Connell-McDowell v Bleechmore [1999] VSCA 68

5. Section 74(4) reads

"(4) No such appeal [i.e. to this Court] shall operate as a stay of proceedings unless the County Court so orders, or unless within fourteen days after the judgment or order appealed from a deposit is made of or security given to the satisfaction of the court for a sum to be fixed by the court not exceeding the amount of the money or the value of the property affected by the said judgment or order."

The construction and operation of s.74(4) were discussed by Hansen, J. in Stavreski v. Van Leer Australia Pty. Ltd. (unreported, 2nd November 1994) and by Beach, J. in Christina v. Browns Valve Service Pty. Ltd. [1995] VICSC 77; [1995] 2 V.R. 288. On both occasions reference was made to the corresponding English rule, the operation of which was explained in Sewing Machines Rentals Ltd. v. Wilson [1976] 1 W.L.R. 37 especially at 41-43, pet.dis. ibid. at 533.

10. On 25th August 1998 Judge Neesham made the following order, which reflected the language of the summons:

1. The Defendant/Appellant pay into Court today the sum of $935,097.73 such sum to be held by the Registrar pending the determination of the Defendant's/Appellant's appeal to the Court of Appeal as instituted by a Notice of Appeal dated 21 August 1998 or further Order and subject to paragraph 2 below all proceedings against the Defendant/Appellant on the Plaintiff's/Respondent's judgment dated 11 August 1998 be stayed.

2. That the Registrar invest the said sum with a Bank in an interest bearing account pending the determination of the appeal or further Order and advise the parties of the particulars of such investment.

3. That there be liberty to either party to apply on giving forty-eight hours prior notice in writing to the other.

4. That the costs of this application be reserved."

I have italicized the word "and" to make it clear that paragraph 1 of the order consists of two distinct parts. The first directs a payment into court and the second stays proceedings on the judgment.

19. The present application was made by summons filed on 29th April 1999. The primary relief sought is an order that such part of the moneys paid into court pursuant to Judge Neesham's order as this Court deems just and equitable be paid out to the applicant pending the determination of his appeal. The alternative relief sought is an order expediting the hearing of the appeal.

22. In his closing address below counsel for the respondent submitted that the applicant's general damages should be in the order of $100,000, conceded that the applicant's earning capacity as a practitioner specializing in criminal law had been affected by his injuries and contended that his loss of earning capacity was approximately 25 per cent. Extrapolating from those concessions in the light of the learned judge's findings, Mr. Stanley, Q.C., who appeared with Mr. Lancy for the applicant, submitted in this Court that at least $450,000 should be paid out to the applicant pending the hearing of the appeal.

25. The summons filed on 21st August 1998 made it clear that the respondent was willing to pay into court an amount equal to the damages awarded. (It was tacitly assumed in argument before us that "the amount of the money ... affected by the said judgment or order" in s.74(4) does not include costs. That is probably the natural meaning of the words, particularly having regard to the alternative, "the value of the property". It may also be more consistent with Hansen, J.'s decision. To the contrary are the observations of Beach, J. at 290 lines 31-32 and 291 lines 4-9, especially if all proceedings on the judgment are to be stayed, as they were here although possibly not in Christina's Case: see 289 lines 10-11 but compare 291 lines 4-9. The view that costs are included may also derive support from the concept of "assessment" in the Sewing Machines Rentals Case at 42G.) In those circumstances it was conceded that the respondent was entitled to a stay as of right; that there was no error in the order Judge Neesham made and no occasion to seek leave to appeal against it; and that the applicant was not assisted by Rule 64.22(1), which confers on this Court, on an appeal, all the powers and duties of the court of first instance.

28. Our jurisdiction or power to grant the primary relief sought in the summons was said to be derived from either or both of s.74(3) of the County Court Act and Rule 64.22(2).

31. In my opinion, it is unnecessary to decide whether either s.74(3) or Rule 64.22(2) applies prior to the hearing of an appeal or in relation to any judgment or order other than the judgment or order against which the appeal is brought. However that may be, Parliament has provided that a litigant in the position of the respondent is entitled to a stay as of right if he or she complies with s.74(4). To order that any part of the moneys paid into court pursuant to Judge Neesham's order be paid out to the applicant prior to the hearing of the appeal would detract from the stay. That would not be an appropriate exercise of any power that this Court may have.

34. Mr. Stanley submitted that s.74(4) was enacted to protect a respondent to an appeal. I accept that both the time limit and the requirement that the appellant make a deposit or give security to the satisfaction of the County Court are for the benefit of the respondent, but the rest of the second limb of the sub-section is for the benefit of the appellant. At least at this stage of the appellate process, Parliament has struck the balance between their competing interests in a particular way, which it would not be right for this Court to disturb.

37. I say nothing as to the position once the hearing of the appeal begins or between the hearing and judgment if judgment is reserved. Prima facie the stay should endure until the determination of the appeal, but s.74(4) does not say so expressly.

40. Mr. Blanden, who appeared for the respondent, conceded that the applicant would eventually be entitled to some damages. It may be inferred from the trial judge's summary of the evidence and the concessions made below that he will be entitled to substantial damages. As I have already mentioned, the appeal is only as to quantum. The affidavits filed in support of the application show that the applicant is being seriously prejudiced by receiving nothing at all in respect of the judgment.

43. This case illustrates that the provision for a stay as of right in s.74(4) is capable of working considerable injustice. It reflects an earlier time when the County Court had very limited jurisdiction. It may well be that the second limb should be repealed and sub-s.(4) should provide simply that an appeal does not operate as a stay unless so ordered by the County Court or the Court of Appeal.

46. For these reasons I would refuse the primary relief sought but I would accede to the application for expedition, to which Mr. Blanden consented.

51. I agree with Callaway, J.A. that the application for payment out of part of the moneys in court should be refused and that an order should be made for an expedited hearing of the appeal.

54. The second limb of s.74(4) of the County Court Act 1958 imposes a straight-jacket upon the Court in that it produces a stay if the appellant pays or gives security for the sum fixed by the Court. The Court can only fix the amount; it cannot determine that it is inappropriate or unjust that there should be a stay. Yet the circumstances of the applicant in the present case demonstrate that in a particular case a stay can produce hardship, indeed injustice, which is not cured by payment or the provision of security by the appellant. The respondent to an appeal may be denied urgently needed moneys, being part of a sum to which he has been held entitled after a trial, and which it is not likely he will be required to repay even if the appeal is successful.