Bilic & Bilic v Nicholls & Ors (No 2) [2013] QDC 298

DISTRICT COURT OF QUEENSLAND CITATION: Bilic & Bilic (No. 2) v Nicholls & Ors [2013] QDC 298 PARTIES: DRAGAN BILIC and VESNA BILIC (plaintiffs/respondents) v ANDREW NICHOLLS (first defendant) and SHARYN LEE NICHOLLS (second defendant) and JIMI LEE (third defendant/applicant) FILE NO/S: 22/2011 DIVISION: Civil PROCEEDING: Application to set aside judgment against third defendant ORIGINATING COURT: District Court, Beenleigh DELIVERED ON: 29 November 2013 DELIVERED AT: Beenleigh HEARING DATE: 1 November 2013 JUDGE: Dearden DCJ ORDER: 1. Application to set aside judgment against the third defendant granted. 2. Judgment against the third defendant, entered at the Beenleigh District Court on 17 May 2013, set aside. CATCHWORDS: PROCEDURE – PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES – where the applicant has applied for default judgment to be set aside – where the default judgment was irregularly entered– whether the judgment by default which was entered against the third defendant in District Court Proceeding no. 22/2011 should be set aside pursuant to UCPR r 290 – whether the consequential orders should be set aside. -- 1 of 10 -- 2 LEGISLATION: Uniform Civil Procedure Rules rr. 476(4). 986(2), 990 CASES: Bilic & Bilic v Nicholls & Ors [2013] QDC 110 Capital Finance Australia Ltd v Edwards & Ors [2011] QSC 104 Cusack v De Angelis [2007] QCA 313 Embrey v Smart & Anor [2013] QSC 241 COUNSEL: MJ Byrne for the plaintiffs/respondents BA Hall for the third defendant/applicant SOLICITORS: Pearson & Associates for the plaintiffs/respondents Robinson Locke Litigation Lawyers for the third defendant/applicant Introduction [2] The third defendant, Jimi Lee, seeks to set aside a judgment delivered in this court on 17 May 2013 insofar as it relates to the third defendant. Background [3] The third defendant was the registered owner of a property at 18 Charlane Street, Underwood as of 24 December 2003.1 On 18 August 2005 the third defendant sold this property to the second defendant, Sharon Lee Nicholls.2 The contract had a 25 year settlement date. The third defendant was not present in Australia at all relevant times and the property was managed by Kim Willis (with correspondence also being sent by his wife Sandra Willis).3 1 Exhibit JL1, affidavit of Jimi Lee, affirmed 20 September 2013. 2 Contract attached to notice of intention to defend (document 5). 3 Affidavit of Jimi Lee, affirmed 20 September 2013, para 3. -- 2 of 10 -- 3 [4] After the matters giving rise to the proceedings occurred on various dates during 2010,4 a Claim, and Statement of Claim was filed in the Beenleigh District Court on 16 March 2011. [5] On 5 May 2011, Sandra Willis filed a Notice of Intention to defend5 which purported to provide the third defendant‟s “residential or business address” as: “c/- Cashflow Properties T A Home Buy Express PO Box 1040 Aspley 4034 Ph (07) 3353 3448” and further under the side marking “If the defendant has no solicitor: defendant‟s address for service: „c/- Cashflow Properties P/L trading as Home Buy Express (07) 3353 3448‟.” [6] This document was signed “S Willis” and gave the description “Agents representative of Home Buy Express”. [7] In the bottom right hand corner of the first page of the document was the following:- “Name: S. Willis Address: 5 Petty‟s Rd, Everton Hills 4053 Phone no: (07) 3353 3448” [8] On 12 July 2011, O‟Hare Law solicitors of Nundah filed a Defence Of The Third Defendant.6 4 Statement of claim paras 5-7. 5 Document 5. 6 Document 10. -- 3 of 10 -- 4 [9] Subsequently, on 22 May 2012, O‟Hare Law filed a document titled “Notice that Party acting in Person”7 which (in the body of the document) contained the following text:- “Take notice that the third defendant is no longer represented by O‟Hare Law and is now acting in person. Third defendant‟s name: Jimi Lee Third defendant‟s address: 5 Petty‟s Road, Everton Hills Signed: [illegible signature] O‟Hare Law Dated: 17th of May 2012 To: The plaintiffs c/- Pearson & Associate Solicitors PO Box 251 Acacia Ridge QLD 4110 To: The first and second defendants c/- McLaughlin & Associates 18 Carol Avenue Springwood QLD 4127.” [10] The document‟s footer contained the following further text:- “Notice that party acting in person Filed on behalf of the third defendant Form 92 R.986(2) O‟Hare Law Solicitors Suite 6, 82 Buckland Road Nundah QLD 4012 Ph: (07) 3266 8999 Fx: (07) 3266 3633” [11] On 18 July 2012 the plaintiff made an application8 to dispense with the signature of the third defendant on the Request for Trial, which was heard (and granted) on 21 August 2012.9 A Notice of Trial dated 22 October 2012 was prepared by Deputy Registrar Kevin Brown and forwarded to the third defendant at 5 Petty‟s Road, 7 Document 16. 