Ecap Finance Pty Ltd v Ottoway Engineering Pty Ltd

1. The application for an interlocutory order that the trial listed in proceedings SAD90 of 2016 commencing on 14 March 2017 be vacated and not relisted until after judgment on the appeal be dismissed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

WHITE J 1 The applicants seek leave to appeal against the judgment of Besanko J delivered on 30 January 2017: Ottoway Engineering Pty Ltd v Westpac Banking Corporation (No 2) [2017] FCA 39. By that judgment, Besanko J dismissed an interlocutory application filed on 19 December 2016 by which the applicants, who were not parties to the underlying proceedings, sought two substantive orders: first, that the first applicant be joined as a second respondent and that Troy James Millen and Kelly Jean O'Brien be joined as third respondents in the underlying proceedings and, secondly, that an injunction granted by his Honour on 30 March 2016 and extended on 2 June 2016 (Ottoway Engineering Pty Ltd v Westpac Banking Corporation [2016] FCA 635) be dissolved. 2 The formal order made by Besanko J on 30 January 2017 was that the interlocutory application dated 19 December 2016 be dismissed. In addition, his Honour reserved the question of costs. It can be taken that by the formal order, his Honour dismissed, at the least, the application for both substantive orders sought in the interlocutory application of 19 December 2016. The applicants' draft Notice of Appeal indicates that they seek leave to appeal against the "judgment" of Besanko J and does not distinguish between the aspects of the interlocutory application which were dismissed. 3 Section 24(1AA)(b)(i) of the Federal Court of Australia Act 1976 (Cth) has the effect that the applicants have no right of appeal against the dismissal of their application for joinder. At best, and subject to a grant of leave, they may be able to appeal against the dismissal of their application for the dissolution of the interlocutory injunction. Counsel for the applicants has confirmed this afternoon that the proposed appeal is confined to this aspect of the judgment of Besanko J. 4 The application for leave to appeal has annexed to it, in the usual way, a draft Notice of Appeal. The applicants have not yet had leave to file that draft notice of appeal and so strictly speaking, it was not necessary for the Court to bring on the application for interlocutory relief which the applicants included in the draft notice of appeal. Nevertheless, given that the applicants indicated that they sought an urgent hearing of that aspect of the interlocutory relief, the Court listed the matter for directions this afternoon and so as to give the applicants the opportunity to make the application for an interlocutory order that the trial in the proceedings at first instance, scheduled to commence on 14 March 2017, be vacated and not be relisted for hearing until after judgment on the applicants' appeal. 5 Counsel for the applicants has advanced a number of submissions this afternoon in support of that aspect of the interlocutory relief sought. The first was to indicate that the applicants have reasonable grounds to pursue on appeal if leave is granted. The second matter was an appeal to case management principles. Counsel submitted that it would be inappropriate for the trial to proceed in tandem with an appeal proceeding before the Full Court. The third matter was an absence of prejudice to either of the parties in the proceedings at first instance if the adjournment is allowed. 6 I am prepared to assume, for this afternoon's purposes and without expressing a view one way or the other, that the applicants have standing to bring the application for leave to appeal. I am also prepared to assume for this afternoon's purposes, and again without expressing any view about the matter, that the applicants do have at least some grounds of appeal which may be reasonably arguable. Despite making those assumptions in favour of the applicants, I am not prepared to accede to the application that the Court presently make an order vacating the trial scheduled for 14 March 2017. A number of matters indicate to me that it would be inappropriate to do so. 7 Accepting that the applicants do have standing to bring their application for leave to appeal, it remains, to my mind, a significant fact that the application for the vacation of the trial is made by persons who are not parties to those proceedings. Not only that, those persons have not made an application for an adjournment of the trial to the Judge who has the conduct of the matter at first instance. There may be cases in which it would be appropriate for the Court exercising its appellate jurisdiction to make an order vacating a first instance trial, but the circumstances in which the Court will consider it appropriate to do so, without an application having first been made to the trial Judge, are likely to be rare and exceptional. The present circumstances are not of that kind. 8 I regard it as particularly pertinent that, not only have the applicants not made any such application to the trial Judge, but, in answer to an inquiry from him as to how they contemplated participating in the trial if leave to be joined as parties was granted, they indicated, at least in substance, that it would be by way of making submissions in the trial itself. 9 I take into account that, at the moment, the Court has before it only an application for leave to appeal. Leave has not yet been granted. The application for leave to appeal is yet to be heard and it is not clear when that will be able to occur and nor is it clear when the decision on the application for leave to appeal will be given. It is not as though the Court can proceed on the basis that this is case in which an appeal will proceed. 10 There may be some force in the point which the applicants have made by reference to case management principles, but those principles also favour the Court presently not interfering with the trial arrangements. The trial, I am told, has been listed for four days and was so listed in November 2016. The time and the resources of the Court have been set aside for that trial. At this stage of proximity to the trial, it is to be expected that the parties to the proceedings have also allocated time and resources to the anticipated trial and are at a stage of detailed preparation. It would be inconsistent with ordinary notions of case management for these arrangements to be interrupted with the consequence that much of the work done to date may be wasted. 11 Coupled with that is a question of delay. Besanko J recorded in the reasons of first instance that Mr Millen, one of the applicants, became aware of the injunction on 8 June 2016 and yet there was no interlocutory application seeking the dissolution of the injunction until 19 December 2016. There is no evidence as to when Mr Millen became aware of the trial, but it seems reasonable to assume that a person who is aware that an interlocutory injunction has been issued would anticipate that there may be an imminent trial. In that circumstance, the absence of any explanation for the delay until 13 February 217 in filing an application for the trial to be vacated is, to my mind, significant. 12 Contrary to the submission made on behalf of the applicants, I do not accept that the Court can be satisfied that the vacation of the trial would not occasion prejudice. I put to one side prejudice that might be occasioned by wasted work and the needless expenditure of costs. Prejudice of that kind may be able to be accommodated by an appropriate order for costs. However, it is not difficult for the Court to infer that Westpac, which is the subject of the interlocutory injunction restraining it from enforcing a guarantee, may suffer prejudice by reason of a delay in the determination of whether it can do so. It is also reasonable, I consider, to infer that Ottoway, the applicant in the proceedings below, may at the very least suffer prejudice by an extension of the period to which their undertaking as to damages will relate. 13 I take into account the matter which counsel for Westpac pointed out, namely, that subject to the grant of the leave of appeal and the outcome of the ultimate appeal if leave is granted, the vacation of the trial would have the effect that the period during which the interlocutory injunction will operate will be extended. That would occur in a circumstance in which, by reason of the refusal of the applicants' application for joinder they cannot be heard on the question of whether or not that injunction should, or should not, be made permanent. There is an incongruity in that. There also seemed to be an assumption implicit in the applicants' submissions that, if the trial proceeds, judgment will be handed down at its conclusion thereby rendering an appeal nugatory. One cannot exclude that as a possibility, but ordinary experience in litigation indicates that a more probable course is that following the four day trial, judgment will be reserved and that some time may elapse before Besanko J will deliver judgment. 14 The matters I have just mentioned indicate that the application for vacation of the trial should not succeed. It is accordingly unnecessary to address the other matters raised by the respondents to the interlocutory application. 15 For the reasons I have just given, the application for an order vacating the trial listed before Besanko J on 14 March 2017 is refused. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice White.