Supreme Court New South Wales Medium Neutral Citation: The Life Like Touring (Australia) Pty Ltd v Joe Gallagher Entertainments Intl Limited (No. 2) [2018] NSWSC 1208 Hearing dates: 3 August 2018 Date of orders: 03 August 2018 Decision date: 03 August 2018 Jurisdiction: Equity - Duty List Before: Parker J Decision: Application for default judgment dismissed Catchwords: PRACTICE AND PROCEDURE – applications – default judgment – application for default judgment dismissed where material facts underlying claim not pleaded Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW), r 14.12 Category: Procedural and other rulings Parties: The Life Like Touring (Australia) Pty Ltd (Plaintiff) Joe Gallagher Entertainments Intl Limited (Defendant) Representation: Counsel: Solicitors: William James Law (Plaintiff) File Number(s): 2018/107215 Publication restriction: Nil Judgment – EX TEMPORE Revised and reissued 6 August 2018 1. The earlier steps in these proceedings were summarised in the judgment which I delivered on 26 July 2018 and which was revised and reissued on 1 August: The Life Like Touring (Australia) Pty Ltd v Joe Gallagher Entertainments Intl Limited [2018] NSWSC 1199. In my earlier decision I concluded that the Statement of Claim in these proceedings had come to the defendant's attention on 4 May at the latest and accordingly the Statement of Claim should be treated as having been served on that date. I noted that no defence had been filed nor had any other step been taken by the defendant in these proceedings, but rather than proceed to deal with the plaintiff's application for default judgment I adjourned the proceedings to today to enable the defendant to consider what I had said and to decide whether to defend the default judgment application. The evidence before me today shows that the solicitors appointed by the defendant were sent by email a note of my orders and a copy of my decision when it was revised and reissued. There has been no further communication from the defendant or its solicitors since then. Accordingly, I now proceed to determine the plaintiff's application for default judgment. 2. There are a number of components to the plaintiff's pleaded claim. The Statement of Claim pleads three contractual clauses giving the plaintiff an entitlement to a share of moneys received by the defendant from the conduct of the shows in question. The first of those is described as the gross box office royalty and represents twelve and a half per cent of the gross sums received by the defendant pursuant to the agreement. The second is described as a producer profit share and is thirty per cent of the surplus of the gross box office receipts received by the defendant after the deduction of certain agreed expenses. The third is described as the merchandise profit share which is thirty-five per cent of the revenue received by the defendant from the sale of merchandise at the production after the deduction of certain expenses approved by the plaintiff. The fourth component of the plaintiff's claim in this application arises under a term by which the defendant allegedly agreed to pay forty per cent of the cost of certain air fares between Australia and the United Kingdom. As pleaded there is a further component to the plaintiff's claim, but Mr Edney, who appears for the plaintiff, accepted in the course of argument that this claim was not a liquidated one for the purpose of the Rules and accordingly a liquidated default judgment on that claim could not be obtained in this application. 3. After reciting the various alleged terms of the agreement the Statement of Claim goes on to allege that the plaintiff provided to the defendant the services required by the agreement and the first performance of the tour was on 1 September 2017. The Statement of Claim then pleads that the plaintiff issued the defendant with certain invoices referring to the different components of the claim to which I have referred. Particulars are given of the invoice number, date and general description and amount claimed. The particulars refer to two invoices for the gross box office royalty (one in pounds and one in euro); two invoices for the producer profit share (one in pounds and one in euro); a further invoice for the merchandise profit share (a small amount in pounds); a further invoice for the flight costs (in Australian dollars); that puts to one side the invoice for the claim which the plaintiff accepts cannot be pursued on this application. The Statement of Claim then alleges breach by reason of non-payment of the amounts claimed. 4. The theory behind an application for default judgment for a liquidated sum is that if no defence is filed the defendant is taken to admit the matters alleged in the Statement of Claim. If the Statement of Claim has been framed in such a way that it identifies all of the facts on which the claim is based, then it should be possible on admission of the allegations in the statement of claim for the Court to see that the cause of action has been established and to calculate the amount due to the plaintiff pursuant to the liability so established. Mr Edney acknowledged that his client's Statement of Claim in terms merely pleaded that invoices had been issued to the defendant and did not plead the underlying facts which would establish that the defendant was liable for the amounts claimed in the invoices. 5. Mr Edney argued that this did not matter. He submitted that the purpose of the pleading rules was to put the opposing party (in this case the defendant) on notice of the plaintiff's claim. He pointed to correspondence and to affidavits filed in support of the application, which he submitted showed that the defendant could be in no doubt of the claim made against it. He also submitted that on the evidence before me, there had been no real dispute by the defendant of the amounts claimed. 6. Mr Edney acknowledged that complaints had been made on behalf of the defendant about aspects of the way in which the agreed services had been provided, but characterised those complaints as giving rise, if anything, to cross-claims for unliquidated amounts. Mr Edney pointed to the fact that in Uniform Civil Procedure Rules 2005 (NSW), r 14.12, there is provision for the pleading of facts in short form in certain money claims. He submitted that the claim made by the plaintiff might have been pleaded as a claim for "work done or materials provided by the plaintiff for the defendant, at the defendant's request", pursuant to r 14.12(1)(c) and that no further specification would have been required of the Statement of Claim, had it been pleaded in that form. Mr Edney submitted that this reinforced his argument that, as a matter of substance, the defendant had been given fair warning of the plaintiff's claim. 7. I do not accept these submissions. Where proceedings are contested, one of the functions of pleadings is indeed to give the defendant fair notice of the plaintiff's case, but if an application is made for default judgment based on a pleading, then in my view it is an essential requirement that all material facts can be taken to be established and to allow the calculation of the amount due by reference to the pleading alone. 8. For all I know, those acting for the defendant have familiarised themselves with the rules of this Court and the principles which apply to pleadings in this Court. They may have observed that the Statement of Claim pleads only that invoices were issued; and they may have chosen not to appear today because they recognise that the form of the Statement of Claim is inadequate as a basis upon which to obtain default judgment. 9. It is not necessary for me to decide whether a claim of the sort made in these proceedings can be described as a claim for "work done or materials provided by the plaintiff for the defendant" for the purposes of r 14.12(1)(c). Had the claim been pleaded in that form, it would have been open to the defendant to file a notice requiring the plaintiff to plead the facts on which it relies in full (see r 14.12(2)). 10. But having regard to the form of the Statement of Claim actually filed by the plaintiff, there was no need or obligation on the defendant to seek such further specification of the claim. Indeed it seems to me that the proper remedy would be an application to have the Statement of Claim struck out. It may be that, had such an application been made, it would have succeeded, but it is unnecessary to consider this further. In my view the defendant was entitled to take no action in the face of the application, and to allow the application to take its course in accordance with the Rules. This has now happened; and in my view the application fails and must be dismissed. 11. This of course will not end the proceedings and it will be open to the plaintiff, should it be so advised, to amend its Statement of Claim. It may be possible in due course for the Statement of Claim to be amended in a way which would satisfy the requirements of the Rules for default judgment, in which case it would be open for the plaintiff to bring a further application, should the defendant not file a defence. I will hear from Mr Edney on what further directions should be made for the conduct of the proceedings. ********** Amendments 07 August 2018 - amend typographical errors 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. Decision last updated: 07 August 2018