ISLANDER ENTERPRISES PTY LTD v COMMONWEALTH OF AUSTRALIA [2024] SASCA 141

On Appeal from SUPREME COURT OF SOUTH AUSTRALIA (THE HONOURABLE JUSTICE MCINTYRE) CIV-22-014019 Appellant: ISLANDER ENTERPRISES PTY LTD Counsel: MR P ADAMS - Solicitor: O'LOUGHLINS LAWYERS Respondent: COMMONWEALTH OF AUSTRALIA Counsel: MR D O'LEARY SC - Solicitor: MCCULLOUGH ROBERTSON (NSW) Hearing Date/s: 12/10/2023, 30/11/2023 File No/s: CIV-23-006587 A SUPREME COURT OF SOUTH AUSTRALIA (Court of Appeal: Civil) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment. The onus remains on any person using material in the judgment to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court in which it was generated. ISLANDER ENTERPRISES PTY LTD v COMMONWEALTH OF AUSTRALIA [2024] SASCA 141 Judgment of the Court of Appeal (The Honourable President Livesey, the Honourable Justice Lovell and the Honourable Justice David) 5 December 2024 APPEAL AND NEW TRIAL - PROCEDURE - SOUTH AUSTRALIA - SECURITY FOR COSTS PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - JUDGMENTS AND ORDERS - GENERALLY - REASONS FOR JUDGMENT - ADEQUACY OF REASONS PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - SECURITY FOR COSTS - FACTORS RELEVANT TO EXERCISE OF DISCRETION The appellant and the respondent entered into a contract for the provision of aerial surveillance operating in the Pacific region. The appellant commenced court proceedings arising out of the respondent’s alleged breaches of contract. The respondent brought a security for costs application pursuant to Uniform Civil Rules 2020 (SA) (“UCR”) r 115.1. A Master of the Supreme Court (“the Master”) ordered that the appellant provide security for costs. The appellant appealed the decision of the Master to a single Justice of the Supreme Court (“the appeal Judge”). The appeal Judge refused to grant leave to appeal, finding that there was no error in the Master’s reasoning, that the Master had taken all material considerations into account, and the finding of the appellant’s impecuniosity was justified. On appeal, the appellant contended that the appeal Judge erred in failing to exercise the discretion afresh and failing to give adequate reasons for her decision. -- 1 of 31 -- The respondent filed a Notice of Alternative Contention. It also contended the appeal was incompetent as it had been automatically dismissed by operation of UCR r 115.1(5). Held, per the Court, granting leave to appeal but dismissing the appeal: 1. It is in the interests of justice to dispense with the operation of UCR r 115.1, resulting in the proceedings being reinstated. 2. No error in the appeal Judge’s approach or reasoning has been demonstrated. 3. Upholding the Notice of Alternative Contention, irrespective of any alleged error, there was no realistic possibility that the result could have been different. Uniform Civil Rules 2020 (SA) rr 1.5, 12.1, 115.1, 213.1, 215.1, 218.4, 218.13, 218.15, referred to. AK v Western Australia (2008) 232 CLR 438; Bomanite Pty Ltd v Slatex Corporation Australia Pty Ltd (1991) 32 FCR 379; Concrete Mining Structures Pty Ltd v Cellcrete Australia Pty Ltd (No 2) [2016] FCA 360; DL v The Queen (2018) 266 CLR 1; Draoui v Le [2021] SASCA 33; Duke Group Ltd (in liq) v Arthur Young (Reg) (No 2) (1991) 4 ACSR 355; Equity Access Ltd v Westpac Banking Corporation (1989) ATPR 40-972; Foundas v Heritage and People’s Choice Ltd [2023] SASCA 87; Hackett v The Queen [2021] SASCA 32; Hegarty v Keogh [2021] SASCA 46; House v The King (1936) 55 CLR 499; Khoo v Bartholomaeus [2020] SASCFC 122; McDonald v Attorney-General (SA) [2022] SASCA 43; Morgan v WorkCover Corporation of South Australia [2011] SASC 113; Mysko v Express Cargo Services [2023] SASCA 120; MZAPC v Minister for Immigration and Border Protection (2021) 273 CLR 506; Pateras v The Queen (2021) 139 SASR 549; Psevdos v Commonwealth Bank of Australia [2018] SASC 9; R v Lutze (2014) 121 SASR 144; Reschke v Trevor Reschke Nominees Pty Ltd [2020] SASC 60; Southern Cross Exploration NL v Fire and All Risks Insurance Co Ltd (No 2) (1990) 21 NSWLR 200; Tyne v UBS AG (2014) 102 ACSR 403; Viscariello v Legal Profession Conduct Commissioner [2021] SASCFC 24; Western Australia v Bond Corporation Holding Ltd (1991) 5 WAR 40, considered. -- 2 of 31 -- ISLANDER ENTERPRISES PTY LTD v COMMONWEALTH OF AUSTRALIA [2024] SASCA 141 Court of Appeal – Civil: Livesey P, Lovell and David JJA 1 THE COURT: On or about 7 August 2014, the appellant entered into a contract with the respondent for the provision of aerial surveillance services operating in the Pacific region. Under the contract, a review of the viability of the services was to take place not less than three months prior to the first 12-month anniversary of the contract. The appellant alleged the respondent failed to undertake that review. On 5 August 2015, the respondent advised the appellant that it did not intend to renew the contract. 2 The appellant contended the respondent made representations that the contract would be renewed following the first 12 months and that it relied upon those representations. The appellant entered into contracts for the purchase of aircraft, positioned fuel throughout various Pacific Islands and acquired specialist equipment in reliance on the respondent’s representations. 3 The appellant commenced proceedings seeking recovery of loss and damages arising out of the respondent’s alleged breaches of contract and in equity by reason of estoppel by representation and promissory estoppel. 4 The respondent sought and was granted security for costs by a Master of the Supreme Court (“the Master”). The appellant appealed the decision of the Master. On appeal to a single Justice of the Supreme Court (“the appeal Judge”), the appeal Judge refused leave to appeal the interlocutory decision of the Master. 5 The appellant seeks leave to appeal, for the security for costs order to be set aside, and the respondent’s application for security for costs to be dismissed. 6 We would grant leave to appeal but would dismiss the appeal. Our reasons follow. History of proceedings 7 Following the commencement of proceedings, on 2 December 2020, the respondent brought a cross-vesting application seeking transfer of the action to the Supreme Court of the Australian Capital Territory. At that time, the respondent also foreshadowed an intention to bring a security for costs application. On 7 July 2021, the cross-vesting application was dismissed, and it was ordered the respondent was to pay the appellant’s costs of the application. 8 Over the following 12 months, procedural timetabling and orders regulating the conduct of litigation, disclosure and mediation were made. A mediation occurred on 20 April 2022, but the matter did not settle. -- 3 of 31 -- [2024] SASCA 141 The Court 2 Application for security 9 On 7 June 2022, the respondent brought a security for costs application pursuant to Uniform Civil Rules 2020 (SA) (“UCR”) r 115.1 which states: 115.1—Security for costs (1) The Court may order that an applicant in an action provide security for costs if— (a) the applicant is bringing the claim or application for someone else’s benefit; (b) the applicant is ordinarily resident outside Australia; (c) there are reasonable grounds to suspect that the action has been brought for an ulterior purpose; (d) the order is authorised by statute; or (e) the order is necessary in the interests of justice. … (2) The Court may order a stay of the action until security is given. (3) The Court may vary or revoke an order for security for costs and may order further security. (4) If security is not given, the Court may dismiss the action. (5) If the action has been stayed under subrule (2) for 6 months without security having been given, the action is automatically dismissed for want of prosecution. (6) If the action is dismissed under subrule (4) or (5), the Court may, for special reasons, reinstate the action. 10 The principles underpinning an application for security for costs were not in issue before the Master. The discretion to award security for costs is broad and unfettered. The only limitation is that it must be exercised judicially according to the merits of each case and without any particular predisposition. In Concrete Mining Structures Pty Ltd v Cellcrete Australia Pty Ltd (No 2) Edelman J observed:1 The substantive onus of proof rests throughout upon the party seeking security. The threshold issue, in the terms of s 1335(1) of the Corporations Act, is that there is “credible testimony” demonstrating “reason to believe that the corporation will be unable to pay the costs of the defendant if successful in his, her or its defence”. However, once this conclusion is reached, there is an evidentiary burden on the party resisting the order for security for costs to establish a reason why security should not be granted. That requires only that the applicant raise (with some basis to do so) the matters that it wishes to be taken into account in determining whether the order for security for costs should be made: … 1 Concrete Mining Structures Pty Ltd v Cellcrete Australia Pty Ltd (No 2) [2016] FCA 360 at [12]-[13]. -- 4 of 31 -- [2024] SASCA 141 The Court 3 Some of the common factors to be considered by the Court in the grant of security for costs were recently summarised by Collier J in Hii v Federal Commissioner of Taxation (No 3) [2016] FCA 58 [9] – [10]. Those factors, and others which are often referred to, include: (1) the likelihood of the applicant being unable to pay the respondent’s costs; (2) the characteristics of the applicant including whether it is a corporation or a natural person, the wealth of the applicant, whether the applicant is a foreign resident and, if so, the assets held by the applicant in Australia; (3) whether any impecuniosity of the applicant was caused by the respondent’s conduct which is the subject of the claim, to the extent to which that can be assessed; (4) whether the application for security is oppressive; (5) whether the award of security would deny an impecunious applicant a right to litigate; (6) whether there are persons standing behind the applicant who are likely to benefit from the litigation; (7) whether the persons standing behind the applicant have offered any security or personal undertaking to be liable for the costs, and if so, the form