Dai v Zhu

This case concerned an appeal from orders made by a primary judge striking out the applicants' defence and entering judgment against them in default of discovery obligations. The applicants, Dai and Zhu, had failed to comply with court directions for discovery, leading the respondents to allege deliberate and contumelious non-compliance amounting to an abuse of process. The primary judge had noted the proceedings had been before the court on multiple occasions, with ongoing complaints about the applicants' failure to produce documents.

The central legal issues before the appellate court were whether the primary judge had erred in his factual findings regarding the applicants' conduct and whether his discretion to strike out the defence and enter judgment had been wrongly exercised. Specifically, the court had to consider the significance of the applicants' failure to provide evidence of a bona fide defence, particularly in light of allegations of fraud and misappropriation of funds. The applicants also raised issues concerning the adequacy of their defence and the opportunity to obtain legal advice.

The appellate court found that the primary judge had correctly identified the applicants' conduct as potentially contumelious and an abuse of process, noting that the respondents only needed to prove this on the balance of probabilities. Despite acknowledging the possibility of an innocent explanation, the primary judge had expressed severe reservations. The court agreed that the applicants had been afforded numerous opportunities to comply with court orders and present their case, describing the court's approach as providing "indulgence upon indulgence." The applicants had failed to provide any substantive answer to the allegations of fraud or explain the whereabouts of the misappropriated moneys.

The appeal was dismissed. Leave to appeal was granted, but the appeal itself was dismissed, with the applicants ordered to pay the respondents' costs.