Procedure - Supreme Court procedure - Tasmania - Practice under Rules of Court - Default of appearance - Setting aside judgment - Lack of sufficient proof of service - Judgment void - Set-aside ex debito justitiae.

Judgment Number: [2006] TASSC 34

KENNETH HENRY BOSWELL v FLETCHER CONSTRUCTION AUSTRALIA LTD

1 By application filed 18 January 2006, the first defendant has applied for an order setting aside an interlocutory judgment in default of appearance entered 30 January 1996. The application, par2, is as follows:

"That the interlocutory judgment entered against the firstnamed defendant on 30 January 1996 for damages to be assessed be set aside on the ground that it was irregularly entered in that there was insufficient evidence to prove valid service of the writ herein."

2 The plaintiff and the first defendant have agreed that this part of the application should be heard and determined first and that initially there should be a determination of the following questions:

(2) If so, is it to be set aside ex debito justitiae or is there a discretion as to whether or not to set it aside?

If there is a discretion the parties are agreed that the hearing of the application should be resumed so that evidence material to the exercise of the discretion can be presented.

3 Order 83 r21 of the Rules of the Supreme Court 1965, which applied at the time the judgment was entered was as follows:

"Non-compliance with any of these rules, or with any rule of practice for the time being in force, shall not render any proceedings void unless the Court or a judge so directs; but such proceedings may be set aside, either wholly or in part, as irregular, or amended, or otherwise dealt with in such manner, and upon such terms, as the Court or judge may think fit."

4 This rule does not apply where a judgment is void or a nullity. Such a judgment will be set aside ex debito justitiae. It is of no legal effect and cannot be cured by amendment or otherwise. The English Rules of the Supreme Court equivalent of Order 83 r21, namely Order 70 r1, was considered in Anlaby v Praetorius [1888] 2 QBD 764. There Fry LJ said at 768 - 769:

"... and the judgment entered on February 7 was premature and irregular. In such a case the right of the defendant to have the judgment set aside is plain and clear. The Court acts upon an obligation; the order to set aside the judgment is made ex debito justitiae, and there are good grounds why that should be so, because the entry of judgment is a serious matter, leading to the issue of execution, and possibly to an action of trespass. We were pressed with the argument that Order LXX, r 1, gives a discretion to the Court which applies here. Rule 1 provides that "non-compliance with any of these rules, or with any rule of practice for the time being in force, shall not render any proceedings void unless the Court or a judge shall so direct, but such proceedings may be set aside either wholly or in part as irregular, or amended, or otherwise dealt with in such manner and upon such terms as the Court or a judge shall think fit." But in the present case we are not concerned with an instance of non-compliance with a rule, nor with any irregularity in acting under any rule. The irregular entry of judgment was made independently of any of the rules; the plaintiff had no right to obtain any judgment at all."

5 In Victoria in the Full Court in Prior v Hannaford [1970] VicRp 94; (1970) VR 772, Winneke CJ, Little and Starke JJ said at 777 - 778:

"Order 52, r 1, reads: 'Non-compliance with any of these Rules or with any Rule of practice for the time being in force shall not render any proceedings void, unless the Court or a Judge so directs, but such proceedings may be set aside either wholly or in part as irregular, or amended, or otherwise dealt with in such manner and upon such terms as the Court or Judge thinks fit.'

It is well settled that a rule in the form of O 52 r(1) ..., has no application where the proceeding which is sought to be cured by way of amendment or otherwise is a nullity. In Plowman v Palmer [1914] HCA 41; (1914), 18 CLR 339, at p 347; [1914] HCA 41; 20 ALR 356, Isaacs, J, said: 'A proceeding taken, where such proceeding is entirely forbidden or excluded by the rules (Hewitson v Fabre (1888), 21 QBD 6) or is not permitted at all at the time it is taken (Anlaby v Praetorius (1888), 20 QBD 764, and Smurthwaite v Hannay, [1894] AC 494; [1891-4] All ER Rep 865) would be more than mere non-compliance with the rules. It is still necessary, therefore, to enquire whether the proceeding impeached is merely an irregularity for non-compliance with the rules or is inherently a nullity.'"

