Practice and procedure - Case management - Judgment and orders - Springing or self‑executing orders - Springing order made in relation to freezing or ancillary orders - Whether principles in Firmware Technologies Inc v Asia Platinum Group Ltd applicable - Where no relevant non‑compliance by defendant and defendant unable to effect compliance

1. On 26 August 2016 the first respondent (Pier) acquired two businesses from the second respondent (Jean Maurice) and the former third respondent (Sancho Bakery) paying $1.8 million. At that time the fourth respondent (Mr Durolek) was the sole director and secretary of the vendor companies.
2. The appellant (Mrs Durolek) is married to Mr Durolek. Mrs Durolek was a director of Jean Maurice until March 2016. An earlier conditional agreement to purchase the two businesses for $2.45 million had been negotiated in February 2016 while Mrs Durolek remained a director of Jean Maurice.

1. On 9 November 2016 Pier commenced proceedings against the other parties to the appeal and Sancho Bakery.
2. Pier alleged breach of contract against Jean Maurice and Sancho Bakery. It also pleaded causes of action alleging misleading or deceptive conduct and deceit against all of the defendants. It was pleaded that:

(1) The agreement for the sale of the businesses was made on about 28 May 2016.

(2) Before the sale agreement was made, further or alternatively, during a 'period of due diligence', the defendants made representations to Pier in relation to the businesses' costs and payment of franchise fees.

(3) Each of the representations was made in trade and commerce and was misleading or deceptive, being false, in that wages were understated and franchisees were not paying royalty fees.

(5) Pier relied on the representations in entering into the sale agreement, carrying out its due diligence and paying the purchase price at settlement on 26 August 2016.

(6) Pier suffered loss and damage by reason of those matters.

1. Pier pleaded that Mr and Mrs Durolek made the representations or were involved in making them. Pier alleged that Mr and Mrs Durolek contravened s 18 of the Australian Consumer Law, aided Jean Maurice and Sancho Bakery to do so or were knowingly concerned in the contravention. Particulars alleged that Mrs Durolek was a director of Jean Maurice until 8 March 2016, remained actively involved in the management and day-to-day operations of a business at Joondalup and instructed and authorised a business agent to advertise and sell the business to Pier.

1. On 14 November 2016 the primary judge made separate freezing orders against each of the defendants following an ex parte hearing. The freezing orders had effect up to 1 December 2016. The freezing order against Mrs Durolek prohibited her from in any way disposing of, dealing with or diminishing the value of any of her assets except as permitted by the order. Among other things the order permitted dealings where the unencumbered value of Mrs Durolek's assets exceeded $2 million.
2. Mrs Durolek was served with the freezing order directed to her, and other documents including the writ in the action, on 24 November 2016.
3. A further hearing took place before the primary judge on 1 December 2016. At that time all defendants (including Mrs Durolek) were represented by counsel. The primary judge made an order extending the operation of the four freezing orders until the hearing and determination of the action by trial or further order of the court discharging or varying the freezing orders.
4. Counsel for the defendants informed the primary judge that he did not have instructions as to whether the defendants were agreeable to extend the freezing orders to trial. But counsel informed the primary judge that:

I am instructed that ... all of the defendants don't oppose - or they don't seek to contest the continuation of the freezing orders at least until the next directions hearing...[2]

1. The primary judge suggested that the usual order would be to provide for a continuation to trial or further order thereby allowing the defendants, should they choose, to seek either a discharge or variation.[3] Counsel for the defendants accepted that suggestion saying: 'I think that might be an appropriate order'.[4]

Disclosure affidavits as to assets sworn on 20 February 2017

1. On 19 January 2017 the primary judge made ancillary orders requiring Mr and Mrs Durolek to swear affidavits setting out to the best of their ability information including all of their 'assets worldwide'. On 15 February 2017 the time for compliance with those orders was extended to 27 February 2017.
2. Mr and Mrs Durolek swore affidavits purporting to disclose their assets on 20 February 2017.
3. The affidavits disclosed that Mr and Mrs Durolek owned a property in Kallaroo and two properties in Mandurah (one of which was their home) as joint tenants. Mrs Durolek's affidavit also disclosed a leasehold interest in an apartment at Hillarys Boat Harbour.
4. Mr Durolek's disclosure affidavit stated that Mr Durolek owned 29 Lingots of 1 kg of gold, purchased on or about 30 November 2016, for €1,066,825.10. Mr Durolek deposed that the gold was stored at a bank in France.
5. Mr Durolek deposed that the net sale proceeds of both businesses, an amount of $1,604,731.26, were:

(1) paid into an Australian bank account of Sancho Bakery on 26 August 2016;

(2) transferred to Mr Durolek's French bank account on or about 30 August 2016; and

(3) used to purchase the 29 gold Lingots on 30 November 2016.

1. It is now accepted by Mrs Durolek and Pier that Mr Durolek lied about the existence of the gold. The circumstances in which Mr Durolek's lie was discovered are discussed at pars 27 to 29 below.
2. Mr Durolek compounded the deception contained in his 20 February 2017 disclosure affidavit by swearing a 13 June 2017 affidavit which also referred to the 29 gold Lingots.[5]
3. The disclosure of the apparent gold Lingots led to further ex parte orders. Among other things, on 6 April 2017 the primary judge ordered that certificates of ownership acknowledging Mr Durolek's title to the 29 gold Lingots be delivered to the Principal Registrar of the court. That order was purportedly complied with under cover of a letter from Mr Durolek's solicitor dated 12 April 2017. The letter stated that it enclosed the 'original certificate of ownership' in respect of the 29 gold Lingots. A document appearing to have that character, issued by the French bank to Mr Durolek and dated 30 November 2016, accompanied the letter.[6]

1. On 15 June 2017 the primary judge ordered Mr and Mrs Durolek to deliver all of their passports to their solicitor.
2. The passport delivery orders were not complied with. To the contrary, Mr and Mrs Durolek left Australia on 20 June 2017, travelling to France after a stop-over in Thailand.[7] Mrs Durolek confirms the 20 June 2017 departure from Australia in an affidavit sworn for the purposes of the appeal.[8] Mrs Durolek's affidavit does not condescend to state whether or not, as at the time of departure from Australia, she had been informed of or was otherwise aware of the passport delivery orders. However, in the course of giving oral evidence before the primary judge in connection with the damages assessment Mrs Durolek gave evidence that she was not aware of the orders (not being told of them until arrival in Thailand) and she was not told she had to hand her passport to her solicitor.[9]
3. On 26 June 2017, on an ex parte application by Pier, the primary judge made orders restricting travel by Mr and Mrs Durolek. The orders required Mr and Mrs Durolek to surrender their passports to a registrar of the court and to not depart Australia for a foreign country without further order of the court. But, by this time, Mr and Mrs Durolek had already left the country.
4. Mrs Durolek's affidavit sworn for the purposes of this appeal fails to state when she became aware of the passport surrender and travel restriction orders. All that is said is that Mrs Durolek surrendered her passport the day after returning to Australia on 9 April 2018.[10]

Pier discovers that the 29 gold Lingots are a fiction

1. On 3 July 2017 Pier's solicitors received a letter from French lawyers acting for Mr Durolek's French bank. The letter stated that the purported ownership certificate was not issued by the bank and was a forgery.[11] The falsity of Mr Durolek's affidavits, and the forgery of the certificate, have subsequently been accepted by Mr and Mrs Durolek in written submissions made on their behalf before the primary judge.[12]
2. In this appeal Mrs Durolek gives evidence that she did not discover her husband's fictitious evidence about the gold until August 2017. Mrs Durolek states:

There are only a few times that I remember being involved at all. One was in August 2017 when we had another lawyer ... acting for us and I found out about the gold. Up to that time I had not heard anything about the gold, or about [Mr Durolek] telling the Court that he had invested the sale proceeds in gold. He never discussed purchasing gold with me. I remember vividly when I found out about it because we were in Thailand ... I was shocked and upset when [Mr Durolek] told me about the story he had made up.[13] (emphasis added)

1. However, in an affidavit sworn by Mrs Durolek on 24 April 2017 in the primary proceedings she refers to having read Mr Durolek's 20 February 2017 disclosure affidavit and a further 24 April 2017 affidavit of Mr Durolek.[14] The 20 February 2017 affidavit referred to the gold (see pars 16 to 19 above). The inconsistency between Mrs Durolek's two affidavits remained unexplained at the time of the hearing before this court despite being the subject of comment in Mitchell JA's reasons for decision on the application[15]or a suspension order.15

1. On 11 July 2017 the primary judge made orders amending the freezing orders against the defendants. Order 11 of each order was removed, meaning that the usual exceptions allowing payment of ordinary living expenses and reasonable legal expenses no longer applied.
2. The primary judge also made orders on 11 and 19 July 2017 requiring agents of Mr and Mrs Durolek to retain rental payments received from their four identified properties located in Western Australia.

