On 11 November 2022 the plaintiff commenced proceedings in this Court seeking to recover money from the defendant which the plaintiff said was lent in the period commencing from February of 2019. An amended statement of claim was filed on 5 April 2023 and the defendant filed a defence in July of that year to the amended statement of claim. A further amended statement of claim was filed by the plaintiff on 4 March of this year.
The plaintiff brings a notice of motion seeking a number of orders, some of which are dependent or consequential on others and some of which are cast in the alternative. The effect of the orders would be that judgment would be entered for the plaintiff in a sum which is part, but not all, of the original claim brought.
I should indicate here, and this will be reflected in a note to the orders that I will ultimately make, that counsel for the plaintiff has indicated that the plaintiff does not forego the balance of the sum originally claimed - the original loan sum advanced and some interest - but proceeds today on the debt represented by loan sums advanced subsequent to the original loan and which are subject to those refined agreements and more readily established without any complication. Counsel for the plaintiff draws my attention to r 13.3 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") and tells me, and I accept for the present purposes, that the entry of default judgment in a lesser sum does not result in law in a situation where the plaintiff would be locked out from subsequently seeking to proceed to attempt to recover the larger sum. That seems a sensible approach to the case in all of the circumstances.
To probably oversimply the position, the plaintiff seeks an order striking out any defence that has been filed by the defendant and default judgment in its favour, or in the alternative it would seek summary judgment pursuant to r 13.1 of the UCPR. The grounds upon which the first orders are sought, or orders to a similar effect are sought, are that there has been a lack of due despatch on the part of the defendant, or if reliance were ultimately placed on an application for summary judgment, on the argument that any defence he seeks to run is so patently untenable that the Court should exercise its jurisdiction to deal with the case summarily and enter judgment in favour of the plaintiff.
The defendant has not appeared today despite what I accept is the proper service of a number of relevant documents and him being notified in a timely fashion and quite recently - I think yesterday - that the plaintiff would seek to proceed on its notice of motion before the Duty Judge today. Review of the past records of proceedings and the evidence filed by the plaintiff in support of today's motion establishes that the defendant did not appear before the Registrar on 8 October of 2024 or on 29 October 2024 when orders for service were made and when the matter was listed today for hearing.
As far as I can tell, the defendant's last appearance was before the Registrar on 23 July 2024. He did file a defence, as I said, to the amended statement of claim on 29 July 2023, and there have been some filings of affidavits earlier this year. He did not file a defence to the original statement of claim which was pleaded. The cause of action was then pleaded in the barest of terms:
"1. First loan dates back to February 2019 as per document provided
2. Recognition of debt has been acknowledged by Defendant and no response to legal demand"
The amended statement of claim filed on 5 April 2023 and further amended statement of claim filed on 4 March 2024 go into further detail of the debt, and how it (on the plaintiff's case) increased over time. I have been provided with copies today as part of a Court Book. There is also, in the affidavit material filed in advance, much more detail of the loan agreements which, as I was told by counsel and which is fairly patent in any event, were prepared by the parties themselves.
There was also a "proposed" defence to the further amended statement of claim which has an affidavit verifying the allegations or defence contained therein dated 14 February 2024. That defence is only known to me because the plaintiff, in accordance with its duty of candour in proceeding in the absence of the defendant (that is to say ex parte) today, has provided me with a copy as part of the material upon which it relies.
The defence to the amended statement of claim filed back on 19 July 2023 says that the defendant was represented by an Alexander Ronayne, but there is a notice of ceasing to act for the defendant filed by Mr Ronayne on or around 16 July 2024. That document indicates that the last known address of the defendant was 6 Lloyd Street, Sans Souci.
The present application is brought by an amended notice of motion filed on 24 October 2024. I have earlier set out in general terms the orders it seeks but will now set out those orders in full:
"1. An order under UCPR r 12.7(2) striking out the Defendant's Defence to the Amended Statement of Claim filed 19 July 2023.
2. An order against the Defendant for:
a. default judgment for $1,054,250.00 under UCPR r 16.3; or
b. summary judgment for $1,054,250.00 under UCPR r 13.1.
3. In the alternative to order 2, an order against the Defendant for:
a. default judgment for the separate amounts of $450,000.00, $38,000.00, $80,000.00, $165,000.00, $300,000.00 and $21,250.00 under UCPR r 16.3; or
b. summary judgment for the separate amounts of $450,000.00, $38,000.00, $80,000.00, $165,000.00, $300,000.00 and $21,250.00 under UCPR r 13.1.
