Ranclose Investments Pty Ltd v Leda Management Services Pty Ltd

The respondents' application for dismissal of the proceedings

1. The application to dismiss the proceedings was listed before Gibson DCJ on 12 November 2021. It was brought by both Leda Management and Leda Holdings, relying on r 42.21(3) and Ranclose's failure to provide the first tranche of security by the appointed date. After hearing argument from the parties, Gibson DCJ adjourned the application to 30 November 2021 so as to give Ranclose a final opportunity to comply with the order for payment of the first tranche of security. On 30 November 2021, when the matter came back before her Honour, no payment had been made.
2. In the course of the hearing on 30 November 2021, counsel for the appellants raised with her Honour that no order for security had been made in favour of Leda Holdings. Gibson DCJ located the orders of Abadee DCJ and referred to the placement of the apostrophe in Order 6, extracted above, as indicating that the order was made in favour of both respondents. The transcript then records the following exchange: DONNELLAN: I apologise, your Honour - HER HONOUR: No, that's fine, it's both of them. DONNELLAN: I accept the position. HER HONOUR: In other words, it's a security for both their costs. DONNELLAN: I'm sorry, your Honour. HER HONOUR: Do you want to have a chat to your solicitor? If your solicitor thinks this is wrong, you did (sic) let me know. Mr Connor, that's right isn't it? CONNOR: Yes, your Honour. HER HONOUR: Just have a quick chat to your solicitor. Just mute yourself and sort it out with your solicitor, Mr Donnellan. DONNELLAN: Thank you, your Honour.
3. Shortly thereafter, Ranclose's counsel informed her Honour that it was incorrect to have made the submission that there was no security order in favour of Leda Holdings. As I set out below at [27], the submission that counsel for Ranclose ultimately withdrew was, in fact, correct: there was no order for Ranclose to provide security for the costs of Leda Holdings.
4. On 2 December 2021, Gibson DCJ dismissed the proceedings, including the cross-claim, and ordered Ranclose to pay the costs of the claim and the cross-claim. On 4 May 2023, this Court ordered, by consent, that the costs order be stayed until the final determination of the appeal or further order of the Court.
5. Given the issue arising on the appeal, it is unnecessary to refer in detail to her Honour's reasons. It is important to note, however, that her Honour's reasons reflect the correct factual position regarding security for costs, namely that: the application for security for costs was brought by "the sole defendant at that time"; that there were now two defendants; and that "the defendants" were applying for dismissal of the claim: at [2]. Her Honour said nothing further on this issue, nor did her Honour consider whether r 42.21(3) of the UCPR conferred power to dismiss the proceedings against both defendants where only one defendant had applied for, and obtained the benefit of, an order for security for costs.
6. I note also that Gibson DCJ dismissed the cross-claim on the basis that it was defensive in nature: at [16]. Her Honour referred in this respect to a letter that Leda Management had sent to Ranclose, dated 9 April 2021, in which Leda Management undertook that if Ranclose was ordered to provide security for costs and was unable to do so, the cross-claim would not be pressed unless and until security was provided. Her Honour took this to mean that if Ranclose's proceedings were dismissed, the cross-claim should also be dismissed: at [16].

The appeal

1. The Court granted an extension of time to the extent necessary pursuant to r 51.16(2) of the UCPR for the appellants to file and serve the notice of appeal following the grant of leave to appeal. The Court also granted leave to the respondents to file the notice of contention out of time to the extent that leave was required.
2. By its ground of appeal, the appellants contend that the District Court erred in dismissing the amended statement of claim as against Leda Holdings "purportedly pursuant to r 42.21(3), or alternatively a provision of the Civil Procedure Act 2005 (NSW)", in circumstances where: "a. Holdings had not applied for security for costs as the Court had acknowledged (Gibson DCJ reasons at [2]); b. Holdings did not give any undertaking not to pursue the cross-claim if an order for security was made (as it was); c. There is no power under r 42.21(1) of the UCPR to order security for a defendant's costs other than 'on the application of a defendant' (which, on its proper construction, refers to the defendant in whose favour such an order is made); d. There is no power under r 42.21(3) of the UCPR to dismiss proceedings unless the plaintiff 'fails to comply with an order under' rule 42.21 (and no order was made in Holdings' favour 'under' rule 42.21); and, or alternatively, e. Insofar as Order 6 made by Abadee DCJ on 28 May 2021 appeared to require the plaintiff to give security for both defendants' costs, it contained a clerical mistake, or an error arising from an accidental slip or omission, in that it referred to 'Defendants'' instead of 'First Defendant's'; or, alternatively, Abadee DCJ erred in making an order for security for costs in favour of Holdings in circumstances where Holdings had not applied for security for costs."
