Weng v NSW Demo & Exca Services Pty Ltd

The application before the court

1. The defendant seeks the following orders by Notice of Motion filed 14 November 2023: "Orders for vacation of assessment hearing 1. The Defendant seeks the following orders/directions be entered forthwith: a. The assessment hearing listed on 16 November 2023 is vacated; and b. The Defendant's Notice of Motion filed on 14 November 2023 to set aside default judgment (being prayers 2 through to 6 of this motion) is listed for directions before the Judicial Registrar on 17 November 2023; and/or c. In the alternative to prayers 1(a) and 1(b), a direction that this motion be made returnable before his Honour Judge Dicker before 16 November 2023, being the date for the listing of the assessment hearing. Orders for setting aside default judgment 2. Pursuant to Uniform Civil Procedure Rules 2005 (NSW) r 36.15(1), default judgment entered against the Defendant on 15 September 2023 is set aside for: a. irregularity and/or b. for being entered against good faith. 3. In the alternative to prayer 2, pursuant to Uniform Civil Procedure Rules 2005 (NSW) rr 36.16(2)(a) and 36.16(2)(b), default judgment entered against the Defendant on 15 September 2023 is set aside. 4. Grant leave to the Defendant to file, serve and rely on the draft Defence annexed to the affidavit of Mr Justin Drew sworn on 14 November 2023. 5. Matter listed for directions before the Judicial Registrar on a date to be fixed by the Court for timetabling orders. 6. Costs of this motion: a. on an indemnity basis; or b. on an ordinary basis."
2. The issues before the court are stated to be whether the default judgment should be set aside on one or more of the following grounds: 1. The default judgment ought to be set aside for irregularity. 2. The default judgment ought to be set aside as it was not entered in good faith. 3. If neither the first nor the second ground succeeds, the defendant relies on having demonstrated a bona fide defence, with an adequate explanation for the delay.
3. The plaintiffs oppose the application on the basis that the asserted irregularity is an obvious typographical error ("August" instead of "June") in relation to dates in an affidavit sworn for the obtaining of default judgment. Alternatively, the admissions as to liability in the proposed defence mean that the only matter in issue is quantum, not liability and, as the defendant will have a fair opportunity to be heard on this issue at any assessment hearing, the default judgment should not be set aside.

The defendant's claim of "defective and unreliable evidence"

1. The defendant relies on the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") rr 36.15 and 36.16, asserting irregularity due to typographical errors identified in paragraph 13 above. These errors were made by the plaintiffs' solicitor, Mr Patrick Pagin, in his affidavit evidencing service in support of the application for default judgment.
2. It is further asserted that the affidavit sworn by the first plaintiff is similarly defective, in that she did not pick up these typographical errors in Mr Pagin's affidavit. It is asserted that she failed to do so because she is Chinese and not sufficiently fluent in English to have read and understood either her own affidavit or her solicitor's affidavit.
3. As noted above, the typographical errors are the same, namely an error in the affidavit in giving wrong dates for attached documents. They are self-evidently erroneous because, as the attached documentation and contents of the other paragraphs of the affidavit make clear, the events in question occurred on 14 and 15 June, not on 14 and 15 August 2023. In fact, Mr Pagin's affidavit was sworn on 8 August 2023, a date before 14 and 15 August 2023, so the giving of dates for events which postdate the swearing of his affidavit underlines that these "August dates" are obviously wrong.
4. The text of Mr Pagin's affidavit (with the wrong dates highlighted) is as follows: "1. I am a solicitor employed by the firm of solicitors on the record and have carriage of this matter on behalf of the plaintiffs. 2. I am over the age of 16 years. 3. The defendant is a corporation with its registered office at 40 Pratten Street, Kemps Creek, NSW, 2178. Annexed and marked "A" is an ASIC extract of the defendant. An updated historical extract was obtained on 8 August 2023 and it is noted on the second page that there were no changes to the company information since 29 October 2019. On 14 August (should be June) 2023, a Statement of Claim was filed electronically. On 14 August (should be June) 2023, I requested that the reception staff at Longton Legal post the following documents: (a) Cover letter dated 14 June 2023 (b) Statement of Claim filed 14 June 2023; and (c) Standard Timetable. On 15 August (should be June) 2023, the above documents were sent via express registered post and received a tracking number ending in 0999. Annexed and marked "B" is a copy of the receipt showing postage was made on 15 June 2023. Annexed and marked "C" is a copy of the cover letter and envelope uploaded by reception to our legal practice management software. On 16 June 2023, delivery of those documents was effected. Annexed and marked "D" is a screenshot taken from the Australia Post website. ln addition to the above, on 31 July 2023, I emailed "info@ndes.com.au", which is the email address listed on a website that appears to be the defendant's, a copy of the following documents: (a) Cover letter dated 14 June 2023 (b) Statement of Claim filed 14 June 2023; and (c) Standard Timetable. Annexed and marked "E" is a copy of that email."
5. Examination of each of the documents attached to the affidavit reveal the correct dates on each of these documents.
6. It was open to the registry to refuse to make the orders sought if the meaning of the affidavit was insufficient to satisfy the registry staff that the steps in question had been carried out in a timely manner in June 2023 and the affidavit correctly reflected this. The registry accepted the affidavit and entered judgment.
7. As noted above, there are no typographical errors in the first plaintiff's affidavit. She correctly refers to all dates. Her error, as I understand it, is that she did not pick up and correct the typographical errors in her solicitor's affidavit.

