BETWEEN : VENTUREAXESS CAPITAL LIMITED (ACN 085 039 818)

Jurisdiction : LOCAL COURT OF WESTERN AUSTRALIA

Appeal from summary judgment in Local Court - Absence of defendant - Competency of appeal - No error by Magistrate - Further evidence on appeal - Ability to set aside summary judgment in Magistrates Court - Delay in filing appeal - Factors relevant to delay

Corporations Act 2001

District Court Rules 2005

Local Courts Act 1904

Magistrates Court (Civil Proceedings) Act 2004

Aboyne Pty Ltd v Dixon Homes Pty Ltd (1980) Qd R 142

Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172

Australian Can Co Pty Ltd v Levin & Co Pty Ltd [1947] VicLawRp 47; [1947] VLR 332

Boomalli Ltd v Hake & Anor [1985] WAR 7

Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission & Ors [2000] HCA 47; (2000) 203 CLR 194

Coleman v Pearce and Anor [2005] WADC 62

Cordinup Resorts Pty Ltd v Terana Holdings Pty Ltd (1997) 143 FLR 18

Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1

Esther Investments Pty Ltd v Markalinga Pty Ltd (1989) 2 WAR 196

Euroclass Automotive Repairs v Capricorn Society Ltd, unreported; DCt of WA, Library No D980091; 9 January 1998

Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87

Gallo v Dawson [1990] HCA 30; (1990) 64 ALJR 458

Gibson v Perceptions (1988) 6 SR (WA) 255

Girando v Girando (1997) 18 WAR 450

Jacob v Booth's Distillery Co (1901) 85 LT 262

Mantegna v Seafeast Sales Pty Ltd & Anor, unreported; FCt SCt of WA; Library No 950497; 24 August 1995

Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109

Naidoo & Anor v Naidoo [2005] WADC 41

Palata Investments Ltd v Burt & Sinfield Ltd [1985] 1 WLR 942

Raeside Pty Ltd v Jymcroe Valley Pty Ltd, unreported; FCt SCt of WA; Library No 7196; 18 July 1988

Re Coldham; Ex parte Brideson [No 2] [1990] HCA 36; (1990) 170 CLR 267

Skahill & Anor v Kestral Holdings Pty Ltd (in liq) & Ors [2000] WASCA 185

Spira v Spira [1939] 3 All ER 924

Warwick Entertainment Centre Pty Ltd v McKenzie & Anor [2000] WASCA 280

Whitehall Holdings Pty Ltd and Whitehall Properties Pty Ltd v Ravi Nominees Pty Ltd & Ors, unreported; FCt SCt of WA; Library No 9189; 13 December 1991

Orr v Holmes [1948] HCA 16; (1948) 76 CLR 632

Greater Wollongong City Council v Cohen [1955] HCA 16; (1955) 93 CLR 435

Mickelberg v R (2004) 29 WAR 13

Jackamarra v Krakouer [1998] HCA 27; (1998) 195 CLR 516

Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VicRp 27; [1978] VR 257

1 COMMISSIONER SCHOOMBEE: This matter comes before me by way of an appeal against the judgment by his Worship, Mr Boothman SM, delivered on 23 July 2004 whereby he granted summary judgment to the respondent with costs. The notice of appeal seeks an order for the extension of time for leave to appeal from the judgment and an order setting aside the judgment and granting the appellant unconditional leave to defend the proceedings in the Magistrates' Court. The unusual feature of this matter is that it is brought by way of an appeal on the basis that the appellant was absent at the hearing of the summary judgment in the Local Court (as it was then called) and not as an application to set aside a summary judgment.

2 On 11 May 2004 the respondent commenced Local Court proceedings to recover a debt of $7,425 which it says was owed to it by the appellant in respect of services provided by the respondent to the appellant pursuant to a written contract. The contract is contained in a letter from the respondent to the appellant, dated 21 November 2003, pursuant to which the respondent agreed to undertake a short-term management consulting role to review the appellant and its investments and to source investors on the basis of an Offer Investment Statement to be settled by the respondent. The respondent provided some of the services to the applicant and issued an invoice to the applicant, dated 22 December 2003, in the amount $7,425 in respect of consulting fees from 21 November to 8 December 2003.

3 On 13 January 2004 Mr Geoffrey Mullins, a director of the appellant sent an email to Mr Guy Le Page, a director of the respondent, referring to the invoice and apologising for not having responded to it earlier. The email states that Mr Mullins has just returned from holidays but is "still pretty sick with pneumonia". The email then expresses concern about the "size of the first account" and requests a detailed summary of the time spent, with associated charges and details of personnel involved. The email further expresses the concern that the respondent has not to date progressed to any fund raising and that in the appellant's opinion the respondent did not have an appropriate understanding of the appellant's structure and status based on the respondent's comments in relation to the investment summary document. Mr Mullins states that a representative of the appellant will travel to Perth on the forthcoming Thursday and asks for a meeting with the respondent's representative.

4 The affidavits filed in support of the application for an extension of time to file the appeal and the affidavits filed in opposition do not provide any information as to whether this meeting took place, and whether there were any further negotiations between the appellant and the respondent. On 6 May 2004 Mr Mullins sent a letter to Mr Le Page stating that the appellant refuted the quantum of the invoice and that the appellant had suffered substantial losses as a result of the respondent's conduct. The letter further advised that the matter had been handed to the appellant's solicitors, Atanaskovic Hartnell in Sydney, and asked the respondent to direct all further correspondence to these solicitors. The appellant also filed a notice of intention to defend the action on 18 May 2004.

5 On 24 June 2004 the respondent filed a summons for summary judgment in the Local Court in respect of the amount of $7,711.20 plus interest. The summons was returnable on 23 July 2004 and supported by an affidavit of Mr Guy Le Page. The appellant or its solicitors did not attend the hearing of the summary judgment application on 23 July 2004, and his Worship, Mr Boothman SM, granted the summary judgment. It appears that no affidavit in opposition to the application for summary judgment had been filed by the appellant. The reason for the appellant's failure to attend on the day to file an affidavit in opposition is provided in an affidavit by Ms Karalyn Jeannette Day, the company secretary of the appellant. She says that after receipt of the application for summary judgment she contacted the Perth Magistrate's Court and spoke to a clerk by the name of Ms Carly Whitemore with the view of arranging a mediation/pre-trial conference by telephone. Ms Karalyn Day states that Carly Whitemore said that this was acceptable and agreed to a conference call to be held on Friday, 6 August 2004 at 10.30 am Perth time. She also told Ms Day that she would confirm such a conference by written correspondence. Ms Day says in her affidavit that she asked Ms Carly Whitemore whether any other action would be taken prior to the telephone hook-up taking place, and Ms Whitemore advised her that no action would be taken, as the conference was the first step.

