International Sports Marketing Pty Ltd v Oasis Development Corporation Pty Ltd

PARTIES: SECOND RESPONDENT: Bulldogs Sport and Community Foundation Ltd

THIRD RESPONDENT: Gary John McIntyre

FOURTH RESPONDENT: Bulldogs Rugby League Club Ltd

FIFTH RESPONDENT: Bulldogs League Club Ltd

CORAM: Boland J President; Walton J Vice-President; Haylen J

CATCHWORDS: APPEAL - s 106 application - continuing failure of applicants to comply with case management orders - self-executing order dismissing application avoided by new timetable to file evidence in reply - new timetable subject to further self-executing order to dismiss application - applicants make enquiries as to time by which affidavits be filed - wrong information passed to applicants - affidavit filed one day out of time required by Court's order but within time wrongly advised to applicants - applicants seek to vary timetable for filing affidavits after self-executing order operative - application refused - appeal against decision not to extend timetable for filing of affidavits in reply - failure to consider facts material to exercise of discretion - extension of time by one day ensures evidence in matter completed and matter ready for trial - justice between the parties paramount consideration - no real prejudice to respondents - dismissal of s 106 application a disproportionate punishment - leave to appeal granted - appeal upheld - time of filing affidavits in reply extended by one day - appellants' concession as to costs of appeal - respondents to receive reasonable costs of appeal

LEGISLATION CITED: Industrial Relations Act 1996

Hoser v Hartcher [1999] NSWSC 527 House v The King (1936) 55 CLR 499 International Sports Marketing Pty Ltd and anor v Oasis Development Corporation Pty Ltd and ors (No 4) [2008] NSWIRComm 202 CASES CITED: Jorgensen v Slater & Gordon Pty Ltd [2008] VSCA 110 Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274 Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 Re Jokai Tea Holdings Limited (1993) 1 All ER 630 Western Sydney Area Health Service v Gibson (2001) 109 IR 359

APPELLANTS: Mr R Goot SC and Mr A Britt of counsel SOLICITORS: Jordan Djundja Mr J Jordan LEGAL REPRESENTATIVES: RESPONDENTS: Mr M J Kimber SC SOLICITORS: CLAYTON UTZ Mr J Catanzariti

CORAM: BOLAND J, President WALTON J, Vice-President HAYLEN J 18 March 2009

Matter No IRC 2162 of 2008 INTERNATIONAL SPORTS MARKETING PTY LTD AND ANOR v OASIS DEVELOPMENT CORPORATION PTY LTD AND ORS

Application by International Sports Marketing Pty Ltd for leave to appeal and appeal against a judgment of Justice Marks given on 29.10.2008 in Matter No IRC 3558 of 2003` JUDGMENT OF THE COURT [2009] NSWIRComm 34

