B & the Estate of Coburn
[2020] FamCA 548
•9 July 2020
FAMILY COURT OF AUSTRALIA
| B & THE ESTATE OF COBURN AND ORS | [2020] FamCA 548 |
| FAMILY LAW – PRACTICE AND PROCEDURE – Stay of costs order – Where an order was made that the applicant (a barrister) be jointly and severally liable with the second respondent (a solicitor) for the costs of the first respondent fixed in the sum of $100,000 – Where the applicant seeks a stay of that order pending appeal – Where the first respondent does not consent to a stay – Consideration of the principles relevant to an application for a stay pending appeal to an intermediate appellate court – Where the onus is on the applicant to establish a proper basis for the stay – Where the applicant has failed to establish such a basis – Where the application for a stay is dismissed. |
| Family Law Act 1975 (Cth) Family Law Rules 2004 (Cth), r 22.11 |
| Aldridge & Keaton (Stay Appeal) [2009] FamCAFC 106 Alexander & Ors v Cambridge Credit Corporation (1985) 2 NSWLR 685 Anderson & Senior (Stay Appeal) (2013) 50 Fam LR 21 Australian Workers' Union v Pilkington (Aust) Ltd [2000] 101 FCR 35 Berry v Green (Unreported, Supreme Court of Queensland, de Jersey CJ, McMurdo P and Demack J, 7 June 1999) Bryant v Commonwealth Bank of Australia (1996) 134 ALR 460 Cook’s Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd [2008] 2 Qd R 453 Croney v Nand [1999] 2 Qd R 342 Friscioni & Friscioni [2009] FamCAFC 43 Griffiths v Australian Postal Commission (1987) 87 FLR 139 Gronow & Gronow [1979] 144 CLR 513 House v The King (1936) 55 CLR 499 Jennings Construction Limited v Burgundy Royale Investments Pty Limited (1986) 161 CLR Maher v Commonwealth Bank of Australia [2008] VSCA 122 Pilkvist & Coburn (Deceased) [2020] FamCA 92 Re Middle Harbour Investments Ltd (in liq) (Unreported, Supreme Court of New South Wales, Moffitt P, Glass and Mahoney JJA, 15 December 1976) Robinson and Higginbotham (1991) FLC 92-209 Stewart v Tsueneaki [2012] ACTSC 159 Tabtill Pty Ltd v Creswick [2011] QCA 66 Virgtel Ltd and Anor v Zabusky and Ors (No 2) [2009] QCA 349 |
| APPLICANT: | Ms B |
| 1st RESPONDENT: | Coburn and Mr E as legal personal representatives of the Estate of Coburn & Ors |
| 2nd RESPONDENT: | Ms F |
| 3rd RESPONDENT: | Ms Pilkvist |
| FILE NUMBER: | BRC | 2525 | of | 2009 |
| DATE DELIVERED: | 9 July 2020 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Carew J |
| HEARING DATE: | 29 June 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr G. Page QC by direct brief |
| SOLICITOR FOR THE 1ST RESPONDENT: | Mr P. Sheehy |
| FOR THE 2ND RESPONDENT: | Appearance excused |
| FOR THE 3RD RESPONDENT: | Appearance excused |
Order
The application for a stay of paragraph 2 of the Order made 19 February 2020 be dismissed.
The names of the legal practitioners who are the subject of the Order made 19 February 2020 are to be [anonymised] from the reasons for judgment dated 9 July 2020 prior to any public dissemination.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym B & the Estate of Coburn has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: BRC 2525 of 2009
| Ms B |
Applicant
And
| Coburn and Mr E as legal personal representatives of the Estate of Coburn & Ors |
First Respondent
And
Ms F
Second Respondent
And
Ms Pilkvist
Third Respondent
REASONS FOR JUDGMENT
On 19 February 2020, I made an order (“the costs order”) that the applicant, a barrister, be jointly and severally liable with the second respondent, a solicitor, for the costs of the first respondent fixed in the sum of $100,000.
The applicant filed a Notice of Appeal from that decision on 17 March 2020 and, on 17 June 2020, filed an Application in a Case seeking that the costs order be stayed pending the determination of the appeal.
The second and third respondents’ appearance was excused. The second respondent nevertheless filed a document in which she purported to provide submissions in support of the application.
The first respondent does not consent to the stay of the costs order.
For the reasons below, the application for a stay will be dismissed.
brief background
The applicant and second respondent represented the third respondent in proceedings involving an application by the third respondent for a property settlement order arising out of an alleged de facto relationship with Mr Coburn (deceased), whose legal personal representatives are the first respondent. The third respondent’s application was dismissed and a declaration was made that a de facto relationship never existed. Significantly, it was found that the Court did not have jurisdiction to make a property order even if there had been a de facto relationship because, according to the third respondent’s own evidence, the relationship had not broken down as required by s 90SM of the Family Law Act 1975 (Cth) (“the Act”).