6 A Notice of Pre-Trial Conference was issued by the Local Court on 12 July 2004 advising the appellant's solicitors, Atanaskovic Hartnell, and the respondent's solicitors, Solomon Brothers, that a pre-trial conference had been arranged for Friday, 6 August 2004 at 10.30 am. There was also further correspondence between Ms Day and Ms Whitemore pursuant to which the appellant provided a telephone number to the Local Court so that Mr Mullins could participate in the pre-trial conference per telephone. Ms Day says in her affidavit that she did not specifically discuss the application for summary judgment with any officer of the Local Court, but was under the mistaken impression that the application for summary judgment would not be heard on 23 July 2004, but would be heard after the pre-trial conference on 6 August 2004.

7 On 15 July 2004 Solomon Brothers sent a letter to the Perth Local Court asking that the pre-trial conference on 6 August 2004 be vacated, pending the outcome of the summary judgment application. A copy of this letter was sent to Atanaskovic Hartnell lawyers. The affidavit by Ms Day does not state whether the appellant received notice of this letter via its own solicitors.

8 On the hearing of the summary judgment application on 23 July 2004 the letter from Solomon Brothers to the Perth Local Court asking for the pre-trial conference to be vacated, was before his Worship, Mr Boothman SM. Mr Christopher Stephen Williams, in an affidavit in opposition to the motion for leave to appeal, states that he drew Magistrate Boothman's attention to the content of this letter. His Worship nevertheless granted the application for summary judgment presumably on the basis that the letter from Solomon Brothers had been sent to the appellant's Sydney solicitors. It does not appear that the Local Court issued any notice vacating the pre-trial conference, as neither the appellant nor the respondent has referred to such a notice in their respective affidavits.

9 On 27 July 2004 Solomon Brothers sent a letter to Atanaskovic Hartnell enclosing a copy of the judgment obtained and requesting payment. They also sent to the appellant on or about 3 August 2004 a creditor's statutory demand for the judgment debt pursuant to the Corporations Act 2001. In response Ms Karalyn Day, as company secretary of the appellant, sent a letter to Solomon Brothers, dated 27 August 2004, in which she stated that the appellant had contacted the District Court Registry in Perth and was preparing to lodge an appeal against the Local Court judgment. Further, on or about 31 August 2004 Minter Ellison in Perth wrote to Solomon Brothers, stating that they were acting for the appellant and Mr Geoffrey Mullins. They informed Solomon Brothers that Mr Mullins was away on vacation until 6 September 2004 and requested that no action in the matter be taken without referring to them. The submissions filed by the respondent indicate that the appellant first conveyed to the respondent that it intended to appeal the summary judgment to the District Court on 16 August 2004, but it is not clear whether this was orally or by letter and it has not been referred to in any of the affidavits filed on behalf of either party.

10 Despite the letters from the appellant, dated 27 August 2004 and from Minter Ellison dated 31 August 2004 respectively, the respondent commenced Supreme Court proceedings for an order winding up the appellant on 9 September 2004. On or about 1 October 2004 Solomon Brothers received a letter from Garton Smith & Co, barristers and solicitors, who advised that they had been instructed to act for the appellant to set aside the judgment in the Local Court and that the appellant would make a counter-claim on the ground of breach of contract. The letter stated that the application to set aside the judgement would be made in the next week and asked Solomon Brothers not to take any further action in relation to the matter or the winding up proceedings in the Supreme Court.

11 On 12 October 2004 Garton Smith & Co wrote to Solomon Brothers attaching a trust account cheque for the judgment sum and stated that this was paid under protest on the basis that the appellant was solvent and had a good defence to the claim made in the Local Court as well as a counter-claim. The letter repeated that an application would be made to set aside the summary judgment in the Local Court and said that Garton Smith & Co did not agree with the allegation made in a facsimile from Solomon Brothers of 7 October 2004 that the Local Court had no jurisdiction to set aside the judgment.

12 On 12 October 2004 Chris Stokes & Associates, the current solicitors for the appellant, received instructions from the appellant to set aside the summary judgment obtain in the Local Court. No explanation is provided in the affidavits filed on behalf of the appellant why there was a repeated change of solicitors, and why none of the three firms of solicitors acting for the appellant before Chris Stokes & Associates, took any steps to set aside the judgment in the Local Court or to appeal it to the District Court. The only explanation provided by Ms Day in her affidavit is that since 23 July 2004 the appellant had tried to negotiate a settlement with the respondent without success. Further, in an affidavit sworn by Mr Geoffrey Mullins, dated 21 October 2004, he states that:

"The delays and misunderstandings on the part of the Defendant (appellant) in this action have unfortunately been contributed to by the fact that around the time of the receipt of the summons in this matter by the Defendant, I suffered a serious illness and have only just recently been able to attend to the matter."

13 Accordingly, it appears that between approximately 24 June 2004 and 21 October 2004 Mr Mullins was ill-disposed and unable to attend to the matter.

14 Having received instructions on 12 October 2004, Chris Stokes & Associates filed an application in the Local Court on 27 October 2004 for an order that the summary judgment be set aside on the ground that it was obtained in the absence of the appellant. This application was listed for hearing on 22 November 2004 at 11.00 am. According to the affidavit filed by Mr Chris Stokes on behalf of the appellant in support of the notice of motion for leave to appeal he spoke to the solicitor for the respondent at approximately 10.30 am on the morning of 22 November 2004 and stated that the appellant intended to proceed with the application on that day and would not be consenting to have the matter stand over to a special appointment. However, due to his inadvertence he had diarised the hearing to be at 11.30 am and when he attended at that time was advised that the application had been dismissed by his Worship Mr Bromfield SM. His Worship agreed to return to court to hear Mr Stokes, but declined to recall the order on the basis that the solicitors for the respondent had foreshadowed to the court that they would be contending that the Local Court lacked the jurisdiction to set aside an order for summary judgment made in the absence of a defendant.

15 Mr Stokes says in his affidavit that after the hearing on 22 November 2004, he advised the appellant that it could either apply by further chamber summons to set aside the summary judgment in the Local Court or, to avoid any jurisdictional argument, could proceed by way of an appeal out of time to the District Court. The appellant decided upon the latter course. On 14 December 2004 Chris Stokes & Associates, on behalf of the appellant, filed the notice of motion by way of appeal which is now before me.

16 The grounds of appeal on which the appellant relies is that the Learned Magistrate erred in fact and law when he entered judgment by failing to consider, or attribute any weight to, the absence of the defendant, the absence of any fault on the part of the defendant in failing to attend at that hearing, and that on the available evidence, if presented, the appellant was entitled to be granted unconditional leave to defend. The problem with these grounds of appeal is that it is difficult to maintain that the learned Magistrate made an error on the basis of the material before him. He presumably did not know that the appellant had arranged a pre-trial conference and was under the impression that no steps would be taken by the Local Court until the pre-trial conference had occurred.

