Southern Longline and Trawl Company Pty Ltd (In Liq) v; Buckland
[1999] TASSC 80
•10 August 1999
[1999] TASSC 80
CITATION: Southern Longline & Trawl Company Pty Ltd (In Liq) v
Buckland [1999] TASSC 80
PARTIES: SOUTHERN LONGLINE & TRAWL COMPANY
PTY LTD (IN LIQUIDATION) (ACN 009 526 596)
v
BUCKLAND, Anthony Dean
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: ORIGINAL
FILE NO/S: 290/1998
DELIVERED ON: 10 August 1999
DELIVERED AT: Hobart
HEARING DATES: 19 July 1999
JUDGMENT OF: Wright J
CATCHWORDS:
Procedure - Supreme Court procedure - Tasmania - Practice under Rules of Supreme Court - Motions and other applications - Default judgment - Default in filing defence - Procedure - Whether time for filing defence had in fact expired - Whether judgment validly entered - General discretion of the Court to set aside - Delay by defendant/applicant.
Rules of the Supreme Court (Tas), O3, r7(6), O23, r6, O30, r2, O79, rr9(1), 10.
Anlaby v Praetorious (1888) 20 QBD 764; Motor Accidents Insurance Board v O'Neil [1981] Tas R 113, considered.
Evans v Bartlam [1937] AC 473, applied.
National Mutual Life Association of Australasia v Century Motors Pty Ltd 64/1984, followed.
Aust Dig Procedure [280]
REPRESENTATION:
Counsel:
Plaintiff: A R Spence
Defendant: In Person
Solicitors:
Plaintiff: Page Seager
Defendant: In Person
Judgment Number: [1999] TASSC 80
Number of Paragraphs: 16
Serial No 80/1999
File No 290/1998
SOUTHERN LONGLINE & TRAWL COMPANY PTY LTD
(IN LIQUIDATION) (ACN 009 526 596) v
ANTHONY DEAN BUCKLAND
REASONS FOR JUDGMENT WRIGHT J
10 August 1999
On 17 February 1998, the plaintiff issued a writ against the defendant, claiming a debt of $14,706.85, being the balance of monies allegedly owed by the defendant to the plaintiff in respect of the purchase of a shop known as "Minx" boutique and for $390 allegedly had and received by the defendant to the plaintiff's use, arising from the sale by the defendant of the plaintiff's motor truck.
On 18 August 1998, the plaintiff obtained an order for substituted service of the writ, and on 15 September 1998, the defendant entered an appearance providing an address for service of process as follows: "PO Box 1015, Sandy Bay, 7006". On 2 October 1998, the statement of claim was prepared by the plaintiff's solicitors and this document was sent by registered post on 9 October 1998 to the defendant at "PO Box 343, Night Cliff, Northern Territory". Annexed to the affidavit of service of the statement of claim, which was sworn by Shannon Horne, a law clerk employed by the plaintiff's solicitors on 28 October 1998, is a delivery confirmation card by Australia Post, bearing a delivery date of 9 October 1998. The card appears to be signed by the defendant. Why the statement of claim was not delivered to the defendant's address for service in Tasmania was not explained. There is no affidavit by the plaintiff's solicitor or by Mr Horne, verifying the defendant's failure to deliver a defence to the statement of claim within the period allowed by the Rules of Court, O23, r6.
It is also noteworthy that Mr Horne's affidavit, though referring to the statement of claim of 2 October 1998, did not annex a copy of that document so as to identify it as a copy of the document served upon the defendant. The comment must be made that it is difficult to see how the Registrar could be satisfied that the plaintiff had an entitlement to judgment unless he had material before him to show that the claim was for a debt or liquidated demand. It is only in respect of such a claim that final judgment may be entered, pursuant to the Rules of Court, O30, r2. The writ issued in this case carried a special endorsement which appears to have complied with O3, r7(6). There was no apparent need for the plaintiff to deliver a statement of claim. However, the plaintiff's legal advisers chose to do so and it seems to me that once this choice was made, the provisions of the Rules applicable to specially endorsed writs ceased to apply.
My only knowledge of the statement of claim has come from seeing a copy of that document provided with the judge's papers filed by the plaintiff's solicitors. In terms, the statement of claim is for a "debt" but there may be some debate about whether or not the claim really is for a debt or liquidated demand, as that phrase is understood for legal purposes. The statement of claim alleges, in par3, an agreement by the defendant to purchase "Minx" boutique for:
"$30,000 of which $50.00 was to be paid to Eugene Alexander & Associates … on the signing of the agreement and the balance was to be paid in equal quarterly instalments, the first such instalment to be paid 90 days from the date of completion."
