ABL Custodian Services Pty Ltd v Bendigo and Adelaide Bank Limited [2017] QDC 212

DISTRICT COURT OF QUEENSLAND CITATION: ABL Custodian Services Pty Ltd v Bendigo and Adelaide Bank Limited & Anor [2017] QDC 212 PARTIES: ABL CUSTODIAN SERVICES PTY LTD (first appellant) and BENDIGO AND ADELAIDE BANK LIMITED (second appellant) v TODD THOMAS TAYLOR (respondent) FILE NO/S: 1162/17 DIVISION: Applications PROCEEDING: Appeal ORIGINATING COURT: District Court of Queensland DELIVERED ON: 9 August 2017 DELIVERED AT: Brisbane HEARING DATE: 9 August 2017 JUDGE: Reid DCJ ORDER: 1. The appeal is allowed. 2. The decision of the Magistrates Court of Queensland to dismiss the appellants’ application for default judgment should be set aside. 3. Judgment by default against the respondent in the sum of $65,641.95 inclusive of interest in relation to the claim by ABL Custodian Services Pty Ltd and $50,180.30 in relation to the claim by Bendigo and Adelaide Bank Ltd. 4. The respondent pay the appellants’ costs of and incidental to the action, including this appeal, to be assessed on an indemnity basis. CATCHWORDS: APPEAL – default judgment – limitation of actions – where parties entered into a deed of settlement of a loan dispute – where repayments were not made and deed was breached – where application for default judgment made in the magistrates court – where magistrate held claim was time- barred – where deed is governed by Western Australian -- 1 of 8 -- 2 legislation which provided for a 12 year period – where action was in any case for recovery of a speciality – where decision was made on the papers without opportunity to make submissions – whether natural justice afforded Uniform civil Procedure Rules 1999 (Qld) Limitation Act 2005 (WA) Limitation of Actions Act 1974 (Qld) Cameron v Cole (1944) 68 CLR 571 John Holland Pty Ltd v TAC Pacific Pty Ltd & Ors (2010) 1 Qd R 302 State Government Insurance Commission v Teal (1990) 2 WAR 105 Attwell v Roberts (No 3) [2009] WASC 96 COUNSEL: P D Tucker for the Appellant No appearance by the Respondent SOLICITORS: Results Legal for the Appellant No appearance by the Respondent [1] This is an appeal from a decision of Magistrate Shearer given on 1 December 2016. His Honour dismissed a claim by the appellants for judgment in default of an appearance by the respondent, Mr Todd Taylor. His Honour’s decision endorsed on the file was in the following terms: “Application refused. In my view the claim is time-barred as the cause of action arose on 31/07/10 and this proceeding was not commenced until 23/09/16.” Background [2] Two companies, Great Southern Finance Pty Ltd (GSF) and ABL Nominees Pty Ltd entered into two loan agreements with the respondent, one in 2006, and the other in 2008. The loans were for $36,357.50 and $22,054.73 respectively. The loan deeds provided for monthly payments of principal and interest, and for interest payments of, respectively, 14.5 per cent per annum and 13.5 per cent per annum, all -- 2 of 8 -- 3 capitalising monthly. Each deed also provided for the recovery of any costs associated with enforcement of the deeds on a full indemnity basis. [3] Subsequently GSF assigned its rights under the 2006 deed to the first appellant, ABL Custodian Services Pty Ltd and ABL Nominees assigned its rights under the 2008 deed to Bendigo and Adelaide Bank Limited. [4] The respondent breached each of the loan deeds by making no payments after 31 July 2010. It is this date on which his Honour appears to have found a cause of action arose. That is neither surprising nor contentious. [5] Subsequently, representative proceedings were filed in the Supreme Court of Victoria on behalf of persons who obtained loans and made investments such as those made by the respondent, Mr Taylor. The respondent was a member of the group on whose behalf those proceedings were instituted. Those proceedings were subsequently compromised by a deed of settlement on 11 December 2014 which was approved in the Victorian Supreme Court. The terms of the deed of settlement included, inter alia, that the respondent acknowledged the validity and enforceability of the loan deeds. It also provided that the deed was governed by and was to be interpreted in accordance with the laws of Western Australia and, where applicable, the laws of the Commonwealth. Subsequently the appellants demanded, as they were entitled, the monies payable under the loan deeds, being outstanding principal, interest and cost less interest foregone in accordance with the deed of settlement. The respondent has failed to pay those monies. [6] The appellants then filed a statement of claim. The respondent filed no defence. The appellants filed a request for a default judgment supported by affidavit material. The request for default judgment was directed to the registrar of the Magistrates -- 3 of 8 -- 4 Court in accordance with Form 25. Pursuant to r 283(10) of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR), if the court was constituted by a registrar, then the registrar need not consider the merits of the plaintiff’s action against the defendant. Subsequently the registrar, under r 982, referred the matter to Magistrate Shearer for determination. His Honour’s decision, set out in paragraph 2 hereof, was conveyed to the appellant’s by email of 1 December 2016. [7] The appellants’ lawyers subsequently conveyed to the Magistrates Court that the claim was not, in their opinion, statute barred and requested the primary court’s decision be reconsidered. On 15 December the registry informed the appellant’s lawyers that: (a) the matter could be referred back to Magistrate Shearer for further consideration but that his Honour was not available until mid- February 2017; or (b) a fresh request for default judgment could be filed. [8] The appellant’s