FEDERAL COURT OF AUSTRALIA
VID 1104 of 2017
Date of judgment:
7 June 2018
PRACTICE AND PROCEDURE – interlocutory applications – adjournment application made immediately prior to trial – delay – prejudice to parties, other litigants and administration of justice if application granted – application for witness evidence to be adduced through letter of request sent to High Court of Singapore – applications refused
Cross Border Insolvency Act 2008 (Cth)
Evidence Act 1995 (Cth) s 190
Federal Court of Australia Act 1976 (Cth) ss 31A, 37M, 37N
Foreign Evidence Act 1994 (Cth) s 7
Evidence (Civil Proceedings in Other Jurisdictions) Act 1979 (Singapore)
UNCITRAL Model Law on Cross-Border Insolvency United States Bankruptcy Code, Chapters 7,11
Berry v Innovia Security Pty Ltd (No 3)  FCA 244
Luck v Chief Executive Officer of Centrelink  FCAFC 75
Zetta Jet Pte Ltd and others  SGHC 16
National Practice Area:
Admiralty and Maritime
Number of paragraphs:
Solicitor for the Plaintiffs:
Counsel for the Defendant:
Mr A Stewart SC with Mr N Wallwork
Solicitor for the Defendant:
Table of Corrections
15 June 2018 In paragraph 1, 6 June 2016 has been replaced with 6 June 2018.
JONATHAN D KING IN HIS CAPACITY AS THE CHAPTER 11 TRUSTEE OF THE FIRST PLAINTIFF
DATE OF ORDER:
7 June 2018
THE COURT ORDERS THAT:
2. The writ issued on 13 October 2017 in these proceedings be set aside.
3. The arrest warrant issued in these proceedings dated 13 October 2017 be set aside.
4. The Plaintiffs pay the Defendant’s costs of the proceedings until 22 November 2017 on a party - party basis.
5. The Plaintiffs pay the Defendant costs of the proceeding from 22 November 2017 on an indemnity basis, subject to order 6.
6. Leave be granted to the Defendant to withdraw the interlocutory application dated 4 April 2018 and that there be no order as to costs in relation to the costs of that application.
7. The proceedings be dismissed.
8. Order 2, 3 and 7 be stayed for 7 days, from the date of this order, pending any application that the Plaintiffs’ wish to make to appeal from these orders.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Revised from Transcript
1 These reasons address some of the events leading to the orders that were made on 6 June 2018 to the effect that an application made by the plaintiffs for an adjournment of the trial be dismissed, and orders that were made on 7 June 2018 to the effect that the writ and arrest warrant issued in relation to the motorised yacht “Dragon Pearl” be set aside and that the proceedings be dismissed with indemnity costs. The reasons set out in  –  below were delivered ex tempore on 6 June 2018. The reasons that follow address further matters pertinent to the orders that have been made.
2 The present proceedings arise from the arrest of the Dragon Pearl in Darwin, Australia, on 16 October 2017. They were commenced by writ filed on 13 October 2017 by the first plaintiff (Zetta), a company incorporated in the Republic of Singapore and the second plaintiff, Jonathan D King, who on 5 October 2017 was appointed as trustee of Zetta pursuant to chapter 11 of the United States Bankruptcy Code (US Code) by the Bankruptcy Court for the Central District of California in the United States of America (US Bankruptcy Court). In their writ, Zetta and Mr King bring a claim in rem against the Dragon Pearl pursuant to s 4(2)(a)(i) and (ii) Admiralty Act 1988 (Cth) (Admiralty Act) claiming possession and ownership of the vessel and a declaration of beneficial or equitable ownership as a result of a constructive trust in favour of Zetta.
3 The Dragon Pearl is registered in the Republic of the Marshall Islands. Her registered owner is Dragon Pearl Ltd (DPL), a company registered in the Marshall Islands. Du Yan claims to be the sole shareholder in DPL and its sole director. On 20 October 2017 DPL and Ms Yan filed appearances in this Court on behalf of the Dragon Pearl in which they asserted that Ms Yan is the rightful possessor of the Dragon Pearl on behalf of DPL.
4 The proceedings progressed with the filing of pleadings by the parties. On 21 December 2017 the Court made orders by consent that the parties file affidavits containing the evidence in chief upon which they rely. On 22 February 2018 the Court made orders by consent setting the proceedings down for a hearing to be conducted over the course of 5 days, commencing on 5 June 2018.
5 On 1 June 2018, two working days before the trial was to commence, the plaintiffs applied by way of interlocutory application for leave to issue subpoenas outside of Australia to three witnesses who are overseas residents and have given affidavits on their behalf; Yap Weai-Hunt, Lee Choon Yen (whom I refer to below as Ms Lee) and Charles Chaw, the first two of whom are resident in Singapore and the third in the People’s Republic of China. The application also sought an order that the hearing be adjourned until a date to be determined by the Court. During the course of a case management hearing on that date Mr Michael Wyles QC, senior counsel who appears with Dr Anton Trichardt for the plaintiffs, indicated that he relied only upon an affidavit sworn by Ryan Nathan Hennessey, a solicitor employed in the Melbourne Office of DLA Piper (DLA), in support of the plaintiffs’ application. The interlocutory application was listed for hearing on the first day of the trial and was opposed by the defendant.
