Elders Rural Services Australia Limited v Landman Pty Ltd & Anor [2015] QDC 131

DISTRICT COURT OF QUEENSLAND CITATION: Elders Rural Services Australia Limited v Landman Pty Ltd & Anor [2015] QDC 131 PARTIES: ELDERS RURAL SERVICES AUSTRALIA LIMITED ACN 004 045 121 (respondent/plaintiff) v LANDMAN PTY LTD ACN 010 860 929 (first applicant/defendant) AND MICHELLE ANNE KLEINIG (second applicant/defendant) FILE NO/S: 2942/14 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: District Court at Brisbane DELIVERED ON: 15 May 2015 ex tempore DELIVERED AT: Brisbane HEARING DATE: 15 May 2015 JUDGE: Samios DCJ ORDER: 1. Dismiss the application to set aside the judgment of Rackemann DCJ entered 19 January 2015. 2. That pursuant to r 290 Uniform Civil Procedure Rules 1999 (Qld) (UCPR), the default judgment given in this proceeding on 19 January 2015 is varied by amending orders 1 and 9 by replacing, in each order, the figure “$9,149.18” with the figure “$3,013.30”. 3. That, pursuant to r 290 UCPR, the first and/or second defendants pay the plaintiff’s costs of the application on the indemnity basis. CATCHWORDS: PRACTICE –– ACTION – SETTING ASIDE JUDGMENT – DEFAULT JUDGMENT – where the first and second applicant/defendant apply to set aside a default judgment entered into for the respondent/plaintiff – where the first and second applicant/defendant did not appear at the hearing at -- 1 of 6 -- 2 which the default judgment was entered into – whether the first and second applicant/defendant provide a proper explanation for their failure to appear – whether the default judgment should be set aside Legislation Uniform Civil Procedure Rules 1999 (Qld) rr 288, 290 Cases EA & S Plaster Company Pty Ltd v The Registrar of Titles & Ors [2000] QSC 14 COUNSEL: Mr M Callanan for the respondent/plaintiff Ms M Kleinig (self-represented) for the first and second applicant/defendant SOLICITORS: Patane Lawyers for the respondent/plaintiff The first and second applicant/defendant were not represented by solicitors [1] HIS HONOUR: This is an application to set aside a judgment entered by Judge Rackemann on 19 January 2015. The application is brought pursuant to rule 290 of the Uniform Civil Procedure Rules. That rule provides: The court may set aside or amend a judgment by default under this division, and any enforcement of it, on terms, including terms about costs and the giving of security, the court considers appropriate. [2] The claim was commenced on the 31st of July 2014. The plaintiff sued Landman Pty Ltd as first defendant and Michelle Anne Kleinig as second defendant. The plaintiff sought declarations. It alleged a written agreement between it and Landman Pty Ltd made on or about 2 May 2012. This is called a credit agreement. The plaintiff alleged in the claim that Landman Pty Ltd granted an equitable charge and/or an equitable mortgage to the plaintiff in respect of its interest in the estate in fee simple of a piece of land. The declarations sought included that the equitable charge and/or equitable mortgage charged the land with payment of all moneys due and owing by Landman Pty Ltd to the plaintiff on any account whatsoever associated with the credit facility -- 2 of 6 -- 3 held in the name of Landman Pty Ltd. It alleged money was owing pursuant to the credit agreement. [3] There is no dispute the second defendant guaranteed the obligations of the first defendant. It is also not in dispute that Landman Pty Ltd became indebted to the plaintiff. The defendants filed a conditional notice of intention to defend. By it Landman Pty Ltd alleged it was not a party to the written agreement, that is, the credit agreement. Further, the second defendant, Ms Kleinig, held no interest in the estate in fee simple in the land. Further, that the claim was one that should have been pursued in the Magistrates Court. [4] Needless to say, as matters progressed the defendants did not appear before his Honour Judge Rackemann. His Honour proceeded pursuant to rule 288 of the Uniform Civil Procedure Rules. That is, the rule appropriate where there might be a claim made for declarations and other claims. His Honour gave judgment for the monetary sum claimed and made the declarations sought. He also provided for a statutory trustee for sale to be appointed with a view to the land being sold to meet the sums due to the plaintiff. [5] In the submissions provided to me by Mr Callanan who appears for the plaintiff he cites a number of authorities for