In the matter of Portman Securities Pty Ltd (in liq)

1. [1]

   By Notice of Motion filed on 14 January 2025, the Applicant, Westwood Capital Pty Ltd ("Westwood") applies for a stay of the enforcement of certain orders made on 25 November 2025.

2. [2]

   It should immediately be noted that this application is dealt with after a relatively long delay since judgment was given. On 13 November 2025, I had delivered my judgment in Re Portman Securities Pty Ltd (in liq) [2025] NSWSC 1338 addressing the issues in the proceedings. On 25 November 2025, I made orders, including the orders which are now sought to be stayed, relevantly that:

3. [3]

   It was not, as I noted above, until mid January 2026 that an application for a stay was brought, and that application has only been brought to a hearing in early March 2026. It appears, from submissions made by Mr Condon, with whom Mr Kadar appears for Westwood, that part of the explanation for that delay may have been that an application for a stay was initially made to the Court of Appeal, which understandably required that it initially be made to the trial judge. I should add that the Court of Appeal has made orders that an appeal to be brought by Mr Pamboris, and Westwood's appeal, be heard together and listed on 26-28 May 2026, with an estimate of two days plus.

Affidavit evidence

1. [4]

   I should first address the affidavit evidence, although the detail of that evidence will largely not be significant for the conclusions that I reach below on wider grounds. Westwood reads an affidavit dated 30 December 2025 of its director, Mr Gertos, which refers to the fact that it is the registered proprietor of a property at Punchbowl and indicates the history of its purchase of that property. Mr Gertos there notes that there are two mortgages over the property, which are exhibited to his affidavit, and refers to the fact that he is a guarantor under the mortgages. His evidence is that all rates, taxes and statutory outgoings in relation to the property have been paid and are up to date and that Westwood has paid all income tax and GST. He also offers an undertaking in respect of dealings with the property, although that undertaking was qualified further in the undertaking put in submissions before me.

2. [5]

   An annexure to Mr Gertos' affidavit included Westwood's grounds of appeal in respect of my orders. Mr Condon fairly accepts, in submissions, that the appeal raises no issue of legal principle and is an appeal against the factual findings which I made, including adverse findings in respect of Mr Gertos' credit which are not challenged in the notice of appeal, although Mr Condon in submissions suggested that they might be challenged in submissions before the Court of Appeal at least in a narrower respect. Mr Condon refers to a ground of appeal against my finding that Westwood did not act in good faith for the purposes of s 588 FG(2) of the Corporations Act 2001 (Cth) (“Act”) and to a ground of appeal that I erred in finding certain matters. That ground of appeal is unilluminating, so far as it indicates that I was wrong in finding the matters that I found. It appears from Mr Condon's submissions that it will be put that inferences from the property market generally would have supported some other finding.

3. [6]

   Westwood also draws attention to the appeal brought by Mr Pamboris, which challenges my findings of breach of director's duties by Mr Pamboris and the findings that I had reached in respect of whether the relevant transaction was an uncommercial, insolvent or unreasonable director-related transaction and related findings in respect of s 37A of the Conveyancing Act 1919 (NSW). It appears that the primary relevance of Mr Pamboris' appeal, for Westwood's stay application, was a contention that, where the appeal would go forward in any event, it would be unfortunate if Westwood was wound up, by reason that the proceedings were not stayed. As will emerge below, it seems to me that the alternative propositions that Westwood would not be wound up, if the orders were stayed, or would be wound up if the orders were not stayed, were both not established.

4. [7]

   Westwood also draws attention to the terms of two financing agreements, one with Athenee Securities Australia Pty Ltd (“Athenee”), which appears to be a company associated with Mr Gertos or with his family. The agreement with Athenee relevantly provides for an event of default if Westwood is placed in liquidation. Westwood also draws attention to a letter of offer from La Trobe Financial Services Pty Ltd (“La Trobe”), which I will assume subsequently became the basis of a loan agreement, in respect of an amount of $21.5 million, with a five-year term. That loan agreement relevantly contains events of default if, first, Westwood is deemed by law to be insolvent, which is a matter of relevance where a creditor’s statutory demand has been served upon it; and second, and likely subsequently occurring, if proceedings are commenced to wind up Westwood. A further event of default applies in respect of certain dealings with secured property, and Westwood relies on that event of default to contend that it cannot raise funds upon the property to, for example, make a payment into Court in support of an application to set aside the creditor’s statutory demand. It does not there address the issue which would commonly arise in the somewhat similar context of a security for costs application of whether those standing behind Westwood have the capacity to raise such funds.

