Nuchman Pty Ltd & Ors v Bodmin Nominees Pty ltd [1984] FCA 198

Federal Court of Australia|1984-03-02|Before: Smithers J

~ Ci A I. VICTORIA DISTRICT REGISTRY GENERAL DIVISION

NUCHMAN PTY. LTD... GLENFRAE SPORTSWEAR PTY. LTD. , SAMUEL

from top of page for a full stop after the word "costs".

(Steven Anandola) Associate to Smithers, 6 March 1984

Practice and procedure - 0.52 r.15 - special reasons for extension of time to file and serve notice of appeal - relevant considerations - reasons for failure to file

notice within time - the prospects of success cn an

appeal - pessible prejudice to the respondent if leave qranted - broad considerations of justice - proposed appeal desiaqned to permit adoption of course in a new trial different from that adopted at the oricinal trial

principles arplicable where leave sought at the trial.

NUCUMAN PTY. LTD. & OPS V. PODMIN NOMINEES COTY. LTD.

IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY

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NUCHMAN PTY. OTD, GLENFRAE SPORTSWEAR PTY. LTD., SAMUEL JOSEPH FREFCMAN AND ADA FREEDMAN

was dismissed with costs adainst the areplicants. By

applicants have sought leave to file and serve a notice

of appeal against the entry of judqment notwithstanding

The original application in this court was filed on 21 January 1981. The statement of claim was amended by leave on 20 February 1981. The defence was filed on 7 April 1981. Subsequently there were proceedings by way of interrogatories and discovery. There was then a lenathy period of inactivity in the proceedings but, after a change in the solicitors for the respondent in June 1983, a date was fixed tor nearing, namely 3

In the application the applicants sought relief by way ef an order ror the avoidance of a lease ratween the firsce named applicant company Nucshman Pty. Ltd. (Nuchman) and 'che respondent and relief to the second, third ani fourth named asplicants zn respect of quaranteas given by 'them of Nuchran 3 obligatians under

the lease. The aroun the alleqation that there had been misleading con2uct on

the rvart of the respondent in contravention of the

provisions of s.92 of the Trade Practices Act 1974,

On the application coming on for hearing on 3 October 1983 both the applicants and the respondant were represented by senior and junior cousel. Senior counsel for the applicants informed the trial Judewe that the

applicants desired to discuss certain matters with tne

respondent out of court and sought permission of the learned Judge to do this. His Honour concurred. There were no further proceedings in court on that day. It was spent in negotiations between the parties. On the following day Mr. Havin, junior counsel for the applicants, appeared before the Court alone. Forthwith, he applied for leave pursuant to the provisions ot 0.22 r.2(i)(d) of the rules to discontinue the action. This apolication was eventuallv rejected. After discussion with counsel for the parties judament was entered for

According to o.52 ¢.15(1)fa) a rotice of appeal shall be filed ard served within 21 davs after the judament appealed crem is = epronounced. But by 9.52 r.15(2) tna Court or a Juda mav, Zar spacral reasons, at any time give leave to file ani serv2 a necice cf

Action directed to the obtainina of leave co file and serve the notice of appeal out of time was taken in this Court on 24 November 1983 by netice of motion. That netice or motion is said to have been in the wrong form and was not proceeded with. But a subsequent notice of motion was tiled and served on 29 November 1983. ft came on for hearing before the trial judae on

2 December 1383 and again on 16 [December 1983 when it

was referred by the trial judge for turther consideration by another member of the Court. On 19

December 1983 it came on for hearing betore me. Mr.

Hooper Q.C. and Mr. Boaden appeared for the applicants,

It was the case for the applicants that leave to file and' serve the notice of appeal out of time should be granted or refused according to broad considerations of justice as between the parties. It was put that

factors fer consideration included the ovorospects of

success on the apreal if it proceedad, the reasons why the notice of apreal had not Leen filed and served within the time fixed by 0.52 r.1S5/l):a), and whether any prejudice would be sutferei by the respondent if leave were ranted. It was saia that the prospects of success cn apreal were qood; that the farlure to serve the rotice ot appeal was du2 12 lack st funds on the part of the applicants at the time, and that ro

prejudice would be caused to the respondent should leave

As to the applicants' alleged lack ct funds, their position improved on 7 November 1933 when a decision was made by the Legal Aid Commission of Victoria to provide funds not only for Supreme Court proceedings on toot but

also this application and the appeal if leave were civen

It is clear, however, that when the applicant seeks "special leave" or merelv "leave", consideration alike of the question of possible iniustice to the applicant if the applicaticn be refusea and the iudament left