1. A further hearing was held before the primary judge on 7 September 2017. The defendants were represented at that hearing. After hearing argument the primary judge made an order requiring the two vendor companies and Mr Durolek to pay $1.6 million to an account of Pier's solicitors, or alternatively, to deliver the 29 gold Lingots referred to in Mr Durolek's affidavit of 20 February 2017 to the Principal Registrar of the court. The time for compliance with the order was specified as being 26 September 2017.
2. Mrs Durolek was expressly excluded from the operation of the deposit order of 7 September 2017.
3. The primary judge published written reasons for making the deposit order.[16]
4. Among other things the primary judge referred to the evidence suggesting that the certificate of ownership as to the 29 gold Lingots was forged and that Mr and Mrs Durolek had left Australia despite the passport surrender orders. Those, and other matters, were characterised by the primary judge as demonstrating a 'very unsatisfactory catalogue of conduct from the defendants' and a 'situation that is both rare and extreme'[17] and 'quite extraordinary and exceptional'.[18] In the circumstances the primary judge considered he was justified in making the deposit order despite having earlier concluded that the order was extreme in character and a court would have to be extremely cautious about making such an order.[19]

1. The deposit order was not complied with by 26 September 2017. On 28 September 2017 a further hearing took place at which the defendants, including Mrs Durolek, were represented. The primary judge extended the time for compliance with the deposit order to 4.00 pm on 5 October 2017 (an extension of seven days). The primary judge also made a 'springing' or 'self-executing' order.
2. The terms of the springing order were that:

[U]pon there still being default at that extended time [ie 4 pm on 5 October 2017], then:

(a) all defendants' defences and counterclaims will then be automatically struck out; and

(b) in the event of the strike out events under (a) coming to pass, there shall be judgment automatically entered for the plaintiff against the defendants for damages and for statutory compensation in amounts to be assessed under subsequent directions of the Court.[20] (emphasis added)

1. Accordingly, the 28 September 2017 springing order also applied to Mrs Durolek. It did so notwithstanding that Mrs Durolek had no obligation to comply with the deposit order as made on 7 September 2017 (non-compliance with which would cause the springing order to self-execute).
2. The primary judge published written reasons for making the springing order.[21] These will be considered below (at pars 66 to 71).
3. The springing order is central to the appeal. In part, as will be seen, Mrs Durolek contended that the primary judge erred in law in making the springing order on the basis of lack of procedural fairness. It was contended that Mrs Durolek did not receive notice of the proposed springing order and did not have a reasonable opportunity to respond to material relied on by Pier in support of the application for a springing order, namely, an affidavit of Pier's solicitor sworn 27 September 2017.
4. The hearing on 28 September 2017 had been listed, as a special appointment, when the primary judge made the deposit order on 7 September 2017.[22] Counsel who appeared for the defendants was provided with Pier's solicitor's affidavit sworn 27 September 2017 on the morning of the hearing.[23] There was, however, no suggestion by counsel for the defendants that an adjournment was required to answer the affidavit. All that counsel said was that, having read the affidavit, there might be one or two things that he may address in due course.[24] Accordingly, counsel for Mrs Durolek was suggesting that he could deal with the affidavit by making oral submissions in the course of the hearing.
5. It is correct, however, that there was no notice of any intention to seek a springing order.
6. Pier was represented by senior counsel at the hearing on 28 September 2017. Senior counsel for Pier did not initially apply for a springing order. Instead, observing that Pier had not formally notified that it would apply for a springing order, senior counsel for Pier suggested that there be a further seven days to comply with the order of 7 September 2017 failing which Pier would have the right to apply for a springing order.[25] It was the primary judge who instead suggested an immediate 'self-executing springing order'.[26]
7. Counsel representing the defendants (who thus appeared for Mrs Durolek) had no instructions as to the reason for non-compliance with the deposit order and no specific instructions more generally.[27] In relation to the possibility of a springing order counsel said that it came as no surprise that the primary judge felt compelled to make such an order.[28] Counsel for the defendants also agreed with the submissions by senior counsel for Pier that it would be 'quite appropriate' for the court to exercise its discretion to make a springing order.[29] The only point of resistance was whether the order should spring in seven days; counsel for the defendants suggested 14 days.[30]
8. It is striking that no submissions were made by counsel for the defendants about whether the springing order should extend to Mrs Durolek when the deposit order did not. All the more so when the springing order might result in judgment being entered against Mrs Durolek despite no relevant non-compliance on her part. However, the incongruity between the two orders was not lost on the primary judge. To the contrary, as the primary judge later recorded,[31] the primary judge deliberately extended the springing order to all defendants, including Mrs Durolek, for the reasons that the primary judge gave on 28 September 2017.

1. The springing order operated to strike out Mrs Durolek's defence when there was a failure by the two vendor companies and Mr Durolek to deposit the $1.6 million or deliver the 29 gold Lingots to the court by 4.00 pm on 5 October 2017.
2. On 10 October 2017 a judgment in favour of Pier against all defendants was extracted. The judgment was described as a 'Judgment against all Defendants for Damages to be Assessed'. It provided:

PURSUANT TO ORDERS ... made 28 September 2017 whereby it was ordered that the defendants' defences be struck out and judgment be entered for the plaintiff UNLESS, by 4pm on 5 October 2017, the defendants (other than the fourth defendant) complied with paragraph 1 of the Order of 7 September 2017 as extended by the said Order of 28 September 2017, AND UPON DEFAULT having been made by all defendants by reason of their non-compliances with those Orders by the stipulated time, IT IS THIS DAY ADJUDGED that:

(a) The defendants' defences be struck out;

(b) There be judgment for the plaintiff against all defendants for damages and for statutory compensation to be assessed; and

(c) The defendants are to pay the plaintiff's costs, including reserved costs, to be taxed of the litigation to date.[32]

1. The preamble to the 10 October 2017 judgment was in error in referring to default having been made by all defendants by reason of their non‑compliances with the order by 4.00 pm on 5 October 2017. As the preamble itself recognised, there was no relevant obligation under the deposit order that Mrs Durolek had to comply with by 4.00 pm on 5 October 2017. Nevertheless, while the default in compliance was a default on the part of the defendants other than Mrs Durolek, the springing order also operated against Mrs Durolek.

Refusal of extension of time to comply with springing order on 16 January 2018

1. On 16 January 2018 the primary judge considered what was, in effect, the defendants' application for an extension of time in which to comply with the springing order. The primary judge published written reasons for refusing the application.[33] In the course of recounting the history of the matter, the primary judge observed:

My springing orders extended to all the defendants. That followed in circumstances where there was evidence before me at 28 September 2017 through [Pier's solicitor's] affidavit of a bank account of [Mrs Durolek] which should have been disclosed, but which had not been disclosed in accord with prior asset disclosure orders that I had made against all defendants.[34]

[The extracted judgment] also took effect deliberately not only against [Jean Maurice, Sancho Bakery and Mr Durolek] but also against [Mrs Durolek].

That was by a reason of further events I related in [Pier No 2] concerning [Mrs Durolek's] non-compliance with my earlier asset disclosure orders concerning an undisclosed bank account of hers but which came to light.[35]

1. The primary judge declined to extend time in circumstances where the two vendor companies and Mr Durolek did not propose to comply with the orders and there was no explanation of what became of the proceeds of the sale of the businesses.

1. A four day assessment of damages hearing took place in May 2018. On 2 July 2018 the primary judge assessed damages for Pier against all defendants (including Mrs Durolek) in the amount of $1,208,970.32 inclusive of interest. It is the judgment of 2 July 2018[36] that is the subject of this appeal.[37]
2. Pier No 6 contains the primary judge's reasons for assessing damages in that amount. Importantly, the primary judge held that - the springing order having taken effect and not otherwise being varied - the defendants' liability had been established in respect of the pleaded causes of action[38] with that liability extending to encompass all liability conclusions against the defendants including that the representations complained of were falsely made.[39] The practical effect of that conclusion is illustrated by what occurred when, at the hearing, counsel for Mrs Durolek sought to call Mrs Durolek to give evidence that she was not involved in any of the alleged representations relied on by Pier. Upon the primary judge questioning why such evidence would be relevant, liability having been established against all defendants and Mrs Durolek having no defence, counsel for Mrs Durolek withdrew the application to call Mrs Durolek.[40]
3. The primary judge explained in Pier No 6 that:

What remains for active determination upon the present assessment hearing is whether or not the plaintiff has proven on the balance of probabilities that the (mis)representational conduct of the defendants upon which it has relied has caused it to sustain any level of financial loss or damage and, if so, how much in a dollar amount.[41]

1. At the appeal hearing before this court counsel for Pier confirmed that this was the basis on which the assessment of damages hearing was conducted.[42] The remaining matters before the primary judge were thus concerned with damages. In this respect, in oral argument before this court, Pier accepted that the judgment of 10 October 2017 did not determine that the defendants owed Pier an amount of money to be ascertained; it instead determined that the criteria for the existence of a liability were established if causation and damage were made out.[43]

1. On 17 August 2018 Mrs Durolek filed an appeal notice against the judgment entered on 2 July 2018.
2. The appeal notice stated that the last day for appealing was 23 July 2018 and an extension of time in which to appeal was required. The application for an extension of time was supported by Mrs Durolek's affidavits sworn 16 and 17 August 2017 (the latter substantially reproducing parts of the former) and an affidavit of Mrs Durolek's solicitor sworn 19 September 2018. In opposition to the extension of time application Pier relied on an affidavit of its solicitor sworn 13 September 2018. In large part that affidavit reproduced materials before the primary judge.
3. Both parties filed additional submissions directed to the question of extension of time.
4. An order was made referring the application for an extension of time to appeal to the hearing of the appeal. It is convenient to address that question later after having recounted the primary judge's reasons for making the springing order and the basis and grounds for the appeal. Accordingly, further discussion of the evidentiary materials explaining the circumstances necessitating the extension will be deferred.
5. At this point, however, it should be recorded that Mrs Durolek's 16 August 2018 affidavit in the appeal deposed that she and Mr Durolek are owners of overseas property, namely:[44]

(1) six flats in West Sussex valued at £900,000 and encumbered by a mortgage in the amount of £747,500; and

(2) a property in France with an estimated value of €170,000, encumbered by a mortgage to a financial institution in the amount of €145,000.