6 By the day of the hearing the landscape had changed somewhat. An amended interlocutory application was filed in Court on 5 June 2018 and the plaintiffs now seek orders that a letter of request (letter of request) be sent by this Court to the competent judicial authority of the High Court of Singapore to take or cause to be taken on oath or affirmation the evidence of Ms Lee and Ms Weai-Hunt and that the depositions taken of the examinations of those witnesses be filed in the Victorian Registry of the Court. The amended interlocutory application also seeks orders that the trial be adjourned or stayed until a date convenient to the Court after 1 October 2018. During the course of argument the plaintiffs made clear that they no longer seek orders for the issue of subpoenas to witnesses outside of Australia, or any orders in respect of the evidence of Mr Chaw.
7 The plaintiffs now rely on the affidavit previously given by Mr Hennessey, as well as a further affidavit sworn by him on 4 June 2018 and an affidavit sworn by Diantha Suet Ping Ho, an advocate and solicitor of the Supreme Court of Singapore in the employ of DLA in Singapore, sworn on 4 June 2018. They also rely on an expert report prepared by Michael B Lubic dated 19 April 2018 (going to matters of United States law) and filed on behalf of the defendants in the proceedings along with a joint expert report prepared by Mr Lubic and John K Lyons. The defendant opposes the adjournment and has tendered various documents to which I refer below.
8 The argument proceeded on the basis that I should first consider whether or not the plaintiffs’ application for an adjournment of the hearing should be granted. In this regard the plaintiffs candidly accept that in the event that the adjournment is refused, then they cannot succeed in their claim. In broad terms the plaintiffs contend that the evidence of Ms Lee and Ms Weai-Hunt is essential to their case. They accept that the application is brought late in the day and could have been brought earlier, but they contend that the proposed adjournment is for only 3 months until October 2018 and that the events set out in the affidavit material indicate that it was only recently that the witnesses refused to co-operate to give evidence. They submit that the question of prejudice does not arise because the Dragon Pearl is being maintained by Mr King as trustee and that security for the defendant’s costs has been provided. They submit that as Mr King is a trustee for the assets of Zetta, there is a broader interest to be considered that goes beyond the immediate parties, namely the interests of the creditors of Zetta. Before turning to consider these matters I address the following subjects:
(a) The issues in the proceedings and the evidence of Ms Lee and Ms Weai-Hunt;
(b) The chronology concerning the evidence of Ms Lee and Ms Weai-Hunt;
(c) The position of Zetta in chapter 7 Bankruptcy;
(d) The proposed letter of request.
2. The issues and the affidavit evidence of Ms Lee and Ms Weai-Hunt
9 The issues as they arise in the proceedings can be broadly summarised for present purposes. The plaintiffs contend that Zetta has a proprietary maritime claim to possession, title or ownership of the Dragon Pearl by virtue of a constructive or resulting trust arising from the fact that the purchase price for the vessel came from its funds. More specifically, the sum of A$4,492,034.82 was paid by Zetta to Maritimo Offshore Pty Ltd in 5 instalments between 28 March 2016 until 14 December 2016. There is no dispute between the parties that the instalments were paid by way of transfer from Zetta to Maritimo.
10 The defendants contend that the true source of the funds was not Zetta but Geoffrey Owen Cassidy or Asia Aviation Company (AAC). Mr Cassidy was a director of Zetta from its incorporation on 15 July 2015 until his removal on about 17 August 2017. AAC was a company the shares in which were originally owned by Mr Cassidy and an associate of his, June Tang. In August 2016 the shares in AAC were sold to Zetta for US$1m. The defendants contend (broadly) that the contract price for the Dragon Pearl was set-off at law or in equity against US$3,540,013.62 that was owed to Mr Cassidy either in his own right or as a result of expenses that he paid on behalf of AAC. Furthermore, the defendants contend that on 5 December 2016 DPL became the registered owner of the Dragon Pearl, when more than half of the purchase price for the Dragon Pearl had been paid. DPL was entirely owned and controlled by Mr Cassidy. The defendants also contend that Mr Cassidy owed money to a company called New Target Investments Ltd (New Target). In order to discharge some of his debt he agreed to transfer the shares in DPL to New Target or its nominee as a means of transferring the beneficial ownership of the Dragon Pearl to New Target or its nominee. New Target nominated Ms Yan to receive the shares in DPL. The defendants contend that Ms Yan acquired the shares in DPL bona fide and for value and that she and New Target had no knowledge of the alleged trust or the plaintiffs’ claim for ownership of the Dragon Pearl.
11 In this broad context it is to be seen that a significant issue of fact arises in respect of funds paid from Zetta to Maritimo. The evidence of Ms Lee and Ms Weai-Hunt goes to this subject. Ms Lee was the finance manager of Zetta from July 2016 until 15 September 2017. She was responsible for overseeing the accounting operations of Zetta. In her affidavit of 24 January 2018 she explains her role as finance manager, the accounting and finance systems of Zetta, the audit for the financial year 2016, her interaction with Mr Cassidy in relation to his director’s account and her understanding of certain invoices issued by China Knowledge Consulting (Shangahi) Co (China Knowledge). Ms Weai-Hunt was the chief financial officer (CFO) of Zetta from 29 March 2017 until July 2017 and interim CFO from 17 August 2017 until 30 November 2017 and, according to her affidavit sworn on 24 January 2018 had been assisting Zetta as a consultant on an ad hoc basis since her employment as CFO ceased. In her affidavit she gives evidence about the formation of Zetta, the audit and about certain invoices apparently issued by China Knowledge that she considered were not legitimate or genuine.
12 In short, as Mr Wyles QC characterised it, any suggestion made in the defence that the money paid for the purchase of the Dragon Pearl was from moneys owing to Mr Cassidy or AAC is wholly refuted by the evidence of Ms Lee and Ms Weai-Hunt, with the consequence, he submits, that the balance of probabilities will dictate a finding in favour of the plaintiffs.
