Beralt Pty Ltd v Whitehead & Anor [1999] QSC 447

~lb6\ ~'C (7. "-t't' ( State Reporting Bureau . TRANSCRIPT bF PROCEEDINGS Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau. SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION WHITE J NO S6646 of 1999 BERALT PTY LTD ACN 060 064 020 and MARK JOHN WHITEHEAD and ANNETTE MARY WHITEHEAD BRISBANE .. DATE 08/09/99 JUDGMENT it rIll"'·, Tit.: l.:m Courts, Ct:llq':l' Stn:cl, Bris/':!Ilt:, Q. .111111) 1 REVISED COPfES ISSUED State Reporting Bureau Date b / 10/ Plaintiff First Defendant Second Defendant T.:I I: I' Ii II III:: (1)7) .12.17 .1.1(01) r:I~: (07) .1247 55.12 -- 1 of 6 -- 080999 T3/SE2~ M/T 5287/99 IAtkinson J) HER HONOUR: This is an appl:.cation pursuant to rule 290 of the Uniform Civil Procedure l~les that the default judgment entered against the sec.ond dufendant, Annette Mary Whitehead, on 18 August 1999 be set aside. 10 The proceedings were instituted by the plaintiff on 16 July 1999. In the statement of claim the plaintiff pleads that in March 1998 the first defendant, Mark John Whitehead, in the presence of Annette Mary Whitehead, his wife, represented to the directors of the plaintiff company that 20 ( the total indebtedness over a hotel property at southport was $1.15 million and that was secured by a first mortgage ( only. 30 The plaintiff then pleads that in reliance on that representation it entered into a contract to purchase the hotel for a purchase price of $1.23 million. It is pleaded that at settlement of the contract the , 40 plaintiff was ··caused to produce further monies to enable settlement to proceed II and sets out a number of particulars relating to a deed of loan which is alleged not to have been disclosed and had it been disclosed would have caused the plaintiff not to proceed with the contract; further monies 50 advanced pursuant to that deed of loan, which presumably would have had the same effect; representations that there were no rates to payor land tax and there were substantial outstanding amounts in respect of both of those matters; and that the purchase price would discharge the mortgage 60 2 JUDGMENT -- 2 of 6 -- 080999 T3/SE25 M/T 5287/99 (Atkinson J). It is alleged that the defen(iants transferred their shares to him and gave him control of the company by executing an agreemen t prepared by t:.he so:~ici tors engaged by the plaintiff. It is asserted that the director carried out due diligence in relation to the affairs of the vendor company 10 and was provided with all information relative to its financial affairs. In particular, it was asserted that the defendants made full disclosure to the plaintiff and its officers as to the liability of the company and it sets out certain matters which are the subject of the claim. All of the allegations as to misrepresentation are specifically denied and there is a counter-claim in respect of the sum of $35,000.00. Mrs Whitehead has sworn an affidavit in the United states of America which has been faxed to her solicitors. Undertakings are given to file the full affidavit when it is received. She annexes to her affidavit a copy of the defence prepared by her solicitors and deposes, liThe defence was prepared on my instructions and I confirm the assertions made in it are true and correct." Mr Sheaffe, who appears on behalf of the respondent/ plaintiff submits that this is insufficient as showing a defence based upon the merits, a condition precedent to giving leave to the defendant to defend an action where judgment has been regularly entered. In my view, in the 5 JUDGMENT 20 30 40 50 60 -- 3 of 6 -- 080999 T4/SE25 M/T 5287/99 :White J) circumstances, this is quite sufficient to swear to the facts upon which the defence is based. There has been no undue delay in respect of this matter and none is suggested. The explanation seems to me to be quite 10 satisfactory. I am satisfied that there is a good defence on the merits to the claim brought by the plaintiff. The parties are agreed that should the judgment entered in default be set aside, that directions should be given in 20 ( respect of this matter. HER HONOUR: The orders that I make are as follows: I set aside the judgment entered on 18 August 1999; I give leave to the second defendant to defend the action; The plaintiff is to have leave to amend its statement of claim to be delivered within 14 days of today; The second defendant is to deliver a request for further and better particulars, if any, within seven days from receiving the amended statement of claim; The plaintiff is to provide further and better particulars within 14 days of the delivery of the request; The second defendant is to file and serve its notice of intention to defend and defence and counter-claim 6 JUDGMENT ( 30 c 40 c 50 60 -- 4 of 6 -- 080999 T4/SE2~ M/T 5287/99 :White J) within seven days of thl! receipt of the further and better particulars or w:~thin 14 days from the date of delivery of the amended statement of claim; each party to have liberty to apply in giving two clear days' notice to the other. The applicant contends that it ought to have its costs of this application notwithstanding that it was a regularly entered judgment. HER HONOUR: Mr Sheaffe, who appears on behalf of the plaintiff, submits that since the judgment was regularly entered, this is an indulgence of the Court and it is entitled to its costs since it had a right to enter that judgment on that day. This does tend to disregard what is regarded as appropriate professional courtesies between solicitors as officers of this Court that when notice is given that there is an intention to defend a claim judgment ought not to be entered without further reference to the solicitors for the defendant, all other things being equal. This seems to me to have been a fairly peremptory entry of judgment against the second defendant against the background that there was an indication from the second defendant's 10 20 30 40 50 solicitors that there was to be a defence. It is true that 60 7 JUDGMENT -- 5 of 6 -- 080999 T4/SE25 M/T 5287/99 (White J) it would appear that the pla~ntiff's solicitors waited out the day in order, no doubt, 1:0 see whether the defence was delivered and it was not and communication was unfortunately - not sent until after the clo~;e of business on that day. 10 I think it important that the courtesies in the profession should be continued to be supported. These are important matters and they lead to wasted costs for parties if these things are not taken into account. On the other hand, it was a regularly entered judgment and the solicitors for the second defendant were a little dilatory in communicating with the other side. c I think in all the circumstances the fairest course is to make the costs of and incidental to this application costs 30 in the cause. c 40 C)1 50 60 8 JUDGMENT -- 6 of 6 --