AVS Australian Venue Security Services Pty Ltd v Criminale

[2006] NSWCA 368

New South Wales

Court of Appeal

CITATION:	AVS AUSTRALIAN VENUE SECURITY SERVICES PTY LTD v CRIMINALE [2006] NSWCA 368
HEARING DATE(S):	23 October 2006
JUDGMENT DATE:	15 December 2006
JUDGMENT OF:	Giles JA at 1; Tobias JA at 7; Basten JA at 8
DECISION:	(1) To the extent that AVS Australian Venue Security Services Pty Ltd requires leave in relation to the matters dealt with in this judgment grant leave to appeal in matter Nos. 40249 and 40765 of 2006.; (2) Dismiss the appeals.; (3) Order AVS Australian Venue Security Services Pty Ltd to pay the costs of Ricky John Criminale of and incidental to the proceedings 40765 of 2005, 40225 of 2006 and 40249 of 2006 in this Court.
CATCHWORDS:	PRACTICE AND PROCEDURE – default judgment in absence of appearance by defendant – District Court Rules 1973 (NSW), Part 11 – standard directions by Registrar to file defence within 28 days – order for judgment obtained prior to expiration of that period – whether Registrar’s direction gave the defendant an unqualified right that the plaintiff take no steps under Part 11 until period in the direction had expired - JURISDICTION – statutory court – District Court Act 1973 (NSW), s 159 – whether District Court had “inherent jurisdiction” to set aside judgment - APPEAL – failure of trial judge to make a finding on a ground relied on by the defendant
LEGISLATION CITED:	District Court Act 1973 (NSW), ss 4, 68A, 159 District Court Rules 1973 (NSW), O 70, r 1; Part 3 r 2; Part 10 r 1, r 4; Part 11 r 1, r 2, r 3; Part 26 r 3, r 5A; Part 31 r 12A Evidence Act 1995 (NSW), ss 69, 135, 136 Supreme Court Act 1970 (NSW), s 46 Uniform Civil Procedure Rules 2005 (NSW), r 6.1, 6.9
CASES CITED:	Anlaby v Praetorius (1888) 20 QBD 764 Autodesk Inc v Dyason (No. 2) (1993) 176 CLR 300 Cameron v Cole (1944) 68 CLR 571 Coles v Burke (1987) 10 NSWLR 429 DJL v Central Authority (2000) 201 CLR 226 Grassby v The Queen (1989) 168 CLR 1 Hoskins v van Den-Braak (1998) 43 NSWLR 290 The King v Richmond Confirming Authority; Ex parte Howitt [1921] 1 KB 248 Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 Reg v Forbes; Ex parte Bevan (1972) 127 CLR 1 Roach v B & W Steel Pty Ltd (1991) 23 NSWLR 110 Smith v Budandan Enterprises (2002) 55 NSWLR 367 Taylor v Taylor (1979) 143 CLR 1 Wentworth v Graham (unrep, 17 April 2003)
PARTIES:	AVS Security Venue Security Services Pty Ltd - Appellant Ricky John Criminale - Respondent
FILE NUMBER(S):	CA 40225/06; CA 40249/06; CA 40765/05
COUNSEL:	H. Shore SC - Appellant K. Andrews/D. Aquilina - Respondent
SOLICITORS:	CPC Lawyers, Merrylands - Appellant CMC Laywers, Sydney - Respondent
LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	DC 5166/02
LOWER COURT JUDICIAL OFFICER:	Karpin DCJ
LOWER COURT DATE OF DECISION:	26 August 2005; 14 December 2005; 23 December 2005; 4 April 2006

CA 40765/05
CA 40225/06
CA 40249/06
DC 5166/02

GILES JA
TOBIAS JA
BASTEN JA

15 December 2006

AVS AUSTRALIAN VENUE SECURITY SERVICES PTY LTD v CRIMINALE

On 11 June 2002, the Plaintiff commenced proceedings against the Defendant for damages, having been bitten by a dog controlled by the Defendant. On 11 September 2002, the Registrar made orders, which included a direction that a defence be filed within 28 days. On 18 September 2002, the Plaintiff obtained an order for judgment for damages to be assessed. Notification of that order was served on the Defendant, advising that a hearing for assessment of damages had been fixed for 5 November 2002. Judgment was given on 19 November 2002 in the absence of appearance by the Defendant, pursuant to Part 26, r 5A of the District Court Rules 1973 (NSW) as then in force. No appearance was filed by the Defendant until 11 December 2002.

On 17 February 2003, the Defendant filed and served a notice of motion in the District Court seeking to set aside the Plaintiff’s judgment. The Defendant argued, inter alia, that the order for judgment should be set aside as it was obtained within the 28 days of the Registrar’s directions. On 26 August 2005 Karpin DCJ dismissed the motion and made consequential orders relating to a stay application and costs. The Defendant appealed from these decisions.

The issues for the Court of Appeal were whether Karpin DCJ erred in failing to:

(i) set aside the default judgment because “it was made irregularly, illegally or against good faith”,

(ii) set aside the default judgment of 19 November 2002 ex debito justitiae, based on the “inherent jurisdiction” of the District Court,

(iii) make a finding in relation to the application to extend the period of 7 days for challenging a judgment made in the absence of a party under rule 5A of the District Court Rules.

Held in relation to (i):
By Basten JA (Giles & Tobias JJA agreeing)

1. The words “irregularity” or “illegally” need not involve misconduct or dishonourable conduct: at [35] & [71].

Roach v B & W Steel Pty Ltd (1991) 23 NSWLR 110; Smith v Bundandan (2002) 55 NSWLR 367, applied; Coles v Burke (1987) 10 NSWLR 429, considered.

2. The order for judgment on 18 September 2002 did not constitute a “judgment” for the purposes of Part 10, r 1(1) of the District Court Rules and it remained open to the Defendant to avoid its effect simply by filing a notice of grounds of defence prior to the date of the assessment hearing, which it did not do: at [40]–[44].

3. The Defendant did not, by the Registrar’s direction limiting the time within which a defence could be filed, obtain an unqualified right that the plaintiff take no steps under Part 11 of the District Court Rules until that period had expired. An order to that effect would have required at least the expression of such an intention: no such intention should be inferred.

4. Part 68A of the District Court Act provided no assistance to the Defendant. The date for hearing the assessment of damages was not fixed by the Registrar prior to the expiration of the 28 days period allowed for the filing of a defence, thus no inconsistency arose: at [53]–[54].

5. There was no irregularity affecting the order for judgment, notice of which was given in accordance with the requirements of the rules, to the Defendant. Despite the clear notification that a notice of grounds of defence needed to be filed prior to the date of the assessment hearing if the Defendant were to avoid a judgment, that step was not taken: at [52] and [56].

6. Therefore Karpin DCJ did not err in refusing to set aside the default judgment: at [57].

Held in relation to (ii)
By Basten JA (Giles & Tobias JJA not deciding)

1. The principles governing the exercise of judicial power are generally to be found in the Act and rules which govern a statutory court. Primary attention should be given to these rules, rather than some more general concept derived from the general law: at [23].

Hoskins v Van Den-Braak (1998) 43 NSWLR 290, considered.

2. The clear purpose and effect of s 159 of the District Court Act 1973 (NSW) is inconsistent with the proposition that relief should be granted, as of right, setting aside a judgment or order obtained without compliance with or in contravention of the rules of the Court: at [24].

3. Avoidance of the statutory scheme cannot be achieved by relying upon some “inherent jurisdiction”. Although the District Court does not have a formal procedure for entry of judgments, its power to reopen a judgment or set aside an order which has been given or made, must depend upon the proper construction of its statutory powers: at [25], [28] – [30], [36].

DJL v Central Authority (2000) 201 CLR 226, applied; Hoskins v Van Den-Braak (1998) 43 NSWLR 290; Taylor v Taylor (1979) 143 CLR 1; Cameron v Cole (1944) 68 CLR 571; Coles v Burke (1987) 10 NSWLR 429; Anlaby v Praetorius (1888) 20 QBD 764, considered.

