BETWEEN : SUSAN ANNE WARD as executrix of the estate of DOROTHY MURIEL LUKIN

JULIA MURIEL LAURISSON as executrix of the estate of DOROTHY MURIEL LUKIN

SUSAN ANNE WARD as administratrix of the incapable estate of LOUISE LUKIN

JULIA MURIEL LAURISSON as administratrix of the incapable estate of LOUISE LUKIN

Practice and procedure - Springing order - Non-compliance with springing order by first defendant - Application to extend time for compliance refused - Plaintiffs' action against second defendant dismissed by consent - Subsequent application to extend time for compliance - Whether an extension of time would be in the interests of justice - Turns on own facts

Law Reform (Contributory Negligence and Tortfeasers Contribution) Act 1947 (WA)

Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175

Attorney-General of Botswana v Aussie Diamond Products [No 2] [2009] WASC 301

FAI General Insurance Co Ltd v Southern Cross Exploration NL [1988] HCA 13; (1988) 165 CLR 268

Homestyle Pty Ltd v City of Belmont [1999] WASCA 59

James Hardie & Co Pty Ltd v Seltsan Pty Ltd [1998] HCA 78; (1998) 196 CLR 53

J-Corp Pty Ltd v Pannell Kerr Foster (A Firm) [2007] WASC 122

Rafferty v Time 2000 West Pty Ltd (No 3) [2009] FCA 727; (2009) 257 ALR 503

Ward v Keet [No 3] [2010] WASC 71

1 ALLANSON J: The applicant is the first defendant to a claim for damages brought by the plaintiffs. Judgment has been entered against him on the plaintiffs' claim, and also on his claim for contribution against the second defendant. Each judgment was entered following the first defendant's failure to comply with a springing order. The first defendant now seeks orders extending time for compliance with those springing orders, and to set aside each of the judgments.

2 In a late amendment to the application, he also seeks an order to set aside judgment entered by consent between the plaintiffs and the second defendant, dismissing the plaintiffs' action against the second defendant.

3 The first defendant is an accountant who acted for the plaintiffs. The first and second-named plaintiffs are sisters. They are the executors of their late mother's estate, and the administrators of 'the incapable estate' of their older sister. They brought proceedings against the first defendant and the National Australia Bank Ltd (second defendant) in their representative capacity on behalf of both estates. The third plaintiff is a family company associated with the other plaintiffs. The plaintiffs claimed that an employee of the first defendant misappropriated a large amount of money from their account with the second defendant, and that both defendants are liable for that loss.

4 This is the second application by the first defendant to extend time to comply with the springing order in the plaintiffs' action. On 9 April 2010, Murphy J dismissed a similar application. The background to the proceedings is conveniently set out in pars [6] - [12] of his Honour's judgment on that occasion: Ward v Keet [No 3] [2010] WASC 71.

5 In dismissing the application, Murphy J stated, at [29] - [36]:

1. The springing orders were made on 5 March 2010 in circumstances where:

(a) the proceedings had been on foot for nearly four years and the alleged defalcations had occurred over a lengthy time going back to 2000. Although not insignificant delay arose in connection with the trial of the preliminary issue, it was obvious that the nature and subject matter of the proceedings called for a trial as soon as possible after the disposition of the preliminary issue;

(b) programming orders had been made in December 2009 in respect of which the first defendant was in default in a number of respects;

(c) there is no evidence of what steps, if any, the first defendant or his solicitor took with a view to complying with the directions made on 11 December 2009 in respect of which he was in default;

(d) there had been a process of consultation prior to the hearing and no objection made at the hearing by the first defendant's counsel, at a time when the first defendant was in court himself;

(e) the first defendant could have been in no doubt about the scope and effect of the springing order;

(f) the springing orders related to the use of discovery documents for trial. The first defendant must have known from at least May 2009 (when he notified the court of his intention to act in person) that his documents were in the possession of his former solicitors. The first defendant's solicitor deposes that he also knew that to be the fact by at least 5 March 2010, but there is no evidence that he did not know that to be the fact prior to then, including when directions were made on 11 December 2009;

(g) there is no evidence that the first defendant did anything between 11 December 2009 and 19 February 2010 (when order 19 of the directions was to be complied with) or between 20 February 2010 and 5 March 2010 (when the springing orders were made), to retrieve the documents or ensure that he and his current solicitors had access to the documents for the purposes of being in a position to comply with the programming orders toward trial made on 11 December 2009; and

(h) the action was in the CMC list, the general objective of which is to have cases resolved at trial (or mediation) in the quickest and most cost-effective way: Supreme Court Practice direction 4.1.2 par 7.

