Polsen v Harrison

The power to order a stay

1. The power to order a stay of proceedings is set out in s 67 of the Civil Procedure Act 2005 (NSW): 67 Stay of proceedings Subject to rules of court, the court may at any time and from time to time, by order, stay any proceedings before it, either permanently or until a specified day.
2. In considering this application and any application before me, I must have full regard to ss 56, 57 and 58 of the Civil Procedure Act: 56 Overriding purpose (1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. (2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule. (3) A party to civil proceedings is under a duty to assist the court to further the overriding purpose and, to that effect, to participate in the processes of the court and to comply with directions and orders of the court. (3A) (Repealed) (4) Each of the following persons must not, by their conduct, cause a party to civil proceedings to be put in breach of a duty identified in subsection (3) - (a) any solicitor or barrister representing the party in the proceedings, (b) any person with a relevant interest in the proceedings commenced by the party. (5) The court may take into account any failure to comply with subsection (3) or (4) in exercising a discretion with respect to costs. … 57 Objects of case management (1) For the purpose of furthering the overriding purpose referred to in section 56 (1), proceedings in any court are to be managed having regard to the following objects - (a) the just determination of the proceedings, (b) the efficient disposal of the business of the court, (c) the efficient use of available judicial and administrative resources, (d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties. (2) This Act and any rules of court are to be so construed and applied, and the practice and procedure of the courts are to be so regulated, as best to ensure the attainment of the objects referred to in subsection (1). 58 Court to follow dictates of justice (1) In deciding - (a) whether to make any order or direction for the management of proceedings, including - (i) any order for the amendment of a document, and (ii) any order granting an adjournment or stay of proceedings, and (iii) any other order of a procedural nature, and (iv) any direction under Division 2, and (b) the terms in which any such order or direction is to be made, the court must seek to act in accordance with the dictates of justice. (2) For the purpose of determining what are the dictates of justice in a particular case, the court - (a) must have regard to the provisions of sections 56 and 57, and (b) may have regard to the following matters to the extent to which it considers them relevant - (i) the degree of difficulty or complexity to which the issues in the proceedings give rise, (ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities, (iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties, (iv) the degree to which the respective parties have fulfilled their duties under section 56 (3), (v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings, (vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction, (vii) such other matters as the court considers relevant in the circumstances of the case.
3. In support of her application for a stay, reliance was placed by the plaintiff upon the statements of the Court of Appeal in Alexander v Cambridge Credit Corp Ltd (1985) 2 NSWLR 685; ("Alexander"). That case dealt with an application to stay execution of a judgment pending appeal, but as stated by Basten JA in Barakat v Goritsas [2012] NSWCA 8 at [22] ("Barakat"), the principles stated still provide relevant guidance: " Two further principles can be mentioned. The first is that where there is a risk that the appeal will prove abortive if the appellant succeeds and a stay is not granted, courts will normally exercise their discretion in favour of granting a stay: Scarborough v Lew's Junction Stores Pty Ltd (at 130); applied in Sun Alliance Insurance Ltd v Steiger (Full Court, Supreme Court of Victoria, 22 March, 1985, unreported). Thus, where it is apparent that unless a stay is granted an appeal will be rendered nugatory, this will be a substantial factor in favour of the grant of a stay: Wilson v Church (No 2) (1879) 12 Ch D 454; Re Middle Harbour Investments Ltd (In Liq) (at 2). Secondly, although courts approaching applications for a stay will not generally speculate about the appellant's prospects of success, given that argument concerning the substance of the appeal is typically and necessarily attenuated, this does not prevent them considering the specific terms of a stay that will be appropriate fairly to adjust the interest of the parties, from making some preliminary assessment about whether the appellant has an arguable case. This consideration is protective of the position of a judgment creditor where it may be plain that an appeal, which does not require leave, has been lodged without any real prospect of success and simply in the hope of gaining a respite against immediate execution upon the judgment."
