A standard brief for very junior barristers starting out has been to make application to set aside a judgment obtained in default of defence or appearance.  The gold standard case setting out the principles was, and to a large extent is, Kostakenellis v Allen.   Now the Court of Appeal in Lubura v Nezirevic [2013] VSCA 215 has considered the first element of the test for setting aside judgments, whether the applicant has a defence on the merits. While it is a unanimous decision each of Warren CJ, Osborn JA and Robson AJA each had separate reasons.

FACTS

The facts are most comprehensively set out in Robson AJA’s reasons.

Early in the morning of  Sunday 8 July 2007 the respondent and other friends attended at the Red Star bar in Pultney Street, Dandenong [30].  A fight broke out between two groups, one of which contained the respondent and the other containing the appeallent, both in the bar and outside on the street subsequently. The respondent was surrounded and assaulted by at least two males with bottles, receiving injuries including bruising and laceration to his ear and head, as well as a ruptured globe to his right eye. He lost sight in his right eye as a consequence of the assault. Other members of the group were also assaulted [31]. The appellant was initially charged with four counts: intentionally causing serious injury, and (as an alternative) recklessly causing serious injury, common assault, and affray.  On 25 November 2011, a fresh presentment was filed, with two charges to which the appellant pleaded guilty; assault of a person unknown to the Director of Public Prosecutions and affray [33].

On or about 30 August 2010 the Appellant received the writ in the civil proceeding brought by the respondent. The appellant says that he did not respond to the writ as he had already engaged Mr Theo Magazis (in September 2009) to act on his behalf in the County Court criminal proceeding, and he considered that Mr Magazis would already have a copy of the writ [35].   On or about 19 December 2011 , he was served with a letter from the Sheriff’s Office, enclosing a warrant and a copy of an affidavit sworn by the appellant on 15 December 2011 that related to the judgment debt of $262,680.09 obtained by the respondent against the appellant [37].

The appellant issued a summons  to set aside the judgment that came on before his Honour Judge Misso on 13 April 2012. On 23 April 2012, his Honour dismissed the application [40] stating  that while the appellant alleged that he was not the person who actually assaulted the responden that defence ignored the appellant’s plea of guilty to affray and the findings of the sentencing judge [57] and that  it was clear from the whole of the sentencing remarks that the affray encompassed a number of events including the assault upon the respondent [60],  the appellant participated in the commission of the tort and acted in the furtherance of the common design, being an assault on the respondent.  As a consequence  the trial judge found that the law imposed upon the appellant the same liability for the respondent’s injuries regardless of whether he struck the blows which resulted in those injuries [65].  As such  it seemed to the court that the appellant had no defence to the respondent’s civil proceeding [67].  The trial judge’s decision is found here.

DECISION

Warren CJ

Her Honour summarised, at [3], the test to set asside a default judgment stating:

• Whether there is a defence on the merits;
• The reasons for the default;
• Whether the application to set aside the judgement was made promptly after the judgment came to the knowledge of the first defendant; and
• Whether, if the judgment is set aside, a suitable award of costs and the giving of security would be adequate to cover the prejudice to the plaintiff in having the judgment set aside.

This test is not all that different from the test for summary judgment.

This case was principally concerned with the first element [4].

Osborn JA

His Honour found:

• the appellant’s plea of guilty to affray did not involve an admission that he assaulted the respondent [8]; and
• that participation in the affray did not necessarily demonstrate that the appellant was responsible as a joint tortfeasor for the infliction of serious injuries upon the respondent [9]
• greement to participate in an affray may be agreement to conduct falling short of participation in a battery with weapons such as bottles [10]

Regarding torious liability his Honour reviewed the authorities ([11] – [12]) to the effect that:

• The difference between joint tortfeasors and several tortfeasors is that the former are responsible for the same tort whereas the latter are responsible only for the same damage [11].
• for there to be joint tortfeasors ‘there must be a concurrence in the act or acts causing damage, not merely a coincidence of separate acts which by their conjoined effect cause damage’ [11].
• joint tortfeasors are  ‘two persons who agree on common action, in the course of, and to further which, one of them commits a tort’ [12].

