Re Saeco Australia Pty Ltd (ACN 059 711 009)

Case

[2010] VSC 161

29 April 2010


IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

COMMERCIAL COURT

LIST E
No. 9429 of 2006

IN THE MATTER of SAECO AUSTRALIA PTY LTD (ACN 059 711 009)

GIORGIO MASSIMO UBERTINI & UBERTINI INVESTMENTS PTY LTD (ACN 009 388 566) Plaintiffs
v
SAECO  INTERNATIONAL GROUP SPA SOCIETA A SOCIO UNICO & SAECO AUSTRALIA PTY LTD (ACN 059 711 009) Defendants

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JUDGE:

DAVIES J

WHERE HELD:

Melbourne

DATE OF HEARING:

18 March 2010

DATE OF JUDGMENT:

29 April 2010

CASE MAY BE CITED AS:

Re Saeco Australia Pty Ltd (ACN 059 711 009)

MEDIUM NEUTRAL CITATION:

[2010] VSC 161

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PRACTICE & PROCEDURE – Appeal against orders of an Associate Justice – Whether leave is required – r 16.5 Supreme Court (Corporations) Rules 2003, r 77.06 Supreme Court (General Civil Procedure) Rules 2005.

PRACTICE & PROCEDURE – Principles governing grant of leave to appeal from a discretionary order where the appeal proceeds as a hearing de novo, if leave is granted.

PRACTICE & PROCEDURE – Discovery – Non-compliance with orders – Summary dismissal of proceeding for non-compliance – Order setting aside the dismissal of the proceeding – Whether discretion wrongly exercised - Principles in Jorgensen v Slater and Gordon Pty Ltd [2008] VSCA 110 (Unreported, Maxwell ACJ, Forrest AJA, 18 June 2008) – Whether principles in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 should have been taken into account in the exercise of discretion – Decision not attended by sufficient doubt to warrant the grant of leave – Substantial injustice not shown – O 24.02 and O 24.06 Supreme Court (General Civil Procedure) Rules 2005.

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APPEARANCES:

Counsel Solicitors
For the Plaintiffs Mr M D Wyles SC with
Ms E S Holt
Foster Nicholson Legal
For the First Defendant Mr P H Solomon Allens Arthur Robinson

HER HONOUR:

  1. On 11 November 2008, Efthim AsJ dismissed this proceeding on the application of the first defendant (“SIG”)[1] pursuant r 24.02 of the Supreme Court (General Civil Procedure) Rules 2005 (“the SCR”). The application was based on the failure of the plaintiffs to comply with orders of the Court made on 4 April 2008, 19 September 2008 and 17 October 2008 for the discovery of documents. Efthim AsJ set aside order for dismissal on 2 December 2009, on the plaintiffs’ application made pursuant to r 24.06 of the SCR. Rule 24.06 gives the Court power to set aside or vary any order made under r 24.02 or under the inherent power of the Court as referred to in r 24.05, without the necessity for any appeal.[2] SIG has appealed the order made under r 24.06.

    [1]The second defendant was joined as a party for the purpose only of the plaintiff obtaining discovery.

    [2]Ridge Lane Pty Ltd v Gadzhis [2007] VSC 212 (Unreported, Hargrave J, 20 June 2000).

A.       Is leave to appeal required?

  1. There was a preliminary issue as to whether SIG can appeal as of right or whether the leave of the Court was required.

  1. It was contended for the plaintiffs that O 77 of the SCR did not govern the appeal. Order 77 is concerned with appeals from an order made by an Associate Judge exercising power under the general rules of the Supreme Court. It was argued that leave was required under r 16.5(2) of the Supreme Court (Corporations) Rules 2003 (“the Corporations Rules”) on the basis that the appeal was against an order of the Associate Judge made in a corporations proceeding[3] which had been referred to Efthim AsJ for hearing by a Judge. Rule 16.5(2) provides that no order of an Associate Judge made on an application referred to the Associate Judge by a Judge of the Court shall be subject to an appeal except by leave of the Court. Alternatively it was submitted that if the appeal is governed by O 77 of the SCR, leave is required under r 77.06(2.1) because the proceeding is in the Commercial Court. Rule 77.06(2.1) provides that no order of an Associate Judge made on an interlocutory application in a proceeding in the Commercial Court shall be subject to appeal to a Judge of the Court without leave of the Court.