1. Title documents annexed to Mrs Durolek's affidavit of 16 August 2018 provide that the West Sussex properties were acquired on 30 November 2016.[45] Paragraph 79 of that affidavit concedes that the properties were purchased using the proceeds of the sale of the two businesses to Pier. Mrs Durolek's affidavit also refers to the properties being encumbered by a £747,500 mortgage.[46] The facility approval letter attached to Mrs Durolek's affidavit is dated 14 November 2017[47] meaning that the mortgage must have been granted after that time. Materials before the primary judge suggest that a legal mortgage was granted over the West Sussex properties on 30 April 2018 and registered on 22 May 2018.[48]
2. The copy of the certificate of title for the property in France is in French but appears to be a certificate issued by a notary on 3 February 2003. Accordingly, Mr and Mrs Durolek have owned the property in France since at least that time.
3. Mrs Durolek failed to disclose the existence of these overseas properties in her 20 February 2017 disclosure affidavit sworn in the primary proceedings. (There is, however, some suggestion in the papers that Mrs Durolek may not have been aware of the West Sussex properties.[49] Whether that is so cannot be determined in this appeal. The apparent execution of the 30 April 2018 mortgage casts significant doubt on Mrs Durolek's oral evidence before the primary judge that she was not aware of her name being on the properties because 'she never signed one document'.)[50]
4. Moreover, prima facie the purchase and mortgage of the West Sussex properties was in breach of the freezing order.
5. It is disquieting that these matters also remained unexplained at the time of the hearing before this court. They too were the subject of comment in Mitchell JA's reasons for decision on the application for a suspension order.[51]

Primary judge's reasons for grant of springing order against Mrs Durolek

1. In determining to make the 28 September 2017 springing order the primary judge commenced by re-stating the circumstances that justified the deposit order.[52] His Honour, rightly, characterised those circumstances as 'unsatisfactory, extraordinary and unprecedented'[53] thereby leading to the 'extreme' deposit order.[54]
2. The primary judge noted that the deposit order of 7 September 2017 had not been complied with and there had been no attempt to explain why the order was not, or could not be, complied with. His Honour, again correctly, viewed that as 'quite exceptional'.[55] In considering what course to take the primary judge then directed himself to this court's decision in Firmware Technologies Inc v Asia Platinum Group Ltd.[56] The primary judge was satisfied, by reference to what were described as the five 'criteria' articulated in Firmware, that it was an appropriate case for a springing order to issue immediately.[57]
3. In so concluding the primary judge again referred to the evidence of the forged ownership certificate in relation to the 29 gold Lingots. Beyond that his Honour noted a series of events which indicated to him that the freezing orders were being ignored by the defendants. Specific reference was made to the non-compliance with orders that Mr and Mrs Durolek surrender their passports and not leave Australia; and not making full and frank disclosure about the full extent of their assets. His Honour found that the court was being treated poorly by 'all defendants' (ie including Mrs Durolek) who continued to ignore orders without explanation.[58]
4. The primary judge expressly identified that the materials attached to Pier's solicitor's affidavit of 27 September 2017 demonstrated that there was a further undisclosed bank account in the name of Mrs Durolek.[59]
5. His Honour clarified that the springing order was to be self‑executing and would strike out the defences and counterclaims of 'all defendants' in the event of non-compliance.[60] Beyond the references to all defendants having not complied with (and having effectively ignored without explanation) prior orders of the court - and the additional non-disclosure on the part of Mrs Durolek as revealed by the 27 September 2017 affidavit - the primary judge did not expressly state why the springing order was to extend to Mrs Durolek. Inferentially, however, the extension was due to Mrs Durolek's non‑compliance with the primary judge's earlier ancillary orders culminating in Mrs Durolek's non-compliance with the asset disclosure orders as identified in the 27 September 2017 affidavit.
6. This understanding of the primary judge's reasoning is confirmed by what his Honour stated subsequently in Pier No 3[61] and Pier No 5.[62] The springing order extended to include striking out Mrs Durolek's defence because of Mrs Durolek's own non-compliance with the primary judge's earlier asset disclosure orders.

1. Mrs Durolek appeals against the final judgment dated 2 July 2018 that followed the assessment of damages. However, in doing so Mrs Durolek primarily challenges the springing order made 28 September 2018 and the earlier freezing and ancillary orders.
2. Mrs Durolek contends that in appealing against a final judgment she is also entitled, without leave, to challenge interlocutory orders which are steps in the procedure leading to the final judgment.
3. There are two grounds of appeal.
4. Ground 1 contends that the primary judge erred in law in determining that it was just to make the springing order against Mrs Durolek. It is contended that the primary judge's exercise of discretion miscarried in circumstances where:

(1) the execution of the springing order prevented Mrs Durolek from advancing her substantive arguments as a defendant in the primary proceedings, being arguments that were unrelated to the subject matter of the springing order (Ground 1(a));

(2) the springing order was to self-execute upon default in compliance with an ancillary order which was not made against Mrs Durolek and with which Mrs Durolek was not obliged to comply (Ground 1(b)); and

(3) Mrs Durolek did not receive notice of the proposed springing order and did not have a reasonable opportunity to respond to the material presented in support of the application for the springing order (Ground 1(c)).

1. Ground 2 contends that the primary judge erred in law and fact in making the earlier freezing and ancillary orders as against Mrs Durolek in that his Honour:

(1) failed to make any finding that Pier had a good arguable case against Mrs Durolek; and

(2) could not have made any such finding on the evidence presented to the court.

The principle in Gerlach v Clifton Bricks Pty Ltd: the appellant may challenge the final judgment on the ground that the springing order was attended by error

1. The springing order made by the primary judge on 28 September 2017 was an interlocutory order.[63] It could, with leave, have been the subject of an appeal. There was no appeal. Continued non-compliance with the 7 September 2017 deposit order resulted, in accordance with the springing order, in the judgment of 10 October 2017 for damages to be assessed. As against Mrs Durolek, given that the nature of the claim made against her is one where damage is the gist of the action, the 10 October 2017 judgment is probably best characterised as 'interlocutory' rather than 'final' (although there is an argument that it is final on the question of liability and interlocutory on the question of quantum).[64] Thereafter the parties, including Mrs Durolek, participated in a four day assessment of damages hearing before the primary judge.
2. In contemporary times, where interlocutory appeals are commonplace, it might initially seem surprising that a litigant may appeal against a final judgment by challenging an earlier interlocutory order. That is all the more so when a prompt interlocutory appeal could avoid a substantial evidentiary hearing. There is, however, long‑standing authority - more recently confirmed in Gerlach v Clifton Bricks Pty Ltd - which unequivocally establishes the proposition that, in some circumstances, a party may challenge the correctness of a final judgment on the ground that an interlocutory decision was wrong.[65]
3. Kirby and Callinan JJ were in the minority in Gerlach. However, their Honours came to a similar conclusion to the majority (Gaudron, McHugh and Hayne JJ) on the question of whether, on an appeal from a final judgment, an appellate court could correct an interlocutory order affecting the final result. Kirby and Callinan JJ explained the historical position:

It is an established rule of practice, not recent but dating back at least to the early decisions of the Privy Council on appeal from colonial courts, that objections to interlocutory orders will not be lost if not immediately prosecuted by an interlocutory application for leave to appeal. Such complaints could be saved up to be raised in objection to the final judgment in the proceedings between the parties, provided the ground was still relevant to that judgment.[66]

