Brookfield, Ian Walter v Davey Products Pty Ltd

[1998] FCA 1159

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SG 99 of 1997

BETWEEN:	IAN WALTER BROOKFIELD and SEPTIC PRODUCTS AUSTRALIA PTY LTD (IN LIQUIDATION) APPLICANTS
AND:	DAVEY PRODUCTS PTY LTD RESPONDENT

JUDGE:	MANSFIELD J
DATE:	6 AUGUST 1998
PLACE:	ADELAIDE

REASONS FOR DECISION

HIS HONOUR: The applicants brought proceedings in this Court against the respondent, alleging variously that the supply of pumps by the respondent to the applicants was in breach of contract, was provided in circumstances in which the respondent was liable for negligently misstating the quality and standard of the pumps, and in circumstances in which the respondent was in breach of s 52 of the Trade Practices Act 1974 (“the principal proceedings”).

The detailed nature of the claim is set out in the judgment of Branson J in the principal proceedings, given on 8 February 1996.  It is described also in the decision of O’Loughlin J, which is the subject of the present application, that decision having been given on 19 May 1998.

The applicants appealed from the decision of Branson J.  On 12 September 1996 the Full Court of this Court dismissed that appeal, again ordering costs against the applicants.  The applicants sought special leave to appeal from the High Court of Australia.  On 30 May 1997 that application was refused.  Accordingly, the judgment of Branson J given on 8 February 1996 stood to determine the rights of the applicants and the respondents as between themselves in relation to the matters ventilated.  The end result of the principal proceedings was the various claims of the applicants against the respondent were unsuccessful and the applicants were ordered to pay costs of the respondent.

I am told, although it is not spelled out in the affidavits before me that, as a result of the orders in the principal proceedings, the costs which the respondent is seeking to recover from the applicants are in the order of some $380,000.  They have not yet been paid.  By application dated 16 December 1997 the subject proceedings were instituted.  They are separate proceedings.  These separate proceedings, in effect, seek suspension of the execution of the order for costs in the principal proceedings before Branson J and on appeal “until perjury and fraud charges” are laid and, presumably, determined against certain officers of the respondent in relation to evidence or affidavits of discovery made in the principal proceedings.

By notice of motion dated 30 January 1998 in this proceeding, the Court was moved for orders as follows:

“1.For the suspension of the execution of the judgment of Branson J. dated 19 December 1997 until 2 August 1998 when the application to have judgment set aside will be served and filed.

2.That the respondent make full and proper discovery of all correspondence in its possession or power located at or from its Melbourne office of Davey Products Pty Ltd with relation to its trading with Lowara Pumps in Italy and its trading with Gould Pumps of Singapore and Italy.

On 19 May 1998, after an extensive hearing, O’Loughlin J dismissed the application.  The order then made was that the applicants’ notice of motion of 30 January 1998 be dismissed with costs.  The reasons do not deal with the second of the two matters referred to in the notice of motion, namely an application for discovery of documents which, it is asserted, and to some extent appears from the reasons for judgment of O’Loughlin J, were found to have existed and not to have been discovered in the principal proceedings.

On 21 July 1998 the applicants sought an extension of time within which to file and serve a notice of appeal from the decision of O’Loughlin J.  It is apparent that that application is made under O 52 r 15(2) of the Federal Court Rules (“the Rules”) on the basis that the decision of O’Loughlin J was a final decision and that no leave to appeal from his Honour’s decision was necessary.  If that be correct, the power to extend the time within which to appeal may be exercised by the Court or a judge at any time for special reasons.  That is certainly the basis upon which the applicants urge the Court to make the order now sought.

In support of the present application for an extension of time, two affidavits of the personal applicant, dated 21 July and 4 August 1998, have been filed.  Those affidavits indicate that for personal reasons the personal applicant was very heavily committed to providing assistance to a friend and her family during a period when that friend was very substantially disabled.  That period largely covers the period of time which elapsed between 19 May 1998 and 21 July 1998.

Other than seeking to explain that the personal applicant was otherwise heavily committed in a personal sense in a way which precluded him from getting about lodging the appeal, which he now seeks to lodge on behalf of the applicants, the material does not provide information on any other particular topics relevant to the exercise of the discretion which the Court is now asked to make.  It refers to legal opinion having been sought and received from the Legal Practitioners Conduct Board, and senior counsel’s legal advice having been sought and received.  It does not say when those documents were sought or when they were received, and indeed it does not explain why those documents were able to be sought and pursued at the same time as the applicants were, for personal reasons, unable to proceed to prepare a notice of appeal against the decision given on 19 May 1998.  It does not suggest anything about the content of that material.