of that security or undertaking; (8) whether the proceedings are in substance defensive in the sense of directly resisting proceedings already brought or seeking to halt the respondent’s self-help procedures so that the applicant is, in substance, forced to litigate; (9) whether the application for security had been brought promptly; (10) whether the applicant has any rights which it can exercise against assets of the respondent to satisfy an order for costs in its favour; (11) the strength and bona fides of the applicant’s case, although this will invariably only be determined in a provisional manner and in many cases will only be a broad brush impression of little weight; and (12) any factors relating to the public interest. (citations omitted) 11 Before the Master, neither director gave evidence of their financial position. The only evidence of the appellant’s financial position was by the affidavit of its solicitor. The evidence established that the appellant had a paid-up capital of $100 and owned no assets. The appellant ceased operation once the contract was not renewed. No evidence was given by Mr Langton and Mr Fuller, the directors of the appellant, as to their financial positions. Despite the lack of evidence, the appellant submitted that its impecuniosity was caused by the respondent’s actions in terminating the contract. It alleged that a security for costs order would stultify the action. -- 5 of 31 -- [2024] SASCA 141 The Court 4 12 An issue before the Master was the respondent’s delay in bringing the application. The respondent brought the application after a mediation was conducted. 13 The appellant submitted before the Master that an order of security for costs would stultify the action. A stay order, if granted, would prevent the appellant from enforcing a costs order made on the unsuccessful cross-vesting application. Decision of the Master 14 On 16 November 2022, the Master delivered her reasons for deciding that the appellant should provide security for costs. On 25 November 2022, having heard further submissions, the Master fixed the quantum of the costs at $110,000. On that date the Master made the formal orders including that the action be stayed pursuant to UCR r 115.1(2). 15 In her reasons delivered on 16 November 2022, the Master noted that the parties agreed the question to be determined was whether an order for security for costs would be in the “interests of justice”. There was no dispute as to the principles to be applied.2 16 The Master did not accept that the appellant was impecunious due to the respondent’s actions. The Master found that Mr Langton, although a director and shareholder of the appellant, did not give evidence before her as to the appellant’s financial position. The only evidence regarding the appellant’s assets came from the appellant’s solicitor by way of affidavit. The Master found that the lack of proper evidence as to the appellant’s or Mr Langton’s financial positions, or indeed from others involved such as Mr Fuller, was “telling”. The evidence established that the appellant had not traded prior to entering into the contract, suggesting it was impecunious before doing so. Given the lack of financial evidence, the Master found that she was not satisfied that an order for security would stultify the action. 17 The Master accepted the respondent’s submission that it was reasonable to wait to bring the security for costs application until after mediation had been conducted and, therefore, there was no undue delay in bringing the application. 18 As the respondent faced a claim for more than $2,000,000 and its defence involved public money, the Master found it was in the public interest that an order for security be made. 19 The Master found that it was in the interests of justice to make the order. Decision of the appeal Judge 20 The appellant appealed the Master’s decision. It was accepted before the appeal Judge that as it was an appeal from an interlocutory decision, she was to 2 Reschke v Trevor Reschke Nominees Pty Ltd [2020] SASC 60. -- 6 of 31 -- [2024] SASCA 141 The Court 5 apply the principles enunciated in House v The King.3 The appellant required leave to appeal. 21 Before turning to the grounds of appeal, the appeal Judge dealt with the appellant’s application to produce fresh evidence. 22 The appellant sought to adduce fresh evidence on appeal (pursuant to UCR r 215.1(2)), namely affidavits of Mr Langton and the solicitor for the appellant. The content of the affidavits was relevant to the issue of impecuniosity. 23 The appeal Judge considered this material and concluded that the material was available at the time of the hearing before the Master and should have been produced; that is, the proffered material was not ‘fresh’. The appeal Judge declined to admit the affidavits. 24 Turning to the appeal, unsurprisingly the grounds of appeal framed the way the appeal Judge undertook her task. To assist in understanding the appeal Judge’s reasons it is necessary to outline the grounds of appeal. 25 There were five grounds of appeal, all of which alleged errors in findings of the Master. 26 Ground 1 alleged an error in the Master’s finding that there had been no undue delay. Ground 2 alleged an error in the Master’s finding that she could not find that the appellant was impecunious. Ground 3 alleged the Master erred in finding that an order for security would not stultify the action. Ground 4 alleged the Master erred in finding that it was in the interests of justice that the order be made. Ground 5 alleged the Master erred in failing to give appropriate weight to the fact that the respondent owed the appellant costs from a failed cross-vesting application. 27 The appeal Judge found that in rejecting the appellant’s submissions and preferring those of the respondent, the Master took all material considerations into account. She found that both parties’ submissions had been considered, and no irrelevant or extraneous material was relied upon. The appeal Judge found that due to the lack of financial evidence, the Master’s finding that the appellant was not impecunious was justified. The appeal Judge found no error in the Master’s reasoning regarding the alleged stultification of the action against a corporation, the public interest argument and the consideration of previous costs orders. 28 Thus, the appeal Judge declined to grant leave to appeal, finding the appellant did not demonstrate that the Master “acted on a wrong principle, was guided by extraneous or irrelevant facts, mistook the facts or failed to take into account a material consideration”. Granting the application for security for costs was not 3 (1936) 55 CLR 499. -- 7 of 31 -- [2024] SASCA 141 The Court 6 manifestly unreasonable or unjust, such that an inference could be made that there was a failure to properly exercise the discretion. Preliminary issue 29 The respondent submitted that the appeal was “incompetent” due to the operation of UCR r 115.1. 30 The Master stayed the operation of the order for security under UCR r 115.1(2). Pursuant to UCR r 115.1(5), if the action has been stayed under UCR r 115.1(2) and the amount ordered for security is not paid within six months, the action is automatically dismissed for want of prosecution. The six-month period lapsed on or around 25 May 2023. It was common ground that the appellant did not give security within the six-month period. The respondent submitted that under UCR r 115.1(5), the action was dismissed for want of prosecution and therefore this Court lacked jurisdiction to hear the appeal. 31 The procedural history flowing from the argument before the Master is as follows: 1. On 16 November 2022, the Master delivered Judgment in favour of the respondent on the security for costs application. 2. On 25 November 2022, the Master, having heard argument, ordered that the appellant provide security in the sum of $110,000. 3. The appellant filed a Notice of Appeal in relation to the order made on 25 November 2022. 4. The respondent filed a Notice of Alternative Contention. 5. On 6 March 2023, the appellant filed affidavits. 6. On 10 March 2023, the appeal proceeded before the appeal Judge. 7. On 25 May 2023, the appeal Judge dismissed the appeal. 8. On 15 June 2023, the appellant filed a Notice of Appeal to the Court of Appeal against the appeal Judge’s dismissal of the appeal. 9. On 29 June 2023, the respondent filed a Notice of Alternative Contention. 10. On 14 July 2023, at a callover, the appeal was listed. 11. On 25 August 2023, the appellant filed an appeal book and accompanying certificate under UCR r 218.4. -- 8 of 31 -- [2024] SASCA 141 The Court 7 32 The appellant accepted that it had not, prior to the expiration of the six-month period, or indeed, at any time, made an application to the Court to extend the time period or ameliorate the operation of UCR r 115.1(5). 33 The appellant submitted that the filing of the Notice of Appeal, and the prosecution of the appeal from the Master’s orders, established that there had been no “want of prosecution”. That is, steps had been taken to appeal the order followed by steps taken to appeal the judgment of the appeal Judge. 34 Relying upon the recent authorities of Hegarty v Keogh (“Hegarty”)4 and Mysko v Express Cargo Services (“Mysko”),5 the appellant further submitted that as this Court had made directive and procedural orders for the prosecution of this appeal, particularly on 14 July 2023 at the callover, there had not been a “want of prosecution”; therefore, UCR r 115.1(5) had no application. 35 Before turning to discuss the appellant’s submissions, it is necessary to consider the two cases the appellant relied upon. 36 In Hegarty, the appellant commenced an appeal on 30 December 2020. Under UCR r 218.13(3), the appellant was to file specified appeal documents by 30 March 2021, otherwise the appellate proceeding would be taken to be discontinued and lapse. Just prior to the expiration date, namely on 19 March 2021, the matter was listed in a callover: several documents had not been filed. On that date, Livesey JA (as he then was) granted the appellant an extension of time until 16 April 2021 in which to file an outline with that extension taking the appellant outside the three-month period. This, Livesey JA held, displaced the automatic discontinuance “otherwise effected by r 218.13(3)”.6 37 Livesey JA observed:7 The purpose of the callover extends beyond managing the listing of appeal hearing dates. The callover is the principal vehicle for the judicial management of appellate litigation in South Australia. At weekly callovers of less than one hour (civil and criminal callovers are held in alternating weeks), a single Judge will list appeals, make interlocutory orders, allocate hearing times for arguments and generally address all issues ancillary to the preparation and hearing of various appeals and applications for leave or permission to appeal. 