ENTERPRISE GOLD MINES N.L. v MINERAL HORIZONS N.L.

Supreme Court of the Northern Territory of Australia Kearney J.
11, 12 and 17 August 1987; 18 February 1988,·at Darwin

Appeal	stay of execution - principles applicable to stay of order of		warden's	court		exercise	of	discretion whether special or exceptional circumstances must be shown - application		of	statute	and	Rule	regulating	stays significance of presumption of correctness of decision.

Appeal	stay		of	execution principles applicable to	stay Court Rules		whether special must be shown.

exercise	of discretion under	common		form	Supreme or exceptional circumstances

Appeal - leave to appeal -	stay	of	execution jurisdiction - principles applicable.

inherent

Appeal decision appeal.

significance under appeal

of	presumption		of	correctness of approach	of	appellate	court	to

Statute - Mininq Act, s.89(c) - power of Secretary.

Cases applied:
Federal Gold Mine Ltd v Ennor (1910) 13 C.L.R/ 276 Scarborough v Lewis Junction Stores Pty Ltd (1963) VR 129

Cases followed:
J.C. Scott Constructions v Mermaid Waters Tavern Pty Ltd (No.I) (1983) 2 Qd.R. 243
Attorney-General v Emerson (1889) 24 Q.B.D. 56 Alexander v Cambridge Credit Corporation Ltd (Receivers
Appointed) (1985) 2 NSWLR 685
Hackney Tavern Nominees Pty Ltd v McLeod (1983) 33 SASR 590 Jennings Constructions Ltd v Burgundy Royale Investments
Pty Ltd (1986) 69 ALR 265

Cases referred to:

The Annot Lyle (1886) 11 P.D. 114
McBride v Sandland (No.2) (1918) 25 C.L.R. 369
Edwards v Noble (1971) 125 C.L.R. 296
Warren v Coombes (1979) 142 C.L.R. 531
Klinker Knittino Mills Pty Ltd v L'Union Fire Accident
& General Insurance Co. Ltd (1937) VLR 142  Federal Commissioner of Taxation v Myer Emporium Ltd (1986)
64 ALR 325
Wilson v Church No;2) (1879) 12 Ch.D. 454
The Marconi's Wireless Telegraph Co. Ltd v The Commonwealth (No.3) (1913) 16 C.L.R. 384
Thrifty Rent a Car v Darwin Marketing Services Pty Ltd (unreported, Asche J., 12 March 1987)

Statutes:
Local Courts Act, Part VI (ss.53-62)
Local Court Appeal Rules, Rule 5, 12 and 22 Mining Act, ss.89(c), 159

Counsel for the Applicant Solicitor for the Applicant

Counsel for the Respondent Solicitors for the Respondent:

J.A.C. Tippett Mildrens

D. Mildren, Q.C.
McDonald Ward Keller

kea880017
IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
No.515 of 1987

BETWEEN:
ENTERPRISE GOLD MINES N.L.
Applicant

AND:
MINERAL HORIZONS N.L.
Respondent

CORAM:	Kearney J.

INTERLOCUTORY JUDGMENT
(delivered 18 February, 1988)

On 25 June 1987 by proceedings No.456 of 1987 the applicant instituted an appeal in this Court from decisions of the warden's court given on 24 June. On 10 August the applicant instituted these proceedings for a stay of execution, pending the determination of that appeal, of one of the orders made by the warden's court: namely, that it deliver up to the respondent certain core samples and the results of assays of those samples. The warden's court had granted a stay of that order for a limited period. I heard the application for the stay on 11, 12 and 17 August  1987 and rule upon it today.

The appeal has not yet been heard because, by consent, certain basic questions involved therein were referred to the Full Court which answered them earlier today.