Paragraph 4 says:
"It was an express term of the Agreement that the purchase should be completed on the 9th day of September 1994"
and par5 says:
"In breach of the Agreement the Defendant has failed to pay to the plaintiff the balance of the purchase price of the business being $14,706.85."
Then follows a reference to the $390 allegedly had and received, and, in par8, an allegation is made that:
"On or about the 4th September 1997 the Plaintiff demanded of the Defendant payment of the sum of $14,706.85 plus the $390 amounting to a total of $15,096.85."
The meaning of the phrase, "debt or liquidated demand" was discussed in detail by Neasey J in Motor Accidents Insurance Board v O'Neil [1981] Tas R 113 and it seems to me that the plaintiff's claim may properly be so characterised.
On 28 October 1998, a judgment in default of defence for the sum of $15,096.85 and costs of $187 was entered in the Registry. The Rules are silent as to the processes necessary for the entry of a judgment in default of defence and I was surprised to learn that the practice apparently exists of the Registrar entering up judgment upon receipt of a letter from the plaintiff's solicitors, simply asserting that there has been a failure of the defendant to deliver a defence within the time allowed by the Rules. I cannot accept that this is an appropriate mechanism to justify the significant step of entering judgment for what may be a very substantial sum of money. Judgment in default of appearance requires the filing of an affidavit of service by the plaintiff and, an appearance being a formal document which must be filed at the Registry, the failure of the defendant to enter an appearance can be verified by the Registrar by reference to the court file before such a judgment is entered. No such safeguards are available in the case of a judgment in default of defence. A defence is a document which is not filed with the court, it is merely an inter partes pleading delivered by the defendant to the plaintiff's solicitors and it is difficult to see what justification can exist for the entry of a judgment in default of defence, without sworn evidence being placed before the Registrar verifying the fact that a defence has not been delivered within the time frame permitted by the Rules.
The defendant, who has acted throughout these proceedings in person, filed an application to set aside the default judgment on 11 December 1998. The grounds of the application were not set forth in the application itself, but it was clear from the contents of two affidavits which he filed, and his own acknowledgement from the bar table, that he was not complaining about the method or procedures adopted by the plaintiff or the Registry which led up to the entry of the judgment but, rather, he was complaining of other matters, to which I will refer shortly, which, he said, would justify the Court in setting that judgment aside.
Before turning to these matters, there is another aspect of the matter which caused me to doubt whether the plaintiff's judgment could survive. These doubts arose because, although the Australia Post card suggests that the defendant was served with the statement of claim on 9 October 1998, Shannon Horne's affidavit (to which the Australia Post card is annexed) says (inter alia):
"I did on the 9th day of October 1998 serve Anthony Dean Buckland with a copy of the statement of claim dated the 2nd October 1998 by posting it by Registered Post at the General Post Office, Elizabeth Street, Hobart in Tasmania …".
It is nearly inconceivable to me that a letter posted in Hobart on 9 October 1998 could be delivered to the defendant at Night Cliff in the Northern Territory on the same day as it was posted, yet this is what the date on the Australia Post card suggests. I should also add that it was asserted by the defendant in par2(b) of a document which purported to be an "amended affidavit", but which was unsworn, that:
"I was sent a Statement of Claim but due to the slowness of mail this took five days to arrive in Darwin."
If this statement were to be relied upon, it would suggest that the defendant did not in fact receive the statement of claim until at least 14 October 1998 and it could therefore be argued that the time for filing a defence had not expired in accordance with the Rules when judgment was entered up by default on 28 October 1998.
In computing the time within which the defendant was required to deliver a defence, regard must be had to the provisions of O79, r10. If the statement of claim was effectively served on the defendant on 14 October, he would have had the right and opportunity to deliver a defence up to 5pm on 28 October (see O79, r9(1)). However, judgment was entered on 28 October and, on the facts predicated, this would have been premature. The defendant, in such circumstances, would be entitled to have the judgment set aside ex debito justitiae, regardless of the merits of any potential defence (see Anlaby v Praetorious (1888) 20 QBD 764).
However, not only was the "amended affidavit" to which I have referred, unsworn by the defendant, but it was filed by him and served on the plaintiff well after the time which he was allowed for this purpose by an order of the Master made on 26 February 1999. I ruled at the hearing of the application that this "affidavit", even though it had been sworn by the defendant shortly before the hearing actually took place, could not be read by the defendant in support of his application. In the circumstances, therefore, I have concluded that no reliance can be placed by me upon the contents of the document, particularly as it is clear that if I had allowed it to be read, Mr Spence, counsel for the plaintiff, may well have challenged the accuracy of the defendant's allegations and sought to cross-examine him upon that and other statements made within the document.
