FAI Leasing Finance Pty Ltd v Beinit Pty Ltd & Ors [1993] QSC 185

G.\\?0,< , . >c .. --<'13;1~£ 1lr State Reporting Bureau TRANSCRIPT OF PROCEEDINGS (Copyright. in this transcript is vestedJn the Crown. Copies thereof must not be made or sold · without the written authority of t~e Director, State ~eporting Bureau.)-· ' · '. REViSED COPIES !SSUED cJ· SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION ( \ de 'JERSEY J No 703 of 1993 FAI LEASING FINANCE. PTY LTD and BEINIT PTY LTD ' and· "-j ( . ~} VICTOR PETER GREEN and . ANN JANE GREEN BRISBANE .. DATE. 18/06/93 . ',. JUDGMENT Plaintiff First Defendant Second Defendant Third Defendant 1 4th Floor, The Law Courts, George Street, Brisbane, Q. 4000 Telephone: (07) 227 4360. Facsimile: (07) 227 5532 -- 1 of 7 -- 170693 rgc (de JERSEY J) HIS.HONOUR: The second defendant applies to set aside a judgment entered against him on 25 May 1993 by the plaintiff in default of his having entered an appearance. Mr.Daubney, who appeared for the second defendant, submitted first that the judgment was irregular. The basis of that submission was, some errors in the special endorsement on the writ which the plaintiff's solicitors have recently conceded. In particular, paragraph 11 (c) refers to clause 3 whereas it should refer to clause 6 (b). The relevant deed of guarantee and indemnity has, however been incorporated into the pleading by paragraph 6 of the pleading. Further, paragraph 14 of the endorsement referred to 12 April 1993, whereas it should have referred to 12 March 1993 but, as I said bef_ore, the relevant date was probably the date of service of any demand, if any demand was necessary, and that is correctly specified as 7 April 1993. In any event, I doubt that such errors, had they been substantial, which these are not, could have invalidated the judgment entered by default. The second point drawn by Mr Daubney was the plaintiff was estopped by acquiescence from entering judgment as it did. The factual basis for that submission was two letters written in November 1992; one to FAI Insurance Limited, a sister company of the plaintiff - nothing turns on the difference in designation - and the second to the solicitors for the plaintiff enclosing a copy of the former letter. In that letter the second defendant sets out the basis of his contention that the guarantee might be rescinded and his 2 10 20 () 0 30 (J 40 50 60 -- 2 of 7 -- 170693 rgc (de JERSEY J) rescission of it. The letter is comprehensive, factually and in law, as Mr Daubney pointed out. Then on 24 May 1993, after the issue and service of the writ, the solicitor for the second defendant wrote to the solicitors 10 for the plaintiff indicating quite clearly that the second defendant wanted to defend the action. Nevertheless, the following day, 25 May and as I infer after they had received that letter of 24 May - the solicitors for the plaintiff went ahead and entered judgment in default of appearance. Again, 20 as I infer, the solicitor for the second defendant had not entered an appearance on time because he mistakenly thought (_ ~ - the writ had been served a day later than it had been served on the second defendant. I infer that the solicitors for the plaintiff had received the letter of 24 May before entering 30 judgment because of the nature of their response by fax on 27 May. (Paragraph B). I would expect them to have asserted at that point that in entering judgment they had not received the letter of 24 May, had that been the case, rather than taking in their fax of 27 May, what I would regard as a very u technical approach to the position set up by the letter of 24 40 May. In any event, Mr Daubney submitted from all of this that the plaintiff was estopped by acquiescence from entering judgment. 50 I have indicated already earlier in this lengthy hearing that I did not accept that contention. At best I think the solicitors for the plaintiff were guilty of some discourtesy to the other side, but·I don't think that either renders the judgment irregular. In that regard I refer to Bratic v. 60 3 -- 3 of 7 -- 170693 rgc (de JERSEY J) Toohey (1988) 2 QdR 140 at 146 between lines 25 and 37. At .::_ . ····:1 mo,~t:.. I think in the end that would go to costs. Consistently with what the Full Court says in the Ogle case, to which Shepherdson J refers to in Bratic, it has been necessary for me to go to the m~rits of the defence which the second defendant seeks to raise. I should make it clear that I think he has adequately explained his failure to enter an appearance on time and that there has peen no relevant delay in the making of this application subsequently to the entry of judgment. The question then is whether the defence to which he swears is a prima