1. The principle in Gerlach recognises that interlocutory orders may be made - either before or at trial - which affect parties' substantive rights. To preclude challenge to such an order other than by interlocutory appeal against the order would be productive of unnecessary fragmentation and multiplication of proceedings.[67] For that reason an interlocutory order can be challenged in an appeal against the final judgment in a matter. However, not every interlocutory order is susceptible to such challenge. In Gerlach the majority endorsed a qualification. On appeal from a final judgment an appellate court can only correct an interlocutory order 'which affected the final result'.[68]
2. The majority in Gerlach also noted that there are some kinds of interlocutory decisions which lead to entry of a final judgment. It was said these may present some other issues for consideration. The example was given that there are circumstances in which an interlocutory decision must be treated as concluding an issue between the parties. The majority left open whether all decisions of that kind may be challenged in an appeal against the final judgment in the proceedings.[69]
3. In mentioning there being circumstances in which an interlocutory decision must be treated as concluding an issue between parties, Gaudron, McHugh and Hayne JJ referred to Fidelitas Shipping Co Ltd v V/O Exportchleb.[70] That was an English case concerning issue estoppel. Among other things, in the passage cited by the majority, Diplock LJ stated that the parties to the suit are bound by the determination of the issue with the only remedy being by way of appeal from the interlocutory judgment.[71] But the majority in Gerlach went on to state that the conclusion in the New South Wales decision of David Syme & Co Ltd v Lloyd[72] was consistent with the qualified principle.[73] In that case the Court of Appeal held that it was open to challenge a ruling made in an earlier separate trial of issue (as to whether an article was capable of bearing a pleaded defamatory imputation) on appeal against a subsequent jury verdict.[74] Accordingly, any exception to the general principle in Gerlach based on an interlocutory decision concluding an issue (due to the operation of issue estoppel) cannot extent to the kind of circumstances exemplified by David Syme & Co Ltd v Lloyd.
4. In its written submissions Pier relied on a decision of Young JA in Illawarra Hotel Company Pty Ltd v Walton Construction Pty Ltd.[75] Pier contended, by reference to that decision, that there were three categories of case: (1) a final decision; (2) an interlocutory decision; and (3) an interlocutory decision with special consequences.[76] The latter was described as a special category which required a person affected by it to lodge an appeal straight away rather than waiting for the end of the proceedings.[77] The last category was said by Young JA to be 'very limited'[78] and was seemingly informed by obiter dicta observations of a plurality of Gummow ACJ, Hayne, Crennan and Bell JJ in Michael Wilson & Partners Ltd v Nicholls.[79]
5. The issue in Michael Wilson & Partners Ltd v Nicholls was whether parties alleging reasonable apprehension of bias on the part of a trial judge were prevented from making that complaint in an appeal against the final judgment following trial because they did not seek, before commencement of trial, to appeal the trial judge's refusal to recuse himself. Accordingly, the question arose in a context where it was argued that the failure to pursue an interlocutory appeal should be seen as a waiver. The plurality endorsed the principle in Gerlach that, in general, any interlocutory order which affects the final result can be challenged in an appeal against final judgment.[80] However, the plurality also noted that, as was said in Gerlach, there may be some limits to the general rule; it was not necessary to decide what those limits may be.[81] The plurality went on to make more specific observations in the particular context of a judge's refusal to recuse himself or herself for reasonable apprehension of bias.[82]
6. Pier submitted that the judgment of 10 October 2017 was an interlocutory decision with special consequences in that it finally determined the rights of the parties as to liability.[83] That is not a special category in the sense discussed in Illawarra Hotel Company Pty Ltd v Walton Construction Pty Ltd. Nor was that sort of case specifically addressed in Michael Wilson & Partners Ltd v Nicholls. Pier's submission is also inconsistent with a series of intermediate appellate court decisions in New South Wales where, following separate trials of issues, it has been held open on an appeal as of right against the final judgment to challenge all decisions or interlocutory orders which were steps in the chain leading to the final judgment.[84]
7. In relation to the New South Wales cases the decision in Smith v Tabain is particularly illustrative. This was a personal injury case in which there were separate trials on liability and quantum. The plaintiff succeeded and a final judgment for damages was entered in his favour after the second trial. A notice of appeal, purportedly filed as of right, raised grounds relating to the issues of both liability and damages. The appeal was held to be competent. It was open to the unsuccessful defendant to raise liability as an issue on the appeal against the final judgment awarding damages. The outcome in Smith v Tabain was entirely consistent with the outcome in David Syme & Co Ltd v Lloyd as approved by the majority in Gerlach.
8. There is no material distinction between Smith v Tabain and the present case. The 10 October 2017 judgment for damages to be assessed - dispositive of all other criteria for final liability - is the functional equivalent of the verdict on the issue of negligence in Smith v Tabain. In any case Pier's focus on the judgment of 10 October 2017 is misplaced. The springing order of 28 September 2017 was an essential step in the proceedings leading up to the final judgment; the making of the springing order is the decision challenged in the appeal against the final judgment (should an extension of time to appeal be granted). The springing order is plainly interlocutory.
9. In the present case, as in Smith v Tabain, Mrs Durolek did not need to appeal from the interlocutory judgment of 10 October 2017. Nor did Mrs Durolek need to appeal from the interlocutory springing order. Mrs Durolek could wait until (and in case) a final judgment was entered against her. Such an appeal is an appeal against that final judgment of the court as entered under O 42. But in an appeal against the final judgment Mrs Durolek was able to challenge the correctness of any decision or interlocutory order which was a step in the chain leading to the final judgment provided that it affected the final result.
10. To the extent that there are some exceptions to the general principle found in Gerlach none are applicable. There was no assertion of waiver on the part of Mrs Durolek such as might affect whether an appeal is tenable. Nor is the making of the springing order, and its resultant judgment for damages to be assessed, something which ought to be treated as precluding an appeal on the basis that an issue was concluded in the absence of an appeal against that order and judgment. Rather, the case is on all fours with Smith v Tabain and within the kind of case said to be within the qualified formulation of the principle in Gerlach.
11. Pier also contended that the springing order of 28 September 2017 was outside the Gerlach principle as the order was not an interlocutory order that affected the final result. That submission sought to test the effect of the order by asking what the position would have been had the primary judge held that Pier had suffered no loss or damage.[85]
12. The question of whether the springing order of 28 September 2017 affected the final result must be considered by what actually happened rather than what might have happened. However, as counsel for Pier seemingly accepted in oral argument,[86] the possibility that a person in the position of Mrs Durolek might be successful in establishing that no damage had been suffered might explain why there was no immediate interlocutory appeal. An appeal might be unnecessary. In the present case there is no doubt that the springing order, having sprung, affected the final result. As has been seen the legal effect of the springing order, having sprung and brought about the judgment for damages to be assessed, was that the defendants' liability was taken to be established in respect of the pleaded causes of action. The practical effect was that Mrs Durolek was precluded from contesting whether she participated in the making of the alleged representations. As will be seen, Mrs Durolek had an arguable defence in this respect.
13. We accept that it is competent for Mrs Durolek to appeal against the final judgment of 2 July 2018 by challenging the springing order of 28 September 2017. The springing order was a step in the proceedings leading up the final judgment which affected the final result.
14. Ground 1 is concerned with the springing order. Ground 2 is concerned with the freezing order against Mrs Durolek as continued on 1 December 2016 and various subsequent ancillary orders as made against Mrs Durolek. These included the passport surrender and travel restriction orders of 26 June 2017. (Notably, the interlocutory orders complained of did not include the disclosure orders of 19 January 2017 as extended on 15 February 2017.)
15. Counsel for Mrs Durolek initially suggested that Ground 2 was directed to the freezing and ancillary orders that are part of the final judgment.[87] However, Ground 2 as drafted is expressed as applying to the freezing and ancillary orders when first made. Thus, at least inferentially, Ground 2 seeks to invoke the Gerlach principle in the appeal against the final judgment rather than appealing the continuation of those orders in the final judgment of 2 July 2018. In subsequent exchanges counsel for Mrs Durolek confirmed that Ground 2 sought to challenge the freezing order made 1 December and subsequent ancillary orders as affecting the final judgment.[88]
16. As developed in oral argument counsel for Mrs Durolek contended that it was necessary to go back to the beginning. It was said that, as Pier had no good arguable case against Mrs Durolek, no freezing order or ancillary order should ever have been made against her. Counsel for Mrs Durolek went on to contend that the continuation of the freezing order affected the final result because it changed the nature of the case and became the foundation for a series of ancillary orders, culminating in the deposit order which was the foundation for the springing order, after the defendants' failure to make proper disclosure of their assets in accordance with the disclosure orders.[89]
17. There is a difficulty with Ground 2 given that the 1 December 2016 continuation of the freezing order was essentially consensual. It is, however, unnecessary to consider whether this alone would prevent Ground 2 succeeding. In oral address counsel for Mrs Durolek accepted that what was being put was a type of causation argument, namely, that but-for the initial freezing order and the ancillary orders as challenged by Ground 2 there would have been no non-compliance and the springing order would not have been made against Mrs Durolek.[90] As so understood Ground 2 does not invoke a basis to appeal against the final judgment consistent with the Gerlach principle. The freezing and ancillary orders, being the orders of a superior court, were valid unless and until set aside;[91] Mrs Durolek was obliged to comply with them. The freezing and ancillary orders sought to be impugned as part of Ground 2 did not themselves affect the final result. What affected the final result was Mrs Durolek's non-compliance with the orders rather than the orders themselves.
18. Mrs Durolek cannot appeal against the final judgment by challenging the initial freezing order and subsequent ancillary orders made against her. Those orders did not affect the final result in any relevant way. At most the orders had an indirect effect on the final result. Ground 2 is outside the Gerlach principle and cannot succeed. That being the case it is not necessary to say anything further about Ground 2.

