There are two applications before the court:
1. The defendants' application for the proceedings to be dismissed for failure to comply with orders to pay security for costs (ordered 28 May 2021, varied on 30 June 2021 and again on 12 November 2021).
2. The plaintiff's application for leave to reopen to tender evidence of a proposed payment on 1 December 2021 and concerning proposed future payments, as well as for a further adjournment of the defendants' application for dismissal.
On 21 April 2021, the sole defendant at that time (there are now two defendants) brought an application for security for costs (in the sum of $150,000), which was heard on 20 May 2021 and the subject of an order for payment of this sum in two tranches. This was varied on 30 June 2021 (as to timing, not amount): Ranclose Investments Pty Ltd v Leda Management Services Pty Ltd (No 2) [2021] NSWDC 288 ("the second judgment"), but still not paid, with the result that the action was stayed on 16 August 2021. The defendants then brought an application for the plaintiff's statement of claim to be dismissed pursuant to Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") r 42.2(3) for failure to pay security for costs as ordered.
The defendants' application for summary dismissal was initially listed before me for hearing on 12 November 2021. On that day, as set out in more detail below, I adjourned the application to 30 November 2021 to give the plaintiff a final opportunity to comply with Abadee DCJ's orders for payment of the first tranche. No further payment was made and, on 30 November 2021, I reserved my judgment, principally to enable me to deal satisfactorily with material served late on the evening of 29 November 2021, indicating that I would hand down my judgment on the following day, 1 December 2021.
However, there were dramatic developments after my associate notified the parties late on 30 November 2021 that I would hand down judgment the following morning at 9.30 am. Late in the evening of 30 November 2021, the plaintiff's solicitor served material purporting to show that Mr Williamson, a director of the plaintiff, had raised $10,000 and could raise a further $20,000, under cover of an email which sought an adjournment until after 5 December 2021 to complete these payments.
In the circumstances, rather than hand down judgment as planned, I advised the parties that I would hear the plaintiff's application to reopen its case rather than hand down judgment.
As is set out below, I have refused leave to reopen and any further adjournment of this application, and dismissed the statement of claim and cross-claim with costs orders against the plaintiff in both these actions.
[4]
The security sum as ordered and varied
At all relevant times, the sum for security for costs has been $150,000. Abadee DCJ's second judgment, varying the security orders, followed the making by his Honour of a security for costs order on 28 May 2021: Ranclose Investment Pty Ltd v Leda Management Services Pty Ltd [2021] NSWDC 210 ("the first judgment"). Abadee DCJ, who heard the application on 20 May 2021, had ordered payment of $150,000 in two tranches, the first within 28 days and the second 10 business days before the hearing, but was later persuaded to vary this order and instead to provide for security to be paid as follows:
1. $30,000 to be paid by 15 August 2021;
2. $30,000 to be paid by 15 November 2021;
3. $30,000 to be paid by 15 February 2022;
4. $30,000 to be paid by 15 May 2022; and
5. $30,000 to be paid by 15 August 2022.
In making those orders, Abadee DCJ made certain findings of fact in relation to the exercise of discretion (at [90] - [112]). Those findings included not being satisfied concerning Mr Williamson's financial position (at [102]), a finding the plaintiff now asks me to go behind, asserting that his impecuniosity is a factor militating against impecuniosity for the reasons set out in Bell Wholesale P/L v Gates Export Corporation (No 2) [1984] FCA 29. As a general rule it is undesirable for a party to seek to go behind factual material in relation to an earlier ruling unless there has been a change in circumstances or an error made by the previous judge. Neither of those is applicable here.
As it happens, the evidence referred to as unsatisfactory by Abadee DCJ at [102] remains, in my view, just as unsatisfactory now, and I propose to proceed on the same factual basis as Abadee DCJ. In particular, I adopt his Honour's findings in relation to the claims that the application for security was brought late and that proceedings would be stifled (at [105] - [107] and [101] - [104] respectively), as well as his Honour's observations as to the unsatisfactory evidence led by the plaintiff generally.
