Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No 1) [1986] HCA 84; (1986) 161 CLR 681 (16 December 1986)

HIGH COURT OF AUSTRALIA

JENNINGS CONSTRUCTION LTD. v. BURGUNDY ROYALE INVESTMENTS PTY. LTD. (No. 1)
(1986) 161 CLR 68
S86/005

High Court

High Court of Australia
Brennan J.(1)

CATCHWORDS

High Court - Practice and procedure - Stay of Supreme Court order pending application for special leave to appeal - Jurisdiction to grant - Preservation of subject-matter of litigation - Factors relevant to exercise of discretion to grant stay.

HEARING

1986, December 16. 16:12:1986
APPLICATION.

DECISION

BRENNAN J.: The applicant in these matters is a contractor. It has completed or is in the course of completing the construction of the Darwin Centre under a contract with the respondent. The Centre is constructed on land described as Crown Lease Term No.115 of which the respondent is the lessee. Pursuant to The Workmen's Liens Act 1893 (S.A.) ("the Act") as applied to the Northern Territory the applicant lodged notices of lien in respect of the land to secure money allegedly due to it under the contract and commenced actions in the Supreme Court of the Northern Territory to enforce the liens. The respondent then applied to the Supreme Court to have the registration of the liens cancelled, relying on s.48 of the Act which reads as follows:

" Nothing in this Act contained shall create or
give any right or remedy against land vested in
Her Majesty or in any person for or on behalf of
the Government or increase or change the
liability of Her Majesty, or of any person
procuring the performance of work for or on
behalf of the Government and, except as between
the contractors, sub-contractors, and workmen,
this Act shall not apply to such work."
of the Northern Territory. Orders were made by his Honour under s.32 of the Act that the liens registered over Crown Lease Term No.115 be cancelled but, by consent, his Honour ordered that the judgments and orders in the actions be stayed until the hearing of appeals to the Court of Appeal.

2. Appeals from his Honour's judgments were dismissed by the Court of Appeal of the Northern Territory. Applications were made to the Court of Appeal to stay the operation of his Honour's order cancelling the registration of the liens. The stay was granted until 4.30pm today in order to allow this Court an opportunity to consider whether a stay should be granted pending the determination of the applicant's applications for special leave to appeal to this Court from the judgments of the Court of Appeal.

3. The inherent jurisdiction of this Court to grant a stay pending the hearing of an application for special leave to appeal has been invoked from time to time in criminal matters: see Tait v. The Queen [1962] HCA 57; (1962) 108 CLR 620, at pp 623-624; Chamberlain v. The Queen (No.1) [1983] HCA 13; (1983) 153 CLR 514. The inherent jurisdiction of the Court to stay proceedings has also been invoked when an application has been made for a writ of prohibition: Re Marks and Federated Ironworkers' Association (1981) 34 ALR 208. In that case, Mason J. said at p 211:

" It has been accepted that the court has inherent
jurisdiction to grant a stay of proceedings to
preserve the subject matter of litigation, though
it is a jurisdiction which is seldom invoked and
rarely exercised (Tait v. R [1962] HCA 57; (1962) 108 CLR 620 at
623-4). There is no reason for thinking that in
an appropriate case the court cannot exercise the
jurisdiction so as to preserve the subject matter
of the litigation when the litigation is an
application for a writ of prohibition."

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. The applicant invoked s.77U of the Judiciary Act 1903 (Cth) as a source of the jurisdiction to stay but that section applies only when an appeal has been instituted. An application for special leave to appeal is not, in my opinion, an appeal within the definition of that term in s.2 of the Judiciary Act. The present application for a further stay of Kearney J.'s orders is made to preserve the statutory liens upon which the applicant relies as security for the money it alleges it is owed under its contract with the respondent for the construction of the Darwin Centre. The amount claimed is an amount in excess of $27m. The respondent contests this liability but the contest has not been resolved either by litigation or arbitration. The contest cannot, of course, be determined in these proceedings.

4. The affidavit filed on behalf of the respondent shows that if it were not for the registration of the liens the respondent would proceed to sub-divide the land in respect of which the liens are registered and, in accordance with its obligations to the Government of the Northern Territory, to transfer the portion of the land on which the Performing Arts Centre stands to the Darwin City Council. It would then offer some of the balance of the land for sale. The conveyancing procedure which would be necessary to achieve this result is said to involve a surrender of the lease to the Crown and the issue by the Crown of a freehold title in sub-division. However that may be, it appears that if the stay is not granted whatever security the liens presently give the applicant for payment of the moneys allegedly due to it will be lost. The applications for special leave would be futile. Jurisdiction to grant the stay is thus established. The question is: how should it be exercised?