1. The application for an extension of time to appeal must be assessed by reference to our earlier conclusion that it is competent to appeal against the final judgment of 2 July 2018 by challenging the springing order of 28 September 2017. The time limited for an appeal against the final judgment expired on 23 July 2018.[92] Accordingly, the appeal notice having been lodged on 17 August 2018, the appeal has been commenced 25 days out of time.
2. The power to grant an extension of time to appeal is a broad one to be exercised in the interests of justice having regard to all the circumstances of the case. Those circumstances are often, but not exclusively, organised around the factors of:[93]
   • the length of the delay;
   • the reasons for the delay;
   • the prospects of the applicant succeeding in the appeal; and
   • the extent of any prejudice to the respondent.
3. The length of the delay is less than four weeks. The reason for the delay is explained in Mrs Durolek's solicitor's affidavit. In essence, instructions to make an appeal were received on 9 July 2018. However, the files of Mrs Durolek's former solicitors were not made available until 19 July 2018. On 23 July 2018 Mrs Durolek's solicitor attempted to file a notice of appeal against the primary judge's order of 28 September 2018. That was not accepted for filing for technical reasons. When, an appeal notice having been filed the next day, the Court of Appeal Registrar informed Mrs Durolek's solicitor that leave was required as the order being appealed was interlocutory in nature, an amended appeal notice was filed. On 2 August Mrs Durolek's solicitors enquired whether Pier's solicitors had instructions to accept service.
4. Accordingly, Pier was aware of Mrs Durolek's intention to appeal from 2 August 2018.
5. By 6 August 2018 Mrs Durolek's solicitors had taken counsel's advice. Based on that advice the solicitor was instructed to file a further amended appeal notice to appeal against the final judgment of 2 July 2018 relying on the Gerlach principle. That intention was raised in correspondence with the Court of Appeal registry. On 7 August 2018 the Court of Appeal Registrar informed Mrs Durolek's solicitor that it was not possible to amend an appeal notice to commence a fresh appeal from a different order. Rather, a new appeal notice was required. Mrs Durolek's solicitor then caused the initial appeal to be discontinued and the present appeal to be commenced.
6. The 25 day delay was not attributable to Mrs Durolek. While, no doubt, Mrs Durolek's solicitor could have achieved commencement of the appeal a little more promptly, it must be acknowledged that the circumstances that confronted him were procedurally obscure. The delay, which is modest, is properly explained. Importantly, it is not asserted that Pier has suffered prejudice as a result of the delay.
7. Pier's main argument against the application for an extension of time to appeal was that the appeal was so devoid of merit that it would be futile to grant the extension. For the reasons we develop below we are satisfied that Grounds 1(a) and (b) have merit. Accordingly, Mrs Durolek should be granted an extension of time in which to appeal.
8. Pier contended that, if this court was minded to allow an extension of time to appeal, the extension should be on condition. Two conditions were sought in written submissions[94] and a third advanced in the course of oral argument. [95] First, that Mrs Durolek pay the judgment amount into court. Second, that Mrs Durolek pay a further amount of $750,000 into court on account of her potential liability for costs. Third, that the costs orders made in the final judgment should remain intact and be enforceable against Mrs Durolek.
9. No principled basis was advanced to impose such conditions as the price of the court allowing Mrs Durolek an extension of time to appeal. The extension of time to appeal should be unconditional.

1. This court and its predecessor have previously cautioned against the indiscriminate use of springing or self-executing orders as a sanction for non-compliance. Each case has to be assessed on its facts and in accordance with its merits.[96] Like other aspects of case management the sanction of a springing order is a means to an end and not an end in itself. Thus a springing order should only be made where it is a legitimate and effective sanction to facilitate the achievement of justice.[97] In so doing there should be appreciation that, in the event of non-compliance, springing orders result in judgment being entered without any assessment of the merits of the case or whether, in all the circumstances, it is in the interests of justice for judgment to be entered.[98] The entry of judgment prior to trial without regard to the merits of the case is, generally speaking, the antithesis of justice.[99]
2. For that reason the general guidance provided by this court in Firmware continues to be applicable:

The power to make a springing order must be exercised with considerable caution and circumspection. At least generally speaking, a springing order will only be justified if, as a last resort, it is necessary to enable the court to fairly determine the substantive matter in dispute. When justified, it is important that springing orders be expressed in clear and unambiguous terms which do not require a qualitative assessment of the character, efficacy or completeness of the mandated procedural step to determine whether the party has complied with the order.[100] (emphasis added)

1. Firmware concerned the use of a springing order in a context where a party had failed to take a procedural step within the ordered time (a defendant had not filed its witness statements). However, many of the observations of the Court of Appeal in Firmware are of more general application. The passage reproduced above is one such observation. The primary judge was correct to seek to apply Firmware to the circumstances before him. In some respects, however, the matters referred to in Firmware required modification to reflect the fact that what confronted the primary judge was non-compliance with an ancillary order made in aid of a freezing order rather than a procedural order.
2. In this court the parties assumed that the primary judge made the springing order as an 'enforcement order'[101] under the power granted to a case manager by O 4A r 5(2)(c).[102] Such an order may be made at any time on the case manager's own initiative after notification.[103] Under O 4A r 5(2)(c) a springing or self-executing order may be made by way of enforcement order as the case manager 'considers just'. There is also a power to make a springing order in the court's inherent jurisdiction.[104] The same broad criterion of whether the order is 'just' informs the exercise of the inherent jurisdiction.
3. Traditionally springing orders have been made in cases of contumacy (ie an intentional perverse and obstinate resistance of authority),[105] persistent dilatory behaviour and where it can be inferred that a litigant will not or is unlikely to take steps as required.[106] Those instances do not exhaust the circumstances in which it may be just to take the drastic step of making a springing order.[107] For example, the court may act to support the integrity of its processes where otherwise the administration of justice would be brought into disrepute.
4. In Firmware the Court of Appeal mentioned five reasons why a springing order should not have been made in that case.[108] Those matters are not exhaustive criteria[109] which establish when a springing order should be made. The touchstone remains whether the order is just. Nevertheless, the reasons given in Firmware provide useful guidance as to some of the relevant considerations for a case manager in determining whether or not to make a springing order.
5. Adapting the five matters enunciated in Firmware:

(1) Where the basis for the springing order is non-compliance with an order of the court consideration should be given to whether the delay has been inordinate. A springing order should ordinarily only be made where a party has, by its conduct, shown a contumelious disregard to compliance with orders of the court.

(2) A springing order should only be made where there is no other available sanction which is appropriate and sufficient to enable the court to determine the matter consistently with the goal and objects in O 1 r 4A and r 4B of the Rules of the Supreme Court 1971 (WA) - in particular the fair and just determination of the litigation. The fair and just determination of the litigation encompasses the concern of procedural fairness expressed in Firmware. The concept acknowledges that a point will be reached where a litigant will have been accorded a sufficient opportunity and that no litigant has an absolute right to avail itself of procedural steps when it has failed to take advantage of its opportunity.[110]

(3) A springing order sought by way of an enforcement order to secure compliance with a pre-trial case management direction should not be made if its execution would prevent the party from advancing an argument unrelated to the procedural step the subject of the intended springing order.

(4) A springing order should only be made if the criterion for compliance is clear and unequivocal.

(5) Springing orders should ordinarily only be made as a last resort when necessary to enable the court to fairly and justly determine the substantive matter in dispute. In that regard, before making a springing order, a case manager should take into account the fact that the self-executing nature of a springing order is such that, once made and absent an extension of time for compliance, the only question is whether the order has been complied with. There is no further assessment of the merits of the case or whether it is in the interests of justice for judgment to be entered.