Abadee DCJ's variation of his earlier orders was expressed to be an indulgence. In granting what is described as a "generous" (at [68]) extension, his Honour went on to warn:
"[69]…However, with that generosity, the applicant should understand that in proceeding with this page and the procedural imbroglio that the parties have enveloped this court in over the last seven months, will come a corresponding strictness in the enforcement of deadlines for the provision of security; with the potentially far-reaching procedural consequences which may follow to the applicant if those dates for the changes are not complied with."
Notwithstanding this warning, the plaintiff failed to comply with these orders, or indeed to pay any security, either since the first judgment was given on 28 May 2021 and by the due date of 15 August 2021.
On 16 August 2021, these proceedings were stayed. On 2 September 2021 and 1 October 2021, affidavits of Robert Kalde were sworn and served in support of an application to dismiss the proceedings. On 16 September 2021, Judicial Registrar Howard ordered the plaintiff to file and serve any affidavits in response to the present application by 15 October 2021. The plaintiff served the affidavit of its solicitor, Mr Clancy (sworn on 15 October 2021) and an affidavit of Mr Williamson (affirmed on 28 October 2021).
When the application came before me for hearing on 12 November 2021 and the evidence was tendered in a Court Book, I noted that Mr Williamson's affidavit of 28 October 2021, at paragraph 38, stated that he may be in a position to pay the first tranche by 30 November 2021. I also noted Abadee DCJ's observations about Mr Williamson's financial position. After further enquiry, I stood the application over part-heard to 30 November 2021 and made orders as follows:
"(1) By way of variation of Order 6 and 7 made on 28 May 2021 and the order set out in the judgment of 30 June 2021 at paragraphs 107 to 108, I extend time for the plaintiff to provide the first tranche of $30,000 from 15 August 2021 to 5pm on Monday 29 November 2021.
(2) The plaintiff is to provide the set of security conformably with order 6 of the orders Judge Abadee of 28 May 2021.
(3) Matter stood over part-heard before Judge Gibson at 9:15am on Tuesday 30 November 2021.
(4) Costs reserved.
(5) Note the parties are agreed that the proceedings are stayed until further order."
By this stage, the second tranche payable on 15 November 2021 would also have been payable, but no order was made by me in relation to that payment. My intention was to make it as easy as possible for the plaintiff to comply with the orders as made on 28 May 2021 and varied on 30 August and 12 November 2021.
Once again, by 30 November 2021, the plaintiff had failed to comply with the order for security for costs. The application of the defendants was that the proceedings should no longer be stayed, or the orders the subject of further extension, and that the proceedings should be dismissed with costs.
It is important to note, in relation to the finalising of the claim, that an undertaking inter partes was given by the defendant/cross-claimant (to which the second defendant later joined), in a letter dated 9 April 2021, that if the plaintiff was ordered to provide security and was unable to do so, the cross-claim would not be pressed unless and until security was provided. What this means is that, if these proceedings are dismissed, the cross-claim should also be dismissed (although a costs order against the plaintiff is sought). This is because, as was acknowledged in the correspondence, the cross-claim was defensive in nature. A large part of the plaintiff's complaints during the hearing of this application has been a suspicion that the cross-claim would be pursued if the plaintiff's claim was dismissed. That suspicion is without foundation, as the orders I have made make clear.
The plaintiff acknowledged to the court, on 30 November 2021, that there has now been a series of failures to comply not only with the orders of Abadee DCJ of 30 June 2021 but also with my orders of 12 November 2021. Mr Williamson, in his most recent affidavit of 29 November 2021, apologised to the court and asked that the proceedings remain stayed on the basis that until the final tranche to be paid in August 2022 is owing, on the basis that no real prejudice will occur, as the costs the subject of the security application are all future costs.
This proposal has been further elaborated upon by the fresh application made on 1 December 2021, on the basis that a part payment was to be made on that day and a further payment of the balance of the first tranche by Friday; the plaintiff is still not able to pay the two tranches now due and offers $10,000 now, with the promise of another $20,000 by the end of the week.
[5]
The events leading to the parties' applications
The interlocutory history leading to the bringing of the application for security for costs is set out by Abadee DCJ in his Honour's first judgment at [11] - [31]. The application by the plaintiff the security on the cross-claim (which was unsuccessful) is set out in paragraphs [120] - [132]. The basis upon which Abadee DCJ varied those orders is set out in detail in the second judgment. His Honour commented (at [65]) that the court is not in the business of creating insuperable barriers to corporate applicants prosecuting a claim so long as the interests of the opposing party can be adequately protected. I have adopted the same approach in relation to this application.
