Practice and procedure - Dismissal of action for want of prosecution - Principles to be applied - Inordinate delay - Prejudice to the respondents - Application for leave to adduce further evidence concerning alleged delay - Principles to be applied as to further evidence

Application for leave to adduce fresh evidence refused

First Appellant : Mr M J McCusker QC & Mr E M Corboy SC

Second Appellant : Mr M J McCusker QC & Mr E M Corboy SC

First Respondent : Mr C L Zelestis QC & Ms D M Bradley

Second Respondent : Mr C L Zelestis QC & Ms D M Bradley

Bellway Pty Ltd v Calder Holdings Pty Ltd, unreported; FCt SCt of WA; Library No 8461; 24 August 1990

BQ & HM Doe Pty Ltd v National Australia Bank [1999] SASC 124

Dzienciol & Ors v Logie Brae Pty Ltd, unreported; FCt SCt of WA; Library No 90078S; 25 February 1998

Norbis v Norbis [1986] HCA 17; (1986) 161 CLR 513

Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247

Southern Cross Exploration NL v Fire & All Risks Insurance Co Ltd (1986) 4 NSWLR 491

Witten v Lombard Australia Ltd [1968] 2 NSWR 529

1 MURRAY J: I have read in draft the reasons now published by Hasluck J, with which I entirely agree and to which I have nothing to add. For the reasons given by his Honour I would not think it proper to add to the evidence which was before the Court at first instance.

2 Having regard to that evidence I too consider that the exercise of discretion by the Acting Master has miscarried. I would grant leave and allow the appeal.

3 WHEELER J: I have had the advantage of reading in draft the reasons for decision of Hasluck J. For the reasons which his Honour gives, I am of the view that leave to appeal the order of the learned Acting Master should be granted, and the appeal allowed.

4 HASLUCK J: The appellants seek leave to appeal from an order made by the Acting Master on 12 September 2002 dismissing the appellants' action for want of prosecution. They also seek leave pursuant to O 63 r 10(1) of the Rules of the Supreme Court 1971 to adduce further evidence at the hearing of the appeal, namely, the affidavit of Steven John Blyth sworn 24 December 2002. The affidavit in question is principally directed to fleshing out the history of the proceedings and includes reference to the reports of two expert witnesses that were delivered to the appellants after the learned Acting Master handed down his reasons for decision.

5 The first appellant, Sangora Holdings Pty Ltd, asserts in its statement of claim that it is an investor in shopping centre and resort developments in Western Australia. The shares in the second appellant, Ackhurst Investments Pty Ltd, are held by persons associated with Sangora. For ease of reference, I will use the name Sangora in speaking of both appellants.

6 At all material times from 13 February 1989 the directors of Sangora included Mr Shozo Kawasaki and Ms Takako Shoji. Mr Kawasaki was responsible for making all investment decisions taken by Sangora. Ms Shoji acted as a personal assistant and Japanese/English interpreter for Mr Kawasaki as the latter could only speak and read minimal English. It seems that Mr Kawasaki engaged an accounting firm, Barrett & Partners, to do the accounting work for his companies and to advise him in certain

matters. His main contact with that firm was through its partner, Mr Ronald Louis.

7 Sangora alleges that on or about 8 February 1990 Ms Shoji suggested to Mr Kawasaki that she introduce him to someone who could advise him on investments. There is a degree of controversy between the parties as to the exact sequence of events thereafter but it appears to be common ground that on or shortly after 8 February 1990 the first respondent, James Hodder, on behalf of the second respondent, Godfrey Pembroke Ltd (formerly known as Godfrey Weston Ltd), provided investment information to Mr Kawasaki and his companies.

8 Sangora contends that as a consequence of various oral and written exchanges between the parties Sangora was persuaded to undertake certain investments. Sangora says that it eventually suffered loss and damage some years later in 1996 when it was obliged to dispose of the investments at a loss.

9 Sangora says further that in or about November 1995, a Mr William Buck, in the course of providing accounting services to Sangora, received information to the effect that Mr Hodder had paid Ms Shoji secret commissions in respect of the unlisted property trust investments forming part of the investment package. Sangora then became concerned that the advice given by Mr Hodder was negligent or otherwise inappropriate.

10 It was against this background that Sangora sought legal advice from its solicitors, Messrs Lewis Blyth & Hooper, and commenced legal proceedings against Mr Hodder and Godfrey Pembroke Ltd on 6 February 1996, that is to say, shortly before the expiry of six years from the date on which Ms Shoji suggested that Sangora obtain investment advice.

11 A few months later, on 25 July 1996, the appellants also commenced proceedings against Barrett & Partners (including Mr Louis) and against Ms Shoji and her colleague, Qunye Velaphi. In these further actions, CIV 1768 of 1996 and CIV 1767 of 1996 respectively, Sangora made various claims in relation to the circumstances surrounding the making of the investments.

