Australian Olives Pty Ltd v Patterson [2011] QDC 153

1-1 [2011] QDC 153 DISTRICT COURT CIVIL JURISDICTION JUDGE ROBIN QC No 2114 of 2009 AUSTRALIAN OLIVES PTY LTD Plaintiff and IAN PATTERSON Respondent BRISBANE ..DATE 13/07/2011 ORDER CATCHWORDS Uniform Civil Procedure Rules 1999, r 171, r 281, r 283, r 371, r 990 Proceeding in which the plaintiff obtained default judgment in the Magistrates' Court which was set aside by consent - defence and counterclaim filed in District Court after transfer to it (as result of quantum of counterclaim) - no notice of intention to defend ever filed - where defence and counterclaim struck out, plaintiff granted judgment in default -- 1 of 7 -- 1-2 ORDER 1 10 20 30 40 50 60 HIS HONOUR: I'll mark Exhibit 1 an e-mail communication received by Cleary Hoare from the defendant which inter alia indicates he no longer wishes the firm to act. ADMITTED AND MARKED "EXHIBIT 1" ... HIS HONOUR: And I might direct Exhibit 1 be sealed, placed in an envelope marked "Not to be Opened." ... HIS HONOUR: There came before the Court today an application by the plaintiff for striking out of the defence and counterclaim pursuant to rule 371, alternatively rule 171, with judgment to be entered for the plaintiff on the statement of claim and counterclaim. There's no application under rule 282 or rule 293 for judgments for the plaintiff on the merits. The proceeding has a chequered history. It was commenced in the Magistrates Court by the plaintiff, which was the manager under a scheme for growing olives, which I attribute the inspiration for to taxation advantages. The defendant was an investor. The plaintiff's claim was relatively modest, $16,218.22. Judgment in default of notice of intention to defend was entered in the Magistrates Court for $20,376.99, which included $2,689.57 interest and $1,469.20 costs. The -- 2 of 7 -- 1-3 ORDER 1 10 20 30 40 50 60 claim and statement of claim had been served on the defendant in New Zealand. A consent order was made once the defendant engaged solicitors here whereby the judgment entered on the 8th of May 2009 was set aside and the proceeding transferred to the District Court with the defendant obliged to pay costs of the plaintiff in certain fixed amounts in respect of obtaining judgment and the application to set it aside. The point of transfer to the District Court was that the defendant had a large counterclaim in the amount of $92,100. Mr Shaw, pursuing the present application, criticises the defence and counterclaim as not complying with the rules of pleading. In particular, for example, he says that the defendant doesn't plead that he actually read a prospectus which may have contained the representations said to be relevant, which representations the pleading suggests did not come true in the event. The plaintiff has had to give notice of intention to proceed after a delay exceeding a year. I am not necessarily persuaded by Mr Shaw's attack on the pleading which there is no need to consider in detail; the circumstances are certainly not ones in which it could be said that the defendant has no case on the merits; he probably should plead them in a more appropriate way. -- 3 of 7 -- 1-4 ORDER 1 10 20 30 40 50 60 The situation is complicated by the withdrawal today, with the Court's leave, of Cleary Hoare, solicitors on the record for the defendant, who effectively represented his interests when they came in a couple of years ago. The steps required by rule 990 and following of the UCPR have not been pursued by the firm, but Mr Thomson, representing it, produced to the Court an e-mail communication from his client which clearly enough indicates that he no longer wished the firm to act for him, it is exhibit 1. In those circumstances, it seemed appropriate to grant leave to withdraw with provision made to protect the plaintiff. Until some other address for service is properly notified documents may be served by being left with the firm, which would not, however, be under any obligation to do any more than hold them for a time against the possibility that the defendant might request them. The communications in some respects might be seen as privileged and it has been sealed up by an order of the Court. I think I can say that the communication, which Mr Shaw indicated he did not wish to see, makes it unlikely in the extreme that the defendant will do anything further in this proceeding. Although his pleading is one settled by counsel, which in Mr Shaw's submission makes the omissions from it particularly significant, it has certain hallmarks of mischief in the surprising amount of the counterclaim in the circumstances and -- 4 of 7 -- 1-5 ORDER 1 10 20 30 40 50 60 the non-admissions, which appear to be avoiding the issue. There's no particular challenge to the plaintiff's calculation of the management fees it was entitled to, just a general assertion that the defendant isn't liable to the plaintiff as alleged or at all. As indicated, if leave to strike out the defendant's pleading were granted that should be on the basis that the defendant might replead, it not being sufficiently clear that on the merits his situation is hopeless. Mr Shaw was resistant to orders of that kind, particularly given the problems that might attend service of any order giving leave to replead. The attendant costs may well be disproportionate to the plaintiff's claim. Perusal of the file, which includes the transferred Magistrates Court file, indicates that contrary to Mr Shaw's supposition that there'd been a notice of intention to defend filed, no such document has been filed. That means that it always has been, and still is, open to the plaintiff to proceed under rules 281 and following to seek judgment in default. That is something ordinarily obtained from a Registrar under rule 283(3). I accept from Mr Shaw that rule 371, in particular subrule 2(e), ought authorise a Judge to make the same order. The order can be based on the default of "appearance" rules, in my view, or a combination of them and disciplinary steps taken under rule 371 subrule (2)(f) gives the Court the widest -- 5 of 7 -- 1-6 ORDER 1 10 20 30 40 50 60 imaginable discretion. Mr Shaw was properly concerned that the Registrar might be loath to act on the basis of no notice of intention to defend having been filed, if there was on the file a defence. In the circumstances I don't think the Court ought to be dissuaded from arriving at such a resolution of this proceeding. It seems to me a correct and appropriate one. Given that it occurs with the defendant unrepresented, he will have the right to approach the Court to seek to have the orders changed, if he can show a sufficiently meritorious case. So I propose to give judgment for the plaintiff on the counterclaim and on the claim with statutory interest and costs. Mr Shaw needs an opportunity to prepare the interest calculation. ... HIS HONOUR: Accepting Mr Shaw's calculation then, there will be judgment on the claim for the plaintiff against the defendant for----- ... HIS HONOUR: -----$22,437.30----- ... -- 6 of 7 -- 1-7 ORDER 1 10 20 30 40 50 60 HIS HONOUR: -----which includes interest of $6,219.08 plus costs of and incidental to the proceeding to be assessed, exclusive of costs already separately ordered. The counterclaim is dismissed. ... ----- -- 7 of 7 --