1 International Sports Marketing Pty Ltd and Achilles Constantinidis have sought leave to appeal and to appeal against a decision of Marks J given on 29 October 2008 declining to extend time for the appellants to file an affidavit in reply in s 106 proceedings. His Honour took that course against a background of continued breaches of the Court's directions by the appellants, culminating in directions that the appellants file their evidence in reply within a nominated time frame with a self-executing provision such that failure to do so would result in the application under s 106 being struck out with costs. The appellant failed to file all their affidavits in reply within the stipulated time frame. His Honour dismissed the further application seeking to vary the self-executing order by extending it by one day, with his Honour declining to take that course. 2 In order to properly consider the merits of the appeal it is necessary to trace the course of the proceedings and the appellants' numerous defaults, described by his Honour in his judgment of 29 October 2008 as a "chronic continuing failure to comply with the orders of this Court". The application for orders under s 106 of the Act was filed on 27 June 2003. His Honour, in a judgment in June 2006 dealing with an earlier strike-out application, described the proceedings as arising out of a claimed contractual relationship between the appellants on the one hand and Oasis Developments Corporation and the Bulldogs Sports and Community Foundation on the other hand. The relationship concerned a proposal for the development of certain property consisting of a sporting, residential and commercial complex within an area administered by Liverpool Council, known as the Oasis Development. The appellants alleged that they were to provide services to the respondents, including consultancy services. The termination of that agreement resulted in the appellants originally seeking the payment of over $2.3 million plus costs and interest. 3 In the June 2006 judgment his Honour noted that, as early as 14 November 2003, the then respondents (others having since been added) sought orders seeking to dismiss the proceedings for want of prosecution. A change in solicitors led to steps being taken to prosecute the proceedings and by April 2004, the proceedings had been amended to include additional respondents, namely, the Bulldogs Rugby League Club Ltd and the Bulldogs League Club Ltd. Interlocutory matters were dealt with by Kavanagh J who conducted conciliation and in late November 2004 issued a certificate of unsuccessful conciliation. Kavanagh J directed the appellants to file and serve any amended summons for relief by the end of February 2005 and to serve further affidavit material to be relied on by the end of March 2005. By consent, on 4 March 2005, the timetable was extended such that any amended summons was to be filed by the end of March 2005 with all affidavits to be filed by 2 May 2005. 4 On 22 April 2005 the timetable was further extended to allow for any amended summons to be filed by the end of July 2005 with all affidavits to be filed by 9 September 2005. The Court was advised that Mr Constantinidis' illness meant that he had been unable to finalise instructions regarding the amended summons for relief and his affidavit. The Court was informed at various stages of Mr Constantinidis' condition. The appellants filed a further amended summons for relief on 1 August 2005. By this stage the proceedings had been placed in the Court's Directions List and there were a number of hearings in that List. 5 Towards the end of 2005, solicitors for the appellants contacted the respondents' solicitors and indicated that ASIC had commenced an investigation into Oasis Development and this had hindered the preparation of Mr Constantinidis' affidavit. It was his view that he should refrain from swearing his affidavit until he was aware of ASIC's attitude and in particular, whether ASIC would commence criminal proceedings against him. The appellants therefore sought the respondents' consent to stay the proceedings until the ASIC investigations were completed, but this proposal was rejected. In late November 2005 the appellants filed a notice of motion seeking a stay of proceedings stating, inter alia, that: the appellants had lodged a complaint with the Legal Services Commissioner claiming that the respondents' solicitors had a conflict of interest and that the resolution of that complaint would take some time and that the proceedings should not progress until that conflict of interest had been determined; Mr Constantinidis and others were currently under investigation by ASIC; and, that the appellants had not had access to documents formerly held by Liverpool Council, presumably because they were with ASIC and the appellants needed access to those documents to finalise their affidavits. 6 The appellants' notice of motion was set down for hearing in early February 2006 but could not be heard on that day because the appellants did not have available certain evidentiary material. During discussion with counsel, it apparently became clear that, in order to advance the conflict of interest claim, the appellants would need to file a notice of motion and affidavit in support so that all of the evidentiary material about that particular issue could be properly examined. The proceedings were adjourned to allow a notice of motion and other material to be filed and a late May 2006 hearing date was set down to deal with all interlocutory matters. The appellants were ordered to file their affidavit material in support of the notice of motion within one month of that date. 7 The appellants failed to file any notice of motion within the time set. The proceedings came on for directions in late March 2006. At that hearing counsel for the appellants was unable to "proffer any explanation as to the reason for the delay". On 24 March 2006 the respondents filed a notice of motion seeking to have the proceedings dismissed for want of prosecution. This motion was based on the failure of the appellants to file any affidavit material in support of the notice of motion anticipated to be filed (but as yet unfiled) and set down for hearing on 26 May 2006. 8 On 2 May 2006 an affidavit of Mr Constantinidis was filed dealing with the conflict of interest issue. The notice of motion to which that affidavit supported was filed on 5 May 2006. The notice of motion asserted that the respondents' solicitors had initially been instructed by the appellants to act for them in connection with the Oasis Development and they had access to sensitive financial and legal records of the appellants and should therefore be restrained from continuing to act for the respondents in the proceedings. 9 Both notices of motion came on for hearing on 26 May 2006 and, by agreement, it was decided that the respondents' notice of motion seeking to strike out the proceedings for want of prosecution should be heard and determined first, notwithstanding the other notice of motion potentially left the respondents' solicitors to be removed from the proceedings because of alleged conflict. 