The real difficulty is that the plaintiff has had no income since 2017 and, even placing the material in Mr Williamson's latest affidavit in its most favourable light, is unlikely to receive income from business activities for some considerable time. Mr Williamson's prognostications, both to Abadee DCJ and to myself concerning the likelihood of receiving funds by certain dates (which have come and gone ) have all failed.
Having given what appear now to have been unduly optimistic estimates, on 30 November 2021, Mr Williamson retreated to a position of making no prognostications at all, in terms of when and how much would be paid in the future. Essentially what was put is that, at some time in the foreseeable future, the plaintiff (through Mr Williamson) will have a realistic prospect of continuing to fund the proceedings and that no prejudice would accrue to the defendants if the proceedings were to remain stayed up until the second half of 2022. This is what made the sudden change of course on 30 November 2021 to propose payment of the first tranche so surprising.
[6]
Should leave to reopen be granted?
The test for whether a party may be granted leave to reopen a case will depend upon whether "the interests of justice are best served by allowing or rejecting the application" (Urban Transport Authority of New South Wales v Nweiser (1992) 28 NSWLR 471 per Clarke JA at 476C-478D). The role the Civil Procedure Act principles play in such a determination is explained by Garling J in Gaskin v Ollerenshaw [2010] NSWSC 788 at [13]-[15]. Most of the decisions on these principles deal with applications to reopen hearings, as opposed to interlocutory applications, and must be viewed with some caution as a result.
Nevertheless, whether the proceedings are interlocutory or final in nature, the court should be aware of the warning given by Mason P (in an application relating to failure to call a witness) in Vale v Vale [2001] NSWCA 245 at [92]:
"The goddess of justice may be blindfolded, but she is not blind to the realities of trial tactics (see D A Ipp, "Judicial impartiality and judicial neutrality: Is there a difference?" (2000) Australian Bar Review 212 at p 219 - p 220)."
These observations have some force in the present case. The plaintiff was given an adjournment by me so that Mr Williamson and his solicitors could take steps to make a first payment towards security for costs, in circumstances where the evidence could still form part of the application, and where the defendants would be able to test the reliability of it. There was plenty of time to attend to this before the hearing of the application resumed, and no need to attend to it only after I reserved. The decision not to do so appears to have been tactical: Deputy Commissioner of Taxation v Liu (2012) 90 ATR 614 at [98].
Section 66 of the Civil Procedure Act, which contains a specific provision in relation to applications for adjournment, was considered and explained by the Court of Appeal in City of Sydney Council v Satara [2007] NSWCA 148 at [17]. The approach that the court should take, when applying case management provisions of the Civil Procedure Act 2005 is to strike a balance between the competing needs of the parties and determine whether or not on balance justice demands that a party should be given an indulgence: Kane v Wyllie [2006] NSWSC 710; Chandra v Perpetual Trustee Victoria Limited [2006] NSWSC 1046. The ultimate aim of the court is the obtainment of justice.
If leave were granted to reopen, the defendants' application for summary dismissal would have to be adjourned part heard for the third time, with the likelihood of a fourth hearing some time in early 2022 in relation to compliance with payment of the remaining four tranches, one of which is outstanding now. This prospect of further interlocutory applications is undesirable in any case, but particularly so in proceedings where Abadee DCJ has described the procedural history as an "imbroglio", where the potential for further non-compliance seems high and where the events in question occurred some years ago.
There is also the question of fairness to the defendants. Mr Connor complained of service late at night of rafts of documentation for two nights running, in circumstances where he was not in a position to test the factual accuracy of any of the material sought to be tendered.
I indicated during the course of the hearing that I was prepared to admit the 29 November 2021 affidavit, and that has been marked as an exhibit. However, taking into account the overarching provisions of the Civil Procedure Act as explained in the decisions referred to above, I consider that leave to reopen the application after I reserved yesterday, in order to tender the material served in the evening of 30 November 2021, should be refused.