The relevant principles of law

1. In Kendell v Carnegie (2006) 68 NSWLR 193; [2006] NSWCA 302 at [60], the Court of Appeal said: "There is not and could not, I would think, ever be an exhaustive judicial definition of what is against good faith; only very broad limits are set by proceeding by analogy from circumstances in which judicial remedies are based on good faith, unconscionability, or other concepts closely related to good faith. I would include the passage cited from Taylor v Johnson among the many conceivably available sources from which to proceed by analogy. "Against good faith" is an expression which requires the impeachment of the intention or behaviour of the person whose good faith is impugned."
2. Applications to set aside on the basis of irregularity pursuant to UCPR rr 36.15 and 36.16 have been made with increasing regularity in recent times: Choi v Secretary, Department of Communities and Justice (No 2) [2022] NSWCA 264 at [11]-[25]. UCPR r 36.16 is restricted to applications made within 14 days of the order and has no part to play here.
3. Mr Vuu submits that the mandatory language in UCPR rr 36.15 and 36.16 "demands that a party seeking default judgment do so with care as the exercise of (delegated) judicial power ex parte requires the court to be able to rely on the affidavits relied on in support of such applications, citing Arnold v Forsythe [2012] NSWCA 18 at [88] and Perpetual Trustees Australia Ltd v Heperu Pty Ltd (No 2) (2009) 78 NSWLR 190.
4. However, the approach taken to this rule by Sackville AJA is not that of a counsel of perfection. All that is required is an affidavit that "substantially" (at [88]) complies with the requirements. Failure to comply that would be substantial would be unacceptable conduct or omissions, such as not filing any affidavit at all, failing to cite the source of the information or some similar ground of substance, as his Honour goes on to note.
5. What is meant by "substantial"? Section 80(1) of the Interpretation Act 1987 (Cth) provides that if a form is prescribed by, or approved under, an act of statutory rule, substantial compliance is sufficient.
6. There are no provisions in the Civil Procedure Act 2005 (NSW) for a set form. UCPR r 16.3 merely requires the filing of an affidavit of service and an affidavit in support. The purpose of the affidavit of service is to attach all relevant documents evidencing service.
7. It is not in dispute that all of these documents were attached and all of them show the correct dates, and not the erroneous dates in August referred to in the highlighted portions of Mr Pagin's affidavit. Nor is it in dispute that in the first plaintiff's affidavit in support, she has correctly identified and dates all facts and matters. Her asserted error is that she refers to Mr Pagin's affidavit of service without referring to the erroneous dates in it, which the defendant invites me to find is due to her limited English.
8. The District Court registry is not slow in returning documents where an acceptable level of clarity is not reached. The registry accepted the documents and the defendant is effectively asking me to go behind the registry's decision to accept the documents and grant the orders sought.
9. The correct dates can readily be identified from the other dates in the affidavit and the annexures. I do not regard the first plaintiff's failure to pick up this error in her solicitor's affidavit as evidence of any irregular conduct on her part.
10. This is a defect of a trivial nature. It is not a basis for setting aside the registry orders. Typographical errors abound in court documents, judgments and court orders. This does not mean that those documents are invalid. In Turner v O'Bryan-Turner [2019] NSWSC 1340 at [85], Ward CJ in Eq stated: "Section 61(1) of the Civil Procedure Act authorises the court to give any direction "it thinks fit (whether or not inconsistent with the rules of court) for the speedy determination of the real issues between the parties to the proceedings" (see also s 62 of the Civil Procedure Act and r 2.1 of the UCPR). The overriding purpose of civil proceedings is further emphasised by the powers contained in s 14 of the Civil Procedure Act (the power to dispense with compliance with the rules in particular cases) and r 1.12 of the UCPR (the power to extend or abridge times provided by orders, judgments and rules). Ritchie's at [s 56.5] observes: All of these provisions echo the sentiment expressed in the frequently stated proposition that procedural rules are the servants, not the masters, of justice: Harding v Bourke (2000) 48 NSWLR 598; [2000] NSWCA 60 at [26] per Mason P. That proposition, and the generality that underlies it, permit courts both to dispense with the formal rule requirements, and to impose requirements different from the rules, where they are satisfied such a course is appropriate to the circumstances of the particular case."
11. I am satisfied that, read properly, Mr Pagin's affidavit is sufficient to prove service on the defendant of the documents in question. I note that the defendant does not challenge the fact of service on the dates in question; he merely points to the date errors as not satisfying the very high standard required by the court for documents sent to it.
12. For the above reasons, the judgment obtained by the plaintiffs should not be set aside under UCPR r 36.15. The provisions of UCPR r 36.16 do not apply as the application was brought outside the 14-day timeframe for that provision.
13. The second basis upon which the defendant sought to be let in to defend is that he has a bona fide defence to the claim (the plaintiffs accept that the explanations proffered by the defendant for delaying the filing of the defence are reasonable).