1. The reason for non-compliance which is given is that the first defendant and his present solicitors could not obtain access to the documents required to comply with the orders because a lien was being claimed over the documents by the first defendant's former solicitors. Counsel for the first defendant submitted, in effect, that extra time is required to compel the former solicitors to provide access to the documents in accordance with the principles in Rafferty v Time 2000. He emphasised the fact that the first defendant's former solicitors had instigated the cessation of their retainer.

Following a substantial quote from Rafferty v Time 2000 West Pty Ltd (No 3) [2009] FCA 727; (2009) 257 ALR 503, his Honour continued:

1. In my view, the reason advanced for non-compliance is unsatisfactory in the context of this application for the following reasons.
2. First, there is no evidence that at least the prospect of the first defendant's solicitors claiming a lien over the documents was not known to the first defendant, or his solicitors, on 11 December 2009 when programming orders were made for the purposes of bringing the matter to trial, or shortly thereafter. The first defendant's solicitor has not deposed to when he first knew of the claimed lien. As I have said, there is no evidence of what the first defendant did, if anything, in relation to any attempt to comply with the directions of 11 December 2009. There is no evidence explaining why any obstacle with respect to access to the documents could not have been identified (if not already known) by or shortly after 11 December 2009. Nor is there evidence that any obstacle could not at least have been sought to be overcome by application to the court, or negotiation, by 5 March 2010.
3. Secondly, there is no, or at least no adequate, explanation as to why any application to compel production of the documents was not taken by 12 March 2010. The first defendant's solicitor knew of the claimed lien by at least 10 March 2010. Indeed, his letter of 10 March 2010 suggested that the lien was properly claimed. It is not apparent on the evidence why first contact was left to a date two days before the orders would spring. The first defendant's solicitor also knew that the first defendant's former solicitors wished to speak to the first defendant directly before there was any potential release of the documents. I have also found that the first defendant's solicitor must have reported that communication to the first defendant promptly. Yet, the first occasion that the first defendant spoke to his former solicitors in that regard was on 29 March 2010, over two weeks after the date for compliance with order 1 of the springing orders. There was not only no application on foot by 12 March 2010, but the first defendant evidently decided to let another couple of weeks pass before even making contact with his former solicitors about the matter.
4. Thirdly, even at the hearing on 1 April 2010, there was still no application to retrieve the documents from the first defendant's former solicitors.
5. Fourthly, the reason for non-compliance derives in significant measure from the costs dispute to which the first defendant has referred. However, the first defendant has said no more than, in effect, he has a belief that the 'nature and appropriateness of the work' carried out by his former solicitors does not enable them to charge for it. The evidence lacks cogency in circumstances where the accounts rendered are not in evidence, the nature of the work done and why it was allegedly not appropriate are not sketched out even in a cursory way, and where the affidavit otherwise provides no objective bases upon which the costs are challenged. It appears, from the first defendant's recent intention to consult a costs consultant, that he has not had the bills taxed. There is no evidence, in my view, to demonstrate the prima facie reasonableness of the belief said to be held by the first defendant that his former solicitors are not entitled to charge for the work allegedly done. Nor is there evidence which would give colour to the genuineness of the asserted belief. Mere assertion of the kind provided by the first defendant in his affidavit is insufficient, in my view, where peremptory orders of the court have been disobeyed.
6. Fifthly, even absent such evidence, it might, nevertheless, be relevant to consider whether the first defendant's failure to pay his former solicitors arose simply from impecuniosity, irrespective of any question about whether the costs were genuinely in dispute. In this regard, there is no satisfactory evidence that the first defendant could not raise the sum of $20,000 to make a conditional payment. Even if I had not struck out those parts of his affidavit to which I have referred, and that evidence remained, it is evidence which is so vague that it lacks cogency and no weight could be accorded to it.