    [3]The proceeding was a application brought under s 233 of the Corporations Act 2001 (Cth).

  1. It was contended for SIG that no leave was required because there ceased to be a proceeding under the Corporations Act2001 (Cth) (“Corporations Act”) governed by the Corporations Rules once the proceeding was dismissed under r 24.02 of the SCR and r 77.06(2.1) of the SCR did not apply because this proceeding had been dismissed before the establishment of the Commercial Court and was not in the Commercial Court.

B.       Leave is required

  1. In my view, the Corporations Rules are not relevant to the question whether leave is required because the power that was exercised by Efthim AsJ was one that was within his general authority under the SCR and not one that was a specific power conferred on him by r 16.1 of the Corporations Rules or one that required referral from a Judge of the Court under r 16.1(3) of the Corporations Rules in order to be exercised. Thus, the order appealed from was not an order made under the Corporations Rules[4] and thus was not governed by r 16 of the Corporations Rules.

    [4]See Supreme Court (Corporations) Rules 2003 rr 1.3(2), 16.5.

  1. In my view, leave is required by reason of r 77.06(2.1) of the SCR. The proceeding, before it was dismissed, was a “Corporations proceeding” because it was a proceeding in the Court under the Corporations Act.  The proceeding, on reinstatement, continued to be a proceeding under the Corporations Act and was automatically entered into the Commercial Court.  No order of the Court or step taken by a party was required.[5]  It follows that the order of Efthim AsJ reinstating the proceeding was in the nature of an interlocutory order in a proceeding in the Commercial Court.  Accordingly r 77.06(2.1) applies and leave is required.

    [5]Supreme Court of Victoria, Commercial Court Practice Note 1 of 2010 (Version 1.0), Chapter 3.

C.       Principles for the grant of leave

  1. Usually the Court’s power to grant leave will be exercised having regard to the principles considered in Neimann v Electronic Industries Ltd.[6]  Those principles include whether in all the circumstances the decision from which the appeal is brought is attended with sufficient doubt to warrant it being reconsidered and additionally whether the order would cause substantial injustice to the party seeking leave, if leave was refused.  If leave is granted the appeal proceeds by way of a rehearing de novo of the application before Efthim AsJ.[7] 

    [6][1978] VR 431.

    [7]Supreme Court (General Civil Procedure) Rules 2005, r 77.06(7).

  1. It was urged on me by counsel for SIG that the usual test applied by the Court was “in tension” with the fact that if leave is granted, the appeal then permitted would be an appeal de novo.  It was submitted that the application of the first part of the test on an application for leave (i.e. “sufficient doubt in the order below”) may be informed by the fact that if leave was granted the appeal would be a hearing de novo.

  1. I do not accept that there is such a tension.  The requirement of leave carries with it the requirement for the Court to be satisfied that there are reasons to grant leave and  the Court must exercise its discretion judicially, even though it is not a discretion confined by particular criteria that must be satisfied.  Where a grant of leave is required to appeal a discretionary decision, the Court has a duty to identify a proper basis for the grant of leave.  It is not a sufficient reason to grant leave that an appellate court may have exercised the discretion differently if the matter had come before it at first instance.  An appellate court will not normally interfere with a discretionary decision unless the Court can identify some error in the exercise of discretion.[8]  Where some error in the exercise of discretion can be identified the question of injustice flowing from the order sought to be appealed will generally be an important consideration on the issue of grant of leave, particularly where, as here, the appeal is sought on an interlocutory order.  The courts will more readily grant leave where the error should be reviewed because substantial injustice would result if the error was not corrected.

    [8]Mace v Murray (1955) 92 CLR 370; House v The King (1936) 55 CLR 499.

D.       Decision not attended by sufficient doubt to justify the grant of leave

  1. It was not submitted that Efthim AsJ acted on a wrong principle of law in exercising the discretion.  Rather the submission amounted to a complaint that His Honour failed to exercise his discretion properly because he did not take into account, or gave inadequate weight to, relevant considerations.

  1. In my opinion, there was no error in the exercise of discretion warranting the interference with the order to set aside the dismissal of proceedings.  The order was not plainly unreasonable or unjust.

