Pi v Zhou

[2015] NSWSC 470

Supreme Court

New South Wales

Medium Neutral Citation:	Pi v Zhou [2015] NSWSC 470
Hearing dates:	22 April 2015
Date of orders:	22 April 2015
Decision date:	22 April 2015
Jurisdiction:	Common Law
Before:	McCallum J
Decision:	Order 1 sought in notice of motion granted. Default judgment in favour of the plaintiff dated, 16 July 2014, set aside.
Catchwords:	PROCEDURE – civil – application to set aside default judgment – arguable defence – where defence filed before entry of default judgment by Registrar – where defence filed put in contest plaintiff's contentions in statement of claim
Legislation Cited:	Evidence Act 1995 (NSW), s 91 Uniform Civil Procedure Rules 2005 (NSW), rr 14.3(1), 16.2
Category:	Procedural and other rulings
Parties:	Guang Hua Pi (Plaintiff/Respondent) Jian Cheng Zhou (First Defendant/Applicant) Christine Zhou (Second Defendant/Applicant)
Representation:	Counsel: Plaintiff/Respondent in person J O’Connor (Defendants/Applicants) Solicitors:
File Number(s):	2013/389177
Publication restriction:	None

Judgment – Ex tempore

1. [ADDENDUM: Since delivering these reasons ex tempore, I have realised that r 16.2(2) of the Uniform Civil Procedure Rules 2005 (NSW), which was not specifically referred to during argument, provides that a defendant is not “in default” if he or she has filed a defence after the time limited by the rules or allowed by the Court but before a default judgment is given against the defendant. For the sake of maintaining an accurate record, this revised ex tempore judgment records the reasons I gave in Court for granting the defendants’ application to have the default judgment entered against them set aside. However, it should be noted that my reasons were stated in ignorance of that provision, which (leaving aside any issue as to whether the defence was duly “filed”) puts it beyond doubt that the defendants were entitled to have the default judgment set aside. Part of the reasoning that follows (recorded as stated orally in open Court) is wrong, in light of that rule.]

2. HER HONOUR: On 12 January 2011, a physical altercation occurred between the plaintiff, Mr Pi, and the first defendant, Mr Zhou. Mr Zhou and his wife (the second defendant) made statements to police concerning those events, resulting in Mr Pi being charged with a criminal offence. He was acquitted of that charge and now brings these proceedings, contending that it was Mr Zhou who assaulted him rather than the other way round.

3. Mr Pi’s claim is for damages for assault. He has also pleaded a cause of action in defamation, evidently based on the statements to police of each defendant. On 16 July 2014, default judgment was entered against each defendant on those claims, for damages to be assessed.

4. The proceedings came before me today as duty judge to hear the defendants' notice of motion filed on 4 March 2015. The relief sought in that notice of motion is as follows:

1. Judgment entered on 16 July 2014 against the first and second defendant be set aside;

2. An order than the proceedings be dismissed pursuant to r 13.4 of the Uniform Civil Procedure Rules 2005 (NSW);

3. Alternatively to order (1), an order that the proceedings be dismissed pursuant to r 12.7 of the Rules;

4. Alternatively to orders (1) and (2), an order that summary judgment be given in favour of the defendants, pursuant to the inherent jurisdiction of the Court;

5. Alternatively, an order that the statement of claim be struck out pursuant to r 14.28 of the Rules;

6. Such other orders as this Honourable Court deems fit; and

7. The plaintiff to pay the defendants’ costs.

5. During the course of argument, Mr O'Connor, who appears for the defendants, indicated that he would wish today to move only on the application to have the default judgment set aside and that, if that application were granted, the defendants would seek further directions before moving on the balance of the relief sought.

6. I have determined that the application to have the default judgment set aside should be granted. These are my reasons for reaching that conclusion.

7. The proceedings were commenced by statement of claim filed on 30 December 2013. The statement of claim was served on both defendants personally on 15 February 2014, having a return date of 7 April 2014. When the proceedings first came before the Court on 7 April 2014 it appears no direction was sought extending the time for filing a defence beyond the period of 28 days allowed under r 14.3(1) of the Uniform Civil Procedure Rules 2005 (NSW). Further, from my examination of the court file, both in the handwritten directions of the Registrar and on JusticeLink, so far as I am able to discern, at no point has the time for filing a defence been extended by the Court. It follows, in accordance with the Rules, that the defendants were exposed to the risk of having default judgment entered against them upon the expiration of 28 days after 15 February 2014, a date which came and went before the first directions hearing.

8. What happened at three directions hearings which took place before the default judgment was entered appears, however, to have proceeded on a different assumption, at least on the part of the defendants. On the first occasion, 7 April 2014, the Registrar ordered the plaintiff to file and serve an evidentiary statement in accordance with the Practice Note SC CL 5. The plaintiff was ordered to do that by 19 May 2014 and the proceedings were stood over to 26 May 2014.

9. In the meantime, on 29 April 2014, the plaintiff filed a notice of motion seeking default judgment. In the circumstances I have recited, he was entitled to do so. By that stage, there had been no defence filed and no extension of time sought for the filing of a defence. In accordance with the Rules, the defendants were at that point “in default", as that term is defined in 16.2(1).

