Reasons for Judgment of the Honourable Madam Justice Southin:

[1]         This is an application by the respondent, the plaintiff below, who recovered judgment against the appellants, the defendants below, to have varied the order of the chambers judge pronounced 23rd September, 2003, staying, on the appellants' application, execution, "on condition that the Appellants post security to the satisfaction of the Registrar in the sum of $275,000."

[2]         This was the judgment below pronounced on the 6th June, 2003, after a trial of fourteen days: 

THIS COURT ORDERS that:

1.   The Plaintiff be awarded general damages in the amount of $200,000.00, with pre-judgment interest thereupon in the amount of $13,200.00, payable by the Defendants, and each of them;

2.   The Plaintiff be awarded aggravated damages in the amount of $50,000.00 with pre-judgment interest thereupon in the amount of $3,300.00, payable by the Defendants, and each of them;

3.   The Plaintiff be awarded further aggravated damages in the amount of $50,000.00, payable by the Defendants, Canjex Publishing Ltd. and John Woods;

4.   The Defendant remove from any internet site that they may maintain the underlined statements contained in Canada Stockwatch's articles, dated February 1, 2, and 3, 2000, as outlined in the Reasons for Judgment herein; and

5.   The Plaintiff be awarded special costs.

[3]         As to what the special costs may be, we have no documentary evidence but the chambers judge indicated it had been suggested to him they could aggregate upwards of $200,000.00, a number I find astonishing.

[4]         The respondent submitted to the learned judge that execution should only be stayed upon payment into court of a sum sufficient to cover the judgment and costs, that is to say the sum of $500,000.00.

[5]         The cause of action was libel.

[6]         As the learned chambers judge set out the substance of the case below in his reasons, 2003 BCCA 511, I need not do so.

[7]         In his affidavit in support of the application for a stay, sworn 16th July, 2003, the appellant Woods said:

1.  I am a personal Appellant in this matter and the owner and President of the corporate Appellant Canjex Publishing Ltd. ("Canjex"), and as such have personal knowledge of the facts and matters hereinafter deposed to save and except where stated to be made upon information and belief and, where so stated, I verily believe the same to be true.

2.  Canjex has been in business since 1984 as a disseminator of news and information about companies listed on various stock exchanges.  The information contained is in a publication called "Stockwatch".

3.  In 1996, Stockwatch increased the services available to its subscribers by including trading statistics from companies trading on United States and Canadian stock exchanges.

4.  In 1998-1999 Stockwatch undertook the filing of SEDAR documents for publicly listed companies with the relevant Securities Commissions.

5.  Canjex also acts as a conduit for the collection of various royalties or fees paid by its subscribers to the supplying stock exchanges.  Periodically there will be large cash balances in a bank account in the name of Canjex that represents money owed to stock exchanges, paid by Stockwatch subscribers, merely passing through the account.  Those funds are not the property of Canjex.

6.  Canjex is only marginally profitable on a year to year basis.  Due to the nature of the services provided there are virtually no tangible assets in the business and its value is only as a going concern.

7.  Since the radical decline in the fortunes of the stock market, the financial position of Canjex has become quite vulnerable.  Canjex has also suffered a major bad debt expense (approximately $400,000) as the result of the bankruptcy of a large customer, Bridge Information Company, in [the] United States.  At the same time, Canjex has embarked on [a] company-wide software upgrade program with respect to its web site and news processing system, the cost of which exceeded 1.25 million dollars.

8.  Canjex is not now able to pay the judgment amount nor post security.  However, if Canjex is subject to execution proceedings, it would be disastrous to the company, likely resulting in its demise.

9.  My personal net worth is approximately $500,000 made up of my personal residence, two motor vehicles and other assets.  My major liabilities include monies owing to Revenue Canada and on a line of credit, which total approximately $100,000.

10.  A significant liability for Canjex and indirectly myself is the outstanding account owed to my solicitors which presently stands at approxi­mately $120,000.  Further, I am advised by my solicitor, Robert Breivik, that the cost to maintain the appeal will be approximately $50,000.  If I am unable to pay my solicitors' account the appeal cannot proceed and I will be prejudiced thereby.

