Scott v Kogarah Municipal Council

[1988] NSWLEC 3

Land and Environment Court

of New South Wales

CITATION:	Scott & Ors v Kogarah Municipal Council & Anor [1988] NSWLEC 3
PARTIES:	APPLICANT Scott & Ors RESPONDENT Kogarah Municipal Council & Anor
FILE NUMBER(S):	40135 of 1987
CORAM:	Bignold J
KEY ISSUES:	:-
LEGISLATION CITED:	Land and Environment Court Act
CASES CITED:	Fatsel Pty. Ltd. v. A.C.R. Trading Pty. Ltd. (1985); Scarborough v. Lew's Junction Stores Pty. Ltd. (1963); Wilson v. Church (No.2) (1879); Klinker Knitting Mills Pty. Ltd. v. L'Union Fire Accident and General Insurance Co. Ltd. (1937); Attorney-General v. Emerson (1889); Grant v. Banque Franco-Egyptienne (1878)
DATES OF HEARING:
DATE OF JUDGMENT:	05/20/1988
LEGAL REPRESENTATIVES:

JUDGMENT:

Bignold J.: The 2nd Respondent has moved the Court for an order staying the taxation of costs ordered by the Court in favour of the successful Applicant in concluded class 4 proceedings pending the final determination of the 2nd Respondent's pending appeal to the Court of Appeal.

The only ground relied upon by the 2nd Respondent in support of its Notice of Motion is that it has filed an appeal against this Court's orders made on 23rd December, 1987 granting the Applicants in the class 4 proceedings declaratory and injunctive relief against the 2nd Respondent.

A few days after the filing of the appeal to the Court of Appeal I made certain costs orders on 15th February, 1988 including an order that the two Respondents pay the Applicants' costs on the hearing of the substantive suit.

Section 59(1) of the Land and Environment Court Act confers express power on this Court to suspend the operation of any relevant order where an appeal has been made to the Court of Appeal until the decision on that appeal.

As I pointed out in Fatsel Pty. Ltd. v. A.C.R. Trading Pty. Ltd. (No. 2) (1985) 58 LGRA 164 guidance as to the proper exercise of the wide judicial discretion conferred by the section is to be obtained from a consideration of the decided cases concerning the inherent and statutory powers of a superior court to stay proceedings especially pending the determination of an appeal in those proceedings.

An allied source of statutory power is to be found in SCR Pt. 44 r5 (applicable to this Court by virtue of s.20(4) of the Land and Environment Court Act and the Rules of Court Pt. 6 r1) - in particular see the cases collected in Paragraph 44.5.3 of Ritchie's "Supreme Court Procedure".

A recent statement of the position established by the decided cases is to be found in the judgment of Dawson J. in Federal Commissioner of Taxation v. Myer Emporium Ltd. (1986) 64 ALR 325 at p.327:-

"Order 70, r12 was amended on 5th December, 1985 and in its new form is the counterpart of similar rules in other jurisdictions. It is well established by authority that the discretion which it confers to order a stay of proceedings is only to be exercised where special circumstances exist which justify departure from the ordinary rule that a successful litigant is entitled to the fruits of his litigation pending the determination of any appeal: see, eg The Annot Lyle (1886) 11 PD 114 at 116; Scarborough v. Lew's Junction Stores Pty. Ltd. (1963) VR 129 at 130. Special circumstances justifying a stay will exist where it is necessary to prevent the appeal, if successful, from being nugatory: see Wilson v. Church (No.2) (1879) 12 Ch D 454 at 458; Klinker Knitting Mills Pty. Ltd. v. L'Union Fire Accident and General Insurance Co. Ltd. (1937) VLR 142. Generally that will occur when, because of the respondent's financial state, there is no reasonable prospect of recovering moneys paid pursuant to the judgment at fi

rst instance. However, special circumstances are not limited to that situation and will, I think, 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: see McBride v. Sandland (No.2) (1918) 25 CLR 369 at 375."