3. Although the ground of appeal referred in the alternative to a provision of the Civil Procedure Act, the appellants did not identify any provision of that Act in either their written or oral submissions as being applicable to the ground. Their sole focus was r 42.21(3) of the UCPR. The issue that the ground raises is whether r 42.21(3) authorises a court to make an order dismissing proceedings as against a defendant who has not applied for, and does not have the benefit of, an order under r 42.21(1).
4. I have set out r 42.21(3) above (at [3]). According to its terms, the operation of the sub-rule is triggered "[i]f the plaintiff fails to comply with an order under this rule". The reference to an order "under this rule" necessarily refers to r 42.21(1). A court making an order under that sub-rule is contingent upon an application being made to it, namely, "the application of a defendant". Consistently with s 8(b) of the Interpretation Act 1987 (NSW), the singular "defendant" includes the plural, such that where proceedings involve multiple defendants, more than one defendant may apply for security for costs. However, the order that the court is empowered to make relates to the costs of the applicant defendant (or defendants): the plaintiff is to give such security as the court thinks fit "for the defendant's costs of the proceedings" (emphasis added).
5. The requirement that an application for security must be made, and granted, before the power under r 42.21(3) can be exercised recognises that determining whether to require a plaintiff to provide security for costs involves a range of considerations, including matters which are specific to the plaintiff and the defendant applicant. Sub-rules 42.21(1A) and (1B) are relevant in this context, providing: (1A) In determining whether it is appropriate to make an order that a plaintiff referred to in subrule (1) give security for costs, the court may have regard to the following matters and such other matters as it considers relevant - (a) the prospects of success or merits of the proceedings, (b) the genuineness of the proceedings, (c) the impecuniosity of the plaintiff, (d) whether the plaintiff's impecuniosity is attributable to the defendant's conduct, (e) whether the plaintiff is effectively in the position of a defendant, (f) whether an order for security for costs would stifle the proceedings, (g) whether the proceedings involves a matter of public importance, (h) whether there has been an admission or payment in court, (i) whether delay by the plaintiff in commencing the proceedings has prejudiced the defendant, (j) the costs of the proceedings, (k) whether the security sought is proportionate to the importance and complexity of the subject matter in dispute, (l) the timing of the application for security for costs, (m) whether an order for costs made against the plaintiff would be enforceable within Australia, (n) the ease and convenience or otherwise of enforcing a New South Wales court judgment or order in the country of a non-resident plaintiff. (1B) If the plaintiff is a natural person, an order for security for costs cannot be made merely on account of his or her impecuniosity.
6. In addition to the discretion to order a plaintiff to give security for the defendant's costs of the proceedings, r 42.21(1) provides that the court may order "that the proceedings be stayed until the security is given". The respondents emphasised this part of the sub-rule as it permits, in terms, the whole of the proceedings to be stayed. Relying on that meaning of "the proceedings" in r 42.21(1), and submitting that the reference to "the proceedings" in r 42.21(1) and r 42.21(3) should be consistent, the respondents submitted that r 42.21(3) should be construed as conferring a broad discretion that extends to dismissing proceedings as a whole where security for costs has been ordered and is not provided. The respondents submitted that this construction conferred on the Court a discretionary dismissal power that enabled it to control its processes and procedure and dismiss generally or specifically.
7. True it is that both r 42.21(1) and 42.21(3) use the language of "the proceedings". However, there is difference between the language at the conclusion of r 42.21(1), which refers to staying "the proceedings", and the language used in r 42.21(3), which refers to an order dismissing "the proceeding on the plaintiff's claim for relief in the proceedings". Assuming for present purposes that "the proceedings" in r 42.21(1) refers to the proceedings as a whole, the difference in language between r 42.21(1) and r 42.21(3) reflects the difference, as a matter of legal consequence, between a stay of proceedings and their dismissal.