11.  I have made arrangements with a financial institution that has agreed to provide a $400,000 line of credit in favour of Canjex using my personal residence as security.  This is the absolute maximum that I am able to arrange by way of financing.

12.  I require approximately $150,000 to $170,000 of that amount to pay my solicitors to be able to maintain this appeal.

13.  I am willing to post $230,000 as security for payment of the judgment as a condition of the Court granting a stay of execution.

[8]         In a subsequent affidavit sworn 28th July, 2003, he deposed:

8.  With respect to paragraph 11 of the Dawson Affidavit #1, I was not aware when I swore my affidavit dated July 16, 2003 that the claim against Dr. Ager had been dismissed by consent.  I am advised by Mr. Breivik that the Consent Dismissal Order was filed July 7, 2003.  I was concerned when I saw the allegation that Dr. Ager was attempting to hide assets from potential judgment creditors.  I was concerned because during the trial of this matter there was evidence that Dr. Ager structured his or his family's financial affairs in offshore tax havens that are protected by secrecy laws.  My concerns about repayment of the judgment should the appeal be successful are exacerbated as Dr. Ager has not provided any information about his financial circumstances nor even given an undertaking that he would repay the judgment amount should the appeal succeed.

9.  In paragraph 7, Exhibit "F" of the Dawson Affidavit #1, reference is made to a letter sent by my counsel to counsel for the Plaintiff/Respondent suggesting that I was prepared to post security for the full amount of the judgment and interest in the amount of $316,500.  In my affidavit sworn July 16, 2003, in paragraph 11 I deposed to arrangements to provide security for a portion of the judgment using my personal residence as security.  The figure of $316,500 quoted by my counsel in Exhibit "F" and my statement about $400,000 in my first affidavit were based on my understanding at the time of what my financial institution would make available.  Attached hereto as Exhibit "H" is a copy of a letter dated July 25, 2003 from Rahim Kurji an employee of the Royal Bank of Canada that confirms that the line of credit that the bank will make available to Canjex is only $350,000.  If this Court sees fit to require Canjex to post security for the full amount of the judgment plus interest in the amount of $316,500, Canjex will do so.  However, this will obviously jeopardize the ability of the Defendant to proceed with the appeal, given the legal expense.

[9]         There was no evidence from the respondent on the point made in paragraph 8.

[10]    The appellant Woods was cross-examined on his two affidavits and also examined in aid of execution.  From what was said to us and not said to us on this application, I infer that, with one exception, the affidavit of 16th July, in broad terms, is true.  The exception is the conclusion in paragraph 10, "If I am unable to pay my solicitors' account the appeal cannot proceed....", if by the words "solicitors' account" the deponent included the $120,000.00 referred to in that paragraph.  The appellants' solicitors are, of course, perfectly entitled to decline to proceed further without payment but if they do it is open to the appellants to consult other solicitors.  I have no knowledge of what the papers required by the rules of this Court for this appeal will cost and am unable therefore to come to any sensible opinion as to whether $50,000 would cover those out-of-pocket expenses as well as fees for counsel.

[11]    The learned chambers judge said this:

[9]  The appellants have arranged a line of credit with a chartered bank in excess of $400,000 but portions of that line are said to be needed to finance any future appeal proceedings and to deal with extant legal costs.  A number of cases were cited on this application by the parties, including Voth Bros. Construction (1974) Ltd. v. National Bank of Canada, [1987] B.C.J. No. 197 (Q.L.) (C.A.), Canadian Helicopters Ltd. v. Interpac Forest Products Ltd., [1999] B.C.J. No. 2769 (C.A.), Strazza v. Stupich, [1998] B.C.J. No. 2007 (C.A.) and Cameo Developments Ltd. v. National Life Assurance Company of Canada (1983), 57 B.C.L.R. 207 (C.A.), at 211.  As noted in the Voth case, a successful plaintiff is normally entitled to the fruits of his or her judgment.  Ultimately the question to be answered is what order ought to be made in the interests of justice.  Esson J.A. giving judgment with two other members of the court in the case of Cameo Developments Ltd. v. National Life Assurance Company of Canada put the consideration as follows:

The chambers judge, in dealing with this application, was in a position, as is generally the case on applications of this kind, of having three possible courses open to him.  One would be to grant a stay without conditions and thus give full protection to the interests of the appellant.  Another is to refuse a stay and give no protection to the appellant, and the third, which was adopted here and which is adopted in many cases, is to grant a stay on terms designed to give reasonable protection to both parties.  In the nature of things, reasonable protection must be that which is reasonable in all of the circumstances and no general principle can be laid down which is applicable to all cases.  But, a basic consideration is that the respondent has a judgment and should not be deprived of the fruits of that unless strong grounds are shown.  It follows from that, I think, that in general, doubts as to where the risk lies should tend to be resolved in favour of the respondent....

(emphasis [of chambers judge])

* * *

[11]  Having regard to the information that has been developed during the interval between 29 July 2003 and 5 September 2003, it does not seem to me that the appellants are hiding assets or anything of that sort.  If security were to be required in the range of the amount suggested by the respondent, it seems to me that there is a very real probability that the appellants would be unable to proceed with the appeal.  That I think would not be in the interests of justice.

[12]  In balancing the interests of the appellants and the respondent, it seems to me that an appropriate order here would be to order that execution proceedings be stayed on terms that the appellants post security to the satisfaction of the Registrar in the sum of $275,000.  As a concomitant of that stay, it seems to me the appeal should proceed as expeditiously as possible.  In my opinion, that sum will secure a very substantial portion of the amount of the damages awarded but will not be so onerous an order as to prevent the appellants from proceeding with their appeals.  It appears to me that the ultimate exigible assets of the appellants should ensure that the sum required to satisfy the respondent's judgment for damages and costs is available.  Of course, having regard to some of the legal issues raised, it may be that the damages and costs in their totality will not be sustained.  In my judgment, there are significant issues to be argued on the appeal and I think that it would not be in the interests of justice to shut the appellants out from proceeding with their appeals.  I consider that the order that I have made will conduce to protect the respective interests of both parties, namely the appellants and the respondent, and accordingly the order is made in the terms I have indicated.  Since there has been some division of success on this application I consider it appropriate that no order for costs be made concerning this application.

[12]    Mr. Lunny asserts that the learned judge erred:

1.   in not directing himself on the significant difference between:

(a)  applications by an unsuccessful party for a stay;

(b)  applications by a successful party requiring an appellant to post security as a condition of proceeding in this Court;

(c)  applications of the sort in issue in the Cameo Developments case;

2.   arising from that error, applying the wrong test, including addressing himself to the merits of the appeal which under the authorities are irrelevant.

[13]    Of the authorities mentioned by the learned judge, the first three were defendants' applications for a stay of execution of a monetary judgment.  Those applications were either unsuccessful or required the full amount of the judgment to be secured. 

[14]    The Cameo Developments case is something very different.

[15]    At trial, the respondent was found entitled to pay off a mortgage which it had granted to the appellant and receive, having done so, a registrable discharge of the mortgage.  The mortgagor thereupon tendered the amount found due and demanded the discharge.  The appellant was asserting that the respondent had no right to pay off the mortgage.  The practical point was that the interest rate under the existing mortgage could not, apparently, be matched if the appellant had to take that money and find another borrower.  The execution to be stayed was not the usual writ of seizure and sale but that form of execution provided by what is now Rule 42(7) of the British Columbia Supreme Court Rules:

(7)  If a mandatory order or an order for the specific performance of a contract is not obeyed, the court, besides or instead of proceeding against the disobedient person for contempt, may direct that the act required to be done may be done so far as is practicable by the person who obtained the order, or some other person appointed by the court, at the cost of the disobedient person; and upon the act being done, the expenses incurred may be ascertained in the manner as the court may direct, and execution may issue for the amount so ascertained and costs.

