Medical Cosmetic Centre Pty Ltd ACN 007 867 398 v Laser Resources Management Pty Ltd ACN 009 650 526
[2003] FCA 512
•16 MAY 2003
FEDERAL COURT OF AUSTRALIA
Medical Cosmetic Centre Pty Ltd ACN 007 867 398 v Laser Resources Management Pty Ltd ACN 009 650 526 [2003] FCA 512
MEDICAL COSMETIC CENTRE PTY LTD ACN 007 867 398 v LASER RESOURCES MANAGEMENT PTY LTD ACN 009 650 526
No S 171 of 2002
von DOUSSA J
ADELAIDE
16 MAY 2003
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
S171 OF 2002
BETWEEN:
MEDICAL COSMETIC CENTRE PTY LTD ACN 007 867 398
APPLICANTAND:
LASER RESOURCES MANAGEMENT PTY LTD ACN 009 650 526
RESPONDENTJUDGE:
von DOUSSA J
DATE OF ORDER:
16 MAY 2003
WHERE MADE:
ADELAIDE
THE COURT ORDERS THAT:
1.Further extend time for the applicant to file witness statements of the evidence in chief of the witnesses upon which it intends to rely to 30 May 2003. In the event that a witness refuses to provide a witness statement and the applicant intends to subpoena that witness, direct that the applicant file an outline of the topics and evidence proposed to be led from that witness by 30 May 2003.
2.Extend time for the applicant to file expert reports on which it intends to rely to 30 May 2003.
3.Direct the applicant to complete its discovery, including of financial and client records and maintenance and service records for the life of the subject equipment, by 30 May 2003.
4.In the event that there is any dispute about inspection of discovered documents, the applicant must, nevertheless, comply with order 3, and on or before 30 May 2003, seek directions from the Court about the preservation of confidential information contained in discovered documents.
5.Direct the applicant to pay into Court by 30 May 2003 the amount of the cross-claim, namely $32,667.63, to abide the further order of the Court.
6.Dismiss the notice of motion of 27 November 2002.
7.Order that the applicant pay the respondent’s costs of the notice of motion of 27 November 2002, including the costs of the hearing on 6 December 2002.
8.Adjourn these proceedings and the notice of motion of 10 March 2003 to 9.30 am on Friday, 13 June 2003.
9.Subject to par 10 below, reserve the question of costs of and incidental to the notice of motion of 10 March 2003.
10.Order that the applicant pay the respondent’s costs of today on a solicitor and client basis, such costs to be payable immediately upon taxation or agreement.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
S171 OF 2002
BETWEEN:
MEDICAL COSMETIC CENTRE PTY LTD ACN 007 867 398
APPLICANTAND:
LASER RESOURCES MANAGEMENT PTY LTD ACN 009 650 526
RESPONDENT
JUDGE:
von DOUSSA J
DATE:
16 MAY 2003
PLACE:
ADELAIDE
REASONS FOR JUDGMENT
These proceedings were commenced on 18 July 2002. A statement of claim was filed with the application. The applicant sought damages for approximately $413,000 in respect of the malfunction of laser equipment used by it in the business of cosmetic surgery, specialising in hair transplantation, laser hair and tattoo removal, and various other cosmetic procedures. The statement of claim was long and complex. It was difficult to ascertain precisely what the cause of complaint was.
I have been informed on several occasions from the bar table that the background is that the applicant acquired laser equipment from a third party, not the respondent. Two years later the respondent was asked to provide maintenance and repairs to the equipment. Having done so, the respondent rendered invoices for a total amount of $32,667.63. As the invoices were not paid, the respondent ultimately issued proceedings against the applicant in a lower jurisdiction court in Victoria. These proceedings were then commenced. The proceedings in Victoria were discontinued by the respondent, and a claim for the invoice amount was brought into this court by way of a cross-claim.
There were immediate complaints by the respondent about the inadequacy of the statement of claim. There was a first directions hearing on 2 September 2002 when leave to amend the application and statement of claim was given. Amended documents were not filed in the time frame envisaged by the leave. The next documents filed were the defence and cross-claim. An amended application was filed on 8 November 2002 which only amended the claims by saying that the amount of damages alleged were also sought by way of breach of contract and at common law. The earlier claims had been made under the Trade Practices Act 1974 (Cth), the Misrepresentation Act 1972 (SA), and the Fair Trading Act 1987 (SA).
On 27 November 2002 a notice of motion to strike out the pleadings was filed. The notice of motion came on for hearing on 6 December 2002 when many complaints about the adequacy of the statement of claim were made by the respondent. On that occasion orders were made giving leave to the applicant to further amend the statement of claim by 20 December 2002, and directing the applicant to give inspection of documents by 20 December 2002, to file witness statements from lay witnesses by 5 February 2003 and expert reports by 28 February 2003.
Those matters were not attended to by the applicant and on 10 March 2003 a further notice of motion was taken out by the respondent, seeking to strike out the proceedings. An affidavit was filed in support, articulating many complaints about the pleadings, discovery and non-compliance with directions.
