Cite as: Purdy v. Fulton Insurance Agencies Ltd., 1990 NSCA 23 IN THE SUPREME COURT OF APPEAL DIVISION BETWEEN: KENDALL W. PURDY Appellant - and - FULTON INSURANCE AGENCIES LIMITED Respondent BEFORE THE HONOURABLE MR. IN CHAMBERS S.C.A. 02378
NOVA SCOTIA Peter McLellan for the applicant/appellant Peter M. Rogers for the respondent Application Heard: November 15, 1990 Decision Delivered: November 30, 1990 JUSTICE DOANE HALLETT
HALLETT, J.: This is an application Rule 62.10(2) to stay execution from a summary judgment granted under Civil Procedure Rule 13. The appellant controller for a number of employment terminated; he says the respondent says he resigned. On April 12, 1990, proceedings against the appellant defrauded the respondent of approximately $100,000.00 through a series of transactions. denies he defrauded the respondent the President of the respondent the transactions for the purpose of providing the President with additional remuneration. a counterclaim alleging wrongful dismissal as the respondent, through its President, authorized transactions in question. On October 23, to a judge of the Trial Division sitting in summary judgment with respect to by the respondent. Summary judgments are not to be lightly granted. The Court must be under Civil Procedure until an appeal is heard was the respondent's financial years. On June 7, 1989, his he was wrongfully dismissed; the respondent commenced alleging that he had In his defence, the appellant of any money; he says initiated and authorized The appellant also filed and was aware of all the 1990, the respondent applied Chambers for some of the money claimed satisf ied not only that there
- 2 is no defence but no arguable point of the defendant (Carl B. Potter Limited (1976) , 15 N. S . R. ( 2d ) County Press Limited v. Demone (N.S.C.A.) . The learned Chambers judgment against the appellant in the and then refused an application judgment pending determination counterclaim. The application for the stay was made pursuant to Civil Procedure Rule l3.02(c) . . On November 1, a notice of appeal stating that the erred in granting summary judgment appellant had a legitimate defence to the respondent's claim and erred in refusing a stay determination of the appellant's dismissal. The appeal has been set for hearing on March 22, 1991. In support of the execution of the judgment pending disposition of the appeal, the appellant has filed his since the termination of his he has been self-employed in can be made on behalf Limited v. Anil (Canada) 408 (N . S . C. A. ); Lunenburg (1977), 18 N.S.R. (2d) 689 judge granted summary amount of $45,700.00 to stay execution of the of the appellant's 1990, the appellant filed learned Chambers judge on the ground that the of execution until the counterclaim for wrongful application for stay of affidavit which states that employment in June of 1989 the sale of automobiles and
- his income is approximately of 1990 he invested as a partner dealership in Truro but that he from this business. He further termination of his wife's employment she enrolled as a full-time Teachers College in the academic due to her pregnancy and the subsequent loss of the chi ld, she has not been employed since He further states that an Order of the judgment and costs would for him and his family. In Nova Scotia, to grant a stay of proceedings is governed of the Judicature Act, R.S.N.S. 1989, c. 240, which states: "41 In every proceeding law and equity shall according to the following provisions: (e) no proceeding the Court shall be restrained or injunction but every which an injunction of any such proceeding might have been obtained prior to the first day of October, uncondi tionally or on may be relied on by provided always that contained shall disable the Court from directing a stay of proceedings in any proceeding pending before the Court if it or any person, whether a proceeding who could 3 $20,000.00 and that in June in a Honda automobile has yet to draw any income states that following the with the respondent student in the Nova Scotia year 1989-1990 and that she completed her studies. for the immediate payment create financial hardship the authority of thi s Court by Section 41 (e) commenced in the Court, be administered therein at any time pending in by prohibition matter of equity on against the prosecution 1884, either any terms or conditions, way of defence thereto nothing in this Act he thinks fit, and party or not to any such have been enti tled, prior
