Tremblett v. Tremblett, 2013 NLCA 53

Date: 20130 808 Docket: 13/34 Citation: Tremblett v. Tremblett , 2013 NLCA 53 IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR COURT OF APPEAL BETWEEN: WILLIAM TREMBLETT APPELLANT AND: DOUGLAS TREMBLETT RESPONDENT Coram: Green C.J.N.L., Welsh and White JJ.A. Court Appealed From: Supreme Court of Newfoundland and Labrador Trial Division (G) 200806T0087 Appeal Heard: May 24, 2013 Oral Decision: May 24, 2013 Reasons for Oral Decision filed: August 8, 2013 Reasons for Oral Decision by Green C.J.N.L. Concurred in by Welsh and White JJ.A. Counsel for the Appellant: John Drover Counsel for the Respondent: Corwin Mills Q.C. and Gregory French

Green C.J.N.L.: [1] The issue on this appeal is whether a judge erred in the exercise of his discretion in denying an application by the appellant(defendant at trial) for a stay of execution of a previous judgment of his, ordering the appellant to pay a sum of money by a certain dateor in default ordering that a crab fishing licence, an asset of a partnership between the appellant and respondent, be sold to satisfy thedebt. [2] At the conclusion of the appeal, the panel allowed the appeal, set aside the trial judge’s decision and granted a time-limitedstay of the judgment with reasons to follow.

These are those reasons. Standard of Review [3] Because the decision under appeal is a discretionary decision, the standard of appellate review is a deferential one. But thediscretion is not unfettered and is reviewable. Any judicial discretion must always be exercised according to proper legal principle. InLangor v.

Spurrell (1997), (NL CA), 157 Nfld. & P.E.I.R. 301 (NFCA), I described the zone of appellateintervention in a discretionary decision of a trial or applications judge this way: [32] … While … discretion must always be exercised judicially upon an evidentiary or other proper basis and according to properprinciples, the applications judge will often have a wide latitude, within the parameters of the applicable principles, to reach a particulardecision according to his or her view of the justice of the particular case. [33] … The court will therefore only interfere with a discretionary order where the judge who made it has exceeded his or herjurisdiction or has failed to apply or has misapplied an applicable principle or made a palpable and overriding error in his or herappreciation of the facts, or the failure to interfere would otherwise cause a manifest injustice.

See Bank of Montreal v. House (H.O.) Ltd. (1976), 10 Nfld. & P.E.I.R. 392 (Nfld. C.A.)…

Summary of Conclusions [4] For the reasons that follow, applying the above standard, the judge erred in the exercise of his discretion in denying therequested stay because he failed to apply the correct principles applicable to the exercise of his discretion and failed to identify andaddress important considerations that were relevant to the exercise of that discretion. [5] Accordingly, the judge’s decision was set aside. On the basis of the record and on other information presented to the Courtand accepted by both parties, a stay of the order for sale in default of payment was granted until 5:00 p.m. on June 7, 2013. Background (

a) The Fishing Enterprise [6] For many years, the appellant William Tremblett (William) and his brother, the respondent Douglas Tremblett (Douglas),fished together commercially. Relations broke down between them by 2006 and they ceased working together. William continued tooperate the enterprise and fished the crab licence, which was in his name. (

b) The Partnership Decision [7] Douglas commenced an action against William claiming that he and William had operated the fishing enterprise, including thecrab licence, in equal partnership. The trial judge found for Douglas. He held that the partnership covered all aspects of the fishingenterprise, including the coveted crab licence. He further held that the partnership was dissolved on April 26, 2004 but that Douglas wasentitled to the relief provided by sections 39 (winding up) and 42 (sharing profits or interest on partnership share since dissolution) of thePartnership Act, RSNL 1990, c. P-3. See 2012 NLTD(G) 166 (the Partnership Decision). (

c) The Valuation/Sale Decision [8] Shortly after the release of the Partnership Decision on November 7, 2012, Douglas applied seeking a quantification of theamount to which he was entitled pursuant to the Partnership Decision. He asserted he was entitled to one-half of the value of the crablicence as at dissolution of the partnership as well as 6% of that value from 2004 to 2012 under subsection 42(1) of the Partnership Act.

He also sought an order that if that total amount was not paid within 30 days, the crab licence should be sold and that in the meantimeWilliam should be restrained from fishing or otherwise dealing with the licence. William responded with the submission that what wasrequired under

section 39 was an accounting of all assets and liabilities of the partnership pursuant to a proper winding up beforeparticular assets should be valued and sold individually. [9] William also applied seeking a stay of the Partnership Decision pending appeal to this Court. That appeal was subsequentlyabandoned. [10] Those applications were heard on March 4, 2013.

The judge dismissed William’s stay application because his counsel concededthat none of the proposed grounds of appeal raised a serious issue and because the judge concluded that William could not show that hewould suffer irreparable or the greater harm if the judgment was executed. As to Douglas’s application for directions as to how to satisfythe Partnership Decision, the judge declared that “there is no reason to delay implementing my judgment any longer” (paragraph 24).