5. [8]

   Westwood also relies on an affidavit dated 30 December 2025 of Mr Savell, which seeks to establish that, at least on the balance sheet basis and on certain assumptions as to property values, Westwood has an excess of assets of over liabilities in a significant amount.

6. [9]

   Westwood also relies on an affidavit of Mr Galanos dated 20 February 2026, which attached an expert report in respect of the valuation of the relevant property and, in a second affidavit dated 3 March 2026, contained the surprising proposition that Mr Galanos had cut and paste part of that valuation report from an earlier valuation report in the earlier proceedings, and made errors in doing so. Happily, no significant reference was made to that report, so I need not address that matter further.

7. [10]

   A further affidavit dated 3 March 2026 of Mr Savell addresses an unsigned and unverified but updated balance sheet for the Westwood unit trust, of which Westwood is trustee, which appears to include reference to its liability to the Plaintiffs in respect of the earlier judgment.

8. [11]

   Westwood also tenders a letter, which will be important in matters which I need to address below, by which Westwood's solicitors advised the Plaintiffs’ solicitors that Westwood does not offer to pay the amount of the judgment debt into Court in support of its claim, in other proceedings that there is some other reason to set aside a creditor’s statutory demand served by the Plaintiffs upon Westwood. The Plaintiffs in turn tender correspondence with Westwood, by letter dated 10 April 2026, in respect of the level of its assets, its income or lack of income, its lack of liquid assets, and the question of security for costs. It will not be necessary to address that correspondence further in order to determine this application.

Applicable principles and authorities

1. [12]

   I now turn to the applicable case law, to which I have been taken in submissions, and I thank the parties and their counsel for their submissions in that respect. The applicable principles in respect of a stay are well established. The overriding principle to apply when determining an application for a stay is to ask what the interests of justice require, and special or exceptional circumstances need not be made out to grant a stay; it is sufficient that the relevant defendant, here Westwood, demonstrate a reason or appropriate case to warrant the exercise of discretion in its favour; and it is relevant whether there are reasonably arguable grounds for an appeal: Alexander v Cambridge Credit Corp Ltd (1985) 2 NSWLR 685 at 694–695 (“Alexander”); NSW Bar Association v Stevens [2003] NSWCA 95 at [83]. The Court must make a preliminary assessment about whether an arguable case exists, and that requires that there be reasonably arguable questions for the determination of the appellate Court: Alexander at 695; Kalifair Pty Ltd v Digi-Tech (Australia) Ltd (2002) 55 NSWLR 737; [2002] NSWCA 383 at [18] (“Kalifair”); Aquaqueen International Pty Ltd v Titan National Pty Ltd [2015] NSWCA 9 per McColl JA at [46] (“Aquaqueen”). It is relevant, in considering a stay application, that an appeal would be rendered nugatory if a stay were not granted, Kalifair at [18]. However, as McColl JA noted in Aquaqueen, it is not sufficient to order a stay that otherwise the appeal would be rendered nugatory, and it is first necessary that the applicant demonstrates that the appeal raises serious issues for the determination of the appellate Court: Aquaqueen at [48].

2. [13]

   Here, the parties drew attention to Alexander, to which I have referred above, and to the observations at 695 in that judgment. Mr Condon placed particular weight on Kalifair, understandably, where that case arose in a context which had some similarities and some differences to this case. The differences include the fact that, in that case, it was common ground at first instance and on appeal, that, if no stay was granted, it was in the nature of things that the creditor companies would move for the winding up of the debtor companies. That was not common ground here, at least so far as the question whether a winding up would proceed while the appeal was pending was squarely raised. The Court there referred to an earlier decision which had recognised that, if a winding up order was made, an application for special leave to appeal would, in the ordinary course, "go by the board." I will proceed on the basis that that is a realistic outcome of a winding up order, while recognising that it depends on the premise that a winding up order would be made in circumstances that the appeal was pending. A second difference is that there was common ground, in that case, that there was a good prima facie case for arguing that the trial judge fell into error. Mr Condon fairly accepted that the Plaintiffs made no such concession here, and I will need to make an assessment of that matter. I recognise that a trial judge is in both a better and a worse position than an appellate Court to do so, being in a better position so far as he or she has the advantage of knowing the evidence led at first instance, and a worse position so far as he or she is required to reach some form of assessment of his or her own reasoning process.

