IDOPORT PTY LTD v NATIONAL AUSTRALIA BANK LTD & ORS; IDOPORT PTY LTD v ARGUS; IDOPORT PTY LTD v NATIONAL AUSTRALIA BANK LTD & ORS

IDOPORT PTY LTD v NATIONAL AUSTRALIA BANK LTD & ORS; IDOPORT PTY LTD v ARGUS; IDOPORT PTY LTD v NATIONAL AUSTRALIA BANK LTD & ORS - [2002] NSWCA 271 - NSWCA 2002 case summary — Zoe

[10]

Overview of proceedings 7 The substantive proceedings are vast by any measure. 8 The "Main proceedings" (No 50113/98) were commenced in September 1998. The "Argus proceedings" (No 50026/99) were commenced in March 1999. The hearing started in July 2000, being a trial as to liability and damages. A third proceeding (No 3991/98, known as the "MLC proceedings") was commenced in September 2000 and, from its inception, it was heard concurrently with the other two proceedings. 9 Opening submissions by both sides took 57 hearing days. The current statement of claim in the "Main proceedings" runs to 232 pages. Hundreds of witness statements have been served. There have been at least 25 contested interlocutory applications. The transcript is roughly 15,000 pages. When the proceedings were stayed finally on 1 December 2001, the trial was on its 222nd day of hearing. It was estimated that they were likely to continue until at least late 2003 even if uninterrupted. 10 The damages claimed against the Bank are US $29.3 billion, a sum exceeding the bank's market capitalisation. Similar damages are claimed against the individual defendants and those claims involve serious allegations of misconduct. The causes of action include claims of breach of contract, procuring and inducing breach of contract, breach of fiduciary duty and threatened participation in the same, unjust enrichment and under the Trade Practices Act 1974 (Cth). 11 By the end of 2001 the Bank's estimated costs of the proceedings were in excess of $60 million ([2001] NSWSC 1081 at [97]). 12 Cross-examination of the appellant's witnesses commenced in March 2001. Significant credit issues will need to be resolved by the trial judge. 13 The burden upon judge, legal practitioners and the Court generally of managing and determining proceedings of such immensity is manifest. The significant case management difficulties are documented in the judgment of 26 November 2001, the reasoning of which was specifically incorporated into the judgment under appeal (see [2001] NSWSC 1081 at 40-41).

[12]

The orders provided that the proceedings were to be stayed in the event of non-payment. 19 On 17 October 2001 Market Holdings was removed as a party in the Main and Argus proceedings on the motion of its liquidator. 20 The appellant failed to make the payment of security in the MLC proceedings by the due date. Accordingly, as from 1 November 2001 the MLC proceedings were stayed. In the other two proceedings only the first monthly payment was made on 1 November 2001. 21 On 13 November 2001 the defendants filed a motion seeking dismissal of the MLC proceedings. 22 On 26 November 2001 Einstein J rejected the plaintiff's application to vacate the orders for security for costs; adjourned the proceedings generally until 29 January 2002; adjourned to 29 January 2002 the defendants' application to dismiss the MLC proceedings; and gave detailed directions that included leave to the defendants to file a notice of motion returnable on 29 January 2002 seeking that the other proceedings also be dismissed. There were also directions for the service of evidence relating to the foreshadowed dismissal orders. 23 In granting the limited adjournment, Einstein J noted the very significant problems for the ongoing conduct of the proceedings which would be caused by any lengthy adjournment. He made it clear that the Court would not lightly countenance further adjournments (see [2001] NSWSC 1081 at 49ff, 104). Of particular relevance to the present appeals are his reasons at [49]-[50]: 49 The short point which I see as unarguable, is that to grant the plaintiff's application for the adjournment and to make ancillary orders staying until further order, the orders of the Court for the provision of security for costs made on 24 September 2001 (or by whatever route, to procure an adjournment of the final hearing until some time in February of next year) will cause very considerable inconvenience and additional costs to the defendants and will present a number of extremely difficult problems in relation to the ongoing case management of and hearing of the final proceedings. These problems include the uncertainty as to: (1) the amount of court time which a continuance of the hearing would require; and (2) when the final hearing could practicably resume following a new regime in terms of directions. 50 The problems concerning the situation with respect to the Court are very real for a number of reasons. Special arrangements have obviously had to be made to make one of the three Commercial List judges available to hear the final hearing over the last 18 months and available to be in a position to continue that hearing through the whole of next year and quite probably thereafter until its conclusion. Those arrangements have included use of the Technology Court with its ancillary complex document management facility…. The short point is that uninterrupted use of the Technology court cannot of course, be taken as a given, where other pending litigation may require use of that Court room with its special facilities. 24 By 1 December 2001 the Main proceedings and the Argus proceedings were also stayed as a result of the plaintiff's failure to pay the security due by that date. 25 The defendants filed motions for dismissal and supporting evidence in accordance with the directions. The plaintiff did not. Despite having been directed to serve its evidence by 24 January 2002 it did nothing until 29 January 2002, i.e. the adjourned hearing date and return date of the motions for dismissal. On that day it filed an affidavit by Mr McConochie, one of its directors. 26 The plaintiff unsuccessfully sought an adjournment. The motions were heard and determined that day. The formal orders were:

[77]

To my mind Idoport has been given the last two months to place its funding house in order. The November judgment represented a standing back from the minutiae and a concerted effort, albeit at high expense, of halting, for Idoport's assistance, every step then in place for the regular continuance of the final hearing. Even if the proceedings were now re-enlivened upon immediate payment of all outstanding amounts due under the security for costs orders, it would take probably months before the Court could expect the defendants to be ready to continue the final hearing. The whole of the momentum of the final hearing reached by late November last year simply stopped in mid air from one moment to the next. This meant that many steps then in the course of being taken in a particular order, ceased. Witnesses who had been planned to be called in late November and early December had to be put off . A United Kingdom witness, Mr Hume, whose personal convenience had led to special steps for him to be given what amounted to a 'special fixture' for the taking of his evidence, could no longer be cross-examined early in the new term. Important questions in terms of the testing of the Court's order for the appointment of an examiner were not able to be dealt with. And in all of this one has to recall that these are commercial proceedings being heard in the commercial list which naturally strain the ability of the Court to deal with other cases. Notwithstanding that fact, any suit for an amount exceeding the capitalisation of what is probably the largest bank in this country has to be given very special attention. And a suit in which Idoport (and originally Market Holdings) made very serious claims generally outlined in the interlocutory judgment delivered in mid 1999 required and received very special attention from the Court. But the courts resources are not unlimited. A stop-start regime in litigation of this order cannot generally be permitted. The many reasons include the complexity of the issues. As earlier stated the current transcript covers over 15,000 pages. The number of witnesses anticipated to be called, the number of statements filed, the complexity of the issues to be dealt with and the general nature of those issues which include for example a patent suit in which United States patent law requires to be proven and understood, all serve to make the point that the final hearing cannot stop and start and stop again, certainly for very long. It should also be recalled that the Technology Court is being used for the final hearing. An outside Project Manager has been appointed. The funding difficulties have meant that Idoport has ceased to pay, as I understand it, the Project Manager. An independent Court Reporting company has been responsible for producing the transcript. The funding difficulties have meant that Idoport has ceased to pay, as I understand it, that Court Reporting company. Reference was made in paragraph 116 of the November judgment to the point made by McHugh J in Oshlack v Richmond River Council (1998) 193 CLR 72 and 97 in terms of the importance that a party contemplating litigation, [or, as here, contemplating continuing the current mammoth final hearing], be under a sober realisation of the potential financial expense involved in that exercise.

