Federal Court of Australia

Hera Project Pty Ltd v Woolworths Ltd [2026] FCA 128

ORDERS

THE COURT ORDERS THAT:

1.    The application for leave to appeal be dismissed.

2.    The applicant pay the respondent’s costs of the application on an indemnity basis, to be determined on a lump sum basis.

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

REASONS FOR JUDGMENT

(Delivered ex tempore, revised from transcript)

O’CALLAGHAN J:

1    The applicant (Hera) commenced a proceeding against Woolworths, the respondent, on 24 June 2021 by filing an originating application and statement of claim.

2    Hera’s claim against Woolworths relates to an agreement for lease (AFL) entered into between Hera and Woolworths on 18 October 2013 in relation to a proposed shopping centre in Cranbourne East, in Victoria.

3    The agreement specified that on completion of the development, Woolworths would lease the supermarket from Hera as a landlord for a period of 20 years with eight five-year options.

4    The AFL imposed various obligations on Hera, including to:

(a)    use its best endeavours to obtain development approval by 30 June 2015; and

(b)    reach practical completion in respect of the shopping centre by 1 June 2017.

5    The termination date was 1 June 2019.

6    There were various delays to the performance of the AFL, and Hera did not meet the milestones set out at paragraph 4 above by the dates specified, or ever. On 7 June 2019, Woolworths terminated the AFL.

7    Hera then commenced a proceeding in this court on 24 June 2021 alleging that the termination was invalid (the proceeding) including on misleading deceptive grounds under s 18 of the Australian Consumer Law, being Sch 2 to the Competition and Consumer Act 2010 (Cth).

8    On 11 November 2024, Woolworths filed an interlocutory application seeking to have the proceeding dismissed by reason of Hera’s failure to provide security in the sum of $550,000.

9    On 21 November 2024, McElwaine J handed down judgment dismissing the proceeding: see Hera Project Pty Ltd v Woolworths Ltd [2024] FCA 1339. Relevantly, his Honour did so for these reasons:

90    Counsel accepted that the discretion to dismiss a proceeding summarily at s 56(4) is one only to be exercised in the clearest of cases. The summary determination of an applicant’s claim is a serious matter. Speaking generally of the power to summarily terminate a proceeding, in Spencer v The Commonwealth (2010) 241 CLR 118 at [24]; 210 HCA 28, French CJ and Gummow J emphasised the need to proceed “with great caution”.

91    There is a minor matter in the submission of Mr Warren that should be answered. The respondent’s application specifies that the proceeding be dismissed pursuant to s 56(4) of the FCA Act and r 19.01(c) of the Rules. Mr Warren submits the rule only permits application for a self-executing order. That is not correct. The rule provides that if an applicant fails to comply with an order to provide security within a specified time (which is this case), the respondent may apply for an order that the proceeding be stayed or dismissed.

92    Justice SC Derrington identified certain principles that guide the exercise of the discretion in Sunshine Energy Australia Pty Ltd v Youssef [2023] FCA 189 at [8] – [9], which I gratefully adopt:

There is no doubt the Court has power under s 56(4) of the FCA Act to dismiss these proceedings for failure to provide the security for costs as ordered by the Court: Microbio Resources Inc v Betatene Ltd [1993] FCA 848. It is a broad, discretionary power: Mecrus Pty Ltd v Industrial Energy Pty Ltd [2015] FCA 103; 327 ALR 523 at [18]- [20] per Murphy J. The only limitation is that power must be exercised judicially: Bell Wholesale Co Ltd v Gates Export Corporation [1984] FCA 29; 2 FCR 1 at 3 per Sheppard, Morling and Neaves JJ. In Microbio, their Honours said at 9 – 10:

The Court is careful to see that orders for security for costs do not work injustice to parties against whom such orders are made, but if those parties do not comply with the orders and give no evidence or explanation as to why they have not complied with them, they cannot be heard to complain of injustice if, after a considerable length of time, and extensions of time, the ultimate sanction of dismissal is applied. It is incumbent on parties in such circumstances to provide evidence of their position.

In Idoport Pty Limited v National Australia Bank Limited [2002] NSWSC 18 (upheld on appeal [2002] NSWCA 271), Einstein J identified five factors relevant to the exercise of the discretion:

(1)    the period that has elapsed since security was ordered;

(2)    the fact that the plaintiff has been on notice of the application for dismissal;

(3)    the seeming inability of the plaintiff to further fund the Main Proceedings;

(4)    the prejudice to the defendants;

(5)    the position of the Court.

