That this applies to an appeal from a Master's exercise of discretion is affirmed by a series of cases of which it is sufficient for present purposes to cite Do Carmo v Ford Excavations Pty Ltd [1981] 1 NSWLR 409 and RT & YE Falls Investments Pty Ltd v State of New South Wales (1998) BC 9802115 (Santow J).
3 Nevertheless, in an interlocutory appeal from a Master, there is a discretion under s.75A (7) of the Supreme Court Act 1970, which is not controlled by any need to find special grounds under s.75A (8), even apart from s.75A (9), to "receive further evidence": Wickstead v Browne (1992) 30 NSWLR 1 at 11, per Handley and Cripps JJA (with whom, relevantly, Kirby P agreed at 4-5); Hartigan v International Krishna Consciousness [1999] NSWSC 139. That must mean, in an appropriate case, that the interlocutory determination can be varied or reversed, not only upon the principle expounded in House v The King (which was not interlocutory in nature - it involved the sentence for a crime), but by virtue of the reception of the further evidence; otherwise, there would be little point in its admission. For if the evidence could only be utilised where there existed an error of principle in the decision made below, its use would be limited to cases where it was hardly needed, or needed simply on subsidiary or consequential issues, since that decision was already liable to be set aside, and the wide terms of s.75A(7) would be somewhat illusory.
4 In the present case, certain evidence that was advanced upon cross-examination seems to have impressed the Master, for he discussed it at some length immediately before stating his conclusion that the appellant had failed to discharge the onus of showing it should be allowed to depart from "the proof of debt process". At the hearing before me, this evidence was answered both by a fresh affidavit and by certain matters (including an open offer) stated from the bar table. As I shall explain when I examine the Master's reasons in detail, I have concluded that his decision was affected by relevant error, but if it were not, the importance apparently given to the issue on which new light has now been thrown would require me, applying the principle of Wickstead v Browne and Hartigan v International Krishna Consciousness, to re-examine the question of granting relief to the appellant.
5 Before turning to the Master's reasons, I should provide a brief outline of the history of the case, which is to be found set out in the opening paragraphs of the judgment of McClellan J in an earlier application, to which I shall refer. On 31 March 1988, the document was created which is sued upon as a contract alleged by the appellant, as plaintiff, to have been breached by FAI Insurances Limited (now in liquidation), the defendant. This alleged contract involved the grant by the defendant of a put option to the plaintiff for a purchase price of $370,000,000 in respect of a Sydney development which has since taken place. The defendant's fee was $12,950,000. Upon the breach of the contract for which suit is brought, deposits of $5,960,000 are alleged to have been lost, together with the opportunity to earn a vast profit. The plaintiff sued in May 1991 in the Commercial Division, its claim being transferred in the same month to the Common Law Division. The plaintiff agreed to an order staying the matter until it provided security for costs in the sum of $20,000, and the proceedings remained in abeyance because it was unable to do so, the shareholder to whom it had previously looked for funds having died. In 1995, the plaintiff was deregistered for failure to lodge annual returns. On 15 June 1999, the plaintiff was restored to the register; on 20 April 2000 the $20,000 security was lodged; and at that time the plaintiff filed a motion seeking directions. The funds had been supplied by a Mr Wong, who became a director. The defendant's response was a motion, filed 15 June 2000, seeking the dismissal of the proceeding for want of prosecution. That motion was dismissed by Master Harrison on 1 September 2000, her decision being then challenged by the defendant by an appeal the hearing of which was delayed by factors relating to the defendant, so that its dismissal by McClellan J did not occur until 23 August 2001, a year and four months after the plaintiff had paid the security and taken out its motion for directions in order to progress the matter.