Stating that the crab licence was “the only valuable asset the partnership owned at dissolution”, and that William had had a reasonabletime to raise the funds to pay Douglas for his interest in the enterprise, he valued the crab licence based on trial evidence and declaredthat Douglas was entitled to half that value, or $432,500. To that he added 6% simple interest for the subsequent years 2006-2013 (butnothing for 2004 and 2005 because he had found that William had paid Douglas 9% of the value he realized using the licence in those

years), or $181,650, for a total of $614,150. [1] [ 11 ] The judge relied on an affidavit of Donald Sweetapple, filed on behalf of Douglas, which asserted that the latest the crab licence could be sold in 2013 for full value would be the end of May [2] .

The judge did not refer to affidavit evidence filed on behalf of William to the effect that he was taking steps to satisfy the judgment and that a third party fishing enterprise was willing to assist with the satisfaction of any judgment up to $660,000 (the amount claimed by Douglas) by installments over a number of years. [ 12 ] The judge stated: [28] Now is the time to complete this process and delaying it further will have adverse consequences for both [William] and [Douglas], but especially the latter. [ 13 ] He did not state what he believed the adverse consequences for either party were.

Nor did he say why, having accepted the evidence of Mr. Sweetapple, in his second affidavit, that the latest the licence could be sold for full value in 2013 was the end of May, he then proceeded to order, on March 7, 2013, that the sum of $614,150 plus taxed costs be paid by March 31, 2013 and that if not paid the licence could be sold and the proceeds paid into court for distribution. [3] See 2013 NLTD(G) 38 (the Valuation/Sale Decision). (

d) The First Extension Decision [ 14 ] On March 26, 2012, William applied under rule 50.09 of the Rules of the Supreme Court, 1986 for a stay of execution of the Valuation/Sale Decision “for a short period” to allow him to pursue long-term financing to enable him to satisfy the judgment. He based his submission on “developments” which he outlined and which I now summarize as follows: (

i) He applied on March 7, 2013 to Bank of Montreal for “long term financing in order to meet the judgment” but after having certain financial work performed by his accountant, the application was declined on March 25, 2013; (ii) On March 26, 2013, following an approach by William’s accountant, Royal Bank of Canada (RBC) “expressed an interest in looking at a long term financing deal”. [ 15 ] Rule 50.09 reads as follows: When a party against whom an order has been granted, or any person against whom obedience thereof may be enforced, applies to the Court for a stay of execution thereunder because of a matter that occurred after the date of the order , the Court may grant the stay and any other relief upon such terms as it thinks just. (Emphasis added.) [ 16 ] William submitted the court should exercise its discretion under rule 50.09 to grant a stay “to provide [William] sufficient time to pursue the opportunity with RBC” based on the events that occurred since the Valuation/Sale Decision.

He submitted that in the event a stay was not granted “the fishing enterprise will fail and eight crewmembers will be without work which will have a negative impact on a number of families in the Bonavista area”.

He further argued that, by contrast, a short stay of execution would not be prejudicial to Douglas because the delay would be “minimal” and the licence would continue to be available for sale. [ 17 ] In response, Douglas submitted that the possible financing by RBC did not constitute “exceptional circumstances” justifying a stay since William should have made multiple applications for financing simultaneously rather than waiting to see if the first application to Bank of Montreal would be successful.

He also submitted that he would suffer the greater prejudice if the sale were delayed and relied on the trial judge’s conclusion in dismissing the original application for a stay pending appeal of the Partnership Decision to the effect that “[William] has enjoyed the benefits of the lucrative crab fishery since [2004] and [Douglas] should not be deprived of his entitlement any longer”. [ 18 ] The application was heard on March 28, 2013 by the Chief Justice of the Trial Division, who granted a temporary stay until close of business on April 3, 2013 to enable further information to be provided about the RBC financing application. [ 19 ] On a further hearing before the original trial judge on April 4, 2013, an affidavit from Paul Anstey, a commercial account manager with RBC, was filed in support of the application.

In it, Anstey deposed that upon reviewing information supplied by William he was of the opinion that the application for financing was sound and that although he could not at that time guarantee it, he felt that RBC “should” provide the requested financing. He felt, however, that an additional two weeks would be necessary to complete the process. William also filed an affidavit from Dwight Saunders, a marine broker with fifteen years’ experience, who deposed that he had identified three buyers for 50% of the licence if the quota was fished for the 2013 season.

He estimated the current value of the licence to be $1,000,000. [ 20 ] The trial judge made an order extending the time for payment of the $614,150 and taxed costs to April 30, 2013 with sale of the licence thereafter on default in payment. (

d) The Second Extension Decision [ 21 ] William was not able to finalize his financing with RBC by April 30, 2013. On that date, he applied for an extension for payment and/or sale for a further 30 days. In the alternative, he sought orders allowing him to fish the licence during the 2013 season with all proceeds being paid into court or a variation of the sale order allowing a sale of 50% of the licence. [ 22 ] In support, William filed a further affidavit from Paul Anstey who stated that, despite further work on the application, RBC was still not in a position to make a final decision on financing.