The background to the stay application is as follows. The respondent had brought 3 plaints before the warden's court. Plaint No.4240 of 1986 alleged that the applicant, by over-pegging the respondent's Mineral Claim No.516 (before the respondent acquired that claim) when pegging out its own adjoining Mineral Claim No.535, had wrongly located more than 90% of the area of MC 535 within the boundaries of MC 516. The warden was asked to determine the boundaries between these claims and did so. The

applicant appeals against that decision. decision was that	the	land	in	which

One effect of that the	applicant	had

drilled certain scout holes, from which it had obtained the core samples, lay within the respondent's claim. Plaint No.4330/86 had complained about this, seeking an order that the core samples be delivered up to the respondent together with the information and assayed results the applicant had derived from the cores. The warden's court held that the respondent was entitled to the samples and the results of the tests made upon the samples, and made the order sought by the respondent. The applicant's appeal is against that decision alleging error of law and fact; meanwhile it seeks a stay of the order that it deliver up the core samples and the results of the tests on those samples.

The applicant relied on the affidavit of Mr Stirk of 10 June 1987 and the evidence of Mr Griffin a geologist.

Mr Griffin deposed that the core samples were taken from 6 scout holes drilled in the land in dispute, and that assay reports had been prepared therefrom. The cost was of the order of $150,000. He testified as to the uses,  legal and illegal, to which he considered the information in the reports could be put if it came into the hands of someone other than the applicant. He did not consider that the utility of that information related only to the land in dispute and MC 516. He considered that although the core samples had not been oriented they would assist  the applicant in determining where best to carry out further drilling in its tenements in that general area.

The respondent relied on the evidence of Mr Shields a geologist, Mr Bloomfield a surveyor, and Mr Quartermain its manager.

Mr Shield's evidence was that some 25 years ago he had made a geological survey and mapped the Union Reefs area, within which MC 516 lies. He had co-authored a Bureau of Mineral Resources report in 1967 on the gold prospects of that area. Mr Shields considered that the core samples bore only upon the hard rock gold potential of MC 516 and that they were important in developing an exploration programme

for part of MC 516 to prove any ore reserve. He estimated the cost of doing so at some $1,000,000. He considered that the information from the cores would not be used for purposes other than that.

It appeared from the evidence of Mr Quartermain that a public company listed on the Australian Stock Exchanges, Eastern Gold N.L., might make an offer to acquire most of the shares in the respondent, which is an unlisted public company; if so, the respondent would become a subsidiary of Eastern Gold N.L. which has an issued share capital of some $28,000,000. This would make it easier for the respondent to raise finance from the public; it appeared that the respondent had encountered some difficulties in floating itself as a listed company. Mr Quarterrnain's evidence was that the respondent had some 22-24 granted Mineral Claims, a few of which (including part of MC 516) were presently under dispute. His evidence was that the respondent was currently "in the red"; its financial difficulties restricted the development work which it could carry out. The only assets of the respondent were its mining tenements and it had no intention of putting in a takeover bid for the applicant.

It is unnecessary to go further into the facts.

It is clear that whether or not a stay should be granted is a matter within the discretion of this Court.

The applicant submits that the principles which guide the exercise of that discretion are determined by the nature of the appeal against the decision of the mining warden's court. It also submits that the decision of the warden's court is not presumed to be correct and for that reason the applicant need not show special or exceptional circumstances to obtain a stay. In summary, as I understood it, the applicant's argument was:-

the approach to staying an order of the warden's court differs to the staying of an order of a superior court;

the criteria applicable to such a stay are likewise different; and

the onus on the applicant for a stay of an order of the warden's court is not as high as in the case of a stay of an order of a superior court.

By way of contrast the applicant points to the principles applicable to stays in two other types of appeal. The first involves appeals where common form stay provisions such as Order 52 Rule 17 of the Federal Court Rules provide

that an "appeal to the Court shall not operate		as	a	stay" except in so far as the contrary is directed.	Rule 83.09 of

the new

Supreme Court Rules	is	to	similar	effect.	The

applicant authority

relies	upon	The Annot Lyle (1886) 11 P.D.114 as for	the	proposition	that. the	basis	of	such

provisions is two-fold: that in those appeals the presumption is that the judgment under appeal is correct and that the Court should not deprive the victor of the fruits of his victory.

