Biddle v Formosa [2000] QDC 190

DISTRICT COURT OF QUEENSLAND ` [2000] QDC 190 PARTIES: ANNE SHIRLEY BIDDLE (Plaintiff) v. KATRINA JULIET FORMOSA (Defendant) FILE NO/S: Plaint No. 154 of 1991 PROCEEDING: Chamber application DELIVERED ON: 21 June 2000 DELIVERED AT: Maroochydore HEARING DATE: 29 May 2000 JUDGE: K S Dodds DCJ ORDER: The application is dismissed with costs CATCHWORDS: PRACTICE – DEFAULT JUDGMENT – application by def to have default jt set aside – delay of 5 yrs – pl prejudiced by lapse of time if had to prove claim COUNSEL: K Downes for the plaintiff G Garrick for the defendant SOLICITORS: Sykes Pearson and Miller for the plaintiff Boyce Garrick Lawyers for the defendant [1] This is an application by the defendant to have the judgment pronounced against her on 23 February 1995 in the District Court Maroochydore pursuant to the then rule 229(1) of the District Court Rules set aside. [2] The defendant did not appear on 23 February 1995, the time appointed for the trial of the proceeding. Judgment was given in terms of the plaint for damages in the sum of $43342.78, interest calculated at the rate of 10 per cent from 15 June 1991 until the date of judgment and for an account of the defendant’s dealings in respect of the items of jewellery and gift items referred to in the plaint. An order was made the defendant pay to the plaintiff all monies found to be due to the plaintiff on the taking of the account. The defendant was also ordered to pay the plaintiff’s costs of and incidental to the action including any reserved costs to be taxed. As to the defendant’s counter-claim it was ordered the defendant be non-suited. [3] Rule 229(2) of the District Court Rules then in force provided power to set the judgment aside. Rule 476 of the Uniform Civil Procedure Rules 1999 (UCPR) deals with the same circumstances as the now repealed rule 229. Judgment or any order obtained in the absence of a defendant under rule 476(1) may be set aside: -- 1 of 6 -- 2 Rule 476(4). Rule 667 UCPR provides a wider power to set aside judgment at any time if it was made in the absence of a party: Rule 667(2)(a) (see the definition of ‘order’ in the dictionary). [4] In Surfers Paradise International Convention Centre Pty Ltd v. National Mutual Life Association of Australasia Ltd (1984) 2 QdR 447, Andrews SPJ (as he then was) considered a number of decisions in which the exercise of the judicial discretion to set aside a judgment such as here, was considered. What emerges from those cases and His Honour’s reasons is that the person seeking the favourable exercise of the judicial discretion must demonstrate that prima facie, they have a defence to the plaintiff’s claim. If that is shown, other matters which may be relevant include the reason why judgment was allowed to go by default, the lapse of time since the judgment was given, and whether prejudice will be suffered by the party who has judgment by setting the judgment aside. [5] I was also referred by counsel to Tonkin v. Johnson (1999) 2 QdR 318 where interlocutory judgment was entered for the plaintiff for damages to be assessed in default of pleading. The defendant had failed to answer interrogatories delivered for his examination by the plaintiff. Damages were subsequently assessed, followed by attempts by the plaintiff to enforce the judgment. In 1994 in the Federal Court, a bankruptcy notice issued in 1993 founded on the judgment was set aside because the execution was stale and leave had not been obtained under Order 47 Rule 24(1)(a) of the Rules of the Supreme Court. When the plaintiff applied to obtain the necessary leave, the defendant applied to have the default judgment set aside. On appeal from orders made on those applications the defendant failed. The defendant had chosen not to answer the interrogatories and had consciously delayed in taking steps to have the judgment set aside until the bankruptcy notice. [6] I was also referred to WR Carpenter Australia Ltd v. Ogle (1999) 2 QdR 327. In that case, a foreclosure order had been made. The defendant had no address for service and the relevant papers seeking the foreclosure order were served by affixing them to the notice board in the Registry. An application was made to have the foreclosure order set aside and was refused. On appeal, it was considered that the non-appearance of the appellant was not due to any material fault on his part. The appeal was allowed and the foreclosure order set aside. [7] In WR Carpenter Australia Ltd, there was reference to the decision of the High Court in Taylor v. Taylor (1979) 143 CLR 1 and to Grimshaw v. Dunbar (1953) 1 QB 408. [8] In Grimshaw, Jenkins LJ at 416 said: “Be that as it may, a party to an action is prima facie entitled to have it heard in his presence; he is entitled to dispute his opponents case and cross-examine his opponent’s witnesses and he is entitled to call his own witnesses and give his own evidence before the court. Prima facie that is his right and if by some mischance or accident a party is shut out from that right and an order is made in his absence, then common justice demands so far as it can be given effect to without injustice to other parties that that litigant who is accidentally -- 2 of 6 -- 3 absent should be allowed to come to the court and present his case – no doubt on suitable terms as to costs...” [9] In Taylor, Mason J at 16 said; “ A jurisdiction to set aside its orders is inherent in every court unless displaced by statute. In my opinion the jurisdiction extends not only to the setting aside of judgments which have been obtained without service or notice to a party…but to the setting aside of a default or ex-parte judgment obtained when the absence of the party is due to no fault on his part.” Aickin J at 22 said, “the principle that parties to litigation are entitled to be present and heard either in person or by a duly authorised legal representative is of fundamental importance and involves the consequence that where, through no fault of his own, a party is deprived of that entitlement prima facie any order of the court made against him may be set aside by that court.” [10] The action was commenced by District Court plaint issued on 13 