SUPREME COURT OF NORFOLK ISLAND Coleman v Hamilton-Irvine [2014] NFSC 1 Citation: Coleman v Hamilton-Irvine [2014] NFSC 1 Parties: PIRIA COLEMAN v TRUDY CELESTE HAMILTON-IRVINE and CHERIE LORRAINE HAMILTON-IRVINE File number: SC 5 of 2013 Judge: JACOBSON CJ Date of judgment: 28 February 2014 Catchwords: PRACTICE AND PROCEDURE – application to set aside default judgment – judgment entered prior to expiration of period for filing of appearance or defence – relevant factors in the exercise of discretion Legislation: Legal Profession Act 1993 (NI) Service and Execution of Process Act 1992 (Cth) Cases cited: Anlaby v Praetorius (1888) 20 QBD 764 Evans v Bartlam [1937] AC 473 Date of hearing: Determined on the papers Date of last submissions: 24 October 2013 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 32 Solicitor for the Plaintiff: Ms P Coleman Solicitor for the Defendants: Mr J Brown IN THE SUPREME COURT OF NORFOLK ISLAND NORFOLK ISLAND REGISTRY GENERAL DIVISION SC 5 of 2013 BETWEEN: PIRIA COLEMAN Plaintiff AND: TRUDY CELESTE HAMILTON-IRVINE First Defendant CHERIE LORRAINE HAMILTON-IRVINE Second Defendant JUDGE: JACOBSON CJ DATE OF ORDER: 28 FEBRUARY 2014 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The default judgment entered on 16 September 2013 be set aside. 2. The matter be referred to a Registrar or Deputy Registrar of the Court for mediation. The mediation is to be held at a time and place suitable to the parties but in any event no later than 30 March 2013. IN THE SUPREME COURT OF NORFOLK ISLAND NORFOLK ISLAND REGISTRY GENERAL DIVISION SC 5 of 2013 BETWEEN: PIRIA COLEMAN Plaintiff AND: TRUDY CELESTE HAMILTON-IRVINE First Defendant CHERIE LORRAINE HAMILTON-IRVINE Second Defendant JUDGE: JACOBSON CJ DATE: 28 FEBRUARY 2014 PLACE: SYDNEY REASONS FOR JUDGMENT Introduction 1 On 13 August 2013 the plaintiff issued an originating claim and a statement of claim against the first defendant, Ms Trudy Celeste Hamilton-Irvine and her mother, who is the second defendant in this proceeding. 2 The claim, as set out in the statement of claim, was for an amount of $47,536.17 for legal fees and disbursements incurred by the defendants as clients of the plaintiff pursuant to a written costs agreement. 3 On 16 September 2013 a Deputy Registrar of the Court entered default judgment against the first defendant by reason of her failure to enter an appearance on or before 13 September 2013 by filing a notice of intention to respond or a defence within 21 days of service of the originating claim pursuant to s 17(1)(b) of the Service and Execution of Process Act 1992 (Cth) (the Act). 4 The order was made upon the basis of evidence filed by the plaintiff that the Originating Claim and Statement of Claim were served on the first defendant by facsimile on 23 August 2013 in Queensland pursuant to the Act. 5 The plaintiff also relied, in support of the application for default judgment, on orders which I made on 9 September 2013 for substituted service. Those orders included an order that service on the first defendant be deemed to have been effected by facsimile at 4.30 pm on 23 August 2013. 6 The first defendant seeks to set aside the default judgment. She contends that the order was not regularly entered because the time within which she was required to file her defence had not expired on 16 September 2013. That question turns largely on the construction of s 17(1)(a) and (b) of the Act. 7 Alternatively, the first defendant contends that the default judgment should be set aside in the exercise of the Court's discretion of the ground that she has an arguable defence in the terms of the defence which she filed on 18 September 2013. Was the default judgment entered regularly? 8 The plaintiff does not dispute the well-established proposition that if a default judgment is entered irregularly, the defendant is entitled ex debito justitiae to have it set aside: Anlaby v Praetorius (1888) 20 QBD 764 at 769, 771. 9 The question which then arises is whether, as in Anlaby v Praetorius the default judgment in the present case was irregular because it was entered prematurely. 10 Section 17(1)(a) of the Act provides that if the person is required to enter an appearance (as defined in s 14) under a law of the place of issue of an initiating process, the period after service within which the person may enter an appearance is whichever is the longer of two periods. The first of these is 21 days but the second is the period in which the appearance would have been required to be entered if the process had been served in the place of issue. 11 The relevant Norfolk Island rule which governs the time for filing a defence is rule 102 of the Court Procedures Rules 2006 (ACT). That rule provides for a defence or notice of intention to respond to be filed within 28 days of service. 12 The effect of s 17(1)(a)(ii) of the Act is therefore that the time for filing a defence (which would fall within the definition of appearance in s 14) did not expire until 28 days from service on 23 August 2013. 