6 In the meantime, the defendant was placed in provisional liquidation on 15 March 2001, and its eventual liquidation, four days after McClellan J's decision, had become inevitable. So leave to proceed under s.471B was now required, and it was sought promptly, on the day of the decision. McClellan J was alive to this requirement, and directed the plaintiff to file and serve its motion. But his Honour does not appear to have envisaged any difficulty arising in that regard, since he referred to the "complexities" of the issues and said: "I should emphasise the necessity for the parties now to pursue the matter with vigour, so that it can be prepared for hearing at the earliest date which the Court can provide". It is plain that, at a hearing at which any suggestion the action was futile would certainly have been relevant to the discretion his Honour was exercising (see the remarks of Bryson J in Hartigan v International Krishna Consciousness at [7] and [16]), he did not regard the case as falling into some category of that kind. However, his Honour's views do not appear to have been noticed at the subsequent hearing before the Master, nor was weight given to the fact that the plaintiff's delay in meeting the requirement to pay security had been expressly held by Master Harrison and McClellan J to be "not inexcusable".
7 The Master, in his reasons, recited a number of the circumstances which had led to the application before him, and referred to the very large deficiency estimated in respect of the respondent ($665,000,000) and the even larger deficiency estimated in respect of the HIH Group to which it belonged. He indicated the dividend may be below 5 cents in the dollar, and noted "no payment is likely before about two years". The Master considered a grant of leave would have "an impact on unsecured creditors", in particular, because the "liquidators would be put to the expense of defending the action and be placed at risk of an adverse costs order", and because of the "distraction" of a hearing. To this proposition, the Master added that legal advice had not yet been sought by the liquidators in respect of the claim, nor were they able to estimate when they would be able to assess it, which they would do with other claims, but not in the next twelve months.
8 Without having referred, up to this point, to the special nature of this claim in contrast to ordinary insurance claims; its complexity and size; the question whether there was any real prospect a proof of debt in respect if it would be allowed, or the extent to which the risk as to costs which he had mentioned would also be involved in any pursuit of a proof of debt through an appeal or could be alleviated by an order for security; or the extent to which much of the alleged distraction could be avoided by the seeking of appropriate legal advice, the Master then turned away ( in para 16 of his reasons) to state:
" There are other factors which the plaintiff emphasises as being relevant to the exercise of the court's discretion in its favour. I shall now deal with certain of them ".
9 The first factor favouring the appellant to which reference was made was the commencement of the proceeding prior to the liquidation (in fact ten years before), the delay for a number of years thereafter being attributable to the very loss of deposit money allegedly caused by the respondent, to the death of the company's then financial backer and shareholder and to its consequent difficulty in arranging the security for costs required. The Master noted the financial problems were "said [to] have been resolved", and the subsequent delays were "said" to have been "by reason of matters outside the control of the plaintiff". Of course, they actually lay at the respondent's door - by reason of its failed application and appeal, and its liquidation, to which the Master did refer.
10 The Master describes the claim as "said" to be "one appropriate for determination by a court", although this description is then firmed up by the comment that the "submission does not seem to be in dispute". Nevertheless, later in the reasons, ambiguity is restored by a reference to the proposition that, to merit leave, the claim would have to be "reasonably arguable", on which issue the Master says the "liquidators join issue", and he concludes: "[I]t seems to be accepted that the court is not really in a position to assess the prospects of success of the plaintiff's claim. However, for the purpose of this application, I will assume (emphasis added) that it is not unarguable". I should note at once that, before me, senior counsel for the liquidators did not hesitate to acknowledge in argument: "It is accepted there is an arguable case". Once it is accepted there is an arguable case, in all the circumstances, that means, plainly, there is "a serious claim and a real dispute", to use the formulation held sufficient by a Full Court in Vagrand Pty Limited (in liquidation) v Fielding (1993) 41 FCR 550 at 557 (see also Re Coastal Constructions Pty Ltd (in liq) (1994) 13 ACSR 329 at 332).
11 The Master now refers briefly to the size and nature of the claim as features it is "said" to have.
12 Then comes paragraph 22 of the reasons, an important passage:
" The plaintiff says that there is a real prospect that the proof of debt would be rejected and it would be necessary for it then to have to approach the court by way of appeal. There would be further delay. The liquidators do not dispute this contention but stress that this must be seen in the context of the plaintiff's own lengthy delay and the lack of good reason to depart from the statutory procedure ".