He explained that delays were caused by the necessity for some corporate restructuring of the enterprise in a manner acceptable to RBC to protect its security and by the need to ensure that the corporate structure and holding of the fishing licences were acceptable to Department of Fisheries and Oceans. He further stated that he would be able to

complete the application in the form required by RBC by May 3, 2013 and he would expect a response from RBC’s regional office in Halifax by May 17, 2013. He concluded: …in my professional opinion, the request for long term financing is being viewed favourably and while I make no commitments on behalf of the Bank, I am confident that RBC will ultimately provide the requested financing to the Applicant. [ 23 ] On cross-examination by counsel for Douglas, Mr.

Anstey reiterated his position and stated he was no less confident that the financing would be provided now than he was when he swore his earlier affidavit. [ 24 ] William’s argument was that the financing application was moving forward, it was being looked on favourably, and that he should be given the opportunity to pay the judgment given the fact that Douglas’ own evidence from Mr.

Sweetapple was that a sale of the licence at full value could still be made by the end of May if the financing fell through by that date. [ 25 ] In response, aside from arguing that William’s application could not be characterized as a stay application but was merely an extension application, [4] Douglas simply submitted that to allow William’s application “would be to unduly delay and frustrate the entitlement of the plaintiff, Douglas Tremblett”. [ 26 ] He also filed a new affidavit from Mr.

Sweetapple who deposed that based on his experience it should not take a bank a month to make a decision on a credit application of this nature. Mr. Sweetapple further stated that he had been contacted by three buyers who would be prepared to offer between $900,000 and $960,000 cash provided the quota was not fished in the 2013 season. He also said that licences have the highest value at the current time of year and that values change depending on stock conditions and world market conditions.

He further said that a sale of half of the licence would not bring finality to the issue because, based on his valuations, a substantial amount of money would still be owing by William to Douglas if only half the license quota was sold. [ 27 ] In oral argument, counsel for William suggested that Mr. Sweetapple’s evidence should be discounted because he was not a commercial banker and was not in as good a position to comment on the length of time it would take to process an application as Mr. Anstey was. He also submitted that Mr.

Sweetapple was in a conflict of interest because he and his firm stood to gain from a sale of the licence, since they had been appointed by the court as the broker to sell the licence in the event of default. [ 28 ] The judge refused to extend the deadline any further and rejected the suggestions that 50% of the licence be sold or that William be allowed to fish the licence for 2013 upon condition that the proceeds be paid into court. [ 29 ] His reasons, stated orally immediately at the conclusion of the hearing, were as follows: … I’m not confident that the financing will be provided despite the submission that you make and the affidavit that Mr.

Anstey presents. When we dealt with this on the 3 rd of April, at that time it seemed much more positive about that likelihood but I don’t feel that way now. I gave 27 days on the 3 rd of April, which was beyond, really what I felt would have been sufficient in light of what I was told at that time, but I’ve put it on the outside because I essentially was trying to allow a bit of a buffer by way of time to get it all done so that we wouldn’t have to come back to this as we are doing now. But I don’t have the sense now that things are as close to being done as, in fact, the application would suggest. Hearing Mr.

Anstey, I know that the application hasn’t been submitted to Halifax for approval, it won’t be submitted until, according to his affidavit, at least Friday of this week. There appears to be other work that has to be done. I’m not sure of the discussion that went on about the structure but other work that has to be done that involves D.F.O. which is an agency beyond either, anybody’s control in terms of the parties to these proceedings. So I’m not confident that the funding will be arranged.

There was sufficient time provided, this matter has been, since I’ve filed judgment in this matter, which was back in, I think, November of 2012, it’s been five months and some now that we’ve been debating this in one way or another, and the season is upon us … The opportunity to find a buyer for that licence is as good as it’s going to be this year, and if it doesn’t happen, from what I can tell reading the affidavits and … reflecting on the evidence in this matter, that it’s going to be this time next year again before that opportunity comes around. [ 30 ] The judge then addressed Douglas’s submissions that only half the licence quota be sold or that he be allowed to fish the licence and pay the proceeds into court: The other suggestions allowing the licence to be fished with the funds to be paid into the court is really no solution to the problem that is presented here, it would only further complicate matters, it still doesn’t enable Mr.

Bill Tremblett to find the funds to pay the judgment amount which is outstanding, and regarding selling half the licence, then I’m not going to permit that to be done in a piecemeal fashion. Essentially, it’s a partnership asset, … Doug Tremblett has the right to get what he’s entitled to from that, the assets of the partnership, and the best opportunity for him to do that is sell that asset.

Aside from the marketability of half the license, I’m also concerned about complications that might present involving D.F.O. in that aspect of things … [ 31 ] He concluded: … so all together I’m not satisfied that the time should be extended any further to satisfy the judgment in this matter, so the judgment stands and the matter will proceed as directed. (

f) The Appeal [ 32 ] The current appeal related to the Second Extension Decision. [ 33 ] Counsel for William submitted that the judge erred in: (

i) failing to state the proper or any legal test in reaching his decision; (ii) failing to consider the issue of bias and conflict of interest in respect of Sweetapple’s evidence; (iii) failing to weigh the conflicting evidence of the affidavits filed by both parties; and (iv) relying on the opinion of Donald Sweetapple relating to commercial banking matters.