10 In the course of the strike-out proceedings, Mr Constantinidis gave evidence about his ill health which he said had deteriorated significantly from late 2004. During late 2005 he spent time in hospital and in late May 2006 he was to undergo medical investigation. He stated that his ill health had deprived him of the ability to participate in the ASIC investigation in a timely fashion and hampered his ability to prepare his affidavits in the present proceedings, including meeting with his solicitors as required. A medical certificate dated late May 2006 was before the Court expressing the opinion that Mr Constantinidis' health was poor and that he required urgent medical attention, but there was no indication as to what extent Mr Constantindis' suffering from various medical conditions impacted upon his ability to instruct his solicitors in preparation for the trial. In cross-examination, Mr Constantinidis accepted that his health problems did not preclude him from swearing his affidavit in late May 2006 nor did they motivate him to seek a delay in the proceedings. When asked why he had not filed affidavit material in support of the substantive proceedings and in support of interlocutory proceedings within the time fixed by the Court, Mr Constantinidis responded that he had told his solicitor that he would not be able to comply with the timetable and had expected his solicitors to advise the Court. He also continually referred to the ASIC investigation, his state of health and blamed his legal representatives for failure to comply with the Court's timetable. 11 After addressing the relevant authorities, Marks J noted that those authorities required the circumstances of each proceeding to be considered. In the present proceedings it was clear that the appellants had continually been in breach of orders of the Court and that neither Mr Constandinidis nor, apparently, his solicitors, appeared to have expressed any particular concern about the breach of orders made by the Court and the consequences of those breaches. Mr Constantinidis was cross-examined about this matter and, in summary, his attitude seemed to be one of getting the proceedings ready as and when he could without any necessary reference to any particular timetable. His Honour was not satisfied that the appellants had done everything that could reasonably be required of them to obtain the documents from ASIC. He could not accept Mr Constandinidis' explanation that he was concerned that, if he issued a summons to ASIC to produce those documents, it might be a reason for ASIC to institute a criminal prosecution against the appellants. The excuse concerning the non-availability of documents from Liverpool City Council did not stand scrutiny as the appellants had access to those documents. As to the assistance given by Mr Constantinidis to ASIC 's investigation of the first and third respondents since late April 2005, his Honour regarded this evidence to be "of a most nebulous and unhelpful kind". There was no evidence concerning the amount of time involved in this work nor was there any evidence as to how those activities precluded Mr Constantinidis in assisting the appellants' solicitor in preparing the necessary affidavit evidence. It was now understood that Mr Constantinidis' involvement with ASIC's investigation was completed and should no longer impact upon the preparation of the applicant's affidavit evidence. In relation to Mr Constantinidis' poor health, Marks J noted that the assertions made were "of a most general kind" and were "unhelpful in assessing whether and to what extent the various ailments and complaints from which Mr Constantinidis claimed to suffer impacted upon his ability to assist the preparation of the affidavit evidence". 12 Marks J concluded that, although the considerations were finely balanced, the appellants had failed to furnish such evidence as may assist the Court in understanding and appreciating the reasons advanced by way of explanation for the delay in the proceedings and their impact upon the ability of the appellants to prepare their affidavit material. However, his Honour was satisfied that the stage had not yet been reached where it could be confidently said that there was no, or little, prospect that the appellants would take no further steps in the preparation of their case. Although noting the comments made by the Court concerning Mr Constantinidis' inactivity and his attitude to the proceedings, it was clear that there had not been sufficient effort and commitment by the appellants to appropriately prosecute the proceedings. His Honour referred to the well-established principle that Courts were obliged to act vigorously and proactively in the case management of proceedings. The appellants were directed to file and serve within 28 days a proposed timetable outlining the date upon which they expected that their affidavit material would be filed. They were to take such other steps as required to issue process for the production of documents in order to complete their affidavits. If the timetable was acceptable to the Court and the respondents and subject to liberty to apply, the appellants were to be bound to adhere to it. In particular, Marks J noted that, if the appellants or their solicitor became aware of any circumstances that could cause a failure to comply with the timetable and when the matter was listed for directions, the appellants' solicitor was required to personally exercise the liberty to apply and would be expected to supply the Court with an appropriate explanation and if necessary, verified by Mr Constantinidis' affidavit. The appellants were reminded that any such affidavit needed to avoid the deficiencies referred to earlier in the judgment. Marks J then stated: [50] Less there be any doubt in the minds of the appellants or their solicitor from the tenor of these directions, they should assume that the Court will intend keeping a close watch on the course of the proceedings as part of the case management function. 13 The next reported judgment dealing with the case management of the proceedings was delivered by Marks J on 15 July 2008. In that judgment his Honour noted that, on 9 April 2008, he completed the hearing of a motion filed by the respondents to have the proceedings dismissed because of the appellants' failure to file any affidavit material in reply. The appellants had filed their evidence-in-chief in December 2006 and the respondents' evidence was filed by 12 July 2007. Since then the further progress of the proceedings had awaited the appellants' affidavits in reply. In an ex tempore judgment delivered that day, Marks J ordered that the second appellant file and serve all affidavits on which he sought to rely as evidence in reply in the proceedings on or before 4 June 2008 and ordered that the proceedings be dismissed unless that affidavit material was filed within that time. Leave was granted to the second appellant to apply for an extension of time or to vary the order provided that application to do so was filed prior to 4 June 2008 or the respondents' consent had been obtained prior to that date. Any application to vary the order was required to be made by way of motion, either by the second appellant or his legal representatives, supported by affidavit evidence demonstrating any then unforseen circumstances. These orders were made by consent. The time therefore fixed for the filing of the appellants' affidavits in reply was a period of approximately eight weeks. 14 On 4 June 2008, the appellants forwarded a facsimile to the Court with a copy to the respondents' solicitors. A copy of a medical report accompanied that facsimile. The appellants' solicitors had been instructed that their client had suffered "a serious motor vehicle accident on 15 May 2008". As a result, their client had suffered breathing difficulties and was in extreme pain. The accident had been reported to the police. As a further result, Mr Constantinidis had not been able to complete his affidavit in reply. It was anticipated that the affidavit would be completed on or by 10 June 2008. The solicitor apologised for the inconvenience and stated he was happy to have the matter relisted on short notice to formally advise the Court if, in the circumstances, that was believed to be appropriate. 