ANSA Enterprises Pty Ltd v St James Finance Corporation Pty Ltd
[2023] WASCA 32
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: ANSA ENTERPRISES PTY LTD -v- ST JAMES FINANCE CORPORATION PTY LTD [2023] WASCA 32
CORAM: BUSS P
MURPHY JA
VAUGHAN JA
HEARD: 24 JANUARY 2023
DELIVERED : 24 JANUARY 2023
PUBLISHED : 14 FEBRUARY 2023
FILE NO/S: CACV 22 of 2022
BETWEEN: ANSA ENTERPRISES PTY LTD
Appellant
AND
ST JAMES FINANCE CORPORATION PTY LTD
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram: MASTER SANDERSON
File Number : CIV 2978 of 2019
Catchwords:
Practice and procedure - Springing or self-executing orders - Self-executing order made in relation to security for costs - Master refused application for extension of time to comply with self-executing order - Whether master was mistaken as to facts - Whether master failed to take into account a material consideration - Whether refusal of application was unreasonable or plainly unjust
Appeal - Appeal against interlocutory order - Whether leave to appeal should be granted - Decision not attended with sufficient doubt - No substantial injustice caused by decision
Legislation:
Rules of the Supreme Court 1971 (WA), O 1 r 4A, r 4B
Supreme Court Act 1935 (WA), s 60(1)(f)
Result:
Application for extension of time to appeal refused
Leave to appeal refused
Appeal dismissed
Category: B
Representation:
Counsel:
| Appellant | : | T Galic |
| Respondent | : | C S Williams |
Solicitors:
| Appellant | : | TGC Legal |
| Respondent | : | Solomon Brothers |
Case(s) referred to in decision(s):
A v C [No 2] [2015] WASCA 199
Biala Pty Ltd v Mallina Holdings Ltd (1989) 2 WAR 381
Brocx v Hughes [2010] WASCA 57
Durham v Durham [2011] NSWCA 62; (2011) 80 NSWLR 335
Durolek v Pier (WA) Pty Ltd [No 2] [2019] WASCA 138
FAI General Insurance Co Ltd v Southern Cross Exploration NL [1988] HCA 13; (1988) 165 CLR 268
Gronow v Gronow [1979] HCA 63; (1979) 144 CLR 513
House v R [1936] HCA 40; (1936) 55 CLR 499
Lovell v Lovell [1950] HCA 52; (1950) 81 CLR 513
Mallet v Mallet [1984] HCA 21; (1984) 156 CLR 605
Melville v East End Holdings Inc [2003] WASCA 133
MTQ Holdings Pty Ltd v Lynch [2007] WASC 49
NRW Contracting Pty Ltd v Cliffs Asia Pacific Iron Ore Pty Ltd [2020] WASCA 107
Ogbonna v Programmed Integrated Workforce Ltd [No 2] [2022] WASCA 79
Osgood v Wham [2007] WASCA 178
Porter Street Investments Pty Ltd v Nellbar Pty Ltd [2022] WASCA 33
Samuels v Linzi Dresses Ltd [1981] QB 115
Skahill v Kestral Holdings Pty Ltd (in liq) [2000] WASCA 185
TP Engineering Pty Ltd v JM [2015] WASCA 181
Wharton v R [No 2] [2015] WASCA 176
REASONS OF THE COURT:
Overview
The appellant sought an extension of time to appeal, and leave to appeal, in relation to an order made by Sanderson M on 7 February 2022 refusing an application to extend the time for compliance with a self-executing order made on 13 January 2022. The self-executing order had operated on 4 February 2022. Thus, when the master refused the application for an extension, judgment had already been entered against the appellant in the primary proceedings.
The appeal alleged various discretionary errors on the part of the master. At the heart of the alleged discretionary errors were contentions that the master erroneously failed to accept the cogency of the appellant's evidence in support of an extension and did not take into account the gravity of the consequences of the refusal to grant the extension. The appellant also claimed that the master's decision was unreasonable or plainly unjust.
After hearing from the appellant's counsel, the court determined that it did not need to hear from counsel for the respondents. That was because, as will be seen, the appeal was without substantive merit. The court made an order refusing the application for an extension of time and dismissed the application for leave to appeal and the appeal. The court stated that reasons for those orders would follow. These are our reasons for those orders.
Background
The appellant conducted a mortgage broking business. It had a business relationship with the respondent. The appellant, as a 'loan writer', was party to a commission agreement with the respondent whereby the respondent facilitated a business of finance and residential mortgage broking with various lenders. Under the agreement the appellant was entitled to various initial and trail commissions.
In circumstances which are not material to the proper disposition of the appeal, the agreement came to an end in February 2013.
