Jorgensen v Slater & Gordon Pty Ltd [2008] VSCA 110

1 The appellant, Alan Jorgensen, is a serial defaulter. That is to say, he has been persistently dilatory in taking steps in his appeal.[1] His notice of appeal was lodged in January 2006. More than two years later, there is no agreement on the contents of the appeal book.

2 On 31 March 2008, the respondent ('SG') applied to strike out Jorgensen's appeal for want of prosecution or, alternatively, for failure to comply with certain orders made by the Acting Registrar of this Court on 28 November 2007. The litany of Mr Jorgensen's failures to take steps within times fixed either by the rules or by the Court is set out in the reasons for judgment of Ashley and Neave JJA. Their Honours made it quite clear in their reasons that they had given very serious consideration to acceding to the strike-out application but, in the event, had decided to give Mr Jorgensen one last chance.

3 Their Honours made a self-executing order concerning the service by Mr Jorgensen of the revised notice of proposed contents of the appeal book, and subsequent steps necessary for the prosecution of the appeal. In conclusion their Honours said:

... in our view Mr Jorgensen should not be given an opportunity to seek further indulgences, if he fails to comply with the orders which we now propose to make. We note that Slater & Gordon has had to expend time and energy in the management and defence of an appeal which is not being diligently prosecuted by Mr Jorgensen. Further, that appeal involves serious allegations of fraud and breach of fiduciary duty against it.[2]

Mr Jorgensen was ordered to pay SG's costs of the application on an indemnity basis.

4 The order made on 31 March 2008 ('the March order') was in the following terms:

1. Within seven days of this day, Alan Jorgensen serve in electronic form a marked-up revised note of proposed contents of the appeal book complying with the following requirements: that is, that it -

(a) excludes all unnecessary documents and, in particular, excludes any unnecessary exhibits and any documents not admitted into evidence;

(b) includes the relevant pages only of transcript.

1. Slater & Gordon provide further comment to Alan Jorgensen on this revised note by 14 April 2008.
2. Alan Jorgensen file in electronic form and serve an agreed revised note of proposed contents of the appeal book on or before 21 April 2008, or if the parties are unable to agree on the contents, then file and serve a note of the contents as respectively proposed by Mr Jorgensen and Slater & Gordon.
3. Failing the compliance of Alan Jorgensen with paragraphs 1 and 3 of these orders, the appeal shall stand dismissed.
4. Alan Jorgensen pay the costs of Slater & Gordon of and incidental to the summons filed 21 February 2008 on an indemnity basis.
5. In the event that the appeal stands dismissed by reason of non-compliance with orders 1 or 3 hereof, or by reason of non-compliance with the Rules otherwise, the security for costs of $66,500 paid into court pursuant to the order of the Court made 12 May 2006, as varied by order of the Court made 17 November 2006, remain in court pending further order.

5 Mr Jorgensen was, accordingly, required to serve the revised note of proposed contents by 7 April 2008. He did not do so. Upon that non-compliance, his appeal stood dismissed by operation of paragraph 4 of the March orders. An order described as self-executing is precisely that. It operates of its own force. That is, if the order has not been complied with, the sanction specified in the order takes effect automatically upon the expiration of the time fixed for compliance.[3]

6 On 9 April 2008, SG filed a summons seeking a declaration that the appeal stands dismissed and an order that Mr Jorgensen pay SG's costs of the appeal (including the application for costs) on an indemnity basis. As we pointed out to counsel for SG during argument, the application for a declaration was redundant. The appeal already stood dismissed, by operation of the self-executing order. Mr Jorgensen appeared on his own behalf, however, to oppose the making of any such declaration. As will appear, he sought to explain the circumstances of his non-compliance.

7 Counsel for SG pointed out, correctly, that the only course open to Mr Jorgensen was to apply to have the self-executing order varied or set aside. An application of that kind is expressly contemplated by r 24.06.[4] Thus prompted, Mr Jorgensen sought leave to make an oral application to set aside or vary the March order. SG, having earlier had service of an affidavit sworn by Mr Jorgensen, did not oppose the grant of leave to make the application, but argued strenuously that the application should be refused.