6 His Honour also considered the question of prejudice to both parties. Taking everything into account, his Honour was not persuaded that it would be in the interests of justice to grant an extension of time and dismissed the application. The decision was delivered on 9 April 2010.

7 At the hearing of the application on 1 April 2010, Murphy J made a further order at the request of the second defendant requiring the first defendant, by 5.00 pm on 16 April 2010, to comply with orders made on 11 December 2009 that he file and serve his statement of claim in the contribution proceedings, or his claim against the second defendant be struck out and judgment entered for the second defendant.

8 By close of business on 16 April, the first defendant had not complied with the orders made on 1 April 2010 in relation to his claim against the second defendant. On 20 April 2010, the second defendant wrote to the court requesting orders striking out the first defendant's claim and entering judgment against the first defendant for failure to comply with the orders of 1 April 2010. On 20 April 2010, draft orders in those terms were circulated by the associate to Murphy J, inviting comment from parties. No comments or objections were received.

9 On 17 May 2010, the plaintiffs and the second defendant began negotiations regarding a possible settlement of the plaintiffs' claim against the second defendant. On 15 June 2010, the plaintiffs accepted an offer of $40,000 from the second defendant in full and final settlement of their claim against the second defendant. The agreement was subject to a deed of settlement between those parties. That deed was executed on 12 July 2010. Consent orders dismissing the plaintiffs' action against the second defendant were filed on 22 July 2010, and judgment was entered on 4 August 2010.

10 At the same time, the first defendant was active in attempting to rectify matters. On 29 April 2010, the first defendant's former solicitors, Patrick Legal, released documents to his present solicitors. The first defendant says the release of documents was incomplete, and the documents were disorganised. On 7 May 2010, his present solicitors wrote to the court requesting an index of (filed) court documents, and on 24 May 2010 wrote again to the court requesting copies of some filed documents.

11 On 14 June 2010, the first defendant filed a minute of proposed statement of claim in the third party proceeding against the second defendant, notwithstanding that judgment had been entered and no application had yet been made to further extend time. The minute of proposed statement of claim was sent to the second defendant by fax on 15 June 2010. It was received shortly after the email by which the plaintiffs communicated their acceptance of the settlement offer made by the second defendant.

12 On 29 June 2010, the first defendant's solicitors wrote to the plaintiffs, the second defendant and the third party, advising that the first defendant's discovered documents and documents for tender at trial were ready for inspection, and advised which of the documents could be tendered by consent. On 5 July 2010, the second defendant's solicitors responded that judgment had been entered and no question of inspection of documents arose.

13 On 30 June 2010, the first defendant circulated a draft chamber summons to set aside the judgments entered in favour of the plaintiffs and the second defendant. The draft chamber summons set out no grounds. The first defendant did not then, by letter or draft affidavit or otherwise, disclose the facts on which he would rely to support the application. It was not until 6 August 2010, that the first defendant filed a chamber summons to extend time for compliance with the orders of Murphy J, and to set aside the judgments entered pursuant to the springing orders. The application was supported by an affidavit of the first defendant, sworn 5 August 2010. A further affidavit in support, by the first defendant's solicitor, was not sworn or filed until 27 August 2010. It attached medical evidence, to which I will later refer.

14 In any event, since the judgment on 9 April 2010, the first defendant sought to comply with the orders earlier made. By July 2010 he was up to date with the matters which had led to judgments being entered for non-compliance.

15 It is necessary to consider also the actions taken on behalf of the plaintiffs. I have already referred to the settlement of proceedings between the plaintiffs and the second defendant. On 25 May 2010, the plaintiffs' bankruptcy notice filed in the Federal Court of Australia was served on the first defendant. On 17 June 2010, a registrar of the Federal Court dismissed the first defendant's application to set aside the bankruptcy notice. On 27 July 2010, the plaintiffs obtained a property (seizure and sale) order pursuant to the Civil Judgments Enforcement Act 2004 (WA). On 2 August 2010, the plaintiffs applied to register the property (seizure and sale) order with Landgate.

16 On 3 September 2010, I heard the application filed on 6 August 2010. At the hearing, the first defendant also applied for an order under s 15 of the Civil Judgments Enforcement Act to suspend enforcement of the plaintiffs' judgment. On 6 September 2010, I dismissed that application.