38 In Mysko, UCR r 218.13 was engaged but the facts were different to those in Hegarty. The appellant commenced an appeal on 2 May 2023 and required to file appeal documents by 2 August 2023. The appellant did not do so. Unlike in Hegarty, no action was taken before the date when the appeal was deemed to have lapsed; that is, the Court had not, before the three-month time period elapsed, made any order or granted an extension of time. 4 [2021] SASCA 46. 5 [2023] SASCA 120. 6 Hegarty v Keogh [2021] SASCA 46 at [29]. 7 Hegarty v Keogh [2021] SASCA 46 at [32]. -- 9 of 31 -- [2024] SASCA 141 The Court 8 39 On 17 October 2023, the appellant lodged an interlocutory application for an adjournment of the appeal. At the hearing of that interlocutory application, Livesey P dismissed the adjournment application and ordered the respondent to file and serve an appeal book. On appeal, Doyle and Bleby JJA held that the interlocutory hearing and order for the appellant to file and serve an appeal book imposed “an alternative regime for progression of the appeal”, and so the appeal had not lapsed by reason of UCR r 218.13(3).8 40 The appellant submitted, based on the reasoning in Hegarty and Mysko, that there had been no “want of prosecution” and in any event by the making of orders at the callover, this Court had imposed an alternative timetable for the progression of the appeal thereby either extending the six-month period in UCR r 115.1(5) or dispensing with that requirement. 41 Turning to the appellant’s submissions, there are similarities in the operation of UCR rr 218.13 and 115.1 but there are also differences. Both rules allow for the reinstatement of the appeal or action if special reasons are found to exist.9 An obvious difference between the two rules is that failure to comply with UCR r 218.13(3) means the appellate proceeding is “taken to have been discontinued and lapses” whereas a failure to comply with UCR r 115.1(5) results in the action being “dismissed”. UCR r 115.1(5) operates not because of a failure to comply with a procedural requirement as to the listing of an appeal, but because of the applicant’s failure to perform the act which preserves its capacity to continue the action. A failure to comply with UCR r 115.1(5) is more serious than a failure to comply with UCR r 218.13(3). 42 This factor is relevant to an assessment of the relevance of Hegarty and Mysko to this matter. In Hegarty, the Court made a specific order altering the timetable before the time period in UCR r 218.13 became relevant. Hegarty was a straightforward application of ordinary principles. That is not what occurred here. 43 In Mysko, Livesey P at the callover made timetabling orders despite the three- month period having expired. It is likely Livesey P was not made aware of the fact that the appeal had lapsed before he made further orders. On appeal, the Court did not explain on what basis Livesey P had imposed “an alternative regime”. Arguably, Livesey P may have made the orders simply because no point was taken that the appeal had lapsed. Alternatively, the Court may have inferred that Livesey P, in giving the applicant time to file an appeal book, had applied UCR r 12.1(2)(a) and, in effect, ordered that UCR r 218.13(3) not apply or, alternatively, dispensed with its operation. Such actions would be consistent with Livesey P’s observations in Hegarty referred to earlier in these reasons. 44 In our view, it does not matter how the Court reached its decision in Mysko. Mysko only involved the operation of UCR r 218.13. Whatever principle can be 8 Mysko v Express Cargo Services [2023] SASCA 120 at [35]. 9 Uniform Civil Rules 2020 (SA) rr 115.1(6) and 218.15(3). -- 10 of 31 -- [2024] SASCA 141 The Court 9 extracted from Mysko cannot, in our view, be applied to the operation of UCR r 115.1. The two rules deal with fundamentally different subject matters. As the respondent submitted, the operation of UCR r 115.1 does not involve a breach of procedural rules relating to the listing of an appeal. It deals with the breach of a court order because of the applicant’s failure to perform the act which preserves its capacity to continue the action. 45 We reject the appellant’s submissions that the filing of a Notice of Appeal, and the subsequent attendance at the callover where the appeal was listed, can be interpreted as imposing an “alternative regime for progression of the appeal” such that the operation of UCR r 115.1(5) no longer applies. To put that another way, imposing a different timetable for the appeal may, in certain circumstances, lead to the avoidance of the consequences of UCR r 218.13(3) but it cannot logically affect the operation of UCR r 115.1(5) when security for costs has not been given as ordered. 46 We also reject the appellant’s argument that simply lodging a Notice of Appeal against the original order somehow obviates the requirements of UCR r 115.1. It cannot be the case that an appellant can avoid complying with an order for security for costs by simply lodging documents in court and alleging it is “prosecuting” the action thereby avoiding a finding that there has been a “want of prosecution”. Such an interpretation would defeat the purpose of the order and the requirements of compliance. 47 The appellant also relied on UCR r 115.1(6) submitting that special reasons existed enabling the Court to reinstate the action. The appellant accepted that the failure to comply with UCR r 115.1(5) was due to the inadvertence of its legal advisers. 48 Justice Stanley in Psevdos v Commonwealth Bank of Australia observed:10 What constitutes “special reasons” for the purposes of SCR 296 and 194 has not been authoritatively decided, but the expression is used in other legislation where it has been held that it is constituted by reasons that are extraordinary, unusual or atypical or beyond the contemplation of Parliament. The requirement for “special reasons” as a condition precedent to the exercise of a discretion to permit a party to reinstate an action lies in public policy considerations surrounding the need for finality in litigation. Given the importance of the principle of finality, the rules erect a significant obstacle to the exercise of the Court’s discretion to reinstate an action. Once an action or appeal stands dismissed, parties are entitled to arrange and conduct their affairs accordingly. Courts should not change this situation unless special reasons to do so are found to exist. (citations omitted) 49 The expression “special reasons” is not capable of exhaustive definition. However, it is clear that the requirement for special reasons is intended to be a 10 Psevdos v Commonwealth Bank of Australia [2018] SASC 9 at [47]-[48]. -- 11 of 31 -- [2024] SASCA 141 The Court 10 limitation on the circumstances in which the court is able to reinstate an action. We consider that “special reasons” in the context of UCR r 115.1(6) are reasons that are extraordinary, unusual or atypical. 50 It is only if special reasons are found to exist that the court may reinstate the action. 51 The appellant submitted that special reasons will be facts and circumstances which, in the interests of justice, require the action to be reinstated. This requires a court to undertake a balancing act between the respective positions of the opposing parties. The requirement for special reasons, the appellant submitted, is not intended to create an unjust outcome. 52 We do not accept those submissions. Special reasons are either established or they are not. The requirement to establish special reasons cannot be supplanted by simply inviting the court to consider the interests of justice. Nor is it relevant that the failure to establish special reasons may lead to what is claimed to be an unjust outcome. Whether it is in the interests of justice to reinstate an action, and whether the dismissal of the action by the ordinary operation of the rules is relevantly unjust, cannot be used to effectively ‘outflank’ the obligation to demonstrate special reasons. As discussed later in these reasons, the interests of justice and whether the dismissal of the action is relevantly unjust are relevant to the discretion available under UCR r 12.1(1). 53 Inadvertence of legal advisers, whilst relevant does not, without more, qualify as a special reason. The appellant submitted that the fact that the respondent raised the issue that the appeal was incompetent only just before the appeal was to be heard was a factor relevant to the assessment of special reasons. While the conduct of the respondent may be relevant to that assessment in certain circumstances, there was no suggestion that the respondent failed to raise the issue promptly once it realised the proceedings had, by operation of the rule, been dismissed, or that this had any bearing on the appellant’s failure to apply to be relieved of the operation of the rule before three months had expired, or its failure to make an application for reinstatement after three months had expired. This is a case where neither party addressed the operation of the rule until sometime after the three months had expired, and the respondent’s conduct could not have had the effect of reinstating the underlying action, or causing the appellant to think that reliance on the rule had been waived. In these circumstances, the conduct of the respondent has not been shown to be relevant to the question of special circumstances. 54 We find that special circumstances have not been established. 