Xie and Zhao (No.2)

[2009] FMCAfam 1303

FEDERAL MAGISTRATES COURT OF AUSTRALIA

XIE & ZHAO (No.2) [2009] FMCAfam 1303

FAMILY LAW – PRACTICE AND PROCEDURE – Application to set aside judgment pursuant to Federal Magistrates Court Rules2001, r.16.05(2)(a) – no reasonable explanation for failing to attend hearing – application dimissed.

Federal Magistrates Court Rules 2001 r.16.05(2)(a)

Aon Risk Services Australia Limited & Australian National University (2009) HCA 27
Clifford & Mountford (2006) FMCAfam 450
Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146
Sali & SPC Limited (1993) 116 ALR 625
Xie & Zhao (2009) FMCAfam 830
Zhao & Xie [2008] FamCAFC 187

Applicant: MS XIE

Respondent: MR ZHAO

File Number: SYM 4331 of 2006

Judgment of: Altobelli FM

Hearing date: 16 November 2009

Date of Last Submission: 16 November 2009

Delivered at: Sydney

Delivered on: 16 November 2009

REPRESENTATION

Counsel for the Applicant: Ms Carr

Solicitors for the Applicant: Austin Haworth & Lexon Legal

Counsel for the Respondent: Ms Winfield

Solicitors for the Respondent: Coelho & Coelho

ORDERS

1. The application filed 3 September 2009 is dismissed.

2. The Respondent’s oral application for costs is dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Xie & Zhao is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYM 4331 of 2006

MS XIE

Applicant

And

MR ZHAO

Respondent

REASONS FOR JUDGMENT

(Ex tempore)

1. The application before me is that of the applicant wife, Ms Xie, filed on 3 September 2009 and which comes before me in today’s duty list. She makes application under rule 16.05(2)(a) of the Federal Magistrates Court Rules that I set aside the order that I made on

   
   

   30 July 2009. In the alternative, she seeks an order that my said order be stayed.

2. The wife’s case was argued by her counsel on the basis that the order should be set aside principally because her understanding of the English language was so limited that she, in effect, became confused about the hearing dates, made certain enquiries and was subsequently, in effect, misinformed and did not attend court until after her matter had been dealt with on the second day of the allocated hearing. The wife’s application was supported by her affidavit affirmed on

   
   

   31 August 2009, a statement that she made today and which was subsequently confirmed in the oral evidence she gave, and by an affidavit of her solicitor Daniel Sheen, also affirmed on 31 August 2009. 

3. By way of a response, dated 11 November 2009, the respondent

   
   

   Mr Zhao asks that the wife’s application be dismissed. He also seeks a number of ancillary orders, but whether I would make those orders largely depends on whether or not I dismiss the wife’s application. The response is supported by an affidavit of James Coelo, the husband’s solicitor in these proceedings.

4. An application under rule 16.05 basically says that a court may vary or set aside its judgment or order before it has been entered, or specifically in this a case in paragraph two, the court may vary or set aside its judgment after it has been entered if (a) the order is made in the absence of a party. It is that provision that is relied on by the applicant wife. In very broad terms, it is advanced on her behalf that because of her difficulties with the English language that is the main reason why the matter proceeded in her absence. I think a logical consequence of the wife’s evidence, if I accept it, is that her absence was also compounded by advice that she claims she was given that turns out to be wrong.

5. The wife was represented by her solicitor and counsel and had the assistance a Mandarin interpreter. The husband was represented by his solicitor and counsel. Neither counsel referred me to any authorities that would guide me in terms of how precisely I would exercise the discretion that is clearly available to me under rule 16.05, but a helpful authority that I found is the decision of Jarrett FM in Clifford & Mountford (2006) FMCAfam 450.

6. In that judgment, his Honour sets out a comprehensive review of the authorities dealing with rule 16.05 and specifically at paragraph 34 he sets out the principles that emerge in relation to this rule.