17 The first defendant filed two affidavits in support of the application: one by himself, and one by his solicitor, Ronald William Bower.

18 The first defendant's affidavit was sworn on 5 August 2010. The first defendant is now 77 years old. He still runs an accounting practice with the assistance of a practice manager. At par 6 of his affidavit, the first defendant offers the following explanation for why he did not comply with the orders:

(i) because I could not pay fees owed by me to a solicitor who had formerly acted for me, I was unable to produce for inspection documents in the possession of that solicitor; and also

(ii) because my solicitors did not have the necessary documents in their possession evidencing the matters to be pleaded in my statement of claim against the Second Defendant, it was not possible for my solicitors to prepare my statement of claim against the Second Defendant. For the same reason, my solicitors were unable to prepare my statement of claim against the Third Party.

19 The substance of those explanations was before Murphy J when he made his decision in April 2010. The first defendant tried, however, to meet some of the criticisms made by his Honour about the evidence on that occasion.

20 The first defendant states that from late December 2009 his accounting practice suffered a severe decline in cash receipts due to a change in policy by the Australian Taxation Office in its processing of tax refunds. I accept, in general terms, that there was such a decline in cash receipts. The information, however, is incomplete and difficult to relate to the matters in issue. For example, in support of the claim regarding the decline in cash flow in his business he provides bank statements for the trust account only. The financial position of his accounting practice is still unknown.

21 In discussing his assets and liabilities, the first defendant refers to the need to borrow money from his daughter in April 2010. In support of that statement he attaches an Acknowledgement of Debt, drawn by the firm of solicitors which represented him in family law proceedings. Those proceedings ended in June 2010. The Acknowledgement of Debt records the first defendant lending money to his daughter.

22 The first defendant also attaches a summary of his assets and liabilities. Inexplicably, some of the summary is up to date and some is not. For example, it records a sizeable credit card debt 'as at 29 December 2009', while also recording adjustments made in family law proceedings in June 2010. Further, even while recording a liability for a judgment debt in favour of the plaintiffs in the sum of $836,477.56, the statement records a healthy net asset position. The applicant owns several properties. There is nothing before me about whether any of them produces income.

23 The first defendant refers also to the strain of the concurrent Family Court proceedings:

The personal emotional stress from my relationship breakdown and the subsequent family court proceedings reduced my ability to deal efficiently and promptly with other matters that were occurring, including my dispute with my former solicitors, Patrick Legal, about the costs they wished me to pay to them for the work they had done as my solicitors in these proceedings in the Supreme Court.

24 The first defendant explains his dispute with his former solicitors, Patrick Legal. The practical effect of the dispute was the inability of his present solicitors to obtain access to documents still held by Patrick Legal. Further, once that dispute had been resolved (after the judgment of Murphy J), at least to the extent that access was given to the documents, the first defendant says that the documents which came were incomplete, disorganised, and required further action by the solicitors to obtain missing documents, including copies of court documents.

25 The first defendant states that the combined strain of the business cash flow problem, the Supreme Court case and the Family Court proceedings affected him physically, and left him feeling anxious and depressed. He had to pass work to his practice manager that he would normally do. At the same time, he was unable to concentrate on the litigation

in such a way as to be able to think through issues and developments in the cases in an efficient and orderly way; and I also had a great deal of difficulty thinking about what my solicitors in those two actions were asking of me and also advising me about the cases, and then responding to the solicitors about those issues.

26 The first defendant refers to two operations which he underwent in 2009. Both of them are well before the relevant period, and there is no apparent relationship between those events and the non-compliance.

27 Finally, the first defendant refers to the delay in bringing this application. On advice, the application was not brought until the first defendant had complied with the directions and orders in respect of which he had been in default. The first defendant thus approached the court without the risk that he would be unable to comply with an extended time limit.

28 Mr Bower has been the first defendant's solicitor since August 2009, when he represented him at the trial of a preliminary issue. Mr Bower states that he noticed at the trial that the first defendant agreed with propositions put to him by counsel for another party that were 'completely at odds' with his statement of evidence and, both then and later, appeared to be unaware of the variance. I can accept this as evidence of Mr Bower's observations.

