13 It will be seen from this history that the application at least in form was directed to overturning the refusal by Bowden ADCJ to set aside the judgment, the later imposition of the term by Cooper DCJ when his Honour did make an order setting aside the judgment, and the later again refusal by Cooper DCJ to remove the term. In submissions before us counsel for the claimant concentrated on the last of these matters. At no time was there any complaint that the judgment entered on 29 January 2001 had been entered irregularly, nor any challenge to the order for entry of that judgment. The refusal by Bowden ADCJ was overtaken by the qualified success before Cooper DCJ on 1 June 2001, and the real issue was whether the qualification to that success was a proper qualification. So far as there had been a denial of procedural fairness on 1 June 2001, there had been an appropriate opportunity to deal with the imposition of the term on 21 June 2001. So in a practical sense, as was with respect correctly accepted by the claimant, attention could be concentrated on the exercise of discretion by Cooper DCJ in that in his combined judgments of 1 June 2001 and 21 June 2001 his Honour considered that the judgment should be set aside only on terms that the security for $100,000 be provided.
14 The claimant's submissions were essentially two.
15 The first submission was that once Cooper DCJ had held that the claimant had an arguable defence, the only kind of term which he could properly impose was one which went to overcome any prejudice suffered by the opponent: that is, that the available terms were limited by the prejudice which the opponent could say she had suffered. It was submitted that the opponent had not put forward any evidence of prejudice and that there was no prejudice, and so that the term of security for $100,000 should not have been ordered.
16 I do not think the submission is soundly based. Power is given to set aside a judgment on terms, and no express fetter is placed on the nature or extent of the terms. It must depend on the circumstances of the particular case. Commonly in cases such as this the plaintiff will suffer because the plaintiff will lose a judgment, will incur more costs, and will be delayed in achieving whatever success in the proceedings will ultimately be achieved. I do not see why that is not prejudice capable of pecuniary remedy by a term. But there is more than that. Default judgments and applications to set aside default judgments are not uncommonly accompanied by doubt about the bona fides of the proffered defence. It may well be proper to let a defendant in to defend notwithstanding some doubt about the bona fides of the defence, but where that is the case in my opinion there is no reason why the terms available to the judge in the exercise of his discretion should not include that the defendant provide security for some or all of the amount at stake.
17 We were referred to the decision of the Court of Appeal in Queensland in Conners v Acheron Pty Limited (No.2) (1996) 1 Qd R 243, particularly at 246-7, but I do not read what the Court there said as precluding the consideration of these matters in the exercise of the discretion. Cooper DCJ did have doubt about the bona fides of the claimant's defence, but nonetheless thought it proper that the claimant should be able to defend the matter on the term in question. Subject to the second submission to which I now come, I consider that it was open to his Honour to take that view.
18 The second submission was that where it is practically impossible for the defendant to meet a condition such as the term that security for $100,000 be provided, it would defeat the rationale of setting aside the judgment to impose the term (or in this case to maintain it), because that would mean that the court would say in one breath that a defence was one which the defendant should be permitted to maintain and in an other breath that the defendant could not maintain it. I do not think the logic is correct, although in a practical sense that may be the result in some cases, nonetheless that is what Lord Diplock had in mind in his Lordship's speech in M.V. Yorke Motors v Edwards (1982) 1 All ER 1024 at 1027. His Lordship's speech was concurred in by the other members of the House, and at the page mentioned he saw no reason to dissent from propositions to the effect that it would be a wrong exercise of discretion to order that a sum be paid as a condition of granting leave to defend which the defendant would never be able to pay, saying that that would be tantamount to giving judgment for the plaintiff notwithstanding the court's opinion that there was an issue or question in dispute which ought to be tried. His Lordship referred also to a condition being imposed which it is impossible for the defendant to fulfil.
19 Here the claimant submitted that, on the evidence in her affidavit sworn on 20 June 2001, there was the impossibility of which his Lordship spoke. It is not clear to me whether Cooper DCJ so concluded. In the passage from his Honour's reasons which I earlier set out he referred to the claimant having no assets and no means whereby she could raise security for the amount of $100,000 in a form acceptable to the Registrar, but he prefaced that by the words "If I accept the evidence of the defendant as stated in her affidavit sworn yesterday … ". On a reading of his Honour's reasons as a whole it seems to me that his Honour was careful not to say that he did accept the evidence of the defendant.
20 The evidence was indeed not satisfactory.
21 The claimant said that she had no assets or income of her own. She was apparently the controller of the three companies. It was asserted in general terms that the companies' assets were mortgaged and that the mortgagee would not provide any more funds and, so far as it was open to it to not agree, would not agree to the assets being mortgaged to someone else. There was, however, no evidence of the value of the assets or the amount of the borrowings against them. There may well have been significant equity to which access could have been had by way of security. There may well have been the ability to sell and after repayment of whatever borrowings may have been secured on the particular property to have money to provide the security.
