Hong Kong Trade Limited v CK Trading Int'l Pty Ltd & Anor
[2023] QDC 89
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- Unreported Judgment
- Hong Kong Trade Limited v CK Trading Int'l Pty Ltd & Anor[2023] QDC 89
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Hong Kong Trade Limited v CK Trading Int'l Pty Ltd & Anor[2023] QDC 89
Hong Kong Trade Limited v CK Trading Int'l Pty Ltd & Anor[2023] QDC 89
DISTRICT COURT OF QUEENSLAND
CITATION: | Hong Kong Trade Limited v CK Trading Int’l Pty Ltd & Anor [2023] QDC 89 |
PARTIES: | HONG KONG TRADE LIMITED (plaintiff) v CK TRADING INT’L PTY LTD ACN 119 291 824 (first defendant) and CHI KEUNG WONG (second defendant) |
FILE NO: | 4653 of 2014 |
DIVISION: | Civil |
PROCEEDING: | Application |
ORIGINATING COURT: | Brisbane District Court |
DELIVERED ON: | 2 June 2023 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 22 May 2023 |
JUDGES: | Byrne KC DCJ |
ORDERS: | In respect of the applications filed 5 April 2023, 12 May 2023 and 17 May 2023:
|
CATCHWORDS: | PROCEDURE – WANT OF PROSECUTION – CROSS APPLICATION FOR LEAVE TO PROCEED – where a claim was commenced for breach of contract – where the defendant pleaded a counterclaim in the defence – where the defendants assert that better particulars are required – where no step has been taken by either party for almost six years – where the illness of a director of the plaintiff and the closing of borders due to COVID-19 occurred during that period – whether the claim and counterclaim should both be dismissed for want of prosecution or whether leave should be given to take a step in the proceeding – where the plaintiff’s case in part relies on the recollections of conversations – where there is prejudice to the defendants arising from that delay. BREACH OF CONTRACT – DAMAGES – SECURITY FOR COSTS – where the claim and counterclaim are both dismissed for want of prosecution – where the plaintiff has previously paid money into Court as security for costs – where the defendants seek an order that the payment of their costs be paid from the security amount – where the plaintiff seeks the return of the security amount – where service of the application and the affidavit in support on the Registrar is required – whether the filing of the application and affidavit amounts to service on the Registrar. |
LEGISLATION: | Civil Proceedings Act 2011 (Qld), s 22 Court Funds Regulation 2009, (Qld), reg 31. Uniform Civil Procedure Rules 1999 (Qld), rule 389. |
CASES: | Artahs Pty Ltd v Gall Standfield & Smith (A Firm) [2011] QSC 273. Re the Courts Fund Regulation 2009 [2023] QDC 79. Tutos v Roman Catholic Trust Corporation [2020] QCA 171. Tyler v Custom Credit Corp Ltd [2000] QCA 178. |
COUNSEL: | Mr Y.W. Wu (by leave) for the plaintiff. Mr. T. Duhig for the defendants. |
SOLICITORS: | The plaintiff was not legally represented. Queensland Construction Legal for the defendants. |
Factual summary
- [1]In 2014 the plaintiff commenced an action for breach of contract claiming USD$323,480, with alternative claims also seeking compensation. In essence, it was said that the defendants failed to complete a contract for the provision of Australian made baby formula into Hong Kong and China. A consignment of baby formula, representing part of the initial order, which was manufactured by the defendants, was rejected by Chinese authorities on its arrival at the border upon testing by an accredited Chinese entity named CCIC due to, it is alleged, the presence of a contaminant. The plaintiff has experienced difficulties in proving that allegation.
- [2]The defendants filed a defence, and a counterclaim for the sum of USD$20,070 which was said to be the unpaid portion of the contract price outstanding.
- [3]Both parties were legally represented at that time.
- [4]On 29 May 2015, Bowskill QC DCJ (as her Honour then was) made certain orders, which included an order that the plaintiff pay the defendant’s costs of the application before her to be assessed, if not agreed. Subsequently, those costs were assessed in the amount of $7,026.35. Although the assessor’s certificate has been filed, no order has been made by the Registrar to give effect to it.
- [5]On 24 March 2016, a consent order was made requiring the plaintiff to pay security for costs in the sum of $50,000. There have been changes in legal representation for both parties since that time and I am told that some records are now incomplete. Although there is no proof before me, it is common ground that it was in fact paid. The applications proceed on the basis that it now amounts to $52,769.65, presumably through the accretion of interest (“the security amount”).
