Plaintiff v First Defendant

1 The plaintiff wishes to enter judgment in default of appearance against the defendants pursuant to rr 21.01 and 21.03(1)(a) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (Rules) in respect of what it characterises as a claim for the recovery of a debt.[1] The claim against the defendants is made under s 17K(6)(a) of the Dangerous Goods Act 1985 (Vic) (Act) and the total sum alleged to be owing is $35,981,112.22 (Total Sum).

2 In other circumstances the administrative step of seeking to enter judgment in default of appearance would be taken by the plaintiff through the Prothonotary in accordance with the Rules without first making an application to the Court for leave to take that step. However, this proceeding is managed by a Commercial List Judge so r 2.07(1) of ch II of the Rules of the Supreme Court[2] is engaged. Paragraph 16.5 of Commercial Court Practice Note SC CC 1 reinforces the position by providing that judgment may not be entered administratively in a proceeding within a Commercial List unless the List Judge gives leave to do so. When introduced, each of these requirements was essentially based upon case management, cost, and efficiency considerations, including preventing what is colloquially known as 'snapping on' judgment in default. However, the requirements do not otherwise alter the essentially administrative process for entering judgment where leave is granted to pursue that course, or change the character of the act of the Prothonotary in entering judgment in default.

3 It follows that before the plaintiff can seek to enter judgment in default of appearance pursuant to rr 21.01 and 21.03 of the Rules it is necessary for it to obtain an order from the Court granting it leave to take that step, which is what in substance the plaintiff seeks in this application.

4 The application was not made by summons, although written notice of the application was given to the defendants even though no appearances have been filed. If and to the extent a summons was required by the Rules to be filed in relation to the application, in my view, cost, efficiency, and the other relevant considerations under the Civil Procedure Act 2010 (Vic) make it appropriate to dispense with that requirement.

5 If leave is granted, it will be open to the plaintiff to utilise the procedures under rr 21.01 and 21.03(1)(a) of the Rules to seek to enter judgment in default of appearance against the defendants for the Total Sum through the Prothonotary in the usual way.[3]

6 The plaintiff relied upon its written submission dated 23 April 2021, a supplementary submission dated 16 July 2021, and what it described as an 'aide memoire' dated 3 August 2021[4] - all of which were supplemented by oral submissions at the hearing.

7 For the reasons that follow it is appropriate to grant the plaintiff leave to enter judgment in default of appearance against the defendants for the Total Sum.[5]

8 The proceeding was commenced by writ in June 2019 and has been on foot for some time. Freezing orders, and ancillary orders requiring information to be provided in relation to the defendants' assets, were made in mid-2019. Neither of the defendants filed an appearance or complied with the orders requiring them to provide information regarding their assets at that time or subsequently. This was referred to in the orders of Elliott J made on 24 July 2019 extending the freezing orders, where his Honour also recorded that service on the defendants of the writ and other documents had been proved. Since that time the proceeding has had a somewhat complex and delayed procedural history, although most of the detail is not relevant for present purposes.

9 Having regard to the content of the affidavits of service referred to in the 'Other Matters' section of the order of Elliott J made 24 July 2019,[6] the affidavit of Mr Patrick Considine dated 17 March 2021, and the affidavit of Ms Donna Kelsey dated 18 June 2019, I am also satisfied that the writ was served on the defendants as required. The affidavits of service of Ms Lynette Parkinson dated 21 May 2020 and Mr Gary Oxley dated 25 June 2020, together with Mr Considine's affidavit of 17 March 2021, establish that the Amended Generally Endorsed (sic) Writ dated 8 May 2020 was served on each of the defendants. Mr Considine's affidavit of 17 March 2021 and Mr Oxley's affidavit of 16 December 2020 satisfy me that service of the Further Amended Generally Endorsed (sic) Writ dated 30 November 2020 was properly effected on the defendants. In being so satisfied I have had regard to the terms and operation of r 6.04(a) of the Rules, s 109X of the Corporations Act 2001 (Cth), and the first defendant's ongoing role as sole director and secretary of the second defendant. This ongoing role was also confirmed by an ASIC company extract obtained from the ASIC database at 5:28pm on the day before the hearing, and tendered by the plaintiff.