1. The present case was not one where the primary judge sought to make indiscriminate use of a springing order.
2. The primary judge referred to and sought to apply Firmware. In so doing the primary judge was confronted with egregious conduct on the part of Mr Durolek (conduct with which his Honour was, correctly, most concerned) and unsatisfactory non-compliance with ancillary orders on the part of Mrs Durolek. The primary judge was entitled to take the view that the court should act to support the integrity of its processes. In circumstances where the other defendants' non‑compliance with the deposit order was unexplained, and the matter was brought on hurriedly before the primary judge who received no assistance from counsel for the defendants, his Honour faced the difficult task of devising and applying appropriate sanctions for non‑compliance.
3. There were, however, a number of unusual aspects to the springing order so far as it concerned Mrs Durolek. First, Mrs Durolek was excluded from, and thus not subject to, the deposit order. Second, as a corollary to the first unusual feature, Mrs Durolek had not herself failed to comply with the deposit order. It is most unusual for a springing order to be made against a party who has not failed to comply with the relevant earlier order of the court. Third, Mrs Durolek was unable to unilaterally bring about compliance with the deposit order; at all times it remained directed to Mr Durolek and the two vendor companies. Mrs Durolek's defence would be struck out, and judgment would be entered against her, unless the other defendants brought about compliance with the deposit order. That was the case even if Mrs Durolek herself paid in an amount of $1.6 million or delivered 29 gold Lingots to the court. Fourth, so far as Mrs Durolek was concerned, the springing order was not directed to those aspects of the ancillary orders that Mrs Durolek had failed to comply with (ie asset disclosure, passport surrender and travel outside Australia).
4. These unusual aspects of the springing order were, in part, taken up in Mrs Durolek's Ground 1(b).

Ground 1(a): No error merely because springing order prevented Mrs Durolek advancing substantive defence

1. In part Ground 1(a) is premised on Mrs Durolek having had an arguable defence based on her not making and not being involved in making the alleged representations relied on by Pier. Mrs Durolek pleaded that defence.[111] In her affidavit sworn for the purpose of this appeal Mrs Durolek alleged that she did not have any part to play in the sale of the businesses and did not say anything at all to Pier or the selling agent.[112] Counsel for Pier submitted that Mrs Durolek's evidence should be viewed with extreme caution.[113] Pier also sought to make good the proposition that Mrs Durolek did not have an arguable defence by referring to various evidentiary matters suggesting that Mrs Durolek was involved in the businesses.[114] In part those evidentiary materials had been relied on in obtaining the initial freezing orders.
2. It is unnecessary to refer to that evidence in detail. It consisted of advertising material, financial statements and a single email on a different subject sent after the sale of the businesses. With the exception of the email there was no evidence that Mrs Durolek participated in those materials being provided to Pier. Otherwise the high point of the evidence was that Mrs Durolek was a restrained person under the sale contract for the two businesses. At the most, taken as a whole, the materials showed that Mrs Durolek was once a director of Sancho Bakery and had an involvement in the two businesses. But, as to whether Mrs Durolek participated in the making of the alleged representations, counsel for Pier was correct when he eventually accepted that there was no direct evidence per se.[115]
3. Accordingly, we accept that Mrs Durolek had an arguable substantive defence as pleaded. That conclusion is not based on the assertion in Mrs Durolek's affidavit; it follows from the lack of direct evidence adduced in support of a prima facie case in the application for a freezing order.
4. The gravamen of Ground 1(a) is that the springing order prevented Mrs Durolek from advancing her substantive defence, namely, that she did not make and was not involved in making the alleged representations, when that argument was unrelated to the subject matter of the springing order. In Mrs Durolek's written submissions this was developed by contending that the grant of the springing order was incompatible with what was said to be the third 'principle' in Firmware.[116] In oral submissions counsel for Mrs Durolek contended that because there was such a principle the primary judge made an error of principle and also failed to take into account a material consideration.[117]
5. We do not accept that the primary judge failed to have regard to the matters identified in Firmware. The primary judge's reasons for making the springing order expressly referred to what his Honour described as being the five 'criteria' in Firmware.[118] His Honour also referred to a springing order as being 'extreme'.[119] The primary judge was aware of and took into account that the springing order would, if it sprung, deprive Mrs Durolek of a defence. That after all is the nature of a springing order. But in any case the primary judge expressly mentioned the possible consequence of the springing order when giving his ex tempore reasons for decision.[120] It was self-evident, and could not have escaped the primary judge, that the subject matter of the proposed springing order was unrelated to any possible defence. Compliance with the deposit order stood outside the pleaded issues between the parties.
6. Once this is appreciated Ground 1(a) can only be successful if it is accepted that there is a principle that - in all cases - a springing order should not be made where its execution would prevent a party from advancing an argument unrelated to the subject matter of the springing order. According to Mrs Durolek such a principle was enunciated by this court in Firmware.
7. The relevant passage in Firmware provides:

Third, a springing order should not be made if its execution would prevent a party from advancing an argument unrelated to the procedural step the subject of the springing order. (emphasis added)

1. The passage must be understood in its factual context. In Firmware the springing order followed the defendant's failure to take a procedural step - the filing of witness statements - within the time specified in an earlier order of the court. The springing order required compliance with that earlier order to file witness statements failing which the defence was to be struck out and judgment entered for the plaintiff. The passage relied on by counsel for Mrs Durolek went on to explain that the defendant in Firmware had a potential partial defence that was capable of being advanced without any oral evidence. However, non-compliance with the springing order would have shut‑out the defendant from litigating that argument because of a failure to provide notice of oral evidence to be adduced on non-related issues. It is easily understood why such an order was not just. It overreached. The more appropriate and just sanction was that not having complied with the order to file witness statements the defendant could not adduce oral evidence at trial without leave of the court.[121]
2. In oral submissions counsel for Mrs Durolek accepted that the relevant passage in Firmware could not be applied literally but rather had to be modified in its application to freezing and ancillary orders.[122] The concession that the passage could not be applied literally in the case of a freezing or ancillary order was properly made. Plainly the passage was referring to springing orders related to non-compliance with pre-trial procedural steps rather than non-compliance with freezing or ancillary orders. The specific passage relied on does not establish any general principle having application beyond the factual context with which it was concerned, namely, the imposition of a springing order following non-compliance with a pre-trial procedural step.
3. Nor is it possible to see how the passage - advanced by the Court of Appeal in Firmware as one of five reasons why a springing order should not have been made in that case - is capable of being modified so as to apply to a freezing or ancillary order.
4. The difficulty with the suggested principle that underlies Ground 1(a) is that, if correct, a case manager could never impose a springing order following persistent non-compliance with a freezing order or an ancillary order. The subject matter of the springing order - compliance with a freezing or ancillary order - will never be related to the defendant's substantive defence. The springing order will always on execution prevent a defendant from advancing an argument by way of defence that is unrelated to achieving compliance with the freezing order or ancillary order.
5. In addressing whether the third reason expressed in Firmware had application in the context of non-compliance with freezing and ancillary orders counsel for Mrs Durolek referred to the English authority of Raja v Van Hoogstraten.[123] There, following continuing failure to comply with disclosure obligations under an ancillary order, a springing order (referred to as an 'unless' order) was made and operated striking out a defence with entry of judgment in favour of the claimant. That order was overturned on appeal. Two reasons were given for that conclusion. First, there was uncertainty as to what the defendant had to do to comply with the disclosure order. Second, it was held that striking out the defence was 'not an appropriate response' to the failure to make adequate disclosure.[124] There was no risk that the failure to make disclosure in aid of the freezing order would put in jeopardy the fairness of a trial.[125]
6. Having noted that the failure to make proper disclosure was a failure in aid of the freezing order, rather than disclosure in the action such as was necessary to ensure a fair trial of the issues in the action, Chadwick LJ cited and approved the following passage:

I do not think that it would be right to drive a litigant from the judgment seat without a determination of the issues as a punishment for his conduct, however deplorable, unless there was a real risk that that conduct would render further conduct of the proceedings unsatisfactory. The court must always guard itself against the temptation of allowing its indignation to lead to a miscarriage of justice.[126]

1. Neither the reasoning in the case nor the passage relied on establishes the principle contended for by Mrs Durolek. The appeal was successful because of the inappropriateness of the sanction of a springing order - the second of the reasons mentioned in Firmware - rather than creating a rule that in all cases a springing order should not be made where it would prevent a litigant bringing an argument unrelated to the subject matter of the springing order. Indeed, the passage quoted confirms that there are circumstances in which a springing order would be appropriate despite being made in the context of a freezing order or an ancillary order: where there is a real risk that the conduct, if continued, would render further conduct of the proceedings unsatisfactory.
2. There will be circumstances, hopefully rare and inevitably exceptional, where a springing order is an appropriate response to continued non-compliance with a freezing or ancillary order because it is the only practicable means of preventing the frustration or inhibition of the court's process. Indeed, counsel for Mrs Durolek, when pressed, accepted that he would not go so far as to say that a springing order could never be an appropriate sanction to failure to comply with a freezing or ancillary order.[127]
3. The primary judge did not commit the error alleged in Ground 1(a). There is no principle that a springing order sought as a sanction due to non-compliance with a freezing or ancillary order ought not to be made simply because it will prevent a party from advancing a substantive defence. That circumstance will often be a material consideration against the exercise of the discretion when a case manager is considering whether to make a springing order following non-compliance with a freezing order or an ancillary order. It may even be determinative in the exercise of the case manager's discretion. But there is no absolute principle as contended for by Mrs Durolek.
4. For reasons already given the primary judge did not fail to have regard to the relevant material consideration. Nor did his Honour act on a wrong principle. When asked whether the Ground included a challenge based on the notion of implied error counsel for Mrs Durolek only embraced the express errors of error in principle and failure to take into account a material consideration.[128] Accordingly, it is unnecessary to consider whether, as to the subject matter of Ground 1(a), the primary judge's exercise of discretion was so unreasonable and unjust that an error of principle must be implied.
5. Ground 1(a) is arguable and in that sense has merit. However, for the reasons given, Ground 1(a) has not been established.

