Australian Lending and Finance Pty Ltd v D & D Properties Australia as trustee for the D & D Property Trust

1. [1]

   HER HONOUR: This is an application, to be dealt with on the papers, referred to me in the Applications List by the Equity Registrar following the making of certain self-executing orders by consent by the Registrar on 22 July 2021. The plaintiff seeks the entry of orders in accordance with prayers 1 to 7 of its notice of motion filed on 14 July 2021. In support of that application, the plaintiff relies on an affidavit sworn 3 August 2021 by the plaintiff’s solicitor, Mr Florian Ammer, on 3 August 2021 (Mr Ammer’s affidavit).

Background

1. [2]

   The underlying dispute, as appears from the pleadings filed in this matter, relates to claims by the plaintiff (as mortgagee in respect of three properties securing moneys due under certain facility agreements) for a liquidated sum ($10,918,561.80 plus contractual interest from 23 June 2020) and possession of the properties in question (as well as leave to issue a writ of possession for the land comprising those properties).

2. [3]

   The statement of claim was filed on 23 June 2020.

3. [4]

   A defence was filed for the respective defendants on 13 October 2020 (comprising mainly bare admissions, denials or non-admissions) including, in answer to the whole of the statement of claim: at [35], allegations as to the payment in full of the principal on 19 December 2017 and an alleged agreement as to the settlement of the claim for an additional amount apparently referable to interest (albeit that it appears that the settlement of the interest claim was not ever finalised); and, (at [36], an allegation that the plaintiff engaged in unconscionable conduct within the meaning of ss 12CA, 12CB and 12CC of the Australian Securities and Investment Commission Act 2001 (Cth) (particularised by reference, among other things, to the terms of the purported credit facility being extortionate, unjust and extravagant – with interest rates purporting to be 48% per annum and a discounted interest rate of 24% per annum).

4. [5]

   A reply, joining issue with the whole of the defence and asserting that there was no agreement as alleged at [35](b) of the defence, was filed on 4 December 2020.

5. [6]

   On 5 February 2021, the Registrar made orders in the proceeding (the February Orders) which provided, inter alia, for the service by the plaintiff of the plaintiff’s evidence by 16 March 2021 and the service by the defendants of their evidence by 20 April 2021.

6. [7]

   The plaintiff served its evidence (late) on 1 April 2021. On 28 May 2021, the Registrar made orders by consent (the May Orders) which provided, inter alia, that the time for the defendants to serve their evidence was extended to 10 June 2021 (Order 1) and that, in the event that the defendants did not serve their evidence in accordance with Order 1, the defendants’ defence be struck out with effect from 11 June 2021, pursuant to r 12.7 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) and the plaintiff be at liberty to apply for default judgment (Order 5).

7. [8]

   The defendants did not serve any evidence in accordance with Order 1 of the May Orders (see Mr Ammer’s affidavit at [3]). Accordingly, the effect of order 5 of the May Orders was that the defendants’ defence was thereby struck out as from 11 June 2021.

8. [9]

   On 14 July 2021, the plaintiff filed the present notice of motion, seeking default judgment in the sum of $15,641,543.40 and orders for possession of the three mortgaged properties (as well as consequential orders for leave to issue a writ of possession and liberty to sell two of the properties subject to first obtaining consent to the sale and the terms of such sale from any prior mortgagee). The plaintiff points out that (at that stage) no evidence had been served by the defendants in the proceeding (see Mr Ammer’s affidavit at [7]).

9. [10]

   On 22 July 2021, the Registrar made further orders by consent (the July Orders) which provided, inter alia, that the defendants serve their evidence in the substantive proceeding, in the form of sworn or affirmed affidavit(s), by 2 August 2021 (Order 1). Order 2 of the July Orders (by consent) provided that, if there was compliance with Order 1, the defence that had been struck out be reinstated. Order 3 of the July Orders provided that, if the defendants failed to serve their evidence in accordance with Order 1, then orders be made on 3 August 2021 in accordance with prayers 1 to 7 of the plaintiff’s notice of motion (Order 3). In other words, the orders contemplated by Order 3 of the July Orders included entry of default judgment in favour of the plaintiff in the specified amount.