55 The appellant further submitted that the Court could, by utilising UCR rr 12.1(1) and 12.1(2)(a), order that UCR r 115.1 not apply, be applied in a modified way, or be dispensed with. -- 12 of 31 -- [2024] SASCA 141 The Court 11 56 The objects of the rules of court are set out in UCR r 1.5 which relevantly states: The object of these Rules is to facilitate the just, efficient, timely, cost-effective and proportionate resolution or determination of the issues in proceedings governed by these Rules. … 57 UCR r 12.1 relevantly states: 12.1—General powers (1) The Court may on its own initiative, or on application by any person, make any order that it considers appropriate in the interests of justice. (2) … (3) … (4) The conferral by these Rules of specific powers on the Court does not affect the generality of the power conferred by this rule. 58 UCR r 12.1 requires the court to consider the interests of justice before taking a step that may ameliorate the operation of a rule. 59 The specific power to reinstate the action if special reasons exist under UCR r 115.1(6) does not affect the generality of the power of the court to act under UCR r 12.1. 60 The respondent submitted that when considering whether to exercise the discretion under UCR r 12.1(1), the Court must have regard to the fact that the appellant has failed to establish that special reasons exist to reinstate the action. We agree. 61 While the absence of special reasons does not deprive the court of the power to exercise the discretion under UCR r 12.1, logically it must be a relevant matter to consider. 62 While we have rejected the appellant’s arguments about applying the concept of the interests of justice to the determination of whether special reasons exist, those arguments are relevant when considering the discretion available under UCR r 12.1. 63 It is common ground that the appellant’s failure to comply with UCR r 115.1 did not involve any attempt to obtain a tactical advantage. The respondent accepted that the failure to seek to ameliorate the operation of UCR r 115.1 was due to inadvertence. It was also common ground that the respondent did not appreciate the effect of UCR r 115.1 until shortly before the appeal was due to be heard. There was no obligation on the respondent to notify the appellant of the effect of the -- 13 of 31 -- [2024] SASCA 141 The Court 12 operation of UCR r 115.1. The fact that the respondent did not appreciate the relevance of UCR r 115.1(5) cannot be held against it. Clearly the respondent did not attempt to obtain a tactical advantage by allowing the appellant to continue to proceed knowing the action had been dismissed for want of prosecution. That said, both parties prepared for the hearing of the appeal without appreciating until shortly before the hearing that the proceedings had been dismissed for want of prosecution and both parties have incurred considerable costs. 64 As the respondent has incurred the costs of preparation of the appeal it will not suffer any practical prejudice and, in the circumstances, it will not suffer material prejudice if the appeal is reinstated. 65 The respondent accepted that had the appellant taken out an application to ameliorate the operation of UCR r 115.1 at an earlier time it may well have been successful. The appellant will suffer prejudice if it cannot proceed to have its appeal determined. 66 The appeal grounds, or at least some of them, are reasonably arguable. 67 Taking into account all of the circumstances, it is our view it is in the interests of justice to dispense with the operation of UCR r 115.1. The practical effect of that order is that the proceedings are reinstated and the appeal can be heard and determined. Appeal before this Court 68 Before turning to consider the grounds of appeal before this Court, it is necessary to say something about them. It was common ground on appeal before this Court, that on appeal from the Master on an issue of security for costs, the appeal Judge was required to apply the principles enunciated in House v The King.11 This Court does not review the Master’s exercise of discretion. Our task on appeal is to determine whether the appeal Judge erred in her approach. Given some of the submissions before the appeal Judge and this Court, it is necessary to repeat the principles involved in a review of a discretionary decision. 69 A challenge to a judicial officer’s discretionary decision can only succeed if the judicial officer: 1. Made an error of legal principle; 2. Made a material error of fact; 3. Took into account some irrelevant matter; 4. Failed to take into account a relevant matter or, exceptionally, gave insufficient weight to a relevant matter; or 11 (1936) 55 CLR 499. -- 14 of 31 -- [2024] SASCA 141 The Court 13 5. Arrived at a result so unreasonable or unjust as to suggest that one of the foregoing categories of error had occurred, even though the error in question did not explicitly appear on the face of the reasoning. 70 To succeed before the appeal Judge, the appellant had to establish either a specific error (points 1-4 mentioned above) or an outcome error (point 5). Absent identifying a specific error, the appellant was required to establish an outcome error, namely that the decision reached was unreasonable or unjust.12 To succeed in establishing an outcome error the appellant had to demonstrate that the result embodied in the order made was, upon the facts, unreasonable or plainly unjust, such that it can be inferred that there has been a failure to properly exercise the relevant discretion, despite the precise nature or source of the error not being identifiable.13 71 The appeal Judge was not entitled to allow the appeal merely because she would have exercised the original discretion, had it attached to her, in a different way. The judgment is a discretionary one and what was required was the appeal Judge had to consider whether the Master considered all relevant (and only relevant) matters in reaching her conclusion. Judicial officers at first instance are to be allowed as much flexibility in their decision making as is consonant with consistency of approach and as accords with any statutory regime that may apply. 72 A submission that too little weight was given to a factual matter does not, standing alone, generally justify appellate intervention.14 73 Unfortunately, the grounds of appeal before the appeal Judge, or indeed this Court, did not specify whether a specific or outcome error was alleged and the particulars, on occasions, appeared to allege both. Further, some of the particulars of the grounds of appeal assumed that the appeal Judge was required to assess the evidence afresh and reach her own conclusions. Some of the appellant’s submissions before this Court also had that character. 74 To summarise, the appeal Judge’s task was to review the exercise of the Master’s discretion. If she found error, and only then, could she exercise the discretion afresh. It is important to remember that on this appeal we are only considering whether the appeal Judge correctly applied House v The King15 principles. Adequacy of reasons 75 The appeal grounds before this Court contend that the appeal Judge failed to give adequate reasons. It is necessary to set out the principles on that topic. 12 Pateras v The Queen (2021) 139 SASR 549; Hackett v The Queen [2021] SASCA 32. 13 Draoui v Le [2021] SASCA 33 at [71] (Doyle JA, Lovell and Livesey JJA agreeing). 14 R v Lutze (2014) 121 SASR 144. 15 (1936) 55 CLR 499. -- 15 of 31 -- [2024] SASCA 141 The Court 14 76 The duty to give reasons is a necessary incident of the judicial process. Failure to provide sufficient or adequate reasons can promote a sense of grievance and may deny the fact and the appearance of justice having been done. The judicial obligation to give reasons is directed, in part, to facilitating the exercise of a party’s right of appeal, in addition to promoting public accountability as to how and why a judge has made a particular decision. 77 It is not the function of an appellate court to set standards as to the optimal, or even desirable, level of detail required to be revealed in reasons for judgment. The function of the appellate court is to determine whether the reasons provided have reached a minimum acceptable level to constitute a proper exercise of the judicial power. 78 It is not necessary for a judge to give extensive and elaborate reasons. However, an appellate court should not have to guess or speculate as to what a judge may or may not have meant, particularly on an important issue. The adequacy of a judge’s reasons will depend on the circumstances of each case. 79 What constitutes ‘adequate’ reasons is informed by the nature of the jurisdiction which the court is exercising and the particular matter that is the subject of the decision.16 80 Reasons for decision are to be read fairly and in the context of the manner in which the matter was conducted. Reasons may appear by necessary inference from what is stated expressly. 81 Justice Heydon observed in AK v Western Australia:17 ... Ordinarily it would be necessary for a trial judge to summarise the crucial arguments of the parties, to formulate the issues for decision, to resolve any issues of law and fact which needed to be determined before the verdict could be arrived at, in the course of that resolution to explain how competing arguments of the parties were to be dealt with and why the resolution arrived at was arrived at, to apply the law found to the facts found, and to explain how the verdict followed. ... (citations omitted) 82 This passage was cited with approval in DL v The Queen.18 83 As Gummow and Hayne JJ observed in AK v Western Australia:19 ... The principles of law that are relevant will be identified by reference to the issues in the case. Usually, then, a trial judge will be obliged to identify and record in the reasons what are the elements of the offence in question and which of those elements were in issue. Resolution of the issues in the case will then require not only statement in the reasons of both the principles of law that are applied and the findings of fact the judge makes, but also 16 DL v The Queen (2018) 266 CLR 1. 17 (2008) 232 CLR 438 at [85]. 18 (2018) 266 CLR 1 at [33] (Kiefel CJ, Keane and Edelman JJ). 