3. Relevant chronology concerning Ms Lee and Ms Weai-Hunt
13 The events leading to the present interlocutory application, and the plaintiffs’ attempts to secure the attendance of Ms Lee and Ms Weai-Hunt to give evidence are set out in the affidavits filed by Mr Hennessey and Ms Ho and in the documents tendered by the defendants. From these materials the following may be discerned.
14 In relation to the evidence of Ms Lee:
Her affidavit was sworn on 24 January 2018 at which time she was no longer an employee of Zetta or under its direction;
A trainee solicitor employed by DLA in Singapore, Ms Sirola, and Ms Ho contacted Ms Lee periodically after she swore her affidavit but apparently not about her availability to give evidence;
On 4 May 2018 Mr Hennessey attempted but failed to contact her by telephone;
On 21 May 2018 Ms Sirola sent an email to Ms Lee informing her that she wanted to talk to Ms Lee about her giving assistance in the Australian proceedings;
On 22 May 2018 and 23 May 2018 Ms Sirola sent text messages to Ms Lee attempting to get in contact with her and on those days and 24 and 28 May 2018 they sought to contact her by telephone;
On 30 May 2018 Ms Ho and Ms Sirola visited Ms Lee at home and explained to her that the purpose of their visit was to speak to her about giving oral evidence in this proceeding. Ms Lee indicated that she did not want to appear in Court to give evidence and that her assistance ended when she provided her affidavit. She said that her position was final and she would only attend if required to do so by Court summons;
On 31 May 2018 Ms Ho sent a text message to Ms Lee inviting her to think about her position and change her mind about giving evidence by video link.
15 In relation to this evidence, Mr Stewart SC, who appeared with Mr Wallwork for the defendant, submits that as much is to be taken from what is not said as what is said in the evidence. In particular, he submits that nothing in the affidavit evidence indicates that DLA informed Ms Lee or Ms Weai-Hunt that they may be required to give oral evidence at the hearing, or that they were contacted when the hearing date was initially set to ensure that they were available to attend, or that any arrangements were made to procure their attendance.
16 A review of the materials indicates that there is no evidence that before 30 May 2018 was the question of Ms Lee giving oral evidence explicitly raised with her at all. In relation to the evidence of Ms Weai-Hunt the following may be observed:
During an initial telephone conversation on 1 December 2017, she indicated to Mr Hennessey that she was reluctant to give evidence at the trial of the proceedings because her partner, Mr Charles Chaw, received a threatening message from Mr Cassidy and she believed that she had been followed home from work and a man had attempted to follow her into her apartment building;
Her affidavit was sworn on 24 January 2018 and since then Ms Ho and Ms Sirola have been in periodic contact with her to obtain information but not about her giving evidence in the Australian proceeding;
On 4 May 2018 Mr Hennessey attempted but failed to contact her by telephone;
On 21 May 2018 Ms Sirola spoke to her in the morning. She expressed reluctance to give oral evidence and questioned why it was required. Ms Sirola explained that the evidence would cover similar factual matters as the affidavit previously given, but records in the file note that without it the affidavit “would not be as convincing to the judge”;
On the same day Ms Sirola followed up with an email suggesting a further conversation;
On 22 May 2018 Ms Sirola spoke to Ms Weai-Hunt who said she was still considering her position;
On 24 May 2018 Ms Ho and Ms Sirola spoke to her again. She said that she was unwilling to appear in the Australian hearing “as she did not wish to be cross-examined”;
On 25 May 2018 she responded to an email from Mr Hennessey of the previous day asking if there will be cross-examination of her by the defendant and indicating that she is apprehensive about testifying in Court and currently engaged in a project with limited availability to assist;
On 29 May 2018 a file note prepared by Mr Hennessey indicates that she informed him that she “does not want to be involved any more voluntarily” and “does not want to be cross-examined/ give evidence”. His note also records that he explained to her that she “can give evidence by video conference” and that she asked “can she think about it overnight?”;
On the same day a partner from DLA in the USA contacted Ms Weai-Hunt by email asking to speak with her;
On 30 May 2018 Ms Ho and Ms Sirola had a further conversation during which she said that she was reluctant to provide evidence as she does not want to be subject to the rigours of cross-examination and she does not see any advantages in doing so for herself. She said she would be unlikely to change her mind.
17 This evidence indicates that from the outset Ms Weai-Hunt was at best reluctant to give oral evidence, and at worst determined not to do so. I do not consider that the suggestion made in the file note on 22 May that Ms Weai-Hunt was considering her position to reflect a change of mind, rather it was a polite way to put off the enquiry.
4. The position of Zetta and the injunction of the High Court of Singapore
18 The statement of claim records that on 15 September 2011 Zetta filed for protection under Chapter 11 of the US Code in the US Bankruptcy Court. On 5 October 2017 Mr King was appointed as chapter 11 trustee of Zetta. On 5 December 2017 he was appointed by the US Bankruptcy Court as the chapter 7 trustee of Zetta.
19 These matters stand in the background of an interlocutory application that was filed on behalf of the defendant on 4 April 2018, seeking orders, inter alia, setting aside the arrest of the Dragon Pearl and summary disposal of the proceedings pursuant to s 31A Federal Court of Australia Act 1976 (Cth) (FCA Act) on the basis, broadly put, that under United States law Zetta had no standing to sue upon the commencement of its bankruptcy because the trustee is the only entity authorised to take any action in pursuit of property in the estate. Furthermore, the defendant submits that Mr King had no independent standing to assert a proprietary maritime claim on the Dragon Pearl. It submits that he can have no standing to sue unless his position as trustee under chapter 7 of the US Bankruptcy Code is recognised in Australia. No application had at that point been made for recognition pursuant to the Cross Border Insolvency Act 2008 (Cth) and no recognition would be afforded to the trustee at common law (because Mr King’s appointment as trustee is not in the place of incorporation of Zetta). The plaintiffs intend to resist this application. After the defendant’s interlocutory application was filed, on 5 April 2018 the plaintiffs wrote to the defendant to indicate that they would resist any attempts to vacate the trial for the hearing of the application. At a subsequent case management conference that position was reiterated. I listed the defendant’s application for hearing at the trial. I do not refer to that further.