- to the first day of to the Court to restrain the prosecution thereof, or who is entitled to or otherwise ·any judgment, all or any part of the taken, may apply to the Court thereof by motion in a summary way for in such proceeding either far as is necessary for the purposes of justice and the Court shall thereupon as shall be just;" A stay of execution of judgment is a particular form of a stay of proceedings. Civil Procedure of execution and provides in part as follows: "62.10 (1) The filing of not operate as a stay of execution of the appealed from. (2) A Judge on application an appeal may, pending disposition of the appeal, order stayed the execution of any judgment appealed from or of any judgment or proceedings of or before a magistrate or tribunal on an appeal under Rules 56 or 58 or otherwise. (3) An order under granted on such terms as the Judge deems just." In contrast to the situation in where the filing of a notice stay, the Ontario law provides execution on the filing of a Scotia rule and practice appears to be based on the practice in England's Court of Chancery 13 D.L.R. ( 2d) 671 at p. 678. 4 October, 1884, to apply enforce by attachment contrary to which proceedings have been a stay of proceedings generally, or so make such order Rule 62.10 deals with stays a notice of appeal shall judgment of a party to which is being reviewed rule 62.10(2) may be Nova Scotia of appeal does not effect a for an automatic stay of notice of appeal. The Nova (Buxton v. Carriss (1958), Section 43(11) of the
- 5 Judicature Act provides that generally in all matters where there is a conflict or variance and rules of common law, the rules of equi ty shall prevail. This no doubt explains why framed in the way it is; in the of a notice of appeal did not operate as unless the Court, in the exercise of its judicial discretion, ordered a stay. The test most commonly applied until recently by this Court for the granting of a stay of execution pending appeal is that the appellant must irreparable harm that is either be compensated in damages if he is eventually successful on Ltd. v. Richardt, Canyon Distributors Ltd. (1975), 12 N.S.R. (2d) 540 Sons Ltd. v. Nova Scotia Labour Relations Board et ale 11 N.S.R. (2d) 536 (N.S.C.A.)). in these cases. That is not the considered stays of custody Orders special circumstances exist that could be harmful to a child if the Order were acted upon a stay would be granted (Millett v. Millett (1974), (2d) 26 (N.S.C.A.); Routledge v. between rules of equity Civil Procedure Rule 62.10 is Court of Chancery filing a stay of execution show that he will suffer difficult to, or cannot the stay is not granted and the appeal (Bluenose Lanes and LA.C. Ltd. (N.S.C.A.)~ w. H. Schwartz & (1975), Stays were not granted only test: this Court has on the ground that if before the appeal was heard, 9 N.S.R. Routledge (1986), 74 N.S.R.
- 6 (2d) 290 (N.S.C.A.)) . These welfare, not monetary judgments. granted; in Routledge refused. C.J.N.S., stated: "In my opnion, there need of a special and persuasive stay. " The test has been In Exco Corporation Ltd. et ale Loan Company et ale (1987),79 N.S.R. sitting in Chambers, granted basis that it was in the best interest of the shareholders in the Company that the status quo appeal from the trial judge's decision was heard. the application, he did not traditional test of irreparable that if the stay was not granted, the effect of appeal would be negated so maintained. In New Brunswick v. Maritime Electric Co. ltd. (1985), 60 N.R. 203, the Federal a similar test but was satisfied the refusal of a stay would not render a successful appeal nugatory. In effect, the cases involved children's In Millett the stay was In the latter case, Clarke, to be circumstances nature to grant a expressed in other terms. v. Nova Scotia Savings & (2d) 29, Jones, J.A., a stay of execution on the be maintained until the In granting make any reference to the harm. He was concerned a successful the status quo should be Electric Power Commission and National Energy Board Court of Appeal applied Court, in both these cases,
- applied the traditional irreparable was couched in different language. There has been that the test for determining whether should or should not be granted same as that for determining if an interlocutory injunction should be granted pending disposition the trial level. In Attorney Metropolitan Stores (MTS) Ltd. et al., (1987), 73 N.R. 341, Mr. Justice Beetz stated at p. 127: "A stay of proceedings injunction are remedies the absence of a different statute, they have sufficient in common to be governed the courts have rightly granting of interlocutory which they follow with injunctions: ... " The three main the Courts in considering applications for interim injunctions were reviewed by Mr. Justice Beetz. make a preliminary assessment and, in particular, whether prima facie case or, alternatively, developed in American Cyanamid 1 All E.R. 504, whether the application a serious question to be tried. Mr. Justice Beetz, nor did he 7 harm test although it a suggestion in recent cases a stay of proceedings should be essentially the of a proceeding at General of Manitoba v. [1987] 1 S.C.R. 110; and an interlocutory of the same nature. In test prescribed by characteristics by the same rules and tended to apply to the stay the principles respect to interlocutory tests currently applied by The first test is to of the merits of the case the applicant can make out a the more relaxed test Co. v. Ethicon Ltd., [1975] can show there is It was not necessary for feel it desirable, to choose
