Plaintiff v Defendants

2 In a statement of claim filed with a writ in this Court on 26 August 2005 Mr French alleges that in a broadcast on each of these radio stations at about 8.10 am on 5 July 2004 he was defamed. He says that the defamation occurred in a programme known as "The Cage" which consisted of a discussion between three named people, Timbo (sic), Bridget and James Brayshaw. The statement of claim alleges that words broadcast in the course of that discussion gave rise to imputations that he was a drug cheat who had knowingly taken performance enhancing steroids, that he had informed on his team mates and was accordingly "un-Australian" and that he was a "dirty, stinking, dobbing cyclist". He claims damages including aggravated and exemplary damages.

3 The writ was served on the date upon which it was issued in accordance with the procedure authorised by the Corporations Act 2001 (C'th).[1] The method of service was by hand delivery to the registered office of each of the companies at Level 14, 400 Collins Street Melbourne. Thus, in order to obviate the risk of judgment being entered in default of appearance, each of the three defendants needed to file an appearance before the end of 5 September 2005. No such appearances were filed.

4 On 6 September 2005 judgment in default of appearance for damages to be assessed and costs was entered against each of the defendants by the Prothonotary of this Court on the application of the plaintiff's solicitors. The defendants now apply to have these judgments set aside pursuant to RSC r.21.07. They do so either because the judgments were entered irregularly and should be set aside ex debito justitiae or because discretionary considerations require their being set aside.

5 The defendants' applications must be acceded to, but, having regard to the questions raised, particularly by the argument as to irregularity, it is appropriate that some attention be paid to the principles which should be applied in setting aside judgments entered in the circumstances in which these default judgments were entered.

6 The evidence before the Court as to the entry of judgment against the defendants is contained in two affidavits of Adrian Francis Kennedy, an articled clerk of the firm of Russell Kennedy, the solicitors for the plaintiff, sworn 3 and 4 November 2005 respectively, and in notations by the Prothonotary's staff on documents now on the court file. Objections were taken to some inadmissible material in Mr Kennedy's affidavits, which objections were upheld so that the facts surrounding the obtaining of these judgments must be determined without reference to that material. In the event the facts emerge relatively clearly from the admissible parts of Mr Kennedy's affidavits.

7 For a judgment to be entered in default of appearance RSC r 21.01(3) requires that the plaintiff file a notice to the Prothonotary requesting him to search for an appearance by the defendant. The plaintiff must also file an affidavit proving service of the writ on the defendant and provide a draft judgment to be settled by the Prothonotary and authenticated if judgment is to be entered.

8 Mr Kennedy says that about 9.30 am on 6 September he took three documents to the Prothonotary's office - a request to the Prothonotary to search for an appearance, an affidavit of service of the writ and a draft judgment in the required form. He said that he handed all three documents over the counter to a member of the Prothonotary's staff. That staff member checked the documents and then made a physical search for an appearance. The staff member told Mr Kennedy an appearance could not be located. Assistance from another staff member did not produce any different result.

9 Upon this search being concluded, according to Mr Kennedy, one of the staff members wrote an appropriate amount for costs on the draft judgment and then stamped all three documents.

10 The Prothonotary's stamp used by the staff member involved contains an automatic clock which prints the date and time a document is stamped. This device exists, presumably, to enable easy compliance by the Prothonotary with RSC r.28.03 which requires him to endorse the date and time of filing on every document filed. In this case the interlocutory judgment on which the assessed costs had been written by a member of the Prothonotary's staff was stamped with a time of 9.41 am on 6 September 2005 whereas the request to search for an appearance was stamped 9.42 am. This suggests, says Mr Wheelahan SC for the defendants, that RSC r.21.01 (3) was not complied with in that judgment was entered against the defendants before the notice requesting a search for an appearance had been filed. RSC r.28.01 defines filing with respect to a court document as "filing it in the office of the Prothonotary . . .".

11 In this case, argues Mr Wheelehan, the time stamps make it clear that the judgment was entered (filed) before the request to the Prothonotary requesting a search for appearance was filed. Thus, so the argument goes, RSC r.21.01(3) has not been complied with, making the entry of judgment irregular and entitling the defendants to have it set aside.

12 That a judgment by default, to be valid, must strictly comply with the requirements of due process cannot be denied. After all it is an extraordinary procedure which enables a person to obtain a judgment from the Court in the absence of the person affected by the judgment. Mr Wheelehan referred to Hamp-Adams v Hall.[2]

13 From Mr Kennedy's evidence it can be concluded that in this case he proffered the three documents to the staff member at the Prothonotary's office at or about the same time; a not unexpected or unusual action in the circumstances. If any of those documents had been found to be defective the Prothonotary's officer could have rejected it pursuant to RSC r.27.06(2) and required its withdrawal, correction and resubmission at a later time before accepting it for filing. In this case it can be inferred that all of the documents were found to have been appropriate so that the Prothonotary's officer undertook the first step in the process of the entry of judgment by searching for an appearance pursuant to the request which had been handed to him and which he had accepted. Such acceptance by the Prothonotary's officer of that document constituted the filing of the document as required by RSC r.21.01(3). That this is so can be inferred from the fact that the Prothonotary's officer acted upon it. It needed compliance with no further rubric or procedure by the plaintiff's solicitor for it to be filed. Its tender by Mr Kennedy and acceptance by the Prothonotary's officer constituted filing in the context of the procedure being undertaken. To define filing thus does no violence to a proper interpretation of RSC r. 28.01.

