Federal Court of Australia

Lloyds Auctioneers & Valuers Pty Limited v Benson [2025] FCA 324

ORDERS

THE COURT ORDERS THAT:

1.    The application for leave to appeal, filed 25 March 2025, be refused.

2.    The applicant pay the respondent’s costs of the application.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BURLEY J:

1    This is an application by the respondent to the main proceedings, Lloyds Auctioneers & Valuers Pty Ltd (Lloyds), for leave to appeal from an order made by a judge of the Federal Circuit and Family Court of Australia – Division 2 (primary judge) on 14 March 2025, declining leave to Lloyds to file further evidence.

2    This Court has jurisdiction to hear an appeal from a decision of the Federal Circuit and Family Court of Australia – (FedCFamC2G) by operation of s 24(1)(d) of the Federal Court of Australia Act 1976 (Cth) (FCA Act). However, as the decision appealed from is interlocutory, leave to appeal is required; FCA Act s 24(1A). It may be noted that s 24(1AA)(b)(iii) of the FCA Act provides that an appeal must not be brought from a judgment (relevantly, of the FedCFamC2G) if the judgment is a decision to grant or refuse to vacate a hearing date.

3    The proceedings before the primary judge are brought by Shane and Amanda Benson (the Bensons) for breach of contract of employment and contraventions of sections 44(1) and 90(2) the Fair Work Act 2009 (Cth) (FW Act) by Lloyds. The statement of claim identifies that damages sought for breach of contract include damages for allegedly unpaid bonuses, valued at an amount calculated by references to the profits of the Fine Art and Luxury Division of Lloyds which the applicants along with Art Invest Pty Limited (a company which they owned and operated), claim they set up and ran. In particulars furnished in the statement of claim, the Bensons allege that about $6.2 million of profits were not accounted for by Lloyds in determining their bonuses. In addition, damages are claimed for unpaid entitlements and for loss suffered because of the contraventions under ss 545(2)(b), 546 and 547 of the FW Act.

4    Lloyds has filed a defence, denying liability. It has also filed a cross-claim against the Bensons and Art Invest Pty Limited alleging breaches of contract, fiduciary duty and obligations under ss 181–3 of the Corporations Act 2001 (Cth).

5    The primary judge made orders on 23 August 2024, setting down the proceedings for hearing over three days from Monday 31 March 2025, and also a timetable for filing affidavits on the claim and cross-claim. On 25 October 2024, the primary judge made pre-trial directions for the filing and service of submissions, chronologies and other such matters.

6    The present application for leave arises from an application brought by Lloyds on 14 March 2024. There was no interlocutory application for relief filed, rather, the application was brought on at a case management hearing that had previously been listed. In an affidavit in support of the application affirmed by the solicitor for Lloyds, Mr Jehan-Phillipe Wood of Clyde & Co on 13 March 2024, the relief sought apparently included: (a) an extension of time to file evidence of at least three identified lay witnesses; (b) leave to amend their pleadings; (c) discovery from the applicants; (d) a suppression order; and (e) an extension of the duration of the hearing from three days to seven or eight days.

7    The present application for leave concerns the first of these. However, I note that at the hearing, the primary judge was handed draft orders by counsel for Lloyds. Orders 1 and 2 read as follows:

1.    The hearing dates listed for 31 March 2025, 1 and 2 April 2025 are vacated;

2.    Pursuant to rule 3.05 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021, the time for compliance by the Respondent/Cross-Claimant with order 2(b) of the orders made by Judge D Humphreys on 25 October 2024, being the time by which it is to file and serve its evidence, be extended to 28 March 2025.

8    It will be noted that Order 2 was for the filing and extension of time for the service of evidence until the last business day before the commencement of the trial on 31 March 2025. Senior counsel for Lloyds accepted in the present application that a necessary consequence of the grant of such an extension was the vacation of the hearing date, a point that is apparent also from the transcript before the primary judge. The primary judge heard the application on 13 March 2024 and declined to grant the leave to file additional lay evidence and confirmed that the hearing dates would remain fixed. That carried with it the consequence that leave to vacate was also refused.