- [6]In the course of preparation for the litigation, a matter of concern for the defendants was the particulars of the testing conducted on the baby formula which led to its rejection at the Chinese border.[1] It can be accepted that this was a matter material to the issues to be litigated.
- [7]On 2 June 2017, the defendants applied for summary judgment as well as, inter alia, an order for further security for costs. By this time the plaintiff was not legally represented, and that remains the case to the present day.
- [8]On 15 June 2017, McGill SC DCJ ordered that the plaintiff was to provide copies of all written conversations between the plaintiff or Mr Wu and a nominated entity concerning the transaction the subject of the proceeding, and copies of “any documents the plaintiff has or can obtain relating to the engagement of CCIC to test the infant formula the subject of the proceeding within 21 days”.[2]
- [9]On 5 July 2017, the plaintiff filed an affidavit which, so far as is presently relevant, attached a translated certification as to the standing of CCIC to conduct the subject testing. It did not deal with the details of the specific testing undertaken.
- [10]Apart from the defendants filing a Notice of Change of Solicitors on 23 January 2020, no further action was taken until the first of the applications before me was filed on 5 April 2023.
The applications
- [11]There are three applications before me, the effect of which are, in order of filing:
- 1)An application by the plaintiff for the return of the security amount, “due to the fact that the account has remained inactive in the Court Suitor’s Fund for a period of more than six (6) years”.[3]
- 2)An application by the defendants for:
- a)Orders dismissing the claim and the counterclaim for want of prosecution; and
- b)A series of orders concerning costs which would exclude any costs of the counterclaim but would cater for the earlier assessed costs and other costs of the proceeding all to be paid from the security amount, with any excess to be paid to the plaintiff. These orders require an order that there be a payment out order, made under reg 31 of the Court Funds Regulation 2009 (“CFR”);[4] and
- (3)An application by the plaintiff seeking leave to proceed and an order that the security amount remain in the “Suitor’s Fund”.[5]
The appearance for the plaintiff
- [12]Mr Wu appeared on behalf of the plaintiff even though he is not a legal practitioner. I was informed that he holds a power of attorney in respect of the plaintiff and that he has previously appeared on behalf of the plaintiff. The order sheet for the proceedings before McGill SC DCJ confirms that. I generally found his submissions to be frank and helpful.
Consideration
The application for dismissal and the application for leave to proceed
- [13]Although not expressed in these terms, the defendants’ application to dismiss for want of prosecution invokes the power provided by s 22 of the Civil Proceedings Act 2011. The plaintiff’s application for leave to proceed is brought under r 389 of the UCPR.
- [14]The filing of the Notice of Change of Solicitors on 23 January 2020 does not constitute the taking of a step in the proceeding.[6] Accordingly, and as implicitly recognised by the wording of the plaintiff’s first application, there has been no step taken in the proceeding for six years, or thereabouts.
- [15]I accept that the criteria listed by Atkinson J in Tyler v Custom Credit Corp Ltd[7] act as a useful guide as to the exercise of the relevant discretion.
- [16]For the plaintiff it is said that it did what it was required to by the order of McGill SC DCJ. It seems to be the submission that, as it was not legally represented, it did not appreciate that other steps were required and, in any event, one of the directors of the plaintiff was very sick for about six months from October 2018. Then the COVID-19 outbreak resulted in restricted travel to China and then closed borders until very recently. The implication being that the plaintiff could not have its officers travel to China to pursue the avenues of enquiry to reveal more or better evidence to support its case.
- [17]The plaintiff emphasises that it has always maintained an interest in pursuing its case. It paid the security against legal advice, it retained some of the baby formula at its own expense until it became obvious after the hearing before McGill SC DCJ that it was not required and it did everything it knew it had to. It did not maintain legal representation because of the cost involved.
- [18]The defendants accept that neither did they advance their counterclaim. It is said that it became “uncommercial” for them to advance it as a stand-alone action and when the plaintiff did not produce further evidence to promote its claim, they elected to do nothing. The defendants accept that the counterclaim should be dismissed if the plaintiff’s claim is dismissed.
- [19]While there is a dearth of evidence to support the factual submissions, especially from the plaintiff, none of the submissions are obviously unlikely and none are specifically challenged by their opponent.
