Civil procedure - Application for stay pending return of order nisi - Financial hardship - Prospects of success on return of order nisi - Whether special circumstances - Turns on own facts

Baker v Commissioner of Federal Police [2000] FCA 1339; (2000) 104 FCR 359

Burton v Zurich Bay Holdings Pty Ltd [1999] WASCA 211

Elliot v Australian Prudential Regulation Authority [2004] FCA 586

Hamersley Iron Pty Ltd v Lovell (No 2) (1998) 20 WAR 79

Hamilton v Oades [1989] HCA 21; (1989) 166 CLR 486

Kwa v Bank of Western Australia [2003] WASCA 163

McMahon v Gould (1982) 7 ACLR 202

Re The Medical Board of Western Australia; Ex parte P [2001] WASC 103

Stampalia v The Stewards of the Western Australian Trotting Association & Anor [1999] WASC 7

Ansell v Walls [1982] FCA 186; (1982) 43 ALR 41

Baker, Re; Flatwash Pty Ltd v Federal Commissioner of Taxation (1987) 19 ATR 11

Cameron's Unit Services Pty Ltd v Kevin R Whelpton Associates (Australia) Pty Ltd [1984] FCA 406; (1984) 4 FCR 428

Cunliffe v The Commonwealth [1994] HCA 44; (1994) 182 CLR 272

Dixon v Commonwealth [1981] FCA 77; (1981) 55 FLR 34

Errington v Minister of Health [1935] 1 KB 249

Golden City Car and Truck Centre and Wall v DCT [1999] FCA 922; (1999) 42 ATR 379

Hammond v Commonwealth [1982] HCA 42; (1982) 152 CLR 188

Harper v Racing Appeal Tribunal of WA, unreported; SCt of WA (Kennedy J); Library No 930738; 26 November 1993

Harvey v Racing Appeals Tribunal of WA [2000] WASC 299

Kanda v Government of Malaysia [1962] AC 332

Lee-Steere v Slater, unreported; SCt of WA; Library No 5083; 29 September 1983

Martins v Racing Penalties Tribunal of Western Australia, unreported; FCt SCt of WA; Library No 970519; 10 October 1997

Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24

Minister for Immigration and Ethnic Affairs v Guo (1997) 191 CLR 559

Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611

Norilya Minerals Pty Ltd v Ireland (1991) 5 WAR 411

Olbers Co Ltd v Commonwealth (No 2) [2003] FCA 177

Re a Solicitor (1938) 55 WN (NSW) 110

Re Levy; Ex parte Incorporated Law of Institute of New South Wales [1887] 8 LR(NSW) 347

Roberts v Hopwood [1925] AC 578

Woolgar v Chief Constable of Sussex Police [1999] 3 All ER 604

1 TEMPLEMAN J: On 1 May 2004, the commercial crayfishing vessel the Andrea, which was skippered by the applicant, collided off Eagle Bay with a small recreational vessel containing four persons. As a result of the collision, one of the persons on the recreational vessel was killed and another injured seriously.

2 On 30 June 2004, the applicant was charged with the manslaughter of the deceased person and causing grievous bodily harm to the person who had been injured.

3 On 26 August 2004, the Chief Executive Officer of the Department of Planning and Infrastructure for Western Australia, Mr Greg Martin, wrote to the applicant to inform him that he (Mr Martin) was considering the suspension of various certificates held by the applicant. Those were the certificates which permitted the applicant to take charge of a commercial fishing vessel.

4 On 24 September 2004, the applicant's solicitors wrote to Mr Martin and requested him to provide the applicant with the evidence he had reviewed in arriving at his decision. The solicitors informed Mr Martin that in their view it was inappropriate for him to proceed with any enquiry which might involve an examination or determination of issues before a superior court.

5 Between 24 September and 23 December 2004, the applicant's solicitors and Mr Martin exchanged correspondence on this issue. Ultimately, Mr Martin did not accept the views expressed by the applicant's solicitors.

