Appellant v Respondent

1. The landlord gave the tenant not less than 14 days' notice to vacate when the tenant owed at least 14 days' rent.
2. The landlord is entitled to a possession order.
3. The rent, which is $3,693.00 per calendar month, is paid to 11 July 2019 and the rent owed to today is $5,999.86.
4. The bond is $3693.00.

1. The tenant must vacate the rented premises by 30 August 2019.
2. The Principal Registrar, at the request of the person who obtained the possession order and on payment of the prescribed fee, shall issue a warrant of possession to be executed within 14 days after the date of issue (Any request must be made no later than 29 February 2020).
3. The tenant shall now pay the landlord rent owed of $5,999.86.

3 The warrant of execution was issued by the Tribunal but a prohibition on executing the warrant was issued until 6.00pm Friday 13 September 2019.

4 The tenant in the VCAT appeal, sought a stay of the VCAT orders and the matter was heard urgently by Ierodiaconou AsJ on the afternoon of 13 September 2019. Her Honour refused a stay in an ex tempore decision, revised and published on 13 September 2019.

1. An appeal or application for leave to appeal from the Tribunal does not operate as a stay of proceedings unless the Court otherwise orders.
2. Relevantly, r 66.16 of the Supreme Court (General Civil Procedure) Rules 2015 ('the Rules') and the inherent jurisdiction of the Court give a discretionary power to stay execution of judgment. That power is said to be exercised 'only on grounds which are relevant to a stay of enforcement of proceedings. The jurisdiction does not extend to grounds which are matters of defence, which ought to have been raised in the proceeding itself'.[1]

6 Her Honour applied the test that the circumstances that will justify a stay of execution are special circumstances which go to the enforcement of the judgment.

7 In applying the test of special or exceptional circumstances going to the enforcement, Her Honour referred to the principles as set out in Abikhair v Ali,[2] by Derham AsJ. Her Honour adopted the principles as set out by the Court of Appeal in Maher v Commonwealth Bank of Australia ('Maher'):

In Cellante and Ors. v G Kallis Industries Pty Ltd ('Cellante'), Young CJ (with whom Brooking J agreed), cited with approval the observation of Mahony JA (with whom Moffit P and Glass JA agreed) in Re Middle Harbour Investments Pty Ltd (in liq) that:

...where an applicant for a stay has not demonstrated an appropriate case but has left the situation in a state of speculation or of mere argument, what must be given to the fact that the judgment below has been in favour of the other party.

Young CJ concluded that an applicant for a stay under r 66.16 must show special or exceptional circumstances to take the case out of the general rule that an appeal does not operate as a stay.

...

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.[3]

8 The appellant has now appealed the decision of Ierodiaconou AsJ refusing a stay pending appeal ('the stay appeal').

9 An appeal from a decision of an Associate Justice is brought before a judge of the Trial Division in accordance with Rules 77.06.1 to 77.06.9. An appeal under Rule 77.06 is not by way of hearing de novo but is a re-hearing[4]: In a re-hearing, error must be demonstrated on the part of the Associate Judge.[5]

10 I am asked by the Appellant as before Her Honour, to stay the orders made by VCAT. The appropriate test for me to apply in determining interim relief on appeal from the decision of an Associate Justice, is whether the appellant has demonstrated that the Associate Judge's decision is attended by error which gives rise to a serious question to be tried and whether the balance of convenience supports the making of an order.

11 The error was said by the appellant to be twofold. First, it was said in oral submissions and outlined in written submissions that Her Honour had wrongly applied the test of special or exceptional circumstances and that the test was rather one where an applicant must demonstrate a proper basis for the stay. Secondly it was said that Her Honour erred in failing to properly consider whether the fact that the appeal would be rendered nugatory amounted to special circumstances.

12 On the first alleged error ,the lengthy written submissions made reference to a number of cases. However, the written submissions did not deal with the case cited by Her Honour of Maher, which made clear that this Court is to apply the test of special or exceptional circumstances. The principles shown in Maher have been cited frequently since that time in both the Trial Division and the Appeal Division of this Court.[6] Ultimately, the appellant accepted that this was the appropriate test and had been applied by Her Honour.