In granting the first respondent’s application for costs against the applicant the following finding was made:
52. [Ms B’s] breach of the duty imposed by r 1.08(1)(a) to ensure that the Court had the power to make the order sought was serious. [Ms B’s] failure to give proper consideration (or any consideration at all) to the futility of the claim or, if she did, to withdraw from the proceedings if her advice was not taken, amounts to improper or unreasonable conduct. The circumstances as they involve [Ms B] are of an exceptional kind and warrant an award of costs on an indemnity basis.
In the absence of any submissions cavilling with the quantum of costs sought by the first respondent, and in the absence of any evidence relating to her financial circumstances (other than that she had been called to the Queensland Bar in 1987), a costs order was made against the applicant. Finally, in the absence of any submissions as to the proportion of costs that should be met by each of the applicant and second respondent, an order was made in the terms sought by the first respondent, namely, that the applicant and second respondent should bear those costs jointly and severally.
No demand for payment of the costs has been made against either the applicant or second respondent. No proceedings for enforcement have been commenced. There is no indication that any demand is likely to be made pending the determination of the appeal.
Applicant’s case for a stay
Mr Page QC for the applicant submits that the stay should be granted for the following “three main reasons”:
a)The applicant’s appeal would otherwise, in part, be rendered nugatory;
b)The appellant has an arguable case on appeal; and
c)The balance of convenience favours the granting of a stay.
In support of the submission that the appeal, in part, would be rendered nugatory it is argued as follows:
The orders made in this matter require a payment of $100,000 by the applicant. No conditions have been suggested by the respondent that such monies if paid would be sequested (sic) in the solicitor’s trust account pending the appeal. No evidence was given by the applicant as to her ability to pay the sum ordered. No evidence was sought as to the likelihood of the applicant borrowing such funds. If she did that, she would pay interest on such borrowed sum. In the event that the appeal was successful given that the order purported to be made in terms of section 117 of the Family Law Act it must be a given fact that such sum would be dispensed immediately to pay the costs, it and any interest would not be recoverable. There was before the Court no evidence of the financial circumstances of the respondents.
As to the grounds and merits of the appeal it is submitted by Mr Page QC:
a)Undertaking “some preliminary assessment of the strength of the appeal” “does not involve the judge hearing an application for a stay of the order to take each of the assertions and consider whether they will succeed as a basis for the appeal”;
b)There is “ample evidence to show that the applicant has an arguable case based on the grounds of appeal”;
c)No reasons were given for finding that the applicant had acted improperly or unreasonably; and
d)There was no proper consideration of the factors required to be considered pursuant to s 117(2A) of the Act, in particular, the applicant’s financial circumstances, and in the absence of evidence the applicant should have been required by the Court to provide it before a decision was made.
Lastly, as to the balance of convenience, it is submitted by Mr Page QC:
The application of this basis is clear when considering the question of whether there is weight in the argument that a failure to grant a stay of the order might render the appeal nugatory.
This is an instance where the financial circumstances of the applicant were not considered. It will be submitted that the orders were made as a punitive step rather than a compensatory measure. It left the applicant with no knowledge as to the attitude of the other person bound by the order to make any contribution to the penalty ordered. That person has not appealed from the orders made and her attitude to this application is unknown.[1]
Regard under this head must be had to the terms of Rule 19.10 of the Family Law Rules. Particular attention needs to be given to the bases on which costs might be ordered against a lawyer and the extent of the order possible to be made.
…
The [first] respondent cannot show any real prejudice in there being a delay in in (sic) their ability to enforce the order.
[1] Mr Page QC was not initially aware that the second respondent had in fact filed a Cross-Appeal on 2 April 2020 and that she had filed a document indicating her support for the stay.
First respondent’s submissions
While not consenting to the application for a stay it could not be said there was any strong opposition to it. In short, in circumstances where no demand for payment of the costs order has been made and where Mr Sheehy, for the first respondent, informed the Court that he had no instructions to make any demand, the first respondent submits only that the Court could not be satisfied that “a sufficient evidentiary basis has been made out for granting of the stay”.
Mr Sheehy further submitted that if enforcement proceedings were commenced in a State court, the fact that an appeal is pending would be required to be disclosed.
Second respondent’s submissions
While excused from appearance, the second respondent supports the granting of the stay and in her written ‘case summary’ submits the stay should be granted for the following reasons:
a)That the matter is now subject to appeal;[2]
b)That the cost of $100,000.00 requires court assistance in determining the proportionality of the liability between Ms B and Ms F.[3] As per order stated in paragraph 2 of the Federal Circuit Court of Australia (sic) Order dated 19 February 2020.
[Ms F] and [Ms B] be jointly and severally liable for the cost of the respondent fixed in the sum of $100,000.00.
c)That the decision of her honor (sic) to arbitrarily charging (sic) $100,000 for the legal cost (sic) when at the court trial the respondent (sic) for Mr Coburn advised the cost was lesser (sic).[4]
[2] As r 22.11 of the Family Law Rules 2004 (Cth) makes clear, the mere filing of a Notice of Appeal does not stay an order.