   34. From the abovementioned authorities, it seems to me that the following principles emerge in respect of applications under r.16.05(2)(a):

   a) The discretion to be exercised is unfettered, but nonetheless to be exercised judicially and bearing in mind the public interest in there being an end to litigation.

   b) There are three criteria, each of which should usually be demonstrated before a judgment or order is set aside under r.16.05(2)(a), namely:

   i) a reasonable explanation for the applicant's absence at the trial or hearing;

   ii) material arguments available to the applicant that might reasonably lead to the making of an order different to that sought to be set aside; and

   iii) no prejudice to the party with the benefit of the orders sought to be set aside that is not able to be adequately addressed by the Court.

   c) Matters relevant to the three criteria set out above will include, but will not necessarily be limited to:

   i) Whether a party with notice of proceedings disregarded the opportunity of appearing at and participating in the trial;

   ii) Delay, if any, in bringing the application to set aside and whether, if during the period of delay the successful party has acted on the judgment, or third parties have acquired rights by reference to it;

   iii) the conduct of the applicant since the judgment or order sought to be set aside was made. 

7. I note that rule 16.05 is, in terms, very similar to the equivalent provision in the Federal Court rules, and is by no means dissimilar to the provision in many other rules of superior courts in Australia.

8. Jarrett FM makes three points about this rule. Firstly, that the discretion to be exercised is unfettered but nonetheless to be exercised judicially and bearing in mind the public interest in there being an end to litigation. Secondly, he says there are three criteria which should usually be demonstrated before a judgment or order is set aside:

   i) a reasonable explanation for the applicant’s absence at the trial or hearing.

   ii) material arguments available to the applicant that might reasonably lead to the making of an order different to that sought to be set aside; and

   iii) no prejudice to the party with the benefit of the orders sought to be set aside that is not able to be adequately addressed by the Court.

9. He then goes on to say that matters relevant to the three criteria set out above would include but will not necessarily be limited to (1) whether a party with notice of proceedings disregarded the opportunity of appearing at, and participating in, the trial, (2) the delay, if any, in bringing the application, and (3) the conduct of the applicant since the judgment or order sought to be set aside was made. I note in this case it is the husband who is asserting that, in effect, the wife was a party with notice of proceedings who disregarded the opportunity of appearing at, and participating in, the trial.

10. For the wife however, her case is in effect that there is a reasonable explanation for her absence at the hearing. This is not a case where there was any material delay between the making of the relevant orders and the bringing of the application. This is not a case where the conduct of either of the parties since the order was made is of relevance. The wife’s case was presented principally on the basis of seeking to establish a reasonable explanation for her absence.

11. The husband’s counsel pointed to the problem that confronted the wife in the final hearing whether or not she was present i.e. that her evidence was so out of date and had failed to deal with issues raised by the Full Court in its appeal Zhao & Xie [2008] FamCAFC 187. He suggested this might be another basis for declining to set aside the orders made. I record in these reasons however that my decision is not being made on the basis that the wife failed to establish that she had material arguments available to her that might reasonably lead to the making of an order different to that sought to be set aside.

12. For example, in her substantive case, she raised issues of non-disclosure about the husband, and as she was not there those assertions could not be tested. In other words, any decision I make is primarily based on whether or not she has established a reasonable explanation for her absence at the hearing.

13. It is necessary to incorporate into these reasons a substantial part of the reasons that I gave on 30 July 2009 when I made the orders that are sought to be set aside.

14. Those reasons were published as Xie & Zhao (2009) FMCAfam 830, and I incorporate a number of paragraphs out of that judgment into these reasons:

    1. I provide the following ex tempore reasons in the matter of Xie and Zhao. Today was to be the final hearing of the applicant wife’s application filed 10 October 2005 for orders that the respondent husband pay lump sum child support and lump sum adult child maintenance. However, the applicant has not attended in circumstances to which I will shortly refer.