However, I consider that examination of The Annot Lyle (supra) shows that it is not authority for the former of those propositions. The case involved an application for a stay of execution pending an appeal in an Admiralty action from the Court of Appeal to the House of Lords. No supporting affidavits had been filed. Bail had been given and it was contended that the respondents, successful below, were thereby secured in the fruits of their victory. The Court of Appeal did not accept that this was so, and considered there was no reason why the normal rule - that an appeal did not stay proceedings - should not apply. Nowhere did the Court refer to any presumption that the judgment under appeal was correct. The observations of Barton J. in McBride v Sandland (No.2) (1918) 25 CLR 369 at p.374, on which the applicant also relied, do not include reference to a presumption that the decision under appeal was correct. His Honour said:-

"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.•

The common form of stay Rule strikes a balance between the competing interests that a successful party ought not to be deprived of the fruits of his judgment, and that a successful appeal should not be rendered nugatory; see J.C. Scott Constructions v Mermaid Waters Tavern Pty Ltd (No.1) (1983) 2 Qd.R. 243 at p.247.

When the issue is whether a stay should be granted it is, I think, irrelevant to consider whether the judgment under appeal is to be presumed to be correct. That question is relevant to the entirely separate and important question of how an appellate court should approach its functions, a question now resolved by Warren v Coombes (1979) 142 CLR
531. Subject to the appeal,·the decision of the warden's court is conclusive as between the parties and determines their rights; that is its legal effect and the source of the respondent's entitlement to the fruits of its judgment.

The applicant, however, relied on Federal Gold Mine Ltd v Ennor (1910) 13 CLR 276 to support its submission that the decision of the warden's court is not, for the purposes of the appeal, to be presumed to be correct. That case involved an appeal from the Local Court in Western

Australia. The appellate provisions in the Local Courts Act 1904 (W.A.) were broadly similar to those in Part VI of the Local Courts Act but there the appellate court was at large in its power to  draw  inferences  of  fact whereas under Part VI it may only draw "all inferences of fact which might have been drawn by the Local Court appealed from". The High Court held that the appeal from the Local Court in Western Australia was in substance a rehearing and the appellate court was not bound to regard the decision of the  Local Court as prima facie correct. But this must be properly understood; the Court clearly had in mind the question  of the proper approach  of the appellate court to the appeal. The Supreme Court had been of opinion that it was bound to accept the  decision of the Local Court unless it was shown to be demonstrably wrong. Griffith C.J. stressed (at p.279) that "the appellant is entitled to the independent judgment of the Court of Appeal". The judgment of Barton J. at p.284 makes it clear that this applies also to an appeal from a court constituted by a Judge.

It is clear, in my opinion, from the Full Court decision on the Reference, that Ennor (supra) applies to appeals from the warden's court even though those appeals are not characterized as rehearings._ However, I do not consider that the fact that for the purpose of deciding the appeal it is not presumed that the decision of the warden's court was correct, is of assistance to the applicant. The

approach		to be taken by the appellate court - the need that it apply its "independent judgment" - does not bear upon the question		of		what		is required of the applicant for a stay; that is	governed		by		s.55	of	the	Local Courts Act,	and Rule 22	of	the		Local Court Appeal Rules.		All	appellate courts are required to give their "independent judgment"		on an	appeal going to the facts, whether the appeal be stricto sensu or by way of rehearing, and statements in some of	the authorities		of the consequences of the proposition that the judgment under appeal is presumed to be correct and must		be shown		to		be		wrong		before it can be upset - see Edwards v Noble (1971) 125 CLR 296 at	pp.303-7,		per	Barwick C.J. must	be		read			in		the light of Warren v Coombes (supra) pp.536-553.