It therefore seems to me that in the final analysis, there is no firm basis upon which I can set aside the judgment on the ground that it was entered prematurely, particularly as two previous affidavits of the defendant, which were read without objection, and upon which he relied but was not cross-examined, stated:
"That due to being outside of the State of Tasmania I was prevented from preparing and serving a Defense [sic] and Counterclaim in the matter between Southern Longline and Trawl Pty Ltd (In Liquidation) and Anthony Dean Buckland Plaint No 290 of 1998 within the time frame provided by the Court."
This statement was made first in his affidavit of 11 December 1998, par2, and was repeated verbatim by him in his affidavit of 13 January 1999. On its face, this statement constitutes a clear acknowledgement that a defence was not delivered within the period allowed by the Rules.
I therefore proceed on the basis that the judgment was validly entered and, in considering the defendant's application, I propose to confine myself to the grounds and arguments upon which he actually relied during the course of the hearing before me.
The defendant argued that the plaintiff should have provided further particulars of the claim and, knowing that he, the defendant, was residing in the Northern Territory, the plaintiff should not have entered judgment in his absence in Tasmania. Neither of these arguments was convincing and, in my opinion, simply cannot be supported. The defendant also claimed that he was unable to properly defend the proceedings because necessary relevant documents were still in Tasmania and unaccessible to him, but this was simply an extension of his first argument, and was equally unconvincing. He also argued that the alleged agreement upon which the plaintiff sued was not clearly pleaded and that judgment should not have been entered without production of the agreement itself. These arguments are without substance, in my view. He suggested that there were implied terms in the agreement and that the agreement had been frustrated by unexpected action by the Australian Securities Commission which had placed the plaintiff company in liquidation, thus supposedly destroying the goodwill of "Minx" boutique. I find these arguments completely unconvincing.
A matter of more substance arises from the defendant's claim that the liquidator of the plaintiff company has acknowledged that the plaintiff owed $175,000 to the defendant at the time of the liquidation and, the defendant says, he should therefore be entitled to set off this sum against the amount claimed by the plaintiff. The defendant referred to Day & Dent Constructions Pty Ltd (In Liquidation) v North Australian Properties Pty Ltd (Provisional Liquidator Appointed) (1981 - 1982) 40 ALR 399. It is no part of my function to determine whether or not the defendant has a strong case or whether he will be able to establish the facts upon which he proposes to rely. All I need to say is that the contention which he puts forward is not unarguable and it may well be that he will establish that he is entitled to a set off against the current claim, notwithstanding the liquidation of the plaintiff company. The issue is certainly not sufficiently clear cut for me to determine it adversely to the defendant on this application. The defendant also makes other claims to set off other debts allegedly due by the plaintiff to himself, but I am in no position to gauge the potential validity of these claims.
On the basis of the material before me, it is difficult to avoid the conclusion that the defendant has been very dilatory in prosecuting the present application and encouragement should not be given to litigants in person to think that they can pursue such applications at their own leisurely pace without suffering the same consequences as would a party represented by solicitors. Delay does not necessarily disentitle a party making such an application from the relief sought (see Evans v Bartlam [1937] AC 473). The discretion to set aside a default judgment is a general discretion (see National Mutual Life Association of Australasia v Century Motors Pty Ltd 64/1984). It is not therefore necessary that a prima facie defence need be shown to the claim. However, if the defendant is unable to provide a satisfactory explanation for the delay which resulted in the default judgment being entered against him, as well as the delay which has occurred thereafter, and where he has been unable to show any real prospect of establishing a defence in the matter if it goes to trial, it would be a rare case indeed in which the judgment should be set aside. In the present circumstances, I am not persuaded that the judgment in this case should be set aside. The possible existence of a set off does not appear to me to provide a proper basis for doing so. Nonetheless, it would be inappropriate to oblige the defendant to pay the sum due under the judgment if he is able to establish a valid and enforceable set off for a greater amount in respect of monies due to him by the plaintiff. I will therefore order that execution not issue in respect of the judgment debt, provided the defendant:
(a)institutes proceedings against the plaintiff in the Supreme Court of Tasmania claiming all sums allegedly due and owing by the plaintiff to the defendant which could have been claimed by way of set off or counterclaim in the present action, within a period of 21 days;
(b)serves the writ and statement of claim in respect thereof upon the present plaintiff's solicitors within the same period of time.
Thereafter, provided that there has been compliance by the defendant with both conditions (a) and (b) above, execution is not to issue while the defendant continues to show due diligence in the prosecution of the new action until the determination of those proceedings or until further order.
The defendant is also ordered to pay the costs of the present application, to be taxed. I certify for counsel.
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