9    In his affidavit of 13 March 2024, Mr Wood explained that his firm was retained by Lloyds on 16 January 2025 to replace Lloyds’ previous solicitors. At that point, the lay and expert evidence of the Bensons had been served in December 2024, and the Lloyds evidence was due to be filed, according to the earlier timetable on 24 January 2025. On 20 January 2025, an extension of time for the filing of evidence was agreed between the parties and orders were made by the primary judge for Lloyds to file all of its evidence in answer by 7 February 2025, with evidence in reply by 7 March 2025.

10    Thereafter, the affidavit of Mr Wood explains that Lloyds ran into difficulties securing an expert. An expert report was prepared by a Mr Rossetto and was served on 11 February 2025. However, Lloyds also wished to serve lay evidence, which had not been prepared, despite the deadline of 7 February 2025.

11    On 14 February 2025, Lloyds informed the solicitors for the Bensons of this fact. On 25 February 2025, Clyde & Co received instructions to brief counsel. On 6 March 2025, Clyde & Co sent an email informing the solicitors for the Bensons that Lloyds wished to file the evidence of at least three lay witnesses and that they would be able to do so by 11 March 2025.

12    In his affidavit, Mr Wood gives the reasons for the extension of time sought before the primary judge to file the additional lay evidence at [54]. The explanation addresses the investigations made by Clyde & Co when they took over the file: difficulties understanding the claim advanced by the Bensons, complexities in the Lloyds business, difficulties caused by the fact that individuals employed by Lloyds were no longer employed there, difficulties in engaging an expert and counsel and challenges caused by Cyclone Alfred in the Brisbane office of Clyde & Co.

13    The grant of leave to appeal from an interlocutory judgment requires consideration of whether the judgment is attended with sufficient doubt to warrant reconsideration by a Full Court and whether, supposing the decision were wrong, whether substantial injustice would result if leave were refused; Décor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 844; 33 FCR 397 at 398 (Sheppard, Burchett and Heerey JJ).

14    The decision of the primary judge involved the exercise of discretion. The principles to be applied in considering whether his Honour erred in making his decision are those set forth in House v The King [1936] HCA 40; 55 CLR 499 at 504–5 (Dixon, Evatt and McTiernan JJ). When considering an exercise of a discretion, Dixon, Evatt and McTiernan JJ said that it was not sufficient for an appellate court to conclude that it would have “taken a different course”. Their Honours said that:

It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution, for his if it has the materials for doing so.

15    In Samsung Electronics Co Limited v Apple Inc [2013] FCAFC 138 (Jacobson, Flick and Griffiths JJ) the Full Court observed at [20]:

In the context of considering whether to grant or refuse leave to appeal from interlocutory decisions as to matters of practice and procedure, it has accordingly been long recognised that a “tight rein” should be exercised: National Mutual Holdings Pty Ltd v Sentry Corp (1988) 19 FCR 155 at 161. The Full Court there reaffirmed the principles governing the circumstances in which appellate courts would interfere in the exercise of the discretion of primary judges in respect to interlocutory orders. In so doing, the Full Court cited with approval the following observations of Gibbs CJ, Aickin, Wilson and Brennan JJ in Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177:

Nor is there any serious dispute between the parties that appellate courts exercise particular caution in reviewing decisions pertaining to practice and procedure. Counsel for Brown urged that specific cumulative bars operate to guide appellate courts in the discharge of that task. Not only must there be error of principle, but the decision appealed from must work a substantial injustice to one of the parties. The opposing view is that such criteria are to be expressed disjunctively ... For ourselves, we believe it to be unnecessary and indeed unwise to lay down rigid and exhaustive criteria. The circumstances of different cases are infinitely various. We would merely repeat, with approval, the oft-cited statement of Sir Frederick Jordan in Re the Will of F B Gilbert (dec) [(1946) 46 SR (NSW) 318 at 323]:

“... I am of the opinion that, ... there is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal.”