4. The distinction between “inherent jurisdiction” and “jurisdictional power derived by implication from statutory provisions conferring a particular jurisdiction” is important for the operation s 159, which will catch failure to comply with implied requirements of the Act and rules but not, arguably failure to comply with general law principles: at [31].

DJL v Central Authority (2000) 201 CLR 226; Reg v Forbes; Ex parte Bevan (1972) 127 CLR 1, applied.

Held in relation to (iii):
By Giles JA (Tobias JA agreeing)

1. The primary judge came to her decision on the basis that, even if time were extended, sufficient cause had not been shown for the judgment to be set aside, no error in that respect had been shown. It is unnecessary to decide whether an extension of the seven days should have been granted: at [3].

By Basten JA

2. Although it may be said that her Honour erred in failing to address a ground relied upon by the Defendant in the proceedings before her, it cannot be said that the error was material in the circumstances. The purpose and intent of rule 5A of the District Court Rules to extend the 7 day period justifies a conclusion that no extension should be granted unless the delay has been fully explained and the circumstances are such as to justify the extension: at [61].

3. There was no material upon which the Court should have been satisfied that an extension of the deliberately brief time period for setting aside a judgment under Part 26, r 5A should be granted, let alone for a period of 83 days: at [68].

CA 40765/05
CA 40225/06
CA 40249/06
DC 5166/02

GILES JA
TOBIAS JA
BASTEN JA

15 December 2006

AVS AUSTRALIAN VENUE SECURITY SERVICES PTY LTD v CRIMINALE

Judgment

1 GILES JA: I have had the advantage of reading the reasons of Basten JA in draft. Subject to the following, I agree with them.

2 I would prefer not to enter upon whether the District Court has an inherent or implied power to set aside a judgment for want of a reasonable opportunity to appear and present a case. No argument of substance was directed to the point, and it is not necessary to decide it. It is sufficient to assume the existence of such a power which, as Basten JA says, is not engaged in the present case.

3 I respectfully do not think it necessary to decide whether an extension of the seven days for a motion to set aside the judgement of 19 November 2002 under Pt 26 r 5A should have been granted. In my opinion, the primary judge came to her decision on the basis that, even if time were extended, sufficient cause had not been shown for the judgment to be set aside; and for the reasons given by Basten JA, no error in that respect has been shown.

4 In relation to setting aside the judgment of 19 November 2002 pursuant to Pt 31 r 12A, I understand the primary judge to have reasoned as follows. She asked whether the plaintiff had acted irregularly, illegally or in bad faith, noting Kirby P’s reference in Coles v Burke (1987) 10 NSWLR 429 at 437 to the genus involved in that phrase of misconduct or dishonourable conduct of the person who procured the judgment. She was plainly not satisfied that there was misconduct or dishonourable conduct. But she went on to say that, even if there had been an irregularity, no prejudice flowed therefrom, and for that reason the discretion to set aside the judgment should not be exercised.

5 It is sufficient that, for the reasons given by Basten JA, I do not think that the judgment was obtained irregularly, illegally or against good faith even if the phrase does not require the misconduct or dishonourable conduct to which Kirby P referred. This is not the case in which to decide whether or to what extent misconduct or dishonourable conduct is part of establishing illegality or bad faith. I would add that the fact of inquiry of counsel at the assessment hearing as to the notations on the directions on the Court file, and absence of satisfactory response, did not show lack of good faith; it would be necessary, at the least, to show that there was some deliberate withholding of a proper response, and perhaps the withholding of a response because giving it would have been contrary to the plaintiff’s interests.

6 I agree with the orders proposed by Basten JA.

7 TOBIAS JA: I have had the benefit of reading in draft the judgment of Giles JA and that of Basten JA. Like the former, I do not consider it necessary to deal with the issues referred to in [2] and the first sentence of [3] of his Honour’s judgment. Otherwise, I agree with the orders proposed by Basten JA and with his reasons, together with the additional remarks of Giles JA in the second sentence of [3] and the whole of [4] and [5] of his Honour’s judgment.

8 BASTEN JA: On 8 July 2000 Mr Criminale was bitten by a dog while being removed from the premises of the Smithfield RSL Club. The dog was under the control of a security company, AVS Australian Venue Security Services Pty Ltd. (It is convenient to refer to Mr Criminale as “the plaintiff” and the company as “the Appellant” or “the defendant”.) Having failed to obtain any response to pre-trial correspondence, on 11 June 2002 the plaintiff commenced proceedings against the defendant for damages. No appearance was filed by the defendant until 11 December 2002. By that stage, the plaintiff had, on 18 September 2002, obtained an order for judgment for damages to be assessed. Notification of that order was served on the defendant, advising that a hearing had been fixed for 5 November 2002 for assessment of damages, and advising the defendant that it could file a defence at any time prior to judgment.

9 Still no steps were taken by the defendant, or on its behalf and damages were assessed, judgment being given for the plaintiff on 19 November 2002, pursuant to which her Honour awarded the plaintiff $145,004.21, together with his costs.

10 The judgment in favour of the plaintiff was given, in the absence of appearance by the defendant, pursuant to Part 26, r 5A of the District Court Rules 1973 (NSW) as then in force. In such a case, the judgment could be set aside “on sufficient cause being shown”, so long as the motion to set it aside was filed and served not more than seven days after the giving of the judgment: r 5A(1)(b), (2)(a) and (4). No application was made within that period to set aside the judgment.

11 On 11 December 2002 the defendant filed a “holding appeal” in this Court. However, that matter was allowed to lapse and no reliance is placed on it for any purposes in the present proceedings.

12 On 17 February 2003 the defendant filed and served a notice of motion in the District Court seeking to set aside the plaintiff’s judgment. Thereafter, matters continued at a somewhat desultory pace, judgment on the motion being given by Karpin DCJ on 26 August 2005. Her Honour dismissed the defendant’s application and made certain consequential orders, both on that date and on 23 December 2005 (in relation to a stay application) and on 4 April 2006 (in relation to costs).

13 On 23 September 2005, within 28 days of the judgment handed down on 26 August 2005, the defendant filed a holding summons in this Court and, on 23 December 2005, filed a summons for leave to appeal from that judgment (proceedings 40765 of 2005). On 21 April 2006 he filed a notice of appeal, purportedly as of right, from the judgments in relation to the stay and costs (proceedings 40225 of 2006), and on 2 August 2006 he filed a summons for leave to appeal from the stay and costs judgments (proceedings 40249 of 2006).

Issues for determination

14 The substantive issue sought to be raised by the defendant was whether Karpin DCJ was right, in her judgment of 26 August 2005, to refuse the application to set aside the default judgment of 19 November 2002.

15 The proceedings in this Court were, however, beset by procedural issues, resulting from the failure of the defendant to take steps in this Court in a timely fashion following the judgment of November 2002, the attempt to manufacture a right of appeal out of the refusal to set aside that judgment in August 2005 and a further attempt to treat the ultimate costs judgment of 4 April 2006 as the date from which time ran for the purpose of the appeal. However, it is convenient to set to one side these procedural issues. That is because the plaintiff did not object to the competency of the appeal and did not object to any necessary extension of time. He objected to the grant of leave to appeal, but on the basis that, if leave were granted, the appeal would be doomed to fail.

16 Secondly, issues were raised by the defendant in relation to the judgment of Karpin DCJ on 23 December 2005, pursuant to which her Honour ordered a stay of the judgment, on conditions, including payment of 50% of the judgment debt. Ten grounds were included in a supplementary notice of appeal complaining of that order. However, the only order sought from this Court in relation to the stay was that it be set aside. Upon the Court noting that that order might have been obtained at any time without opposition from the plaintiff, it was explained that what was sought to be challenged were certain inferences or findings made by her Honour in her reasons. However, because a challenge by way of appeal should be brought against orders made in the Court below, and not against things said in the course of reasons, unrelated to the validity or propriety of an order, these grounds should be disregarded.