12 Sangora pleads in the present proceedings that the respondents made oral representations concerning the investment of substantial amounts in three unlisted property trusts. It is said that they failed to inform Sangora about various matters relevant to the investments. In addition, Sangora alleges that the respondents failed to monitor the investments after they were made and negligently advised Sangora to retain the same at a time when they would have redeemed the investments but for the respondents' advice. It is said the investments were made between March and May 1990 in reliance upon the initial representations; the investments would have been sold when the price declined in February 1991 but for the ongoing negligent conduct of the respondents.

13 Sangora's statement of claim also includes an allegation that Mr Hodder caused a secret payment of $30,820 to be made to a company known as Shoji Australia Pty Ltd at Ms Shoji's direction. An order is sought that Mr Hodder pay to Sangora the sum of $30,820 upon the basis that he is liable as a constructive trustee in respect of the alleged secret commission.

14 The pleadings on each side were refined as the action proceeded. However, as the pleadings now stand, Godfrey Pembroke acknowledges that it carried on business as an investment adviser and that Mr Hodder acted as its agent. The respondents agree that they offered to advise Sangora in relation to investing up to $12,000,000 in unlisted property unit trusts and that they owed Sangora duties at common law and under the corporations law. They acknowledge that in early 1991 they advised the appellants to maintain their holdings in two of the unlisted property trusts, notwithstanding a fall in the value of the relevant units. Sangora was advised further that units in all three of the recommended investments should be held until property values improved.

15 By their statement of defence the respondents set out their version of the relevant events. They contend that the recommendations which they made were reasonably based. They refer to what they say was the true cause of any loss suffered by Sangora and plead various matters bearing upon the issue of damages. They say that payments made to Shoji Australia were made for services provided by that company and not for introduction of the Sangora business.

16 It emerges, then, on the face of the pleadings, that there was undoubtedly a relationship between the parties and of a kind that could give rise to duties of care and to significant evidentiary issues. It is also apparent, being a matter referred to in the Acting Master's reasons for decision, that the causes of action the subject of the Sangora claim are now statute barred. Thus, if the action is struck out for want of prosecution, the appellants will not be able to pursue the causes of action reflected in the statement of claim.

17 There was evidence before the Acting Master, being the affidavit of David William Speake sworn 3 May 2002, that at the time Sangora advanced its claim, Godfrey Pembroke held a professional indemnity policy with FAI General Insurance Company Ltd and that Mr Hodder was also an insured under the policy.

18 It appears from the affidavit that FAI granted the respondents indemnity under the policy, with the exception of the secret commission claim against Mr Hodder, for which indemnity was denied. Thereafter, Downings Legal assumed conduct of the defence of the claim on behalf of both respondents. The legal costs involved were paid by FAI until approximately February 2001.

19 The Speake affidavit goes on to say that a provisional liquidator was appointed to HIH Insurance and its subsidiaries including FAI on 16 March 2001 with the result that Godfrey Pembroke is now responsible for all fees and disbursements incurred in the defence of the action. Mr Speake deposes to his belief that FAI will not be in a position to fund the ongoing defence of the claim and there is little, if any, prospect that FAI will be in a position to indemnify the respondents in relation to any award of damages against them.

20 The evidentiary materials before the Acting Master comprised, on the respondents' side, the Speake affidavit, the affidavit of Mr Hodder sworn 22 April 2002 and the affidavits of the respondents' solicitor, Deborah Margaret Bradley, sworn 17 April and 9 July 2002. Sangora relied upon the affidavit of its solicitor, Steven John Blyth sworn 29 May 2002. These materials, especially a chronology of events included in the first Bradley affidavit, reflect the procedural history of the matter.

21 It is not necessary for present purposes to traverse the various interlocutory steps in detail. However, it will be useful to draw attention to various features of the chronology. Sangora submits that it should be kept in mind that the legal proceedings brought against Barrett & Partners and Ms Shoji were being progressed simultaneously.

22 The writ of summons issued by Sangora on 6 February 1996 was served six months later on 26 August 1996. This was followed by service of a statement of claim on 31 October 1996. It seems that a statement of defence was filed shortly thereafter. The respondents then brought on for hearing a summons to strike out the statement of claim. This led to a revision of the pleadings on both sides and eventually to the provision of further and better particulars of the claim. The appellants swore an affidavit of discovery on 23 December 1996 and this was followed by the respondents' affidavit early in 1997.

23 Slight progress was made in 1996 and 1997 and very little occurred in 1998. On 4 February 1999 Sangora was obliged to give notice of intention to proceed upon the basis that no procedural step had been taken in the preceding 12 months. In the meantime, one of the other actions, CIV 1767 of 1996 was pursued and listed for trial to commence on or about 5 February 1998. At about that time the action was resolved by a negotiated settlement whereby the defendants paid to Sangora a sum of money.