10. Upon the return of the proceedings on 26 May 2014, the Registrar made “order 6” allowing the defendants to file and serve “any notice of motion and affidavits” by 16 June 2014. There is no evidence before me on the present application as to what notice of motion was foreshadowed by the defendants at that time. Mr O'Connor, of counsel, appears without the assistance of an instructor this morning.

11. The Registrar further ordered the plaintiff to file and serve any further affidavit evidence upon which he intended to rely by 30 June 2014 and ordered that any motion filed in accordance with order 6 be returnable on 7 July 2014 for referral to the Duty Judge to be heard together with the plaintiff's motion (evidently a reference to his application for default judgment). By that point, the defendants must have appreciated, having been served with the notice of motion for default judgment by the plaintiff, that the time within which the defence had to be filed had expired.

12. The proceedings were stood over to 7 July 2014. On that occasion, it appears that the defendants had not filed any notice of motion, contrary to what appears to have been foreshadowed on 26 May 2014. The only order made on that date was in the following terms:

“Notice of motion filed 29 April 2014 [the plaintiff's application for default judgment] referred to a Deputy Registrar to be considered in chambers, such application not to be considered until after 12 [midday] on 8 July 2014."

13. An affidavit sworn by the defendants' solicitor, Mr Orford, dated 4 May 2015, asserts that it was said on that occasion that if a defence was not filed within that period (that is, by midday on 8 July 2014), the application for default judgment would proceed to be considered in chambers by the Registrar.

14. As already noted, there was still no express extension of the time for filing a defence at that stage. Mr Orford was proceeding on the premise that, if he did file the defendants' defence within that period, that would obviate the risk of default judgment being entered.

15. On 8 July 2014, at a time not disclosed in the evidence before me, a letter was delivered by Mr Orford to the Registry attaching his clients' defence and two affidavits (curiously, the letter on the Court file is not the same as the letter put in evidence by Mr Orford in support of the present application – there appear to have been two different versions prepared within his office – but the contents of both letters are to the same effect). All of those documents, including the defence, are stamped as having been received by the Court on 8 July 2014. The Court, however, proceeded to enter default judgment on 16 July 2014.

16. A possibility is that the Deputy Registrar who considered the application had before him or her the defence stamped as having been received on 8 July 2014 and determined nonetheless to proceed to enter default judgment. On balance, however, I think that is unlikely. The likelihood is that the Registrar who entered default judgment on 16 July 2014 did so in ignorance of the fact that defence had been filed on 8 July 2014. It follows that the judgment was entered irregularly and should be set aside.

17. I have reached that conclusion with some hesitation, principally for two reasons. One is that, as submitted by the plaintiff, Mr Pi, he has at all times conducted himself entirely in accordance with the Rules. He filed the notice of motion at a time when, in accordance with the Rules, the defendants were exposed to having default judgment against them. The defendants evidently delivered their defence to the Court together with other material but without having sought an extension on 7 July 2014. The second reason I have some hesitation in reaching the conclusion I have is that the circumstances I have recited have been discerned by me, by my own examination of the court file, without the assistance of any explanatory affidavit for the defendants.

18. The premise of the application appears to be simply that defence was filed on 8 July 2014, prior to the entry of default judgment, and that it therefore follows inexorably that the default judgment should be set aside. As I have endeavoured to explain, however, those defences were delivered to the court in the absence of any order extending the time for filing a defence and accordingly the defendants were in default at the time default judgment was entered. It behoved the solicitor for the defendants to put before the Court a full and frank explanation of all of the circumstances in support of the application to have the judgment set aside.

19. That said, my consideration of the dictates of justice has led me to the conclusion that the default judgment should nonetheless be set aside. In reaching that opinion, I am principally guided by the fact that the defence filed squarely puts in contest the plaintiff's contentions in the statement of claim.

20. The application to set aside the default judgment was supported by an affidavit sworn by each of the defendants, attaching respectively his and her statements to police, asserting their version of the relevant events surrounding the assault. It is clear that there is a real issue to be tried as to whether this was a case of the plaintiff being assaulted by the first defendant or the first defendant defending himself against an assault by the plaintiff. That is a contest which I do not think should be brushed aside by the procedural history I have recited.

21. For those reasons, order 1 sought in the notice of motion filed 4 March 2015 should be made.

22. As already noted, the notice of motion also sought dismissal of the proceedings or summary judgment, invoking various powers of the Court. In deferring the determination of those parts of the notice of motion Mr O'Connor was, I think, acceding to the force of a number of matters put to him by the Court during argument. Plainly, it is open to the defendants to pursue the balance of the motion if they see fit, but I would observe that there emerged in argument a number of potential hurdles to the relief sought (for example, the findings of the Magistrate, sought to be relied upon by the defendants in support of the summary judgment application, are not admissible in these proceedings to prove any fact that was in issue in the criminal proceedings: see s 91 of the Evidence Act 1995 (NSW)). It may be considered by the defendants to be expedient to proceed directly to a final hearing rather than pursuing further interlocutory relief so as to contain the costs of the proceedings, which are already at risk of being disproportionate to the interests at stake.

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Decision last updated: 27 April 2015