17 Thirdly, the defendant sought to challenge certain aspects of the costs order made on 4 April 2006. At first it appeared that it also sought to challenge the order for costs made on 26 August 2005, on the basis that the orders made on that date continue to have effect, and were not replaced by the further orders made on 4 April 2006. However, at the hearing of the appeal the plaintiff accepted that the effective orders were those made on 4 April 2006, so that the aspect of the challenge directed to orders made on 26 August 2005 fell away.

18 Clearly so much of the costs orders as were consequential upon the judgment in favour of the plaintiff would stand or fall with that judgment. No separate challenge was made to those orders, including the basis upon which they were to be assessed. An independent challenge was ultimately limited to the following orders made by her Honour on 4 April 2006, namely:

2. The defendant to pay the plaintiff’s costs of and incidental to the plaintiff’s motion.
…
4. The defendant to pay the plaintiff’s costs of one day interlocutory hearing on the notice of motion before Judge Karpin.
5. Each party to pay their own costs of two days hearing before Judge Gibb.

No attempt was made to quantify the amount of costs independently challenged, nor to identify any point of principle in relation to these specific orders.

19 Fourthly, an attempt was made by way of motion to challenge a judgment of Handley JA delivered in proceedings 40225 of 2006 and 40765 of 2006 on 19 June 2006. His Honour was dealing with a motion seeking “production of and access to draft judgments of Karpin DCJ, and correspondence between her and the Court Reporting Branch”: at [7]. Ultimately it seems that those applications were not pressed, but his Honour stated at [9]:

“The notice of motion came on before me today, and after argument, I ruled that the orders made on 26 August 2005 were interlocutory so as to attract s 127(2)(a) of the District Court Act 1973.”

Whilst his Honour may have so “ruled”, he made no order striking out the notice of appeal in proceedings 40225 of 2006 on the basis that it was incompetent. The attempt to review his Honour’s judgment, pursuant to s 46(4) of the Supreme Court Act 1970 (NSW) falls foul of the same difficulty as arises with respect to the stay judgment of Karpin DCJ, namely that there is no intention to set aside any order.

20 Decisions in this Court dealing with the proper limits of the power to “discharge or vary” a judgment given by a judge of appeal, were also sought to be challenged. The basis upon which those authorities were in error and the basis on which the conclusion of Handley JA that the judgment of 26 August 2005 was interlocutory might have been thought to be in error were by no means self-evident, but were not explored in the course of argument. Because it is convenient to approach the questions raised by the defendant on the basis that it has a right to have them determined by this Court and, to the extent necessary, to grant leave to allow it to do so, these questions need not be further addressed.

Power to set aside judgment: general principles

21 The primary submission for the Appellant, both in this Court and in the Court below, was that it was entitled to have the orders of the District Court made on 18 September 2002 and 19 November 2002 set aside “ex debito justitiae”. The orders were claimed to be nullities. Before turning to the factual justification for these assertions, it is necessary to identify the legal principles which underlie them. (In the alternative, if the power to set aside the judgment and orders was discretionary, it was said that the exercise of the power miscarried: in that case, the Appellant accepted the need to demonstrate an error of principle on the part of the primary judge, in order for this Court to intervene.)

22 The language of the primary submission requires attention. It tends to obscure the fact that such assertions involve two statements: first, there is a statement that there has been non-compliance with or contravention of some identifiable legal rule or principle; secondly, there is a statement as to the consequences which follow from that contravention or non-compliance. The first issue must therefore be to identify the specific rule or principle relied upon. The Court was referred (as was the primary judge) to Cameron v Cole (1944) 68 CLR 571 at 589, where Rich J stated:

“It is a fundamental principle of natural justice, applicable to all courts whether superior or inferior, that a person against whom a claim or charge is made must be given a reasonable opportunity of appearing and presenting his case. If this principle be not observed, the person affected is entitled, ex debito justitiae , to have any determination which affects him set aside; and a court which finds that it has been led to purport to determine a matter in which there has been a failure to observe the principle has inherent jurisdiction to set its determination aside.”

23 That principle was applied by this Court in Hoskins v Van Den-Braak (1998) 43 NSWLR 290 at 294, in circumstances where Hoskins had not been served and did not know that a claim was being made against him. However, principles governing the exercise of judicial power are generally to be found in the Act and rules which govern a statutory court. The Act will usually provide a more precise content to the concept of providing a reasonable opportunity of appearing and presenting a case, and (in less stark circumstances than those in Hoskins v Van Den-Braak) may govern the situation. Primary attention should be given to these rules, rather than some more general concept derived from the general law.

24 The second issue, namely the consequence of breach or non-compliance, should also be addressed, in the first instance, by reference to the Act and rules constituting and governing a particular statutory court. Thus, attention must be paid to the provisions of s 159 of the District Court Act 1973 (NSW) as then in force:

159 Irregularity
(1) Where, in the purported commencement of any proceedings or at any stage in the course of or in connection with any proceedings, there is, by reason of anything done or left undone, a failure to comply with any requirement of this Act or the rules whether in respect of time, place, manner, form or content or in any other respect:

(a) the failure shall be treated as an irregularity and shall not nullify the proceedings, or any step taken in the proceedings, or any document, judgment or order in the proceedings, and

(b) subject to subsections (2) and (3) the Court may, on terms, set aside wholly or in part the proceedings or any step taken in the proceedings or any document, judgment or order in the proceedings, or exercise its powers under the rules to allow amendments and to make orders dealing with the proceedings generally.

The clear purpose and effect of this provision is inconsistent with the proposition that relief should be granted, as of right, setting aside a judgment or order obtained without compliance with or in contravention of the rules of the Court. This conclusion should not be evaded by seeking to assert breach of some general law principle, and thus not a failure to comply with a requirement of the Act or the rules, in circumstances where that general law principle has found statutory expression.

25 Further, avoidance of the statutory scheme cannot be achieved by relying upon some “inherent jurisdiction” or power of a statutory court. The District Court is established as a court of record, though not a superior court of record: it is a statutory court. Although it does not have a formal procedure for entry of judgments, its power to reopen a judgment or set aside an order which has been given or made, must depend upon the proper construction of its statutory powers: see DJL v Central Authority (2000) 201 CLR 226 at [25] ff (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ).

26 The notice of motion, as amended and filed by the defendant on 3 July 2003, and set out by her Honour on p 1 of her judgment of 26 August 2005, referred only to Part 26, r 5A of the District Court Rules, and in a context where its application was recognised as requiring an extension of time. Written submissions filed on behalf of the defendant also referred to s 159 of the District Court Act, Part 31, r 12A of the District Court Rules and a supposed inherent power to set aside a judgment said to be given “ex debito justitiae”.

27 In the grounds of appeal, reliance was placed upon two broad principles, namely the power to set aside a judgment made “irregularly, illegally or against good faith”, and the entitlement to have a judgment set aside “ex debito justitiae”. The first phrase picks up the language of Part 31, r 12A, the second the language of the “inherent jurisdiction” of the District Court. It is convenient to consider the latter first, because, as briefly noted above, recent High Court authority suggests that this concept has no place in identifying the powers of a statutory court, such as the District Court. This conclusion requires some further reference to the authorities relied upon by the Appellant.

