Ixia Pty Ltd v Szumylo

[1998] FCA 1382

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SG 3033 of 1997

BETWEEN:

IXIA PTY LTD
ACN 007 891 518

APPLICANT

AND:

ANDREW MICHAEL SZUMYLO,
COMPLETE SYSTEMS & SOLUTIONS PTY LTD
ACN 054 919 112 and
JACMM NOMINEES PTY LTD
ACN 073 749 783

RESPONDENTS

JUDGE:	MANSFIELD J
DATE:	16 OCTOBER 1998
PLACE:	ADELAIDE

REASONS FOR JUDGMENT

HIS HONOUR:  I have before me an application for judgment against the first respondent in default of defence, brought by notice of motion filed on 14 August 1998.

The principal application was commenced on 23 October 1997.  The focus of the parties initially was on interim relief to preserve assets of the respondents to which the applicant claimed to be entitled.  Orders by consent were made and continued from time to time in that regard.

On 19 May 1998 I gave directions for the exchange of pleadings with a view to the matter proceeding to trial.  In accordance with those directions, a statement of claim was filed on 2 June 1998.  It was not served in accordance with the directions and not until about 14 August 1998, when the present motion was issued.  It was clearly an inappropriate motion at that time.  Its service, under the directions, activated the need to file a defence in accordance with the directions.  The present notice of motion came on for hearing on 24 August 1998.  No appearance and defence had been filed by then.  Counsel then appearing for the respondents sought, and was granted, an extension of time in which to file and serve an appearance to 28 August 1998, and within which to file and serve a defence and any cross-claim to 25 September 1998.  An affidavit has been filed indicating that those orders were specifically brought to the attention of the respondents by their then legal advisers.  I note also that service of the notice of motion, of the statement of claim and of my order with directions was served upon the respondents on 18 September 1998.

Despite those orders, no defence was filed.  The matter came before me again on 14 October 1998 for the seeking of a default judgment against the first respondent only.  On that occasion, Mrs Szumylo appeared and asked that the matter be adjourned.  After some argument, I adjourned the matter to today to enable the respondents to file and serve such affidavits as they were advised in relation to opposition to the motion, or to file a defence if so advised.

The respondents have still not filed any defence.  Mrs Szumylo is unable to specify any time frame within which that might be done.  The position, therefore, is that there has been a failure to comply with the Federal Court Rules, and with the directions of the Court, in respect of the filing of defences.  Order 11 rule 23 of the Rules in those circumstances entitles the Court to enter judgment in default of defence.  That is what I am now asked to do.

I have considered the affidavits now filed on behalf of the respondents in opposition to the motion.  The first is a short affidavit of the first respondent authorising, so far as he lawfully can, Mrs Szumylo to appear today on behalf of the respondents generally.  The second is a long affidavit of Mrs Szumylo deposing to events in December 1996 when the issues apparently the subject of these proceedings first came to light, and deposing in a very general way to possible claims which the first respondent may have against the applicant.  To the extent to which he may have those claims, the order which I am asked to make on this motion will not affect his entitlement to pursue them.  The third is a short affidavit of the first respondent sworn on 16 October 1998, giving his reasons why no defence or counterclaim has been filed.  They are as follows:

“I am still under the care of Doctor M Ewer Psychiatrist, treating my mental state, and under continual medication.

Could not obtain legal advice due to my counsel Mr Robert Sallis of Andersons withdrawing from any further assistance due to lack of funds and outstanding accounts not paid.

Legal Aid have not given at this point of time any answer whether they will supply funding for my defence even though all documentation asked for having been forwarded.”

I do not know when the application for legal assistance was made, or in what terms, or when, or what communications there have been since that time in relation to it, or when it is anticipated that a formal ruling on the application for legal aid will be given.  I infer from the earlier attendances of Mr Sallis of counsel before me, including on 24 August 1998, that that application was made sometime after that date.  I am not persuaded that it is a sound reason for defences not having been filed in accordance with the Rules and the directions, that there might be a delay, if indeed there be any, in the Legal Services Commission responding to an application for legal aid.  Appearances were filed by the respondents on 27 August 1998, acting in their own behalf.  It was incumbent upon those respondents then to file defences.  I do not regard the dealings with the Legal Services Commission in the circumstances and with the limited information provided as a sufficient reason to accommodate the request Mrs Szumylo has again made for an adjournment to a time sometime in the future, and that time being one which she has been unable to specify.

The other reason given by the first respondent for not having filed a defence is that he says he is under the care of a psychiatrist treating his mental state and under continual medication.  Whilst I accept what he deposes to in his affidavit, that does not sufficiently satisfy me that a defence ought not to have been filed by him by this time.  No medical evidence was tendered from Dr Ewer to indicate the condition from which he is suffering, or that it has not enabled him to attend to some or all of his affairs, or that it has prevented him from being able to address the filing of a defence or to confront the allegations which have been made against him in these proceedings.  It is not clear from the very general comments in his affidavit as to how long he has been suffering that illness, or its significance, or why that illness has precluded the filing of a defence both in the period of time up to 27 August 1998, when counsel was appearing on behalf of the respondents, and since then.

In those circumstances, in my judgment it is appropriate that the order sought be granted.  I accordingly enter judgment for the applicant against the first respondent in the terms of the amended minutes of order dated 16 October 1998 handed to me today and which I now initial.

I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.

Associate:

Dated:             27 October 1998

Counsel for the Applicant:	Mr J White
Solicitors for the Applicant:	Thomson Playford
Ms M Szumylo in person for and on behalf of the respondents
Date of Hearing:	16 October 1998
Date of Judgment:	16 October 1998