Australian Securities Commission v MacLeod

In the matter of Robert James MacLeod and others, the Australian Securities Commission (ASC) sought judgment against the respondents pursuant to Order 10, Rule 7(1)(b) of the Federal Court Rules. The respondents had filed a defence but failed to comply with a direction given under Order 10, Rule 1, requiring them to file and serve further particulars of their defence by 20 October 1993. The respondents' solicitor conceded that there was a failure to comply with the direction in question but submitted that the applicant knew or had the means, in the form of documents in its possession, of ascertaining the facts, and this was a discretionary consideration against granting the judgment sought.

The court held that where final judgment is sought against a respondent pursuant to Order 10, Rule 7(1)(b) on the ground that the respondent is in default in complying with directions given under the order, the applicant must support its motion for judgment with material in legally admissible form sufficient to prove not only that the Court has jurisdiction in the matter and that the circumstances are such as to justify the grant of this discretionary remedy, but also all the facts necessary to prove its entitlement to the relief claimed under the judgment applied for. The applicant had filed material sufficient to entitle it to final judgment in the action, and the court ordered final orders in terms of paragraphs 1, 2A, 3A, 4 and 4A of the amended application filed on 11 March 1993. The applicant was also entitled to an order against the respondents for the payment of its costs of and incidental to the proceedings.

The court acknowledged that in theory, a recalcitrant respondent would be able to put an applicant for judgment to proof by appearing on the application and cross-examining, after notice had been given requiring the attendance of the applicant's witnesses; such a proceeding could become very protracted indeed. However, as with all procedures enabling a party to bring an action to an end summarily, judgment can only properly be applied for under the rule in a clear case. In such a case, it will generally be fairly plain whether the respondent who wants to cross-examine all and sundry is engaging in delaying tactics: the Court has power to deal with that.