VN International Video Pty Ltd v West End HK TVB Video & Others

[1996] FCA 213

CATCHWORDS

PRACTICE & PROCEDURE - legal proceedings - application by director for leave to conduct hearing on behalf of applicant company - no attempt to prepare case for hearing - evidence did not establish that applicant could not meet the costs of legal representation, either from its own resources, or from assistance from its members - leave refused.

Federal Court Rules - O 4, r 14(2)

Cases Considered

Dietrich v R (1992) 177 CLR 292
Gamester Pty Ltd v Lockhart (1993) 112 ALR 623
Molnar Engineering Pty Ltd v The Herald & Weekly Times Ltd (1984) 1 FCR 455; (1984) 3 FCR 68
Simto Resources Limited v Normandy Capital Limited (French J, 29 June, 1993, unreported)

VN International Video Pty Ltd
v West End HK TVB Video (a firm) & Ors
QG 143 of 1994

Drummond J
Brisbane
20 March, 1996

IN THE FEDERAL COURT OF AUSTRALIA )    No. QG 143 of 1994
QUEENSLAND DISTRICT REGISTRY     )
GENERAL DIVISION                 )

BETWEEN:  V.N. INTERNATIONAL VIDEO PTY. LTD.

(ACN 051 017 317)

Applicant

AND:     WEST END HK TVB VIDEO (A FIRM)

First Respondent

AND:YEN PHI NGUYEN

Second Respondent

AND:LAN THI NGUYEN

Third Respondent

MINUTES OF ORDERS

JUDGE MAKING ORDER:         Drummond J
DATE OF ORDER:              20 March, 1996
WHERE MADE:                 Brisbane

THE COURT ORDERS THAT:

1. The director's application for leave to conduct the hearing on behalf of the applicant company be refused.

1. The hearing be adjourned sine die, with leave to any party to seek a new hearing date from the District Registrar on reasonable notice to the other parties.

1. The applicant pay the respondents' costs thrown away by the adjournment of the hearing.

1. Leave be granted to the respondents to tax the costs referred to in Order 3 forthwith.

1. Leave be granted to Mr. Wong, the solicitor on the record for the applicant, to file forthwith a Notice
   of Ceasing to Act for the applicant.  Service of that notice on all parties is dispensed with.

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

IN THE FEDERAL COURT OF AUSTRALIA )    No. QG 143 of 1994
QUEENSLAND DISTRICT REGISTRY     )
GENERAL DIVISION                 )

BETWEEN:  V.N. INTERNATIONAL VIDEO PTY. LTD.

(ACN 051 017 317)

Applicant

AND:     WEST END HK TVB VIDEO (A FIRM)

First Respondent

AND:YEN PHI NGUYEN

Second Respondent

AND:LAN THI NGUYEN

Third Respondent

Coram:    Drummond J
Date:     20 March, 1996
Place:    Brisbane

REASONS FOR JUDGMENT

This case came on for hearing today.  It was set down on 21 November, 1995 for hearing over seven days.  Yesterday the solicitor who has acted for the applicant company since the start of the action wrote to the Court to advise that he would today seek leave to withdraw.  The applicant has failed to pay costs incurred to date to the solicitor and has failed to put him in funds for the hearing. Mr. Tran, a director of the company, sought to appear, according to his letter to the Court, in order to present the applicant's case to the Court.  Leave is required for Mr. Tran to do that by O. 4, r. 14(2) the Federal Court Rules.
         The circumstances in which the retainer of Mr. Wong, solicitor on the record for the applicant, came to an end, are dealt with in Mr. Wong's affidavit sworn today and in his letter, Exhibit 3.  Mr. Tran does not dispute what Mr. Wong says.  Mr. Wong drew Mr. Tran's attention to the hearing fixed for today back on 14 December, 1995 and reminded him of it on 31 January, 1996.  He then told him of the preparation necessary and the costs that would be involved.  Almost immediately Mr. Tran replied saying that it was unlikely that the applicant would be able to afford the costs of being represented at the hearing.  Mr. Wong, however, instructed his employed solicitor to continue with preparation.  Mr. Wong says that it was only on 18 March, 1996 that Mr. Tran instructed him that he, Mr. Tran, would personally take over the conduct of the case because of the applicant's alleged inability to afford legal representation.  In Exhibit 3, Mr. Wong claims a lien for his costs to the extent of $25,000 over the file.  He says that on 18 March, 1996, Mr. Tran advised him that Mr. Tran intended to rely only on the affidavit material filed in court in presenting the applicant's case and that when Mr. Wong offered to courier what Mr. Wong refers to as the original documents to Mr. Tran for today's appearance, Mr. Tran declined and said he did not want them as he would rely on the documents on the court file.

