YYW Financial Pty Ltd v Tarrawarra Yarra Valley Holding Pty Ltd & Ors

"(1) Where a party fails to comply with an order to give particulars of any pleading ... the Court may order -

(a) ...;

(b) if the party is a defendant, that the defendant's defence, if any, be struck out.

(2) A defendant whose defence is struck out in accordance with paragraph (1)(b) shall, for the purpose of Rule 21.02(1), be taken to be a defendant who, being required to serve a defence, does not do so within the time limited for that purpose."

1. The principles and authorities relevant to the application of r 24.02 are well known. In Lenijamar Pty Ltd v AGC (Advances) Limited [1990] FCA 520; (1990) 27 FCR 388, Wilcox and Gummow JJ said (at page 395-6):

"It is to be noted that the power given by this rule is conditioned on one circumstance only: the failure of a party to comply with an order of the Court directing that party to take a step in the proceeding. There is no requirement of intentional default or contumelious conduct, although the attitude of the applicant to the default and the Court's judgment as to whether or not the applicant genuinely wishes the matter to go to trial within a reasonable period will usually be important factors in weighing the proper exercise of the discretion conferred by the rule. There is no requirement of "inordinate and inexcusable delay" on the part of the applicant or the applicant's lawyers, although any such delay is likely to be a significant matter. There is no requirement of prejudice to the respondent, although the existence of prejudice is also likely to be significant. And it must be remembered that, in almost every case, delay adversely affects the quality of the trial and is an additional burden upon the parties."

1. These observations were applied in the Full Court of the Federal Court in Professional Administration Service Centres Pty Ltd v Commissioner of Taxation [2012] FCAFC 180; (2012) 295 ALR 52, where, "under the umbrella" of the "overriding consideration" of the question of injustice, the following non-exhaustive list of relevant considerations was set out (at pages 62-63):

(ii) the duration of the default and whether it is continuing;

(iii) the circumstances in which the orders, in respect of which default has occurred, were made including whether the orders made accorded with the practice of the Court in making orders of that kind;

(iv) the circumstances which occurred between the time of making the orders and the order for the dismissal of the proceeding, including whether any attempt was made by the defaulting party to amend or set aside the orders to accommodate or deal with these intervening circumstances;

(v) whether the continuing default is occasioning unnecessary delay, expense or other prejudice or unacceptable burden on the respondent;

(vi) the attitude of the applicant to the default and the Court's judgment as to whether or not the applicant genuinely wishes the matter to go to trial within a reasonable period;

(vii) the stage that the proceeding has reached - whether they have only recently been commenced; whether it has been commenced for some time but not advanced due, in whole or in part, to the default; or whether the proceeding is in an advanced state ready or nearly ready for hearing;

(viii) the likely disruption to hearing dates or, if not fixed, to setting the matter down for hearing at an early date;

(ix) the consequences to the applicant of dismissing the proceeding."

