HL v HR[2024] QDC 126

DISTRICT COURT OF QUEENSLAND

Introduction

1. [1]
   This is an application by the defendant to set aside a default judgment entered on 23 March 2023 pursuant to r 290 of the UCPR. There is a further application that the civil proceedings be stayed until the conclusion of related criminal proceedings.

Background

2. [2]
   On 29 November 2022, the plaintiff filed a claim and a statement of claim in the Supreme Court.  The claim is for damages for personal injuries sustained over a period of time between 1980 and 1992 occasioned by unlawful assault and battery upon the plaintiff committed by the defendant.
3. [3]
   In the statement of claim the plaintiff says that she was the stepdaughter of the defendant.  Over a period of time alleged, the defendant, on a frequent and repetitive basis, committed acts of sexual abuse, indecent dealing, rape, physical abuse and psychological abuse upon the plaintiff. 
4. [4]
   Commencing when she was about six until nine he would digitally penetrate her every few months and would physically abuse her.  From when she was nine to 14 he had sexual intercourse with her on at least a weekly basis, required her to perform oral sex on him, would touch and digitally rape her when they were in a motor vehicle, would prevent her having friends come over and would physically abuse her. 
5. [5]
   After the age of 14, he would force her to sleep in the same bed as he did, he would have sexual intercourse with her on most days and he was controlling her life, social activity and food intake.  The sexual abuse continued until about the age of 17.  At about 18 years of age she conceived a child and the defendant unsuccessfully pressured her to terminate the pregnancy.
6. [6]
   The plaintiff also claims aggravated and/or exemplary damages.
7. [7]
   The affidavit of Justine Sparkes, a process server, states that the defendant was served with a request for trial date.  The affidavit of Darren Costello states that the statement of claim and claim was served on the defendant on 28 January 2023. 
8. [8]
   On 17 March 2023, the plaintiff requested default judgment conditional on the assessment of damages. 
9. [9]
   On 23 March 2023, judgment was entered against the defendant conditional on damages being assessed. 
10. [10]
    On 5 July 2023, a request for trial date was served on the defendant.
11. [11]
    On 9 January 2024, the plaintiff successfully applied for an order that the defendant’s signature on request for trial date be dispensed with.
12. [12]
    The trial was listed to proceed on 9 and 10 July 2024 in the District Court. On 8 July 2024, the defendant applied for an adjournment of the trial and Judge Burnett AM on 15 July 2024 allowed the application for the adjournment and ordered that the defendant file and serve an application to set aside the judgment on 19 July 2024 and the application be listed for hearing on Monday 5 August 2024.
13. [13]
    On 23 July 2024, the defendant applied for an order to set aside the default judgment.