[81]

Some general considerations concerning the relevant power to dismiss 31 The written and oral submissions of the appellant were effectively prefaced by reference to general principles touching access to justice and a proper exercise of discretionary powers to dismiss proceedings otherwise than on their merits. It was submitted that the learned primary judge had overlooked these issues or at least failed to give them sufficient weight. 32 Reference was made to the overriding purpose of the Supreme Court Rules to facilitate the "just, quick and cheap" resolution of the real issues in civil proceedings (Part 1 r1.3). In the present case this injunction clearly cuts both ways, for reasons which are developed below. 33 From this uncontroversial starting point we were taken to Lord Woolf's interim and final reports on Access to Justice and the discussion of the requirements which should be met in a civil justice system to ensure that goal. Particular reference was made to the basic principle that litigants have an equal opportunity, regardless of their resources, to assert or defend their legal rights. This principle may readily be acknowledged, but so too should the other desiderata stated in Chapter 1 s3 of the Interim Report, which should be set out in full: 3. In considering the problems of the civil justice system I have had in mind the basis principles which should be met by a civil justice system so that it ensures access to justice: (a) It should be just in the results it delivers. (b) It should be fair and be seen to be so by: - ensuring that litigants have an equal opportunity, regardless of their resources, to assert or defend their legal rights; - providing every litigant with an adequate opportunity to state his own case and answer his opponent's; - treating like cases alike. (c) Procedures and cost should be proportionate to the nature of the issues involved. (d) It should deal with cases with reasonable speed . (e) It should be understandable to those who use it. (f) It should be responsive to the needs of those who use it. (g) It should provide as much certainty as the nature of particular cases allows. (h) It should be effective : adequately resourced and organised so as to give effect to the previous principles.

[83]

Again, the citation is very selective. Reference should be made to the whole of Section 1 par 9 for a full survey of Lord Woolf's "new landscape". 36 The appellant is drawing a long bow in invoking the Access to Justice reports as the springboard for the criticism of the judgment below. I readily accept that the appellant lacked the ready access to the vast financial resources of the respondent bank, even taking account of the appellant's litigation funders. But the immensity of its claims (which in terms of damages exceed by many times the total market capitalisation of the bank) takes the present litigation well outside the type of situation contemplated by Lord Woolf when he spoke of unequal litigants. The respondent bank and the respondent individuals who were also sued for comparable sums were fully entitled to defend themselves with all the means at their disposal, subject to their own duties as litigants and the duties imposed upon their legal representatives to conduct the litigation in a proper manner. 37 The second broad reason why reliance upon Lord Woolf's reports is inapt is that (to put the matter at its lowest) the appellant has simply not demonstrated that the respondents' conduct of the litigation was the effective cause of the appellant's funding difficulties. It is sufficient to draw attention to the immensity of the three cases instituted by the appellant (measured for example by the size of the pleading and the number of statements relied upon filed by the appellants themselves), the extent of the late amendments to the appellant's pleadings and the pattern of procedural defaults quite apart from those associated with the orders for payment of security for costs (see Main proceedings WB 5/1154-5, MLC proceedings WB 4/1158). 38 One aspect of the appellant's invocation of access to justice jurisprudence was its subliminal criticism of the orders for payment of security for costs themselves. These orders were not and are not the subject of any appeal. Nevertheless, there were hints that they were oppressive, and references to the situation that might have prevailed were the appellant other than a corporation. But it needs reiteration that the appellant is a corporation, not a natural person. Like its predecessors stretching back to the mid nineteenth century, the Corporations Act exposes a plaintiff corporation to the risk of security for costs if there is good reason to believe that it may be unable to pay costs at the end of the day. This is part of the legislative package that includes the privilege of limited liability. 39 In Rugby Union Players Association Inc v Australia Rugby Union Ltd (SCNSW, 50225/96, unreported, 30 July 1997) Giles CJ Com Div described the rationale behind the exceptions to the general rule that the impecuniosity of a plaintiff should not be a ground for making an order for security for costs. This general rule is well established at common law in relation to natural persons: Cowell v Taylor (1885) 31 Ch D 34, Melville v Craig Nowlan & Associates Pty Ltd (2002) 119 LGERA 186 at 192-3, 212-3, 223. Giles J explained why corporations are different, when he pointed out the injustice: … that those who will benefit from success in the proceedings, as shareholders in or creditors of a corporation or as third parties for whose benefit the plaintiff (whether a natural person or a corporation) sues, should be able to litigate and expose the defendant to the risk of irrecoverable costs while themselves shielded, by reason of the interposition of the impecunious plaintiff, from the burden of an adverse order for costs.