3. [14]

   That case is also significant, so far as it distinguished the position of three entities which had no assets, where a stay was granted without condition; and an entity which had assets, where an unqualified undertaking was offered as to dealing with relevant assets. That was not the case here where, between the first affidavit of Mr Gertos and closing submissions, a qualification to permit dealings by Westwood in the ordinary course of business had been introduced in the undertaking. A further difference between that case and this case is that the Court of Appeal plainly was not there asked to consider whether a winding up order would likely follow from the failure to grant a stay, because that issue was not raised before it, and that appears to have been assumed by the parties in that case. Again, that question is in issue here.

4. [15]

   I was also taken to the decision in Cross-Country Realty Victoria Pty Ltd v Ubertas 350 William Street Pty Ltd [2015] VSCA 347, where two judges of the Court of Appeal in the Supreme Court of Victoria, again in circumstances where the issue does not seem to have been contested before them, observed that:

5. [16]

   Plainly, the Court of Appeal there assumed that the failure to grant a stay would bring about the making of a winding-up order, and that assumption will require further scrutiny below. The Court of Appeal there also observed that:

6. [17]

   As I noted above, a trial judge is in a better position in that respect, although he or she is admittedly in a worse position in respect of assessing his or her own judgment.

7. [18]

   I should also return to the decision in Aquaqueen to which I referred above. In that case, the Court at first instance had made a winding-up order against the Defendant and the Defendant sought to stay the winding-up order on the basis that its appeal would otherwise be frustrated. As I noted above, the Court of Appeal declined to grant that stay, on the assessment, in that case, that the prospects of appeal did not warrant the stay, notwithstanding that the refusal of the stay would render the appeal nugatory.

8. [19]

   It is finally necessary to address two other matters which were not raised in the cases to which I have referred, but which are well established in the New South Wales case law, and which have some significance for the determination of this application. First, the case law indicates that, where an application is made, as here, to set aside a creditor's statutory demand issued by the Plaintiffs to Westwood under s 459J(1)(b) of the Act, another reason to set aside the demand would not generally be established without payment of the amount of the judgment debt into Court: Cranney Farms Pty Ltd v Corowa Fertilisers Pty Ltd [2011] NSWSC 9; Timberland Holdings Pty Ltd v Schindler Lifts Australia Pty Ltd [2011] NSWSC 466 at [26]; Re Land Enviro Corp Pty Ltd [2013] NSWSC 731 at [13] (“Land Enviro”). Here, as I noted above, Westwood makes clear that it does not propose to, and on Mr Condon's submissions, is unable to, pay funds into Court from its own resources. Westwood does not address its ability to procure others associated with it, or standing behind it, to pay funds into Court from their resources.

9. [20]

   Second, the case law, including case law as to whether a creditor's statutory demand should be set aside for some other reason, recognises that, even if a presumption of insolvency arises, the Court may adjourn a winding-up application rather than proceed to making a winding-up order if an appeal on arguable grounds against the judgment founding the claimed debt is on foot: Land Enviro at [15] and see the cases cited therein.

Submissions and determination

1. [21]

   Turning now to the parties' submissions, Westwood's primary submission, first put in paragraph 3 of its submissions in support of a stay, is that the appeal will be rendered futile absent a stay, and that a winding up order and the appointment of a liquidator will delay, if not preclude, the determination of Westwood's appeal. Implicitly, in the way that submission was put, and explicitly in the way oral submissions were put, Westwood put two propositions. First, that it needed the stay that was sought today in order to avoid a winding-up, and second, that the grant of the stay it sought today would in fact assist it in avoiding a winding up. If the latter proposition was not established, then there was no utility in the stay, on the basis on which Westwood sought it.

2. [22]

   Mr Condon referred to the applicable principles and submitted that Westwood’s grounds of appeal are arguable. Mr Condon in turn addressed, albeit without evidentiary references, a number of propositions that might be put to the Court of Appeal to support a submission that I had erred in reaching the factual findings that I had reached. I have recognised, above, that a trial judge is in a better and a worse position than an appellate Court in reaching a finding as to whether the grounds of appeal are arguable, and I am conscious of that difficulty, but I must address that question where it is an essential element of the stay application.

