Identifying some permanent or irretrievable detriment is key to a successful application for a stay pending appeal. Mere inconvenience or financial hardship is unlikely to suffice, even if that involves severe or harsh consequences for the applicant.
Litigants who are unsuccessful at trial often wish to defer complying with the judgment until their appeal is determined.
However, the default position is that the party who succeeded at trial is entitled to the fruits of its victory.
A party seeking a stay pending appeal must persuade the court that complying with the orders would cause it to suffer some considerable disadvantage which outweighs the detriment to their opponent.
This article discusses the key principles and some practical considerations when seeking, or advising on, a stay pending appeal to the Court of Appeal or Full Court of the Federal Court.
Appeals to the Court of Appeal
In the Supreme Court of Queensland, the commencement of an appeal does not automatically stay enforcement of the decision which is under appeal.1
However, under the Uniform Civil Procedure Rules 1999 (UCPR), the Court of Appeal, a single judge of the Court of Appeal or the court at first instance may order a stay of enforcement of a judgment which is under appeal.2 Often these applications are heard by a single judge of the Court of Appeal.
The power to order a stay under the UCPR is only available where an appeal is on foot.3 However, the Court of Appeal also has an inherent power to order a stay in connection with an application for leave to appeal.4
The true purpose of a stay pending appeal is to ensure that the orders which might ultimately be made by the Court of Appeal are fully effective.5
While “special or exceptional circumstances” are not required,6 the applicant must persuade the court that the circumstances justify a departure from the ordinary rule that judgments of the Trial Division should not be treated as merely provisional pending appeal.7
The applicant must demonstrate three matters:8
- first,that there is a good arguable case on appeal
- second,that the applicant will be disadvantaged if a stay is not ordered
- third, that the competing disadvantage to the respondent (if the stay is granted) does not outweigh the disadvantage to the applicant (if the stay is not granted).
These elements are addressed below.
Prospects of success
The Court will typically undertake a “preliminary assessment” of the strength of the applicant’s case in the appeal.9
Where the applicant’s prospects of success are hopeless or can be seen to be very poor, a stay is likely to be refused regardless of the parties’ comparative disadvantage.10
Whilst poor prospects of success undoubtedly count against the granting of a stay, it is unclear on the current state of the authorities whether strong prospects of success favour the grant of a stay (or whether that is simply a neutral consideration).11
Comparing the disadvantage to each party
The nature of the disadvantage which would be suffered by the applicant if the stay were refused is critical to the success of the application.
A stay will not be granted merely because compliance with the orders at first instance is inconvenient.12 The court will focus on whether the appeal would be rendered nugatory and whether the appellant would be irremediably prejudiced.13
Stays have been refused in cases which involved quite severe consequences for the applicant. For example:
- The fact that compliance with the orders under appeal would result in the applicant becoming bankrupt14 or insolvent15 is not determinative.
- The fact that, in order to satisfy the judgment debt, the applicant would have to sell assets which would be destructive of the applicant’s business is also not determinative and, if this reason is advanced as a basis for a stay, it must be based on clear financial evidence.16
- The fact that the orders under appeal would result in the eviction of a person from their home is a weighty factor but is also not determinative (particularly when the appeal also has poor prospects of success).17
On the other hand, stays have been granted in circumstances where:
- There is a real risk that the judgment sum will be dissipated or removed from the jurisdiction of the court pending the hearing of the appeal.18
- The orders under appeal require the disclosure of confidential information and compliance with those orders would cause confidentiality to be irretrievably lost.19
- The orders under appeal require a security to be given to a financier, and that financier could not be compelled to relinquish it if the appeal succeeded.20
- Compliance with the orders under appeal would result in bankruptcy, which would in turn risk the cancellation of the applicant’s solicitor’s practising certificate and his income.21
As these examples show, it is typically cases which involve some form of permanent or irreversible damage which are more likely to succeed compared to those cases which involve merely adverse economic consequences (even if those consequences are quite severe).
Appeals to the Full Court of the Federal Court
The Federal Court also has power to order a stay pending appeal.22 In Stefanovski v Digital Central Australia (Assets) Pty Ltd  FCA 1121 at , Derrington J stated that the following principles are well established:
- A court should not be easily disposed to delaying the enforcement of a judgment obtained after a trial. Prima facie, the successful party at trial is entitled to the fruits of their judgment. In particular, judgments of the trial division should not be treated merely as provisional and, following a trial the successful party should generally have an unfettered entitlement to enforce their judgment.
- However, the provisions permitting the court to grant a stay pending the determination of an appeal exist to prevent possible injustice arising from the enforcement of a judgment which might subsequently be overturned.