10 When this application first came before the Court for hearing on 29 April 2021,[7] no statement of claim had been filed and the plaintiff proposed to proceed with an application based upon the Further Amended Generally Endorsed (sic) Writ. After exchanges with the Court regarding the claim, the terms of s 17K of the Act, the terms and operation of ord 21 of the Rules, and some apparent limitations with the terms of the further amended general indorsement, the plaintiff elected not to pursue the application at that time and sought an adjournment to further consider its position. The plaintiff subsequently filed (and served) a statement of claim and then an amended statement of claim dated 10 June 2021,[8] with the latter being the current pleading in which the Total Sum is now claimed and upon which the plaintiff moves.

11 Although no appearances have been filed to date, affidavits of service of Mr Gary Oxley dated 28 April 2021, 23 June 2021, and 2 August 2021, and an affidavit of service of Ms Lynette Parkinson dated 26 April 2021, establish that the defendants have been served with various other documents in the proceeding. Relevantly this includes personal service in June and July 2021 of: the amended statement of claim dated 10 June 2021; written notice of this application and its hearing date; written notice of the plaintiff's intention to seek judgment in default of appearance against each of the defendants; further affidavit material of the inspector under the Act (Mr Eather), and the plaintiff's supplementary written submissions.

12 The Court was informed that no response regarding any of this material or other relevant communication had been received from either of the defendants and that neither the plaintiff nor its solicitors have at any time received a notice of appearance from either of the defendants. The absence of any appearances being filed by the defendants is also consistent with the search of the court file carried out by my chambers immediately before the hearing of this application. A search by the Prothonotary will also take place in accordance with the requirements of r 21.01(3)(a) of the Rules.

13 It is well established that where there has been no appearance filed, or where there is no defence to a statement of claim,[9] each of the allegations in the statement of claim is taken to be admitted, with the defendants being treated as though they had not defended the claim at all.[10] As the Court of Appeal observed in Yang v Finder Earth Pty Ltd,[11] where for any reason the contingency of judgment in default is to be anticipated in respect of what is said to be a claim against a defendant for a debt, '... the pleader must take care to ensure that any claim for the recovery of a debt is clearly pleaded as such. As in every case, care must be taken to ensure that all of the material facts necessary to establish the cause(s) of action are pleaded'. In the context of the operation of r 21.03 of the Rules, the same observation may also be made in relation to claims for the recovery of damages or the recovery of property.

14 That said, and as was referred to by the Court of Appeal,[12] the courts do not take an unduly technical or restrictive approach to pleadings. I also refer more generally to the observations regarding pleadings set out in Business Service Brokers Pty Ltd v Optus Mobile Pty Ltd & Ors.[13]

15 The plaintiff's claim is brought under s 17K of the Act. Briefly, by what was described by counsel for the plaintiff as its 'gateway provision',[14] this section applies where an 'inspector' believes on reasonable grounds that danger to any person or property exists, or may arise, from any dangerous goods that are: damaged or spilled; in a container that is damaged; or in a container that is dislodged from a vehicle, ship or boat.

16 Where an inspector believes on reasonable grounds that there is an immediate danger to any person or property, s 17K(4) of the Act permits the inspector to take any action that he or she considers necessary for the destruction, rendering harmless, disposal or removal of the dangerous goods or container, or the destruction or rendering harmless of anything contaminated by the spilled dangerous goods (Inspector Action).