19 (2008) 232 CLR 438 at [44]. -- 16 of 31 -- [2024] SASCA 141 The Court 15 statement of “the reasoning process linking them and justifying the [findings of fact] and, ultimately, the verdict that is reached”. (citations omitted) 84 When considering a complaint of inadequate reasons on appeal, the majority of the High Court in DL v The Queen explained:20 … Not every failure to resolve a dispute will render reasons for decision inadequate to justify a verdict. At one extreme, reasons for decision will not be inadequate merely because they fail to address an irrelevant dispute or one which is peripheral to the real issues. Nor will they be inadequate merely because they fail to undertake “a minute explanation of every step in the reasoning process that leads to the judge’s conclusion”. At the other extreme, reasons will often be inadequate if the trial judge fails to explain his or her conclusion on a significant factual or evidential dispute that is a necessary step to the final conclusion. In between these extremes, the adequacy of reasons will depend upon an assessment of the issues in the case, including the extent to which they were relied upon by counsel, their bearing upon the elements of the offence, and their significance to the course of the trial. … (citations omitted and emphasis added) 85 Thus, judges will ordinarily be expected to expose their reasoning on points critical to the contest between the parties. This expectation applies to both evidence and argument. Reasons must be read in their entirety bearing in mind how the issues were argued. However, ultimately the reasons must be more than a bare statement of the principles of law applied and the findings of fact made; there must be exposed a reasoning process linking them and justifying the latter and, ultimately, the verdict that is reached. Reasons must identify the relevant principles of law, refer to relevant evidence, state the judge’s findings upon material questions of fact and provide an explanation for those findings and the ultimate conclusions reached by the judge. 86 The failure to give adequate reasons constitutes an error of law. Where such an error is found, the appeal must be allowed unless the Court is of the view that there is no substantial miscarriage of justice. Ground 1 1. The Honourable Justice erred in finding … the ‘Master took all material considerations into account’ in that, in so finding, she failed to give adequate or any reasons why; 1.1 on the facts, a delay of nearly two and a half years was not sufficient to displace the general principal that the discretion to order security in favour of an applicant will not be granted w[h]ere there has been delay, - or in this case, extensive delay; 1.2 why, in exercising the discretion in favour of awarding security, the facts justified disregarding the considerable expenditure that had been spent by the 20 DL v The Queen (2018) 266 CLR 1 at [33] (Kiefel CJ, Keane and Edelman JJ). -- 17 of 31 -- [2024] SASCA 141 The Court 16 respondent on dealing with the security applicants [sic] failed cross vesting application, inadequate discovery and delays in the procedural steps to that point; 1.3 why the bringing of the application after mediation justified ignoring the previous two and a half years delay, particularly where those delays were largely a consequence of the security applicant’s procedural approach and it was not the security applicant which had sought orders for mediation at any stage; nor 1.4 why, on the facts, it was not manifestly unreasonable or plainly unjust for the security applicant to have allowed costs to accumulate over two years before bringing the application and why that fact alone was not sufficient to establish that it would be unreasonable and plainly unjust to then order security against the appellant. 87 The appeal ground raises the issue of the adequacy of the appeal Judge’s reasons. Particulars 1.1, 1.2, and 1.3 allege a lack of reasons on the topic of the respondent’s delay in bringing the application for security for costs. They suggest that the appeal Judge had an obligation to explain why, on the facts, their submissions before the Master were not accepted. That was not the appeal Judge’s task. 88 In argument before the appeal Judge, the appellant had alleged (in Ground 1) that the Master erred in finding that the appellant was not impecunious. It did not allege a specific error, only an outcome error. The appellant submitted that the Master’s approach was “patently unjust”. 89 On this appeal, the appellant submitted that the appeal Judge failed to consider the respondent’s delay of approximately two and a half years in bringing a security for costs application. The appellant further submitted that the appeal Judge failed to properly consider the evidence that during the delay the appellant incurred further legal costs. In addition, the appellant submitted that a consequence of a security for costs order is that it deprives the appellant of any ability to recover the costs from the cross-vesting orders made in its favour. 90 The Master’s reasons disclose that she considered all those matters. The appellant emphasised the issue of costs, that is the amount of costs incurred, when making submissions on the issue of delay. This also included the costs of the cross- vesting application. The Master’s reasoning reflected the way the appellant had argued the issues before her. 91 During submissions, the appellant submitted that if the Master intended to make an order for security for costs, she should take the question of the past costs into account. That is the way the Master proceeded. The Master considered the question of costs on the issue of whether to make the order and, having decided to make the order, took costs into account when determining the amount of security to be ordered. -- 18 of 31 -- [2024] SASCA 141 The Court 17 92 The appeal Judge reviewed the Master’s reasons on this topic and considered the appellant and respondent’s submissions. Before the appeal Judge, the appellant repeated the submissions made before the Master. Relevantly she found: I do not consider that there is anything unreasonable or improper about the Master’s conclusions. The Master took all material considerations into account. The Master rejected the applicant’s submissions on delay, preferring those of the respondent. That does not amount to an appealable error. 93 No specific error had been alleged. The complaint before the appeal Judge was that the Master gave insufficient weight to various matters. As mentioned, a failure to give insufficient weight will rarely amount to a specific error. The appeal Judge, correctly in our view, treated the ground of appeal as alleging an outcome error. The appeal Judge found that the Master took into account all relevant matters and her finding was not unreasonable. That is, the appeal Judge was unable to identify a specific or outcome error. The appeal Judge’s reasons are adequate. No error in the appeal Judge’s approach has been demonstrated. 94 We would dismiss this ground of appeal. Grounds 2 and 3 95 There is considerable overlap between Grounds 2 and 3 and it is convenient to deal with them together. 2. The Honourable Justice erred … in concluding that the Master was justified in finding the appellant was not impecunious and that an order for security would not stultify the action, in that : [sic] 2.1 The Honourable Justice g[a]ve no consideration in her reasons to the fact the appellant had offered to provide such further information if the Master had considered that evidence other than the appellant’s impecuniosity was relevant to the exercise of the discretion; 2.2 Further information on the issue had not been sought by the Master, despite a lack of information being said to form the basis for exercise of the discretion in favour of ordering security; 2.3 The Appeal Court had further affidavit evidence before it which addressed this issue, but did not allow that evidence to be admitted and did not have regard to it in considering whether impecuniosity and stultification of the action was established. 3. The Honourable Justice erred … in not admitting further evidence on stultification on the grounds that it could be inferred the Master had formed the view that impecuniosity was not insufficiently finely balanced to warrant the calling of further material, in that the Honourable Justice ought to have found: 3.1 That the Master had identified both the respondent and appellant maintained the appellant was impecunious … ; 3.2 there was evidence before the Master supporting the appellant’s impecuniosity; -- 19 of 31 -- [2024] SASCA 141 The Court 18 3.3 despite this common position between the parties, the Master ‘was unable to conclude that the applicant was impecunious’ … ; and that therefore, the issue of impecuniosity was finely balanced so as to warrant the calling of further material on the issue of impecuniosity and stultification of the action if that was to be the basis for exercise of the Masters [sic] discretion on the application. 96 The substance of these grounds of appeal relates to the appeal Judge’s decision to uphold the Master’s findings that the appellant was not impecunious and that she was not satisfied the action would be stultified by a security for costs order. Contained within both Grounds 2 and 3 is a submission that the appeal Judge erred in refusing the appellant’s application to adduce fresh evidence relating to Mr Langton’s financial position. 97 It is convenient to deal initially with the issue of the fresh evidence. 98 Before the appeal Judge, the appellant sought to tender an affidavit of Mr Langton (dated 25 November 2022) who deposed to his and his wife’s financial position and that of the appellant’s solicitor (dated 6 March 2023). 99 The appellant submitted that the appeal Judge erred in not admitting the fresh evidence. In particular, he submitted that the appeal Judge was in error in finding that Mr Langton’s reason for not submitting an affidavit at the hearing before the Master, namely that he was busy earning money to stay afloat, was not a compelling reason. The appellant submitted that Mr Langton is a pilot and his work meant he was interstate and/or overseas for extended periods of time. This made it difficult for him to swear an affidavit. 100 The appellant relied on the affidavit of the appellant’s solicitor dated 25 July 2022 that was before the Master, and his fresh affidavit of 6 March 2023. The solicitor’s affidavit of 25 July 2022 stated that Mr Fuller became a director in order to assist Mr Langton with the conduct of the action whilst Mr Langton was working as a pilot interstate and overseas. 