Case: Wu v Avin Operations Pty Ltd [2006] FCA 36
Outcome: discussed
On 3 February 2006, I delivered reasons for judgment concerning the applicant's motion for default judgment and made the orders that Mr Armitage now seeks to have set aside: see Wu v Avin Operations Pty Ltd [2006] FCA 36 (" Wu "). 6 In Wu , I considered (at [6]-[25]) the extensive history of delay and non-compliance with the Court's orders by the first and second respondents. I found (at [52]-[53]) that the first and second respondents had failed to defend the proceeding with due diligence and were in default for the purposes of O 35A r 2(2)(h) of the Rules. My reasons for judgment record that: &#8226; The applicant (hereafter referred to as Ms Wu) was required to bring an application to the Court for an order for substituted service as regards Mr Armitage ([7]-[8]). &#8226; Ms Wu applied twice by motion for orders that the respondents, including Mr Armitage, provide their lists of documents and the respondents, including Mr Armitage, breached orders of 8 October 2003 and 16 December 2003 for the provision of these lists ([10]-[13]). From September 2003 until 14 April 2004, Mr Armitage and the other respondents retained a solicitor (Mr Joseph Guss) ([8] and [15]). &#8226; Mr Armitage failed to make documents available for inspection, despite orders by the Court on 8 October 2003, 16 December 2003 and 9 June 2004 ([10]-[17]). Following an order for further discovery on 4 March 2004, Mr Armitage filed an affidavit stating that the first respondent's accounts and statutory records were "mistakenly removed by a waste paper removalist with various other papers and records" and that he was unable to locate his file in respect of Ms Wu's application for an Australian visa and her alleged investment in the first respondent ([14]). &#8226; After 14 April 2004, Ms Wu's solicitor's attempted to contact the respondents, including Mr Armitage directly. By a letter dated 21 April 2004, Mr Armitage informed Ms Wu's solicitors that he was "unable to facilitate" the inspection of the discovered documents because they were "located at the office of Joseph Guss" ([15]). &#8226; On the first occasion when Ms Wu's motion for default judgment came on for hearing, counsel appeared for Mr Armitage. Counsel advised that she was instructed by solicitors who expected to act in the matter. This expectation was not fulfilled ([17]). &#8226; On the second occasion when Ms Wu's motion for default judgment came on for hearing, different counsel appeared for Mr Armitage. Counsel advised that he was instructed by solicitors, who subsequently advised the Court that they were no longer retained to act for Mr Armitage (or any other respondent) in the proceeding ([19]). &#8226; Although it was made clear in court on 13 October 2004 that it was open to the respondents to serve a subpoena on their previous solicitor (Mr Guss) to produce the discovered documents to the Court the respondents did not take steps to do this until 3 December 2004 ([19] and [21]). &#8226; On 3 December 2004, George Liberogiannis and Associates went on record as solicitor for the Armitages, including Barry Armitage. Mr Liberogiannis did not, however, appear on the return of the subpoena. The subpoena was not discharged against Mr Guss until 16 February 2005 ([21]-[22]). &#8226; At the adjourned hearing of the motion for default judgment on 27 April 2005, Mr Liberogiannis sought leave to withdraw as the solicitor on the record. His evidence was that Barry Armitage and his son had failed to keep appointments with counsel and to provide him with instructions for the conduct of the matter, notwithstanding his numerous calls to their cell phones and place of residence. His firm filed a notice of ceasing to act for Barry Armitage and his son on 28 April 2005 ([24]). 7 Notwithstanding this, for the reasons stated in Wu at [54] and following, I declined to make orders in terms of the motion for default judgment. At [54]-[55], I said: "I would not order that judgment be entered without more because, following the return of the subpoena directed to Mr Guss, there remains no continuing and unexplained default on the respondents' part. If Barry Armitage's evidence is accepted, there is nothing more the respondents can do to facilitate inspection of documents. Although Mr Guss did not produce all of the documents the subject of the subpoena, Barry Armitage has affirmed that the remaining documents remain in Mr Guss' custody. Ultimately, the credibility (or lack thereof) of Barry Armitage's claims regarding these and like matters will be an issue for trial: see Australian Finance Group Ltd v Accent Financial Group Pty Ltd [2005] FCA 66 at [33] per Nicholson J. Whether he is believed or not is likely to have other consequences for this litigation. I note too that there may be circumstances that partly explain the delays. These circumstances include the ill health of Barry Armitage and of a family member and the disturbance caused by changes in legal representation. Moreover, although the respondents have needed repeated prompting by Ms Wu's solicitor, they have filed their defence, various affidavits responding to Ms Wu's claims and lists of discoverable documents. They have mostly participated in court hearings and they were represented at the mediation by their solicitor. Barry Armitage ultimately took steps to have a subpoena issued to Mr Guss, in order that Ms Wu have access to the first and second respondents' discovered documents." 