kea93008j
IN THE SUPREME COURT
OF THE NORTHERN TERRITORY OF AUSTRALIA

No. 668 of 1989

BETWEEN:

ARTHUR JOHN MENGEL, ELEANOR CAROLINE MENGEL, RODNEY JOHN MENGEL, SUSY CHRISTINE MENGEL, WALTER KLEIN and CAROLYN KLEIN
Plaintiffs

AND:
THE NORTHERN TERRITORY OF AUSTRALIA
First Defendant

AND:
DAVID TABRETT
Second Defendant

AND:
ROBERT BAKER
Third Defendant

CORAM:	KEARNEY J

REASONS FOR RULING
(Delivered	1 April 1993) The application
On 2 March 1993 the defendants applied by Summons to stay the execution of an order made by Asche CJ on
29 January 1993, pending the hearing by the Court of Appeal of appeal AP7 of 1992 against his Honour's judgment of
28 August 1992 in this action.	I heard the application on
30 March; on 31 March I ruled as follows:-

111.	The relief sought in parsl and 2 of the Summons of 2 March 1993 is granted.
This stay of execution is to remain in force until 12 noon on 19 April 1993, the date presently listed for the commencement of the hearing by the court of Appeal of the defendants' appeal AP7 of 1992.
The relief sought in parl is granted subject to the following condition: that if the defendants do not succeed in obtaining the relief sought in appeal AP7 of 1992, they will pay on the amount of $95,166.00, (the subject of the order by the Chief Justice on
29 January 1993) interest calculated from
29 January 1993 until they pay that amount to the plaintiffs, at the same rate as the interest payable by the plaintiffs to their Bankers under their present arrangements for financial accommodation."
The defendants did not oppose the imposition of the above condition.	I now publish reasons for the ruling of
31 March.
Background
The various affidavits relied on by counsel establish the following facts.
On 28 August 1992 his Honour found for the plaintiffs following the trial of this action; he awarded them $305,371.00 damages; the questions of interest and

costs were reserved.	In finding for the plaintiffs his Honour upheld only their cause of action founded on
Beaudesert Shire Council v Smith (1969) 120 CLR 145.	In that case it was held that the Council was liable on an action on the case for intentionally doing a positive act forbidden by law which had inevitably caused damage to the plaintiff, who was thereby prevented from continuing to exercise his right as licensee to take water from a waterhole.	This was a statement of a broad new principle of tort law; it has been much discussed over the ensuing 26 years and has been applied once in that time, as far as I am aware.
Mr Southwood informed me that on the hearing of the appeal the defendants would seek to distinguish Beaudesert on the basis that here the cause of action was not analogous to trespass but involved the proper construction of a Gazette notice which specified restrictions on the movement of cattle.	I note in passing
that his Honour expressed his views on this aspect at ppl09
'
and 114 of his judgment of 28 August 1992 and discussed the "The Beaudesert principle" at ppl61-6.
On 18 September 1992 the defendants appealed against the judgment of 28 August 1992.	On 13 December 1992 they obtained a stay of execution of that judgment.
The affidavit of 29 October 1992 of Mr Camens, the former accountant for the plaintiffs, shows that as at
5 March 1992 the plaintiffs did not have a sufficient cash flow to repay the $99,000.00 loan referred to on p4; as at

October 1992, they were unable to restructure their borrowings so as to repay that loan.	Further, at that time, the plaintiffs were considering disputing their liability to repay it.	In his affidavit Mr Camens considered that the plaintiffs were in a "strong nett asset position" of
$2.Smillion as at 21 October 1992 but would continue to have a "limited cash flow" until their litigation with the defendants was resolved.
on 29 January 1993 Asche CJ ordered that the amount of interest to judgment, payable on the damages awarded on 28 August 1992, be fixed at $95,166.00; and that the defendants pay 60% of the taxed costs of the plaintiff. The costs have not yet been taxed, and formed no part of the application before me; I am concerned only with the
$95,166.00.
As a separate matter the first defendant is seeking to recover from the plaintiffs an amount in the order of $99,000.00, as a rural adjustment scheme loan it had made to them which had not been repaid.	The loan is
'secured by a first mortgage over the plaintiffs' Neutral Junction Station, which is also mortgaged to Westpac Banking Corporation as security for loans said to total some
$818,000.00 as at 21 October 1992.	The first defendant has now issued and served a Writ to recover these loan monies.
The plaintiffs obtained from the Master on
15 March 1993 a Certificate under s8(1) of the Claims by and against the Government Act, in relation to the amount of
$95,166.00.	On 16 March 1993 a stay was granted restraining