28 The language used by the Appellant has a respectable lineage. However, the use of the Latin phrase, ex debito justitiae, does little to explain the contention relied upon by the Appellant. It means no more than that relief should follow from the obligation imposed by the law, or its correlative right. More modern terminology would involve an assertion that relief followed “as of right” and not as an exercise of a discretionary power to either grant or withhold such relief. Such language is well-understood in relation to prerogative writs, such as certiorari: see The King v Richmond Confirming Authority; Ex parte Howitt [1921] 1 KB 248 at 253-254 (Earl of Reading CJ); cf Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at [53]-[56] (Gaudron and Gummow JJ). As the Appellant noted, similar language was used in Anlaby v Praetorius (1888) 20 QBD 764 (Eng CA). Anlaby was relied on for a number of reasons. First, it was a case in which judgment was entered by default, and prematurely, before the time for filing a defence had passed. The Court of Appeal held that the defendant was entitled to have the judgment set aside by the Court in which it was obtained, “ex debito justitiae”, that is unconditionally and as of right. Secondly, the signing of judgment was described variously as “irregular”, “premature and irregular”, as “against good faith” and as a “wrongful act”. This language is mirrored in Part 31, r 12A, referred to below. Thirdly, that decision was reached despite O 70, r 1 which provided that “non-compliance with any of these rules, or with any rule of practice for the time being in force, shall not render any proceedings void unless the Court or a judge shall so direct, but such proceedings may be set aside either wholly or in part as irregular, or amended, or otherwise dealt with in such manner and upon such terms as the Court or a judge shall think fit”: pp 768-769. The last provision is mirrored in s 159 of the District Court Act.

29 The Appellant also relied on the reasoning of the President in Hoskins v Van Den-Braak (1998) 43 NSWLR 290. That was a case involving an appeal from the Common Law Division, which had dismissed an appeal by way of stated case from the Local Court. The appellant had been the subject of a judgment in the Local Court (pursuant to a cross-claim) without having been served with any process. Part 26, r 3 was in similar terms to Part 31, r 12A of the District Court Rules, and provided for an order to be set aside which had been made “irregularly, illegally or against good faith”. However, that rule was not expressly relied upon as a basis for setting aside the judgment of the Local Court, but rather a power said to exist in the inherent jurisdiction or as a power which resided in the Local Court “as an incident of its function as a court of justice”: at p 298E (Mason P, Priestley and Beazley JJA agreeing). Hoskins expressly relied upon statements in Cameron v Cole (1944) 68 CLR 571 at 589 (Rich J) and in Taylor v Taylor (1979) 143 CLR 1 at 8 (Gibbs J, Stephen J agreeing) and at 16 (Mason J) that any court “has inherent power to set aside an order made against a person who did not have a reasonable opportunity to appear and present his case”: Hoskins at p 294E.

30 At some stage, a reassessment of Hoskins may be required in the light of the approach adopted by the High Court in DJL v Central Authority noted above at [25]. The only member of the Court in DJL who referred to Taylor v Taylor was Kirby J, who was in dissent. In doing so, at [104], his Honour expressly agreed with the joint judgment “that it is desirable, in relation to courts created by statute, that the expression ‘inherent powers’ should not be used.” His Honour continued:

“That appellation may be appropriate to courts originally created out of the Royal Prerogative. It is not apt to a court, such as the Family Court, which is created by Federal legislation. In such a case it is necessary to attribute the power (where it is not conferred expressly by or under such legislation) to an implication derived from the legislation establishing the body.”

31 A similar distinction was drawn by Dawson J in Grassby v The Queen (1989) 168 CLR 1 at 16, quoting Reg v Forbes; Ex parte Bevan (1972) 127 CLR 1 at p 7 (Menzies J). The distinction between “inherent jurisdiction” and “jurisdictional power derived by implication from statutory provisions conferring a particular jurisdiction” was affirmed as “fundamental” in DJL at [26], with express reliance on Ex parte Bevan. The distinction is important for the operation of s 159, which will catch failure to comply with implied requirements of the Act and rules but not, arguably, failure to comply with general law principles.

32 In Hoskins, Mason P distinguished the earlier judgment of this Court in Coles v Burke (1987) 10 NSWLR 429. Coles, like the present case, involved an application to set aside a default judgment of the District Court. In that respect, it was unlike Hoskins because in Hoskins no proceedings had been properly commenced in the first place: (43 NSWLR at 297G). In Coles, a judgment was entered against the defendants in the District Court proceedings pursuant to default in compliance with certain orders, such a consequence being provided for in the orders which had been proposed by the defendants themselves. The defendants argued that they had not given instructions to their solicitor to subject them to judgment in default of compliance and, further, that they had taken all steps necessary to permit compliance with the principal orders: 10 NSWLR, p 432F-G (Kirby P, Samuels and McHugh JJA agreeing). Despite these circumstances, this Court held that the District Court judge had no power to set aside the judgment. The President stated (at p 437F):

“The power of the District Court to set aside judgments was relevantly exhausted by the explicit provisions of the District Court Act and rules. Reference was made to the High Court decision in Taylor v Taylor which concerned the Family Court of Australia, and in particular the remarks of Gibbs J (at 5). I do not read that decision, or his Honour’s remarks, to apply to the present circumstances. In Taylor v Taylor there was a lacuna in the Family Court’s powers. The District Court’s powers, to the contrary are ample. They provide for the setting aside of judgments, in terms of great detail. But they regulate and control the discretion to grant such relief.”

33 Part 31 of the District Court Rules was headed “Judgments and orders”; r12A provided as follows:

12A Setting aside of judgment or order
(1) A judgment or order of the Court in any proceedings may, on sufficient cause being shown, be set aside, on terms, by order of the Court, if the judgment was given or entered up, or the order was made, irregularly, illegally or against good faith.

34 Kirby P also identified a limitation on the scope of the power in Part 31, r 12A in the following terms (p 437C):

“The genus which is involved in the phrase ‘irregularly, illegally or against good faith’ appears to me to be misconduct or dishonourable conduct of the person who procured the judgment which it is suggested undermines the authority of that judgment warranting the exceptional course for which r 12A provides.”

35 There is no need to rely upon an implied statutory power to discharge an order made, if it can be said that the order has been entered “irregularly, illegally or against good faith”. As noted above, in Coles Kirby P suggested that such language might invoke misconduct or dishonourable conduct on the part of the person who procured the judgment, although he did not specify whether that was necessarily a party or could be a solicitor. However, it would appear that his Honour was dealing with the phrase “against good faith” in the circumstances of that case, and was not seeking to impose a general limitation inconsistent with the source of the statutory language relied upon by the Appellant in this case, namely Anlaby v Praetorius: see Roach v B & W Steel Pty Ltd (1991) 23 NSWLR 110 at 114D, and Smith v Budandan Enterprises (2002) 55 NSWLR 367 at [60]-[67].

36 As will be seen below, it is not necessary for present purposes to determine whether the principles stated in Hoskins in relation to inherent jurisdiction can survive the reasoning of the High Court in DJL. However, it is tolerably clear that the approach adopted in Anlaby in relation to the Queens Bench Division, being a common law court, cannot be applied without modification to a statutory court. Similarly, the statement of Rich J in Cameron v Cole (p 589) that “in the absence of clear words, a statute should not be treated as depriving a court of the inherent jurisdiction possessed by every court to ensure that trials before it are conducted in accordance with the principles of natural justice” would appear to reverse the proper approach, which must start with the express wording of the Act and rules, in order to identify express and implied powers.

37 It is perhaps unfortunate that the concept of irregularity in Part 31, r 12A connotes a want of jurisdiction or power, whereas in s 159 of the District Court Act, a different emphasis is given. Section 159 states that a failure to comply with a requirement of the Act or rules “shall be treated as an irregularity and shall not nullify the proceedings, or any step taken in the proceedings, or any document, judgment or order in the proceedings”. Irregularity is there treated as something less than a want of jurisdiction.