- 8 between the two tests, although constitutional case such as relaxed American Cyanamid was appellant must show that if the injunction is not granted, he will suffer irreparable harm "not susceptible or difficult to be compensated in damages." of convenience) was described by Mr. Justice Beetz at p. 128 and involves "a determination will suffer the greater harm of an interlocutory injunction, merits." Mr. Justice Beetz considerations on an interlocutory by stating that there may be to be taken into consideration in a particular case. In Re Island Telephone Company Limited (1988), 67 Nfld. & P.E.I. Reports 158, I will call the American Cyanamid test in granting of execution of a judgment. In short, (i) is there a serious issue, (ii) the irreparable harm balance of convenience. In Donahoe, The Assembly v. MITV and the CBC, of this Court, sitting as Chambers for a stay, stated: "Similar considerations of a stay of proceedings as apply on the granting of an injunction." he felt that in a he was considering the more appropriate. Secondly, the The third test (the balance of which of the two parties from the granting or refusal pending a decision on the concluded his review of the injunction application many other special factors McQuaid, J., applied what a stay question, and (iii) the Speaker of the House of June 21, 1990, Jones, J.A., judge on an application apply on the granting
- Mr. Justice Jones made reference to the remarks of Mr. Justice Beetz in support of the above statement. Mr. Justice Jones on the application before him for interlocutory injunctions: the issues, (ii) the irreparable harm question and (iii) the balance of convenience (the concluded that the status quo television in the Legislature) appeal. He was of the opinion constitutional issues involved mechanical intrusion of television He therefore stayed any proceedings trial judge I s judgment and Order that would way for the respondents to Legislature with their own cameras. In Associated al. v. A.C.A. Cooperative November, 1990, Macdonald, J.A., sitting in Appeal Division Chambers, granted a stay of Trial Division on the ground proceedings (whether or not were required to indemnify the appellants) from the main proceeding and 9 agreed with counsel that he should consider the tests (i) the serious nature of American Cyanamid test). He should be maintained (re pending the hearing of the that there were serious over and above simply the in the Legislature. with respect to the have paved the televise the sittings of the Freezers of Canada Inc. et Association Limited et al., execution on a judgment of the that an issue raised in the certain insurance companies had been severed was yet to be determined by
- 10 the Trial Division. It was stay until the insurance issue of his reasons, Mr. Justice the criteria that the Courts us~ an interlocutory injunction should be granted. was for several million dollars. applicants might suffer irreparable be compensated in damages if a stay was not granted. So what is the a stay of execution of a judgment the appeal? In the older cases, whether the applicant has met in other cases, the American added components that the applicant is a serious question on appeal convenience favours granting considered whether there are exceptional warrant granting the stay and in other cases a stay is granted to maintain the status quo pending the hearing of the appeal. There is a wide discretion in the Court under Section 41(e) of the Judicature stay applications although not as broad on the Court with respect obviously just to grant the was decided. In the course Macdonald considered some of in determining whether The judgment He concluded that the harm that could not current test for granting pending disposition of the Court has considered the irreparable harm test; Cyanamid test which has the must also show there and that the balance of the stay. Other cases have circumstances that Act in consideration of a power as conferred to the consideration of
- interlocutory injunctions pursuant Judicature Act as an interlocutory injunction may in Nova Scotia if it is "just Convenience is not a statutory of proceedings nor is that the basis of the American Cyanamid test. A review of the a trend towards applying what Cyanamid test for an interlocutory injunction in considering applications for stays of execution my opinion, it is a proper test as it puts burden on the appellant which application considering the prevents a litigant from realizing litigation pending the hearing of the appeal. In my opinion, pending disposition of the appeal if the appellant can either (1) satisfy the Court on each of the following: (i) that there is an arguab.le (ii) that if the stay is not successful, the appellant will harm that it is difficult to, by a damage award. This involves 11 to Section 43(9) of the be granted or convenient" to do so. basis for granting a stay cases indicates there is is in effect the American pending appeal. In a fairly heavy is warranted on a stay nature of the remedy which the fruits of his stays of execution of judgment should only be granted issue raised on the appeal; granted and the appeal is have suffered irreparable or cannot be compensated for not only the theoretical
