Simonsen, E.g. v Westpac Banking Corporation

[1992] FCA 390

JUDGMENT NO. - 3 Q 3

IN THE FEDERAL COURT OF AUSTRALIA)

NEW SOUTH WALES DISTRICT REGISTRY)	No G 447 of 1991
GENERAL DIVISION	1

BETWEEN EDWARD GEORGE SIMONSEN

Applicant

AND	W E S T P A C	B A N K I N G
CORPORATION Respondent

EX TEMPORE JUDGMENT

EINFELD J SYDNEY 8 APRIL 1992

There is a motion before the Court which was filed on 31 March

1992 on behalf of Westpac Banking Corporation (the respondent)

that the application and statement of claim of Mr Edward George Simonsen (the applicant) be struck out. Alternatively the respondent seeks an order that the applicant file and serve his list of documents within seven days or such other time as the Court deems fit, failing which that the applicant's application and statement of claim be struck out. The respondent also seeks an order that the applicant pay the costs of the notice of motion.

Street, Sydney, seeking relief under the Trade Practices Act	1974 in respect of a foreign currency loan alleged to have
been given by the respondent to the applicant on 11 February 1985. The statement of claim alleges false and misleading or deceptive statements made by officers of the respondent bank before the loan was drawn down, in or about November 1984.
The respondent filed a notice of appearance in court on 13 September 1991 and on that day directions were given by way of timetable for the preparation of the case for hearing. These included directions for further and better particulars of the applicant's claim, the filing and serving of the defence, and for discovery and inspection. On 12 November 1991 a series of orders were made which were designed to elicit an explanation from the applicant's side as to why the 13 September orders were not complied with and why that non-compliance should not be treated as contempt of court. As a consequence, an affidavit was filed by a solicitor in the employ of Harris and Company on 13 November 1991.
Without dealing finally with the question of possible
contempt, further directions and orders were made on 14
November 1991 fixing a new timetable for the same matters as had been previously ignored by the applicant and adding dates for the filing and serving of statements of the witnesses intended to be called by the parties. A further directions hearing was fixed for 30 March 1992 which was subsequently twice changed administratively to today.
It seems that for some considerable time, probably at the latest from about mid-1991, the applicant has been living in New York. He visited Australia, according to his solicitor's affidavit, in May 1991 but appears to be operating a business in the United States requiring him to travel frequently between Washington and New York.
An affidavit by a solicitor employed by Harris and Company dated 15 January 1992 deposed that on 11 December 1991 he had sent to the applicant by facsimile a letter stating, for the reasons more particularly set out in that letter, that in the absence of certain matters being attended to by M r Simonsen within 14 days from the date of the letter, Harris and Company intended to file and serve a notice of ceasing to act in this matter on M r Simonsen's behalf. The letter was not annexed to the affidavit because it was said that some parts of it were privileged. There was filed in the registry with that affidavit a notice by Mr Harris of Harris and Company that he has ceased to act for the applicant. This notice gave an
place of business. No telephone or facsimile number was address in New York said to be the applicant's last known given.
On 6 February 1992 the solicitors for the respondent wrote to the applicant at the New York address provided by Harris and Company. Although the letter is stated to have been delivered by hand, it seems that it was in fact delivered by some other means. Nevertheless, it is clear that the letter was received by Mr Simonsen because, by letter dated 27 February 1992 sent by facsimile to the solicitors for the respondent, he acknowledged its receipt.
The facsimile reply of the applicant was set out on a letterhead giving an address in Washington and providing a telephone and facsimile number in that city. The initial paragraph of the letter indicates that someone at the address in New York had forwarded the 6 February letter to Washington but it had not been delivered to him until 25 February 1992. Accordingly, his 27 February 1992 reply was prompt, certainly much more so than might otherwise have appeared.
In response to a particular request in the letter of 6 February by the solicitors for the respondent, the applicant supplied an address for service of documents and other communications within ten kilometres of this Court's Sydney registry. That address was care of Casablanca Investments, 32 Bayswater Road, Kings Cross. In response to a second request
of 27 February 1992 that notwithstanding his previous defaults in the letter of 6 February, the applicant said in his letter
in complying with the Court's orders, it was his intention to pursue the case. As to the list of documents in respect of which order the applicant was by this time in considerable default, he undertook to supply a schedule "shortly".
The applicant explained that his business took him on extended trips to places which "pose some communication difficulties from time to time" although none of these matters were regarded as "insurmountable." The respondent's solicitors were re-invited to fax either his New York number or the number on the Washington letterhead. I note, in passing, that on the documents before me, at least at that stage, no facsimile number had been given for the New York address. Air or surface mail was said to be "best sent to the Washington DC address" on the letterhead. Mr Simonsen explained that there were many areas, by which I presume he meant many areas where he does business and where he may be from time to time, where "fax does not yet exist" and where "telex is not yet practical either". In such circumstances "the only practical means for relaying on communication, for instance, via New York was by occasional courier pouching". He pointed out that everything did reach him in due course by one means or another, although often with considerable delay.
I must confess to being unaware that there are so many places in the USA where not even the hotels, businesses or airline
as the applicant could occasionally access. This is important offices have fax machines which a substantial businessman such
because it must be emphasised that there is no obligation upon a litigant in this Court to communicate with a party in another country, still less to chase him around that country or wait until someone else does so. There is no requirement to use overseas courier services. The rules require that there be an address within ten kilometres of the Sydney registry for such communication, for the obvious purpose of enabling parties to carry on litigation with reasonable efficiency, expedition and cost. It is for the person so addressed to arrange to receive the communication personally if not otherwise present at the address given.
Receipt of the facsimile letter of 27 February 1992 from the applicant was confirmed by letter to the applicant dated 6 March 1992. This was sent in two ways: it was posted to the Kings Cross address care of Casablanca Investments, and it was faxed to the number given in Washington. The letter emphasised the seriousness of the applicant's failure to provide the list of documents as ordered on 14 November 1991. As I have mentioned, the list was originally ordered on 13 September 1991.
The letter of 6 March 1992 stated that the respondent:

The facts of this matter are that on the 12 August 1991 an application and statement of claim was filed on behalf of the applicant by Harris and Company Solicitors of 99 Bathurst

i s prepared t o a l l o w you a f u r t h e r 14 d a y s t o serve

your l i s t o f documents f a i l i n g which i t w i l l a p p l y

t o t h e c o u r t t o have your c l a i m s t r u c k o u t .

The letter pointed out that the respondent had served its list

of documents on the applicant's former solicitors on 20 December 1991. It stated that a further copy of that list was to be supplied to the Kings Cross address and that the documents were available for inspection at the office of the respondent's solicitors. The letter made it perfectly clear that the only obligation which the respondent actually had in the matter was to serve the documents at the Kings Cross address of Casablanca Investments and that if there was any delay, the responsibility was that of the applicant. The 6 March 1992 letter also indicated that the further directions date had been changed from 30 March to 6 April 1992. On 19 March 1992, the applicant was advised by letter to the address of Casablanca Investments that the directions hearing had been changed again from 6 April 1992 to today.

It seems that all this correspondence was faxed to M r Simonsen's Washington facsimile number on 1 April Sydney time which was 31 March in Washington. On 2 April Mr Simonsen faxed receipt of the documentation by a letter to the respondent's solicitors. Although the facsimile confirmation sheet of the respondent's solicitors recorded that all of the material had been satisfactorily communicated by facsimile at the time of transmission, the applicant's letter of 2 April 1992 stated that some seven pages, 18 to 24 inclusive, had not been adequately transmitted. Accordingly, a further facsimile was sent to the Washington number with a covering letter dated	7 April 1992 transmitting those seven pages again. The first	17 pages earlier received apparently included the notice of
motion for summary dismissal of the action. The return date given on the notice of motion was 9.30 am today. The re- transmitted seven pages included the letter of 19 March indicating that the next directions hearing was to take place today.
On 1 April 1992, under cover of a letter dated the previous day from the respondent's solicitors to the applicant, a process server delivered to the address of Casablanca Investments in Kings Cross the notice of motion, a supporting affidavit of 31 March 1992 by the solicitor handling this matter for the respondent and the annexures to that affidavit. This documentation was all included in the facsimile sent to Mr Simonsen on 1 April 1992 except possibly the covering letter of 31 March for the service at Kings Cross of the notice of motion and affidavit. The service was effected on a woman named Julia Cooke, said to be the secretary to Leo Christie, a director of Casablanca Investments. According to the affidavit of the process server, MS Cooke acknowledged that she knew Mr Simonsen. She said that he was in America, that she was authorised to accept service of the notice of motion and the affidavit, and that "We do get documents for him and we pass them on to him".
Nothing has been heard from Mr Simonsen, so far as the
evidence before me reveals, since his facsimile of 2 April 1992 and there is no appearance on his behalf today. I am
quite satisfied that the applicant knows or ought to know of the notice of motion. He has chosen not to comply with the order for discovery now made twice and not to appear today or to provide any explanation to the Court for these defaults. He has provided no excuse for not having inspected the respondent's documents and supplied the statements of the witnesses upon whom he proposes to rely.