    2. Counsel for the respondent seeks an order dismissing the application filed 10 October 2005. While she does not specifically articulate the statutory basis of the same, I apprehend it is pursuant to rule 13.03A of the Federal Magistrates Court Rules 2001, the provisions of which I incorporate into these ex tempore reasons:

    13.03A   When a party is in default

    (1)   For rule 13.03B, an applicant is in default if the applicant fails to:

    (a)    comply with an order of the Court in the proceeding; or

    (b)    file and serve a document required under these Rules; or

    (c)    produce a document as required by Part 14; or

    (d)    do any act required to be done by these Rules; or

    (e)    prosecute the proceeding with due diligence.

    (2)   For rule 13.03B, a respondent is in default if the respondent:

    (a)    has not satisfied the applicant’s claim; and

    (b)    fails to: 

    (i)    give an address for service before the time for the respondent to give an address has expired; or

    (ii)    file a response before the time for the respondent to file a response has expired; or

    (iii)    comply with an order of the Court in the proceeding; or

    (iv)    file and serve a document required under these Rules; or

    (v)    produce a document as required by Part 14; or

    (vi)    do any act required to be done by these Rules; or

    (vii)    defend the proceeding with due diligence.

    Background

    3. By way of background, firstly, I do not intend to repeat the comprehensive statement of background that is contained in paragraphs 1 to 54 of the Full Court’s decision in this case, is reported as (2008) FAMCAFC 187. I will instead set out a brief procedural background, since the appeal was determined. 

    4. The matter first came before me on 13 February 2009, and I note in this regard that the Full Court’s orders were made 28 November 2008. It is the practice in this court to seek to expedite the re-hearing of appeals from this court, to the extent that that is possible. The matter first came before me on 13 February 2009. The applicant was represented by her solicitor, Ms Chen, and Ms Winfield of counsel appeared for the respondent. On that date I ordered the parties to attend a conciliation conference and set the matter down for hearing on 30 July 2009 at 10.00am for a two-day hearing. I also made directions about filing the amended application and possibly an amended response as well as a timetable for filing affidavits.

    5. The matter then again came before me on 18 May 2009 and that was following a conciliation conference. The note of the conference indicates that the parties had reached an “in-principle” agreement but the wife needed the assistance of an interpreter and independent advice before orders were made.  When the matter came before me on 18 May the applicant was appearing in person and again Ms Winfield appeared for the respondent. I had certain discussions with the applicant in court and there was no doubt in my mind that she was aware of what was going on, and certainly, on that day the hearing on 30 July, was confirmed.

    6. Nonetheless, the matter was adjourned to 29 May, and that was in response to the applicant’s request that she wanted to get some legal advice. The matter came before me again on 29 May 2009. The applicant represented herself and Ms Winfield again appeared for the respondent, and the matter was confirmed for hearing today. That means there were three mentions before today. At two of these, the applicant was present in person.

    7. In relation to the application for dismissal I deal with the following evidence. The wife’s interpreter gave sworn evidence today about a discussion that he had with the applicant. The interpreter, Mr T, indicated to me in evidence that he spoke to the applicant this morning on her mobile and she indicated to him words to the effect that she did not realise that the hearing would take place today, and that she had taken the initiative to ring the court yesterday and was told to come to court tomorrow, 31 July.

    8. In the conversation between Mr T and the mother there was also reference to the mother having rung the court as I have just indicated. As a result of that, I caused enquiries to be made with the National Enquiry Centre that is operated by the Family Law Courts. One of the operators of that service, Ms M, was able to give sworn evidence to the court in the following terms. Ms M did have communication with the applicant, but it was not yesterday, it was the day before, namely, Tuesday 28 July. The applicant indicated to Ms M that she wanted to confirm the court dates, and this was confirmed as being 30 and 31 July at 10 am. Ms M indicated that nothing else relevant was said.

    9. That is the evidence specifically in the context of the application for dismissal. In terms of the evidence of the proceedings generally, the case has a very long history and the material filed is vast and indeed, perhaps disproportionate to the issue, but that happens when litigation lingers for such a long period of time.