93    Of course, this list should not be applied as if it operates as a statutory command. Everything depends on the circumstances. Mr Warren also relies on the statement by Lander J in Smart Company Pty Ltd (in liq) v Clipsal Australia Pty Ltd (No 6) [2011] FCA 419 at [563]:

Usually, a respondent would have to not only establish the failure to comply with an order or orders but some sort of prejudice occasioned to the respondent by reason of the failure. If for example, a respondent was able to show that the failure meant that any trial could not be fair then ordinarily the respondent would have discharged the onus which the respondent undoubtedly bears on an application of this kind. The respondent might also be able to satisfy the Court that an order should be made if by reason of the applicant’s failure to comply with an order or orders of the Court the respondent has been put to very great expense which is irrecoverable.

94    His Honour was then concerned with the power to dismiss a proceeding for non-compliance with orders pursuant to the former O 35A r 2(1) of the Federal Court Rules 1979 (Cth). In the immediately preceding paragraph, his Honour noted that there are no universal rules that determine the exercise of the discretion. Of course, what his Honour said at [563] is covered by the fourth proposition from Idoport, which I turn to.

95    The first matter is against the applicant. It had from 27 May until 30 September 2024 to comply. As soon as it appreciated that it may not have been able to comply then, acting in obedience with the overarching purpose, an immediate application should have been made to my chambers for a case management hearing supported with a detailed affidavit by way of explanation. It had a further period until 15 November 2024 to move with urgency to determine why security had not been provided in accordance with the Sandhurst land contract and then to provide a definitive explanation why this option had not developed in accordance with the expectation of Nickolaos. It failed in each respect.

96    As to the second consideration, whilst technically the applicant was not put on notice of the interlocutory application brought by the respondent to dismiss the preceding until 11 November 2024, it has known since 27 May 2024 that non-compliance would inevitably result in the making of the application absent a satisfactory explanation or a negotiated variation. Assurances were provided by Mr Blythman commencing on 1 October 2024, that arrangements were in place to provide the security which inevitably postponed the respondent’s decision to file the application.

97    The third matter counts heavily against the applicant. It is insolvent, is indebted to the respondent for unpaid interlocutory costs, has failed to comply with a statutory demand and has offered no concrete proposal and timeframe to discharge its obligations and to proceed with the litigation by funding it. There are no more than options that may at some time bear some fruit, contingent upon the decisions of third parties and postponement of the trial. Mr Robins is correct to submit that these are speculative “if, but, maybe and perhaps” concepts. The multiplicity of uncertainties in the applicant’s proposals provide no adequate basis to grant further indulgence.

98    The fourth matter also falls against the applicant. I have found specific prejudice to the respondent in the costs incurred thus far in the expectation that security would be provided by 30 September 2024 and that further costs have been incurred in reliance on the applicant’s assurances thereafter. Based on the evidence of the costs assessor that I accepted when making the security orders, those costs to date must have either exhausted the security amount or be very close to doing so. There is no prospect of recovery, save for an order which permits the respondent to have access to the security of $200,000 that has been provided. The shortfall is very significant.

99    I am also of the view that there is no realistic prospect made out on the evidence that the applicant will be able to prosecute the proceeding to conclusion, which flows from the cumulative consideration of the facts and my analysis.

100    Combined with the applicant’s long history of non-compliance with Court orders and the unsatisfactory state of its evidence upon this application, the last-minute desperate attempt to assure the Court that if more time is granted there is a prospect that the security may be provided is unconvincing. The obvious prejudice that will be suffered by the applicant if the proceeding is dismissed is outweighed by each other factor and the recited history.

101    Regrettably, the applicant is responsible for the dire predicament in which it finds itself. This is a clear case which justifies dismissal of the proceeding.

10    On 5 December 2024, Hera filed an application for leave to appeal McElwaine J’s order dismissing the proceeding, along with an affidavit from Hera’s solicitor (which incredibly was not served on Woolworths until 4 February 2025).

11    Hera’s application for leave to appeal the orders of McElwaine J, and if leave is granted, the appeal, is listed for hearing before a Full Court on 13 March 2026, before Beach and Younan JJ and myself.

12    On 4 September 2025, Anderson J made orders that, among other things, required Hera to:

(a)    file and serve any further affidavits in support of its application for leave to appeal by 23 September 2025;

(b)    provide draft indices to Parts A and B of the Appeal Book to Woolworths by 40 business days before the hearing (being 16 January 2026);

(c)    file and serve Parts A and B of the Appeal Book by 30 business days before the hearing (being 30 January 2026); and

(d)    file and serve submissions and a chronology of relevant events by 25 business days before the hearing (being 6 February 2026).

