Luzaj v Boldknight Pty Ltd (Ruling)

[2015] VCC 59

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

COMMON LAW DIVISION

Revised
Not Restricted
Suitable for Publication

GENERAL LIST

Case No. CI-13-06351

BARDHYL LUZAJ	Plaintiff
v
BOLDKNIGHT PTY LTD	Defendant

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JUDGE:	HIS HONOUR JUDGE SACCARDO
WHERE HELD:	Melbourne
DATE OF HEARING:	9 and 15 December 2015
DATE OF RULING:	10 February 2016
CASE MAY BE CITED AS:	Luzaj v Boldknight Pty Ltd (Ruling)
MEDIUM NEUTRAL CITATION:	[2015] VCC 59

RULING
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Subject:  PRACTICE AND PROCEDURE

Catchwords:             Application by defendant seeking an order setting aside an interlocutory judgment entered against it

Legislation Cited:     Limitation of Actions Act 1958

Cases Cited:Luzaj v Boldknight Pty Ltd [2015] VCC 485; Kostokanellis v Allen [1974] VR 596; Sweeney v Boylan Nominees Pty Ltd [2006] HCA 19

Ruling:  Application granted.  Interlocutory judgment set aside.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr A Ingram	Melbourne Injury Lawyers Pty Ltd
For the Defendant	Ms E M Brimer	Wotton & Kearney

HIS HONOUR:

1       In this application the defendant seeks an order setting aside an interlocutory judgment entered against it in this Court on 12 March 2015.  The chronology relevant to the current application by the defendant may be summarised as follows:  

·On 12 December 2010, the plaintiff was assaulted in a parking lot adjacent to the Marquee nightclub.

·On 9 December 2013, the plaintiff commenced a proceeding against the defendant, the operator of the nightclub, in which he alleged that the defendant was responsible for the provision of security at, or in the immediate environs of, the nightclub and, accordingly, for the actions of the security guard who unlawfully assaulted him.

·On 9 December 2014, the defendant was validly served with the plaintiff’s Statement of Claim.

·On 12 March 2015, Interlocutory Judgment was entered into against the defendant by reason of the failure by the defendant to enter an appearance.

·The hearing date for the assessment of damages in the case was fixed for 17 April 2015 and notice of the hearing date was given to the defendant by way of a letter sent to the defendant’s registered address by the Registrar of the Court.

·On 28 April 2015, the trial in the matter proceeded, following which, by reason of the judgment of her Honour Judge Kings, dated 22 April 2015,[1] judgment was entered against the defendant in favour of the plaintiff in the sum of $307,887.97.

[1]Luzaj v Boldknight Pty Ltd [2015] VCC 485

2       There is no issue in this matter that the judgment entered for the plaintiff was a valid judgment which was primarily based upon the defendant’s vicarious liability for the actions of the plaintiff’s assailant, and that the defendant did nothing to:

·        Defend the claim made by the plaintiff

·        Contest the quantum of the plaintiff’s damages at the trial to assess damages; or

·        Set aside the judgment which had been entered against it until the issuing of the current application.

3       There is no issue that in considering the defendant’s application in this instance, I should do so adopting the approach described by the Court of Appeal in Kostokanellis v Allen,[2] applying due weight to the following relevant criteria:

(a)      whether the defendant has a defence on the merits;

(b)the reason for the default of the defendant in consequence of which the judgment was attained;

(c)whether the application to set aside the judgment was made promptly after the judgment came to the knowledge of the defendant; and

(d)whether, if the judgment were set aside, the plaintiff would be prejudiced in any respect, which could not be adequately compensated for by way of a suitable award of costs and the giving of security.

[2][1974] VR 596

4       I am satisfied that the defendant was properly served with both the Statement of Claim in this proceeding and notice as to the date upon which the assessment of damages was to be undertaken, and that no good reason has been given by the defendant in explaining its decision to take no action to defend the case other than it was disorganised and uninterested in corporate governance insofar as the management of this claim was involved.

5       As to the timing of the present application, no position was advanced on behalf of the plaintiff that there was undue delay in the making of this application.

6       It is put on behalf of the defendant that it has established that it has a defence on the merits in this instance on two grounds, namely:

(a)that at all material times Dominance Guardian Services (DGS), (a security company), had been retained by it as an independent contractor to provide security at the nightclub and that, in those circumstances, any liability for the actions of the plaintiff’s assailant rested with DSG and not the defendant;

(b)that the content of the affidavit of William Carr as to the circumstances of the alleged incident raises a defence on the merits.