8. As the appellants accepted in their Reply, "the proceedings" in r 42.21(1) could well be construed as permitting the court to stay proceedings as a whole, including as against a defendant that has not applied for security for costs. A temporary measure of that nature is consistent with the case management principles in Part 4 of the Civil Procedure Act. However, different considerations apply when a court is considering dismissal of proceedings under r 42.21(3). The appellants submitted that, at that point, considerations of efficiency yield to larger considerations, namely the injustice of shutting a plaintiff out from pursuing proceedings against a defendant who has not applied for an order for security for costs. In my view, that submission has force.
9. Having regard to those consequences, as the appellants submitted, when read with r 42.21(1) the reference in r 42.21(3) to "the proceeding on the plaintiff's claim for relief in the proceedings" is not readily construed as referring to the plaintiff's claims for relief against a defendant that has not applied for, and obtained, an order under r 42.21(1). Rule 42.21(3) only applies, after all, if an order for security has been made - the precondition to which is an application by a defendant (or defendants) - and the plaintiff has not provided the ordered security for the costs of that defendant (or those defendants).
10. The respondents submitted that the phrase in r 42.21(3) "the plaintiff's claim for relief in the proceedings" was intended to indicate that the discretion is to be exercised in relation to any claims made in the proceedings by any of the plaintiffs and not, for example, in relation to any claims made by a cross-claimant. While the language of r 42.21(3) may indeed support that distinction, it does not support the respondents' broader contention that the court can exercise the discretion in that sub-rule in favour of a defendant who did not apply for security.
11. That the rule would not readily be construed as broadly as the respondents contend is consistent with the purpose of the rule. The fundamental purpose of an order for the provision of security for costs is "to secure justice between the parties": Hoxton Park Residents Action Group Inc v Liverpool City Council [2012] NSWSC 1026 at [89] (Ward J). Both parties submitted that an order for security has a generally protective purpose, requiring a plaintiff to provide security for costs in the exercise of the court's discretion, and dismissing that claim if the security is not then provided. The respondents submitted that it should follow from that purpose that r 42.21(3) should be construed so as to enable a court to dismiss proceedings as against a party in whose favour security has not been ordered. However, that construction does not account for the manner in which the rule gives effect to the protective purpose that it serves, to which I have referred above.
12. A further difficulty with the respondents' construction involves its legal consequences. The respondents' construction would operate to shut a plaintiff out of a claim against a defendant that has not sought to invoke the protection of an order for security in accordance with r 42.21(1). The structure of r 42.21 as a whole, including the nature of considerations that are involved in considering whether to make an order under r 42.21(1), in r 42.21(1A) and r 42.21(1B), tell against construing the power of dismissal under r 42.21(3) as extending to a defendant that has not applied for an order. As the appellants submitted of the present case, it could not be assumed that the District Court would have made a security for costs order in favour of Leda Holdings had it applied for such an order.
13. The appellants relied on two authorities to which Brereton JA and I referred in our respective reasons on the application for leave to appeal (at [5] and [59]), Thomatis v McLean (1896) 13 WN (NSW) 68 ("Thomatis") and Asian Investments Corporation Ltd v Symons (Supreme Court (NSW), Young J, 10 April 1996, unrep) ("Asian Investments"). Having considered them more closely in the context of the appeal, the decisions are of limited significance, referring to different rules and different factual circumstances.
14. Thus, in Asian Investments, Young J construed Part 53, r 4 of the Supreme Court Rules 1970 (NSW), upon which r 42.21(3) is modelled, as empowering a Master to dismiss proceedings against one of several defendants on the basis that the plaintiff had been ordered to provide security for costs for that defendant and had not done so. The respondents do not suggest that r 42.21(3) cannot be relied on in that way; rather, their contention is that the rule can also be relied on by defendants who have not sought security, a contention that Young J had no cause to consider in Asian Investments.
15. Similarly, as the respondents submitted and the appellants accepted, Thomatis involved different factual circumstances and application of a rule that was worded differently to r 42.21 of the UCPR. The applicable rule in Thomatis was r 75 of the Standing Rules of Court in its Equitable jurisdiction. Rule 75 conferred an entitlement upon a defendant to obtain an order for security for costs "as of course" where the plaintiff resided out of the jurisdiction. It further provided that where an order for security was made, "no further proceeding shall be taken in the suit except by leave of the Court until after such security shall have been given".