the plaintiffs from presenting that Certificate to the Treasurer for payment under s8(2) of the Act, until
25 March.	Thereafter the plaintiffs undertook not to present the Certificate to the Treasurer until the summons of 2 March had been heard and determined.
The plaintiffs' estimated costs of the appeal AP7 of 1992 are of the order of $60,000.00, while the estimate of legal fees incurred in this action after the judgment of
28 August 1992 is of the order of $15,000.00.	As to these costs, in parsl0 and 11 of his affidavit of 4 December 1992, Mr Camens deposed:-
1110.	On the basis of my assessment of the Plaintiffs' financial position - - it is my opinion that the Plaintiffs' cash flow will be insufficient to meet Messrs Cridlands' [the plaintiffs' solicitors] fees and disbursements for acting on the Plaintiffs' behalf in connection with the completion of this proceeding and the proceeding before the Court of Appeal.	I believe that until this matter is finally resolved, it is unlikely that the Plaintiffs' Bankers, Westpac, will increase advances currently approved.
11.	In my opinion the Plaintiffs will be unable to meet their existing and prospective liabilities in respect of Messrs Cridlands' costs and disbursements [estimated at some $75,000] without further encumbering their real and/or personal property or to liquidate assets.	Any such restructuring would be attended by the difficulties referred to in paragraphs 10, 11 and
12 of my affidavit dated 29 October 1992.	On this basis the Plaintiffs may have no option other than to dispose of assets or grant to Messrs Cridlands a secured interest either by way of a second mortgage over Neutral Junction Station or a bill of sale in relation to the assets of the Plaintiffs' trucking business."
The principles applicable
Mr Southwood submitted that the principles applicable on the question whether a stay should be granted

in this case, are as set out in Enterprise Gold Mines NL v Mineral Horizons NL (No.l) (1987-88) 52 NTR 13 at 20, viz:-
11-    -	-	the principles applicable upon this application are as follows.	To succeed, the applicant must make out a case which warrants the discretion to stay being exercised in its favour. The court has a general discretion on the question of granting a stay and the terms on which it will be granted.	In exercising its discretion the court will consider the balance of convenience and what is fair and just as between the parties.	If it is established, for example, that there is a real risk that the appeal will be nugatory without a stay, in the sense that there is a real risk that it will not be possible for a successful appellant to be restored substantially to its former position if the judgment of the warden's court is executed, a stay will normally be granted: see Scarborough v Lew's Junction Stores Pty Ltd [1963] VR 129 at 130.	The court will not speculate on the applicant's prospects of success in its appeal, unless it appears not to have an arguable case.	The terms of any stay must fairly take account of the interests of both parties."
I note that that was a statement of the principles applicable to a stay of execution of a judgment of the Warden's Court under appeal to this Court, at a time when stays were provided for by s55 of the (repealed) Local Courts Act and r22 of the (repealed) Local Court Appeal Rules.	Such stays in cases of appeal to this Court are now provided for by r83.09 of the Supreme Court Rules, the "common form" of stay rule, the effect of which is discussed at pp17-18 of Enterprise Gold Mines NL.
The order of 29 January 1993 is not under appeal.
It is this order the execution of which is sought to be stayed.	I consider that the application to stay is properly made under r66.16 which provides:-
"The Court may stay execution of a judgment".

The defendants' submissions
Mr Southwood submitted that execution of the order of 29 January 1993 should be stayed.	The stay of
13 December 1992 of the judgment of 28 August 1992 had been granted on condition that if the defendants lost their appeal against that judgment they would pay interest on the judgment sum at the same rate of interest as the plaintiffs were paying their bankers for their financial accommodation. He submitted that the imposition of this condition protected the plaintiffs from ultimately suffering any real loss.	He stated that the first defendant consented to the imposition of a similar condition on the stay now sought, should the court see fit to grant it.
As to where the balance of convenience lay, he submitted that the plaintiffs had not demonstrated any inconvenience, because a large proportion of their estimated legal costs of $75,000.00 had not yet been incurred, there was ho evidence that the plaintiffs' solicitors required them to pay any of those costs until the appeal had been determined, and there was no suggestion that the preparation of their case on the appeal had been hampered by their alleged impecuniosity.	As to the defendants' position, he submitted that it was clear that if they won the appeal and were thus entitled to recover any monies now required to be paid over to the plaintiffs, it would be necessary to take enforcement proceedings to do so.	There was no question but that if the defendants lost their appeal, they would be able to pay the amounts due to the plaintiffs.