6 On 23 December 2004, Mr Martin exercised his powers under reg 15 of the Western Australian (Certificates of Competency and Safety Manning) Regulations 1983 and cancelled the following certificates held by the applicant:

Skipper Grade 3 Restricted Certificate No WC018263

Master Class 5 Fish Restricted Certificate WC022606

Coxswain of Fishing Vessel Certificate No 1113

7 On 31 December 2004, the applicant applied for a writ of certiorari to quash Mr Martin's decision to cancel his certificates. The application was made on the following grounds:

"Mr Greg Martin's decision to cancel the applicant's Certificates before the completion of the criminal proceedings that have been brought against the applicant denied, in practice, the applicant the right to natural justice.

Mr Greg Martin's decision to cancel the applicant's Certificates before the completion of the criminal proceedings that have been brought against the applicant was unreasonable.

Mr Greg Martin's decision to cancel the applicant's Certificates before the completion of the criminal proceedings that have been brought against the applicant was unfair.

In arriving at his decision to cancel the applicant's Certificates Mr Greg Martin took into account irrelevant considerations."

8 The application came before me on 14 January 2005. I considered that the applicant's position was sufficiently arguable to justify the grant of an order nisi. However, the applicant sought also a stay of the decision to cancel his certificates, pending the return of the order nisi and the decision in relation to it.

9 The principal basis for the stay application was that the applicant would suffer substantial and irremediable financial loss if the stay were not granted and he was ultimately successful in his application to have the decision to cancel his certificates quashed.

10 Notice of the stay application had been served on the office of the State Solicitor who instructed counsel to seek leave to appear as amicus curiae in relation to that issue.

11 I gave counsel leave to appear. Although counsel was prepared to argue the issue, she sought an adjournment so that further enquiry could be made about the applicant's financial position.

12 It seemed to me that this was appropriate, there being a number of unanswered questions which arose from the affidavits already filed by and on behalf of the applicant in relation to that matter.

13 I therefore gave directions for the filing of further affidavits in accordance with a timetable which enabled me to deal with the application on 20 January. I then heard full argument which led me to the conclusion that I should not grant a stay. I gave my reasons for that conclusion in summary form on the basis that I would later set out my reasons in full.

14 These are my reasons for dismissing the stay application.

15 It is common ground between the parties that the Court has the power to grant a stay in conjunction with an order nisi. The power arises both under O 56 r 5(2) of the Rules of the Supreme Court, and under the inherent jurisdiction of the Court.

16 It is also common ground that the question which must be answered favourably to the applicant for a stay, is that formulated by Owen J in Stampalia v The Stewards of the Western Australian Trotting Association & Anor [1999] WASC 7 at [11]:

" ... has the applicant demonstrated that there are special circumstances sufficient to satisfy the court that it is just and reasonable to order a stay so as to preserve the subject-matter and integrity of the litigation?"

17 In Re The Medical Board of Western Australia; Ex parte P [2001] WASC 103, Murray J held that the successful applicant for an order nisi who sought a stay, carried the onus of satisfying the Court that there were special circumstances:

" ... such as that the refusal of a stay would be likely to render the application for final prerogative relief nugatory, which would justify the departure from the ordinary rule that the process of review, whether by way of appeal or otherwise, will not of itself justify an order having the effect that the decision challenged and proceedings consequent thereon should be deprived of effect before the final determination of the court upon the review process." (at [23])

18 Murray J referred to Hamersley Iron Pty Ltd v Lovell (No 2) (1998) 20 WAR 79 where it had been noted that:

" ... the grant of a stay involved an extraordinary or exceptional jurisdiction only to be exercised where necessary to preserve the essential rights of the parties in the proceedings under challenge or to preserve the process of the challenge or review made to those proceedings if it may ultimately be the case that if the applicant for a stay was to succeed, he or she could not be restored to the position deemed to be appropriate upon the making of final orders to determine the process of appeal or other form of review." ([24])

19 "Special circumstances" may exist where, for example, the decision under review is a suspension, and the substantive application cannot be heard until after the relevant period has expired. In those circumstances, it might be just and reasonable to order a stay, to prevent the applicant's right to a review being rendered nugatory by the passage of time.