[85]

The power under Part 53 Rule 4 41 The appellant accepted that the power of dismissal conferred by Pt 53 r4 arises, in terms, when there has been breach of an "order" for payment of security. 42 This power is distinct from the power to dismiss for want of prosecution or for default in procedural directions (Part 33 r6). Of course, a failure to pay security may be evidence of the former and accompanied by the latter. 43 The appellant submitted that breach of an order for payment of security is categorically different from default in compliance with procedural directions or the due prosecution of litigation, at least as regards the weight or force with which the discretionary power of dismissal is engaged. It was said that an impecunious litigant in default of an order for security is different to a litigant delinquent in complying with procedural directions. I find it unnecessary to reach a concluded view on this interesting topic of comparative forensic obloquy. For one thing I see no appealable error in the general way in which Einstein J addressed the ultimate issue. It is not suggested that the factors that he took into account were extraneous to the proper exercise of the power. 44 I content myself with remarking that the distinction sought to be drawn becomes increasingly illusory if one examines the impact of the defaulting plaintiff's conduct upon the other party and the proper conduct of the litigation itself. Whatever the cause of default, the capacity for disruption to the administration of justice is the same; in either situation, the court is required to weigh up the actual impact of the plaintiff's "default" (whatever its nature) as part of the calculus for determining whether it is appropriate to exercise the power of dismissal in the particular circumstances. 45 Somewhat at variance with this isolating approach to Pt 53 r4, the appellant sought to have the Court apply by analogy various principles touching the power to dismiss proceedings for want of prosecution. The appellant submitted that:

[90]

48 The appellant submits that Einstein J erred in failing to give due weight to the relative shortness of the period of default having regard to the immensity of the past investment in the litigation and the issues at stake in the appellant's claims. It was said to be no real answer to show that the appellant had been on notice of the application for dismissal for a period of two and half months. The appellant thought that it was entitled to certain funds held in an account up until the time when this belief was dashed by the judgment of Palmer J on 24 December 2001. Thereafter the difficulties were exacerbated by the Christmas break. 49 Einstein J did not overlook these matters, nor did he fail to give them due weight. 50 The appellant had been on notice of the threat that security might be ordered from the beginning of 2001. This must have conveyed awareness of the likelihood of consequential orders for stay and subsequent dismissal. 51 The clearest of warnings and explanation were given in November. There is no minimum period established by legislation, rules or practice within which an application for dismissal might be made following default in compliance with an order for payment of security. No judicial discretion is uncontrolled, but it is common ground that the discretion to dismiss conferred by r4 is a broad one, unfettered by any express limitations (see Microbio Resources Inc v Betatine Ltd unreported, FCA (Full Court), Black CJ, Sheppard and Einfeld JJ, 8 October 1993, Asian Investments Corporation Ltd v Symons (SC(NSW), unreported, Young J, 10 April 1996), Billinudgel Pastoral Co Pty Ltd v Westpac Banking Corporation FCA, (1998) unreported, Cooper J). There is no written or unwritten minimum time, although I would accept that something more than a technical or accidental default is required. 52 The circumstances of the present case cried out for resolution having regard to the huge difficulties that would ensue if the proceedings adjourned to the beginning of 2002 would be unable to recommence at about the start of that new term. And the probability that things were not likely to change was established to Einstein J's satisfaction. 53 On the evidence, the appellant is not in a position to suggest that the judgment of Palmer J in Idoport Pty Ltd v Efficiency Investment DV [2001] NSWSC 1197 came like a bolt out of the blue. Subject to any appeal, it must be taken to have vindicated the (absence of any) right to further funding from that particular source. In any event, as the respondents point out, the appellant's claims in that litigation would not have yielded the requisite level of funding to meet the security for costs orders even if the appellant had succeeded. Furthermore, since no appeal from Palmer J had been instituted or even foreshadowed by 29 January 2002, Einstein J was perfectly entitled to proceed on the basis that that door was firmly shut. 54 These complaints are particularly lacking in merit when it is recognised that the appellant's submissions of 15 November 2001, opposing the defendants' then motion to dismiss the MLC proceedings, contained the following: 12. It is submitted that the appropriate period of grace in the present case, given the nature and extent of the case, where an explanation has been provided such as that referred to … above, should be at least 3 months. 13. It is submitted that an order for dismissal of the proceedings in three months is appropriate if the security fo costs outstanding is not provided.