(i)       Applicable principles for an order under r 24.06

  1. Under r 24.02 of the SCR, where a plaintiff fails to comply with an order for discovery the Court may order that the proceeding be dismissed. The only condition for the exercise of power is non-compliance with a discovery order. Although the power to dismiss is discretionary the power must be exercised with due regard to the principle that orders are to be complied with. There is no requirement to show intentional default or contumelious conduct on the part of the party to the default or any requirement of prejudice to the other party.[9]

    [9]Lenijamar Pty Ltd v AGC (Advances) Limited (1990) 27 FCR 388, 395-396 (Wilcox and Gummow JJ) in relation to o 10 r 7 of the Federal Court Rules 1976 (Cth), corresponding to Supreme Court (Civil Procedure) Rules r 24.02.

  1. Rule 24.06 gives the Court power to set aside or vary any order made under o 24.02, without the necessity for any appeal.[10]  The power to set aside is discretionary, involving broader consideration than the fact of non-compliance.  Rule 24.06 provides:

The Court may set aside or vary—

(a)     an order under this Order or an order referred to in Rule 24.05;

(b)a judgment entered or given upon the failure of a party to do any act or take any step which under these Rules the party is required to do or take or to comply with an order that the party do any such act or take any such step.

[10]Ridge Lane Pty Ltd v Gadzhis [2007] VSC 212 (Unreported, Hargrave J, 20 June 2000) [29].

  1. The applicable principles governing the exercise of power were considered by the Court of Appeal in Jorgensen v Slater and Gordon Pty Ltd.[11] Although the Court was there concerned with the discretion under r 24.06 exercised with respect to a party who was in default under a self executing order, the principles are not relevantly different to the circumstance where a proceeding is dismissed by reason of non-compliance. The Court of Appeal said as follows:

    [11][2008] VSCA 110 (Unreported, Maxwell ACJ, Forrest AJA, 18 June 2008).

The court has a wide discretion to relieve a party of the consequences of non-compliance with a self-executing order.  The governing consideration, as in every aspect of practice and procedure, is what justice requires.  As Burt CJ said in Link Blocks Pty Ltd v Fullin,

all the circumstances must be weighed in the balance and one must not … lose sight of the fact that the justice spoken of is an even-handed justice to [both sides].

The power to relieve must be exercised with care.  As Roskill LJ said in Samuels v Linzi Dresses Ltd, it is a power

which should be exercised cautiously and with due regard to the necessity for maintaining the principle that orders are made to be complied with and not to be ignored.

We respectfully agree with what was said by Newnes J in the Western Australia Supreme Court in MTQ Holdings Pty Ltd v Lynch, as follows:

The authority of the court will equally be undermined, and the quality of justice for the innocent party eroded, if the ultimate sanction effected by the operation of a [self-executing] order can be avoided by showing that non-compliance with [that] order came about by the same sort of inattention or laxity that caused the order to be made in the first place.

We would also adopt what Newnes J said regarding the considerations which should ordinarily be brought to bear in considering the exercise of this discretion.  The court should have regard at least to the following matters:

(a) the circumstances in which the self-executing order was made;

(b) the reasons for non-compliance with it;

(c) the prejudice to the defaulting party if relief were not granted;  and

(d) the prejudice to the innocent party if relief were granted.

As to the reasons for non-compliance, it is of the first importance to ascertain whether the failure to comply was wilful, that is, was reflective of deliberate disregard of, or indifference to, the court’s order.  As Browne-Wilkinson VC said in Re Jokai Tea Holdings Ltd:

The court should not be astute to find excuses for such failure since obedience to orders of the court is the foundation on which its authority is founded.  But, if a party can clearly demonstrate that there was no intention to ignore or flout the order and that the failure to obey was due to extraneous circumstances, such failure to obey is not to be treated as contumelious and therefore does not disentitle the litigant to rights which he would otherwise have enjoyed (references omitted).[12]

[12]Ibid [9] – [12].

  1. Thus, the consideration of “what justice requires” involves a broader inquiry than the exercise of power to dismiss a proceeding for non-compliance, where the condition for the exercise of power is the non-compliance itself. Obedience to the orders of the Court is the basis of r 24.02.[13] The interests of justice between the parties is the basis of the exercise of discretion under r 24.06.

    [13]Re Jokai Tea Holdings Ltd (1993) 1 All ER 630 referred to with approval in Jorgensen v Slater and Gordon Pty Ltd [2008] VSCA 110 (Unreported, Maxwell ACJ, Forrest AJA, 18 June 2008) [12].

