Powerflex Services Pty Ltd & Ors v Data Access Corp [1996] FCA 460

BETWEEN: POWERFLEX SERVICES PTY LTD A.C.N. 007 302 810 First Appellant POWERFLEX CORPORATION PTY LTD A.C.N. 058 475 488 Second Appellant DAVID MEREDITH BENNETT Third Appellant MARGARET ANN BENNETT Fourth Appellant DEMILEIGH PTY LTD A.C.N. 006 026 704 Fifth Appellant AND: DATA ACCESS CORPORATION REGISTRATION NO. 508 968 Respondent

CORAM: Burchett, Heerey & Whitlam JJ PLACE: Melbourne DATE: 4 June 1996

BURCHETT J: This is an application for a stay of certain orders pending an appeal. The reasons I am about to deliver are the reasons of the Court.

In this case, difficult and complex questions arose as to the application of the Copyright Act 1968 to computer software. Counsel for the respondent does not contend that the appeal lacks substance. The circumstances are unusual. The judgment under appeal contains findings of fact that the respondent, which was the applicant below, delayed for its own purposes and reasons over a period of several years before seeking the injunctive relief it has been granted. Prima facie that suggests a stay would not impose any severe burden on the respondent. The evidence before us shows that a refusal of a stay would impose a severe burden on the applicant. The principles applicable depend on the terms of order 52, rule 17 of the Rules of the Court. Rule 17(1) provides: "An appeal to the Court shall not: (a) operate as a stay of execution or of proceedings under the judgment appealed from; or - ... except so far as the Court or a Judge or the court below may direct." The language of that rule suggests no limitation upon a broad discretion inhering in the Court. Several judges of the Court, most recently Heerey J in Russell Fraser Henderson v Amadio Pty Ltd (Number 4), in which judgment was delivered on 2 May last, have followed the decision of the Court of Appeal of New South Wales in Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) (1985) 2 NSWLR 685, where, at 694, that Court said it was "sufficient that the applicant for the stay demonstrates a reason or an appropriate case to warrant the exercise of discretion in his favour". The Court of Appeal also referred with approval to a statement of Mahoney J.A. in Re Middle Harbour Investments Limited (in Liquidation), an unreported decision of the New South Wales Court of Appeal of 15 December 1976 where, with the concurrence of the other members of the Court, Mahoney J.A. said: "Where an application is made for a stay of proceedings, it is necessary that the applicant demonstrate an appropriate case. Prima facie, a successful party is entitled to the benefit of the judgment obtained by him and is entitled to commence with the presumption that the judgment is correct. These are not matters of rigid principle and a court asked to grant a stay will consider each case upon its merits, but where an applicant for a stay has not demonstrated an appropriate case but has left the situation in the state of speculation or of mere argument, weight must be given to the fact that the judgment below has been in favour of the other party."

Notwithstanding that in the Supreme Court of Victoria a more stringent test has generally been applied (see Cellante v G Kallis Industries Pty Ltd [1991] 2 VR 653; Lagarna Pty Ltd v Bridge Wholesale Acceptance Corporation (Australia) Ltd [1995] 1 VR 150), we think we should follow the decision in Alexander v Cambridge Credit. "Special" circumstances do not have to be shown. In any case, in this Court the word "special", in a comparable context, has not been thought to raise a significant barrier to the exercise of a broad general discretion: Jess v Scott (1986) 12 FCR 187. There, the rule itself dealing with leave to appeal out of time used the expression "special reasons". We think that in this matter a sufficient case has been shown for the exercise of our discretion, and we propose to order a stay upon appropriate undertakings. Initially, the applicant sought a stay to include orders for costs. We do not think that would be appropriate, given the ability of the respondent to make repayment if required. Orders of an injunctive nature are in a quite different position, and these are the orders that we shall stay. Undertakings having now been sorted out after argument and with the co-operation of counsel, and having been proffered by counsel for the appellants, we accept them as follows: (1) To maintain proper records of all sales of PFX Plus. (2) Not to destroy any records in relation to the business of the appellants. (3) In the case of the corporate appellants, not to dispose of or encumber any assets otherwise than in the ordinary course of business.

(4) In the case of the third and fourth appellants, not to dispose of or encumber any interest in real property. (5) Not to grant a distributorship for PFX Plus except by way of replacement of the present US distributor. (6) To take all available steps to expedite the hearing of the appeal, including an application to have the appeal set down at the first available sittings after 26 June 1996 whether in Victoria or elsewhere. We reserve liberty to each party to apply to a Judge on seven days notice. We order that the orders of the learned judge numbered 1,2,4 and 7 be stayed until further order. It is ordered that the costs of this application be costs in the appeal. I certify that this and the preceding four (4) pages are a true copy of the Reasons for Judgment of the Court. Associate: Date: 4 June 1996. Counsel for the Appellants: Mr Macaw, QC Dr J. Bleechmore Solicitors for the Appellants: Trumble Szanto Braham Solicitors Counsel for the Respondent: Mr J. Burnside, QC Solicitors for the Respondent: Stephens Solicitors Date of hearing: 4 June 1996