17 This appeal was filed on 14 December 2004 and heard on 6 May 2005. At the time that the appeal was filed the Local Courts Act 1904 was still in operation. This Act was repealed by the Courts Legislation Amendment and Repeal Act 2004, which received Royal Assent on 23 November 2004, but only came into operation on 1 May 2005. The Magistrates Court (Civil Proceedings) Act 2004 received Royal Assent on 12 November 2004 and also came into operation on 1 May 2005. Section 7 of the Courts Legislation Amendment and Repeal Act 2004 provides as follows:

If immediately before commencement an action or matter (as defined in the Local Courts Act 1904) is pending before a Local Court, then on commencement the action or matter -

(a) is to be taken to be a case pending before the Magistrates Court; and

(b) shall be heard and determined under the Magistrates Court (Civil Proceedings) Act 2004 as if it is within the civil jurisdiction of the Magistrates Court."

18 "Commencement" is defined in s 5 of the Courts Legislation Amendment and Repeal Act 2004 as the "commencement of this Division", which is Division 2. The commencement date for Division 2 is 1 May 2005.

19 An "action" is defined in s 2 of the Local Courts Act 1904 as "includes suit and means a civil proceeding commenced as prescribed by plaint." There is no definition of what "pending" means. However, in my view, an action in the Local Court which has been appealed is still "pending" before the Local Court insofar as any application of a statutory provision dealing with the right of appeal and manner in which it is to be heard is concerned. The summary judgment was granted on 23 July 2004 and the notice of appeal filed on 14 December 2004. The appeal was heard on 6 May 2004. Accordingly, the respondent's action against the appellant was "pending" before the Local Court on 1 May 2005, the commencement day of Div 2 of the Courts Legislation Amendment and Repeal Act 2004. This means that the appeal brought by the appellant against the judgment of his Worship, Mr Boothman SM, is to be heard and determined under the Magistrates Court (Civil Proceedings) Act 2004.

20 The Magistrates Court (Civil Proceedings) Act 2004 provides in s 40(1) that a party to a case that is not a minor case may appeal to the District Court against the judgment of the Magistrates Court in the case. Pursuant to s 40(3) the appeal must be commenced within 21 days after the date of judgment and be conducted in accordance with the Rules of Court made by the District Court.

21 Section 40(4) and s 40(5) of the Magistrates Court (Civil Proceedings) Act 2004 provide as follows:

"40(4) The District Court must decide the appeal on -

(a) the material and evidence that were before the Magistrates Court; and

(b) any other evidence that it gives leave to be admitted.

(5) Leave may only be given under subsection (4)(b) in exceptional circumstances."

22 If I am wrong in holding that this appeal is to be determined pursuant to the provisions of the Magistrates Court (Civil Proceedings) Act 2004, then this appeal is subject to s 107 of the Local Courts Act 1904. Section 107(1) and s 107(2) provide as follows:

"107. Appeals

(1) Subject to subsection (2), a party to an action or matter who is dissatisfied with -

(a) a final judgment may appeal from that judgment to the District Court;

(b) a judgment that is not a final judgment, may by leave of the District Court appeal to that Court,

notwithstanding that the action or matter to which the final judgment or judgment relates may have been brought in the Local Court by consent as provided in this Act.

(2) An appeal to the District Court shall be made in the time and manner prescribed, and with such security for costs of the appeal as prescribed, by the Rules of the District Court, and, subject to subsection (5), the District Court has the jurisdiction to hear and determine the appeal accordingly."

23 Whether this appeal is subject to the Magistrates Court (Civil Proceedings) Act 2004 or the Local Courts Act 1904, the Rules of the District Court apply. The only material difference in respect of this appeal is that s 40(5) of the Magistrates Court (Civil Proceedings) Act 2004 provides that the District Court may only give leave to admit further evidence on appeal in "exceptional circumstances", whereas the Local Courts Act 1904 does not deal specifically with further evidence on appeal.

24 Order 8 of the Rules of the District Court deals with appeals from the Local Court. Order 8 r 2 provides that an appeal from a judgment of a Local Court shall be instituted by notice of motion (called a "Notice of Appeal") and that it shall be by way of re-hearing.

25 The High Court explained the difference between an appeal by way of re-hearing and a hearing de novo in Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172. Gaudron, McHugh, Gummow and Hayne JJ held as follows at [23]:

"23. For present purposes, the critical difference between an appeal by way of rehearing and a hearing de novo is that, in the former case, the powers of the appellate court are exercisable only where the appellant can demonstrate that, having regard to all the evidence now before the appellate court, the order that is the subject of the appeal is the result of some legal, factual or discretionary error (See CDJ v VAJ (1998) 197 CLR 172 at 201-202 [111], per McHugh, Gummow and Callinan JJ.), whereas, in the latter case, those powers may be exercised regardless of error. At least that is so unless, in the case of an appeal by way of rehearing, there is some statutory provision which indicates that the powers may be exercised whether or not there was an error at first instance (See Re Coldham; Ex parte Brideson [No 2] [1990] HCA 36; (1990) 170 CLR 267). And the critical distinction, for present purposes, between an appeal by way of rehearing and an appeal in the strict sense is that, unless the matter is remitted for rehearing, a court hearing an appeal in the strict sense can only give the decision which should have been given at first instance whereas, on an appeal by way of rehearing, an appellate court can substitute its own decision based on the facts and the law as they then stand (See Werribee Shire Council v Kerr [1928] HCA 41; (1928) 42 CLR 1 at 20-21, per Isaacs J; Victorian Stevedoring & General Contracting Co Pty Ltd v Dignan [1931] HCA 34; (1931) 46 CLR 73 at 107, per Deane J; at 298 per Toohey and Gaudron JJ; Re Coldham; Ex Parte Bridesman [No 2] [1990] HCA 36; (1990) 170 CLR 267; Quilter v Mapleson (1882) 9 QBD 672 at 676, per Jessel MR; Ponnamma v Arumogam [1905] AC 383 at 390, per Lord Davey, delivering the judgment of the Privy Council.)"

26 A similar explanation, to the same effect, was given by Gleeson CJ, Gaudron and Hayne JJ in Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission & Ors [2000] HCA 47; (2000) 203 CLR 194.

27 On the basis of the above two High Court decisions this Court may only set aside the summary judgment granted by his Worship, Mr Boothman SM, if the appellant can demonstrate that, having regard to all the evidence before this Court, the judgment was the result of some legal, factual or discretionary error. This is, unless there is some statutory provision which indicates that the powers may be exercised whether or not there was error at first instance. In support of the latter statement made in Allesch v Maunz, their Honours referred to Re Coldham; Ex parte Brideson [No 2] [1990] HCA 36; (1990) 170 CLR 267. In Re Coldham; Ex parte Brideson the appellant appealed from the decision of the Registrar of the Australian Industrial Relations Commission ("the Commission") to register the Teachers' Association of Australia as an organisation of employees under the Conciliation and Arbitration Act 1904 (Cth). At the time of making this decision the Australian Teachers' Union ("ATU") and the Independent Teachers' Federation ("ITF") were not yet registered, although this occurred later on the same day. On hearing the appeal from the Registrar's decision to register the Teachers' Association of Australia, the Commission took into account that the ATU and ITF had in the meantime been registered and that in light thereof it was not desirable to register the Teachers' Association of Australia as, at the date of the appeal, there was an organisation to which the members of that association might conveniently belong, namely the ATU or ITF. The matter found its way to the High Court and the question was whether the Commission had been entitled to take into account a matter (the registration of the ATU and ITF) which existed at the time that it heard the appeal, but did not exist at the time when the Registrar made his decision. The right of appeal to the Commission against the decision of the Registrar was given by s 88F of the Conciliation and Arbitration Act 1904 which gave the Commission the right to "take further evidence for the purposes of an appeal" and to "make such order as it thinks fit". Accordingly, the High Court held that "the Commission was bound to make its own decision on the evidence before it, including evidence of events which had occurred since the Registrar's decision" (at 274).