    10. I am going to specifically identify the material filed on behalf of the applicant. There is her application for final orders filed 10 October 2005. There is an affidavit sworn 7 October 2005, filed 10 October 2005, an affidavit of the applicant sworn 1 November 2005 and filed on that date, an affidavit of the applicant sworn 12 December 2006 and filed on 13 December 2006. There is an affidavit of Ms Z, who is, I understand, the oldest daughter of the applicant and respondent that was sworn 7 December, filed 10 October 2005. Another sworn 1 November 2005 and filed on that date. Another sworn 12 December 2006 and filed 13 December 2006. Another sworn 12 February 2008 and filed 14 February 2008. The applicant has also filed two financial statements on 10 October 2005 and 9 September 2008.

    11. The material that is relied on by the respondent is contained in a table on the first page of the chronology and outline of case document prepared by Ms Winfield, counsel for the respondent, and I will simply incorporate that list into these, my ex tempore reasons.

    APPLICATIONS  Sworn            Filed         

Mother’s Application	10.10.05
Father’s amended response	27.7.09

AFFIDAVITS

1F	Father’s affidavit	19.10.05	19.10.05
M	Mother’s affidavit	12.1.06
Father’s affidavit	28.3.06	6.6.06
Father’s affidavit	9.6.06	9.6.06
Father’s financial statement	9.6.06	9.6.06
Father’s financial statement	15.12.06	18.12.06
2F	Father’s affidavit	18.12.06	18.12.06
Father's affidavit	20.4.07
James Coelho, Father’s solicitor filed in EA56/2007	20.4.07	20.4.07
Father's affidavit faxed to Federal Magistrates' Court    7.5.07	7.5.07
Father’s affidavit filed in EA 56/2007	15.8.07
Father’s updated financial statement	9.9.08	9.9.08
Father’s submission on costs	Aug 08
Full Court reasons for judgment allowing appeal	28.11.08

12. All of these materials had been read by me before I came on to the bench this morning. 

1. The history becomes very relevant in determining whether the wife has established a reasonable explanation for her absence at the hearing.

2. The wife gave evidence today and she was cross-examined. She agreed, for example, that she was in court on 13 February 2009 when the matter was first set down for hearing on 30 and 31 July 2009, that she went to a conciliation conference on 28 March when the matter was confirmed for hearing. She also indicated that she conducted the conciliation conference herself; that an agreement in principle was reached which she took away to get legal advice. She also agreed that she was present in court on 18 May when the matter was confirmed for hearing. She agrees that she was also present in court on 29 May when the matter was once again confirmed for hearing. 

3. However, her evidence is that she rang the court before 30 July and spoke to a person named Ms M from the National Enquiry Centre. I heard evidence from Ms M on 30 July, and that evidence is set out at paragraph 8 of my reasons for judgment. There is a substantial difference in the evidence of Ms M as compared to the evidence of the wife about what took place. As will be seen from paragraph 8 of the reasons of 30 July, Ms M says that she confirmed the hearing dates as being 30 and 31 July, whereas the mother says that Ms M indicated that it was 31 July. 

4. In any event, in her evidence the mother concedes that on 30 July, the date of what turned out to be an undefended hearing and the making of the orders sought to be set aside, that she did have a telephone conversation with an interpreter. Her evidence about this conversation is set out at paragraph 9 of her affidavit and paragraph 3 of her statement that was confirmed in evidence today. At paragraph 7 of the reasons for judgment, I set out the sworn evidence of Mr T, the interpreter of the wife. 

5. Based on the wife’s evidence itself though, she asserts in her affidavit that the interpreter said to her words to the effect “No, you are coming to court today”. These words need to be understood in the context of the conversation that is set out by the wife at paragraph 9. At paragraph 3 of her statement however, the wife asserts that on no occasion did the interpreter tell her she had to come to court immediately. I indicated to Ms Carr, the wife’s counsel, that I thought these two statements of the wife were inconsistent.