On 12 March 2003 an amended statement of claim was filed which changed many paragraphs of the pleading. On 14 March 2003 there was a directions hearing. The witness statements had not been filed. The respondent complained of that failure and urged the striking out of the proceedings. Extensions of time were granted to enable the applicant to put its house in order. There was a formal direction that there be a clean copy of the amended statement of claim filed within seven days. It was filed out of time on 2 April 2003.
The applicant was directed to file statements of their witnesses by 21 March 2003, save for one from Mr Ian Firth that was to be filed by 11 April 2003, and its expert reports were to be filed by 28 March 2003. None of those things occurred. At the behest of the Court, the matter was relisted on 3 April 2003. The Court made clear its concern about the non-compliance with the orders, and indicated that if the orders were not complied with the action was likely to be struck out. The notice of motion of 10 March 2003 seeking that the action be struck out was adjourned to 1 May 2003. It was necessary for the Court to change that date to 16 May 2003.
The matter has come on today. The respondent has renewed the application to have the action struck out on the basis that no witness statements or expert reports have been filed, and the process of discovery has not been completed to the satisfaction of the respondent.
I am particularly concerned about the delays which have occurred and the apparent failure of the applicant to prosecute the claim with due seriousness. The proceedings and the way in which they have been conducted up to date by the applicant have all the hallmarks of a debtor seeking to avoid paying a creditor.
Mr Chrzaszcz informs the Court from the bar table that extensive steps have been taken to prepare witness statements and an expert report, and it is the applicant’s desire to go on with the case. He has again asked for further time. Reluctantly, I propose to grant that further time, but subject to some conditions. One condition is that within 14 days the amount of the cross-claim – $32,667.63 – be paid into Court.
I think that against the history of the defaults that have occurred there would be grounds to order that that money forthwith be paid out to the respondent but without prejudice to the respondent’s entitlement to claim interest thereon. However, as the applicant plead its claim by way of a set-off to the cross-claim I propose to order that the money remain in Court until further order. But the applicant must realise that unless there is a strong ground of defence to the cross-claim made apparent on the papers before the Court at the next hearing, at the very least there is likely to be an order giving judgment on the cross-claim, and an order for payment out of the money in Court to the respondent, together with an assessment of interest and costs on the cross-claim. If the action is otherwise in order, the applicant may be permitted to proceed with its claim but will be faced with the judgment on the cross-claim in the meantime.
A further warning is given to the applicant that if the matter is not properly in order at the next hearing, it can expect that the application itself will be struck out for failure to properly prosecute it.
There is still outstanding the notice of motion of 27 November 2002 which sought further and better particulars of the statement of claim. There is now an amended statement of claim which substantially addresses many of the earlier issues and, indeed, changes the nature of the claim somewhat. In the circumstances, I think that it is appropriate now to formally dismiss the notice of motion of 27 November 2002, making no further order on it, save that the applicant must pay the respondent’s costs of that notice of motion.
On the notice of motion of 10 March 2003, there will be an order that it be adjourned, with the costs of the notice of motion to date being reserved, save that I will order that the costs of today be taxed on a solicitor and client basis and be paid forthwith upon taxation to the respondent by the applicant.
The orders of the Court are as follows:
1.Further extend time for the applicant to file witness statements of the evidence in chief of the witnesses upon which it intends to rely to 30 May 2003. In the event that a witness refuses to provide a witness statement and the applicant intends to subpoena that witness, direct that the applicant file an outline of the topics and evidence proposed to be led from that witness by 30 May 2003.
2.Extend time for the applicant to file expert reports on which it intends to rely to 30 May 2003.
3.Direct the applicant to complete its discovery, including of financial and client records and maintenance and service records for the life of the subject equipment, by 30 May 2003.
4.In the event that there is any dispute about inspection of discovered documents, the applicant must, nevertheless, comply with order 3, and on or before 30 May 2003 seek directions from the Court about the preservation of confidential information contained in discovered documents.
5.Direct the applicant to pay into Court by 30 May 2003 the amount of the cross-claim, namely $32,667.63, to abide the further order of the Court.
6.Dismiss the notice of motion of 27 November 2002.
7.Order that the applicant pay the respondent’s costs of the notice of motion of 27 November 2002, including the costs of the hearing on 6 December 2002.
8.Adjourn these proceedings and the notice of motion of 10 March 2003 to 9.30 am on Friday, 13 June 2003.
9.Subject to par 10 below, reserve the question of costs of and incidental to the notice of motion of 10 March 2003.
10.Order that the applicant pay the respondent’s costs of today on a solicitor and client basis, such costs to be payable immediately upon taxation or agreement.
I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice von Doussa. Associate:
Dated: 26 May 2003
Counsel for the Applicant: Mr R J P Chrzaszcz Solicitor for the Applicant: Gretsas Chrzaszcz Counsel for the Respondent: Mr A D O’Halloran Solicitor for the Respondent: Ponte Earle Harrick Date of Hearing: 16 May 2003 Date of Judgment: 16 May 2003
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