lawyers considered that the more appropriate course was to have the matter referred back to the primary court and so the matter was listed for further hearing on 10 March 2017. Magistrate Shearer on that day: (a) noted that he had refused the request for default judgment; and (b) expressed the view that he was functus officio so could not reopen the decision and that an appeal was necessary to challenge the original decision. [9] The appellant relies on two grounds of appeal: 1. that the appellants were denied natural justice by not having an opportunity to make submissions in respect of the basis upon which the primary court dismissed the request for a default judgment; and -- 4 of 8 -- 5 2. that the primary court was in error, because the relevant limitation period was not expired. [10] It is apparent that because the magistrate determined the matter on the papers, no opportunity was given to the appellants to be heard on the question of whether or not the action was time barred. [11] The appellants rely upon observations of Rich J in Cameron v Cole (1944) 68 CLR 571 at 589 that: “It is a fundamental principle of natural justice, applicable to all courts whether superior or inferior, that a person against whom a claim or charge is made must be given a reasonable opportunity of appearing and presenting his case.” [12] The appellants also rely on a decision of Applegarth J in John Holland Pty Ltd v TAC Pacific Pty Ltd & Ors (2010) 1 Qd R 302 at 319 where his Honour said at [50]: “The subject of a decision is entitled to have his or her mind directed to ‘the critical issues or factors on which the decision is likely to turn in order to have an opportunity of dealing with it.’ In a case such as the present, if the decision is likely to turn on a point of law not contended for by one of the parties, and about which the parties have not been given an opportunity to address, then the requirements of natural justice will not have been observed. It is the issue of law, and not the general issue in dispute, upon which the decision is likely to turn.” And at [55]: -- 5 of 8 -- 6 “Natural justice required the adjudicator to afford the parties the opportunity to make submissions about a critical issue upon which he was minded to determine the matter, being a view of the law for which neither party contended.” [13] That is clearly the case here. No-one had asserted that the action was statute barred. Indeed, as is apparent, the respondent had filed no defence to the claim. That submission appears to me to have particular force where, reliance on a limitation of actions defence is something which needs to be raised on the pleadings. [14] The real determination of the appeal, however, ultimately lies in the question of whether or not the limitation period had in fact expired. The law prescribing the limitation period in Western Australia is contained in s 18 of the Limitation Act 2005 (WA) which provides: “Deeds – 12 years An action on a cause of action founded on a deed cannot be commenced if 12 years have elapsed since the cause of action accrued.” [15] As I have said, clause 25 of the Deed of Compromise provided that the deed was to be governed by the laws of Western Australia, and, where applicable, the law of the Commonwealth of Australia. In my view that adequately disposes of the matter. [16] I might interpose that even if the Queensland equivalent of the Limitation of Actions Act applied, it seems very strongly arguable that the limitation period had not expired because the claim was one for a speciality. Pursuant to s 10 of the Limitation of Actions Act (Qld) the usual six year limitation period applicable to actions in quasi contract or in tort, other than in respect of personal injuries, does -- 6 of 8 -- 7 not apply for “an action upon a speciality” for which the limitation period is 12 years (see s 10(3) of the Limitation of Actions Act (Qld)). [17] While “speciality” is not defined in the body of the Limitation of Actions Act, it is a term usually used to donate a contract under a seal and a speciality debt is an obligation under seal securing a debt (see State Government Insurance Commission v Teal (1990) 2 WAR 105 at 114 and Attwell v Roberts (No 3) [2009] WASC 96 at para 151). [18] The applicable limitation period appears clearly to have been one of 12 years and not six years as the primary court determined. [19] An examination of the facts in this case illustrates the danger of a judicial officer determining a matter as Magistrate Shearer did, without giving the parties an opportunity to be heard especially where the officer proposes to dismiss the claim on a basis not raised by either party. The failure of his Honour to have accorded to the appellant the usual rules of natural justice caused him to be led into clear error. [20] In circumstances where this court has all the powers and duties of the primary court it seems clear to me that the appropriate orders are that: 1. the appeal should be allowed; 2. the decision of the Magistrates Court of Queensland to dismiss the appellant’s application for default judgment should be set aside; 3. there should be judgment by default against the respondent, in the sum of $65,641.95 inclusive of interest in relation to the claim by ABL Custodian Services Pty Ltd, and $50,180.30 in relation to the claim by Bendigo and Adelaide Bank Ltd; and -- 7 of 8 -- 8 4. the respondent pay the appellants’ costs of and incidental to the action, including this appeal, to be assessed on an indemnity basis. [21] In my view it should also be ordered that the respondent pay the appellants’ costs of the appeal, as well as of the action including the request for default judgment on an indemnity basis because of the provisions of the deed which provide to that effect. -- 8 of 8 --