20 Some further background is required.
21 On 18 September 2017, Aviation Holdings Pte Ltd and Truly Great Global Limited, who were some of the shareholders of Zetta, commenced proceedings against James Noel Halstead Seagrim, Stephen Matthew Walter and Zetta in the High Court of Singapore. The evidence in the current interlocutory application does not indicate the basis for the application, but on 19 September 2018 the High Court made the following order:
The Defendants, whether by themselves, or through their agents, solicitors or special counsel, including but not limited to Michael Maher and Belinda Vega, be enjoined from carrying out any further steps in and relating to the purported bankruptcy filings relating to the 3rd Defendant [that is Zetta] and Zetta Jet USA, Inc in case [2;17-bk-21387-BB and Case 2;17-bk-21386] in the United States Bankruptcy Court for the Central District of California – Los Angeles Division until trial or further order.
22 This order has not been discharged.
23 In January 2018 Mr King applied to the High Court in Singapore for recognition as interim Trustee acting in Chapter 7 proceedings in the US Bankruptcy Court pursuant to the Singapore Model Law. In a published judgment Zetta Jet Pte Ltd and others  SGHC 16, Aedit Abdullah J considered that it would be contrary to public policy (as that term is used in the Singapore Model Law) to allow the application for recognition under the Model Law because of the injunction then in place. His Honour said at :
Ignoring an injunction granted by a Singapore court undermines the administration of justice. Orders issued by a court are to be complied with. Those who do not comply are rightly subject to penalties. In particular, they cannot generally seek the assistance of the courts unless the non-compliance is rectified or purged. Where the court’s power to refuse recognition under Article 6 of the Singapore Model Law is discretionary, it would be rare for the court not to refuse recognition where there has been non-compliance with a Singapore court order.
5. The letter of request
24 The Amended Interlocutory Application seeks the following orders:
2A Further that a letter of request in a form attached hereto or a form to be approved by the Registrar or the Court be sent to the competent judicial authority of the High Court of Singapore to take or cause to be taken on oath or affirmation the evidence of:
a. Lee Choon Yen (also known as Eunise Lee), ordinarily resident in Singapore at Blk 561, Choa Chu Kang, North 6, #02-96; and
b. Yap Weai-Hunt, ordinarily resident in Singapore at 38 St Michael’s Road, #03-02, Singapore.
2B. That the depositions taken of the examinations of the persons referred to in 2A above be filed in the Victorian Registry of the Court.
2. That the trial of the proceeding listed to commence on 5 Jun[e] 2018 be adjourned alternatively be stayed until the depositions of the witnesses referred to in paragraph 2A above are filed with the Registrar of the Victorian Registry of the Court alternatively, until a date
to be determined by the convenient to the Court after [1 October 2018].
25 The second affidavit of Mr Hennessey attaches a letter dated 3 June 2018 from Wong Partnership, which acts for Zetta in Singapore. The author, a partner of that firm and senior counsel, indicates that he has been asked for his opinion on whether the Singapore courts will assist to compel persons residing in Singapore to provide testimony for civil proceedings in Australia. He states that by the Singapore Evidence (Civil Proceedings in Other Jurisdictions) Act 1979 and Order 66 of the Rules of Court the Singaporean High Court, the Court has the power to order that evidence be obtained from witnesses in Singapore for use in Australian proceedings. The letter sets out the requirements for such an order, which include an affidavit exhibiting a letter of request from the Court. Armed with the correct affidavit, an ex parte application may be made to the Singaporean High Court. No evidence indicates how long such a request is likely to take to be heard or executed.
26 Exhibited to Mr Hennessey’s second affidavit is a draft letter of request. It concludes with a request from a judge of this Court for assistance of the Singaporean High Court asking it to summon the named witnesses to attend at such time and place as it appoints, or such other person as according to its procedure is competent to take the examination of the witnesses, and that it will cause such witnesses to be examined orally upon their respective affidavits. In submissions the plaintiffs pointed to the provisions in the rules that enable the High Court to compel the attendance of witnesses.
27 I was not, during the course of the current application, addressed by the plaintiffs on the terms of the Foreign Evidence Act 1994 (Cth) (Foreign Evidence Act), which is the relevant Act. Section 7 appears to be the relevant section, which relevantly provides:
7 Orders for taking evidence abroad
(1) In any proceeding before a superior court, the court may, if it appears in the interests of justice to do so, on the application of a party to the proceeding, make an order, relating to a person outside Australia:
(a) for examination of the person on oath or affirmation at any place outside Australia before a judge of the court, an officer of the court or such other person as the court may appoint; or
(b) for issue of a commission for examination of the person on oath or affirmation at any place outside Australia; or
(c) for issue of a letter of request to the judicial authorities of a foreign country to take the evidence of the person or cause it to be taken.
(2) In deciding whether it is in the interests of justice to make such an order, the matters to which the court is to have regard include the following:
(a) whether the person is willing or able to come to Australia to give evidence in the proceeding;
(b) whether the person will be able to give evidence material to any issue to be tried in the proceeding;
(c) whether, having regard to the interests of the parties to the proceeding, justice will be better served by granting or refusing the order.
