Luna Park Sydney Pty Limited (ACN 102 907 184) v Bose [2006] FCA 94 (8 February 2006)

PRACTICE AND PROCEDURE – application for default judgment – whether failure of respondents to defend the proceedings with due diligence

Federal Court Rules – Order 35A

Arthur v Vaupotic Investments Pty Limited [2005] FCA 433 cited
Australian Competition and Consumer Commission v 1Cellnet LLC [2005] FCA 856 cited
Australian Securities Commission v McLeod (1994) 54 FCR 309 referred to
Commissioner of Taxation v Finn [1960] HCA 69; (1960) 103 CLR 165 referred to
Grey v Mango Prepaid Calling Cards Pty Limited [2004] FCA 1664 referred to
Wu v Avin Operations Pty Limited (ACN 076 956 913) [2006] FCA 36 distinguished
Zomba Production Music v. Roadhouse Productions (2001) 190 ALR 288 referred to

LUNA PARK SYDNEY PTY LIMITED (ACN 102 907 184) v ZACHARY ART BOSE AND DROP DEAD PROMOTIONS LIMITED (NZ) (NZCN 15 40 477)

NSD534 OF 2005

JACOBSON J
8 FEBRUARY 2006
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD534 of 2005

BETWEEN:	LUNA PARK SYDNEY PTY LIMITED (ACN 102 907 184) APPLICANT
AND:	ZACHARY ART BOSE AND FIRST RESPONDENT DROP DEAD PROMOTIONS LIMITED (NZ) (NZCN 15 40 477) SECOND RESPONDENT
JUDGE:	JACOBSON J
DATE OF ORDER:	8 FEBRUARY 2006
WHERE MADE:	SYDNEY

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD534 of 2005

BETWEEN:	LUNA PARK SYDNEY PTY LIMITED (ACN 102 907 184) APPLICANT
AND:	ZACHARY ART BOSE AND FIRST RESPONDENT DROP DEAD PROMOTIONS LIMITED (NZ) (NZCN 15 40 477) SECOND RESPONDENT
JUDGE:	JACOBSON J
DATE:	8 FEBRUARY 2006
PLACE:	SYDNEY

1 This is an application for default judgment pursuant to Order 35A of the Federal Court Rules. The applicant seeks default judgment by reason of the failure of the respondents to defend the proceedings with due diligence.

2 The notice of motion seeking default judgment was filed in court today. It was served on Friday, 3 February 2006, which is less than the three days clear notice prescribed by the rules. I will refer to this later.

3 The proceedings relate to the planned performance of a performer known as "Busta Rhymes" at Luna Park Sydney. The applicants claim that they entered into a contract with Mr Bose of Drop Dead Promotion New Zealand, as agent for Busta Rhymes, for the performance of Busta Rhymes at Luna Park on 29 September 2004. Mr Rhymes did not ultimately perform. The orders sought include claims for damages for breach of contract.

4 On 2 June 2005, I gave leave to the applicant to serve an amended statement of claim outside the Commonwealth in accordance with Division 2 of Order 8 of the Federal Court Rules.

5 On 30 June 2005 at a directions hearing before me there was no appearance by the respondents. I stood the matter over to 4 August 2005.

6 On 4 August 2005 there was still no appearance from the respondents and the applicant indicated that it wished to file an application for default judgment.

7 On 24 August 2005, the matter was listed for hearing of the application for default judgment. However, at the hearing the respondents appeared by solicitors Messrs Gray and Perkins who filed a notice of appearance on that date.

8 Orders were made for the filing of a defence and a defence was filed on 29 September 2005.

9 At a directions hearing on 29 September 2005 I referred the matter to mediation and listed it for further directions on 24 November 2005. I subsequently vacated the directions hearing and relisted it for directions on 15 December 2005.

10 On 7 December 2005, Messrs Gray and Perkins filed a notice of ceasing to act supported by an affidavit of a partner of that firm.

11 At the directions hearing on 15 December 2005 there was no appearance by the respondents. The solicitor for the applicant indicated on that date that the applicant would be seeking an order for default judgment. I stood the matter over to today.