6. Ms Carr argues that they are not necessarily inconsistent and that the wife would not necessarily have formed the impression that she was required to come to court on 30 July as a result of the conversation with the interpreter. I beg to differ, and I think that any reasonable interpretation of the wife’s own evidence would lead to the conclusion that wife knew after the conversation with Mr T on 30 July that her matter was in court that day and that she was required to be there. Alternatively, I think it was an inescapable inference from this conversation that the wife ought to have known that she should have been in court on 30 July. 

7. The wife gives evidence that on the day in question, she was undertaking a [omitted] job at [L]. Interestingly, this evidence is not set out in her affidavit of 31 August, it is set out in her evidence of today’s date. It is quite a startling omission and for one thing, it has meant that the husband has been denied the opportunity to test the evidence of the wife. She says at paragraph 4 of her statement that she was working as a [omitted] at [L]; that she had no access to a car during that day whilst she worked, and that it would have been impracticable for her to walk to [omitted] station.

8. However she agreed in cross-examination that she could have taken a taxi to get to the station, and that she chose not to. The evidence is that the wife, in fact, came to the court on 31 July and spoke to the receptionist, and as a result of that conversation, certain things happened, and letters were sent out as set out in the affidavit.

1. The history of this matter leaves it beyond doubt that the wife knew or ought to have known that this matter was listed for hearing on 30 July. There were no less than three occasions, and probably four occasions, when this information was conveyed to the wife, either directly or through her solicitor.

2. I think there is a real doubt about the wife’s assertion that her understanding of English was so limited that she did not appreciate that the hearing was listed on 30 July. Where the wife’s evidence conflicts with the sworn evidence that Ms M gave before me from the National Enquiry Centre and the sworn evidence of Mr T the interpreter gave me, I prefer the evidence of Mr T and Ms M, on the basis that they have no vested interest in these proceedings and they are impartial bystanders. In any event, even if it is the case that the wife was mistaken about the dates, I simply do not accept that she could not have attended court on 30 July after she had been telephoned by Mr T, the interpreter.

3. All the evidence leads me to form the impression that this is a case where what the wife did, for whatever reason, was notwithstanding notice of the proceedings, disregard the opportunity of appearing at and participating in the hearing, and now seeks to set the orders made aside. I don’t understand the reasons for that. I don’t know whether the wife thought that she would get some benefit out of doing so, but the issue that now confronts the court is whether she should be left to bear the consequences of this, or whether the matter should be set aside and remitted for a hearing at some future date.

4. I am very, very conscious of the fact that if I decline her application, she will have limited remedies available to her. One such remedy is to appeal against this decision. Another such remedy is to seek leave to appeal against the orders that I made on 30 July 2009. Another remedy may be to seek to resist the enforcement proceedings that may inevitably come as a result of any decision I make to dismiss her application. I fully understand the thrust of the submissions that are made by Ms Carr that she would be denied the opportunity to present her case if I decline to make the orders that she has sought. Implicit in this submission is the fact that she would be denied natural justice.

5. However she has failed to establish to my reasonable satisfaction that she had a reasonable explanation for her absence at the hearing. I note with some interest the recent decision of the High Court in Aon Risk Services Australia Limited & Australian National University (2009) HCA 27, a decision of the High Court on 5 August 2009.

6. This decision does not deal with an application to set aside pursuant to rule 16.05, but I think it does deal with the principles that are in effect being dealt with in this case, and that is whether the application of a procedural rule should be applied in such a way that a person is denied natural justice. The High Court revisited a number of well established decisions including the decision of the full court of the Supreme Court of Victoria in Sali & SPC Limited (1993) 116 ALR 625 as well as a number of other well established cases including Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146.

7. I incorporate into these ex tempore reasons a selection of paragraphs from the said High Court judgment, namely paragraphs 26 to 30 inclusive and paragraphs 94 to 103 inclusive.