14 Of course, at this point, the Prothonotary's officer might have complied immediately with RSC r.28.03 and endorsed the time and date of filing upon it. The fact that he postponed the performance of this administrative act until he had completed other acts does not alter the fact that the plaintiff's solicitors had filed the request to search for an appearance before the search was made and before the default judgment was settled and authenticated as required by RSC r.60.02 (1).

15 Mr Wheelahan's argument that the entry of judgment was irregular depends upon an acceptance that the discrepancy between the time of filing the request to search for an appearance and the default judgment as shown by the time stamps conclusively determines the sequence in which these events occurred. It does not. The uncontested evidence is to the contrary. Nothing in the rules gives the Prothonotary's time stamp any evidentiary value beyond that which might be derived from the application of the presumption of regularity. In this case that presumption has been displaced by the evidence as to what actually occurred.

16 Judgment in default of appearance in favour of the plaintiff was regularly entered. The defendants have no entitlement to have it set aside ex debito justitiae.

17 RSC r 21.07 permits the Court in the exercise of a discretion to set aside a judgment entered by default. Ordinary considerations as to the exercise of judicial discretions apply - principally whether it is in the interests of justice that such a judgment be allowed to stand. It is usual to require compliance by an applicant for such relief to meet the criteria set out in cases such as Rosing v Ben Shemesh.[3]

18 There are in this case a number of reasons why this judgment should be set aside on discretionary grounds. First, the plaintiff's claim is for libel. Since Fox's Libel Act of 1792 the question of libel or no libel has been a decision committed to the tribunal of fact (historically a jury). The decision requires the application of a community standard with respect to the words used so as to assess whether the plaintiff has been brought into "hatred, ridicule and contempt" as the old formulation was expressed. This is clearly a question of fact. It would be very difficult to argue except, perhaps, in the clearest case, that a denial that a plaintiff was libelled could not possibly succeed. In such a clear case, in the absence of any other possible arguable defence, there might be some justification for permitting a default judgment to stand but this case is certainly not one such.

19 Secondly, the defendants have foreshadowed a number of defences they wish to raise if they are successful on this application. They claim the plaintiff's pleaded imputations do not arise from the discussion relied or that if they do arise they are not defamatory of the plaintiff. They wish to plead alternative imputations in which they say the words sued upon meant that the plaintiff was a drug cheat who had injected substances and that he had "dobbed" on other cyclists in an interview broadcast on commercial television. They wish to seek to justify these imputations.[4] They also wish to plead fair comment and to raise various matters in mitigation of damages. Of particular importance, they wish to raise a limitation defence insofar as the plaintiff seeks to litigate a cause of action which arose in New South Wales. This defence would appear, on its face, to be unanswerable. Indeed, Mr Wilson QC, who appeared for the plaintiff, conceded that even if he was successful on the application to set aside judgment, he would not be able to hold so much of the default judgment as related to that cause of action. It may be that this concession is enough to dispose of the defendants' application in their favour, but having regard to the matters which are referred to above there is no need for any separate examination of that question.

20 In Roberts v David Syme and Co Ltd[5] Murray J acknowledged that defamation cases may fall into a category of their own so far as the setting aside of default judgments is concerned. His Honour thought that such a case would require the very strongest of circumstances to warrant a refusal to set aside the judgment. I respectfully agree with his Honour's conclusions.

21 In Altarama Ltd v Forsyth[6] Hunt J said in a similar context:

"Particularly in defamation litigation, a plaintiff can rarely if ever hold a judgment by default where the issue of defamation itself remains for the jury to determine. This is because it is a rare case in which the matter complained of is of such a nature that a jury's finding that it is not defamatory would be set aside as perverse; Australian Newspaper Co Ltd v Bennett [1894] AC 284 at pp 287, 288; Lockhart v Harrison (1928) 139 Lt 521 at P 523; and see Capital & Counties Bank Ltd v George Henty and Sons (1882) 7 App Cas 741 at p 771; Slatyer v Daily Telegraph Newspaper Co Ltd [1908] HCA 22; (1908) 6 CLR 1 at p 6; Roberts v John Fairfax & Sons Ltd (Supreme Court of Victoria, Murray J, 26 November 1975)."

22 Much time was spent on the hearing of this application in analysing the steps taken (or not taken) by various parties before and after the writ was served. However, it is clear from the material before the Court that the plaintiff's solicitors knew that the defendants had retained solicitors at the time the writ was issued. They had corresponded with those solicitors prior to filing it. Mr Wilson argued forcefully that the conduct of the defendants and their solicitors which led to no appearance being entered meant that they should, in effect, take the blame for the predicament created by their procedural failure, even to the extent that the defendants be not permitted to defend the action. However, he could point to no particular prejudice to his client's rights beyond his now having to conduct this defamation suit in the ordinary way.