Challenge to ‘order for judgment’

38 The first limb of the Appellant’s case was that the circumstances giving rise to an order for judgment for damages to be assessed had not arisen on 18 September 2002, when the order was made. That proposition depended on the fact that, some seven days earlier, on 11 September 2002, the Registrar had made orders in accordance with the timetable provided by the plaintiff’s solicitors, which included a direction that a defence was to be filed “within 28 days”. In fact, the directions given on 11 September covered all the anticipated pre-hearing steps in the matter, which were anticipated to take a period of some months. Although liberty to apply was not expressly reserved, had there been any default at any stage, the innocent party could no doubt have been expected to seek further orders or directions. However, the defendant sought to rely simply on the fact that, as at 18 September 2002, it was not in default of the first relevant order, namely that relating to the filing of a defence.

39 The Appellant sought to bolster its reliance on the Registrar’s directions by reference to s 68A of the District Court Act 1973, which provided:

68A Directions for speedy determination of real questions in civil proceedings
The Court may, from time to time, give such directions as the Court thinks fit (whether or not inconsistent with the rules) for the speedy determination of the real questions between the parties to a civil action.

The Appellant contended that the direction with respect to the filing of a defence overrode any power to make an order for judgment for damages to be assessed, which might otherwise have been a procedure available to the plaintiff, by rendering the defendant no longer ‘in default’.

40 This argument requires attention to the requirements of the rules with respect to steps to be taken by the parties following the commencement of proceedings. It is a common practice to require a defendant who seeks to defend proceedings, or indeed take any step in those proceedings, to first file an appearance in the Court, which will identify the solicitor on the record and an address for service: see, eg, Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”), r 6.1. Nevertheless, it is also common for the filing of a defence to be a sufficient compliance with that requirement: UCPR r 6.9. This was the case under the District Court Rules at the relevant time: District Court Rules, Part 10, r 4. A defence could be filed in accordance with Part 10, r 1 which relevantly provided, in June 2002:

(1) A defendant in an action commenced by the lodging of an ordinary statement of claim may at any time before judgment file notice of the grounds of his defence, signed by the defendant or his solicitor.

41 The term “judgment” was not then defined in the District Court Rules, but was defined in the District Court Act as meaning “judgment given or entered up in the action”: s 4(1).

42 Part 11 of the District Court Rules then provided:

1. Order for judgment
(1) Where, in an action commenced by the lodging of an ordinary statement of claim:
(a) a defendant has not filed a notice of the grounds of his defence under Part 10 rule 1(1), … and
(b) a period of 28 days after service of the statement of claim on that defendant has elapsed,
the plaintiff may, within 12 months after the expiration of that period, … and on filing a form of order for judgment and an affidavit of service of the statement of claim on that defendant, have an order for judgment made by the Court or registrar against that defendant.
(2) Subject to rule 2(2), where an order for judgment is made in an action against a defendant:
(a) that defendant shall be deemed to have admitted liability, and
(b) the action shall go to trial, in accordance with rule 3 and Part 27 rule 1, only as to the assessment of the amount to be recovered by the plaintiff against that defendant.

43 According to an affidavit of service dated 18 September 2002, the statement of claim was served on the defendant on 14 June 2002. The period of 28 days provided in Part 11, r 1(1)(b), therefore terminated on 12 July 2002. Accordingly, leaving to one side the directions given by the registrar on 11 September, the preconditions for an order for judgment were satisfied, and the making of such an order would have the effects identified in r 1(2). However, that was subject to the effect of r 2, which provided as follows:

2. Setting aside order
(1) An order for judgment against a defendant:
(a) may be set aside, on terms, by order of the Court at any time before judgment, and
(b) shall, without order, be set aside on the filing of a notice of grounds of defence by that defendant under Part 10 rule 1(1).
(2) Rule 1(2) shall, on the setting aside of an order for judgment against a defendant in an action, cease to have any operation upon or in respect of the action as against that defendant.

44 Accordingly, the order for judgment did not constitute a “judgment” for the purposes of Part 10, r 1(1) and it remained open to the defendant to avoid its effects simply by filing a notice of grounds of defence. That step was not taken.

45 The making of an order for judgment required further consequential steps identified in Part 11, r 3:

3. Trial
(1) Where an order for judgment is made by the registrar in an action, the registrar shall:
(a) fix a date for the trial of the action as to the assessment of the amount to be recovered by the plaintiff, and advise the plaintiff of that date, and
(b) at least fourteen days before the date so fixed give to the defendant, or send to him by post addressed to him at the best address known to the registrar, notice of the order for judgment and the date so fixed.
(2) The trial of the action as to assessment shall, unless the order for judgment is set aside or the trial is adjourned, proceed on the date fixed as notified as mentioned in subrule (1), but it shall not be necessary to prove compliance by the registrar with the requirements of that subrule.

46 Because, on one aspect of the defendant’s case, it may be that questions of procedural fairness arise it is desirable to set out the next steps taken in the proceedings. At the hearing of the application to set aside the judgment, on 3 November 2004, counsel for the plaintiff tendered a bundle of documents described as “defendant’s documents”: Tcpt p 21 (35). Amongst those documents was a notice dated 18 September 2002, signed by a registrar of the District Court, addressed to the defendant. It read:

NOTICE OF ORDER FOR JUDGMENT
The Plaintiff has this day obtained an order for judgment against you for your failure to file notice of the grounds of your defence; you are deemed to have admitted liability, and the action has been set down for assessment of the damages to be recovered by the plaintiff on 05/11/2002 at 10:00am.
Unless you file notice of the grounds of your defence, judgment may on that day be given for the plaintiff for the amount so assessed.
If you file notice of the grounds of your defence, prepared in accordance with the rules, before judgment is given, the order for judgment will be set aside, and you will be allowed in to defend the action, but you may be liable for the plaintiff’s costs of the order for judgment in any event.

47 On the appeal, the defendant embraced any technicality that it perceived to be to its advantage. One such technicality concerned the order for judgment itself. It appears that the solicitors for the plaintiff themselves took the step of sending to the defendant, on 19 September 2002, a copy of the order for judgment. Six days later, they also sent the defendant a copy of the notice from the registrar which, although addressed to them, was otherwise identical with the notice given by the registrar to the defendant. However, the copy of the actual order provided to the defendant under cover of the letter from the solicitors for the plaintiff, was unsigned, although it bore the stamp of the District Court and was dated 18 September 2002. The relevance of that matter was somewhat obscure. Sometime later, on 2 May 2003, a solicitor for the defendant had uplifted the District Court file and photocopied various documents, including a copy of the order for judgment which appears to bear the initial of a registrar and notation in handwriting as to the date for hearing and the date on which notices were sent. The fact that the solicitors for the plaintiff had an unsigned copy does not appear to be of any relevance. However, the identity of the person making the order for judgment acquired significance as a result of steps taken by Gibb DCJ and announced in open court on 26 September 2003. The transcript of that day, included the following statements:

“The position, gentlemen, is after the mention of this matter yesterday there was a point which concerned me about which I have since made some further inquiries … .
The order for judgment that was made on 18 September purportedly in the name of the register [sic], John Cowen, was made more than two months after John Cowen had left the office, more than one month after he had retired from the office, and entered by a clerk in the registry. I do not intend to give you the person’s name. I can tell you I know who it is. He lacked authorisation, never had, never has had and is never likely to have authorisation for the affixing of the registrar’s stamp or exercising registrar’s powers.
This, gentlemen, is a matter that as a matter of record it seems to me I am bound to tell you.”

48 Somewhat surprisingly, senior counsel for the defendant sought to tender that transcript on the hearing before Karpin DCJ on 1 October 2004: Tcpt p 79. The proposed tender met with understandable opposition. The factual problems raised by the statement of her Honour may be illustrated by the exchange in the submissions of counsel before Karpin DCJ, commencing with the second objection taken by counsel for the plaintiff (Tcpt p 80):

“Secondly, your Honour, it does not appear to bear upon the issues to be determined by your Honour. She refers to making [an] inquiry of the Registrar John Cowan, in whose name an order for judgment had been made. Your Honour, the notice of order [for] judgment didn’t have John Cowan’s name on it. It had Mr Riznakov, who I’m told is a registrar of the District Court and has been for some time. … How it came about that her Honour [thought] that John Cowan had in fact signed the document when someone else had clearly signed it – and the point she seems to make is he’s been retired. It looks as though for some reason or other she’s got the names confused.”