13    On 30 September 2025, Anderson J made orders by consent extending the time for Hera to file and serve any affidavits in support to 7 October 2025.

14    On 20 January 2026 Woolworths’ solicitors wrote to Hera’s solicitors as follows:

We refer to order 4 of the Orders made by Justice Anderson on 4 September 2025, requiring the applicant to provide draft indices to Parts A and B of the Appeal book 40 business days before the hearing (being 16 January 2026) and the respondent to provide any comments 35 business days before the hearing (being 20 January 2026).

We are yet to receive the draft indices. Please urgently let us know when the applicant expects to serve the draft indices. Woolworths also notes that the applicant did not serve any further affidavits in support of its application for leave by 23 September 2025 and, in the circumstances, is proceeding on the basis that the applicant will not serve any such affidavit(s).

15    A follow up email was sent on 22 January 2026.

16    On 28 January 2026, Woolworths’ solicitors wrote to Hera’s solicitors as follows:

We refer to our emails below dated 20 and 22 January to which we have not received a response.

Given Hera's failure to comply with Justice Anderson's 4 September 2025 orders requiring the applicant provide draft indices of the Appeal book on 16 January 2025, and the consequential effect it has had on the balance of the timetable and Woolworth's ability to prepare for the appeal, we require Hera’s urgent response.

We provide notice that unless we receive a substantial response from you prior to this Thursday 29 January at 5pm, we will write to the Associate seeking to relist the matter before the Court.

17    On 29 January 2026, Hera’s solicitors sent an email to Woolworths’ solicitors. That email relevantly said:

Unfortunately, counsel for our client has been on leave and is not due back until 3rd February 2026. Consequently, we have not been able to discuss with Mr Warren the contents of the Appeal Book.

So as not to unduly upset the overall timetable, may we impose upon you to draft the indices to Part A and B of the Appeal Book and our client provide its response thereto within 5 days. We imagine that you may have already considered the matter and hope that this suggestion is not unduly burdensome.

As to the filing of further affidavit material, the information upon which our client intended to rely could not be formulated within the time envisaged by order 3 of the orders made by Justice Anderson on the 4th September 2025. However, this situation has now changed and your client's consent to late filing of an affidavit by Angellique Konstandellos will be sought.

18    On 30 January 2026 Woolworths’ solicitors wrote to Hera’s solicitors reminding them that it is the applicant’s obligation to prepare the Appeal Book; stating that Woolworths would provide amendments if Hera provided the draft indices within the next two days; and should Hera fail to provide the indices then Woolworths would seek to relist the matter.

19    There were numerous subsequent exchanges with Hera in relation to preparation of the appeal book, but to no avail.

20    Order 6 of Anderson J’s 4 September 2025 orders required Hera to file and serve an outline of submissions and chronology of relevant events by 4:00pm on 6 February 2026. Hera failed to comply with that order.

21    On 9 February 2026 Woolworths’ solicitors wrote to Hera’s solicitors as follows:

We note that Woolworths did not receive a response from Hera to the email below regarding the service of its submissions and chronology of events and those documents have not been filed as required by Order 7 of Justice Anderson’s Orders.

Woolworths now considers that it has no option but to relist the matter given Hera’s continued defaults of the Court's orders. As such, Woolworths intends to send the below communication to the Court at midday today.

22    Later that day, Hera’s solicitors filed a Notice of Ceasing to Act on behalf of Hera.

23    A case management hearing was duly listed for today before me.

24    At that hearing Mr M Robins KC who appeared with Ms A Golding of counsel for Woolworths, applied to dismiss the application for leave to appeal and read an affidavit of his instructor, Mr Bolston, sworn on 17 February 2026 which deposed to many of the factual matters outlined above.

25    In the alternative, Woolworths sought a self-executing order that unless by 26 February 2026 Hera complied with the orders necessary for the appeal to be heard, the applicant’s application for leave to appeal should stand dismissed.

26    Pursuant to s 25(2B) of the Federal Court of Australia Act 1976 (Cth), a single judge has the power to order that an appeal be dismissed for want of prosecution (s 25(2B)(ba)) or failure to comply with a direction of the court (s 25(2B)(bb)(i)).

27    The procedure by which a respondent may apply for such an order is found in r 36.74 of the Federal Court Rules 2011 (Cth), which provides that a respondent may apply to the court for an order that an appeal be dismissed for an appellant’s failure to comply with a direction of the court (r 36.74(1)(a)) or to prosecute an appeal (r 36.74(1)(d)).