The notice of motion is filed under order 15 rule 16 which states:

( 1 ) Where a p a r t y d o e s not f i l e or serve a l i s t o f

documents or a f f i d a v i t or other document or

d o e s not produce a n y document a s r e q u i r e d by or

u n d e r t h i s Order , a n y other p a r t y may move the

C o u r t on notice -

( a ) i f the p a r t y i n d e f a u l t i s an a p p l i c a n t -

for	an	o r d e r	t h a t	the	p r o c e e d i n g be	s t a y e d
or	d i s m i s s e d	a s	t o the	whole	or	a n y p a r t

o f the relief c l a i m e d by h i m i n the

proceed ing;

( b ) i f the p a r t y i n d e f a u l t i s a r e s p o n d e n t -

for judgment or an o r d e r a g a i n s t him; or

( c ) for an o r d e r t h a t s u c h document , a f f i d a v i t

or l i s t o f documents be f i l e d , s e r v e d or

produced	w i t h i n	the	t i m e	l i m i t e d	i n	the
o r d e r .

( 2 ) The C o u r t may make an o r d e r o f the k i n d

m e n t i o n e d i n s u b - r u l e ( 1 ) or a n y other o r d e r or

may g i v e s u c h d i r e c t i o n s , and s p e c i f y s u c h

consequences for non -compl i a n c e w i t h the o r d e r ,

a s the C o u r t thinks j u s t .

( 3 ) T h i s r u l e d o e s not l i m i t the powers o f the

C o u r t t o p u n i s h for c o n t e m p t .

It may be seen from this rule that several options are now

permanently or temporarily stayed; a second is that they be

available to the Court. One is that the proceedings be

dismissed as to the whole or any part of the relief claimed by the applicant; a third is that the time earlier fixed for the supply of material but ignored by the applicant be extended to a new time now fixed. The Court may prescribe sanctions in these regards and may also exercise its contempt powers or indicate that it will do so at some time in the future in the event that certain orders or directions are not complied with.

- l0 -

The facts of this case, so far as are revealed by the statement of claim, suggest that it is unlikely that the applicant has a particularly significant set of documents which are essential for the preparation of the case by the respondent. I say that because, in the experience of the Court in foreign currency loan cases, the vast majority of the relevant documentation is to be found in the hands of the respondent and not the applicant.

The solicitor for the respondent suggests today that the applicant may have documents indicating that he consulted an accountant, possibly a solicitor and maybe some other expert, about the loan before it was taken out. This is certainly possible but it seems likely that if anything of substance existed in these regards, the respondent would itself be able to depose that its officers had discussed at least a recommendation to the applicant that he seek such advice, if not also the consequences of his having done so. There is no such evidence before the Court. Although I do not doubt that

the applicant has some discoverable documents, it seems likely

that he would have few which could be regarded as essential to

the conduct of the litigation, especially to the establishment by the respondent of its defence to the claim. If I may say so, this is a fairly generous conclusion to the applicant in view of the attitude which he has taken to the litigation but I think it is one imposed upon me by the probabilities of the case and by the phraseology of the rule under which this motion is being pressed. That does not mean that the applicant is excused from discovering what he has or from the apparent contempt of the Court's orders which he seems to have committed.

