There is one leading authority, and it is more often cited than followed. Understanding what it actually decided changes how a stay application should be argued.
The leading case
McHardy v Prosec Security and Communication Ltd [2000] PGSC 31; [2000] PNGLR 279 (Supreme Court).
Because the Supreme Court is the highest court of unlimited jurisdiction in the country, vested with an inherent discretionary power to do justice, and must exercise that power on proper principles — justly, reasonably, and according to natural justice to all parties — it can state what factors are relevant when the discretion is exercised.
But the factors cannot be exhaustive. They necessarily vary from case to case and from time to time. They are guidelines to assist the Court and the parties, and are not to be treated as hard and fast pre-conditions.
To hold that the test is whether there are “special” or “exceptional circumstances”, or that there is a “good reason”, or that it is an “appropriate case”, is restrictive.
What matters is to articulate the factors and circumstances that may be relevant in the particular case.
Not a checklist
McHardy is regularly cited as though it laid down a list of conditions to be worked through in order. That reading is the one the judgment itself warns against.
An application drafted as a march through a formula, with a paragraph for each item and nothing said about why this judgment should not be enforced against this appellant before this appeal is heard, has not engaged with what the Court said.
The correct approach is to identify the factors that actually bear on the case, and to address why justice requires a stay.
The considerations that recur
Whether the appeal is arguable. Not whether it will succeed. A stay in aid of a hopeless appeal serves nothing.
Whether the appeal would be rendered nugatory. The strongest single consideration. If enforcement will destroy the subject matter — the land sold, the company wound up, the money paid away and irrecoverable — success on appeal will come too late to matter.
The prejudice to the respondent. A judgment creditor kept out of money for a year suffers real prejudice, and interest may not answer it if the appellant cannot pay at the end.
Promptness. How quickly the applicant moved after judgment.
The financial position of both sides. Whether the appellant can meet the judgment if the appeal fails; whether the respondent could repay if it succeeds.
The nature of the judgment. Money, possession, an injunction, a declaration — each raises different questions about what enforcement would do.
How soon the appeal can be heard. A short stay to a listed hearing is a far smaller intrusion than an open-ended one.
What to offer
An undertaking as to damages, where the stay may cause the respondent loss. Order 13 contemplates an undertaking as to damages (where appropriate) among the matters dealt with in interim orders.
Payment into Court of the judgment sum, or part. This answers most of the prejudice to a judgment creditor and greatly improves an application.
An undertaking to prosecute the appeal expeditiously — to have the appeal book settled by a date, submissions filed, and no adjournment sought.
Security in another form — a bank guarantee, or a charge over identified property.
An applicant who offers nothing is asking the Court to shift the whole risk of the appeal onto the successful party below.
Ask for the right stay
Where only part of the judgment is appealed, ask for a stay of that part. Order 7 Rule 9(b) requires the notice of appeal to state whether the whole or part only and what part is appealed from; the stay should follow it.
And ask for a defined period — “until the determination of the appeal or further order” — rather than an open-ended order.
Varying and costs
Under section 5(3) of the Supreme Court Act, a direction or order made by a single Judge may be discharged or varied by the Supreme Court. A respondent whose circumstances change, or who can show the appeal is not being prosecuted, can apply.
Under Order 12 Rule 23 of the Supreme Court Rules 2012, where a further interlocutory injunction or stay continues an earlier one, the costs order on the further application shall, unless otherwise ordered, include the costs of the first.
And remember section 19: unless otherwise ordered, an appeal does not operate as a stay. Until the order is made, the judgment is live.
Opposing a stay
Section 19. The starting position is that the appeal does not operate as a stay. The applicant is asking the Court to displace the ordinary consequence of having won.
Delay. Set out the chronology. An applicant who waited two months has, by their own conduct, shown the matter was not urgent.
The grounds. Where the notice of appeal consists of bare assertions contrary to Order 7 Rule 10, say so — an unarguable appeal is a weak foundation for a stay.
Your own prejudice. Interest that will not be recovered, an asset deteriorating, a business that cannot plan. Put it in evidence rather than in submissions.
And if a stay is likely, argue for conditions: payment into Court, an undertaking as to damages, and a short return date.
Sources
- McHardy v Prosec Security and Communication Ltd [2000] PGSC 31; [2000] PNGLR 279
- Kawaso Ltd v Oil Search (PNG) Ltd [2010] PGSC 34; SC1082
- Supreme Court Act (Chapter 37) — ss 5, 19
- Supreme Court Rules 2012 — O 7 r 9; O 12 r 23; O 13 rr 14, 15
Before relying on anything here, read the current text of the Supreme Court Rules 2012 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.