   26. Sali v SPC Ltd was concerned with a refusal by the Full Court of the Supreme Court of Victoria to grant an application for an adjournment of an appeal. By majority, this Court held that in the exercise of a discretion to refuse or grant an adjournment, the judge of a busy court was entitled to consider "the effect of an adjournment on court resources and the competing claims by litigants in other cases awaiting hearing in the court as well as the interests of the parties". Brennan, Deane and McHugh JJ went on to sayhttp:// - #:

   "What might be perceived as an injustice to a party when considered only in the context of an action between parties may not be so when considered in a context which includes the claims of other litigants and the public interest in achieving the most efficient use of court resources."

   Toohey and Gaudron JJ dissented in the result but acknowledged by reference to GSA Industries, thathttp:// - #:

   "The contemporary approach to court administration has introduced another element into the equation or, more accurately, has put another consideration onto the scales. The view that the conduct of litigation is not merely a matter for the parties but is also one for the court and the need to avoid disruptions in the court's lists with consequent inconvenience to the court and prejudice to the interests of other litigants waiting to be heard are pressing concerns to which a court may have regard." (footnote omitted)

   27. The observations made in the two joint judgments in Sali were linked to the particular knowledge that a judge or court, called upon to exercise a discretion to adjourn, would have of the state of that court's lists. However, the mischief engendered by unwarranted adjournments and consequent delays in the resolution of civil proceedings goes beyond their particular effects on the court in which those delays occur. In that connection, there have been a number of cases after Sali in which it has been accepted, in the context of Judicature Act Rules, that the public interest in the efficient use of court resources is a relevant consideration in the exercise of discretions to amend or adjournhttp:// - #.

   28. Both the primary judge and the Court of Appeal in the present case regarded the decision of this Court in J L Holdings as determinative of the approach they should take to the amendment application. But that case was factually very different. As counsel for Aon pointed out in written submissions:

   1. The applicant had explained, and the Court had accepted, that the application was made late because a material fact had only recently been discovered.

   2. The application was made before a hearing date was fixed and, once it had been fixed, the period of six months intervening between the application and the commencement of trial meant that the hearing dates would not be imperilled.

   3. The point sought to be raised could not be avoided at trial, as it was apparent on the face of certain documents.

   In reversing the decision of the Full Federal Court, which upheld the primary judge's refusal to grant leave to amend the defence, this Court held case management principles to be relevant, but said that they could not be used to prevent a party from litigating a fairly arguable case.

   29. In their joint judgment, Dawson, Gaudron and McHugh JJ reaffirmed the "principles established in Cropper v Smith and accepted in Clough and Rogers v Frog...". They held that nothing said in Sali suggested that proper principles of case management might be employed, except perhaps in extreme circumstances, to shut a party out from litigating a case which was fairly arguable. Their Honours said:

   "Case management is not an end in itself. It is an important and useful aid for ensuring the prompt and efficient disposal of litigation. But it ought always to be borne in mind, even in changing times, that the ultimate aim of a court is the attainment of justice and no principle of case management can be allowed to supplant that aim."

   And further:

   "Justice is the paramount consideration in determining an application such as the one in question. Save in so far as costs may be awarded against the party seeking the amendment, such an application is not the occasion for the punishment of a party for its mistake or for its delay in making the application. Case management, involving as it does the efficiency of the procedures of the court, was in this case a relevant consideration. But it should not have been allowed to prevail over the injustice of shutting the applicants out from raising an arguable defence, thus precluding the determination of an issue between the parties."

   Kirby J wrote a concurring judgment.

   30. It might be thought a truism that "case management principles" should not supplant the objective of doing justice between the parties according to law. Accepting that proposition, J L Holdings cannot be taken as authority for the view that waste of public resources and undue delay, with the concomitant strain and uncertainty imposed on litigants, should not be taken into account in the exercise of interlocutory discretions of the kind conferred by r 502. Also to be considered is the potential for loss of public confidence in the legal system which arises where a court is seen to accede to applications made without adequate explanation or justification, whether they be for adjournment, for amendments giving rise to adjournment, or for vacation of fixed trial dates resulting in the resetting of interlocutory processes.

