Stays of execution
Rule 66.16 of the Supreme Court General Civil Procedure Rules states that “[t]he Court may stay execution of a judgment”, while rule 66.01 states that “judgment” includes “order”. The County Court’s rule 66.16 is the same, and the Magistrates’ Court rule is analogous, but refers to the execution of “an order”.
As the very simple text of the rules suggests, the court has a wide discretion to stay execution of its judgments or orders. Usually, an application for a stay is likely to arise when an appeal is in the works, and so we also need to make reference to Supreme Court rule 64.39 which states, for appeals to the Court of Appeal, that “except so far as the Court of Appeal otherwise orders…. an appeal or application for leave to appeal shall not operate as a stay of execution or of proceedings under the decision appealed from.” Similar rules apply to other kinds of appeal, and a stay may also be granted under the court’s inherent jurisdiction.
These rules support a presumption that the general discretion to stay execution will not be exercised merely because there is an appeal on foot. More is required.
An impending (or in process) appeal is not the only situation where a stay of execution might be sought: where a set-off has been granted and needs to be given effect, for example. There is some suggestion that the appeal-oriented cases are the subject of a “distinct body of law” as compared with cases where the basis for the stay application is something other than an appeal. I hesitate to regard them as wholly distinct and they appear at times to be conflated. If they are indeed distinct bodies of law, they are certainly closely related. The distinction, if there is one, lies in the requirement for “special” or “exceptional” circumstances – more on this below.
The relatively recent Court of Appeal decision, Maher and Anor v Commonwealth Bank of Australia and Anor  VSCA 122, conveniently sets out the relevant principles in the context of a pending appeal. Per Dodds-Streeton JA, Redlich JA concurring:
The principles governing a stay of execution of judgment pending the hearing and determination of an appeal are well established.
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.
The Court has a wide discretion, which is not circumscribed by rigid rules. It should take into account all the circumstances of the case.
In Scarborough’s v Lew’s Junction Stores Pty Ltd… 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.
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’.
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.
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.
Maund v Racing Victoria is a good, recent example of a case where “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” – in this case, a racehorse trainer was to be disqualified unless execution was stayed; in the event of disqualification, the preparation of each of 17 horses would have been “deleteriously affected to the extent that the preparations would be wasted in full”, at considerable cost to the owners of the horses and to the trainer’s relationship with those owners, such that the trainer’s business could not recover.
Special or exceptional circumstances
As can be seen in Maher, there is a generally recognised requirement for “special or exceptional circumstances” before a stay will be granted. There is an obvious (though not irresoluble) tension between such a requirement and the – equally well recognised – broad discretion available to the court. (Note that it appears to be the case that in NSW the “special or exceptional circumstances” has been abandoned.)
In Maund, the court sidestepped the question of whether “special circumstances” are required, finding that the applicant had met the test whether he was required to do so or not, and noting that the requirement of special circumstances arises from the presumption set out in rule 64.39 (ie, that an appeal does not act as a stay).
It seems to me that the “special circumstances” requirement may now be somewhat vestigial, or at least that it adds little to the general proposition that the an applicant must prove a reasonable basis for the court’s exercise of its discretion. In Re S & D International Pty Ltd (in liq) (No 6), the court was faced with a multiplicity of related proceedings, and granted a stay in relation to one proceeding (with conditions protecting the respondent) pending the outcome of others. Robson J stated, “[i]n my view, the reference to special circumstances is an acknowledgment that prima facie a successful litigant is entitled to the fruits of its litigation. The applicant for a stay bears the onus of establishing that in those circumstances a stay should be granted.” This is not the same basis for the requirement for special circumstances as found in the context of a pending appeal, where the basis is the presumption from rule 64.39. It is, however, a wholly plausible basis. I suggest that both bases are sound, and that they have more or less the same effect on the court’s discretion. In other words, there is not really a different test in the context of a pending appeal.
This is because it seems to me reasonable to take the view that:
- each case must be decided on its facts;
- the requirement for “special circumstances” arises from the prima facie right of a successful litigant to the benefits of the judgment in all cases;
- the same requirement arises independently for cases where an appeal is pending, under rule 64.39 and similar rules;
- the court does not look at the merits of an appeal or the validity of an underlying judgment; and,
- it is for the applicant for a stay to prove that there is a basis for the stay.
With all of these points in mind, it is hard see a lot of room for a different test in the case of a pending appeal, as opposed to other cases of stay applications.
The discretion is wide
References to a broad discretion follow the earlier decision of Joskovitz v Bonnick, in which Herring CJ held that “there is no question, I think, under that rule that a court or a judge has a very wide discretion… I have, as I have already indicated, a wide discretion which requires me to take into account all the circumstances of the ease. I think I should say at once the decisions on other sets of facts do not bind me, nor is assistance to be derived from cases which are not really concerned with exactly the same problem as I am concerned with… In cases of this class also it is clear that each case has to be determined on its own facts.” This decision in turn was one of a long thread of cases emphasising the breadth of the discretion.
It’s not about the underlying judgment
As noted, each case must be determined on its own facts. But what facts is the court concerned with? Only facts that relate to the circumstances of the execution that is to be stayed. The merits of the underlying judgment are not under consideration, and nor are the merits of the appeal except insofar as a truly hopeless appeal would preclude a stay. From Re S & D International Pty Ltd (in liq) (No 6)  VSC 119 again: “the grounds must be relevant to a stay of the enforcement proceedings, rather than grounds which may bear upon the validity or correctness of the judgment.” This follows logically from the propositions that a successful litigant is entitled, prima facie, to the benefit of the judgment.
 It was stated in Maund v Racing Victoria Limited & Anor  VSCA 276, in the context of an appeal from a VCAT decision, that rule 64.39 is an independent basis for a power to stay; if this is correct then presumably all of the other, similar rules also form such a basis.
 See also Supreme Court General Civil Procedure rules 58.05, 58.12, 58.21, 77.06.6, and 84.12. Also see s109 and (for completeness) s110(4) of the Magistrates’ Court Act 1989, and s74(4) of the County Court Act 1958.
 For example, Cook’s Annotated Rules of Court.
 I have omitted some footnotes and references. This decision followed the decision of Young CJ in Cellante.
 This decision also makes some reference to Frugtniet v Law Institute of Victoria Ltd, familiar to most lawyers in Victoria, in which the need to protect the public weight heavily against a stay.
 Re S & D International Pty Ltd (in liq) (No 6)  VSC 119
 Joskvitz v Bonnick 1964 VR 654
 Re S & D International Pty Ltd (in liq) (No 6)  VSC 119 (at 130).