(ii)      Judgment below

  1. Efthim AsJ referred to Jorgensen v Slater and Gordon Pty Ltd and the need to decide the application with regard to whether the interests of justice required the order dismissing the proceeding to be set aside.

  1. Efthim AsJ did not find that the plaintiffs had deliberately disregarded the final order for discovery nor was it contended on behalf of SIG that Efthim AsJ should have held that the plaintiffs’ failure to comply with the orders for discovery was contumelious or “reflective of deliberate disregard of, or indifference to, the court’s order”.[14]  That point was not argued, properly in my view having regard to the evidence. In this matter, there was detailed evidence before the Court providing the explanation for the plaintiffs’ non compliance with the Court’s orders for discovery.  That evidence was to the following effect:

    [14][2008] VSCA 110 (Unreported, Maxwell ACJ, Forrest AJA, 18 June 2008) [12].

(a)       the plaintiffs commenced this proceeding by originating process filed 26 October 2006.  At that time, they were represented by Maddocks, solicitors.  In due course Maddocks ceased to act and Mills Oakley, solicitors was retained in their place.  Throughout the balance of 2007, various steps were taken by the parties in preparing the proceeding for trial, including the exchange of categories of documents for discovery;

(b)      on 4 April 2008, Master Efthim (as he then was) ordered the parties to make discovery on or before 18 July 2008 and listed the proceeding for directions on 25 July 2008.  The parties agreed by consent to adjourn that directions hearing to 8 August 2008 because neither party was able to comply with completion of discovery by 18 July 2008.  The directions hearing was adjourned to 22 August 2008;

(c)       on 19 August 2008 Mills Oakley wrote to SIG’s solicitors (“AAR”) stating that the plaintiffs would not be in a position to complete discovery until 29 August 2008 and seeking an adjournment of the directions hearing listed for 22 August 2008 to 12 September 2008.  SIG consented to the adjournment and the directions hearing was adjourned to 19 September 2008.  Mr Ubertini, in his affidavit, deposed that during this time he was also involved in proceedings in the County Court involving the second defendant in this matter, that he had provided substantial numbers of documents to his solicitors relating to both matters and that there was considerable overlap in the documents to be discovered in the two matters.  Mr Ubertini deposed to a meeting he had on 15 September 2008 with Mills Oakley concerning discovery;

(d)      on 17 September 2008 Mills Oakley wrote to AAR stating that the plaintiffs would not be in a position to complete discovery before the directions hearing listed for 19 September 2008 and sought an adjournment of the directions hearing for approximately two weeks.  SIG’s consent was not forthcoming;

(e)       on 19 September 2008, Master Efthim ordered the plaintiffs to make discovery by 9 October 2008 and the matter was listed for further directions on 7 November 2008;

(f)       Mr Ubertini met again with his solicitor on 3 October 2008 in relation to discovery.  Mr Ubertini was leaving that day for overseas and knew that his affidavit of documents was due by 9 October 2008.  The solicitor told him that he would be in contact with him within the week to finalise his affidavit of documents.  Mr Ubertini told his solicitor that he was going overseas that day and would be gone for some weeks but would be available by telephone and email.  In fact the solicitor did not contact Mr Ubertini within the week, nor did Mr Ubertini contact his solicitor during that time to ascertain whether the affidavit was ready.  The affidavit of documents was not finalised by 9 October 2008;

(g)      Mr Ubertini deposed that unknown to him at the time AAR had emailed Mills Oakley enquiring whether the affidavit of documents would be filed and served that day and putting Mills Oakley on notice that an application would be made to strike out the proceeding for non-compliance, if there was no “adequate response”;

(h)      on 13 October 2008 SIG filed and served an application for dismissal of the proceeding on the basis of the plaintiffs’ failure to make discovery.  That was heard undefended on 17 October 2008 and refused.  The Court ordered the plaintiffs to make discovery by 31 October 2008;

(i)       on 29 October 2008, Mills Oakley telephoned AAR informing AAR that they had been unable to contact Mr Ubertini who they believed to be in Italy, that the plaintiffs would not be in a position to provide discovery by 31 October 2008, that Mills Oakley intended filing a notice of solicitor ceasing to act and seeking SIG’s consent to a two week extension beyond 31 October 2008 for the plaintiffs to make discovery.  That request was refused;

(j)        on 30 October 2008 Mills Oakley filed a notice of ceasing to act;

(k)      in cross examination Mr Ubertini said that he knew on 30 October 2008 that Mills Oakley had ceased to act for him.  He said that he asked Mills Oakley to “try to adjourn” because he would not be back in Australia in time.  Although Mr Ubertini did not say so expressly in his affidavit, it may be inferred reasonably from the documentary evidence recording the conversation that Mills Oakley had with AAR on 30 October 2008 that the reference to “try to adjourn” was a reference to seeking an extension of time by which the affidavit of documents was due. 