   …

   94. It will be recalled that in J L Holdings the plurality said that nothing in Sali v SPC suggested that principles of case management might be employed "except perhaps in extreme circumstances, to shut a party out from litigating an issue which is fairly arguable". Their Honours said that case management was not to be seen as an end to itself and that the ultimate aim of the court remained the attainment of justice, even in changing times. In Gale v Superdrug Stores Plc Millett LJ expressed a similar concern, regarding the need to ensure that justice is not sacrificed. Waller LJ, delivering the judgment of the Court of Appeal in Worldwide Corporation Ltd v GPT Ltd, said that such a concern did not pay sufficient regard to the fact that the courts are concerned to do justice to all litigants. Where a party had had a sufficient opportunity to plead his or her case, it may be necessary for the court to make a decision which may produce a sense of injustice in that party, for the sake of doing justice to the opponent and to other litigants.

   95. The statement of Waller LJ identifies a fundamental premise of case management. What may be just, when amendment is sought, requires account to be taken of other litigants, not just the parties to the proceedings in question. The statement is consistent with what was said in Sali v SPC, which reflected a proper understanding of case management. The statements in J L Holdings do not reflect such an understanding and are not consistent with what was said in Sali v SPC. To say that case management principles should only be applied "in extreme circumstances" to refuse an amendment implies that considerations such as delay and costs can never be as important as the raising of an arguable case; and it denies the wider effects of delay upon others.

   96. An important aspect of the approach taken by the plurality in J L Holdings was that it proceeded upon an assumption that a party should be permitted to amend to raise an arguable issue subject to the payment of costs occasioned by the amendment. So stated it suggests that a party has something approaching a right to an amendment. That is not the case. The "right" spoken of in Cropper v Smith needs to be understood in the context of that case and the Rule, which required amendment to permit the determination of a matter already in issue. It is more accurate to say that parties have the right to invoke the jurisdiction and the powers of the court in order to seek a resolution of their dispute. Subject to any rights to amend without leave given to the parties by the rules of court, the question of further amendment of a party's claim is dependent upon the exercise of the court's discretionary power.

   97. The objectives of case management are now expressly stated in r 21 of the Court Procedures Rules. It cannot be overlooked that later rules, such as r 21, are likely to have been written with the decision in J L Holdings in mind. The purposes stated in r 21 cannot be ignored. The Court Procedures Rules make plain that the Rules are to be applied having regard to the stated objectives of the timely disposal of the proceedings at an affordable cost. There can be no doubt about the importance of those matters in litigation in the courts of the Australian Capital Territory.

   98. Of course, a just resolution of proceedings remains the paramount purpose of r 21; but what is a "just resolution" is to be understood in light of the purposes and objectives stated. Speed and efficiency, in the sense of minimum delay and expense, are seen as essential to a just resolution of proceedings. This should not detract from a proper opportunity being given to the parties to plead their case, but it suggests that limits may be placed upon re-pleading, when delay and cost are taken into account. The Rule's reference to the need to minimise costs implies that an order for costs may not always provide sufficient compensation and therefore achieve a just resolution. It cannot therefore be said that a just resolution requires that a party be permitted to raise any arguable case at any point in the proceedings, on payment of costs.

   99. In the past it has more readily been assumed that an order for the costs occasioned by the amendment would overcome injustice to the amending party's opponent. In Cropper v Smith Bowen LJ described an order for costs as a panacea that heals all. Such a view may largely explain the decision of this Court in Shannon v Lee Chun, which upheld a decision allowing the plaintiff to raise a new case at the second trial, but which imposed a condition as to costs. The modern view is that even an order for indemnity costs may not always undo the prejudice a party suffers by late amendment. In the present case it is difficult to see that such an order could be sufficient compensation, given that Aon would be required to again defend litigation which was, effectively, to be commenced afresh.

