FEDERAL COURT OF AUSTRALIA Lacey v Hot Metal Pty Ltd [2001] FCA 100 DWAYNE DERRICK LACEY v HOT METAL PTY LIMITED (ACN 087 987 317) & ORS N 1110 OF 1999 LINDGREN J 13 FEBRUARY 2001 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 1110 OF 1999 BETWEEN: DWAYNE DERRICK LACEY APPLICANT AND: HOT METAL PTY LTD (ACN 087 987 317) FIRST RESPONDENT LYNDA SIMPSON SECOND RESPONDENT PETER ANTHONY GROSSMAN trading as "EAGLE BADGES" THIRD RESPONDENT JUDGE: LINDGREN J DATE OF ORDER: 13 FEBRUARY 2001 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The applicant pay, as taxed or agreed, on an indemnity basis, the costs of the first and third respondents of their application for dismissal under Order 10, rule 7 of the Federal Court Rules; 2. The first and third respondents have leave to tax the costs referred to in Order 1 and the costs referred to in Order 1 be payable forthwith after taxation or agreement; 3. That the proceeding be stayed until the costs, as taxed or agreed, are paid; 4. That each party have leave to apply on 24 hours' notice. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 1110 OF 1999 BETWEEN: DWAYNE DERRICK LACEY APPLICANT AND: HOT METAL PTY LTD (ACN 087 987 317) FIRST RESPONDENT LYNDA SIMPSON SECOND RESPONDENT PETER ANTHONY GROSSMAN trading as "EAGLE BADGES" THIRD RESPONDENT JUDGE: LINDGREN J DATE: 13 FEBRUARY 2001 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This proceeding is for infringement of the applicant's registered design. The proceeding was settled on 12 May 2000 as between the applicant and the second respondent. 2 The first and third respondents seek an order under Order 10, rule 7 of the Court's Rules that the proceeding be dismissed because of the default of the applicant in complying with orders of the Court directing him to take steps in the proceeding. Although there is no formal notice of motion, Mr Burley, counsel for the first and third respondents, made clear on the last directions hearing on 6 February, that he wished to apply for this order. Ms Bowne, counsel for the applicant, has come along today aware that that was the issue to be decided. The matter has been argued accordingly. 3 There have been read two affidavits, one by Christopher Francis Jordan of Davies Collison Cave, solicitors, in support of the application for dismissal, and one by Jane Margaret Frances Owen, of Griffith Hack, solicitors, on behalf of the applicant, in opposition to that application. The affidavit of Mr Jordan gives a chronological account of the history of the matter. I will not recount that history beyond making some observations about events on and since 3 November 2000. 4 On 3 November 2000, by consent, the Court made directions including directions relating to discovery by both parties, mutual inspection of documents and the filing of affidavits. For example, there was an order that the applicant file his affidavits in support of his claim by 22 December. 5 On 6 November Davies Collison Cave, solicitors for the first and third respondents, forwarded a list of categories of documents sought by their clients and noted that they looked forward to receiving the applicant's supplementary list of documents. On 17 November Davies Collison Cave served lists of documents of the first and third respondents and invited Griffith Hack to make an appointment for inspection. On 23 November Davies Collison Cave wrote to Griffith Hack seeking the applicant's list of documents "without further delay." 6 On 24 November Griffith Hack replied making a complaint as to an alleged shortcoming in the lists of the first and third respondents. In relation to the applicant's own discovery, they stated that the applicant was overseas and that they had had difficulty in obtaining instructions in relation to further documentation. They said they anticipated being unable to obtain a sworn list until mid-December. 7 On 1 December Davies Collison Cave wrote to Griffith Hack asserting that the applicant's list of documents was well overdue. They advised that they reserved their clients' right to apply to have the proceeding dismissed for want of prosecution. On 14 December Davies Collison Cave wrote again to Griffith Hack referring to the applicant's default and again referring to the possibility of moving the Court for dismissal of the proceeding. 8 On 18 December 2000 Griffith Hack wrote to Davies Collison Cave providing copies of the applicant's discoverable material. On 5 January 2001 Davies Collison Cave wrote to Griffith Hack again referring to default by the applicant in complying with the directions of 3 November in the form of a failure to serve affidavits by 22 December. Again they referred to the possibility of an application for dismissal. 9 On 9 January 2001 Davies Collison Cave wrote to Griffith Hack requesting confirmation that the applicant had no further documents to be discovered and advising that if they did not receive the applicant's verified list or affidavits within seven days, they would file a notice of motion seeking dismissal of the application. 10 According to the affidavit of Ms Owen, the applicant was overseas until the week commencing 15 January 2001. The affidavit does not indicate for how long he had been overseas, although, on the basis of Griffith Hack's letter dated 24 November 2000 noted above, it appears he was overseas at least as at that date. On 15 January 2001 Ms Owen spoke to the applicant and sought instructions regarding further discoverable material in order to prepare a further list of documents on his behalf. On 17 January Ms Owen telephoned Mr Jordan of Davies Collison Cave advising Mr Jordan of her continuing difficulties in obtaining instructions but explaining that the applicant was now within the jurisdiction and that she expected to be able to obtain his instructions shortly. Paragraph 6 of Ms Owen's affidavit is as follows: Having spoken to my client on 15 January and on occasions subsequent to 15 January, I believed that my client would be in a position to comply with its [sic – his] obligations in respect of discovery prior to the directions hearing on 6 February, 2001. However, I have not yet received further documents from my client. 