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[2014] QCA 75
Court of Appeal (Qld)
2014-04-11
Muir and Morrison JJA and Applegarth J, Separate, reasons for judgment of each member of the Court, each concurring as to the, orders made
Original judgment source is linked above.
Source: Queensland Judgments (Supreme Court Library Queensland) (www.queenslandjudgments.com.au). Converted to plain text by ZoeLaw. Not the official version.
SUPREME COURT OF QUEENSLAND
CITATION: Embrey v Smart [2014] QCA 75
PARTIES: ADRIAN JAMES EMBREY (appellant) v PHILLIP JOHN SMART (respondent)
FILE NO/S: Appeal No 9564 of 2013 SC No 7490 of 2010 SC No 9104 of 2010
DIVISION: Court of Appeal
PROCEEDING: General Civil Appeal
ORIGINATING COURT: Supreme Court at Brisbane
DELIVERED ON: 11 April 2014
DELIVERED AT: Brisbane
HEARING DATE: 27 March 2014
JUDGES: Muir and Morrison JJA and Applegarth J Separate reasons for judgment of each member of the Court, each concurring as to the orders made
ORDERS: Appeal allowed.Set aside orders made on 17 May 2013 in proceeding No 9104 of 2010.The application filed 24 April 2013 in proceeding No 9104 of 2010 be dismissed.The respondent pay the costs of and incidental to the application filed on 24 April 2013 in proceeding No 7490 of 2010, the costs of and incidental to the application filed 24 April 2013 in proceeding No 9104 of 2010 and the costs of and incidental to the appeal to be assessed on the standard basis.
CATCHWORDS: PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS – SERVICE – SUBSTITUTED SERVICE – where the appellant was injured in October 2007 after being allegedly assaulted by the respondent – where the respondent was personally served with a Notice of Claim – where the Notice was not responded to – where in July the appellant’s filed an originating application seeking the dispensation of attending a compulsory conference and pursuant to r 116 of the Uniform Civil Procedure Rules 1999 (Qld) that service of the appellant’s claim be substituted by causing those documents to be personally delivered to a specified address – where the document for which substituted service was sought had not yet been filed – whether the document for which substituted service was sought needed to have been filed before an order under r 116(1) UCPR could be made – whether order for substituted service was validly made / PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS – JURISDICTION AND GENERALLY – SETTING ASIDE JUDGMENTS – where an order for substituted service was made and service effected according to order – where the order for substituted service was not set aside prior to service being effected – whether the order was a judicial order of a superior court – whether the order remains valid until set aside / PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS – JURISDICTION AND GENERALLY – SETTING ASIDE JUDGMENTS – where a default judgment was regularly entered – where the respondent failed to give a satisfactory explanation for his failure to appear to the proceeding – where the respondent’s affidavit stated legal conclusions without supporting evidence – where the affidavit did not swear to the truth and accuracy of an attached draft defence – whether a prima facie defence disclosed / Uniform Civil Procedure Rules 1999 (Qld), r 5, r 8, r 32, r 116, r 290, r 667 / Bernstein v Jackson [1982] 1 WLR 1082, cited / Cook v D A Manufacturing Co Pty Ltd [2004] QCA 52, cited / Embrey v Smart [2013] QSC 241, cited / Evans v Bartlam [1937] 2 All ER 646; [1937] AC 473, cited / Foxe v Brown (1984) 59 ALJR 186; (1984) 58 ALR 542; [1984] HCA 69, cited / Kendell v Sweeney [2002] QSC 404, cited / Laurie v Carroll (1958) 98 CLR 310; [1958] HCA 4, cited / Love v Attorney-General (NSW) (1990) 169 CLR 307; [1990] HCA 4, cited / National Mutual Life Association of Australasia Ltd v Oasis Developments Pty Ltd [1983] 2 Qd R 441, cited / Prus-Butwilowilcz v Moxey [2002] QDC 166, cited / State of NSW v Kable (2013) 87 ALJR 737; (2013) 298 ALR 144; [2013] HCA 26, followed / Tunnecliffe v Besnard [1938] 55 WN. NSW 58, cited / Yankee Doodles Pty Ltd v Blemvale Pty Ltd [1999] QSC 134, cited
COUNSEL: R A I Myers for the appellant / R S Ashton for the respondent
SOLICITORS: Shine Lawyers for the appellant / Minter Ellison for the respondent
MUIR JA: I agree with the reasons of Applegarth J and with the orders he proposes.
MORRISON JA: I have read the reasons of Applegarth J and agree with his Honour’s reasons and the orders he proposes.