24 According to the Blyth affidavit, Sangora provided to the respondents a minute of proposed amended statement of claim on or about 28 July 1999. There were then some exchanges between the parties which led to a minute of consent orders in relation to Sangora's substituted statement of claim being filed on or about 27 October 1999. Two months later on 24 December 1999 the respondents filed and served a consolidated amended defence. This led to a request for further and better particulars of consolidated amended defence in early 2000.

25 The Blyth affidavit asserts at par 13 that the current pleadings comprise the substituted statement of claim dated 27 October 1999 and the consolidated amended defence dated 24 December 1999 which documents are exhibited to the affidavit. The pleadings are lengthy and reflect a host of discrete issues concerning the representations complained of and subsequent exchanges between the parties including reference to the secret commission issue.

26 Mr Blyth says in his affidavit that par 24 of the consolidated amended defence contains an allegation that on 21 March 1990 at the offices of Barrett & Partners in Perth Mr Hodder met with Mr Louis, who was acting as accountant and agent for Sangora. Mr Hodder allegedly informed Mr Louis that no assurance could be given that the units in question would not fall in value.

27 The "no assurance" defence plea was said to have complicated Sangora's case in that, at the time the consolidated amended defence was served, Mr Blyth was engaged in negotiations with the solicitors for Mr Louis and other defendants regarding a possible compromise of Supreme Court action CIV 1768 of 1996. The "no assurance" plea meant that Louis could be an important witness in the present proceedings.

28 It seems that Sangora's claims in CIV 1768 of 1996 were later resolved by negotiated settlement pursuant to which Mr Louis and one of his fellow defendants paid a sum of money to Sangora.

29 During the course of 2000 there were exchanges between the parties to the present proceedings concerning the pleadings, discovery and expert evidence. Further and better particulars of the defence were provided. Sangora provided further and better particulars of the claim on 7 August 2000. The respondents provided answers to interrogatories on 22 December 2000.

30 There were exchanges concerning discovery during the course of 2001 with the respondents providing an affidavit verifying supplementary discovery on 16 October 2001 and Sangora providing a supplementary affidavit of discovery on 26 October 2001.

31 Sangora engaged financial experts in early 2002. They were provided with the materials that had been discovered in the action as a basis for preparing their reports. It was Mr Blyth's understanding at the time of swearing his affidavit that preparation of the reports was at an advanced stage. He said that as far as the plaintiffs were concerned the matter was ready for entry for trial as soon as the substance of the experts' evidence was disclosed, subject to any review of the statement of claim which might be necessary in the light of the experts' opinions.

32 The Blyth affidavit concludes with par 28 which is expressed in these terms:

"Since November 1995 the Plaintiffs have formulated and pleaded their claims; through my firm and William Buck, expended considerable time and money in investigating and pursuing the claims to which I have referred above. Two of the three sets of proceedings which have been commenced have been settled. In these proceedings, the Plaintiffs inspected and analysed a large quantity of discovered documents and, where appropriate, sought and obtained further discovery; conferred extensively with counsel; made enquiries from possible witnesses and prepared proofs of evidence; engaged and consulted with experts in the financial planning industry and generally prepared the Plaintiffs' case for trial. The time taken to complete those steps reflects matters such as the number of actions which the Plaintiffs considered it was necessary to commence, the need to make extensive enquiries in relation to those actions, the fact that Mr Kawasaki requires an interpreter and spends substantial periods of time in Japan, the involvement of various counsel and experts and the work required to coordinate and conduct the actions generally including the prospect of CIV 1768 of 1996 being either consolidated with or heard at the same time as this action."

33 The respondents' application to strike out the claim for want of prosecution pursuant to the inherent jurisdiction of the Court was filed and served on 18 April 2002. The matter was heard on 16 July 2002. The learned Acting Master handed down his reasons for decision on 27 August 2002.

34 The learned Acting Master commenced by referring to the general principles to be applied in applications to strike out for want of prosecution. He said that they were conveniently summarised in Duke v Royalstar Pty Ltd [2001] WASCA 273 at par 10. The Full Court indicated that there are five paramount matters to be considered, namely, the length of the delay, the explanation for the delay, the hardship to the plaintiff if the action is dismissed and the cause of action left statute barred, the prejudice to the defendant if the action is allowed to proceed notwithstanding the delay and the conduct of the defendant in the litigation.

35 The Acting Master proceeded to examine the circumstances and history of the case before him in the light of these categories. His observations under the heading "Delay" were as follows:

"5. This action was commenced by writ filed on 6 February 1996, which was more than six years after the first meeting and some five years since the plaintiffs had knowledge of the decline of the value in the investments. The writ was not served until 26 August 1996.

6. Some eleven to twelve years had elapsed from the time the oral advice was given to the bringing of this application and six years since the writ was filed. In my view this constitutes an inordinate delay."

36 The Acting Master then looked at Sangora's explanation for the delay, namely, that the writ was not issued until 6 February 1996 due to the fact that it was not until shortly prior to November 1995 that information was received concerning the alleged secret commission. He observed at par 10 that he did not find the explanation for the delay particularly convincing.