August 1991. On 10 September 1991, the defendant filed an entry of appearance and defence. Mutual discovery was sought in October 1991. The plaintiff filed an affidavit of documents on 30 October 1991 and an amended affidavit of documents on 2 December 1991. The plaintiff provided further and better particulars of the plaint on 9 January 1992. The defendant requested further documents from the plaintiff in June 1992 which were provided on 11 August 1992. On 10 November 1992, an amended entry of appearance and defence and counterclaim/set off was filed but was not served. On 28 November 1992, it appears the defendant left Australia and went to the United Kingdom. On 22 December 1992, the defendant’s solicitor sought further discovery from the plaintiff. Further documents were provided by the plaintiff on 23 April 1993. In the mean time, on 22 March 1993 the amended entry of appearance and defence and counterclaim/set off was served. The plaintiff filed a reply and answer on 1 April 1993. [11] The defendant had been legally aided for the proceeding. Legal aid was terminated on 22 October 1993. On 12 May 1994, the defendant’s solicitors filed a notice advising they ceased to act for the defendant. They remained on the record as her solicitors until on 5 December 1994 when an order was made removing them from the record. [12] The pleadings disclosed that between April 1990 and June 1991 the defendant was employed by the plaintiff as the manager of the defendant’s antique and contemporary jewellery store at Noosa. On 15 June 1991, the defendant summarily dismissed the plaintiff. The plaint alleged the defendant was under a duty to exercise reasonable care in respect of jewellery and gift items in the shop and failed to do so. Items of stock which had been at the store and items of stock which had been on layby were missing and unaccounted for after the plaintiff was summarily dismissed. The plaint further alleged it was the duty of the defendant to render to the plaintiff monthly true and full accounts of sales and business of the shop and she failed to do so for April, May and June 1991. Damages and interest were sought for breach of duty. An account of the defendant’s dealings with the missing items was sought together with an order for payment of all monies found to be due. [13] The original entry of appearance and defence admitted the plaintiff was the owner of the shop at Noosa and either denied or did not admit any other allegation. -- 3 of 6 -- 4 [14] The amended pleading admitted additionally that in April 1990 the defendant was employed by the plaintiff as manageress of the business at the shop. It asserted that if the defendant was under a duty to account to the plaintiff she had complied with that duty except to the extent the plaintiff had waived the duty. It included a counterclaim and/or a set off. It asserted terms of the employment agreement were that the plaintiff would pay the defendant a certain net wage and the employment would only be determinable by reasonable notice. It asserted the employment was wrongfully terminated because reasonable notice was not given causing loss and damage to the defendant. It asserted the plaintiff did not pay the defendant all wages due to her, under the employment agreement. It asserted the defendant was entitled to certain items of jewellery which the plaintiff had retained in the shop and despite demand refused to give to the defendant. A total of $30275 damages was sought. [15] The plaintiff’s reply and answer inter alia admitted that the plaintiff had continued to retain certain jewellery to which the defendant claimed she was entitled but denied the defendant was entitled to those items. It admitted the rate of wages asserted by the defendant but not that wages were due to the defendant. It denied her employment was wrongfully terminated. [16] The defendant in an affidavit read on this application said that she left Australia and returned to the United Kingdom (UK) on 28 November 1992. She was cross- examined by means of a telephone link. She denied she ever returned to Australia after that time. She said that in November 1993 she wrote to her solicitors asking about the action and what needed to be done. That letter, which is dated 12 November 1993, appears to have been received by her solicitors on 21 January 1994. It is in evidence. In it she wrote inter alia “since I have been in England I have not really been informed of the current position I am in with Mrs Biddle. If you could give me some idea of the next steps to be taken and how much the costs involved are I’ll take things from there.” She said that she did hear anything from her solicitors after that time. [17] The defendant says that the first she knew that the action had proceeded and judgment given is when she was served with a statutory demand in the UK on 15 February 2000. She immediately contacted her solicitors. [18] An affidavit from one Barbara Scott who said she was the defendant’s grandmother was also read on the application. In it, Mrs Scott says that when the defendant returned to England she lived with her from about late 1992. An old boyfriend from Australia continued to harass the defendant with letters. From shortly after her arrival she, that is, Mrs Scott intercepted letters from the boyfriend and returned them. She identified handwriting on a postal document which appears to have accompanied a letter from the applicant’s solicitors in late November 1994 as hers. The words “Gone away touring Europe. Return to sender” have been written. She says the possibility exists that she unintentionally returned letters from the plaintiff’s solicitor unopened. [19] Mr McArdle, the solicitor who had been acting for the defendant in the action was cross-examined on the application. He had a recollection but no record of advising the plaintiff’s solicitors that the defendant had returned to Australia in March 1993. He wrote to the defendant on 22 February 1993 at the address of her grandmother in -- 4 of 6 -- 5 the UK. He wrote to her again on 27 April 1993, 2 June 1993 and 24 June 1993 at an address in Eumundi in Queensland and then on 19 July 1993, 18 August 1993 and 19 October 1993 at the