Case: Welsh v Digilin Pty Ltd [2007] FCA 2064
Outcome: related
This is an application for leave to appeal from the judgment of Dowsett J of 14 December 2007 ( Welsh v Digilin Pty Ltd [2007] FCA 2064) pursuant to s 24(1A) Federal Court of Australia Act 1976 (Cth) and O 52 r 10 Federal Court Rules , and for an order that the judgment of his Honour be stayed pursuant to O 52 r 17 Federal Court Rules . The application has been brought by the applicant to the substantive proceedings, Mr Welsh. 2 Facts relevant to this matter appear from the background summary in the decision of his Honour and include the following: &#8226; the substantive application in these proceedings was filed in 2005, although the relevant circumstances date from the mid 1990s &#8226; the matter was set down for trial before his Honour in April 2006 however at that time the applicant indicated that he proposed to raise new issues in the proceedings. Accordingly the trial dates were vacated &#8226; the matter was subsequently listed for trial before his Honour in October 2006, however it subsequently emerged that another amendment to the statement of claim would be required. Accordingly the trial dates were again vacated &#8226; on 22 December 2006 his Honour ordered the applicant to pay costs of the respondents, including, inter alia , costs thrown away by reason of the vacation of the trial dates. His Honour also ordered that, in view of the history of the matter, the proceedings be stayed pending payment by the applicant of $20,000 on account of costs, and that the respondents be at liberty to apply for additional stays as the costs orders became quantified by assessment or taxation. As his Honour subsequently explained: "This may have been an inelegant way of saying that the respondents could apply to increase the amount to be paid as the costs were assessed or taxed. The bills have now been assessed. The total is, as I understand it, $68,609.41, including the costs of the figure. I do not understand there to be any challenge to that figure." ( Welsh [2007] FCA 2064 at [4] ) &#8226; the matter was again listed for trial in December 2007, in the expectation that the applicant would have complied with the costs order &#8226; no amount of costs was paid by the applicant to the respondents. Accordingly, the respondents moved to strike out the application for want of prosecution. That application was the subject of his Honour's judgment of 14 December 2007 &#8226; the applicant's solicitor, Mr Boaz Ben Yani, filed an affidavit on 13 December 2007 asserting in summary that: o the applicant had suffered financial hardship; o apart from his claim, the applicant's only asset was a car worth approximately $4,000; o the applicant's net income was approximately $728 per week; o the applicant intended to lodge a claim against his previous counsel for professional negligence; and o the applicant had approached a litigation funder to assist him in payment of $20,000 towards the respondents' costs, which sum the applicant believed he would be able to obtain by the end of February 2008. His Honour observed however that, in the absence of any evidence as to the nature of the cause of action against his previous counsel the proposed claim against counsel was of little relevance. Further, his Honour noted that it appeared that the claim against counsel and the approach to the litigation funder had occurred recently, and one might have expected to see more detail concerning the applicant's efforts if the applicant were genuinely trying to advance the matter (at [6]). 3 In light of these facts his Honour was of the view that the applicant should not be allowed to continue to prosecute the proceedings against the respondents until such time as he met the orders for costs made as a result of his conduct in connection with the scheduled hearings in April and October 2006 (at [6]). In reaching this view, his Honour took into consideration: &#8226; the fact that it will, as a general proposition, be inappropriate to prevent a party from litigating a claim to resolution simply because he or she is impecunious, and &#8226; notwithstanding this principle, fairness between the parties must be the primary consideration and the conduct of a party may lead to an order which effectively prevents his or her continuation of the proceedings. 4 Significantly his Honour continued: [10] "In this case the applicant seems to have encountered serious difficulty in formulating his claim. He has, to some extent and in very general terms, sought to blame his previous counsel for that. I am not willing to act on the basis that such difficulty was necessarily attributable to counsel. That is one possibility, but not the only one. That the applicant has experienced difficulty in formulating his claim does not encourage confidence in its merits. On the other hand it does not exclude the possibility that it is a meritorious claim. The difficulties which he has experienced have caused the respondents to incur considerable costs which ought not to have been incurred, and which they ought not to have to pay. They have, however, paid, or are liable to pay, a considerable amount of money, no doubt at least $68,000, and probably significantly more. They, or their lawyers, are out of pocket to that extent. That may not be a compelling consideration in cases where there is reason to hope that the proceedings will be quickly resolved. The history of this matter offers no cause for such optimism, even if the stay is lifted. The applicant's failure to pay the specified sum, and so lift the stay, has resulted in this matter not having progressed since December 2006, further demonstrating that the case is unlikely to be resolved quickly. This is all the more reason, in my view, for steps being taken to ensure, as far as possible, that the respondents are not out of pocket. [11] Although there is considerable merit in the respondents' application, I am minded to give the applicant one further chance to regularise the proceedings. I order that para 21 of the order made on 22 December 2006 be amended by deleting the amount of $20,000 and inserting, in lieu thereof, the amount of $68,609.41. I further order that unless, on or before 29 February 2008, the applicant pays to the respondents the sum of $68,609.41, these proceedings are to stand dismissed. The applicant is to pay the respondents' costs of the motion and the hearing today." 16 Although as a general rule proceedings under a judgment should not be stayed pending an appeal ( Shaw v Holland (1900) 2 Ch 305), it is equally clear that the Court ought to see that the appeal, if successful, is not nugatory ( Wilson v Church (No 2) (1879) 12 Ch D 454). In considering whether to grant a stay, it is also important that the Court take account of the risk of prejudice resulting from a stay to the other party ( The Marconi's Wireless Telegraph Company Ltd v The Commonwealth (No 3) [1913] HCA 23 ; (1913) 16 CLR 384, ACCC v BMW (Australia) Ltd (No 2) [2003] FCA 864). In this case in the absence of a stay, an appeal from his Honour's judgment would be nugatory. Further, there is no evidence before me that a stay of his Honour's orders would prejudice the respondents. THE COURT ORDERS THAT: 1. Leave to appeal against the judgment of his Honour in Welsh v Digilin Pty Ltd [2007] FCA 2064 be granted pursuant to section 24(1A) Federal Court of Australia Act 1976 (Cth) and Order 52 rule 10 Federal Court Rules . 2. The judgment of his Honour in Welsh v Digilin Pty Ltd [2007] FCA 2064 be stayed pursuant to Order 52 rule 17 Federal Court Rules . 3. Costs be reserved. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. Associate: Dated: 18 February 2008 Counsel for the Applicant: C Heyworth-Smith Solicitor for the Applicant: Efron &amp; Associates Counsel for the Respondent: M Steele Solicitor for the Respondent: ClarkeKann Date of Hearing: 7 February 2008 Date of Judgment: 18 February 2008 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2008/78.html