6 Even where Order 83 r21, or its equivalents apply, a party may be entitled to have a proceeding set aside ex debito justitiae because the discretion, in accordance with settled practice, may only be capable in the particular circumstances of being exercised one way. This was pointed out by Upjohn LJ in In re Pritchard (1963) 1 Ch 502 at 520 - 521 where he said:

"I am not so sure that it is so difficult to draw a line between irregularities, by which I mean defects in procedure which fall within Ord. 70, and true nullities, though I agree no precise definition of either is possible. I think part of the difficulty is that the phrase 'ex debito justitiae' has been taken as being equivalent to a nullity, but, with all respect to Lord Greene's judgment in Craig v Kanssen [1943] 1 KB 256, 258 et seq, it is not. The phrase means that the plaintiff is entitled as a matter of right to have it set aside. Let me quote an analogy. The right to wind up a company is by statute a discretionary right. Yet the books and authorities point out that in many cases as against the company an unpaid creditor on a winding-up petition is entitled to a winding-up order ex debito justitiae. This means no more than that, in accordance with settled practice, the court can only exercise its discretion in one way, namely, by granting the order sought. So in many of the cases where there are defects of procedure, even if the defects are mere irregularities for the purposes of Ord 70 so that the court has a discretion, it must follow that the applicant, if he is in no wise estopped by conduct or waiver, is entitled to say: 'I am entitled under Ord 70 to have the order made upon me set aside ex debito justitiae.'" Indeed the only difference between a nullity and an irregularity, to which such a principle applies, is where being a nullity, it is too late to start again.

7 The basic rule regardless of whether the defect causes the judgment to be a nullity is as stated by Dixon AJ in Chitty v Mason [1926] VLR 419 at 423, where he said:

"There is a great difference between judgments which are regularly obtained in good faith and judgments which are irregularly obtained or obtained in bad faith. The first class are not in general set aside save upon an affidavit of merits. The second class are set aside ex debito justitiae, irrespective of the merits of the party applying."

8 This rule is not completely inflexible however. Crawford J pointed out in Farrow Mortgage Services Pty Ltd v Tunevitsch [1994] TASSC 56, at par13, that the general run of authority is that if a judgment is irregular the defendant is entitled to have it set aside ex debito justitiae, but he went on to say that there are some cases where an irregular judgment might be put right by amendment. There are cases such as Hogarth v Higgs [1980] TASSC 23, where there was an undoubted entitlement to judgment, but a trivial slip up in procedure and where the justice of the case was such that the judgment ought be allowed to stand. Reference to a number of cases where an irregular judgment has not been set aside is contained in the judgment of Parker J in ACN 076 676 438 Pty Ltd & Anor v A-Comms Teledata Pty Ltd & Anor (2000) WASC 214 at par18.

9 Although in most cases the judgment will be set aside ex debito justitiae regardless of whether the defect renders the judgment a nullity or amounts to a mere irregularity, the first enquiry once a defect has been identified is an enquiry as to whether the defect results in a nullity. This was clearly stated by Everett J in Hogarth v Higgs (supra), where he said at p7:

"But the initial step must remain that of determining whether the nature of the erroneous act or omission is such as to result in a nullity or an irregularity. Only in the latter case, in accordance with clearly established law, does Order 83 Rule 21 become relevant."

10 A proceeding is a nullity if the defect is fundamental. Upjohn LJ said in In re Pritchard (supra) at 523:

"I do not think that the earlier cases or the later dicta upon them prevent me from saying that, in my judgment, the law when properly understood is that Ord 70 applies to all defects in procedure unless it can be said that the defect is fundamental to the proceedings. A fundamental defect will make it a nullity. The court should not readily treat a defect as fundamental and so a nullity, and should be anxious to bring the matter within the umbrella of Ord 70 when justice can be done as a matter of discretion, still bearing in mind that many cases must be decided in favour of the party entitled to complain of the defect ex debito justitiae."

11 Where a proceeding is not provided for at all in the Rules, such a proceeding is a nullity. In Plowman v Palmer [1914] HCA 41; (1914) 18 CLR 339, Isaacs J said at 348:

"In other words, the test is: Is there jurisdiction at the time to do the act impeached, even though prior precautions for the protection of a party, or other formalities, are directed; or is the act complained of, in the circumstances entirely unprovided for or prohibited at the time it is done?"