His Honour noted that the evidence at the plea hearing did not establish that the respondent was bashed pursuant to a common design shared by the appellant with the assailants [14]  and that the trial judge had misdirected himself as to the effect of the plea [16].  As a consequence once it was clear that the appellant had an arguable defence the summary judgment should not be allowed to stand [17] and enunciated the guiding principle as:

The fundamental principle must be that justice allows real issues between the parties to be tried subject to procedural considerations directed to achieving finality in litigation and the imposition of conditions avoiding prejudice arising from the prior course of the matter. In the present case because the appellant has proffered an explanation for his procedural default the fundamental principle should prevail subject to the imposition of appropriate conditions.

The critical question informing the court’s discretion is not whether the defence will succeed but whether a defence on the merits has been adequately raised [20].

ROBSON AJA

His Honour found:

• the finding that the only conclusion that was reasonably open was that the appellant deliberately ignored the civil proceeding court documents was not the only conclusion that was reasonably open and that  the trial judge took into account an irrelevant consideration and erred in law [83].
• it is not possible to say that the offence of affray that the appellant pleaded guilty to included carrying out the battery and assault pleaded by the respondent in his civil claim and as such  the learned judge acted upon a wrong principle or took into account an irrelevant consideration [92].
• the plea of guilty to the affray did not necessarily amount to an admission by the appellant of the elements necessary for the appellant to be found a joint tortfeasor with those who did assault and batter the respondent. To establish joint tortfeasor liability, it would be necessary to establish that the appellant was acting in a concerted action to a common end. A plea of guilty to affray does not carry with it an admission that the appellant was acting in concert with the other people in the affray to a common end to assault and batter the respondent [100]. As such the trial judge exercised his discreation on a wrong principle or took into account an irrelevant consideration [101].

His Honour highlighted the deficiences in the statement of claim which worked against the respondent when the court considered the appeal stating:

•  while finding the the appellant had not been “..as forthcoming as perhaps he should..” regarding the alleged assault and battery in the street outside the bar the the plaintiff’s  statement of claim had not  distinguished between the injuries suffered inside the bar and those outside in the street and the sentencing observations do suggest a defence on the merits to the assault and battery alleged to have taken place in the street [115].
• even if the appellant has not shown a defence on the merits to the alleged assault and battery in the street outside the bar, the judgment cannot stand in any event as no distinction is drawn in the statement of claim between the injuries allegedly suffered as a result of the assault and battery in the street outside the bar and those allegedly suffered as a result of the prior assault in the bar because the judgment amount is for all the injuries pleaded [116].

And as a consequence “..there is a real likelihood that it would be unjust to the appellant to allow the judgment to stand”[117] notwithstanding the inadequacy of the appellant’s affidavit marterial.

His Honour set stringent conditions upon allowing the appeal and setting aside the judgment being:

1. the appellant pay the costs of and incidental to the application to set aside judgment entered in default of appearance and the costs thrown away by reason of judgment being entered including the costs of assessing the respondent’s damages and the respondent’s attempted enforcement of the judgment, such costs to be taxed on an indemnity basis in the absence of agreement [120].
2. the appellant provide security of $20,000, in a form satisfactory to the registrar of the County Court, for the costs of the respondent in the proceedings in respect of the costs referred to in para 120 and in the event that any further costs are awarded in favour of the respondent as against the appellant [121].
3.  there be a stay on the order to set aside judgment until the security for costs is posted to the satisfaction of the registrar of the County Court [122].
4. if the appellant does not post  security within 30 days of the order, unless the time is extended within 30 days by further order of the County Court, the order for setting aside judgment shall be vacated [123].

ISSUE

This decision does not disturb the principles set out in Kostenellis v Allen.  But the court did undertake a detailed analysis of the merits element.  Their Honours were crtical of the analysis of the trial judge in considering the evidence at plea with the actual pleading.  Robson in particular also highlighted that poor pleading contributed to the success of the respondent.  Careful and detailed pleadings of a claim rather than what Robson described as “conflated” pleading of the key allegations is important.  It is also a salutory lesson in properly preparing the affiavit material in support of an application.  Their Honours, Warren CJ and Robson AJA in particular, found the appellant’s material wanting.  In this case the court looked to the core evidence, the plea and exhibits and the transcript at the criminal trial. in particular the sentencing remarks, when undertaking their analysis. That was very fortunate, at minimum, for the appellants.  There is no substitute for having an affidavit which addresses the key issues. It may sound trite but inadequate affidavit material is a common problem for counsel in applications of this nature.

The decision is quite notable in providing a useful analysis of joint and separate tortfeasors in the context of a civil proceeding alleging the intentional tort of battery.