[3] No submissions were made by the applicant or second respondent as to proportion of costs that should be borne by each of them despite the first respondent seeking an order that they be jointly and severally liable.
[4] This submission is incorrect. The costs awarded were in fact less than the sum sought by the first respondent.
Discussion
The application for a stay is brought pursuant to r 22.11 of the Family Law Rules 2004 (Cth) (“the Rules”) which provides as follows:
(1)The filing of a Notice of Appeal does not stay the operation or enforcement of the order appealed from, unless otherwise provided by a legislative provision.
(2)If an appeal has been started, or a party has applied for leave to appeal against an order, any party may apply for an order staying the operation or enforcement of all, or part, of the order to which the appeal or application relates.
(3)An Application for a stay must be filed in the Registry in which the order under appeal was made and be heard by the Judge, Federal Magistrate or Magistrate who made the order under appeal.
The application filed on 17 June 2020 does not identify the order sought to be stayed seeking only the following:
Orders of of (sic) the Honourable Justice Carew be stayed pending the determination of the appeal filed 17 March 2020.
It is common ground, however, that the relevant order was made on 19 February 2020 and that only paragraph 2 of that order is the subject of the stay application. Paragraph 2 of the costs order provides as follows:
[Ms F] and [Ms B] be jointly and severally liable for the costs of the respondent fixed in the sum of $100,000.
It is often stated that the principles for granting a stay pending appeal are well settled and the following quote from Aldridge & Keaton (Stay Appeal)[5] (Bryant CJ, Boland, Crisford JJ) is most often cited in support of that proposition:
[5] [2009] FamCAFC 106 (“Aldridge & Keaton”) (a case involving a stay pending appeal to the Full Court of the Family Court).
18. The principles to be applied in determining an application for a stay of orders both in the general law and in respect of parenting proceedings are also well known (see The Commissioner of Taxation of the Commonwealth of Australia v Myer Emporium Limited [No.1](1986) 160 CLR 220 at 222; Alexander v Cambridge Credit Corporation (1985) 2 NSW LR 685; Jennings Construction Limited v Burgundy Royale Investments Pty Limited(1986) 161 CLR 681; Clemett & Clemett(1981) FLC 91-013; JRN & KEN v IEG & BLG(1998) 72 ALJR 1329 at 1332). The authorities stress the discretionary nature of the application which should be determined on its merits. Principles relevant to this matter include the following:
·the onus to establish a proper basis for the stay is on the applicant for the stay. However it is not necessary for the applicant to demonstrate any “special” or “exceptional” circumstances;
·a person who has obtained a judgment is entitled to the benefit of that judgment;
·a person who has obtained a judgment is entitled to presume the judgment is correct;
·the mere filing of an appeal is insufficient to grant a stay;
·the bona fides of the applicant;
·a stay may be granted on terms that are fair to all parties - this may involve a court weighing the balance of convenience and the competing rights of the parties;
·a weighing of the risk that an appeal may be rendered nugatory if a stay is not granted – this will be a substantial factor in determining whether it will be appropriate to grant a stay;
·some preliminary assessment of the strength of the proposed appeal – whether the appellant has an arguable case;
·the desirability of limiting the frequency of any change in a child’s living arrangements;
·the period of time in which the appeal can be heard and whether existing satisfactory arrangements may support the granting of the stay for a short period of time; and
·the best interests of the child the subject of the proceedings are a significant consideration.
While I am of course bound by the Full Court, and respectfully agree with the principles therein set out, I am somewhat troubled by the authorities cited in support of the principle that it is not necessary to establish a “special” or “exceptional” circumstance for the granting of a stay and the impression perhaps created that there is no difference between an application for a stay pending appeal to an intermediate appellate court and an application for special leave to appeal to the High Court.
As pointed out by the Full Court (Thackray, Ainslie-Wallace, Murphy JJ) in Anderson & Senior (Stay Appeal),[6] the High Court in Jennings Construction Limited v Burgundy Royale Investments Pty Limited[7] said the opposite to that for which it was cited in Aldridge & Keaton:
35. Although the matter was not the subject of any argument before us, the highlighted proposition [that it is not necessary for the applicant to demonstrate special or exceptional circumstances] appears inconsistent with authority. For example, it is inconsistent with one of the cases to which his Honour referred, namely Jennings Construction Limited v Burgundy Royale Investments Pty Ltd (supra), where Brennan J said at 684:
A stay to preserve the subject-matter of litigation pending an application for special leave to appeal is an extraordinary jurisdiction and exceptional circumstances must be shown before its exercise is warranted.
[6] (2013) 50 Fam LR 21 at 28, [35] (“Anderson & Senior”) (a case involving an application for a stay pending special leave).
[7] (1986) 161 CLR 681.
The Full Court of the Federal Court in Australian Workers' Union v Pilkington (Aust) Ltd [8] (Goldberg, Finkelstein and Weinberg JJ) discussed the test to be applied when considering a stay pending appeal to an intermediate appellate court compared with a stay pending a special leave application to the High Court and said:
[8] [2000] 101 FCR 35 at 38–39, [9]–[12] per Goldberg and Weinberg JJ; See also at 42–43, [30] per Finkelstein J. See also Bryant v Commonwealth Bank of Australia (1996) 134 ALR 460 at 463–464 per Kirby J.
