Responding to the claim

Early steps available

What steps are open to a defendant in the early part of a case?

If a defendant considers that the claim brought against it does not disclose a proper cause of action, is frivolous or vexatious or is an abuse of process, it may make an application to have part or all of the claim struck out or amended. Such an application should be made promptly and before the close of pleadings.

A defendant may bring a counterclaim against the plaintiff as part of its defence to the claim. It may also bring a claim against a third party or seek to join a third party to the proceeding where it claims any contribution or indemnity, or seeks relief or remedy connected to the subject matter of the proceeding, against that third party.

A defendant who considers that the court is not suited to hear the claims made by the plaintiff (for example because of lack of jurisdiction or forum non-conveniens) may make an application for its dismissal or transfer to another court.

A defendant should also consider whether the claim has been commenced within the relevant time limits set out in the applicable Limitation of Actions legislation in the relevant state or territory.

If the plaintiff resides outside of the state or territory in which the claim is issued, or is a corporation and sues for the benefit of some other person and there is reason to believe the plaintiff has insufficient assets in Victoria to pay the defendant’s costs if ordered to do so, the defendant may apply to the court for an order that the plaintiff gives security for the defendant’s costs of the proceeding. If an order for security is made, the plaintiff will be required to deposit security into court and the proceeding will be stayed until the security is given.

Defence structure

How are defences structured, and must they be served within any time limits? What documents need to be appended to the defence?

Defences must be set out in consecutively numbered paragraphs. They must either admit, deny or require the plaintiff to prove each of the matters set out in the statement of claim. Denials must be specific and deal with the point of substance, setting out the basis for the denial. If a defendant intends to prove different facts than those pleaded by the plaintiff, they must be set out. Where any defence or answer to be raised by the defendant arises under any Act, the specific provision relied on must be identified in the defence. 

The time for filing a defence varies according to the rules of the particular court. Parties to complex litigation will often agree on a timetable that includes provision for the filing of a defence by a particular date.

A defendant who has a claim against the plaintiff may bring a counterclaim in the proceeding. A counterclaim is usually issued in the same document, which is headed ‘defence and counterclaim’.

No documents need to be appended to the defence. If a document is referred to in the defence, the particulars of that document should be noted. The plaintiff can later call for its production.

Changing defence

Under what circumstances may a defendant change a defence at a later stage in the proceedings?

A party may amend its defence once prior to the close of pleadings without leave of the court. A party may seek leave of the court, or the consent of all other parties, to amend its defence at any other time.

Sharing liability

How can a defendant establish the passing on or sharing of liability?

Outside of ordinary contractual principals relating to joint and several liability, a defendant may:

  • bring a claim against a third party;
  • file a counterclaim against a plaintiff in circumstances relating to contributory negligence; or
  • seek to join a third party whom the defendant considers shares liability.

 

In Australia, a legislative regime of proportionate liability exists.

While the legislation is slightly different in each state and territory, as a general rule, the regime provides that a defendant who is able to establish that other parties are concurrent wrongdoers in respect of the acts or omissions that caused the claimant’s loss or damage may succeed in having some of its liability for the loss or damage apportioned to those concurrent wrongdoers as a several obligation.

Considering the possibility of concurrent wrongdoers is an important aspect of both bringing and defending a claim.

Avoiding trial

How can a defendant avoid trial?

The most common way to avoid trial is for the parties to reach an early resolution and mutually agree on a settlement. This can occur as a result of the parties’ own volition, but is commonly a result of court-ordered mediation with a private or court-appointed mediator. Almost all commercial matters in Australia will feature mediation as part of the case management process.

An application to the court for summary dismissal may be made if:

  • the limitation period has expired;
  • the cause of action is invalid due to being without reasonable grounds or a proper basis, an abuse of process or commenced for a wrongful purpose and has no real prospects of success;
  • the court does not have jurisdiction to hear the case; or
  • a plaintiff is failing to properly prosecute its case in an efficient manner or is failing repeatedly to comply with orders of the court or is conducting its case in a vexatious way.

 

Consideration might also be had to questions of issue estoppel where parties are involved in successive litigations. Similarly, particular cases may be suitable for determination of preliminary questions of law to be determined at an early stage by application to court.

Case of no defence

What happens in the case of a no-show or if no defence is offered?

The court may award summary judgment in favour of the plaintiff if it is satisfied that the defendant does not have a defence or the prospects of successfully defending the case are so low as to be negligible. If granted, the party seeking the order will be granted judgment in its favour, without having to go through the trial process.

If the defendant fails to file and serve an appearance or a defence within the required timeframe pursuant to the court rules, the plaintiff can make an application for default judgment, generally inclusive of costs.

As with plaintiffs, if a defendant fails to properly conduct its case in an efficient manner or is failing repeatedly to comply with orders of the court or is conducting its case in a vexatious way, a plaintiff may be entitled to have the defence struck out and judgment awarded in its favour.

In either of the above cases, where a plaintiff claims damages to be determined, the court will likely still require the plaintiff to proceed and prove its damages claim.

Claiming security

Can a defendant claim security for costs? If so, what form of security can be provided?

Yes. A defendant is entitled to require a corporate plaintiff to establish its financial capacity to pay costs should the cause of action be unsuccessful. If a plaintiff is unable to provide evidence to satisfy the defendant, the defendant may bring an application for security of costs.

A defendant should act on the question of security for costs as soon as possible following the commencement of a proceeding. Delay may be a factor that counts against a defendant when seeking security for costs.

The court’s power to order security for costs is discretionary. The onus is on the defendant to establish that the plaintiff should be required to provide security. If the defendant can establish this, several forms of security may be sought including:

  • money paid into court;
  • bank bonds or guarantees; or
  • charges over property or assets owned by the plaintiff.

 

A security for costs order against a natural person (rather than a corporation) is only granted in extremely limited circumstances. This is to ensure that people with limited financial resources still have fair and equal access to justice.

Law stated date

Correct on

Give the date on which the information above is accurate.

18 August 2020.