101 The solicitor asserted in general terms that Mr Langton’s work takes him interstate and overseas. He did not proffer that as a reason for not filing an affidavit of Mr Langton for the purpose of the interlocutory proceedings before the Master. The solicitor’s affidavit of 6 March 2023 did not take that issue any further. The solicitor asserted in the affidavit of 6 March 2023 that Mr Fuller has no financial interest in the action nor expectation of reward and in any event, has no capacity to finance the litigation. 102 No affidavit of Mr Fuller was proffered. 103 Before the Master, the appellant had submitted that if there was an issue as to the sufficiency of evidence as to the financial position of the directors and shareholders, and the matter was finely balanced, he should be given an -- 20 of 31 -- [2024] SASCA 141 The Court 19 opportunity to produce further evidence.21 The appellant submitted before the appeal Judge that the failure to allow him to call further evidence was an error. Discussion 104 The decision of the appeal Judge on the question of the admission of fresh evidence involves the exercise of a discretion. House v The King22 principles, discussed earlier in these reasons, apply to the appeal from this decision. 105 In Viscariello v Legal Profession Conduct Commissioner Tilmouth AJ (Lovell and Hughes JJ agreeing) observed:23 Rule 215.1(2)(i) provides a discretionary power to the Court as follows: 215.1—Interlocutory orders (1) The Court may, at a directions hearing or in chambers, make orders on its own initiative or on the application of any person in relation to an appellate proceeding. (2) For example, the Court may make orders— … (i) relating to evidence sought to be adduced at the hearing of the appellate proceeding; … Remedial Rules of Court of this kind are unconfined by common law principles. Instead they are designed: … to give to the Full Court a discretionary power to admit further evidence where that evidence, if accepted, would demonstrate that the order under appeal is erroneous … to facilitate the avoidance of errors which cannot be otherwise remedied by the application of the conventional appellate procedures. McHugh, Gummow and Callinan JJ proceeded to observe in CDJ v VAJ (No 1): … The power to admit the further evidence exists to serve the demands of justice. Ordinarily, where it is alleged that the admission of new evidence requires a new trial, justice will not be served unless the Full Court is satisfied that the further evidence would have produced a different result if it had been available at the trial. Without that condition being satisfied, it could seldom, if ever, be in the interests of justice to deprive the respondent of the benefit of the orders made by the trial judge and put that person to the expense, inconvenience and worry of a new trial. The material sought to be adduced by the Commissioner fulfils the well-established principles at common law for the reception of fresh evidence, in the sense that it was unavailable at the time of trial and it was likely to produce a different result if it was. If anything, the admission of such material in civil cases is more strictly controlled than it is 21 Tyne v UBS AG (2014) 102 ACSR 403. 22 (1936) 55 CLR 499. 23 Viscariello v Legal Profession Conduct Commissioner [2021] SASCFC 24 at [93]-[96]. -- 21 of 31 -- [2024] SASCA 141 The Court 20 in criminal appeal jurisdictions. In Australasian Meat Industry Employees Union; Ex parte Ferguson, Toohey J added: … fresh evidence should be admitted only where it is so material that the interests of justice require it; … and perhaps that no prejudice would ensue to the other party by reason of the introduction of the evidence so late. In Commonwealth Bank of Australia v Quade, the High Court explained the policy underscoring this position: … the reconciliation of “the demands of justice” and the “policy” that there be an end to litigation at least prima facie (or “generally”) dictate that the successful party should be deprived of the verdict in his favour only if the unsuccessful party persuades the appellate court that there was no lack of reasonable diligence on his part and that it is reasonably clear that the fresh evidence would have produced an opposite verdict. Such a stringent rule in that ordinary class of case is supported by considerations of both justice and public interest. Considerations of justice support it in that it would be unfair to the successful party if he were to be deprived of a verdict obtained after a trial on the merits and be subjected to the expense, inconvenience and uncertainty of a further trial merely because some relevant evidence had, without fault on his part, been unavailable to the unsuccessful party at the time of the trial. Considerations of public interest support it in that it is desirable in the public interest that there be finality in litigation in other than the truly exceptional case. … (citations omitted) 106 The appeal Judge commenced her consideration by identifying the correct principles for allowing fresh evidence. She stated: The applicant requires leave of the Court under UCR r 215.1(2)(i) to rely on this material. Such leave should be granted exceptionally. The relevant principles are: • Whether the evidence was available at the hearing below, or could with reasonable diligence have been obtained for use at that hearing. • Whether the evidence is such that it would have had an important influence on the result. While it need not necessarily be decisive, it must be more than merely useful. • The likely impact of the evidence in terms of whether it is controversial or contested, and, if so, whether its receipt is likely to require cross-examination, further responding evidence or that the matter be remitted for rehearing; and • The public interest in the finality of litigation. (citations omitted) 107 The appeal Judge then turned to consider the affidavit material against the enunciated principles. She stated: The applicant in this case has been represented at all times by a solicitor and counsel. It is apparent from the face of the two affidavits that the material contained therein is not new material and was or ought to have been available at the time of the argument before the Master. The applicant has argued that Mr Langton did not provide an affidavit for the -- 22 of 31 -- [2024] SASCA 141 The Court 21 Master because he was busy earning money to stay afloat. Given the importance of the security for costs argument, this is not a compelling reason for the failure to provide the material to the Master. The applicant further says that this material was before the Master, albeit in a different form, and that the material does no more than address a concern raised by her Honour as part of her decision. I take the “concern” to be the comments at paragraphs [28] and [29] of the Master’s reasons for decision: The fact that no evidence has been adduced in respect of the applicant’s financial position, both before and after entry into the contract with the respondent is telling. The only evidence is that provided by Mr White; none of the applicant’s directors or shareholders has given evidence about the applicant’s financial position. I am unable to conclude that the applicant is impecunious. I consider that the fact that Mr Langton has not deposed to his own financial position weighs heavily in favour of making an order for security. The only evidence is from his solicitor, who deposes that Mr Langton does not own any real property or significant assets in Australia. The question of the property and assets that he owns outside of Australia has not been addressed. Nor have the assets of financial positions of Mr Fuller and Hermoine June Langton been disclosed. If this is the case, then it is challenging to understand on what basis it would be appropriate to allow the tender of the affidavits on the appeal. The additional material does not fully address the lack of evidence on the topic of the financial position of the directors and shareholders and accordingly, even if admitted, the information contained in the affidavits is unlikely to have had a significant impact on the result. (footnotes omitted) 108 The appeal Judge correctly identified the principles for the receipt of fresh evidence. The affidavit material did not contain an explanation for why Mr Langton did not file an affidavit for the purpose of the original application. Neither Mr Langton nor the appellant’s solicitor asserted that Mr Langton’s work meant he was not able to file an affidavit. Whether or not he was available to swear or attest to an affidavit at the relevant time was not addressed. 109 On the material before her it was open to the appeal Judge to find that the material could, with reasonable diligence, have been obtained for use at that hearing. Such a finding, with respect, was inevitable. Given the absence of an affidavit from Mr Fuller it was open to find, as the appeal Judge did, that the additional material failed to fully address the lack of evidence and that even if admitted, the information contained in the affidavits was “unlikely to have had a significant impact on the result”. 110 Further, the appeal Judge considered that the Master had determined that the financial evidence was not finely balanced such as to allow the appellant to call further evidence. Given the Master’s findings, this conclusion was open to the appeal Judge. 111 No error in the appeal Judge’s approach has been identified. Nor has the appellant established an outcome error; that is, the appeal Judge’s decision was not unreasonable or unjust. -- 23 of 31 -- [2024] SASCA 141 The Court 22 112 We would dismiss the appeal against the appeal Judge’s order to not admit the further affidavit material. 113 Turning to the balance of the particulars of Grounds 2 and 3, the appellant submitted that the respondent had agreed that the appellant was impecunious. The appellant submitted that both the Master and appeal Judge ignored the respondent’s concession, and both were in error in doing so. 114 Before the appeal Judge, the appellant submitted that the Master gave “too much weight” to the absence of an affidavit from Mr Langton and that, on the evidence before her, the Master was in error in finding that she was not satisfied that an order would stultify the action. On this appeal, the appellant repeated this submission. 