8 We turn to consider the principles applicable to such an application.

9 The court has a wide discretion to relieve a party of the consequences of non-compliance with a self-executing order. The governing consideration, as in every aspect of practice and procedure, is what justice requires.[5] As Burt CJ said in Link Blocks Pty Ltd v Fullin,[6] all the circumstances must be weighed in the balance and

one must not ... lose sight of the fact that the justice spoken of is an even-handed justice to [both sides].

10 The power to relieve must be exercised with care. As Roskill LJ said in Samuels v Linzi Dresses Limited,[7] it is a power

which should be exercised cautiously and with due regard to the necessity for maintaining the principle that orders are made to be complied with and not to be ignored.

We respectfully agree with what was said by Newnes J in the Western Australia Supreme Court in MTQ Holdings Pty Ltd v Lynch, as follows:

The authority of the court will equally be undermined, and the quality of justice for the innocent party eroded, if the ultimate sanction effected by the operation of a [self-executing] order can be avoided by showing that non-compliance with [that] order came about by the same sort of inattention or laxity that caused the order to be made in the first place.[8]

11 We would also adopt what Newnes J said regarding the considerations which should ordinarily be brought to bear in considering the exercise of this discretion. The court should have regard at least to the following matters:

(a) the circumstances in which the self-executing order was made;

(c) the prejudice to the defaulting party if relief were not granted; and

(d) the prejudice to the innocent party if relief were granted.[9]

12 As to the reasons for non-compliance, it is of the first importance to ascertain whether the failure to comply was wilful, that is, was reflective of deliberate disregard of, or indifference to, the court's order.[10] As Browne-Wilkinson VC said in Re Jokai Tea Holdings Limited:

The court should not be astute to find excuses for such failure since obedience to orders of the court is the foundation on which its authority is founded. But, if a party can clearly demonstrate that there was no intention to ignore or flout the order and that the failure to obey was due to extraneous circumstances, such failure to obey is not to be treated as contumelious and therefore does not disentitle the litigant to rights which he would otherwise have enjoyed.[11]

13 Paragraph 1 of the March order replicated the substance of the order made by the Acting Registrar in November 2007. Master Lansdowne had also ordered Mr Jorgensen to obtain a transcription of all the tapes of the County Court hearing and to provide a copy to SG.

14 At the hearing on 31 March, there was dispute as to whether the transcript (in electronic form) had been provided to SG prior to the hearing. An electronic version was received by SG on the day of the hearing. The court said:

If the transcribed tapes had not been provided to Slater & Gordon on the day of the hearing we would have been inclined to strike out the proceedings on the basis that there was inordinate and inexcusable delay, which was such as to give rise to a substantial risk of prejudice to the defendants.[12]

15 In the course of argument on 31 March, Mr Jorgensen stated his understanding that the only thing missing from the draft index to the appeal book was 'a particular reference to the transcript pages that are relevant to the appeal'. In response, Ashley JA said: 'That's critical. Otherwise the content of the appeal cannot be understood.' Mr Jorgensen said: 'I understand that'.

16 At the commencement of the hearing on 31 March 2008, Mr Jorgensen's then solicitors, Messrs Efrons, sought and obtained leave to cease to act for him. Up until 28 March (the Friday before the Monday hearing at which the March order was made), Mr Jorgensen had been represented by Messrs Efrons both at the trial and on the appeal. On that day, he was told by his solicitors that they would no longer act on his behalf.

17 Mr Jorgensen informed the court that he was 'looking for another solicitor'. He stated that the transcript ran into some 2000 pages and that he had

gone through every page and put those stick-ons, so a lot of work has been done there for the next solicitors to pick up ...

He also stated that counsel retained on his behalf had said that it would 'probably take him five days to go through 2000 pages'. Mr Jorgensen requested that the period for compliance be 14 days, rather than the seven days sought by SG. In the event, the court order fixed seven days for compliance.

18 What then occurred was as follows. On the afternoon of 7 April, the day on which the seven day period expired, Mr Jorgensen sent an email to Mr Walter of SG, attaching a draft appeal book index. The index did not comply with the requirements of the order. The email said:

You will notice [the index] is incomplete as I was advised only on Thursday by [counsel] that he found DAY 4 Cassette of the trial in his chambers.