12 I now turn to the legislation and rules which applied at the time the default judgment was entered.

13 An entitlement to enter judgment in default of appearance did not arise unless: there was effective service of the writ; within three days of service the writ was endorsed by the person serving it with the date of service; there was a failure to appear and an affidavit had been filed showing effective service and timely endorsement. These were the requirements of the Rules which I will come to in more detail later.

14 Consideration also needs to be given to the requirements for effective service. The writ was issued in Tasmania. The first defendant is a company. It was purportedly served in the State of Victoria in 1995. At that time companies legislation, although uniform, was State law and so that law, insofar as it related to service of process, was overridden by the Service and Execution of Process Act 1992, ("the Commonwealth Act"). Section 8(4)(a) of the Commonwealth Act provided that that Act applied "to the exclusion of a law of a State with respect to the service ... in another State of process of that State ...". Similarly, because of s8, there could be no question of service of the writ under the authority of the Tasmanian Rules. The result was that the requirements for service of the Tasmanian writ in the State of Victoria were exclusively governed by the Commonwealth Act.

15 As to the method of service the following provisions of the Commonwealth Act were relevant, namely, s9(1) and (2), s15(3) and s16. As at the time of purported service in 1995 they were as follows:

"9 (1) Service of a process, order or document under this Act on a company is to be effected by leaving it at, or by sending it by post to, the company's registered office.

(2) Without limiting the operation of subsection (1), a process, order or document may be served on a company by delivering a copy of it personally to each of 2 directors of the company who reside in Australia.

15 (3) Service on a company or a registered body must be effected in accordance with section 9.

16 Service is effective only if copies of such notices as are prescribed are attached to the process, or the copy of the process, served."

16 The Commonwealth Act also contained provisions concerning proof of service. Subsections 11(1) and (2) were as follows.

"(1) Subject to subsections (2) and (8), service of a process, order or document under this Act is taken to have been proved only if the following are proved:

(b) the time at which and the day on which it was served;

(e) if service was effected in a way that required the person served to be identified - the way in which the person served was identified.

(2) Subsection (1) does not apply to service by post."

(Subsection (8) is irrelevant for present purposes.)

17 The Tasmanian Rules of the Supreme Court 1965, Order 83, r19, like the Commonwealth Act specified that affidavits of service "shall state the time when, the place where, the person by whom, and the manner in which service was effected". Regardless of whether the Commonwealth Act or the Tasmanian Rules were applied the position was that the affidavit of service had to contain sufficient evidence to show that there had been effective service.

18 Because of the Commonwealth Act, s12, which provided that service under that Act had the same effect and gave rise to the same proceedings as if service had been effected in the place of issue, leave to proceed before default judgment could be entered was not required. The other requirements for proceeding to default judgment under the Rules still had to be satisfied however. Pursuant to the Tasmanian Rules of the Supreme Court 1965, proof of effective service had to be by affidavit with the affidavit including mention of the date of endorsement of the writ by the process server. I set out below the relevant parts of the Rules:

(1) The person serving a writ of summons shall, within three days at most after such service, endorse on the writ the day of the month and week of the service thereof, otherwise the plaintiff shall not be at liberty, in case of non-appearance, to proceed by default; and every affidavit of service of such writ shall mention the day on which such endorsement was made.

When any defendant fails to appear to a writ of summons, and the plaintiff is desirous of proceeding upon default of appearance ... he shall, before taking such proceedings upon default, file an affidavit of service of the writ ...

(1) When the writ is endorsed with a claim for ... damages only, ... and the defendant fails, ..., to appear, the plaintiff may enter interlocutory judgment ...

When by ... these rules, ..., it is provided that any judgment may be entered upon the filing of any affidavit ... the officer shall examine the affidavit ... and, if the same be regular and contains all that is by law required, he shall enter judgment accordingly."

19 Obviously the affidavit in order to demonstrate effective service and the existence of an entitlement to judgment needed to include:

(a) mention of the day on which the writ was endorsed with the date of service;

(b) confirmation that the Commonwealth Act, s16 notice was attached to the document served;

(c) if service was effected under the Commonwealth Act, s9(1), proof that the place to which the process was posted or at which it was left was the registered office of the defendant company; and

(d) if service was effected under the Commonwealth Act, s9(2), the names of the two persons served and how they were identified including confirmation that they were directors of the company and Australian residents.