28 One aspect of the exercise of discretion in considering whether or not to issue such a request is “if it appears in the interests of justice to do so”. This is likely to include consideration of whether it is appropriate to issue such a request in light of the terms of the interlocutory injunction granted by the Singaporean High Court on 19 September 2017. The terms of the orders are broad and include that Zetta (and its agents) be enjoined from carrying out any further steps in and relating to the purported bankruptcy filings identified. There appears to be no dispute that those identified filings include the appointment of Mr King as trustee. Nor is there any dispute that the present proceedings are brought in the interests of the creditors of Zetta.
29 The plaintiffs submit that the giving of evidence in relation to the Australian proceedings under the Admiralty Act would not be considered by the Singaporean High Court to be steps “relating to the purported bankruptcy filings identified”. They submit that the High Court in Singapore would take the view that the assistance sought in the letter of request would not be in breach of the injunction but a step in proceedings that can uniquely be brought in Australia to secure an asset for the creditors. The defendant contends to the contrary, pointing to the breadth of the injunction. No evidence was adduced by either side as to the likely approach of the Singaporean High Court to any request made in light of the interlocutory orders made. That is hardly surprising on the part of the defendant, because the amended interlocutory application seeking these orders (and the second affidavit of Mr Hennessey) were served on them on the night before the hearing of the application.
30 This Court would be slow to issue a letter of request where to do so would put the High Court in Singapore in the embarrassing position of considering whether to act on it in light of an injunction that it has made. Before doing so, I would require further information in the form of expert evidence as to the likely approach of the High Court in Singapore. Leaving aside the question of whether or not this Court should issue the letter of request in the light of the interlocutory orders, the next question is whether or not the Singaporean High Court would grant them in the exercise of its discretion. On the basis of the present evidence, one is left to speculate as to whether the request would be acted upon.
31 In my view there remains an unsatisfactory state of uncertainty in relation to the letter of request. I would not grant it without receiving further evidence and submissions in relation to the approach likely to be taken by the Singaporean High Court.
32 There is further uncertainty, and a lack of evidence, as to the amount of time that the request may take to be granted and as to the procedure that might be implemented in the provision of evidence. In this regard, it is unclear whether the plaintiffs wish to request that the evidence be taken by a commissioner and the transcript of oral evidence tendered in the proceeding, or whether the witnesses may provide evidence by video link, or whether I might be asked, or otherwise consider it necessary, to attend any cross-examination. These matters are yet to be determined.
33 The legal principles relevant to be applied in considering an adjournment application are not in dispute. In Luck v Chief Executive Officer of Centrelink  FCAFC 75 (Luck), the Full Court said as follows (at ):
In considering an application for an adjournment, issues particular to the parties and the circumstances of the case must be considered. The Court must also determine how the grant or refusal of an adjournment will promote the overarching purpose of the civil practice and procedure provisions governing the exercise of its jurisdiction, here its appellate jurisdiction, including the objectives in s 37M(2) of the FCA Act.
34 Subsection 37M(1) of the Federal Court of Australia Act 1976 (Cth) (FCA Act) provides that the overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes according to law, and as quickly, inexpensively and efficiently as possible.
35 Subsection 37M(2) of the FCA Act provides that the overarching purpose includes the following objectives:
(e) the just determination of all proceedings before the Court;
(f) the efficient use of the judicial and administrative resources available for the purposes of the Court;
(g) the efficient disposal of the Court’s overall caseload;
(h) the disposal of all proceedings in a timely manner;
(i) the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute.
36 Furthermore, pursuant to s 37N of the FCA Act, the parties are obliged to conduct the litigation in a way that is consistent with the overarching purpose of those provisions (Luck at ).
37 As the High Court made clear in Aon Risk Services Australia Limited v Australian National University  HCA 27; (2009) 239 CLR 175 (AON), the types of matters that should be considered in the context of an adjournment application include: (a) the explanation for the adjournment; (b) the detriment to other parties; (c) the detriment to the court and other litigants, and; (d) the choices made by the parties as to the claims to be made and how they are to be framed. That, of course, is not an exhaustive list.
38 In the current context it is also apposite to note that in the exercise of its discretion it is appropriate for the Court also to consider the position of other litigants and confidence in the judicial system generally: AON at  (French CJ) and  (Gummow, Hayne, Crennan, Kiefel and Bell JJ). It is for the plaintiffs to persuade the Court, on sufficient material, that an adjournment is appropriate. As the plurality in AON said at , , , if an application that would result in an adjournment is sought and no, or no sufficient explanation is given then the application should be refused. French CJ said (at ) that where an application is made “late in the day”, without adequate explanation and necessitating the vacation of a trial date, the applicant bears a heavy burden to show that the exercise of the Court’s discretion should be in its favour.
39 The present application is to vacate the hearing date and adjourn the proceedings to a date that is presently indeterminate, and dependent on the issue of the letter of request, the acting by the High Court of Singapore on the request and the provision of evidence in response thereto. There are unsatisfactory aspects of the current application for the issue of the letter of request. One is that it is by no means clear that it is appropriate for this Court to issue the letter of request in circumstances of the injunction granted by the High Court of Singapore. As I have indicated, I am not satisfied on the state of the evidence that it is appropriate to grant the letter, and would have been assisted by the provision of evidence from a suitably qualified person as to the likely approach that that Court would take to the request in light of the injunction. There then arises the question of whether the High Court of Singapore would grant the request, notwithstanding any view taken in this Court that it is appropriate to ask for it. That Court plainly enough has a discretion to refuse it, and one is left to speculate as to what might then happen. Accordingly, there is an unsatisfactory state of uncertainty as to whether the process envisaged by the plaintiffs in their amended interlocutory application would yield the outcome that they seek.