APPLEGARTH J: The appellant was injured on 5 October 2007 when he was allegedly assaulted by the respondent. On 16 December 2008 the respondent was personally served with a Notice of Claim under the Personal Injuries Proceedings Act 2002 (“PIPA”). However, he did not respond to it. The next 18 months were occupied with the respondent giving the appellant what might be described as “the run around”. Delays were occasioned by the respondent’s failure to comply with disclosure obligations. The appellant had to make applications to the District Court. Attempts to personally serve the respondent were unsuccessful. The respondent was represented by solicitors during this time. These events are more fully described in the reasons of the primary judge.1
On 19 July 2010 the appellant’s solicitors filed an originating application in the Supreme Court (proceeding 7490/2010) seeking orders:
(a)that the requirement for the parties to attend a compulsory conference and the requirement to exchange written final offers under PIPA be dispensed with; and
(b)that pursuant to r 116 of the Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”) service of the appellant’s claim and statement of claim be substituted by causing those documents (which were annexed to the application) to be personally delivered to 43 Ipswich Road, Woolloongabba.
The application also sought an order pursuant to r 116 that service upon the respondent of the originating application and the supporting documents be dispensed with and the documents be served at 43 Ipswich Road, Woolloongabba. This was the address of the second respondent, of which the respondent was the sole director and shareholder. That address was recorded in ASIC records of the second respondent as the respondent’s residential address. The respondent was later to depose that he attended there every two to three weeks.
The application, supporting material and a letter directed to the respondent were served upon that address on 27 July 2010. On 3 August 2010 the application came before Atkinson J who made an order for substituted service of the originating application and supporting documents. The application was otherwise adjourned to 17 August 2010. The originating application and supporting material were duly served in accordance with the order.
On 17 August 2010 the application came before Martin J. The respondent did not appear. Orders were made dispensing with the compulsory conference and the exchange of final written offers. His Honour also made an order for substituted service of the claim and statement of claim upon the respondent by delivery of the documents to 43 Ipswich Road, Woolloongabba.
The appellant’s claim and statement of claim, copies of which were referred to in and annexed to the order of Martin J, were filed on 24 August 2010 in Supreme Court proceeding 9104/2010. Service of those documents was effected in accordance with the order made by Martin J. Default judgment for damages to be assessed was obtained on 4 November 2010.
On 20 June 2011 Fryberg J dispensed with the requirement for signatures of the respondent and the second defendant on a request for trial date. The matter proceeded to an assessment of damages before Clare DCJ on 29 August 2011. On 6 September 2011 her Honour gave judgment for the appellant against the respondent and the second defendant for $581,689.03 and ordered costs against them.
On 24 April 2013 the respondent filed an application in proceeding 7490/2010 seeking that the orders of Atkinson J and Martin J which had been made in August 2010 be set aside. A second application filed the same day in proceeding 9104/2010 sought orders that the default judgment given on 4 November 2011 be set aside pursuant to UCPR 290 and that the order of Fryberg J made on 20 June 2011, and the order of Clare DCJ made on 29 August 2011 be set aside pursuant to UCPR 667. Those applications were heard on 17 May 2013 and reserved. On 13 September 2013 the primary judge dismissed the first application. However, his Honour went on to order that the judgment entered on 4 November 2010 and the orders of Fryberg J and Clare DCJ be set aside.
The reasons of the primary judge
The primary judge took the view that the order for substituted service made by Martin J was ineffective because, at the time that order was made, the claim in proceeding 9104/2010 had not been filed and the requirements for the making of an order under r 116 were not, and could not be, satisfied. Based on that interpretation of r 116, the judgment obtained on 4 November 2010 was found to have been irregularly entered.
Rule 116 provides:
“116****Substituted service
(1)If, for any reason, it is impracticable to serve a document in a way required under this chapter, the court may make an order substituting another way of serving the document.
(2)The court may, in the order, specify the steps to be taken, instead of service, for bringing the document to the attention of the person to be served.
(3)The court may, in the order, specify that the document is to be taken to have been served on the happening of a specified event or at the end of a specified time.
(4)The court may make an order under this rule even though the person to be served is not in Queensland or was not in Queensland when the proceeding started.”
The primary judge concluded that r 116(1), properly construed, requires that the proceeding in which an order for substituted service is sought must have been commenced before the order can be made. Reliance was placed upon the words in r 116(1) that “it is impracticable to serve a document in a way required” under UCPR Chapter 4. Rule 116 was said to not contemplate a party demonstrating that, if an originating process is issued in the future, it would be impracticable to serve it personally. Rule 116 was said to contemplate that the originating process exists and for the applicant to show that it is impracticable to effect personal service of it.
This conclusion was said to be supported by Kendell v Sweeney2 in which an order for substituted service was refused where it had not been shown that there had been any attempt to serve the respondents in the usual way. His Honour’s interpretation of r 116(1) was said to be fortified by reference to r 116(4), which assumes that the relevant proceeding has already started when the order for substituted service is made.