And as Gummow J also observed in Bomanite Pty Ltd v Slatex Corp Aust Pty Ltd (1991) 32 FCR 379 at 387:

It is not a matter of saying that the discretion miscarried because the result strikes one as perhaps harsh or perhaps one might have exercised the discretion differently. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course.

It has further been recognised that greater scrutiny should be given to those interlocutory decisions which go to the ability of a party to advance its case for resolution: United States Tobacco Co v Minister for Consumer Affairs (1988) 20 FCR 520 at 532.

16    Lloyds has read a further affidavit of Mr Wood in the present application filed on 24 March 2025. It seeks to augment the evidence of prejudice suffered by it as a consequence of the refusal to allow leave to file evidence. In summary, the additional prejudice to the respondent is said to be:

(a)    First, that the respondent is not able to lead evidence about discussions its representatives had with the applicants about the subject matter of the pleadings and the Benson’s affidavit evidence. This point of prejudice was, apparently, not raised before the primary judge. No explanation is provided why that evidence was not answered after 24 December 2024, when the applicant’s evidence was filed. Indeed, as the chronology indicates, no real explanation is given why it was not prepared immediately after 14 February 2025, when notified to the Benson’s solicitors would be required. Some general explanation is given, but no real specific explanation;

(b)    Second, Lloyd’s evidence will now involve tendering many documents instead of being addressed through the affidavits of witnesses, going to the financial and other matters in dispute, which is – it is said that the affidavit evidence will be more efficient. This goes to the efficient conduct of the trial, but I do not understand Lloyds to be saying that the evidence cannot be adduced. It may mean that the trial takes longer than three days, but it is not a matter that cannot be addressed at trial.

17    In the present application senior counsel of Lloyds additionally submitted that lay evidence going to support the expert evidence of Mr Rossetto will need to be proved in order for that evidence to be admissible, and it may be that it cannot be proved. He also referred to the difficulty in cross-examining the applicant’s witnesses without having equivalent affidavits providing instructions as to how to respond to them.

18    The primary judge gave reasons for his decision declining the extension. They are understandably abbreviated and must be understood in the context of the transcript of the argument. They indicate the matters to which he had regard in determining that extension of time to be refused, including the matters raised in Mr Wood’s first affidavit. The application was heard less than two weeks before the hearing was due to commence. The transcript indicates that the primary judge took into account the lengths that had been gone to to provide the evidence and noted that there had been no adequate explanation as to why the application had not been brought earlier.

19    Indeed, it is apparent from the affidavit of Mr Wood that one month earlier, Lloyds was aware that it would need to file additional evidence.

20    The reasons of the primary judge were delivered ex tempore. An uncorrected version of the judgment is provided in an affidavit prepared by Lauren Colless, a solicitor employed by McCabes, on 26 March 2025, which the parties accept sufficiently sets out the primary judge’s reasons.

21    The reasons are relevantly set out below.

This matter was listed before me today for a directions hearing on the basis that I was going on leave for 14 days and be heard upon my return.

The orders I made on 23 August 2024 when I listed it for hearing on 31 March, 1 April and 2 April [2025].

Parties had liberty to apply on two days notice, [sic] made orders for discovery on certain matters.

On 25 October [2024], I made further orders in terms of the filing of evidence by the respondent and cross-applicant in the matter that would serve all evidence on which they rely on by 24 January and [the] applicants file and serve any evidence [by] 21 February.

Again, I provided that the matter have two days notice.

Then again, by way of orders, I extended it further for the respondent to 7 February and applicants to 7 March.