The appellant claims that the respondent has withheld trail commissions from it since January 2015. The appellant issued a writ against the respondent on 15 November 2019. Among other things the appellant sought declaratory orders as to its entitlement to receive the trail commissions and an account and inquiry as to the alleged unpaid trail commissions.
An amended statement of claim was filed on 14 April 2021.
In June 2021 the respondent sought security for costs. The application for security was opposed. On 29 September 2021 the master ordered that security for costs in the amount of $50,000 be paid into court within 28 days, ie the appellant was required to provide the security for costs on or before 27 October 2021. The order contemplated that the respondent may apply to refresh the amount of the security after the action had been entered for trial.
When pronouncing orders, the master said that the security should be provided within 28 days. However, the master also mentioned that there was liberty to apply. The master then noted that, should an extended time be necessary, he certainly 'would give consideration' to extending that period. As will be seen, the appellant's ground of appeal relies on what was said in this respect.
The appellant did not pay the $50,000 into court by 27 October 2021.
On 20 December 2021, by letter, the respondent applied for a self‑executing order consequential on the appellant's failure to comply with the order for provision of security of costs. The application followed conferral between 28 October 2021 and 13 December 2021. The application for the self-executing order was listed before the master to be heard on 13 January 2022. The appellant's director, Anthony Esposito, swore an affidavit on 12 January 2022 in support of an extension of time to provide security. In other words the appellant sought to resist the making of any self-executing order and instead sought an order that there be an extension of the time for compliance with the order made on 29 September 2021 for provision of security for costs.
In his affidavit, Mr Esposito referred to the appellant and himself having an 'impaired credit score', allegedly as a result of the respondent's and its related entity's actions.[1] Mr Esposito went on to state:
By reason of impaired credit scores for both myself and [the appellant] it has unfortunately taken me longer than first expected to raise the money as I have had to approach private lenders outside the banking system. I had genuinely believed that I had raised the money through a third party and had even told my solicitors that the funds would be paid into court prior to Christmas. Due to reasons beyond the control of myself and the party loaning me the money access to the money became delayed.
I am now expecting the money to be available by the end of this month. However in anticipation of further delays (which I am not expecting) I am making contingency plans to source the funds from elsewhere and I am confident of making either payment into court or providing some other acceptable form of security such as a bank guarantee by the end of this month.[2]
[1] Mr Esposito's affidavit sworn 12 January 2022 par 3 BAB 36.
[2] Mr Esposito's affidavit sworn 12 January 2022 pars 4 - 5 BAB 37.
The appellant sought an extension until the end of the month, ie until 31 January 2022.
On 13 January 2022 the master made a self-executing order in these terms:
Unless [the appellant] complies with order 1 of the order made on 29 September 2021, and pays $50,000 into court as security for costs of [the respondent], by Friday, 4 February 2022:
(a)the action be and hereby is dismissed; and
(b)[the appellant] shall pay [the respondent's] costs of the action, including all reserved costs.
The date on which the self-executing order would operate was raised at the 13 January 2022 hearing. When the master said that he thought the respondent should have a self-executing order the appellant's counsel asked, if this was the case, whether the appellant could have more time. The master said 'enough is enough'. The master said that Mr Esposito's affidavit, while vague, indicated that the money should be available and that the time had been 'lengthy'. After restating the 4 February date, the master then said, 'you can still apply [ie for an extension] even after the springing order has sprung'.
The appellant did not pay the $50,000 into court. Instead, on 4 February 2022, the appellant filed a chamber summons. In the chamber summons the appellant sought an order that the time for compliance with the self-executing order made on 13 January 2022 be extended until 18 February 2022. In the alternative, no doubt in recognition that the application for an extension was made on the last day for compliance with the self-executing order, the application sought that any dismissal of the action by reason of the operation of the self‑executing order be set aside and the time for compliance be extended until 18 February 2022.
The appellant's application was supported by an affidavit sworn on 4 February 2022 by Mr Esposito. In addressing the ground of appeal it will be necessary to refer to the contents of that affidavit.
The master heard the application on 7 February 2022. At that time, as the appellant's counsel accepted before the master, the self‑executing orders of 13 January 2022 had operated to bring about the dismissal of the action.[3] After hearing from counsel for the appellant the master dismissed the application.
[3] ts 2 (07/02/2022).
The master's reasons for dismissing the application
The master gave short oral reasons for dismissing the appellant's application for an extension of time to comply with the self‑executing order.
It is convenient to set out the substance of the master's reasons. The master commenced by stating that he was not persuaded that he ought to grant an extension of time. He then referred to the history of the matter, commencing with the order for provision of security for costs on 29 September 2021. The master observed that he was satisfied that the respondent had made out a case for having security for costs as against the appellant.[4]
[4] BAB 3.
