KM & A Chadwick Pty Ltd v Yeung, E.T.M. & Ors [1995] FCA 354

KM & A Chadwick Pty Ltd v Yeung, E.T.M. & Ors [1995] FCA 354

Although the respondents' explanations for repeated delay and non-compliance were unsatisfactory, the solicitor's default was exceptional, a real and previously unappreciated conflict of interest existed between groups of respondents, and the affidavit material disclosed arguable defences. The proper test was whether an arguable case or question was raised, not proof of a prima facie case. Because there was no evidence justifying security for the judgment amount or costs, the summary judgment orders were set aside and leave to file defences was granted, with indemnity costs thrown away ordered against the respondents.

Jurisdiction
Australia
Judgment Date
02 June 1995
Procedural Posture
Application to Set Aside Orders Striking Out the Defence and Entering Summary Judgment, and for Leave to File Defences / Notice of Motion After Orders Made by Sackville J on 21 February 1995 and 1 March 1995; Judgment Had Not Yet Been Entered
Outcome
Application granted; orders made by Sackville J on 21 February 1995 and 1 March 1995 set aside; respondents given leave to file defences within ten days; security conditions refused; respondents ordered to pay specified indemnity costs.
Legal Topics
['setting Aside Judgment or Orders' 'summary Judgment' 'striking Out Defence' 'failure to Comply With Discovery Orders' 'failure to Appear' 'solicitor Default' 'conflict of Interest' 'security for Judgment or Costs' 'insolvent Trading Under S 592 of the Corporations Law']
['civil Procedure' 'corporations Law'] ['setting Aside Judgment or Orders' 'summary Judgment' 'striking Out Defence' 'failure to Comply With Discovery Orders' 'failure to Appear' 'solicitor Default' 'conflict of Interest' 'security for Judgment or Costs' 'insolvent Trading Under S 592 of the Corporations Law']

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Procedural Posture

Application to Set Aside Orders Striking Out the Defence and Entering Summary Judgment, and for Leave to File Defences / Notice of Motion After Orders Made by Sackville J on 21 February 1995 and 1 March 1995; Judgment Had Not Yet Been Entered

Legal Issues

  1. 1 ['Whether the orders striking out the defence and entering summary judgment should be set aside under O35 r7 of the Federal Court Rules.' 'Whether the respondents had adequately explained the failures to comply with court directions and to appear before Sackville J.' 'Whether the respondents needed to demonstrate a prima facie case or whether an arguable case was sufficient.' "Whether the conflict of interest between groups of respondents and the solicitor's default justified allowing the respondents to file defences." 'Whether leave to defend should be conditional on security for the judgment amount or security for costs.']

Ratio Decidendi

Although the respondents' explanations for repeated delay and non-compliance were unsatisfactory, the solicitor's default was exceptional, a real and previously unappreciated conflict of interest existed between groups of respondents, and the affidavit material disclosed arguable defences. The proper test was whether an arguable case or question was raised, not proof of a prima facie case. Because there was no evidence justifying security for the judgment amount or costs, the summary judgment orders were set aside and leave to file defences was granted, with indemnity costs thrown away ordered against the respondents.

Court Disposition

Application granted; orders made by Sackville J on 21 February 1995 and 1 March 1995 set aside; respondents given leave to file defences within ten days; security conditions refused; respondents ordered to pay specified indemnity costs.

Orders

  • ['The orders made by Sackville J in this matter on 21 February 1995 and 1 March 1995 be set aside.' 'The respondents be given leave to file defences within ten (10) days from today.' "The respondents pay such of the applicant's costs in the main proceeding, on a full indemnity basis, as have been thrown away in...