17 Relevantly, s 17K(6)(a) of the Act provides that if an inspector takes any action under sub-s 17K(4) or (5)[15] the 'Authority' - which in this case is alleged to be the plaintiff - 'may recover the costs of that action' from any occupier of a 'place' where the dangerous goods, container or thing was or were present, provided the 'place' is not a vehicle, ship or boat.[16]

18 As is apparent from the terms of the amended statement of claim, the claim for the Total Sum relates to Inspector Action alleged to have been taken pursuant to s 17K(4) of the Act in relation to dangerous goods and containers at various 'places', each being identified properties said to be occupied by the defendants. In respect of the dangerous goods and containers at each place, the material facts pleaded address in a logical, well-structured and coherent way each of the relevant requirements in ss 17K(1), (4), and (6)(a) of the Act, including (but not limited to): the existence of the relevant beliefs; the Inspector Action taken; the defendants' status as occupiers; and the costs incurred and entitled to be recovered by the plaintiff as the Authority pursuant to s 17K(6) in each case. So much is evident when regard is had to the terms of the statutory provisions referred to and they are considered against the facts pleaded in relation to the dangerous goods and containers at each place, the detail of which need not be traversed or set out in these reasons. It may also be noted that the partner at the plaintiff's solicitors responsible for the proceeding signed and filed a proper basis certificate in respect of the allegations in the amended statement of claim on 14 July 2021.

19 The Total Sum of $35,981,112.22 is said to be made up of the combined total of each separate sum alleged to be owing and recoverable pursuant to s 17K(6)(a) of the Act in respect of the incurred costs of the Inspector Action taken at each of the properties. The pleaded amounts are:

(a) $8,307,002.19 for 2-4 Devon Court, Epping;

(b) $4,384,176.97 for 31 Yale Drive, Epping;

(c) $5,373,205.71 for 2/88 Capital Link Drive, Campbellfield;

(d) $2,830,131.57 for 100 Capital Link Drive, Campbellfield;

(e) $9,361,688.56 for 24-26 Freeman Street, Campbellfield; and

(f) $5,724,907.21 for 26 Malcolm Place, Campbellfield -

20 Upon a review of the amended statement of claim in a manner consistent with the approach earlier referred to, and taking into account the observations of the Court of Appeal in Yang v Finder Earth Pty Ltd, it is apparent that the claim for the Total Sum is pleaded as a claim being made for the recovery of a combined total of the debts said to be owing to the plaintiff by reason of the operation of s 17K(6)(a) of the Act.

21 It is also the case that the claim in the amended statement of claim is not in any way framed as a claim for damages so as to engage r 21.03(b) of the Rules. This is consistent with the terms of s 17K(6)(a) of the Act, which does not speak of an entitlement to recover damages, damage or loss. It provides an entitlement to recover from an occupier (as defined in the Act) a sum of money, being an amount equal to the costs of the Inspector Action, albeit a sum that may be the subject of dispute and require determination by the Court should there be such a dispute. Of course, disputes about the quantum of a debt are common. Further, where, as here, the defendants have not filed appearances, the Separate Sums, and the Total Sum pleaded as the amount owing by the defendants in respect of the costs of the Inspector Action, are taken to be admitted.

22 In this debt claim characterisation context reference was made by the plaintiff to the plaintiff's express right to recover the 'costs of that [Inspector Action]' under s 17K(6)(a) of the Act and the material facts pleaded regarding the specific amount - and the total - of those costs. Further support was also said to be gained from the plaintiff's references to, among other things, the observations of McInerney J in The City Mutual Life Assurance Society Ltd v Giannarelli[17] and judicial observations in other contexts,[18] including to the effect that, where an Act of Parliament creates a duty or obligation to pay money, an action will lie for its recovery as a sum certain.[19]

23 As recently observed by the Court of Appeal in Quin v Vlahos,[20] and noting that the term 'debt' is not defined in the Rules, the term 'debt' falls to be construed in accordance with ordinary principles of statutory construction and, as in that case, '[a] useful starting point is the ordinary legal meaning of debt, being a sum of money which is now payable or will become payable in future by reason of a present obligation'.[21]

