Body Corporate for Villas on Blue Ridge v Armour [2014] QCAT 369

CITATION: Body Corporate for Villas on Blue Ridge v Armour [2014] QCAT 369 PARTIES: Body Corporate for Villas on Blue Ridge CTS 31479 (Applicant) v Robert William Armour (First Respondent) Mary Theresa Armour (Second Respondent) APPLICATION NUMBER: MCDO100/13 MATTER TYPE: Other minor civil dispute matters HEARING DATE: 6 May 2014 HEARD AT: Coolangatta DECISION OF: Adjudicator Trueman DELIVERED ON: 6 May 2014 DELIVERED AT: Coolangatta ORDERS MADE: 1. THAT the Respondents application to set aside the default decision of 4 April 2014 is refused. CATCHWORDS: Minor Civil Dispute – set aside default judgement – where default decision regularly entered – where Respondents failed to file Response – where no adequate reason provided for failure to file a Defence Queensland Civil and Administrative Tribunal Act 2009 Queensland Civil and Administrative Tribunal Rules 2009 Unique Product Marketing Pty Ltd v Bortek Sales Pty Ltd [2000] QDC 314 -- 1 of 5 -- 2 APPEARANCES and REPRESENTATION (if any): This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act). REASONS FOR DECISION [1] Before a decision by default for a debt or liquidated demand of money in QCAT can be granted, the applicant must firstly prove that the respondent has been given a copy of the application1. [2] In this matter, Mr and Mrs Armour did not file a response to Body Corporate for Villas on Blue Ridge’s originating application. [3] Section 51 of the QCAT Act provides that: The tribunal, on application by the respondent, may set aside or amend a decision by default under section 50 on terms, including terms about costs and the giving of security, the tribunal considers appropriate. [4] If QCAT were satisfied that Mr and Mrs Armour had not received the application, this would amount to an irregularity, such that the default decision should be set aside pursuant to s 51 of the QCAT Act, and a new hearing ordered. [5] In addition to irregularities with respect to service, there are several further factors that might persuade QCAT to set aside a default decision. The factors that would be considered by the courts under the comparable provision of the Uniform Civil Procedure Rules 1999 (Qld) r 290 were outlined by His Honour Judge Shanahan DCJ in Unique Product Marketing Pty Ltd v Bortek Sales Pty Ltd [2000] QDC 314 at [28]. Rule 290 of the Uniform Civil Procedure Rules provides that the court may set aside or amend a judgment by default under that division of the rules, and any enforcement of it, on terms, including terms about costs and the giving of security that the court considers appropriate. The relevant considerations to be taken into account are: (a) whether there is a good reason why the defendant failed to file a defence; (b) whether there has been any delay by the defendant in bringing the application; (c) the defendant's conduct in the action before and after judgment; (d) the defendant's good faith; (e) whether the defendant has raised a prima facie defence on the merits (raising triable issues); and 1 QCAT Act s 50(5). -- 2 of 5 -- 3 (f) whether the plaintiff would be irreparably prejudiced if the judgment is set aside which cannot be adequately compensated by a suitable award of costs. [6] These factors are equally relevant considerations for QCAT when considering whether to set aside a default decision. [7] On the evidence there is insufficient material to justify the setting aside of a regularly entered default decision. Mr and Mrs Armour have not addressed any of the substantive matters that might justify the setting aside of a regularly entered default decision in any meaningful way in their submissions. [8] There are several factors that are relevant to a consideration on this point, and support my view that there are insufficient grounds to justify the setting aside of a regularly entered decision in default:  Mr and Mrs Armour clearly had the benefit of legal assistance evidenced by lawyers letters in December 2013 to the Body Corporate with offers to resolve the matter of outstanding payments and therefore legal assistance in considering the steps that should have been taken once they were served with the claim and the default decision was made;  Mr and Mrs Armour have not endeavoured to file a substantive defence to the application, other than to offer up an excuse that they have repaid some of the monies,  Mr and Mrs Armour have in fact agreed the monies are owed but that they require time to pay and propose a lengthy payment plan.  