His Honour went on to give his reasons for ordering a stay upon the execution of the judgment below and it is of interest to note that the stay expressly excluded the order for costs made by the Court below.

In the present case the 2nd Respondent's application is limited to this Court's order for costs in favour of the Applicants. As I have earlier indicated the application is entirely based upon the fact that an appeal has been made to the Court of Appeal against my judgment disposing of the class 4 proceedings. Is this a sufficient basis for staying or suspending the order for costs made in favour of the successful applicants? I think not.

In Attorney-General v. Emerson (1889) 24 QBD 56 the question at issue before the English Court of Appeal was "whether or not there has arisen a practice, which has become invariable that the Court will in every case, make an order to stay proceedings pending an appeal unless the respondent's solicitor gives an undertaking to repay the costs paid to him in the event of a successful appeal (pp.57/58)". Although the Court unanimously rejected that such an invariable practice could fetter the Court's discretion, in the particular circumstances of the case it stayed its order for costs (not yet paid) in respect of one of the defendants unless the Solicitor's undertaking was given because the evidence established "that there is a great danger that they would not recover any costs from him" (p.59).

To similar effect is an earlier decision of the English Court of Appeal in Barker v. Lavery (1885) 14 QBD 769 which involved an application for a stay of execution for costs pending an appeal to the House of Lords. The brief judgment of the Court was delivered by the Lord Chancellor at p.770:-

"The defendant is not entitled to have the application granted as a matter of course. Evidence ought to have been adduced to show, that the plaintiff would be unable to repay the costs if he should be unsuccessful before the House of Lords. As to the request for time to make an affidavit about the plaintiff's means, we cannot accede to it; those, who apply for a stay of execution, must come before us prepared with all necessary materials."

These later cases must I think be taken to have necessarily modified the earlier decision of the English Court of Appeal in Grant v. Banque Franco-Egyptienne (1878) 3 CPD 202 at least to the extent that that earlier decision was based upon the practice of the Court to order costs to be paid to the Solicitors who personally undertake to repay them in the event of the decision being reversed on appeal (p.204).

In Hood Barrs v. Crossman & Pritchard (1897) AC 172 Lord Herschell at p.175 referred to the common practice in England for the Court when refusing to stay execution and allowing costs to be received, to require the Solicitor who is to receive them to give a personal undertaking to repay them if the Court of Appeal should reverse the order for their payment. Although His Lordship entertained no doubt that in the circumstances of the case had there been an application that the Court should require an undertaking from the Solicitor to repay the costs it would have been required by the Court (which had refused an application for a stay of execution) the fact that no such application had been made was held to be fatal to the appeal (p.176).

I think that these English decisions of last century establish the following propositions which are relevant to the exercise of the relevant statutory judicial discretions I have earlier identified for staying costs orders of the Court -

(i) there is no invariable rule or practice to require in lieu of a stay of execution a Solicitor's personal undertaking for the repayment of costs in the event of a successful appeal;

(ii) the party seeking a stay or suspension of a costs order must establish circumstances justifying the stay or requiring the Solicitor's undertaking to be given; and

(iii) the mere filing of an appeal is not a sufficient basis for ordering a stay of execution of a costs order.

In the present case the 2nd Respondent has not established circumstances justifying the stay of execution of the Court's cost order in favour of the Applicants. Nor has the 2nd Respondent applied to the Court to require a Solicitor's undertaking to be given to repay the costs in the event of a successful appeal.

The 2nd Respondent referred me to the usual practice of litigants not enforcing costs orders pending appeals to the Court of Appeal.

Counsel for the Applicants in opposing the Motion stated that the Applicants are three neighbours whose properties adjoin the 2nd Respondent's development site and had borrowed funds to sustain the litigation. The Bill of Costs they had submitted for taxation amounts to $26,000. It was agreed that the pending appeal in the Court of Appeal is unlikely to be heard for some considerable time (perhaps 12 months hence). I do not think that those circumstances justify a stay or suspension of the costs order made in the present case.

Accordingly the Notice of Motion is dismissed with costs.