13 The other limb of the appellant's argument as to error was that the Associate Justice failed to have proper regard for the fact that absent a stay, the possession order with the consequent eviction of its staff and guests who were tenants there, would render its appeal nugatory. The Appellant submitted that this amounts to a special or exceptional circumstance. In that regard, Her Honour considered the evidence before her which consisted of an affidavit of Mr Youl[7], deposing to hardship suffered by the plaintiff's guests and staff who are living at the relevant property, who will suffer hardship. There was also affidavit evidence that did not go to special circumstances surrounding the matters relevant to a stay of the enforcement of proceedings but to matters of defence and the outlining of the appellant's argument below, which centred on the fact that the landlord's notices to vacate were not properly served. The learned Associate Trial Judge noted that the written reasons of VCAT were not before the Court and there was no explanation for the absence of those reasons. In any event the special circumstances with which Her Honour was concerned related to the enforcement rather than the issues at trial.

14 The hardship identified was not that of the appellant but of those guests or staff that it housed at the premises it occupied by agreement with the landlord. Her Honour said, relevant to the exercise of her discretion, that there was no evidence led as to whether the appellant has other property in its possession or what steps had been explored in relation to meeting the hardship that might be experienced by those guests and staff. These matters were clearly relevant to whether special circumstances existed. There was simply no evidence that her Honour was satisfied, amounted to special circumstances. Ultimately the application failed through lack of relevant evidence in circumstances where the appellant bore the responsibility of persuasion to the exercise of discretion.

15 Importantly, the Associate Justice asked whether the appellant was prepared to pay the unpaid rent or give an undertaking that it be paid. An undertaking as to damages is often sought and usually proffered by a person seeking the benefit of injunctive relief. This was not forthcoming by the appellant. The appellant however said it was prepared to pay rent for the period of the appeal in this Court going forward, if a stay were granted.

16 In all of the circumstances listed above, the Associate Justice was not satisfied that there was sufficient evidence before the Court to support the application and establish special circumstances.

17 In determining the application, the Associate Justice was exercising a discretionary power. Principles relevant to the appeal of a discretionary judgment are clear. In House v R, the High Court said:

The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judge composing the Appellate Court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court at first instance.[8]

18 In this Court, it was submitted on appeal that the error made by the Associate Judge was her failure to properly consider that a refusal of a stay would render the appeal against the possession and monetary orders nugatory. The fact that an appeal does not operate as a stay does not automatically mean that the existence of the appeal warrants a stay. Two matters appear from the reasons to weigh against the appellant. The first was that the appellant tenant, who by order was found in breach of its obligations to pay rent, was not itself living at or operating out of the premises but responsible for various staff and guests that it housed there who were at risk of eviction and homelessness if the warrant of possession was executed. In the circumstances, the ability to avoid rendering any appeal nugatory lay with the appellant should it have been prepared to give the undertaking sought by the Court or otherwise meet its obligations as tenant.

19 Before me, the appellant renewed its position that it was not prepared to give any undertaking as to payment of the monetary orders and submitted that despite this no prejudice was afforded to the respondent by the stay. There is a very simple prejudice afforded to the respondent in my view by the granting of a stay. That is, that the respondent is deprived at least by delay of the fruits of the judgment in her favour. The presumption that the appellant must displace for the discretion to be exercised in its favour is this presumption in the respondent's favour. I am not persuaded that by the submissions advanced on behalf of the appellant that the reasons given for refusing the stay give rise to a serious question to be tried as to error on the part of the Associate Justice.

20 Accordingly, I am not prepared to grant a stay of the possession order. At the conclusion of the hearing I indicated the decision that I had reached and advised that I would provide my decisions the next day. At that time I heard from the parties on the question of costs of the application before me. The respondent argued that costs follow the event. The appellant submitted that the question of costs should be reserved until the conclusion of the appeal. I see no reason not to deal with the question of costs. The plaintiff has been unsuccessful in its application and the defendant is entitled to his costs of this application.

21 On listing the matter today for delivery of reasons the appellant did not attend.

[1] Efektiv Pty Ltd v Jescal Nominees and Efektiv Pty Ltd v Jescal Nominees v Hodge [2019] VSC 628 citing Abikhair v Ali [2018] VSC 93, [22] - [25] (citations omitted).

[2] [2018] VSC 93 (Abikhair) [22]-[25].

[3] Abikhari (n 2) [21], [22], [25] (citations omitted).

[4] Oswal v Carson [2013] VSC 355; Glass (a Pseudonym) v Chief Examiner [2015] VSC 29.

[5] See generally Hou v Westpac [2014] VSC 606.

[6] Including in Maund v Racing Victoria Ltd [2015] VSCA 276; Giurina v Giurina [2018] VSCA 262.

[7] Affidavit of David Youl (Affidavit, 15 September 2019).

[8] House v R (1936) 55 CLR 499, 504 -505.