9.The general principles which govern an application for a stay pending the hearing and determination of an appeal in these circumstances are well settled. A party seeking such a stay is not entitled to the stay as of right. It is clear from O52 r17 that the filing of a notice of appeal, of itself, does not warrant or justify the grant of the stay: see also Alexander v Cambridge Credit Corp Ltd (1985) 2 NSWLR 685 at 694.
10.The Court is given a discretion which is only circumscribed by the need to be satisfied that there be a reason sufficient in the circumstances to warrant the exercise of the discretion in favour of the grant of the stay. In Powerflex Services Pty Ltd v Data Access Corp (1996) 67 FCR 65 Burchett J delivering the reasons of the Full Court (Burchett, Heerey and Whitlam JJ) followed the Court of Appeal in New South Wales in Alexander v Cambridge Credit Corp Ltd (supra), concluding that special circumstances did not have to be shown. The Court did not follow what it had regarded as a more stringent test applied in the Supreme Court of Victoria: see Cellante v G Kallis Industries Pty Ltd [1991] 2 VR 653; Lagarna Pty Ltd v Bridge Wholesale Acceptance Corp (Aust) Ltd [1995] 1 VR 150.
11.In Philip Morris (Aust) Ltd v Nixon [1999] FCA 1281 the Full Court of the Federal Court (Sackville, Hely and Gyles JJ) said at [17]:
"The Court has a discretion whether or not to grant the stay, and if so, as to the terms that will be fair. In the exercise of the Court's discretion, it weighs considerations such as the balance of convenience and the competing rights of the parties, in particular whether prejudice will be caused by reason of the grant or withholding of a stay."
Although special circumstances do not have to be shown it is important to recognise that a sufficient reason for the stay must be established.
12.An important factor in considering whether a stay should be granted pending an appeal, especially when the granting of the stay will be to deny the party seeking the injunction the benefit of the primary order in part, is whether the stay is necessary to preserve the subject-matter of the litigation. Such a consideration has been regarded as relevant by the High Court in the context of applications for a stay pending the hearing of applications for special leave to appeal: Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No 1) (1986) 161 CLR 681 at 683-684; Haydon v Chivell (1999) 165 ALR 1 at 3. Authorities in the context of applications for special leave to appeal to the High Court are not directly applicable in the present circumstances as it has been established in such cases that exceptional circumstances must be shown before the exercise of the jurisdiction is warranted.
[emphasis added]
In Tabtill Pty Ltd v Creswick,[9] the Queensland Court of Appeal (Fraser JA) said, when considering an application for a stay of an order for specific performance made in the trial division of the Supreme Court, “[t]he overwhelming weight of authority in this court rejects the test that the applicant must show “special or exceptional circumstances””.[10] His Honour cited Keane JA (with whom McMurdo P and White AJA agreed) in Cook’s Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd[11]in which his Honour said:
The decision of this Court in Berry v Green suggests that it is not necessary for an applicant for a stay pending appeal to show “special or exceptional circumstances” which warrant the grant of the stay. Nevertheless, it will not be appropriate to grant a stay unless a sufficient basis is shown to outweigh the considerations 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. Generally speaking, courts should not be disposed to delay the enforcement of court orders. The fundamental justification for staying judicial orders pending appeal is to ensure that the orders which might ultimately be made by the courts are fully effective: the power to grant a stay should not be exercised merely because immediate compliance with orders of the court is inconvenient for the party which has been unsuccessful in the litigation.
[footnotes omitted]
[9] [2011] QCA 66.
[10] Ibid at [33].
[11] [2008] 2 Qd R 453 at [12].
In Berry v Green,[12] the Queensland Court of Appeal (de Jersey CJ with whom McMurdo P and Demack J agreed) refused an application for a stay of a District Court damages judgment and said:
The relevant approach as described by recent decisions of this Court is simply whether it is appropriate to grant a stay pending appeal. There has been departure from the previous position which expressly required the demonstration of special or exceptional circumstances. Of course it might be said the prescription of "appropriateness" as the test is rather unhelpful. But it is plain that there must be some particular feature about the case which warrants departure from what I have referred to as the fundamental or prima facie position.
[12] (Unreported, Supreme Court of Queensland, de Jersey CJ, McMurdo P and Demack J, 7 June 1999).
However, in Virgtel Ltd and Anor v Zabusky and Ors (No 2),[13] the Queensland Court of Appeal (McMurdo P with whom Mullins and Philippides JJ agreed) dismissed an appeal against a refusal to grant a stay of costs orders made in ongoing Supreme Court proceedings and said:
19.… The costs orders the subject of this appeal are final orders. It follows that, ordinarily, the Virgtel companies are entitled to the “fruits of their victory” by enforcing those final costs orders before the conclusion of the action, unless the appellants show “special or exceptional circumstances” warranting a stay: Alexander v Cambridge Credit Corp Ltd; Croney v Nand. The onus is on the appellants to demonstrate why the court should grant the stay and deny the Virgtel companies the benefit of the orders in their favour.