[16]    The stay was refused on condition that the respondent post security not for an existing judgment but for the loss the appellant would suffer from having been forced to discharge a mortgage prematurely.

[17]    The power of this Court to grant stays of execution is now found in s. 18 of the Court of Appeal Act, R.S.B.C. 1996, c. 77: 

18 (1)  After an appeal or application for leave to appeal is brought, a justice may, on terms the justice considers appropriate, order that all or part of the proceedings, including execution, in the cause or matter from which the appeal has been taken are stayed in whole or in part.

(2)  After an appeal has been decided, a justice may, on terms the justice considers appropriate, order that all or part of the proceedings, including execution, in the cause or matter from which the appeal was taken are stayed and the justice may make any other order to preserve the rights of the parties pending further proceedings.

(3)  Without limiting subsection (1) or (2), a justice may order one or more of the following:

(a)  that documents be delivered;

(b)  that possession of land or personal property be given;

(c)  that property be placed in the custody of a person designated by the justice;

(d)  that an instrument be executed;

(e)  that perishable property be sold and the proceeds paid into the Court of Appeal or the court appealed from;

(f)  that a direction be given to a sheriff or poundage be disallowed;

(g)  that a person be paid money received by the sheriff under an execution;

(h)  that security be given for any purpose in a form and manner directed by the justice.

(4)  A justice may dismiss as abandoned the appeal of an appellant who fails to comply with an order made under subsection (1).

[18]    But where the powers of the Court come from to enable it, at the instance of a respondent, to require an appellant to post security is an interesting question which was addressed by Newbury J.A., without it being finally decided, in Canadian Imperial Bank of Commerce v. Sayani (1995), 16 B.C.L.R. (3d) 191 (C.A.).  My own view, tentative though it is, is that s. 18 has to do with stays at the instance of the party who was unsuccessful in the court below and that the power to grant orders at the instance of a successful party in the court below must be found in s. 10. 

[19]    But whether that be so or not, it is my opinion that it is an error in principle to apply the same considerations to the two types of application.  When a plaintiff succeeds in the court below and obtains a judgment of that court, he is entitled, as a matter of law, to pursue the remedies which are given under the applicable statutes and rules of the court below to realize his judgment, whereas orders at the instance of the successful party, forcing the appellant, as a condition of proceeding with his appeal, to post security, and orders of the Cameo type are very different animals.  In other words, I agree that the learned judge erred in not directing himself on the significant difference, thereby entitling and requiring us on this application to address the questions arising de novo. 

[20]    It is worth noting that it is not only this Court which can grant stays of execution.  A judgment debtor who cannot pay all at once, but for whom, say, a writ of seizure and sale, if it led to the taking away of the tools by which he conducts his business, would be disastrous, is not without any avenue of relief, for, by Supreme Court Rule 42(21):

(21) (a)  The court may, at or after the time of making an order,

i)   stay the execution of the order until such time as it thinks fit, or

(ii) provide that an order for the payment of money be payable by instalments.

(b)  Unless the court in an order under paragraph (a) (ii) otherwise provides, where an instalment is not paid by the time fixed for payment, the balance of the money remaining unpaid under the order is, at that time, due and payable without notice being given to the judgment debtor.

(c)  Without limiting the generality of paragraph (a), a party against whom an order has been made may apply to the court for a stay of execution or other relief on grounds with respect to which the supporting facts arose too late for them to be pleaded, and the court may give relief it considers just.