Defendant’s evidence

14. [14]
    In his affidavit dated 23 July 2024, the defendant says that he was born in March 1943.  He says that he was unaware default judgment had been entered against him until he was told by his solicitor in July 2024.  He encloses a report from Dr Hatzipetrou (clinical and forensic psychologist), a discharge summary and a letter from a doctor.  He also encloses correspondence concerning criminal matters brought against him.
15. [15]
    He says that he engaged solicitors namely the Frigo Adamson Legal Group concerning the notice of claim in June 2020.  Those lawyers terminated the retainer in March 2022. 
16. [16]
    In June 2022, he had a stroke and was admitted to the Sunshine Coast University Hospital for about three days.  He had another stroke later in 2022.  At the time of the service of the court documents in November 2022 he was 79 years of age.
17. [17]
    He accepts he may have received the letter from Travis Schultz & Partners regarding the default judgment but he has no recollection of this.  In July 2024, his solicitor collected an archive box full of paperwork from his house.  That particular letter was never found.
18. [18]
    He denies the plaintiff’s allegations in the claim and statement of claim.
19. [19]
    With regard to the criminal proceedings, a reference to the Mental Health Court was filed by his solicitors, Lumme Rynderman Legal, on 9 April 2024.  He notes that Dr Hatzipetrou suggests the matter should be referred to the Mental Health Court regarding fitness for trial.
20. [20]
    Exhibit RGH2 is a discharge summary from the Sunshine Coast University Hospital.  This notes that on 22 June 2022 he was transferred from the Noosa Hospital to the Sunshine Coast Hospital for acute confusion and transient dysphasia concerning CVA^[1]. 
21. [21]
    The report from Dr Hatzipetrou notes that the defendant during his working life, worked for the Department of Foreign Affairs.  It was noted during the course of discussions he had difficulties in sequencing historical events and was unable to account for periods from his last employment and his current circumstances.^[2]  It was noted in the medical history section that aside from the admissions for suspected strokes there were ongoing health problems.  The defendant presented with symptoms consistent with Parkinson’s Disease and there were references of poor compliance in community settings.^[3]  A number of tests were administered.  Dr Hatzipetrou noted that Mr R’s overall cognitive functioning fell in the average range while his verbal comprehension abilities fell within the high average range. However he was unable to recall images in visual reproduction after 20 minutes. He had erroneous recollections.^[4] 
22. [22]
    As to the sexual offences, he denied that he had raped her and believed that the plaintiff was seeking money.  At one point he said there was consensual sex but this was when she was 18.^[5] 
23. [23]
    It was noted that Mr R’s performance on memory tasks were much worse than expected given his assessed cognitive ability.^[6]  On the balance of the current findings and observations he presented with symptoms consistent with a neurocognitive disorder as defined in DSM5.^[7] 
24. [24]
    It was noted that there appear to be multiple aetiologies related to this condition and impairments in adaptive functioning.^[8] 
25. [25]
    It was noted that his capacity to follow proceedings and understand the relevance of evidence in a trial is impaired and he would have difficulties providing instruction to counsel in a trial.^[9] 
26. [26]
    Importantly he is likely to experience episodes of confusion and forgetfulness.^[10]
27. [27]
    “Given the complexity of a jury trial, Mr R would be markedly disadvantaged and would not have the requisite capacity to follow the trial or instruct counsel.”  Considering Mr R’s current presentation, his capacity to provide instructions to his current legal representative is likely to also be impaired.  On the balance of the findings, Mr R is unlikely to be fit for trial.  Hence, Mr R’s matter should be referred to the Mental Health Court for further examination and opinion regarding his fitness for trial.^[11]
28. [28]
    There is a letter from Dr Howarth from the Tewantin Medical Centre which notes that there has been a previous stroke and Parkinson’s Disease.  As at 5 July 2024, he noted “on my examination today I have found H not able to articulate what he is expected to do or why he must appear except that someone is trying to steal his money.”
29. [29]
    In a further affidavit filed 1 August 2024, the defendant swears that he has had no update regarding any hearing in the Mental Health Court. 
30. [30]
    On 26 July 2024, Dr McDermott advised that the defendant suffers from Parkinson’s Disease which causes a range of physical symptoms.  He has mild cognitive impairment and a history of CVA.  He would struggle to attend court for more than a very brief time due to his medical condition.

Plaintiff’s evidence

31. [31]
    There is an affidavit from the plaintiff filed 30 July 2024.  In this affidavit she says that she was born in May 1974, completed year 12 in 1991 and graduated in dentistry and owns her own dental practice.  Between 1980 and 1992 she was the subject of sexual abuse, indecent dealing, rape, physical abuse and psychological abuse perpetrated by the defendant.  The circumstances of this are set out in the report of Dr John Chalk.
32. [32]
    She commenced the claim against the defendant in June 2020.
33. [33]
    The defendant was initially represented by solicitors and denied liability for the claim which she found very upsetting.  He had not responded to the claim for several years.
34. [34]
    She has suffered numerous symptoms as a consequence of the offending.^[12]
35. [35]
    She talks about her life with her children and ex-husband.  In mid-2019, her mother was diagnosed with cancer.  She went to the defendant’s house to confront him about the abuse.  He accused her of “dreaming” and “making things up.”  As a result the police were called and the defendant pressed charges against her for wilful damage and trespass.  On legal advice, she pleaded guilty to the minor charge of wilful damage in 2020.
36. [36]
    She made her complaint to police in July 2019 and he was charged in January 2022.  She has attended two court hearings.  The last mention date was in April 2024 and she has not been provided with any information as to the progress of the prosecution.  On 26 April 2024, she received an email from the Mental Health Court advising they were now dealing with the matter.
37. [37]
    She talks about her working life and the effect the offending had against her.  She also talks about gratuitous care and past treatment costs.
38. [38]
    The affidavit of Timothy McClymont from the plaintiff’s solicitors filed 30 July 2024 states that the sealed request for trial date was served on the defendant on 27 May 2024 by registered post.  On 29 May 2024 by letter sent by registered post, the defendant was advised the trial had been set down for two days commencing 9 July 2024.  Further documents and an offer to settle were also sent by registered post. 
39. [39]
    Until 8 July 2024 he had not received any communications from the defendant or anyone acting on his behalf.
40. [40]
    Mr McClymont encloses the special damages sought by the plaintiff and other relevant documents.
41. [41]
    There are also all of the affidavits of service and orders to which I have had regard.