10. [11]

    The defendants failed to comply with Order 1 of the July Orders by 2 August 2021 as required (see Mr Ammer’s affidavit at [6]). Rather, they served their evidence on 3 August 2021 (i.e., one day late).

11. [12]

    The plaintiff’s position is that, as of 3 August 2021, the proceedings had been brought to an end pursuant to Order 3 of the July Orders (which they note – and the defendants here accept – was self-executing) and that, beyond orders which are ancillary to Order 3 of the July Orders, the Court no longer has power to make orders in the proceeding. The plaintiff relies in support of that position on Bailey v Marinoff (1971) 125 CLR 529; [1971] HCA 49 (Marinoff) and Gamser v The Nominal Defendant (1977) 136 CLR 145 (Gamser).

12. [13]

    In Marinoff, the relevant orders were that the appellant file and serve appeal books on or before a specified date and that, if the appeal books were not filed and served on or before that date, then the appeal was to “stand dismissed for want of prosecution”. It appears that, while the appeal books were filed on the requisite date, they were not served until some six days later. The appellant subsequently filed a notice of motion seeking an order to the effect that the date by which the appeal books had been filed and served be deemed sufficient compliance, such relief being granted by the Court of Appeal.

13. [14]

    The question as to whether there was power to make such orders went to the High Court, where Menzies J said (at 531):

14. [15]

    His Honour (at 533) referred to the decision in Goodwin v Southern Tablelands Finance Co Pty Ltd (1968) 42 ALJR 309 (Goodwin), and said:

15. [16]

    At 530 in Marinoff, Barwick CJ (with whom the majority agreed) said:

16. [17]

    The plaintiff in the present case submits that the language of Order 3 in the July Orders (that, if the defendants failed to serve their evidence in accordance with Order 1, orders should be made on 3 August 2021 in accordance with prayers 1 to 7 of the plaintiff’s notice of motion, including entry of default judgment) is to the same effect, although worded differently from the self-executing order in Marinoff (where the order provided that the proceeding was to “stand dismissed”). The plaintiff submits that, upon the defendants’ non-compliance with Order 1, orders in the nature of default judgment for the plaintiff were to be made.

17. [18]

    As to the reliance placed by the plaintiff on Gamser (which did not concern the effect of a self-executing order), the plaintiff points to the fact that the Court there affirmed the position in Marinoff, Aickin J saying (at 154):

18. [19]

    The plaintiff also refers to Mango Boulevard v Spencer [2010] QCA 207 (Mango Boulevard), which concerned an appeal from the making of self-executing orders providing, in essence, that judgment would be entered in favour of the plaintiff against the first and second defendants (and the amended defence and counterclaim would be struck out) if the defendants did not serve their list of documents by a particular date. Relevantly, the orders provided that, in the event of non-compliance with the orders and the filing of an affidavit deposing to the failure to do so, the particular paragraphs of the amended defence and counterclaim “shall be struck out” and that “there shall be judgment for the plaintiff against the first and second defendants on the counterclaim …”, with a consequential costs order as there provided. In Mango Boulevard, Fraser JA accepted (at [97]) that the Queensland Court of Appeal was bound by the decisions in Goodwin and in Marinoff to conclude that “a self-executing order may give rise to a judgment upon satisfaction of expressed conditions without any further judicial act”.

19. [20]

    The plaintiff here submits that the self-executing orders in Mango Boulevard are relevantly analogous to the self-executing July Orders despite the difference in wording. In particular, it is noted that Order 3 of the July Orders provides for orders being made in accordance with the plaintiff’s notice of motion upon non-compliance whereas the orders in Mango Boulevard refer to judgment being awarded. The plaintiff submits that the difference in the wording of the orders is not material and their effect is relevantly the same; that is, that the proceedings are concluded in the form of judgment for the plaintiff upon non-compliance with the orders.

20. [21]

    In the alternative, the plaintiff submits that (should the proceeding not have come to an end in relevantly the same way as was held in Marinoff and Mango Boulevard), the Court should now make “or formalise” orders 1 to 7 of the prayers set out in the plaintiff’s notice of motion in circumstances where: the July Orders were made by consent (the defendants being fully informed and aware of the consequences should they not comply with Order 1 of the July Orders); and no application has been made by the defendants to vary or set aside Order 3 of the July Orders pursuant to r 36.16 of the UCPR, the time for which expired on 5 August 2021 (14 days after entry of the July Orders, and after the defendants had failed to comply with the self-executing order and were on notice of the plaintiff’s position). The plaintiff says that there is no prejudice to the defendants by the making of such orders on the basis that it was the defendants’ own conduct in not complying with the July Orders which has brought about the result (the consequences of which they were fully aware).