I do not think that an order for summary dismissal should be made for the failure to comply with the directions given in this matter unless there can be added to the conclusions already expressed that the applicant is intent on or wilfully not complying with the directions or on otherwise not co- operating in the preparation of the case for hearing. Despite the applicant's unsatisfactory approach to the litigation up to date, such a finding is as yet premature, although not very much so. Further, for summary judgment to be appropriate on the ground of default in discovery, the default should be one which significantly affects or is likely to affect the conduct of the hearing or the preparation by the respondent of its case. For the reasons given, this is not yet shown to be such a case.

Order 15 rule 16 is also broad enough to include the failure	of the applicant to file and serve the statements upon which
he intends to rely in his case and not merely the list of documents for discovery. These statements have been outstanding since 14 February 1992, a date which actually gave the applicant three months from the directions hearing on 14 November 1991 at which that order was made. The failure to file and serve those statements is most assuredly relevant to the conduct of the hearing and puts the respondent's obligation to file and serve its statements, ordered for 27 March 1992, on more or less permanent hold.
Litigation in this Court would simply be unworkable and the Court would soon be stacked high with futile litigation if all parties were to take that attitude to directions given five months in the past. The fact that in this case they were given by consent and that three months were given for the preparation of the statements, plus the fact that not a single statement has been filed, not even the statement of the applicant himself, indicates the nature of the applicant's inactivity in respect of everything that he said himself he would do, let alone of what the Court has required.
Although I have concluded that the applicant is by now well aware of the position of this litigation and his obligations in it, I am prepared to give him one final chance to comply with the Court's orders before considering dismissal of the
claim and dealing with him as may be appropriate for his failure to comply with Court orders. I have taken the trouble
to set out the facts in this judgment in some detail so that the applicant can be in no doubt about the matter. Ordinarily such detail would not have been given and such additional time as has been taken up in their cataloguing would not have been spent.
I make the following orders in the matter: (1) A copy of this judgment is to be delivered by the

respondent to the address given by the applicant care of Casablanca Investments in Kings Cross, and by facsimile to the number given in Washington, within three days of its becoming available.

(2) Within fourteen days of the later of the two services to be effected, the applicant is to file:

(a)	the list of documents required to be discovered by the Court's orders of 13 September and 14 November 1991;
(b)	a statement of the evidence to be given by him personally in the claim, and a list of the names of the persons he intends to call as witnesses in the action:
(c)	an affidavit or statutory declaration, which may be
officer delegated by the laws of the United States, taken before a notary public or other appropriate

stating why no action has been taken in respect of the orders of the Court on 13 September 1991 and 14 November 1991, and why in the applicant's opinion he should not be dealt with for contempt of those orders. The affidavit or statutory declaration should state what arrangements the applicant proposes for the continuing preparation of this case for hearing, provide convenient dates for the hearing of the matter in Sydney, commencing after 1 July 1992, and advise whether he proposes to be legally represented at such a hearing and if so, by whom. The affidavit or statutory declaration should also include any submissions the applicant wishes to make on why the costs of the present motion should not be granted to the respondent.

(3) In the meantime costs will be reserved and the present motion will be adjourned part heard to Friday 8 May 1992 at 9.30 am. At that time I will resume the hearing of the motion with a view to its final resolution. Unless the case is discontinued or withdrawn, it is obvious that default in compliance with these orders without adequate explanation will reinstate for consideration the respondent's application for dismissal of the claim. I shall also consider what should be done in respect of all

past and present defiances of Court orders in the matter. . I certify tli3: <!l15 ~ n d i h c &lJi4.,\ 03)

n---.- ?m E 1 ~ ~ 2 copy of the

c~~~~~~ fcr J u d c n o n i he~sln of h ~ s tlonour