20 That is not the case here, because the cancellation of the applicant's certificates was permanent.

21 The formulation of the test for the grant of a stay does not exclude the possibility that financial considerations may constitute special circumstances. However, if such considerations are to be decisive, they must, in my view, be such as to bear on the integrity of the litigation, in the sense expressed above.

22 Thus, in Stampalia (supra), Owen J held that even great financial hardship and an inability to use the only work skills possessed by the applicant, who was a trainer of horses, did not constitute special circumstances such as to justify a stay of 12 months' disqualification imposed on the applicant by the stewards of the Western Australian Trotting Association.

23 With these considerations in mind, I turn to consider the applicant's evidence of his financial hardship.

24 In his affidavit of 13 January 2005, the applicant deposed to his understanding that his substantive application could not be heard until April 2005, after which he would have to wait for the Court to deliver its decision.

25 The applicant pointed out that the fishing season commenced on 15 November 2004 and would conclude on about 30 June 2005. The applicant said that if the stay was not granted, it would mean "effectively" that he would not be able to fish for the remainder of the season, and would therefore incur substantial financial loss.

26 The applicant went on to say that he is 63 years old and had been fishing for 48 years. He had no other profession, skill or trade which he could use to earn an income.

27 The applicant said he receives some $44,000 per annum from leasing 22 crayfish pots. However, his outgoings include $24,395 payable in December, March and June of each year for the hire purchase of his vessel Frances and $33,983 payable in the same months for the hire purchase of the vessel Andrea. Those payments are due and payable for the next three years as part of a five-year hire purchase agreement the applicant entered into two years ago. The total current debt on the vessels is $618,311. After setting out some other outgoings, the applicant said that because fishing was his "dominant source of income", he would not be able to meet his financial commitments if unable to return to work immediately. The applicant said this would:

"effectively mean that I will need to make a decision about selling some of my assets that my wife and I have built up over the past 48 years of work so that I can support my family while I am not working."

28 Later in his affidavit, the applicant said that at his age, he is unable to work as a deckhand as he was when younger. He has not worked as a deckhand since the age of 23 years. He would not now be able to lift craypots weighing approximately 80 kilograms in and out of the water.

29 The applicant's affidavit of 13 January 2005 did not explain why the applicant was unable to lease the Andrea or employ a suitably qualified person to skipper it in his place. The applicant addressed these issues in a further affidavit filed on 18 January 2005.

30 In that affidavit, the applicant said he made a decision in late October 2004 to tie up the Andrea for the 2004-5 fishing season. The applicant said he made that decision because he had been informed by Mr Martin that he was considering the suspension or cancellation of the applicant's certificates. The applicant said he knew it was a real risk that this course would be taken.

31 The applicant said that the preparation of the Andrea for the 2004-5 season, would have required expenditure of approximately $100,000, including $50,000 for the leased crayfish licence units. There would be additional licence costs and other costs necessary to prepare the vessel for sea.

32 I pause to note that by this decision, the applicant saved himself some $100,000.

33 The applicant went on to explain why he was "not prepared" to find another Master to skipper the Andrea. He said that based on his experience, most owners would have secured the services of a Master well before the commencement of the season on 15 November 2004. Thus, there was unlikely to be anyone of sufficient competence available to skipper the Andrea.

34 The applicant went on to say that in any event, he did not trust anyone other than his son Anthony to skipper the Andrea because of the meticulous way he has maintained that vessel (and indeed, all his previous vessels).

35 The applicant also expressed concern about the possibility of another skipper involving the Andrea in an incident or contravening regulations. This would have resulted in "a black mark" against the Andrea. The consequence of three black marks in 10 years might be the loss of the applicant's fishing licence.

36 These considerations seem to me to be unduly speculative. I therefore leave them out of account.

37 The applicant then said it was necessary to explain some of his business affairs in order to demonstrate the financial hardship he would suffer as a result of the cancellation of his certificates.