[footnotes omitted]
[13] [2009] QCA 349. The refusal to grant the stay was substantially based on the delay in bringing the application. The primary judge did not apply a test requiring special or exceptional circumstances.
Respectfully, the cited authorities (Alexander v Cambridge Credit Corp (1985) 2 NSWLR 685 and Croney v Nand [1999] 2 Qd R 342) do not support the proposition that special or exceptional circumstances are required.
In Alexander & Ors v Cambridge Credit Corporation,[14] the New South Wales Court of Appeal (Kirby P, Hope and McHugh JJA ) said:
Although it is true that, in a number of more recent decisions of the Court, reference has been made to the requirement of “exceptional” and “special” circumstances, and although the same requirement appears still to be observed in Victoria, the general practice of the Court conforms more closely to that stated by Mahoney JA. In our opinion it is not necessary for the grant of a stay that special or exceptional circumstances should be made out. It is sufficient that the applicant for the stay demonstrates a reason or an appropriate case to warrant the exercise of discretion in his favour.
There are other principles to be kept in mind. The onus is upon the applicant to demonstrate a proper basis for a stay that will be fair to all parties: Trlin. The mere filing of an appeal will not, of itself, provide a reason or demonstrate an appropriate case, nor will it discharge the onus which the applicant bears: see Supreme Court Rules, Pt 51, r 10; Waller v Todorovic.
(footnotes omitted)
[14] (1985) 2 NSWLR 685 at 694.
In Croney v Nand,[15] the Queensland Court of Appeal (McPherson, Pincus JJA and Jones J) considered the applicable principles when granting a stay of execution of a damages award made in the District Court and said:
33.On its face the discretion to grant a stay is unfettered. Over time various epithets, such as “special” or “exceptional”, have been used to describe the circumstances which call for the exercise of discretion. This Court has accepted as correct the test that the applicant bears the onus of showing that it is an “appropriate” case for a stay to be granted.
(citations omitted)
[15] [1999] 2 Qd R 342.
The position in Victoria appears at odds with elsewhere, at least in so far as the terminology used. The Victorian Court of Appeal in Maher v Commonwealth Bank of Australia[16] (Dodds-Streeton JA with whom Redlich JA agreed) adopted the ‘special or exceptional’ circumstance test when setting out the relevant principles for granting a stay pending appeal to an intermediate appellate court as follows:
[16] [2008] VSCA 122. Applied in ASEA 1 Pty Ltd v Rudyard Pty Ltd [2020] VSCA 122 at [13].
19.The principles governing a stay of execution of judgment pending the hearing and determination of an appeal are well established.
20.Prima facie, a successful party is entitled to the benefit of the judgment obtained below and the presumption that the judgment is correct. The applicant for a stay therefore bears the onus of demonstrating that a stay is justified.
21.In Cellante and Ors v G Kallis Industries Pty Ltd (Cellante), Young CJ (with whom Brooking J agreed), cited with approval the observation of Mahoney JA (with whom Moffit P and Glass JA agreed) in Re Middle Harbour Investments Ltd (in liq) that:
… 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.
22.Young CJ concluded that an applicant for a stay under r 66.16 must show special or exceptional circumstances to take the case out of the general rule that an appeal does not operate as a stay.
23.The Court has a wide discretion, which is not circumscribed by rigid rules. It should take into account all the circumstances of the case.
24.In Scarborough’s v Lew’s Junction Stores Pty Ltd (approved in Cellante), Adam J recognized that special circumstances might exist where a successful appellant would be deprived of the fruits of the appeal if a stay of execution were not granted. In such a case, the appeal might be rendered nugatory.
25.In Cellante, Young CJ stated that special circumstances would ‘exist where for whatever reason, there is a real risk that it will not be possible for a successful appellant to be restored substantially to his former position if the judgment against him is executed’.
26.An appeal could be rendered nugatory in that sense in a variety of ways. The test could be satisfied where a defendant appeals and there is a real risk that the plaintiff would remove the proceeds of the judgment from the jurisdiction. Similarly, special circumstances may be recognised where, for example, although the respondent is solvent, the subject matter of the appeal is, in substance, irreplaceable.
27.The prospect that the appeal may be rendered nugatory must be balanced against the principle that the successful party is entitled to the fruits of the judgment. A stay should not be granted unless there is at least an arguable ground of appeal, although otherwise speculation as to the ultimate prospects of success is usually inappropriate.