16. The plaintiff in Thomatis had commenced proceedings against five defendants, being her sister and four brothers, but had only served the claim upon her sister and two of her brothers. The three defendants who were served applied for and obtained an order that the plaintiff should give security for costs on the basis that she resided out of the jurisdiction. Before the security ordered was given, the plaintiff applied for an order for substituted service of the statement of claim on the remaining two defendants (whose whereabouts she had been unable to ascertain) by way of service on her sister or, alternatively upon her sister's solicitor. The respondents on the motion contended that as the order for security for costs had not been complied with, r 75 precluded the plaintiff from taking any step in the suit. Manning J construed the rule as applying only "against the party who has obtained the order for security for costs": at 69.
17. Rather than reason by analogy to earlier versions of rules that have been considered in other circumstances, the preferable course is to focus on the rules in question, informed by their context and purpose. Mullighan J made observations to that effect in Remm Constructions (SA) Pty Ltd v Allco Newsteel Pty Ltd [1991] SASC 3100 ("Remm Constructions"), to which the respondents drew this Court's attention. In that case, Mullighan J was referred to Thomatis in support of the plaintiff's application to proceed to trial against one of several defendants in circumstances where other defendants had obtained orders for security for costs and security had not been provided. The applicable rule in Remm Constructions, R.100.03 of the Supreme Court Rules 1987 (SA), provided that where security for costs was ordered, "the action or other proceedings shall be stayed until the security is furnished, unless the Court otherwise orders".
18. Mullighan J stated that when considered against the background of the development of court rules and their placing control of proceedings in the hands of the court, the use of "action or other proceedings" in R.100.03 meant the action or other proceeding itself, and not some part of it. In response to Thomatis, Mullighan J observed that it was concerned with a differently formulated rule, and with different circumstances. His Honour's decision was affirmed on appeal in Remm Construction (SA) Pty Ltd v Allco Newsteel Pty Ltd (1992) 57 SASR 180 at 191 (King CJ, Bollen and Prior JJ agreeing).
19. Specifically in relation to r 42.21(3), the respondents relied on Idoport Pty Ltd v National Australia Bank Ltd [2002] NSWSC 18 ("Idoport"), an appeal from which was dismissed in Idoport Pty Ltd v National Australia Bank [2002] NSWCA 271. The respondents emphasised Einstein J's description of Part 53, r 4 of the Supreme Court Rules, which as noted above is in substantially similar terms to r 42.21(3), as "unfettered" (at [19]), citing Billinudgel Pastoral Co Pty Ltd v Westpac Banking Corp [1998] 278 FCA ("Billinudgel"). However, as was the case in Asian Investments, Einstein J in Idoport was not considering the issue with which this Court is now concerned. Rather, his Honour was considering the likely more common scenario of whether to exercise the discretion in Part 53 r 4 in circumstances where the defendants to the various proceedings had obtained orders for security (see Idoport Pty Ltd v National Australia Bank Limited [2001] NSWSC 744), and the plaintiff was opposing dismissal. It does not follow from his Honour's description of the discretion in that context as "broad" and "unfettered", and as requiring all relevant factors to be weighed in the balance (at [24]), that the discretion can be exercised against a non-applicant defendant.
20. As to Billinudgel, on which the respondents also relied, Cooper J was considering the same question as was before Einstein J in Idoport, albeit in relation to O 28 r 5 of the Federal Court Rules 1979 (Cth) or s 56(4) of the Federal Court of Australia Act 1976 (Cth). In that case, his Honour had earlier ordered the three corporate applicants to provide further security for the respondents' costs, and they had not complied with that order. The respondents applied to vary that order, so as to provide for the dismissal of the applicants' proceeding if security was not provided by a certain date. However, as the appellants pointed out in their Reply, the individual applicants had been required to provide the initial security for costs, in the form of a joint and several personal guarantee. None of the six applicants gave evidence on the application before Cooper J as to why, in the seven months since the further security had been ordered, the security had not been provided. It was in those particular circumstances that Cooper J considered it appropriate to order that "the applicants' proceedings be dismissed with costs" if the corporate applicants did not provide the further security by an appointed date.
21. There is no doubt, as the respondents submitted, that where an order for security has been made in favour of a sole defendant, or several defendants, r 42.21(3) confers a broad discretion on a court to dismiss proceedings where that order has not been complied with. However, there is no support in the authorities on which the respondents relied for their submission that the discretion includes the power to dismiss proceedings against defendants irrespective of whether they had first obtained an order for security.