Counsel then noted that her Honour’s refusal to identify the source of her information would render its admission unfair and prejudicial to the plaintiff, pursuant to s 136 (perhaps intending to refer to s 135) of the Evidence Act 1995 (NSW), because it prevented the plaintiff making his own independent inquiries.

49 In response, senior counsel for the defendant stated:

“The document with which her Honour was plainly dealing in my submission was that which bears a Court stamp; it doesn’t have anything in the nature of a signature. Her Honour was talking about who may have affixed that stamp.”

50 As already noted, a copy of the order obtained from the Court file, by the solicitors for the defendant, and placed in evidence by the defendant, had a signature which bears at least some similarity to that which appears on the notice of judgment with the name identified by counsel as “Riznakov”, although that spelling seems doubtful. However, on the basis that counsel for the defendant relied upon the document which did not bear a signature, but only the Court stamp, the complaint of irrelevance, quite apart from other matters, was persuasive. The issue of the regularity of the Court process was raised by Gibb DCJ in the manner noted above, but when senior counsel for the defendant sought to rely upon the document (Tcpt pp 80-81) an objection was raised by his opponent which Karpin DCJ sensibly cut short, saying “I’m [not] going to allow it to be tendered at this stage”. She agreed to revisit the matter after certain further evidence had been given. This Court was told that she was never asked to revisit the matter.

51 Despite that, it was a ground of appeal against her Honour’s judgment that the transcript had been rejected. When invited to explain the basis on which it should have been admitted (even though the tender was not finally rejected), senior counsel for the Appellant stated that it was a “business record”, but later withdrew that submission.

52 The ground of appeal must be rejected: the tender of the transcript in question was not ruled upon, but deferred. The tender was never revisited, despite her Honour’s express indication of her willingness to do so. Further, the Appellant has not demonstrated the relevance of the document, nor any basis of its admissibility. The tender was misguided and the ground of appeal misconceived. It follows that there was no evidence to support the view that the order for judgment, made on the application of the plaintiff, was other than a validly made order, putting to one side the complaint based on the timetable, fixing a time for filing a defence which had not expired.

53 The Appellant’s contention that the timetable fixed by the Registrar somehow overcame the effect of Part 11, with or without reliance upon s 68A of the District Court Act, is difficult to follow. The direction that the Registrar gave on 11 September 2002 in fact limited the time permitted under the rules for the filing of a defence: it did not expand it. Part 10, r 1(1) permitted the filing of a notice of grounds of defence at any time prior to judgment. The “order for judgment for damages to be assessed” was not a “judgment”: as appears from the express terms of Part 11, r 2, the defendant remained entitled to file a notice of grounds of defence at any time prior to the judgment which would result from an assessment of damages. The only restriction resulting from the order for judgment was that a date was fixed for such an assessment. However, a defendant, under Part 10, did not have an unlimited time within which to file a notice of grounds of defence: unless the plaintiff fails to take any steps to prosecute a civil action, a stage will always be reached at which a date is fixed for trial and a judgment is given. To read the fixing of a timetable, including the time within which a defence was to be filed, as interfering with the steps permitted pursuant to Part 11 is unrealistic. The defendant did not, by a direction limiting the time within which a defence could be filed, thereby obtain an unqualified right that the plaintiff take no steps under Part 11 until that period had expired. An order to that effect would require at least the expression of such an intention: no such intention should be inferred.

54 Section 68A provides no assistance to the defendant. As explained, there was nothing inconsistent between the direction with respect to the filing of a defence and the right of the plaintiff under Part 11 to obtain an order for judgment. If the registrar, in relation to the order for judgment, had fixed a date for hearing of the assessment of damages prior to the expiration of the 28 day period allowed for the filing of a defence, an inconsistency might possibly have arisen. That did not arise in this case. If it had, it would have been necessary to consider whether, in so fixing the date, the registrar was in effect varying the standard form of direction earlier given: there may be more than one way of removing an inconsistency. In any event, the question does not arise in the present case.

55 Before leaving the issues which involve the directions given on 11 September, it should be noted that one matter raised by the Appellant in its submissions was that the directions in fact forwarded by the solicitors for the plaintiff to the defendant were in standard form, and omitted certain amendments made by the registrar at the pre-trial conference. The only variation of consequence was that the standard form direction provided for a defence “to be filed by within [sic] 28 days of service”. The relevant amendment deleted the words “of service”. If the defendant had been left in some uncertainty as to the precise meaning of the direction, that would have been understandable. The failure to notify the change would hardly have affected that. In any event, the restriction was effectively removed by the notice of order for judgment, which expressly allowed the defendant until 5 November 2002 to file a notice of grounds of defence.

56 It follows from these conclusions, that there was no irregularity affecting the order for judgment, notice of which was given in accordance with the requirements of the rules, to the defendant. Despite the clear notification that a notice of grounds of defence needed to be filed prior to 5 November 2002 (the date fixed for the assessment hearing), if the defendant were to avoid a judgment, that step was not taken.

Failure to set aside final judgment

57 The grounds of challenge to the order for judgment dated 18 September 2002 were said to be sufficient to render invalid the final judgment given on 19 November 2002. For the reasons set out above, none of the attacks on the order for judgment has been made out and accordingly the challenge to the final judgment, based on those challenges, must also fail. (Even if the attacks on the order for judgment had been made out, it would not necessarily follow that the final judgment would be set aside.)

58 As noted above, one basis for seeking to set aside the judgment of 19 November 2002 was Part 26, r 5A. That rule read as follows:

5A Action called on for trial
(1) Subject to these rules, where an action that has been set down for trial is called on for trial:
…
(b) if the plaintiff does, but a defendant does not, appear, the Court may proceed to the trial of the action against that defendant on the part of the plaintiff only … .
(2) Where the court proceeds to the trial of the action on the part of the plaintiff only, as referred to in sub-rule (1)(b), … its judgment:
(a) may on sufficient cause being shown be set aside by order of the Court, and
(b) shall, if not set aside, be as final and conclusive between the parties to the action as if both parties had appeared.
…
(4) A motion to set aside a judgment under sub-rule (2) must be made on notice and the notice must be filed and served not more than 7 days after the giving of the judgment.

59 The Appellant complains that the primary judge treated this last sub-rule as a mandatory provision which was not amenable to discretionary extension pursuant to Part 3, r 2. That rule provided under the heading “Time”:

2 Extension and abridgement
(1) The Court may by order extend or abridge any time fixed by the rules or by any judgment or order.
(2) The Court may extend the time under subrule (1) as well after as before the time expires, whether or not an application for the extension is made before the time expires or at all.


Her Honour noted the plaintiff’s submission that time could not be extended, but whether she accepted it is unclear. Having stated the submission, she went on to discuss decisions concerning principles applicable to the reopening of a matter following judgment. From those authorities she derived two principles, namely that (pp 17-18):

(1) the applicant must establish that the Court has proceeded on a misapprehension of the facts or the law, and

(2) the public interest in the finality of litigation will not preclude the exceptional step of reviewing or rehearing an issue where a Court has good reason to consider that, in its earlier judgment, it has proceeded upon a misapprehension as to facts or the law.

Reference was made to the judgment of Santow JA in Wentworth v Graham (unrep, 17 April 2003) and authorities to which his Honour referred, including Autodesk Inc v Dyason (No. 2) (1993) 176 CLR 300. These authorities did not, however, deal with cases where judgment had been obtained in the absence of a party. Further, as is clear from DJL v Central Authority , the principles which operate in relation to judgments of the High Court do not necessarily have a similar operation in relation to a statutory court.