28 Pursuant to s 40(4) of the Magistrates Court (Civil Proceedings) Act 2004 the District Court must decide the appeal on the evidence that was before the Magistrates Court and on any other evidence that it gives leave to admit. Further, pursuant to s 40(3) the appeal must be conducted in accordance with the Rules of Court made by the District Court. The powers of this Court on the hearing of an appeal from the Local Court (now the Magistrates Court) are prescribed in O 8, r 30 as follows:

"8(30)(1) On appeal to the Court a party may on special grounds only, apply to the Court for special leave to adduce further evidence on questions of fact either by oral examination or by affidavit and the Court has full discretionary power to grant such leave; and

(2) On the hearing of an appeal the Court has power to affirm, reverse or modify the judgment appealed from and to give or make such judgment, order, decision, determination or award as sought to have been given or made in the first instance and to review any finding of fact and to draw inferences of fact and may order a new trial or hearing on such terms as the Court shall think just or make any other order on such terms as the Court thinks proper to ensure the determination on the merits of the real questions in controversy between the parties or the real merits of an application and may make such order as to costs as it shall think just."

29 Order 8, r 30(1) entitles this Court "on special grounds only" to allow further evidence on questions of fact, whereas s 40(5) of the Magistrates Court (Civil Proceedings) Act 2004 provides that leave to admit further evidence may only be given under "exceptional circumstances". As s 40(5) of the Magistrates Court (Civil Proceedings) Act specifically deals with the circumstances under which further evidence may be admitted on appeal, it should be given precedence over the generally applicable O8, r 30(1) of the Rules of the District Court. However, in my view, there is no material difference between "exceptional circumstances" and "special grounds".

30 In Naidoo & Anor v Naidoo [2005] WADC 41 Eaton DCJ decided upon an application pursuant to O 8, r 30(1) of the District Court Rules to admit further evidence and gave the following interpretation to the requirement that "special grounds" had to exist (at par 9):

"The requirement for "special grounds" means that the discretion in that rule is at least as circumscribed as the equivalent rule in the Supreme Court Rules, O 65, r 10(2). In relation to the Supreme Court Rules Ipp J in Cranley v Medical Board of Western Australia, unreported; SCt of WA; (Ipp J); Library No 8610; 27 November 1990 said at 4:

'The reference to 'special order' in O 65 r 10 implies that 'special' circumstances should exist before the Court admits additional or fresh evidence. Conditional upon special circumstances existing, the Court is given a very wide discretion to admit such evidence.

In exercising its discretion under O 65, r 10, the Court should, of course, continue to bear in mind the powerful policy consideration that there should be finality in litigation. In particular, O 65, r 10 should not be used merely to allow a party to remedy a tactical decision that proved to have unforeseen and disadvantageous consequences, or to reinforce perceived weaknesses in a case already presented.'

31 Mr Chris Stokes filed an affidavit in support of the notice of appeal to which he attached the affidavit by Mr Geoffrey Mullins, sworn on 21 October 2004, in support of the application made by the appellant in the Local Court to set aside the summary judgment, as well as the affidavit of Ms Karalyn Day, sworn on 21 October 2004 for the same purpose. The notice of appeal does not ask for an order for leave to adduce further evidence on questions of fact at the hearing of the appeal. However, as the appeal was clearly argued before me in reliance by the appellant on these two affidavits I invited the appellant's counsel to make an oral application for special leave to adduce the affidavits by Mr Geoffrey Mullins and Ms Karalyn Day as further evidence on questions of fact in respect of the appeal, which he did. It was also apparent at the hearing that the respondent relied, for purposes of the appeal, on the affidavits filed by Mr Guy Le Page, sworn on 21 June 2004 and on 1 February 2005, and by Mr Christopher Stephen Williams, sworn on 22 July 2004 and on 14 January 2005. I gave the respondent's counsel a similar opportunity to apply for leave to adduce these affidavits as further evidence in the appeal and he made such an oral application.

32 There is no doubt that this is a case where "exceptional circumstances" or "special grounds" exist to allow the further evidence by affidavit which explains why there was no appearance on behalf of the appellant at the hearing of the summary judgment application and sets out the grounds on which the appellant alleges that it has a good defence to the respondent's claim for payment of the sum in dispute. This evidence was not placed before his Worship, Mr Boothman SM by reason of a misunderstanding by Ms Day and the appellant should not be deprived of the opportunity of having a hearing in respect of the summary judgment application and of producing an affidavit setting out the grounds on which it relies for its defence. The fact that Atanaskovic Hartnell, the solicitors then acting for the appellant, received a copy of the letter from Solomon Bros to the Perth Local Court asking that the pre-trial conference to be held on 6 August 2004 be vacated, is in my view not sufficient reason to deprive the appellant of this opportunity. Although this is not explained on affidavit, it may be that Atanaskovic Hartnell, being Sydney lawyers, were not familiar with the procedures in the Local Court in Perth and did not understand the potential implications of the vacation of a pre-trial conference. Even if they did, or should have, it is unlikely that Ms Day or any other representative of the appellant was advised that the summary judgment application would proceed on 23 July 2004. When Ms Day was first advised of the application for summary judgment she immediately took steps to contact the Local Court in Perth. It is unlikely that she would not have taken similar steps if she had been advised that the pre-trial conference had been vacated and the application for summary judgment was going ahead.

33 I am therefore prepared to admit the affidavits by Ms Day and Mr Mullins as further evidence of questions of fact. If I allow the appellant to set out the circumstances and reasons for the appellant's failure to appear at the hearing of the summary judgment application, justice demands that I also allow the respondent to submit the affidavits by Mr Le Page and by Mr Williams.

34 Once this evidence is before the Court as further evidence on the appeal, the question still is whether this Court has to identify an error in the judgment made by his Worship, Mr Boothman SM, or whether "there is some statutory provision which indicates that the powers may be exercised whether or not there was an error at first instance" as referred to by the High Court in Allesch v Mannz. Section 40(3) of the Magistrates Court (Civil Proceedings) Act 2004 provides that the appeal must be conducted in accordance with the Rules of Court made by the District Court. Pursuant to O 30(2) of the Rules of the District Court this Court is entitled to "make any other order on such terms as the Court thinks proper to ensure the determination on the merits of the real question in controversy between the parties or the real merits of an application". In Warwick Entertainment Centre Pty Ltd v McKenzie & Anor [2000] WASCA 280 Miller J held that this description of the Court's powers gives a District Court Judge "somewhat wider powers than might normally be exercised by an appellate court conducting a re-hearing from another court."

