New South Wales Supreme Court CITATION : NIKOLOPOULOS & ORS v GREEK HERALD PTY LTD [2002] NSWSC 808 FILE NUMBER(S) : SC 20071 OF 1999 HEARING DATE(S) : 2 September 2002 JUDGMENT DATE : 11 September 2002 GEORGE NIKOLOPOULOS (First Plaintiff) JOHN GEORGOPOULOS (Second Plaintiff) ALEX PETTAS (Third Plaintiff) TOM HARALAMBIDIS (Fourth Plaintiff) PETER MITROTHANASIS (Fifth Plaintiff) BILL KATEGIANNIS (Sixth Plaintiff) GEORGE TSOKOS (Seventh Plaintiff) JIM PANAGAKIS (Eighth Plaintiff) CHRIS GIORGAKOPOULOS (Ninth Plaintiff) JOHN GOUNAROPOULOS (Tenth Plaintiff) PARTIES : BILL VENETOULIS (Eleventh Plaintiff) v GREEK HERALD PTY LTD (First Defendant) THEODORE SKALKOS (Second Defendant) THEODORE SKALKOS (Cross-Claimant) v GEORGE NIKOLOPOULOS (First Cross-Defendant) SKOULOUDIS GROUP Pty Ltd (ACN 085 286 255) (Second Cross-Defendant) DIMOTRIS SKOULOUDIS (Third Cross-Defendant) GEORGE MESSARIS (Fourth Cross-Defendant) VASILIS PASSAS (Fifth Cross-Defendant) JUDGMENT OF : Levine J LOWER COURT Supreme Court JURISDICTION : LOWER COURT FILE NUMBER(S) : LOWER COURT JUDICIAL OFFICER : N Kidd (Fifth Cross-Defendant on Cross-Claim) COUNSEL : T Molomby (Defendant) R Barron (Fifth Cross-Defendant on Cross-Claim) SOLICITORS : T Lazaropoulos (Defendant) CATCHWORDS : Setting aside default judgment LEGISLATION CITED : Defamation Act 1974 CASES CITED : Altarama Ltd v Forsyth & Ors [1981] 1 NSWLR 188 DECISION : See paragraphs 24 and 25 DLJ: 1 IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION DEFAMATION list JUSTICE DAVID LEVINE WEDNESDAY 11 SEPTEMBER 2002 20071 OF 1999 GEORGE NIKOLOPOULOS (First Plaintiff) JOHN GEORGOPOULOS (Second Plaintiff) ALEX PETTAS (Third Plaintiff) TOM HARALAMBIDIS (Fourth Plaintiff) PETER MITROTHANASIS (Fifth Plaintiff) BILL KATEGIANNIS (Sixth Plaintiff) GEORGE TSOKOS (Seventh Plaintiff) JIM PANAGAKIS (Eighth Plaintiff) CHRIS GIORGAKOPOULOS (Ninth Plaintiff) JOHN GOUNAROPOULOS (Tenth Plaintiff) BILL VENETOULIS (Eleventh Plaintiff) v GREEK HERALD PTY LTD (First Defendant) THEODORE SKALKOS (Second Defendant) THEODORE SKALKOS (Cross-Claimant) v GEORGE NIKOLOPOULOS (First Cross-Defendant) SKOULOUDIS GROUP Pty Ltd (ACN 085 286 255) (Second Cross-Defendant) DIMOTRIS SKOULOUDIS (Third Cross-Defendant) GEORGE MESSARIS (Fourth Cross-Defendant) VASILIS PASSAS (Fifth Cross-Defendant) JUDGMENT (setting aside default judgment) 1 By Notice of Motion filed on 29 May 2002 the fifth cross-defendant (Vasilis Passas) moves to set aside a judgment entered by default by Adams J on 11 October 2001. 2 A jury hearing under s7A of the Defamation Act was conducted in respect of a cross-claim brought by Mr Skalkos (the second defendant in the principal action) against Mr Nikolopoulos (the plaintiff), Skouloudis Group Pty Ltd, Mr Dimitris Skouloudis, Mr George Messaris and the fifth cross-defendant. 3 Those proceedings were heard before Adams J on 10 and 11 October 2001. The cross-claimants were represented as was the first cross-defendant and the fourth cross-defendant. 4 In respect of the cross-claim litigated against the first cross-defendant, Mr Nikolopoulos, the jury was asked two sets of questions. The first set of questions (marked MFI 6 in the court file) was directed to the jury making a finding as to the cross-defendant (Mr Nikolopoulos) saying all the words or words to the same effect as those words attributed to him in the first matter complained of. The jury were not satisfied and answered "no" and proceeded to the next question which involved the jury in performing an editing exercise on the English translation of the first article which was published in "Kosmos" newspaper on 22 January 1999. This they did by eliminating words which, it must be taken, were not said by that cross-defendant. Having answered that series of questions in relation to the first matter complained of, the jury embarked upon the same exercise in relation to the second matter complained of, being an article in "Kosmos" of 26 February 1999. The first question received a negative response and the second question received the editing process. 5 MFI 7 in the court file is the consequential series of questions asked of the jury in relation to the first cross-defendant, Mr Nikolopoulos. The response of the jury bought it about that the cross-claimant (Mr Skalkos) had not establish that either the first or the second matter complained of carried any defamatory imputations of him. 6 The questions asked of the jury in relation to the fourth cross-defendant (Mr Messaris) were directed only to whether asserted imputations were carried and whether they were defamatory in relation to each matter complained of. In relation to the first matter complained of the jury found one imputation being as carried and being defamatory. In relation to the second matter complained of the jury found no defamatory imputation to have been carried. Thus it can be seen that the cross-claimant, Mr Skalkos, succeeded in respect of the cross-claim as litigated against the fourth cross-defendant in respect of one imputation only arising from the first matter complained of. 7 It is to be understood that after the conclusion of the s7A proceedings in relation to the cross-claim, service of the relevant process (a Second Further Amended Cross-Claim) was proved to the satisfaction of his Honour and his Honour then entered judgment by default. His Honour's remarks are brief and I set them out in full: "1 On 2 March 2000, a second further amended cross-claim was filed in this Court. It contained the conventional warning concerning the entry of judgment in the absence of the filing of an appearance in the registry of the Court within 14 days of service. 