29 In early 2010, Mr Bower again noticed the first defendant having some difficulty in remembering details. He would occasionally miss appointments. He refers to difficulty in obtaining input from the first defendant, with occasions where the first defendant's responses 'were often not to the point, inconsistent with earlier instructions, or expressed by him with reference to his doubt as to the accuracy of his memory'. Later, Mr Bower states that he experienced delays and incapacity to comply with deadlines 'as the result of the receipt of uncertainly-expressed, incomplete and contradictory instructions'.

30 Mr Bower states that it was only in late February or early March 2010 that the first defendant informed him that his former solicitors had a substantial file of documents relevant to the action. He only learned about the involvement of Patrick Legal at that time.

31 As a result of his concerns, Mr Bower suggested that the first defendant talk to his doctor. He attaches to his affidavit two letters from the first defendant's general practitioner, Dr Fox, and a report from Dr Nguyen of the Memory Clinic at Sir Charles Gairdner Hospital. The letter from Mr Bower requesting Dr Fox's report is dated 4 August 2010.

32 The first letter from Dr Fox is dated 8 April 2010 and addressed to solicitors acting in the family law proceedings. There is no evidence about why the letter was written, or any questions the doctor was asked. Dr Fox refers to the first defendant dealing with a number of difficult legal cases, and states that

this has made him quite anxious together with symptoms consistent with a depressive illness.

33 While, having regard to the first defendant's age, Dr Fox could not exclude 'some very early dementia' he had not then seen any evidence of memory loss or cognitive impairment.

34 The next report, in chronological order, is that of Dr Nguyen of 9 July 2010. Dr Nguyen's report is also inconclusive. He notes a history, including that the first defendant continues to manage his own finances and denies any history of financial issues such as late bills. The first defendant continued then to work part-time as an accountant, and was also a vineyard owner.

35 Dr Nguyen records symptoms suggestive of depression which the first defendant reported to have been ongoing for the previous eight years. In conclusion, he describes the first defendant as 'a 76 year old man with likely mild cognitive impairment but a relatively preserved functional status'. Dr Nguyen sets out a plan, including blood tests and psychological assessment, but there is no evidence about whether the first defendant underwent any further testing or assessment, and, if so, with what results.

36 Finally, in a letter dated 11 August 2010 to the first defendant's solicitors, Dr Fox gives a more complete history. He states that the first defendant presented in January 2010 with major depression, and was treated with antidepressant and anxiolytic medication. In April 2010, Dr Fox provided the letter already referred to. Later, on 19 and 28 April 2010, he saw the first defendant again and noted that he had missed appointments and his history was sometimes inconsistent. He arranged for a CT brain scan, the result of which 'would support but not prove a diagnosis of a dementing illness'. Dr Fox arranged the specialist review at the Memory Clinic. He concludes:

I suspect Mr Keet does have early dementia. He has had clinical depression which I suspect was secondary to his legal issues and the break-up of his marriage ... As he presents as a high-functioning sociable and affable individual it is possible that he has had some subtle cognitive decline as the result of early dementia for the past 12-18 months which has not been immediately obvious.

37 His uncertainty about historical details at the hearing in August 2009 'could be the result of early dementia, perhaps aggravated by anxiety and depression'.

38 In summary, the medical evidence supports a conclusion that the first defendant may, during the relevant period, have been affected by depression and anxiety, and by mild cognitive impairment and early signs of dementia. It does not, however, state how and to what extent the first defendant may have been affected. I can make no finding about how the first defendant's conduct in the litigation was affected. I am not satisfied that illness is the reason for the first defendant's failure to comply with the court orders. It may have had some effect, but I can say nothing more definite than that.

39 The plaintiffs rely on an affidavit of Susan Anne Ward, the first named of the plaintiffs. Ms Ward is 71 years old. The second named plaintiff, Julia Laurisson, is 70 years old. Their sister, Louise Lukin, is 73 years old, lives at a nursing home, and requires 24 hour care.

40 Ms Ward states that she and her sister have suffered under considerable pressure and strain, both financially and emotionally during the course of this matter. The money which was misappropriated by the first defendant's employee was to be used, at least in part, for Louise Lukin's ongoing care and general wellbeing.