23 In the circumstances of this case, the entry of a default judgment at the earliest possible opportunity without warning against parties known to the plaintiff's solicitor to be represented constituted a precipitate and unwarranted, if nonetheless legal, attempt to advance his client's case by taking advantage of what any reasonable and experienced solicitor should have realised was an oversight or perhaps several oversights by the defendants and their legal advisors. It would be contrary to justice for this Court to allow this tactic to be successful by refusing to set aside the judgment entered by default. Litigation is not a steeple chase nor even a bike race where a fall can determine the outcome. As the High Court made clear in Queensland v J L Holdings Pty Ltd "... the ultimate aim of a Court is the attainment of justice..."[7]

24 Subject to hearing counsel as to form I propose the following orders:-

1. That judgment entered on 6 September 2005 for the plaintiff for damages to be assessed be wholly set aside;

2. That the defendants file and serve a defence to the plaintiff's statement of claim by 20 February 2006;

3. That the plaintiffs file and serve any reply to the defendants' defence within 14 days of service of that defence upon his solicitors;

4. That the proceeding be listed for directions in the Major Torts list when appropriate, the date of such listing to be agreed between the parties, or in default of agreement, as the plaintiff determines.

25 The defendants also seek an order that so much of the plaintiff's statement of claim as relates to the New South Wales cause of action be struck out. The application, which presupposes a successful limitations defence, is inappropriate. Limitation defences must be pleaded. The fact that a plaintiff is relying on an apparently statute barred cause of action does not entitle a defendant to have a statement of claim struck out.

(Some discussion ensued as to paragraph 24 of these reasons)

26 My attention has been drawn by Mr Wheelahan to the fact that paragraph 24 of the published reasons do not acknowledge that the application by the defendants to strike out that part of the statement of claim which pleaded a New South Wales cause of action was not, in fact, argued and accordingly, although paragraph 24 states a non-contentious conclusion it is appropriate that the defendants' application with respect to that part of the statement of claim as relates to the New South Wales cause of action should be generally stood over.

27 I shall hear the parties further on the issue of costs.

28 This is an application consequent upon orders which I will make setting aside a judgment entered by default. The application for costs by the defendants is that the plaintiff pay the defendant's costs to be taxed on an indemnity basis. The plaintiff seeks his costs in the ordinary course; that course being that a default judgment has been set aside which was regularly entered. In the course of my reasons I have referred to the correspondence between solicitors and I do not propose to refer to it further except in one respect.

29 That correspondence was polemic in nature, particularly that emanating from the plaintiff's solicitor. It canvassed various contentions of fact, some of which were disputed but some of which appear to have been indisputable. One of those, which appears indisputable, is that the judgment was entered in circumstances where the defendants, as public broadcasters, had not had in place any reasonable system for determining that a writ had been served upon them and for taking appropriate steps to deal with that situation.

30 A second indisputable fact which emerges is that the defendants offered to have the default judgment set aside on 13 September 2005 and to pay costs at that point, which offer was not accepted, although this fact in the defendants' favour is to some extent mitigated by the fact that they did not put forward any factual material concerning the plaintiff's claim in any of their letters which could have established a right to have the judgment set aside on discretionary grounds.

31 Those matters are all relevant to the exercise of the discretion as to costs as is the fact that the defendants were not successful on their principal argument, that is that the judgment was entered irregularly. Mr Wilson says that his client should get costs as that is the ordinary rule. Mr Wheelahan seeks a reversal of that situation. In the circumstances justice will be done in this case if there is no order as to costs.

(1) That the judgment entered on 6 September 2005 for the plaintiff, for damages to be assessed, be wholly set aside.

(2) That the defendants file and serve a notice of appearance and a defence to the plaintiff's statement of claim by 24 February 2006.

(3) That the plaintiff file and serve any reply to the defendants' defence within 14 days of service of that defence upon its solicitors.

(4) That the proceeding be referred to the Major Torts List for a further directions hearing on 17 March 2006.

I certify that this and the 8 preceding pages are a true copy of the reasons for Judgment of Bongiorno J of the Supreme Court of Victoria delivered on 13 February 2006.

DATED this twenty-second day of February 2006.

[1] Section 109 X (1) (a).

[2] [1911] 2 KB 942 per Vaughan Williams LJ at 944. See also Sargent v Veneris [1995] unreported Supreme Court of Victoria BC 9507179 per Beach J.

[3] [1960] VicRp 28; [1960] V.R 173

[4] Hore-Lacy v David Syme (2000) 1 V.R. 267

[5] Unreported, Supreme Court Victoria 26 November 1975.

[6] [1981] 1 NSWLR 188

[7] [1997] HCA 1; (1997) 189 CLR 146 at 154 per Dawson, Gaudron and McHugh JJ.