In the event that I have erred in this regard, I have nevertheless considered this material in terms of the application brought by the defendants. For the reasons set out more fully below, the new material would not have persuaded me to make a different order in any event.
[7]
The relevant principles of law
In Idoport Pty Ltd v National Australia Bank Ltd [2002] NSWSC 18 at [24], Einstein J outlined the following factors as being relevant to take into consideration:
"24 I accept as correct the defendant's submission that the following five matters at the least, require to be taken into account on the issue of whether the Court should now dismiss the Main Proceedings. The list is by no means exhaustive as all relevant circumstances require to be taken into account, including the Court straining wherever practicable consistently with the interests of justice to avoid taking the radical step of denying a plaintiff it's day in Court. Clearly the proper exercise of the Court's discretion requires all relevant factors to be weighed in balance, the ultimate decision reflecting the interests of justice. The principles were generally set out in paragraphs 23 - 37 of the November judgment.
The five factors identified by the defendants are:
(1) the period that has elapsed since security was ordered;
(2) the fact that the plaintiff has been on notice of the application for dismissal;
(3) the seeming inability of the plaintiff to further fund the Main Proceedings;
(4) the prejudice to the defendants;
(5) the position of the Court."
In Idoport Pty Ltd v National Australia Bank Pty Ltd [2002] NSWCA 271 at [51], the Court of Appeal explained the nature of the discretion as follows:
"51 The clearest of warnings and explanation were given in November. There is no minimum period established by legislation, rules or practice within which an application for dismissal might be made following default in compliance with an order for payment of security. No judicial discretion is uncontrolled, but it is common ground that the discretion to dismiss conferred by r4 is a broad one, unfettered by any express limitations (see Microbio Resources Inc v Betatine Ltd unreported, FCA (Full Court), Black CJ, Sheppard and Einfeld JJ, 8 October 1993, Asian Investments Corporation Ltd v Symons (SC(NSW), unreported, Young J, 10 April 1996), Billinudgel Pastoral Co Pty Ltd v Westpac Banking Corporation FCA, (1998) unreported, Cooper J). There is no written or unwritten minimum time, although I would accept that something more than a technical or accidental default is required."
Some caution should be exercised when applying these principles, as the factual background to Idoport Pty Ltd v National Australia Bank Pty Ltd was exceptional. Idoport lost its litigation funding on day 222 of a trial set to run for a further two years, and was left in the position of having to raise approximately $24 million to continue to fund the trial to finality (at [49]). At first instance, Einstein J described the proceedings as being "unusual in the extreme" (at [58]). Nevertheless, the statements of general principle remain applicable today.
In Porter v Gordian Runoff Ltd (No 3) [2005] NSWCA 377, the Court of Appeal stressed that summary dismissal of proceedings for non-payment of security was an extreme measure (at [65]). I have taken that into account.
However, in both Porter v Gordian Runoff Ltd and Idoport, the concepts of case management increasingly applied to litigation over the next decade played a lesser role than is now the case. As an example of the degree of this change, I note that in Tripod Fund Management Pty Ltd v Shao [2014] NSWSC 1722, Rein J stated at [11]:
"The authorities establish that, if a significant sum is ordered by way of security and the plaintiff with due notice of the dismissal application fails to satisfy the Court that there is any prospect of complying with the order, the proceedings should ordinarily be dismissed: see Porter v Gordian Runoff No 3 [2005] NSWCA 377 and Ballard v Brookfield [2013] NSWCA 82 per Ward JA at [103]."
While the court is reluctant to strike out proceedings where the company the subject of the security for costs order falls at the first hurdle, repeated failures are viewed in another light. In Ballard v Brookfield Australia Investments Ltd [2013] NSWCA 82, where there was partial compliance followed by failures to pay, Ward JA stated at [103]:
"The unfortunate position for Mr Ballard is that he has no funding for an appeal if (as it has been) the outcome of his motion is unsuccessful and on that basis has no prospect of being able to continue with the appeal. In Porter v Gordian Runoff Ltd (No 3) [2005] NSWCA 377, it was said that if a significant sum is ordered by way of security and the plaintiff with due notice of the dismissal application fails to satisfy the court that there is any prospect of complying with the order, the proceedings should ordinarily be dismissed. (See also Idoport v National Australia Bank [2002] NSWSC 18 at [24] per Einstein J; Idoport v National Australia Bank [2002] NSWCA 271 at [48]ff per Mason P (with whom Stein and Giles JJA on this issue agreed); Farnell v Penhalluriack [2010] 29 VR 727 at [19] per Mandie JA with whom Harper JA agreed.)"
