Contempree v BS Investments Pty Ltd & Anor

In this significant case, the Court of Appeal considered the correct test for determining whether a stay of enforcement of a judgment should be granted under r 800 Uniform Civil Procedure Rules 1999. The Court clarified the test under r 800 and identified several key considerations in applying it.

Morrison and Mullins JJA and Brown J

12 November 2021

The respondents commenced proceedings against the appellant under a guarantee, ultimately obtaining judgment in their favour in the amount of $528,555.40. [2]. An appeal against that judgment was unsuccessful. [2]. While the guarantee proceedings were ongoing, a company associated with the appellant commenced proceedings against the respondents for damages arising from misleading or deceptive conduct in the sale of a catamaran. [2], [6]. These proceedings are ongoing, with the respondents recently filing a counterclaim seeking set-off of various amounts, including the judgment debt. [8].

Following their success in the guarantee proceedings, the respondents obtained enforcement warrants from the Court, which they registered over six properties owned by the appellant. [7]. Consequently, the appellant applied under r 800 Uniform Civil Procedure Rules 1999 for a stay of execution of the judgment in the guarantee proceedings pending the outcome of the catamaran proceedings. [3]. This stay was not granted, with the primary judge relying on Virgtel Ltd v Zabusky (No 2) [2009] QCA 349 to hold that an applicant under r 800 must show special or exceptional circumstances warranting the grant of a stay. [12].

On appeal, Mullins JA, with whom Morrison JA and Brown J agreed, accepted a submission put by the appellant that, to the extent that Virgtel supports the proposition that special or exceptional circumstances must be shown before a stay will issue under r 800, it should not be followed. [17]. This was because the Court in Virgtel had overlooked relevant intermediate appellate authority which contradicted that proposition. [17]. Her Honour contrasted this position with that in the UK, where the rules expressly require that special circumstances be shown. [17].

Mullins JA accepted, however, that it remained for an applicant for a stay under r 800 to show that it is an appropriate case for a stay to be granted. [18]. In this way, her Honour considered the test to be consistent with that applied in Cook’s Construction Pty Ltd v Stork Food Systems Australasia Pty Ltd [2008] 2 Qd R 453 in respect of a stay pending an appeal under r 761. [19]. Her Honour quoted Cook’s Construction at [12], where Keane JA observed that an applicant for a stay must show that there are sufficient reasons to outweigh the expectation that a successful litigant will have the fruits of the judgment in its favour before a stay will be granted, and that courts should generally not be disposed to grant stays. [19]. Mullins JA considered that so long as the different stages at which the powers under rr 761 and 800 are exercised are taken into account, there is no reason why the tests should be different. [20]. The ultimate test is whether it is appropriate in the particular circumstances of the case to grant a stay. [20]. Accordingly, the primary judge erred in applying the wrong test. [24].

However, Mullins JA found that the primary judge did not err in considering the merits of the appellant’s claim in the catamaran proceedings or in considering the time that had elapsed since entry of the judgment, which “must be a relevant consideration”. [29]–[31]. Indeed, her Honour found that Virgtel remains authoritative as support for the proposition that it is highly relevant if a party does not apply for the stay until after costs have been assessed. [30]. After identifying the factors weighed up by the primary judge and taking them into account, Mullins JA found that the appellant had failed to show that any different result would have been reached had the primary judge applied the correct test. [36]–[37].

The appeal was dismissed with costs. [39].

M Paterson