4. Basten JA re-stated and refined these principles in Barakat in that part of his judgment headed "Basis of the application for leave to appeal", in the context of pre-trial rulings made by a trial judge who had refused to recuse himself for apprehended bias: "[22] The stay sought by the applicants is not the stay of the execution of a judgment or order subject to appeal. Nevertheless, the principles stated in Alexander v Cambridge Credit Corporation Ltd (Receivers appointed) (1985) 2 NSWLR 685 provide relevant guidance. First, which is not controversial, the power to grant a stay is discretionary. Secondly, the onus to demonstrate a proper basis for a stay that will be fair to all parties is borne by the applicant: judgment of Kirby P, Hope and McHugh JJA at 694F. Further, the mere filing of a notice of appeal will not, of itself, demonstrate an appropriate basis for a stay. In circumstances where an application for leave to appeal is brought from an interlocutory order, the grant of a stay will depend upon various circumstances, one of which is the likelihood of a grant of leave to appeal. [23] An application for leave to appeal against the refusal of a motion to recuse is not merely a matter involving practice and procedure: cf Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; 148 CLR 170 at 176-177 (Gibbs CJ, Aickin, Wilson and Brennan JJ); Gerlach v Clifton Bricks Pty Ltd [2002] HCA 22; 209 CLR 478 at [13] (Gaudron, McHugh and Hayne JJ). In the present case, the factors militating in favour of a grant of leave are that the issue is one which goes to the heart of the proper administration of justice between the parties; the ruling of the trial judge was in effect final in respect of the matters raised before him, and to allow the trial, which has not commenced, to proceed without determining the issue, could involve a waste of significant time and resources. It is not suggested that the application is motivated by any improper purpose, nor that there has been any delay in bringing the application. [24] The respondents did, however, contend that the applicants had made no attempt to establish a reasonably arguable case for overturning the decision of the primary judge. Counsel for the applicants sought to rectify that position by seeking leave to file further submissions in respect of the grounds sought to be agitated on appeal. Given the urgency of the application and the commitments of the Court, that request was declined. In those circumstances, the parties accepted that the question of whether there were reasonably arguable grounds should be addressed by the Court itself considering the judgment, the grounds identified in the draft notice of appeal and a document in the application book headed "Draft summary of applicants' argument."
5. At [29], [30] and [31] in Barakat Basten JA considered the power pursuant to which a judge of appeal could make an order to preserve the status quo pending the hearing of an appeal. He noted that in relation to an appeal against an interlocutory order that may involve, in an appropriate case, directing that the trial not proceed pending determination of the appeal or ordering a stay of proceedings in the court below having a similar effect, s 46(2) of the Supreme Court Act 1970 (NSW) provides the power to preserve the status quo pending the hearing of an appeal, his Honour adding: "No doubt, as a matter of practice that power, will not be exercised to vacate or override an earlier order given by another judge absent a change of circumstances".
6. The situation with which I am dealing is a little more uncertain than that presented in Barakat given that there is arguably no "order" from which the plaintiff seeks leave to appeal.
7. In Barakat the applicants invited Basten JA to revisit the "conventional view" of resistance to interlocutory intervention in trial proceedings, absent a clear indication that the applicants for intervention are likely to succeed: "[10] In the past, such considerations have been weighed by appellate courts,with, perhaps, a preference to resist interlocutory intervention in trial proceedings, absent a clear indication that the applicants for intervention are likely to succeed. That course had, and no doubt continues to have, support in circumstances where a claim of apprehended bias is seen to be colourable or merely a stalking horse to achieve the result refused by the trial judge, such as delay of a scheduled trial. It has also been conventional wisdom that no appeal lies from the rejection of a recusal application as such, although a litigant could usually find an interlocutory order upon which to base an appeal: see Barton v Walker [1979] 2 NSWLR 740 at 755. [11] The applicants assert that the approach set out above should be revisited in the light of the reasoning of the High Court in Michael Wilson & Partners v Nicholls [2011] HCA 48; 282 ALR 685 at [74]-[86], in the joint judgment of Gummow ACJ, Hayne, Crennan and Bell JJ."