(footnotes omitted)
In the Australian Capital Territory, Harper M in Stewart v Tsueneaki[17] helpfully reviewed a number of decisions and said:
28.There is some inconsistency in the decided cases as to what an applicant needs to demonstrate in order to justify a stay. In Federal Cmr of Taxation v Myer Emporium Ltd (No 1) (1986) 160 CLR 220 at 222 Dawson J expressed the opinion that the normal rule is that after judgment a litigant is entitled to the fruits of the litigation and that special circumstances are required to justify a departure from that rule. Similarly in Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (1986) 161 CLR 681 at 684 Brennan J described the jurisdiction to grant a stay as “extraordinary” and exercisable only in “exceptional circumstances”. It may be that those decisions should be seen as limited to appeals to the High Court of Australia where there has already been an intermediate appeal.
29.At State level, the New South Wales Court of Appeal said in Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed)(1985) 2 NSWLR 685 that it was not necessary for an applicant for a stay to show special or exceptional circumstances and that it was sufficient for the applicant to demonstrate a reason or an appropriate case to warrant the exercise of the discretion in its favour. That approach was referred to with apparent approval by Besanko J in Lewincamp.
30.The Court of Appeal in Victoria took a contrary view in Cellante v G Kallis Industries Ltd[1991] 2 VR 653, that an applicant had to show special or exceptional circumstances. In this court, Miles CJ said in Griffiths v Australian Postal Commission (1987) 87 FLR 139 at 141 that it was “misleading and probably putting it too high” to say that special circumstances were required before the court would grant a stay. His Honour thought that the distinction between the NSW and Victorian lines of authority was more apparent than real, and that whilst the applicant had the onus of establishing grounds for a stay, the discretion to grant a stay was wide and aimed at achieving justice in all the circumstances.
31.Stays have been granted where it has appeared that the respondent would be unable to refund the judgment sum if the appeal succeeded, for example in Alexander v Cambridge Corporation Ltd. The court also said in Alexander that on an application for a stay the court does not estimate the applicant’s chances of success but can assess whether the applicant has an arguable case.
[17][2012] ACTSC 159 (“Stewart”).
In summary, a review of the relevant authorities supports the following conclusions:
a)The test to be applied when considering an application for a stay of an order pending determination of an appeal to an intermediate appellate court does not require a ‘special or exceptional’ circumstance;
b)An applicant for a stay of an order pending determination of an appeal to an intermediate appellate court must establish a “proper” or “appropriate” or “sufficient” basis for granting a stay;
c)A more stringent test is applicable for the stay of an order pending an application for special leave to appeal to the High Court than to an appeal to an intermediate appellate court i.e. a special or exceptional circumstance is generally required;
d)There has, at times, been a disparity in the test applied by intermediate appellate courts e.g. at times requiring the establishment of a special or exceptional circumstance and at other times not;
e)While Victoria continues to apply the ‘special or exceptional’ circumstance test, the difference in the test is “more apparent than real”;[18] and
f)“The fundamental justification for staying judicial orders pending appeal is to ensure that the orders which might ultimately be made by the courts are fully effective: the power to grant a stay should not be exercised merely because immediate compliance with orders of the court is inconvenient for the party which has been unsuccessful in the litigation”.[19]
[18]Stewart (n 17) discussing Griffiths v Australian Postal Commission (1987) 87 FLR 139 at 141 per Miles CJ.
[19] Cook’s Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd [2008] 2 Qd R 453 at [12] per Keane JA.
Conclusion
The tensions that arise in any stay application recognise the competing policy interests at play, namely, that a successful litigant should not be deprived of the “fruits of the litigation” on the one hand, and the maintenance of the status quo pending appeal when it is appropriate to do so on the other.
The grant of a stay is “wholly discretionary and the circumstances that would justify an order for a stay depend on the circumstances of each case. The onus of establishing a proper basis for a stay is on the applicant for the stay”.[20]
[20]Friscioni & Friscioni [2009] FamCAFC 43 at [54].
The strongest ground for granting a stay is usually that there is a real risk that to deny the stay would render a successful appeal nugatory, or would make it impossible or impractical to restore the situation presently existing. There are, of course, other considerations to take into account including:
a)Any delay in bringing the application for a stay;
b)The grounds and merits of the appeal;
c)When the appeal will be heard;
d)The bona fides of the applicant for a stay; and
e)Where the balance of convenience lies.
This is not a case where the costs, if paid, would be impossible or even difficult to recover given the financial means of the first respondent. Accordingly, I am not satisfied that a refusal to grant the stay would render a successful appeal nugatory.
The delay in the application for a stay is unexplained but, as the first respondent takes no issue with the delay, I place little weight on this fact.
A costs order is a discretionary decision and the limits on interference by an appellate court are well known.[21] It is not sufficient that an appellate court considers that it would have reached a different outcome. It must be established that there has been some error of principle in the exercise of the discretion, or that there has been a failure to take into account some relevant matter, or that some irrelevant matter has been taken into account. It may not be possible to identify how the decision was made but if it is plainly wrong, it may be set aside.[22] In the current case, the grounds of appeal are as follows:
[21] See, eg, Robinson and Higginbotham (1991) FLC 92-209 at 78,417 per Nygh J.
[22]House v The King (1936) 55 CLR 499 at 504-505.