The appellant’s submissions
The appellant raises two principal arguments: one about the proper interpretation of r 116; the second of a more fundamental character.
The appellant contends that the primary judge erred in his interpretation of r 116. He argues that the rule contains no requirement that the “document” in respect of which an application for substituted service is made has been filed. The rule does not refer to the existence of an “originating process”. Rule 116 should be construed with the objective of avoiding delay, expense and technicality and facilitating the purpose of the rules.3 Accordingly, r 116(1) does not prevent an application being made in anticipation of a proceeding that is about to be commenced. The pre‑condition for the exercise of the discretion under r 116(1) is that it is impracticable to serve a document in a required way. If that impracticability is established then the Court’s discretion is enlivened, and can be exercised in respect of a claim which the applicant proposes to file if an order for substituted service is made. It may be that, in the absence of an order for substituted service, it would make no sense to file the relevant claim if personally serving a party was shown to be impracticable. In such a case it would be futile to commence an action without the benefit of an order for substituted service.
The appellant’s more fundamental argument is that:
(a)service was effected in accordance with an order of the Supreme Court which authorised service in accordance with its terms;
(b)the order of a superior court of record is valid until set aside, even if made in excess of jurisdiction;4
(c)the order of Martin J was effective to authorise substituted service of the claim and statement of claim when they were issued unless it was set aside before service was effected in accordance with its terms;
(d)even if the primary judge’s interpretation of r 116 is correct, the order of Martin J was not ineffective to permit substituted service of the claim.
The respondent’s submissions
On the issue of interpretation, the respondent submits that it would be surprising if r 116 was to be interpreted so as to permit an order to be made in respect of a document which had yet to be filed and become the originating process issued by the Court. The respondent argues that the language of the rule does not apply to a document which only becomes an originating process at some time in the future. The concern on an application for substituted service is whether the process is likely to come to the attention of the defendant, and that assessment is made at the time the order is made.
On the issue of the effectiveness of an order for substituted service until the order is set aside, the respondent sought to distinguish a judicial order of the kind discussed in Kable which is valid until set aside, even if made in excess of jurisdiction, from an order which permits departure from a procedural regime.
The notice of contention
Certain issues will arise for this Court’s consideration if the appellant establishes that the judgment was regularly entered.
The primary judge concluded that, had it been necessary to decide the application on the basis that the judgment was regularly entered, then he would have refused the application to set it aside because the respondent had not given a satisfactory explanation for his failure to appear. The respondent’s notice of contention challenges this conclusion. The respondent submits that he provided a satisfactory explanation and showed a defence on the merits. The appellant contests both these things. By his amended notice of appeal, the appellant contends that the primary judge erred in concluding that the respondent had shown a defence on the merits.
The interpretation of r 116(1)
The terms of r 116(1) require a present impracticability to serve a document in a way required under Chapter 4 of the UCPR. The sub-rule does not refer in terms to “a document which has been filed in the court” or “an originating process which has been issued by the court”. It refers more generally to “a document” and, on a literal interpretation, would apply to an originating process which has been prepared and not yet filed.
The respondent submits that it would be surprising if r 116(1) were to be interpreted so as to permit a substitution order to be made in respect of a document which had not yet been issued as a command of the Court. Such a course may be unusual, but it would not be surprising. The usual course is that an application for substituted service follows failed attempts to effect personal service of a claim or other originating process which has been issued by the Court. But that usual course does not dictate the interpretation of r 116, and the terms of r 116 do not require the document in question to have been first issued by the Court.
The absence of such a requirement is understandable. One can imagine a case in which a party seeks an urgent injunction to restrain conduct by a respondent who cannot be personally served in circumstances of great urgency. The rules permit an oral application in such circumstances.5 A judge hearing such an application might make an order under r 116 substituting a way of serving a document which has yet to be issued by the Registry.
A proceeding starts when the originating process is issued by the Court.6 Before then, a claim or other type of originating process is a “document” within the ordinary meaning of that term, and being an originating process is required to be served personally under Chapter 14.7 In the kind of urgent case hypothesised above, r 116(1) applies to such a document if it is impracticable to serve the document in the required way at the time the order for substituted service is made.
The primary judge concluded that it is not possible to make an order under r 116 for substituted service of an originating process in anticipation of the relevant originating process being issued by the Court. His Honour emphasised that the pre-condition for the exercise of the discretion under r 116(1) is that “it is impracticable to serve a document in a way required” under UCPR Chapter 4. The respondent submits that the language of the rule does not provide room for a contention that it is enough that, on the evidence, it will be impracticable to serve a document that is “created” at some time in the future. This submission may be accepted. But the claim and the statement of claim to which the order of Martin J referred were not created at some time in the future. Those documents were in the material before Martin J. They had not been issued by the Court so as to commence proceedings. But like other originating process, including the originating application or claim in the case of an urgent oral application for an injunction, the claim was “a document”, and one which r 105 required to be served personally.