[34] These issues can all be subsumed under the general issue of whether the judge approached his discretionary decision properly,applying the proper legal principles. Considerations (

a) Analysis of Second Extension Decision [35] The judge made no reference to the principles that he believed were applicable to the exercise of his discretion. He essentiallybased his decision on the fact that he was “not confident” that the financing would ultimately be provided by RBC. He also observedthat he and the parties had been “debating” the issue “in one way or another” for over five months since the Partnership Decision andthat “the season is upon us” such that “the opportunity to find a buyer for that licence is as good as it’s going to be this year”. [36] The judge also rejected the alternative suggestions of: (

i) allowing the licence to be fished, because it would “complicatematters” and would not allow William to obtain all the funds to pay the judgment; or (ii) proceeding with a sale of half of the licencequota, because it would involve sale in a “piecemeal fashion” and Douglas “has the right to get what he’s entitled to from … the assets ofthe partnership.” He also said he was concerned about marketability of the licence and complications from D.F.O. involvement. [37] He did not explain how or why, according to proper principle, those considerations were determinative in the exercise of thediscretion. [38] Notably absent from his analysis were the following: (

i) any reference to the principles to be applied; (ii) a determination of the impact on William if the stay were not granted; (iii) an assessment of the conflicting evidence provided by the affiants as to the progress made by William with respect to thefinancing application; (iv) an analysis of the impact on the value of Sweetapple’s evidence on William’s submission that Sweetapple was in a conflict ofinterest; (

v) any comparative analysis of the relative harm to each party if a stay were granted or refused. (

b) Power to Grant a Stay [39] The jurisdiction to grant a stay of proceedings in the nature of execution, not pending appeal, derives from

section 97 of theJudicature Act, RSNL 1990, c. J-4 and the inherent jurisdiction of a superior court to control its own process, including its judgments andorders. In Kerr Controls Ltd. v.

Yetman (1995), (NL SC), 128 Nfld. & P.E.I.R. 271 (NFSCTD), a case dealing withstaying a judgment to allow for payment of a debt by installments, I observed: [19] So long as an execution order remains as an order of this court, the court will retain inherent jurisdiction over all judgments orexecution orders which it has made and, in the exercise of that jurisdiction, may stay execution upon terms in appropriate circumstancesthat are relevant to a stay… [40] The provisions in the rules of court (rules 50.09, 53A and 57.10) are merely manifestations of certain circumstances where thecourt’s power to grant a stay is often exercised.

They do not define the limits of the court’s jurisdiction. The specific rules do notpurport to occupy the whole of the court’s inherent jurisdiction in this regard but merely deal with discrete individual aspects of it. [41] Although an application for a stay of a judgment may be made invoking a particular rule, once the jurisdiction of the court isengaged for the purpose of considering whether a stay should be granted, the court is not limited to a rote application of the parsedlanguage of the particular rule.

The jurisdiction may be exercised, according to proper principles, to do substantial justice in a given case,taking into account the interests of the parties as well as others affected by the proposed enforcement of the judgment. [42] In this case, the application was made pursuant to rule 50.09. It is appropriate to consider the scope and application of this rulefirst before going on, if necessary, to consider the broader inherent jurisdiction of the court generally. [43] Rule 50.09 grew out of the previous procedure of audita querela in chancery.

The writ of audita querela permitted a defendantwho had a judgment rendered against him or her to stop the judgment from being executed where enforcement would be contrary tojustice. Circumstances justifying staying execution of the judgment included situations where events had occurred or were discoveredafter entry of the judgment that rendered it unjust to allow execution to proceed, such as the discovery of fraud in the procuring of thejudgment or the discovery of new evidence potentially justifying a new trial.

It was also available where the debt had been discharged orotherwise satisfied after judgment had been rendered but the formal release or satisfaction had not been entered on the record and thejudgment creditor was continuing to try to execute on the judgment, thereby effectively obtaining payment twice. See Blackstone,Commentaries on the Law of England (1765), Book 3, pp. 405-406. [44] Eventually the writ fell into disuse and was abolished in England. But a similar remedy was provided for in the rules of court.Newfoundland followed a similar procedure.

Order 38, Rule 20 of The Rules of the Supreme Court 1889, Sch. E of The Judicature Act,1889, 52 Vict. cap. 39,: No proceeding by audita querela shall hereafter be used; but any party against whom judgment has been given may apply to the Court ora Judge for a stay of execution or other relief against such judgment, upon the ground of facts which have arisen too late to be pleaded;and the Court or Judge may give such relief and upon such terms as may be just. (Emphasis added.)

[45] The emphasized words in O. 38, r. 20 seem to relate only to the situation where new evidence has been discovered since the trialand could not therefore have been pleaded and relied on in the original trial.