The applicant claims relief against the three respondents in respect of their alleged breaches of copyright in video films dubbed in the Vietnamese language.  The applicant claims it holds the Australian copyright to some 318 existing films under a licence from a United States corporation as well as the Australian copyright to any future films produced by that corporation for distribution in Australia.  It had agreements with each of the respondents with respect to the production of copies of these films and the hiring to consumers of those copies.  The applicant alleges that the respondents have produced and hired copies of the films without the applicant's authority after their various arrangements with the applicant came to an end, either because they were cancelled by the applicant for breach, or because the arrangements expired.  The applicant also claims relief in passing off and under the Fair Trading Act 1989 (Qld) in respect of the respondents' actions.

The legal issues raised are not unduly complex, although the respondents have foreshadowed a defence based on an affidavit recently filed on behalf of the applicant that because the films were made in Taiwan, they are not the subject of copyright protection in Australia, even though they were dubbed in the Vietnamese language in the United States.

The action will, however, involve a wide-ranging factual inquiry.  The respondents rely on 10 affidavits from seven deponents.  There is a question as to the admissibility of a good deal of the evidence on which the applicant relies, being evidence which it gathered in the course of executing an Anton Piller order.  The respondents contend that, because the order was executed by the applicant in breach of the terms on which it was granted, the evidence should be excluded from the hearing.  The applicant has filed 22 affidavits from 13 deponents.  Two of these are members of the applicant's solicitors who were involved in the execution of the Anton Piller order.  They live in Melbourne.  The others, who include Mr. Tran, live in Brisbane so he informs me.  If the respondents' foreshadowed objection succeeds, the applicant will be reduced to eight deponents.

The respondents have given notice that all 13 of the applicant's witnesses are required for cross-examination.  However, Mr. Tran has apparently not given notice requiring the attendance of any of the respondents' deponents for cross-examination.  This is no doubt because he has made, in my view, no attempt to identify any of the factual or legal issues involved in the case.

Although Mr. Tran says he wants to conduct the case for the applicant, he acknowledges he has made no attempt to obtain copies of the pleadings or of the affidavits filed on behalf of the applicant or of the affidavits filed on behalf of the respondents.  He says he has never even bothered to have translated to him any of this material, apart from, I assume, his own affidavits.  He has made no attempt to contact the applicant's deponents to have them attend court, although he claims he can do that if that is necessary.  He did, however, mention difficulties likely to be encountered in seeking the attendance of some of these deponents, to which he was alerted yesterday by the applicant's solicitor on the record.

Mr. Tran is completely unable, through lack of any attempt on his part to seek an understanding of what is involved in running the case the applicant puts forward, to conduct that case in any meaningful way.  His expressed attitude is to offer to answer any questions the Court may put to him.  What in truth, it seems to me, Mr. Tran wants, is not leave to carry on the proceedings for the applicant but rather to cast the entire responsibility for that onto the Court.

I have no doubt that Mr. Tran will do his best to meet any request the Court may make of him if the hearing proceeds.  But the Court will have to involve itself in the calling of evidence for the applicant, in identifying whether objection should be taken on behalf of the applicant to any of the respondents' material, in identifying to Mr. Tran which of the deponent's witnesses he needs to cross-examine, and in identifying to him what topics he will need to cross-examine them on.

What Mr. Tran expects of the Court goes well beyond the assistance the Court, as the impartial arbiter between applicant and respondents, can properly give to an unrepresented party.  This is a matter which is dealt with in
cases such as Gamester Pty. Ltd. v Lockhart (1993) 112 A.L.R. 623 and Dietrich v R (1992) 177 C.L.R. 292 at 335.

Although Mr. Tran needs the assistance of an interpreter, I do not believe that he is so unaware of Australian legal procedure that he thinks that it is in order to expect the Court to perform such a function.  He has been in business in Australia for 10 years.  He has taken proceedings with respect to pirated tapes against others in the past in Sydney and Adelaide.  He has also been involved, through the applicant, in contested interlocutory litigation in this action.

One relevant consideration in deciding whether to grant leave to a non-lawyer to represent a company is the need for the Court to be satisfied that the proposed representative does truly have authority to act on behalf of the company.  See Molnar Engineering Pty. Ltd. v The Herald & Weekly Times Ltd. (1984) 1 F.C.R. 455 at 458. The applicant's 1995 annual return confirms what Mr. Tran told me about he and his wife being the only shareholders and directors of the applicant. I accept that he would promptly be able to obtain proof of authority to act for the applicant.