13 It follows that subject to the operation of s 17(1)(b) of the Act to which I will refer shortly, the time within which the first defendant was required to file her defence expired at the close of business on 16 September 2013. 14 Thus, subject to the operation of s 17(1)(b) of the Act, the time within which the first defendant was required to file her defence had not expired when default judgment was entered before the close of business on 16 September 2013. 15 Section 17(1)(b) provides for an abridgment of the time which is limited by s 17(1)(a). It provides that the time within which the defendant may enter an appearance is "such shorter period as the court of issue, on application, allows". 16 The plaintiff contends in her written submissions that an abridgment of time was granted by the Court on 16 September 2013. The plaintiff has not filed evidence in support of that contention but I understand the effect of her submission to be that the abridgment of time was granted by the Deputy Registrar pursuant to an oral application made on 16 September 2013 when default judgment was entered. 17 It seems to me that I cannot proceed on the basis of matters that are not in evidence. In any event, I do not see how an abridgment of time granted on 16 September 2013 without notice to the first defendant could have been effective. 18 But even if I am wrong in this view, the case seems to me to be one in which I ought to exercise my discretion to set aside the judgment. Exercise of discretion 19 It is well-established that the Court has a wide discretion to set aside a default judgment even if entered regularly: Evans v Bartlam [1937] AC 473 at 479-480. 20 Ordinarily what is required to enliven the discretion is an affidavit from the applicant who seeks an order setting aside the default judgment. The affidavit should explain the reason for the delay and, in particular, provide evidence that he or she has a prima facie defence to the claim. 21 In the present case the first defendant did not herself swear an affidavit. The evidence filed on her behalf in support of the application was that of her solicitor, Mr Brown. 22 I am satisfied that Mr Brown has given an adequate explanation for the delay (if in fact there was a delay). His explanation turns on the fact that he was away from Norfolk Island from 13 August 2013 to 8 September 2013 and upon his calculation of the time limit for filing a defence. 23 Whilst I do not consider his calculation to be correct, nothing turns upon this because on any view the delay in filing the defence was slight. 24 However, the difficulty which arises is that the terms of the defence which purport to contain the first defendant's grounds of defence contain material allegations as to the terms of the retainer said to have been entered into between the plaintiff, the first defendant and her mother. I have no evidence from the first defendant upon which I can consider whether the retainer could be arguably said to be in the terms that are asserted. 25 What seems to me to be clear from the defence, and from other evidence including a request by the defendants for determination of the plaintiff's bill by taxation, is that the real issue in the case is the amount of the plaintiff's charges. I do not consider that the provisions of s 34(1) of the Legal Profession Act 1993 (NI) are a bar to determination of this issue because the Court has power to extend the time for taxation. 26 Paragraph 3 of the defence asserts that the plaintiff agreed in effect that any costs and disbursements would be paid out of the deceased estate, and not claimed from them. 27 As I have said, this assertion is not supported by evidence. Moreover, it seems to me to be contradicted by the defendants' request for taxation of the bill and by the payment of disbursements (albeit at a reduced amount) to counsel whose charges were included in the amount of approximately $47,000 claimed by the plaintiff. 28 If the matter is to proceed further I will impose, as a condition of so doing, that this paragraph of the defence be deleted. Orders and further conduct of the proceeding 29 The real issue in this case can be determined very quickly by a mediation to be conducted by a Registrar or Deputy Registrar of the Court who is familiar with the amounts allowable on taxation. Moreover, the amount in issue is not large and does not warrant the expense of a full hearing. 30 It therefore seems to me that the appropriate orders to be made are: 1. The default judgment entered on 16 September 2013 be set aside. 2. The matter be referred to a Registrar or Deputy Registrar of the Court for mediation. The mediation is to be held at a time and place suitable to the parties but in any event no later than 30 March 2013. 31 The Court retains a discretion as to costs even though the judgment was entered irregularly: Anlaby v Praetorius at 769. 32 I will hear the parties briefly on costs but in the light of the difficulties in the defence referred to above, my preliminary view is that the costs should be costs in the cause. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Jacobson. Associate: Dated: 28 February 2014