(l)       SIG filed a further application for dismissal on 5 November 2008, returnable 11 November 2008.  The material was served on the address for service contained in the notice of solicitor ceasing to act;

(m)     the application on 11 November 2008 was undefended and granted;

(n)      Mr Ubertini’s evidence was that he did not become aware of the 5 November 2008 application until after he returned to Australia on 18 November 2008.  He also gave evidence that on his return to Australia he started to look for a new lawyer and did not become aware until 3 December 2008 that the proceeding had been dismissed.  Ultimately Foster Nicholson Legal were retained to act on Ubertini’s behalf on 18 December 2008 and took possession of the files on 17 January 2009.  It was not contended that Mr Ubertini was tardy in appointing new solicitors;

(o)      on 20 May 2009 the plaintiffs filed and served their affidavit of documents. Nothing specific was made in argument about the lapse of time between the appointment of Foster Nicholson and the service of the affidavit of documents;

(p)      On 15 June 2009 the Court heard the application to set aside the order dismissing the proceeding.

  1. Before Efthim AsJ, SIG had submitted that a series of questions needed to be asked and determined for the purpose of determining this application regarding Mr Ubertini’s knowledge, namely:

-            When did Mr Ubertini become aware that the discovery order had been made on 4 April 2008 and did he understand what that meant?

-            What steps did Mr Ubertini take between 4 April 2008 and 19 September 2008 in respect of that order?

-            When did Mr Ubertini become aware of the order made 19 September 2008?  Did he understand its meaning?

-            What steps did Mr Ubertini undertake in respect of that order?

-            What relevantly was Mr Ubertini’s knowledge after 3 October 2008?[15]

[15]Ubertini v Saeco International Group Spa Societa A Socio Unico [2009] (Unreported, Efthim AsJ, 26 August 2009) [18].

  1. Efthim AsJ stated that in his view those specific questions did not need to be asked because the “matters referred to in Jorgensen v Slater & Gordon Pty Ltd by the Court of Appeal are more important.  [He] should look to whether the interests of justice require that the order dismissing the plaintiffs’ claim be set aside.”[16] His Honour went on as follows:

On carefully watching Mr Ubertini give his evidence, I accept the submission of his counsel that his evidence was consistent and efficacious and ought to be accepted. Mr Ubertini had been providing documents to his solicitors and on 19 September 2008 a difference of opinion regarding discovery with his solicitor had been resolved. Mr Ubertini did give his solicitors documents so that affidavit of documents could be prepared.  He went overseas when discovery was required and was in Costa Rica.  He had urgent business to attend there which would have been very pressing.  I cannot find that there has been a deliberate disregard with the final order for discovery.  I also accept that he did not learn that the plaintiffs’ proceedings came to an end until 15 December 2008.  It is unfortunate that his solicitors ceased acting for him on 30 October 2008 however, that made it even more difficult for the orders to be complied with.[17]

[16]Ubertini v Saeco International Group Spa Societa A Socio Unico [2009] (Unreported, Efthim AsJ, 26 August 2009) [19].

[17]Ubertini v Saeco International Group Spa Societa A Socio Unico [2009] (Unreported, Efthim AsJ, 26 August 2009) [20].

(iii)     No discernible error

  1. The error in the exercise of discretion identified on behalf of SIG was an apparent “tilt” by Efthim AsJ  in favour of the plaintiffs in the exercise of his discretion.  It was argued that His Honour considered matters relative to the plaintiffs’ position if the order for dismissal was not set aside, rather than to consider matters relative to the position of SIG, specifically the time and effort taken up in pursuing the plaintiffs’ compliance with the discovery orders that would not be compensated by the order for costs that was made.

  1. Reliance was placed on Aon Risk Services Australia Ltd v Australian National University,[18] the principles of which were applied in Heng v (Australia) Pty Ltd v Wang[19] in justification of dismissing an appeal by the appellants from an order made by the court striking out their defence as a result of default in compliance with orders of the Court for the discovery of documents.  In consequence, judgment for a substantial sum of money was entered for the respondent on the respondent’s claim.  Gray J stated that the appeal raised:

    [18](2009) 239 CLR 175.