The master then continued as follows:
It is always a difficult matter to dismiss an action without the merits of that action being considered. On the other hand, there is, for very good reasons, a capacity for a defendant to seek security for costs from the plaintiff.
Once an order is made, the matter just can't go on indefinitely. There has to be a timeframe within which the security is to be provided. The timeframe should be reasonable. And, looking again at the file, I was satisfied at the time that the period offered to the plaintiff to provide the security was reasonable.
A further extension was granted with a springing order. Inherent in the making of that order was the view I took that while an extension was justified, the matter had to be brought to a conclusion if justice was to be done between the parties. In other words, I was satisfied it was in the interests of justice to offer an extension, provided that the security was paid within that period.
An application [for an extension of time to comply with the self‑executing order] was made on the last day for provision of that security. It was supported by an affidavit of Mr Esposito. With great respect, there's nothing in that affidavit which offers any concrete support for the proposition that funding would be available in the short term.
If this was a case where the documents annexed to an affidavit indicated that the money was available, that there was a short hiatus while the cheques were cleared, or some such steps were taken to ensure funds would be available, that would be an entirely different thing. I would have no hesitation in extending the time. But, here, what is sought, is an extension and the period of the extension isn't entirely clear from the affidavit material. But assuming that it's an extension of two weeks, there's nothing in the material which I could - upon which I could be satisfied that within that two-week period the security would be provided.
To use the colloquial expression, it just seems that the plaintiff is acting on a wing and a prayer.
For those reasons, I'm not prepared to extend the time for compliance with the order.[5]
[5] BAB 3.
Accordingly, the master refused the application to extend the time for compliance with the self-executing order because he was not satisfied, on the affidavit material relied on by the appellant, that the $50,000 in security for costs would be provided in the two‑week extension sought by the appellant.
Grounds of appeal
There was notionally a single ground of appeal:
The master erred in fact and in law in dismissing the appellant's application seeking an extension of time to make payment into court. In particular
1.1.The master erred in law and in fact in fact [sic - repetition in original] in finding in effect that there had been no concrete evidence put forward that funding (for the amount of the security for costs required) would be available within the 14 day extension period sought.
1.2.The master should have found that the appellant's directors [sic] evidence under oath sworn 4 February 2022 contained sufficient enough proof and evidence of steps having been taken to secure funding for the security and the appellant should have been afforded the extended opportunity of making the payment into the court.
1.3.The master failed to properly weigh and factor into account and consider the gravity of the consequences of the refusal to grant the extension (namely the dismissal of the case) before exercising his discretion to refuse the application.
1.4.The exercise of the master's discretion to refuse to grant a further extension in this case on evidentiary grounds - namely that there was (to quote the Master) 'nothing in the affidavit which offers any concrete support for the proposition that funding would be available in the short term' was unreasonable and against the weight of the evidence and leads to a manifestly injust [sic] outcome. The result is particularly unjust in the light of the masters [sic] earlier comments at the time of ordering security for costs on 29 September 2021 that if an extension of time to provide security was sought by the appellant an extension of time would be given. The master further stated at the time of making the springing order on 13 January 2022 that the time for compliance with the springing order could be extended even after the order had sprung. Indeed the court does have power to extend the time for compliance with a springing order, even after judgment has been entered by it's [sic] automatic operation.
The single ground as so stated rolled up a number of different allegations of discretionary error on the part of the master. To put the appeal on an intelligible footing it was necessary to re-state the ground, separating out its component parts, so that the appellant's contentions on appeal observed the principles in House v R.[6] In that respect, the principles relevant to appellate interference with the exercise of a discretion are well-known. Where a discretion is to be exercised, minds may differ as to the appropriate result. It is not enough that an appellate court would, if in the position of the primary court, have exercised the discretion differently. It must be shown that the primary court acted on a wrong principle, allowed irrelevant matters to affect the decision, mistook the facts, failed to take into account a mandatory relevant consideration or reached a result that was on its face plainly unjust or unreasonable.
[6] House v R[1936] HCA 40; (1936) 55 CLR 499, 504 - 505. As to the formulation of a ground of appeal alleging discretionary error in accordance with the principles in House v R see generally Durham v Durham [2011] NSWCA 62; (2011) 80 NSWLR 335 [71] - [74].
Having regard to these principles, and reading the single ground in that context, essentially three contentions were advanced by the appellant in support of the appeal:
1.The master was mistaken as to the facts in that he held there was no concrete evidence that funding for security for costs would be available within the period sought by way of extension whereas the master should have held that the affidavit of Mr Esposito sworn 4 February 2022 contained sufficient proof of steps having been taken to secure the funding (grounds 1.1 & 1.2).
