The plaintiff, by Statement of Claim filed on 19 January 2021 in the District Court at Newcastle, claimed $30,000 in damages from the three defendants for publications made on 21 January 2020 in the form of statements to police concerning property damage claims. An Amended Statement of Claim, filed on 18 February 2021, was filed in the Sydney registry after these proceedings were transferred to the Defamation List.
On 18 March 2021, the first return date for case management in the List, Wilson SC DCJ made the following orders:
"NOTATIONS:
1. Mr Olsen appears for the Defendants but does not intend to continue acting for them after today;
2. The Plaintiff is the subject of criminal charges which are listed to obtain a hearing date on 10 April 2021 in the Toronto Local Court;
3. The Statement of Claim as served was defective, in that it was not sealed and did not refer to the case number;
4. The Statement of Claim was filed on 15 January 2021, within the limitation period;
5. There are AVO's preventing the Plaintiff from contacting the Defendants;
6. the Plaintiff seeks orders for substituted service in order to avoid breaching the AVO's;
7. The Plaintiff does not wish to advance these proceedings until the criminal proceedings arising out of events the subject of these proceedings are disposed of;
8. The Defendants are neighbours of the Plaintiff, and their addresses are known to him;
9. Mr Woods is also the plaintiff in unrelated defamation proceedings (2020/270800), which are listed in the Defamation List on 26 March 2021.
ORDERS:
1. the Plaintiff is granted leave to serve the Statement of Claim filed 15 January 2021 on the Defendants by registered post, such service to be effected within 7 days of today;
2. I list the Matter in the Defamation List on Thursday 24 June 2021 at 9:00am, by which time it is expected that the criminal proceedings in the Toronto Local Court will have been concluded."
It is clear from the above orders that the plaintiff sought a stay of this action pending the hearing of the proceedings before the Toronto Local Court, namely the hearing of the criminal charges laid by police against the plaintiff, which included the evidence of the three defendants. It is also clear that no order was made for the filing of any defence. The defendants had not yet been served with the statement of claim and the issue of whether a defence should be filed, or the pleadings challenged, would be a matter for determination on the next return date.
The defendants were served by registered post, and an affidavit by a solicitor to this effect was duly filed. Service in this fashion was necessary by reason of the bail conditions placed on the plaintiff, which included a requirement not to contact the defendants, as set out in the Orders above.
Notwithstanding the orders made by Wilson SC DCJ, and without any notification to the defendants (or to Mr Olsen, who had appeared on their behalf when the proceedings before Judge Wilson) beforehand, the plaintiff made an application to the registry of this court for default judgment on 3 May 2021. The plaintiff claimed $30,000 in damages plus filing fees of $703, service fees of $300 and solicitors' fees of $200, making a total of $1203. Judgment for $31,463.84 was entered on 05 May 2021 against all three defendants. Garnishee orders were issued against the defendants on 14 and 18 May 2021 to enforce the judgment.
When the registry discovered that default judgment was entered for an unliquidated claim and garnishee orders issued, these proceedings were restored to the Defamation List a week early, which is how these proceedings came to be before the court on 17 June 2021.
The hearing at Toronto Local Court has yet to conclude and the parties agree that, for the stay to continue, the proceedings must be adjourned again until 10 September 2021.
However, in the interim, the default judgment entered by the plaintiff against the defendants cannot stand. I set out my reasons for setting aside the default judgment pursuant to Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") r 36.15.
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The relevant principles of law
The first reason for setting aside the judgment is that default judgment is generally not available in defamation proceedings for the reasons explained by Hunt J in Altarama Ltd v Forsyth & Ors [1981] 1 NSWLR 188 and by Bongiorno J in French v Triple M Pty Ltd [2006] VSC 36. The mere fact that 28 days have expired since service of the Statement of Claim does not result in any obligation to file a defence unless an order has been made by the court for the filing of a defence, as defamation proceedings in New South Wales have been case-managed proceeded in a specialist list in the Supreme Court from 1979 onwards (and since 1999 in this court). The obligation to file a defence arises from a case management order, rather than by operation of the UCPR. That feature alone would warrant the setting aside of the judgment.
