'… (1) Where a party with notice of proceedings has disregarded the opportunity of appearing at and participating in the trial, he will normally be bound by the decision. (2) Where judgment has been given after a trial it is the explanation for the absence of the absent party that is most important: unless the absence was not deliberate but was due to accident or mistake, the court will be unlikely to allow a rehearing. (3) Where the setting aside of judgment would entail a complete retrial on matters of fact which have already been investigated by the court the application will not be granted unless there are very strong reasons for doing so. (4) The court will not consider setting aside judgment regularly obtained unless the party applying enjoys real prospects of success. (5) Delay in applying to set aside is relevant, particularly if during the period of delay the successful party has acted on the judgment, or third parties have acquired rights by reference to it. (6) In considering justice between parties, the conduct of the person applying to set aside the judgment has to be considered: where he has failed to comply with orders of the court, the court will be less ready to exercise its discretion in his favour. (7) A material consideration is whether the successful party would be prejudiced by the judgment being set aside, especially if he cannot be protected against the financial consequences. (8) There is a public interest in there being an end to litigation and in not having the time of the court occupied by two trials, particularly if neither is short.'
Roch and Morritt LJJ agreed with the reasons for judgment of Leggatt LJ.
45 It seems clear that the appellant did not relevantly disregard the opportunity to appear at and participate in the hearing listed for 9.30 am on 16 February 2006. The arrival of Mr Vo, albeit late, suggests that the appellant's absence was anything but deliberate. It does not appear that there was an extensive trial before the Federal Magistrate on 16 February 2006 before Mr Vo arrived. There was plainly no relevant delay on the part of the appellant in seeking to set aside the orders made earlier in the day on 16 February 2006 and there would appear to be no real prejudice to the respondent if the orders made earlier in the day on 16 February 2006 were to be set aside. The conduct of the appellant in failing to comply with orders of the Federal Magistrate in relation to the provision of particulars of her grounds of opposition to the trustee's application and the filing of affidavits warrants criticism, but does not, in my view, compel a conclusion that the application to set aside the earlier orders should have been refused. It is but one of the matters to which the Federal Magistrate was entitled to have and should have had regard in the exercise of his discretion.
46 The substantial consideration, in the circumstances of this case, seems to me to be whether the appellant would enjoy 'real prospects of success' were the orders made in her absence on 16 February 2006 to be set aside.
47 Whilst the Federal Magistrate appears to have conducted something of a mini trial by reference to the appellant's affidavit of '15 December 2005' and the corroborative documents upon which she sought to rely being annexures 'A', 'B' and 'C' to that affidavit, the fact remains that notwithstanding the Federal Magistrate's findings in respect of the corroborative evidence, her untested evidence as recorded in the affidavit was, as the Federal Magistrate found, to suggest that she had 'advanced $37,000 of the $67,000 purchase price, the balance being a mortgage to the Commonwealth Bank of Australia, which she says she made all the payments for'.
48 It seems to me that, if at a hearing of the trustee's application, the facts deposed to by the appellant were accepted, then it may well be inappropriate for there to be a sale of the property with an equal division of the proceeds of sale as contemplated by the orders made by the Federal Magistrate (see generally Calverley v Green (1985) 155 CLR 242, Muschinski v Dodds (1985) 160 CLR 583, Baumgartner v Baumgartner (1987) 164 CLR 137 and Parsons v McBain (2001) 109 FCR 120).
49 The Federal Magistrate's decision to refrain from setting aside his earlier orders seems to me to be attended by sufficient doubt to warrant a grant of leave to appeal from it, given the substantial injustice which would result if a sale of the property were to proceed at this stage. Once sold, the property could hardly be recovered.
50 This brings me to a consideration of the appeal itself. In accordance with s 25(1A) of the Federal Court Act the Chief Justice has considered it appropriate for the appellate jurisdiction of the Court in relation to this appeal to be exercised by a single Judge. Accordingly, it falls to me to determine whether or not the exercise by the learned Federal Magistrate of his discretion to set aside the orders made by him earlier in the day on 16 February 2006, miscarried.
51 Whilst counsel for the respondent submitted that leave to appeal should be refused because of the non compliance by the appellant with the orders of the Court, the repeated conduct of Mr Vo in arriving late for hearings and the finding by the Federal Magistrate, after rejecting the appellant's corroborative evidence, that 'I cannot be satisfied that the respondent [referring to the appellant] has any arguable case that should prevent the sale of this property', the respondent elected not to put any submissions in opposition to the appeal being allowed, once leave to appeal had been granted. In this regard it should be noted that the application for leave to appeal and the appeal were dealt with sequentially rather than at the same time. At the commencement of the hearing of the leave application counsel for the respondent indicated that the respondent would be opposing both the leave application and the appeal. However, after considering the evidence given on the leave application, the respondent resiled from this position. There can be no doubt that, at the conclusion of the hearing of the leave application, the appellant's conduct in failing to comply with earlier court orders seemed far less significant than may have appeared at the outset.