11 On 24 January 2001 Davies Collison Cave wrote to Griffith Hack referring to their letters of 1 December 2000, 14 December 2000, 5 January 2001 and 9 January 2001 and advising that they intended within the following few days, to file a notice of motion seeking dismissal of the proceeding. 12 On 2 February 2001 the applicant telephoned Ms Owen and advised her that he would be despatching to her on 5 February, in the words of her affidavit, "all documents relating to the generation of the design so that any further discovery could be made in accordance with the order agreed and made at the directions hearing on 3 November 2000". There is still no indication in the evidence that the applicant has dispatched the documents to his solicitors. 13 The matter was, as I indicated earlier, before the Court for directions in the ordinary way on 6 February when the first and third respondents sought an order under Order 10, rule 7, but it was not possible for the matter to be dealt with on that occasion and it would not have been appropriate for it to be dealt with then since the applicant had not had the opportunity of filing any evidence. 14 Ms Bowne of counsel has said all that, I think, can be said as to why the proceeding should not be dismissed. She refers to the fact that there was earlier delay in the proceeding in relation to discovery, and it is also, I think, fair to say that some of the correspondence even since 23 November has related to an issue over discovery. But the substance of the matter is that the applicant, apparently because of his absence overseas, has not progressed the matter. Parties for litigation have a responsibility to each other and to the Court to ensure that a proceeding does progress efficiently and expeditiously. If a party is to be overseas for a period of such length or in such circumstances that he or she will not be able to comply with the Court's directions, that party should raise the matter before departing so that it can, if possible, be accommodated. Instead of doing that here, the applicant consented to directions and the first and third respondents have been caused to incur costs wastefully on the assumption that the applicant was serious about complying with the directions. 15 Ms Bowne points to the fact that infringement is admitted and submits that it would not be appropriate for the proceeding to be dismissed. Mr Burley responds that not all the alleged acts of infringement are admitted. 16 I think it would be excessive to dismiss the proceeding: the applicant's case may well entitle him to relief, and he should not suffer a dismissal with an order that he pay all the costs of the first and third respondents of the proceedings to date But the fact remains that the first and third respondents have been put to unnecessary expense by the irresponsibility of the applicant. 17 It would be possible for me simply to make directions for the progression of the matter and to make an order for costs against the applicant in the usual way which would not be taxable until the final hearing and determination of the application, but I do not think this achieves justice as between the parties. 18 It seems to me that the appropriate course is to order that the applicant pay, on an indemnity basis, the additional costs to which the first and third respondents have been put; that the first and third respondents should have liberty, if they cannot be agreed, to tax those costs now; and that there should be an order staying the proceeding until the costs are taxed and paid. There would be also liberty for the parties to apply on 24 hours' notice. 19 In making the costs order mentioned, I have in mind only the costs relevant to the application for dismissal, and I think I can indicate what those costs are. They are the costs of the following letters from Davies Collison Cave, that is, letters dated 23 November 2000, 1 December 2000, 14 December 2000, 5 January 2001, 9 January 2001 and 24 January 2001; the costs of preparing Mr Jordan's affidavit of 31 January 2001; and the costs of today's hearing, but not the costs of the directions hearing on 6 February 2001, which would have had to take place in any event. If the applicant thinks that the first and third respondents are acting unreasonably as to the amount they seek, he can bring the matter back before me. 20 Accordingly, the Court orders that: 1. The applicant pay, as taxed or agreed, on an indemnity basis, the costs of the first and third respondents of their application for dismissal under Order 10, rule 7 of the Federal Court Rules; 2. The first and third respondents have leave to tax the costs referred to in Order 1 and the costs referred to in Order 1 be payable forthwith after taxation or agreement; 3. That the proceeding be stayed until the costs, as taxed or agreed, are paid; 4. That each party have leave to apply on 24 hours' notice. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. Associate: Dated: 20 February 2001 Counsel for the Applicant: Ms A H Bowne Solicitor for the Applicant: Griffith Hack Counsel for the Respondent: Mr S C G Burley Solicitor for the Respondent: Davies Collison Cave Date of Hearing: 13 February 2001 Date of Judgment: 13 February 2001