22. The respondents submitted that it would be contrary to s 56 of the Civil Procedure Act to require Leda Holdings to make a contested and expensive application for security. That application would have had to have been made after 6 July 2021 when the amended statement of claim was filed, and before 16 August 2021 when the proceedings were stayed, in circumstances where the Court had found Ranclose was impecunious and there was no prospect of it being able to provide the first tranche of existing security. The respondents further submitted that a narrow construction of r 42.21(3) would create the absurdity that the Court could not dismiss proceedings under that provision as against defendants who had filed submitting appearances, despite that course also being consistent with s 56 of the Civil Procedure Act.
23. I do not find either of these arguments persuasive. In so far as the first argument calls in aid the particular circumstances of the case, I note that at least according to the reasons of Abadee DCJ, Leda Holdings was represented at the hearing of the application that Ranclose made to amend its pleading and to join Leda Holdings as a defendant, and opposed the application: at [18], [28]-[29]. His Honour heard that application on the same day as his Honour heard Leda Management's application for security for costs. There was nothing to preclude Leda Holdings seeking to make its joinder conditional upon provision of security for costs, or otherwise seeking to join in Leda Management's application for security in the event that it was joined as a defendant to the proceedings.
24. As to the second argument, the present case is not the occasion for a detailed analysis of the consequences of a defendant filing a submitting appearance pursuant to r 6.11(1) of the UCPR. In any case, pointing to the circumstance in which a defendant has submitted to the orders of the court does not illustrate any absurdity in dismissing proceedings as against other defendants which have sought and obtained orders for security.
25. Finally, in oral submissions, Senior Counsel for the respondents submitted that the dismissal of the proceedings was supported by both r 12.7 of the UCPR and s 61 of the Civil Procedure Act, and that the construction for which the appellants contended was inconsistent with each of those provisions. I do not accept that submission. Rule 42.21 provides for a specific procedure by which a defendant may apply for and obtain an order for security for its costs, and move to have those proceedings dismissed on the basis that the ordered security is not provided. A defendant with the benefit of an order for security would have no cause to consider r 12.7 of the UCPR, which deals with dismissal of proceedings for want of due despatch, or s 61 of the Civil Procedure Act, which provides that the court may make directions and a lists a range of non-exhaustive measures that it may take if a party to whom a direction is given fails to comply with it, including, in s 61(3)(a), the power to "dismiss the proceedings, whether generally, in relation to a particular cause of action or in relation to the whole or part of a particular claim". On the other hand, a defendant that does not have the benefit of an order for security may seek to invoke the court's discretion in r 12.7 or s 61.
26. The respondents' submission as to inconsistency is premised upon a defendant that does not have an order for security for costs in its favour relying on either r 12.7 or s 61 to have the proceedings against it dismissed for non-compliance with an order for security made in favour of another defendant. There is nothing in the terms of either the rule or the section that would preclude such an application being made, although whether it would be granted in the exercise of the discretion conferred by the two provisions would necessarily depend on the particular circumstances. I note that by their notice of contention, the respondents seek to advance these very arguments.
27. I would uphold the appellants' ground of appeal. I have noted above that Gibson DCJ recognised, in her reasons at [2], that although Leda Management alone applied for security for costs, and obtained that order, both Leda Management and Leda Holdings sought the dismissal of the proceedings. In acceding to that application in circumstances where Leda Holdings had not applied for or obtained an order for security for costs, her Honour can only have proceeded on a misconstruction of r 42.21(3). Her Honour reached that conclusion without any assistance from the parties on the proper construction of r 42.21(3) such as this Court has received on the appeal.

The notice of contention

1. The respondents seek to have this Court affirm Gibson DCJ's dismissal of the proceedings as against Leda Holdings on the following, alternative grounds: 1. Gibson DCJ ought to have dismissed the proceedings as against Leda Holdings under s 61 of the Civil Procedure Act by reason of Ranclose's failure to comply with Orders 2 and 7(a) made by Abadee DCJ on 28 May 2021, Orders 1 and 3 made by Abadee DCJ on 17 June 2021, Order 7(a)-(b) as amended by Abadee DCJ on 30 June 2021 and Order 7(a) as amended by Gibson DCJ on 12 November 2021; 2. Gibson DCJ ought to have held that Ranclose's failure to comply with the orders of the District Court to which I have referred in (1) above constituted a failure to prosecute the proceedings with due dispatch, and ought to have dismissed the proceedings against Leda Holdings under r 12.7 of the UCPR.