Mr and Mrs Armour have not provided any explanation for the delay in filing a response. Was the default decision regularly entered? [9] In these circumstances the matters that must be considered in deciding whether the default decision was regularly entered is whether Mr and Mrs Armour received the application. The affidavit of service indicated they were served with the claim on 26 October 2013 at 8.35am. [10] Mr and Mrs Armour allege that they have been making weekly payments towards the monies owed, that they could not pay any more as they had ‘no other funds due to downturn in work’ and that the were not aware of ‘this action being taken’. [11] Mr and Mrs Armour clearly were aware that the Body Corporate had filed a claim against them as they had been served with a copy of the claim seeking payment of outstanding levies. [12] Mr and Mrs Armour claim that the ‘thought the matter had been settled with weekly payments’. -- 3 of 5 -- 4 [13] The Body Corporate provided Submissions in Response to the application to set aside the default decision. They enclosed evidence that the Body Corporate had rejected Mr and Mrs Armour’s offer to make regular weekly payments to pay off their outstanding arrears. The Body Corporate provided evidence of lawyer letters from Caldwell Martin Cox Solicitors dated 42 and 173 December 2013 proposing payment plans to repay the outstanding monies. The Body Corporate advised on 7 January 20144 that the offer for weekly periodic payments was not acceptable and that they required ‘full settlement’ of outstanding monies owed. The correspondence to Mr and Mrs Armour’s solicitors advised that failure to make full payment to their trust account would result in ‘an application for default judgement to QCAT’. [14] It is clear that as at 7 January Mr and Mrs Armour’s solicitors were advised that the outstanding monies had to be paid in full or a default judgement would be obtained. The Body Corporate gave Mr and Mrs Armour a further three months to make payment or to file a response and they failed to do so. The application for default decision was granted on 4 April 2014. The Body Corporate served Mr and Mrs Armour with a copy of the application in October 2013, and waited some 6 months before applying for a default order. I am satisfied that they gave Mr and Mrs Armour plenty of time to either pay the outstanding monies in full or in the alternative to file a response. They did neither of those things. [15] In the circumstances the affidavit of service sworn on 2 April 2014 conclusively establishes that Mr and Mrs Armour were served with the originating Application, and the default judgement was not therefore irregular. [16] As the QCAT application form 3 warns the respondent to file a response within 28 days, the form states that the applicant can apply for a decision by default in failing to file a Response. In my view the form warns Mr and Mrs Armour of the consequence of failing to file a response. They did not heed that warning. Further, the email to the Armours’ solicitor on 7 January 2014 warned them again that if the full payment was not made a default decision would be requested. Mr and Mrs Armour ignored this further warning and still did not file a Response. [17] The failure by Mr and Mrs Armour to file a response entitles the Body Corporate to apply for a decision by default, which is what they did. [18] Not withstanding that Mr and Mrs Armour have not provided any reasonable explanation for their failure to file a Response they have also not provided any persuasive evidence as to any defence, and in fact acknowledge that they owe the monies. It is not an appropriate defence that they merely need time to pay. 2 Annexure ‘B’ to Submissions in Response filed 6 May 2014. 3 Annexure ‘C’ to Submissions in Response filed 6 May 2014. 4 Annexure ‘D’ to Submissions in Response filed 6 May 2014. -- 4 of 5 -- 5 [19] For reasons already considered, the decision by default was regularly entered. A default judgement which has been regularly obtained in the circumstances arising will only, usually, be set aside if the respondents can advance some good reason for failing to file a defence (in QCAT, a response) and has raised something approaching a good defence on the merits. Mr and Mrs Armour cannot meet the first test, and surprising has said little about the nature or merits of any defence they might have to the application. [20] The application to set aside the default decision must fail for the reasons articulated above. In the circumstances the order I make to give effect to the decision I have reached is as follows: Order 1. THAT the Respondents application to set aside the default decision of 4 April 2014 is refused. -- 5 of 5 --