60 Because there is no explicit finding made in relation to the application to extend the period of 7 days for challenging a judgment made in the absence of a party, the better view is that her Honour declined to consider the operation of that power. Whether that was because she thought that its application would be subsumed within the broad discretionary power contained in Part 31, r 12A, which she clearly did address, or because she considered that the time limit was not extendable, cannot be known.

61 Although it may be said that this constitutes an error in failing to address a ground relied upon by the defendant in the proceedings before her, it cannot be said that the error was material in the circumstances. The purpose of r 5A is to permit a small window of opportunity for setting aside a judgment given in the absence of the defendant, prior to the judgment becoming “final and conclusive between the parties”, so that any variation of the orders made must be undertaken by way of an appeal to this Court. In fact the application to set aside the judgment was not filed until 90 days after the judgment was delivered. Assuming, without deciding, that the 7 day period may be extended, the purpose and intent of the rule justifies a conclusion that no extension should be granted unless the delay has been fully explained and the circumstances are such as to justify the extension, in this case allowing a period almost 12 times the length of that allowed by the rule.

62 The evidence relied upon by the defendant before the primary judge included an affidavit from a Mr Scott Taylor, on behalf of the defendant, and an affidavit from Ms Janet Lazzaro, a solicitor with a firm of solicitors instructed to act for the defendant on 6 December 2002. The evidence of Mr Taylor basically recounted the history of his dealings with solicitors first instructed in the matter, Noyce Legal. Mr Taylor was vague as to when he first contacted Noyce Legal, but it may have been after notification of the claim, which he stated was on about 20 June 2002. However, in his evidence in chief, he accepted that he had received a letter from solicitors for the plaintiff in December 2001. Whether that document was ever forwarded to Noyce Legal is unclear. The first (and only) letter from Noyce Legal to the defendant annexed to Mr Taylor’s affidavit was dated 8 August 2002 confirming instructions to act on behalf of the defendant, but asking Mr Taylor to confirm that the plaintiff “has not commenced proceedings in the District Court”. That letter also sought a copy of the defendant’s insurance contract, its contract with the Smithfield RSL Club and requested payment of fees on account of two previous matters, together with the new matter, and execution of an unconditional costs agreement. This letter was curious in two respects: first, Mr Taylor claimed that it was a response to his action in sending material received from the solicitors for the plaintiff, which included a copy of a statement of claim and medical reports. He said that he considered the request to confirm that no proceedings had been commenced “strange” in the light of that material. He then stated in his affidavit that he queried the amount to be paid on account of fees and negotiated a lower amount. There is no suggestion that he queried the inquiry in relation to commencement of proceedings, nor that he gave the confirmation sought.

63 Mr Taylor’s affidavit then annexes correspondence received from the solicitors for the plaintiff on eight occasions up to 10 October 2002, some of which he stated was forwarded to the company’s solicitors. Despite confirming that the order for judgment and affidavit for service had been received, he gave no evidence that he had any communication with the solicitors as to what if anything they were doing on behalf of the defendant. In his oral evidence, he was cross-examined as to whether he had any communication with his solicitor at Noyce Legal (Ms Jane Morgan), after the discussion in relation to fees in June or early July 2002. He confirmed that he had no recollection of any further discussions or written communications. He was asked (Tcpt, 30 September 2004, p 38):

Q. You never sought any advice from her either orally or [in] writing as to things that you people should be doing or could be doing in relation to the matter did you?
A. No, I dealt with Jane Morgan and that company for many years so I considered them to be quite reputable and professional, up to this point, obviously.
Q. Did it occur to you that you had been sending on this material for about six months and you heard absolutely nothing from the solicitor that there might be something astray in relation to the conduct of the matter on behalf of your company by that firm of solicitors?
A. As I said, I dealt with that company for like, approximately I’d say at this point probably over the last nine years … . So once I passed the documentation on my opinion was that the fact that they would have done all the appropriate action that was needed.

64 After receiving notice of the judgment in November 2002, Mr Taylor gave evidence that he forwarded further documents in relation to that matter to Noyce Legal, without receiving any response. At that stage he instructed new solicitors, namely Goldrick Farrell Mullan.

65 The file of Noyce Legal was duly tendered in the proceedings. It contained some documents which appear not to relate to the present case. There is little which suggests that work was undertaken by Noyce Legal in this case after the initial conference. The file did not contain a copy of the statement of claim. One of the irrelevant documents is a memorandum from Noyce Legal to the new solicitors, which suggests that more than one matter was being transferred to Ms Lazzaro and that there were unpaid fees in relation to some of the matters.

66 In the circumstances, it is not appropriate or relevant to make any particular finding in relation to the conduct of Noyce Legal. It may, however, be concluded that for a period of approximately 12 months from first notification of a claim by the plaintiff, until after the time had expired for setting aside the judgment pursuant to Part 26, r 5A, the defendant took no effective steps to protect its interests in this matter, nor any steps at all to ensure that solicitors apparently instructed by it were protecting its interests. As to what happened thereafter, Mr Taylor gave no evidence.

67 The only other relevant evidence was that of Ms Lazzaro. She noted that her firm was instructed by Mr Taylor on 6 December 2002. The rest of her affidavit merely annexed correspondence sent or received by her and noted that she had on various occasions sent what were described as “without prejudice letters” to her client. They were not annexed. As already noted, she filed a notice of appearance in the District Court on 11 December 2002 and a holding appeal in this Court on the same day. The latter matter was pursued through to March 2003 but ultimately did not proceed. In correspondence with the solicitors for the plaintiff, she advised on 9 January 2003 that an application for a stay would be made and suggested that the Civil Liability Act might apply. On 29 January 2003 she requested from court reporting, a copy of the transcript of the hearing on 19 November 2002. On 7 February 2003 further transcripts were sought. On 17 February 2003 a notice of motion seeking to have the judgment set aside was filed. It was served on the solicitors for the plaintiff on 19 February 2003, apparently with an affidavit in support, although that document was not included and presumably provided no more information than Ms Lazzaro’s affidavit of 25 June 2003, which was relied upon by the defendant in the District Court proceedings.

68 The defendant was, of course, entitled to rely upon legal professional privilege, so as not to disclose any advice it received or any instructions it gave to its solicitors. However, non-disclosure of this material, leaves for speculation the reasons why the defendant took no steps at an earlier time to seek to have the District Court judgment set aside. Mr Taylor gave no evidence in that respect on behalf of the defendant, nor did Ms Lazzaro. Whether Ms Lazzaro realised the urgency of the matter and whether she conveyed that urgency to the defendant or not, is simply unknown. The result is that there is no material upon which the Court could be satisfied that an extension of the deliberately brief time period for setting aside a judgment under Part 26, r 5A should be granted, let alone for a period of 83 days.

69 The primary judge did, however, deal expressly with the defendant’s contention that the judgment should be set aside pursuant to Part 31, r 12A. It is clear that she saw such an order as an exercise of discretionary power and in that respect was clearly correct. The requirement that “sufficient cause” be shown, in order to obtain such an order, placed on the defendant the burden of demonstrating that it was appropriate in all the circumstances that the order be made. The precondition to the exercise of the discretionary power involved establishing that the judgment or order was made “irregularly, illegally or against good faith”.

70 Her Honour considered herself bound by the principles set out by Kirby P in Coles v Burke (1987) 10 NSWLR 429 requiring that misconduct or dishonourable conduct must be shown on the part of the person who procured the judgment.

