Duties of applicants in ex parte applications

In certain circumstances, a party may approach a court for orders to be made in the absence of a respondent.

For example, when there are reasons to believe that notifying a respondent would lead to the destruction of relevant evidence, an applicant may be entitled to abstain from notifying the respondent and a so-called ex parte hearing may be held.

However, courts have long recognised the potential for misuse of ex parte applications. Evidently, such hearings deprive a respondent of a right to be heard before orders may be made contrary to their interests.

Relatedly, courts are placed in the invidious position of hearing only one side of the story, and erroneous submissions are less likely to be countered than when advocates are available for both sides, as normally occurs in our adversarial justice system.

Because of those risks, courts have recognised that applicants appearing in ex parte applications owe a number of “onerous duties”.1 A failure to meet those duties can have severe consequences, including that any orders made may be set aside.2

A recent decision of the Supreme Court of Queensland (per Martin J) – Mineralogy Pty Ltd & Anor v The State of Western Australia [2020] QSC 344 – provides a timely reminder about the duties of applicants seeking ex parte relief, and the pitfalls that may befall those who fail to acquit them.

Factual background

In August 2020, Mineralogy and International Metals (the applicants) made an application without notice to Western Australia to enforce two arbitral awards, pursuant to s35 of the Commercial Arbitration Act 2013 (Qld). Those awards had been made in 2014 and 2019 respectively. The awards made declarations about various matters, including the entitlement of the applicants to damages arising from breaches of an agreement.3

At the hearing, the applicants contended that they were entitled to proceed on an ex parte basis because that was “the usual manner of proceeding” which “had been accepted in Australia” in respect of applications to enforce arbitral awards, and because there were “urgent, unprecedented circumstances” justifying such an approach.4

As to the latter contention, it was anticipated that legislation would soon be passed by the WA Parliament that would “render nugatory any accrued rights” under the arbitral awards (this legislation – the Iron Ore Processing (Mineralogy Pty Ltd) Agreement Amendment Act 2020 (WA) – was subsequently enacted).5

After the ex parte hearing, the court agreed to make the order sought enforcing the arbitral awards. However, WA subsequently applied to the court to have the order set aside.6 It made two arguments, which were ultimately accepted by the court – first, that the applicants had improperly brought the application on an ex parte basis; and second, that the applicants had failed to make full disclosure of the material facts and had misstated the law.7 The success of those arguments resulted in the order for enforcement being set aside.8

In the remainder of this article we explain why those arguments were successful, and explore the lessons for applicants bringing ex parte applications.

The necessity of establishing an entitlement to proceed ex parte

The circumstances in which an ex parte application may be heard in Queensland are set out in r27 of the Uniform Civil Procedure Rules (Qld). As Martin J observed, whether r27 relevantly permitted an ex parte hearing in the circumstances of this case was “[t]he first question that should have been considered at the hearing (but was not)”.9

The applicants did not attempt to demonstrate compliance with that rule. Instead, the court decided to proceed based upon the applicants’ submission that proceeding ex parte was the “usual” approach for the enforcement of arbitral awards.10

Justice Martin held that, contrary to the submission, proceeding ex parte was not the “usual” approach for such an application. Although authorities were referred to that indicated such an approach had been taken in Victoria, those decisions were premised upon particular Victorian rules of court (which, in any event, had now been amended).11 Nor was such an approach taken by the Federal Court.12

In any event, whether a manner of proceeding was “common or orthodox” was “not a ground available” under r27.13 The applicants’ submission that there were “urgent, unprecedented circumstances” did appear to rely on one aspect of that rule,14 but Martin J found that the requirement was not met in the circumstances.15

In particular, there was “nothing to suggest that there would have been any delay in the hearing had WA been served” and there was “no evidence to support a contention that irreparable or serious mischief would have been caused had WA been served”.16

Accordingly, the applicants had been wrong to apply ex parte without notice to WA.17 The consequences of such a mistake have been canvassed in numerous authorities, which Martin J helpfully reviewed. For example, in Cameron v Cole (1944) 68 CLR 571, Rich J said:

“It is a fundamental principle of natural justice, applicable to all courts whether superior or inferior, that a person against whom a claim or charge is made must be given a reasonable opportunity of appearing and presenting his case. If this principle is not observed, the person affected is entitled, ex debito justitiae [as of right], to have any determination which affects him set aside.”

More recently, the Queensland Court of Appeal endorsed that principle in Queensland Police Credit Union Ltd v Criminal Justice Commission [2000] 1 Qd R 626 and Greig v Stramit Corporation Pty Ltd [2004] 2 Qd R 17.