Late last night, the Court was provided with an affidavit [sic] the affidavit setting out a sad and [sorry] history that the solicitors now in the matter, came into the matter in January, this year tell me they are no longer in a position whereby the matter can effectively go on on the dates already set.

The reasons for that go to some length but apparently [there is] evidence not filed that needs to be filed, issues in relation to export report in relation to what might be payable and I have been provided with some orders by the respondents in the matter that the hearing dates be vacated, time for compliance for [sic] respondent with orders made on 25 October be extended to 28 March and respondent file and serve Further Draft Amended Defence and Statement of Cross-Claim and [sic] 4 April [the] applicants [are] to advise whether [they] consent and if don’t consent the matter would have to go on further [sic].

There may well be further applications in relation to discovery and suppression orders.

Mr Sirtes has conceded, and I no way blame him, that he only came into the matter a few weeks ago. In his view, the matter could not finish in the time frame of three days. He has indicated that he cannot and would not resist and order for costs.

Mr Darams who appears for the applicant points out that it has been set down since August last year.

[The] first matter to determine is if further evidence is to be provided. If I determine no further evidence be provided, that would resolve the matter to a large extent and if it proceeds on 28 March, 1 and 2 of April 2025, it could finish within those few days.

Mr Sirtes’ argument is that it would run for seven or eight days, if they are able to file that additional evidence.

[They] made reference to [the] High Court in Aon Risk.

Where case management matters assume an importance [and] where there has been non-compliance and indeed at the last minute, applications of this sort are made and the case management principles assume a significant importance that may well override the capacity of one party to run the party [sic] that they would like to.

The fact is, this matter has been listed for hearing since August of last year. 14 days prior to the hearing, or 16 days prior to the hearing dates, effectively new solicitors or legal representatives for the respondents wish to, in effect, recast the entirety of the defence and cross-claim with the result that the hearing dates would be vacated and I am in a situation where I would be unable to be able to fill those hearing dates with other matters, unless another judge wanted to transfer a matter to me.

Effectively, I could not use it to write judgments as [I] only [have] one outstanding that would take a couple of hours.

No adequate explanation has been put to me given [the] apparent difficulties facing the respondents as to why they didn’t bring the matter to me at an earlier time, which may have allowed me to fill those dates.

It must have been clearly apparent to the respondents that they were in severe difficulties when they first took this matter [on and] indeed that they were unlikely to comply with the orders that were in place.

The Court has a reasonable expectation that when orders are in place they will be complied with. [The Court has not had] the courtesy of being contacted prior to the dates when compliance could not be achieved and being asked for an extension.

14 days prior to hearing [I] got a terribly sorry “can’t comply and have to start again”.

In my view, I made orders for filing and serving of evidence. Those times have passed.

In my view, the respondents and cross-claimants are stuck with the evidence filed and the applicants will not be prejudiced.

If there are implications for the respondent, so be it.

In these circumstances, if [this] results in implications, Aon Risk says that [it] is simply what happens.

I am not prepared to allow leave for any further evidence to be filed on behalf of the respondents. I confirm the trial dates 31 March, 1 April and 2 April [2025].

I confirm the orders I made on 25 October [2024] for [the] filing and service of submissions, list of objections, chronology, tender bundles and court bundles to the Court.

22    It will be noted that no interlocutory application was filed before the primary judge and that the primary judge had no notice of the application. The affidavit of Mr Wood was filed at the last minute; however, the primary judge indicated that he had read and understood it.

23    The draft grounds of appeal relied upon by Lloyds are as follows :

Grounds of appeal

1.    His Honour’s discretion miscarried by only taking into account one factor, namely, the allocation of Court resources, to the exclusion of other factors that were necessary to consider including:

a.    the overarching purpose of the civil practice and procedure provisions to facilitate the just resolution of disputes;

b.    the factual material before the Court;

c.    the prejudice that would be suffered by the Applicant in being deprived of the opportunity to rely on affidavit evidence in the proceeding; and

d.    the absence of prejudice that would be suffered by the Respondent.