40 Furthermore, other questions remain unanswered. No evidence has been adduced by the plaintiffs as to the length of time that it will take to issue the process in Singapore, the time it will take to arrange for the witnesses to give evidence, or the time that it may take to take steps to compel them to attend if they remain of the view that they will not voluntarily attend the examination. In addition, it is not apparent what form the involvement of the two witnesses will take. The form of orders sought suggests that the letter of request will be to ensure that the evidence can be taken on commission, that the witnesses will be cross-examined in Singapore before a commissioner of some sort and that a transcript of their evidence will be tendered in the Australian proceeding. Yet that proceeds on the assumption that it is appropriate for the evidence to be given in this manner; contrast Berry v Innovia Security Pty Ltd (No 3)  FCA 244 at . At one point the plaintiffs submitted that I might consider it appropriate to travel to Singapore to hear the evidence of the witnesses in person. At another, it was suggested that the result of the letter of request process may be that they could attend by video link from Singapore.
41 Whatever may be said of these uncertainties, it may be seen that this aspect of the interlocutory application remains in a state of poor preparation. That is perhaps not surprising, given that in the unamended form of the interlocutory application filed last Friday, on 1 June 2018, the letter of request process was not even foreshadowed.
42 In considering the detriment to other litigants in the Court and the parties’ choices to date in the litigation, I note that in February 2018 the proceedings were set down for a hearing to commence on 5 June 2018. This hearing date was allocated at an early stage, specifically to accommodate for the fact that the plaintiffs had secured the arrest of the Dragon Pearl, that the claim to ownership of the vessel was contested and that accordingly the case warranted expeditious disposition. Time was allocated so that the trial could be completed and also so that there was time to deliver judgment expeditiously. As a consequence, the interests of third parties were dislodged to accommodate these requirements. If the adjournment application is allowed, no substitute hearing can be put in place of the 5 days allocated.
43 Furthermore, in the current circumstances it is unsafe to allocate a further hearing date. Although the plaintiffs tentatively suggest a date in October 2018, as I have noted there is no evidence to suggest that a date given in that month would allow sufficient time for a hearing. My present trial and appeal commitments are such that no further dates are available until the second quarter of 2019 and even then allocation of such dates would involve dislodging the interests of third parties.
44 One then turns to consider the explanation given for the late adjournment.
45 The plaintiffs submit that they were, in effect, taken by surprise by the refusal of Ms Lee and Ms Weai-Hunt to assist in giving oral evidence. Through their counsel, they accept that the adjournment application is brought late in the day and apologise for that fact, but they submit that the delay does not reflect any lack of competence in the preparation of the case. They submit that to read the evidence in that way is too harsh and would involve looking at the preparation of the case from an ivory tower. They submit that the plaintiffs are represented by an international firm of lawyers that has done what it could to bring the witnesses to Court and that only recently have they been met by a point blank refusal to co-operate. Further, they submit that justice “demands” that the trustee, who had to arrest the Dragon Pearl in Australian waters to secure the interests of Zetta’s creditors, be permitted to adduce the best evidence possible in support of its case. In this regard they invoke s 37M and s 37N of the FCA Act to contend that in order to do justice, the application for an adjournment should be granted.
46 I find the explanation offered to be unpersuasive and inadequate.
47 First, the evidence relating to Ms Weai-Hunt indicates that she expressed considerable reluctance to give oral evidence from the outset, as early as 1 December 2017. The evidence indicates that this was a reluctance based on clearly articulated concerns that suggest that she would indeed be slow to change her mind. However, she appears to have been first contacted with a view to securing her cooperation on 4 May 2018. That yielded no contact with her, and it was not until 21 May 2018 when further attempts were made, when she reiterated her reluctance to assist, a position that remained unchanged. The evidence reveals that it is far from surprising that Ms Weai-Hunt would refuse to co-operate; that was her position from the outset.
48 The position of Ms Lee is slightly different. The evidence does not reveal that at any point during the course of the preparation of her affidavit, she was made aware that there was a prospect that she would be required to assist by giving oral evidence and being cross-examined. It appears that the first contact sought to be made to secure her assistance by giving evidence was on 4 May 2018, when Mr Hennessey tried unsuccessfully to speak to her on the telephone. Then on 21 May 2018 emails were sent and it was not until 30 May that it would appear that the question of her essential role in answering questions in cross-examination was addressed. It is unclear on what basis the plaintiffs were surprised by Ms Lee’s refusal to attend, other than by reason of a misplaced assumption that she was aware that she would be required to give oral evidence and an assumption that she would oblige by doing so.
49 No evidence suggests that either witness was informed of the hearing date when the matter was set down for hearing in February 2018, asked whether they could attend, or even asked if the dates were convenient to them.
50 The attendance of these witnesses, according to the plaintiffs, is crucial to the presentation of their case. That is a fact that ought to have been apparent from early in the proceedings. Their importance, one might have thought, would direct attention to the need to ensure that they were available during the trial.
51 The obligations imposed under s 37N of the FCA Act require the parties to conduct litigation in a way that is consistent with the overarching purpose of s 37M of the FCA Act (Luck at ). I reject the plaintiffs’ submission that it is to be looking at the preparation of the plaintiffs’ case from an ivory tower to consider that their preparation of the case has been less than adequate. In circumstances of the arrest of a ship it was incumbent on the plaintiffs to act in their own interests and in the interests of the proper administration of justice to ensure that the matter was ready for trial at the date set down for hearing. They manifestly failed to do so.