35 Further, in my view the present matter is similar on the facts to the matter decided in Re; Coldham, Ex parte Brideson which I referred to earlier, and that this Court is therefore entitled to review the learned Magistrate's decision on the basis of the further evidence allowed on the appeal and without having to find an error in the decision made by his Worship, Mr Boothman SM. It is necessary in order to ensure "the determination on the merits of the real question in controversy between the parties" that this Court review the decision made by the learned Magistrate on the basis of the new evidence before this Court, as was done in the Re; Coldham, Ex parte Brideson. In that case the new evidence placed before the Commission dealt with facts which had only occurred after the decision at first instance had been made, whereas in this case the evidence already existed when the learned Magistrate made his decision, but was only placed before this Court at a later stage. However, in my view this is not a material difference.

36 I accordingly find that this Court has the power to grant an order to set aside the summary judgment on appeal without it being necessary for this Court to determine that an error was made by his Worship Magistrate Boothman SM.

Appeal competent where summary judgment could have been set aside in the Magistrates Court

37 A further question that arises is whether the appeal to this Court is competent or whether the appellant should have applied to have the summary judgment set aside in the Magistrates Court. The view held by this Court seems to have been that pursuant to the Local Courts Act 1904 a magistrate did not have the power to set aside a summary judgment: Gibson v Perceptions (1988) 6 SR (WA) 255 at 257, Coleman v Pearce and Anor [2005] WADC 62 at p 13. There is no procedure by which an application to set aside a judgment granted in the Local Court can be made to the District Court. The Magistrates Court (Civil Proceedings) Act 2004 only came into operation on 1 May 2005. The appellant made an application in the Local Court to have the summary judgment set aside, which application was heard on 22 November 2004. As indicated earlier, this application was dismissed because the appellant's counsel did not make his appearance at the appropriate time and because the learned Magistrate was persuaded by the respondent's argument that the Local Court did not have jurisdiction to set aside a summary judgment application. The appellant did not renew the application for summary judgment after it was dismissed.

38 Section 18 of the Magistrates Court (Civil Proceedings) Act 2004 deals with summary judgments and subsection 18(6) provides as follows:

"18(6) The Court may set aside a judgment given under this section and may do so on conditions as to the payment of costs or as to other matters."

39 As the Magistrates Court (Civil Proceedings) Act 2004 was in operation as at 6 May 2005, when this appeal was heard, the appellant would have been able to obtain relief in the Magistrates Court by way of a subsequent application to that Court. The question therefore arises whether the appeal to the District Court is competent where a procedure to set aside the summary judgment is available in the Magistrates Court. A Court of Appeal applies the law as it is when the appeal is heard not as it was when the decision appealed from was made: Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1 at 7.

40 In Gibson v Perceptions, Sadleir J referred to the case of Spira v Spira [1939] 3 All ER 924 CA in which the English Court of Appeal held that the King's Bench Division did not have the power to set aside a summary judgment, prior to the introduction of O 14, r 11 of the English Rules of the Supreme Court. Sadleir J cited the Supreme Court Practice 1988 (England) at p 163 which states that O 14, r 11 of the English Supreme Court Rules:

"Reversed Spira v Spira [1939] 3 All ER 924 CA, and removed the anomaly that, unlike every other judgment in default or even a judgment at trial in the absence of a defendant, a judgment under O 14 in the absence of a defendant could not be set aside, although it could be made the subject of an appeal."

41 In Spira v Spira an appeal was lodged against the summary judgment granted by the King's Bench Division, but the appeal was dismissed because it had been lodged out of time. However, the Court held that where a summary judgment had been granted in the absence of a defendant a court could intervene on appeal and set aside the judgment (at 928). Spira v Spira was decided in a situation where it was not open for the appellant to approach the Court which had granted the summary judgment to have the judgment set aside. However, as discussed above, I am of the view that this Court has power to set aside the summary judgment on appeal on the basis that it may take into account additional evidence provided by way of affidavit for purposes of the appeal. There is no reason why this Court should not be entitled to set aside the summary judgment on appeal merely because the Magistrates Court could have done so.

42 In Euroclass Automotive Repairs v Capricorn Society Ltd, unreported; DCt of WA, Library No D980091; 9 January 1998, Commissioner Greaves assumed that on appeal to the District Court this Court had jurisdiction to set aside a summary judgment granted in the Local Court in the absence of the appellant. Commissioner Greaves proceeded to apply the principles usually relied upon in an application pursuant to O 14, r 12 of the Rules of the Supreme Court under which the Supreme Court (and the District Court) has power to set aside a summary judgment granted by its own Court. These principles are that the appellant must show a satisfactory explanation for its failure to appear at the hearing of the summary judgment, explain the delay in bringing the application to have the judgment set aside and show that if it had appeared at the summary judgment hearing it would have obtained leave to defend: Aboyne Pty Ltd v Dixon Homes Pty Ltd (1980) Qd R 142 at 143.

43 However, as this is an appeal and not an application to set aside a summary judgment, I have approached the matter on a slightly different basis, as indicated above.

44 Before deciding the appeal on its merits, the appellant has to persuade this Court that it should exercise its discretion to extend the time for the filing of the appeal. Pursuant to s 40(3) of the Magistrates Court (Civil Proceedings) Act 2004 an appeal to the District Court from a decision of a magistrate has to be commenced within 21 days after the date of judgment. The summary judgment was granted on 23 July 2004 and the appeal should therefore have been lodged at the latest on 13 August 2004. In fact the appeal was only filed on 14 December 2004, which is a delay of four months.

45 Order 8, r 5 of the Rules of the District Court provides that a notice of appeal shall be filed and served within 21 days of the date of the judgment "or within such further time as a Judge or Registrar shall allow." The principles applicable in relation to the exercise of the Court's discretion to extend the time under the Rules of Court are well documented. The first principle is that the object of the rule allowing an extension of time is to ensure that justice is done between the parties. In Gallo v Dawson [1990] HCA 30; (1990) 64 ALJR 458 McHugh J held in respect of O 70, r 3 of the High Court Rules 1952 (Cth) as follows [at 459]:

"The grant of an extension of time under this rule is not automatic. The object of the rule is to ensure that those Rules which fix times for doing acts do not become instruments of injustice. The discretion to extend time is given for the sole purpose of enabling the Court or Justice to do justice between the parties: see Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VicRp 27; [1978] VR 257 at 262."