2.The master failed to take into account a material consideration, namely, the gravity of the consequences of the refusal to grant the extension of time as sought by the appellant - that being the dismissal of the action (ground 1.3).
3.The decision of the master to refuse the extension of time was unreasonable or plainly unjust having regard, among other things, to what was said by the master on 29 September 2021 and 13 January 2022 and the circumstance that the court is empowered to extend the time for compliance with a self‑executing order even after the order has operated (ground 1.4).
The appellant's counsel accepted at the appeal hearing that the appeal should be considered in the framework of these reformulated contentions.[7]
Applicable legal principles on application for extension of time to comply with a self-executing order
[7] Appeal ts 3.
In the primary court the appellant did not identify the power it relied on for the grant of an extension of time. The relevant power is found in O 3 r 5 of the Rules of the Supreme Court 1971 (WA). Order 3 r 5 RSC provides:
(1)The Court may, on such terms as it thinks just, by order extend or abridge the period within which a person is required or authorised by these rules, or by any judgment, order, or direction, to do any act in any proceedings.
(2)The Court may extend any such period as is referred to in subrule (1) although the application for extension is not made until after the expiration of that period.
Order 3 r 5 RSC is a remedial provision which provides a broad power to relieve against injustice.[8] An application for an extension of time under O 3 r 5 RSC is ultimately to be determined having regard to the interests of justice in all the circumstances of the case.[9] Ordinarily, this will include case management considerations and the goal and objects enshrined in O 1 r 4A & r 4B RSC.[10]
[8] FAI General Insurance Co Ltd v Southern Cross Exploration NL [1988] HCA 13; (1988) 165 CLR 268, 283 - 284 (the approach adopted in that passage being equally applicable to O 3 r 5 RSC: Biala Pty Ltd v Mallina Holdings Ltd (1989) 2 WAR 381, 387, 399).
[9] Ogbonna v Programmed Integrated Workforce Ltd [No 2] [2022] WASCA 79 [105].
[10] Melville v East End Holdings Inc [2003] WASCA 133 [17].
Among other things, O 3 r 5 RSC empowers the court to extend the time for compliance with a self-executing order even after judgment has been entered by the automatic operation of the order.[11]
[11] FAI General Insurance Co Ltd v Southern Cross Exploration NL (286), (290). See also: Melville v East End Holdings Inc [17]; Wharton v R [No 2] [2015] WASCA 176 [48] - [49].
Where a defaulting party seeks an extension of time to comply with a self-executing order the starting point is that it is for the defaulting party to establish why it should be permitted to continue with the litigation despite its non-compliance.[12] It follows that the defaulting party assumes an evidentiary burden to adduce the necessary evidence to establish the facts which would support the order for an extension of time.
[12] Wharton v R [No 2] [50]; TP Engineering Pty Ltd v JM [2015] WASCA 181 [53]. (Both referring to MTQ Holdings Pty Ltd v Lynch [2007] WASC 49 [51].)
A failure by a party to comply with a self-executing order has often been described as an 'egregious breach'.[13] A self-executing order is intended to be the last opportunity afforded to a party in breach of an order to bring about its compliance. The proper administration of justice, and the quality of justice for the other party, generally requires that a self-executing order remain a last opportunity - meaning that, ordinarily, a litigant must bear the consequences of a failure to comply with a self-executing order whether the failure was due to the litigant or its solicitor.[14] There is, however, a discretion to extend the time for compliance with a self-executing order. The power is to be exercised cautiously lest it undermine the principle that orders are to be complied with rather than ignored[15] (a principle that applies with added force in the case of a self-executing order). While the touchstone for the exercise of the discretion is always the interests of justice in the circumstances of the particular case, the exercise of the discretion will be informed by the purpose for the making of a self-executing order[16] and the necessity to give due regard to the public policy that there be finality in litigation.[17]
[13] Wharton v R [No 2] [50] (referring to MTQ Holdings Pty Ltd v Lynch [54]); TP Engineering Pty Ltd v JM [53] (referring to MTQ Holdings Pty Ltd v Lynch [54]); A v C [No 2] [2015] WASCA 199 [2].
[14] Wharton v R [No 2] [50] (referring to MTQ Holdings Pty Ltd v Lynch [54]); TP Engineering Pty Ltd v JM [53] (referring to MTQ Holdings Pty Ltd v Lynch [54]); A v C [No 2] [2].
[15] Samuels v Linzi Dresses Ltd [1981] QB 115, 126 ‑ 127.
[16] As to which see Durolek v Pier (WA) Pty Ltd [No 2] [2019] WASCA 138 [107] - [108], [110] - [111].
[17] FAI General Insurance Co Ltd v Southern Cross Exploration NL (283).
