Re Wridgemont Display Homes Pty Ltd

[1992] FCA 604

JUDGMENT No. ..h04.. J 3&.,

FEDERAL COURT OF AUSTRALIA	1	No. QG 3103 of 1992
QUEENSLAND DISTRICT	1
GENERAL DIVISION	1

IN THE MATTER OF THE

CORPORATIONS LAW

AND

IN THE MATTER OF WYSVISA PTY.

LTD. ("the Company") ACN 010 947

145

PETER TAK YUEN KAM

First Applicant

PETER JOSEPH 14cINALLY

Second Applicant

ROWAN ANDREW ASTILL

Third Applicant

SILVERVILLA PTY. LTD. ACN

010 928 336

Fourth Applicant

DAVID FISHER

First Respondent

TREVOR DAVID CHAPPELL

Second Respondent

HAVENCAY PTY. LIMITED ACN

003 928 336

Third Respondent

today's proceedings of all the other parties, such costs to be taxed on a solicitor and client basis.

MINUTES OF ORDERS

JUDGE MAKING ORDER:	Drummond J
DATE OF ORDER:	11 August, 1992
WHERE MADE:	Brisbane
THE COURT ORDERS THAT:

1.        The first applicant, Mr. Kam, pay the costs of

2.        All parties have leave to tax their costs of today.

THE COURT DIRECTS THAT:

1.        Each applicant file and serve a statement of factual and legal contentions by 10.00 a.m. on Monday, 17 August, 1992.

2.        The proceedings brought by any applicant who is in default of direction 1 herein shall stand dismissed as from 10.15 a.m. on Monday, 17 August, 1992.

3.        In the event that the proceedings brought by any applicant stand dismissed pursuant to direction 2 herein, that applicant shall pay the costs of the respondents of and incidental to that applicant's proceedings, such costs to be taxed on a solicitor and client basis.

4.        All respondents file and serve all material upon which they propose to rely in support of their applications for security for costs by 4.30 p.m. on

Thursday, 13 August next. C- F- -..

- ! i , t .,

,. . '-p -I-..,

5. Any material upon which the first' appl,icanf, Mr. Kam, wishes to rely in response to applications for security for costs be filed and servedlby ,91a.m'., on Monday, 17 August. . - , . .1 \ ' . I--

. , . . -

,- .

6. In relation to direction 5 herein, &$e firs$ # . - I

applicant, Mr. K m , has lealib. to 'file £acs'imil'&, I - . * .

affidavits.	2	* .F , , - *
"" ". " S3S' - '

.' -,. /,;'

7.        The Court will hear any applications -by-&iy or all of the respondents for security for costs at 10.00

a.m. on Monday, 17 August, 1992.

8.        The application by Messrs. McInally Astill for leave under Order 45 rule 7(2) of the Federal Court Rules is adjourned to 10.00 a.m. on Monday, 17 August,

1992.

9.        The matter is adjourned generally for further directions to 10.00 a.m. on Monday, 17 August, 1992.

10. The applicants' solicitors, Messrs. McInally Astill
forthwith advise Mr. Klapper of Messrs. Clarke &
Kann of the terms of these directions.

FEDERAL COURT OF AUSTRALIA	1	NO. QG 3013 of 1992
QUEENSLANTI DISTRICT	)
GENERAL DIVISION	1

IN THE MATTER OF THE

CORPORATIONS LAW

AND

IN THE MATTER OF WYSVISA PTY.

-	LTD. ("the Company") ACN 010 947
145
PETER TAK YUEN KAM

First Applicant

PETER JOSEPH McINAtLY

Second Applicant

ROWAN ANDREW ASTILL

I

Third	Applicant	!v
I '

SILVERVILLA PTY. LTD. ACN	,
010 928 336

Fourth Applicant I

DAVID FISHER	..
i

First	Respondent	t .
I
i

TREVOR DAVID CHAPPELL	1'
I

Second Respondent

i

HAWNCAY PTY. LIMITED ACN	!
003 928 336	!

Third Respondent

I

!

m:	Drummond J
Date:	11 August, 1992

Place: Brisbane

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EX TEMPORE REASONS FOR JUDGMENT

This matter came before me on Wednesday, 5 August

last on an application by all four applicants for
interlocutory orders. The first applicant, Mr. Kam, was
present in court on that occasion. It, ultimately, became
unnecessary for me to make any of the interlocutory orders
sought because arrangements were able to be made within the
court to give the parties an accelerated hearing. Mr. Justice
Beaumont is available to hear the matter for five days in the
week commencing Monday, 24 August, 1992.