3. [23]

   With the greatest respect to Mr Condon, it seems to me that the appeal is, at best, weakly arguable, so far as the structure of the appeal could be fairly summarised as involving grounds of appeal that, as to each significant factual finding reached by an experienced trial judge, the trial judge should have reached the opposite finding. No doubt, appeals succeed on that basis, although perhaps rarely. I do not exclude the possibility that I had erred in every significant factual finding that I reached, but there is nothing in the Notice of Appeal which indicates, for example, some significant facts overlooked, or some matter that I had not addressed, so as to reach a view that a wholly factually based appeal is likely to succeed, where much of the findings I reached reflected credit findings as to the relevant witnesses. It is ultimately not necessary to reach a conclusion as to that matter, beyond finding that it seems to me that the prospects of the appeal are relatively weak.

4. [24]

   More significantly, Westwood identifies the matters which it suggests indicate that the balance of convenience supports the grant of the stay, or that the grant of the stay is in the interest of justice, namely that, as I noted above, the grant of the stay is necessary to avoid its winding-up and, implicitly, the making of the stay will assist it to avoid its winding up, so as to preserve the opportunity for a determination of its appeal on the merits. I am unable to accept either of those propositions, for reasons which I should now explain, by reference to the authorities to which I have referred above. First, I accept that Westwood is unlikely to succeed in an application to set aside a creditor's statutory demand without obtaining the stay, and that is plainly an essential premise of its application. However, the difficulty with that is that Westwood is also likely to be unable to set aside a creditor’s statutory demand for some other reason, without payment of funds into Court, where that is the approach recognised in Australian case law. Here, the utility of the grant of the stay is undermined, in my view, by the fact that Westwood makes clear that it does not, or cannot, offer a payment into Court. Those associated with it, or standing behind it, also do not offer to fund it to make any such payment into Court.

5. [25]

   The case law to which I have referred indicates that the grant of the stay, without the offer of payment into Court, is likely to have no utility in allowing the creditor's statutory demand to be set aside. That has a second consequence, important for the arguments that Mr Condon put, because Mr Condon rightly recognised that an event of default arises under the La Trobe facility where Westwood is deemed by law to be insolvent, and that will occur prior to the making of any winding up application. Here, whether or not a stay is granted, absent a payment into Court, and absent a setting aside of the creditor's statutory demand for some other reason, an event of default will then arise under the La Trobe facility.

6. [26]

   The further basis of Westwood's application was, as had been assumed in some of the earlier case law to which I referred, that the absence of the stay would lead to a winding-up, which would deprive it of the opportunity to contest its appeal. There are again two difficulties with that proposition. The first is that, as Mr Condon himself emphasised in submissions, the effect of a presumption of insolvency arising, because the creditor's statutory demand is not set aside, puts Westwood at risk that La Trobe will appoint receivers, before any winding-up is brought.

7. [27]

   The second, possibly more fundamental difficulty, is that the case law recognises, and I have referred to the authorities above, that the absence of a stay, and the absence of a setting aside of a creditor's statutory demand, does not in fact have the necessary or likely consequence that a company will be wound up because, as Ms Bailey fairly accepted in submissions for the Plaintiffs, the Court will likely adjourn a winding-up application until after the hearing of the appeal. I recognise that Mr Condon put that that does not assist Westwood, so far as an event of default arises from the making of a winding-up application; but the problem with that submission is that, by the time an event of default has arisen from the making of a winding-up application, an event of default will already have arisen from the presumption of insolvency, and a second event of default adds nothing to a first event of default.

8. [28]

   Mr Condon in turn submits that the balance of convenience favours the grant of the stay, but I cannot accept that submission in circumstances where, first, the detriments to the Plaintiffs are obvious enough, and are addressed in the Plaintiffs' submissions, and the advantages to Westwood are, for the reasons noted above, illusory, where the grant of a stay, without the payment of funds into Court, will likely not provide a basis to set aside a creditor's statutory demand for some other reason; will not avoid the event of default, which Mr Condon has identified as arising under the La Trobe facility; and will likely have no impact on whether a winding-up order would ultimately be made, where that winding-up hearing would likely be adjourned to allow the appeal to be determined.

9. [29]

   I bear in mind that Ms Bailey, in submissions, addressed other issues, including the ordinary entitlement of a plaintiff to its judgment; the detriment to the Plaintiffs here, of being deprived of their judgment by a stay; and, in oral submissions, the limits to the undertaking offered by Westwood, which include, most significantly, the fact that the "ordinary course of business" exception has the capacity to allow transactions which would significantly erode the Plaintiffs' position.

Orders

1. [30]

   For all of these reasons, I am not satisfied that a stay should be granted. The Notice of Motion filed on 14 January 2026 is dismissed with costs.