The facts in Ballard v Brookfield Australia Investments Ltd are of particular relevance to this application. Ward JA set these out at [2]:
"The first tranche of payments by way of security for the respective respondents' costs were due by 15 January 2013. Subsequent payments were due on 28 and 31 March 2013, with the last two payments to be paid at times referable to the commencement of the hearing of Mr Ballard's appeal (which was then provisionally listed for a two week hearing in June this year but which is now listed to commence on 22 July this year). No sum has been paid by way of security for costs in accordance with those orders and the evidence on Mr Ballard's present application is that he is not (and will not be) able to meet the security for costs orders. The appeal (though a date for hearing has been fixed) is currently stayed, having regard to Mr Ballard's non-compliance to date with the security for costs regime ordered late last year."
Ward JA set out the factual material relevant to the application to dismiss as well as explaining the basis upon which an order for dismissal of the proceedings for non-payment may be made:
"96 Ms Merlino deposes to the fact that no security has been provided in accordance with the orders I made in December (a fact not in dispute) and to the communications made with Sagacious Legal (and later with DC Legal) seeking confirmation as to whether Mr Ballard intended to comply with the orders. I note that the response by Sagacious Legal to the first query, by letter dated 22 January 2013 simply referred to a difficulty obtaining instructions (though by that time Sagacious Legal had already informed Mr Ballard that they could not continue to act for him); the (somewhat surprising on its face) response to a second query (also of the same day) was that they had "taken every step to ensure that our client complies with the timetable set by the Court". No further communication was received from Sagacious Legal in relation to security for costs.
97 Once Clayton Utz received a Notice of Change of Solicitor on 11 February 2013, Clayton Utz advised DC Legal that they held instructions to apply for a dismissal of the proceedings if security was not provided by 28 February 2013. Similarly, Mr Riches communicated with DC Legal after receipt of the Notice of Change of Solicitor, advising that if security were not provided by that date a motion for dismissal would be filed.
98 Rule 42.21(3) provides that if a plaintiff fails to comply with an order made under that rule, the court may order that the proceeding on the plaintiff's claim for relief in the proceedings be dismissed. In the present case, the orders for security for costs were made pursuant to Rule 51.50 but there is inherent jurisdiction to dismiss an appeal where the appellant has failed to comply with an order to provide security for costs.
99 Exercise of the power to dismiss requires consideration of various factors, as set out in Idoport Pty Ltd v National Australia Bank Ltd [2002] NSWCA 271: the time that has passed since security was ordered; the likely ability to provide security; the extent to which the plaintiff has been on notice of the dismissal application; the likelihood of prejudice to the defendant as a result of continuing the stay; the impact on the court of continuing the stay; the ability of the plaintiff to commence new proceedings and the prejudice to the plaintiff (such as the expiry of a relevant limitation period).
100 Here, security was ordered some 4 months ago. The security was ordered to be provided in stages referable to the then proposed timetable for the proceedings. The respondents' lawyers were unable for some 2 months to obtain any indication as to whether Mr Ballard intended (or was able) to comply with the orders (even at a time by which Sagacious Legal had told Mr Ballard they could not continue to act for him).
101 Although I take into account the fact that Mr Ballard deposes he was not told about the avenue for review of the December security for costs orders, he has had the benefit of legal advice throughout. Mr Ballard's former lawyers alerted him in January 2013 to the likelihood of a dismissal application if the security was not provided."
Those were proceedings where some payments had in fact been made conformably with the security for costs, as Mr Connor pointed out during his submissions on 1 December 2021. Had I permitted the leading of the additional evidence for the plaintiff, the observations of Ward JA would have been of particular relevance in terms of whether or not this was a satisfactory state of affairs. There are other points of similarity as well, including the fact that at all relevant times the plaintiff had the benefit of legal advice as to the nature of a security for costs order.