52 I take into account in considering this application the fact that there really is no good reason for the late application. In this regard no witness came forward to explain the delay. No person from DLA came forward to say that he or she was “surprised” by the failure of the witnesses to co-operate. The plaintiffs ask the Court to infer that this is the relevant state of mind to be discerned from the objective facts. For the reasons indicated, I do not accept that this is a correct interpretation. One is left in a state of uncertainty whether the failure to move on the preparation for trial before May 2018 was the result of a deliberate decision, or because of oversight.
53 I now turn to consider the detriment to the parties.
54 The plaintiffs submit that the prejudice to them if the adjournment is refused is profound, because it will bring their claim to an end. They accept that without the evidence of Ms Lee and Ms Weai-Hunt, their case will fail. The defendant refers to evidence that the Dragon Pearl was initially sold for about US$3,300,000. In the scheme of the liquidation it submits, this is a relatively small amount. It points to evidence that the estimate value of the assets and liabilities of Zetta are between $50m and $100m and that there are over 200 creditors.
55 I accept that the plaintiffs will suffer serious prejudice in the event that the adjournment is refused.
56 Conversely, the plaintiffs submit that during the adjournment of the hearing, the Dragon Pearl will be safely at a marina on the Gold Coast, with the plaintiffs accepting liability for costs incurred. They submit that there is no evidence that the Dragon Pearl has any commercial purpose, and no suggestion that it will be poorly maintained.
57 The defendant submits that it will suffer prejudice because DPL is indisputably the registered owner of the Dragon Pearl and legal and beneficial owner of it. The claim of the plaintiffs is to equitable ownership and is hotly disputed. While the vessel is under arrest the defendant is kept out of its ownership. Further, the fact that the Dragon Pearl is not a commercial vessel means that any claim for compensation for unjustified arrest under s 34 Admiralty Act will be impaired because compensation cannot properly be calculated. I give these matters some weight, but they are less significant than the prejudice to the plaintiffs.
58 I have considered all of the circumstances of the case in considering the outcome of this application. I agree with the plaintiffs that it is important to weigh the interests of the parties and to ensure that justice is done. A heavy matter in their favour is that their claim will come to an end if they do not secure an adjournment. But then to a very large degree, the fault for that lies at their own feet. Having utilised the coercive powers of this Court to secure the arrest of the Dragon Pearl, the plaintiffs then took plainly inadequate steps to prepare the case for hearing. The obligation that lies on all litigants pursuant to s 37N of the FCA Act is brought into particularly sharp relief in such circumstances. Furthermore, I regard the explanation offered by the plaintiffs for their conduct in bringing the application so late to be inadequate, which is a significant factor which weighs against the grant of the relief sought (AON at ). My consideration of this application includes consideration of the likely steps to be taken in the future, if the adjournment is granted. Those steps are shrouded in uncertainty. It is unclear whether or not the letter of request process will succeed at all. That uncertainty also plays a role in diminishing the likelihood that the plaintiffs will suffer prejudice. It is also uncertain when a hearing will be able to proceed. This is antithetical to the interests of the administration of justice, to the interests of third parties and prejudicial to the defendants, as is the vacation of the present hearing date. I am also conscious that the process of the letter of request is likely to add significant expense to the conduct of the proceedings. The plaintiffs have made no offer to pay costs, on any basis, for any adjournment or the costs of the steps that would require the defendants to attend in Singapore, although of course these can be a condition of any orders that might be made.
59 Taking these matters together, I have formed the view that the application for the adjournment should be refused.
7. Subsequent Events
60 The parties’ arguments concerning the adjournment application took most of Tuesday 5 June 2018. On the morning of 6 June 2018, I delivered the ex tempore reasons set out in  –  above. After doing so, I assumed that the consequence of refusing the adjournment was that the plaintiffs could and would no longer proceed to prosecute their case. During the course of argument on 5 June 2018, the following exchange took place :
His Honour -- I understand from Mr Wyles’ submission today that, in the event that the adjournment application is refused…that the plaintiff can’t succeed, and that accordingly the matter would not proceed. I might have misunderstood him, but…I thought words…to the effect of “Not even my creativity could come up with something which can address that”. Am I incorrect about that Mr Wyles? ---No, your Honour.
Thank you. ---If we’re unsuccessful, we will seek a stay, your Honour.
61 Nevertheless, after delivering my reasons for refusing the adjournment application, senior counsel for the plaintiffs submitted that I should not dismiss the proceedings, because they wished to proceed to prove their case and that the proceedings should be stayed pending an application for leave to appeal from my decision. Senior counsel submitted that he proposed to rely on the affidavit evidence of Mr Tsiakis, a partner at DLA, and that an application may be made under s 190 of the Evidence Act 1995 (Cth) (Evidence Act) for leave to rely on the evidence of Ms Lee and Ms Weai-Hunt, notwithstanding the fact that they are not available to be cross-examined. This was a concerning submission, because in order to put their case for an adjournment at its forensic highest, the plaintiffs had informed me, in effect, that they no longer had a case to run and that the case would not proceed (see transcript 35, 50, 51). That consideration was material in my consideration of the plaintiffs’ application, as is recorded in paragraphs , ,  and  above.
62 Nevertheless, after the refusal of the adjournment, the plaintiffs indicated that they were in a position to proceed with the case there and then. They submitted, however, that I should grant an adjournment of the proceedings to enable them to seek leave to appeal from my refusal to grant the adjournment and any appeal. The paradox tied up in this submission is immediately apparent. After hearing argument on the subject, I declined to grant that adjournment, after drawing the parties’ attention to s 24(1AA)(b)(ii) FCA Act. At that point, Mr Wyles QC indicated that he wished to take instructions from his client in the United States overnight. It was early afternoon, but I nevertheless directed that the hearing commence at 10.15 am on 7 June 2018. The matter was adjourned until 4 pm on 6 June 2018 to permit the plaintiffs to take instructions on a call for the production of documents made by the defendant.