15 The medical report appeared to have been sent by facsimile on 20 May 2008 and stated that Mr Constantinidis had been examined on 19 May 2008. It was stated that he was suffering from injuries sustained "from an alleged motor vehicle accident on 15 May 2008". He had complained of severe chest wall pain, had been referred for an X-ray to exclude any fracture and alternatively, he was suffering a soft tissue injury to his chest wall. This created some breathing difficulties and extreme pain and he had also sustained direct trauma to his left knee. He was declared unfit from 19 May 2008 for three weeks and would be reviewed within that period. 16 The respondents thereafter exercised the liberty to apply provision in order to have the Court determine the question of costs on the basis that the proceedings had been dismissed as a result of the Court's prior order. On 24 June 2008 the appellants filed a motion to vacate the 9 April 2008 orders. At the hearing of that motion on 27 June 2008, counsel for the appellants said they would be in a position to complete the filing of their affidavit material in reply by 11 July 2008, a period of 14 days from the date of the hearing of the motion. 17 In his affidavit on this last motion, Mr Constantinidis spoke about the seriousness of the accident and how it had aggravated conditions from his previous accident. He said he had been bedridden for approximately three weeks and as at 23 June 2008 he was spending at least 70 per cent of his time recovering in bed. After the accident he had moved from his residence to Windsor to live with his sisters so they could look after him. He continued to suffer from mild pain to the left side of his chest, had difficulty breathing and had continuous pain in his left knee and left shin muscles. The pain had only recently subsided to the point where he could sit up in bed or sit at a desk and read documents to finalise the affidavits in reply. Because of this great pain and suffering he was unable to leave his sisters' house and had been unable to attend a conference with his solicitor or counsel to complete the affidavits in reply. Because of his pain he was unable to have the medical report forwarded to his solicitors until 3 June 2008, in the late afternoon. In oral evidence, Mr Constantinidis said that he had not obtained any medical treatment prior to attending the doctor on 19 May 2008 and the X-ray undertaken did not reveal any fracture. He had not sought any further medical treatment and had not returned to see the doctor. Marks J noted that, from the doctor's address, Mr Constantinidis had travelled on 19 May 2008 either from his home in Stanmore or from Windsor to attend the surgery at Coogee for the purpose of the medical examination. 18 When Mr Constantinidis was asked what steps, between 9 April 2008 and 15 May 2008, he had taken to prepare his affidavits in reply, he said that during this period he went through the affidavits in detail and made notes, had made enquiries of the bank's credit officers to obtain certain documents and had contacted other people. His Honour noted that, prior to 9 April 2008, it was clear from this evidence that Mr Constantinidis had not really commenced the preparation of any affidavit material in reply. There was no evidence from that time until 15 May 2008 to suggest that either Mr Constantinidis personally or through his solicitors, had advanced the preparation of the affidavits in reply in any meaningful sense. His Honour also noted that, in explaining the delay prior to 9 April 2008, the applicant had said that it was partly as a result of severe illness and other issues and partly because certain documents had gone missing when he had moved home and had stored them in a factory premises. The appellant had prepared an affidavit in reply to three affidavits that had been filed in May 2007 by the respondents. That affidavit in reply was sworn on 26 June 2008 and was described as being essentially 12 pages consisting predominantly of denials of certain material in each of the respondents' affidavits. Other than the contents of each affidavit, there was no reference to any particular documentation. Marks J noted that, while it was difficult to assess the amount of time that might properly be expended in preparing an affidavit in reply of the kind filed by Mr Constantinidis, he was unable to discern why it could not have been prepared shortly after each of the affidavits were filed in May 2007. 19 After addressing the relevant principles, Marks J made a number of observations. Firstly, Mr Constantinidis had failed to comply with a consent order, in its totality, and such non-compliance would have to be regarded as serious. The seriousness of that failure may have been ameliorated by the late preparation of one affidavit in reply. There was some doubt concerning the nature and extent of the injuries suffered by Mr Constantinidis and their effect on his ability to prepare his affidavit material in reply. The medical report was non-specific and it was not clear what Mr Constantinidis was unfit to do. The failure to adduce sufficiently specific medical evidence concerning the nature and extent of the injuries and the manner and extent to which he was disabled as a result of those injuries and the duration of any disability made it difficult to assess the validity of the reasons given for non-compliance. On balance, Marks J was unable to conclude that Mr Constantinidis had not established that his preparation of the affidavit material in reply was affected to some extent by the consequences of the motor vehicle accident. Further, while there was a history of delays in the preparation of the appellants' case, it was obvious that Mr Constantinidis would be severely prejudiced if the proceedings were dismissed because he would be time-barred from re-commencing the proceedings. There did not appear to be any particular prejudice accruing to the respondents if the proceedings were permitted to continue. 20 Marks J did note that the question of the authority of the Court was one that had created the most difficulty for him in determining the outcome of the interlocutory proceedings. In earlier judgments he referred in clear terms to the necessity for Mr Constantinidis to comply with the orders of the Court in the preparation of his case. Further, on 9 April 2008 when the consent order was made, the Court had made it clear that Mr Constantinidis was required to give notice of any matter which might impact upon his ability to file evidence and the ability of the respondents to deal with it, as soon as possible. Despite the accident occurring on 15 May 2008 and despite Mr Constantinidis' ability to attend the medical practitioner on 19 May 2008 and although he was in receipt of a medical report on 20 May 2008, no attempt was made to communicate any difficulty in complying with the order of the Court until 4 June 2008. Marks J noted that it was arguable that Mr Constantinidis did not appear to be diligently applying himself to compliance with any aspect of the orders made by the Court. The authority of the Court was an important matter because it was an integral part of the efficient and effective administration of justice. 21 Having canvassed these matters against the relevant authorities his Honour then stated: [22] On balance, having regard to the circumstances which attach to this interlocutory application and having regard to each of the six matters of principle to which I have referred, it is arguable that Mr Constantinidis should not have the benefit of any further exercise of discretion in his favour. However, there is, in my opinion, one final matter that allows the scales to be tipped ever so slightly in favour of the grant of a further indulgence to Mr Constantinidis. That is, that through his counsel he has agreed that any further extension of time will be limited to a period of 14 days. It is this matter and this matter alone that on balance has persuaded me to accede to the application made by Mr Constantinidis. ... [24] I make the following orders: 1. The appellants' affidavit evidence in reply to the affidavit of Gary John McIntyre, sworn 12 July 2007, must be filed by 4pm 15 days from this date (the date of this judgment being counted for this purpose) in default of which the proceedings brought by the appellants under s 106 of the Industrial Relations Act 1996 will stand dismissed with costs. ... 