37 The Acting Master went on to say that although the delay prior to the issue of the writ would not of itself constitute an inordinate delay, it was such as to make it incumbent upon Sangora to proceed with all due speed. In his view Sangora had failed to proceed in that manner. He supported his observation by reference to an apparent lack of progress made between 1996 and 1999 and went on to say that he did not find the explanation encapsulated in par 28 of the Blyth affidavit to be satisfactory. He accepted that some delay could be attributed to the respondents but was of the view that the majority of the delay was without adequate explanation.

38 The Acting Master recognised that if the action was struck out for want of prosecution the appellants would be exposed to hardship in that their claims are now statute barred. However, he was of the view that the respondents were likely to be prejudiced by the delay, for it was reasonable to infer that the recollection of witnesses, including expert witnesses, would have faded so that there was real prejudice to the respondents. Further, he was of the view that the failure of the insurer constituted a substantial prejudice to the respondent.

39 The learned Acting Master then proceeded to a balancing of the relevant considerations in the manner allowed for by the Full Court in Duke v Royalstar Pty Ltd (supra) at par 28. In doing so, he accepted that the application to strike out was brought without prior warning. He noted that neither respondent had gone on affidavit to say that there had been, in fact, any prejudice suffered by reason of the delay, apart from the collapse of the insurance company. Further the application was not brought until some 12 months after the collapse of the insurance company. He accepted that the interlocutory steps in the action had been substantial, although many of the steps related to the settling of the statement of claim or supplying particulars thereof. He accepted that there was no evidence of any lost witnesses or documents or the like.

40 However, in reviewing the countervailing considerations, the Acting Master doubted that the matter would be in a position to be entered for trial in the near future. He noted that the delay had deprived the respondents of the benefit of the professional insurance that they held and that this had caused the respondents' real prejudice in that had the proceedings been prosecuted expeditiously it was likely that the action would have been resolved before the insurer was placed into provisional liquidation. He expressed his conclusion in this way:

"40. I consider there has been inordinate delay, most of which is without an adequate explanation and the defendants have suffered serious prejudice.

41. In my view this is one of those cases where despite the fact that the plaintiffs will be unable to maintain a fresh action it is not unjust to dismiss the plaintiffs' action for want of prosecution and I propose to do so."

41 Before turning to the grounds of appeal, it will be useful to look at the legal principles bearing upon the reception of further evidence at the hearing of an appeal before the Full Court and upon the exercise of the discretionary power to dismiss an action for want of prosecution.

42 By O 63 r 10(1) of the Rules of the Supreme Court the Full Court has on appeal full discretionary power to receive further evidence on questions of fact including evidence by affidavit. Such further evidence may be given without special leave upon interlocutory applications. However, upon appeals from a judgment after trial or the hearing of any cause or matter on the merits, such further evidence shall be admitted on special grounds only, and not without the special leave of the court.

43 Previously decided cases reflect a degree of controversy as to whether an application leading to the dismissal of an action for want of prosecution can be characterised as an interlocutory application. However, there appears to be clear authority in the Full Court that an interlocutory application does not necessarily change its character if it results in a final order. This means that an order dismissing an action for want of prosecution should be regarded as an interlocutory order: Hughes v Gales (1995) 14 WAR 434 at 437; Australian Electrical Electronics Foundry and Engineering Union (Western Australia Branch) v Hamersley Iron Pty Ltd (1998) 19 WAR 145 at 155. Accordingly, I proceed from the premise that the further evidence which Sangora sought to lead was in relation to an interlocutory application and special leave is not required to adduce the evidence.

44 In Orr v Holmes [1948] HCA 16; (1948) 76 CLR 632 the view was expressed that new evidence should not be allowed in save to fulfil an imperative demand of justice. New evidence does not constitute such a demand unless it is almost certain that an opposite result would have been reached at the trial if that evidence had been given. Also, the evidence must be such that it would not have been available for use by the defeated party if he had searched reasonably diligently for it before the trial.

45 This approach was affirmed in regard to an appeal against dismissal for want of prosecution by Owen J in the Hamersley Iron case (supra) at 162. He said that the general principle is that a verdict or judgment regularly obtained should not be disturbed by the admission of further evidence without some insistent demand of justice. However, Owen J was of the view that in the context of an appeal in respect of an order made on an interlocutory application, even where that order was in the nature of a final order, the test to be applied should not be as high as that posed in Orr v Holmes (supra). The test to apply is that there must be at least a real possibility that the new evidence would have produced an opposite result.

46 In the earlier case of Lewandowski v Lovell (1994) 11 WAR 124 Murray J was of the view at 153 that ordinarily the court would not exercise its discretion so as to receive such evidence unless it could not with reasonable diligence have been discovered and was of such cogency that it might at least be capable of acceptance by the court below.