He submitted that the defendants had a reasonably arguable case before the Court of Appeal that Beaudesert Shire council should be distinguished.	As to the need to show an arguable case he noted that in Griffiths v Australian Postal Commission (1987) 87 FLR 139, where the judgment the subject of a stay application was under appeal, Miles CJ said at pl41:-
"It was submitted on behalf of the plaintiff
/respondent that in order to succeed on the application for a stay pending appeal, it was necessary for the applicant/defendant to show that there were "special circumstances" in order that the plaintiff should not be robbed of the "fruits of victory".
In my own view, it is misleading and probably putting it too high to say that the plaintiff must show exceptional circumstances.		There are, however, statements to this effect in text books and in reported cases.	Reliance was placed upon N J Williams, Williams Practice of Supreme Court of Victoria in its civil Jurisdiction, par58.21.1. The author contrasted the Victorian practice with the New South Wales practice.	It might be noted in passing that some of the cases referred to are decisions by an appeal court following a decision by the trial judge to refuse the stay of execution, and in such cases the tests may not be the same as at first instance.		In any event, it seems to me that upon an analysis of the cases in recent years, any distinction between the practice in Victoria and that in New South Wales is more apparent than real.	It is obvious that an applicant for a stay of execution upon a judgment
has to make out a case why the judgment should not be enforced.	A rule of court providing that an appeal does not of itself operate as a stay unless the court or a .judge orders a stay	may do nothing more than cast an onus upon the applicant for the stay to convince the court or the judge that the discretion to order the stay should be exercised. An applicant for a stay of execution pending appeal can hardly hope to succeed if he or she does not show that there is a reasonably arguable ground of appeal.	But this does not mean and should not mean that the court or judge hearing the application for the stay should necessarily enter upon a provisional hearing of the appeal, assessing its chances of success on a percentage

basis.	The discretion to grant the stay is a wide one and what is aimed at is justice in all the circumstances.	An applicant for a stay of execution pending appeal is, in my view, neither obliged to rely upon nor restricted to relying upon matters which have been persuasive in favour of a stay in past reported judgments.	- - -

The principles governing a stay of proceedings pending an appeal were set out fully, clearly and recently in a judgment of the New South Wales court of Appeal in Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 at 693-695.	I respectfully agree with what was said in that case, and there is no point in reproducing in
these reasons for judgment the clear statement of law set out in that case.	My preceding remarks are intended to be in accord with it." (emphasis mine)
Mr Southwood submitted that on the application which resulted in the stay of 13 December 1992, the trial judge had considered and rejected very similar submissions to those now relied on by the plaintiffs.	He noted that no change in the plaintiffs' circumstances since that time was alleged, and they had not sought to have that stay lifted on the basis, for example, that their circumstances had deteriorated.	Further, although the plaintiffs had sold Banka Banka Station there was no evidence that that sale was attributable to the actions of the defendant.
The plaintiffs' submissions
Mr Hiley referred to the power to stay contained in s57 of the Supreme Court Act, and to r84.14 which is very similar to r83.09.	I note that s57 and r84.14 apply where an appeal from the judgment in question to the court of Appeal has been instituted, while r83.09 applies where it is appealed to this Court.	No appeal has been lodged against the order of 28 January 1993 which is the subject of the

present application to stay; accordingly, I think the better view is that neither s57 nor r84.14 directly apply to this application.
Mr Hiley submitted that the plaintiffs' strong nett asset position meant that it could not be suggested that they would be unable to repay any monies now required to be paid to them by the defendants, if the defendants were successful on the appeal.	Further, the plaintiffs' nett assets were ample to meet the claim for $99,000.00 by the defendants.
He submitted that the plaintiffs should not be compelled to take the action indicated in par11 of
Mr Camen's affidavit of 4 December 1992, in order to defend the appeal.	The balance of convenience pointed to the plaintiffs not being so compelled, because the defendants had not advanced a single reason why it would be inconvenient for the Northern Territory to pay over to the plaintiffs the sum of $95,166.00 it had been ordered to pay.
He submitted that the stay application should be viewed in its context: a case on foot for some 5 years in which the plaintiffs had been awarded sums of $305,371.00 and $95,166.00, a pending appeal the disposition of which would take some further time, and the strong possibility on the horizon of further proceedings in the High Court if the defendants failed to distinguish Beaudesert Shire Council before the Court of Appeal.
He submitted that the plaintiffs should now be paid some part of the various sums which had been awarded to

them, and that the balance of convenience did not favour the Northern Territory retaining the amount of $95,166.00 until its appeal had been determined.	He noted that in seeking a stay the Northern Territory was seeking an indulgence, and the normal rule was that a successful litigant was entitled to the fruits of the litigation, notwithstanding the existence of an appeal; this was the thrust of s57 of the Supreme court Act.	Accordingly, there had to be some reason before the normal rule was not followed; as Barton J put it in McBride v Sandland (No.2} (1918) 25 CLR 369 at 374:-
"The ordinary principle is that a successful party is entitled to the fruits of his judgment.	That being so, there must be sound reasons sufficient to justify the Court in suspending his right.	It is not a sufficient ground to say that he, being a rich man, cannot be prejudiced by having his right temporarily denied to him".
He submitted that the stay of 13 December 1992 related to a capital sum, whereas the defendants now sought to retain (additional) monies in the nature of ongoing costs.	That is to say, the capital asset of $305,371.00 was frozen by the stay of 13 December, and the defendants now sought to restrain the plaintiffs from having the benefit of the ongoing costs of being without that capital asset - costs in the sense of the interest awarded to them - going right back to September 1988.
Mr Hiley also mentioned as a minor point that the stay of 13 December had been granted on the assumption that the appeal would be heard early in March, whereas it is now clear that it will not be heard until 19 April.