- It is not necessary for a party seeking a stay to show ‘special’ or ‘exceptional’ circumstances. All that needs to be shown is that the applicant has demonstrated that the case is an appropriate one for the exercise of the discretion in their favour.
- The applicant for a stay must necessarily provide sound reasons to justify a suspension of the successful party’s right to recover judgment.
- Necessarily, the applicant will need to establish that their appeal has some merit to it. They are not obliged to demonstrate that the appeal will be successful, or that success is more probable than not. The degree of confidence which a court needs to have in the appeal’s prospects will most likely vary with all of the circumstances of the case, including the potential prejudice which might be suffered by the parties as the result of the granting or refusal of the stay. That said, where an appellant can demonstrate that they have substantial prospects on appeal, that will be a significant factor in favour of granting a stay.
- Although the applicant for a stay must necessarily establish the grounds of their application by admissible evidence, it must be kept steadily in mind that much of the evidence will relate to events which may occur in the future. Necessarily, the evidence produced must provide an appropriately sound foundation on which a court may assess the risk of those future events occurring. In that respect, for the purposes of establishing that the circumstances warrant the granting of a stay, the applicant must not leave the situation in a state of mere ‘speculation’ or ‘argument’.
- A significant factor in any discretionary consideration is whether there is a real risk or probability that a successful appellant would be deprived of the fruits of their appeal if a stay is not granted. That consideration extends to the circumstances where there is a real risk that it will not be possible for the successful appellant to be substantially restored to its former position if judgment is executed against it.
- Conversely, there is a strong reason for refusing a stay where it is established that there is a real risk that the granting of a stay may prevent the successful party at trial from obtaining the full benefits of their judgment if the appeal is unsuccessful.
If you are acting for a respondent to an appeal, you should take into account that many applications for a stay pending appeal can be warded off by a voluntary undertaking which will address concerns raised about an appeal being rendered nugatory if the stay is not granted.
For example, where the judgment at first instance requires the payment of a sum of money to the respondent, an undertaking by the respondent to hold that money in an Australian bank account, or a solicitor’s trust account, pending the outcome of the appeal will usually defeat an application for a stay premised on concerns about the risk of dissipation of the judgment sum.23
This approach is advantageous for a respondent because it allows them to secure the judgment sum pending appeal.
If you are acting for an appellant, you should consider seeking an appropriate undertaking from the respondent prior to bringing the application for the stay. If the undertaking is provided, this avoids the uncertainty and cost associated with bringing an application. If it is not provided, the request and refusal can be put before the court hearing the application and this may enhance the prospects of obtaining a stay.
Kylie Downes QC is a member of Northbank Chambers and the Proctor editorial committee. Will Le Mass is a Brisbane barrister and associate member of Northbank Chambers.
1 UCPR, Rule 761(1).
2 UCPR, Rule 761(2).
3 Stone v Copperform Pty Ltd  1 Qd R 106 at 107.
4 Simonova v Department of Housing and Public Works  QCA 60 at pages 4-5.
5 Cook’s Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd  2 Qd R 453 at .
8 Elphick v MMI General Insurance Ltd  QCA 347 at ; also Beraru v Perpetual Ltd  QCA 330, page 3.
9 Cook’s Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd  2 Qd R 453 at .
10 Drew v Makita (Australia) Pty Ltd  QCA 312, page 4.
11 Cook’s Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd  2 Qd R 453 at .
12 Cook’s Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd  2 Qd R 453 at .
13 Ibid at .
14 Phoenix Constructions (Qld) Pty Ltd v McCracken  QCA 259.
15 Cook’s Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd  2 Qd R 453 at .
16 Cook’s Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd  2 Qd R 453 at -.
17 Beraru v Perpetual Ltd  QCA 330.
18 Andrews v John Fairfax & Sons Ltd  2 NSWLR 184 at 189.
19 Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd  QCA 276.
20 Jawhite Pty Ltd v Trabme Pty Ltd  QCA 225 at .
21 Crouch and Lyndon (a firm) v IPG Finance Australia Pty Ltd  QCA 332 at  and .
22 Federal Court of Australia Act 1976 (Cth), s30AK; Federal Court Rules 2011 (Cth), r36.08.
23 Mineralogy Pty Ltd v BGP Geoexplorer Pte Ltd  QCA 275 at ; Cook’s Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd  2 Qd R 453 at ; Crouch and Lyndon (a firm) v IPG Finance Australia Pty Ltd  QCA 332 at ; Chapel of Angels Pty Ltd v Hennessy Building Pty Ltd  QCA 229 at -.