21. [22]

    The defendants put the position somewhat differently. They contend that the issue arising in this matter is whether they should be granted an extension of time to serve their evidence to 3 August 2021 (the date on which the defendants’ evidence was served), which assumes that there is power so to do.

22. [23]

    The defendants accept that their evidence was served one day after the date (2 August 2021) provided for in the July Orders. However, the defendants’ position is that, given the severity of the matter (namely, that default judgment against the defendants would lead to the loss of the defendants’ places of residence), there should be an exercise of discretion to extend the time for service of the evidence by one day and therefore allow the defence to be reinstated. (That, of course, begs the question as to whether there is any proceeding still on foot in which such a discretion could be exercised or whether the proceeding should be treated as having been regularly concluded; i.e., whether there is power now to make such an order.)

23. [24]

    The defendants say that the outcome they seek would expedite matters, as any order for default judgment would invite an application by the defendants to set this aside. (Again, that seems to me to beg the question as to the power to grant the extension of time here sought, albeit without any formal application, by the defendants – who, I might add, appear to have shown little or no concern for the expeditious conduct of the matter to date, having been in default of both the May and July Orders.)

24. [25]

    Insofar as the plaintiff relies on the principles set out in Marinoff and Gamser, the defendants submit that those authorities should be “disregarded” (a somewhat extraordinary proposition if it is hereby suggested that a judge at first instance is able arbitrarily to disregard appellate authorities, including the ultimate appellate authority). To be charitable, I will assume that what is there meant is that the authorities relied upon by the plaintiff are either distinguishable or not binding on the particular issue here before me.

25. [26]

    More pertinently, the defendants submit that there is power to extend the time for compliance with a self-executing order notwithstanding that the time for compliance with that order has passed and the order has come into effect.

26. [27]

    Reliance for that proposition is placed on FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268; [1988] HCA 13 (FAI). In FAI the issue before the High Court was as to whether the then Supreme Court Rules 1970 (NSW) (Pt 2, r 3 of the Supreme Court Rules) empowered the Court to extend the time allowed by an order made at first instance by Waddell CJ in Eq that the proceeding “be and stand dismissed” unless certain steps were taken by the plaintiffs (involving service on the defendants of detailed particulars of facts, matters and circumstances to be relied on by the plaintiffs in support of any application, among other things to re-open the plaintiff’s case and to provide security for costs). The plaintiffs had failed to comply with those orders and the proceeding was dismissed.

27. [28]

    The Court of Appeal (Priestley JA, with whom Hope and Glass JJA agreed) held that Waddell CJ in Eq had erred in holding that there was no power to extend the time for compliance with that order. The High Court affirmed the decision of the Court of Appeal that there was jurisdiction to extend the time prescribed by the self-executing order that had been made at first instance by Waddell CJ in Eq. In the High Court, Wilson J said (at 283-284), having referred to both Marinoff and Gamser, that:

28. [29]

    The defendants note that, as to Marinoff, Wilson J said (at 285) that:

29. [30]

    The defendants therefore submit that there is discretion to extend the time limit of the self-executing orders made on 22 July 2021. Emphasis is placed on the fact that the delay was only one day. It is submitted that if the defence is not reinstated (which seems to acknowledge the effect of the first round of self-executing orders which was that the defence was struck out) then this will “only further delay” matters (since the defendants “may” then apply for an application to set aside the default judgment).

30. [31]

    Reference is made to the observation by Gaudron J in FAI (at 288), that:

31. [32]

    The defendants submit that, in the present case, rather than fresh proceedings being brought an extension of the time limit would: save all parties from an application to set aside default judgement; save all parties from additional expense and time; and be in the interest of the administration of law and justice.