This is now being transcribed & will be emailed to you as soon as it is finished (I expect it in the next day.)

Once this is received the references to the Transcripts will be completed & forwarded to you.

It is relevant, in our view, that Mr Jorgensen was clearly cognisant of his non-compliance and was assuring SG that the position would be rectified in the near future.

19 SG replied by facsimile the following day. In its relevant part, the letter said:

Your letter notes that the notice is incomplete. The revised note of proposed contents of appeal book provided by you is clearly in breach of the orders made 31 March 2008.

In plain breach of order 1(b) no effort has been made on your behalf to identify the relevant pages of transcript.

By the comments made by Justice Ashley at the hearing of the recent application, it was made amply clear to you that it was an essential task for your legal representatives (or you personally) within 7 days of the hearing to identify the relevant pages of transcript. This mandatory requirement is reflected in the wording of order 1.

The discovery of a further tape for transcription is no excuse for your failure to identify the relevant pages of transcript already produced. In any event, the electronic form of transcript provided by Efron & Associates on your behalf on 31 March 2008 does include transcript for 22 August 2005, which is listed as the 4th day of hearing. Accordingly it is unclear whether any additional tape has been located at all. We reiterate however that irrespective of whether additional tape has been located, you are in breach of order 1 made 31 March 2008.

Further, order 1 required that you serve a marked-up revised note of proposed contents of the appeal book. The document provided by you does not mark-up amendments to the proposed contents of appeal book previously served on your behalf (on 19 December 2007). Accordingly, you have also failed to comply with that requirement of order 1.

By reason of the self-executing nature of order 4 made 31 March 2008, the consequence of your breaches of order 1 is that the appeal now stands dismissed.

20 In an affidavit sworn 30 April 2008, Mr Jorgensen gave the following account of his activities during the period of seven days in which he had been ordered to prepare the revised index. After the hearing in Melbourne on 31 March, he flew to Cairns to prepare for an appeal due to be heard the following day in the District Court of Queensland, in which he was representing his company, Mantonella Pty Ltd. Tuesday, 1 April, was devoted to that hearing. On Thursday, 3 April, Mr Jorgensen flew to Brisbane to see his solicitors, Messrs Lillas Loel, in order to engage them to prepare the index and 'discuss the appeal generally'. He spoke to the principal of the firm who advised that

there was no way they could comply with such a tight timetable given the vast amount of transcript and court documents that they would have to familiarise themselves with before being able to start to compile such an appeal book index. Accordingly, they refused to accept the appointment as solicitors.

21 Later that same day, Mr Jorgensen flew to Melbourne and met with counsel who had been engaged to represent two of Mr Jorgensen's companies in 'a multi-million dollar case against the NAB'. An application by the defendant in that proceeding to strike it out was due to be heard the following Tuesday (8 April). Mr Jorgensen had hoped that the same counsel would be able to assist him in the preparation of the revised index for the present appeal but he was unable to do so because of preparation for the strike out application

other than give me some general advice on co-ordinating the transcript references and the exhibits to the appeal points.

Mr Jorgensen himself had to spend time the following day (4 April) in conference with counsel regarding the strike out application. In addition, he attended at the office of Messrs Efrons, his former solicitors in the appeal, in an endeavour to locate all of the SG files from the trial.

It was only after trying to compile the index that spotlighted the fact that many documents were missing from the files I had in my possession. Efrons handed over what I felt were the remaining files where they asked me to sign an acknowledgment that I had in fact received such files.

22 Mr Jorgensen was advised by counsel on 4 April that he had found in his chambers

a cassette tape of the fourth day of the trial ... that had somehow become separated from the box of tapes of the entire trial. I recall that it was this particular tape that evidenced unequivocally that a settlement of $866 did not occur between the parties as decided by the County Court judge, but rather an acknowledgment that SG's claim was now reduced from $14 136 to $866 after the costing experts "settled" on a figure of $13 272 as not being chargeable from the $17 260 of miscellaneous professional fees originally alleged by our cost consultant. Hence why this tape was of special interest to [counsel].

During this week I continued to review the 18 days transcript trying to extract the relevant pages. However without the full Court files including exhibits and interlocutory material it proved difficult if not impossible for myself to prepare a properly completed index. Accordingly, I submitted a draft index to the respondent on the due date, 7 April 2008, that in my view was the best that could be done under the very difficult circumstances that my solicitors had left me in.