41 Significantly, Ms Ward states that the main reasons the plaintiffs accepted a relatively low amount in settlement of their claim against the second defendant was because, at the relevant time, they had judgment in full as against the first defendant; the first defendant had made no application to appeal the decision of Murphy J or set it aside; and the plaintiffs had been informed, by way of Landgate searches, that the first defendant owned more than sufficient real property in Western Australia to satisfy the judgment.

42 The second defendant relies on an affidavit of Jeffery Lin, solicitor. Mr Lin sets out the history of the matter in some detail, leading up to the hearing before Murphy J on 1 April 2010, and after the judgment. That history is recounted in an earlier section of these reasons.

43 Mr Lin also states his belief, and the reasons for it, that a major consideration in the second defendant agreeing to settle with the plaintiffs was the fact that judgment had been entered in favour of the second defendant in the contribution and indemnity proceedings brought by the first defendant.

The judgment in the claim between the plaintiffs and the second defendant

44 The first defendant's claim against the second defendant is for contribution under s 7(1)(c) of the Law Reform (Contributory Negligence and Tortfeasors Contribution) Act 1947 (WA). Under that section, where damage is suffered by any person as the result of a tort:

any tortfeasor liable in respect of that damage may recover contribution from any other tortfeasor who is or would if sued have been liable in respect of the same damage whether as a joint tortfeasor or otherwise.

Under the settlement reached between the plaintiffs and the second defendant, judgment has been entered dismissing the plaintiffs' claim against the second defendant. That judgment has the legal effect that the second defendant is not liable as a tortfeasor or otherwise in terms of s 7(1)(c): James Hardie & Co Pty Ltd v Seltsam Pty Ltd [1998] HCA 78; (1998) 196 CLR 53.

45 The first defendant recognises the hurdle posed by the judgment between the plaintiffs and the second defendant. He accepts the need for that judgment to be set aside if the application to have time extended is not futile, at least as regards his contribution proceedings against the second defendant. As a late amendment to the application, he sought an order that the court set the consent judgment aside. I have not, however, been shown any basis upon which the court has power to set aside that judgment.

46 The first defendant makes no allegation that the judgment was entered by fraud, or that there is some other basis upon which it might be vitiated.

47 In written submissions, the first defendant asserted that the plaintiffs and the second defendant settled their claim 'in full knowledge of the procedural options available to the [f]irst [d]efendant' and did not inquire whether he intended to attempt to set aside the judgments before they effected their settlement. The first defendant further submitted (although it was not pressed in oral submissions) that the plaintiffs voluntarily assumed the risk of entering into the settlement. In oral argument, counsel submitted that the interests of justice require that the claims be determined on their merits.

48 None of those matters establish any source of power to set aside the consent judgment. Further, even if there were power, I am unable to accept any of those submissions as a sufficient basis on which to exercise it. The plaintiffs and second defendant began negotiations on 17 May 2010 - over a month after the judgment of Murphy J. No application had then been made to appeal or otherwise challenge that decision. The parties reached agreement on 15 June 2010. The draft chamber summons, foreshadowing this application, was not circulated until 30 June 2010 and the application was not brought until August 2010.

49 In oral submissions, the first defendant also sought to avoid the effect of the consent judgment by referring to the fact that he had not been heard in relation to the entry of that judgment - relying on the comments of Gaudron and Gummow JJ in James Hardie v Seltsam [16] - [20]; and see Rules of the Supreme Court 1971 (WA), O 18 r 6(2); Homestyle Pty Ltd v City of Belmont [1999] WASCA 59 [30]. However, at the time the consent judgment was entered, the first defendant had been a party until judgment had been entered against him by each of the other parties. He had then made no application to set those judgments aside. In those circumstances, in my opinion, he had no continuing entitlement to be heard on the application to enter judgment.

50 Further, in J-Corp Pty Ltd v Pannell Kerr Foster (A Firm) [2007] WASC 122 [33], Master Newnes (as his Honour then was) held that the fact that the second and third defendants in that case were not aware of a consent order until after it had been made was immaterial.

51 As matters now stand, the claim between the plaintiffs and the second defendant has been dismissed. The second defendant is no longer liable to the plaintiffs for the damage they suffered and is not liable to make a contribution under s 7(1)(c). Any extension of time for the first defendant to file a statement of claim against the second defendant would be futile.