8. The reference to "the past" in [10] of Barakat I take to be a reference to the approach of the Court of Appeal in Jae Kyung Lee v Bob Chae-Sang Cha & Ors [2008] NSWCA 13 ("Lee v Cha") and in particular the observations of Hodgson JA at [1] to [3]; Makucha v Sydney Water Corporation (No 2) [2011] NSWCA 249 at [6] ("Makucha") and Nikolaidis v Legal Services Commissioner 2005 NSWCA 91 at [15] to [16] and [18] ("Nikolaidis") (amongst others). In Nikolaidis, Bryson JA highlighted the different considerations that apply when a stay of execution of the judgment is sought, such as in Alexander, as opposed to a stay in relation to proceedings which are part heard. See in relation to this distinction the helpful discussion in Vitality Works Australia Pty Ltd v Yelda [2021] NSWCA 4 ("Vitality") at [15] to [20] per Payne JA, upon which Mr Windsor SC placed reliance, and which provides in my view a pragmatic and proper approach to issues such as these.
9. The relevant part of the "approach" of the High Court in Michael Wilson was as follows: "[74] The respondents did not seek leave to appeal against the refusal by Einstein J of their application that he not try the proceedings. [75] In light of the conclusion that there was not a reasonable apprehension of bias in this case, it is not necessary to decide whether the respondents were thus not able to pursue the issue in their appeal against the final judgment given at trial. It is as well, however, to make the following points. [76] It is well established that a party to civil proceedings may waive an objection to a judge who would otherwise be disqualified on the ground of actual bias or reasonable apprehension of bias. (It may well be that the principle extends to criminal proceedings but that issue need not be considered.) If a party to civil proceedings, or the legal representative of that party, knows of the circumstances that give rise to the disqualification but acquiesces in the proceedings by not taking objection, it will likely be held that the party has waived the objection. [77] Here, of course, the respondents did object to Einstein J trying the proceeding. They did not waive their objection by any failure to raise the point. But could they, having failed in their application to have Einstein J recuse himself, raise the issue on appeal against the final judgment entered at trial? [78] In general, any interlocutory order which affects the final result can be challenged in an appeal against final judgment. As the majority noted in Gerlach v Clifton Bricks Pty Ltd, there may be some limits to that general rule but it was not necessary in that case, and is not now necessary, to decide what those limits might be. The majority in Gerlach noted, however, that there are some kinds of interlocutory decision made otherwise than at trial that may present other issues. In particular, "[t]here are circumstances in which an interlocutory decision must be treated as concluding an issue between the parties" and reference was made in that regard to O'Toole v Charles David Pty Ltd and Fidelitas Shipping Co Ltd v V/O Exportchleb. [79] In most cases, a judge's refusal of an application that the judge not try, or continue to try, a case on account of reasonable apprehension of bias will constitute a final determination by the judge that the facts and circumstances relied on by the applicant do not establish the relevant apprehension. In such a case, it may be that an applicant who does not seek to challenge the refusal by seeking leave to appeal should be held to have given up the point. [80] In this case, if the respondents were right in asserting that there was a reasonable apprehension of bias, the whole of the trial with its attendant expense and use of court time would be wasted. Of course it must be recognised that the respondents in this case had no right to appeal against the refusal of Einstein J to recuse himself. But the respondents did have a right to seek leave to appeal. [81] As was explained in Gas & Fuel Corporation Superannuation Fund v Saunders, a later interlocutory order made by a judge who has refused an application that the judge not hear the matter on account of a reasonable apprehension of bias is an order against which leave to appeal can be sought on the ground that the judge who made the order should not have done so. Conversely, as Saunders itself illustrates, where a judge allows an application for disqualification and makes orders effecting that decision, leave to appeal can be sought against those orders on the ground that they should not have been made. Thus the order against which the respondents could have sought leave to appeal in this case was whatever order was made by Einstein J after he had refused to recuse himself. If, as the respondents asserted, Einstein J should not have continued to sit in the matter, whatever order was made (other than an order adjourning the case for the purpose of allowing another judge to deal with it) was an order which should not have been made by the judge who made it and would found an application for leave to appeal. And as it happened Einstein J made such an order on 4 June 2009 when he set dates for compliance with the general requirements for trial of proceedings in the Equity Division. [82] In so far as Barton v Walker holds to the contrary, that decision should not be followed. The decision in Barton v Walker depended upon the proposition that whether a judge should continue to hear a case was a matter only for the judge concerned and that a motion that the judge disqualify himself