2. The orders in the District Court on which the respondents rely are as follows: 1. Order 2 of the orders made by Abadee DCJ on 28 May 2021 directed Ranclose to file and serve a modified version of the proposed amended statement of claim, in accordance with his Honour's reasons of that date, within 14 days. According to the subsequent reasons of Abadee DCJ dated 30 June 2021, delivered in respect of a subsequent application brought by the applicant, his Honour noted that the amended statement of claim was not served in accordance with Order 2: Ranclose Investments Pty Ltd v Leda Management Services Pty Ltd (No 2) [2021] NSWDC 288 at [103]. His Honour extended the leave granted to Ranclose under Order 2 to file and serve an amended statement of claim to 6 July 2021. As noted above, the amended statement of claim was filed on that date. 2. Order 7 of the orders made by Abadee DCJ on 28 May 2021 was that Ranclose provide security for costs in tranches, with the first tranche (in Order 7(a)) being $80,000 within 28 days of the date of those orders. On 30 June 2021, his Honour acceded to the application to vary Order 7, in the manner to which I have referred in [15] above. 3. Orders 1 and 3 made by Abadee DCJ on 17 June 2021 related to a notice of motion filed by Ranclose on 10 June 2021, which was the subject of his Honour's reasons on 30 June 2021. By Order 1 of 17 June 2021, Abadee DCJ had directed Ranclose to file and serve any evidence on the motion and written submissions (not exceeding 5 pages) by 21 June 2021; and Order 3 directed Ranclose to file any submissions in reply (not exceeding 3 pages) by 25 June 2021. According to his Honour's reasons of 30 June 2021 at [8]-[9], Ranclose filed one of its affidavits a day late, and its written submissions, whilst on time, were 10 pages without Ranclose seeking leave to double the length. Ranclose's reply submissions also "substantially" exceeded the directed length: at [11]. 4. Orders 7(a) and (b) of the orders made by Abadee DCJ on 28 May 2021 and varied on 30 June 2021 related to the payment of security for costs in tranches of $30,000 by 15 August 2021 and 15 November 2021. Ranclose's non-compliance with these orders led to the application to dismiss the proceedings that was heard by Gibson DCJ. 5. Order 7(a) of the orders of Abadee DCJ as further varied by Gibson DCJ extended the time for payment of the first tranche of security to 5pm on Monday, 29 November 2021. As I have noted above at [18], Ranclose did not make any payment by that date.
3. The respondents accepted that the arguments relying on r 12.7 of the UCPR and s 61 of the Civil Procedure Act were not put below, but submitted that they were nonetheless entitled to raise these arguments in relation to the position of Leda Holdings. They relied in this respect upon the decision of Barrett JA in Hannover Life Re of Australasia Ltd v Dargan [2012] NSWCA 185, in which his Honour summarised the position regarding notices of contention as follows at [23]-[24]: "While an appellant ordinarily cannot raise on appeal matters that were not agitated below, a respondent - who is made party to the appeal whether he or she likes it or not - is not so limited: David Syme & Co Ltd v Lloyd (1985) 1 NSWLR 416. Subject to the procedural requirement of notice of contention (as a means of avoiding surprise), the respondent is entitled to seek to uphold the decision below on 'any good legal ground appearing upon the evidence, although he did not present it in the Court below'. These are the words of Jordan CJ in NRMA Insurance Ltd v B & B Shipping and Marine Salvage Co Pty Ltd (1947) 47 SR (NSW) 273 at 282. This formulation makes it clear that the evidential base established at trial is alone available. Points of law and points of construction not argued below are therefore particularly suited to being raised by a respondent on appeal."
4. In oral submissions, Senior Counsel for the respondents summarised their point on the notice of contention as being that if the issue of the scope of the power in r 42.21(3) had been raised before Gibson DCJ, Leda Holdings could have taken a number of steps. Those steps included moving for dismissal under s 61 of the Civil Procedure Act or r 12.7 of the UCPR, in effect, for want of prosecution or due despatch for non-conformity with Abadee DCJ's various rules and with the rulings that Gibson DCJ made on 12 November 2021 (when her Honour adjourned the dismissal application to 30 November 2021 to permit further time for payment of security). The respondents contended that her Honour's conclusion to dismiss the proceedings against Leda Holdings would have been supported by the exercise of either or both of those broad powers, on the basis of the same considerations as those her Honour considered, as well as Ranclose's numerous breaches of procedural orders up to 2 December 2021.