A common factor in judgments where there has been a failure to comply with court orders is the court's concern at failure to comply with an order made for the purpose of conducting the litigation efficiently; for example, in Farnell v Penhalluriack [2010] 29 VR 727 the court regarded failure to pay security conformably with an order as a species of want of prosecution (at [17] - [18). In the present case, the plaintiff had the additional benefit, first of Abadee DCJ revisiting his earlier ruling in order to be more generous, and then of a further adjournment from me.
Each case must turn on its facts. The plaintiff places great weight on the absence of any hearing date, the potential for payment in the future and the fact that the proceedings are largely ready for trial in terms of affidavit evidence. In those circumstances, the plaintiff argues, the delay in complying with the security for costs orders does not really impinge upon the conduct of the proceedings in the future.
The defendants, however, submit that the pattern of failure to comply is not merely prejudicial to the conduct of the proceedings when they are eventually listed for hearing, but that there is in effect no likelihood of any resolution of the plaintiff's financial situation at any foreseeable time in the future, given the inadequacy of the documentation provided by Mr Williamson to date. Given the emphasis placed on the absence of likelihood of future compliance in the decisions discussed above, this is of particular importance.
In practical terms, even if the first tranche is paid in full now, the future is clouded with doubt. When the matter was before me on 12 November 2021, I expressed concern that there was no executed agreement between Northpoint Infrastructure Pty Ltd ("NPI") and Catapult Developments Pty Ltd as well as no evidence confirming that the plaintiff would be the beneficiary of funds flowing from the NPI Mooball project. The material attached to Mr Williamson's latest affidavit (which I accepted as evidence despite its lateness and inherent unfairness to the defendants as a result) does not allay those fears. Mr Donnellan acknowledges the "irregularity" of the signing of the agreement (by Mr Williamson only, in circumstances that appear to be contrary to s 127 of the Corporations Act 2001, and the circumstances in which this agreement is with Sunrise Tweed Pty Ltd (which has not signed) and not Catapult are unexplained. The documents relating to Ranclose's entitlement were the subject of challenge by Mr Connor on the basis that there was no letterhead and the signature of Mr Smith appeared to be electronic. While there is nothing sinister in this, the second "generous" (to borrow Abadee DCJ's word) adjournment afforded by me to the plaintiff in this application could, and indeed should, have resulted in documentation more compelling than that which has been provided. Essentially, I am left in the same position, in terms of unsatisfactory evidence, as Abadee DCJ was when this application was first heard on 20 May 2021.
[8]
Prejudice to the defendants
Mr Donnellan submits that there can be no prejudice to the defendants because, if the proceedings remain stayed, any legal costs incurred would be inconsequential as there would be no activity of significance.
This submission is contrary to the overarching principles of s 56 of the Civil Procedure Act 2005 (NSW) (see In the matter of AAMAC Warehousing and Transport Pty Ltd (in liquidation) [2014] NSWSC 834 at [32]; First Tiffany Resource Corporation v Hill End Gold Ltd [2014] NSWSC 1713). Justice delayed is justice denied. The significant impact of lengthy delay in proceedings which are, as Abadee DCJ noted, already of some antiquity, would be considerable.
In addition, the court should take into account that having any litigation pending can be a source of distress or concern not only to individuals but also to businesses. This is particularly the case in circumstances such as the present, where the unconvincing nature of the documentation attached to Mr Williamson's affidavit is as problematic to me as it was to Abadee DCJ. Documents tendered on his behalf included a contract not signed by any other party, the terms of which are vague in extreme. I am told that his current income is the old age pension, and that he sold his home and cashed in his superannuation to pay for this litigation but, as was the case with the earlier proceedings (where Abadee DCJ was given similar information about the sale of the home) only in the most general terms. To require the defendants to continue to have this litigation hanging over them for what could be not merely months but years is inappropriate.