46 In Raeside Pty Ltd v Jymcroe Valley Pty Ltd, unreported; FCt SCt of WA; Library No 7196; 18 July 1988, Malcolm CJ stated this principle as follows in respect of an application for extension of time in which to lodge a notice of appeal against a judgment entered into in default of a defence (at 5):

"The object of conferring a discretion to extend the time is the avoidance of injustice. ... The question in each case is whether justice as between the parties would be best served by granting or refusing the application. The possible injustice to the applicant if the application is refused and the judgment left undisturbed, and possible injustice to the applicant resulting from the disturbance of his vested interest in the maintenance of the judgment must be weighed in the balance: Hughes v National Trustees, (supra) at pp 263-264."

47 The factors that have to be taken into account by the Court in determining whether strict compliance with the Rules will work an injustice upon the applicant are the following:

4. the consequences for the parties of the grant or refusal of the application for extension of time;

5. the prospects of the applicant succeeding in the appeal;

6. the prejudice to the respondent who has "a vested right to retain the judgment".

These factors have been listed in a number of authorities: Gallow v Dawson (supra) at 459; Girando v Girando (1997) 18 WAR 450 at 453-454.

48 In considering the conduct of the parties a relevant factor is whether the appellant has indicated earlier that he/she has an intention to appeal: Raeside Pty Ltd v Jymcroe Valley Pty Ltd (supra) at 5. A similar factor to be considered is whether negotiations between the parties commenced within the time limit: Girando v Girando (supra) at 457.

49 As regards the factor "nature of the litigation" the Full Court of the Supreme Court of Western Australia in Boomalli Ltd v Hake & Anor [1985] WAR 7 took into account in respect of a motion that an appeal be dismissed for want of prosecution that the subject matter of the action was a gold mining lease and the relief sought was an order for specific performance of an agreement of sale of the lease. The Court held that from the nature of the litigation it could be seen that there were considerations within the action itself which reinforced the importance of the appellant adhering to time limitations (at 9).

50 In Esther Investments Pty Ltd v Markalinga Pty Ltd (1989) 2 WAR 196, Kennedy J, in reliance on Palata Investments Ltd v Burt & Sinfield Ltd [1985] 1 WLR 942 at 946, identified the following four major factors to be considered in the exercise of the discretion to allow an extension of time for the filing of an appeal (at 198):

"They are, first, the length of the delay, secondly, the reasons for the delay, thirdly, whether there is an arguable case and, fourthly, the extent of any prejudice to the respondent. There may in a particular case be additional factors, but I accept that the foregoing are the major factors in the present case."

51 This identification of four major factors was adopted by the Full Court of the Supreme Court of Western Australia in Mantegna v Seafeast Sales Pty Ltd & Anor, unreported; FCt SCt of WA; Library No 950497; 24 August 1995 at 4. In that case Malcolm CJ considered that an additional factor was that the oversight which had resulted in the delay was not attributable to the appellant, but to its solicitors.

52 In Esther Investments Pty Ltd v Markalinga Pty Ltd (supra) Franklyn J said the following with regard to delay caused by an appellant's solicitors (at 202):

"Viewing the appellant in isolation, its culpability was no more than the unknowing failure to comply with a rule of procedure. As was said by Barwick CJ, in Hall v Nominal Defendant [1966] HCA 36; (1966) 117 CLR 423 at 435, it is the litigant's failure to take action in time which must be satisfactorily explained, and that no matter that in some fields the client must suffer for his solicitor's acts done on his behalf, 'in this field the litigant is not necessarily ... to be saddled with responsibility for all that his solicitor does or does not do'. The blamelessness of the client and the responsibility of the solicitor are material considerations: Sophron v Nominal Defendant [1957] HCA 27; (1957) 96 CLR 469 at 474."

53 In this case the length of the delay is four months. However, it should be taken into account that the appellant did not leave the matter totally unattended during this period of time. The appellant did file an application to set aside the summary judgment on 27 October 2004 which was heard on 22 November 2004. The time taken between 22 November 2004 and the date on which the notice of appeal was filed (14 December 2004) is only approximately three weeks.

54 As regards the reasons for the delay the affidavits filed on behalf of the appellant are very sketchy and provide hardly any information as to what occurred during the period after the summary judgment had been granted on 23 July 2004 and the filing of an application to set aside this judgment on 27 October 2004. The only information provided in the affidavit of Ms Day is that after the grant of the summary judgment the appellant tried to negotiate a settlement with the respondent without success. The affidavit by Mr Mullins indicates that he was unwell in the period after the grant of the summary judgment until approximately October 2004. At least Ms Day on behalf of the appellant wrote a letter to the respondent's solicitors on 27 August 2004 advising them that the appellant was preparing to lodge an appeal against the Local Court judgment. This notification to the respondent's solicitors was approximately two weeks after the expiry of the time for the filing of a notice of appeal (13 August 1999). As indicated earlier, it appears from the written submissions filed by the respondent that the appellant also communicated its intention to lodge an appeal to the respondent or its solicitors on 16 August 2004, which would have been three days after the last day for the filing of a notice of appeal.

55 However, there is no adequate explanation in the affidavits filed by the appellant as to why no steps were taken to file an appeal by the various firms of solicitors which acted for the appellant. There does not seem to have been any response whatsoever from Atanaskovic Hartnell, although they were advised by the respondent's solicitors on or about 27 July 2004 that summary judgment had been obtained against the appellant. Minter Ellison and Garton Smith & Co wrote letters to the respondent's solicitors on 31 August 2004 and 1 October 2004 respectively asking that no further action be taken against the appellant without conferral with its solicitors, but it has not been explained why no steps were taken to either file an application in the Local Court to set aside the summary judgment or to lodge an appeal to the District Court.

56 There is also no explanation in the affidavit filed by Mr Stokes regarding the two week period between his firm receiving instructions from the appellant on 12 October 2004 and filing the application to set aside the summary judgment application on 27 October 2004, nor of the three week period after the application to set aside the summary judgment application was dismissed on 22 November 2004 and the filing of the notice of appeal and application for extension of time on 14 December 2004. These are not lengthy periods of delay and the first one can probably be explained on the basis that Chris Stokes & Associates did not consider there to be any time pressure in making an application to set aside the summary judgment. As regards the second period, Mr Stokes explained in his affidavit that after the dismissal of the application to set aside the summary judgment application he advised the appellant that it could either bring a further application or proceed by way of an appeal out of time to the District Court. Although this has not been explained in the affidavits, the delay of three weeks may be due to Mr Stokes trying to receive instructions from the appellant in Melbourne.

57 As held by McHugh J in Gallow v Dawson (supra) the grant of an extension of time is not automatic and it requires proof by the appellant that strict compliance with the Rules will work an injustice upon it. The delay in filing a notice of appeal and also in bringing the application in the Local Court to set aside the summary judgment is not properly explained. The appellant's current solicitors should have asked Ms Day or Mr Mullins to explain this delay in their affidavits or, if they could not explain it, should have contacted the various firms of solicitors to find out why no progress was made in appealing the summary judgment. On the other hand it appears, that the appellant indicated its intention to appeal the summary judgment as early as 16 August 2004, and certainly by letter on 27 August 2004, and the letter by Garton Smith & Co also indicates that the appellant intended to set aside the judgment in the Local Court. The affidavits filed on behalf of the appellant do not explain why there was a repeated change of solicitors, but this in itself may be an indication that it was not because of the disinterest by the appellant that no steps were taken to set aside the summary judgment or to lodge a notice of appeal against it.

