Heng v (Australia) Pty Ltd v Wang

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FEDERAL COURT OF AUSTRALIA

Heng V (Australia) Pty Ltd v Wang [2009] FCA 922

PRACTICE AND PROCEDURE – case-management – judgment in default of compliance with orders for discovery and inspection of documents – persistent refusal to make documents available for inspection – whether principle that a party should not be made to suffer a judgment for a large sum of money without being entitled to a trial and judgment of all of the issues in a proceeding to which that person is a party – relevance of case-management powers and principles

Trade Practices Act 1974 (Cth), ss 52, 75B

Federal Magistrates Court Rules 2001 (Cth), rr 13.03, 13.03A, 13.03B, Pt 14

House v The King (1936) 55 CLR 499 applied
Freeman v Rabinov [1981] VR 539 not followed
State of Queensland v JL Holdings Pty Ltd (1997) 141 ALR 353 not followed
Aon Risk Services Australia Limited v Australian National University [2009] HCA 27 followed

HENG V (AUSTRALIA) PTY LTD (ACN 101 665 785) and TIANFU LI v QI WANG

VID 304 of 2008

GRAY J
20 AUGUST 2009
MELBOURNE


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 304 of 2008
ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA
BETWEEN:

HENG V (AUSTRALIA) PTY LTD (ACN 101 665 785)
First Appellant

TIANFU LI
Second Appellant
AND:

QI WANG
Respondent

JUDGE:

GRAY J

DATE OF ORDER:

20 AUGUST 2009

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1.The appeals be dismissed.

2.The appellants pay the respondent’s costs of the appeals.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.


The text of entered orders can be located using eSearch on the Court’s website.


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 304 of 2008
ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA
BETWEEN:

HENG V (AUSTRALIA) PTY LTD (ACN 101 665 785)
First Appellant

TIANFU LI
Second Appellant
AND:

QI WANG
Respondent

JUDGE:

GRAY J

DATE:

20 AUGUST 2009

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

The nature and history of the proceeding

  1. These appeals result from a judgment given as a result of default in compliance with orders made by the Federal Magistrates Court of Australia in a proceeding before it.  Following repeated failure by the appellants to comply with orders requiring them to make discovery of documents, the learned federal magistrate ordered that the appellants’ defence be struck out.  On the following day, the matter proceeded on an undefended basis, and the federal magistrate gave judgment against the appellants, in favour of the respondent to this appeal.  The appellants contend that his Honour should not have placed them in a position in which they are subject to a judgment for a substantial sum of money, without having had the opportunity to have the issues in the proceeding tried.  The appeals raise questions of principle relating to the application of sanctions, such as refusing to allow a party to defend a proceeding, consequent upon…

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Details
Case
[2009] FCA 922
Decision Date

CaseChat Overview and Summary

Heng V and Mr Lee sought to appeal against the orders of the Federal Magistrates Court made on 1 April 2008, 14 April 2008, and 15 April 2008. The Federal Court was required to determine whether leave to appeal the interlocutory orders was necessary, and if so, whether the appeal should be allowed. Additionally, the Court needed to decide whether the appellants' failure to comply with the discovery orders and the lack of legal representation justified the dismissal of their defence and the granting of judgment to the respondent, Ms Wang.

The Federal Court held that leave to appeal the interlocutory orders was necessary as the final judgment was intertwined with those orders. The Court found that the appellants' failure to secure legal representation and comply with discovery orders was unjustified. The Court rejected Mr Lee's excuses regarding his father's illness and the alleged lateness of Ms Wang's solicitor. The evidence presented by Ms Wang's solicitor regarding the appellants' refusal to allow inspection of documents without payment substantiated the Court's findings. Consequently, the Federal Court dismissed the appeals and ordered the appellants to pay Ms Wang's costs of the appeals.

The orders of the Federal Court were that the appeals be dismissed and that the appellants pay the respondent's costs of the appeals. This decision reinforced the importance of complying with court orders and securing timely legal representation in litigation proceedings.

Orders

Orders of the court

1. The appeals be dismissed.

2. The appellants pay the respondent’s costs of the appeals.

Note:

Background

Background to the litigation

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Evidence

Evidence Before The Court

On 6 May 2008, Heng V and Mr Lee filed in this Court a notice of appeal, purporting to be an appeal from the orders made on 1 April, 14 April and 15 April 2008. At the initial directions hearing, I raised the question whether leave to appeal from the orders of 1 April 2008 and 14 April 2008 was necessary, as those were clearly interlocutory judgments. I gave directions for the filing of: an application for an enlargement of the time to apply for leave to appeal from the judgment of 14 April 2008; an application for leave to appeal from that judgment; any affidavit in support of those applications; a notice of appeal from the judgment of 14 April 2008; and an amended notice of appeal from the judgment of 15 April 2008. On 30 June 2008, I extended the time for leave to appeal from the judgments of 1 April and 14 April 2008 to 8 May 2008 and 26 June 2008 respectively. I granted leave to appeal from the judgments of 1 April 2008 and 14 April 2008. I directed that the appellants file and serve a notice of appeal relating to the judgment of 1 April 2008 and that their draft notice of appeal filed on 26 June 2008 stand as their notice of appeal from the judgment of 14 April 2008. It was apparent that the correctness of the final judgment of 15 April 2008 was so bound up with the previous orders that leave ought to be granted, so that all questions could be before the Court on the hearing of the appeal. On 26 June 2008, the appellants filed an amended notice of appeal from the judgment of 15 April 2008. They did not file an amended notice of appeal from the orders of 1 April 2008.The evidence before the federal magistrate At the directions hearing on 25 July 2007, Mr Lee is recorded as appearing, with the assistance of an interpreter, for himself and for Heng V. By the time the orders were made on 5 March 2008, the appellants were represented by solicitors. On 1 April 2008, and again on 14 April 2008, Mr Lee appeared without legal representation. On 1 April 2008, the federal magistrate had before him an affidavit of Ms Wang’s solicitor, Mr Lim, concerning the failure of the appellants to make discovery of documents. In the affidavit, Mr Lim recounted that an appointment was made with the appellants’ then solicitor, Yong Peng, at Mr Peng’s office, at 10.00 am on 19 March 2008, to inspect documents. The affidavit then proceeded as follows:7.On the 19 March 2008 at about 10.10 am I attended at the offices of the [appellant]s’ Solicitors where I met Yong Peng and [Mr Lee]. Shortly after that Yong Peng left us and went into his room to attend to his other clients.8.[Mr Lee] told me in a very angry tone that he had taken more than 2 weeks to gather all the documents this Honourable Court had ordered to be discovered by the [appellants] and he had spent no less than $3,000 to do that.9.I am not sure what [Mr Lee] had brought that day. He merely told me that he had brought with him more than 10,000 pages of documents not arranged properly and I would need to search for what I wanted to inspect and copy.10.[Mr Lee] told me that if I wanted to inspect the documents discovered by the [appellants], I or [Ms Wang] had to pay him $3,000 otherwise he would refuse inspection by me.11.I told [Mr Lee] that I was there to carry out an inspection ordered by this Honourable Court and there is no order for [Ms Wang] to pay the [appellants] $3,000 or any amount before inspection could be carried out by [Ms Wang]. To this [Mr Lee] said he could not be bothered what the Court ordered. If [Ms Wang] or I refused to pay him $3,000 he would not permit inspection.12.I then called Yong Peng who was in another room attending to his other clients when I had the above conversation with [Mr Lee]. I told Yong Peng what happened and what [Mr Lee] said to me.13.Yong Peng explained to [Mr Lee] that the Court had made the order and he had to allow me to inspect the documents without payment of any amount of money.14.[Mr Lee] refused to follow the advice of Yong Peng and told him to go back into his room as it did not concern him. He insisted that if I refused to pay the $3,000 he demanded he would not allow me to inspect the documents he had allegedly brought to Yong Peng’s offices that day.15.I told him that I would not pay him any money for the inspection and I would not advise [Ms Wang] to pay either. I told him in the presence of Yong Peng that I was not there to argue with him and if he refused to allow me to inspect the documents that day I will leave.16.I told them that if I leave without inspecting the documents I will be compelled to inform this Honourbale [sic] Court of his demand of $3000 and refusal to allow inspection if payment is not made.17.[Mr Lee] said he could be bothered even if I inform this Honourable Court of his demand for payment and refusal to allow inspection without payment of $3,000.

Decision

Reasons for decision

GRAY J
On 14 April 2008, the federal magistrate inquired of Mr Lee what he had done between 1 April and 14 April 2008 to get new solicitors. Through an interpreter, Mr Lee said that he had telephoned one solicitor, whose name he gave, but she said the time was too limited for her to read through so many documents. Mr Lee also said he told his previous solicitor to find another one for him, “but we didn’t have so much time so we couldn’t find me a new one.” The federal magistrate also asked Mr Lee some questions about the attempted inspections of documents. Mr Lee alleged that, on 19 March 2008, Ms Wang’s solicitor had been 38 minutes late, and that he had lied to the court in his affidavit about what time he arrived at Mr Peng’s office. The interpreter translated Mr Lee as saying:We have already brought every documents [sic] required by [sic] they didn’t appear, so we could only take them away. We have carried out my computer three times back and forth on that day.The federal magistrate also asked why the appellants were not ready to proceed with the case on that day. Mr Lee referred to the fact that his father was dying and that he had not seen him for seven years. The federal magistrate’s reasons for judgment In reasons for judgment delivered on 14 April 2008, the federal magistrate accepted that Mr Lee’s father’s illness had reached a critical point and that his sister had requested Mr Lee to go back to China. His Honour found on the affidavit material filed by Ms Wang’s solicitor that there had not been proper compliance with the orders for discovery. His Honour said:On balance I am satisfied that the [appellant] has no satisfactory explanation for not having organised legal representation for today. I am unpersuaded by his evidence from the bar table he spoke to a lawyer on the phone and never bothered to follow up with seeking advice from another lawyer about today’s final hearing. I am unpersuaded that there is a reasonable excuse for the failure to comply with the previous orders made, and I am unpersuaded as to his explanation for those failures. On 15 April 2008, his Honour also delivered reasons for judgment. After pointing out that he had struck out the defence on the previous day, the federal magistrate said:In addition, I was unpersuaded to grant an adjournment sought by [Mr Lee] on his behalf and [Heng V]’s behalf to allow him to get legal assistance, because the circumstances of the matter are such that he has not persuaded me that when he had the opportunity to get further legal assistance he exercised a true endeavour to do so.I was unpersuaded by the comments made by [Mr Lee] yesterday as to his due application to the proper defence of this claim, and accordingly I made the order yesterday striking out the response defence and cross-claim that he has lodged. His Honour then proceeded to give reasons for his satisfaction of each element of Ms Wang’s claim, on the basis of an affidavit she had filed containing evidence about that claim. The rules of the Federal Magistrates Court

Ratio Decidendi

Legal Principle Established

Established by: GRAY J

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