Although the plaintiffs had not sought to have the stay of 13 December 1992 lifted, Mr Hiley submitted that whether the stay now sought should be granted was entirely a matter of discretion, in the exercise of which the decision of 13 December was irrelevant.	He submitted that ultimately what had to be determined was where the balance of convenience lay.	In that connection, the defendants had to satisfy the court that the status quo should be changed, and that the inconvenience to them in paying out the sum of
$95,166.00 outweighed the inconvenience to the plaintiffs of being deprived of that sum in circumstances where they were about to defend an appeal at a cost of some $60,000.00.
He noted that the plaintiffs had already sold Banka Banka Station; they should not be required in effect to further encumber their Neutral Junction station to defend the appeal, when they had judgments in their favour for amounts of over $400,000.00.
He submitted that the defendants had not adduced any evidence to support their argument that the balance of convenience favoured them.	They had suggested only that if they paid the $95,166.00 and later won their appeal in toto, they might have to sue to get the money back.	He submitted that even if they were required to do so, this did not amount to prejudice; if a party has to sue to enforce a judgment it can then recover the costs of doing so.
Further, Mr Camens had testified to his belief that the plaintiffs would have been able to repay the sum of
$305,371.00 should the need have arisen.

As to the Writ issued by the defendants to recover the alleged loan of $99,000.00 Mr Hiley informed me that the parties had agreed that no further action would be taken on the Writ until the appeal had been determined; accordingly, he submitted that for present purposes it should be treated as a "red herring".
As to the question of the plaintiffs paying	their solicitors' costs, he submitted that the plaintiffs should not be required to introduce evidence, for example, that they had received demands from their solicitors for prior payments of those amounts.
Conclusions
As indicated earlier, the power to stay execution of the order of 29 January 1993 is contained in r66.16.	It is a wide discretionary power.	In this jurisdiction it is not necessary for the applicant for a stay to show that there are special circumstances which render it inexpedient to enforce the order; cf 047	rl of the Rules of the Supreme Court (UK).
The reality is, however, that the order of
29 January is consequential upon the judgment in favour of the plaintiffs of 28 August 1992, when the question of interest was reserved.	The judgment of 28 August is the subject of the appeal to be heard on 19 April.
Consequently, the appeal against that judgment is a relevant factor when deciding whether or not to stay the execution of the order of 29 January.

I accept that the starting point is that a successful party to litigation is entitled to have the judgment enforced without delay.	In general, the circumstances relevant to a stay are those which are relevant only to its enforcement; but in this case, because of the appeal against the main judgment, the considerations relevant to an application for a stay under r84.14 are also relevant, though I am not bound by the fact that the execution of the main judgment was stayed on 13 December.
The fact that the defendant has issued a Writ in separate proceedings to recover the sum of $99,000.00 is by itself no grounds for a stay; see, for example, Wagner v Laubscher Bros. & co. (1970] 2 QB 313.
Because of the relevance of the considerations applicable to r84.14 I accept that a balance must be struck between the rule that a successful party should not be deprived of the fruits of its judgment, and the desirability that if the defendants succeed in their appeal there be no real risk that their success be rendered partially nugatory, by their not being restored to their present position to the extent of the sum of $95,166.00.	It is for the defendants to show that the discretion to grant a stay should be exercised in their favour; that is to say, they must demonstrate a reason or an appropriate case to warrant the exercise of the discretion in their favour.	Since the balance of convenience must be weighed, if at the end of the day the matter remains one of speculation, the prima facie entitlement of the plaintiffs to the fruits of the judgment should prevail.

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on the evidence there appears to me to be some possibility that the plaintiffs could not repay the
$95,166.00, if it was now paid over to them.	I note that there has been no offer by the plaintiffs to protect those monies; for example, by agreeing that if paid they be retained in their solicitors' trust account pending the determination of the appeal.	I consider that the defendants have an arguable case on distinguishing the Beaudesert principle on the appeal.	The condition the defendants have agreed to accept should ensure that the plaintiffs will not suffer any ultimate loss, if they successfully resist the appeal.
Upon weighing the evidence placed before me in the light of these considerations, I considered that a stay should be granted in the terms set out on p2.

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