23 On Wednesday, 9 April, Mr Jorgensen sent to SG what he described as a further draft index. This again did not include the transcript references. He stated in the email:

I am currently in Melb & am trying to get the missing 4th Day's transcript, which will be forwarded to you asap.

In meantime, feel free to send an interim DRAFT index, given that you won't be able to respond fully due to my delay in providing all the References to the various pages from Transcript.

Anyway, even though you do not have my specific references to the Transcript pages, you can assume that I will be confining my references to the relevant pages.

I am still not in possession of all the "Process & Pleading" documents, so intend going into Appeal Registry today to try & locate any missing Docs. that ought to be included in section "A".

SG responded the same day, enclosing the court documents for the present application.

24 The next communication was on Friday, 11 April, when Mr Jorgensen sent an email to SG acknowledging receipt of the court documents. In relevant part, the email stated:

I arrived home 2 AM this morning after being in Melb all this week, & saw your email re Appeal Application to strike out.

Now that I have copied some missing Docs from the Appeal Court File & received more from Efrons, I should be able to email you the specific Transcript Pages for the Index.

Do you intend sending me your Response to this Draft Index of mine on Monday?? The Reason the Index was not marked up is that I simply started afresh. So disregard any prior Draft Indexes from Efron's which you say were flawed anyway. Just use my attached Draft Index which will be further updated during today once I obtain the 4th Days Transcript.

Having regard to your failure to comply with the self-executing orders made 31 March 2008, we take the view that the appeal stands dismissed and we shall not file any response to the document served by you.

25 Mr Jorgensen responded the same afternoon, as follows:

It is the Court that decides whether Cases are struck out. Not your own self Serving interpretation.

For Example, what if I decided not to rely on the Transcript, but just the documents & Judgments which speak for themselves? What if there were mitigating circumstances that caused the delay in the inclusion of each of the transcript pages? This is clearly not up to you or I, to determine.

Accordingly, unless you have a Court direction to excuse your obligation, then I expect your response to my Appeal Book Index.

I repeat, I have provided to you the Best Index I could, given the lack of other material available to me, so I insist on your suggested content in reply to my latest Draft.

26 A week later, on 18 April 2008, Mr Jorgensen sent a further email to SG, in the following terms:

See attached this missing tape transcription that I just now received. You will be receiving my final version of the Draft Index for the Appeal Book before Mondays end. It will be this version that will be filed with the Registrar as Ordered. Since you have not complied at all with the Orders from 31 March 08, then that has been your own choosing & no doubt be at your own peril.

As stated already, you or Slater & Gordon, do not make decisions for the Court of Appeal. Accordingly your own interpretation of what constitutes a breach of the Order, has no standing at all & is certainly no justification for you to not even attempt to provide your submission of the Draft Index. Once I file & serve my latest Version of the Index, I will complete an Affidavit in reply to your prior affidavit.

Other than pressing Mr Jorgensen for his affidavit in reply to their application, SG made no response. SG were perfectly correct to treat the appeal as having been dismissed by operation of the order, as soon as the time for compliance had passed without a complying index being provided. Contrary to what Mr Jorgensen was contending, no court order was required.

27 The same evening (18 April) Mr Jorgensen sent SG an email headed 'Alan Jorgensen's Latest Appeal Book Index'. In relevant part, the email stated:

Received your Fax of today & advise that certainly I will complete my Affidavit in reply to your Application to Strike out, once I have a Law Firm in place.

In the meantime find attached my best effort to provide a Index for the Appeal Book. In the event I still do not have a Reply from you by Noon 2 PM Monday 21st April 08, regarding the preparation of a mutually acceptable Index, then I will be filing an Index without your input.

My view & I imagine that of the Court, will be that in any event you were entitled to submit your Version of the Index, given that I did in fact send you my best effort of an Index last Monday as scheduled.

The draft index attached to that email was forwarded to the Acting Registrar the following Monday, 21 April 2008.