47 It was against this background that counsel for Sangora submitted in the present case that it is not necessary in the case of an interlocutory application to demonstrate that the evidence could not be obtained by reasonable diligence. The test of whether the further evidence should be received is simply whether there is a "real possibility" that a different result would have been produced if the evidence had been given at the first instance. In my view, however, the authorities do not go quite as far as counsel for Sangora suggests and thus, to my mind, the question of whether the additional evidence could have been brought forward by the exercise of reasonable diligence continues to be a factor to be considered.

48 It is clear from the decided cases that the power of the court to dismiss an action for want of prosecution is a discretionary power. The appellate court will only exercise its own discretion in substitution for that of the judicial officer below if he or she has acted upon a wrong principle, or allowed extraneous or irrelevant matters to affect the outcome, or if the facts have been mistaken, or if the judicial officer does not take into account some material consideration: House v The King [1936] HCA 40; (1936) 55 CLR 499.

49 In Birkett v James [1978] AC 297 the House of Lords held that the power of the court to dismiss an action for want of prosecution should be exercised only where the plaintiff's default has been intentional and contumelious or where there had been inordinate and inexcusable delay on his or his lawyer's part giving rise to a substantial risk that a fair trial would not be possible or would cause serious prejudice to the defendant. Further, where the plaintiff has delayed in bringing his action in the first place he must thereafter pursue his action with diligence. However, there must be, in addition to non-compliance with the rules, some additional prejudice to the defendant from the delay after action brought to justify dismissal of the action (after expiry of the limitation period) for want of prosecution. To hold otherwise would be to superimpose a further limitation period on that already prescribed by parliament.

50 In Lewandowski v Lovell (supra) Murray J noted that in Western Australia a new dimension has been added to the matter by the addition to O 1 of the Rules of the Supreme Court of rules specifically directed towards the employment of a system of case flow management and the elimination of delay generally. His Honour observed that the new rules would certainly have an impact on the readiness of the court to dismiss an action for want of prosecution.

51 Justice Murray referred with approval to the reasoning of Diplock LJ in Allen v Sir Alfred McAlpine & Sons Ltd [1968] 2 QB 229 at 259. In that case his Lordship observed that an order for dismissal after a period of limitation has expired is by then a draconian order and will not be lightly made. It should not in any event be exercised without giving the plaintiff an opportunity to remedy his default, unless the court is satisfied either that the default has been intentional and contumelious, or that the inexcusable delay for which the plaintiff or his lawyers have been responsible has been such as to give rise to a substantial risk that a fair trial of the issues in the litigation will not be possible. It is for the defendant to satisfy the court that one or other of these two conditions is fulfilled.

52 In regard to the case before him, Murray J approved the view that the delay was inordinate and inexcusable, but not intentional and contumelious. The question was whether the delay had hopelessly prejudiced the capacity of the court to fairly try the issues in the litigation. As errors had been made in assessing the nature of the evidence said to give rise to serious prejudice, it could be said that the exercise of discretion by the learned Master in that case had miscarried.

53 It is against this background that one comes to the recent decision of the Full Court in Duke v Royalstar Pty Ltd (supra), being the decision to which the learned Acting Master referred. As appears from earlier discussion, that case suggests that in applying the broad principles reflected in Birkett v James (supra) and Lewandowski v Lovell (supra) certain paramount matters should be considered, being the various matters considered by the learned Acting Master in the present case, namely, length of delay, explanation for the delay, hardship to the plaintiff and prejudice to the defendant. However, in the end, what is required is a balancing of relevant interests.

54 I pause to observe that the reasoning of the Acting Master in the present case appears to be generally consistent with the principles reflected in the earlier decisions. However, as appears from the various grounds of appeal, counsel for Sangora sought to persuade the Court that in various respects the Acting Master had erred in the exercise of his discretion in failing to give sufficient weight to a number of relevant considerations. In that result, the decided cases recognise that even if the nature of the error is not easily discoverable, the result may be so unreasonable or plainly unjust that it is open to the appellate court to infer that there has been a failure properly to exercise the discretion: Australian Coal and Shale Employees' Federation v Commonwealth [1953] HCA 25; (1953) 94 CLR 621 at 627.

55 By their notice of motion dated 9 January 2003 the appellant sought leave to read and rely upon the affidavit of Steven John Blyth sworn 24 December 2002 at the hearing of the appeal. The notice of motion was supported by a separate affidavit of Mr Blyth sworn 13 January 2003. In the latter affidavit he referred to the hearing before the Acting Master on 16 July 2002 and advice provided to the Court by counsel for Sangora that expert reports in support of the appellants' claims would shortly be ready. This understanding of the position is reflected in a comment to that effect made by the Acting Master at par 36 of his reasons for decision.