32. [33]

    The plaintiff draws a distinction between final judgment and dismissal of proceedings. In that regard, the plaintiff says that FAI concerned a self-executing order which resulted in the dismissal of the proceeding whereas, in the present case, if orders 1 to 7 as sought by it were made, this would operate as a final judgment and it would therefore not be open to the defendants to bring fresh proceedings (as was the case for the plaintiffs in FAI). Further, the plaintiff submits that it would not be open to the defendants to apply to set aside a default judgment entered pursuant to the July Orders, because the orders so made would arise “not by way of default judgment but pursuant to self-executing consent orders”.

33. [34]

    As to the submissions made by the defendants regarding the exercise of any discretion that is here open to be exercised (contrary to the plaintiff’s principal contention that there is now no power to extend the time for compliance with the self-executing orders), the plaintiff cavils with the proposition put by the defendants that a decision not to extend the date for compliance with Order 3 of the July Orders (by one day) would be one that would result in an apparent injustice to the defendants.

34. [35]

    Insofar as the defendants refer to the “severity of the matter”, the plaintiff points out that the defendants were aware of the “severity” of the consequences of non-compliance with the July Orders when they consented thereto; and that it was within their control to avoid such consequences. The plaintiff says that parties in such a position will invariably be able to point to the severity of a judgment or orders made against them; and it is submitted that the severity of the outcome cannot of itself amount to relevant injustice (particularly where the July Orders were made by consent).

35. [36]

    Insofar as the defendants emphasise that their evidence was one day late, it is noted that there had been two prior instances of non-compliance with orders for service of their evidence (though I would add that the first followed delay in compliance by the plaintiff itself and hence cannot fairly be the subject of complaint); and that the May Orders (which were also by consent) included a self-executing order which resulted in the defendants’ defence being struck out as at 11 June 2021. Complaint is made that no evidence was served by the defendants in the proceeding (whether after their defence had been struck out or after the plaintiff filed its application for default judgment on 14 July 2021); nor is there any evidence by the defendants to explain the reason for their default under the May Orders or the July Orders. In those circumstances it is submitted that there can be no relevant injustice.

36. [37]

    The plaintiff submits that the present case is not one where the defendants ought be excused from non-compliance (cf Wilson J’s observation in FAI at [23] that it would be wrong to read the rule there under consideration so as to deny to a court “power to prevent injustice in circumstances where the party subject to a conditional order ought to be excused from non-compliance”), the plaintiff here emphasising that the defendants have already been excused from non-compliance on two prior occasions (again, the first of those two prior occasions seems to have followed default in compliance by the plaintiff itself).

37. [38]

    The plaintiff points out that it could have proceeded with its notice of motion for default judgment, which was first listed before the Court on 26 July 2021; but that, instead, it agreed with the defendants for them to have one further opportunity to serve their evidence and to have their defence reinstated, pursuant to the terms of the July Orders. It is submitted that it was entirely within the control of the defendants whether to agree to those orders, just as it was within their control to comply with them.

38. [39]

    Accordingly, the plaintiff in its reply submissions presses for the relief sought. In summary, the plaintiff maintains that FAI is distinguishable and that, in any event, any extant discretion under r 1.12 of the UCPR to extend the time for compliance under Order 3 of the July Orders should not be exercised because there is no relevant injustice to be remedied. It is submitted that doing so would have the effect of the defendants avoiding any consequences of their default under the self-executing order (to which they consented), and that extending the time for compliance in such circumstances would defeat the nature and purpose of self-executing orders, as well as allowing parties in similar circumstances to default without explanation.

Determination

1. [40]

   As is apparent from the above, the first issue that arises on the present application is one of power, namely, whether, if the effect of non-compliance by the defendants with the self-executing orders (made with the defendants’ consent) in July this year is that the proceeding is at an end (or, in the words of Menzies J in Marinoff, has been regularly concluded), there is power to exercise a discretion after the event to extend time for the filing of evidence (so as in effect, retrospectively, to bring about a situation where the self-executing order has not been triggered).

2. [41]

   There is no dispute as to the fact that there was a failure to comply with the orders made in relation to the filing of the defendants’ evidence by 2 August 2021; nor that this had the effect, pursuant to the consent self-executing orders, that “orders be made on 3 August 2021” in accordance with prayers 1 to 7 of the plaintiff’s notice of motion.