It is clear, however, that the proceeding by way of auditaquerela encompassed more circumstances than this, including events unrelated to the original trial, such as relieving the judgment debtor“upon good matter of discharge, which has happened since judgment” (Blackstone, p. 405). [46] In any event, even if O. 38, r. 24 cut down the scope of the procedure, it has, since 1986, been replaced by the broader wordingin the current rule 50.09 which employs the words “because of a matter that occurred since the date of the order” instead of “upon theground of facts which have arisen too late to be pleaded”.

This change paralleled an earlier similar change in England when the sameolder wording was replaced by the newer wording. See, Annual Practice, 1965, O. 45, r. 11. This wording was described by G. F. Harwood and B. A. Harwood, Odgers on Pleading and Practice, 19th ed. (London: Stevens & Sons, 1966) in the broadest terms: “[I]fmatters have occurred since judgment which would make it just to stay execution, the court may do so under Order 45, r. 11.” [47] In this province, the Trial Division in Canadian Papermakers Union, Local 58 v.

Corner Brook Pulp and Paper Ltd. (1987), (NL SC), 65 Nfld. & P.E.I.R. 261 accepted the applicability of rule 50.09 in an application for a stay (thoughultimately denying it) against an inferior tribunal pending a subsequent challenge of a bargaining unit certification order in the TrialDivision. Even before the adoption of the broader wording in rule 50.09, Morgan J.A. in Bank of Montreal v. H.O.

House Limited.(1978), 15 Nfld. & P.E.I.R. 33 (NFCA) observed in obiter that “the Court has power to stay the immediate execution on a judgment debt,where such would cause unnecessary hardship or loss,” as where the judgment debtor has a cross-claim in the nature of a counterclaimagainst the judgment creditor which must for procedural reasons be subsequently tried separately. To like effect, see Ellis v. St. John’sDaily Star Publishing Co. Ltd. (1921), 12 Nfld. L.R. 35. [48] In Kerr Controls Ltd. v.

Yetman the Trial Division recognized the jurisdiction of the Court, founded on a line of earlyNewfoundland cases (Flahavan v. Gamble (1819), 1 Nfld. L.R. 36; Coleman v. Executors of Kennedy et al. (1817), 1 Nfld. L.R. 8), toorder a stay of immediate execution so long as a judgment debt is paid by installments, where immediate payment of the whole debtwould cause undue hardship to the judgment debtor. Finally, in White v.

True North Springs Ltd., 2002 CarswellNfld 216, the TrialDivision applied rule 50.09 to a case where a stay of execution of an injunctive order was sought pending application to the same courtfor a reconsideration of the original decision. [49] Whether one can describe the Bank of Montreal and Kerr Controls Ltd. cases as exercise of the inherent jurisdiction of the Courtor an application of rule 50.09, the fact remains that the Court has purported to exercise its jurisdiction to grant a stay of execution incircumstances outside discovery of new evidence and upon events that have occurred after entry of the original judgment.

In this regard,Newfoundland law may have diverged from its English progenitor in its

interpretation and application of the rules relating to the grantingof stays. In London Permanent Benefit Building Society v. De Baer, [1968] 1 All E.R. 372 (Ch. D.) the Newfoundland case of Flahavenv. Gamble was cited to the Court in favour of an expansive reading of the English equivalent of rule 50.09 but Plowman J. would notaccept it and instead gave the rule an

interpretation that limited it to “matters which would or might have prevented the order being madeor would or might have led to a stay of execution if they had already occurred at the date of the order” (p. 379).

This approach essentiallylimited the application of the rule to discovery of evidence that could not with reasonable diligence have been discovered before entry ofjudgment; in other words, the rule was to be read as if its old formulation (“upon the ground of facts which have arisen too late to bepleaded”) still existed. [50] Counsel for Douglas argued, however, that regardless of the broader wording of rule 50.09, it did not extend to events that werenot related to the occurrence of some other proceeding that, if not allowed to be completed, would render execution on the originaljudgment unjust.

He focused on the word “matter” in rule 50.09. He submitted, citing

definitions of the word “matter” in various legaldictionaries, that it refers to another proceeding in court, such as an application for reconsideration of a decision (as in True NorthSprings) or the subsequent trial of a counterclaim not dealt with at the time of the original trial (as referred to in Bank of Montreal v. H.O. House Ltd.). [51] I see no reason why rule 50.09 should be confined in this way. Certainly, under the old writ of audita querela, it covered more. I see no reason why rule 50.09 could not refer to any event that occurs subsequent to judgment that renders it unjust to enforce thejudgment immediately. In addition to a claim, based on rule 15.08 (

a) or (b), to reverse or vary the judgment based on a matter arisingsubsequent to the making of the order, it could include significant financial hardship to the judgment debtor or other circumstances thathave arisen since the entry of the judgment. Such an

interpretation would explain the jurisdiction, accepted from an early date inNewfoundland, to stay a judgment pending payment by installments because of significant hardship to the judgment debtor. Indeed, theauthority to stay a judgment pending appeal (though admittedly exercised under separate rules – 53A and 57.10) can also be said toexemplify, at least in part, the same sort of principle designed to prevent unnecessary hardship to the person subject to a judgment. Infact, rule 50.09 has been applied to circumstances of potential hardship pending appeal of a judgment: Power v.