[97]

Ground 1(b): Failure to take into account that as recently as 5 October 2001 his Honour had declined an application made by the Defendants for a 12 month adjournment of the proceedings. 61 The submission that the primary judge placed undue emphasis upon the defendants' prejudice is also raised as this separate ground of appeal. 62 On 5 October 2001 Einstein J dealt with several notices of motion (see [2001] NSWSC 868). These included motions by the plaintiff for leave to amend its pleadings and for case management directions, and motions by the defendants for leave to file additional technical reports and for case management directions. One of the defendants' claims was for the adjournment of the main proceedings and the MLC proceedings for 12 months. The defendants' solicitor, Mr Lovell, explained the basis for this "suggested way forward" at pars 189-200 of an affidavit sworn on 26 September 2001. 63 The appellant submits that the respondents' willingness to seek such a lengthy adjournment should have been borne in mind by Einstein J when he came to address the dismissal application the following January. It is submitted that a prolonged interruption would not have had the significant problems for the case that were relied upon by his Honour in support of the decision to dismiss the proceedings rather than allow the stay to continue. 64 This criticism of the dismissal orders should be rejected on a number of grounds. 65 In the first place, the defendants' application in September/October 2001 was based upon particular difficulties that had arisen at that stage of the trial. They are spelt out in detail in Mr Lovell's affidavit. The problems were related to the way the plaintiff was conducting the trial, including problems stemming from late applications to amend and late changes in previously agreed arrangements as to the order of witnesses. 66 Second, the defendants did not press their application for an adjournment in September/October, when a proposal was put forward by the plaintiff which appeared to alleviate the difficulties inherent in the ongoing conduct of the litigation. The proposal emerged during the argument on the motions when, in the words of Einstein J ([2001] NSWSC 868 at 70): …. It became reasonably clear to both parties that the adjournment being sought by the defendants had little chance of success and that the Court's specific interest was in endeavouring to closely examine the best use of hearing time so as to permit the continued final hearing to go forward ….

[99]