Accordingly, WA was entitled to have the enforcement order made in its absence set aside. That was the case even if there was “nothing which WA could have legitimately put before the Court … which would have altered the outcome of the [ex parte] application”.18

The necessity of making full disclosure of material facts and not misleading the court on issues of law

WA argued that an independent basis justifying the setting aside of the enforcement order was that the applicants had failed to disclose certain material facts at the ex parte hearing, and had misled the court on some issues of law. Martin J agreed, finding that the applicants had failed to adequately disclose the actual state of compliance with the arbitral awards (with closer inspection indicating, for example, that there was nothing left in the 2014 award to enforce).19

Further, the applicants had failed to put case law about the enforceability of declaratory awards before the court, and had made erroneous submissions about the supposed orthodoxy of proceeding ex parte on applications of this kind (as discussed earlier in this article).20

Martin J also agreed that the applicants’ failures (which his Honour accepted were inadvertent) meant that the enforcement order should be set aside.21 As Gageler J observed in Aristocrat Technologies Australia Pty Ltd v Allam (2016) 327 ALR 595, [15]:

“It is an elementary principle of our ordinarily adversarial system of justice that full and fair disclosure must be made by any person who seeks an order from a court ex parte, with the result that failure to make such disclosure is ordinarily sufficient to warrant discharge of such order as might be made.”

After a review of the authorities, his Honour provided a helpful summary of the duties of applicants in ex parte proceedings, which include that:22

  • an applicant must make full disclosure of all material facts (and make proper enquiries about those facts before a hearing)
  • an applicant must identify any crucial points for and against the application, and make the judge aware of any likely defences, and
  • an applicant must inform the court of the relevant legal authorities, including those that are contrary to the applicant’s interests or arguments.

A key rationale for such duties, his Honour explained, was that judges hearing applications must often proceed quickly, and will seek to deliver an ex tempore judgment. In doing so, judges “rely heavily on those who appear before them to accurately and expeditiously lay out the case for consideration”.23 Paraphrasing an observation of well-known American judge Richard Posner, his Honour colourfully explained that “judges are not pigs, hunting for truffles in the documents”, and that no judge has the time – when attempting to resolve applications expeditiously – of closely examining voluminous affidavits, exhibits and authorities, in order to “determine whether they support, in all necessary respects, an applicant’s case”.24

Conclusion

Parties involved in commercial litigation can ordinarily be sure that an opponent will quickly point out any deficiency in a case. In the usual course, it is not a practitioner’s responsibility to make the opponents’ submissions for them.

However, when proceeding ex parte a different approach must be taken. Apart from establishing an entitlement to proceed ex parte,applicants must turn their minds in a more comprehensive way to what might be said for the (non-attendant) respondent party, and then actually present those arguments to the court.

As Allsop J (as his Honour then was) explained in Walter Rau Neusser Oel and Fett v Cross Pacific Trading Ltd [2005] FCA 955, [38], an applicant appearing ex partemust “take the place of the absent party”, which means “squarely putting the other side’s case, if there is one” by outlining “what might be said against the making of the orders”. Accordingly, the cost of proceeding ex parte includes the cost of presenting the other side’s case for them, while they are unable to be heard.

Whatever the costs may be of preparing for an ex parte application – that is, of corralling and presenting arguments both for and against oneself – the costs of failing to meet the attendant duties on such an application are even greater.

As Mineralogy v WA illustrates, the duties of ex parte applicants must be complied with “on pain of a penalty that the order will be set aside” (Savcor Pty Ltd v Cathodic Protection International APS (2005) 12 VR 639, 648 (per Gillard AJA)). Where that occurs, it may be necessary for a further hearing to be held (possibly in the presence of the respondent) in order to establish an entitlement to relief all over again.

William Isdale is a senior legal officer at the Australian Law Reform Commission. Samuel Walpole is a legal officer at the Australian Law Reform Commission and an adjunct fellow at the University of Queensland. The views expressed in this article represent solely the personal views of the authors.

Footnotes
1 Mineralogy Pty Ltd & Anor v The State of Western Australia [2020] QSC 344, [77] (Mineralogy v WA).
2 Savcor Pty Ltd v Cathodic Protection International APS (2005) 12 VR 649, 648 (per Gillard AJA).
3 Mineralogy v WA, [12].
4 Ibid [27].
5 Ibid [57].
6 Ibid [3].
7 Ibid [20].
8 Ibid [145].
9 Ibid [29].
10 Ibid [41].
11 Ibid [56], [61].
12 Ibid [46], [49]-[51].
13 Ibid [42].
14 Uniform Civil Procedure Rules, r27(3)(a).
15 Mineralogy v WA, [34].
16 Ibid [58]-[59].
17 Ibid [58].
18 Ibid [75].
19 Ibid [96], [99].
20 Ibid [103], [111].
21 Ibid [85], [123].
22 Ibid [82].
23 Ibid [77].
24 Ibid [78].

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