Daysea Pty Ltd v Watpac Australia Pty Ltd [2000] QDC 306

DISTRICT COURT OF QUEENSLAND CITATION: Daysea Pty. Limited v. Watpac Australia Pty. Limited [2000] QDC 306 PARTIES: DAYSEA PTY. LIMITED WATPAC AUSTRALIA PTY. LIMITED FILE NO/S: 2723 of 2000 DELIVERED ON: 27 July 2000 DELIVERED AT: Brisbane HEARING DATES: 21 July 2000 JUDGE: Skoien S.J.D.C. ORDER: Application dismissed. CATCHWORDS: Stay of execution pending application for leave to appeal from determination of Queensland Building Tribunal. COUNSEL: Gotterson Q.C. and E. Morzone for applicant H. Fraser Q.C. and Burnett for respondent SOLICITORS: Hopgood Ganim for applicant Barwicks Wisewoulds for respondent [1] This is an application for a stay of enforcement of a determination of the Queensland Building Tribunal that Daysea pay $614,722 to Watpac. The determination of the Tribunal was made on 19 June 2000 and registered in this Court on 30 June 2000. Thereupon Watpac became entitled to enforce the determination as if it were a judgment of this Court (Queensland Building Services Authority Act 1991, s.91(2)). Daysea has applied for leave to appeal against the determination (ibid s.94) and consequently now seeks the stay pending the hearing of the application for leave and in the event that leave is granted, pending the hearing and determination of the appeal. -- 1 of 5 -- 2 [2] It is unnecessary to set out the facts in any great detail. It is sufficient to say that Watpac had contracted to build a unit building for Daysea for some twenty-two million dollars. Practical completion was certified on 30 November 1999. The amount which the Tribunal determined Daysea should pay Watpac was made up of an amount for final progress payment and an amount for some rejected variation claims. The certifying supervisor had originally disallowed the amount of the variation claim and had also certified that Daysea was entitled to deduct a sum from Watpac’s claim to reflect liquidated damages for delay. That was taken to the Tribunal and the Tribunal held that the certificate was invalid in that it was out of time, so that Watpac’s claim should have been paid. Whether Daysea actually has a good claim for liquidated damages and whether Watpac actually has a valid claim for variations was not decided and the merits of this dispute remain as yet unlitigated before the Tribunal. The appeal to this court, if leave is given, will relate to the question whether the Tribunal correctly set aside the certificate and ordered that the progress claim be paid. [3] Under rule 761 of the Uniform Civil Procedure Rules (applied to this appeal by rule 785(1)) the commencement of an appeal does not stay enforcement of the decision under appeal unless the court so orders. [4] There is some conflict in the authorities on the test to be applied in deciding whether to order a stay. Some authorities laid down that there must be special circumstances, for example J.C. Scott Constructions v. Mermaid Waters Tavern Pty. Ltd. (No 2) [1983] 2 Qd.R.255; Cosgrove v. Johns [1998] QCA 110; BC 9802197; Federal Commissioner of Taxation v. Myer Emporium Ltd. [No. 1] (1986) 160 CLR at 222-223; Asia Pacific International Pty. Ltd. v. Peel Valley Mushrooms Limited [1999] 2 Qd.R.458 at 463 para [10]. On the other hand the Court of Appeal in two decisions, Williams v. Chesterman (unreported App. 74/1992) and Croney v. Nand (1999) 2 Qd.R.342 at 348 have said that the court must simply decide whether it is an “appropriate” case for a stay. These two decisions of the Court of Appeal bind me, and I propose to apply the test they lay down. Further, the Court of Appeal has decided that it is not necessary for the applicant to show that some important question of law or justice is involved, Amos v. Catakovic (unreported, C.A. 2009/1999, delivered 4 May 1999). -- 2 of 5 -- 3 [5] When is it “appropriate” to order a stay? What must be established? The effect of rule 761 that there is no stay unless a court orders otherwise suggests that it is the usual or normal position that there is no stay. That has been described as the ordinary rule by Dawson J. in Commissioner v. Taxation v. Myer Emporium Ltd. (1986) 160 CLR 220 at 222 when he referred to the “ordinary rule that a successful litigant is entitled to the fruits of the litigation pending the determination of any appeal.” Obviously the party which seeks the stay must carry the onus of satisfying the court that a stay is appropriate and that must involve establishing something sufficient to disturb the ordinary or normal situation of no stay. [6] Mr. Gotterson of Queens Counsel, for Daysea, submitted the following as of greatest factual relevance to establish the appropriateness of a stay:- (a) the building is practically complete, so it is not a case of the builder’s cash flow being embarrassed by the withholding of a progress claim. (b) the two items making up the amount in dispute had actually been certified in Daysea’s favour before the determination of the Tribunal; (c) the two items are to be litigated before the Tribunal which will determine their validity and decide which of the two parties is entitled to any, and what, payment. [7] It is common ground that neither Daysea nor Watpac would have difficulty paying or repaying the sum in dispute. Watpac also concedes (for the purpose of this application only) that if leave to appeal is granted Daysea would have a