Ferguson v Dallow

WHITE J: 1 The applicant has applied for the entry of judgment by default. 2 In the underlying proceedings, the applicant claims both injunctive relief and damages. Although he pleads two causes of action, misleading or deceptive conduct in contravention of s 18 of the Australian Consumer Law (ACL) contained in Sch 2 to the Competition and Consumer Act (2010) (Cth) and defamation, his claim appears to be, in substance, a claim for defamation. 3 There are two respondents to the proceedings, but the second respondent has not been served. The applicant has recently filed a notice of discontinuance of his claim against that respondent, having foreshadowed at a previous hearing that he may not pursue relief against it. 4 The Court has issued three injunctions restraining the first respondent from publishing or continuing to publish the material about which the applicant complains: interim injunctions on 2 and 9 December 2020 and an interlocutory injunction on 17 December 2020. 5 The applicant filed his Statement of Claim on 7 December 2020, and an Amended Statement of Claim on 14 December 2020. At the case management hearing on 21 December 2020, the Court ordered that the defence by the first respondent be filed and served by 4 pm on 27 January 2021 with any reply by the applicant to be filed and served by 10 February 2021. It adjourned the matter for a further case management hearing today. 6 The first respondent was represented by a solicitor in the period between 16 December 2020 and 19 January 2021. That solicitor filed a notice of ceasing to act on 19 January 2021. The first respondent has been unrepresented ever since but, at the time of this hearing, has not filed a notice of address for service. 7 More critically for present purposes, the first respondent has not filed any defence to the applicant's Amended Statement of Claim, let alone a defence by 27 January 2021. One consequence of that is that the factual allegations in the Amended Statement of Claim are deemed, pursuant to r 16.07(2) of the Federal Court Rules (2011) (Cth) (the FCR), to have been admitted - see Sony Corporation v Costaneo [2012] FCA 153 at [15] and Sampson (Trustee) v Taboada [2016] FCA 926 at [11]. The only document the first respondent has filed is an affidavit of his own made on 1 February 2021, which purported to annex a number of documents (the majority of which appear to be media articles with some connection to the applicant). It was not suggested that that affidavit was relevant to the issues with which I am now dealing. 8 By an interlocutory application filed on 1 February 2021 (that is, four days after the expiration of the period fixed by the Court for the filing of the defence), the applicant applied for default judgment. In particular, he seeks orders making permanent the existing interlocutory injunction, an order for damages to be assessed and other orders. 9 The applicant makes that application pursuant to r 5.23(2) of the FCR which provides: (2) If a respondent is in default, an applicant may apply to the Court for: (a) an order that a step in the proceeding be taken within a specified time; or (b) if the claim against the respondent is for a debt or liquidated damages - an order giving judgment against the respondent for: (i) the debt or liquidated damages; and (ii) if appropriate, interest and costs in a sum fixed by the Court or to be taxed; or (c) if the proceeding was started by an originating application supported by a statement of claim … or if the Court has ordered that the proceeding continue on pleadings - an order giving judgment against the respondent for the relief claimed in the statement of claim … to which the Court is satisfied that the applicant is entitled; or (d) an order giving judgment against the respondent for damages to be assessed, or any other order; or (e) an order mentioned in paragraph (b), (c) or (d) to take effect if the respondent does not take a step ordered by the Court in the proceeding in the time specified in the order. Note 1 The Court may make any order that the Court considers appropriate in the interests of justice - see rule 1.32. Note 2 An order or judgment under this Division may be set aside or varied. 10 In relation to the claim that the interlocutory injunction be made permanent, the applicant invokes subr (2)(c). In relation to the claim for damages to be assessed, the applicant invokes subr (2)(d). 11 Rule 5.22 of the FCR identifies when a party is in default for the purposes of r 5.23. That includes the circumstance in which a party fails to comply with an order of the Court (subr (b)); and a failure by a party to defend the proceeding with due diligence (subr (d)). 12 The failure by the first respondent to file a defence within the time fixed by the Court on 21 December 2020 means that he is in default within the meaning of r 5.22. 13 Over 10 weeks have now elapsed since the applicant first filed his Statement of Claim. With the exception of the affidavit of 1 February 2021, to which I referred earlier, and the documents concerning the address for service filed by the first respondent's former solicitor, the first respondent has not filed any other documents in the proceedings. He did appear at the hearing on 9 December 2020, but not at the hearing on 21 December 2020. I draw no adverse inference against him by reason of his non-attendance at the second of these hearings because the first respondent was then represented by a solicitor and may well have expected that solicitor to attend. 14 The entry of a default judgment is a serious matter. It gives at least partial success to an applicant in the proceedings, without the applicant having to prove its entitlement to that relief by evidence: Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2006] FCA 1427, (2006) 235 ALR 665 at [48]; Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2007] FCAFC 146, (2007) 161 FCR 513 at [42]. The authorities indicate that the exercise of the discretionary power to enter a judgment by default should be exercised with caution: Chamberlain Group Inc v Giant Alarm System Co Ltd [2019] FCA 1606 at [13]. 15 Rule 5.23(2)(c) of the FCR empowers the Court to enter the default judgment for the relief claimed in the statement of claim, to which the Court is satisfied that the applicant is entitled. 16 The authorities indicate that the Court is not required to receive evidence for the purposes of satisfying itself about that entitlement. Instead, it may have regard to the face of the statement of claim and the adequacy of the matters pleaded there. 17 On my review of the Amended Statement of Claim, I have not identified any shortcoming, which would make it inappropriate for the applicant to be given the default judgment, which he seeks. That is to say, on the face of the Amended Statement of Claim, and bearing in mind the deemed admissions of the first respondent, the applicant appears to be entitled to the substantive relief which he now seeks. 18 A number of matters bear on the exercise of the discretion to enter the default judgment in this case. First, as I have noted, a reasonably long period has now elapsed since the Statement of Claim was filed without any defence having been filed. 19 Secondly, there is the fact that the Court fixed the time within which a defence must be filed, and it has not been filed. 20 Thirdly, there is the fact that the first respondent has had legal representation during at least part of that period. 21 Fourthly, there is the fact that the first respondent has not sought an extension of time in which to file a defence. Instead, he indicated today that he does not oppose the entry of the default judgment, and maintained that position even after the consequences of the entry of a default judgment were explained to him. 22 For all those reasons, I am satisfied that it is appropriate to accede to [1] and [2] in the interlocutory application filed on 1 February 2021, that is to say, to enter judgment by default. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice White.