28 On the face of it, therefore, Mr Jorgensen was two weeks late in complying with the first part of the March order. Counsel for SG maintained before us, however, that the index provided on 21 April still did not comply. He argued that the list of transcript references in the draft index reflected a 'scattergun' approach and that the references listed by Mr Jorgensen were of no assistance to SG in preparing to meet the appeal. We reject this argument. Mr Jorgensen's draft index satisfies the requirements of the order, in that he has identified 'the relevant pages only of transcript', being the references on which he intends to rely. Whether or to what extent those transcript references substantiate any part of his grounds of appeal is a matter which will, of course, have to be addressed by him - and SG - in the presentation of the appeal.

29 As matters stand, Mr Jorgensen's appeal is at an end. As the case law in this area has consistently acknowledged, the loss of a right of action or appeal is a very severe penalty indeed. On the other hand, SG has already been caught up in this appeal for more than two years, with little progress having been made, and should not, it is now submitted, be exposed to the prospect of further delays before the appeal can finally be heard and determined.

30 Ultimately, however, we have concluded that the interests of justice require that Mr Jorgensen be relieved of the consequence of the self-executing order. Critically, in our view, the conduct of Mr Jorgensen in the seven day period fixed by the court for compliance did not reflect either deliberate disregard of or indifference to the court's order. On the contrary, as we noted earlier, Mr Jorgensen took active steps to secure fresh legal representation for the purposes of having the draft appeal index completed, as he had told the court on 31 March he would do. He cannot, in our view, be criticised for having directed some of his time and energy towards immediately pressing court commitments in which (as the representative of his companies) he was unavoidably involved.

31 Contrary to his expectation, Mr Jorgensen was unable to retain alternative lawyers to carry out the task of revising the appeal book index and was obliged to carry out the task himself. It is also significant, in our view, that he remained in regular contact with SG, at all times acknowledging what was required of him by the order and promising that it would be done as soon as practicable. This is not, in our view, a case of the kind referred to by Newnes J in MTQ Holdings, where

non-compliance ... came about by the same sort of inattention or laxity that caused the order to be made in the first place.[13]

32 A self-executing order is, quite intentionally, penal in character. The order has several purposes - to signify the court's disapproval of prior non-compliance; to emphasise the importance of obedience to court orders; and to secure the performance of the particular procedural step(s) the subject of the order. The imposition of a self-executing order in the present case has, in our view, secured all of these purposes. It sent the clearest message to Mr Jorgensen, and to others who will doubtless follow him, that disobedience to procedural orders will not be tolerated. It also secured, albeit two weeks late, the filing of a revised court book index.

33 On an application such as this, for relief from the operation of a self-executing order, we think it proper to ask (as Parker LJ put it in Re Jokhai Tea Holdings Ltd) whether 'the punishment fits the crime'.[14] Given the view we take of the circumstances of the non-compliance, we have concluded that the loss of Mr Jorgensen's right of appeal would be a disproportionate punishment.

[1] Cf Freeman v Rabinov [1981] VicRp 52; [1981] VR 539, 544 (Lush J).

[3] Freeman v Rabinov [1981] VicRp 52; [1981] VR 539, 543.

[4] See, eg, Ridge Lane Pty Ltd v Gadzhis [2007] VSC 212 (Hargrave J).

[5] See, eg, Southern Motors Pty Ltd v Australian Guarantee Corporation Limited [1980] VicRp 23; [1980] VR 187, 193; Freeman v Rabinov [1981] VicRp 52; [1981] VR 539, 549; Pereira v Beanlands [1996] 3 All ER 528, 536.

[6] [1986] WAR 187, 190.

[7] [1981] 1 QB 115, 126.

[8] [2007] WASC 49 ('MTQ Holdings'), [51]; see also Van Blitterswyk v Sons of Gwalia Limited [No 2] [2008] WASC 22.

[9] MTQ Holdings [2007] WASC 49, [55].

[10] See Re Jokai Tea Holdings Limited [1993] 1 All ER 630, 637 (Browne-Wilkinson VC), 641 (Megaw LJ).

[11] [1993] 1 All ER 630, 637.

[12] Cf Bishopsgate Insurance Australia Limited (in liq) v Deloitte Haskins & Sells (1999) 3 VR 863, 872 [25].

[13] [2007] WASC 49, [51].

[14] [1993] 1 All ER 630, 641.