Power (1988), (NL SC), 70 Nfld. & P.E.I.R. 174 (NFSCTD); Metropolitan Trust Co. of Canada v. Murray et al. (1993), (NL SC), 109 Nfld. & P.E.I.R. 197 (NFSCTD). [52] In the instant case, William is claiming that he has been diligently attempting to raise the funds necessary to satisfy theValuation/Sale Decision without the necessity of having the license, in which he has a fifty percent interest, sold.

He claims he needsmore time to complete the financing which he has been pursuing diligently and that if the license has to be sold he will suffer hardship.This is sufficient to constitute a “matter that has occurred since the date of the order.” [53] The questions that remain are: upon what principles should the discretion to grant a stay be exercised, and did the trial judgeidentify and apply them properly? (

c) Applicable Principles [54] One starts with the self-evident proposition that a party who is the beneficiary of a judgment is in principle entitled to its fullsatisfaction from the moment it becomes enforceable. Any delay of enforcement will be an exception to this general proposition. Theburden will be on the party seeking delay in enforcement to justify why, in the circumstances, the general principle should not prevail.

[55] Once the jurisdiction under rule 50.09 is engaged (because the court has determined that a matter has occurred since the date ofthe order), the Court must go on to determine whether the matter that has occurred is sufficient to justify displacing the “immediateenforcement” principle. [56] In determining whether a stay of proceedings should be granted, the Court generally applies a three-part test as enunciated inRJR – MacDonald Inc. v. Canada (Attorney General), (SCC), [1994] 1 S.C.R. 311 and applied by this Court in StratosGlobal Corp. v. Antle, 2005 NLCA 47, 248 Nfld. & P.E.I.R. 97: (

i) on a preliminary assessment of the merits, whether there is a seriousissue to be dealt with; (ii) whether failure to grant the stay would result in irreparable harm to the applicant; and (iii) which of the partieswould suffer the greater harm as a result of granting or refusing a stay. In addition, the Court has on occasion recognized a residual test,applicable in exceptional or compelling and overriding circumstances: whether it would nevertheless be “fit and just” for a stay to begranted. See White v.

True North Springs Ltd. 2002 NFCA 51, 216 Nfld. & P.E.I.R. 193, per Steele J.A. at paras. 10–15; per contra,Rees v. Canada (Royal Canadian Mounted Police), 2005 NLCA 4, 244 Nfld. & P.E.I.R. 72 at paras. 43–49. [57] The RJR MacDonald test has been applied to applications to this Court for stays pending appeal.

The question is whether it is orshould be applicable to applications to stay execution of a judgment when no appeal is pending. [58] In True North Springs, Thompson J. blended the first part of the RJR MacDonald three-part test with the “fit and just” testmentioned in Steele J.A.’s judgment in the other True North Springs case, to come up with a two-part test applicable under rule 50.09: [11] In this case I feel then that consideration should be given to: 1. whether there is an arguable issue; and, if so 2. whether there are exceptional circumstances that would make it fit and just that the stay be granted in this case. [59] In True North Springs (Thompson J.), the stay was sought to enable an application to the court for reconsideration of thedecision to grant an injunction on the ground that there was “significant evidence” not before the court which, if it had been considered,would have resulted in a different decision.

In that context, a focus on whether there was an arguable issue on the reconsiderationapplication was appropriate. However, given that, as discussed above, rule 50.09 can additionally apply to situations that do not involveother contemplated proceedings of the True North Springs and Bank of Montreal type, a focus on the “arguable issue” question will notalways be appropriate. [60] The purpose of applying an arguable issue test is to accommodate the problem of contingency. One cannot predict withcertainty whether the other event relied on will in fact occur or resolve itself as thought.

Since a judge on an interlocutory applicationought to “eschew to the greatest possible extent passing on the relative strengths of each party’s case” on the ultimate merits (Hogan v.Newfoundland (Attorney General) (1998), (NL CA), 172 Nfld. & P.E.I.R. 185 (NFCA), he or she is left withapplying the low bar of “arguable issue” to the “proceeding” that is being relied on as justifying the stay. [61] In like manner, even if the “matter that occurred after the date of the order” is not a “proceeding” but still involves a futurecontingency (such as a pending application for financing) the trial judge is in the same position.

In such a case, he or she should notattempt to make a firm prediction of what will likely happen but, instead, should make a determination of whether there is an arguableclaim that the contingency will occur. [62] In still other cases, no contingency will be involved because the “matter that occurred after the date of the order” being reliedon is simply some event that has already occurred (such as a reversal of financial fortunes causing severe financial hardship in being ableto satisfy the judgment immediately). In such situations, there is no room for operation of an arguable issue or arguable claim test.