reasonably arguable appeal although it does not concede any prima facie error by the Tribunal. [8] An obviously cogent reason which would make it appropriate for a stay to be granted would be when there is reason to believe that enforcement of the decision below could lead to irreversible loss or damage. Thus, it might be shown that it is possible that the judgment creditor will dissipate the judgment sum, or that payment of the judgment sum by the judgment debtor could lead to its insolvency. Consequences of that type would render the appeal nugatory or at least could impose great hardship on the appellant and one would think that appropriateness -- 3 of 5 -- 4 would thus be made out. See Commissioner of Taxation v. Myer, above at 222-3; J.C. Scott Constructions v. Mermaid Waters Tavern Pty. Ltd. (No. 2) (1983) 2 Qd.R.255 at 256, 259; Starbourne Holdings Pty. Ltd. v. Radferry Pty. Ltd. (unreported, Federal Court of Australia QG 125 of 1996). [9] So the absence of any suggestion that enforcement of the Tribunal’s decision may render the appeal, if successful, nugatory or that some other type of irremediable damage may befall Daysea is highly important. In those circumstances one wonders why Watpac should not be permitted to enjoy the fruits of successful litigation by enforcing the decision if it chooses to do so. The submission of Mr. Gotterson which I have set out in paragraph [6(a)] that Watpac will not be financially embarrassed by non-receipt of the money seems to me to be an attempt to raise a “reverse financial hardship” argument, but really, it is a neutral point. It says “Watpac does not really need the money”. But the fact is that Daysea does not really need it either. A well-off judgment creditor is just as entitled to enjoy the fruits of successful litigation as a poor one, and even more so if the judgment debtor is also well off. [10] The other two matters raised by Mr. Gotterson which appear in para [6(b) and (c)] seem to me to raise equally neutral points. Paragraph (b) simply says that before the Tribunal’s decision was made Dayser was not bound by the certificate to pay the money but that ignores the basic point that the certificate was set aside by the Tribunal which then made the order in favour of Watpac against which Daysea seeks to appeal. The status quo, as set by the Tribunal, is the decision in favour of Watpac and I do not see that it is relevant to the exercise of my discretion that an earlier status quo, not established by any court or any tribunal, favoured Daysea. [11] Paragraph (c) simply points out that the sum in dispute is to be litigated before the Tribunal and I cannot speculate on the likely outcome of that. It is appropriate to set out a passage from the judgment of Cooper J. in Starbourne (above), with which I respectfully agree: “An application for a stay is not the occasion to finally consider and weigh the strength of each ground of appeal. Mr McQuade did not suggest that the respondents had no arguable basis for the appeal. Instead, he submitted that there was nothing in the argument which -- 4 of 5 -- 5 displaced the prima facie view that judgment was correct and that the applicant was entitled to the fruits of it. That is, applying the approach taken in Alexander v. Cambridge Credit Corporation Ltd., and adopted by the Full Court in Powerflex Services, the existence of an arguable case on appeal does not of itself justify the granting of a stay. I agree. Without a careful consideration of the evidence and His Honour’s reasons, it is not possible to determine whether there is a high probability of success on appeal. A cursory examination leaves the matter in the speculative or argumentative state referred to by Mahoney JA in the extract cited above.” and the judgment by Mahoney JA referred to (in Re Middle Harbour Investments Ltd. (in liq.) (unreported, N.S.W. Court of Appeal 15 December 1976) is as follows:- “Where an application is made for a stay of proceedings, it is necessary that the applicant demonstrate an appropriate case. Prima facie, a successful party is entitled to benefit of the judgment obtained by him and is entitled to commence with the presumption that the judgment is correct. These are not matters of rigid principle and a court asked to grant a stay will consider each case upon its merits, but where an applicant for a stay has not demonstrated an appropriate case but has left the situation in the state of speculation or of mere argument, weight must be given to the fact that the judgment below has been in favour of the other party.” [12] I accept Mr. Fraser’s submission that no prima facie error in the Tribunal’s decision has been shown. At best is the concession made on behalf of Watpac that the appeal is reasonably arguable. [13] Finally, the Tribunal has determined that the disputed sum is to be paid at this time although cross claims are still the subject of litigation. The Tribunal decided that to be the expressed intention of the parties in their contract. Whether the Tribunal was right will be decided in this appeal, if leave is granted, but for now it is a decision in favour of Watpac and Watpac is entitled to the fruits of that decision. Compare L.U. Simon Builders Pty. Ltd. v. H.D. Fowles (1992) 2 V.R.189. [14] I have not been persuaded that the facts of this case are such that a stay is appropriate and I dismiss the application. -- 5 of 5 --