Ground 1(a): Failure to take account of the irreparable prejudice caused by dismissal, especially in relation to the claims under the Trade Practices Act 69 This is the ground that initially troubled me. 70 Einstein J said: No issue estoppel or res judicata 56. A dismissal under Part 52 of the Rules will not, in law, shut out the plaintiff from commencing fresh proceedings relating to subject matter of the proceedings dismissed. No issue estoppel or res judicata arises. As the defendants point out Part 40 Rule 8 of the Rules permits new proceedings to be commenced in circumstances such as the present. A dismissal, of itself, will not shut Idoport out from litigating an issue which is fairly arguable (see, for example, Queensland v J. L. Holdings Pty Ltd at 154). A dismissal merely provides certainty to a defendant when proceedings have been stayed. 71 The pleaded claims included allegations of misleading and deceptive conduct contrary to the Trade Practices Act 1974 (Cth) and the Fair Trading Act 1987 (NSW). These were said to have occurred in July-September 1996 in the course of negotiations leading to the entry into certain transactions by Mr Maconochie and Market Holdings Pty Ltd (Fourth Further Amendment Statement of Claim s9). The pleaded representations were said to be of continuing operation (s10). In reliance upon them Mr Maconochie and Market Holdings are said to have entered into various Agreements and to have caused the plaintiff to have done likewise (s11). The plaintiff also pleads detrimental reliance by entry into a September 1996 Agreement (s12). The plaintiff and Market Holdings claimed damages (s56). 72 The appellant correctly points out that, if and when fresh proceedings are commenced, they would be statute-barred having regard to s82(3) of the Trade Practices Act and s68(2) of the Fair Trading Act. The primary judge did not consider this particular aspect of prejudice to the plaintiff. Indeed, it is arguable that he decided to the contrary in J56 quoted above. 73 The respondents seek to meet the argument by showing that only the Trade Practices/Fair Trading causes of action are affected; and by pointing to the plaintiff's allegations of continuing representations occurring after September 1996. No such claims are pleaded in the MLC proceedings. These factors reduce the scope of the plaintiff's complaint, but do not remove it altogether. 74 The respondents also submit that, as this issue was not raised by the plaintiff on 29 January, his Honour cannot be criticised for not taking it into account. The affidavit of Mr Maconochie and the written submissions signed by him, each of 29 January 2002, are silent on this matter. The appellant's retort is that neither Mr Maconochie nor the junior counsel retained on 29 January in an unsuccessful attempt to get an adjournment should be faulted for not having thought of the point: it was up to Einstein J to do so if he was to consider all matters relevant to the discretion to dismiss. 75 The respondents' rejoinder is that this is not enough to show error in the exercise of a discretion. The appellant's rights do not rise and fall depending on whether or not it is legally represented. The respondents also point to evidence and arguments that could possibly have been raised at first instance had the point been taken (CA Tr pp45-6. Cf Multicon Engineering Pty Ltd v Federal Airports Corporation (1997) 47 NSWLR 631 at 645). They cite a passage in the judgment of Heydon JA (with whom Sheller JA and Studdert J agreed) in Micallef where he said (at [83]): … while it is legitimate to criticise a primary judge considering a discretionary judgment for not understanding matters of which he had been informed, it is not legitimate to criticise a primary judge for not taking account of matters not drawn to his attention. If there was some inadequacy in the primary judge's understanding because of what he had not been informed of by the plaintiff's representative, it was not an inadequacy of which the plaintiff can complain on appeal.

[102]

Appeal dismissed with costs. 85 STEIN JA: I agree with Mason P. 86 GILES JA: Subject to what follows, I agree with the reasons of Mason P. 87 Ground of appeal 1(a) was that Einstein J failed "to take into account the irreparable prejudice caused by dismissal, especially in relation to the claims under the Trade Practices Act". The irreparable prejudice on which the appellant relied was that in any fresh proceedings the appellant would be met with a defence that its claims of misleading and deceptive conduct in the period July to September 1996 were out of time. 88 The misleading or deceptive conduct alleged in the period July to September 1996 is the making of various representations. The pleading of that misleading or deceptive conduct is found in the Main proceedings. The convoluted pleadings in the Argus proceedings may take it up, but it is not found in the MLC proceedings. The loss or damage alleged in the Main proceedings, apparently taken up in the Argus proceedings, is that the appellant would not have entered into a number of agreements but for the representations and that it suffered "loss of opportunity of making profits being the loss of the opportunity of making profits by exploiting and/or disposing of the AUSMAQ Service and the AUSMAQ IP to a party other than NAB or NMG". 89 Three matters should be noted. 90 First, the appellant put forward claims of misleading or deceptive conduct otherwise than in the period July to September 1996, not only by alleging that the representations in question were continuing representations but also by alleging further and later misleading or deceptive conduct. The appellant also put forward claims of breach of contract, breach of fiduciary duty and unjust enrichment. Depending on when any fresh proceedings were commenced, the appellant could be met with defences that these other claims were out of time. The appellant did not rely upon that as irreparable prejudice. Even in the appeal, therefore, prejudice caused by dismissal was selectively formulated. 91 Secondly, the claims of misleading or deceptive conduct in the period July to September 1996 would be out of time if the appellant's cause or causes of action accrued more than three years before the commencement of the fresh proceedings. The cause or causes of action would not accrue until the suffering of loss or damage. As consideration of cases such as Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 shows, it is by no means obvious that the loss or damage alleged was suffered in or about September 1996. When any loss or damage was suffered would depend upon how the appellant put its case and the evidence it led. It may not have been suffered until long after September 1996: when it was suffered could be a complex issue. 92 Thirdly, the appellant accepted in the appeal that its proceedings could not be "allowed to drift on indefinitely": in substance, its position was that Einstein J should have declined to dismiss the proceedings on 29 January 2002 and should have given the appellant something like a further three months to obtain funding. It is evident that a similar approach of a period of grace of the order of three months was the context of the hearing before Einstein J, and it is worth repeating from the appellant's submissions of 15 November 2001 opposing the application to dismiss the MLC proceedings - "12. It is submitted that the appropriate period of grace in the present case, given the nature and extent of the case, where an explanation has been provided such as that referred to … above, should be at least 3 months. 13. It is submitted that an order for dismissal of the proceedings in 3 months is appropriate if the security for costs outstanding is not provided."