20 None of this information was contained in the affidavit of service which was filed. The affidavit was in the following terms:

"I, MICHAEL JOHN BOOKMAN of 422 COLLINS ST, MELBOURNE 3000 PROCESS SERVER in the State of Victoria, affirm as follows:-

1 I did, on the 11th day of December, One thousand nine hundred and ninety five, at Level 2, 40 City Rd, Sth Melbourne at the hour of 4.10 in the afternoon personally serve Fletcher Construction Australia Ltd of Level 2, East Tower, 40 City Road, South Melbourne in Victoria, the First Named Defendant, with a sealed copy of the Writ in this action, by delivering it to and leaving it with him (or offering it to and leaving it with him).

2 At the time of the said service the sealed Writ was subscribed in the manner and form prescribed by the Rules of the Supreme Court.

21 Although paragraph 2 of the affidavit mentions that at the time of service the writ was subscribed the affidavit does not say who subscribed it, with what and when. It is far from clear whether this paragraph is intended to meet the requirement of Order 10 r9. In fact it seems that in the standard affidavit of service subscribing was something different to endorsing the writ under Order 10 r9. Form 1 of Appendix B Part 1 of the Rules was as follows:

"I [name, address, and description of deponent], make oath and say as follows:

1 I did, on the day of 19 , at am/pm at [state where], personally serve CD, the abovenamed defendant [or one of the abovenamed defendants], with a true copy of the writ of summons in this action, which appeared to me to have been regularly issued out of the Principal Registry of the Supreme Court [or the District Registry of the Supreme Court] against the abovenamed defendant [or defendants] at the suit of the abovenamed plaintiff [or plaintiffs], and which was dated the day of 19 .

2 At the time of the said service the said writ and the copy thereof were subscribed in the manner and form prescribed by the Rules of the Supreme Court.

3 I did on the day of endorse on the said writ the day of the month and the week of the said service on the said defendant.

22 It is self-evident that proof of effective service of the process upon which the judgment in default of appearance is based is fundamental to the right to have the judgment entered. Without it, in the words of Isaacs J in Plowman v Palmer (supra), an entitlement to enter judgment is "entirely unprovided for". Plainly the affidavit here does not show effective service of the writ. This being so, the judgment is a nullity. It goes beyond a non-compliance with the Rules or a mere irregularity and so Order 83 r21 has no application. There is no discretion and the judgment must be set aside ex debito justitiae.

23 Counsel for the plaintiff called in aid Order 83 r22, which provides that a set aside application will not be allowed if there has been delay or a fresh step taken after the applicant acquires knowledge of the irregularity. That rule clearly only applies to applications to set aside to which the preceding rule applies. As Lord Denning said in MacFoy v United Africa Co Ltd (1962) AC 152, a void act which is a nullity is incurably bad. You cannot have something which is a nullity for a while and then because of the passage of time or some supervening act ceases to be a nullity. In Hamp-Adams v Hall [1911] 2 KB 942, it was held that the equivalent of Order 83 r22, namely, the English Rules of the Supreme Court, Order 70 r2, could not be relied upon where the proceeding is a nullity. This is clear from the extract from the judgment of Vaughan Williams LJ, which I have quoted further on in these reasons. Order 83 r 22 does not assist the plaintiff.

24 There is another matter. Although the application specifies the defect complained of to be "that there was insufficient evidence to prove valid service of the writ", the first defendant without objection from the plaintiff adduced evidence to support an argument that the judgment is also to be set aside ex debito justitiae for failure by the process server to endorse the writ within three days of service as required by Order 9 r10.

25 The whole of the Court file was tendered and it contained no endorsed writ or copy. It contained no affidavit, evidence or other evidence of the writ having been endorsed. Combined with this was the fact that despite Order 9 r10 mandating that the affidavit of service must "mention the day on which such endorsement was made", there is no such mention in the purported affidavit of service. The plaintiff did not adduce any evidence on the hearing of the application to the effect that an endorsement had been made nor any evidence explaining the lack of such evidence. I am satisfied that the writ was not endorsed.

