Petrotimor Companhia de Petroleos S.A.R.L. v Commonwealth of Australia

Federal Court of Australia (Full Court)|1989-12-11|Before: Black CJ, Hill JJ, Hill J

INTRODUCTION 8 By their notice of motion filed on 3 March 2003, the applicants have applied for a stay of proceedings on the orders of the Full Court made on 3 February 2003, pending the determination by the High Court of (a) an application by the applicants to the High Court for special leave to appeal from the Full Court's judgment; and (b) (if special leave is granted) of the appeal. 9 The respondents oppose the stay application. 10 The notice of motion is filed in this context: on 3 February 2003, the Full Court ordered, for the reasons then published, that the claims made by the applicants in their Amended Application, other than the claim relating to confidential information ("the CCI") be dismissed, but further ordered that if the applicants did not wish to proceed with the CCI, they were to notify the Court and the respondents of this within twenty-one days (i.e. by 24 February 2003) (Order 3); and that, if the applicants wish to proceed with the CCI, they were to file and serve within twenty-one days (i.e. by 24 February 2003) written submissions regarding the Court's jurisdiction to hear and determine the CCI (Order 4). However the applicants, having not filed or served any such submission, by their solicitor's letter dated 24 February 2003 informed the respondents that, since the applicants proposed (a) to apply to the High Court for special leave to appeal from the Full Court's judgment and (b) to move this Court for a stay of the Full Court's orders, pending further order or direction of this Court, the applicants did not propose to file and serve written submissions as directed. Instead, as mentioned, on 3 March 2003, they have brought their stay application.

Conclusions on THE stay application 13 It is common ground that pending the hearing of an application to the High Court, this Court has the power and the jurisdiction to order a stay of an order of the Full Court. The question here is whether, in the present circumstances, it is appropriate that it be exercised. 14 The nature of the jurisdiction to order a stay has been explained by Justices of the High Court on a number of occasions. 15 In Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No. 1) (1986) 161 CLR 681, where the Court below had ordered the cancellation of certain securities, Brennan J said (at 683): "The jurisdiction to grant a stay in the present case depends on whether a stay is necessary to preserve the subject-matter of the litigation. If an application for special leave to appeal would be futile unless a stay is granted, the jurisdiction arises." 16 His Honour characterised a stay to preserve the litigation's subject-matter as "an extraordinary jurisdiction and exceptional circumstances must be shown before its exercise is warranted" (at 684). 17 Brennan J explained (at 685): "In exercising the extraordinary jurisdiction to stay, the following factors are material to the exercise of this Court's discretion. In each case when the Court is satisfied a stay is required to preserve the subject-matter of the litigation, it is relevant to consider: first, whether there is a substantial prospect that special leave to appeal will be granted; secondly, whether the applicant has failed to take whatever steps are necessary to seek a stay from the court in which the matter is pending; thirdly, whether the grant of a stay will cause loss to the respondent; and fourthly, where the balance of convenience lies." 18 In Edelsten v Ward (No. 2) (1988) 63 ALJR 346, Brennan J, emphasising the "exceptional" character of the Court's inherent jurisdiction to preserve the subject matter of litigation pending the making of a special leave application, said (at 346): "[This jurisdiction] is one which can only be exercised in extraordinary circumstances. It is as well to emphasise that observation again lest the impression be created that, in the conduct of litigation, the orders of this Court are available to keep matters in statu quo until the litigation is finally resolved. That is not the purpose of the inherent jurisdiction. Something quite exceptional must be shown before that jurisdiction is exercised." 19 In Commissioner of Taxation v Myer Emporium (1986) 160 CLR 220, Dawson J noted (at 222) that the High Court Rules (see now O 70 r 8(1)) provide that, unless otherwise ordered, an appeal does not operate as a stay. His Honour said (at 222 - 223): "It is well established by authority that the discretion which it confers to order a stay of proceedings is only to be exercised where special circumstances exist which justify departure from the ordinary rule that a successful litigant is entitled to the fruits of his litigation pending the determination of any appeal: see, e.g., The Annot Lyle [(1886) 11 P.D. 114]; Scarborough v. Lew's Junction Stores Pty. Ltd. [[1963] V.R. 129]. Special circumstances justifying a stay will exist where it is necessary to prevent the appeal, if successful, from being nugatory: see Wilson v. Church [No. 2] [(1879) 12 Ch. D. 454]; Klinker Knitting Mills Pty. Ltd. v. L'Union Fire Accident and General Insurance Co. Ltd. [[1937] VLR 142]. Generally that will occur when, because of the respondent's financial state, there is no reasonable prospect of recovering moneys paid pursuant to the judgment at first instance. However, special circumstances are not limited to that situation and will, I think, exist where for whatever reason, there is 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: see McBride v. Sandland [No. 2] [(1918) 25 CLR 369]." 20 In Manfal Pty Ltd (in Liq) v Trade Practices Commission (1990) 65 ALJR 256, Toohey J, in refusing a stay, observed (at 258): "The circumstances here are not exceptional and, in particular, the refusal of a stay will not render nugatory any appeal by Manfal. If all assumptions favourable to Manfal are made, at worst it will have been put to time and expense in complying with the directions of French J, time and expense that in retrospect may prove to have been largely unnecessary." 21 His Honour added (at 258): "It is important to keep in mind that the Commission has a judgment of the Full Court in its favour and that the directions made by French J were made to give effect to that judgment. It is Manfal that must satisfy this Court that an exercise of its 'extraordinary jurisdiction' is warranted. This it has not done when, in the end, the Court is left with no more than questions of costs and convenience." 22 In Rahme v Commonwealth Bank (1993) 117 ALR 618, Deane J said (at 620): "Apart from the exceptional case in which special leave to appeal to this court has been actually granted, the final decision of the highest appellate court of a State or Territory is conclusive of the particular litigation. That being so, it is only in demonstrably exceptional circumstances, such as the immediate threat of the destruction of the subject matter of the litigation or of grave and irreparable damage being sustained, that an application to this court for interlocutory relief can be justified." 23 I am not persuaded the matters relied upon by the applicants warrant the grant of the "extraordinary" remedy of a stay of this Court's orders. 24 In my opinion, the circumstances now relied upon by the applicants in support of their stay application could not be characterised as "exceptional" in the sense explained in the authorities cited. To the contrary, in my view, the stay application is not, in truth, grounded upon any sustainable claim of grave and irreparable prejudice; upon analysis, what the applicants now seek is merely to preserve the status quo. Put differently, at its highest, the applicants' case for a stay is grounded on no more than temporary considerations of cost and convenience, in that, if the applicants were to succeed in obtaining special leave and in the appeal itself, their rights will be vindicated on the appeal being allowed, and they will be able to recover any monies paid to the respondents as a consequence of the costs orders made against them by this Court.