or herself was "not cognizable"; the judge was held to make no order on the application for disqualification. [83] The decisions about apprehension of bias that have been given by this Court since Barton v Walker show that a judge's decision to grant or refuse an application for disqualification is not a matter only for the particular judge. As was pointed out in the plurality reasons in Ebner, the apprehension of bias principle has its roots in principles fundamental to the common law system of adversarial trial. [84] Whether failure to seek leave to appeal against refusal of an application that a judge not try the case on account of a reasonable apprehension of bias precluded maintenance of the complaint in an appeal against the final judgment would require consideration of whether the failure to seek that leave was reasonable. That would require examination of all relevant circumstances. Ordinarily those would include the stage the proceedings had reached when the disqualification application was made and refused and the consequences that would follow from leaving appellate determination of the issue of disqualification until after trial. In this case, trial was fixed to begin within a very short time after the refusal. How much time and money would be spent if the question were to be left over to an appeal against final judgment? The trial of this matter was expected to be very long. A lot of time and money would have been wasted if the judge who tried the proceedings should not have done so. [85] If it was reasonable in the circumstances of the particular case not to seek leave, and there was no other basis upon which a choice not to persist with the allegation of apprehended bias can be identified as having been made (either then or at some later time), the point would remain open in an appeal against the final judgment. But if it was reasonable in the circumstances to seek leave, and leave was not sought, why should it not be concluded, absent countervailing considerations, that the party making the complaint did not maintain the objection? Simply saying to the opposite party that it is sought to preserve the point for consideration in an appeal against final judgment would not of itself be effective to achieve that result. [86] As explained earlier these points need not be decided. It is, however, important to add, contrary to what was said in the Court of Appeal, that an application for leave to appeal against the rejection of an application that a judge not hear a matter due to apprehended bias may well be a case where the usual criteria would require leave to be granted, at least if a long and costly trial would be wasted if the judge's decision were incorrect." (footnotes omitted).
10. I have reproduced the extract from Michael Wilson in full because it formed a central focus of the plaintiff's application, as did the detailed review of its effect by Basten JA in Barakat at [15] to [21], where his Honour dealt with the question of the potential repercussions of failure to seek leave to appeal and that it could be considered to be a waiver of that right, and circumstances where and why the Court of Appeal had, and should, grant leave to appeal in such circumstances: "[15] This contention had, however, a second limb, namely that the subject matter of the proposed appeal could be the decision of the primary judge to reject the recusal application. The applicant submitted that the plurality in Michael Wilson & Partners had sanctioned such a course. That submission was based upon two passages in the judgment, each of which was, concededly, part of the obiter discussion in relation to waiver. Thus, at [84], their Honours referred to a "failure to seek leave to appeal against refusal of an application that a judge not try the case on account of a reasonable apprehension of bias". There was also reference to "an application for leave to appeal against the rejection of an application that a judge not hear a matter due to apprehended bias": at [86]. The applicants also referred to the reference in Brooks v The Upjohn Company (1998) 85 FCR 469 at 475, in the judgment of Beaumont, Carr and Branson JJ, to the "somewhat artificial device of fastening on" interlocutory orders, other than the refusal to recuse, to provide the subject-matter of an appeal. [16] The step said to have been taken by the High Court in these passages is no doubt one which could be taken by that Court. However, the passages in which the statements quoted appear were directed to other issues and bear the hallmarks of concise, if elliptical references, to an application for leave to appeal based on the ground of the refusal to recuse. The express reference to both Gas & Fuel Corporation and to Brooks , in the same passage in the joint judgment, together with the affirmation set out at [13] above of the approach adopted in Gas & Fuel Corporation , is inconsistent with some implicit rejection of the need to identify an interlocutory order, other than the refusal to recuse, to form the basis of an application for leave to appeal. At best, the applicant's submission involves an uncertain inference: that is an insufficient basis for departing from an established line of authority in courts of appeal in this country, including not merely the two judgments just referred to, but also Rajski v Wood (1989) 18 NSWLR 512 at 518 (Kirby P), 527 (Hope AJA) (Priestley JA agree with both) and Witness v Marsden [2000] NSWCA 52; 49 NSWLR 429 at [96] (Heydon JA, Mason P agreeing). A single judge of this Court should continue to follow the