22 The judgment with which this appeal is concerned was delivered by Marks J on 29 October 2008, (International Sports Marketing Pty Ltd and anor v Oasis Development Corporation Pty Ltd and ors (No 4) [2008] NSWIRComm 202). In that judgment his Honour dealt with the appellants' application to vary the previous orders by extending the time limit by one day for the filing of affidavits in reply. In that judgment his Honour referred to the appellants being "guilty of a chronic continuing failure to comply with orders" of the Court. He referred to the consent orders made on 9 April 2008 requiring the appellants to file affidavit material in reply on or before 4 June 2008 on the basis that a failure to comply would result in the proceedings being dismissed. It was noted that the appellants failed to comply with that order and in a judgment given on 15 July 2008 the Court ordered that the appellants' affidavit evidence be filed by 4.00 pm 15 days from that date, with the date of that judgment being counted for that purpose and in default of which the proceedings would stand dismissed with costs. His Honour referred to extending a "further leniency" to the appellants and stated that the effect of the judgment was that, unless the appellants' affidavits were filed by 29 July 2008 at 4.00 pm, the proceedings would stand dismissed. The appellants had filed one affidavit on 28 July 2008 and purported to file another affidavit on 30 July 2008, one day late. His Honour stated that the period of 15 days had been fixed because the appellants' counsel had agreed that they would be in a position to file their affidavit material within a period of 14 days - "it was that matter and that matter alone that persuaded me to exercise the Court's discretion in favour of the appellants". The affidavit filed on 28 July 2008 was sworn on 26 June 2008, was 13 pages long, consisting mostly of rebuttals. The affidavit sworn and filed on 30 July 2008 was 25 pages long, had no attachments and a large part of it concerned rebuttals and responded to an affidavit of Gary John McIntyre sworn on 12 July 2007. 23 His Honour recorded that the appellants now sought a further leniency be extended to them. It was not seriously argued by their counsel that the time for compliance was other than 29 July 2008 at 4.00 pm but they relied on the exercise of a discretion, moving on an affidavit sworn by a paralegal employed by the appellants' solicitors. In that affidavit the paralegal said she had been contacted by Mr Constantinidis on 29 July 2008 at approximately 10.00 am and asked that she telephone the Court registry to find out when the affidavit in reply had to be filed. In her affidavit, the paralegal stated that she telephoned the registry and was advised by a female person that, in calculating the time for compliance with the Court's order, weekends were included and that the affidavits had to be filed by a time she understood to be 30 July 2008 at 4.00 pm. The paralegal then left a telephone message to that effect for Mr Constantinidis. The paralegal also said that, on that day, she was not able to speak to the solicitor for the appellants as he was away from the office on a family holiday and she did not know how to contact the counsel briefed in the matter. 24 Marks J then considered the authorities he had previously referred to in order to determine this further application by the appellants. His Honour proceeded to consider the seriousness of the non-compliance, the reasons proffered for non-compliance, the history of delay or breach of the orders, the prejudice to the respondents from permitting the proceedings to continue and the authority of the Court. 25 In relation to these matters his Honour regarded the non-compliance as serious. He stated there was no evidence of any steps taken by the appellants to comply with the order for filing the final affidavit material other than a telephone call, by a paralegal in the appellants' solicitor's office, on the last day of compliance. There was no explanation as to what steps were taken in the interim to ensure compliance where, through their counsel, the appellants had contended that a period of 14 days only was necessary for the preparation of the evidence. All of this was considered against the background "of the sorry history of these proceedings". 26 His Honour then said that no reason for non-compliance had been proffered other than a request for information about the last day for compliance made in a telephone conversation by a paralegal and an assertion that incorrect information was furnished by a member of the Court's registry staff. Assuming that, as asserted by the paralegal, the staff member had sought advice from the legal department of the registry, it could not be said that advice from the registry staff could in any way be understood to represent the "definitive exposition" of the effect of an order of the Court. This was a matter upon which the appellants' solicitors or counsel should have been asked to advise but there was no evidence of any such advice being proffered. 27 In relation to the history of delay, the previous judgments of the Court were referred to. His Honour expressed the view that the delay and prosecution of the proceedings by the appellants was "appalling" with a consistent history of breaching orders of the Court. 28 In relation to prejudice to the respondents, his Honour noted that the respondents had participated in a number of interlocutory applications seeking to have the proceedings struck out. They had already succeeded on one occasion only to have a further indulgence granted to the appellants and the respondent parties therefore suffered the burden of a contingent liability and of course, incurred legal costs. Assuming that it was appropriate to do so, it was in their interests that the proceedings be brought to finality. There was no other evidence of further prejudice to the respondents. 29 In relation to the authority of the Court, his Honour stated that, if the Court continued to permit the appellants to breach orders that had been made and extended even greater indulgence to the appellants, it must seriously bring into question the authority of the Court to make orders in connection with the case management process that would have some relevance to the conduct of the parties in the proceedings. His Honour accepted that case management was, in itself, not an end and courts should be slow to seek to enforce orders merely for the sake of demonstrating the power of the court to make those orders. Nevertheless, if the case management process was to operate effectively for the just, quick and cheap disposal of proceedings some rigour needed to be exercised to ensure compliance except where circumstances warranted the grant of some indulgence. 30 His Honour then expressed his conclusion in the following manner: [10] In my opinion, the appellants could have been under no misapprehension as to the effect of the last order made by me on 15 July 2008. In circumstances where there is no evidence of any steps taken by the appellants to comply with that order prior to 29 July 2008 and no reason advanced as to why the order could not have been complied with by the date and time so limited and, given the sad and sorry history of these proceedings, I am not prepared to extend any further indulgence to the appellants. Accordingly, the application for further time in which to comply with the order of 15 July 2008 is refused. I reserve the costs of this interlocutory application and grant liberty to apply in connection therewith.

