20 What then of the three points now raised by the applicant?
21 There is presently no application to set aside the two orders for further security for costs made on 14 February 2007. Rather, there is an application for an extension of time within which to appeal from those orders. There is no evidence explaining why the applicant did not appeal within the time allowed, having been granted leave to appeal on 19 February 2007. The applicant was represented at the time those orders were made. As I have said, there is no explanation for the very lengthy delay. Nor is there any suggestion in the submissions as to why the orders made were wrong, or even why there is any real prospect of them being set aside on appeal.
22 In my view, in addition to the unsatisfactory and unexplained delay in securing any response from Deumer Asia, the letter from Deumer Asia does not have the effect for which the applicant argued.
23 In that context, it is appropriate to refer to the letter from Deumer Asia of 15 July 2007. One of the reasons why the further security for costs orders were made on 14 February 2007 was that the applicant had not indicated that it could or could not get the support of Deumer Asia to maintain the proceedings, even though Deumer Asia would be likely to be the principal, if not the only, beneficiary of any award for damages if the applicant succeeded in its claim. At some unspecified time, but I infer in the weeks preceding 15 July 2007, the applicant apparently requested Deumer Asia to support the applicant by contribution or indemnity with respect to costs. There is no indication that the support sought was limited only to meet the orders for further security for costs, that is an additional $100,000. There is no indication that Deumer Asia was given any information as to the prospect of success or as to the likely award of damages. All that is apparent is that Deumer Asia was told that it would recover amounts owing by the applicant to Deumer Asia in the sum of $1.3 million if the proceeding was successful, but would otherwise be unlikely to recover any such debt. The applicant has not chosen to expose what it conveyed to, or sought from Deumer Asia other than that it "assist" with the proceeding. I am not prepared to infer that Deumer Asia was asked only to provide $100,000 to cover the amounts of the further security for costs orders of 14 February 2007. Nor am I prepared to infer that Deumer Asia was given such appropriate information upon which it could make an informed commercial decision.
24 Moreover, Deumer Asia simply responded that it cannot accede to the request but will be forced to write off "the debts". In other words, if the proceedings do not proceed, it acknowledges that it will be unable to recover its debt from the applicant. It does not say that if the proceedings continue and the applicant is successful it will waive the debt. I reject the contention that there is a substantial change in circumstances revealed by the letter from Deumer Asia to the effect that the applicant could proceed to recover damages based on potential sales of the 450,000 key rings without having now to account to Deumer Asia, or in any other way.
25 In my view, apart from it becoming clearer that Deumer Asia would not generally fund proceedings, the applicant has not shown that it has made a cogent and sensible approach to Deumer Asia for it to support the proceedings by presenting a limited claim for financial support (sufficient to meet the requested security for costs only), and by explaining anything about the nature of the action or its prospect of success.
26 Importantly, for the purposes of the application for a further extension of time within which to appeal, I do not think that a letter of such generality without more is sufficient to indicate that Deumer Asia has received a detailed and properly constructed request for financial assistance and has declined it so that the principal creditor who will mainly benefit from the proceeding, if it is successful, has declined to support the proceedings and as a result the proceedings will be stultified. Its letter is far too general for that. Moreover, even if such a request had been made and declined, the position would be that Deumer Asia (which stands to gain principally, if not exclusively, from the proceeding depending upon the amount of damages recovered if the applicant succeeded) would not be prepared to support the further prosecution of the claim even to the relatively modest amount of the further security for costs orders in relation to the quantum of the claim. That reinforces one of my reasons for making the further security for costs orders on 14 February 2007.
27 Accordingly, subject to considering the applicant's second and third contentions, I am not persuaded that it should be granted a further extension of time within which to appeal from the further security for costs orders made on 14 February 2007. In brief, it has not explained the delay satisfactorily at all. It has not demonstrated any relevant significant change in circumstances, even if the Deumer Asia letter of 15 July 2007 were to be permitted to be adduced in evidence on the appeal (as to which see e.g. Council of the City of Greater Wollongong v Cowan (1955) 93 CLR 435 at 444). It has not explained, in any event, why that letter could not have been procured much earlier. It has not sought to have the security for costs orders discharged. It is clearly, and admittedly, unable to pay the further security for costs orders and will be unable to meet any costs of the respondents if the matter proceeds to hearing and the applicant is unsuccessful.
28 Nor has any reason been identified of any substance as to why the orders of 14 February 2007 for further security for costs might be set aside on appeal. There is no draft notice of appeal, nor anything identifying error.
29 The second matter argued by the applicant relates to matters taken into account when the further security for costs orders were made. It is not a new argument. It is discussed in Cosdean (No 2) [2007] FCA 163 at [12] - [14].