There are no hard and fast rules as to the matters to which the court should have regard in the exercise of the discretion. However, the court will normally have regard to at least the following matters:[18]
1.The circumstances in which the self-executing order came to be made.
2.The reason for non-compliance with the self-executing order.
3.The prejudice to the defaulting party if the time were not extended.
4.The prejudice to the other party if the time were extended (the relevant prejudice will be prejudice resulting from the extension of time for compliance with the self-executing order).
[18] Wharton v R [No 2] [50] (referring to MTQ Holdings Pty Ltd v Lynch [55]); TP Engineering Pty Ltd v JM [53] (referring to MTQ Holdings Pty Ltd v Lynch [55]); A v C [No 2] [3].
It will also normally be a relevant consideration whether or not the defaulting party has a reasonably arguable case on the merits, there being no point in resuscitating a case that is devoid of merit. However, the fact that a party has an apparently meritorious case cannot be permitted effectively to insulate it from the consequences of a failure to comply with a peremptory order of the court.[19]
[19] Wharton v R [No 2] (referring to MTQ Holdings Pty Ltd v Lynch [56]); TP Engineering Pty Ltd v JM [53] (referring to MTQ Holdings Pty Ltd v Lynch [56]); A v C [No 2] [4].
In a particular case, other relevant factors may include: (1) that the failure to comply with the self-executing order was the fault of the defaulting party's legal representatives rather than the party itself;[20] and (2) whether any applicable limitation period has expired.[21]
[20] See eg Skahill v Kestral Holdings Pty Ltd (in liq) [2000] WASCA 185 [10].
[21] See eg Osgood v Wham [2007] WASCA 178 [52], [56].
It will generally not be sufficient simply to show that the non‑compliance was not intentional and was not contumelious.[22]
[22] Wharton v R [No 2] [50] (referring to MTQ Holdings Pty Ltd v Lynch [51]); TP Engineering Pty Ltd v JM [53] (referring to MTQ Holdings Pty Ltd v Lynch [51]).
Disposition
Leave to appeal
It was common ground that the master's dismissal of the application for an extension of time was an interlocutory order. Accordingly, the appellant required leave to appeal.[23]
[23] Supreme Court Act 1935 (WA), s 60(1)(f).
The principles that apply in determining whether there should be leave to appeal are well-established. A recent recitation of the applicable principles appears in NRW Contracting Pty Ltd v Cliffs Asia Pacific Iron Ore Pty Ltd.[24] We adopt those principles but will not repeat them in full. Leave may be granted whenever the interests of justice require it. Often the interests of justice require consideration of two matters. First, whether the decision was wrong or, at the least, attended with sufficient doubt to warrant its being reconsidered. Second, whether substantial injustice would result if the decision is left unreversed, supposing the decision to be wrong.
[24] NRW Contracting Pty Ltd v Cliffs Asia Pacific Iron Ore Pty Ltd [2020] WASCA 107 [117] - [118].
In the present case the interests of justice did not justify leave to appeal.
First, for reasons developed below, the master's dismissal of the application for an extension of time to comply with the self-executing order was not attended with doubt so as to warrant its being reconsidered. To the contrary, as will be seen, the appellant failed to make out the alleged discretionary errors that grounded the appeal. The appeal was without substantive merit.
Second, the decision has not visited substantial injustice on the appellant.
The second point requires some elaboration. The automatic operation of the self-executing order means that the primary proceedings stand dismissed. The dismissal has occurred without consideration of the merits of the claim. Those matters bespeak the real possibility of substantial injustice insofar as the appellant's substantive rights have been affected by the master's decision. However, this overlooks the circumstance that there was (and still is) no bar on the appellant bringing a fresh application for an extension of time to comply with the self-executing order. Any such new application would need to demonstrate a material change in circumstances to have prospects of success. For example, if the appellant paid $50,000 into its solicitor's trust account, there would be a material change in circumstances as the appellant would then be in a position to demonstrate unequivocally that it was able to provide the security for costs. If, having regard to the interests of justice in all the circumstances of the case as at the time of the hearing of the second application, the court was satisfied that there should be an extension of time, the time for compliance could be extended notwithstanding the operation of the self-executing order (see [29] above).
Accordingly, the master's decision to refuse the application for an extension of time to comply with the self-executing order has not occasioned any substantial injustice to the appellant. Rather, at all times it has been open to the appellant to put its affairs in order so as, in practical terms, to overcome the effect of the decision. The appellant has not taken those obvious practical measures to deal with its circumstances but instead has elected to proceed with an appeal.
In this respect it is significant that, even by the appeal hearing, there was no affidavit evidence demonstrating the appellant's capacity and proposed arrangements to pay the security for costs into court. The absence of such evidence is marked. The appellant invited this court to re-exercise the discretion if it succeeded in establishing discretionary error. It was to be expected that the appellant would provide up to date information about its capacity to pay the $50,000 into court.