Submissions by the defendant

42. [42]
    The defendant submits that he has given satisfactory explanation for his failure to defend.  It is also submitted he has been criminally charged with offences the subject of the civil proceedings.  It is submitted he was unaware that judgment had been entered against him until he attended upon his current solicitor in July 2024.  He has suffered significant health problems. 
43. [43]
    It is relevant the defendant was left unrepresented in the civil proceedings.
44. [44]
    The defendant cannot answer the plaintiff’s claim without potentially prejudicing his position in the criminal proceedings.  In all of the circumstances, the orders sought should be made.
45. [45]
    In oral submissions Mr Mason:

    1. Submitted the right to silence is an important matter to be considered.
    2. Submitted the health problems suffered by the defendant explain why he did not defend the civil action.
    3. Relies on Lucciano v R^[13] to support the application for the stay.
    4. Submitted there is not a huge amount of prejudice to the plaintiff is setting aside the judgment or staying the matter bearing in mind the considerable delay already.
    5. Submitted if the court ordered costs, they should be delayed until the conclusion of the trial.
    6. Distinguished the case of Tobin^[14] relied on by the plaintiff.   

Plaintiff’s submissions

46. [46]
    The plaintiff submits that the defendant has been non-responsive to the pre-trial procedures and indeed this required a Personal Injuries Proceedings Act 2002 (Qld) application.
47. [47]
    It is noted the defendant did not file a defence and the default judgment was entered on 23 March 2023 and sent to him by express post on 5 June 2023.
48. [48]
    The matter was listed for a two day trial to proceed in the Brisbane District Court on 9 July 2024.  It was a day before the trial on 8 July 2024 that the defendant engaged a solicitor and advised of his intention to apply for the adjournment of the assessment hearing.
49. [49]
    It is submitted the defendant’s explanation for the delay is wholly unsatisfactory particularly bearing in mind he has been legally represented since 11 April 2022.  He has been repeatedly served with court documents.  It is submitted that the failure to enter the defence was deliberately intentional and not some innocent mistake. 
50. [50]
    It is submitted that there has been significant delay in making the application to set aside the judgment.  The judgment was served in or about June 2023 and an application was only made in July 2024.  The affidavit includes bare denials of the allegations against him and does not disclose a draft defence.^[15] 
51. [51]
    At one point he admitted intercourse with the plaintiff.
52. [52]
    It is also submitted that there would be prejudice in the plaintiff in setting aside the judgment.  She has incurred significant costs in obtaining default judgment and in  preparing the claim. 
53. [53]
    The criminal matter has been transferred to the Mental Health Court and there have been four mentions.  The matter has not been listed for hearing and will not be soon.
54. [54]
    The plaintiff suffers PTSD and further delay will cause her distress.  It is ultimately submitted his explanation in bringing the application is unsatisfactory, the delay has been inordinate and the defendant’s evidence is implausible.  The stay application should also be refused. This would only compound the prejudice.
55. [55]
    In the supplementary outline the Plaintiff:

    1. Submits the defendant’s present position concerning the defence is contrary to his earlier position.
    2. Relies on McMahon v Gould^[16] regarding the stay application.
56. [56]
    In oral submissions Mr Jensen:

    1. Submitted I should not accept the defendant’s evidence as to delay bearing in mind he was consistently served.
    2. Points out he was represented in the criminal process.
    3. Submitted there will be significant delay in the criminal proceedings being heard.
    4. Submitted the right to silence is only one matter to be considered and in any event he has provided his version to Dr Hatzipetrou.
    5. Submitted there will be psychological harm to the plaintiff if the matter is stayed.
    6. Relied on the case of Tobin.   