12 On 6 January 2006, the solicitors for the applicant wrote to each of the respondents informing them that the application for default judgment would be listed for hearing before me this morning as a consequence of the failure of the respondents to appear at the directions hearing on 15 December 2005. There has been no reply to those letters.

13 Both firms of solicitors retained by the respondents have ceased to act and it appears that monies are owing to them for legal fees. In those circumstances it seems to me that the respondents are not defending the proceeding and the court's powers to make orders on default are enlivened.

14 It seems to me to be appropriate to proceed today on the notice of motion notwithstanding that it was served less than three clear days before the date fixed for the hearing of the notice of motion.

15 A copy of the form of the proposed notice of motion was sent by the solicitors for the applicant to the respondents’ by facsimile on 3 February 2006 and by regular post on 6 February 2006.

16 It was until recently well settled that there was no presumption upon default of the respondent of the correctness of the applicant's claims: see Commissioner of Taxation v Finn [1960] HCA 69; (1960) 103 CLR 165.

17 It was not open to the court to make an order for default judgment except on the bringing of a motion supported by evidence as to the merits of the application: see Australian Securities Commission v McLeod (1994) 54 FCR 309 per Drummond J; see also for example Grey v Mango Prepaid Calling Cards Pty Limited [2004] FCA 1664 per Nicholson J, and Zomba Production Music v. Roadhouse Productions (2001) 190 ALR 288 per Stone J.

18 However, recent authorities indicate that the introduction of Order 35A provides the foundation for a finding that in the absence of a defence where there is a pleading by way of a statement of claim then the facts in the statement of claim are admitted.

19 Here there is a defence, but the respondents are not pursuing it with due diligence.

20 Recent authorities support the proposition that Order 35 does not require proof by way of evidence of the claim. It requires that on the face of the statement of claim there is a claim for relief sought and that the court has jurisdiction to grant that relief: see Australian Competition and Consumer Commission v 1Cellnet LLC [2005] FCA 856 per Nicholson J at [14] and Arthur v Vaupotic Investments Pty Limited [2005] FCA 433; cf Wu v Avin Operations Pty Limited (ACN 076 956 913) [2006] FCA 36 at [49], [57] – [58].

21 I am satisfied that the respondents are aware of the proceeding and that they were aware of today's application. I am also satisfied that they are in default for the reasons previously mentioned.

22 The power to enter default judgment is enlivened for the reasons given above. The structure of the statement of claim is straight forward. Damages are calculated in an affidavit of Peter Warren Hearne sworn 17 August 2005 and filed on 18 August 2005. The amount claimed is $125,193.95.

23 There was an error in the application as originally filed and the amount claimed is slightly less than the claim in its original form. I am satisfied that the calculation is a calculation of the loss and damage suffered by the applicant as a result of the failure of Busta Rhymes to perform at Luna Park on 29 September 2004.

24 I note that on 25 November 2005, the applicant by consent discontinued the proceedings against the Third Respondent (Drop Dead Entertainment Ltd (NZ) NZCN 14 98 190) with no order as to costs.

25 Accordingly I will make orders in terms of [1] and [2] of the short minutes of order and I will order the respondents to pay the applicant's costs on a party/party basis. I note that the interest rate referred to in [2] of the short minutes of order is the rate currently prescribed by the Federal Court rules.

I certify that the preceding twenty five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson.

Solicitor for the Applicant:	Esplins Solicitors

	No appearance for the respondent

Date of Hearing:	8 February 2005

Date of Judgment:	8 February 2005

1.	The applicant is given leave to file a notice of motion in court, returnable instanter, pursuant to Order 19 Rule 3.
2.	Default judgment is ordered, pursuant to Order 35 Rule (2)(2)(h).
3.	The respondents pay the Applicant damages in the amount of AUD$125,193.95;
4.	The respondents pay the applicant interest on the amount of AUD$125,193.95 at an interest rate of 10.5% per year calculated over the period from 30 September 2004 to 8 February 2006;
5.	The respondents pay the applicant’s costs on a party-party basis.

Federal Court of Australia

Luna Park Sydney Pty Limited (ACN 102 907 184) v Bose [2006] FCA 94 (8 February 2006)