63 When the matter resumed at 4 pm, the call was answered and, before adjourning, I asked junior counsel for the plaintiffs whether there would be any live witnesses the following day. He responded that there were not.
64 Events took a further turn at 10.15 am the next day. Junior counsel for the plaintiffs commenced by indicating that he had received instructions from his client overnight to seek leave to adduce fresh evidence in chief from Mr Seagrim, a director of Zetta, and also to read his two affidavits. Junior counsel for the plaintiffs submitted that Mr Seagrim’s oral evidence could be taken by video link, because he is in California, or alternatively in person the following Tuesday 11 June 2018, which was the final day allocated for the present hearing.
65 Senior counsel for the defendants correctly characterised the defendants position as yet a further application to adjourn.
66 Several factors led me to refuse that application. First, the content of the further evidence in chief that the plaintiffs sought to lead was inchoate. The plaintiffs submitted that they would not be in a position to provide it in written form until that afternoon. Secondly, the question of leave to adduce the further evidence (whether by video link or otherwise) could not be considered until the content of the additional evidence could be considered. That would no doubt involve further argument and delay. The defendants submitted that it was doubtful that Mr Seagrim would be in a position to advance admissible evidence of the relevant events, because on his current affidavit material he was not present in Singapore at the relevant time and had no apparent role to play in the preparation of the accounts of Zetta. They submitted that it was doubtful that he could fill the gap in the evidence occasioned by the absence of evidence from Ms Lee and Ms Weai-Hunt. Furthermore, the plaintiffs had filed two affidavits of Mr Seagrim that did not touch upon these issues. If they could have done so, then they should have done so long ago. These points indicate that there was likely to be a substantial dispute about whether it was appropriate to grant the leave sought and yet further delay. Thirdly, if it were determined that the further evidence of Mr Seagrim could be admissible, the logistical issues of whether or not the plaintiffs should be permitted to give evidence by video link or orally needed to be addressed. I was by no means satisfied, having regard to the plaintiffs’ conduct of the case to date, that these would be resolved before the end of the allocated time for hearing. No evidence was advance to suggest that they could. Fourthly, no explanation was offered as to the overnight change of position regarding the conduct of the case. I accept that the circumstances of the refusal on 6 June 2018 of their adjournment application must have come as a blow to the plaintiffs. But it cannot sensibly have come as a surprise. It was plainly not a strong application. Put differently, it is to be expected that the experienced and able practitioners representing the plaintiffs must have realised from well before 31 May 2018 that there was a very real prospect that the adjournment would be refused, and turned their minds to the likely manner in which the case would be conducted if that were the outcome. The statements made by senior counsel on 6 June 2018 that the plaintiffs intended only to call the evidence of Mr Tsiakis and possibly make an application under s 190 of the Evidence Act should be taken to be a considered view (I set to one side for this purpose the volte face that immediately followed the refusal of the first adjournment). The late application on the morning of 7 June 2018 came with no explanation as to the more recent change of position, save for the fact that it came recently, and on instructions from the plaintiffs. That was manifestly inadequate. Finally, at no point did the plaintiffs indicate during the course of argument that they could not proceed with the presentation of their case in the absence of the further evidence that they sought to adduce. Prejudice to the plaintiffs was not articulated at all. I assumed that the plaintiffs intended to proceed with their case, foreshadowed the previous day, by calling the evidence of Mr Tsiakis and tendering documents.
67 After refusing the plaintiffs’ further oral application I directed that the plaintiffs commence with the presentation of their case. It was then that the proceedings took yet another twist. I was informed by junior counsel that the plaintiffs could not proceed with their case with the consequence that their claim must be dismissed.
68 The defendant then tendered a Notice of Offer of Compromise dated 22 November 2017 and submitted that it should have an order that it be paid its costs of the proceedings on a party- party basis until 22 November 2017 date and thereafter on an indemnity basis. The plaintiffs made no submission in opposition to this order, save to submit that there should be no order as to costs concerning the defendant’s interlocutory application of 4 April 2018. The plaintiffs also applied for a stay of any orders concerning the release of the Dragon Pearl pending an application for leave to appeal from my orders. Leave to appeal would not appear to be required. Nevertheless I granted the plaintiffs’ a stay on orders 2, 3 and 7 (previously orders 1, 2, and 6, prior to the amalgamation of these orders) below for a period of 7 days. If an appeal is lodged, they may choose to apply to the Full Court for an extension of the stay.
69 As a consequence of these matters I made the following orders (order 1 was made on 6 June 2018 and had been added to the more recent orders 2 - 8):
(1) The amended interlocutory application filed by the plaintiff’s in Court on 5 June 2018 be dismissed with costs.
(2) The writ issued on 13 October 2017 in these proceedings be set aside.
(3) The arrest warrant issued in these proceedings dated 13 October 2017 be set aside.
(4) The Plaintiffs pay the Defendant’s costs of the proceedings until 22 November 2017 on a party - party basis.
(5) Plaintiffs pay the Defendant’s costs of the proceeding on an indemnity basis from 22 November 2017, subject to order 6.
(6) Leave be granted to the Defendant’s to withdraw the interlocutory application dated 4 April 2018 and that there be no order as to costs in relation to the costs of that application.
(7) The proceedings be dismissed.