58 Counsel for the respondent pointed out in his submissions that Mr Mullins was but one of the directors of the appellant and that no explanation has been given as to why the other directors or Ms Day could not take charge and could not have made sure that steps were taken by the appellant's solicitors in time. It appears from the affidavit by Ms Day that she took control of the matter, but it is unlikely that she would have known what the time constraints were with regard to the filing of a notice of appeal and that this was the appropriate step to be taken.

59 The respondent's counsel further submitted that there would be prejudice to the respondent if the summary judgment was set aside as the respondent had a vested right to the judgment. The "vested right to retain the judgment" by the respondent has been identified as one of the factors that the Court has to take into account in exercising its discretion: Gallo v Dawson (supra) at 480. In Raeside Pty Ltd v Jymcroe Valley Pty Ltd (supra) Malcolm CJ also held the following (at 5):

"In the meantime the plaintiff has proceeded with steps to execute the judgment on the footing that no appeal has been instituted. While the plaintiff may be protected by the imposition of terms as to costs on (sic) otherwise, this is a circumstance which weighs against the grant of an extension."

60 Counsel for the respondent argued that the prejudice incurred by the respondent in instituting the winding-up proceedings against the appellant in order to execute the judgment could not be cured by costs, as the respondent had incurred solicitor/client costs in bringing the winding-up proceedings. However, I am of the view that the respondent only has itself to blame in incurring solicitor/client costs which it has not recovered in respect of the winding-up proceedings. The appellant indicated well before the winding-up proceedings were instituted on 9 September 2004 that it intended to lodge an appeal against the grant of summary judgment. Further, the respondent's solicitors knew under what circumstances the summary judgment had been granted, namely in the absence of the appellant and after the respondent's solicitors had asked that the pre-trial conference be vacated. In addition, the respondent's solicitors had received a letter from Minter Ellison asking them not to take any action until Mr Mullins had returned from vacation in the week commencing 6 September 2004. The respondent therefore had ample indication that the appellant wished to take steps to have the summary judgment set aside.

61 The appellant has paid the judgment sum under protest. There is no indication in the affidavits filed on behalf of the respondent that the respondent would not be able to repay the judgment sum if the summary judgment was set aside and the appellant was ultimately successful in defending the respondent's claim. In fact, the respondent has had the benefit of having been paid the judgment sum in the meantime.

62 In weighing the possible injustice to the appellant if the application for an extension of the time for filing the appeal is refused against the possible injustice to the respondent by the disturbance of its vested interest in maintaining the judgment, I am of the view that the possible injustice to the appellant is to be given greater emphasis. The appellant was not to blame for the misunderstanding in not appearing at the hearing of the summary judgment application and the unsuccessful attempt to set aside the summary judgment in the Local Court. Further the inadequate steps taken to bring this matter on appeal do not appear to be the fault of the appellant. The appellant indicated its intention to defend the summary judgment application from the start and it would be an injustice to the appellant not to allow it to defend the respondent's claim in light of the history of this case. It is a material consideration in the exercise of the Court's discretion whether the failure to institute the appeal on time is that of the solicitor or that of the client: Esther Investments Pty Ltd v Markalinga (supra) at 199, per Kennedy J, and at 204, per Rowland J. In Skahill & Anor v Kestral Holdings Pty Ltd (in liq) & Ors [2000] WASCA 185, Owen and Heenan JJ in a joint judgment held as follows:

"Of course, a solicitor acting in his professional capacity is the agent of the client and, as a consequence, the solicitor's neglect or other fault will often be visited upon the client. Nevertheless, the absence of fault on the part of the client always will be relevant, and might be a significant factor, when the justice of the case is an important consideration ... ."

63 I am of the view that the justice of this case requires that, subject to the appellant proving it has prospects of success on the appeal, I grant the appellant leave to file the notice of appeal out of time even though the affidavits filed by the appellant in this regard leave much to be desired.

64 The appellant has asked that on appeal the summary judgment be set aside and the appellant be granted unconditional leave to defend the respondent's claim. Accordingly, in order to prove that it has prospects of success on appeal, the appellant not only has to show that this Court would set aside the summary judgment, but also grant leave to unconditionally defend the respondent's claim.

65 The Court's discretion can only be exercised in favour of the appellant upon proof by the appellant that the rules will work an injustice if the appellant is not granted leave to extend the time for filing the notice of appeal (see Gallo v Dawson, supra, at 454), but the ultimate burden of proof is upon an applicant for summary judgment (the respondent) to persuade a court that there is no defence to its claim: Cordinup Resorts Pty Ltd v Terana Holdings Pty Ltd (1997) 143 FLR 18 at 23 (FC). It is further trite law that the power to order summary judgment is one that should be implemented with great care and should never be exercised unless it is clear that there is no real question to be tried: Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87 at 99.

66 Mr Mullins has said in his affidavit, admitted as additional evidence, that the respondent was in breach of the contract to provide corporate advisory services to the appellant in that the respondent:

(a) failed to use Mr James B Richardson and Mr Guy Le Page as responsible personnel in relation to the contract;

(d) failed to source any investors for the appellant.

67 As regards the first allegation of breach of contract, Mr Mullins' affidavit states that by virtue of cl 9 of the contract the respondent allocated Mr James B Richardson and Mr Guy Le Page as responsible personnel from the respondent in respect of the contract. The contract attached to the affidavit by Mr Mullins appears to have the last page missing, which contains cl 9. However, the allegation that the contract contained such a term does not appear to be in dispute. Mr Mullins further says in his affidavit that the respondent used Mr Peter Dale to do the work for the appellant. Mr Dale had just arrived in Australia from extended work in the United Kingdom and, according to Mr Mullins, told him on several occasions that he was relying on his experience in the United Kingdom and needed to understand how matters happened in Australia. By reason of the nature of the contract, which was to provide corporate advisory services for the appellant, a review of its Offer Investment Statement and sourcing of investors, the appellant may be able to prove that it was essential for the proper performance of such services that the person assigned to the task had knowledge of the legal requirements and preferences of the investment market in Australia and that the respondent was in breach of its contract in this regard.