38 The applicant and his wife are co-directors of Leashaw Pty Ltd ("Leashaw") and Foreshore Pty Ltd ("Foreshore"). Leashaw owns the Frances and its fishing licence. Foreshore owns the Andrea. The Andrea's fishing licence is owned by the applicant and his wife.

39 The applicant had the Andrea and the Frances built two years ago so that he and his son Anthony could work together, but on their own vessels. The applicant said he had no plans to retire before the age of 70. It was therefore his intention that the Andrea and the Frances should serve him and his son "for a few years yet". The applicant said:

"Now that my certificates have been taken away, I am forced into thinking about having to sell both these vessels and building a vessel that can accommodate the 194 crayfish licence units that I have rights to. There will be a loss associated with selling the two vessels at this stage."

40 It is clear from this evidence that despite the extent of the applicant's financial commitments, he does not contemplate that the cancellation of his certificates - even the permanent cancellation - would put him out of business or that the sale of the Andrea and the Frances would result in a loss so substantial that he could not sustain it.

41 The applicant referred again to the hire purchase payments required to be made in respect of the Andrea and the Frances. The applicant said that he and his wife were guarantors of the hire purchase agreement so that they would have to draw on their savings to cover any shortfall if the payments were not made.

42 The applicant does not, however, express any view as to the likelihood that this will happen. In my view, it is clear that it will depend on the income the applicant is able to generate from the arrangements put in place to enable him to derive income from the craypots which would otherwise have been used on the Andrea.

43 The applicant referred to these arrangements in his affidavit. He said he had the rights to 194 crayfish licence units on the Andrea and the Frances. He transferred 71 of those licence units to the Frances, enabling it to work 140 crayfish licence units.

44 Further, as he said in his previous affidavit, the applicant had transferred 22 crayfish licence units to Lobster Australia, at $2,000 each. One crayfish licence unit is held with the Fisheries Department "as normal practice".

45 Thus, the applicant said, he had effectively "lost out on the full use of 31 crayfish licence units and the partial use of the 22 crayfish licence units transferred to Lobster Australia."

46 It seems to me that not all of the applicant's crayfish licence units are accounted for in his calculation. In particular, it is not clear to me why the applicant was unable to lease the 31 units which he claims to have "lost out on".

47 Further, I think the applicant has failed to take into account the extra income likely to be earned by the Frances with the increased number of licence units, and the saving of $100,000 resulting from the Andrea being out of commission in the current season.

48 The applicant expressed concern about the possibility of his son Anthony falling sick so as to be unable to work as a Master, with the result that the Frances would not generate any income. The applicant says that his son has a medical condition known as carpel tunnel, which affects his hands and which leads him to complain of regular pain. Anthony is to have an operation in the off-season.

49 The fact that the operation is planned for the end of the season, suggests to me that the prognosis of Anthony's condition is such that it is unlikely he would be unable to continue for the balance of the season. I therefore regard the applicant's concern as speculative.

50 I accept entirely that the cancellation of his certificates will result in the applicant suffering substantial financial loss. However, the evidence suggests to me that the loss might not be as great as the applicant fears. Furthermore, it appears that the applicant's present financial circumstances have resulted in considerable measure from the decisions he took himself, which ruled out the possibility that the Andrea might be used productively under the command of another skipper. While I can fully understand the applicant's reluctance to engage an alternative skipper, it is clear he made no attempt to do so. Nor did he explore any arrangement whereby he could direct operations on the Andrea to ensure it was run and maintained to his satisfaction, albeit under the command of another skipper who would be ultimately responsible for the vessel.

51 Furthermore, as I have noted above, I think it clear that whatever the outcome of the substantive application, the cancellation of the applicant's certificates will not prevent him from carrying on his crayfishing business, even if he is not able to skipper a vessel.