Thequestion will simply be whether in fact the matter has occurred or not. [63] Once the question of whether a matter has occurred since the date of the order (and, if it involves an uncertain future event,whether there is an arguable issue or arguable claim relating to another proceeding or other contingent event) is decided in theaffirmative, then the judge would have to proceed to a consideration of factors that would inform as to an appropriate exercise ofdiscretion as to whether a stay should be granted.

In that regard, I see no reason why the other two parts of the RJR MacDonald test (i.e.whether there will be irreparable harm if the stay is denied and where the balance of convenience lies) should not have application. Indeed, the early Newfoundland cases respecting stay of judgment debts and allowing delayed payment by installments focused on thepotential hardship to the judgment debtor if he were required to pay immediately.

That consideration was then balanced against theimpact on the creditor if payment were delayed. [64] Accordingly, I would state the general test applicable under rule 50.09 as follows: 1. (

a) Where a stay of judgment is sought on the basis that the “matter that occurred after the date of the order” is another contemplatedproceeding (such as an application for reconsideration; a separate related proceeding; or an appeal not falling within rules 53A or 57.10)and it would be unjust to allow enforcement of the original judgment until the other proceeding has been resolved, the applicant mustconvince the court that there is an arguable issue to be dealt with in the other proceeding; (

b) In cases where paragraph 1(

a) does not apply, the applicant must satisfy the court that some other matter or event has occurred sincethe original order and that the occurrence of that matter or event is logically connected to the question of whether it is fair to allowdeferral of immediate enforcement. If the matter or event is ongoing and its outcome is uncertain, the applicant must, additionally,satisfy the court that there is a reasonably arguable (not frivolous) claim that the uncertain outcome will occur. 2.

The applicant must in any event establish that he or she will suffer irreparable harm, as defined in the stay jurisprudence, if the stayis not granted; 3. The applicant must establish that he or she will suffer greater harm as a result of refusing to grant a stay than the judgmentbeneficiary will suffer if a stay were to be granted.

[ 65 ] Because it is not necessary to decide it for the purposes of this case, I leave to another day whether the court retains a residual discretion to grant a stay on just and equitable grounds if the primary test is not met. (

d) Errors of the Judge [ 66 ] The judge did not purport to enunciate or apply any particular principles in the exercise of his discretion. His analysis did not address the principles enunciated above. [ 67 ] Because no other proceeding was contemplated,

part 1(

b) of the articulated test applies. In that regard the judge expressed the view that he was “not confident that the financing will be provided”. With respect, in determining whether a “matter … occurred after the date of the order” within rule 50.09, the focus should not have been on whether William’s application was going to be successful; rather, the “matter” that has occurred is the fact that an application has been made and was actively being pursued.

The trial judge should have, instead, determined whether it was reasonably arguable that William would be successful in obtaining financing not whether the judge was “confident” that that would occur. [ 68 ] The issue was whether, in light of these developments, it would be just and fair to allow William a further opportunity to bring the matter to a conclusion. It was not appropriate for the judge to engage in an exercise in predicting the future, except for the limited purpose of assessing whether the application was frivolous or at least had no reasonable prospect of success.

On the evidence before the judge, that conclusion could not be drawn. [ 69 ] Indeed the judge must have discounted Anstey’s evidence to the effect that he was “confident that RBC will ultimately provide the requested financing” to William. It was not possible to draw a negative inference from Anstey’s description of what had happened since the last stay application. If anything, his evidence showed that the application process was progressing with various hurdles having been overcome and that there were reasonable explanations for the delay.

It was more optimistic than pessimistic. [ 70 ] Against Anstey’s evidence, the judge only had Sweetapple’s evidence that in his experience it should not have taken so long for the bank to process the application.

To accept that evidence (and then to draw an inference from it that it was unlikely the application would be accepted) the judge would have had to address William’s argument that Sweetapple’s background did not justify giving significant weight to his opinions on banking and commercial practice, as well as the argument that Sweetapple’s evidence was tainted because his firm had been retained to sell the licence and he stood to benefit financially if the stay were denied and the sale allowed to proceed.

The judge did not address these matters at all in his reasons. [ 71 ] With respect to the second part of the test (irreparable harm to William), the judge failed to focus at all upon the impact of having to pay the judgment without further delay would have on William. There was, of course, much evidence before the judge, including affidavit evidence from previous stay hearings (which was available for use on the current proceeding – see rule 48.14) which itemized the impact on the continued viability of William’s enterprise and on the employment conditions of Bonavista residents dependent on it.

His point was that if a short further extension could be granted, Douglas would likely receive payment of the judgment in full and all of the negative economic impact on William and those dependent on him could be avoided. None of this was addressed by the judge in his reasons for denying the stay. Failure to do so was, in these circumstances, an error in principle. [ 72 ] Finally, with respect to the third part of the test (balance of convenience), it is not apparent from the judge’s reasons that any comparative analysis of relative harm to the parties was undertaken.

The main theme running through the judge’s approach on the current and previous stay applications was, in essence, that Douglas was entitled to his money and he had “waited long enough”. Of course, it is a given that a judgment beneficiary is entitled to the fruits of his or her judgment unless the court is persuaded to make an exception on proper grounds. The question in any case is whether there should be a departure from the immediate enforcement principle. The principle itself cannot therefore be treated as a factor to be weighed in the balance with other competing factors.