68 The second allegation of breach of contract deals with the respondent's failure to adhere to the agreed timetable. The contract only provides that the respondent will use "its best endeavours" to adhere to the timetable. The timetable set out in the contract indicates that the due diligence and review, finalisation of documentation, pricing and presentation material was to be completed between 24 to 28 November 2003. The invoice indicates that "consulting" services have been rendered for the period 21 November 2003 to 8 December 2003. The respondent may very well have used its best endeavours to comply with the very brief period of time allowed in the timetable. Mr Mullins says in his affidavit that "the review" had still not been completed as at the date of his affidavit (21 October 2004). However, the respondent clearly did not do any further work once the dispute about the fees rendered had arisen. Whether the respondent used its best endeavours to comply with the timetable cannot be decided at this stage without further evidence on whether the review done by the respondent up to 8 December 2003 was sufficient and in compliance with the contract.

69 As regards the allegation that the advice provided by the respondent was inappropriate, Mr Mullins provided a number of particulars in his affidavit. In summary, these amount to the following allegations:

(a) the respondent did not properly review the appellant's Offer Investment Statement;

(b) the respondent made an inappropriate recommendation that there should be a minimum subscription level. This was inappropriate because the appellant had already taken investments and Mr Mullins alleges that the appellant would have acted contrary to its legal and fiduciary duties by retrospectively imposing a minimum subscription level to the potential detriment of the shareholders who had already taken investments;

(c) the respondent inappropriately recommended that the prospect of further capital raisings for further investments should be deleted from the Offer Investment Statement whereas the appellant was under a legal duty to disclose this prospect to potential investors;

(d) the respondent gave inappropriate advice to the appellant to raise the price of its options offered where the appellant had already raised a substantial amount of money under restricted offering with options attached and an increase in the options would have been detrimental to new investors;

(e) the respondent failed to understand the inherent nature and purpose of the appellant, the laws and regulations relating to disclosure documents and the statutory and common law duties of directors.

70 In my view these are allegations which indicate that, if proven, there was a serious breach of contract in that the respondent was unable to provide the appellant with appropriate and correct advice as agreed.

71 The fourth allegation of breach of contract is that the respondent failed to source any investors. Mr Mullins says in his affidavit that not only were no investors sourced, but the appellant lost many months in its capital raising programme as a result of which it had suffered loss and damage. Mr Le Page in his affidavit sworn on 21 June 2004 in support of the summary judgment application says "that there were a number of flaws in the VentureAxess proposal and that while these flaws existed, it would be extremely difficult for VentureAxess to raise capital."

72 There is clearly a dispute of fact as to whether the advice given by the respondent was appropriate and correct or not, and whether the failure to raise capital was due to the respondent's inappropriate advice or the appellant's reluctance to accept the respondent's correct advice. It is well established law that a court does not dispose of the factual merits on a conflict of affidavits: Jacob v Booth's Distillery Co (1901) 85 LT 262.

73 Counsel for the respondent argued that the appellant had failed to identify a breach of contract "sounding in damage" or negligence. He relied on the case of Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109 at 113 for the principle that a defendant who wishes to defend a summary judgment application needs to "condescend upon particulars". However, in Whitehall Holdings Pty Ltd and Whitehall Properties Pty Ltd v Ravi Nominees Pty Ltd & Ors, unreported; FCt SCt of WA; Library No 9189; 13 December 1991, Seaman J held as follows:

"However the requirement is for a condescension to the particulars of an arguable defence, not the defence in its complete form, and a statement of the facts which go to show that it is arguable and not the facts which would be necessary to establish it at trial, as in my view emerges from what Lord Blackburn said in Wallingford v Mutual Society."

74 Accordingly, it is not necessary for a defendant to a summary judgment application to set out in full detail the facts which support each cause of action upon which he or she relies. It is only necessary that the defendant provide facts which show that there is an arguable defence. On the facts set out in the affidavit by Mr Mullins it is arguable that the appellant may prove a defence of a substantial breach of contract or breach of a duty of care or misleading and deceptive conduct.

75 The question of what legal remedies might flow from the facts deposed to in the affidavit by Mr Mullins was not fully argued before me. In Australian Can Co Pty Ltd v Levin & Co Pty Ltd [1947] VicLawRp 47; [1947] VLR 332 at 335 Herring CJ and Lowe J in a joint judgment said the following with regard to the test to be applied on analysis of the defendant's affidavit:

"Whatever the language various Courts have used, it seems to us that the substance of the criterion to be applied is that after the matter involved has been explained to the Judge there must be a real uncertainty without full argument or further investigation of the facts as to the plaintiff's right of judgment."

76 In my view on the facts set out in the affidavits of Mr Mullins and Mr Le Page there is a "real uncertainty" that the respondent is entitled to payment of the sum claimed from the appellant in respect of the services performed.

77 As indicated above the appellant has made an application for leave to file the affidavits of C P Stokes, Karalyn Jeannette Day and Geoffrey Ernest Mullins as further evidence in the appeal. I am prepared to allow this application as the circumstances in which it came about that the summary judgment was granted in the absence of the appellant are exceptional. In light of the explanation by Ms Day in her affidavit as to why the appellant was absent on the hearing of the summary judgment application, justice requires that the appeal be allowed and the summary judgment be set aside. The facts deposed to in the affidavit by Mr Mullins show that the appellant has an arguable defence to the respondent's claim.

78 I summarise the conclusions that I have arrived at in this matter as follows:

1. The appellant is entitled to proceed by way of appeal to this Court even though the appellant may also have been able to set aside the summary judgment by way of application in the Magistrates Court.

2. By reason of the exceptional circumstances of the background to this case the additional affidavits filed on behalf of the appellant by Mr C P Stokes, Ms Day and Mr Mullins should be admitted as additional evidence on the appeal.

3. Pursuant to O 8, r 30 of the Rules of the District Court this Court has the jurisdiction to set aside the summary judgment granted by the learned Magistrate in the circumstances where the learned Magistrate did not necessarily make an error, but where, on the basis of the additional evidence allowed, it would be proper to ensure the determination on the merits of the real question in controversy between the parties that the summary judgment be set aside.

4. Although the explanation provided for the appellant's delay in the period after the grant of the summary judgment and before the application was made to set it aside in the Local Court is scant, in the circumstances of this case the appellant should not be held responsible for the neglect of its solicitors to speedily take steps to set aside the summary judgment and the appellant should be granted leave to extend the time for filing of the notice of appeal.

5. The summary judgment should be set aside in light of the circumstances which prevailed at the time that the summary judgment was granted, and notably the fact that the appellant was absent at the hearing of the summary judgment application by reason of a misunderstanding on its behalf.

6. As the further affidavit by Mr Mullins has provided sufficient facts to raise a "real uncertainty" whether the respondent was entitled to judgment on its summary judgment application, the appellant is to be given unconditional leave to defend the respondent's claim.

1. The appellant be granted an extension of time for leave to appeal from the summary judgment granted in the Local Court of Perth on 23 July 2004;

2. The appeal be allowed and the summary judgment dated 23 July 2003 be set aside;

3. The appellant be granted unconditional leave to defend the respondent's claim;

4. The respondent pay two-thirds of the appellant's costs of this appeal to be taxed, unless agreed.

5. The judgment sum paid by the appellant to the respondent be repaid within 14 days.