Ground 1(b): Error in making springing order where no relevant non‑compliance by Mrs Durolek and Mrs Durolek unable to effect compliance

1. Ground 1(b) focuses on two of the striking features of the springing order insofar as it was made against Mrs Durolek: Mrs Durolek was not in default of the deposit order and was never obliged to comply with the deposit order.
2. In oral submissions counsel for Mrs Durolek characterised the springing order as being a sanction for non-compliance.[129] That is an apt description.[130] However, a springing order is not a penalty. Rather, a springing order is employed by the court as a means of enforcement to support the integrity of the court's processes. The primary object of any springing order is to bring about compliance with the court's earlier order or other process. As a sanction a springing order grounded on non-compliance with an earlier order of the court should ordinarily only be made against a person in default. In the present case, however, the deposit order did not extend to Mrs Durolek and there was (and would be) no relevant failure on her part to comply with the deposit order. The springing order might spring, with its extreme consequences, despite no relevant non-compliance on the part of Mrs Durolek. The springing order was imposed and would operate as a sanction against Mrs Durolek when Mrs Durolek was not obliged to take the step the court was seeking to enforce.
3. Counsel for Mrs Durolek contended that the primary judge erred in principle in this respect.[131] Counsel argued further that there was nothing before the primary judge to suggest that compliance by the other three defendants was something that Mrs Durolek could affect or bring about.[132]
4. These submissions must be accepted. As was said by this court in Firmware:

Because a springing order can result in injustice, it should ordinarily only be made when a party has, by their conduct, shown a contumelious disregard for compliance with the orders of the court.[133] (emphasis added)

1. There may be exceptional cases in which a springing order could provide for the possible entry of judgment against one party by reason of the default and continued non-compliance of another party. In our respectful view this was not one of those cases. For example, it was never shown that Mrs Durolek controlled the actions of Mr Durolek or the vendor companies so far as they were delinquent in their compliance with the deposit order (or the freezing orders and ancillary orders more generally). Nor was it shown, or suggested before the primary judge, that Mrs Durolek was responsible for the relevant non‑compliance (that being the non-compliance with the deposit order) on the part of Mr Durolek and the vendor companies.
2. The primary judge explained the extension of the springing order to Mrs Durolek on the basis of her prior defaults with ancillary orders - in particular the non-disclosure of the bank account which came to light in Pier's solicitor's affidavit sworn 27 September.
3. There were other sufficient and appropriate sanctions for that non‑compliance. For example, consideration could have been given to contempt proceedings. Alternatively, it might have been appropriate to consider the appointment of a receiver with power to conduct suitable investigations to ensure the disclosure of any further assets and the proper policing of the freezing order. It was, however, wrong in principle to conflate Mrs Durolek's instances of non-compliance (predominantly as to asset disclosure) with the immediate act of non‑compliance that confronted the primary judge at the hearing on 28 September 2017 and informed the making of the springing order, namely, the non-compliance with the deposit order on the part of Mr Durolek and the vendor companies.[134]
4. In circumstances where the deposit order did not apply to Mrs Durolek, and she was not and never would be in default of the deposit order, a springing order should not have been made against Mrs Durolek by way of enforcement of the deposit order.
5. It was equally problematic that Mrs Durolek could not herself bring about compliance with the deposit order. The springing order thus had the potential consequence that Mrs Durolek's defence might be struck out, and judgment entered against her for damages to be assessed, but there were no unilateral steps Mrs Durolek could take to prevent the operation of the springing order. Mrs Durolek was hostage to compliance on the part of the other defendants. That illustrates why, as a sanction, a springing order grounded on non-compliance with an earlier order of the court should ordinarily only be made against a person in default. It is the person in default - to whom the earlier order of the court applies - that can (and should) bring about compliance.
6. In answer to Ground 1(b) Pier sought to argue that, had the primary judge known of Mrs Durolek's involvement in the purchase of the West Sussex properties, his Honour would have included Mrs Durolek in the deposit order.[135] That is no more than speculation. The relevant fact is that in the events as they happened Mrs Durolek was not subject to the deposit order. Yet, in the event of continued non-compliance by the other defendants with the deposit order, the springing order was to have the effect of striking out Mrs Durolek's defence and judgment would be entered against her for damages to be assessed. Mrs Durolek would be deprived of an opportunity to propound an arguable defence without relevant default on her behalf.
7. Pier also contended that there were steps Mrs Durolek could have taken. First, it was said that Mrs Durolek could have applied to vary or set aside the springing order. Second, it was said that Mrs Durolek could have prevailed on her husband to use the West Sussex properties to meet the order.[136] The former provides no answer to whether the order should have been made in the first place. The latter is again a matter of speculation. It does not gainsay the position that Mrs Durolek was not in default of the deposit order and could not herself bring about compliance with it.
8. As a variant of Pier's second contention, Pier suggested that as Mrs Durolek was the joint registered proprietor of the West Sussex properties with her husband she had a degree of control over Mr Durolek's ability to satisfy the deposit order. The submission went so far as to contend that the default by Mr Durolek could be inferred to be a consequence of Mrs Durolek's actions.[137] That submission is completely without merit. There is no basis for the inference. Moreover, in making the springing order the primary judge was unaware of the West Sussex properties. Mrs Durolek's interest in the West Sussex properties was irrelevant to the primary judge's decision to extend the springing order to Mrs Durolek.
9. We would allow Ground 1(b). The primary judge acted contrary to principle in extending the springing order to Mrs Durolek as a sanction for continued non-compliance with the deposit order when the deposit order did not apply to Mrs Durolek. That was all the more so when Mrs Durolek could not bring about compliance with the deposit order.

Ground 1(c): No failure to accord procedural fairness

1. Counsel for Mrs Durolek confirmed that Ground 1(c) alleged error in the form of alleged failure to accord procedural fairness to Mrs Durolek.[138] It was said that Mrs Durolek had no notice of the intention to make the springing order and no opportunity to answer the allegations made about her in Pier's solicitor's affidavit sworn 28 September 2017.
2. The Ground and the submissions in support of it did not grapple with the fact that Mrs Durolek was represented at the time of the hearing before the primary judge. Counsel for Mrs Durolek did not seek any adjournment to obtain instructions on the affidavit. Nor did counsel for Mrs Durolek suggest that he was unable to respond to the primary judge's notification, as case manager, of an intention to make the springing order. In those circumstances there was no denial of procedural fairness as alleged in Ground 1(c).
3. Ground 1(c) is without merit.

1. Mrs Durolek should be granted an extension of time to appeal against the final judgment dated 2 July 2018 and the appeal should be allowed on Ground 1(b).
2. The final judgment entered pursuant to the primary judge's order on 2 July 2018 should be varied as follows:

(1) in par 1 delete the words 'all defendants' and substitute the words:

(2) in par 2 delete the words 'against the defendants (attached as Schedules 1, 2, 3 and 4)' and substitute the words:

'against the first, second and third defendants (attached as Schedules 1, 2 and 3)';

(3) in par 3 delete the words 'in relation to the requirement of the third and fourth defendants to deliver all passports and to prohibit their departure' and substitute the following:

'in relation to the requirement of the third defendant to deliver all passports and to prohibit his departure'.

1. Also, for the avoidance of doubt, pars 1(a) and (b) of the springing order dated 28 September 2017 and the judgment for damages to be assessed dated 10 October 2017 should be varied by deleting the references to 'all defendants' or 'the defendants' and substituting the words 'first, second and third defendants'.
2. The initial freezing order and the ancillary orders will, however, remain in force against Mrs Durolek. The making of those orders is not before this court on the appeal so far as an extension of time has been allowed for the bringing of the appeal. Mrs Durolek may, if so advised, seek to discharge or vary those orders by application to the primary judge. The proceedings themselves will be remitted to the primary judge.
3. Mention has been made that Pier sought that any extension of time to appeal be on condition that Mrs Durolek remain subject to the costs orders made in the final judgment. Counsel for Pier also contended that, if the appeal was allowed, the court should not overturn those costs orders.[139] Counsel for Mrs Durolek did not respond to those submissions. That matter should be the subject of further submissions on the delivery of these reasons for decision. We would also hear counsel on the costs of the appeal.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Durolek v Pier (WA) Pty Ltd [2018] WASCA 187 [2] - [31]; BAB 236 - 243.

[5] Pier (WA) Pty Ltd As Trustee For Isandi Trust v Jean Maurice Pty Ltd [2018] WASC 22 [76] - [77] (Pier No 1); BAB 188.