- [20]One can have sympathy for a plaintiff appearing without legal representation seeking to advance a case that has difficulties, including proof of conduct occurring overseas and which is also based on oral conversations, all of which occurred several years ago. Nonetheless, and while allowing some latitude, the defendants are entitled to expect that the plaintiff will conduct the litigation according to the UCPR’s and the other practices of the Court.[8]
- [21]Upon disengaging from their legal representation, the implied undertaking to conduct the litigation expeditiously continued to apply to the plaintiff. There has been a period of almost six years where not only has there not been a step taken in the litigation as that term is understood, there seems to have been no attention paid to the conduct of the litigation at all until the plaintiff’s first application to release the security amount. This seems to have been triggered by a letter received from the Registry suggesting that unless an application was made the money would be transferred to the consolidated fund.[9] Even that application was not designed to advance the claim.
- [22]Accepting that there was a period of about six months where one of the plaintiff’s directors was incapacitated through illness, there is still a period in excess of five years during which no step was taken. While it is true that travel to and from China was variously restricted and prohibited for a little over three years of that time, there is no satisfactory explanation why further, apparently necessary, enquiries and gathering of evidence could not have been undertaken by telephone and email from Australia, or on the plaintiff’s behalf by people in China.
- [23]The litigation was commenced over eight years ago. It has not been progressed in a real sense since the close of pleadings. While not so weak as to justify summary judgment, it appears to me that there are real hurdles to its success in terms of the evidence available to the plaintiff as revealed in the material before me. Further, where the delay is now significant, there is inevitably some prejudice to the defendants arising from that delay where the plaintiff’s case in part relies on the recollections of conversations. The dismissal of the whole of the claim is not done lightly, but I am satisfied that it is appropriate in the present circumstances. It necessarily follows, as is accepted by the defendants, that their counterclaim must also be dismissed, largely for the same reasons.
- [24]It is arguable that the defendants should be awarded their costs of the proceedings, on the standard basis as agreed or to be assessed. Although the counterclaim has also been dismissed, there need not be any recognition of that in the costs order. The focus of the litigation was the plaintiff’s claim and the defendants have wholly succeeded on that aspect. The counterclaim represented less than ten percent of the whole claim and, apart from evoking a reply, it does not seem to have materially added to the issues to be litigated.
- [25]However, the plaintiff claims the defendants have been refunded their costs of the attempted importation and submit that they should not also be rewarded by a favourable award of costs. In support of that, a document was tendered and marked A for identification. The defendants contend that it is inadmissible as it is protected by legal professional privilege, which has not been waived, or alternatively because it is irrelevant. Given the view that I have reached as to the balance of the applications before me, it is appropriate not to determine the issue of costs at this time. I have not read the document marked A and I make no finding as to its admissibility.
The applications concerning costs and the payment of the secured amount
- [26]The remaining applications, which are all variously concerned with the payment of costs and otherwise payment out orders of the security amount, are all intertwined.
- [27]It should be noted that the plaintiff’s first application is for the payment to it of the secured amount, whereas its last application is, in part, for the secured amount to remain in the Suitor’s Fund. The other part of the latter application was for leave to proceed. I have assumed that the plaintiff’s intent was for the secured amount to remain in the Creditor’s Fund only if leave were given to proceed. That assumption will require clarification in due course but, if I have understood it correctly, that part of the application will be abandoned by the plaintiff given my earlier finding.
- [28]The application for a payment out order of the secured amount engages the powers under reg 31 of the CFR. It provides:
“31Payment out order
- (1)This section applies to a person claiming an entitlement to money or securities in court mentioned in a list of inactive accounts.
- (2)The person may apply to the court for an order for payment, delivery or transfer of the person’s entitlement (a payment out order) within the time stated in the notice displayed or published under section 30(1) or the further time the court may allow.
- (3)The person must file in the court an affidavit stating the facts relied on.
- (4)The person must serve a copy of the application and the affidavit on—
- (a)the registrar of the court; and
- (b)any other party to the proceeding to which the money or securities in court relate.
- (5)The court may make—
- (a)a payment out order; or
- (b)a consolidated fund order; or
- (c)any other order the court considers appropriate for the disposal of the money or securities.
- (6)If, after filing an application, the applicant does not prosecute the application to finality within 3 months or the further time the court may allow, the registrar may apply for a consolidated fund order as if no application for a payment out order had been made.”
- [29]
- [30]The terms of reg 31(4) requiring service of the application for the payment out order and of the affidavit “stating the facts relied on” are mandatory. The defendants’ submissions on this issue, if accepted, must apply equally to the plaintiff’s application.
- [31]The submissions are that by filing the application, the Registrar was served with it. The submission continues that while it may be that mere filing will not necessarily amount to service, in this case it can be safely concluded that the application has come to the attention of the Registrar. That is because Barlow KC DCJ recently, in Re the Courts Fund Regulation 2009[12] referred to there being four District Court matters in the List of Accounts issued under the CFR, with the Deputy Registrar having deposed to one of those matters being the subject of an application for a payment out order. It is submitted that because the present matter is contained on the list of accounts,[13] and because his Honour made an order transferring to consolidated revenue the other three matters, it can be safely accepted that the present matter is the one referred to by the Deputy Registrar.