8 Document 18. 9 Affidavit of Malcolm Robinson, affirmed 1 October 2013, para 3. -- 4 of 10 -- 5 Everton Hills, and (it appears) was subsequently returned to the Beenleigh District Court Registry with the envelope marked “return to sender”.10 [12] The trial proceeded in the absence of the first, second and third defendants on 25 February 2013, with judgment issued on 17 May 2013.11 Submissions [13] It is submitted on behalf of the third defendant that the judgment (in respect of the third defendant) was irregularly entered and should be set aside, regardless of the defence of the merits. [14] The third defendant‟s submissions in respect of that proposition are as follows:- 1. A Notice of Intention to Defend (but with no Defence) was filed on 5 May 2011, but was irregular and disclosed no address for service of the third defendant. 2. O‟Hare Law was engaged to act for the third defendant and filed a Defence on 12 July 2011. 3. On 22 May 2012, without the knowledge or approval of the third defendant, and contrary to the provisions of Uniform Civil Procedure Rules (UCPR) r.986(2), an irregular notice that the defendant was acting in person was executed and filed by O‟Hare Law. 4. The purported notice that the third defendant was acting in person filed by O‟Hare Law was irregular because: 10 Affidavit of Malcolm Robinson, affirmed 1 October 2013, para 3(a)-(c). 11 Bilic & Bilic v Nicholls & Ors [2013] QDC 110. -- 5 of 10 -- 6 (a) O‟Hare Law was obliged, pursuant to UCPR r.990, to serve the third defendant with a Notice of Intention to Apply for Leave to Withdraw and then make an application to the court for leave to withdraw (rather than making a unilateral decision to withdraw as the solicitor on the record); (b) The filing of a UCPR r.986(2) notice is a procedure by which a party may notify the court that it is now self-acting, not a means by which a law firm can effect withdrawal from acting for a party in a proceeding; (c) The purported Notice of Intention by O‟Hare Law was executed by them, filed and, it appears, apparently served on the other parties without the knowledge of the third defendant, and did not comply with the requirement to record service details set out in UCPR r.986(2)(b). [15] The consequence was that the solicitors for the plaintiffs then caused all subsequent correspondence to be delivered to the third defendant at the address specified in the notice filed by O‟Hare Law (5 Petty‟s Road, Everton Hills), although this address was not actually nominated as an address for service, and in any event the plaintiff‟s solicitors subsequently became aware that the third defendant was not at the Petty‟s Road address.12 12 Affidavit of Malcolm Robinson, affirmed 1 October 2013, para 2(b)(iii). -- 6 of 10 -- 7 [16] Despite these failures in process, the plaintiffs brought an application to dispense with the third defendant‟s signature on a Request for Trial Date for 21 August 2012, an application for which there is no evidence that service was effected.13 [17] On 22 October 2012, the Beenleigh District Court Registry issued a Notice of Trial which was forwarded to the address at 5 Petty‟s Road, Everton Hills, but was subsequently (apparently) returned to the Registry with the envelope marked “return to sender”.14 [18] It is submitted, in summary, that the third defendant therefore did not know and had no way of knowing that the trial was to proceed (as it turns out, in his absence) on 25 February 2013. Irregular judgment – the law [19] As Muir JA stated in Cusack v De Angelis15: “It has been long accepted that a defendant is entitled to have an irregularly entered judgment set aside as of right, subject to the exercise of a power of amendment and the futility of interfering with the judgment. Such judgments are the product of the exercise of administrative acts performed without legal authority. Irregularity, as that term is used in relation to default judgments, normally results from a failure to comply with the rules of court relating to the entering of default judgments.” (citations deleted) [20] In Embrey v Smart & Anor [2013] QSC 241, Daubney J noted: “The long-held general rule is that a defendant may have an irregularly entered judgment set aside ex debito justitiae, regardless of the defence of the merits. A defect in service of originating process is sufficient to render irregular any judgment subsequently entered in default of appearance.”16 (citations deleted) 13 Affidavit of Malcolm Robinson, affirmed 1 October 2013, para 3(a). 