undisturbed, and of possible iniustice to the respondent resulting from the disturbance or his saeningly vested interest ain the maintenance cf the iudamenc involves a consideraticn cr the prospects cf success ot the aprsal if the extansion be ayanmred. For it would be uniust te the resrendent t3 fut him to the trouble and exvense of an anneal if the judgment sought co be attached is Plainly right - compare tne coservations on 4 Similar eoint by Echell, J., in Bayview Guarrieas Oty. Ltd. v. Castley Cavelcorent Pevy. Ltd., Cid623 V.F. 445 ac ci. 446 citing Evans v. 2artlam, £1937] A.c. 472; £19377 all E.P. 346 ani Cellins Eccw Caeck Pry. Lii. v Bretherton, £1338] V.L.R. 49.

From this point of view the inquiry seems gererally to have been exerescad in terms whether the judament attacked 1s atrended with sutficient doubt to justify the aranting

of leave - see North v. Tavlor (1905), 2 C.L.R. 291; Johansen v. Citv Mutual LO1fe Assurance Society Led. (1904), 2 C.L.R. 186."

and that the applicants desired that the hearing be not delayed. On 4 October 1983 Mr. Havin tor the applicants appeared alone and opened proceedings by

"MR HAVIN: If your Honeur pleases. We are indebted to your Honour for making yesterday available for the purposes of exploring the possibilities of settlement. Although some progress at the end of the day was made not sufficient proqress at the end of the day was made. The result is that the applicants in the matter now wish

to seek leave of the court to discontinue their application before the court. They do not feel they are able to cecmmit themselves to the extent of lLitiaqatien cf some weeks that this casa will involve inevitabivy, and I woula te seeking the leave of the court pursuant to rule 2 order 22 of the Fedaral Court Rules, in

particular to sub-rule '1) paraqraph (d) of those rules. That sub-rule provides:

Before this application was dealt with the respondent applied tor leave to file and serve a cross-claim seeking judgment for money said tc be due for rent under the lease and judament against the quarantors. Counsel for the respondent also contended that the leave to

discontinue should be granted only en strict conditions

as to payment of costs and restraint on the revival by the applicants of their claims in other proceedings.

address your Honour on the question of discontinuance of the claim, and then make brief comments in respect of the cross-claim. I am not able to sufficiently stress that not cnly were the instructions I received this mornina to discontinue this application, but the applicant at all times felt themselves to have a acod and proper case to be -rought berere this court and thar, ain a word, through their being impecunicus, are not anole to presecute the case to its ultimate.

i interrupt, but if these «= are going to o8 rade tha atfidavit. They are not

ort of submissions & should be put on sufficient. with

HIS HONOUR: I do not really cnow whether it is a matter for either aviczence cre azserticn Fitner wav, Mr. Chernov, 2 wourd net at the moment be making an atterce <c2 determina that issue. 1 sav that suoject to submissions from either side, but people discontinue proceedinys ror a variety ofr

reasons. It could be, as you suagest, the whole thing is sinister and an abuse of the court's process. On the other hand, Mr. Havin savs it is that thev ara not able to litigate the matter. Either version could be trues. I would not think that in considering the present application it is any part of my function to have to determine where the truth lies and what are the factors that are onthe applicant's mind in deciding it does not want to do ahead in this court with these proceedings.

acreot that. We did not intend to imply we were accusing him of anv improper conduct.

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HIS HONOUR: I had not taken it there was anv such suggestion. I would have thought what Mr Havin has said was desianed to redress the balance against the suagestion made, perhaps understandably on your part, that there was something sinister about these whole proceedings. The words "abuse of process" have probably led to Mr dHavin saying it is not abuse of preces3 but they have not qot encuaqn money to fight the matter. I think I should treat the matter that I do not know whether either of these reasons is the real reason or whether it 15 a mixture or factors."

"MR CHERNOV: What we seek - and if would meet tne point which we 3¢2k to arhieve, that 13 if judament were anteret tor the respondent that would put to an ena -cnce and for all all the issues between tne parties in this court or any other court.

MR CHEPNOV: Yes, your Yoncur Te is one thana ts say a condition s¥ aivind leave to discentinua, is to pay costs, Sut particularly having vaqard co tne ract that your Honcur 15 intlsenced DY shis state/federal dichoto-y in turisdiction, ic would be mest unfertunate if this court did mot co something which :t could have done to prevent this matter being raised again.

HIS HONGUR: f follow that - I will ask Mr. Havin on that. Mr. Havin, whv should not veur clazrm be dismissed with costs?"