Another important consideration is whether the company is in a financial position to afford the legal representation, which is prima facie required when a company chooses to engage in litigation.  See Molnar Engineering Pty. Ltd. v The Herald & Weekly Times Ltd., supra, at 459 and, on appeal, at (1984) 3 F.C.R. 68 at 74-76, 79 and 80. Mr. Tran has asserted that the company cannot afford legal representation. He has not, however, attempted to put before the Court any evidence backing up that assertion. There is evidence suggesting the contrary.

Firstly, in late 1994 when the applicant was seeking an interlocutory injunction, the respondents raised the issue of the worth of the company's undertaking as to damages.  Mr. Tran swore an affidavit on 2 December, 1994 in reply, saying that he was surprised that the applicant was recorded in Australian Securities Commission records as dormant when it had, in fact, been trading as a video cassette distributor throughout Australia.  He put that down to an oversight on behalf of the applicant's accountant.  He said he had attempted to contact the accountant, but could not raise him.  He went on to say that he was familiar with the books of account of the applicant and he said in the income statement he included in his affidavit that, for the year ending 30 June, 1994, the company had income from its business of $860,000, which showed a gross trading profit of $130,000 after allowing for the direct and indirect costs of sale.  He said that there was a surplus of $320,000 of assets over liabilities, the liabilities totalling only $80,000.  The respondent's solicitor swears that it was as a result of the information contained in this affidavit that the respondents did not seek from the applicant security for their costs.
         Next, the respondents have put in evidence the applicant's annual return for the 1995 year.  It shows an apparent deterioration in the company's position in comparison with what Mr. Tran had to say about its performance in the 1994 year.  The 1995 return shows a surplus of $68,183 of current assets over current liabilities, but a deficiency of $52,808 of non current liabilities over non current assets.  It shows an operating profit after tax of $9,331.  It appears that the applicant trades throughout Australia from premises at Cabramatta.  Mr. Tran tells me it is still in business.

I am not satisfied that the financial position of the applicant is so poor that it cannot be regarded as reasonably able to meet the costs of legal representation at the hearing.

I raised with Mr. Tran the possibility of he and his wife assisting the company to engage legal representation.  They are the two people who stand to benefit from any success the applicant has in the action:  see Simto Resources Limited v Normandy Capital Limited (French J, 29 June, 1993, unreported, particularly at 8).  Mr. Tran's response from the bar table suggests that there is a real prospect of funding being available to assist the company from that source.

The impression I have is that Mr. Tran has decided to seek to appear for the applicant at the hearing in the hope that the Court will run the applicant's case for him because Mr. Tran has decided not to allow the applicant to incur the costs and burdens of paying for legal representation.  This is my impression even though I think the company could probably meet from its own resources, or from assistance it could obtain from Mr. Tran and his wife, the necessary funds.  I cannot, on the evidence, make a finding that this is, in fact, the position, but I am very far from being satisfied that the applicant's financial position is so poor as to justify leave.

I have regard to the factual complexities of the case.  I also have regard to the fact that, because of Mr. Tran's failure to make any attempt to obtain a grasp of the case, he will, if given leave to appear for the company, be of no assistance at all either to the applicant or to the Court in running the applicant's case and that, as I have said, what he really wants is for the Court to conduct the applicant's case for it.  It is therefore doubtful if Mr. Tran's application comes within the terms of O. 4, r. 14(2) at all.

For these reasons, the leave sought by Mr. Tran to conduct the case on behalf of the applicant is refused.

The question then is whether the applicant should be forced on to hearing with the inevitable result being that its case will be dismissed.  The respondents urge that the hearing proceed today.  They cannot be criticised for the way they have acted to discharge their obligations to get the matter ready for hearing today.  The respondents, however, did not point to any particular prejudice they would suffer if the action was adjourned, although they will, of course, incur wasted costs of the legal preparation for today's hearing.

I will therefore adjourn the hearing sine die with leave to any party to seek a new hearing date from the District Registrar on reasonable notice to the other parties.  I will order that the applicant pay the respondents' costs thrown away by the adjournment of the hearing.  For the reasons I have mentioned, I will give the respondents leave to tax those costs forthwith.

Given the adjournment, no purpose can be served by refusing the applicant's solicitor on the record leave to withdraw.  I will therefore grant Mr. Wong leave to file forthwith a notice of ceasing to act for the applicant.  I will dispense with service of that notice on all parties.

I certify that this and the preceding
nine pages are a true copy of the
reasons for judgment herein of the
Honourable Justice Drummond.

Associate:

Date:        20 March, 1996

Mr. Tran, Director of the applicant, appeared in person.

Counsel for solicitor on record:     Mr. T.P. Sullivan

Solicitor on record:                 Jonathon Wong

Counsel for the first, second

and third respondents:              Mr. P.A. Hastie

Solicitors for the first,

second and third respondents:       Fisher Robinson

Date of Hearing:  20 March, 1996