[21]    I begin by contrasting s. 18 with its predecessor sections:

Court of Appeal Act, R.S.B.C. 1948, c. 74

  31.  Upon the perfecting of such security, execution shall be stayed in the original cause:  Provided that:-

(a)  If the judgment appealed from directs an assignment or delivery of documents or personal property, the execution of the judgment shall not be stayed until the things directed to be assigned or delivered have been brought into the Court appealed from, or placed in the custody of such officer or receiver as the said Court appoints, nor until security has been given to the satisfaction of the Court appealed from, or of a Judge thereof, in such sum as the said Court or Judge directs, that the appellant will obey the order or judgment of the Court of Appeal:

(b)  If the judgment appealed from directs the execution of a conveyance or any other instrument, the execution of the judgment shall not be stayed until the instrument has been executed and deposited with the proper officer of the Court appealed from, to abide the order or judgment of the Court of Appeal:

(c)  If the judgment appealed from directs the sale or delivery of possession of real property, chattels real, or immovables, the execution of the judgment shall not be stayed until security has been entered into to the satisfaction of the Court appealed from, or a Judge thereof, and in such amount as the said last-mentioned Court or Judge directs, that during the possession of the property by the appellant he will not commit, or suffer to be committed, any waste on the property, and that if the judgment is affirmed he will pay the value of the use and occupation of the property from the time the appeal is brought until delivery of possession thereof, and also, if the judgment is for the sale of property and the payment of a deficiency arising upon the sale, that the appellant will pay the deficiency:

(d)  If the judgment appealed from directs the payment of money, either as a debt or for damages or costs, the execution of the judgment shall not be stayed until the appellant has given security to the satisfaction of the Court appealed from, or of a Judge thereof, that if the judgment or any part thereof is affirmed the appellant will pay the amount thereby directed to be paid, or the part thereof as to which the judgment is affirmed, if it is affirmed only as to part, and all damages awarded against the appellant on such appeal.

  32. (1)  When the security has been perfected and allowed, any Judge of the Court appealed from may, subject to the Rules of Court, issue his fiat to the Sheriff to whom any execution on the judgment appealed from has issued to stay the execution, and the execution shall be thereby stayed whether a levy has been made under it or not.

[22]    Section 31 provided for the same things as are provided for in s. 18, albeit in more detailed language, but gave the jurisdiction to determine security for a money judgment to the court below and not to this Court.

[23]    Neither section requires that the security be cash, although that is the usual term.  Although the former section contemplated security sufficient to ensure the judgment, if affirmed, would be paid, the present section contains no such requirement.  Nor, as I read the cases, has any division of this Court ever said that under the present section execution of a money judgment may never be stayed unless it is fully secured by, for instance, payment into court or a letter of credit.  In light of the words "a justice may, on terms the justice considers appropriate" in s. 18, I do not see how any such thing could be said.

[24]    I do agree, however, generally, that there should be full security – a party who succeeds below should not have to run the risk of the unsuccessful party levanting or becoming bankrupt. 

[25]    But there is in this case a peculiar feature:  the assets of the defendant company are primarily in a computer system and attendant software designed especially for its business.  If the condition of a stay is that the appellants post $500,000.00 in cash, and if the appellants are unable to do so, and if the respondent causes the system to be seized and sold, and if the appellant succeeds on the appeal, even on the costs issue – and that is not a frivolous issue – its business may well be damaged beyond repair.

[26]    I do not believe there is any authority for the proposition that in such circumstances the appellant company would have a cause of action against the respondent for the damage thus caused.  When under an execution what is seized and sold is land or securities, a successful appellant is, as I have always understood the law, entitled to recover the proceeds, but those proceeds would in ordinary circumstances match the value to the appellant which they had at the time they were seized.

[27]    Thus, in the peculiar circumstances of this case, I do not consider the learned judge erred by not refusing a stay unless the full $500,000.00 was deposited in court.  I do, however, consider that the outstanding account of the appellants' solicitors in contradistinction to the probable costs of the appeal ought not to have weighed with the learned judge.  I would vary the order to require as a condition of the stay the deposit in court of the sum of $316,500.00 with leave to the respondent to seek an order requiring the appellants, as a condition of the stay continuing, to pay into court at some suitable intervals, the difference between what the money earns in court and the present rate of post judgment interest.

[28]    The costs of this application shall be costs in the appeal.