115 The respondent, while agreeing that the appellant was impecunious, submitted both before the Master and appeal Judge that given the lack of evidence of the financial position of the directors and shareholders, the appellant had failed to discharge the onus that it was impecunious in the sense that an order would stultify the action. 116 Before this Court, the respondent submitted that no specific error in the appeal Judge’s approach has been identified and that her conclusion was not unreasonable or unjust. 117 In her reasons the appeal Judge considered the evidence and submissions before the Master. The appeal Judge considered that the Master had not overlooked the concession that the appellant was impecunious but had clearly found that due to the paucity of evidence from the directors and shareholders, the appellant was not impecunious in the sense that an order for security would stultify the action. 118 The appeal Judge found: The Master noted the paucity of evidence advanced by the applicant in respect of its financial position and that of its three directors. She said further that this gap in the evidence lay entirely at the feet of the applicant and “weighs heavily in favour of making an order for security.” These findings justified the ultimate finding that the applicant was not impecunious and further led to the finding that the Master was not satisfied that the order would stultify the action. In my view, the findings were based on issues and arguments which arose directly out of the submissions advanced by both parties. Accordingly, the Master did not consider irrelevant or extraneous material nor was the applicant denied an opportunity to be heard. It is not an error for a Judge not to accept an agreed statement of facts put forward by parties if that position is not supported, or is contradicted, by the evidence. Given the lack of evidence about the financial circumstances of the applicant and its directors, the conclusion was justified. This was an orthodox analysis of the state of the evidence and is not infected with error. Finally, in relation to the issue of stultification, it is well settled that where a security for costs application is being sought against a corporation rather than a natural person, the question of stultification is an important but not decisive factor. -- 24 of 31 -- [2024] SASCA 141 The Court 23 (citations omitted) 119 It is clear from her reasons that the appeal Judge considered the issues and arguments before the Master. The appeal Judge found that the Master did not consider irrelevant or extraneous material. Further, the appeal Judge found that the Master did not err in the application of any legal principle. It is clear that the appeal Judge did not consider that the Master’s conclusions were unreasonable or unjust. 120 The appellant has failed to demonstrate that the appeal Judge fell into error in her assessment of the issues. Absent error, the appeal Judge was not required to exercise the discretion afresh. Given the application of House v The King24 principles, it was not sufficient for the appellant to establish that other judicial officers may have reached a different conclusion. 121 We would dismiss these two grounds of appeal. Ground 4 4. The Honourable Justice erred in finding that there was no error in the Master’s consideration of factors going to the interests of justice in that; 4.1 The only reason identified by the Master for an order for security being in the interests of justice was that the defence of the action involved public monies; 4.2 The reasons of the Honourable Justice give no consideration to the other matters addressed in the appeal relating to; 4.2.1 the principles concerning delay, 4.2.2 reliance on extraneous or irrelevant facts, 4.2.3 a failure to take into account material considerations, and 4.2.4 an outcome which was manifestly unreasonable and the influence of those matters on the balance of what was in the interests of justice.25 122 This ground of appeal is not easy to follow. 123 We interpret the particular in 4.1 as alleging that the Master erred in taking into account only one factor when considering the issue of the “interests of justice” and the appeal Judge erred in failing to correct the error. The particulars stated in 4.2 allege a specific error (4.2.1), an outcome error (4.2.4) and general and unspecified errors (4.2.2 and 4.2.3). We interpret the particulars in 4.2 as alleging a failure of the Master and the appeal Judge to consider all relevant matters when 24 (1936) 55 CLR 499. 25 In the Notice of Appeal the particulars were numbered 4.4 and 4.5. There were no particulars numbered 4.1 and 4.2. We have renumbered the particulars as 4.1 and 4.2 to match the numbering of the appellant’s written submission. -- 25 of 31 -- [2024] SASCA 141 The Court 24 deciding the issue of whether it was in the interests of justice to make the security for costs order. 124 The appellant submitted that the Master erred in only considering that the defence of the action involved expenditure of public monies when deciding the question of whether an order for security for costs was in the interests of justice. The appellant submitted that the appeal Judge, in not finding that the Master erred, fell into error herself. 125 In submissions before this Court, the appellant argued that the bare fact that the respondent is the Commonwealth government is not a relevant public interest basis to be weighed against the other factors militating against an order for security such as delay and impecuniosity. Relying on the remarks of Hill J in Equity Access Ltd v Westpac Banking Corporation (“Equity Access Ltd”),26 the appellant submitted that ordering security for costs on the premise that the Commonwealth uses public funds would potentially be oppressive in that it would stifle a reasonably arguable claim and deter members of the public who become litigants from commencing proceedings against government bodies, for in fear they will inevitably be ordered to provide security. This submission asks too much of the remarks of Hill J. 126 In Equity Access Ltd, when considering an application for security for costs (not involving the government as a party), Hill J observed:27 The cases indicate that among the matters appropriate for consideration are: • the chances of success of the applicant; whether the applicant’s claim is bona fide or a sham; • the quantum of risk that the applicant cannot satisfy a cost order; • whether use of the power would shut out a small company from making a genuine claim against a large company, i.e. is the power being used oppressively; • whether the impecuniosity arises out of the Act [sic] in respect to which relief is sought; • whether there are aspects of public interest which weigh in the balance against the making of an order; • whether there are any particular discretionary matters peculiar to the circumstances of the case. 127 We assume that the appellant relies on the third bullet point in the remarks of Hill J. There was no suggestion in this matter that the respondent was using the application oppressively. We do not consider that the above remarks of Hill J support the appellant’s wide-ranging submission. The principles enunciated by 26 (1989) ATPR 40-972. 27 Equity Access Ltd v Westpac Banking Corporation (1989) ATPR 40-972, 50,635. -- 26 of 31 -- [2024] SASCA 141 The Court 25 Hill J are unremarkable. Much depends on the facts of the case. As Hill J recognised there may, and inevitably will, be other discretionary factors to consider. 128 In our view, the fact that the defendant is the Commonwealth government and that the defence involves the expenditure of public monies is a factor to be taken into account when considering the issue of the interests of justice. How much weight this factor should be given is of course a different matter and will depend on the facts of the case. 129 The thrust of the appellant’s submissions is that whatever weight is to be given to that factor, it alone cannot determine the issue of what is in the interests of justice. As an abstract proposition, we agree. 130 It is necessary to set out the Master’s findings on this issue. Having discussed the question of delay, the merits of the appellant’s claim and lack of evidence relating to impecuniosity of the appellant, the Master found: I note that, in oral submissions, Mr Adams contended that the issues in dispute in this matter dealt with an important question of public interest, that is, Australia’s security operations in the Pacific. I reject that submission; the issue in dispute is whether the respondent was entitled not to renew the contract in the way that it did. The applicant has not satisfied me that an order for security would stultify the action. On the other hand, the respondent has satisfied me that it is in the interests of justice that an order for security be made. The respondent is facing a claim for more than $2,000,000. It is entitled to take the claim seriously and undertake the preparations necessary to ready its case for trial. As its defence will involve the use of public moneys, it is in the public interest that there will be a degree of certainty that it will be in a position to recoup some of its costs in the event that it is successful at trial. 131 When dealing with this ground of appeal, the appeal Judge observed: The applicant says the fact that the respondent is the Commonwealth does not in and of itself create a public interest reason for ordering security. This is plainly correct. That was not, however, the Master’s finding. Public interest was an issue raised by both parties in submissions which the Master addressed in her decision. The Master rejected a submission by the applicant that the proceedings raised an important public interest question related to Australia’s security operations in the Pacific. The Master accepted a submission by the respondent that the Commonwealth’s defence involved the use of public money and therefore it was in the public interest for there to be a degree of certainty that the respondent may recoup its costs if successful at trial. It is however plain from the reasons for decision that this was not the only factor that the Master considered when she found that it was in the interests of justice that an order for security be made. There is no error in the Master’s reasoning on that point. (citations omitted) 132 We agree with the appeal Judge’s reasons. The appellant mischaracterised the Master’s findings. It is plain from a proper and fair reading of the Master’s reasons that the question of public monies was not the only factor considered when -- 27 of 31 -- [2024] SASCA 141 The Court 26 finding that the making of the order was in the interests of justice. No error in the appeal Judge’s approach or reasoning has been identified. 