An applicant for substituted service must show at the time the order is obtained that it is impracticable to serve the document personally. The rule requires that it is presently impracticable to serve a document. That document may be in the form of a claim or application which the applicant and the Court anticipate will be issued by the Court in the very near future. The terms of the rule do not require the document to already have been issued by the Court.
Next, the respondent points to cases in which judges have emphasised the importance of an applicant for an order for substituted service using reasonable effort to serve a party personally, but being unable to do so.8 The primary judge cited Kendell v Sweeney9 in this regard. There is no doubt about the correctness of those authorities, which concerned circumstances in which an originating process had been issued. Proof that there had been attempts to serve a party personally may be part of proof that “at the date on which the application for substituted service is made, the plaintiff, using reasonable effort, is unable to serve the defendant personally”10 or, in terms of r 116(1), that it is “impracticable” to serve the party personally. Cases such as Kendell v Sweeney in which a party has failed to prove attempts to serve in the usual way do not stand for the proposition that an originating proceeding must first be issued before r 116 may be engaged. Proof that it is impracticable to serve an originating proceeding often may depend on past, failed attempts to serve an originating process that has been issued. But the rule does not require this. The hypothetical injunction case mentioned above provides a reason why r 116 should not be interpreted so as to impose such a requirement.
The primary judge stated that his view of the proper construction of r 116(1) was fortified by reference to r 116(4). His Honour stated:
“Rule 116(4) overcomes difficulties previously encountered as a consequence of cases decided under the old rules of court, where issues arose as to whether a writ of summons in the form prescribed for service within the jurisdiction, but issued at a time when the defendant was not in the jurisdiction, could be the subject of an order for substituted service.11 It is notable for present purposes, however, that r 116(4) is clearly drawn on the assumption that the relevant proceeding has already started when the order for substituted service is made.”12
Rule 116(4) refers to the whereabouts of the person to be served “when the proceeding started”. But that reference does not call for a restrictive interpretation of r 116(1). Rule 116(4) clarifies that an order under r 116 may be made in certain circumstances, particularly it may be made even though the person is not in Queensland or was not in Queensland when the proceeding started. It does not imply that an order cannot be made under r 116(1) before a further proceeding is started. Rule 116(4) does not illuminate the present issue which concerns the proper interpretation of r 116(1).
The respondent relies upon the decision of the English Court of Appeal in Bernstein v Jackson13 which concerned an order for substituted service of a “notice of a writ” in circumstances in which the writ itself had become “stale”. A judge treated the matter as falling under a rule dealing with irregularities. On appeal, the plaintiffs attempted to argue that although a writ which had not been renewed was not valid for service, the same did not apply to a “notice of a writ”. This argument was rejected by both the judge and the Court of Appeal. They ruled that the expression “notice of a writ” refers to a valid writ. The decision concerns the interpretation of English rules, which in a particular context, required the existence of a writ which was valid for service. I do not regard the authority as of any real assistance in determining proper interpretation of r 116(1).
The respondent submits that, in providing for a departure from the requirement of personal service, r 116(1) should be construed to interpret the reference to “a document” as a reference to an originating process which already has been issued. I am unable to agree. Such an interpretation is not required by the terms of the rule and such an interpretation might have unfortunate and unintended consequences in urgent cases in which the originating process has yet to be filed when the application for substituted service is heard.
Finally, the respondent submits that an order which simply permits a document in the form of an originating process, which has yet to be issued by the Court, to be served at some future time would allow the document to be served other than by personal service at a time when it was practicable to personally serve it. But this is not an argument which calls for the words “a document” in r 116(1) to be read as if they said “an originating process issued by the court”. Instead, it may call for conditions to be included in an order for the process to be issued and served forthwith.
In summary, r 116 refers to “a document”. It does not refer to “an originating process issued by the court”. The rule might apply to an originating process which is anticipated to be issued, for instance in circumstances of urgency. The fact that such an originating process has not been filed and issued by the Court does not preclude r 116(1) from applying. I respectfully disagree with the construction of r 116(1) adopted by the primary judge.
Service was effected in accordance with an order of the Supreme Court
The order of Martin J authorised substituted service of the claim and statement of claim, and those documents were served in accordance with the terms of the Court’s order. The order of Martin J was not set aside. More importantly for present purposes, it was not set aside at the time substituted service was effected. The respondent was validly served.
The respondent sought to place some reliance on a distinction noted in Kable14 between non-compliance with procedural requirements and proceedings which are a “nullity”. But, as in Kable that kind of distinction has no direct application.
The real issue is whether there is any reason to conclude that the order made by Martin J was not a judicial order of a superior court which is valid until set aside.