The true position, as I understand it, is that this Court has a general discretion to stay execution upon a judgment which is under appeal, but where a common form Rule such as Rule 83.09 regulates the question of a stay, the construction of the terms of such Rules indicates that there is in general to be no stay unless the circumstances are such as to warrant it. That is, the norm is no stay. The Court cannot look beyond the Rule; see Attorney-General v Emerson (1889) 24 QBD 56 at p.58. The circumsta.nces which would displace this general approach have been described as "special" or "exceptional"; see, for example, Klinker Knitting Mills Pty Ltd v L'Union Fire Accident & General

Insurance Co. Ltd (1937) VLR 142 at p.143 and Federal Commissioner of Taxation v Myer Emporium Ltd (1986) 64 ALR
325 at p.327. This, I think, puts the burden  too  high though it is one  which  is  not  lightly discharged.  As Lowe J. put it in Klinker Knitting Mills Pty Ltd (supra) at p.143: "The  facts must justify the stay".  The burden upon an appellant under the common form Rule is perhaps better expressed in terms used in Alexander v Cambridge Credit Corp Ltd (Receivers Appointed) (1985) 2 NSWLR 685  at  p.694:­ "••• it is sufficient that the applicant for a stay demonstrates a reason or an appropriate case to warrant the exercise of the discretion in his favour".  In other words, in a case under the common form Rule the general discretion to stay is not fettered but "appropriate reasons" must be shown by an applicant before a stay will be granted; see Hackney Tavern Nominees Pty Ltd v McLeod (1983) 33 SASR 590 at pp.594-5 per White J, where his Honour notes that it is also necessary "to show that the appeal machinery is not being used as an instrument of oppression or merely as a delaying tactic". There are many illustrations of what are "appropriate reasons" for this purpose: for example,  if there is  a risk that the appeal would be rendered nugatory in the absence of a stay - see Wilson v Church (No.2) (1879) 12 Ch. D. 454.

For	present	purposes, however, the relevant point is that the approach under the common form Rule exists as	a

10

result of the construction of the applicable Rule; and that construction does not turn upon a presumption that the decision under appeal  is correct but upon the language of the Rule.

Matters relevant to the exercise of an inherent jurisdiction of the Court to stay execution on an application for special leave to appeal were considered by Brennan J. in Jennings Constructions Ltd v Burgundy Royale Investments Pty Ltd (1986) 69 ALR 265. This was the second type of appeal to which the applicant drew attention, by way of contrast. His Honour held that there was jurisdiction to stay if otherwise the subject matter of the litigation could not be preserved; exceptional circumstances had to be shown, to warrant a stay. In The Marconi's Wireless Telegraph Co. Ltd v The Commonwealth (No.3) (1913) 16 CLR 384, where the defendant sought a stay pending its application for special leave to appeal to the Privy Council, the High Court said (at p.386):-

"The Court will not ordinarily grant an application

of this kind unless very strong and special are	shown.••	It	really	is	a	question preservation of the rights of the		parties disregard of the balance of convenience"

grounds of the without

Brennan J.	in	Jenninqs Constructions Ltd	(supra)	applied these remarks and said (at p.267):-

"In each case when the court is satisfied a stay is required to preserve the subject matter of the litigation, it is relevant to consider first, whether there is a substantial prospect that special leave to appeal will be granted; secondly, whether the applicant has failed to take whatever steps are necessary to seek a stay from the court in which the matter is pending; thirdly, whether the grant of a stay will cause loss to the respondent; and fourthly, where the balance of convenience lies."

As I say, the applicant drew attention to these remarks, for the purpose of distinguishing them.

The applicant submits primarily that neither the factors relevant on an application for a stay under provisions such as Rule 83.09, nor those identified by Brennan J, apply on this application. It is submitted that the guiding principles here are two-fold: first, whether there is a need for a stay so as to preserve the subject matter of the litigation; and, if so, second, whether or not either of the parties would suffer prejudice if a stay were granted. The applicant submits that it does not have to show that special or exceptional circumstances warrant a stay.

