Case: Jennings Construction Limited v Burgundy Royale Investments Pty Ltd (No 1) [1986] HCA 84 ; (1986) 161 CLR 681
Outcome: applied
Mr Murdaca's application is, or at least is akin to, an application for a stay to preserve the subject-matter of litigation pending an application for special leave to appeal. In Jennings Construction Limited v Burgundy Royale Investments Pty Ltd (No 1) [1986] HCA 84 ; (1986) 161 CLR 681 at 684 Brennan J made clear that such an application should in the first instance be made to the court below which is familiar with the matter rather than to the High Court. 6 In Burgundy Royale Brennan J at 685 said: 'In exercising the extraordinary jurisdiction to stay, the following factors are material to the exercise of this Court's discretion. In each case when the Court is satisfied a stay is required to preserve the subject matter of the litigation, it is relevant to consider: first, whether there is a substantial prospect that special leave to appeal will be granted; secondly, whether the applicant has failed to take whatever steps are necessary to seek a stay from the court in which the matter is pending; thirdly, whether the grant of a stay will cause loss to the respondent; and fourthly, where the balance of convenience lies.' 7 Subject to the second of the above considerations having no relevance, the above passage provides valuable guidance as to the proper approach to be taken on the present application. I understand Brennan J's reference to the prospect of a grant of special leave being 'substantial' to be intended to convey no more than that there should be a real, as opposed to a remote or insubstantial, possibility of special leave being granted. 8 For the following reasons it seems to me that Mr Murdaca's application for special leave could be understood to involve a question of law that is of public importance because of its general application. It also seems to me that the interest of the administration of justice could be understood to require consideration by the High Court of the judgment because authoritative guidance from the High Court, or indeed the Full Court of this Court, is not presently available on that question of law (s 35A of the Judiciary Act 1903 (Cth)). 9 The act of bankruptcy on which the creditor's petition was founded was Mr Murdaca's alleged failure to comply with a bankruptcy notice. The bankruptcy notice required payment of a judgment debt within 21 days after the service of the notice. At the time of issue and service of the bankruptcy notice, execution of the relevant judgment had not been stayed (see s 41(3)(b) of the Bankruptcy Act ). However, an ex parte stay of proceedings in respect of the judgment was granted within the period of 21 days after the service of the notice; that is, before the commission by Mr Murdaca of the purported act of bankruptcy on which the creditor's petition was founded. 21 I conclude that Mr Murdaca's prospects of success on his application for special leave are sufficiently real to be characterised as substantial in the sense discussed in Burgundy Royale [1986] HCA 84 ; 161 CLR 681 (see [7] above). 22 Neither the trustee nor the petitioning creditor pointed to any loss or other prejudice that would be suffered if the stay were granted, provided that the value of Mr Murdaca's interest in his home was maintained. After taking the opportunity to review Mr Murdaca's records of payments made by or on his behalf, including payments of rates, utility charges, strata levies and mortgage instalments, the trustee did not oppose the grant of a stay of proceedings under the sequestration order so as to allow Mr Murdaca to retain possession of his home. 23 In considering the balance of convenience I note that the reasons of the Federal Magistrate suggest that Mr Murdaca's only source of income is a disability pension and that his assets are limited to a car valued at $300 and his interest in his home. His home secures repayment of a mortgage debt. The judgment debt is modest when compared with the equity apparently held by Mr Murdaca in his home. If the property is sold, costs, including agent's fees and commission and trustee's remuneration, will be incurred. Should Mr Murdaca ultimately succeed on an appeal to the High Court it may prove impossible for the status quo to be restored.