5. While I accept that the respondents are able to raise the points that they have on their notice of contention, the points are without significant merit when one considers the nature of the orders that were not complied with. The order in [52(1)] was procedural, relating to the filing of an amended statement of claim the content of which all parties were aware of (it having been the subject of Ranclose's amendment application and Abadee DCJ's judgment of 28 May 2021). His Honour extended the time for compliance, and the amended pleading was filed within the extended time. The security for costs order in [52(2)] did not concern Leda Holdings and was in any event varied by his Honour (albeit reluctantly) on 30 June 2021. The non-compliances with the orders in [52(3)] related to a notice of motion that did not concern Leda Holdings (it was a party by that stage but Ranclose had not filed the amended pleading), and which Abadee DCJ determined on 30 June 2021. Finally, the orders in [52(4)] and [52(5)] related to the payment of the security for costs ordered on the application of Leda Management.
6. Having regard to the nature and content of all of the orders on which the respondents rely, and the non-compliances, I do not consider that they would warrant the significant step of dismissing the proceedings against Leda Holdings pursuant to s 61(3)(a) of the Civil Procedure Act, for non-compliance with a direction, or dismissing the proceedings pursuant to r 12.7 of the UCPR.
7. Further, and in any event, Leda Holdings is not precluded from raising these matters upon the matter being remitted, should it consider it appropriate to do so. It is also not precluded from applying for security for costs, a matter to which Brereton JA referred in his Honour's reasons on the application for leave to appeal at [6].

Conclusion

1. The error that the appellants advanced in their notice of appeal took issue with her Honour's order for dismissal "insofar as the proceedings were brought against the second respondent ([Leda] Holdings) and the Amended Statement of Claim named [Leda] Holdings as second defendant". I have found that the appellants have established that error.
2. By way of relief, the appellants sought that the appeal be allowed (Order 3) and that Gibson DCJ's order of dismissal, and the order that Ranclose pay the costs of the claim and the cross-claim, be set aside (Order 4). While I would allow the appeal, I do not consider that the orders should be set aside in their entirety, in circumstances where those orders were properly made as against Leda Management, which had the benefit of an order for security for costs which Ranclose had not satisfied. The appellants accepted as much in their written submissions, submitting that Gibson DCJ erred in ordering Ranclose to pay the costs of the claim and the cross-claim as agreed or assessed, as some of the costs were incurred after the joinder of Leda Holdings and in respect of the respondents' application for dismissal. At worst, they submitted, the costs order should have been limited to an order to pay Leda Management's costs only.
3. In considering costs, both at first instance and on appeal, it is also necessary to bring to account what occurred before Gibson DCJ. As I have noted above, at the hearing before Gibson DCJ the parties proceeded on the basis that both Leda Management and Leda Holdings had the benefit of an order for security. That was wrong. When the issue was raised, Ranclose and the respondents were invited to consider the correctness of the position that Gibson DCJ put to them, namely, that Order 6 made by Abadee DCJ was in favour of both defendants. Counsel for the respondents before Gibson DCJ, who had also appeared before Abadee DCJ, confirmed (wrongly) that her Honour's understanding was correct. Counsel for the appellants before Gibson DCJ was not briefed in the hearing before Abadee DCJ; he was invited to check with his instructing solicitor and, having done so, he did not contend for a contrary view on behalf of the appellants.
4. In my view, insofar as the order for costs that Gibson DCJ made below relates to Leda Management, it should not be disturbed. Insofar as the application for dismissal of the statement of claim was joined in by Leda Holdings, I would make no order as to costs. Leda Holdings was not a party to the cross-claim and thus the costs of the cross-claim should concern only Leda Management and not Leda Holdings.
5. As to the costs of the appeal, the appellants have succeeded on a ground they did not raise below. In the circumstances, I do not consider it appropriate to make any order as to the costs of the appeal. However, the respondents should pay the appellants' costs of the notice of contention.
6. Accordingly, I propose the following orders: 1. Appeal allowed. 2. Vary order 2 made by Gibson DCJ on 2 December 2021 to add, after the word "dismissed", the words "as against Leda Management Services Pty Ltd". 3. Vary order 4 made by Gibson DCJ on 2 December 2021 to add, after the words "costs of the claim", "of Leda Management Services Pty Ltd". 4. Make no order as to the costs of the appeal. 5. The respondents are to pay the appellants' costs of the notice of contention.
7. ADAMSON JA: I agree with Mitchelmore JA.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 05 October 2023