It is other factors which, when weighed against each other, might or might not justify allowing the deferral of immediate enforcement. In effectively focusing on the immediate enforcement principle as a justification for denying the stay, instead of considering whether other factors justified a departure from the principle, the judge fell into error. [ 73 ] Accordingly, for the reasons outlined earlier in paragraph 4, the judge erred in the exercise of his discretion, his decision was set aside and the Court exercised the discretion that the judge ought to have exercised, according to proper principles. (

e) Appropriateness of a Stay [ 74 ] The fact that, following the Valuation/Sale Decision quantifying the amount to which Douglas was entitled under the Partnership Decision, William commenced efforts to obtain financing to satisfy the judgment and persisted in doing so, and that there was evidence that the application for financing was under active consideration and was progressing at the time of the application for the second extension satisfies the requirement in rule 50.09 that “a matter [has] occurred after the date” of the Valuation/Sale Decision.

Such an event could arguably raise questions as to the fairness of enforcing the judgment immediately because the matter involved an alternate means of satisfying the judgment that would not have the effect of potentially destroying the whole fishing enterprise. With respect to the uncertainty as to whether the financing application with RBC would be successful, for the reasons given earlier, there was, on the record, a reasonably arguable claim that it would.

The first part of the proper test was therefore satisfied. [ 75 ] Here, there was irreparable harm that would be suffered by William if a stay were not granted and a sale of the licence proceeded forthwith. It would involve the potential destruction of an economically viable business enterprise with consequential impacts on those dependent on it. While it is true that William might over time establish a new enterprise, if he could acquire a new licence, that might have the potential of being as profitable as the current one, that would not account for the loss of income in the meantime.

The harm resulting from the closing of the existing enterprise is therefore effectively irreparable. [ 76 ] Applying the balance of convenience, the question is whether the demonstrated potential harm to William was nevertheless outweighed by potential harm to Douglas if the stay were granted.

The biggest risk facing Douglas was that if the sale of the licence were delayed well into or beyond the crab season, the pool of potential buyers might dry up or at the very least the price to be obtained for the licence would drop until next year’s crab season, and even then there is no guarantee that market conditions would be as

favourable as they were this season, which of course would also be reflected in a possible lower licence sale price. [ 77 ] This, of course, would be a very important consideration. However, it must be remembered that William was only seeking a stay for another thirty days to the end of May. The affidavit evidence provided by Douglas indicated that so long as the licence could be sold by the end of May, full value could likely be obtained for it. At the hearing in this Court on May 24, 2013, counsel for Douglas conceded that a sale would not be put in jeopardy if it were put off until Friday, June 7, 2013.

Viewed in this light, the risk (and corresponding potential harm) to Douglas was less important than it might otherwise be. [ 78 ] Furthermore, it is not without significance that the evidence was that the licence is currently valued somewhere between $900,000 and $1,000,000 whereas the amount to which Douglas is entitled under the Valuation/Sale Decision is $614,150. Even if the licence were sold later at a reduced price, the value would have to decrease by more than thirty percent before the ability of Douglas to receive the full amount of his judgment would be impacted.

No one suggested that if the licence were sold after the current season, its value would be reduced to zero and there was no evidence submitted to the Court as to what any reduced value would be. While it is certainly possible that a later sale price would not enable full recoupment of the judgment amount, the fact that this is uncertain is also a factor to consider when weighing the balance of convenience. [ 79 ] In the circumstances, the balance of convenience weighed in favour of William being allowed a short further extension.

Relevant here, as well, was the importance of not unnecessarily impeding or destroying viable economic activity if there is another way of achieving satisfaction of court orders. Here, if through a short further stay, William was able to secure appropriate financing, there is a good chance that the interests of both parties would be satisfied. The enterprise could be secured and Douglas would still be able to get his money.

Counsel for William at the appeal hearing indicated that since the denial of the stay and during the preparation of the appeal, matters had been moving forward with respect to the financing application and that he expected a favourable reply in short order. [ 80 ] Accordingly, the Court announced at the conclusion of the hearing that the appeal was allowed. The judge’s decision was set aside and a time-limited stay of the Valuation/Stay Decision was granted.

Conclusion and Disposition [ 81 ] The judge erred in principle and made palpable and overriding errors in his appreciation of the evidence in denying William’s second application for a further temporary stay of the Valuation/Sale Decision to allow him to pursue additional efforts to obtain financing to satisfy the judgment. [ 82 ] The appeal is allowed and the decision of the judge made on May 1, 2013 is set aside. A stay of execution of the Order made on March 8, 2013 was made effective until 5:00 pm on June 7, 2013. [ 83 ] The appellant did not seek costs on his stay application before the trial judge.

He did however, seek costs on this appeal. Accordingly he shall have his costs in this Court, applying column 3 of the

schedule to rule 55. J. D. Green C.J.N.L. I Concur: B.G. Welsh J.A. I Concur: C.W. White J.A.