The applicant founded these submissions - and the distinction between stays controlled by the terms of Rules such as Rule 83.09 and stays in cases involving applications for leave to appeal, as opposed to stays in appeals from the warden's court on the basis that the appeal from the

warden's court had a distinctive nature, and on the particular statutory provisions which apply to stays of the warden court's decision. As to these matters, the applicant relied upon an interpretation of s.159 of the Mining Act, and Part VI of the Local Courts Act (comprising ss.53-62), which provides for appeals from Local Courts.

It is unnecessary to deal with many of the applicant's submissions on these matters. They lay at the root of the applicant's case on the Reference before the Full Court, the decision in which was given earlier today. The Full Court made it clear that an appeal from the warden's court is treated in the same way as an appeal from a Local Court; in its essence it is an appeal stricto sensu and not a rehearing but that characterization does not in any way affect the applicant's entitlement to the independent judgment of the Supreme Court on the appeal. In the light of the Full Court's decision, it is also unnecessary to deal with those submissions of the applicant which equated the appeal from the warden's court with an appeal from a Court of Summary Jurisdiction; nor with the submissions dealing with a stay which relied upon an analogy with the grant of bail following appeal from a conviction.

I turn to the specific legislative provisions relevant to this application for a stay; they are contained in the Local Courts Act and the Local Court Appeal Rules.

Section 55 of the Local Courts Act provides	for	a stay, as follows:-

"55. STAY OF PROCEEDINGS

When an appeal has been instituted, the Court to which the appeal is made or a Justice or Judge, as the case may be, of that Court or the Court from which the appeal is made or a Judge or Stipendiary Magistrate of that Court may order a stay of all or any proceedings  under the judgment, determination or order appealed from for such time and upon such conditions, if any, as are specified in the order."

Rule 22	of	the Local Court Appeal Rules applies to appeals and provides:-

"22. NOTICE NOT TO OPERATE AS STAY OF PROCEEDINGS

An application for an order that a notice of intention to appeal operates as a stay of proceedings may be made by summons to a Judge in Chambers at any time after notice of intention to appeal has been given.

Except in case of urgency, at least 24 hours notice shall be given to the other party of an application for a stay of proceedings.•

With the language of Rule 22 may be contrasted that of Rule 12 which applies to appeals from interlocutory orders. Rule 12 provides:-

"12. STAY OF PROCEEDINGS
An order giving leave or special leave to appeal shall not operate as a stay of proceedings unless an order to that effect is included in that order giving leave or special leave to appeal or an order to that effect is made upon separate application to a Judge.•

The effect of Rule 5 is that Rule 22 applies to appeals from the warden's court, and Rule 83.09 of the Supreme Court Rules has no application.

The applicant submitted that the terms of s.·55 and Rule 22 do not contain the directive which authorities (such as Alexander's case (supra)) establish flow from Rules such as  Rule 83.09.  I consider that this is correct.  Rule 12 (as set out above) is to my mind indistinguishable in effect from provisions such as  Rule 83.09 but does not apply in this case. I consider that the position is that this Court has a general and unfettered discretion to grant a stay on this appeal, and special or exceptional circumstances need not be shown by the applicant. The application js to be considered on its merits, but if a case for a stay is not made out weight must be given to the fact that  the respondent was successful in the warden's court.

In summary, I consider that 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 judgrnent of the warden's court is executed, a stay will normall:y be granted; see Scarborough v Lewis' Junction Stores Pty Ltd (1963) VR
129 at p.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.

The applicant submitted that the grounds of appeal showed that its case on appeal was "arguable in the substantial sense", as it was put in Thrifty Rent-a-Car v Darwin Marketing Services Pty Ltd (unreported,  Supreme Court, 12 March 1987, at p.9). In that case leave to appeal was required, and so the factors mentioned by Brennan J. in Jennings Constructions Pty Ltd (supra) were relevant.  That is not the case here. It is, however, not in issue that the appeal is arguable.