10 Mr Armitage's earlier affidavits, the affidavits of the third and fourth respondents and Ms Saldaneri are mentioned in Wu at [27] and [31]. Mr Armitage's lengthy affidavit of 16 May 2006 deposes to matters of fact. It also contains what are in truth submissions on his motion. For present purposes, it is sufficient to note that Mr Armitage claimed (amongst other things): &#8226; Mr Armitage was unable to collect his documents relating to this matter from previously retained counsel (Mr Dennis Baker) until 4 May 2006. He had not previously seen some of these documents. &#8226; Prior to the hearing on 27 April 2005, Mr Armitage had no knowledge of the affidavit of Anna Maria Krycer of 12 April 2005; that Mr Lieberogiannis intended to seek leave to withdraw from the proceeding; and that he would be unrepresented at that hearing. He claimed that he was denied an opportunity to respond to Ms Krycer's affidavit and Mr Lieberogiannis' evidence. &#8226; After receiving a copy of the 27 April 2005 order (granting leave to Mr Lieberogiannis to cease to act) Mr Armitage asked Registry "what was happening with the proceedings" and was told that "no other date had been appointed, and that it appeared that there was no further action or procedure contemplated". He returned to the Registry on two further occasions. He assumed the action was not proceeding. &#8226; When the respondents retained Mr Guss, they gave Mr Guss all relevant documents and did not retain any copies. In early April 2004, there was a dispute between Mr Guss and Mr Armitage (and other respondents), as a consequence of which Mr Guss ceased to act for them. Mr Guss claimed a lien over the respondents' documents. Mr Armitage photocopied the documents on the Court file. &#8226; After Mr Guss ceased to act, the respondents decided to draft instructions, affidavits and other documents needed in the proceeding and to engage counsel "to finalise documents and make any necessary Court appearances". Ultimately, a barrister's clerk "agreed to arrange for solicitors (not then known to the Respondents) to provide the 'Back Sheets' required to brief counsel". Mr Armitage added: "In practice, the arrangement ... did not provide a proper level of legal services and ... Mr Baker agreed to provide a 'budget-type' representation for the Respondents." &#8226; Mr Liberogiannis agreed to act as solicitor on the record, "with the Respondents providing all secretarial-type support, full written instructions, and the like". Mr Baker agreed to supervise the work and retain the documents relevant to the proceeding. Mr Baker therefore held all relevant documents and the respondents retained no copies. &#8226; Mr Armitage and his son (the third respondent) attended Mr Baker's chambers frequently, "often on two occasions a week". Mr Armitage deposed: "In the period leading up to 27 April 2005 I was aware that the matter was to come back before the Court fairly soon, but I was not aware of the nature of the anticipated proceedings." &#8226; Mr Armitage and his son were unable to keep an arrangement to meet Mr Baker on 22 April 2005 and left a message that they would attend on 26 April 2005. They did not attend Mr Baker's chambers on 26 April 2005 because their car "broke down in the countryside" and they did not contact Mr Baker because "we were in an area of poor mobile telephone reception". &#8226; Mr Armitage did not find out about the 27 April hearing until after the scheduled time of the hearing. He added that "[w]e immediately tried to contact Mr Baker and he told us we should speak to Mr Liberogiannis". &#8226; Mr Armitage and his son made unsuccessful attempts to contact Mr Liberogiannis, whom he ultimately met "by chance" early this year. &#8226; Hereafter, the respondents intended to act on their own behalf and "to retain full control and ensure that all matters requiring attention are dealt with promptly". &#8226; Mr Armitage had severe health problems and associated difficulties, including inability to give "sustained personal attention to ... this litigation". &#8226; Mr Armitage resigned as director of the first respondent because it could be insolvent. &#8226; Mr Armitage did not intentionally avoid service of the documents initiating this proceeding. &#8226; Mr Armitage did not attend court because of his health, the fact he had legal representation, and because Ms Wu, through her solicitors, had threatened him. &#8226; Mr Armitage did not become aware of Ms Wu's desire to inspect the discovered documents until he received a letter dated 20 April 2004 from her solicitors. He responded the next day. &#8226; Mr Armitage did not become aware until late November or early December 2004 that the Court had indicated that it would give leave to issue a subpoena to Mr Guss to obtain the documents for Ms Wu's inspection. He claimed that Mr Guss still held relevant documents. &#8226; Mr Armitage did not know that Mr Liberogiannis had failed to attend on the return of the subpoena. He did not knowingly breach any order of the Court. He "should not be held responsible for ... delays ... during the time" when Mr Guss and Mr Liberogiannis acted for him. 11 In addition, Mr Armitage challenged the reliability of the evidence of Ms Xia but it is unnecessary to provide the details of that challenge here. He also expanded on his claim that the initiating application and statement of claim in the proceeding were "based on a serious fraud and constitutes an abuse of the processes of this ... Court". He asserted that Ms Wu had made fraudulent claims in relation to her migration objective and investment claims. He responded to Ms Wu's claims against him at some length and alleged that her former and present solicitors had acted improperly in various ways. It is unnecessary to set out the details of these various allegations here. 12 In his affidavit of 16 May 2006, Mr Armitage further contended that the costs order of 3 February 2006 was unjust. This was because the primary matter in dispute had been the production of documents, over which he had no control. Also, so he said, Ms Wu's claims were fraudulent and, if he were required to meet the costs order before the determination of the proceeding, he would be prevented from defending himself. Mr Armitage specifically noted that paragraphs 36 and 38 of the statement of claim alleged that he acted dishonesty.