52 I am satisfied that after the Federal Magistrate made his orders on 6 December 2005, the appellant attempted to file an appearance in the Federal Magistrates Court on 7 December 2005 in the manner described above. I am also satisfied that whilst the learned Federal Magistrate, quite reasonably, was critical of the appellant's affidavit of '15 December 2005' having only 'surfaced' on 16 February 2006, that affidavit was in fact sworn on 15 February 2006, the completion of its preparation having been delayed from a starting date of 15 December 2005 coupled with an inadvertent but unintentional failure by Mr Vo to cause the date on the front of the affidavit to be brought into harmony with the date indicated on the relevant annexure notes as the date of swearing, namely 15 February 2006. Whilst Mr Vo failed to correct the Federal Magistrate's quite reasonable misunderstanding that the affidavit was in fact sworn on 15 December 2005, it also seems clear, as counsel for the appellant submitted, that Mr Vo was constrained in his ability to put his submissions to the Federal Magistrate on 16 February 2006 by the constant interjections to which reference has been made earlier. It is also important to note that the suggestion that the appellant's claim of a 100% interest in the property was not made at the 'heel of the hunt' on 15-16 February 2006 as the Federal Magistrate surmised in the course of the hearing on 16 February 2006. Clearly, such a claim had been propounded in a document provided to the Court on the appellant's behalf at the outset on 6 December 2005. The issue was not raised as a last ditch attempt to avoid the sale of the property after a failed application by the appellant's husband to have the sequestration order set aside and the lapsing of caveats which had been filed on the appellant's behalf in respect of her claimed interest in the property.
53 In my opinion, the Federal Magistrate's exercise of his discretion in respect of setting aside his earlier orders, miscarried. The untested affidavit of the appellant of '15 December 2005' provided a sufficient basis for those orders to be set aside. The very text of the affidavit is inconsistent with a conclusion that the appellant was without an arguable case to prevent the sale of the property.
54 The parties are agreed that, should the appeal be allowed, not only should the Court set aside orders 1 to 5 inclusive and 8 of the orders made by the Federal Magistrate on 16 February 2006 as later entered on 3 March 2006, but also order 6 which was made after Mr Vo arrived at the Federal Magistrates Court on 16 February 2006 and order 7 which was amended after Mr Vo appeared.
55 In my opinion the Court should dispense with compliance with Order 52 Rule 5(2) of the Federal Court Rules, grant leave to the appellant to appeal from the decision of the Federal Magistrate refusing to set aside the orders made by him on 16 February 2006 in the appellant's absence, the orders made by him on 16 February 2006 should be set aside and the respondent's application filed 16 November 2005 should be remitted to the Federal Magistrates Court for hearing. The respondent's motion filed 18 May 2006 should be dismissed.
56 It remains for me to consider what, if any, orders should be made in respect of costs. Four matters need to be considered, firstly the costs of the leave application, secondly the costs of the appeal, thirdly the costs of the respondent's motion and fourthly the costs thrown away in the court below as a result of the course which the matter has taken. Counsel for the appellant has submitted that I should leave the determination of the last mentioned costs for the Federal Magistrate who may hear the respondent's application hereafter. I do not propose to accede to that request given that I have an ample understanding of the appellant's earlier defaults without which the respondent's application could have been disposed of one way or another on 16 February 2006. In the result, there is a need for the matter, to, in effect, now start all over again.
57 In relation to the costs of the application for leave to appeal which occupied more than 90% of the hearing time before me on Tuesday 6 June 2006, I consider that there should be no order as to costs. The appellant submitted that leave was not required, even though a formal application for leave was made. In this regard the appellant failed. In relation to the question of whether or not the judgment of the Federal Magistrate was attended with sufficient doubt to warrant its reconsideration there was much to be said at the commencement of the hearing, for the view that the appellant's several defaults and, arguably, deception of the Court, would have fully justified the Federal Magistrate's decision. However, when Mr Vo drew attention, in the course of his evidence, to the matters referred to above, it became clear that the Federal Magistrate had misunderstood the conduct of the appellant in certain respects. In these circumstances, even though the respondent's opposition to the grant of leave to appeal failed, the proper order as to costs would be that there be no order as to costs.
58 In relation to the costs of the appeal, a similar order, should, in my opinion, be made especially in the light of the fact that when the Court embarked upon the hearing of the appeal the respondent indicated that he did not wish to be heard in opposition to the making of the orders sought by the appellant.
59 As to the costs of the respondent's motion, no new issues arose under it and it occupied no hearing time. In respect of it there should be no order as to costs.
60 In relation to the costs thrown away in the Federal Magistrates Court, it seems clear to me, that not only should the appellant have been ordered to pay, as she has, the costs of the hearing on 17 January 2006, she should also be ordered to pay the cost of the hearings in the Federal Magistrates Court on 6 December 2005 and 16 February 2006. The value of the hearing on 6 December 2005 was totally eroded by the default of the appellant in complying with the directions that were then given in relation to disclosing her case and providing evidence in support of it. Had the appellant filed and served her affidavit nominally dated 15 December 2005, but in fact sworn on 15 February 2006, in a timely fashion and had Mr Vo been punctual in attending the hearing on 16 February 2006, that hearing may have allowed the respondent's application to be finally heard and disposed of. Whilst satisfactory explanations have been provided in respect of some of the appellant's conduct, what remains in terms of non compliance with the Federal Magistrate's orders and the appellant's solicitor's lack of promptitude warrant the severest criticism. Counsel for the respondent has asked that these costs be ordered on an indemnity basis. Whilst an alleged lack of financial resources may have prevented the appellant's affidavit, the preparation of which commenced on 15 December 2005, from being finalised prior to 15 February 2006, I consider that it would be grossly unfair for the bankrupt's creditors to be prejudiced by the unsatisfactory conduct on the appellant's behalf. In these circumstances the costs of the hearings on 6 December 2005 and 16 February 2006 should be awarded on an indemnity basis.
I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham.