Cash Resources Management Pty Ltd v Park Printing Pty Ltd [2009] QDC 382

DISTRICT COURT OF QUEENSLAND CITATION: Cash Resources Management Pty Ltd v Park Printing Pty Ltd [2009] QDC 382 PARTIES: CASH RESOURCES MANAGEMENT PTY LTD (respondent/plaintiff) v PARK PRINTING PTY LTD (applicant/defendant) FILE NO/S: DC No. 1458 of 2009 DIVISION: District Court PROCEEDING: Application to set aside default judgment ORIGINATING COURT: District Court DELIVERED ON: 10 December 2009 DELIVERED AT: Brisbane HEARING DATE: 27 October 2009 JUDGE: Judge Devereaux SC ORDER: 1. Application allowed 2. Default judgment of 9 July 2009 set aside 3. The applicant pay the plaintiff’s costs of signing default judgment and the costs of this application to be agreed or failing agreement to be assessed 4. The time for filing Notice of Intention to Defend is extended until 24 December 2009 CATCHWORDS: PROCEDURE – JUDGMENTS AND ORDERS – AMENDING, VARYING OR SETTING ASIDE – whether Applicant satisfactorily explained failure to defend claim – whether Applicant had plausible defence in fact or law. Uniform Civil Procedure Rules 1999 r 290 Aboyne Pty Ltd v Dixon Homes Pty Ltd [1980] Qd R 142 Watson v Anderson (1976) 13 SASR 329 Yankee Doodles Pty Ltd v Blemvale Pty Ltd [1999] QSC 134 COUNSEL: -- 1 of 5 -- 2 SOLICITORS: McCullough Robertson for the applicant Boyd Legal for the respondent Introduction [1] At the times relevant to this application, Park Printing Pty Ltd (‘Park Printing’) and the Empire Printing Group (‘Empire Printing’) both conducted printing operations in Marrickville, Sydney. From time to time, they provided printing services to each other. Empire Printing was a division of Elders Group Pty Ltd (‘Elders’). In June 2008, Elders entered into a “debt factoring facility” with the plaintiff/respondent, Cash Resources Australia Pty Ltd (‘Cash Resources’). [2] In October and December 2008, Elders issued invoices to Park Printing. The six invoices particularised in the Statement of Claim total $70,846.60. Cash Resources, as the assignee of the debt, brought a claim for that amount plus interest and costs against Park Printing. The Claim was filed on 25 May 2009. Park Printing did not file a notice of intention to defend. Cash Resources obtained judgment by default on 9 July 2009. [3] On 3 August 2009, Cash Resources served a Creditor’s Statutory Demand for Payment of Debt on Park Printing. Park Printing then started to act. It filed, on 26 August 2009, an originating application in the Equity Division of the Supreme Court of New South Wales seeking to have the statutory demand set aside. This application, to set aside the default judgment, was filed on 27 October 2009. Setting aside a default judgment [4] The power to set aside or amend a judgment by default is provided in wide and plain terms by UCPR R 290: “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.” [5] It is said three matters the defendant must show are that — (i) it has a satisfactory explanation for the failure to appear; (ii) any delay in bringing the application is not such as to preclude it from obtaining relief; and (iii) had it appeared at the hearing of the application for summary judgment, it should have been granted leave to defend.1 Park has not shown good reason for failing to defend the claim. [6] Mr Paterson, the director of Park Printing, received a letter dated 15 January 2009 from Cash Resources telling him it had entered into an arrangement with Elders and 1 Aboyne Pty Ltd v Dixon Homes Pty Ltd [1980] Qd R 142; and see Watson v Anderson (1976) 13 SASR 329 -- 2 of 5 -- 3 asking him to advise whether the six invoices listed in the letter were ‘true and valid and that the goods have been supplied and if they are still due for payment’. [7] Mr Paterson’s response: As I had nothing owing to Elders I gave no reply. [8] Next, Mr Paterson received a letter from BDO Kendalls, advising that it had been appointed receivers and managers of Elders Group by Cash Resources and asking that Park Printing send a cheque for the amount owing under the six invoices. Mr Paterson deposes that he telephoned BDO Kendalls and told someone, ‘We do not owe any money to the Elders Group. You should go back to them and check.’ [9] Mr Paterson received another letter requesting payment about 20 February 2009. He swears that he telephoned BDO Kendalls and again told someone he did not owe money to Elders Group. He said, ‘We are a small company, we are very busy but I will try and get the information showing we don’t owe any money as soon as I can.’ [10] BDO Kendalls sent another letter dated 6 March 2009. Mr Paterson swears he telephoned after receiving it. [11] Mr Paterson received letters from solicitors for Cash Resources in April and May 2009. He deposes to referring these to Mr Frank Zarfati, who was the operator of Empire Printing Group. [12] There was an e-mail exchange between Mr Paterson and Mr Creswell, solicitor for Cash Resources in May 2009, Mr Paterson disputing the debt and undertaking to gather documentation. [13] Upon being served with the statement of claim, Mr Paterson ‘referred’ it to Mr Zarfati ‘on the basis that he would be able to resolve this dispute as he had full knowledge of the payments and arrangements which had been made between my company to the Elders’. [14] Park Printing has provided no further explanation for the failure to defend the claim. [15] Mr Paterson did speak to a Mr Comer, apparently a financial advisor, who contacted Mr Creswell and, on 8 July 2009, sent to Mr Creswell a statutory declaration sworn by Mr Paterson. In it, Mr Paterson referred to several invoices – not those particularised in the letters and statement of claim. He denied ever receiving the invoices listed in the statement of claim. This denial is inconsistent with his specific responses to the invoices, as set out below. [16] Mr Paterson does not swear that he instructed solicitors to defend the claim. He does not even claim that Mr Zarfati told him he would take action regarding the disputed debt. He did no more than pass on to Mr Zarfati the letters and court documents in the expectation that Mr Zarfati would take care of the problem. He acted only once he was served with the statutory demand. [17] As it happens, Mr Zarfati held a prominent position in Empire Printing Group. This is made plain by the Certification forms that Cash Resources obtained from Elders before enforcing the invoices. The forms - which certify that certain invoices, including those listed in the statement of claim, are ‘a true and correct statement of book debts’ as at a particular date and in a particular amount – are signed by Mr Zarfati as manager. -- 3 of 5 -- 4 [18] Mr Paterson deposes that over the past 10 years, operating his business and dealing with Empire Printing Group, he dealt with Mr Zarfati ‘in relation to new printing service requests, and all invoicing matters’. [19] Even accepting that there was a long relationship between Mr Paterson and Mr Zarfati, Park Printing has not provided a satisfactory explanation for the failure to defend the claim. Delay in bringing this application? [20] The next question is whether the delay in applying to set aside the judgment should preclude relief. No particular prejudice has been argued by Cash Resources and Park Printing acted with reasonable speed upon service of the statutory demand being served in early August 2009. The solicitors for Cash Resources, in their written outline of argument, do not suggest delay in making the application. Has Park demonstrated “a plausible defence either in law or in fact”?2 [21] Mr Paterson provides various responses to the six invoices which comprise the claim: (i) Invoice 30254 – was sent in error and ‘does not represent an invoice for any work requested’ by Park Printing; (ii) Invoice 30256 - Park Printing was not required to pay this invoice because, in effect, it was offset against an invoice Park Printing had issued to Elders for work done (specified as invoice no 29921 dated 10 September 2008); (iii) Invoice 30257 – was a duplicate of 30258 and so did not require payment; (iv) Invoice 30258 – Park Printing was not required to pay because this invoice was offset against Park Printing invoices numbered 30008 and 3009 dated 17 October 2008. (v) Invoice 30267 – was offset against the Park Printing invoices referred to above; (vi) Invoice 30319 – did not require payment because the work done by Empire was faulty, Empire agreed to do the job again but the work was not done before financial difficulties beset Elders. [22] The materials before the court include copies of Park Printing invoices numbered 30008 and 30009 dated 17 October 2008, whose sum exceeds $11,680. Also exhibited to Mr Paterson’s affidavit are two documents which appear to be adjustment notes, sent by Empire to Park Printing referring to invoices 30257 and 30258. Adjustment note 80025 apparently makes it plain that, in respect of invoice 30258, the amount of $10,657.90 is not due and payable. Similarly, adjustment note 80026 makes it plain that, in respect of invoice 30257, $10,863.60 is not due and payable. The two documents are consistent with Mr Paterson’s response, as set out in paragraph 20 (iv) above, that invoice 30258 is a duplicate of 30257. The notation 2 Yankee Doodles Pty Ltd v Blemvale Pty Ltd [1999] QSC 134 Atkinson J 23 June 1999 -- 4 of 5 -- 5 on each adjustment note reads “Credit – Version A & B mixed up in dispatch”. It may be that other invoices exists whereby Park Printing is required to pay Empire Printing the amounts claimed in respect of invoices 30257 and 30258, but that is not the basis of the claim. The materials before the court are, at least, consistent with the assertion that the amounts claimed under at least two of the six invoices which comprise the claim are not owing. [23] In his affidavit sworn 19 October 2009, Mr Paterson swears he received, on 11 December 2008, a letter from Mr Zarfati. It is exhibited to the affidavit. It purports to confirm Mr Paterson’s account of the dealings between Park Printing and Empire. It is on Empire Printing letterhead of a type inconsistent with the Empire documents referred to above. It is not signed. Mr Paterson did not refer to the letter in his affidavit sworn 26 August 2009 for the New South Wales proceedings. He did not refer to it in his telephone or e-mail correspondence with Cash Resources or its solicitors. Nor did he refer to it in the statutory declaration referred to above. [24] I find it impossible to rely on the unsigned, unsworn, recently revealed document that purports to be a letter from Mr Zarfati. [25] Cash Resources submits that because of the conflicts between Mr Paterson’s affidavit evidence and his statutory declaration, Park Printing cannot satisfy the court that it has a reasonably clear or convincing defence. It is tempting, because of the poor efforts made by Park Printing to comply with the rules of court and the apparently inconsistent statements by Mr Paterson, to refuse the application. But Park Printing has, through Mr Paterson’s affidavit, presented a response to each invoice which comprises the claim. The material includes documents which may amount to a compelling answer to part of the claim. The remaining responses will have to be the subject of evidence from, at least, Mr Paterson. Assessment of his credibility and reliability is for a trial judge. Although I do not rely on the letter said to have been written by Mr Zarfati, that person’s existence is not contested. As I have mentioned, it is his signature on Empire Printing certificates that were relied on by Cash Resources in its pursuit of the assigned debts. Mr Paterson swears Mr Zarfati still operates a printing business in Marrickville. It seems he would be a relevant witness. [26] Ultimately, I am persuaded to allow the application to set aside the judgment entered by default. It is appropriate that Park Printing pay Cash Resources’ costs of the application and the application for default judgment. I will hear the parties on the appropriate extension of time for filing notice of intention to defend. -- 5 of 5 --