Lloyd Werft Bremerhaven GmbH v “Zoya Kosmodemyanskaya”

[1999] FCA 471

FEDERAL COURT OF AUSTRALIA

Lloyd Werft Bremerhaven GmbH v “Zoya Kosmodemyanskaya” [1999]
FCA 471

PRACTICE AND PROCEDURE – last minute application for adjournment – critical witnesses unable to obtain visas in time for hearing – not possible to proceed to a fair and complete hearing – costs thrown away – whether on an indemnity basis – need to make application to Court in a timely way rather than making repeated requests for further discovery – costs awarded on party-party basis

LLOYD WERFT BREMERHAVEN GmbH v

THE OWNERS OF THE SHIP “ZOYA KOSMODEMYANSKAYA” AS SURROGATE FOR THE SHIPS “TARAS SHEVCHENKO”, “DELPHIN” (PREVIOUSLY “KAZAKHSTAN II” PREVIOUSLY “BYELORUSSIYA”) AND “KAZAKHSTAN”

NG 311 of 1997

TAMBERLIN J
SYDNEY
14 APRIL 1999

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 311 OF 1997
IN ADMIRALTY

BETWEEN:	LLOYD WERFT BREMERHAVEN GmbH Plaintiff
AND:	THE OWNERS OF THE SHIP “ZOYA KOSMODEMYANSKAYA” AS SURROGATE FOR THE SHIPS ‘TARAS SHEVCHENKO”, “DELPHIN” (PREVIOUSLY “KAZAKHSTAN II” PREVIOUSLY “BYELORUSSIYA”) AND “KAZAKHSTAN” Defendant

JUDGE:	TAMBERLIN J
DATE:	14 APRIL 1999
PLACE:	SYDNEY

REASONS FOR JUDGMENT
Ex-tempore Judgment

1. A Notice of Motion was filed in Court this morning by Ukrainian Shipping Company and Tor Shipping Limited for orders that the hearing fixed for 19, 20 and 21 April 1999 be vacated.  A second proposed order is that the applicants on the Motion should pay the costs of the plaintiff thrown away as result of the vacation of the hearing date.

2. This proceeding commenced early in 1997.  There have been a number of interlocutory proceedings and directions given and the matter was fixed for hearing on the above dates, at a directions hearing on 6 November 1998.

3. It is apparent from the evidence filed, and from what I have been told by counsel that, this matter is not in a position to proceed to a full and proper hearing beginning next Monday.  There is an outstanding and unresolved dispute between the parties as to the adequacy of discovery with respect to what are claimed to be essential documents. Furthermore, dissatisfaction has been expressed on behalf of the respondent to this application (the plaintiff in these proceedings) in relation to the wording of the security for costs, which was not provided until this morning, foreshadowing a further dispute as to security for costs.

4. The principal reason raised on behalf of the applicants in support of the adjournment, is that visas have not been obtained by the applicants for two critical witnesses.  I am informed that the evidence to be given by these witnesses cannot be arranged by video-link which is commonly employed in this Court to minimise expense and to save time.

5. The respondent to the application proposes that the hearing be vacated but on the basis of an order that the applicants pay the indemnity costs of the respondent; a stay of the proceeding until those costs have been paid; an order that security for costs for the motion be provided by the applicants at an amount to be agreed between the parties; an order that the amount of security and payment must take place prior to the taking of any further step; an order that the applicants file an affidavit explaining why there was a failure to comply with discovery and the failure to obtain visas; an order that direct questions of leave to adduce further evidence be reserved and that further directions be given.  The respondent’s submissions focus on the continuing failure by the applicants to provide discovery.  I am informed by the applicants that this claim is disputed.

6. The present situation which has been allowed to develop is most unsatisfactory from the viewpoint of the Court’s efficient and timely handling of litigation, and the allocation of Court time.  What the application entails is that there must now be an adjournment of three full hearing days, set aside five months ago, because of non-compliance with directions.  The circumstances are such that the fault to a considerable extent lies on both sides, although predominantly in relation to the present application it lies on the part of the applicants for this adjournment.

7. I am not satisfied on the material before me that any case has been made out for imposing the exceptional burden of indemnity costs on the applicants, particularly in view of the fact that no application for discovery was taken out in the Court by the respondent despite continuing failure on the part of the applicant to furnish discovery.  The respondent relied on repeated assertions by the applicants that discovery would be provided.  There appears to have been much sabre-rattling but no positive application to the Court to resolve the discovery issue.  This is not a clear-cut case where the fault lies entirely on one side.  With strong reservations and great reluctance I consider that there is no alternative in the interests of a fair and complete hearing but that the hearing date should be vacated.  I am not persuaded that an order for costs of this Motion on an indemnity basis should be made.  However, the applicants for the adjournment must pay the costs of the Motion and any costs thrown away as a result of the vacation of the hearing dates and I so order.  I also order that leave be granted to tax costs and to take steps forthwith to recover the costs of the adjourned application.  I am not prepared to stay the proceedings or make any other orders except to direct that the matter be listed before me on 3 June 1999 for further directions with a view to fixing a hearing.  In relation to the outstanding questions of the discovery and the adequacy of the security, the respondent can make any appropriate application which it considers fit within the above two month period.  I grant liberty to restore the matter on two days prior notice.

8. I note that further affidavit evidence for the hearing of these proceedings is to be provided by an officer of Tor Shipping Limited in the form of the draft affidavit of Mr Gennadiy Teplov.

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin.

Associate:

Dated:             14 April 1999

Counsel for the Applicants:	D Pritchard
Solicitor for the Applicants:	Norton Smith & Co
Counsel for the Respondent:	A W Street SC G Nell
Solicitor for the Respondent:	Phillips Fox
Date of Hearing:	14 April 1999
Date of Judgment:	14 April 1999