The explanation of the defendant and the adequacy of the defence

1. Mr Li submits that, individually and collectively, the proposed defence admits liability and only challenges quantum. He has helpfully set out a list, in his submissions, of the admissions made in the proposed defence ("defence") to the matters pleaded in the statement of claim ("SOC"): 1. The proposed defence (at [3]) admits, in answer to SOC [7], that the defendant entered the relevant land without the consent of the then tenants or plaintiffs. 2. The defence (at [4(b)(i)]) contains a partial admission that, having entered the land without that consent, the defendant then carried out work that damaged two external walls. 3. The defence (at [4(b)(ii)]) also contains a partial admission that, having so entered the land, the defendant damaged the rear door. 4. The defence (at [5]) admits that the defendant did not have the plaintiffs' consent to do the damage admitted in [4(b)(i)] and [4(b)(ii)]. 5. The defence (at [6]), when read with paragraph [4(b)]) is a partial admission to SOC [10] and [11], namely that the defendant caused damage to the plaintiffs' reversionary interest in the land. The defendant does not otherwise deny SOC [10] and [11] and conformably with UCPR r 14.26(1)(a) this amounts to an admission. 6. The defence (at [17]) admits that the defendant owes the plaintiffs a duty to exercise reasonable care to ensure that it did not enter onto the land. 7. The defence (at [19]) admits that the defendant breached its duty of care to the plaintiffs. 8. The defence (at [20]) contains a bare denial to SOC [30]. That is, the defendant entered a bare denial to the claim that the defendant's breach of its duty of care caused the plaintiffs to suffer loss and damage, notwithstanding that the defendant admitted entering the land and damaged, on its own admissions, two external walls and the rear door, in circumstances where it does not appear to be in dispute that asbestos problems arose. 9. The defence (at [38]) states that whilst the defendant "has accepted some liability for the damage, the Defendant has through his proposed Defence sought to fairly dispute the balance of the damage by reference to contemporaneous evidence" including the matters raised in paragraph [31]. 10. Some of the matters pleaded appear to be contrary to provisions in the Home Building Act 1989 (NSW), as is pointed out at paragraph 12 of Mr Li's submissions. It is not necessary for me to determine these issues for the purpose of this application.
2. Essentially the issues raised in the defence all go to quantum, not to liability. The defendant does not plead it had a lawful reason or license to enter the relevant land and has acknowledged that it has caused damage. Mr Vuu did not say to the contrary. The sole question, on this pleading, is the nature and extent of the damage, which is an issue for determination at the assessment hearing.
3. Mr Li added to his submissions that, if I were satisfied that default judgment should be set aside on the basis of irregularity, the admissions in the defence would entitle him to bring an application for summary judgment on the basis that no issues as to liability arose.
4. Mr Vuu's response to this submission was to indicate that his client did not in fact intend to file the draft defence pleaded but to redraft the defence entirely, so as to include a cross-claim against a third-party who is, it would appear, the plaintiffs' son. The effect of this submission is to cast into doubt precisely what the nature and extent of the defendant's defence is.
