FEDERAL COURT OF AUSTRALIA Leung v American International Assurance Company (Australia) Limited [2007] FCA 989 WILLIAM LEUNG, QING NA RONG AND WEN GOODWILL (AUSTRALIA) PTY LIMITED [ACN 075 925 218] v AMERICAN INTERNATIONAL ASSURANCE COMPANY (AUSTRALIA) LIMITED NSD 1497 OF 2003 COWDROY J 28 MAY 2007 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD1497 OF 2003 BETWEEN: WILLIAM LEUNG First Applicant QING NA RONG Second Applicant WEN GOODWILL (AUSTRALIA) PTY LIMITED [ACN 075 925 218] Third Applicant AND: AMERICAN INTERNATIONAL ASSURANCE COMPANY (AUSTRALIA) LIMITED Respondent JUDGE: COWDROY J DATE OF ORDER: 28 MAY 2007 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The applicants file and serve all affidavits upon which they intend to rely by 4 pm on 6 June 2007. 2. The hearing of the motion is adjourned until 2.15 pm on 8 June 2007. 3. The costs of the hearing on 16 May 2007 and today are reserved until 8 June 2007. 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 NSD1497 OF 2003 BETWEEN: WILLIAM LEUNG First Applicant QING NA RONG Second Applicant WEN GOODWILL (AUSTRALIA) PTY LIMITED [ACN 075 925 218] Third Applicant AND: AMERICAN INTERNATIONAL ASSURANCE COMPANY (AUSTRALIA) LIMITED Respondent JUDGE: COWDROY J DATE: 28 MAY 2007 PLACE: SYDNEY REASONS FOR JUDGMENT 1 Before the Court is a notice of motion filed by the respondent on 16 May 2007 seeking orders that the proceedings be dismissed pursuant to Order 20 Rule 2 of the Federal Court Rules on the ground that the proceedings are an abuse of process of the Court. An order for the payment of costs on an indemnity basis is also sought. 2 The proceedings were commenced on 1 October 2003. Between 1 October 2003 and 16 December 2004, five directions hearings were held. On 16 December 2004 the Court ordered the applicants involved in the proceedings to institute separate proceedings. 3 Between 16 December 2004 and 4 April 2007 there have been 23 directions hearings. On 14 December 2005 Wilcox J made an order that the applicants file any evidence upon which they sought to rely by 24 February 2006. No evidence was filed. The next directions hearing was held on 29 March 2006. On that date the Court ordered that the proceedings be stood over until 13 April 2006. On that day the proceedings were again stood over until 1 May 2006. On 1 May 2006 the proceedings were adjourned until 29 May 2006. On 29 May 2006 the proceedings were again adjourned until 10 July 2006. On this day the proceedings were stood over until 26 July 2006. It should be noted that many of the directions hearings referred to above related to difficulties with discovery on the part of each party. 4 On 26 July 2006 the Court ordered that the applicants file a statement setting out the issues in dispute concerning the respondent's discovery by 1 August 2006. The proceedings were listed for further directions on 9 August 2006. On this date directions were made with regard to issues of discovery and a further directions hearing was fixed for 21 August 2006. On 21 August 2006 the proceedings were stood over until 4 September 2006. 5 On 4 September 2006 the proceedings were again adjourned until 19 September 2006. On this date the applicants were ordered to file and serve their affidavits regarding liability by 29 January 2007. A further directions hearing was listed for 21 December 2006. The Court also ordered that a statement of each issue and the respondent's answer be filed within seven days prior to the next directions hearing. No documents were filed. In fact, the last day on which any documents were filed in the proceedings by the applicants, save for an affidavit being relied upon in this motion, was 20 June 2006. 6 On 21 December 2006 the Court ordered the applicants to file and serve their affidavits on or before 30 March 2007, a hearing date was fixed and the proceedings listed for further directions on 4 April 2007. On 4 April 2007 the Court ordered the applicants to file and serve their evidence by 9 July 2007. The Court again directed the applicants to file a statement of issues by 9 August 2007. Order 8 of the orders made on 4 April 2007 stated: 'In the event that the applicant fails to comply with order 1, the respondent is granted leave to apply to have the proceedings struck out and for an order for indemnity costs.' 7 No evidence was filed by the applicants as directed and on 16 May 2007 the proceedings were re-listed at the request of the respondent who sought leave to file a notice of motion to strike out the application. 8 The Court set down the motion for hearing on 28 May 2007 and directed that any affidavit explaining non compliance with the orders of the Court be filed by 24 May 2007. 9 The applicant's solicitor Mr Lawrence Liwei Lin filed an affidavit sworn on 24 May 2007 which referred to difficulties which he has experienced in relation to translation from Mandarin to English. He also states that he was absent from work and on holiday between 25 December 2006 and 23 January 2007. Mr Lin also refers to the conduct of discovery at the offices of the respondent as a reason for the non compliance. 10 Mr Lin has also referred to the large work load of his practice which includes hearings in the District Court and Family Court. He states that he has made genuine attempts to comply with the orders of the Court but because of the above it has been difficult to obtain instructions to provide the necessary evidence. A further extension of time without any limit is sought. FINDINGS 11 The Court has the power to strike out a matter as an abuse of process pursuant to Order 20 Rule 2(1)(c) of the Federal Court Rules. It has been recognised that such power should be exercised only in exceptional circumstances and that the categories which might entitle the Court to exercise such power are not closed: see Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256 at 267. Although applicable only in the Court's appellate jurisdiction, s 25(2B)(bb)(i) of the Federal Court of Australia Act 1976 (Cth) empowers the Court to dismiss an appeal where there has been failure to comply with directions of the Court. 12 The history of these proceedings show that there has been an inordinate time allowed for the applicants to file their evidence. Although there may have been difficulties with discovery of documents by both applicants and respondent, this cannot detract from the fact that the applicants have been ordered on numerous occasions to file their evidence but have failed to do so. As far as the Court is aware there are no current issues relating to discovery. 13 Although the Court considers the reasons advanced by the applicants for non compliance with Court orders to be unmeritorious, the applicants will be given a final opportunity to provide the evidence upon which they rely in these proceedings. The Court will allow until 4 pm on 6 June 2007 for such evidence to be filed. The Court will adjourn this application until 2.15 pm on 8 June 2007 and will indicate now that if the affidavits are not filed by the due date now fixed, the Court will accede to the request that the proceedings be struck out with costs. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy. Associate: Dated: 28 May 2007 Counsel for the Applicant: I. Archibald Solicitor for the Applicant: Accentro Legal Counsel for the Respondent: B. Shields Solicitor for the Respondent: Ebsworth & Ebsworth Date of Hearing: 28 May 2007 Date of Judgment: 28 May 2007