28    Woolworths seeks an order to dismiss the appeal pursuant to rr 36.74(1)(a) or 36.74(1)(d).

29    Justice Stewart summarised the principles relevant to such an application in Nandutu v Chapman (No 2) [2021] FCA 45 at [19]-[23], which I adopt:

19    In Van Reesema v Giameos (1979) 27 ALR 525 the Full Court per Bowen CJ, Fisher and Lockhart JJ in an application for the dismissal of an appeal for want of prosecution stated (at 530) that “the power to dismiss appeals for want of prosecution must not be lightly exercised” and that “each case depends on its own circumstances.” The Court also stated (at 531) that “public policy demands that the business of the courts should be conducted with expedition and that its rules and orders should be complied with.” The Court dismissed the appeal reasoning (at 533) that there had been inexcusable delay on the part of the appellant and breach by him of an undertaking to the Court and of orders of the Court, the Court was not satisfied that there was any reasonably arguable case for the appellant in the appeal, and that further delay would increase the prejudice to the respondent and non-parties to the appeal (being other creditors to the appellant’s sequestrated estate).

20    In Hoefler v Tomlinson (1995) 60 FCR 452 the Full Court per Spender J, Sackville and Kiefel JJ agreeing, dismissed an appeal for failure on the part of the appellant to prosecute it. After referring to the dicta and reasoning in Van Reesema v Giameos referred to above, the Court reasoned (at 453) that “there has been simply no effort to prosecute the appeal, and one can infer that there is no intention on [the appellant’s] part to prosecute his appeal, and in those circumstances it seems … that the appeal should be dismissed for want of prosecution”.

21    In Wade v AMI Australia Holdings Pty Ltd [2010] FCAFC 120; 274 ALR 431 the Court per Cowdroy J dismissed an appeal pursuant to s 25(2B)(ba) of the Act for want of prosecution. The Court noted (at [37]) that the personal difficulties of the first appellant in prosecuting the appeal and the status of the first and second appellants as litigants-in-person must be balanced with the respondents’ interests arising from orders made by the primary judge in their favour. It was held (at [38]) that the first appellant had not complied with the Court’s directions and had otherwise failed to be diligent in the prosecution of the appeal.

22    On the authorities, I accept that dismissal of an appeal for want of prosecution is a drastic remedy that should be sparingly resorted to, that a court should not lightly deprive a litigant of their right of appeal, and that each case turns on its own facts and circumstances. It is also the case that the respondent to an appeal has a key interest in being able to enjoy the fruits of the judgment that is appealed from and to bring the appeal to a reasonably quick and efficient conclusion. These divergences in interests must be balanced.

23    However, there are also other interests that must be brought into consideration. These include the overarching purpose of the civil practice and procedure of the Court which is to facilitate the just resolution of disputes “as quickly, inexpensively and efficiently as possible”: s 37M(1) of the Act. Parties to a civil proceeding, including an appeal, must conduct the proceeding in a way that is consistent with the overarching purpose: s 37N(1) of the Act. These provisions, and the jurisprudence of the Court, recognise the broader public interest and the interest of other litigants in other cases in having proceedings brought to a just and efficient conclusion: Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175 at [5] and [30] per French CJ, [93]-[98] per Gummow, Hayne, Crennan, Kiefel and Bell JJ.

30    At the hearing this morning, I granted Ms Konstandellos leave to appear on behalf of Hera (under r 4.01(2) of the Federal Court Rules) for the limited purpose of making submissions about Woolworths’ application. She relied on an affidavit of her own referring in very general terms to:

(a)    the cessation of William Murray Lawyer’s retainer;

(b)    the failure of William Murray Lawyer’s to take certain steps in this application;

(c)    the cessation of Mr Warren’s retainer as solicitor advocate;

(d)    unspecified correspondence with other solicitors;

(e)    a development property in Sandhurst with no explanation as to its relevance to the applicant’s ability to fund these proceedings, or otherwise; and

(f)    VCAT orders and reasons in respect of the Sandhurst Development.

31    Ms Konstandellos sought an extension of the current timetabling orders and an adjournment of the application for leave to appeal until July or August 2026.

32    The sorry saga of delay by Hera since it commenced its proceeding in 2021 is summarised in a document exhibited to Mr Bolster’s affidavit on the history of delay of Hera in pursuing its case below and its application for leave to appeal (exhibit “ITB2”). I attach that chronology to these reasons marked “Annexure A”. As Mr Robins submitted, by May 2024 Hera had defaulted in respect of eleven separate court orders, including its failure to provide the sum of $550,000 by way of security for costs. As he also submitted, Hera has to date failed to comply with any order made in respect of the application for leave to appeal.

