CFI Finance Pty Ltd v Coppolecchia [2026] QDC 30

DISTRICT COURT OF QUEENSLAND CITATION: CFI Finance Pty Ltd v Coppolecchia [2026] QDC 30 PARTIES: CFI FINANCE PTY LTD (Plaintiff) v DAMIAN MATTHEW COPPOLECCHIA (First Defendant) v MEGAN LOUISE COPPOLECCHIA (Second Defendant) v MA WALKER PTY LTD IN ITS OWN CAPACITY AND AS TRUSTEE FOR THE D & M COPPOLECCHIA FAMILY TRUST (Third Defendant) FILE NO: BD 415/25 DIVISION: Civil DELIVERED: 16 March 2026 DELIVERED AT: Brisbane HEARING DATE: 13 March 2026 (on the papers) JUDGE: Barlow KC, DCJ ORDERS: 1. Judgment for the plaintiff against the first defendant for $114,346.58, including interest of $615.70 on the principal debt of $113,730.88. 2. The first defendant pay the plaintiff’s costs of the proceeding as against that defendant, including one third of the costs of the application filed on 6 March 2026. 3. The application filed on 6 March 2026 otherwise be dismissed, with no other order as to the costs of that application. CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – DEFAULT JUDGMENT – the plaintiff seeks to recover a debt that it alleges each of the defendants guaranteed - no notice of intention to defend was filed by any defendant – the plaintiff claims an equitable mortgage over a property owned by the second defendant – whether the statement of claim justifies default judgment - judgment be awarded against the defendants -- 1 of 6 -- 2 PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – INDEMNITY BASIS – the plaintiff seeks to recover a debt that it alleges each of the defendants guaranteed – the plaintiff claims an equitable mortgage over a property owned by the second defendant – whether, under the guarantees, the plaintiff’s costs are to be paid by the defendants on an indemnity basis LEGISLATION: Uniform Civil Procedure Rules 1999 r 288 Civil Proceedings Act 2011 s 58 CASES: Adelphi Hotel (Brighton) Ltd, Re [1953] 2 All ER 498. Chen v Kevin McNamara & Son Pty Ltd (No 2) [2012] VSCA 229 Citibank Savings Ltd v Nicholson & Ors [1998] ANZ Conv R 442. Commonwealth Bank of Australia v Aspenview Productions Pty Ltd [2001] VSC 499. Gomba Holdings (UK) Ltd v Minories Finance Ltd (No 2) [1993] Ch 171. Kheirs Financial Services Pty Ltd v Aussie Home Loans Pty Ltd [2010] VSCA 355, (2010) 31 VR 46. Kyabram Property Investments Pty Ltd v Murray [2005] NSWCA 87. Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service (No 3) [2010] NSWSC 1139. Russo v Buck (No 2) [2007] SASC 157. Rumball v Mortimore [2000] WASC 126. Taree Pty Ltd v Bob Jane Corporation Pty Ltd [2008] VSC 228. SOLICITORS: Cornwalls -- 2 of 6 -- 3 [1] In this proceeding, the plaintiff seeks to recover a debt that it alleges each of the defendants guaranteed. It also seeks a declaration that it has an equitable charge (as sought in the claim) or an equitable mortgage (as sought in the draft order provided to the court) over a property owned by the second defendant, as security for the debt. [2] The plaintiff seeks judgment against each defendant in default of any defendant having filed a notice of intention to defend. The application is made to the court constituted by a judge, under UCPR r 288 because one of the orders sought is a declaration. The application has been made ex parte on the papers. [3] For the following reasons, I decline to order default judgment, except for a monetary judgment against the first defendant. [4] Subrule 288(3) provides: On the application, the court may give the judgment it considers is justified on the pleadings even if the judgment was not claimed. [5] An application for default judgment should therefore be made on the basis of the claim and statement of claim and evidence of service of those documents. Notwithstanding that, the plaintiff has filed an affidavit of its solicitor purporting to prove the agreements under which the guarantees were given, the demands made on the defendants and the ownership of the second defendant’s property over which the plaintiff claims a charge or mortgage. Strictly speaking, I should not take into account that evidence on this type of application. There are also evidentiary problems with the evidence, to which I turn first. [6] The deponent – a solicitor employed by Cornwalls, solicitors for the plaintiff - swears that: I have access to the correspondence and file maintained by Cornwalls in respect of this matter and I make this affidavit based on my review of such file and from my own knowledge and belief, save where otherwise stated. Where I state matters on the basis of information provided to me by others, I believe those matters to be true and correct. [7] He then purports to depose, from his own knowledge it seems, to service of the claim on each defendant, to the loan