His Honour referred to the tact that there had been adequate time for consideraticn, that the matter had

been in the hands of two counsel and had no doubt been

"MR HAVIN: Do [I understand your Honour now to be saying that the effect of the distinction between discontinued and what your Honour now proposes will be in any event to prevent the applicants bringing actions?

HIS HONOUR: Yes, it will conclusively determine the matter. You are ina position. as I gather, that you are proposing to lead no evidence in support of your claim. You have considered your position and we will not qo into the reasons why, whether it is what Mr. Chernov said earlier or what you have said, but the fact is that here we are, the court has allotted ten days and you have chosen not to preceed. You do not

propose to pursue the matter and while you do that is scemathinz that we will not ao into. This 15 onlv machinery, but why should vou get leave

MR HAVIN: Even if that were to he the form of the order, that the application were to be

with tha costs ot the resrondent, Presumably tha rescondent would wisn '9 litigate with vescecr t9 the arrears of cne type or anctner ealsewnere.

HIS HONCUR: Yes, they will iibtigata it if your client do2s not pay

MR HAVIN: I take the force ef vour Henour's comments.

HIS HONOUR: Whether they wiil have to litigate 15 another matter and whether tnere 1s any defence te that claim. That is one ef tne matters of which Mr. Chernov so elcauentli?v complained of this merning. nis clients

MR HAVIN: Your Honour foreshadows a matter that I was now aoing to turn my mind to and that is this: the respondent mav wish to lead evidence elsewhere 1£ nothing happens in the interim in respect of those arrears. The making of an order in either cr those

possitilicies ceror2 your Yeonsur at che moment would not ereclude that matter boing defended.

HIS HONOUR: No. I understand that. What weight, if any, the master would attach to evidence being placed before him, had this matter been dismissed with costs, might be a matter ... but I am simply hearing the

proceeding before me. As you have gathered from what I said to Mr. Chernov, I am loath

to take any step across the line from this building ---

MR HAVIN: The position of the applicant is that if your Honour were mindful to making the order in terms of it being dismissed; the action, rather than discontinue it, it will be a distinction without a difference from our clients ---

MR HAVIN: A distinction without a difference, from my clients point of view. My clients, should the time come, would be able to defend that matter andthe question of

substance if the defence was determined elsewhere by the appropriate persons.

HIS HONOUR: I follow that. You do not desire to put any submission on that last suggestion?

HIS HONOUR: I will give you judgment on the claim. Costs: Is there any problem as to costs at all?

HIS HONOUR: Anything you want to say on that, Mr. Havin?

The grounds on which it is desired to challenge the entry of judgment are set out in the form of the proposed notice of appeal. The main grounds appear to

(1) that the learned judge failed to take into account the reasons for the applicants' application for

(2) that the learned judge expressed the view and acted on the basis that it was not necessary for him to enquire into the applicants' reasons for applying for leave to discontinue the action and failed to give the applicants an opportunity to

(3) that the circumstances did not warrant an entry of judgment which would conclude the issues between

There can be no doubt that his Honour was more than a little surprised that the applicants who appeared before him on 3 October 1983 by two counsel and

indicated through counsel their readiness to proceed

with a ten day trial and their desire to do so without delay, had decided on 4 October 1983 to seek leave not to do so. Concerning the financial position of the applicants it is to be observed that in putting the matter to his Honour in opening, Mr. Havin did not say, no doubt because he was not so instructed, that the applicants could not support the trial financially. He said that they did not feel they were able to commit themselves to the extent of litigation of some weeks. At a later stage Mr. Havin said that his instructions were to discontinue the application because although the applicants felt themselves to have a good case against the respondent "in a word, through their being impecunious they are not able to ovorosecute the case to its ultimate". In the light of everything that occurred on 3 and 4 October 1983 I do not interpret this later statement as an aintimation to his Honour that the applicants were without funds in the sense that if they wished to fight the case they simply did not have access to enough money to do so. His Honour did express the view that it was unnecessary for him to unvestiqate the state of the applicants' finances or the considerations which had led the' applicants to seek leave to discontinue. There is good reason to think that his Honour sensed, correctly, from what had occurred that the applicants did not suggest that they desired to

justify their application by reasoned argument on the

basis of lack of funds or any other circumstances. But he expressed the view referred to as "subject to

submissions. He invited cousel for the applicants to state why the applicants should have leave to discontinue and why judgment should not be entered against then. He received no response of substance to

called to establish the alleged financial difficulty of the applicants. Indeed from what has emerged at the