In the circumstances it was inappropriate to grant leave to appeal.
Ground 1.1 & 1.2: Did the master mistake the facts?
The appellant contended that the master mistook the facts so far as the master concluded that nothing in Mr Esposito's affidavit sworn 4 February 2022 provided 'concrete support' for the proposition that funding for the $50,000 required by way of security for costs would be available within the 14‑day extension sought by the appellant.
In support of this contention, the appellant's counsel referred to Mr Esposito's affidavit sworn 12 January 2022 (see [12] above). Counsel argued that this evidence was vaguer and contained less definite information than was found in Mr Esposito's affidavit of 4 February 2022. The argument went that, so far as the affidavit of 12 January 2022 had resulted in a practical extension - given that the self-executing order allowed 22 days for compliance - all the more so there should have been a further extension based on the 4 February 2022 affidavit.[25]
[25] Appeal ts 6 - 9.
The argument is misconceived. The mere fact that, on 13 January 2022, the master allowed 22 days for compliance with the self‑executing order notwithstanding the admitted inadequacies of the appellant's then affidavit evidence cannot alone justify a further extension if - as the master considered was the case - the 4 February 2022 affidavit evidence did not satisfy him that the $50,000 in security for costs would be provided in the further two-week extension sought by the appellant. The 4 February 2022 affidavit either justified the conclusion reached by the master or it did not.
In any event, it may be inferred that the master - quite properly - was prepared on 13 January 2022 to allow a relatively generous time period for compliance irrespective of the inadequacies of the affidavit of 12 January 2022 because the master was making a self‑executing order. The master was no doubt conscious that the interests of justice required that the appellant have a reasonable time to provide the security for costs given the potential consequences of the self-executing order.
The 4 February 2022 affidavit referred to and incorporated the 12 January 2022 affidavit (par 1). Mr Esposito then referred to the self executing order (par 2). Mr Esposito expressed regret that the self‑executing order had to be made and said that he genuinely believed that the necessary funds had been secured because an unnamed individual had promised him $70,000 for work done - that money was meant to have been available before Christmas 2021 (par 3).
This statement as to the intended source of the appellant's funding was inconsistent with what Mr Esposito had deposed to in his 12 January 2022 affidavit. Then, as has been seen, Mr Esposito mentioned that he had approached private lenders outside the banking system (see [12] above).
Returning to the 4 February 2022 affidavit, Mr Esposito stated that in late December 2021 he was told that there would be some delay in the provision of the $70,000 and that he had to look elsewhere for finance (par 6). Mr Esposito then stated as follows:
I was recently put in contact with a number of reputable litigation funding providers that I did not previously known [sic] about and wasn't aware that I qualified for and was eligible to receive funding for a range of litigation related purposes. I have in the last two weeks been in discussions with a number of litigation funding providers and have impressed upon them the urgency of my situation. At least two funders have indicated a genuine willingness to assist me financially on terms which I fully understand. There is likely to be some security involved that I aim [sic] able to provide as I have a small trail commission that I have been rebuilding. I am told it could take another 7 days to complete the exercise enabling funds to be released. I am now very confident that I will have the money within that time but 14 days is a more realistic timeframe I believe.[26]
[26] Mr Esposito's affidavit sworn 4 February 2022 par 7 GAB 32.
The appellant relied on this passage as making out the master's alleged factual error.[27]
[27] Appellant's PD 7.4 Schedule WAB 17.
The passage needs only to be read to conclude that the master was entirely correct, with respect, to conclude that the affidavit did not offer any concrete support for the proposition that funding for the $50,000 in security for costs would be available in the 14‑day period sought by way of extension. The relevant litigation funding providers are not identified. The basis on which Mr Esposito has reached a conclusion that two of them have 'indicated a genuine willingness' to assist with funding is not exposed. There is no reference to a binding agreement, an offer capable of acceptance or even indicative funding terms. The highest that the evidence gets to is 'discussions'. The reference to 'at least' two funders itself demonstrates the imprecise and uncertain nature of the state of Mr Esposito's negotiations. The evidence is perfunctory and nebulous and, in part, plainly inadmissible. For example, there is no identification of the person who told Mr Esposito that 'the exercise' could take another seven days.[28]
[28] Compare Rules of the Supreme Court 1971 (WA), O 36 r 6(2) & (3A).
In short, especially when considered in the light of the procedural history and Mr Esposito's affidavit of 12 January 2022, the affidavit evidence relied on by the appellant was manifestly deficient. There was nothing that might sustain a finding that the court could be satisfied that the appellant was in a position to provide the security for costs by paying the $50,000 into court within the additional period sought for compliance with the self-executing order. The master did not mistake the facts in this respect.