5. A stay to preserve the subject matter of litigation pending an application for special leave to appeal is an extraordinary jurisdiction and exceptional circumstances must be shown before its exercise is warranted. If an order for a stay is made, the respondent is kept out of the benefit of the order of the Court in which the matter is pending until the hearing of the application for special leave to appeal. That was the situation to which this Court adverted in Marconi's Wireless Telegraph Co.Ltd. v. The Commonwealth (No.3) [1913] HCA 23; (1913) 16 CLR 384. There the Court granted an order staying the operation of one of its own orders pending the hearing of an application to the Privy Council for special leave to appeal. What the Court said in that case, at p.386, is applicable to this case:

" The Court will not ordinarily grant an
application of this kind unless very strong and
special grounds are shown. This is a very
peculiar case. The conditions are such that, on
the one hand, if the stay is granted without
more, the whole benefit of the action may be lost
to the plaintiffs, while, on the other hand,
unless the stay is granted on some fair terms,
the defendants' appeal will be nugatory. It
really is a question of the preservation of the
rights of the parties without disregard of the
balance of convenience."

A stay order was then made on terms.

6. When an application for special leave to appeal is made to this Court, a jurisdiction to stay may be exercised by the Court below and it is to that Court - the Court in which the matter is pending and which is familiar with the matter - that an application to stay should first be made. In this case the Court of Appeal, not wishing to pre-empt the view that may be expressed in this Court, tailored its order accordingly. In future, there should be no inhibition on the Court in which the matter is pending framing a stay order, if a stay be appropriate, to avoid the necessity for application to this Court.

7. 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.

8. In the present case the respondent submits that special leave is unlikely to be granted. It is undesirable to canvass the arguments in advance. I do not, however, think that the prospect of a grant of special leave is insubstantial. The applicant has sought a stay from the Court of Appeal and, having regard to the novelty of the application, the failure to obtain from the Court of Appeal the stay which is sought here is no reason for refusing the present applications. However, if a stay is granted, the respondent will or may incur financial loss in consequence of the maintenance of the liens on the register. That circumstance warrants consideration of the terms imposed in Marconi's Case. The order there made was that:

" ... the order of this Court ... be suspended
until the hearing of the defendants' application
to the Privy Council for special leave to appeal,
on the defendants undertaking to prosecute their
application with all reasonable expedition, and
also undertaking to pay the plaintiffs such
damages or loss, whether legally claimable or
not, as this Court or a Justice thereof may think
just and fair as compensation to the plaintiffs
for any disadvantage they may sustain by reason
of this order. ..."

If an undertaking in these terms or in other terms acceptable to the respondent is forthcoming, I should think the balance of convenience lies in favour of the making of an order staying the cancellation of the liens.

9. The formal order that I shall make is:

Upon the applicant, by its counsel, undertaking to
prosecute the applications for special leave to appeal
from the judgment of the Court of Appeal of the
Northern Territory with all reasonable expedition and
further undertaking to pay the respondent such damages
or loss whether legally claimable or not as this Court
or a Justice thereof may think just and fair as
compensation to the respondent for any disadvantage they
may sustain by reason of this order, I do order that so
much of the orders of Kearney J. in the proceedings in
the Supreme Court of the Northern Territory as ordered
the cancellation of the applicant's liens be stayed
until the hearing and determination of the applicant's
applications for special leave to appeal from the
judgments in those matters of the Court of Appeal of
the Northern Territory. And I do further order that the
costs of this application be the respondent's costs in
the cause of the applications for special leave.

10. I certify for counsel.

ORDER

Upon the applicant, by its counsel, undertaking to prosecute the applications for special leave to appeal from the judgment of the Court of Appeal of the Northern Territory with all reasonable expedition and further undertaking to pay the respondent such damages or loss whether legally claimable or not as this Court or a Justice thereof may think just and fair as compensation to the respondent for any disadvantage they may sustain by reason of this order, order that so much of the orders of Kearney J. in the proceedings in the Supreme Court of the Northern Territory as ordered the cancellation of the applicant's liens be stayed until the hearing and determination of the applicant's applications for special leave to appeal from the judgments in those matters of the Court of Appeal of the Northern Territory.

Further order that the costs of this application be the respondent's costs in the cause of the applications for special leave.

Certify that this was a matter proper for the attendance of counsel in chambers.