ZHANG v Saiyu Construction Pty Ltd

[2017] FCCA 2951

FEDERAL CIRCUIT COURT OF AUSTRALIA

ZHANG v SAIYU CONSTRUCTION PTY LTD [2017] FCCA 2951

Catchwords:
PRACTICE & PROCEDURE – Application to set aside order – where orders were made in the absence of a party – no satisfactory explanation for the non-appearance – no prima facie case made out – application in a case dismissed.

Legislation:

Federal Circuit Court Rules 2001, r.16.05(2)(a)

Applicant: ZHITAO ZHANG

Respondent: SAIYU CONSTRUCTION PTY LTD

File Number: SYG 722 of 2017

Judgment of: Judge Street

Hearing date: 29 November 2017

Date of Last Submission: 29 November 2017

Delivered at: Sydney

Delivered on: 29 November 2017

REPRESENTATION

No appearance by or on behalf of the applicant.

Solicitors for the Respondent: Ms D Essa, with leave
W & H Lawyers Australia

ORDERS

1. Under r 13.03C(1)(e) of the Federal Circuit Court Rules 2001 the Court proceeds with the hearing of the application in a case filed by the respondent on 16 November 2017.

2. The application in a case filed on 16 November 2017 is dismissed.

3. Leave to the respondent to file any further affidavit in support of the application in a case filed on 5 October 2017 on or before 11 December 2017.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 722 of 2017

ZHITAO ZHANG

Applicant

And

SAIYU CONSTRUCTION PTY LTD

Respondent

REASONS FOR JUDGMENT

1. This is an application in a case filed on 16 November 2017 in a matter commenced under the Fair Work Act 2009 (Cth) in the small claims division of this Court. On 21 July 2017, a Judge of this Court made orders fixing the matter for a directions hearing on 29 September 2017 and directing the respondent to file a response and affidavit in support. The only document filed within time was the response, which was filed on 21 September 2017. No affidavit from the respondent was filed in accordance with that direction. Further, on 29 September 2017, the respondent failed to appear and the Court proceeded to make an order requiring the respondent to pay the sum of $12,000.00 within two months.

2. On 5 October 2017, an application in a case was filed seeking to have set aside the order made on 29 September under r 16.05(2)(a) of the Federal Circuit Court Rules 2001 (“the Rules”) by reason of it being made in default of appearance of the respondent. No affidavit was filed in support of the application in a case explaining why there was a failure to appear.

3. On 8 November 2017, an officer of the respondent put on an affidavit seeking to address the merits of the application in relation to the termination of the alleged subcontracting agreement between the applicant and the respondent. That affidavit did not advance one iota of explanation for the failure to appear on 29 September 2017.

4. The current application in a case filed on 16 November 2017 was listed for hearing before this Court as the duty Judge at 3:00 p.m. today. It sought an order staying Order 1 made by Judge Altobelli on 29 September 2017.

5. In support of that application the respondent had read an affidavit of Belle Lou, sworn on 27 November 2017. That affidavit identified Ms Lou was the solicitor in the employ of W&H Lawyers, solicitors for the respondent, who have the conduct of this matter. The affidavit refers to the consequences of the respondent being in breach of the order if payment is not made by 29 November 2017. The affidavit relevantly states:

   The orders were made in the absence of the Respondent on 29 September 2017 and require the Respondent to make a payment of $12,000.00 to the Applicant.

6. The affidavit otherwise completely fails to address in any way the explanation for the failure to appear on 29 September 2017. That evidentiary failure is a matter upon which Ms Diana Essa, the paralegal who was granted leave to appear given her imminent admission, sought to adduce telephone evidence from Ms Belle Lou to supplement the affidavit and address the deficiency. That was a sensible and competent step for Ms Essa to take. However, Ms Belle Lou advanced a bare allegation that the failure was due to a mismanagement of the diary in relation to the firm’s system for which she has taken full responsibility. No proper explanation as to what steps were taken following the orders made on 21 July 2017 to address the diarising and ensure attendance on the return date were advanced.

7. Those orders required another step to be taken in relation to the filing of an affidavit which was not done. The explanation by Ms Lou in relation to her failure to appear on 29 September 2017 is entirely unsatisfactory. The failure by Ms Lou to ensure that her affidavit was candid and complete in support of the current application is unsatisfactory. The unsatisfactory nature of the affidavit is only compounded by the fact that Ms Lou is the supervising solicitor for the paralegal in respect of which Ms Lou has decided not to attend Court because she is preparing some other case.

8. This was the first appearance by Ms Diana Essa in this Court. It is apparent that there had been no discussion with the paralegal in relation to the principles that would be applied in seeking the stay and the need for both a satisfactory explanation as to the failing to appear and a prima facie case to have set aside the order that was made in default of appearance under r 16.05(2)(a).

9. Had there been any attention by the supervising solicitor to those principles it would have been patent that the affidavit of 27 November 2017 was deficient. In the course of Ms Lou’s evidence she volunteered that she had made an affidavit in October 2017. The Court reminded her that she was on oath and that the Court had in front of it the Court file, which shows that no such affidavit had been filed in October 2017. There have been no affidavits filed by Ms Bell Lou explaining why there was a failure to appear on 29 September 2017.

10. The supervision of paralegals is a very important task by any supervising solicitor. This Court expects that task to be undertaken diligently in respect of any paralegal that appears in front of this Court. It is the common practice where a paralegal seeking to appear by leave for the first time in a Court that a competent supervising solicitor ensures attendance to assist the paralegal and to supervise the paralegal in relation to that first appearance. Had that occurred in the present case it would not have been necessary to take telephone evidence.

11. Be that as it may, the more concerning aspect is the failure of Ms Lou to turn her mind to what the issues were that would arise in respect of this application for a stay. I am not satisfied that any prima facie case for a stay has been made out. The steps taken do not reflect compliance with the alleged contractual even if the applicant is properly characterised as a subcontractor. I am not satisfied that there is any satisfactory explanation for the failure to appear on 29 September 2017.

12. I am not satisfied that the affidavit of Mr Gear Zhan identifies a sufficiently strong triable issue to mean that there is a prima facie case that the orders made on 29 September 2017 should be put aside so as to support this Court granting a stay. Further, the proximity of the hearing of the application in a case under r 16.05(2)(a) does not in the present case warrant a stay.

13. In all these circumstances the Court dismisses the application in a case filed on 16 November 2017 for a stay.

I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of Judge Street

Date: 30 November 2017