3. [42]

   Turning first to the reliance placed by the plaintiff on Marinoff (which in turn refers to Goodwin), as noted by Wilson J in FAI, Marinoff involved consideration of the powers of an appellate court, not of a judge at first instance (as noted by Wilson J in FAI at 283); and of the power to extend time with regard to an order that a proceeding “stand dismissed”, rather than entry of default judgment as such.

4. [43]

   The plaintiff, as noted above, has pointed to the decision of the Queensland Court of Appeal in Mango Boulevard (at [97]), to the effect that “a self-executing order may give rise to a judgment upon satisfaction of expressed conditions without any further judicial act”. As I understand it, the plaintiff’s principal contention is that the consequence of non-compliance with Order 1 of the July Orders was automatically to give rise to default judgment against the defendants on 3 August 2021, without the need for any further judicial act (and hence that all that is now required is to “formalise” that position).

5. [44]

   However, in Marinoff, the High Court was considering the scope of the Court’s inherent jurisdiction (see Barwick CJ at 530; Menzies J at 531-532). Walsh J (at 537), making reference to Goodwin, said that case stood as “direct authority for the proposition that there is no inherent power to vary an order by which an appeal stands dismissed in a case… [where] the order was formally drawn up and entered before any application to vary it was made” (noting that no question there arose as to the power of the Court to vary an order of that kind if the order, although it was or had become an unconditional order for the dismissal of an appeal, had not yet been taken out).

6. [45]

   In FAI, the plurality (Wilson, Deane, Brennan and Dawson JJ, and Gaudron J in a separate judgment), distinguished Marinoff by drawing a distinction between the Court’s inherent power and the application of the Supreme Court Rules, specifically Pt 2, r 3 and Pt 40, r 9 (later repealed but replicated in similar form in the UCPR (rr 1.12 and 36.16, respectively); see National Australia Bank Ltd v Viziteu [2017] NSWSC 1125 at [8]).

7. [46]

   Gaudron J in FAI (at 289) emphasised the fact that in Marinoff the High Court was considering an order made in the exercise of the Court’s inherent jurisdiction (rather than an order made under a specific statutory power under statute or instrument permitting the extension of the time fixed for a particular action); and hence that the decisions in Goodwin and Marinoff had no necessary bearing on the proper interpretation of the relevant Supreme Court Rule under consideration in the decision then before the Court (Pt 2, r 3).

8. [47]

   The relevant rule in the Supreme Court Rules 1970 (Pt 2, r 3), which was in force at the time of FAI, provided as follows:

9. [48]

   By comparison, r 1.12 of the UCPR provides:

10. [49]

    The Supreme Court Rules (at Pt 40, r 9 – now repealed) stated:

11. [50]

    The equivalent rule under the UCPR (r 36.16) provides:

12. [51]

    In FAI, their Honours did not comment on the proposition in Marinoff that, once a court order has been entered, such a perfected order is beyond recall (except on appeal) and hence the court’s inherent power does not permit interference with such an order. Instead, as noted above, the Court drew a distinction between any inherent jurisdiction to set aside an order that had been perfected, and a specific power under the rules to extend a time fixed either by the rules or an order.

13. [52]

    In FAI, Gaudron J discussed the question as to the point at which a court becomes functus officio. Her Honour did not consider that a court is functus officio after the time for compliance with a self-executing order expires, as there is still a judicial function to be performed, saying (at 289-290):

14. [53]

    Her Honour noted (at 290-291) that it was yet to be considered whether an order which had been duly entered could be the subject of an extension of time for compliance under the court rules:

15. [54]

    Neither Marinoff nor Mango Boulevard expressly considered the doctrine of functus officio. Mango Boulevard was also a case of an order that the proceeding “stand dismissed”, rather than entry of default judgment. The Court there dealt with FAI by stating that, in matters where a court is required subsequently to hear whether the conditions of the self-executing order were satisfied, then judgment is yet to be made and, therefore, time for compliance can be extended; however, it was noted that this was not the course in most cases concerning self-executing orders. At [106], Fraser JA said:

16. [55]

    Having considered the above authorities, and noting the similarity between r 1.12 of the UCPR and Pt 2, r 3 of the Supreme Court Rules, I am bound to conclude that there is power under the UCPR to entertain an application for extension of the time for compliance with the July Orders in the present case (applying the dicta in FAI), even though non-compliance therewith gave rise to default judgment against the defendants. I can see no relevant distinction between the respective iterations of the Court rules in this regard.

