• 29 Oct 2018

Avoid being 'aced' in litigation

Litigation is like tennis: the party with the ball (or the claim) serves it, often with spin, at an opponent who tries to counteract its force and alter its trajectory to prevent the serving party from capitalising on having taken the offensive.

Professional tennis, like litigation, is run much more efficiently than it once was. Points must be played within limited timeframes. Penalties can be imposed for wasting time or disrespecting the umpire. An athlete (or a pair of them) may not refuse to face particular opponents because they have 'bigger fish to fry', or ask their coach to stand in for them during the first game while they finish warming up.

A good rule of thumb in both types of tournament is that any defence that complies with the rules and has a reasonable prospect of success � even the clumsiest backhand return � is better than no defence at all. If the ball can be sent back over the net without being called 'out', the onus of dealing with it returns to the initiating party.

Work with your lawyers to prepare your defence early

Tennis 'pros' study their opponents' techniques to develop strategies for countering them and compensating for their own weaknesses. On court, each player works to anticipate and return multiple shots, simultaneously preventing the other side from doing the same.

Being well prepared for possible litigation against you can reap similar rewards. Directors of a company served with a statement of claim at its registered office or through its lawyers cannot afford to put the document aside because the dispute is not on their radar or priority list. The plaintiff (initiating party) has 'seized the moment', making it necessary to respond within the prescribed timeframe.

Preparing a defence typically requires detailed consultation between lawyer and client, including about factual matters and the evidence required to prove them. It is not a task that can simply be left with the lawyers. The period for filing a defence is normally 28 days after being served with a statement of claim. Day 27 is much too late for directors to be turning their minds to its content.

On the other hand, where there are reasonable prospects of success, putting on the best defence that the circumstances allow is usually better than not filing one at all. At the very least, taking that step puts the onus back on the plaintiff to ask the 'umpire' to strike out your 'return' for failure to disclose any reasonable defence, insulting the court or wasting its time.

Don't get 'aced' by a default judgment

If a defence is not filed within 28 days, a plaintiff can ask the court to grant judgment against its opponent (the defendant) by default. Default judgment could be described as the legal equivalent of the 140 km/hour 'ace' serve in tennis.

A plaintiff is not necessarily obliged to notify a defendant that it has properly served with a statement of claim that it seeks default judgment. The court's decision to award judgment to the plaintiff can be made in the parties' absence and the defendant simply notified that it has lost the case. Because failure to file a defence tends to suggest an inability to mount one, courts commonly grant default judgment in terms that reflect the plaintiff's statement of claim.

Overturning a default judgment is more difficult than filing a defence in time

Like a professional tennis player who believes that their opponent's blistering unreturned serve should have been called 'out', a defendant against whom default judgment has been granted has some scope to challenge that result. However, such challenges cannot be undertaken lightly, not least because they require the same detailed work that preparation of a defence involves.

Key considerations for a court asked to set aside a default judgment are whether it appears that the defendant really does have a defence � and if so, why it didn't file one in time. The fact that a defendant was simply not paying attention when the plaintiff served the statement of claim is unlikely to be enough.

If you have been served with a statement of claim, Acorn Lawyers' Litigation and Dispute Resolution Team would be happy to assist you to ascertain whether you have a defence, and if so, to draft and file your defence. Please call Justin Conomy on (02) 9002 6060 or email him at justin@acornlawyers.com.au to request a consultation

Written by: Litigation Team

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