1. This list of considerations was approved by Cavanough J in Mainstream Construction (Aust) Pty Ltd v Carr Electrical Pty Ltd [2014] VSC 317 in allowing an appeal from an Associate Judge dismissing proceedings for non-compliance with procedural orders. Those are the considerations that I should take into account in determining this application.
2. I have before me an affidavit in support of the application sworn by Mr Aaron Xia, solicitor for the plaintiff, on 25 February 2025. He has set out the history of the proceeding and the history of dealings between the parties in respect of this request for further and better particulars. It is apparent that despite the defendants, through their solicitors, having accepted that the request for further and better particulars must be answered, and having advised that they were in the process, through their solicitors and/or counsel, of doing so, no such answers have been provided. This is in the face of multiple orders having been made requiring them to do so, including, as I am informed, the order on 17 January 2025, which was made by consent.
3. I note that the proceeding is at a fairly early stage; that is, pleadings are not yet closed. It is my view that, as submitted by the plaintiff, they are not in a position to file a reply to the second and fourth defendants' defence because that defence is inadequately particularised. The consequence is that the proceeding has been delayed from the time that their request for particulars was served on 26 August 2024 to today. This has had the consequence of stalling the proceedings for a period of eight months, which is clearly unacceptable.
4. I note that the nature of the default involved is one of a seemingly, and without the benefit of any proper explanation from the second and fourth defendants, intentional or at least reckless refusal to comply with the orders. I note that that refusal or failure to comply is continuing. I note also that the circumstances in which the orders were made were in accordance with the ordinary practice of this Court, in that where allegations of the nature that were made in the second and fourth defendants' defence required proper particularisation in order for the issue to be properly joined with a reply, the consequences are that the relevant issues cannot be properly articulated for trial.
5. I do note that the second and fourth defendants' solicitors came off the record some time ago. I also note that communication has been had with a new firm of solicitors, Macpherson & Kelley, who I understand have on occasions signed-off on consent orders purporting to act on behalf of the second and fourth defendants. Macpherson & Kelley have not formally come on the record as acting for the second and fourth defendants. However, I am prepared to assume that to the extent that they have purported to communicate with the plaintiff's solicitors in this fashion, they did hold instructions to do so. However, the plaintiff as a matter of caution, and noting that Macpherson Kelley were not formally on the record as acting for the second and fourth defendants, served those defendants with the materials in respect of this application by email to the last email address notified by the solicitors who came off the record as being an appropriate email address. The consequence is that I am satisfied that the second and fourth defendants have had adequate notice of the hearing today but have elected not to attend.
6. This is a further circumstance that leads me to conclude that those defendants simply do not intend to comply with the Court orders to answer the request for further particulars.
7. For those reasons, I am satisfied that their continuing default is occasioning unnecessary delay and expense and prejudice to the plaintiff.
8. I can only assume that the second and fourth defendants' attitude to the default is one of indifference, and I am also able to infer that they have no particular desire to have the matter go to trial within a reasonable period.
9. It is the practice of this Court to fix the trial date at the first directions hearing. That is indeed the case in this matter. The proceeding has been set down for trial on 3 September 2025. Noting that pleadings have not yet closed as a consequence of the second and fourth defendants' default, I must infer that the trial date is in jeopardy.
10. I am required to, and do, take account of the fact that, should I strike out the second and fourth defendants' defence, it will be open to the plaintiff to enter judgment in default of defence. Nevertheless, when faced with what appears to be recalcitrant defendants who do not comply with the Court's procedural orders designed to move the case to a determination in a cost-effective and timely manner, the consequence that judgment may be entered against them is a matter entirely of their own making.
11. For all of those reasons, I am satisfied that it is appropriate for me to exercise my discretion under r 24.02(1)(b) that the second and fourth defendants' defence filed 19 July 2024 be struck out.
12. The plaintiff applies to have their costs of this application paid by the second and fourth defendants on an indemnity basis. They say that this ought to be done because the second and fourth defendants' conduct in failing to comply with the order for further and better particulars is recalcitrant, and was done in the face of adequate and appropriate explanations by the plaintiff as to the need for those particulars to be provided. There is substantial force in these submissions.
13. Having regard to the nature of the order that is sought under paragraph 24.02, in the absence of having heard from second and fourth defendants, and the circumstances which enliven the Court's discretion and indeed the factors relevant to the exercise of the discretion, it seems to me that the second and fourth defendants should have known that their refusal to provide the particulars was without excuse and done without any legal justification. Under those circumstances, I consider that there is "evidence of particular misconduct that causes loss of time to the court and the other parties:" Colgate Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248, such that it is appropriate to exercise my discretion in favour of making an order for indemnity costs.
14. Under those circumstances I will order the second and fourth defendants to pay the plaintiff's costs of and incidental to this application on an indemnity basis.

I certify that these 7 pages are a true copy of the reasons for ruling of His Honour Judge Wise delivered on 11 April 2025.