The only other matters of substance referred to in the affidavits are that the extension of time is asserted not in any way to inconvenience the respondent “in preparing their defence”, that any appeal could not be heard until early in 1999, and that the prospects of success on the appeal are considered to be favourable by the applicant.  Nothing is proffered to support any such assessment.

I note also that, if the leave sought is given, the applicants also seek a longer period than the prescribed twenty-one days within which to lodge the appeal.  The reason for that is not given, other than to say that it will be done by the personal applicant rather than through legal representation.

Counsel for the respondent disputes that the application is in respect of a final judgment.  If it is in respect of an interlocutory judgment, then leave to appeal itself is necessary under O 52 r 10 of the Rules, and that leave should have been sought within seven days of the judgment.

For reasons which I am about to expand upon, I do not think that it is necessary to determine whether the appeal is from an interlocutory judgment or from a final judgment.  If it is a final judgment, then the appeal should have been instituted within twenty-one days of the judgment.  In either event, the time has substantially expired before the present notice of motion.  If it were from an interlocutory judgment I would give the applicants leave to amend the present notice of application to accommodate the terms which would be necessary for seeking an extension of time within which to seek leave to appeal from an interlocutory judgment, and to seek leave to appeal from that interlocutory judgment.  Although the considerations relevant to an application for leave to appeal, either within time or out of time, under O 52 r 10, and for an extension of time in which to appeal under O 52 r 15(2), are generally different, considerations applicable in the present circumstances, in my view, under either provision lead to the same result.

I will explain those considerations.  The principal authority in this Court in dealing with applications for an extension of time within which to appeal under O 52 r 15(2) is Jess v Scott (1986) 12 FCR 187. The Full Court said (at 195):

“What is needed to justify an extension of time is indicated in r 15(2) by the words “for special reasons”.  It is that there be shown a special reason why the appeal should be permitted to proceed, though filed after the expiry of twenty-one days.  In that context, the expression “special reasons” is intended to distinguish the case from the usual course according to which the time is twenty-one days.  But it may be so distinguished (not necessarily will, for the rule gives a discretion) wherever the Court sees a ground which does justify departure from the general rule in the particular case.  Such a ground is a special reason because it takes the case out of the ordinary.”

That decision has been referred to and applied on a number of occasions, including most recently by the Full Court in Hannpost Pty Ltd v Mita Copiers (1996) 67 FCR 416 at 427 - 428. As Jess v Scott (above) recognises, the power to extend the time within which an appeal may be instituted is a discretionary power.  I do not propose to accede to the application under O 52 r 15(2).  A fortiori, but for the same reasons, if the application were made under O 52 r 10 I would also decline the application in terms of that rule and the principles underlying its operation.

It is important to bear in mind that the applicants’ proceeding now before the Court is only in a sense a peripheral one.  The applicants’ ultimate objective is to institute separately an application to set aside the decision of Branson J in the principal proceedings on the ground that it was procured through fraud, through forgery and through the failure of the respondent in the principle proceedings properly to give discovery.  Even if the applicants are able to appeal from the decision of O’Loughlin J, apart from delaying any enforcement of costs awarded in the principal proceedings, the applicants’ main objective will not in reality be advanced.

The applicants have not yet instituted those proceedings, although early in the proceedings before O’Loughlin J they indicated that they would do so by 2 August 1998.  I have not been told when those proceedings are now proposed to be instituted, but I have been told that they are proposed still to be instituted.

At the time of the proceedings before O’Loughlin J, the personal applicant frankly and properly told O’Loughlin J that the evidence in support of the claims for fraud and perjury was not then available.  Consequently, the proceeding before O’Loughlin J was limited to the issue of the adequacy of the discovery in the principal proceedings.  I am now told by the applicants that further evidence is available to support more widely the broad and significant allegations which the applicants seek to make.  Accordingly, the decision of O’Loughlin J, confined as it was to the issue of the adequacy of the discovery in the principal proceedings, will not put the applicants out of Court in the sense that, if they have the material to support other alleged grounds asserting that the judgment of Branson J was improperly procured, they will be able to ventilate them either in some other proceeding or in resistance to any process designed to enforce recovery of the costs awarded.

As I pointed out to the applicants in the course of submissions, time is marching on.  It is critically important to the applicants that if evidence is available to support the allegations identified, the proceedings now contemplated by them and contemplated at least for a considerable period of time, should be instituted and pursued with vigour.  Allied to that is the fact that, even if time to appeal were now extended or if leave to appeal out of time were now granted, any appeal from the decision of O’Loughlin J would not itself operate as a stay of any order for costs.  That appeal would not now be heard until some time early in 1999.  In the meantime, the proposed proceedings should have been instituted and should be significantly advanced.  The granting of any leave to appeal out of time, or the extending of the time for appeal, which is now sought would not preclude the respondent from proceeding to enforce its rights to recover the costs awarded in the principal proceedings in any event, subject to the normal processes and subject to any other applications which the applicants seek to make in opposition to that process.