Orders 25 Accordingly, I would order that the application for the stay of proceedings be dismissed; and that the applicants pay the costs of the respondents of the application. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Beaumont.

Associate: Dated: 6 May 2003 Counsel for the Applicants: Mr F. Douglas QC Mr C. Ward Mr G. Kennett

Solicitor for the Applicants: Deacons

Counsel for the First Respondent: Mr D. Bennett QC Mr H. Burmester QC Mr S. Lloyd Ms R. Irwin

Solicitor for the First Respondent: Australian Government Solicitor

Counsel for the Third, Fourth and Fifth Respondents: Mr T. Bathurst QC Mr S. Gageler SC Dr A. Bell

Solicitor for the Third, Fourth and Fifth Respondents: Freehills

Date of Applicants' Submissions: 13 March 2003

Date of First Respondent's Submissions: 28 March 2003

Date of Third, Fourth and Fifth Respondents' Submissions: 3 March 2003

Date of Judgment: 6 May 2003

BLACK CJ AND HILL J 1 On 3 February 2003 the Court delivered judgment in the present matter. It ordered that the claims in the amended application, other than the claim relating to confidential information, be dismissed. 2 As the judgments delivered made clear, there was a question which had not been the subject of argument, namely whether in these circumstances the Court had jurisdiction to hear and determine the confidential information claim or whether it did not have such jurisdiction in which event the whole of the claims in the amended application should be dismissed. The Court ordered the applicants to notify the respondents and the Court within 21 days if they did not wish to proceed with the confidential information claim. No such notification was received. 3 The Court also ordered that should the applicants wish to proceed with the confidential information claim they should file and serve written submissions regarding the Court's jurisdiction to hear and determine that claim. The applicants, however, filed a motion that the Court stay the orders it had made and also filed written submissions relating to that motion. The applicants did not file any written submissions regarding the jurisdiction of the Court. This might lead to the inference that the applicants did not wish to pursue the confidential information claim. However, the material filed with the Court in relation to the stay did suggest that the applicants wished to preserve their position with respect to that part of the application even if the remainder of the application was to be dismissed. We therefore proceeded to consider, without the aid of any submissions on behalf of the applicants, whether the Court has jurisdiction to hear and determine the confidential information claim. We have concluded that it did not (see Petrotimor Companhia de Petroleos S.A.R.L. v Commonwealth of Australia [2003] FCAFC 83). 4 The applicants moved the Court to stay the orders of the Full Court dated 3 February 2003 pending the determination of the application to the High Court for special leave to appeal and, if successful, any resulting appeal. A consequence of the stay being granted would presumably be that there would be no need for submissions to be filed relating to the jurisdiction of the Court in respect of the confidential information claim. Apart from that consequence it is difficult to see why there would be any advantage at all to the applicants of the grant of a stay. Application has apparently been made for leave to appeal from the High Court. If that application is successful then the appeal will be argued and if the applicants are successful on the appeal then presumably the orders dismissing the claims other than the confidential information claim will be set aside. This would leave it unnecessary to argue the confidential information claim. On the other hand, if the application for special leave is refused or, the applicants fail on the appeal in the event special leave is granted, then there would be the necessity for this Court to determine the jurisdiction question and, if that were determined favourably to the applicants, the confidential information claim would proceed to a hearing. If the jurisdiction question were determined unfavourably to the applicants there is a likelihood that a further application for leave to appeal to the High Court would be filed and if that application succeeded there would be a further appeal to the High Court on that issue. 5 The present is not a case where orders have been made against a party to the appeal granting substantive relief where the grant of a stay may be necessary to preserve the subject matter of the litigation. It is a case where the only orders which might be enforced, before an application for leave to appeal or an appeal to the High Court if leave is granted is determined, will be the orders already made, although not complied with by the applicants, that is to say, orders relating to the filing of submissions on the jurisdiction matter. 6 It is practically unlikely that the respondents would seek to enforce the order for costs before the appeal to the High Court (including the application for leave to appeal) has been decided. There is usually some delay in bills of costs being prepared and taxed if no agreement is reached. Additionally, there is no suggestion that the applicants could not pay the costs as assessed should that be necessary. Accordingly there can be little practical advantage to the applicants in a stay being granted save that the applicants would not be required to prepare the submissions which they are now in default in filing relating to jurisdiction to determine the confidential information claim alone. In any event, we do not think that it would be appropriate to grant a stay purely because of cost orders even were it practicable for costs to be taxed before any appeal to the High Court is determined save in a case where an appellant might be unable to appeal on financial grounds. 7 Subject to what we have said, we agree with Beaumont J and for the reasons he has given that the application for stay should be refused. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Black and the Honourable Justice Hill.

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