33    As Mr Robins submitted, the desirability of appeals being heard in as timely a fashion as possible and the burden on the court and other parties to ensure this occurs are factors the court must take into account in determining applications of this sought. Mr Robins referred me in particular to the decision of the Full Court in Luck v University of Southern Queensland [2016] FCAFC 167 at [36]-[40] (Collier, Jessup and Katzmann JJ):

36    Thirdly, we did not consider that adjourning the hearing would have been the best way to promote the overarching purpose of the civil practice and procedure provisions of the FCA Act and Rules of Court.

37    The overarching purpose of those provisions is to facilitate the just resolution of disputes according to law, and as quickly, inexpensively and efficiently as possible: the FCA Act, s 37M(1). The Court is obliged to exercise its powers and discharge its duties under those provisions in the way that best promotes that purpose: the FCA Act, s 37M(2). Furthermore, the parties are obliged to conduct the litigation in a way that is consistent with the overarching purpose: the FCA Act, s 37N. In Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 the High Court of Australia explained the importance of case management principles in determining applications affecting the progress of litigation, such as applications for adjournment.

38    An appeal to the Full Court from a decision of a judge of this Court requires a bench of three judges. Two of the judges in this appeal travelled from interstate to hear the appeal. It is certain that if the hearing of the appeal were adjourned to a date later in 2016, one if not more of those judges would be unavailable, and it would be necessary to empanel a new bench. Even assuming at this late stage, and so close to the end of the calendar year, that this could have been done, the inconvenience to the Court would be considerable.

39    Further, the University was ready to proceed. Indeed, it appears that the University has been ready to proceed at least since it filed its first set of submissions in 2015.

40    The desirability of appeals being heard in as timely a fashion as possible and the burden on the Court and other parties to ensure that this occurs were factors we were bound to take into account.

34    As Mr Robins also submitted that the applicant has had ample opportunity to prepare for the application and appeal (if leave is granted). The applicant was granted by Woolworths’ consent an extension of the timetabling orders made by Anderson J on 30 September 2025. The applicant did not take advantage of the extension of those orders to file any further affidavit material. And it provided no explanation for its wholesale failure to comply with any order in relation to its application for leave to appeal until yesterday, when Ms Konstandellos provided her brief affidavit.

35    Further, the merits of the proposed appeal are also relevant to any adjournment application. In my view, the application for leave to appeal the exercise of discretion by McElwaine J to dismiss the proceeding is very weak. The reasons given by the primary judge for doing so strike me as overwhelming, in light of Hera’s failure time and time again to comply with orders and directions of the court.

36    Mr Robins also tendered a letter from Jadig Finance dated 13 December 2022 confirming that Jadig as first mortgagee in possession of the property in Cranbourne (which is the subject of the proceeding brought by Hera) was sold in December 2022 with a shortfall to Jadig of $5,962,488. That shortfall remains outstanding and as was submitted, default interest is presumably accruing to Jadig.

37    As Mr Robins submitted, the suggestion made by Ms Konstandellos in her oral submission this morning that Hera may be able to obtain funding to fund the application for leave to appeal, and should the appeal be successful the proceeding, is nothing more than “a wing and a prayer” proposition.

38    Mr Robins also submitted, and I agree, that it is relevant to take into account the fact that Hera’s proceeding involves, at least in part, a misleading deceptive conduct case founded on supposed oral assurances given by representatives of Woolworths at meetings alleged to have occurred in 2018 and 2019. Even assuming that the hearing of the application for leave to appeal and the appeal against the decision of McElwaine J were successful, if an adjournment of the length sought were given, in all probability judgment would not be handed down until next year and again, in all probability, the trial of the proceeding would not occur until late 2027 or 2028, almost one decade after the alleged oral representations were said to be made. That would obviously cause prejudice to Woolworths’ witnesses who were alleged to have made the relevant representations (as well as prejudice to other users of the court).

39    As Mr Robins also said, Woolworths also continues to suffer prejudice because it continues to incur costs in circumstances where in all probability it will never recover them in the event that it succeeds.

40    For those reasons, I will order that the application for leave to appeal be dismissed, with costs to be assessed on an indemnity basis.

Associate:

Dated:    19 February 2026

ANNEXURE A

Respondent’s Chronology

In proceedings VID335 of 2021