4. Interest until judgment pursuant to s 100 Civil Procedure Act 2005.
5. Costs.
6. Such further or other orders as the Court thinks fit"
A perusal of that document and a comparison made to the original sum claimed bears out what I have been told by counsel today, namely that only part of the claim is pursued or subject to the current application. The reason for that essentially is the complication of proving the original loan agreement and the fact that the disposal of the matter today, if it were by summary judgment, would require some more complicated proofs whereas the amount sought, which is in orders 2(a) and 2(b), is the sum total of those particular loan amounts advanced which are quantified in orders 3(a) and 3(b).
The motion is supported by an affidavit of Rana Saab, the plaintiff's solicitor, and I will return to that in due course. There is also an affidavit of service affirmed by Ella Meyer who is a paralegal in the employ of the plaintiff's solicitor. Ms Meyer says she served the amended notice of motion, Ms Saab's affidavit and a record of the orders made by the Registrar on 8 October 2024 on the defendant by emailing the documents to him on 14 October 2024 and then sending them by express post on 15 October 2024 to the defendant's Sans Souci address as notified in the notice ceasing to act.
When the matter was called this morning the defendant did not appear when called by his name and by a number of other names by which he is apparently known. He was called three times outside of the courtroom.
A further affidavit of Ms Saab was read which showed the final attempts to have the defendant respond to his legal predicament by sending the material again in the last day or so.
Based on all I have said to this point I decided quite early on that it was appropriate to proceed, as the plaintiff submitted I should, to hear the notice of motion in the defendant's absence. The supporting affidavit of Ms Saab establishes the history of the defendant's non-compliance with court orders:
In October 2023 the plaintiff filed a motion, together with supporting affidavits, seeking summary judgment in respect of six loan transactions made by the plaintiff to the defendant.
On 15 February 2024 the defendant's solicitors served a sworn affidavit opposing the motion and provided a proposed defence to the amended statement of claim.
The motion for summary judgment was discontinued and the plaintiff filed a further amended statement of claim in accordance with court orders.
The defendant was ordered to file and serve a defence to the further amended statement of claim by 27 March 2024, which was extended to 19 April 2024. The defendant failed to do so, and to this date, the defendant has not filed its amended defence.
Between April and June this year the plaintiff's lawyers made numerous attempts to contact the defendant's solicitors via email, enquiring as to the status of the amended defence and detailing the defendant's non-compliance with court orders. No response was received.
The defendant's legal representatives filed a notice of ceasing to act on 16 July 2024.
The defendant was last seen at the directions hearing before the Registrar on 23 July 2024 when a "guillotine" order was made and the consequences of breaching such an order were clearly explained to the defendant.
In support of that history, Ms Saab's affidavit annexes a copy of the orders made by the court in the proceedings to date, extracted from the NSW Online Registry, as well as a copy of the proposed amended defence to the further amended statement of claim (which, as I have already said, was not filed) and evidence of the various email correspondence sent from the plaintiff's lawyers to the defendant's legal representatives.
I have also taken into account the most recent affidavit of Ms Saab along with the defendant's failure to appear today when called and at earlier mentions, directions hearings and the like conducted before the Registrar. I have already made passing reference to two of those non-appearances.
Based on all that evidence and history, I am satisfied that the defendant has not conducted his defence with due despatch and has failed to engage with this litigation for many months and has been tardy throughout in responding and filing documents. As I have said, it seems that no defence was ever filed to the original statement of claim. The defence to the amended statement of claim was filed but has not been prosecuted with any degree of despatch and the solicitor who prepared that defence is the one who filed the notice of ceasing to act. It appears, based only on what I have been told by the plaintiff's legal team, in accordance with its duty of candour, that there was a defence prepared to the further amended statement of claim and indeed that was verified by affidavit. However, despite what I understand to be repeated requests for him to do so by the lawyers appearing for the plaintiff, the defence has never been actually filed with the Court.
For what it is worth, the most likely inference to be drawn from the defendant's lack of engagement in the proceedings and tardiness throughout is that he owes the money, as asserted by the plaintiff, and has no real defence.
In any event, I am satisfied on the evidence that the defendant has not conducted the defence with due despatch, and I am satisfied that there are no countervailing features of the case which would lead me to the view that I ought not to exercise the discretion in UCPR r 12.7(2) to strike out the defence that was filed to the amended statement of claim.