[8] Affidavit of Belinda Durolek sworn 16 August 2018, par 24; WAB 14.

[10] Affidavit of Belinda Durolek sworn 16 August 2018, pars 40 - 41 (WAB 17).

[11] Pier No 1 [54] - [60] (BAB 185).

[12] Pier (WA) Pty Ltd As Trustee For Isandi Trust v Jean Maurice Pty Ltd (in liq) [No 6] [2018] WASC 204 [17] ‑ [18] (Pier No 6); BAB 66.

[13] Affidavit of Belinda Durolek sworn 16 August 2018, par 23; WAB 14.

[14] Affidavit of Belinda Durolek sworn 24 April 2017 in the primary proceedings; GAB 584, par 5.

[15] Durolek v Pier (WA) Pty Ltd [51(1)]; BAB 248.

[21] Pier (WA) Pty Ltd As Trustee For Isandi Trust v Jean Maurice Pty Ltd [No 2] [2018] WASC 23 (Pier No 2).

[22] Order made 7 September 2017 in the primary proceedings [8]; BAB 174.

[31] Pier (WA) Pty Ltd As Trustee For Trust v Jean Maurice Pty Ltd [No 3] [2018] WASC 24 [6], [42] - [43] (Pier No 3) BAB 207, 213; Pier (WA) Pty Ltd As Trustee For Isandi Trust v Jean Maurice Pty Ltd (in liq) [No 5] [2018] WASC 203 [4] - [9] (Pier No 5) BAB 228 - 230.

[35] Pier No 3 [42] - [43]; BAB 213.

[44] Affidavit of Belinda Durolek sworn 16 August 2018, pars 66 - 70; WAB 22 - 23.

[45] Affidavit of Belinda Durolek sworn 16 August 2018, annexure 'BD-9'; WAB 29 - 52.

[46] Affidavit of Belinda Durolek sworn 16 August 2018, par 68; WAB 22.

[47] Affidavit of Belinda Durolek sworn 16 August 2018, attachment 'BD-11'; WAB 54 - 57.

[48] Affidavit of Leith Ayres affirmed 28 May 2018 in the primary proceedings, par 9 and attachment 'LDA-7'; WAB 107, 120 - 156.

[51] Durolek v Pier (WA) Pty Ltd [43] - [44], [50]; BAB 246, 248.

[52] Pier No 2 [2] - [13]; BAB 196 - 197.

[55] Pier No 2 [7], [15] - [16], [19] - [20]; BAB 196 - 198.

[56] Firmware Technologies Inc v Asia Platinum Group Ltd [2016] WASCA 179 (Firmware).

[57] Pier No 2 [21], [30]; BAB 198, 200.

[58] Pier No 2 [24] - [26]; BAB 199. See also [30]; BAB 200.

[59] Pier No 2 [27] - [30]; BAB 199 - 200.

[61] Pier No 3 [6], [42] - [43]; BAB 207, 213.

[62] Pier No 5 [4] - [9]; BAB 228 - 230.

[63] Bourke v State Bank of New South Wales [1995] FCA 139 [11] - [13].

[64] Electricity Commission of New South Wales v Lapthorne [1971] HCA 11; (1971) 124 CLR 177, 183 ‑ 186, 189; Hahn v Conley [1971] HCA 56; (1971) 126 CLR 276, 278, 296; Burns v Lipman [1975] HCA 2; (1975) 132 CLR 157, 159. See also Taylor Woodrow Homes Builders Pty Ltd v Chitarra (Unreported, WASC, Library No 940374, 20 July 1994), 4; Computer Edge Pty Ltd v Apple Computer Inc [1984] HCA 47; (1984) 54 ALR 767, 768; Equuscorp Pty Ltd v Haxton [2012] HCA 7; (2012) 246 CLR 498 [73]. Cf National Australia Bank Ltd v Maher (No 2) [1999] VSCA 189; [1999] 3 VR 589 [13] - [18], [20], [26] - [30]; Major Engineering Pty Ltd v Timelink Pacific Pty Ltd [2007] VSCA 228 [4] - [11]. In its written submissions Pier assumed that the judgment of 10 October 2017 was interlocutory: WAB 310 (par 18). In oral submissions counsel for Pier suggested that the 10 October 2017 judgment was a 'final order', 'wasn't some form of interlocutory order' or was a 'final order in relation to liability' but made no detailed submissions on the true character of the 10 October 2017 judgment: ts 65; see also ts 66 ('not an interlocutory order'). This must be understood together with Pier's concession as to the basis on which the assessment of damages hearing was conducted (see pars 54 to 55 above). Accordingly, Pier did not advance a consistent position. In circumstances where the point was not properly argued in the appeal it is unnecessary to come to a conclusion on the issue insofar as, for reasons to be developed, it is enough to conclude that the final judgment of 2 July 2018 may be challenged on the ground that the springing order of 28 September 2017 was attended by error.

[65] Gerlach v Clifton Bricks Pty Ltd [2002] HCA 22; (2002) 209 CLR 478 [5].

[68] Gerlach [6] - [7]. Cf the minority of Kirby and Callinan JJ at [49] ('the point will need to be relevant to the disposition of the case').

[70] Fidelitas Shipping Co Ltd v V/O Exportchleb [1966] 1 QB 630.

[71] Fidelitas Shipping Co Ltd v V/O Exportchleb (642).

[72] David Syme & Co Ltd v Lloyd [1984] 3 NSWLR 346.

[74] David Syme & Co Ltd v Lloyd (349).

[75] Illawarra Hotel Company Pty Ltd v Walton Construction Pty Ltd [2012] NSWCA 61 [21].

[76] Illawarra Hotel Company Pty Ltd v Walton Construction Pty Ltd [21].

[77] Illawarra Hotel Company Pty Ltd v Walton Construction Pty Ltd [19].

[78] Illawarra Hotel Company Pty Ltd v Walton Construction Pty Ltd [23].

[79] Michael Wilson & Partners Ltd v Nicholls [2011] HCA 48; (2011) 244 CLR 427 [74] - [86].

[80] Michael Wilson & Partners Ltd v Nicholls [78].

[81] Michael Wilson & Partners Ltd v Nicholls [78].

[82] Michael Wilson & Partners Ltd v Nicholls [79] - [80], [84] - [85].

[84] See David Syme & Co Ltd v Lloyd (349) (approved in Gerlach [8]); Smith v Tabain (1987) 10 NSWLR 562, 565, 566 (followed in Pioneer Industries Pty Ltd v Baker [1997] 1 Qd R 514 and cited with approval by Kirby and Callinan JJ in Gerlach [48] (fn 93); National Employers Mutual General Insurance Association Ltd v Manufacturers Mutual Insurance Ltd (1989) 17 NSWLR 223, 231, 233 ‑ 235, 238 ‑ 239.

[91] Cameron v Cole [1944] HCA 5; (1944) 68 CLR 571, 590.

[92] Supreme Court (Court of Appeal) Rules 2005 (WA) r 26(2).

[93] See Simonsen v Legge [2010] WASCA 238 [8].

[96] Skahill v Kestral Holdings Pty Ltd (in liq) [2000] WASCA 185 [18].

[97] Skahill v Kestral Holdings Pty Ltd (in liq) [17] - [18].

[100] Firmware [5]. See also at [42], [48].

[101] Rules of the Supreme Court 1971 (WA) O 4A r 3(c).

[102] See WAB 287 (par 21), WAB 310 (par 17).

[103] Rules of the Supreme Court, O 4A r 5(1)(a).

[104] Dallas Development Corporation Pty Ltd v Western Australian Land Authority [2000] WASCA 49 [9].

[105] Hytec Information Systems Ltd v Coventry City Council [1996] EWCA Civ 1099; [1997] 1 WLR 1666, 1673.

[106] Freeman v Rabinov [1981] VicRp 52; [1981] VR 539, 544.

[107] See eg Dallas Development Corporation Pty Ltd v Western Australian Land Authority [22].

[110] Cf Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 [94], [102], [112].

[111] BAB 164 (par 20(c)), BAB 167 (par 22(c)) BAB 168 (par 26).

[112] Affidavit of Belinda Durolek sworn 16 August 2018, WAB 18 (par 48).

[114] See eg the materials listed at BAB 322; ts 56 - 60, 69.

[116] WAB 288 (pars 25 - 26), WAB 289 - 290 (pars 30 - 31).

[118] Pier No 2 [21], [30]; BAB 198, 200.

[123] Raja v Van Hoogstraten [2004] EWCA Civ 968; [2004] 4 All ER 793.

[124] Raja v Van Hoogstraten [111] - [112].

[134] The primary judge confirmed at the outset of his reasons in Pier No 2 that the 'significant order of business today' arises because the deposit orders made 7 September 2017 were not met: [2]; BAB 196. See also at [4] and [7]; BAB 196.

[135] WAB 316 (pars 53 - 54); ts 70 - 72.