Disposition

Application to set aside default judgment

57. [57]
    Relevant considerations for the court in determining whether a default judgment should be set aside under r 290 of the UCPR are:

    1. Whether the defendant has given a satisfactory explanation of the failure to defend;
    2. Whether the defendant’s delay in making the application to set aside precludes it from obtaining relief; and
    3. Whether the defendant has a prima facia defence on the merits.^[17]
58. [58]
    Although there is a wide discretion reposed in the courts in determining an application to set aside a default judgment,^[18] it is also important to note that the courts place great weight on the existence of a defence on the merits.
59. [59]
    I will first turn to the question of delay.
60. [60]
    On all of the evidence, I accept that the defendant has significant health problems.  I accept the evidence of Dr Hatzipetrou and the evidence of Dr McDermott.  The defendant has cognitive difficulties, has suffered suspected strokes and most likely suffers from Parkinson’s Disease.  There is a possibility at this point he may be found not fit for trial.
61. [61]
    I find it is likely on the evidence he received the documents relating to the trial and judgment but I infer in light of his mental state he most likely was not aware of the importance of these. I infer his medical conditions interfered with his rational thinking.  Also it is most likely he was most concerned about the criminal proceedings.
62. [62]
    Criminal proceedings are different to civil proceedings. In criminal proceedings there are usually mentions in court requiring a defendant’s appearance. A defendant is often represented by a lawyer for the criminal proceedings. Lawyers will usually ensure the client’s attendance at court. Even if unrepresented they are aware of the court dates. Civil proceedings are conducted differently. One must also bear in mind the defendant was not represented at the relevant time for the civil proceedings.
63. [63]
    Bearing in mind the state of his mental health, I can understand that the defendant’s focus would have been on the criminal charges. In these unusual circumstances I accept his explanation for the delay.
64. [64]
    I have had regard to the case of Tobin & Tobin as trustees for the Tobin Superannuation Fund v Gray & Anor.^[19] That case provides an example of where a judge refused to set aside a default judgment. In that case the judge found that there was no satisfactory explanation for delay. That was a factual finding relevant to that case. Of course each case depends on its own facts.
65. [65]
    I now turn to the issue of a defence on the merits. This is an important point to be considered in this matter.^[20]
66. [66]
    The defendant denies the allegations.  He did admit at one point to Dr Hatzipetrou there was “consensual sex” but this occurred after the complainant was of age. There would be a defence to a charge of rape in those circumstances and incest would not be open as the last of the alleged offences occurred in 1992.^[21]
67. [67]
    Ordinarily a draft defence is exhibited to the material in such applications but in this case one can understand why no draft defence has been submitted as the defendant is also seeking a stay so that he is not required to plead to the allegations. Also, this is a case in which a bare denial does constitute a defence to the allegations. It is a word on word case.
68. [68]
    In the result, I conclude on the material the defendant does have a defence on the merits. 
69. [69]
    I now turn to the issue of prejudice.
70. [70]
    On the issue of prejudice, the fact is these allegations arise from events many years ago now.  It is hard to see that a short delay of this matter would significantly prejudice the plaintiff when one considers her delay in bringing the suit itself and her delay in complaining to the police.  I am not being critical of the plaintiff for making delayed complaint. The Court understands in these sorts of cases that complainants may not make complaints for many years for a variety of logical reasons but I am concerned with the issue of prejudice.
71. [71]
    I do accept that her psychiatric condition may be affected by the delay but I need to bear in mind the fact that there will be delay with the criminal proceedings in any event which will no doubt cause distress also. I also cannot ignore the prejudice which would be occasioned to the defendant who has a defence on the merits.^[22]
72. [72]
    The other aspect concerning delay is that if the judgment is set aside and a stay is not granted then trial dates are available in the District Court in October 2024. In this regard I note that pursuant to s 72 of the District Court of Queensland Act 1967 (Qld) that the parties have consented to jurisdiction.
73. [73]
    However there is also the question of costs to consider. I was told that the costs incurred by the plaintiff are considerable to this point.^[23] She has had to expend money on the PIPA application; the application to dispense with the certificate of readiness, the default judgment and the preparation for the assessment of damages.
74. [74]
    At this point, the defendant has not paid any of these costs.
75. [75]
    I do think however that an order requiring the defendant to pay an amount on account of these costs prior to the judgment being set aside should be made. In this way (at least in part) the plaintiff’s position as to costs is rectified. Also the defendant is asking for an indulgence seeking that a regularly entered judgment be set aside.
76. [76]
    I also need to be conscious of not shutting the defendant out of defending the matter. In all of the circumstances I have determined that prior to setting aside the default judgment, the defendant should pay to the plaintiff’s solicitor the sum of $25,000 on account of the costs orders made. I make it clear this is not my assessment of the costs to be paid but merely an amount to be paid towards the assessed costs.
77. [77]
    During the argument there was discussion on whether I could make a freezing order. In the end I have decided not to make one. The effect of such an order could well prevent the defendant from defending this matter and the criminal proceedings. Also it is not usually appropriate for a court to order a defendant provide security for costs of defending a matter such as this. Finally I was told that the house is actually owned by a trust. An order restraining the trust from disposing of the house should not be made without notice and it may be that the plaintiff will not be permitted to “go behind” the trust when executing any judgment.     