   100. The views expressed by Lord Griffiths in Ketteman v Hansel Properties Ltd, that justice cannot always be measured in money and that a judge is entitled to weigh in the balance the strain the litigation imposes upon litigants, are also now generally accepted. In Bomanite Pty Ltd v Slatex Corp Aust French J said of Bowen LJ's statements in Cropper v Smith:

   "... That may well have been so at one time, but it is no longer true today ... Non-compensable inconvenience and stress on individuals are significant elements of modern litigation. Costs recoverable even on an indemnity basis will not compensate for time lost and duplication incurred where litigation is delayed or corrective orders necessary."

   101. In Ketteman Lord Griffiths recognised, as did the plurality in J L Holdings, that personal litigants are likely to feel the strain more than business corporations or commercial persons. So much may be accepted. But it should not be thought that corporations are not subject to pressures imposed by litigation. A corporation in the position of a defendant may be required to carry a contingent liability in its books of account for some years, with consequent effects upon its ability to plan financially, depending upon the magnitude of the claim. Its resources may be diverted to deal with the litigation. And, whilst corporations have no feelings, their employees and officers who may be crucial witnesses, have to bear the strain of impending litigation and the disappointment when it is not brought to an end. The stated object in the Court Procedures Rules, of minimising delay, may be taken to recognise the ill-effects of delay upon the parties to proceedings and that such effects will extend to other litigants who are also seeking a resolution in their proceedings.

   102. The objectives stated in r 21 do not require that every application for amendment should be refused because it involves the waste of some costs and some degree of delay, as it inevitably will. Factors such as the nature and importance of the amendment to the party applying cannot be overlooked. Whilst r 21 assumes some ill-effects will flow from the fact of a delay, that will not prevent the parties dealing with its particular effects in their case in more detail. It is the extent of the delay and the costs associated with it, together with the prejudice which might reasonably be assumed to follow and that which is shown, which are to be weighed against the grant of permission to a party to alter its case. Much may depend upon the point the litigation has reached relative to a trial when the application to amend is made. There may be cases where it may properly be concluded that a party has had sufficient opportunity to plead their case and that it is too late for a further amendment, having regard to the other party and other litigants awaiting trial dates. Rule 21 makes it plain that the extent and the effect of delay and costs are to be regarded as important considerations in the exercise of the court's discretion. Invariably the exercise of that discretion will require an explanation to be given where there is delay in applying for amendment.

   103. The fact that an explanation had been offered for the delay in raising the defence was regarded as a relevant consideration in J L Holdings. Generally speaking, where a discretion is sought to be exercised in favour of one party, and to the disadvantage of another, an explanation will be called for. The importance attached by r 21 to the factor of delay will require that, in most cases where it is present, a party should explain it. Not only will they need to show that their application is brought in good faith, but they will also need to bring the circumstances giving rise to the amendment to the court's attention, so that they may be weighed against the effects of any delay and the objectives of the Rules. There can be no doubt that an explanation was required in this case.

8. I understand the case to mean that it is not only perfectly legitimate, but increasingly important that in making decisions such as the present one, I take into account the impact of my decision, not just on the wife, and not just on the husband, but on litigants in this court generally.

9. The history of these proceedings indicates that the husband and the wife have been litigating since 2005. The substantive application of the wife was filed 10 October 2005, so the case is now into its fifth year. This is a case that has already been to the Full Court once. This is a case where precious court time was set aside in order to deal with the matter. If the application to set aside is granted, this case will not be heard until August or September of next year at the earliest. This case has consumed court resources in a manner which I observed in my reasons for judgment on 30 July 2009 would be regarded by many as disproportionate to the issues in question. 

10. The impact of setting aside these orders would be to do justice to the wife, no doubt she would say, but would be to impose an unreasonable further burden on public resources, with strain and uncertainty imposed on other litigants in this court. I also believe that if I were to grant the application of the wife on the evidence that she advances, and in the circumstances of this case, that it would serve as the grounds for the potential loss of public confidence in the legal system to accede to an application which has such inadequate explanation or justification.

I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of Altobelli FM

Associate:  Anthony Thompson

Date:  8 December 2009