52 There is also the possibility that the applicant might be able to use his qualification as a marine engine driver. I have an affidavit of John Robert Brooker filed in opposition to the stay application. Mr Brooker, who has long experience in the marine industry, is employed by the Department for Planning and Infrastructure as the Manager, Marine Environment Protection in the Marine Safety Directorate of the Department. A search made by Mr Brooker in the Department's Marine Register disclosed that the applicant holds a valid certificate of competency as a Marine Engine Driver (Motor) Grade II, No WC018264.

53 This certificate would permit the applicant to be the Chief Engineer on a vessel of less than 750 kw for offshore operations (less than 200 nautical miles offshore) or 500 kw for Australian coastal and middle waters (within 600 nautical miles offshore, and to be the First Engineer on vessels within engine power less than 1000 kw for offshore operations (within 200 nautical miles offshore).

54 I do not know whether the applicant would be able to work (either on one of his own vessels or as an employee) using his marine engine driver's certificate. However, in the absence of any evidence to the contrary, I assume it would be open to him to do so.

55 For all these reasons, I am not persuaded that the applicant's financial position is such as to constitute special circumstances and thereby justify the grant of a stay.

56 The applicant contends further that he has a very strong case for quashing Mr Martin's decision to cancel his certificates, and that this also constitutes special circumstances.

57 I accept for present purposes that the prospects of success may properly be taken into account in an application such as this: see Burton v Zurich Bay Holdings Pty Ltd [1999] WASCA 211 and Kwa v Bank of Western Australia [2003] WASCA 163.

58 The applicant contends that when Mr Martin exercised his power under reg 15 of the Regulations, he was under an obligation to afford natural justice to the applicant. I will assume that to be the case, for present purposes. On that basis, the applicant was entitled to a fair hearing in relation to the question whether his certificates should be cancelled.

59 The applicant contends that it was not possible for him to have a fair hearing because such a hearing would have involved him in explaining to Mr Martin how the incident of 1 May 2004 occurred, thereby prejudicing his defence and his right of silence in the pending criminal proceedings.

60 The applicant relies on Hamilton v Oades [1989] HCA 21; (1989) 166 CLR 486. At 495, Mason CJ said:

"The privilege against self-incrimination can only be abrogated by the manifestation of a clear legislative intention ... The privilege is not lightly abrogated ...."

"The public examination on oath or affirmation of a person charged with an indictable offence on matters with which the charge is concerned will ordinarily be viewed as seriously and unfairly burdensome, prejudicial or damaging if for no reason other than that it will ordinarily be viewed as constituting a real risk to the fairness and integrity of the trial of that charge. That is so whether or not the examination involves questions the answers to which have a tendency to incriminate. If the answers have a tendency to incriminate, an even greater risk is constituted by the public claiming of the privilege against self-incrimination."

61 The question in Hamilton v Oades (supra) was whether a provision of the Companies (NSW) Code which empowered the Supreme Court to order the examination of a director of a company on matters relating to the affairs of the company, abrogated the common law privilege against self-incrimination. The High Court, for reasons encapsulated in the above passages, held that it did. That is not this case, however. The issue here, is whether it was right for Mr Martin to undertake the administrative process of considering whether to cancel or suspend the applicant's licence, when the applicant could only respond by disclosing matters he would not otherwise be bound to disclose.

62 That was very close to the situation which arose in Elliot v Australian Prudential Regulation Authority [2004] FCA 586. There, the Australian Prudential Regulation Authority, in the exercise of its statutory powers, was proposing to disqualify the applicant from being an approved auditor. At the same time, the Director of Public Prosecutions of the Commonwealth was considering whether to lay charges in respect of criminal offences against the applicant, arising out of the same circumstances. Gray J applied the proposition summarised by Gyles J in Baker v Commissioner of Federal Police [2000] FCA 1339; (2000) 104 FCR 359 at [27] in the following terms:

"There is a long line of authority which establishes that the granting of a stay of civil proceedings in those circumstances is discretionary in the civil court and that the choice of either fully pursuing a civil claim or a defence to a civil claim or not doing so to avoid the risk of self-incrimination is not sufficient in itself to warrant a stay."