overwhelming weight of appellate authority in the absence of any clear statement by the High Court to the contrary. [17] Upon the Court indicating to counsel for the applicants that, on a preliminary view, the draft notice of appeal was deficient, counsel foreshadowed an application to amend to challenge, (a) the refusal of the primary judge to grant a stay to permit these proceedings to be determined before trial, and (b) the order of the primary judge fixing the dates for hearing of the contempt proceedings. Counsel for the respondents accepted that no prejudice could follow from such an amendment. For the purposes of this application it is sufficient to assume that such an amendment will be made in due course and that, on that basis, the jurisdiction of this Court is properly engaged. [18] The third principle of importance which the applicants derive from Michael Wilson & Partners concerns the manner in which this Court should proceed, on the basis that there is an interlocutory application for leave to appeal from an appellable order of the trial judge. Accepting that the comments of the plurality in Michael Wilson & Partners were obiter - see at [75] - and that the issue arose in relation to the possible waiver of the right to object, flowing from the failure of the respondents in that case to pursue their unsuccessful recusal applications by way of an interlocutory appeal, the principles enunciated should nevertheless be followed. Those principles go beyond considering whether the complainant who fails to seek leave to appeal has waived any right to complain about the final judgment, and extends to the approach this Court should take in dealing with an interlocutory application for leave to appeal. The first proposition to be noted appears at [79]: "In most cases, a judge's refusal of an application that the judge not try, or continue to try, a case on account of reasonable apprehension of bias will constitute a final determination by the judge that the facts and circumstances relied on by the applicant do not establish the relevant apprehension. In such a case, it may be that an applicant who does not seek to challenge the refusal by seeking leave to appeal should be held to have given up the point." [19] That reasoning clearly has consequences in respect of an application which is in fact made, seeking leave to appeal. Their Honours continued at [86]: "As explained earlier these points need not be decided. It is, however, important to add, contrary to what was said in the Court of Appeal, that an application for leave to appeal against the rejection of an application that a judge not hear a matter due to apprehended bias may well be a case where the usual criteria would require leave to be granted, at least if a long and costly trial would be wasted if the judge's decision were incorrect." [20] Those remarks appear to be directed to the final two sentences in my judgment in this Court in Nicholls v Michael Wilson & Partners Ltd [2010] NSWCA 222; 243 FLR 177 at [77], which read: "Whether this Court would have favoured such a course [that is, granting leave to appeal] at a point where the trial was about to begin may be doubted. As noted in Lee at [36] and [37], the Court will generally exercise restraint and not interfere in proceedings at an interlocutory stage unless there is some clear reason to do so, sufficient to outweigh 'the undesirability of discontinuity, disruption or delay' in the orderly hearing of a claim." [21] Lee v Cha involved an application made on the 29th day of a trial which was continuing, and was likely to continue for some significant time: at [6]. The circumstances in Michael Wilson & Partners were quite different, the trial not having commenced at the time the unsuccessful recusal applications were made, and should have been approached differently from Lee, had that been necessary: cf Makucha v Sydney Water Corporation (No 2) [2011] NSWCA 249."
11. Reliance was also placed by Mr Bartley on Barakat v Goritsas (No 2) [2012] NSWCA 36 at [63] to [64] ("Barakat (No 2)") as providing critical context and articulating the test that unless the appeal is "patently untenable" leave to appeal should be granted: "[63] It is likely that judgments on recusal applications should, in most situations, be addressed with caution on an appeal or application for judicial review. Although a recusal application does not involve a judge deciding a matter in which she or he has an interest (there being no legal "interest" in sitting or not sitting on a particular case) the judge is nevertheless called upon to rule on the possible effect of his or her conduct on a fair-minded lay observer. That assessment may, at least subconsciously, be influenced by the judge's assessment of his or her own ability to determine the case impartially. Further, a challenge to the position or conduct of a judge may have the tendency to exacerbate, or appear to exacerbate, any level of conflict between the judge and a party or counsel appearing in the case. In most circumstances, that consideration will militate in favour of brief reasons, accepting that brevity may need to be tempered by the need to demonstrate that the various matters raised have been taken into account. [64] It is because of the particular role placed upon a judge in determining a recusal application that it will frequently be appropriate to grant leave to appeal, assuming the challenge is not patently untenable and where a long and costly trial would be avoided if the decision below were incorrect: Michael Wilson & Partners at [86]."