56 Mr Blyth went on to say in his January 2003 affidavit that, subsequent to delivery of the reasons for decision, Sangora received the expert witness report of Mrs Judith Towler on 9 October 2002 and the report of Mr Maxwell Weston dated 12 December 2002. The reports in question are exhibits to Mr Blyth's affidavit sworn 24 December 2002, being the affidavit the subject of the application to admit new evidence.

57 Mr Blyth went on to say that in preparing his affidavit sworn 29 May 2002, being the affidavit that was before the Acting Master at the hearing below, he (Blyth) had not anticipated that it would be necessary to describe in detail what work had been undertaken by his firm (apart from what was shown on the Court file) in order to explain the appellants' conduct of the proceedings and the course of the proceedings generally. He says that his December 2002 affidavit will explain what work was undertaken in relation to the proceedings between December 1995 and December 1998 in addition to having the effect of placing before the Court the reports of the experts.

58 The reports of the expert witnesses exhibited to the December 2002 affidavit of Mr Blyth are each of great length and address a wide range of issues bearing upon the various claims in negligence being advanced by Sangora. They refer to various sources of information including guidelines published by regulatory agencies with a view to depicting the investment scene and the conventions observed by investment advisers in 1990 and following years. The report of Mrs Towler in various instances refers to documents discovered in the present proceedings including documents first listed in the affidavit of Mr Hodder verifying a supplementary list of documents sworn 5 October 2001.

59 It was put to counsel for Sangora on the hearing of the appeal that in regard to an application to dismiss for want of prosecution the evidentiary materials should be and are usually directed to events preceding the hearing of the application. These events are likely to bear upon the issue of delay and explanations concerning the same. It was therefore difficult to see why evidence of reports received subsequent to the making of the order for dismissal could be thought to establish that there was a real possibility of an opposite result being achieved if they had been available to the Court when the order was made. Further, and in any event, in the circumstances of this case, it was apparent that the Acting Master had proceeded from the premise that the reports of the experts would come to hand shortly. It was therefore difficult to see in what way the subsequent reception of the reports could be thought to have an influence on the outcome.

60 Counsel for Sangora responded to this enquiry by submitting that the principal relevance of the reports, now that they had been received, was to underline the complexity of the matters in issue and therefore add weight to Sangora's contention that the delay complained of was excusable. Further, it was material to note, that the reports of the experts could not be finalised in a case of this kind until there had been full discovery by the respondents, as evidenced by the fact that Mrs Towler had taken account of some of the respondents' lately discovered documents in the course of formulating her views. This was a matter also which reinforced the explanation for delay relied upon by Sangora.

61 The balance of the December 2002 affidavit, as intimated by Mr Blyth in his January 2003 affidavit, goes principally to providing a wide ranging account of the various activities undertaken by Sangora and its solicitors in the period between the commencement of proceedings in early 1996 and the application to dismiss for want of prosecution. Reference is made to the taking of legal advice concerning certain evidentiary issues (including the evidence to be given by experts) and the supposed difficulty of presenting Sangora's case in the absence of co-operation from Mr Louis and Ms Shoji, bearing in mind that Ms Shoji acted as interpreter for Mr Kawasaki at various stages of the dispute.

62 It follows from my review of the legal principles bearing upon the admission of new evidence that Sangora must satisfy the Court that there is a real possibility that the evidence sought to be adduced might have changed the outcome. It is also a factor in the exercise of the discretion as to whether the proposed evidence could have been obtained by reasonable diligence. The decided cases suggest that the discretion to admit new evidence should be exercised sparingly and with caution.

63 In the circumstances of this case, I am not satisfied that the proposed evidence should be received. To my mind, it was open to the solicitors for Sangora to place a full account of the work undertaken and their various activities prior to the earlier hearing. In effect, as to this aspect of the December 2002 affidavit, Sangora is simply seeking to supplement its earlier affidavit.

64 As to the evidence of the experts, it emerges from earlier discussion, that these reports are not likely to have influenced the outcome. The Acting Master made it clear that he accepted that instructions had been given for preparation of such reports and that they would be to hand shortly. It does not appear from his reasons for decision that his decision turned upon this point. Further, I am not satisfied that the length of the reports necessarily establishes the complexity and difficulty of the matters in issue. That is a judgment to be made having regard to the issues disclosed by the pleadings.

65 Accordingly, for these reasons, I consider that the further evidence sought to be adduced by Sangora, that is to say, the December 2002 affidavit of Mr Blyth, should not be received pursuant to O 63 r 10(1) in the manner proposed by Sangora. The appeal will have to be resolved by reference to the evidentiary materials before the Acting Master.

67 The first ground of appeal refers to the learned Acting Master's determination at par 5 and par 6 (mentioned above) of his reasons for decision that the action was commenced more than six years after the first meeting and some five years after Sangora had knowledge of the decline in value of the investments. These matters were said by the Acting Master to constitute an element of "inordinate delay" for which there was no satisfactory explanation.