Grounds 1.1 and 1.2 failed.
Ground 1.3: Did the master fail to take into account a material consideration?
Ground 1.3 was advanced without regard to the master's reasons. There was no proper basis for the appellant's contention that the master failed to take into account the gravity of the consequences of the refusal to grant the extension - namely, the dismissal of the action. To the contrary, the master expressly acknowledged the prejudice the appellant would suffer due to the automatic operation of the self-executing order. The master did so at the outset of his brief oral reasons when he stated:
It is always a difficult matter to dismiss an action without the merits of that action being considered.
In the context of the master providing short oral reasons, and where the failure of the application was due to the master not being satisfied on the affidavit material that the $50,000 in security for costs would be provided in the two-week extension sought by the appellant, this was more than adequate to signify that the master properly took into account the prejudice to the appellant that arose from not extending the time for compliance with the self-executing order.
The ground, both in its terms[29] and as developed in the appellant's written submissions,[30] also argued that the master failed to 'properly weigh' the gravity of the consequences of refusing the extension.
[29] See [23] above.
[30] Appellant's submissions par 9.3 WAB 13.
This aspect of the appellant's complaint by ground 1.3 was no more than a complaint of a weighting error. The appellant contended that the master should have given greater weight to this factor. An appellate court will not interfere with an exercise of discretion on the basis of a failure to give adequate weight to a relevant consideration unless it can be shown that the failure really amounts to a failure to exercise the discretion actually entrusted to the court.[31] That was not this case. The master took the dismissal of the action into account. The weight to be given to that factor, as against the master's lack of satisfaction as to the appellant's ability to provide the security for costs in the ensuing two-weeks, was a matter for the master.
[31] Lovell v Lovell [1950] HCA 52; (1950) 81 CLR 513, 519; Gronow v Gronow [1979] HCA 63; (1979) 144 CLR 513, 534 - 535; Mallet v Mallet [1984] HCA 21; (1984) 156 CLR 605, 614. See also Porter Street Investments Pty Ltd v Nellbar Pty Ltd [2022] WASCA 33 [112] ‑ [113].
Ground 1.3 failed.
Ground 1.4: Was the master's decision unreasonable or plainly unjust?
Ground 1.4 was ambitious. It amounted, as the appellant's counsel accepted at the appeal hearing, to a contention that on the evidence the master was bound to grant an extension of the time for compliance with the self-executing order. In other words, the grant of an extension of time was, on the evidence, the only decision that was reasonably open to the master.[32]
[32] Appeal ts 10 - 11.
In support of ground 1.4, the appellant relied on various matters in addition to the evidence. First, the appellant relied on what it attributed to the master at the hearing on 29 September 2021. The appellant said that the master said that an extension 'would' be given if the appellant sought an extension of time to provide security (see [23] above). The master said no such thing. The master said only - quite properly - that, if an extended time became necessary, he would 'give consideration' to an extension (see [9]). It is plain that the master did give consideration to an extension. What was stated on 29 September 2021 provides no support for the contention that the master's decision to refuse the application for an extension was unreasonable or plainly unjust.
Second, the appellant relied on the master having said, on 13 January 2022, that the time for compliance with a self-executing order may be extended despite the order having operated and judgment having been entered - and that this was in fact the case.
The master did state words to that effect (see [15] above). The master's observation was correct in law (see [29] above). But neither matter supports a conclusion that the master's decision was unreasonable or plainly unjust. The mere fact that there is power to make such an order does not mean that, in the circumstances of this particular case, the master was bound to make an order extending the time for compliance with the self-executing order.
On the evidence, the most significant factor in favour of an extension was the prejudice that would be suffered by the appellant if the action remained dismissed. It is, as the master correctly acknowledged, a hard thing to enter judgment without any assessment of the merits of the case. The entry of judgment prior to trial without regard to the merits of the case is, generally speaking, the antithesis of justice.[33] In the present case the prejudice to the appellant had weight. The action included a claim to trail commissions from January 2015. Even if, as has been suggested, there is not necessarily an abuse of process in recommencement of proceedings for the same cause of action following dismissal of earlier proceedings for failure to comply with a self-executing order,[34] the dismissal of the primary proceedings in this case resulted in potential limitation period issues for the appellant.
[33] Durolek v Pier (WA) Pty Ltd [No 2] [107].
[34] Brocx v Hughes [2010] WASCA 57 [80].
By contrast, the respondent could not - and did not - point to any prejudice that it might suffer from a two-week extension of time for compliance with the self-executing order.