address of her grandmother in the UK. All of those letters were written in an attempt to obtain instructions from the defendant. There is no evidence any were returned. No reply was received to any of them. In the letter of 19 October 1993, Mr McArdle advised that if no instructions were received within four weeks, he intended to cease acting on the defendant’s behalf. The letters addressed to Eumundi suggest that Mr McArdle had been given information in early 1993 that letters addressed to an address in Eumundi would be likely to reach the defendant. By July 1993 something appears to have caused him to change his mind. Mr McArdle could not elaborate. [20] Mr McArdle wrote again to the defendant at her UK address in 1994. He sent a letter to her in June 1994 which was not returned in which he advised her that his firm was ceasing to act for her. He wrote again in November 1994 to the same address. That latter letter appears to have been returned unopened. It appears he sent a letter in December 1994. That letter also appears to have been returned unopened. [21] The plaintiff’s solicitors also sent correspondence to the defendant at the United Kingdom address in December 1994 which was returned unopened marked “Gone away. Return to sender”. Another letter sent by the plaintiff’s solicitors on 31 January 1995 advising of the trial date of the matter was not returned unclaimed. [22] In an affidavit filed by the plaintiff, she says that she had been unable to locate the defendant since obtaining the judgment until February 2000. She does not provide any particulars about what attempts she made. She says she will be seriously prejudiced now in proving her claim if judgment is set aside. At a trial it will be necessary to prove what jewellery was sent to the shop, what jewellery the defendant held on consignment for others at the shop, what jewellery had been purchased by the defendant under her dealers’ licence, what jewellery the defendant maintained at the shop of her own for sale on her own behalf and the value of such jewellery, what jewellery was sold and what monies were received by the defendant on the plaintiff’s behalf, whether others may have been responsible for taking jewellery and the value of jewellery missing. There will be factual disputes. Recollection has faded. To this point she is unable to locate other employees at the shop during the time the defendant was manager. Once the judgment was obtained she made no effort to maintain records to this time. She does not now have the original or copies of her journals for the period. Copies of credit card vouchers were provided to the defendant on discovery. [23] There is no evidence that the defendant was advised or was aware of the judgment before the demand was served in February 2000 in the UK. That is not necessarily the end of the matter. On the defendant’s account, she left Australia in late November 1992 for the UK. Her amended entry of appearance, defence and counterclaim/set off was served on 22 March 1993. Letters were written to her seeking instructions throughout 1993. Certainly the ones that were returned to her solicitors written in late 1994, copies of some of which are in evidence, display the name of the solicitors on the envelope. It appears she wrote to her solicitors in November 1993. She says she received no response. After that she did not make or -- 5 of 6 -- 6 attempt to make any other or further contact. She says she assumed the plaintiff was not proceeding. She was not interested in pressing her counterclaim. [24] Her grandmother has identified as hers, writing on one postal document, which appears to have accompanied a letter to her from solicitors in late 1994. On the defendants account it follows that her grandmother must have intercepted and returned all or some of the other letters which were written to her or all or some of them were not delivered by the postal services. [25] The defendant may have had valid personal reasons to leave Australia and return to the UK. She was aware of the plaintiff’s action and must have provided instructions for her counterclaim/set off. After her departure, on her account, the only attempt she made to keep herself informed about what, on any view of it, was an important matter regarding her legal liability to the plaintiff and the plaintiff’s legal liability to her was her letter of November 1993 to her solicitors. She made no further attempt by any available means to contact her solicitors. She acted promptly when served with the statutory demand. [26] It is now nine years since the events the proceedings concern. It is five years since the judgment. Recollection will be affected. According to the plaintiff she no longer has journals containing relevant stock details. She says she will be prejudiced in attempting to now prove her claim. I accept that will be so. [27] The fact that judgment went by default was due to fault of the defendant. Even if it be accepted that her grandmother intercepted all letters to her and returned them, and there are a significant number of letters which solicitors have no record of being returned, the defendant took no step other than writing the letter in November 1993 to keep abreast of what was, on any view of it, an important legal matter with potentially serious consequences for both her and the plaintiff. [28] It is not clear why it took so long for the plaintiff to locate the defendant. An address which was said to be the defendant’s address in England was available. The lapse of time since the judgment has contributed to the prejudice the plaintiff will suffer if the judgment is set aside. The plaintiff had six years in which to execute the judgment. After that time leave would be required: rule 287A of the repealed rule and rule 799 UCPR. That the defendant apparently had no earlier notice of the judgment is in part due to the fact that she did not pursue any other inquiry into the plaintiff’s claim or her counterclaim after the letter I have referred to. The plaintiff seems to have done all she could prior to judgment to bring the matter to the defendant’s attention. [29] In all the circumstances, the application is dismissed with costs. -- 6 of 6 --