14 Affidavit of Malcolm Robinson, affirmed 1 October 2013, para 3(c). 15 [2007] QCA 313, para 36. 16 Embrey v Smart & Anor [2013] QSC 241, para 41. -- 7 of 10 -- 8 [21] It is submitted that the third defendant is entitled to have the judgment set aside, as of right (without regard to the merits) if “there was some deficiency in the steps prerequisite to the judgment being made”17 or “there was some impropriety on the part of the plaintiff that taints the obtaining of the judgment.”18 Discussion [22] As will become apparent, it is, in my view, not necessary to examine whether there was any impropriety on the part of the plaintiffs, nor to examine the merits of the third defendant‟s case. [23] I accept the following submissions made on behalf of the third defendant:- 1. The address of 5 Petty‟s Road, Everton Hills, was never a proper address for service either in the original Notice of Intention to Defend (apparently filed by Ms Sharon Willis on behalf of the third defendant), nor pursuant to the purported “Notice that Party acting in Person” filed by O‟Hare Law on 22 May 2012. 2. The Application for Trial Dates was sent to the address at 5 Petty‟s Road, Everton Hills but no affidavit of service was ever filed to support that application.19 3. It is not now contended that the third defendant was ever properly served with an Application for Trial Dates. 4. The plaintiffs failed to serve the third defendant with any order subsequent to the Application for Trial Dates, and the Notice of Trial itself was never served on the third defendant.20 17 Submissions of the third defendant (applicant), para 13(a). 18 Submissions of the third defendant, para 13(b). -- 8 of 10 -- 9 [24] It is submitted on behalf of the plaintiffs that UCPR r.476(4) does not compel the court to set aside the judgment ex debito justitiae as a matter of course, but rather enables the court to exercise a wide discretion.21 [25] In my view, the irregularity, generated by the unilateral decision of O‟Hare Law in purporting to file a document titled “Notice that party acting in person”, without compliance with the provisions of UCPR r.990, has had the inevitable and clearly foreseeable consequence that the third defendant was deprived of his opportunity to either defend the matter personally, brief alternative solicitors, or opt not to participate in the litigation. The provisions of UCPR r.990(1) are mandatory, and if O‟Hare Law had difficulties obtaining instructions from the third defendant, it was their obligation to apply to the court to be granted leave to withdraw. By their unilateral choice not to do so, they deprived the third defendant of his opportunity to decide whether or not to participate in the legal proceedings. Conclusion [26] The steps taken by O‟Hare Law to unilaterally withdraw from acting for the third defendant, without seeking leave of the court, and without compliance with the relevant UCPR provisions clearly, causally and inevitably lead to the chain of events that resulted in the trial proceeding in the absence of the third defendant. I am not persuaded that any aspects of the chronology subsequent to 22 May 2012 brought the proceedings to the personal notice of the third defendant. I consequently conclude that the judgment entered against the third defendant on 17 May 2013 was 19 Ex SJP009, Affidavit of Stephen Pearson sworn 11/10/2012, para 10. 20 Submissions of the third defendant, para 14. 21 Capital Finance Australia Ltd v Edwards & Ors [2011] QSC 104 per Boddice J at para 8. -- 9 of 10 -- 10 irregularly entered and should be set aside “ex debito justitiae, regardless of the defence of the merits”.22 [27] It is, of course, of grave concern that this unfortunate sequence of events has been triggered by the unilateral decision of the third defendant‟s solicitors, O‟Hare Law, who, as I have indicated, appear to have acted entirely non-compliantly with the Uniform Civil Procedure Rules, in particular UCPR r.990, and, therefore, appear directly responsible for the unfortunate, but predictable chain of events which followed the filing of the purported Notice that Party acting in Person on 22 May 2012. Consequently, before considering an appropriate order as to costs, I propose to provide O‟Hare Law an opportunity to be heard, given this court has the power to make a costs order against that firm as a non-party. Orders 1. Application to set aside judgment against the third defendant granted. 2. Judgment against the third defendant, entered at the Beenleigh District Court on 17 May 2013, set aside. 22 Embrey v Smart & Anor [2013] QSC 241, para 41. -- 10 of 10 --