In Ballard v Brookfield Australia Investments Ltd, Ward JA stated at [104]:
"As to the prejudice to the respondents of the proceedings remaining on foot, the Brookfield/Multiplex respondents maintain that the continued existence of the appeal (in which serious allegations are made against them) is, in itself, serious prejudice to them. Although there was no evidence as to any particular prejudice, I accept that allegations of conspiracy are serious allegations for entities and individuals to have remain on foot. Reference was made in submissions to the likely delay in enforcement of the costs order from the trial and to the disruption arising from the need to maintain availability for the July hearing dates. While the last matter would be accommodated simply by vacating the July hearing dates, it seems to me that there is no utility in so doing where there seems to be no prospect that Mr Ballard will be able to provide security for costs and no submission was made that with further time he would be able or likely to be able to do so."
There is also the question of pressure on the Court's available resources. I note the reference by Abadee DCJ to the court's time having been taken up by an "imbroglio" of applications; that has certainly been the case not only up to then, but also since the orders made by his Honour on 30 June 2021.
The pressures on the court system are not assisted by proceedings being stayed and then periodically relisted if and when the plaintiff wishes to agitate some aspect of its claim or is able to pay a tranche of security and seeks further revision of the security orders.
These further applications could be considerable in terms of cost and complexity. For example, the plaintiff has already sought variations on three occasions; there is nothing to stop a further application being made. It is a more appropriate use of the Court's resources to allow matters which are able to do so to proceed promptly to hearing and to dismiss the proceedings now. In addition, Mr Clancy stated in his affidavit that the plaintiff was considering serving a further cross-claim against "Leda Manorstead". Given the lengthy and costly arguments before Abadee DCJ regarding the Amended Statement of Claim and the plaintiff's application to join further parties, and given the finding that Ranclose is impecunious, it is concerning that Ranclose is discussing proposed applications which will add to the time and expense of these proceedings, at a time when they were currently stayed, by discussing the serving of a further cross-claim.
[9]
No bar to fresh proceedings
The plaintiff's central claim for breach of contract is said to have arisen in or around February 2018. The 6-year limitation period is likely to expire in February 2024, which would give the plaintiff ample time to commence fresh proceedings when it has the means to do so if these proceedings are dismissed.
The striking out of the proceedings does not of itself create any prejudice. Under s 91 of the Civil Procedure Act, the dismissal of these proceedings, in the absence of any terms to the contrary, and subject to any relevant limitation periods, would not prevent the plaintiff from commencing fresh proceedings against the defendants for the same relief; see the discussion of s 91 in Tjiong v Tjiong [2021] NSWSC 1389 at [168] - [181]. Similarly, any equitable causes of action will not be precluded by an order dismissing the proceedings.
[10]
Costs issues
Where proceedings are struck out, an application is sometimes made for a stay of any fresh proceedings under UCPR r 12.10 until those costs are paid. However, the stay would not be automatic. No such stay is sought here.
Mr Connor indicated that the costs in question would be sought against the plaintiff, not Mr Williamson himself. That is a factor which I also take into account when exercising my discretion.
[11]
Conclusion: the proceedings should be dismissed
For the reasons set out above, all the relevant factors - the past (going back to 2017) and continuing long-term insolvency of the plaintiff, the prejudice to the defendants, the requirements of s 56 and efficient case management, the factors identified by Ward JA in Ballard v Brookfield Australia Investments Ltd, the entitlement of the plaintiff to commence proceedings in the future and the nature and extent of the costs orders in question - support the defendants' position. That would be my finding even taking into account the plaintiff's belated proposal to pay the first tranche this week.
Conformably with the orders proposed by Mr Connor, both the statement of claim and cross-claim will be dismissed, and in order will be made for the plaintiff, Ranclose Investments Pty Ltd, to pay the costs of the claim and cross-claim.
There is one final matter. As earlier noted, Mr Connor expressed concern at documents being served late at night, two days running, without the leave of the court. While modern technology permits communications to be sent 24 hours a day, 7 days a week, communications of that kind should be restricted to emergencies.
[12]
Order:
1. Refuse leave to the plaintiff to reopen its case; plaintiff's application for a further adjournment of the defendants' application is refused.
2. Statement of claim dismissed.
3. Cross-claim dismissed.
4. The plaintiff/ first cross-defendant, Ranclose Investments Pty Ltd, is to pay the costs of the claim and the cross-claim as agreed or assessed.
[13]
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: 03 December 2021