Wet Fix Holdings Pty Ltd v Chapman - [2023] NSWCA 245

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Wet Fix Holdings Pty Ltd v Chapman [2023] NSWCA 245
Hearing dates: 9 October 2023
Date of orders: 9 October 2023
Decision date: 13 October 2023
Before: Gleeson JA; Mitchelmore JA
Decision:
Summons dismissed with costs.

Catchwords:
APPEALS — Leave to appeal — Proceedings dismissed for failure to comply with order to provide security for costs — Where plaintiff failed to provide security for costs after two extensions of time — Whether reasonably clear injustice — UCPR, r 42.21(3)

Legislation Cited:
Civil Procedure Act 2005 (NSW), s 56
Supreme Court Act 1970 (NSW), s 101(2)(e)
Uniform Civil Procedure Rules 2005 (NSW), r 42.21(3)

Cases Cited:
Cheng v Motor Yacht Sales Australia Pty Ltd t/as the Boutique Boat Company (2022) 108 NSWLR 342; [2022] NSWCA 118
Durham v Durham [2011] NSWCA 62
Goodman v Lorenzen [2000] QCA 11
Hassan v Sydney Local Health District (No 2) [2020] NSWCA 356
House v The King (1936) 55 CLR 499; [1936] HCA 40
Idoport v National Australia Bank Ltd [2002] NSWSC 18
Idoport Pty Ltd v National Australia Bank Ltd & Ors; Idoport Pty Ltd v Argus [2002] NSWCA 271
McInnes v Rheem Australia Pty Ltd [2021] NSWCA 89
PPK Willoughby Pty Ltd v Baird [2019] NSWCA 48
Secretary, Department of Family and Community Services v Smith (2017) 95 NSWLR 597; [2017] NSWCA 206
Wet Fix Holdings Pty Ltd v Chapman [2022] NSWSC 1771

Category: Principal judgment
Parties: Wet Fix Holdings Pty Ltd (Applicant)
Christopher Chapman (Respondent)
Representation:
Counsel:
A J Morris KC / A Elizabeth (Applicant)
M Cowden (Respondent)
Solicitors:
Australian Law Partners (Applicant)
Brown Wright Stein Lawyers (Respondent)

File Number(s): 2023/197522
Decision under appeal

Court or tribunal:

Supreme Court of New South Wales

Jurisdiction:

Common Law Division

Date of Decision:

23 May 2023

Before:

Button J

File Number(s):

2021/169213

HEADNOTE

[This headnote is not to be read as part of the judgment]

On 11 June 2021, Wet Fix Holdings (Holdings) commenced proceedings against the first defendant, the principal of a firm of solicitors, and the second defendant, Mr Chapman, an accountant in relation to a business transaction in May 2015. On 12 September 2022, the Registrar ordered that Holdings provide security for Mr Chapman’s costs in the sum of $360,000, either by payment into court or by way of an unconditional bank guarantee, by 13 December 2022. Holdings failed to provide security for costs by that date. On 16 December 2022, Beech-Jones CJ at CL varied the orders made by the Registrar by granting a 3-month extension of time until 17 March 2023 and increased the amount of security to $390,000. The stated basis for Holdings to provide the amount of security was the proposed sale by Ms Lisa Miller of a property at Whale Beach. Holdings failed to provide security for costs by the extended date. On 21 March 2023, Holdings sought a further extension of time on the basis that the sale of the Whale Beach…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] NSWCA 245
Decision Date: 13 October 2023

CaseChat Overview and Summary

Wet Fix Holdings Pty Ltd (the plaintiff) sought leave to appeal a decision of the primary judge who had dismissed its proceedings for failure to comply with an order to provide security for costs. The plaintiff had been granted two extensions of time to provide the security, but ultimately failed to do so.

The central legal issue before the Court of Appeal was whether it was reasonably clear that injustice would result from the dismissal of the proceedings, as required by rule 42.21(3) of the Uniform Civil Procedure Rules (UCPR). This rule governs applications for leave to appeal against interlocutory orders, and requires the applicant to demonstrate a reasonably clear injustice.

Gleeson and Mitchelmore JJA reasoned that the plaintiff had been afforded ample opportunity to comply with the security for costs order, having received two extensions of time. Their Honours noted that the purpose of security for costs orders is to ensure that a defendant is not left without recourse for their costs if the plaintiff's claim fails. The plaintiff's continued failure to comply with the order, despite repeated opportunities, demonstrated a lack of diligence and a disregard for the court's directions. Consequently, the Court found that it was not reasonably clear that injustice would result from the dismissal of the proceedings.

The summons for leave to appeal was accordingly dismissed with costs.

Orders

Orders of the court

Summons dismissed with costs.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Medium Neutral Citation:	Wet Fix Holdings Pty Ltd v Chapman [2023] NSWCA 245
Hearing dates:	9 October 2023
Date of orders:	9 October 2023
Decision date:	13 October 2023
Before:	Gleeson JA; Mitchelmore JA
Decision:	Summons dismissed with costs.
Catchwords:	APPEALS — Leave to appeal — Proceedings dismissed for failure to comply with order to provide security for costs — Where plaintiff failed to provide security for costs after two extensions of time — Whether reasonably clear injustice — UCPR, r 42.21(3)
Legislation Cited:	Civil Procedure Act 2005 (NSW), s 56 Supreme Court Act 1970 (NSW), s 101(2)(e) Uniform Civil Procedure Rules 2005 (NSW), r 42.21(3)
Cases Cited:	Cheng v Motor Yacht Sales Australia Pty Ltd t/as the Boutique Boat Company (2022) 108 NSWLR 342; [2022] NSWCA 118 Durham v Durham [2011] NSWCA 62 Goodman v Lorenzen [2000] QCA 11 Hassan v Sydney Local Health District (No 2) [2020] NSWCA 356 House v The King (1936) 55 CLR 499; [1936] HCA 40 Idoport v National Australia Bank Ltd [2002] NSWSC 18 Idoport Pty Ltd v National Australia Bank Ltd & Ors; Idoport Pty Ltd v Argus [2002] NSWCA 271 McInnes v Rheem Australia Pty Ltd [2021] NSWCA 89 PPK Willoughby Pty Ltd v Baird [2019] NSWCA 48 Secretary, Department of Family and Community Services v Smith (2017) 95 NSWLR 597; [2017] NSWCA 206 Wet Fix Holdings Pty Ltd v Chapman [2022] NSWSC 1771
Category:	Principal judgment
Parties:	Wet Fix Holdings Pty Ltd (Applicant) Christopher Chapman (Respondent)
Representation:	Counsel: A J Morris KC / A Elizabeth (Applicant) M Cowden (Respondent) Solicitors: Australian Law Partners (Applicant) Brown Wright Stein Lawyers (Respondent)
File Number(s):	2023/197522
Decision under appeal	Court or tribunal: Supreme Court of New South Wales Jurisdiction: Common Law Division Date of Decision: 23 May 2023 Before: Button J File Number(s): 2021/169213