Body Bronze International & Anor v Fehcorp Pty Ltd [2010] VSCA 72

1. That execution on the orders of His Honour Judge Saccardo of the County Court of Victoria made 6 August 2009 be stayed pending the hearing and determination of the appeal or further order;

2. That the appellants pay into court the sum of $27,500 as security for costs of the appeal, such moneys to be paid into court on or before 23 December 2009;

3. In the event that the appellants fail to pay the sum of $27,500 into court on or before 23 December 2009 the further hearing of the appeal to be stayed;

4. That the summons of the appellants dated 25 August 2009 be otherwise dismissed with no order as to costs.

2 The applicants now seek orders from the Court that the stay of the appeal be lifted and that in substance they be permitted to continue with the appeal. Such an order is opposed. Mr Mitchell, the principal director of the first appellant, has sworn an affidavit in which he has set out his explanation for why the time limit imposed for payment of the security for costs was not met. He acknowledges that he was aware that the security for costs were to be paid on or before 23 December 2009.

3 In his affidavit he deposes to the effect that he forgot to pay the money into court on that date as it was his birthday and that that may have contributed to his oversight of the matter. It appears that within a fortnight after that date he left Australia for the Philippines and, according to his affidavit, for the purpose of distributing clothing and shoes to the needy in the Philippines. Prior to his return he received communications from his solicitors inquiring as to whether or not the security for costs had been made in compliance with the order and, on his return, was able on 28 January to make the payment that had been required pursuant to the order I have mentioned.

4 He now seeks a variation of the order that the time for payment of the security for costs be extended to that date. In support of his application the appellants submit that the time should be extended and the stay should be lifted on the basis that the period of the breach was short, the payment of security for costs was made one month late, that the reason for the breach was inadvertence and did not involve any contumelious disregard for the orders of the court, that the breach has been cured as the security for costs has now been paid, that the initial order for security for costs was made with the consent of the appellants, that there is no prejudice to the respondents and that there would be injustice to the appellants and significant prejudice if they are unable to prosecute the appeal.

5 That injustice includes the contention which has not been challenged on the material that the individual appellants will either suffer the risk of bankruptcy or winding up in the event that they are unable to proceed with the appeal and challenge the orders that have been made against them. As Ms Annesley, who appears for the applicants, has said, the principles upon which this question is to be determined are not in issue. If upon the material before it this court perceives that it would be unjust to an appellant that an appeal should be stayed or dismissed despite non compliance with an order made by the court this court may exercise a discretion in favour of the appellant if it is appropriate to do so taking account of the legitimate interests of the respondent whilst insisting of the importance of adherence to orders made by this court.

6 The Court is required to determine what in its opinion is the just way in which the discretion should be exercised. This would involve the weighing up of the extent to which the appellants would be prejudiced by leaving the appeal to stand as though stayed and any prejudice to the respondent to the appeal by ordering that the stay be lifted.

7 As Mr Messer frankly acknowledges the respondent to this application does not concede that it would be prejudiced by a lifting of the stay save potentially as to a question of costs, but he submits that the reasons advanced by the applicants for failing to comply with the orders were unreasonable and for that reason this court should insist upon compliance with its orders and refuse the application. Reliance is also placed upon the history of these proceedings to which only the briefest reference need be made.

8 It is submitted on behalf of the respondent that the conduct of the applicants during the course of the proceedings in the County Court betrayed, it was submitted, a degree of nonchalance to the litigation. The applicants, despite having solicitors on the record, were unrepresented at mediation and following mediation solicitors for the applicant continued to act for them until shortly prior to trial but at trial the applicants appeared unrepresented in the proceedings.

9 Speaking for myself, it seems difficult to draw any hard conclusions from the history of proceedings particularly as no additional detail has been provided in support of those submissions by either party. In my view having regard to all of the circumstances the appropriate course for this court to follow is to accede to the application and lift the stay which has been imposed as a consequence of the orders pronounced on 27 November 2009. I would lift the stay and I would vary the order permitting security for costs to be paid into court on or before 29 January 2010.

11 Are there any submissions the parties want to make in respect to the question of costs?

12 In my submission the applicant ought pay the respondent's costs. The applicants breached an order, seeks an indulgence and the usual course should follow in my submission.

14 Not with any great force, your Honour. The only thing that I can say is that the respondents did say that if the costs were paid by 28 January then they would not make an application to have the stay, seeking enforcement. That's the highest I can put it. It's effectively a consent that they be paid by 28 January so that we did do that and now they are here opposing the application.

16 I don't agree with that characterisation. What happened was my instructing solicitor wrote to his opposite number and said unless you pay by tomorrow an application will be made to dismiss the appeal for want of prosecution. The appeal

was by then stayed. In essence what my instructor said was you do something by tomorrow or we'll make our own application. That did not indicate that if an application was made to vary the order that it would be consented to, by no means.

17 I don't put it that high, your Honour. I simply say that they said if we do it by a certain date then they won't be seeking to take those steps to strike out the appeal. We did it by that date and they've now come along today to oppose the automatic stay that was imposed by the court, and we say that's not (indistinct) to do that.

18 In view of the fact that there is a disagreement between counsel as to the nature of any agreement that was reached it seems to us that it is inappropriate to act upon the assertions on one side that are made from the Bar table. In those circumstances the application having been necessitated because of non compliance by the applicants with an order of the court we consider it appropriate that the applicants pay the respondent's costs of this application. The orders of the Court will therefore be as follows:

1. The appeal be no longer stayed by reason of the appellant's failure to comply with paragraph 2 of the orders made on 27 November 2009;
2. The time for payment into court of $27,500 as security for costs of the appeal pursuant to the said paragraph 2 be extended to and include 28 January 2010;
3. 3. The applicants pay the respondent's costs of this application.

19 It's just a question of what becomes of the proceeding now. It needs to go for directions. The proceeding is to be referred to Associate Justice Lansdowne for directions, I think we're agreed about that.

20 Yes. I don't think that would require any order or direction by us.