CONSIDERATION 31 There was no debate between the parties that this was an appeal against a discretion exercised by a judicial member of the Commission. In such circumstances the appellants had to demonstrate a relevant error, namely, that the Court below acted upon a wrong principle, allowed extraneous or irrelevant matters to guide it, was mistaken as to the facts or did not take into account a material consideration. However, the Full Bench of the Court on appeal was not able to simply substitute its own conclusion for that expressed by the Judge at first instance (see House v The King (1936) 55 CLR 499 at 504-505; Western Sydney Area Health Service v Gibson (2001) 109 IR 359). Should relevant error be identified, the appellate court may exercise its own discretion, should leave to granted. 32 It is clear from the extracts and the summaries of the judgments leading to the particular judgment appealed against that his Honour, in concluding that he would not vary his previous order, had referred to matters and principles that were relevant to that task including the judgments in Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274 at [45]; and in Hoser v Hartcher [1999] NSWSC 527. 33 In the course of his judgment in Micallef, Heydon JA, in dealing with the vicarious attribution of default by the plaintiff's solicitor to the plaintiff, at [49] said: In Stollznow v Calvert at 751-752 the Court of Appeal quoted approvingly an observation of Walsh JA in an earlier decision of that court, Witten v Lombard Australia Ltd (1968) 88 WN (Pt 1) (NSW) 405 at 412: It is, of course, proper to consider whether any explanation or excuse has been offered for the delay, and whether any explanation or excuse that has been offered is credible and satisfactory.