All the parties were represented before me on the afternoon of Friday, 7 August, when the arrangements for an early trial were said to be accepted and, indeed, desired by

all parties. On that occasion counsel for all four applicants

informed me that there was a good prospect that the matter
would settle in the immediate future. Counsel for the first
respondent and counsel for the second and third respondents
confinned this.

On the following &ionday, I had my associate send a

letter by facsimile to the solicitors for each of the parties

indicating that, notwithstanding the intimation given on

Friday, 7 August as to the prospects of the matter settling, I proposed to make certain directions designed to ensure that the matter would be ready to proceed on 24 August, if settlement did not eventuate. The letter sent by my associate

is framed in terms of my having actually made directions. In

fact, it should be regarded as my having foreshadowed that I
would today make directions.

All the parties are again represented before me

today. However, Mr. Daubney, counsel for the four applicants,
seeks leave for his solicitors, Messrs. McInally Astill to
file and serve notice of having ceased to act for the first
applicant, Mr. Km. Leave is necessary because those
solicitors, through no fault of their own, have not been able
to comply with Order 45, rule 7(2) of the Federal Court Rules.

What has happened to make this application necessary

is revealed in an affidavit sworn today by Mr. Astill, who is
not only a member of that firm of solicitors but also the
third applicant. He deposes to Mr. Klapper, a member of the
firm of Messrs. Clarke and Kann, having been brought into the

proceedings on 30 July, 1992 on behalf of Mr. Kam. He says

that his partner, Mr. McInally, who is also the second

applicant, has told him that on 31 July, Mr. K m contacted Mr.

McInally personally and told Mr. McInally that Messrs. Clarke and Kann would retain a "watching brief" on the matter in order to protect the interests of Mr. K m . Nevertheless, the arrangements were that M r . Km's present solicitors, Messrs.

McInally Astill, would remain solicitors on the record for him

with the conduct of the application on his behalf.

Mr. Astill goes on to depose to the fact that,

acting on instructions from Mr. Kam and his CO-applicants, he
attended a meeting in Sydney on Friday, 7 August last with the

first and second respondents, Messrs. Fisher and Chappell.

Mr. K m was personally in attendance. The purpose of the

meeting was to hold "without prejudice" discussions with a
view to settling the matter. Mr. Astill says that, in effect,
terms of settlement were agreed between all parties save that

Mr. Kam was not in agreement with the proposal that was then

reached.	The proposal is not, of course, before me.
Mr. Astill says that on his advice, something

confirmed by a letter exhibited to his affidavit, Mr. Kam was
urged to take advice from Mr. Klapper of Messrs Clarke and
Kann concerning the settlement proposal. Mr. Astill also says
that he forwarded to Mr. Xlapper a copy of the letter from my
associate dated 10 August, 1992 dealing with the matter of
directions and it is apparent from the letter itself, which is
exhibit "A" to Mr. Astill's affidavit, that he drew Mr.
Klapper's attention to the fact that a directions hearing
would be held this afternoon.

Neither Mr. Kam nor any lawyer seeking to appear on behalf of Mr. Kam has appeared this afternoon,

notwithstanding, as I have said, that it is plain that Mr.

K m , by Mr. Klapper, the solicitor apparently now acting for him, was well aware of the arrangement for a directions hearing to take place this afternoon.

Mr. Kam is, of course, perfectly entitled not to

compromise his claims and to take them to trial, but what he
is not entitled to do is to manoeuvre so as to obtain a
personal advantage in the litigation at the expense not only
of the other litigants, but also at the expense of this court.
It appears from the material before me that that is what he is
attempting to do. In paragraph 6 of Mr. Astill's affidavit,
to which I have referred, Mr. Astill says that at the meeting

in Sydney on 7 August, Mr. K m told.him that he would be

remaining in Australia to give instructions to Mr. Klapper on the morning of 10 August. However, it is clear that that did not happen because Mr. K m appears very promptly after 7

August to have returned to his home in Hong Kong. Mr Astill,

in fact, rang Mr. Kam in Hong Kong on the morning of 10 August
and was told by Mr. Kam that Mr. Klapper would hitherto be

attending to his interests in relation to these proceedings.