68 Sangora contends in the first ground of appeal that the Acting Master erred in that he failed to take into account that the respondents had advised Sangora to continue to hold the investments and failed to give proper weight to the evidence that it was not until shortly prior to November 1995 that Sangora received information concerning the secret commission. Reference is made also to the Acting Master taking into account a gross profit of in excess of $16.5 million (said to have been achieved by the first appellant up to 1991) which in fact was the first appellant's gross revenue, it having incurred a loss of $32,754. Sangora submits that the Acting Master should have held that any profit made by the first appellant was irrelevant. Further, he failed to give any reason for finding the appellants' explanation for the delay in commencing the action not "particularly convincing".

69 The respondents submit in regard to this and the other grounds for appeal that Sangora has failed to identify any error of principle on the part of the Acting Master. His summary of the relevant principles and his balancing of the various considerations was said to be entirely consistent with the previously decided cases including, in particular, the reasoning of the Full Court in the recently decided case of Duke v Royalstar Pty Ltd (supra).

70 It will be apparent from my review of the previously decided cases that, in my view, the reasoning of the learned Acting Master reflected the proper principles to be applied in dealing with an application to dismiss for want of prosecution. I accept that an appellate court will only exercise its own discretion in substitution for that of the judicial officer below if he or she has acted upon a wrong principle or allowed irrelevant considerations to affect the outcome. However, in the circumstances of the present case, I am of the view that the learned Acting Master gave an undue emphasis to the items of supposed delay referred to in the first ground of appeal. The matters touched on are drawn together to support the conclusion that they constitute an inordinate delay. That conclusion is subsequently used to underpin his final view as it is expressed at par 40 and par 41 (mentioned above) of his reasons for decision.

71 To my mind, Sangora has provided a sufficient explanation as to why the action was not commenced until close to six years after the cause of action arose. Sangora's loss arguably did not crystallise until 1996. There was persuasive evidence before the Acting Master that it was not until shortly prior to November 1995 that information was received by Sangora concerning the alleged secret commission. One can readily understand in the circumstances of a case such as this, bearing in mind the unpredictability of financial planning, that a complainant might not be alerted to the possibility of negligence until specific information came to his attention that the advice he had received might have been effected by extraneous considerations such as the payment of a secret commission.

72 It follows that, in my view, the learned Acting Master overstated the position in suggesting that some 11 to 12 years had elapsed from the time the oral advice was given to the bringing of the application to dismiss as a composite period of delay. The presentation of the issue in this way appears to have coloured the Acting Master's view as to whether there had been a sufficient explanation for the delay complained of. The crucial question was whether there was a sufficient explanation for delay occurring after the proceedings were commenced.

73 This approach to the matter influences my response to the complaint of delay generally. It does not appear from the evidentiary materials that this is a case of contumelious delay. Is it a case of inordinate delay? In circumstances in which there is a sufficient explanation for the delayed commencement of proceedings, the central question is whether Sangora pursued the action with sufficient vigour once the legal proceedings were commenced. In addressing that question, I proceed from the premise that the pleadings raise issues of complexity. Further, in a case of this kind concerning the adequacy of financial advice given many years ago, both parties were entitled to exercise care in refining their pleaded cases and dealing with discovery.

74 Sangora contends in its second ground of appeal that the learned Acting Master erred in that one of the bases for his finding of inordinate delay was that he failed properly to take into account or give due weight to the extensive interlocutory steps which had been taken in the proceedings. Further, he failed to give proper weight to the complexity of the action and the work done on behalf of Sangora in obtaining expert advice and consulting with experts in the financial planning industry. He failed to give proper weight to the fact that when the expert reports were available Sangora would be ready to enter the action for trial.

75 I consider that the extent of the investigations necessarily undertaken by Sangora in preparing the matter for trial is apparent from the issues raised in the pleadings and the nature and extent of the other interlocutory steps necessarily involved in the presentation of the respective cases. There is force in Sangora's contention that the issue raised by the defence filed on 24 December 1999 as to whether a warning about the risk associated with the investments had been given to Mr Louis was a matter that had to be explored. It could not be inferred from Sangora's conduct that the claimant had not always intended to prosecute its claim to a conclusion.

76 I consider that the summary of the matter provided in par 28 of Mr Blyth's affidavit (mentioned above) bears upon the question of delay and is sufficient to establish that the delay complained of in the present case cannot be characterised as inordinate delay. In essence, as at 16 July 2002, when the application to strike out came before the Acting Master, Sangora, had completed all interlocutory steps, save for providing the substance of expert reports, being a further step, as the Acting Master acknowledged, which had been set in motion.

77 The respondents submitted that it is not enough simply to provide a description of what was done. There must be a clear explanation for the delay. However, in my view, Sangora provided such an explanation by drawing attention to the complexity of the pleaded issues and by providing evidence on affidavit as to the steps taken in the course of addressing those issues. The Acting Master had enough before him to infer that there was a sufficient explanation for the alleged delay.

