Case: Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2006] FCA 1427
Outcome: followed
The operation of O 35A r 3(2)(c) was considered by Kiefel J in Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2006] FCA 1427. Her Honour, at [44], held that the rule deems a respondent to have admitted the facts alleged in a statement of claim, but not to have conceded the entitlement to the relief sought. Order 11 r 13 of the Rules also has the effect of the owner and the vessel being deemed to have admitted the facts alleged in the statement of claim. 9 The power under O 35A r 3(2) is discretionary. In this instance, I have no hesitation in exercising that power in respect of the claim for judgment for a liquidated sum. The owner and the vessel have never disputed that the claimed sums were advanced and have not been repaid. There is now nothing to suggest that the owner or the vessel has any defence to the claim. Indeed, the owner at material times acknowledged its indebtedness to the plaintiff and to others. The calculation of interest to date has been made in accordance with the pleaded terms of the agreement and the mortgage (and which are both in evidence), and has been verified by affidavit. 11 Kiefel J in Dataline [2006] FCA 1427 expressed the issue pithily in the following terms at [57]: The question is whether declarations should be made on deemed admissions, given that there has been no adjudication by the Court on the facts and the declarations may give the impression that there has. 12 Dataline [2006] FCA 1427 concerned alleged unconscionable conduct by a supplier of internet-related services contrary to s 51AC of the Trade Practices Act 1974 (Cth), and of misleading and deceptive conduct contrary to s 52 of that Act. Justice Kiefel made declaratory and injunctive orders, and imposed pecuniary penalties, under O 35A r 3(2)(c) of the Rules. The respondents had failed to comply with various interlocutory orders and their defence was struck out. 13 Justice Kiefel at [35]-[51] discussed the terms of O 35A of the Rules and their analogues in the various Supreme Court Rules for judgment in default of appearance or defence. I respectfully adopt her Honour's comments and conclusions. I do not need to repeat them. Her Honour concluded that O 35A r 3(2)(c) operates so that the allegations of fact in the statement of claim are taken to be admitted, so that the Court then has the power to grant such relief as it considers appropriate on the basis of those deemed admissions. Fairness in the conduct of litigation may require a defaulting respondent to be informed if the relief sought differs materially from that sought in the application, and for the respondent to be given an opportunity to respond to the claim for that more extensive or different relief. No such problem arises in this matter: the relief sought is that claimed in the application. Moreover, although the deemed admissions provide the basis for the relief proposed, her Honour considered that further affidavit evidence may be adduced to support the relief claimed, but not so as to alter the pleaded case: at [50]. 14 As the power in O 35 r 3(2)(c) is discretionary as to whether relief as sought should be granted, additional affidavit evidence to support the exercise of the discretion is in my view clearly admissible, subject to her Honour's qualification that it does not alter the pleaded case. 15 Considerations particular to granting declaratory relief under O 35 r 3(2)(c) were discussed by Kiefel J at [52]-[59]. Again, I respectfully adopt and agree with her Honour's views. In that case, her Honour at [59] said: It may no longer be correct to have a practice which operates as a prohibition in every case of default and preferable to consider the circumstances pertaining to the particular case and the purpose and effect of the declaration. Millett J made declaratory orders in Patten v Burke Publishing Co Ltd [1991] 1 WLR 541 where justice to the plaintiff required it. The order however operated principally inter partes and it might be doubted whether it would be of interest to other persons. Cases such as this, involving the protection of consumers, are of public interest. Declarations are often utilised in such cases to identify for the public what conduct contributes (sic, constitutes) a contravention and to make apparent that it is considered to warrant an order recognising its seriousness. It is however important that there be no misunderstanding as to the basis upon which they are made. This could be overcome by a statement, preceding the declarations, that orders are made ' upon admissions which [the respondent in question] is taken to have made, consequent upon non-compliance with orders of the Court '. (original emphasis) 16 I have reached the view that I should make the declaratory order sought on the basis of the deemed admissions, and in the light of the additional material relied on by the plaintiff. I have had regard to the background to the action, the nature of the claim (as deemed to be admitted), the apparent strength of the plaintiff's claim, the opportunity of others who may be directly affected by the declaration to have participated in the action, and the interests of fairness to the plaintiff and to others. 17 I shall briefly explain my consideration of those matters.