agreement and guarantees and demands from the plaintiff to the defendants, and that the defendants have “failed to remedy the default,” even though clearly the agreements must have been provided to him by the plaintiff, he did not personally serve the defendants and he did not personally send the demands, nor know of his own knowledge whether they had paid any part of the amounts alleged to be due. He has not stated from whom he obtained that information. In contrast, he has (rightly) deposed that he was informed and believes that a director of the plaintiff undertook a title search of the property the subject of the claim and he exhibits that search. [8] In their written submissions, the plaintiff’s solicitors refer to three affidavits of service that have been filed and seek to rely on them to prove service. As to service on the first defendant, they rely on an affidavit of service sworn on 14 November 2025 as proving service on him at 5.29pm on 11 November 2025. That affidavit was filed on 3 February 2026. I am satisfied that it proves service of the claim and statement of claim on the first defendant. -- 3 of 6 -- 4 [9] As to service on the second defendant, the submission says that it relies on an affidavit of service sworn on 17 February 2026 as proving service on her at 5.34pm on 11 November 2025. There is no affidavit on the file sworn on that date. There is an affidavit sworn on 14 November 2025 and filed on 3 February 2026 that purports to prove service on the second defendant at that time and date. However, the deponent swore that: I identified the person served by asking: “Are you Damian Matthew Coppolecchia, the person named in the documents?” showing the male the documents. The male replied: “Yes”. I then handed the male the documents. [10] That affidavit is inadequate to prove service on the second defendant, given that it does not depose correctly as to how she was identified. [11] As to service on the third defendant, the plaintiff relies on an affidavit affirmed on 14 October 2025 and filed on 17 February 2026. The deponent – an employee of the plaintiff’s solicitors - deposes to having posted a letter, the claim and the statement of claim to the third defendant on 3 September 2025. However, she said that the envelope was addressed to the Third Defendant at the company’s registered address being DMC PROPERTIES GREENBANK PTY LTD, and then an address in Augustine Heights, Queensland. [12] The letter, of which she exhibits a copy, is addressed to “DMC Properties Greenbank Pty Ltd (formerly MA Walker Pty Ltd).” [13] Neither that deponent, nor the solicitor in his affidavit, deposes to any document or other evidence of the apparent change of name of the third defendant, nor its registered office. There is therefore insufficient evidence of service on the third defendant. [14] These issues alone mean that the plaintiff is not entitled to default judgment against the second or third defendants. [15] But another issue arises concerning the claim for a declaration of an equitable charge or mortgage. Notwithstanding the defects in the solicitor’s affidavit to which I have referred above, default judgment is to be decided by reference to the pleadings, not evidence of the truth of the facts pleaded. (The latter would only be necessary if the application were for summary judgment.) So it is necessary to look to the statement of claim. In the statement of claim, the plaintiff pleads that the first and second defendants gave a guarantee on or about 19 October 2023, while the third defendant gave its guarantee on or about 18 October 2023. It goes on to plead three terms of the guarantees: namely terms to the effect that they guaranteed the borrower’s performance, they would pay all amounts not paid by the borrower and they indemnified the plaintiff against losses, costs, etc, incurred as a result of the borrower’s default. It then pleads default under the guarantees, demands and the guarantors’ failure to remedy defaults. It pleads the amount owing as at 11 February 2025 and that the second defendant is the registered proprietor of the relevant land. It then alleges: By reason of the matters pleaded in paragraphs 8 to 11 inclusive above, on or about 18 October 2023, the Second Defendant granted in favour of the Plaintiff an equitable charge over her interest in the Land (Equitable Charge), as security for her obligations to the Plaintiff under [her guarantee]. -- 4 of 6 -- 5 [16] Two problems arise from this pleading. The minor issue is that the charge is alleged to have been given on or about 18 October, when the second defendant’s guarantee was allegedly given on or about 19 October. Of course, it can be said that 19 October is about 18 October. The principal