The background to this matter is set out in my judgment of 6 April 2020. [1] These reasons assume familiarity with that judgment.
On 6 April 2010 I ordered that the plaintiff give security in respect of the defendants' costs in the sum of $524,439.74 within 21 days and that, if such security was not provided, the proceedings be stayed.
The plaintiff failed to provide such security.
On 7 May 2020 Hammerschlag J granted the defendants leave to file a Notice of Motion to dismiss the proceedings.
On 22 May 2020 the defendants filed such a Notice of Motion and on 1 June 2020 Hammerschlag J made the following orders:
"1. The proceedings are dismissed with costs.
2. Order 1 is stayed up to and including 26 June 2020.
3. If by 26 June 2020, security of $524,439.74 is paid into Court, the dismissal will be vacated.
4. The matter is stood over for directions to 3 July 2020. If the money is not paid into Court by 26 June 2020, the plaintiff is forthwith to notify the List Judge's Associate, in which event the 3 July listing will be vacated.
5. Liberty to apply on three days' notice."
His Honour gave the following reasons for making those orders:
"The plaintiff has failed, despite ample opportunity, to put up security. It is appropriate that the proceedings be dismissed but on terms that give the plaintiff one final opportunity to avoid ultimate dismissal of the proceedings. The mechanism adopted gives the plaintiff the final chance it seeks, but protects the defendant if the plaintiff nevertheless, again, fails to put up security." (Emphasis added.)
Now, by notice of motion filed on 24 June 2020, the plaintiff seeks a variation of those orders so that the stay on the order dismissing the proceedings be extended to 31 July 2020. In particular, the plaintiff seeks orders substituting "31 July 2020" for "26 June 2020" in orders 2 and 3.
The plaintiff also seeks an order that the defendants produce certain documents. I will return to this after dealing with the amendment application.
The Court's power to vary a judgment or order is contained in the Uniform Civil Procedure Rules 2005 (NSW) Part 36.
The Court has a general power under UCPR r 36.15 to set aside a judgment or order on sufficient cause being shown if it was given or entered, or the order was made, irregularly, illegally or against good faith. There is no such suggestion here.
The Court also has a power under UCPR r 36.16(1) to set aside or vary a judgment or order before the entry of the judgment or order. That provision has no application here as the order was entered on or about 1 June 2020; certainly before the making of this application: see UCPR r 36.11(2).
The Court also has a power to set aside or vary a judgment or order after entry under r 36.16(2) in three identified circumstances: a default judgment, a judgment given or made in the absence of a party, and in proceedings for possession of land where an order for possession has been given in the absence of a person ordered to be added as a defendant. None of these circumstances is engaged here.
The Court has additional power r 36.16(3) to vary any judgment or order except so far as the judgment or order determines any "claim for relief" or "determines any question … arising on any claim for relief" or "dismisses proceedings".
The orders made on 1 June 2020 determined the defendant's "claim for relief" [2] that the proceedings be dismissed. Order 1 dismissed the proceedings. Orders 2 and 3 determined a question arising from the defendant's "claim for relief"; namely whether there should be a stay of the order granting that relief.
Although the plaintiff's variation application is directed, in terms, to the stay made by Hammerschlag J to the order for dismissal, it is in substance directed to the dismissal itself. That is because, absent a variation to the terms of the stay, and assuming no payment into court, the proceedings will stand dismissed today. The effect of the variation sought is that the proceedings will not stand dismissed today. To vary the term of the stay would be to vary the terms of the dismissal itself.
And the order staying the dismissal involved a determination of a question "arising from" the defendants' claim for relief that the proceedings be dismissed. What is now sought is a variation of that order.
Either way, the exception to UCPR r 36.16(3) is enlivened, and the rule has no application.
Finally, the Court has power under UCPR 36.16(3A) to set aside or vary a judgment or order if a notice of motion seeking such relief is filed within 14 days of entry of the judgment or order. This rule is not engaged as the plaintiff's notice of motion was filed more than 14 days after the 1 June 2020 order was entered. UCPR r 36.16(3C) provides that despite UCPR r 1.12 [3] the Court may not extend the time limited by UCPR 36.16(3A).
For the plaintiff it was suggested that the general power in UCPR 36.1 for the Court to "make such order, as the nature of the case requires" provides a basis to make the orders sought. I do not think that rule should be construed this way. The rules make very specific provision for the circumstances in which judgments and orders may be varied. Although UCPR 36(4) states that nothing in UCPR r 36.16 affects any other power the Court has to set aside or vary a judgment or order, I do not see how it follows that UCPR 36.1 should itself be construed as a power to do so. Otherwise, there would be no purpose served by the specific provisions in UCPR 36.16.
The plaintiff did not suggest the Court had inherent power to make the order sought.
In any event, despite Mason J's unqualified statement in Taylor v Taylor, [4] that "a jurisdiction to set aside its orders is inherent in every court unless displaced by statute", the most recently expressed view of the Court of Appeal tends against a proposition so widely expressed.
