Hercules and the Magistrates’ Court rule requiring reasons for denials in defences

I had a little debate with the Supreme Court not so long ago about whether my client’s bare denial defence was appropriate. A bank had pleaded that my client had mortgaged his house to it. My client simply denied the allegation. I said by way of a place to start the discussion that it was indubitably a proper pleading if my client’s case was that he had never had anything to do with the Bank. It is not necessary to plead, I said, “The defendant denies paragraph 4, and says further that he had never had any dealings with the Bank, and they must have sued the wrong person”, nor “… that it was not him but his cousin with the same name who mortgaged his house to the Bank”. I thought that was uncontroversial, but it proved not so.

In Keith Hercules v Magistrates’ Court of Victoria [2008] VSCA 1, Mr Hercules, a Melbourne sole practitioner, applied to strike out the defence of a personnel agency he sued. He pointed out that the Magistrates’ Court Rules are peculiar in requiring reasons to be given for denials. He failed, and was ordered to pay costs. Instead, the Magistrate ordered the provision of further particulars. It seems that Mr Hercules had acted peremptorily, without first raising his complaints with his opponent, as is the custom. As the Court of Appeal said:

’12 The only question that needs to be decided today is whether there is any arguable error in the magistrate’s decision to order an amended defence. In our view there is no error. It would be a drastic step indeed to strike out a defence on the first occasion when objection is taken. To strike out a defence for want of particulars without affording the pleader an opportunity to make good the deficiency is unheard of. The magistrate’s decision refusing the strike out application and instead ordering an amended defence was clearly correct.’

I think truth in pleadings is good, but I maintain, like the Court of Appeal, that there are some denials which do not require anything more. President Maxwell and Justice of Appeal Redlich seemed to find it somewhat ironic that the Mr Hercules’s statement of claim was more impoverished of particulars than the defence he was attacking. Their Honours gave Mr Hercules’s appeal short shrift indeed, expressly considering a solicitor-client costs order, saying:

‘5 Mr Hercules’ complaint was that the defence did not comply with the requirements of sub rule 9.02(3) of the rules of the Magistrates’ Court of Victoria, which relevantly states that: “A defendant who states that a fact stated in the statement of claim is denied must (a) give the reasons for denying the fact.”

6 Mr Hercules points out, as appears to be the case, that this sub rule, requiring reasons for a denial in a defence, is unique. The learned authors of Williams – Civil Procedure say as much. Mr Hercules informs the Court that, in his experience, the rule is rarely complied with in Magistrates’ Court proceedings.

7 In fact, the defence filed in this case is notable for the very extensive particulars which it contains. A number of paragraphs and sub paragraphs plead bare denials but then set out quite lengthy particulars of those denials. In the County Court and the Supreme Court, particulars of a denial are not required. A bare denial is a sufficient pleading unless there are additional facts or matters on which the defendant proposes to rely, of which notice must be given.

8 Whereas the defence is impressively particularised, the statement of claim by contrast is hardly particularised at all. It lacks particulars in respect of matters which under the Supreme Court Rules would need to be particularised, including an alleged agreement, alleged terms of the agreement, and alleged warranties and representations. Nothing for present purposes turns on those omissions, however.

9 The Magistrate refused Mr Hercules’ strike out application and ordered instead that the defendant file and serve amended particulars of defence within 21 days. The magistrate ordered that Mr Hercules pay the costs of the day. It was that order – that is to say, the refusal to strike out – which Mr Hercules appealed to the Supreme Court by originating motion, and it was that originating motion which the learned judge on 8 November 2007 dismissed with costs.

10 No occasion arises for any detailed exploration of what was intended by the requirement that reasons be given for a denial. We did not hear extensive argument on the question. Clearly, what is required will vary according to the nature of the allegation which is denied. It may be impossible to give reasons where, for example, what is denied is an act of alleged negligence. The denial itself conveys that the defendant says it was not negligent. Likewise, in the case of an allegation of breach of contract, the denial is sufficient to convey the defendant’s position, which is that it did not breach the contract or that it positively complied with the contract. In both cases, it is difficult to see what other ‘reasons’ might be given for such a denial.

11 Where explanatory reasons are required to be given, and can meaningfully be given, the intention of the rule is presumably that they should be provided in the form of particulars. By this means the plaintiff, whose allegation has been denied, is informed more fully than a bare denial might do of the case which the defendant will make. That is of course the function of pleadings and, specifically, the function of particulars. As already noted, that is the approach which was adopted in the defence in the present case, where extensive particulars of a number of denials are given. Mr Hercules’ complaint was that there were other denials in the defence which were not so particularised, that is, no ‘reasons’ for the respective denials were given. Accepting that the defendant was obliged by the rule to give the reasons for each denial of a statement of fact, Mr Hercules had a legitimate objection to make. There is no qualification in the rule and it is expressed in mandatory terms. But, as with the rule in this Court requiring particulars to be given, the particulars to be given will only be such as the defendant is reasonably capable of giving, having regard to the allegation pleaded and denied.’

I will keep an eye out for the special leave application and keep you posted.

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