2.    His Honour erred by making an erroneous assessment of the factual material before the Court.

24     In relation to ground 1, it is not apparent that the primary judge misunderstood or failed to apply the “overarching purpose of the civil practice and procedure provisions to facilitate just resolution of disputes”. His Honour referred to Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175 at [102]–[103], [111] (Gummow, Hayne, Crennan, Kiefel and Bell JJ) – as he was referred to it by counsel – and indicated an understanding that it should be applied. Nor is it apparent that his Honour misunderstood the factual material before the Court. It was set out in the affidavit of Mr Wood, which he adverted to, and apparently understood.

25    The primary basis upon which the application for leave to appeal appears to lie in ground 1(c): that the primary judge erred in failing to take into account and consider the prejudice that would be suffered by Lloyds in being deprived of the opportunity to rely on affidavit evidence in the proceeding. However, the judge clearly read and understood the affidavit in support of the application. He provided details of the last-minute circumstances of it being raised and noted the consequence that, if allowed, the hearing date would be vacated. He noted the absence of a satisfactory explanation for the delay and (albeit in shorthand) the potential implications for Lloyds which must by necessity include the prejudice that it might suffer. It is true that his Honour addressed this all briefly. However, the reasons given must be understood in terms of the circumstances of the application brought before the primary judge. It is apparent that, having read the affidavit of Mr Wood, he addressed the consequences to Lloyds of the failure of the application. Although his reasons do not refer, in terms, to an offer made by Lloyds to pay the costs forthwith for the vacation of the hearing date, that was a matter identified immediately before the ex tempore judgment was given.

26    Criticism is levelled at the judgment for failing to include a balancing exercise. I accept that the ex tempore judgment was imperfectly expressed, but in the circumstances in which it was brought on, I think it would be harsh indeed to assume that the primary judge did not conduct any weighing exercise. He referred in terms to the implications for Lloyds and the consequences of vacating the hearing date, as well as the interests of the administration of justice in the form of vacation of the hearing date.

27    Having regard to all of these matters, I am not satisfied that leave to appeal ought to be granted. I am not satisfied that there is sufficient doubt in the decision of the primary judge to warrant the grant of leave, and nor am I satisfied that the balance of prejudice favours Lloyds. In the latter regard, the application for leave arises from an interlocutory application. Such applications, of their nature, can be renewed. I note that, at the time of the application – some 10 days before the trial on 31 March 2025 – Lloyds did not proffer draft affidavits, or completed affidavits, which it had known would need to be prepared by at least 14 February 2025 and most likely much earlier. Indeed, it is inconceivable that the respondents should not have understood, in December 2024 when the Bensons’ affidavits were supplied, that they should be responded to. Were completed affidavits to be prepared and adduced, then no doubt the primary judge could, at the trial, evaluate the circumstances and consider whether or not it is in the interests of justice to adjourn the hearing. The matters of prejudice then articulated, including by reference to actual affidavits, rather than the theory of what they may contain, may persuade his Honour that it is appropriate to take steps to admit those affidavits. It is possible that other aspects of the hearing can continue in the three days allocated if more time is required.

28    These matters are all matters for speculation to be addressed depending on what happens at the trial.

29    Furthermore, and separately, despite being couched as an appeal from a decision declining an extension of time to file affidavits, in substance, this is an application for leave to appeal from a refusal to vacate a hearing date. The necessary consequence of any extension was, as counsel properly accepted, vacation of the hearing date. It was against that background that the primary judge considered the application. It is somewhat artificial to characterise the present application in a different way. For that reason alone, leave to appeal must be refused because by operation of s 24(1AA)(b)(iii) of the FCA Act.

30    Nevertheless, if I am wrong about that for the reasons given, in any event, the application should be refused. I order that the applicant pay the respondent’s costs of the application.

Associate:

Dated:    7 April 2025