1. That in ordering that the appellant be jointly and severally liable for the payment of the costs fixed at $100,000 the trial judge erred in that she:
(a) Failed to give any or any adequate reasons for the order;
(b)Failed to require the respondent to disclose her financial circumstances to enable the proper consideration of section 117(2A)(a);
(c)Failed to take into proper consideration that the appellant was retained on or about 2 April 2019 which was approximately 3 years after the commencement of the relevant proceedings including following amendments to the relevant application;
(d)Failed to take into account the fact that the evidence at trial from the applicant disavowing that previous evidence was that there had been a breakdown of the de facto relationship was not disclosed to the appellant at any time;
(e)Made a finding that each iteration of the applications were prepared by the applicant's solicitor which included the further amendment on 10 April 2019 following the case management hearing on 2 April 2019;
(f)Made a finding that the evidence at trial was consistent with each iteration of the application without regard to the amendment made on 10 April 2019.
(g)Made the order on the basis of a punitive process having regard to the financial circumstances of the respondent.
While it is not the role of a judge hearing an application for a stay to conduct the hearing as if it were the appeal, it is nevertheless necessary to consider the grounds of appeal and its merits.
As to the first ground of appeal, Mr Page QC submits that the reasons were inadequate as they failed to identify any basis upon which an order could be made against the applicant and that there were no reasons provided for finding that Ms B had acted improperly or unreasonably.
Contrary to those submissions, the reasons for judgment[23] include the following:
[23]Pilkvist& Coburn (Deceased) [2020] FamCA 92.
34. In relation to the claim against the applicant’s solicitor and barrister, it is submitted by the respondent that the best that can be said for the applicant’s legal representatives is that they were ignorant of the law, but ignorance is no defence to a claim for costs, particularly in circumstances where the jurisdictional requirement, namely, a breakdown of the de facto relationship, was brought to the attention of the legal representatives during a case management hearing on 2 April 2019. The conduct of the legal representatives on that occasion led to the expression of a concern that the legal representatives may have been attempting “to fashion the evidence to create a jurisdictional basis for a claim that did not, in fact, exist”. It is submitted that a finding on that issue is not necessary to found a costs order against the legal representatives. I agree.
…
38.[Ms B] refers to an attachment to her submissions described as “my updated agenda for a conference with the solicitor and the client”. [Ms B] submits that on an unspecified date it was “clearly established with the client that the de facto relationship ended when [the respondent] was removed from his home to the Nursing home”. I note that the respondent was removed by third parties from his home on 23 July 2014 and taken to hospital. He was moved to a nursing home on 29 July 2014.
…
40. … it is curious, given [Ms B’s] submission as to when the end of the relationship was “clearly established”, that the applicant’s evidence in chief was not corrected at the commencement of the trial to reflect that. It is also curious that when [Ms B] sought to amend the Initiating Application at the end of the trial it was to state that the end of the relationship was the 26 July 2014 i.e. not the date when the respondent was removed from the home nor the date he commenced to live in a nursing home. The application for leave was not granted as it was contrary to the applicant’s evidence. I further note that when the matter was before me for a case management hearing on 2 April 2019, [Ms B] initially submitted that the relationship was still ongoing as at 2 April 2019 and moments later (when it was brought to her attention by opposing counsel that the Court would have no jurisdiction if the relationship were ongoing) submitted that the parties separated on 6 December 2016 i.e. five months after the proceedings were commenced. When asked by me what happened on 6 December 2016, [Ms B] said that was when separation occurred. Nothing in the applicant’s evidence at trial supports the submission that the parties separated on 6 December 2016 and no attempt to clarify her representations to the Court on 2 April 2019 were forthcoming from [Ms B].
41. [Ms B’s] written submissions conclude with the following submission:
I submit that my conduct shows no evidence of negligence, there was no improper conduct on my part, nor was there other misconduct or default that would merit an order against me. I had no knowledge that the client would give completely different evidence at the trial.
(emphasis added)
42. A difficulty with [Ms B’s] submission is that the applicant’s oral evidence during cross-examination at trial was consistent with her evidence in chief and consistent with her statements in each of the four iterations of the Initiating Application i.e. there was no final separation. In other words the applicant did not give “completely different evidence at trial”.
…
44. A costs order can be made against a lawyer where they have failed to comply with the Rules or where their conduct has been improper or unreasonable. There is no requirement for a finding of negligence or professional misconduct or default. Of course, not every failure to comply with the Rules would warrant a costs order. In my view, it would only be in cases where the failure is clear and the consequences serious that costs against a lawyer would be warranted. Likewise, not every example of a lawyer acting improperly or unreasonably would necessarily warrant a costs order. The discretion to award costs should be exercised with caution bearing in mind the competing public policy interests. I am also mindful that the applicant has not waived legal professional privilege and in those circumstances, not every relevant fact may be known to me.
45. However, the Initiating Applications in their various iterations do not establish an entitlement to advance the claim at law. I do not accept that this fundamental deficiency can be excused as a mere error when the evidence in chief of the applicant also failed to establish the legal entitlement to advance the claim. The applicant’s evidence did not change during the proceedings. To the contrary, it remained consistent.