Stay

78. [78]
    I now turn to the issue of the stay. 
79. [79]
    In McMahon v Gould^[24] Wootten J set out a series of guidelines in cases where a stay is sought of a civil case pending the outcome of criminal charges as follows (citations omitted):

1. “(a)
   Prima facie a plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of the court (Rochfort v John Fairfax & Sons Ltd at 10);

3. (b)
   It is a grave matter to interfere with this entitlement by a stay of proceedings, which requires justification on proper grounds (ibid);

3. (c)
   The burden is on the defendant in a civil action to show that it is just and convenient that the plaintiff’s ordinary rights should be interfered with (Jefferson v Bhetcha at 905);

3. (d)
   Neither an accused (ibid) nor the Crown (Rochfort v John Fairfax & Sons Ltd at 21) are entitled as of right to have a civil proceeding stayed because of a pending or possible criminal proceeding;

3. (e)
   The court’s task of one of “the balancing of justice between the parties” (Jefferson Ltd v Bhetcha at 904), taking account of all relevant factors (ibid at 905);

3. (f)
   Each case must be judged on its own merits, and it would be wrong and undesirable to attempt to define in the abstract what are the relevant factors (ibid at 905);

3. (g)
   One factor to take into account where there are pending or possible criminal proceedings is what is sometimes referred to as the accused’s “right of silence”, and the reasons why that right, under the law as it stands, is a right of a defendant in a criminal proceeding (ibid at 904)…. ;

3. (h)
   However, the so-called “right of silence” does not extend to give such a defendant as a matter of right the same protection in contemporaneous civil proceedings. The plaintiff in a civil action is not debarred from pursuing action in accordance with the normal rules merely because to do so would, or might, result in the defendant, if he wished to defend the action, having to disclose, in resisting an application for summary judgment, in the pleading of his defence, or by way of discovery or otherwise, what his defence is likely to be in the criminal proceeding (ibid at 904-5).

3. (i)
   The court should consider whether there is a real and not merely notional danger of injustice in the criminal proceedings (ibid at 905);

3. (j)
   In this regard factors which may be relevant include:

1. (i)
   the possibility of publicity that might reach and influence jurors in the civil proceedings (ibid at 905);

3. (ii)
   the proximity of the criminal hearing (ibid at 905);

3. (iii)
   the possibility of miscarriage of justice eg by disclosure of a defence enabling the fabrication of evidence by prosecution witnesses, or interference with defence witnesses (ibid at 905)

3. (iv)
   the burden on the defendant of preparing for both sets of proceedings concurrently (Beecee Group v Barton);

3. (v)
   whether the defendant has already disclosed his defence to the allegations (Caesar v Somner at 932; Re Saltergate Insurance Co Ltd at 736);

3. (vi)
   the conduct of the defendant, including his own prior invocation of civil process when it suited him (cf Re Saltergate Insurance Co Ltd at 735-6);

3. (k)
   The effect on the plaintiff must also be considered and weighed against the effect on the defendant. In this connection I suggest below that it may be relevant to consider the nature of the defendant’s obligation to the plaintiff;

3. (l)
   In an appropriate case the proceedings may be allowed to proceed to a certain stage, eg, setting down for trial, and then stayed (Beecee Group v Barton).”