The respondent did not contend that the appellant's claim was not reasonably arguable. Nor, however, did the appellant adduce compelling evidence to demonstrate that its claim was more likely than not to succeed. The most that can be said as to the merits of the appellant's claim is that there was a serious issue for trial.
Militating against these three matters, and in favour of a refusal of the application for an extension of time, was the following:
1.The inadequacy of the appellant's affidavit evidence in support of the application for an extension - the master was correct, with respect, to conclude that on the affidavit evidence he could not be satisfied that the $50,000 in security for costs would be provided in the time sought by way of an extension (see [51] ‑ [54] above).
The paucity of the appellant's affidavit evidence was a weighty factor against the favourable exercise of the discretion. Prima facie time limits must be obeyed. In order to justify an extension it was incumbent on the appellant to adduce evidence as to why, despite proper endeavours, it had failed to comply with the court's orders and why it was to be expected that the appellant would be able to comply with the court's orders if afforded a reasonable extension of time. The appellant's affidavit evidence was unsatisfactory in both respects.
2.The inconsistency between Mr Esposito's affidavit of 4 February 2022 and his affidavit of 12 January 2022 (see [12] & [49] ‑ [50] above).
3.The appellant's apparent dilatory conduct in seeking funding for security for costs. On Mr Esposito's affidavit of 4 February 2022 he became aware in late December 2021 that the expected $70,000 promised for work done would not be immediately forthcoming. However, it was not until the two weeks before 4 February 2022 - after the self-executing order was made - that the appellant approached litigation funding providers.
4.The circumstance that the appellant had already been allowed over four months to provide the security for costs - the order for security for costs had been made on 29 September 2021.
5.The circumstance that the appellant had been given a reasonable time to comply with the self-executing order made on 13 January 2021.
6.The importance of the principle that orders of the court are to be complied with. That consideration is to be understood in the context of the goal and objects in O 1 r 4A & r 4B RSC. The appellant had already been given a 'last opportunity' to provide the security for costs. However, viewing the affidavit evidence as a whole, the appellant's efforts to bring about compliance with the orders for provision of security for costs were too little and too late. In the circumstances, to allow an extension of time for compliance with the self-executing order was inconsistent with the public policy that there be finality in litigation and the due administration of justice.
It was also significant that, as discussed at [41] - [42] above, the appellant was not barred from bringing a fresh application for an extension of time to comply with the self-executing order should the appellant be able to demonstrate that it had the means to pay the $50,000 into court. That possibility moderated the prejudice suffered by the appellant by reason of the refusal of the extension. If it is within the appellant's power actually to obtain funding it could approach the court on a more solid footing in seeking the indulgence of an extension of time for compliance with the self-executing order.
In the circumstances we do not accept that the master was bound to grant an extension of time in the sense that the grant of an extension was the only decision that was reasonably open to the master. To the contrary, it was well open in the proper exercise of the master's discretion to refuse the appellant's application for an extension of time to comply with the self-executing order. Indeed, having regard to the force of the matters that militated against the favourable exercise of the discretion, had we been considering the application at first instance we too would have exercised the discretion adversely to the appellant. It cannot be said that the master's decision was unreasonable or plainly unjust.
Ground 1.4 failed.
Conclusion and orders
The appeal notice was filed seven days outside the time prescribed by the Supreme Court (Court of Appeal) Rules 2005 (WA). No affidavit was included in the appeal books in support of an application for an extension of time. However, at the appeal hearing the appellant's counsel explained that the late filing was due to a misapprehension, on his part, that the time to lodge an appeal was the usual 21 days.[35] This was an erroneous belief. An interlocutory civil appeal must be commenced within 14 days after the decision being appealed.[36]
[35] Appeal ts 2.
[36] Supreme Court (Court of Appeal) Rules r 26(1).
The delay in filing the appeal notice is short. It was not suggested that the delay had caused any prejudice to the respondent. The delay is attributable to the appellant's legal representative rather than the appellant. Given what was stated by the appellant's counsel it may be accepted that the error that caused the delay was inadvertent. If the appeal had merit it would be appropriate to grant an extension of time for the filing of the appeal notice. There was, however, no utility in doing so given the lack of merit in the appeal. The application for an extension of time to appeal was dismissed because leave to appeal was to be refused.
For these reasons we made the orders that:
1.The application for an extension of time to appeal is dismissed.
2.Leave to appeal is refused.
3.The appeal is dismissed.
An order was also made that the appellant pay the respondent's costs of the appeal, including any reserved costs, to be assessed if not agreed. In all the circumstances it was appropriate that costs followed the event. In that respect the appellant did not resist an order for costs given the dismissal of the appeal.[37]
[37] Appeal ts 12.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
EM
Associate to the Honourable Justice Vaughan
14 FEBRUARY 2023
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