In paragraph [51] his Honour referred to the judgment of Moffitt P in Stollznow at 751-752 where he approved the principles stated by Walsh JA in Witten stating: The view I have stated was well expressed by Walsh J when a member of this Court, in Witten v Lombard Australia Ltd. Having made reference to earlier local authority and to English authority, including the decision just then given in the Court of Appeal in Allen v Sir Alfred McAlpine & Sons Ltd [[1968] 2 QB 229], Walsh J said: … a balance must be struck as between the plaintiff and the defendant and, in the end, 'the court must decide whether or not on balance justice demands that the action should be dismissed He further said the exercise of the Court's discretion should not be fettered 'by rigid rules', but required 'a decision to be reached, upon a balance of the relevant circumstances'. It is of assistance to quote at length what he ultimately said: Everything must depend upon the circumstances disclosed in each particular case. It is, of course, proper to consider whether any explanation or excuse has been offered for the delay, and whether any explanation or excuse that has been offered is credible and satisfactory. It is proper to consider whether or not there is evidence of particular prejudice to the opposing party by reason of the delay. When all relevant factors have been taken into account, a decision is then to be reached as to the manner in which the discretionary power should be exercised. ... 34 At paragraph [63], Heydon JA then referred to the following passage in the joint judgment of Dawson, Gaudron and McHugh JJ in Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 at 155: Justice is the paramount consideration in determining an application such as the one in question. Save as in so far as costs may be awarded against the parties seeking the amendment, such an application is not the occasion for the punishment of a party for its mistakes or for its delay in making the application. Case management, involving as it does the efficiency of the procedures of the court, was in this case a relevant consideration. But it should not have been allowed to prevail over the injustice of shutting the applicants out from raising an arguable defence, thus precluding the determination of an issue between the parties. In taking an opposite view, the primary judge was, in our view, in error in the exercise of her discretion . 35 It is significant that in considering the prejudice to the appellants and to the respondents, his Honour did not consider and weigh the surrounding circumstances, namely that, except for this last affidavit in reply, whether it was appropriate to leave the guillotine order effective when one further affidavit in reply had been filed arguably within time and a further affidavit in reply (described as being largely "in rebuttal") was only one day out-of-time. No consideration appears to have been given to whether any other appropriate course was available, including to simply decline to accept the affidavit filed out-of-time and there was no discussion as to what prejudice might flow from such a course and whether or not the existing affidavits for the appellants effectively joined issue with the respondents. 36 In considering what reasons had been advanced for non-compliance, his Honour referred to the fact that no reasons had been proffered "other than a request for information about the last day for compliance" being a telephone enquiry made by a paralegal from the appellants' solicitor's office. His Honour noted that incorrect information was furnished by a member of the registry staff. His Honour then said that, even assuming the registry member had sought advice from the registry's legal department as asserted in the affidavit by the paralegal (Ms Mott), it could not be said that advice from the registry staff could in any way be understood to represent a definitive exposition of the effect of an order of the Court. His Honour further noted this was a matter upon which the applicant's solicitor or counsel should have been asked to advise and there was no evidence that such advice was proffered. Although recording these matters, his Honour concluded: "The circumstances where there is no evidence of any steps taken by the applicants to comply ... and no reason advanced as to why the order could not have been complied with. ... I am not prepared to extend any further indulgence to the applicants". 37 It was quite appropriate and understandable for his Honour to raise the lack of involvement in this process by the appellants' legal advisors but the circumstances set out in Ms Mott's affidavit put that in context, as did the discussion before his Honour in relation to the appellants' motion. It was clarified in discussion before his Honour that the appellants' solicitor was not just absent on a family holiday but was in fact staying in Greece. Ms Mott's affidavit was read without objection and she was not cross-examined. Her affidavit contained what she described as a contemporaneous file note recording the effect of her enquiry to the registry about the last day for filing and receiving erroneous information that the last day for filing was the day on which the appellant's second affidavit in reply was in fact filed. Ms Mott stated that she did not know how to get in touch with counsel about that matter (and in any event, she had been called and asked to make an enquiry of the registry in order to ascertain the correct date). This evidence, that was not called into question, showed the nature of the difficulty of receiving advice from the appellants' solicitors and counsel. 38 While electing not to cross-examine Ms Mott about this affidavit, the respondents were content to submit that there was no evidence of what had occurred in the previous ten days in order to have this now critical time limit met by the appellant. It was submitted that the application for a further indulgence was breathtaking and that the appellant had many indulgences granted to him by the Court. Both these observations had merit but it was not correct to say that there was no evidence of what had occurred in the intervening period because it was common ground that one affidavit in reply had been filed, although that affidavit had been handed up in Court in the June hearing, was dated 26 June 2008 but filed on 28 July 2008. The second and larger affidavit dealing with Mr McIntyre's evidence was filed a day late in circumstances where no doubt was cast upon Ms Mott's affidavit. These circumstances were not considered by his Honour or were not adequately considered and his Honour appears to have wrongly proceeded on the basis that there was effectively no evidence for the reasons for the delay when in fact there was a reason for the delay, whatever he would make of that reason. His Honour was quite right in observing that nothing said by a member of the registry staff could have altered the actual effect of his Honour's orders made on 14 July 2008. However, in a real sense, that observation was beside the point. The question was not whether his Honour's orders could have been altered in their effect by something said by a member of the registry staff - the point was the appellant had made an enquiry of his solicitor's office as to when the time for filing affidavit in reply expired, had been told that the registry advised 30 July 2008 and the appellant in fact filed his affidavit within that time frame. This enquiry was made in circumstances where the order did not directly specify 29 July 2008 as the closing date for affidavits but referred to a time scale whereby 29 July 2008 was, in fact, the last day by which affidavits in reply were to be filed. 