That leads to the situation where there is no defence before the Court. Now, as I said, I know that there was a verified defence prepared to the further amended statement of claim but that defence has never been filed. If it were necessary, I would refuse leave to file that defence at this stage, however no such leave has ever been sought.
That determination, that is that the defence is to be struck out, leads to what I take to be the primary position taken by the plaintiff on this application which is that the defendant is "in default" in accordance with the meaning in r 16.2:
16.2 Definition of "in default" (cf SCR Part 17, rule 2; DCR Part 13, rule 1; LCR Part 11, rule 1)
(1) A defendant is in default for the purposes of this Part--
(a) if the defendant fails to file a defence within the time limited by rule 14.3(1) or within such further time as the court allows, or
(b) if the defendant fails to file any affidavit verifying his or her defence in accordance with any requirement of these rules, or
(c) if, the defendant having duly filed a defence, the court orders the defence to be struck out.
(2) Despite subrule (1), a defendant is not in default if the defendant--
(a) has made a payment towards a liquidated claim under rule 6.17, or
(b) has filed an acknowledgment of claim under rule 20.34, or
(c) has filed a defence after the time limited by these rules or allowed by the court, but before a default judgment is given against the defendant.
I am satisfied on the material relied on by the plaintiff, which I have really touched upon in quite peremptory terms without any disrespect to those who prepared it but simply in the interest of consuming as little time as necessary in circumstances where I find the plaintiff's position to be clearly established, that the defendant is in default in accordance with the rules and therefore that default judgment ought to be entered.
Having reached those conclusions, that is (i) the defence should be struck out, (ii) the defendant is in default, and (iii) default judgment should be entered in favour of the plaintiff, it is unnecessary to consider the alternative path to a similar result - namely, to consider whether to deal with the matter pursuant to r 13.1 by entering summary judgment. Rule 13.1 presents a slightly higher hurdle in that it requires the plaintiff to establish that the defence is untenable, manifestly groundless, fanciful, and the other pejorative words used in any number of authorities on summary disposal: see, for example, General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129; [1964] HCA 69, Brimson v Rocla Concrete Pipes Ltd [1982] 2 NSWLR 937 at 942, Pannizutti v Trask (1987) 10 NSWLR 531 at 536, Rajski v Powell (1987) 11 NSWLR 522 at 524, Cosmos E-C Commerce Pty Ltd v Bidwell & Associates Pty Ltd [2005] NSWCA 81 at [37]-[38], Spencer v Commonwealth (2010) 241 CLR 118; [2010] HCA 28 at [24], Westpac Banking Corporation v Lahood [2011] NSWSC 1057 at [15] and Commonwealth Bank of Australia v ZYX Learning Centres Ltd [2014] NSWSC 1676 at [52]; (2014) 103 ACSR 476. However, it is unnecessary to reach any conclusion as to that, although on what I have seen the likelihood is that I may have reached that level of satisfaction had I been called upon to do so.
Nor is it relevant to embark on the undertaking of determining whether, in accordance with r 13.1(1)(a), there is evidence of the facts upon which the claim is based, although again on a brief perusal of the material in the Court Book and notwithstanding what might be considered the somewhat incoherent nature of the loan agreements relied upon, I think I would have done so. But again, I am not making any final rulings as to that because I just do not need to go to consideration of the matters relevant to summary judgment.
[2]
Orders
For those reasons I make the following orders:
1. Order under Uniform Civil Procedure Rules 2005 (NSW) r 12.7(2) that the defendant's defence to the amended statement of claim filed on 19 July 2023 be struck out.
2. Order against the defendant for default judgment under r 16.3 in the sum of $1,054,250.
3. Interest is payable on that sum from 10 December 2021 until the date of judgment, that is 14 November 2024.
4. The defendant is to pay the plaintiff's costs of the proceedings.
5. Note that the plaintiff does not forego the balance of the sum originally claimed.
6. Order that the matter is listed before the Registrar on Thursday, 21 November 2024 at 9am for mention and consideration of steps to be taken for the remainder of the sum claimed.
[3]
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Decision last updated: 20 November 2024
Parties
Applicant/Plaintiff:
Lazarus Gremos
Respondent/Defendant:
Haralabos Triandafyllou aka Harry Triandas, Harry Triandafyllou, Harry Trianda