Mr. Astill goes on to say that about midday today,

Mr. Klapper telephoned to advise him that he did not propose to appear at the directions hearing scheduled for this afternoon. Mr. Astill told Mr. Klapper that Messrs. McInally Astill would be seeking leave to, in effect, withdraw as solicitors on the record for Mr. Kam.

Mr. Astill expressed concerns at what consequences

that might have for Mr. Kam. Mr. Klapper said he understood
the consequences but then went on to inform Mr. Astill that
he, Mr. Klapper, while aware of the possible consequences of
non-appearance at the directions hearing by Mr. Kam this
afternoon, had gone on to advise Mr. K m of these consequences
and still did not believe that he, Mr. Klapper, would receive
instructions from Mr. Kam to appear today on Mr. Km's behalf.

I also have before me a letter from Messrs. Clayton Utz, the solicitors for the first respondent, to Mr. Klapper, of Messrs. Clarke and Kann, sent by facsimile this afternoon, in which the importance of Mr. Kam being represented this

afternoon is again stressed.

However, as I have mentioned, Mr. Kam does not

appear in person or by any legal representative, nor has he
made any application to the effect that he is in any
difficulty in complying with the directions foreshadowed in my
associate's letter of 10 August, 1992. Instead, he has, on
the material before me, deliberately refused to instruct the
person who appears to be his present solicitor, Mr. Klapper,
of Messrs. Clarke and Kann, to attend here today. Hence my

comment that the inference from the material before me is that

W. Kam is doing quite a deal more than he is entitled to -

quite a deal more than not agreeing to compromise the action
and insisting on his trial, but instead, engaging in quite

reprehensible manoeuvres.

What I propose to do, in these circumstances, in an

endeavour to hold the trial date (because there is now no
reason to feel confident that the matter will settle), is give
a series of directions which, unfortunately, will involve
bringing the parties back again on the morning of Monday, 17
August, 1992.

I direct that each applicant file and serve a

statement of factual and legal contentions by 10.00 a.m. on

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Monday, 17 August, 1992. I further direct that in default of compliance with this first direction, the proceedings brought by any applicant in default shall stand dismissed as from

10.15 a.m. on Monday, 17 August, 1992. I further direct that

in the event that the proceedings brought by any applicant
stand dismissed because of any such default, that applicant
shall pay the costs of the respondents of and incidental to
that applicant's proceedings, such costs to be taxed on a

solicitor and client basis.

I further direct that the applicants' solicitors

forthwith advise Mr. Klapper, of Messrs. Clarke and Kann, of

the terms of the directions made by me this afternoon.

The application by Messrs. McInally Astill for leave

under Order 45, rule 7(2) of the Federal Court Rules is

adjourned until 10 a.m. on 140nday, 17 August, 1992. The

matter is adjourned generally for further directions to the
same time and date.	I will indicate that I anticipate that on

17 August, 1992 I will give directions in terms of paragraphs
2, 3 and 4 of my associate's letter of 10 August and any other
directions that may be necessary to ensure that the matter

wlll be ready to proceed to trial.

I will make an order that the first applicant, Mr.

Kam, pay the costs of today's proceedings of all the other

part ies, such costs to be taxed on a solicitor and client

basis. .

All three respondents have foreshadowed applications

that Mr. Kam be required to give security for their costs of

the action, he being resident out of the jurisdiction.

I direct that all respondents file and serve all

material upon which they propose to rely in support of their

applications for security for costs by 4.30 p . m . on Thursday,

13 August next. I will appoint 10.00 a.m. on Monday, 17

August as the time for the hearing of any such applications.

I direct that any material upon which Mr. Xam wishes

to rely in response to applications for security for costs be filed and served by 9 a.m. on Monday, 17 August. If leave be necessary, I give Mr. Kam leave to file facsimiles of

affidavits upon which he may wish to rely.

In relation to the order for costs of today's

proceedings, I will give leave to all parties to tax those

costs.

I certify that this and the preceding

seven pages is a true copy of the
reasons for judgment herein of the

Honourable Mr. Justice Drummond.

Associate:

1992 V

Date:  11 U ugust,