    [19][2009] FCA 922 (Unreported, Gray J, 20 August 209).

questions of principle relating to the application of sanctions, such as refusing to allow a party to defend a proceeding, consequent upon default by that party in compliance with orders of the court.[20] 

[20]Ibid [1].

Gray J noted that case management principles are backed by provisions and rules of the Court, which include the rule that provides expressly for the giving of judgment against a defaulting party without trial, because of the default.  His Honour continued:

Such powers are not to be exercised lightly.  A judgment for a large sum of money is a significant consequence to visit upon a defaulting party …

If the powers given by rules of court to give judgment against a defaulting party were never to be exercised, because of a supposed principle that judgment for a large sum of money should not be given without a trial, the grants of express powers by rules would be hollow.  Case-management would be deprived of its only real sanction against a party who, while resisting a claim for a substantial sum of money, defaults persistently in complying with orders of a court. … There is no injustice in judgment for a large sum of money against [the appellants], having regard to [the second appellant’s] apparent determination not to comply with repeated orders requiring him to produce for inspection all of the appellants’ discoverable documents.[21]

[21]Ibid [35] – [38].

  1. It was submitted on behalf of SIG that the “insight of these authorities” is that:

the due administration of justice balances the interests of the parties, but further, and moreover, looks to more than each of the parties to litigation.  Considerations of justice must be informed by a perspective of the whole of the system; this includes, but is not limited to, the parties themselves. 

  1. Efthim AsJ did not address the prejudice to SIG for the wasted effort and time in seeking compliance that costs orders cannot compensate fully or the wider implications of persistent neglect in the prosecution of a case.  It was argued for SIG that if these matters had been addressed in light of the plaintiffs’ conduct the discretion should have been exercised in favour of SIG.

  1. The questions directed to Efthim AsJ as questions that needed to be determined for the purposes of deciding the application were plainly relevant to the consideration of the culpability of the plaintiffs.  In appropriate cases, the conduct itself may be sufficient reason not to re-instate the proceeding.  In appropriate cases, the conduct may weigh against the party seeking reinstatement in the consideration of what justices requires.  But I do not think that this is one of those cases. In my view the exercise of discretion was not plainly unreasonable or unjust.

  1. The inquiry under r 24.06 is wider than the inquiry under r 24.02. The very purpose of r 24.02 is to provide a sanction for non-compliance with orders. There the burden of undertaking the work required to be done to meet a Court order or the fact of other pressing commitments does not exonerate a party from complying with Court orders. The sanction was imposed here. On the other hand, r 24.06 entitles a defaulting party to come to Court, without the need to appeal, to persuade the Court that it should be relieved of that sanction. Hence the question is what justice requires, which involves the need to balance the interests of the parties. Here, there was not flagrant disregard by the plaintiffs of what was required of them. It is regrettable that the plaintiffs were not sufficiently attentive to their discovery obligations but the evidence did not support a finding that the plaintiffs were not genuine about prosecuting their case. On the contrary the plaintiffs had taken substantial steps towards providing discovery.

  1. It may be accepted that SIG has wasted time and effort.  It may also be accepted that the wasted time and effort cannot be fully compensated by the order for costs but otherwise no specific prejudice to them with respect to continued prosecution of the action against them was identified.  Considerations of case management do not compel any different exercise of discretion in this case.  The default in providing discovery has led to delay in the timely hearing of this action but not in circumstances where the default was wilful or unexplained or unduly disruptive of the Court’s processes.  In my view, this is not a case where it clearly must be concluded that the wider implications of neglect in the prosecution of a case should bear upon the exercise of discretion.  Accordingly I conclude that there was no discernible error of law in the exercise of discretion.

E.        No substantial injustice flowing from the order setting aside the dismissal of the proceeding

  1. In view of my conclusion that the discretion was not wrongly exercised, a grant of leave is not necessary to remedy any substantial injustice to SIG by reason of the order setting aside the dismissal of the proceeding.

F.        Appeal dismissed

  1. Accordingly I affirm the orders made by Efthim AsJ. I also direct that the proceeding be listed for a case management conference as soon as practicable.  Subject to argument, I propose to order that SIG pay the plaintiffs’ costs of the application.

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