the propositions that when seeking to set aside the default judgment that has been regularly entered, the court should look at a satisfactory explanation for the failure to appear, an explanation for any delay in bringing the application so it can be determined if any delay is reasonable and if not if -- 3 of 6 -- 4 it precludes the applicant from the relief sought and evidence of an asserted defence disclosing a prima facie defence on the merits. [6] Clearly, on Ms Kleinig’s affidavit I am satisfied there is a proper explanation for the failure to appear. She has not been well and despite her previous credentials in the law even people with legal training cannot defend themselves if they are ill. Furthermore, I am satisfied that the time taken to bring this application by the defendants is excusable. She was advised of the default judgment on 6 February 2015 and brought the application 15 April 2015. Again, it is to be inferred from her affidavit that she was not able to do what she needed to do because of her illness to protect the defendant’s interests. Therefore, again, I would excuse the period since being notified of the judgment and filing the application to set it aside. [7] However, it is as to the presence of merits that in my view the defendants fail on this application. While Ms Kleinig has referred in her affidavit and in her submissions to unfairness, nevertheless I am satisfied the plaintiff had a proper basis to apply to the court for the judgment it sought including the declarations. The relevant clause in the credit agreement is: I/we shall at any time when there has been a breach in these terms of trading grant in favour of the supplier any mortgage or other security over any of the client’s property real or personal which the supplier may call for and such security shall be in a form acceptable to the supplier or its solicitors. [8] At first sight I thought that clause may be insufficient to support the making of the declarations sought by the plaintiff. However, there is evidence in the affidavit of Mr Patane filed on 2 December 2014 that shows the first defendant was tendered a mortgage for execution pursuant to that clause I have referred to in the credit agreement. It was not returned executed. Mr Callanan who appears for the plaintiff -- 4 of 6 -- 5 has persuaded me that the judgment of Justice White in EA & S Plaster Company Proprietary Limited v The Registrar of Titles and others [2000] QSC 14 supports the plaintiff in the present matter in seeking the declarations and supports his Honour Judge Rackemann granting those declarations. The doubt I had was that the clause in the present matter did not expressly charge property. It did not say with words appearing in paragraph 3 of the EA & S Plaster Company Proprietary Limited case: The Customer charges as a fixed charge with the payment of all moneys now or in the future. [9] Nevertheless, as her Honour then went on to find in the EA & S Plaster Company Proprietary Limited case, the effect of tendering to the customer a mortgage and it not being returned executed gave rise to an equitable mortgage. Her Honour found that would support a caveat. [10] It is for those reasons that I find in the present matter the declarations that were made were properly made and there are no grounds on the merits to set aside the judgment entered by his Honour Judge Rackemann. I have considered the submissions made by Ms Kleinig, however, I find that, unfortunately, they rest on notions of fairness and are not supported by law in those circumstances. [11] It is unfortunate that her tender of money was not accepted. What has occurred now is an escalation of costs including the trustee’s costs to act under the appointment by Judge Rackemann. Therefore, I dismiss the application to set aside the judgment entered by his Honour Judge Rackemann on 19 January 2015. -- 5 of 6 -- 6 [12] I will make an order as per paragraph 2 of the draft, that is, that pursuant to rule 290 Uniform Civil Procedure Rules 1999 (Qld) (UCPR) the default judgment given in this proceeding on 19 January 2015 is varied by amending orders 1 and 9 by replacing in each order the figure $9,149.18 with the figure $3,013.30. [13] HIS HONOUR: So the order is that pursuant to rule 290 UCPR the first and/or second defendants pay the plaintiff’s costs of the application on the indemnity basis. Yes. Thank you very much. No need to wait. [14] MR CALLANAN: May it please the court. -- 6 of 6 --