hearing before me it is clear that there was never any intention to call evidence as to the financial position of the applicants. When the learned Judge asxed counsel for the applicants to set out =ne reasons wny leave to discontinue should be granted counsel was in difficulty. It was one thing to say that for financial reasons they felt that they could not further support the litigation, or even to say that because of their being 1mpecunious they were not able to prosecute the case to the ultimate, but an application for leave to discontinue on financial grounds at that stage required a fuller explanation. To answer the question fully or to persuade his Honour to consider the reality of the

financial position of the applicants counsel would have

had to explain that although he understood that adequate

Se es et me a eee eee Se a RRR aps ste ane Ne aed later

finance was available to the applicants to support the litigation for at least ten days, the applicants had simply decided not to proceed, or that the applicants had been advised that the quantum of relief obtainable in the action would be much less than the liability of the applicants to the respondent in respect of rent under the lease, and that even if the action were successful, the individual applicants faced bankruptcy

and the corporate applicant faced winding up proceedings. He might have added that the applicants'

view of the situation could be summed up in the phraseology of Mr. John Felman, a director of Nuchman, that there was no point in throwing good money after bad. He might also have said that the applicants had decided that the appropriate strategy for them was to conserve the available funds, keep the claim on foot 1f possible by a discontinuance, and use the funds saved to finance a possible settlement im the near future. He would have then said that this strateay took into account the probability that the respondent would

promptly sue in the Supreme Court for rent estimated at

some $140,000 or in the Federal Court if its threatened

All this is the proper inference to be drawn from the straight forward evidence given before me by Mr.

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It is apparent that if negotiations could take Place before the limited extent of relief obtainable by the applicants, if successful on their claim, became apparent, the chances of negotiating a settlement, against a background of their claim appearing to be better than it was, might be reasonable. As Mr. Havin put it "the strengths of our own case was such as they were at Court on 3 October 1983." Although in actual negotiations there remained a large gap between the figures in the minds of the applicants and those in the minds of the respondent, the sum of $20,000 payable by the applicants to the respondent was the applicants' target for settlement and it must be taken that it was

available tc the applicants for settlement purposes.

There being no suggestion ry the applicants of any desire to call evidence to establish their respective financial positions and the application being supported only by the statements of counsel set out above and there being no real answer to the question why leave to discontinue should be granted, no occasion existed for the learned Judge to make an assessment of the financial position of the applicants or its significance in the

applicants were in difficulties concerning witnesses or in any other practical way. Clearly his Honour had inferred that if the application for leave to discontinue were rejected the applicants proposed to call no evidence and he made this clear. His Honour said "You have chosen not to proceed. You do not propose to pursue the matter". When he asked, "Why should there not be judgment with costs?". The answer to his Honour's question might have been "because we wish to call evidence to show that our case for leave to discontinue is a gcod one" or "if our application for discontinuance 1s to be dismissed we wish to call

evidence to prove our case against the respondent". But

Mr. Hooper sought to rely on the discussion between his Honour and Mr. Havin as to the effect which entry of judgment might have cn the ability of the applicants to defend in the Supreme Court of Victoria an action by the respondent against the applicants in respect of the rent payable by Nuchman under the lease. His Honour having stated unequivocally that the entry of judgment would "conclusively determine the matter", namely, the issues in the applicants' application in the Federal Court, what tcok place should, I think, be interpreted as an expression of his Honour's concurrence

in the view that notwithstanding the entry of judgment

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respondent's proceedings in the Supreme Court if they had a defence and that the effect of the judgment on that defence would be a matter for the Supreme Court. I do not gather from Mr. Havin's evidence before me that

he was under any misapprehension in this respect. It is

| the applicants would not be excluded from defending the } | my view therefore that the chances of success in an appeal against the entry of judgment on 4 October 1983

There may be circumstances in which a genuine financial inability to sustain an action could found a successful application for leave to discontinue. A sudden unexpected financial disaster might found a successful application. The further proceedings have continued the further the privilege of discontinuance recedes. When the action reacnes the day for trial and both parties have announced their readiness to procered

Newspaper Company (1898) 1 Q.B. 636 at p.639 with respect to o.XXVI r.1 which provided that after a

certain stage the plaintiff cannot without the leave of

"The principle of the rule is plain. It is that after the proceedings have reached a

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certain stage the plaintiff, who has brought his adversary into court, shall not be able to escape by a side door and avoid the contest. He is then to be no longer dominus litis, and it is for the judge to say whether the action shall be discontinued or not and upon what terms."