26 The failure to endorse the writ is a fatal defect. This is made clear by Vaughan Williams LJ in Hamp-Adams v Hall (supra), where he said at 943 - 944:

"Order IX, r15, ... requires that within three days at most after service the person serving the writ shall indorse on it the day of the month and week of the service otherwise the plaintiff shall not be at liberty in the case of non-appearance to proceed by default. The writ was served on November 24, and the indorsement was not made until November 30. Therefore it cannot be denied that the rule has not been complied with, and it follows that the plaintiff was not entitled to proceed by way of default. It is contended for the plaintiff that the non-compliance with the rule has been waived by the defendant. In my opinion it was impossible for the defendant to waive the defect, for the result of the non-compliance with the rule was that there was no writ on which the plaintiff was entitled to proceed. Then it was said that at the most the case should be regarded as one in which there has been a mere irregularity, and Order LXX, r2, was called to our attention as showing how the right of a party to take advantage of a defect in the nature of an irregularity may be limited or taken away. In my opinion that rule has no application to the circumstances of the present case. It is said that it is a very severe penalty to put on a mistake of this kind that all the subsequent proceedings should be set aside. I am not at all impressed by that argument. Where proceedings are taken by a plaintiff in the absence of the defendant it is most important that there should be at every stage a strict compliance with the rules, and therefore it is a reasonable and proper thing in the case of proceedings by default to treat non-compliance with such a rule as Order IX r15, not as a mere irregularity which can be waived, but as a matter which prevents any further proceedings from being taken on the writ.

This application therefore succeeds, and there must be an order to set aside the judgment."

27 Hamp-Adams v Hall was referred to without disapproval in Hogarth v Higgs (supra) although there Everett J was able to distinguish the case because on the facts before him there had been a timely endorsement it was just that the particular day of the week was not included on the endorsement. The process server had written on the writ that he served it on "the 7th day of December 1979" instead of writing on the writ in strict compliance with Order 9 r10, that he had served it on: Friday, the 7th day of December 1979. Everett J said at p9:

"First, in Foat v Basset (1888) WN 255, the omission from the endorsement of the day on which service was effected was held by Stirling J (as he then was) not to invalidate subsequent proceedings. The authority of this case has been accepted by editors of the English Annual Practice ...

Secondly, in Steers v Rogers (1891) 7 TLR 184, a departure from the prescribed mode of endorsement of service was held to be the 'merest technicality' ...

In my opinion, the authorities clearly establish that the omission from the endorsement of service of the day of the service of the writ is an irregularity in respect of which it is appropriate to resort to the jurisdiction conferred by Order 83 Rule 21."

28 In the present case there was not merely an omission to specify on the endorsement the day of the week of service, but a complete failure to endorse anything. Accordingly, as explained in Hamp-Adams v Hall (supra), the writ was not capable of being the basis for a judgment in default of appearance.

29 Counsel for the plaintiff submitted that in light of the decision in Commonwealth Bank of Australia v Buffett (1993) 114 ALR 245, I should decline to follow Hamp-Adams v Hall. The case, however, is of no assistance to the plaintiff. There Morling CJ was dealing with legislation which unlike the Tasmanian rules overcame the decision in In re Pritchard (supra). He said at 250:

"However, s29 of the Supreme Court Ordinance provides:

29 (1) Proceedings in the Supreme Court shall not be invalidated by any formal defect or by any irregularity, unless the Court is of the opinion that substantial injustice has been caused by the defect or irregularity and that the injustice cannot be remedied by an order of the Court.

(2) The Court or the Judge may make an order declaring that any proceeding is valid notwithstanding any defect or irregularity.

In Hamp-Adams v Hall [1911] 2 KB 942 a writ of summons that had been duly served was not endorsed by the process server with the date of service, as required by the relevant court rules. The Court of Appeal held that non-compliance with the rules was not an irregularity which could be waived and that the plaintiff, not having complied with the rules, was not entitled to obtain a default judgment. But again, there was no provision such as s29 available to be called in aid by the plaintiff."

30 The judgment is a nullity. There was no right to cause it to be entered as there was no proof of service and no endorsement. The judgment must be set aside ex debito justitiae and there will be an order accordingly.