30 Both the second and third matters argued by the applicant go beyond the evidence on the motion and rely upon certain evidence at the hearing and certain proposed evidence. It is fundamental to those contentions that the applicant, in the period 1 April 2006 to about 30 July 2006, would have been able to pay for the second tranche of key rings from sales of the first tranche of 50,000 key rings, and/or from other resources, and would have been able to sell by retail or wholesale most of the key rings. It is not at all clear that either of those premises is correct. The evidence showed that the applicant had sold under half of the first tranche of 50,000 key rings in the period 1 April 2006 to the commencement of the conduct complained of on 25 May 2006, despite its very extensive efforts to do so. The sales to that date had not generated anywhere near sufficient funds to pay for the second tranche (or some of it). It had no other funds, other than borrowed funds, to do so. The fact that its sales had been so low, and that there was a significant period between payment and delivery was likely to mean that the further key rings would have been available for sale only in about mid-June 2006, even if the applicant could have paid for the 350,000 key rings which had been ordered and which, by about 21 May 2006, were ready for dispatch. Having regard to the sales to 25 May 2006, even allowing for increasing public interest as the World Cup became closer and occurred, the prospect of a very dramatic upturn in sales in that period is not immediately attractive. That is the more so having regard to the evidence about the efforts to market the key rings through member or associated clubs of the respondents prior to 25 May 2006, and that the interest of such clubs was neither consistently positive nor likely to generate large sales of key rings, at any one particular club. On the evidence, the sales strategy of the applicant through member or allied clubs of the respondents was close to its last ditch plan after several other plans had been tried and had not resulted in significant sales.
31 Moreover, the contention asserts that sales of the first tranche would in part have funded the balance of the key rings. As the sales of almost half of the first tranche to 25 May 2006 had not put the applicant in a position to do so, it must be referring to the balance of the first 50,000 key rings. On its best case, those sales would have taken place in June 2006. The surplus funds generated may, therefore, not have been available to fund the second tranche or the part of it comprising 350,000 key rings at a point in time which was early enough to ensure the availability of that second tranche or part of it at the critical time prior to and during the World Cup. The balance of the second tranche, namely 100,000 key rings had not been ordered and, as the evidence showed, with a considerable period between order and availability of the first tranche and of that part of the second tranche comprising 350,000 key rings, it may be doubted that they would be available at or before the World Cup.
32 The alternative asserted funding source of finance is supported only by a statement of a proposed witness. It is a conditional rather than an absolute offer of finance. It is not clear that the requirements of the potential financier would have been satisfied. It was at a usurious rate of interest. The applicant also asserts the willingness of Deumer Asia to provide the applicant with "as much assistance as was reasonably possible", based upon the witness statement of Johan Conze of Deumer Asia. The nature of that assistance is not identified. The decision of Deumer Asia regarding the provision of assistance in relation to this proceeding, so far as it is apparent on the material on the motion, is discussed above.
33 In my view, the second and third matters raised by the applicant may be seen as errors asserted by the applicant in the making of the further security for costs orders on 14 February 2007. Otherwise, they are simply an attempt to re-argue matters which have already been argued. I shall also therefore consider whether those matters might demonstrate some arguable prospect of success if an extension of time to appeal from those orders were granted. I do not think these matters demonstrate a relevant mistake of fact in considering the potential award of damages, in considering the capacity of the applicant to fund the second tranche of key rings as discussed in Cosdean (No 2) [2007] FCA 163at [12] - [14]. Nor do I think that they otherwise provide an arguable basis for error from the discretionary judgment to impose the further security for costs orders upon the applicant: See House v The King (1936) 55 CLR 499 at 504 - 505.
34 For those reasons, I do not consider that the applicant should be granted a further extension of time within which to appeal from the further security for costs orders made on 14 February 2007, or from the order presently staying the proceeding until the further security for costs was paid, made on 19 February 2007.
35 I am further of the view, having regard to the conclusion I have reached that there should be no extension of time within which to appeal from the further security for costs orders, and having regard to the accepted inability of the applicant to comply with those orders by providing further security for costs, that the orders made on 17 May 2007 should not be discharged. The applicant is faced with further orders for security for costs. It cannot satisfy them. It acknowledges that. The proceedings have been permanently stayed. In those circumstances, nothing has been shown to indicate that the orders dismissing the proceedings against each of the respondents were inappropriate in the first place, or should now be discharged.
36 For those reasons, the orders sought on the applicant's notice of motion of 23 July 2007 are refused. The applicant should pay to each of the respondents their costs of that motion. I also now discharge the order which I made further extending the time to a date to be fixed by which the further security for costs should be paid, pending the hearing and determination of the applicant's motion. Out of an abundance of caution I will further extend the time by which the applicant should pay the security for costs specified in Order 1 of the order of 17 May 2007 to 30 November 2007. The intent of that order is that, if the further security for costs is not then paid by that date, the proceedings against each respondent will be dismissed.