In the instant case the action had been on foot since January 1981. When it commenced Mr. Freedman and his wife were directors of Glenfrae Pty. Ltd. (Glenfrae) and the beneficial interest in the shares therein was theirs. In November 19382 a company called Alroth Pty. Ltd. (Alroth) was formed. It took over the assets of Glenfrae. It seems that $22,726 was paid to Mr. & Mrs. Freedman as superannuation and that that sum was reinvested by them in Alroth and has been used for trading purposes by it. Alroth was formed as a trust company. Mr. Freedman'-said, in what he suggested later was an unquarded moment, that his solicitor advised that a trust company be used "because of the court case, Ii think". By virtue of the transaction the adult children of Mr. & Mrs. Freedman became the beneficial owners of the shares in Alroth. The consequences of this were that the shares of Mr. & Mrs. Freedman in the Ringwood business ceased to be assets of theirs: there were

taxation benefits, and Glenfrae, one of the guarantors

non-trading shell apparently without assets. But it would seem that there is a liability in Alroth to Mr. & Mrs. Freedman of an amount exceeding $22,726 being the amount of superannuation mentioned above. The value of the shares in Alroth is not stated but it was obviously thought that it was sufficient to make worthwhile the formation of the trust company to hold them for their

Mr. Sam Freedman exhibited a remarkable lack of knowledge when the financial dealings of Alroth, the management or which he was and 1s closely concerned, are enquired about. In fact he displayed a remarkable lack of knowledge about any company with which he has been cr is involved. He said that he thought the companies in which ne and Mrs. Freedman and Mr. John Felman were invelvea were "all mixed up" together. However, 1t appears that the financial position of Mr. & Mrs. Freedman and of Glenfrae was weakened by their own acts, and, according to Mr. Freedman's statement "because of the court case". But they were not bereft of funds to fight the case. It 1S apparent that the financing of the case was left by them to Mr. John Felman. He was a director and manager of Nuchman and of a company called Honte Pty. Ltd. (Honte) which was formed in 1978 asa

trading company and which traded from the premises the

subject of the lease vetween Nuchman and the respondent.

That was a company in which Mrs. Freedman was a director and held 5% of the shares, Mr. Freedman held 5% and their two adult children held 40%. Mr. John Felman held

In mid October 1983 after judgment had been given against the applicants there was a proposition put to Mr. Freedman by Mr. John Felman that he purchase for $12,000 the family half interest in Honte which was held by the Freedmans. Mr. Freedman eventually rejected the offer. But that it was made indicates that there was at the relevant time a family asset worth $12,000, a fifth of which belonged to Mr. & Mrs. Freedman absolutely. Asked whether the children, who owned the other four fifths, did not do as they were told, Mr. Freedman said,

The above also indicates that Mr. John Felman at all material times had an asset worth $12,000. And of course what other assets were available to him is not known. It is known, however, that he had paid Mr. Rockman, his solicitor, and an accountant at least $13,000 for the purposes of the case. It is a reasonable inference from the evidence, that if, on 4 October 1983 it had been thought wise to carry on with the action, any additional money would have been found

by hin. In any event Mr. Freedman himself could have

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drawn a cheque for at least $6,000. That, with what was already available, would have seen the action through for the next ten days with one counsel. If it is said that Mr. John Felman was not a party to the proceedings, nevertheless he was a director of Nuchman and he was the person accepted by the applicants and himself to be the Paymaster to Mr. Rockman. No evidence was submitted on this motion of the position of Nuchman. Mr. John Felman gave no evidence. He was said to be in poor health but no adjournment was sought. It appears in the evidence before me that Mr. & Mrs. Freedman have been largely dependant on the returns of a retail clothing business now carried on by Alroth at Ringwood. They each draw $103 weekly and the company pays their general living expenses. Yet, they had seen fit in December 1982 to make a gift to the children of the shares in Alroth. Asked why in their modest financial condition and having regard to their ages they would make such a gift Mr. Freedman said it might dispose the children to treat them well in their old age. I don't accept this. It is apparent that thought has been taken for the protection of Mr. & Mrs. Freedman from liability for tax or perhaps for other liabilities by their accountant or their then solicitor, Mr. Rockman. Appropriate as this may have been it is not a good background of fact upon which to

claim privileges on the ground of impecuniosity. The

evidence of Mr. Freedman, who was the only witness to

speak of the applicants' finances, was characterised by evasion and contradiction. His demeanour was unconvincing and it is impossible to rely on any of it on any important matter. The fact that the applicants were impecunious to the point that they could not have proceeded to trial has not been proved. The evidence is