- [32]The submissions cannot be accepted for a few reasons. First, filing and service are different things. They are, or can be, affected in different ways and they inevitably serve different purposes. I do not accept that the filing of the document, without more, satisfies the mandatory requirement for service on the Registrar. The mere fact that the Registrar is aware of the application does not satisfy the mandatory requirements of the regulation.
- [33]Second, the regulation requires service of a copy of both the application and the affidavit. Although not expressly stated, that would usually be understood to be a sealed copy, hence again drawing a distinction between the filing and the service of the document.
- [34]Thirdly, reg 31 of the CFR must be understood to apply to each applicant for a payment out order. In this case, that is both the plaintiff and defendants. The application before Barlow KC DCJ was filed on 8 May 2023, along with the affidavit of the Deputy Registrar earlier referred to.[14] The plaintiff’s application and affidavit were filed 5 April 2023. The defendants’ application and affidavit were filed 10 May 2023; i.e. two days after the Deputy Registrar’s affidavit was filed in the other case. While there may be an inference open that the Registrar is aware of the plaintiff’s application, there is no evidence of any awareness of the defendant’s application.
- [35]Fourthly, even if the relevant affidavit were filed at the same time as the respective application, it cannot be incumbent on the Registrar to ferret through the file in an effort to find any affidavit or, as is the case in the defendants’ position here, affidavits in support of the application. This again supports the proposition that a separate act of service is required.
- [36]The plaintiff has an existing entitlement to one assessed order of costs and may be entitled to more. It is sensible, if possible, to allow them to be paid from the secured amount.
- [37]In the circumstances, the appropriate course is to allow each party, if they wish, to comply with the mandatory requirements of reg 31 of the CFR.
- [38]The CFR provides for the transmission of monies in the List of Accounts to consolidated revenue if an application under reg 31 is not finalised within three months. The plaintiff’s application was first filed on 5 April 2023, and the defendants on 12 May 2023. It is appropriate that some further time be allowed for compliance with reg 31(4), if the respective parties see fit, and to treat the service as though it was the commencement of the application.
- [39]In the meantime, the plaintiff can consider issues of admissibility of the document marked A, or any other documents relevant to the issue of the costs of the proceeding and both parties can consider whether their affidavit to be served, if any, requires updating given my earlier finding.
Orders
- [40]In respect of the applications filed 5 April 2023, 12 May 2023 and 17 May 2023:
- The plaintiff’s claim is dismissed for want of prosecution.
- The defendants’ counterclaim is dismissed for want of prosecution.
- The issue of costs in the proceeding not already determined is adjourned to a date to be fixed.
- All other applications before me are adjourned to a date to be fixed subject to the following orders:
- Service on the Registrar of the District Court by either party of a copy of the application under reg 31 of the Court Funds Regulation 2009 and the affidavit stating the facts relied on must be effected on or before 1 July 2023.
- If either party elects to serve those documents by that date, that service is to be treated as though an application for a payment out order had been commenced on the date of service for the purposes of reg 31(6) of the Court Funds Regulation 2009.
- If such service is not affected, the relevant date for the purposes of reg 31(6) of the Court Fund Regulation 2009 is the date the application was originally filed.
- Either party is at liberty to apply on seven days written notice.
Footnotes
[1]Affidavit of Antony Mark Eaton filed 10 May 2023, [20].
[2]This order was never taken out by solicitors previously acting. The wording reproduced above is taken from the handwritten associate’s endorsement on the Order Sheet on file.
[3]Application filed 5 April 2023, CD#49.
[4]Application filed 12 May 2023, CD#56.
[5]Application filed 17 May 2023, CD#58.
[6]Artahs Pty Ltd v Gall Standfield & Smith (A Firm) [2011] QSC 273, [9].
[7][2000] QCA 178, [2].
[8]Tutos v Roman Catholic Trust Corporation [2020] QCA 171, [14]-[15].
[9]Affidavit of Yan Wing Wu filed 5 April 2023.
[10]The final date referred to in correspondence from the Registry before the matter would be transferred to consolidated revenue.
[11]Affidavit of Yan Wing Wu filed 5 April 2023.
[12][2023] QDC 79, [9]-[10].
[13]Affidavit of Yan Wing Wu filed 5 April 2023.
[14]supra at [5].