…
49. [Ms B] was not retained (as far as I know) at the time of commencement of the proceedings but she was involved in the case on 2 April 2019 at a case management hearing before me. [Ms B’s] conduct during the case management hearing on that day was troubling and the circumstances of that hearing are set out in my earlier reasons for judgement which should be read with these reasons. [Ms B] has never adequately explained the conflicting statements she made on that date. While I am conscious that the applicant has not waived legal professional privilege and therefore approach this matter with some caution, the submissions made by [Ms B] on 2 April 2019, namely, that the parties separated on 6 December 2016 were not consistent with the applicant’s evidence at trial. The applicant’s evidence at trial was however consistent with the first version submitted by [Ms B] on 2 April 2019, namely, the relationship was still intact.
50. In [Ms B’s] written submissions dated 21 November 2019 she submits that “it was clearly established” on an undisclosed date during a conference with the solicitor and client that the de facto relationship ended when the respondent “was removed from his home to the Nursing Home”. The applicant’s evidence was not consistent with that submission. In any event, the respondent was removed from the home on 23 July 2014 and commenced to live in the nursing home on 29 July 2014 yet at the end of the trial [Ms B] suggested the date of separation was 26 July 2014 (when her client was initially evicted from the home), a date inconsistent with what [Ms B] now says was “clearly established” prior to trial.
51. Although [Ms B] submits that she considered withdrawing during the trial, it could not be said that her attempts to do so were made within a reasonable time, given what she knew or ought to have known at least as early as 2 April 2019, namely, that the Court did not have the power to make the order sought. The fact that [Ms B] decided not to withdraw because she contends that [Ms F] swore at her and threatened to sue her for negligence does little to commend her or indeed [Ms F’s] (if accurately portrayed) professionalism. [Ms B] also incorrectly submits that the applicant’s case changed during the trial. As already noted, the applicant’s evidence as contained in her trial affidavit, her statements on each of the four iterations of the Initiating Applications, and her oral evidence remained consistent.
52. [Ms B’s] breach of the duty imposed by r 1.08(1)(a) to ensure that the Court had the power to make the order sought was serious. [Ms B’s] failure to give proper consideration (or any consideration at all) to the futility of the claim or, if she did, to withdraw from the proceedings if her advice was not taken, amounts to improper or unreasonable conduct. The circumstances as they involve [Ms B] are of an exceptional kind and warrant an award of costs on an indemnity basis.
As to the second ground of appeal, Mr Page QC submits that the Court should have “required” the applicant to provide evidence of her financial circumstances prior to making a costs order against her and that the failure to do so was an appellable error. No authority for that proposition was forthcoming.
As to the third ground of appeal, the fact that the applicant commenced to act on behalf of the third respondent (as far as I was aware) well after the proceedings were commenced was not only considered, but the reasons address the applicant’s particular conduct after that date. This ground really is a weight argument and the difficulty with such a ground is notorious.[24]
[24]Gronow & Gronow [1979] 144 CLR 513 at 519-520.
It is not at all clear what evidence is being referred to that supports ground four, namely, “disavowing that previous evidence was that there had been a breakdown of the de facto relationship was not disclosed to the appellant at any time”. The findings were that the third respondent consistently stated that there had been no breakdown of the relationship.
Mr Page QC conceded that the fifth ground of appeal is not in fact a ground of appeal at all.
The sixth ground of appeal appears to overlook that the evidence did not support the amendment made on 10 April 2019.
The last ground of appeal was unsupported by any evidence or, indeed, any submission. Mr Page QC said simply that he could not see that the applicant had done anything wrong.
I am not persuaded that the applicant has established an arguable case on appeal.
The appeal, I am told, will likely be heard by the Full Court in the December sittings later this year.
There is no suggestion that the application for a stay is made other than bona fides.
As to the balance of convenience, Mr Page QC invited the Court to speculate about the possible consequences for the applicant if she were required to pay the costs order e.g. she might have to borrow the money and would incur interest which would not be recoverable. Curiously, the applicant elected not to provide any evidence as to her financial circumstances at the time the costs application was considered, nor in her affidavit filed in support of the stay application. If it be the case that she has insufficient funds to pay the costs and would have to borrow funds, one might have expected evidence to that effect. As the New South Wales Court of Appeal said in Re Middle Harbour Investments Ltd (in liq) (Mahoney JA with whom Moffitt P and Glass JA agreed):[25]
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 the 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.
[25] (Unreported, Supreme Court of New South Wales, Moffitt P, Glass and Mahoney JJA, 15 December 1976)
In the absence of evidence I am not prepared to speculate about any prejudice the applicant may experience.
The second respondent’s submissions do not advance the argument in support of the granting of the stay.
Accordingly, I accept the first respondent’s submission that the applicant has failed to establish a proper or appropriate or sufficient basis for a stay and her application will be dismissed.
I certify that the preceding fifty-four (54) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Carew delivered on 9 July 2020.
Associate:
Date: 9.07.2020
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