The order was a judicial order. It was quite unlike the warrant discussed in Love v Attorney-General (NSW)15 which involved the exercise of a power which was “essentially administrative in nature”. The order, although made ex parte, was made in the course of judicial proceedings, based on evidence and took the form of a court order which relieved the appellant from a procedural requirement to personally serve a document. It accordingly affected the rights of the respondents to the application. It was a judicial order of a superior court of record and was valid until set aside.16
I accept the appellant’s argument that, even if the primary judge’s interpretation of r 116 is correct, the order of Martin J was effective to permit substituted service of the claim.
This was not a case in which there was a defect in service of the originating process sufficient to render irregular any judgment subsequently entered in default of appearance. The claim and statement of claim were duly served in accordance with an order of the Supreme Court which had not been set aside.
The judgment obtained on 4 November 2010 was regularly entered following service upon the respondent in accordance with the Court’s order. The orders of Fryberg J and of Clare DCJ which were consequential upon that judgment followed from a judgment which was regularly obtained.
Did the primary judge err in concluding that the respondent’s explanation was not satisfactory?
By a notice of contention filed 25 October 2013, the respondent contends that the decision of the primary judge should be affirmed on a ground other than a ground relied on by the primary judge. As noted, the primary judge concluded that, had it been necessary to decide the application on the basis that the judgment had been regularly entered, he would have refused it. This was because the respondent had not given a satisfactory explanation for his failure to appear to the proceeding.17
The respondent’s notice of contention states that the learned primary judge erred in this regard and contends that the respondent did provide a satisfactory explanation for his failure to appear to the proceeding. This is not a case in which a notice of contention identifies a ground which was not relied upon by a trial judge which, if upheld by the trial judge, would have led to the same result. The respondent says that the decision should be affirmed on a ground which was expressly rejected by the trial judge. Still, the matter is the proper subject for a notice of contention, rather than a notice of cross-appeal.18
The primary judge considered the outcome which would have been obtained if, contrary to his interpretation of r 116, the judgment of 4 November 2010 had been regularly entered. Applying the considerations which were summarised by McPherson J (as His Honour then was) in National Mutual Life Association of Australasia Ltd v Oasis Developments Pty Ltd19, the primary judge considered whether the respondent had:
(a)given a satisfactory explanation for his failure to appear;
(b)delayed in bringing the application;
(c)disclosed a prima facie defence on the merits.
As to (a), the respondent’s explanation was that the premises at 43 Ipswich Road upon which substituted service was effected on 26 August 2010 had been vacated after 15 August 2010. This may explain why the defendant did not receive the claim and statement of claim. However, as the primary judge concluded after considering relevant evidence, it is easy to assert that court documents were not received, it is “quite another thing for the defendant to provide a satisfactory explanation for the failure to appear”.20
The primary judge considered an affidavit sworn by the respondent about the residences which he had occupied in Brisbane over the years and addresses given for him on ASIC searches of a number of companies. Importantly, the ASIC register for the company which was made a second defendant, The Greatest Sales Company Pty Ltd, recorded the respondent as residing at 43 Ipswich Road. His company was said to have operated its business from that address from about 15 August 2007 to 15 August 2010. The respondent deposed that during that period he attended that address approximately every two to three weeks and otherwise was in New Zealand.
The respondent claimed not to have received at any time at the Ipswich Road address any correspondence or other documents from the appellant’s lawyers. The primary judge was entitled to treat such an assertion with reserve, given other evidence before him. That other evidence included a comprehensive affidavit of the solicitor for the appellant, which exhibited a substantial volume of correspondence and other documents. It is unnecessary to canvass it in detail. It discloses a lengthy history of dealings with the respondent, his company and the lawyers who acted for him from time to time. The material shows that the respondent must have been aware of legal claims by the appellant advanced pursuant to PIPA and associated court proceedings. Correspondence was directed to the respondent and his company care of the address at 43 Ipswich Road, Woolloongabba. The correspondence related to their non-compliance with orders of the Court in respect of the plaintiff’s claim for damages. The correspondence was addressed to the registered address of the respondent’s company and to the address shown in ASIC records of that company as the address of the respondent. The respondent was the sole shareholder and sole director of the company.
The course of correspondence and other communications stretches over a lengthy period. Of particular relevance is the period of weeks and months leading up to the making of the order for substituted service and the service of the claim and statement of claim.
In March 2010 the respondent, through his personal assistant, made direct contact with the appellant’s solicitors seeking information about the status of the court proceedings. He was told on 30 March 2010 that court orders had been made on 22 March 2010 with which he had not complied and that he needed to contact his solicitors. The appellant’s solicitors wrote to the respondent’s solicitors on 5 May 2010, noting their assumption that the firm did not hold instructions, and advising that all future communications would be directed to the respondent and his company. This in fact happened in May 2010 when correspondence was forwarded to the company. A process server attended the respondent’s office on 15 June 2010 and met a New Zealand male who said that no-one with the respondent’s name had worked there for a while. The process server suspected that the person was lying. In any event, this evidence shows that the respondent’s business premises were still occupied at this time.