--12 consideration whether the harm compensated in damages but also party at trial has executed whether or not the appellant if successful be.able to collect, and (iii) that the appellant will suffer greater harm if the stay is not granted than the respondent would suffer if the stay is granted; of convenience. OR (2) failing to meet the primary test, satisfy the Court that there are exceptional would make it fit and just that the stay be granted in the case. While I have reservations am persuaded that notwithstanding the applicant cannot meet the primary test as it would could pay a damage award in favour of the appellant if the summary judgment was set aside respondent had executed on the are exceptional circumstances the granting of the stay. The consist of three factors. First, the in a summary proceeding rather on the face of the pleadings, appears to be an arguable issue is susceptible of being whether if the successful on the appellant's property, on appeal will the so-called balance circumstances that on the issue, I appear that the respondent on appeal but after the appellant I s property, there in this case that warrant exceptional circumstances judgment was obtained than after trial. Second, the appellant raises what and thus may be successful
- 13 on the appeal from the granting Third, the appellant's counterclaim and the claim to a setoff have not yet been adjudicated Therefore, the proceedings (as case) have not been completed and it is premature to execute on the summary judgment. The combined effect of these factors creates an exceptional circumstance that makes it just that the application for a stay judgment pending the disposition judgment be granted but on terms. The objective protect the interest of the time, protecting those of the prevented by the stay from realizing on his Procedure Rule 62.10(3) provides may be granted on "such terms This provides great flexibility although I have not seen any been imposed. If an interlocutory as a general rule the Court requires the applicant to make an undertaking that he will pay damages for any loss sustained by the other party by reason granted if it is held at trial that the party who enjoined from doing an act was entitled to do such act. of the summary judgment. upon by the Trial Division. in the Associated Freezers of execution of the summary of the appeal from that of stay of execution is to appellant while, at the same judgment creditor who is judgment. Civil that a stay of execution as the Judge deems just." in granting the remedy instances where terms have injunction is granted, of the in junction having been has been
- 14 In my opinion, in order to protect the interest of the judgment creditor, who judgment if a stay of execution the judgment debtor dissipate hi s of the appeal, the Court should appellant to undertake not to assets in the interim. This balance between the interest hand and the respondent on the other; it is not a for the appellant to pay for the stay of execution and enables the Court to grant a stay in circumstances otherwise not be just. Rule 62.10(7) protection for the interest that notwithstanding the granting of the stay, credi tor may register the judgment in the Registry of and thus bind the appellant's real property. Accordingly, to granting the stay, I would order that the execution of the judgment be stayed pending disposition the condition that the appellant undertaking to the respondent of or encumber his assets so The undertaking shall be in respondent and shall have attached the appellant describing his cannot execute on a monetary is granted, from having assets before disposition generally require the dispose of or encumber his is necessary to preserve a of the appellant on the one high price where it might provides additional of the judgment creditor in the judgment Deeds satisfy my reservations in of the appeal on execute under seal an and the Court not to dispose long as the stay is in force. a form acceptable to the to it an affidavit of assets, such as real estate,
- 15 investments and motor vehicles, which the assets are respectively of undertaking and affidavit respondent, I shall fix the by either party. The undertaking delivered, duly executed, to not later than December 7, 1990. of the appeal, the appellant further affidavit stating that undertaking. Costs shall be in th if any, and the extent to encumbered. If the form is unacceptable to the form thereof on application and affidavit shall be the respondent and the Court On the date of the hearing shall file with the Court a he has complied with his I~~ -----. - ! . Hallett, J.A.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.