The applicant submitted that the respondent would not suffer loss from a stay, and 5 aspects of the evidence were referred to me; see pp.12-13 of the applicant's written submission.  It is sufficient to say that on the evidence I am satisfied that the respondent would suffer loss from a stay in that it would be deprived of information which it

would otherwise acquire under the order of the warden's court under appeal, which would materially assist it in determining the optimum manner of proceeding to determine the existence of any ore body in MC 516.

On the question of where the balance of convenience lies, the applicant advanced 5 reasons why the balance  was in favour of the grant of a stay; see items A-Eon pp.13-15  of its written submission. Amongst those reasons was the contention that the core samples and assay reports, the subject of the order by the warden's court, though physical in nature, could be characterized as information and accordingly were analogous to intellectual property. In its capacity as information it would be used by the respondent and could not in any meaningful sense be returned to the applicant.   The  applicant  contended  that  therefore  its
appeal would be rendered nugatory because it would be deprived of  the exclusive benefit of using the information to work out its exploration programme. The applicant also contended that it  would be prejudiced by the respondent's use of this information in that it would be exposed to the risk of a takeover by Eastern Gold N.L. and that the respondent could use the information to explore areas presently  the  subject  of .their competing applications for
exploration licences (see Exhibit Al).

I do not propose to deal at length with the respondent's submissions. The respondent contended that special circumstances had to be shown before a stay could be granted; for the reasons already given I do not accept that contention. The respondent further contended that the material objects the subject of the warden's court order - the core samples and assay reports - could be returned by the respondent if the applicant's appeal were successful. The submission was that it was not correct that the refusal to grant a stay would render the appeal nugatory, because the applicant already had and still would have the information in question. I consider that that contention is correct and what the applicant loses in the absence of a stay is its exclusive knowledge of the information. If a stay is not granted that information becomes information known both to the applicant and the respondent instead of simply to the applicant.

I consider that, assuming the appeal ultimately fails, the consequence of granting a stay would be that the respondent would suffer loss in the form of prejudice to its preparation of an exploration programme for MC 516. It appears to me from the evidence that on the probabilities the utility of the information in question relates only to that part of MC 516 in dispute; I accept the evidence of Y..r Shields on that aspect. Consequently, if the appeal succeeds, the probabilities are that the fact that the

respondent would obtain this information in the absence of a stay, would be of no ultimate value to it.

Accordingly,	if litigation	be	treated		as

the	subject 'information,

matter	of	the the fact that the

refusal of a stay would mean that the applicant's hitherto exclusive knowledge would cease to be exclusive, would have no practical effect adverse to the applicant. I do not consider that the applicant would suffer a real risk of prejudice in this or any other respect if a stay were refused, which cannot be met by an appropriate order, while it is clear that the respondent would be prejudiced if a stay were granted.

I should add that I see no power in s.89(c) of the Mining Act for the Secretary to issue directions other than those the purpose of which can be fairly categorized as
•appropriate for the protection of the environment•.

On the whole, I consider that the balance of convenience in this case favours the refusal of a stay. I note that the evidence is that further information may be obtainable from the core samples, presumably by further testing. I also note that the respondent is prepared to undertake not to destroy the core samples of the assay results, until the results of the appeal are known.

The formal order	I	have	in	mind	making	is	as
follows:-

"Upon the respondent by its Counsel undertaking not to destroy the· core samples or the assay results pending the outcome of appeal No.456 cf 1987, and further undertaking, in the event that the applicant succeeds on the appeal, to supply the applicant with any further information it may meanwhile have derived from the core samples and to pay the applicant such damages or loss whether legally claimable or not as this Court or a Judge thereof may think just and fair as compensation to the applicant for any disadvantage it may sustain by reason of this order; I do order that the application herein of 10 August 1987 for a stay of execution be refused.".

However there may be other matters which should be	adverted to in the order; I will hear Counsel further on that aspect.