63 That proposition emerged from a line of authority stemming from McMahon v Gould (1982) 7 ACLR 202.

64 In Elliot's case (supra) Gray J said (at [21]):

"There is a need, in my view, for the applicants to descend to specifics if they wish to establish that there will be injustice or prejudice to them from having to elect whether to respond to the letters of 31 October 2003. It is necessary for each applicant separately to say how he or she might be affected in making any response, so that the Court can see if there is a real risk of prejudice or injustice of a sufficiently substantial nature."

65 In my view, that is the position here. However, the applicant has not descended to that level of specificity. In fact, far from suggesting that an explanation of the events of 1 May 2004 would result in self-incrimination, the applicant has repeatedly referred to the incident as being an accident. The implication is that, having regard to s 23 of the Criminal Code, the applicant is not criminally responsible for the matters with which he has been charged.

66 In the absence of any further information, I am not persuaded that there would be a real risk of prejudice or injustice of a sufficiently substantial nature to the applicant, if he was to disclose the facts on which he relies in support of that contention.

67 The applicant next relies on the fact that he was informed by Mr Martin that he reviewed 26 documents in making his decision to cancel the applicant's certificates. However, it has emerged that some 75 statements were taken by the police in their investigation of the collision.

68 The applicant submits that in these circumstances, either the police were selective in the documents they gave to Mr Martin or Mr Martin failed to disclose documents he had in fact considered. The applicant contends that on either basis, he has been denied natural justice.

69 In my view, this contention is entirely speculative. It cannot be inferred from the fact that the police took 75 statements, that every such statement was relevant to the issues considered by Mr Martin in making his decision. In the absence of any more detailed evidence, I am not persuaded that these circumstances result in the applicant having a strong case for the quashing of the decision.

70 The applicant then relies on two public interest considerations.

71 First, he contends that he is not, in fact, a danger to the public. He points to his long career as the Master of a crayfishing boat in which he has not been involved in any other collision. Nor was he involved in any other accident at sea in the period from 1 May 2004 until December of that year, when his certificates were cancelled.

72 I regard this not so much as a public policy question, but as a matter going to the "unreasonableness" ground relied on by the applicant.

73 In that context, the Court hearing the substantive application might wish to consider the applicant's record. However, in the absence of any explanation from the applicant, the Court would no doubt place considerable weight on Mr Martin's assessment.

74 Clearly, the applicant's unblemished record was be a matter for Mr Martin to take into account in making his decision. However, it is not suggested that Mr Martin did not do so. It was drawn to his attention in a letter dated 21 November 2004 from the applicant's solicitors.

75 The applicant contends that had safety considerations been paramount, he would have expected Mr Martin to act more expeditiously than he did. However, the first intimation that the applicant might be considered unfit to act as a Master was Mr Martin's letter of 26 August 2004. Of course, the fishing season was then closed. Thus, the inference may also be drawn that Mr Martin did not regard the matter as unduly urgent.

76 Finally, the applicant contends that if his certificates remain cancelled at the time of his criminal trial, he may be prevented from calling character evidence on his behalf. The implication in the submission is that if the applicant put his character in issue, he could be asked questions in cross-examination which required him to admit that his certificates had been cancelled because he was regarded as a risk.

77 In my view, this point is without merit. Whether or not the applicant is properly to be regarded as a risk, may depend on the outcome of the criminal trial. What will be in issue there, will be his character before the incident of 1 May 2004. The fact that his certificates were cancelled as a result of the incident would, in my view, be irrelevant to the criminal proceedings. Without wishing to pre-empt any ruling likely to be made by the trial Judge, it seems to me unlikely that the jury would learn of the cancellation of the applicant's certificates in any event.

78 For the above reasons, while I accept that the applicant's case is arguable, I am not persuaded that the strength of the case is such as to constitute special circumstances and thereby justify a stay. I conclude that the application for a stay should be dismissed.