80. [80]
    In Bannister v Department of Corrective Services^[25], Holmes J followed these guidelines.
81. [81]
    I consider the following features of significance in the present case:

    1. The plaintiff has a right to have her action heard.
    2. Generally speaking the courts are disinclined to stay a civil action in these circumstances.
    3. The onus is on the defendant here.
    4. Whilst the right to silence must be considered, the defendant has in effect disclosed his defence to Dr Hatzipetrou. It is a simple one. He denies the allegations by the plaintiff and alleges any sexual relationship was a consensual one after the plaintiff was 18. The right to silence is also not an absolute right when one considers these applications.^[26]
    5. In light of the matters raised, I do not consider there is more than a notional danger of injustice. Indeed it may be it is found the defendant is not fit for the criminal trial.
    6. Publicity can be limited by orders of the court. In this regard e.g. pseudonyms can be used in judgments. I will hear from the parties further on this point.
    7. At the moment the only admissible evidence from the plaintiff’s side seems to be from her and Dr Chalk. The preliminary complaint evidence is not admissible in a civil proceeding,^[27] unless it is to rebut any suggestion of recent invention or to re-establish credit.   
    8. At this stage there is no burden on the defendant preparing the civil proceedings as the criminal matter has been referred to the MHC. Indeed the conduct of the defendant in the civil proceedings may be very relevant to whether he is fit for trial in the criminal proceedings.
    9. I must consider the effect on the plaintiff and note she allege she suffers PTSD from the conduct. Whilst the allegations come from events which occurred a long time ago, through no fault of her own the civil matter has now been delayed in the courts for almost 2 years. 
    10. The criminal trial will be some time off. The MHC is a very busy jurisdiction. It was only in April 2024 that the matter was referred. There may well be a delay of up 18 months to 2 years before the matter comes on for trial if the defendant is found fit. This point very much tells against a stay.     
82. [82]
    In all of the circumstances, balancing all of the factors and noting it is a grave matter to interfere with a plaintiff’s entitlement to a trial, I have decided to decline to order a stay. I do not consider there will be a miscarriage of justice if the civil trial proceeds in light of the nature of the defence.^[28]
83. [83]
    I did have regard to the case of Lucciano v R^[29] relied on by Mr Mason. I note that the comments made by the judges are merely obiter (the case concerned an appeal against conviction). Also the court stated at [25] that it did not find a case where the civil proceedings occurred ahead of the criminal proceedings, however Bannister is a clear example of this. Also see Black & White Cab Co Pty Limited v Kelk.^[30]
84. [84]
    On the issue of costs, the Court is granting an indulgence to the defendant.  In all of the circumstances, it is appropriate for the defendant to pay the plaintiff’s costs of and incidental to this application and for any costs thrown away concerning the trial. There is no valid reason why they should be delayed until the end of the trial.

Orders

85. [85]
    By reason of the above, I make the following orders:

1. Leave is granted to the defendant to file the amended application.
2. The defendant is to pay to the plaintiff’s solicitors the sum of $25,000 within 14 days representing a contribution towards the costs in the proceedings ordered to be paid by the defendant to the plaintiff.
3. If the said sum is not paid then the application to set aside the default judgment is dismissed.
4. Once the said sum is paid, then pursuant to r 290 of the Uniform Civil Procedure Rules 1999 (Qld) the default judgment dated 23 March 2023 will be set aside.
5. I dismiss the application for the stay.
6. Pursuant to section 72 of the District Court of Queensland Act 1967 (Qld) the proceeding is to remain in the District Court at Brisbane for final determination.
7. The defendant is to pay the plaintiff’s costs of and incidental to the application on the standard basis as agreed or assessed.
8. The parties have liberty to apply on the giving of two days written notice.
9. I will hear the parties on the use of pseudonyms.