 1. the action is stayed pending further order; 2. the further hearing of the defendants’ application for security for costs filed 3 October 2023 is adjourned; 3. the action is listed for review at 9.15 am 7 August 2024; 4. liberty to apply on the giving of two business days’ notice in writing; 5. costs reserved; and 6. the transcript of my reasons is to be added by the Registrar to the Court file on its receipt. -- 4 of 4 --