7       As to the second of these positions, Counsel for the plaintiff pointed to inconsistencies between the descriptions given by the plaintiff of the incident in which he was injured and the evidence of Mr Carr, and submitted that Mr Carr was referring in his affidavit to an incident other than that in which the plaintiff suffered his injuries.

8       Although:

(i)    In his affidavit, the plaintiff described:

§    his assault as occurring after 3.00am on 12 December 2010, which was a Sunday morning; and

§    his last recollection being that he observed a fight outside the defendant’s nightclub and in the middle of the street; and

(ii)   In his affidavit, Mr Carr describes the incident occurring on a Saturday night and not involving a situation in which the road was blocked so as to impede the passage of vehicles such as that being driven by the plaintiff;

I am satisfied, given the unusual nature and scale of the incident, that the parties are probably describing the same incident.

9       I am satisfied that a prima facie position exists that the circumstances in which the plaintiff suffered injury did not give rise to a breach of the duty of care owed by the defendant to the plaintiff.

10      Contrary to the plaintiff’s position that he was assaulted by a security officer for whose actions the defendant was liable, Mr Carr’s evidence is:

·        The defendant had sub-contracted its security arrangements to DGS which Mr Carr deposes provided a reliable and professional service and security staff who were properly licenced; and

·        If the plaintiff was assaulted by a security officer, the plaintiff’s assailant was employed by DGS for whose actions the defendant had no vicarious liability.

11      It is clear that a licensee may have no liability for the tortious actions of an independent contractor engaged by the licensee to manage security at the premises of the licensee.[3]

[3]Sweeney v Boylan Nominees Pty Ltd [2006] HCA 19.

12      Given the questionable ability of the plaintiff to identify his assailant or to establish any vicarious liability in the defendant for the actions of his assailant, I am satisfied that a real issue arises as to whether the plaintiff suffered any injury by reason of the breach of a duty of care owed by the defendant to him.

13      It is put on behalf of the plaintiff:

·        that should the judgment in this instance be set aside, he will be exposed to a prejudice which cannot be compensated by the making of a costs order in his favour, given that he may now be exposed to a limitation of actions defence being taken by DGS in respect of any proceeding he may now commence against it; and further

·        that the defendant has not undertaken to pay costs nor to provide security. 

14      As to the second of these issues, an undertaking has been provided on behalf of the defendant’s insurer that it would meet any costs to which the plaintiff was entitled should an order be made setting aside the judgment.

15      As to the potential defence available under the Limitation of Actions Act  available to DGS, I am satisfied that, whilst I should give due weight to the potential of such a defence being raised, it remains to be determined whether a limitations defence may be available to DGS given the plaintiff’s position, as is clear from his affidavit:

·        that he was unaware of the existence of DGS; or

·        that the defendant had subcontracted its security services

until the issue was raised by the defendant in this application.

16      For these reasons, I accept the position put on behalf of the defendant that the prejudice which arises by reason of the potential operation of the Limitation of Actions Act to limit the plaintiff’s ability to commence proceedings against DGS is speculative in nature and that, whilst it should not be ignored, neither should it be necessarily determinative of the outcome of the application when my task in this instance is to weigh up the extent to which the defendant is prejudiced by allowing the order and judgment to stand and the prejudice occasioned to the plaintiff in setting the order and judgment aside.

17      I am satisfied, notwithstanding the absence of any material which in any way justifies the failure by the defendant to file a defence in this instance, that in the absence of any prejudice to the plaintiff arising by reason of the operation of the Limitation of Actions Act, given:

·        the absence of any significant delay by the defendant in seeking to set aside the judgment once it was notified of the presence of the same;

·        the ability of the defendant to compensate the plaintiff for any costs incurred by the plaintiff by reason of the entry of the judgment or the setting aside of the judgment;

·        the potential merit of the prima facie defence raised by the defendant in this instance;

·        the prejudice to the defendant which arises by reason of a judgment existing against the defendant in respect of which it has demonstrated the existence of a defence on the merits

that an order should be made setting aside the judgment obtained by the plaintiff.

18      Whilst I am satisfied that the plaintiff is potentially exposed to the risk that he may be shut out from commencing a proceeding against DGS should his judgment against the defendant be set aside, I am not satisfied, given the uncertainty which arises to whether the defence is open to DGS, that the potential of such a defence should operate to dissuade me from the course which I would take in the absence of the defence, namely, to set aside the judgment obtained by the plaintiff against the defendant in this instance.

19      For the reasons set out above, I am satisfied that I should set aside the judgment in this instance subject to the defendant providing an undertaking to meet any costs order to which the plaintiff is entitled in this instance.

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