5. In practical terms, given the extraordinary circumstances of the defendant's wrongful entry onto the plaintiffs' property due to its own error, it is hard to imagine what defence would justify such conduct and how it could be pleaded. Beyond referring to delays in negotiations between the defendant and the plaintiffs' son, Mr Vuu gave no indication of the basis of liability in relation to any new party. It was unclear what other parties would be joined or why, but there is no suggestion that the plaintiffs or any other party were responsible for the dreadful error which led the defendant to start to demolish the wrong house.
6. Judgment cannot be set aside unless there is a defence on the merits, and that defence must be shown to the court, preferably in the form of the pleading the defendant proposes to file. In National Australia Bank v Priestley (No 3) [2012] NSWSC 1171, Schmidt J said (at [9]) that "some evidence must be led" as opposed to assertions as to a belief and (at [11] - [16]) that relevant facts such as what was said or done must be set out. It is not sufficient merely to proffer a pleading, especially where that pleading is then acknowledged not to be the one which would be relied upon at the hearing. The onus lies upon the defendant and that onus has not been discharged.
7. Accordingly, if I had been prepared to set aside the judgment on the basis of irregularity, I would not have been satisfied that there was a bona fide defence on the merits.

Costs

1. The plaintiffs seek orders for indemnity costs on a number of bases including the following: 1. The applications for relief under UCPR rr 36.15 and 36.16 were hopeless. 2. Whether or not there was a bona fide defence on the merits, it was not to the defendant's credit that he proposed to redraft this document and was considering a cross-claim against their son. 3. The application to set aside was not filed until the last minute which meant that the assessment hearing set down by Dicker DCJ on 16 November 2023 could not proceed (this was the second date for the hearing of the assessment).
2. Under s 98 of the Civil Procedure Act 2005 and UCPR r 42.2, the Court has discretion to order an unsuccessful party to pay the successful party's costs of proceedings, or an application within proceedings, on an indemnity basis. The discretion may be exercised where the circumstances are sufficiently "special" or "unusual" to warrant departing from the usual order for costs on the ordinary basis, or there has been "some relevant delinquency" on the part of the unsuccessful party in the conduct of the proceeding: Oshlack v Richmond River Council (1998) 193 CLR 72 at [44] (Gaudron and Gummow JJ).
3. The parties have asked me to reserve costs so that they can serve written submissions on costs which will refer, inter alia, to offers made. I have granted leave to the parties to bring in Short Minutes of Order for a timetable for these submissions, following which I will hand down judgment on costs.

ORDERS 1. Defendant's Notice of Motion dismissed. 2. Liberty to the parties to bring in Short Minutes of Order for an exchange of written submissions for the costs of the Notice of Motion to be determined by Gibson DCJ "on the papers". 3. Proceedings stood over before the List Judge on 8 March 2024 for allocation of a hearing date for the assessment of damages. 4. Exhibits retained until further order.

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