One is forced to the ultimate conclusion that the reason for the decision to seek leave to discontinue and to bring the litigation to an end whether or not such leave were obtained was not shortage of money but a reluctance to spend the available money in a way that would not sufficiently ward off the threatened winding up and bankruptcies. It would therefore have been difficult, and it appears tome, impossible for the applicants to have obtained leave to discentinue their application on financial grounds. Once it appeared that the applicants' application for leave to discontinue was rejected, they had to decide whether to proceed with the trial of the issues or to refrain from doing so. It is clear that their decision had already been made not to proceed to prove their case if their application to discontinue were to fail. On that analysis the entry of judgment was inevitable unless it could be shown that the application for leave to discontinue with or without

conditicns was wrongly rejected. As was said by Lord

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Halsbury in Fox v. Star Newspaper Company Etd. (1900) A.C. 19 at p.20, "The substance is that when it Cthe

case} once comes into court, and when the plaintiff offers no support to his action, there must be a verdict for the defendant". And see the observations of Rich J.

in Phillips v. Ellinson (1941) 65 CLR 221 at 228. As

indicated, I see, inthe instant case, no factor of error in the rejection of the application for leave to

discontinue and consequently of the entry of judgment.

According to 0.52 r.15(2) the time for appeai shall be extended only where there 15 special reason for doing so. The times appointed by the rules for the taking of steps in proceedings are intended to be observed. No doubt strict compliance with time

provisions is more important in some resvects than in

others. But once judgment has been aiven and the time

for appeal has expired the successful party has, as

pointed out by Brett M.R. in Re Manchester Economic

Building Soczety (1883) 24 Ch.D. 488 at p.496, a right

to say that no appeal shall be brought against him. But this is "a right which in some sense has a limitation,

it is: subject to the special leave of the Court of Appeal". And Mr. Hooper relies on the observations of

"... I. know of no rule other than this, that the Court has power to give the special leave, and exercising its judicial discretion is bound to give the special leave, if justice requires that that leave should be given. The cases which were brought before the Court were cases in which either justice aid require that the leave should be given or justice required that it should not be given. But those are instances of the application of the rule; they cannot alter the rule and they cannot alter the phraseology of the rule; and although some Judges with regard to the particular cases before them have used expressions which have been relied on, yet other judges when they came to see what was the effect attributed to those expressions have at once pointed out that they were expressions used with regard to the particular case before them, and that they were mot to be taken as substituting anything for the words of the 15th rule."

But the question under 0.52 r.15(2) is whether the applicants can establish special reason for the extension of time to file and deliver the notice of app2al. This focuses attention, in the first instance, on what occurred during those 21 days, such as whether there was the intention of the applicants to appeal, how it was that notice of appeal was not filed, and

whether, whatever those circumstances, there is some

particular factor that constitutes a special reason.

So far as the intention of the parties is concerned the only evidence before the court is that of Mr. Freedman. His evidence is halting and varying. But

I am satisfied that he had no intention during those

twenty one days of appealing against the entry of judgment. If he left the matter to his solicitor Mr. Rockman, the only inference one can drawis that Mr. Rockman had no instructions to appeal and never contemplated doing so. In so far as Mr. Freedman left the matter to Mr. Phillip Felman as representing golicitors now employed by the applicants during the relevant period there is no evidence of any intent on the part of Mr. Phillip Felman to appeal. It appears however, that on 27 October 1983 an application was made for legal aic for Mr. and Mrs. Freedman "in relation to

the defence of the Supreme Court action" brought by the

respondent against the applicants in respect of the amount of outstanding rent payable by Nuchman. No suggestion appeared in the letter accompanying that application that 1t was desired to appeal from the judgment entered on 4 October 1983. There is no evidence of the antention of Mr. John Felman, the director and manager of Nuchman, or of any other executive of that company. Mr. Freedman spoke for Glenfrae and said nothing with respect to that company even considering an appeal. But on 7 November 1983 apparently arising out of negotiations with the Legal Aid Commission the notion emerged that it would be desirable to appeal against the entry of judgment of 4 October 1983. This may have emerged out of the

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{ { judgment for the amount of the rent was entered by i Master Brett in the Supreme Court of Victoria and an | appeal against his decision was contemplated. That appeal is suspended pending the outcome of this motion.