52 I will deal with the application to extend time in relation to both the plaintiffs and the second defendant together.

53 First, it is common ground that the court has power to extend time under a springing order which has 'sprung': FAI General Insurance Co Ltd v Southern Cross Exploration NL [1988] HCA 13; (1988) 165 CLR 268. No party submitted that the power to extend time is affected by the earlier decision of Murphy J.

54 Second, I should have regard to the principles of case flow management. The rules of the court are to be applied and its processes and procedures conducted so as to best ensure the attainment of the objects referred to in O 1, r 4B(1); and see Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175. The first of those objects is promoting the just determination of litigation.

55 All factors relevant to the exercise of the discretion to permit an extension of time must be weighed, including the fact of substantial delay by the first defendant which led to the making of the springing orders in the first place; the further delay since judgment was entered; the wasted costs which the extension might produce (including the costs incurred by the plaintiffs in seeking to enforce their judgment). Consideration must also be given to the explanation given by the first defendant for his non-compliance, and for the subsequent delay in applying for judgment to be set aside and time extended. I must have regard to the prejudice to each party. I am not in a position, on the material put before me, to make any assessment of the strength of the first defendant's case.

56 I am particularly concerned about the possible effect of major depression on the ability of the first defendant to properly conduct the action. But the medical evidence presented is weak and inconclusive, and I can make no positive finding. On the evidence before me, I am not satisfied that the first defendant's conduct in failing to comply with the orders of Murphy J is attributable to any cognitive or other medical problem.

57 I have allowed for difficulties caused by the retention of documents by the first defendant's former solicitors. I take into account the obvious prejudice to the first defendant should judgment be enforced against him, either by property sale or by bankruptcy. Bankruptcy would have a particular effect on the first defendant due to his profession as an accountant.

58 There is, however, force in the submissions made on behalf of both respondent parties regarding whether the first defendant has sufficiently explained the delay leading to the execution of the springing orders, and the further delay after judgment was entered. The application required the first defendant to give proper and candid explanation for the delay: Attorney-General of Botswana v Aussie Diamond Products [No 2] [2009] WASC 301 [70]; Aon Risk Services Australia Ltd v Australian National University [103], [107] - [109].

59 The first defendant's evidence, both financial and medical, is still presented at a high level of generality. I am also concerned that the first defendant's solicitors only requested a report from Dr Fox as late as 4 August 2010.

60 I must still speculate about the precise state of the first defendant's financial circumstances and how they affected his position. For example, I am unsure whether the first defendant was unable to pay his former solicitors in order to obtain access to the documents held by them, or was refusing because of his dispute about the quality of their work. Despite his assertion that he did not have the funds to pay $20,000, that assertion is difficult to accept in the light of the financial circumstances he discloses.

61 Further, as the second defendant submits, the first defendant has not explained what documents he did not have but needed to plead his statement of claim against them. Before Murphy J, counsel for the first defendant acknowledged the possibility of pleading a claim without documents, but which might later have to be amended.

62 I also take into account the delay, and the prejudice suffered by the plaintiffs, including the '[n]on-compensable inconvenience and stress' of litigation: see Aon Risk Services Australia Ltd v Australian National University [100] - [101]. I have regard to the plaintiffs' ages, the time these proceedings have been before the court, and the steps they have already taken in enforcement.

63 I particularly take into account the prejudice to the plaintiffs from the settlement of their claim against the second defendant. I accept the evidence of Ms Ward that the judgment against the first defendant was one of the main reasons the plaintiffs accepted the relatively low amount of $40,000 in compromise of their claim against the second defendant. When they accepted the second defendant's offer of settlement, the first defendant had made no application to appeal the decision of Murphy J or to set it aside. The first defendant appeared to have real property in Western Australia sufficient to satisfy the judgment.

64 I also accept the evidence on behalf of the second defendant that the judgment entered in the contribution proceedings was material to their decision to settle with the plaintiffs.

65 Most importantly from the point of view of the second defendant, I accept the submission made on their behalf that to extend time and set aside their judgment against the first defendant would be futile, for the reasons I have given above.

66 In all the circumstances, and particularly having regard to the change in the legal situation brought about by the entry of judgment in the claim between the plaintiffs and the second defendant, I am not satisfied that the orders sought by the first defendant would result in justice being done between the parties.