The second reason for setting aside the judgment obtained is that the claim is not one for a liquidated sum within the meaning of UCPR r 16.2. While the UCPR does not define the expression "debt or liquidated claim", any sum asserted to be liquidated must be shown to have been "agreed upon in some binding and conclusive fashion" (AE Consulting Pty Ltd v Online Valuations Pty Ltd [2012] NSWSC 1300 at [7], citing Alexander v Ajax Insurance Co Ltd [1956] VLR 436 at 422).
UCPR r 36.15 provides:
"36.15 General power to set aside judgment or order
(1) A judgment or order of the court in any proceedings may, on sufficient cause being shown, be set aside by order of the court if the judgment was given or entered, or the order was made, irregularly, illegally or against good faith.
(2) A judgment or order of the court in any proceedings may be set aside by order of the court if the parties to the proceedings consent."
The plaintiff cannot transmogrify his claim for unliquidated damages into a liquidated sum by simply putting a dollar value on it. This is not a calculation of a precise amount of any kind, but a general claim for damages for defamation.
The third reason judgment cannot be entered is that the plaintiff sought, and was granted, a stay of these proceedings, and did not ask the court to make any case management orders such as the filing of a defence. The orders made by Wilson SC DCJ clearly stayed the conduct of the defamation proceedings until after the hearing in the Toronto Local Court. That meant that neither party was obliged to take any steps in the proceedings other than the steps specifically provided for in the orders his Honour made on 18 March 2021.
A fourth reason, and one which would have applied even if default judgment had been available, is the factor of judicial discretion in relation to the setting aside of judgments which are "snapped on" without warning. No notice was given either to the defendants or to their legal representative of any intention to enter judgment. While UCPR r 16.3(1A) does not require the giving of notice of an application for default judgment unless the court otherwise orders, judges in New South Wales (Commonwealth Bank of Australia v Wales [2012] NSWSC 407; Josa Constructions Pty Ltd v Amarino Pty Ltd [2016] NSWDC 306) and other states and territories (Jender Pty Ltd v Flood Emergency Services Group Pty Ltd & Anor [2021] VSC 212; Microscience (International) Pty Ltd v Total Peripherals Pty Ltd [1998] VSC 50; Superior Food Group Pty Ltd v Sands Contracting Pty Ltd [2016] WASC 164) have made it clear that the practice of snapping on a default judgment without notice immediately upon the expiry of the period provided by the rules is to be strongly deprecated.
The proceedings in the Toronto Local Court will not be completed until September 2021. While Mr Woods indicated that he would now prefer for the defendants to be ordered to file their defences, he does not propose to take any further steps himself until the hearing is over. I see no reason to vary the orders made by Wilson SC DCJ and accordingly I have made orders for their continuation, which means that the stay in place effectively continues until further orders are made on 23 September 2021.
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Payment of the filing fee
One other issue arose in the course of the proceedings. One of the amounts claimed by Mr Woods in his application for default judgment was the filing fee for the statement of claim which is $703. However, the registry has provided copies of correspondence from the Registrar of the Newcastle District Court stating that Mr Woods' application for this fee to be waived was rejected, that a letter of demand was sent requesting payment of this sum, which was refused, and that the sum is due and payable.
Fresh copies of the correspondence have been sent to the plaintiff, and I have given him an extension of two months to pay this filing fee.
Payment of court fees is an integral part of the court process and, in circumstances where the Registrar sent a letter of demand on 25 February and again 28 April 2021, to the first of which the plaintiff responded with a flat refusal, the proper course is for the court to make an order for compliance.
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Order:
1. Set aside default judgment entered against defendants on 5 May 2021 and Garnishee Orders made on 14 and 18 May 2021, pursuant to UCPR r 36.15, by reason of this being an unliquidated claim.
2. Note the plaintiff has been provided with a copy of the correspondence from Registrar at Newcastle concerning the refusal of SOC fee waiver; I direct the plaintiff to pay the SOC fee by 19 August 2021.
3. Matter stood over to Defamation List Thursday 23 September 2021 for further directions at 9:00am, pending the Criminal matter listed for hearing in Toronto Local Court on 10 September 2021.
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DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 22 June 2021