17. [56]

    As to the distinction drawn by the plaintiff between an order for default judgment and an order that proceedings stand dismissed (being a basis on which the plaintiff seeks to distinguish FAI) as noted above, the plaintiff says that FAI concerned a self-executing order which resulted in the dismissal of the proceeding whereas, in the present case, if orders 1 to 7 as sought by the plaintiff were made, this would operate as a final judgment and it would therefore not be open to the defendants to bring fresh proceedings (as was the case for the plaintiffs in FAI). The plaintiff here seems to be placing weight on the final effect of a default judgment as opposed to a dismissal of proceedings without a hearing on the merits (the latter being circumstances where it may be open to bring fresh proceedings). I accept that there is a distinction between orders for the dismissal of proceedings without a hearing on the merits and entry of default judgment, although I am not persuaded that this is a relevant point of distinction for the purposes of the present issue to be determined.

18. [57]

    As to the plaintiff’s contention that it would not be open to the defendants to seek to set aside a judgment entered pursuant to prayers 1 to 7 of the plaintiff’s July notice of motion, the making or entry of default judgment (for which provision was made by the July Orders) would not in terms preclude an application, pursuant to r 36.16(2)(a) of the UCPR, for the setting aside of the default judgment. Such a default judgment is not one given in open court – it is one that arises on the failure to comply with a self-executing order. The plaintiff submits that it would not be open to the defendants to apply to set aside a default judgment entered pursuant to the July Orders, because the orders so made would arise “not by way of default judgment but pursuant to self-executing consent orders”. If I understand the submission correctly, this seems to me to be suggesting that the default judgment so made would somehow not fall within r 36.16 (say, perhaps, because it would be treated as not having been given “in open court”). I do not accept that this follows.

19. [58]

    Nor do I consider it necessary, in light of the decision in Mango Boulevard, to enter into consideration of the distinction between the making (or pronouncement) of an order for judgment and formal entry of judgment (see, in a different context, the discussion in Pearl Bay Corp Pty Ltd v Lodur Pty Ltd (2001) 19 ACLC 982; [2000] WASC 315 per Sanderson M at [6]-[9] as to when a judgment debt arose; adopted in Alternative Engine Technologies Pty Limited v Kruger Ventures Pty Limited (No 2) [2010] SASC 60 per Lunn J (at [11]-[12]), about which there was no discussion raised in the submissions in the present case (but which I have assumed was the premise underlying the plaintiff’s submissions referred to in [57] above).

20. [59]

    As I have concluded that FAI makes clear that there is power to extend time after default judgment has arisen, pursuant to the self-executing orders made in the present case. the question is then whether such an extension is in the interests of justice (or, as it was expressed in Arthur Andersen Corporate Finance Pty Ltd v Buzzle Operations Pty Ltd (in liq) [2009] NSWCA 104, whether the justice of the case requires this).

21. [60]

    In the present case, there was a one day delay. That is hardly gross default or delay, even accepting that it followed two earlier instances of non-compliance (one of which followed the plaintiff’s default) and even though the May Orders were also by consent.

22. [61]

    Leaving aside the question of costs (which I deal with in due course), I do not accept that there will be prejudice caused to the plaintiff as a result of an extension of time other than that the plaintiff would then be required to proceed to a determination of their claims on the merits (which would be the case if default judgment were entered and then set aside on an application that has so clearly been foreshadowed by the defendants).

23. [62]

    As to the position of the defendants, the appeal by them to the “severity of the matter” goes to the prejudice that would be suffered if the extension is not granted (in that orders for default judgment and possession of the properties the subject of the dispute would be entered). True it is that the defendants must always have appreciated the “severity of the matter” (i.e., in terms of the consequences of being unable to defend the proceeding) but that does not gainsay that being deprived of an opportunity to defend the proceeding (where so much is at stake for the defendants) in circumstances where there has been a one day delay in their compliance with the self-executing orders does seem to me to be a severe consequence for a very minor delay (and notwithstanding that this is not the first instance of non-compliance with Court orders). The fundamental importance for parties to have their claims dealt with on the merits underlies the recognition in the high threshold required to be met, for example, on summary dismissal applications (see General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69 per Barwick CJ at 129). It is clear therefore that the defendants will suffer prejudice in terms of being unable to defend the claims against them on their merits if the relief sought by the plaintiff is granted. The only question is whether, in all the circumstances, that would produce an injustice (or, framed differently, prejudice that outweighs the prejudice to the plaintiff of not granting the relief it seeks).