i } i a | It is difficult to understand the real reason why i

the applicants would now desire to appeal other than that they may now do so without expense to themselves, and that an appeal and new trial if granted would perhaps delay the respondent from obtaining judgment for that portion of their claim for rent which would remain outstanding should the applicants obtain all the relief they could hope for in their Federal Court action. In other words the appeal would restore the position to what it was on 4 October 1983. But ait would seem less Satisfactory now that the opnjective of the proposed discontinuance has been disclosed in this application. But perhaps the critical consideration in relation to the extension of time is that it 1s designed to relieve the applicants from the consequences of a course of action deliberately adopted by them in their contest with the respondent arising out of the liability for rent of the premises the subject of the lease. Apparently the applicants, being now publicly financed,

The question of whether assistance should be granted to the applicants to achieve this by granting leave to appeal does not to my mind involve considerations of justice, but rather whether grounds exist for extending to them an indulgence. To my mind the notion of special reason for an extension of time to appeal is a reason supported by some sort of merit in the applicants relative to the non-compliance with the

The Effect on the Respondent of Extension of Time to Appeal

Mr. Hooper's ultimate contention was that the entry of judgment operated as an injustice because the entry of judgment determined the issues against the applicants without any investigation of the merits, and that, provided that the respondent's costs were paid the respondent would not be prejudiced if an extension of time to appeal were granted. He urged that there is an overriding consideration of justice which requires that a party should have the opportunity to have a bona fide claim at law determined on the merits. He said nobody could say that by the judgment the applicants had not suffered a reverse and the respondent enjoyed a

investigated, might have occurred. On this outline he contended that there is a substantial consideration of justice arising out of the fact that it is unacceptable to the law that a possibly unjust situation should be sustained when the requirements of fairness and reasonableness can be met by an order for costs. He relied largely on the judgment of the Full Court of Victoria in particular the observations of Lush J. in Freeman v. Rabinov (1981) V.R. 539. In that case judgment had been entered as a result of non-compliance with a self executing order for the delivery of a supplementary affidavit of documents within a fixed period in default of which the action was to he dismissed and the defence to the defendant's counter claim struck out. The plaintiff delivered a supplementary affidavit of documerts within the time limited by the order but it was defective in that it omitted a final paragraph to the effect that all the documents listed therein together with those listed in

an earlier affidavit were all the documents which were or had been in the possession of the defendant. There was another defect in that there was a non-specific description of certain. lost cheque butts. On the basis that the automatic operation of the order had occurred, the plaintiff sought to extend the time for compliance with the order, or alternatively, leave to appeal

against the order. The defendant sought interlocutory

judgment on the counterclaim for damages to be assessed. The judge refused to extend the time for compliance with the order. He extended time for appealing against his order and gave the defendants interlocutory judgment on the counterclain. The plaintiff appealed to the Full Court against the self-executing order and the refusal to set it aside or extend time for compliance with it, and against the entry of interlocutory judgment on the counterclaim. The argument was that authorities established the power of an appellate court in such circumstances to vary the original order if it had in the result led to an injustice, without making a decision that the order was wrong when made. It was submitted that in the case there was a resulting injustice, in that the plaintiff had complied with the time requirement but because of the form of the

The Court expressed the view that the absence of the final paragraph of the affidavit of documents was a defect of form and fatal to the sufficiency of the affidavit and that the description of the cheque butts was a defect of content and not of form and was not such as to make the affidavit insufficient. It took the view that the defects inthe affidavit did not render it

In the end the Court took the view that although the order made by the learned judge who dismissed the plaintiff''s application for an extension of time to comply with the original order and giving leave to enter interlocutory judgment against him on the counterclaim had not erred, nevertheless it had jurisdiction to set aside or vary a decision of a single judge on the basis that an injustice in the result flowed from the

operation of the order. The Court ordered that the time for delivering a supplementary affidavit of a documents

It is a question whether the situation before me is comparable with that before the Full Court of the Supreme Court of Victoria dealing with a question of compliance with the rules of that Court. Giving weight to the view as to the class of injustice perceived therein, it is apparent that there are marked differences between that case and this case. The situation arising under a self executing order where the failure to obey the order occurred despite bona fide but inefficient efforts to comply with the order is very different from one arising out of a step in litigation, deliberately adopted for such advantages as it had, by a party fully advised. That step in this case was to refrain, for tactical reasons, from proceeding, although