On 27 July 2010 a letter directed to the respondent, an originating application which had been filed on 19 July 2010 and a supporting affidavit were served by leaving them at the business premises. The letter confirmed that the originating application was listed for hearing on Tuesday, 3 August 2010. There is no satisfactory evidence that these documents would not have been considered in the ordinary course of the business and brought to the attention of the respondent.
In the light of the history of the matter, the respondent must reasonably have anticipated that documents relating to the appellant’s claim for damages would continue to be posted to or served at 43 Ipswich Road, Woolloongabba.
The primary judge observed:
“Smart’s contention that he failed to appear to the proceeding because the documents served at 43 Ipswich Road did not come to [his] attention is a bare explanation. Whether it is a satisfactory explanation is an entirely different question.”21
His Honour went on to note the absence of any explanation as to why the address given for The Greatest Sales Company Pty Ltd and for another company as the respondent’s residential address was not in fact his address. The primary judge noted that the respondent had failed to meet a statutory obligation to ensure the accuracy of the ASIC records. His Honour continued:
“... Smart’s bald assertion that documents delivered to 43 Ipswich Road did not come to his attention does not at all sit with his deposition that during the period that TGSC operated from the Ipswich Road address, he attended there every two – three weeks. He has not explained the administrative processes he had in place at those premises, the relationship and degree of control of the personnel who were actually at the premises, and what processes he had in place for the receipt of correspondence delivered to him at that address. Nor has he explained how it is that the documents did not come to his attention when another of his companies was trading from the same address.”22
The respondent’s notice of contention asserts that the absence of an explanation of administrative processes at the premises, the relationship and degree of control of the personnel at the premises, and processes in place for correspondence delivered is of “no relevance”. The respondent’s submissions do not advance any reason as to why such matters have no relevance. Instead, the respondent submits that he deposed that the Ipswich Road premises were vacated at some time before 15 August 2010, that he had been accustomed to visit the premises every two to three weeks and, on the face of that evidence, it would “not be surprising that the purported service of 26 August did not come to his attention”.
This submission does not adequately meet the point at hand. The issue is not the simple explanation that 43 Ipswich Road had been vacated by the time the claim and statement of claim were served at that address pursuant to the order for substituted service. The issue is whether the explanation for not being aware of the institution of the proceedings and service of documents upon that address is satisfactory. As the primary judge observed, there is a difference between a bare explanation that documents served at an address did not come to the respondent’s attention and a satisfactory explanation for the failure to appear.23
By August 2010 the respondent must have anticipated that documents in relation to the appellant’s claim would be sent to or served upon 43 Ipswich Road, Woolloongabba. An application seeking an order for substituted service of a claim and statement of claim were served on that address on 27 July 2010. The respondent gave no evidence about what he did to ensure that such documents would be brought to his attention, and he did nothing to advise the appellant’s solicitors that the address was to be vacated and of an address to which the documents should be sent, or a place at which he might be served.
The findings made by the primary judge about the absence of explanation of the administrative processes which the respondent had in place are unexceptional. Those matters are relevant to whether the applicant’s explanation for not having received court documents is satisfactory.
The failure to explain why the respondent did not comply with the requirements of the Corporations Act was also relevant.
The primary judge was correct. The respondent did not explain how it was that documents did not come to his attention prior to the time the premises were vacated, or why he failed to provide a forwarding address or other means for documents to be brought to his attention.
The respondent did not provide a satisfactory explanation for the failure to appear. He has not established the essential matter raised in his notice of contention. The decision to set aside the judgment and the other orders should not be affirmed on the ground that, contrary to the primary judge’s finding, the respondent provided a satisfactory explanation for his failure to appear.
Delay in bringing the application
The primary judge found there had been no relevant delay in bringing the application to set aside the default judgment.
Was a prima facie defence on the merits disclosed?
The primary judge found that the respondent had “disclosed a prima facie defence on the merits, and has, relevantly, sworn to his denial of having assaulted the plaintiff.”24 No reasons were given for this precautionary finding.
The appellant contests this finding. He submits that the matters advanced by the respondent did not disclose a prima facie defence, and consisted of conclusionary assertions that he did not “unlawfully assault the plaintiff as alleged, or at all” and that any trespass to the person of the plaintiff was justified on the grounds of self-defence. The respondent submits that his affidavit and the draft defence exhibited to it disclosed a good defence.