problem, however, is that nowhere in the pleading is there any allegation of the term of the guarantee that allegedly gave rise to the alleged charge. In the absence of a pleading that the guarantee contained a term giving rise to a charge, the plaintiff cannot be entitled to a declaration, by a default judgment, that such a charge exists. A default judgment can be given only if the court considers that the judgment is justified on the pleadings. On this pleading, a declaration of the existence of a charge is not justified. [17] Finally, the judgment sought includes an order that the defendants pay the plaintiff’s costs of the proceeding on the indemnity basis “pursuant to the Agreement and the Guarantee.” The clause of the guarantee pleaded as giving rise to an indemnity refers, among other things, to “costs”. There is much authority for the proposition that, in documents such as a loan agreement or a guarantee, a clause that obliges a person to pay another person’s costs, or legal costs, refers only to standard (or party and party) legal costs unless the clause expressly provides that the obligation is to pay costs on the indemnity basis (or, in some jurisdictions, on a solicitor and own client basis). As has been said in the Victorian Court of Appeal:1 An agreement to pay costs will be construed as an agreement to pay costs on a party and party basis, unless it is plain from its terms that costs are to be paid on a “special basis.”2 Where the terms plainly and unambiguously provide for costs to be assessed on some special basis, the court will take such a provision into account3 but it is not bound to give effect to any extra-curial contract as to costs.4 An agreement to pay costs on a “special” basis is only a factor informing the exercise of the court's discretion, but not requiring the exercise of that discretion in a particular way.5 Generally however, where the parties have unmistakably agreed to the making of a special costs order, such a term will be given effect6 to unless there is some other discretionary consideration that militates against the making of such an order.7 [18] The relevant clause, as pleaded in the statement of claim here, does not specifically provide that the costs for which the guarantors gave an indemnity would be costs on the indemnity basis or its equivalent. Nothing is pleaded that might give rise to an inference that the agreement was to pay costs on the indemnity basis rather than on the normal basis. In any event, I am not satisfied that this is a case in which the court ought exercise its discretion to order indemnity costs. 1 Chen v Kevin McNamara & Son Pty Ltd (No 2) [2012] VSCA 229, [8]. 2 Kheirs Financial Services Pty Ltd v Aussie Home Loans Pty Ltd [2010] VSCA 355, (2010) 31 VR 46. 3 Citibank Savings Ltd v Nicholson & Ors [1998] ANZ Conv R 442, 444; Rumball v Mortimore [2000] WASC 126, [14]; Commonwealth Bank of Australia v Aspenview Productions Pty Ltd [2001] VSC 499 (McDonald J); Kyabram Property Investments Pty Ltd v Murray [2005] NSWCA 87 (Beazley JA with whom Hodgson and Ipp JJA agreed). 4 For a discussion of relevant authority see Taree Pty Ltd v Bob Jane Corporation Pty Ltd [2008] VSC 228 (Vickery J). 5 Russo v Buck (No 2) [2007] SASC 157. 6 Gomba Holdings (UK) Ltd v Minories Finance Ltd (No 2) [1993] Ch 171. 7 Re Adelphi Hotel (Brighton) Ltd [1953] 2 All ER 498; Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service (No 3) [2010] NSWSC 1139. -- 5 of 6 -- 6 [19] In the circumstances, while I shall give judgment against the first defendant for the amount claimed, interest and costs on the standard basis, I otherwise dismiss the application. [20] As to the amount of the judgment, in the claim it seeks $114,831.78. In the statement of claim, the plaintiff pleads that, as at 11 February 2025, the defendants were indebted to the plaintiff in the sum of $114,831.78, comprising $113,730.88 “pursuant to the Agreement and the Guarantees” and $1,100.90 in “legal costs reasonably incurred by the Plaintiff in enforcement of its rights under the Agreement and the Guarantees.” In the claim it also seeks interest pursuant to statute. It does not appear to seek interest or other sums that may accrue after the nominated date. Nor has it separately pleaded that the plaintiff has incurred any particular sums of legal costs. Furthermore, given its attempt to obtain judgment for legal costs on the indemnity basis, I infer that the costs it claims have been calculated in that manner. In my view, on the pleading it is entitled to judgment against the first defendant only for the principal amount stated and interest pursuant to statute (that is, s 58 of the Civil Proceedings Act and Practice Direction 6 of 2013). -- 6 of 6 --