78 I therefore consider that Sangora is entitled to succeed on this ground of appeal.

79 The third ground of appeal is that the learned Acting Master failed properly to take into account the hardship to the appellants which would result in striking out the action. Sangora contends that substantial work and steps had been taken by the company in prosecuting the action. The action was nearly ready to enter for trial. The claim has reasonable prospects of success. If the action is struck out, Sangora's claims will be statute barred, and all expenditure incurred by the appellants in prosecuting the action, to a point where it was about to be entered for trial, will be wasted.

80 In the course of reviewing the authorities, I referred to Allen v Sir Alfred McAlpine & Sons Ltd (supra). Diplock LJ observed that an order for dismissal after a period of limitation has expired will not be made lightly and should not be exercised without giving the claimant an opportunity to remedy his default.

81 The learned Acting Master was undoubtedly conscious that dismissal for want of prosecution would bar Sangora's claim, but I am not satisfied that he gave sufficient weight to this aspect of the matter in the circumstances of the present case. Each of the parties had provided further discovery towards the end of 2001. Then, in early 2002, when new solicitors commenced to act for the respondents, the application to strike out was initiated. Against a background of protracted interlocutory exchanges in a matter of complexity, and bearing in mind the limitation issue, the respondents should have made known its specific requirements before proceeding further.

82 I consider that this ground of appeal has been made out.

83 The fourth ground of appeal is that in holding that the respondents had suffered such prejudice by Sangora's delay in prosecuting the action that the action should be struck out in the interests of justice, the learned Acting Master was in error. It is said he failed to give any or proper weight to the extent to which delay in proceeding to trial had been attributable to the respondents; he failed to give proper weight to the fact that until 30 January 2002 the respondents had made no complaint about delay, or that any delay had caused or would cause prejudice to either of them; he inferred that the recollection of witnesses would have faded, and that this would amount to "real prejudice".

84 As to this last matter, I pause to note that the view expressed by the Acting Master is set out in par 24 of his judgment in these terms:

"24. In this action not only will the evidence as to what was said at various meetings be crucial, but so will the evidence of experts. Given the passage of time since the relevant events have occurred, I accept that it is reasonable to infer that the recollection of witnesses, including expert witnesses, will have faded. I am satisfied that the particular circumstances of this matter establishes real prejudice on behalf of the defendants."

85 Sangora contends that this was an impermissible inference. It is apparent from the admissions and allegations in the defence that full statements must have been taken from those witnesses soon after service of the writ, so that any prejudice in that respect would be minimal. Further, there was a lack of persuasive evidence from the respondents that any witness proposed to be called would be unable to recall relevant facts. Mr Hodder said at par 3 and par 4 of his affidavit that he did not have in his possession any notes taken at the relevant meetings which might assist him to recall the specifics of what was said. As would be expected, his memory of the meetings had faded with time. This was not persuasive evidence in that the deponent does not say specifically that he has no independent recollection of the events and fails to say whether he provided a proof of evidence to his solicitors at an earlier time.

86 Sangora challenges also the suggestion that the recollection of expert witnesses would have faded and that this would also constitute real prejudice when there was no or no sufficient evidence to that effect. Further, it is to be inferred from the Bradley affidavit that any expert evidence would be based on records and data rather than personal recollections.

87 Sangora argued that the Acting Master wrongly treated the collapse of FAI as relevant to the question of prejudice when the respondents had not applied to dismiss the action for want of prosecution until approximately 12 months after the collapse of FAI. During that period both parties had taken further interlocutory steps. There was no evidence, nor could it be fairly inferred, that had the action been entered for trial with greater expedition that the respondents would have retained the benefit of the insurance cover.

88 I consider that the appeal should be allowed on this ground also. The respondents have been on notice for a considerable period of time that the claim would be pressed. They have therefore had an opportunity to address the evidentiary issues, other than the evidence of experts. As to expert evidence, the Acting Master too readily assumed that the respondents would be prejudiced. It could not be fairly inferred that had the action been entered for trial with greater expedition that the respondents would have retained the benefit of their insurance cover.

89 According to the fifth ground of appeal, the learned Acting Master should have found that there was no evidence of intentional or contumelious delay by the appellants and that there had not been such inordinate and inexcusable delay as to give rise to a substantial risk that a fair trial would not be possible. Sangora contended that in all the circumstances, and in particular the stage reached in the litigation, it was not in the interests of justice that the action be struck out.

90 It follows from earlier discussion and the conclusions I have arrived at concerning the issues principally raised by the notice of appeal that, in my view, it is not in the interests of justice that the action be struck out.

91 In summary, then, I consider that the leave sought by Sangora to adduce further evidence on the hearing of the appeal should be refused. Nonetheless, upon the basis of the evidentiary materials that were before the learned Acting Master, I consider that leave to appeal against the order dismissing the action for want of prosecution should be granted and the appeal should be allowed.