24 In the present circumstances it is not necessary or desirable to explore at any length on this unopposed application what might be the outer boundaries of the expression 'debt' in ord 21 of the Rules. It is plain that s 17K(6)(a) of the Act entitles the Authority to 'recover the costs of that [Inspector] action' from any occupier of the relevant 'place'. That being so, and having regard to: the terms of the amended statement of claim; the language, and apparent purpose and object of the provision; the starting point referred to by the Court of Appeal; and the observations in the cases earlier referred to;[22] it can be concluded, at least on a prima facie basis, that the plaintiff's claim for the Total Sum[23] can be characterised as a claim for the recovery of a debt within the meaning of that expression as used in ord 21 of the Rules. Given the limited nature of the application before the Court, the ministerial nature of the entry of judgment by the Prothonotary, the absence of full argument or submissions from a contradictor or any other person on the issue, and the opportunity in appropriate circumstances for a defendant to apply to seek to set aside a judgment entered in default of appearance,[24] it is in my view neither necessary nor desirable to reason beyond this prima facie conclusion on this application.

25 Having regard to the above, being satisfied that the allegations in the amended statement of claim plead sufficient material facts to make out the cause of action relied upon, and noting that the allegations in the pleading are taken to be admitted - including those relating to the Separate Sums and the Total Sum[25] - it is appropriate to grant the plaintiff leave to enter judgment in default of appearance against the defendants for the Total Sum[26] pursuant to rr 21.01 and 21.03(1)(a) of the Rules. If the plaintiff acts on that leave then the process for entering judgment through the Prothonotary in accordance with the requirements of the Rules, including rr 21.01(3)(a), 21.01(3)(b), and 21.03(2), will be followed or addressed by the plaintiff in the usual way.

26 For completeness I add that it has not been necessary to have regard to the affidavits of the inspector, Mr Eather, which addressed the factual matters the subject of the amended statement of claim. The pleaded allegations are taken to be admitted, and the entering of judgment is an action by the Prothonotary of the character earlier referred to. Had it been necessary or desirable to take that material into account, the affidavits were, in general terms, supportive of the plaintiff's claim, although it is preferable that these matters not be further explored or addressed at this point.

27 Subject to addressing the precise terms of the orders with counsel for the plaintiff, I propose to make an order in favour of the plaintiff to the following effect:

The plaintiff has leave to seek to enter judgment in default of appearance against the defendants pursuant to rr 21.01 and 21.03(1)(a) of the Rules for:

(a) the amount claimed in paragraph B of the amended statement of claim's prayer for relief, less 1 cent, namely $35,981,112.21; and

(b) costs in accordance with r 21.03(2) of the Rules.[27]

[1] It was not contended that the claim was a claim to recover damages, or that it was a claim of the character referred to in r 21.04, and it is not necessary to consider rr 21.03(b) or 21.04 of the Rules further. Although the terms of a proposed order received from the plaintiff shortly before the hearing included a draft declaration, counsel for the plaintiff responsibly confirmed that it was not seeking such an order - which would not have been made on this application in any event.

[2] Entitled Supreme Court (Miscellaneous Civil Proceedings) Rules 2018 (Vic).

[3] As observed by McInerney J in The City Mutual Life Assurance Society Ltd v Giannarelli [1977] VicRp 53; [1977] VR 463, 469, '... the entry of judgment in default of appearance by the Prothonotary is an act of "ministerial character" ... and cannot be regarded as being, or as being equivalent to, a judge in the exercise of powers committed to him [or her] in relation to the trial.' See also Bass Coast Council v Hollole [2017] VSC 803, [1] (Mukhtar AsJ).

[4] And the affidavits referred to in them.

[5] Less 1 cent to take account of a small arithmetical error that the Court raised with, and was acknowledged by, the plaintiff during the hearing.

[6] Being the affidavits of Ms Jade Ryan affirmed 7 June 2019, 12 June 2019, 8 July 2019, and 23 July 2019 and Ms Debra Coombs affirmed 12 June 2019.