2 I am satisfied on the affidavits of Carolanne Duah, sworn 26 March 2001 in respect of Skouloudis Group Pty Ltd and 27 March 2001 in respect of Dimitris Skouloudis, and the affidavit of Morrie Fahd sworn 21 April 201 in respect of Vasilis Passas that sealed copies of the second further amended cross-claim were served on each of those persons respectively on 12 March 2001, 14 March 2001 and 21 April 2001. 3 No appearance has been entered by any of the specified cross-defendants, nor has there been filed any notice of motion seeing orders under Part 11 Rule 8(1) of the Rules of Court. 4 Accordingly, each of the cross-defendants I have named is in default within the meaning of Part 17, Rule 2 of the Rules and upon the application of the cross-claimant, Theodore Skalkos, judgment is entered for the said Theodore Skalkos against each of Skouloudis Group Pty Ltd, Dimitris Skouloudis and Vasilis Passas for damages to be assessed and for costs". 8 From the face of his Honour's judgment it can be seen that his Honour found that each of the cross-defendants (who had not appeared at the 7A trial) was in default by reason of the operation of SCR Pt 17 r 2 and it is clear on its face that his Honour entered judgment on the basis of a failure to file a Notice of Appearance. No perfected form of judgment was produced in the course of this application. 9 It is this judgment that the applicant seeks have set aside. 10 In support of the Notice of Motion affidavits were read of the applicant/fifth cross-defendant sworn 28 May 2002, the 9 July 2002 and that of the fifth cross-defendant's wife sworn 30 May 2002. The respondent to the Motion relied upon an affidavit of Mr Tony Lazaropoulos, solicitor, sworn 8 July 2002. 11 At the outset I note that the applicant, if granted the relief sought, namely the setting aside of the default judgment, would not seek to put in issue the effect of the jury's findings in the 7A trial on the cross-claim. 12 In addition to the affidavit material I have a copy of his Honour's summing-up, the questions answered by the jury and nothing else. No transcript of the proceedings was tendered. 13 It is not in dispute that contrary to the basis upon which his Honour appears to have entered the default judgment, the fifth cross-defendant had in fact filed an appearance on 2 May 2001 having been served with the Second Further Amended Cross-Claim which had been issued on 2 March 2001. 14 The Second Further Amended Cross-Claim pleaded against the fifth cross-defendant that he was at all material times a journalist responsible for sports at the Greek language newspaper "Kosmos" (paragraph 2D). Paragraph 3 of the Second Further Amended Cross-Claim alleged that on or about 22 January "the cross-defendants" published the relevant article. Particulars of publication provided "The first matter complained of comprises an article published inter alia by the First, Second, Third and Fourth Cross-Defendants on 22 January". There is otherwise no specific allegation in relation to publication by the fifth cross-defendant. 15 The second matter complained of in the cross-claim was that published on 26 February "by the cross-defendants" (paragraph 7) and the particulars of publication expressly allege publication by the first, second, third, fourth and fifth cross-defendants. They further allege that the first cross-defendant spoke to the third cross-defendant "and/or the Fourth Cross-Defendant and/or the Fifth Cross-Defendant and/or other servants or agents of the Second Cross-Defendant" in circumstances where they would be liable (whosoever "they" were) for the re-publication by the second, third, fourth and fifth cross-defendants. 16 On 19 September 2001 the fifth cross-defendant filed a "Notice of Intention to Act Without a Solicitor". He swears in his first affidavit that shortly before filing that Notice he had learned of a certain family situation in Greece to which country he returned on 10 October 2001 (the date of the hearing). It was not until after his return on 4 February 2002 that he learned of the outcome of the proceedings before Adams J. He swears that in relation to the first matter complained of he played no part but concedes that he was the journalist who wrote the second matter complained of. He says that he was not aware of the hearing being fixed on 10 October. He appeared before Whealy J on 12 April 2002 who directed that he notify the cross-claimant of the position in which he found himself. Mrs Passas' affidavit corroborates the departure of her husband for Greece on 10 October and states that had she been aware of the hearing on that date she would have contacted her husband and sought to arrange legal representation. 