I do not therefore see that there is a significant disadvantage or injustice to the applicants in declining the present application, limited as it was to a particular feature of the proposed claims, and further limited as it was to a period of time which has now elapsed.

It seems to me appropriate also to have some regard to the prospects of success on any appeal from the decision of O’Loughlin J.  I sought to explore those prospects with the applicants in argument.  No misdirection in point of law was pointed out.  What was put was that there were a series of contradictions throughout the judgment, more specifically enumerated in the proposed draft notice of appeal.  However, what appears from the draft notice of appeal is that a series of findings made by O’Loughlin J that further discovery should have been made, or findings related to such issues, are recorded.  It is asserted that there was a further finding of his Honour that the failure to make that discovery was deliberate and unconscientious, and that that conclusion contradicts the findings as to adequacy of discovery.  It is not apparent to me that the asserted contradiction is made out.  On an appeal the applicants will be faced with the finding of O’Loughlin J on that topic as follows:

“There is not, in my opinion, the slightest suggestion of bad faith on the part of the respondent’s solicitors.  That conclusion is obvious because of the express reference to the “non-discovered” documents in exhibit DW27 and because of the contents of exhibit DW28.  This is a clear case of a genuine mistake about whether or not certain documents were discoverable.”

That is a finding of credit.  It is trite to say that, in respect of such findings, an appeal court is very reluctant to interfere, in large measure because it has not had the opportunity of considering the way in which such matters were ventilated at a hearing, including the presentation of the witnesses.  It is also significant in this regard that no ground of appeal raises criticism of his Honour’s conclusion that the applicants themselves had failed to satisfy him that there was no lack of diligence on their part in respect of discovery.  It was also put by the respondent that in any event the conclusion of O’Loughlin J that the complaints as to the non-discovery of documents are not of sufficient substance to warrant the intervention of the Court had not been confronted, and would mean that there was little prospect of a successful appeal.  His Honour noted Branson J’s conclusion that there was a relationship between the established failure of a significant proportion of certain of the pumps supplied to the applicants by the respondent on the one hand, and the modifications effected by the applicants to the system in which those pumps were used.  In other words, one reason why the pump may have failed is that they were used in a system other than that for which they were provided, or a system which was modified from that for which they were provided.  It is correct that, on this application, nothing was put to suggest that the decision appealed from, in so far as it relied on that conclusion was erroneous.  Ultimately, O’Loughlin J was not satisfied that the inadequacy of the discovery, in light of his findings that the applicants’ legal advisers could have demanded further and better discovery of the documents that were identified and in all the circumstances, should lead to the relief sought.  For the reasons expressed above, I am not persuaded that the prospects of having the judgment on any appeal are significant.

In summary, whilst I accept the evidence of the applicant that personal commitments caused a delay in the institution of any appeal, or the application for leave to appeal, in my view considerations involving the respective interests of the parties lead to this application being refused.  There is unfairness to the respondent of further being put out of its right to enforce its judgment, for the reasons ventilated by O’Loughlin J.  There is still the absence of any proceedings of the nature threatened to set aside the decision in the principal proceedings.  The applicants now assert that the grounds upon which their proposed proceedings to set aside the decision of Branson J are significantly more extensive than those ventilated before O’Loughlin J and, if substantial and provable, might be used to resist any bankruptcy application.  In that regard, the applicants would no doubt have to explain satisfactorily why such evidence was not available earlier.  They should have progressed the threatened claim.  The conclusions, and the basis of the conclusions of O’Loughlin J as to why the present application before him should have been dismissed, have not been shown to have been erroneous, or to be vulnerable in any clear way to attack on appeal.  Accordingly, in my view there is no significant injustice to the applicants in this present application being refused.  Those matters are, in the peculiar circumstances of the case, matters to which in my view the Court should have regard in exercising its discretion.

Accordingly, I decline to extend the time to file and serve a notice of appeal from the judgment of O’Loughlin J given on 19 May 1998.  I order that the applicants pay the respondent’s costs of and incidental to the application for extension of time to file and serve notice of appeal.

I certify that this and the preceding seven (7) pages are a true copy of the Reasons for Decision herein of the Honourable Justice Mansfield.

Associate:

Dated:            16 September 1998

Mr I W Brookfield appears in person
Counsel for the Respondent:	Mr R J Mills
Solicitors for the Respondent:	Piper Alderman
Date of Hearing:	6 August 1998
Date of Decision:	6 August 1998