22 Further, it was said in one paragraph in the affidavit that the income from two of the properties, apparently the income earning properties, was devoted to servicing the mortgages, but in another paragraph it was said that some funds were available from cash flow and it was estimated that about $11,000 would be available in about six weeks to pay what was admittedly due to the opponent. Regrettably there was no cross-examination on this, but it was a far from compelling case that the claimant's position was one of impossibility.
23 To my mind Cooper DCJ saw it in this way, and that is why he said that on the facts of this case he did not consider that it was appropriate to do away with the term which he had earlier imposed. If it be asked whether there was an error in his Honour's exercise of discretion in concluding that the term was an appropriate term, whether originally imposed or maintained, where lies the error? In effect the submission was that the amount was wholly excessive. It was suggested that a term could properly have been imposed for an amount in the order of $25,000, made up of the amount admittedly due plus interest and some costs and perhaps with what was described as some security for the costs of the trial. I am not sure why, on the arguments put by the claimant, security for the costs of the trial ought to have been included, but that does not matter for present purposes.
24 There is a different way of looking at it. The judgment on 29 January 2001 was for about $125,000. There is prima facie a statute of limitations defence to the 1991 loans, although that may of course be affected by questions of confirmation and a later 1996 contract to which I have referred. Beyond that, the defence depends upon the affidavit of the claimant. The 1991 loans alleged were approximately $25,000. It seems to me that if the reasoning apparent in the two judgments of Cooper DCJ be taken up, a term providing for the opponent's claim less the 1991 loans and their applicable interest but plus costs would as an approximation (and no one attempted more than approximations) entirely justify an amount of about $100,000 in the term. This may not exactly been his Honour's reasoning and his Honour does not seem to have had in mind the judgment amount of $125,000. However, it seems to me to be in accord with his Honour's reasoning, and that being so I do not think it can be said that there was an error in that the figure which his Honour imposed was wholly excessive.
25 In these circumstances it seems to me that it cannot properly be said that appealable error has been shown in the combined discretions exercised on 1 June 2001 and 21 June 2001. Accordingly, it seems to me that the application should in substance fail. Leave to appeal should be refused in relation to the order of Bowden ADCJ, and leave to appeal should be granted in relation to the orders of Cooper DCJ but the appeal in relation to the latter orders should be dismissed, and I so propose.
26 HEYDON JA: I agree.
27 HODGSON JA: I also agree.
28 In this case, in my opinion, the claimant needed to lead satisfactory evidence justifying an order setting aside the judgment against her, and in the third application, satisfactory evidence showing that it was impossible for her to comply with the condition imposed. It was not open, in my opinion, for the claimant to rely on absence of cross-examination to complete a case where her own evidence was unsatisfactory.
29 There is some force in the submission that there was no objection taken to the bald statement in the applicant's evidence that she was unable to comply with the condition. However, that evidence was explained by subsequent paragraphs in the affidavit, which did not justify the bald statement, but on the contrary raised very substantial questions as to its accuracy. In my opinion, it is plain that Cooper DCJ referred in his judgment to those unsatisfactory aspects of the affidavit and took account of them, and in so doing was justified in not in the end accepting that the claimant had proved that she did not have the means to satisfy the condition.
30 Mr McHugh, for the claimant, also criticised Cooper DCJ for adverse comment made on the credit of the applicant in the absence of cross-examination. In my opinion, the conduct of the claimant and the contents of here own affidavits supported the reservations expressed by Cooper DCJ on her credibility. There was some force in a criticism about an adverse inference apparently drawn in relation to a letter written on 4 February 2001, but in my opinion that matter did not vitiate the overall view expressed by Cooper DCJ.
31 GILES JA: The order of the Court will be therefore as I have proposed, plus that the claimant pays the respondent's costs of the application.
32 It may be that there should be a new timetable for provision of the security and filing the defence.
MCHUGH: Your Honour, the orders below are behind tabs 5 and tab 7 in that regard.
HODGSON JA: Well they seem to contemplate three weeks for the security and four weeks for the defence.
MCHUGH: It's been pointed out to me by my instructing solicitor in the course of your Honour's judgment that my client's remaining hope is that there'll be something - that when the premises on which the nightclub is conducted are sold on 27 November, which is four weeks from today, that there will be a sufficient net equity that she's ahead and that really is her last hope. In the circumstances I wouldn't normally be asking for more than twenty-eight days, but would five weeks be a possibility as to the provision of the security?
HODGSON JA: There may be a six week settlement time.
MCHUGH: I suppose perhaps it could be done on this basis that--
HEYDON JA: Why don't you ask for 1 February 2002 and see what happens?
MCHUGH: I'd be happy to ask for that, at that point I'll be happy to sit down. I do ask for it.
HEYDON JA: Any problem Mr Murphy?