71 For reasons noted at [35] above, that authority does not preclude the words “irregularly” or “illegally” embracing conduct which was in contravention of the rules, but which did not involve misconduct or dishonourable conduct. Nevertheless, the defendant must fail because there was no irregularity, illegality, contravention of rules or non-compliance with rules, in the conduct undertaken on behalf of the plaintiff. Her Honour’s conclusion that the plaintiff was “punctilious in taking every possible step to ensure that the defendant was aware of the proceedings and the progress of the proceedings” (Judgment, p 21) should, with one qualification which her Honour noted, be upheld. The qualification relates to the fact that the directions given by the registrar on 11 September 2002 were notified in a standard, and unamended form. As her Honour correctly found, the plaintiff’s solicitor “must be taken to have had knowledge of those orders, and could not seek refuge behind an inexperienced clerk’s failures to appreciate that he should have brought the amended orders to the attention of the solicitor”: Judgment, p 20. However, as already noted, the amendments, so far as they were relevant for present purposes, were immaterial. There was no shred of evidence that the defendant misunderstood the orders (or even that Mr Taylor on its behalf was concerned to note the orders). No steps were taken, or not taken, because of the failure to note the amendments. Different changes to the standard form of orders, or different circumstances, might give rise to a different conclusion. In the present case, the omissions were clerical errors. They could not, on any view, give rise to an allegation of conduct “against good faith”.

72 It appears to be true, as the defendant suggests, that her Honour made some inquiry of counsel at the assessment hearing as to the notations which appeared on the directions on the Court file. One may assume, in the absence of evidence to the contrary, that no satisfactory explanation was received. However that additional fact cannot change the conclusion as to their materiality. The inquiry and the absence of evidence as to the response was expressly noted by the primary judge in her judgment and it is clear that she thought that nothing turned on it: Judgment, pp 15-16. Her Honour’s conclusion in that regard should be accepted.

73 It follows that all of the challenges to the failure to set aside the judgment of 19 November 2002 fail.

Challenge to independent costs orders

74 Those costs orders which were consequential upon the refusal to set aside the judgment, will remain unaffected. The remaining orders are those identified at [18] above. If the matter were not proceeding on the basis that the substance of the matters raised by the Appellant were to be addressed, there would have been no reason to address these orders. Nothing was shown as to why leave should be granted in relation to these discretionary orders in relation to costs.

75 The first substantive issue raised was whether it was correct to order the defendant to pay the plaintiff’s costs of his motion. That motion was filed on 7 April 2004 and was in effect a response to the defendant’s motion to set aside the order for judgment and the judgment of 19 November 2002. It sought two orders, which were as follows:

(1) Any procedural failures that may have been involved in the filing of an Order for Judgment entered on 18 September 2002 be treated as an irregularity and not nullify the proceedings or any step taken in the proceedings, or any other documents, Judgment or Orders made in the proceedings pursuant to s 159 of the District Court Act 1973.
(2) Order 1 made by Registrar O’Dowd at the Pre-Trial Conference heard on 11 September 2002 be set aside. The time for filing a defence expired on 12 July 2002.

76 To the extent that s 159 of the Act was relevant (as indeed it was) it had the effect asserted in order 1 in any event. No doubt it was helpful to put the defendant on notice, by one means or another, that s 159 would be relied upon. Order 2 was defensive and based on acceptance of the defendant’s misapprehension as to the effect of the order for judgment under Part 11, namely that the direction given at the pre-trial conference was inconsistent with the right to obtain an order for judgment under Part 11. Order 2 was therefore unnecessary. However, her Honour, in a judgment with respect to costs delivered on 4 April 2006, rejected the submission that any different costs order should be made in relation to the plaintiff’s notice of motion on the basis that it was “not possible to point to, or unravel from the material, any matter or argument that was raised solely or principally in response to the plaintiff’s notice of motion”: Judgment, p 4. It followed that, although the plaintiff’s motion was dismissed, that was because the premises on which it was based were not established by the unsuccessful defendant and it was therefore unnecessary. There was no error of principle in treating the inseparable costs of that motion otherwise than as part of the costs of the defendant’s motion. The first ground of appeal in relation to the costs judgment should be rejected.

77 The second matter concerned the costs of an interlocutory hearing before the primary judge. The third order challenged was that each party pay his or its own costs of the hearing before Gibb DCJ, which proved futile. The two issues were related. In explaining the orders made, her Honour stated (Judgment, pp 7-8):

“In the course of preparation for hearing the notices of motion, the matter came before the Registrar. The plaintiff submitted that the application to set aside the judgment obtained on 19 November 2002 should be heard by a Judge other than myself, on the basis as I understand it, of a concern about apprehended bias. The Registrar acceded to that submission and ordered that the matter be listed before another Judge. Consequently it came before Judge Gibb set down for hearing for two days. The facts of the matter having been made clear to her Honour on the first day and after some discussion and submissions from both sides, her Honour adjourned to the following day when she ruled that the matter should be heard by me and referred the matter back to me.
In due course it was listed in front me, on which occasion the plaintiff raised what might kindly be referred to as a half-hearted suggestion that there was an issue of bias, which was promptly abandoned. The rest of the time on that day, was occupied in dealing with interlocutory issues to prepare for hearing and a hearing date was fixed. …
In so far as the one day before me is concerned, I am of the view that although ostensibly to argue the issue of bias, as the matter unfolded it was substantially occupied in other, necessary, interlocutory issues. The plaintiff should have the costs of that day. The two days in front of Judge Gibb clearly arose from the plaintiff’s successful application before the Registrar that the matter should be heard by someone other than me. Her Honour took a different view. Having regard to the fact that the issue raised successfully before the Registrar was a suggestion of potential bias, that although successful in that Court her Honour took a different view, and the issue was effectually abandoned before me, I have come to the view that each party should bear their own costs of the two days before Judge Gibb.”

78 According to the submissions for the Appellant, the reasons why the matter was listed before Gibb DCJ were that Karpin DCJ did not ordinarily sit on the hearing of motions and that earlier hearing dates before another judge were available. It was further alleged:

“The sole reason for the matter not proceeding before Gibb DCJ was because Gibb DCJ was not Karpin DCJ.”

79 The assumption underlying this last statement is apparently that an application under Part 26, r 5A “was required to be made to the trial judge”. The basis of that requirement was not made clear. It may often be convenient for the trial judge to hear such an application, but in many cases, it will not be convenient. If Gibb DCJ in fact refused to hear the matter on the basis that it was either inappropriate for her hear it or that she lacked power to make the relevant order, that may well have been unfortunate. Given the inquiries made by her Honour in relation to aspects of the procedures in the registry, it may ultimately have been inevitable that another judge would need to hear the matter. Whether or not the understanding of Karpin DCJ as to what happened in relation to the hearing before Gibb DCJ is correct or not, and assuming in the Appellant’s favour that her explanation is incorrect, it would nevertheless not warrant departure from the costs order made by her Honour.

80 The challenge to the orders for costs made by her Honour in relation to the various motions before her should be rejected.

Conclusions

81 The manner in which the matters presently before the Court came to be presented and argued was in many respects misconceived. If there are issues which were raised in submissions which have not been fully addressed above, it is because they do not warrant a reply. Because all of the challenges to the judgments in the District Court require leave, leave should not be granted in relation to any such matters.

82 Otherwise, leave should be granted to the defendant in the Court below, who has somewhat inaccurately been described as “the Appellant”, to the extent that it needs leave. However, the appeal, the summons for leave to appeal and the various motions filed in proceedings 40225 of 2006 and 40765 of 2005 should otherwise be dismissed with costs. I note that Handley JA, on 19 June 2006, ordered the Appellant, referred to by his Honour as “the claimant” to pay the costs of the notice of motion before him. The result is that AVS Australian Venue Security Services Pty Ltd should pay all the costs of Mr Criminale of all proceedings in this Court including the motions.

83 Accordingly, I propose the following orders:

(1) To the extent that AVS Australian Venue Security Services Pty Ltd requires leave in relation to the matters dealt with in this judgment grant leave to appeal in matter Nos. 40249 and 40765 of 2006.

(2) Dismiss the appeals.

(3) Order AVS Australian Venue Security Services Pty Ltd to pay the costs of Ricky John Criminale of and incidental to the proceedings 40765 of 2005, 40225 of 2006 and 40249 of 2006 in this Court.

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