17 Mr Lazaropoulos' affidavit makes it clear that an appearance was filed on 2 May 2001 by Mr Barron (the then solicitor, and now, solicitor for the applicant). He annexes to his affidavit a letter from Mr Baron of 16 July 2001 advising that he no longer acted for Mr Passas. Mr Lazaropoulos wrote to Mr Barron on 16 August 2001 pointing out that he had not yet received any Notice from that solicitor that he had ceased to act. Mr Barron, whilst ostensibly the solicitor on the record as far as Mr Lazaropoulos was concerned (the fifth cross-defendant's Notice not being filed until 19 September) was informed on 4 October of the listing of the 7A hearing of the cross-claim. 18 It seems to me that the cross-claimant is entitled to relief. The first observation to make is that the basis upon which Adams J entered the judgment was simply not the fact: the fifth cross-defendant had filed a Notice of Appearance. 19 There was no question of the fifth cross-defendant having to have filed a defence. If a defence had been required, it would have been a defence only to those issues to be determined by the jury under s7A of the Defamation Act. The only finality that has been brought about, or can be brought about by the peculiar mechanism of a s7A hearing, is in the event of a jury finding that the relevant matter complained of carries no defamatory imputations, judgment is entered for the defendant in respect of those pleaded imputations – that is, the causes of action. Where a jury finds at least one defamatory imputation, the action is not conclusively determined in favour of the plaintiff. There still remains the hearing by a judge of the substantive defences a defendant might plead to the imputation, or the publication of it, as found by the jury and any matters the defendant wishes to raise in mitigation of damages. 20 It thus seems to me that the default judgment was entered on a false basis of fact. Further, it is to be borne in mind, under the Rules of Court as would have applied to these proceedings (SCR Pt 67 r11A and 11B) the normal operation of the default proceedings under the general Rules of Court are inapplicable: see Altarama Ltd v Forsyth & Ors [1981] 1 NSWLR 188. 21 Further, the cross-defendant having filed a Notice of Appearance, and indeed a Notice of an intention to act on his own behalf (and thereby still appearing) and not otherwise being required to file a defence to the issues to be raised under the s7A proceedings, he is not thereby, in my view, to be deprived by his failure to appear at the hearing of those proceedings to raise any substantive defence consequent upon the findings by the jury. Particularly in the light of the concession made for the applicant fifth cross-defendant that he does not seek to go behind the findings of the jury but rather to raise matters of substance (although no affidavit has been sworn as to what they are) the interests of justice, in my view, compel by reason of the factors to which I have referred that the default judgment be set aside. 22 The effect of the judgment purported to have entered by Adams J was effectively to compel the fifth cross-defendant to fight a case only on damages in the peculiar structural circumstances arising from s7A of the Defamation Act where, irrespective of an adverse finding on the carrying of defamatory imputations, a defendant still has the chance to have a verdict and judgment entered in his or its favour upon the establishment of substantive defences. The s7A trial does not directly lead to the question of damages. 23 If was sought to be argued for the cross-claimant that by reason of the non-appearance at trial of the fifth cross-defendant some forensic disadvantage was suffered by the cross-claimant. Not only am I in no position to determine that, in the light of the position adopted by the fifth cross-defendant I cannot see otherwise how the cross-claimant is prejudiced. I agree that on its face it appears as a result of the answers given by the jury the issues to which the fifth cross-defendant is obliged to plead, though it will be a matter for him on advice, are rather restricted. 24 I make the following orders: 1. I set aside the default judgment entered by Adams J on 11 October 2001. 2. I direct the fifth cross-defendant within 21 days to file a defence to the Second Further Amended Cross-Claim, such defence to be limited to substantive defences to the cause of action found by the jury and to any matter in mitigation of damages. 25 I was asked to defer the question of costs in the current application pending my determination of it. The parties have liberty to list the matter for argument if necessary in a Defamation Motions List on 14 days notice. Otherwise, 3. I place the matter in the Registrar's Defamation Directions List on 11 October 2002. ********** Last Modified: 09/12/2002 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.