133 Turning to the particulars set out in 4.2, the appellant submitted that had the appeal Judge considered the matters set out in the particulars, she would have concluded that an order for security for costs was not in the interests of justice. 134 As discussed, it was not the obligation of the appeal Judge to exercise the discretion afresh absent error being established. On the assumption that the appellant’s submission includes an allegation that on this issue the Master’s conclusions were unjust and/or unreasonable for the reasons already given on the other grounds of appeal, we would reject that submission. No outcome error is established. 135 We would dismiss Ground 4. Ground 5 5. The Honourable Justice erred in finding that sufficient consideration had been given by the Master to the costs orders already accrued in the appellant’s favour, in that the Honourable Justice should have found that: 5.1 The impact of costs orders owed to the appellant was relevant and had not been considered by the Master when assessing the balancing of factors concerning what was in the interests of justice; 5.2 That this error by the Master infected the exercise of the discretion that security should be ordered because it occurred prior to and as part of the Master’s exercise of the discretion; and 5.3 That the Master’s error was not cured by only considering the high value of costs orders in the appellant’s favour when setting the amount of the security, after the discretion had already been exercised. 136 This ground of appeal raises a matter not argued before the appeal Judge. Before the Master the appellant argued that the question of costs orders made was relevant to both the issue of delay and to the amount of any order for security for costs. 137 The appeal ground before the appeal Judge was in the following terms: The Learned Master erred in failing to give appropriate weight to the amounts owed by the respondent to the applicant by way of costs orders payable in any event by the Commonwealth to the applicant which costs orders had already been made and have not been paid by the respondent. 138 As can be seen, the appeal ground now alleges a specific error that the Master only considered the question of costs when deciding the amount of the security. This matter was not raised before the appeal Judge. Having not been raised, the respondent did not address this point before the appeal Judge. -- 28 of 31 -- [2024] SASCA 141 The Court 27 139 As discussed under Ground 1, the appellant before the Master argued the question of costs in the context of the delay. The appellant also submitted that the issue of costs was relevant to the amount of security if it was to be ordered. 140 Consistent with their approach before the Master, the appellant before the appeal Judge focussed its submissions on the failure to give sufficient weight or consideration to the costs incurred when assessing the effect of delay. No distinction was drawn between the Master’s orders made on 16 November 2022 and those made on 25 November 2022. 141 The appeal Judge specifically found: The costs orders arose from the dismissal of the respondent’s cross-vesting application in 2021. In my view, this ground of appeal does not disclose an appealable error. The detailed remarks of the Master accompanying the orders made on 25 November 2022 fixing the appropriate amount for security indicate that the Master expressly took the issue of past costs orders into account. In any event, properly understood, this ground of appeal appears to be a complaint about the weight attached to the costs orders rather than a complaint that there was an error. 142 The appeal Judge dealt with the issue before her. 143 The appellant now seeks to argue that the Master’s order made on 25 November 2022, where the Master specifically mentions the issue of past costs orders, demonstrates that she did not take them into account before exercising the discretion to make a security for costs order on 16 November 2022. 144 The appellant did not seek leave to add a ground not argued before the appeal Judge. Strictly speaking it is not open for the appellant to argue on appeal to this Court an issue not raised before the appeal Judge. 145 In our view, the appeal Judge correctly dealt with the issue that was before her. However, we will address the substance of the submission in any event. 146 As discussed, the appellant before the Master submitted that the costs incurred (including costs orders) were relevant to both the question of delay and the quantum of any order. So much is clear from the transcript of proceedings before the Master. 147 As discussed earlier, the Master’s reasons reflect the way in which the matter was argued. The Master referred to the appellant’s submissions on costs but rejected it. The Master only dealt with the question of costs in a general way, but it is clear that she had regard to the appellant’s submissions. The Master’s specific reference to the costs orders when assessing quantum reflected the way in which the matter was argued. The Master did not make a specific error in any event. 148 The appeal Judge found, correctly in our view, that the Master expressly took into account the issue of past costs orders. Further, the appeal Judge was correct in finding that the complaint related to the weight that should be given to this factor. -- 29 of 31 -- [2024] SASCA 141 The Court 28 149 We would dismiss this ground of appeal. Notice of Alternative Contention 150 The respondent filed a Notice of Alternative Contention which stated that the decision of the appeal Judge should have also been made on the following grounds: 1. In respect of the interlocutory decision (judgment and orders) of 16 November 2022 of [the Master]: a. Irrespective of the Court’s state of satisfaction as to the appellant’s impecuniosity, the same outcome would have been reached on the application due to the alternative findings in the respondent’s favour. Particulars (i) … [The Master] assumes the counterfactual position that the appellant is impecunious and nevertheless concludes that the respondent did not cause the appellant’s impecuniosity. (ii) … [The Master] found that an order for security would not stultify the action. (iii) … [The Master] found that it was otherwise in the interests of justice to grant security. b. Even if there is an error in respect of the Court’s state of satisfaction regarding the appellant’s impecuniosity (which is denied), the error is not material as there is no realistic possibility that the result could have been different because: (i) … [The Master] assumes the counterfactual position that the appellant is impecunious and nevertheless concludes that the respondent did not cause the appellant’s impecuniosity. (ii) … [The Master] found that an order for security would not stultify the action. (iii) … [The Master] found that it was otherwise in the interests of justice to grant security. 151 The respondent submitted the same result would have occurred immaterial of the error asserted in relation to impecuniosity given the balance of the issues all fell in the respondent’s favour. 152 The onus is on the appellant to demonstrate a realistic possibility of a different outcome.28 If this is not demonstrated, then the Court cannot be satisfied the appellant has suffered a substantial injustice and leave ought to be refused. This is only relevant if there has been an appealable error. 28 MZAPC v Minister for Immigration and Border Protection (2021) 273 CLR 506 at [39] (Kiefel CJ, Gageler, Keane and Gleeson JJ). -- 30 of 31 -- [2024] SASCA 141 The Court 29 153 The appellant submitted that the result would have been different but for the errors in the lack of weight placed upon the factors of delay, impecuniosity, stultification, and the effect of existing costs orders. 154 We accept the respondent’s submissions on the Notice of Alternative Contention. Given the several findings supporting the grant of security for costs, and absent findings to the contrary, then irrespective of the alleged error in the Master’s decision,29 the same outcome could have resulted, or the alleged error was immaterial because there was no realistic possibility that the result could have been different. Leave to appeal 155 It was common ground that the appellant requires leave to appeal.30 The Court must act in the interests of justice,31 and consider if there is an issue of principle or general importance; whether the decision of the appeal Judge is either wrong or attended with sufficient doubt to warrant reconsideration on an appeal; and if the decision were to stand, a substantial injustice would be caused to the appellant.32 156 In the circumstances, we would grant leave to appeal but dismiss the appeal. Order 157 Leave to appeal is granted. The appeal is dismissed. 29 Concerning the absence of evidence adduced in respect of the appellant’s financial position, and being unable to conclude that the litigation was not stultified because the appellant was impecunious. 30 Uniform Civil Rules 2020 (SA) r 213.1(1)(b). 31 Khoo v Bartholomaeus [2020] SASCFC 122 at [10] (Kelly J, Livesey and Bleby JJ agreeing). 32 McDonald v Attorney-General (SA) [2022] SASCA 43 at [21]. See also Foundas v Heritage and People’s Choice Ltd [2023] SASCA 87 at [13]; Duke Group Ltd (in liq) v Arthur Young (Reg) (No 2) (1991) 4 ACSR 355; Southern Cross Exploration NL v Fire and All Risks Insurance Co Ltd (No 2) (1990) 21 NSWLR 200; Bomanite Pty Ltd v Slatex Corporation Australia Pty Ltd (1991) 32 FCR 379; Western Australia v Bond Corporation Holding Ltd (1991) 5 WAR 40; Morgan v WorkCover Corporation of South Australia [2011] SASC 113. -- 31 of 31 --