Thus in James v Australia and New Zealand Banking Group Limited [5] Basten JA, with whom Emmett AJA and Simpson AJA agreed, said:
"To similar effect, observations of Mason J in Taylor v Taylor were relied upon for the proposition that "a jurisdiction to set aside its orders is inherent in every court unless displaced by statute". However, that unqualified proposition was drawn from the reasoning in Cameron v Cole [6] , discussed above, and was followed by the next sentence which qualified the scope of what had just been stated:
'In my opinion the jurisdiction extends not only to the setting aside of judgments which have been obtained without service or notice to a party … but to the setting aside of a default or ex parte judgment obtained when the absence of the party is due to no fault on his part.'
Taylor was a case in which orders had been made in the absence of a party; it provided no basis for the broader proposition than that enunciated in Cameron v Cole which, it is suggested above, is encapsulated in the present r 36.15.
The inability of a court to reopen orders which have been entered, otherwise than pursuant to statutory authority (including rules made under statutory authority), reflects the importance of the value of finality as an element of the rule of law. '[T]he principal qualification to the general principle of finality is provided by the appellate system.' An attempt to have a trial court reopen its orders after the time for appeal has expired, without recourse to that procedure, is to undermine the statutory constraints imposed on appeals. A power to reopen would not likely be construed to allow such a course."
I would not in any case exercise any power, inherent or otherwise, to grant the plaintiff the orders sought.
The basis for the extension sought arises from the plaintiff's continued pursuit of litigation funding.
In the plaintiff's position paper before me earlier this year it was said that a funder "is now eager to fund a commercial litigation matter of this nature". In the position paper before Hammerschlag J, it was stated that "the plaintiff has now received confirmation that litigation funding is likely".
The position is little further advanced now in that a party expressing themselves to be the agent of a litigation funder has stated that the funder is "prepared to conditionally fund" the proceedings "subject to the satisfaction of two pre conditions".
The plaintiff's solicitor, Mr Essey, has stated that the two "preconditions" are that:
1. the matter is not dismissed or struck out; and
2. the plaintiff receives final advice as to its prospects of success in the proceedings.
Mr Essey deposed that in order to "come to a determinative view" of whether funding will be made available, the litigation funder requires production of certain documents.
The plaintiff is a trustee of the Warren Anderson Trust and sues in that capacity. The former trustee of that Trust was Owston Nominees No 2 Pty Ltd. The documents apparently sought by the funder concern the defendants' dealings with Owston Nominees.
Mr Essey has deposed that, in order that the funder form a final view as to whether it will fund these proceedings, it requires the following documents.
1. Owston's consolidated statement of account with Angas Securities. This should include details of all loans, including any loans that were assigned to Angas, guaranteed by Owston, interest and receivership costs and expenses, along with all payments received from Owston (ie a running account or statements in regard to all of the securities with Owston);
2. A statement of account of any loans Owston have provided guarantees over. The Defendant's response alleges those loans as at 10 June 2010 are loans to Pelagon Pty Ltd and Sanishell Pty Ltd;
3. Any letters of demand sent to Owston concerning the guaranteed amounts to Pelagon Pty Ltd and Sanishell Pty Ltd; and
4. Documents confirming how the 2 x $2m payments were applied in 7 July 2020 which have the description 'Secured Creditors (Fixed): Claims'.
Mr Essey has sought from the defendants' solicitors those documents.
On 24 June 2020 the defendants' solicitor responded:
"The documents sought by you have been disclosed, discovered and produced to your client as part of discovery in this action in October and November 2019. You are referred to your client's former solicitors, Cornwalls, in this regard.
In circumstances where your client's claim has been dismissed, in part due to unsatisfied cost orders and failure to pay amounts into Court for security for costs, our clients will not take further and unnecessary steps in this action and incur further expense. This includes producing the documents now requested."
I am not prepared to order the defendants to produce any documents. By reason of my orders of 6 April 2020, and as the security I ordered has not been provided, the proceedings are stayed. I cannot see how it would be just in those circumstances to direct the defendants to go to the trouble and expense of providing documents to assist the plaintiff in obtaining litigation funding. This is especially so where the plaintiff makes no offer to meet the costs of the provision of those documents. Indeed, in its notice of motion of 24 June 2020 it seeks an order that the defendant pay its costs.
As Mr Essey deposed in his affidavit in support of the plaintiff's notice of motion, "the matter has been in the Supreme Court since 2016 and has suffered from significantly less than diligent prosecution by the plaintiff". Indeed, that understates matters to a considerable degree. The proceedings were commenced 4 years ago yesterday and, as I said in my judgment on 6 April 2020, little has been achieved.
On 1 June 2020 Hammerschlag J said that the orders of that date represented the plaintiff's "one final opportunity to avoid ultimate dismissal of the proceedings".
Assuming I had power to do so, I would not be prepared to afford the plaintiff any further opportunity.
I order that the plaintiff's notice of motion of 24 June 2020 be dismissed with costs.
[2]
Endnotes
MCDS Group Nominees Pty Ltd v Angas Securities Ltd [2020] NSWSC 814.
Defined to include "a claim for the determination of any question or matter that may be determined by the court": see definition in s 3 of the Civil Procedure Act 2005 (NSW), incorporated by reference into the UCPR: see "Note" in the UCPR Dictionary.
Which provides generally for extensions of time.
(1979) 143 CLR 1; [1979] HCA 38 at 16.
[2020] NSWCA 101 at [30]-[32].
(1944) 68 CLR 571; [1944] HCA 5.
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Decision last updated: 26 June 2020