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One responds to the proposition that there may be an element of injustice as between parties in that one of them has obtained a judgment against the other otherwise than on the merits. But, in substance, the judgment under consideration was obtained in the course of battle where one party retreated with a view to obtaining thereby a tactical advantage in the war. When a case is in the list and is called on, and preliminary applications are disposed of, and an applicant able to proceed refuses todo so, then the "merits" as between the parties are to be found inthe reasons for the attitude adopted. Here it was adopted by the applicants for the reason that they saw it as having advantages to them, that the consequences were regarded as preferable

to the expenditure of the money available to support the

As previously stated the present application is really a plea by the applicants for an opportunity to seek a return to the situation which existed on 4 October 1983 so that a course in the litigation, different from that which they took on that day, may be adopted. It is doubtful if there can be said to exist in a situation of that nature the kind of justice which was referred to by Brett M.R. in the passage referred to

course of action at the trial desires to appeal so that it can take a different course of action on a new trial special considerations arise. And not the less so when it is said that the desire to do so constitutes a special reason for extending the time to appeal. There is inherent difficulty whenever, on appeal or otherwise, a party-desires to depart froma course deliberately

adopted at atrial. As was said by the Full Court of

this Court in Thurgood v. National Bank of Australasia Limited NSW, No. G.129 of 1981 1 October 1981

(unreported) "Under 0.52 r.15, sub-rule 2 ... to succeed in this application the applicant has to give to the Court an explanation which it finds satisfactory of the delay and the failure to comply with the rules. ..." It is well established that on an application for a new trial to call fresh evidence or to introduce fresh evidence on appeal such relief is not normally extended save where, inter alia, the fresh evidence was not available at the trial notwithstanding reasonable diligence to seek it: see Thurgood v. National Bank of Australasia Limited (supra). It would not, except in exceptional circumstances, be extended where the evidence was available at the time of the trial but, pursuant to a deliberate decision made on the basis of

what was seen to be the best interests of the party

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What was said by Jessel M.R. in Sanders v. Sanders (1881) 19 Ch.D. 373 at 380 appears to me to be in point.

"The appellant has applied for leave to adduce fresh evidence ... The application is for an indulgence. He might have adduced the evidence in the Court below. That he might have shaped his case better in the Court below is no ground for leave to adduce fresh evidence before the Court of Appeal. As it has often been said nothing is more dangerous than to allow fresh oral evidence to be introduced after a case has been discussed in Court."

The circumstances of this case, where a party having decided on and adopted a course of action at a trial for reasons which seemed to be in its best interests at the time, desires to extend the time for appeal in order to seek anew trial where a different course of action would be pursued, seem to me to call for the application of principles similar to those applied in cases where

fresh evidence is submitted as a ground for a new trial

"My Lords, of course i do not say the rule is so extreme that if there were some extraordinary miscarriage or justice the persons concerned should be bound by 1t; but in an ordinary case, inmy opinion, the parties must be bound by what is called the course of the trial - that 1s to say, the way

in which the trial was carried on - and when the learned counsel on both sides agree upon what are to be the questions to be put to the jury, in my opinion it would be only in an exceptional case (so exceptional that at the moment I cannot anticipate what would be the circumstances that would, in my judgment, justify it) it could be held that any other questions should be submitted to the jury beyond those which the parties had agreed upon". and:

"In Roycroft v. Iago (1873) 4 A.J.R. 145 in refusing to allow a new trial on the application of a defendant, Barry and Williams JJ. said: "If parties come prepared to try issues and confine themselves to certain of them, or to one only, or toa particular view or bearing of the evidence with respect to that one, they are not at liberty to open up a new and totally different case in Banco, and 1t would appear that the result is the same whether the omissions to take the objection or to present

or deliberate intention". In both of those cases great weight was attached to the "course of the trial" and in particular to the way in which the case had been put on behalf of the party

436 an employer who had called no evidence at a hearing in the original jurisdiction of the Supreme Court of the Northern Territory on "an appeal from the Administrative Appeals Tribunal, suffered judgment against him. On appeal to the Full Court of the Federal Court it was

pointed out in the joint judgment of Keely, Deane and

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Toohey JJ. that "the appropriate principle is that the employer is bound on appeal by the manner in which his

instance". Uranbey_ (Aust) Pty. Ltd. v. Hale (1980) 54 ALJR 378 was relied on and McCormack v. Federal

Commissioner of Taxation (1979) 143 CLR 284 was distinguished. A similar principle was applied by the Full Court of the Federal Court in Lynch v. Howard (1980) 44 FLR 71.

It ais my view, therefore that it would be incompatible with principles relating to the proper administration of the law concerning the conduct of litigation to grant to the applicants the indulgence of an extended time for appeal to enable them to adopt ina

I think that the prospects of success on any appeal would be slight. Also, I am not satisfied that any reason for the failure of the applicants to file and serve a notice of appeal in time has emerged other than that in that period there was no intention to appeal. I am not satisfied that there exists an element of

At a glance

Court

Decision date

Before

Source

Judgment (203 paragraphs)

Cases Cited (5)