[103]

The quality of the irreparable prejudice on which the appellant relied is inextricably bound up with the prospect of the appellant obtaining funding, since if the appellant would not obtain funding before dismissal was on any view warranted no prejudice would be caused by immediate dismissal. 93 In these circumstances I do not think it was incumbent on Einstein J to seek out for himself, from the complex pleadings and speculating how the appellant relevantly put its case of suffering loss and damage, prejudice from any claims of misleading or deceptive conduct in the period July to September 1996 being out of time in any fresh proceedings. Particularly is that so when his Honour found that the prospect of the appellant obtaining funding was remote, see - "50. The absence of reliable evidence from Idoport as to its ability to further fund its actions, the expected length of the final hearing which will clearly run until at least the end of 2003, and the estimate by Idoport's parent company Negubo that Idoport requires $21,520,000 in order to fund the prosecution of its claims at first instance to finality provides powerful support for the proposition that on the evidence presently before the Court, Idoport has no real prospect of being able to fund the continuance of the proceedings at first instance to finality. Whilst arguably the Court may not be entitled to now require Idoport to identify otherwise than in broad generality , precisely where when and how it proposes to secure this dimension of funding, the Court is entitled in considering Idoport's past and continuing failure to honour the security for costs orders, to take into account the seemingly dismal if not altogether hopeless position facing Idoport in terms of its ability to fund the proceedings at first instance up to conclusion. At least bearing in mind the immediate history and the scale of the proceedings and the courts list, the Court is entitled at this stage in these proceedings to require to be reasonably satisfied that Idoport has in place at least some program having some prospect of success in terms of funding arrangements. In fact Idoport has simply not shown that it can realistically continue the final hearing. To the contrary the funding problems appear to remain pervasive. Mr Maconochie's affidavit, to which I have already referred, gives the Court no assurance with sufficient precision of any reliability in Idoport's prospects of success in terms of funding arrangements. These matters can be taken into account in the exercise of the Court's discretion to presently dismiss the proceedings." 94 It follows, in my opinion, that the appellant can not complain that Einstein J failed to take into account, as a relevant matter, the irreparable prejudice raised in ground of appeal 1(a). His Honour was not asked to take it into account, and in the circumstances it was not a matter calling for his attention of his own motion. I do not think that, in what he said concerning issue estoppel and res judicata, his Honour denied any limitations prejudice; whether there might be prejudice in that fresh proceedings alleging misleading or deceptive conduct in the period July to September 1996 would be out of time was not in issue, and was (and is) not self evident. 95 I am prepared to accept that ground of appeal 1(a) warrants the grant of leave to appeal, but I am not as troubled by it as Mason P. There is in any event some unreality in the ground. When the appeal was heard in late July 2002 the appellant was in no better position to fund the proceedings than as found by Einstein J. If the appellant had been given something like a further three months, even four or five months, to obtain funding, there was no evidence to suggest that it could have done so. It was said from the bar table that obtaining funding for the dismissed proceedings was more difficult than obtaining funding for current proceedings, but that also was without evidence and one would think that funding would be on condition that the dismissal was overturned and unaffected by the passing status of the proceedings. At least retrospectively, it is difficult to see that there was the irreparable prejudice required for ground of appeal 1(a). 96 I agree with the orders proposed by Mason P. **********

At a glance

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Judgment (104 paragraphs)

Legislation Cited (2)

Cases Cited (20)