The respondent’s affidavit did not descend to detail. Some matters of detail were canvassed in the draft defence. But the affidavit did not swear that these details were true and correct. Two paragraphs of the affidavit dealt with the respondent’s grounds of defence:
“48.I believe I have a good defence to the whole of the plaintiff’s claim on the following grounds:
(a)I did not unlawfully assault the plaintiff as alleged, or at all;
(b)any trespass to the person of the plaintiff (including any battery) was justified at law on the grounds of self defence;
(c)I did not owe the plaintiff a duty of care ‘to prevent [other persons] from perpetrating an assault upon the plaintiff’ as alleged;
(d)I therefore did not breach any duty of care to the plaintiff;
(e)I did not actively encourage other persons ‘to perpetrate the assaults’; and
(f)I was acquitted after trial of a criminal charge of unlawful assault against the plaintiff arising out of the same circumstances.
Contained in a bundle and marked Exhibit ‘PJS1’ at pages 40 - 48 is a draft defence, which more fully articulates my grounds of defence.”
Paragraph 48 asserts conclusions without reference to the evidence which might be said to support those conclusions. It does not describe in any detail what the respondent did or did not do. The terms “assault”, “trespass” and “self-defence” may be used in a colloquial or a legal sense. To say “I did not unlawfully assault the plaintiff” is ambiguous : was there no assault or was an admitted assault said to be justified? Sub-paragraph (b) suggests the latter, but neither sub-paragraph describes, even in general terms, the nature of the “assault” or “trespass”.
Issues of unlawfulness and self-defence are raised in paragraph 48 in a general and conclusionary fashion. Nothing is said about any assault by the appellant and no evidence is given to support the conclusion that the response to any alleged assault was not so excessive as to deprive the respondent of the defence of self-defence.
The fact of an acquittal in criminal proceedings may indicate that any defence to a civil proceeding has some merit, notwithstanding the different standards of proof and possibly different evidence in each proceeding. But the evidence which would be relied upon in defence of the civil proceeding is not disclosed by paragraph 48.
The exhibited draft defence contains detail of certain matters, as required by the rules of pleading for denials and non-admissions. However, those matters of detail are not sworn to in the affidavit. Paragraph 49 seems carefully worded. To say that a document “articulates my grounds of defence” is not the same as saying that its contents are true and correct.
Relevantly, the draft defence states in paragraph 8(f) that the respondent:
“(f)denies the allegation in subparagraph (m) that he perpetrated repeated, violent and sustained assaults upon the plaintiff, because:
(i)when the first defendant approached the plaintiff, the plaintiff threatened to assault the first defendant with a beer bottle;
(ii)the first defendant then ‘backhanded’ the plaintiff’s left hand which was holding the beer bottle, hitting the plaintiff in the left eye and knocking the plaintiff to the ground and the bottle out of his hand;
(iii)the first defendant did not strike the plaintiff again, with a golf club or otherwise;”
Paragraph 10(a) states that the respondent:
“denies that he did not have lawful justification for the application of physical violence as against the plaintiff because the first defendant struck the plaintiff in self defence and once only;”
The draft defence is deficient in not particularising whether the threat to assault was verbal or physical. But, unlike the affidavit, it does assert certain facts which, if accepted, could support a defence or make the respondent responsible for only injuries he inflicted, not those inflicted by others in his company. In that regard the draft defence says that “when the plaintiff fell to the ground, other persons present kicked the plaintiff briefly but ceased when the first defendant told them to stop.”
Rule 290 confers a discretion to set aside a judgment by default. The rule does not require an applicant to establish each of the three matters referred to in National Mutual Life Association of Australiasia Ltd v Oasis Developments Pty Ltd25. But these matters assume importance, and it has been said that the issue whether the applicant defendant has a prima facie case on the merits “is the most cogent” of the three matters.26
The third matter has been described in different ways. Lord Atkin in Evans v Bartlam27 referred to rules that guide the discretion and one of them was “an affidavit of merits, meaning that the applicant must produce to the Court evidence that he has a prima facie defence”. It has been said that the affidavit “must set out all the defences on which the defendant intends to rely and briefly set out the facts by which the defendant seeks to establish such defences”.28 The defendant must make more than a bare allegation: the allegation must be supported by “some reference to evidence to suggest that the defence is plausible and not just raised for the purpose of having default judgment set aside”.29 It is insufficient for an applicant:
“to allege that he has a defence upon the merits and swear to such a defence generally. He must go further and disclose what such merits are, and show to the court that his application is bona fide.”30
The requirement to refer to evidence, not generalities, does not necessarily require a lengthy affidavit of merits. As Prus-Butwilowicz v Moxey31 illustrates, the contents of a fulsome draft defence may be sworn to by a short affidavit. In that case it was not necessary for the applicant to swear “a long affidavit touching the same matters as appear in his long, detailed pleading”32. This case is different. The affidavit does not swear to the truth of the contents of the draft defence and itself swears to matters of defence very generally.