24. [63]

    I accept that the conduct of the defendants in this proceeding has been unsatisfactory and has not been compliant with the statutory mandate for the just, quick and cheap resolution of the real issues in dispute in the proceeding (see s 56 of the Civil Procedure Act 2005 (NSW). I consider it is also unsatisfactory that there has been no explanation as to the reason for the delay (see, in a different context, Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 (Aon Risk), as to the need for satisfactory explanation being provided when there is an application seeking an indulgence akin to that which is here sought by the defendants).

25. [64]

    Litigants in general (and in particular, the defendants in the present case) ought to appreciate that court-ordered timetables are not aspirational; and that adverse consequences may follow from non-compliance with such timetables which will not necessarily be seen to be productive of injustice. There is a very real sense in which the present situation can be said to be wholly of the defendants’ own making; and the plaintiff’s evident frustration with what has occurred is perfectly understandable. There is also some force in the plaintiff’s submission that an extension of time would defeat the purpose of self-executing orders of this kind. Nevertheless, what must be determined is the application at hand, not whether it may have the effect that other litigants in future may be less willing to consent to self-executing orders of this kind.

26. [65]

    Accepting that costs are not a panacea for all ills (again, see Aon Risk), it seems to me that in the present circumstances the extension of time here sought should be granted, albeit at the price not only of costs in relation to the present application (which would not have been necessary had the defendants complied with the orders to the making of which they had themselves consented), in respect of which the defendants have sought and obtained a not insignificant indulgence, but also of the costs thrown away by the consistent pattern of non-compliance with consent orders for the filing of their evidence in the proceeding (which is not consistent with the statutory mandate for the just, quick and cheap resolution of the real issues in dispute).

27. [66]

    The plaintiff’s position is that the July Orders were agreed on the basis that this was a final opportunity (or indulgence) provided to the defendants. Whether there was an agreement in those terms is not necessary here to determine. The objective fact is that the defendants obtained an indulgence when the July Orders were made (which circumvented the default judgment application then to be determined) and they have proffered no explanation for their non-compliance with the (second) self-executing regime that was then put in place. The plaintiff says that in effect (and there is no reason not to accept this), it could simply have pressed for default judgment on 26 July 2021. I accept that the plaintiff could have done so – though whether default judgment if then entered could later have been set aside (say, for error in the exercise of the discretion involved in its grant, is another matter).

28. [67]

    Nevertheless, I remain of the view that the proper exercise of the discretion in all the circumstances is not to grant the relief sought by the plaintiff but instead retrospectively to extend the time for compliance with Order 1 of the July Orders to 3 August 2021 (at the price of the making of costs orders to reflect the indulgence so granted and the costs thrown away by the delay in compliance with the Court orders).

29. [68]

    Taking into account the above matters (and having regard to the fact that this is a discrete issue and the timeframe for the likely determination of the substantive dispute is not known), I also consider that those costs should be payable forthwith.

30. [69]

    Finally, to remedy the deficiency in the defendants’ evidence on the present application, and in particular, to address reason for the delay, I also consider that the defendants should file and serve an affidavit explaining the delay in compliance with both the May and July Orders.

Orders

1. [70]

   For the above reasons, I make the following orders:

   1. (1)

      Extend the time for compliance with Order 1 made on 22 July 2021 to 3 August 2021.

   2. (2)

      Dismiss the plaintiff’s notice of motion filed 14 July 2021.

   3. (3)

      Reinstate the defence struck out pursuant to the May Orders.

   4. (4)

      Order the defendants within 7 days to file and serve an affidavit explaining the defendants’ default in compliance with the May and July Orders.

   5. (5)

      Order the defendants to pay the plaintiff’s costs of the present application and of the notice of motion filed on 14 July 2021, assessed on the ordinary basis and payable forthwith.

   6. (6)

      List the matter for directions before the Equity Registrar on 6 September 2021.