39 There might be a number of things available to be said about these circumstances and many of them, understandably, were put on the record by the respondents' senior counsel but the critical fact remains unaltered that there was a reason proffered by the appellant for not complying with the order and on the enquiries made on his behalf, he had in fact filed within the time limit referred to by the registry, albeit a day late. His Honour then had to consider those circumstances, not only against the background of repeated failure to comply with orders of the Court but also in the context that an earlier affidavit in reply had been filed without objection by the respondents and that this was now the last affidavit in the appellants' case, being an affidavit in reply and that the evidence in the case was now completed. His Honour then had to consider the circumstances in the context that the case had not yet been set down for hearing and apart from the fact of the guillotine order, the respondents did not attempt to show any other or real prejudice. They had received one affidavit in reply one day out-of-time and while understandably most unhappy about that situation, did not identify any real prejudice to their case. This was not a case where the evidence that came in out-of-time raised new issues or caused the respondents to have to cast around well after the event to find some evidence in further rebuttal, nor did come up to the type of prejudice described by Heydon JA in Micallef. 40 It might be said that on a review of the various difficulties created by the appellant in having his own proceedings promptly dealt with and the fact that there were numerous occasions when orders of the Court were breached, that his Honour was entitled to be critical of the appellant's conduct. Nevertheless, his Honour had before him a certain set of facts and on a proper analysis of what occurred, he exercised a discretion in circumstances where he did not consider or adequately consider a material fact or, alternatively, had mis-described or misunderstood a matter to be considered by regarding it as being basically without evidence when there was evidence before the Court. A balance then had to be struck between the interests of the appellants and the interests of the respondents. There was no evidence of further prejudice to the respondents. In arriving at that balance, justice was the paramount consideration: the question then to be addressed was - "Is it just to strike out the entire application for relief where one affidavit in reply is one day late?" In Jorgensen v Slater & Gordon Pty Ltd [2008] VSCA 110, the Victorian Court of Appeal adopted the approach in Re Jokai Tea Holdings Limited (1993) 1 All ER 630 in the context of an application to overturn a self-executing order asking where the dismissal of proceedings could be said to be punishment fitting the crime. The loss of a right of appeal in the circumstances disclosed in that case was held to be "disproportionate punishment". 41 In the way described in the preceding paragraph, an error in the House v The King sense has been demonstrated in his Honour's approach and the error is of such significance as to warrant granting of leave to appeal and the upholding of the appeal. The grant of leave is necessary for the proper administration of justice, particularly in the light of the fact that the judgment under appeal finally determines the s 106 proceedings brought by the appellants. In light of the views already expressed by his Honour, it is preferable and is likely to be more efficient in relation to the costs to be borne by the parties that the appropriate determination be made by this Court on appeal. There can be no doubt that the appellants' overall behaviour in pursuing this case has been disrespectful to the Court and a cause for reasonable complaint by the respondents. However, the circumstances in which the latest breach of the Court's order came about requires a judgement call to be made. The Court cannot be satisfied that an affidavit in reply, being the last affidavit to be filed in the case and being described as a rebuttal affidavit, and being one day late represents the type of circumstance where justice requires that the application should be struck out. The appropriate order to make on appeal is that the appeal be upheld and that the motion before Marks J filed by the applicant be acceded to with the result that his Honour's order of 14 July 2008 should be amended so as to require the affidavits in reply to be filed by 4.00 pm on 30 July 2008. 42 One further matter should be mentioned before concluding the appeal. This application has been considered on its own, special, facts and should not be regarded as signalling a green light to parties to ignore directions made by the Court or to routinely flout the obligations imposed upon them by orders of the Court. The appellants in this case have received the benefit of considerable leniency in the preparation of a case for hearing that was filed in 2003. In other circumstances the Court may have been well justified in dismissing the proceedings for want of prosecution at a much earlier time. The flexibility of the Court in this regard cannot be presumed and parties should understand that they run a grave risk should they fail to proceed with the preparation of their case in a timely manner. 43 We would also wish to add that, generally speaking, parties will not be able to rely upon the advice of the Industrial Registry in the conduct of their proceedings as to the effect of orders made by the Court where those orders are plainly expressed and the parties have the benefit of legal representation. 44 During the course of submissions senior counsel for the appellants properly conceded that, should leave be granted and the appeal upheld, then it was appropriate for the appellants to pay the respondents' reasonable costs of the appeal as agreed or assessed. Having regard to the whole of the circumstances, the Court intends to adopt that course. ORDERS 45 The Court makes the following orders: (i) Leave to appeal is granted; (ii) Appeal upheld and the decision of Marks J made on 29 October 2008 is set aside; (iii) The time for the filing of affidavits in reply under order No 1 of the orders made by Marks J on 15 July 2008 in Matter No IRC 3558 of 2003 is extended to 4 pm on 30 July 2008; (iv) The appellants are to pay the reasonable costs of the respondents on the appeal as agreed or assessed.

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