The affidavit and the draft pleading, in combination, might be described as an affidavit of merits. But the absence of:
(a)sworn evidence supporting assertions of a lawful excuse for an assault; or
(b)sworn verification that the contents of the draft defence are true and correct,
means that the affidavit has far less weight than sworn evidence in support of identified defences.
The primary judge may not have been correct in concluding that the respondent had “sworn to his denial of having assaulted the plaintiff”. The affidavit ambiguously swore to having not “unlawfully” assaulted the plaintiff, and the draft defence admitted to an assault. The affidavit alluded to defences without swearing to evidence in support of them. The defences sworn to in general terms may have amounted to prima facie defences, but the absence of sworn evidence in support of them means that the third matter has less cogency than in other cases in which a sworn, prima facie defence is the most influential factor.
Disposition of the application to set aside a regularly entered default judgment
The failure by the respondent to provide a satisfactory explanation for his failure to appear was influential in the primary judge’s discretionary judgment. The primary judge concluded that had it been necessary to decide the application on the basis that the judgment had been regularly entered, he would have refused that application. Accordingly, if the primary judge had adopted a different construction of r 116 then, in the light of his findings, he would have refused the respondent’s application to set aside the judgment and the orders of Fryberg J and of Clare DCJ.
The finding that the respondent had failed to provide a satisfactory explanation for the failure to appear should not be disturbed.
Although a defendant who has an apparently good ground of defence is rarely refused the opportunity of defending, the respondent has not demonstrated by sworn evidence the evidentiary basis for his broad allegations that he did not act unlawfully, acted in self-defence and was not responsible for assaults committed by others in his company. He has previewed these grounds of defence but not sworn evidence in support of them.
In circumstances in which defences have not been sufficiently sworn to and the respondent has failed to provide a satisfactory explanation for the failure to appear, the default judgment, which was regularly entered, should not be set aside in the exercise of the discretion under r 290.
Conclusion
The appeal should be allowed on the issue of the proper construction of rule 116(1). In any case, the judgment was regularly entered. The respondent fails in his notice of contention. The default judgment should not be set aside.
I propose the following orders:
Appeal allowed.
Set aside the orders made on 17 May 2013 in proceeding No 9104 of 2010.
The application filed 24 April 2013 in proceeding No 9104 of 2010 be dismissed.
The respondent pay the costs of and incidental to the application filed on 24 April 2013 in proceeding No 7490 of 2010, the costs of and incidental to the application filed 24 April 2013 in proceeding No 9104 of 2010 and the costs of and incidental to the appeal to be assessed on the standard basis.
Embrey v Smart [2013] QSC 241. ↩
[2002] QSC 404. ↩
UCPR r 5. ↩
State of NSW v Kable (2013) 298 ALR 144 at 152 [32], 158-195 [57] – [60]; [2013] HCA 26 at [32], [57] – [60] (“Kable”). ↩
UCPR r 32. ↩
UCPR r 8. ↩
UCPR r 105. ↩
Foxe v Brown (1984) 58 ALR 542 at 547; [1984] HCA 69. ↩
[2002] QSC 404 at [15]. ↩
Foxe v Brown (supra). ↩
See, for example, Laurie v Carroll (1958) 98 CLR 310; [1958] HCA 4. ↩
Embrey v Smart [2013] QSC 241 at [52]. ↩
[1982] 1 WLR 1082. ↩
Embrey
Smart [2014] QCA 75
(1984) 59 ALJR 186
(1958) 98 CLR 310
(1990) 169 CLR 307
(2013) 87 ALJR 737
(2013) 298 ALR 144
(Supra) at 150 [23]. ↩
(1990) 169 CLR 307 at 321-322; [1990] HCA 4. ↩
Kable at 152 [32], 158 [56]. ↩
Embrey v Smart [2013] QSC 241 at [85]. ↩
UCPR rr 754, 757. ↩
[1983] 2 Qd R 441 at 449-450. ↩
Embrey v Smart [2013] QSC 241 at [84]. ↩
Embrey v Smart [2013] QSC 241 at [77]. ↩
Ibid at [83]. ↩
Ibid at [84]. ↩
Embrey v Smart [2013] QSC 241 at [87]. ↩
Supra. ↩
Ibid cited in Cook v D A Manufacturing Co Pty Ltd [2004] QCA 52 at [19]. ↩
[1937] AC 473 at 480. ↩
Yankee Doodles Pty Ltd v Blemvale Pty Ltd [1999] QSC 134 at [13]. ↩
Ibid at [14]. ↩
Tunnecliffe v Besnard [1938] 55 WN NSW 58. ↩
[2002] QDC 166 at [11] – [16]. ↩
Ibid at [16]. ↩