[7] Of which notice had been given to the defendants, although they did not appear or seek to be heard.

[9] Including where a defence has been struck out and there is no grant of leave to re-plead.

[10] See, for example, the decision of the Court of Appeal in Yang v Finder Earth Pty Ltd [2019] VSCA 22, [24] (Maxwell P, Tate and Emerton JJA). See also Kirk v PBP Accounting Solutions Pty Ltd [2015] VSC 173, [20] (Macaulay J).

[11] [2019] VSCA 22, [7] (Maxwell P, Tate and Emerton JJA).

[12] When referring to aspects of the reasons at first instance and Thomson v STX Pan Ocean Co Ltd [2012] FCAFC 15; Yang v Finder Earth Pty Ltd [2019] VSCA 22, [22] (Maxwell P, Tate and Emerton JJA).

[13] [2021] VSC 310, [16]-[22] (Connock J).

[15] This subsection is engaged where a direction has been given by an inspector under s 17K(2) of the Act to the owner or past or present possessors of dangerous goods prior to taking Inspector Action. The subsection is not substantively relevant for present purposes as the Inspector Action alleged to have been undertaken in this case is alleged to have been taken under s 17K(4) of the Act and not s 17K(5).

[16] Although not substantively relevant for present purposes, where the dangerous goods, container or thing was or were present on a vehicle, ship or boat, s 17K(6)(b) of the Act allows the costs of the Inspector Action to be recovered from the owner of the vehicle, ship or boat.

[17] [1977] VicRp 53; [1977] VR 463,467-8. In other varying contexts see also Spain v The Union Steamship Company of New Zealand Ltd [1923] HCA 21; [1923] 32 CLR 138, 142, 158; Alexander v Ajax Insurance Co Ltd [1956] VicLawRp 5; [1956] VLR 436, 440-445; Yang v Finder Earth Pty Ltd [2019] VSCA 22, (Maxwell P, Tate and Emerton JJA); Quin v Vlahos [2021] VSCA 205, [250].

[18] Mallinson v Scottish Australian Investment Co Ltd [1920] HCA 51; (1920) 28 CLR 66, 70; Victorian WorkCover Authority v Esso Australia Ltd [2001] HCA 53 [16]; Pape v Commissioner of Taxation [2009] HCA 23; (2009) 257 ALR 1 [38] (French CJ), [140] (Gummow, Crennan and Bell JJ).

[19] The authorities referred to included: Mallinson v Scottish Australian Investment Co Ltd [1920] HCA 51; (1920) 28 CLR 66, 70; Victorian WorkCover Authority v Esso Australia Ltd [2001] HCA 53 [16], in turn referring to Shepherd v Hills [1855] EngR 377; (1855) 11 Exch 55; Booth v Trail [1883] UKLawRpKQB 153; (1883) 12 QBD 8 at 10; Pape v Commissioner of Taxation [2006] HCA 21; (2009) 227 ALR 1 [38].

[20] [2021] VSCA 205, [250] (Kyrou, Kennedy and Walker JJA). This was in the context of 'debt' in s 588G of the Corporations Act 2001 (Cth).

[21] Ibid, [250] and the cases there cited in note 153.

[22] See paragraph 21 above and the cases referred to in the notes to that paragraph.

[23] Or if considered as separate claims, for each of the Separate Sums.

[25] And noting that service has been effected and no appearances have been filed to date.

[26] Less the 1 cent discrepancy that appears to have been a minor non-material arithmetical error on the part of those who drafted the amended statement of claim.

[27] Counsel for the plaintiff informed the Court that, for pragmatic reasons, the plaintiff was not proposing to seek to enter default judgment in respect of statutory interest. Consequently, it was not necessary to hear submissions regarding the operation of ss 58 or 60 of the Supreme Court Act 1986 (Vic), including submissions regarding the position of the Prothonotary. As to that position, see, for example, LexisNexis, Civil Procedure Victoria (online at 4 August 2021) [670.20] and the cases there cited.