facie or substantial defence, sufficient to warrant my setting aside the judgment and letting the matter go on as if to trial. The .essence of the first defence was that the guarantee on which the plaintiff sues was subject to an implied condition that certain insurance would be obtained. That is pleaded in paragraph 12 of the draft defence. Paragraph 13 then alleges that was not done so that the second defendant properly discharged himself from liability under the guarantee. The evidence put before me however, from the plaintiff, establishes clearly that the relevant insurance was put in place. That is to be gained from the affidavit of J E J Hammond filed by leave today, especially paragraph (c) on page 2 and onwards and the exhibits to which it refers. Mr Daubney conceded there was really nothing but an assertion from·his side on.this point and ultimately said well, even though they say these things; the matter should go to trial. 4 10 20 C) 0 30 0 \ 40 () 50 60 -- 4 of 7 -- . 170693 rgc (de JERSEY J) But, the evidence being all one way and in favour of the plaintiff on this point, I think it would be wrong for me to conclude there was nevertheless a prima facie defence raised. The second point arises from an allegation, paragraph 15, that 10 before execution of the guarantee the plaintiff, by its agent, Term and Permanent Securities Australia Pty Ltd, made a representation to the defendants about interest rates, as seen from paragraph 16. The second defendant alleges that led him () '-- / into executing the guarantee and so on. Mr Bain, who appears 20 for the plaintiff, contends that there is no evidence that the person who made those representations, Mr Frost, who was ( . \ ) himself an agent for Term and Permanent Securities was acting on behalf of the plaintiff. There was some material which may have borne on this in the second defendant's affidavit. I 30 should refer in particular to the last sentence in paragraph 8 in which he, in a composite form, confirms the accuracy of the allegations in the draft defence. Mr Bain objected to that I I \___) sentence in the paragraph and I upheld , . lll.S objection to the point of confirming that that could not be seen as verifying 40 matters where the grounds of the belief in their accuracy were not set forth. Accordingly, it could not be seen as verifying the agency alleged in paragraph 15 in the absence of a statement of the grounds for the belief. 50 I indicated during.argument on the objections that I thought a letter in the Term and Permanent. Securities material, whj_ch had the FAI letterhead, might be a ground for inferring that Term and Permanent Securities was in this transaction perhaps acting for FAI, the plaintiff. But when one looks carefully 60 5 -- 5 of 7 -- 170693 rgc (de JERSEY J) at that material, and all the rest of the material which has now been put before me for the plaintiff, it is perfectly plain to me that the only material on agency indicates that Term and.Permanent Securities was not the agent of FAI, the plaintiff, but was the agent of the defendant in this transaction. One is sometimes inclined to be skeptical about assertions, where one is tempted to think that, comme·rcial enterprises like these work·'in conjunction,. but although I indicated some such skepticism during argument, I don't think, on careful ref1ection, there was an evidentiary basis for that skepti6ism. In the end, the fact is that all of the evidence bearing on this matter of agency is in support of the contention made by Mr Bain, which was that Term and Permanent Securities was, as as$erted by FAI and itself, the agent for the second defendant and not the plaintiff. It therefore does seem to me .that this defence, which starts in paragraph 15 of the defence and counterclaim, has not been sufficiently set up either. There is a requirement in circumstances like these that the party seeking to set aside the judgment must sufficiently verify the defence or put evidence before the Court to raise it to a prima facie level. That would include, in a case like this, putting before the Court enough to raise the arguable position of the agency of Term and Permanent Securities for the plaintiff. I do not see how I could favour the second defendant on that point wher~asher~ all of the evidence seems 6 10 20 () 30 0 40 0 50 60 -- 6 of 7 -- .• .. .. 170693 rgc (de JERSEY J) to be the other way. I therefore conclude that no prima facie defence or substantial defence has been raised by the second defendant. I should also mention perhaps, a reference here in the pleading to misleading and deceptive conduct, s 35{1)(A) of the Trade Practices Act, and a claim in consequence to set aside the guarantee under the later relevant section of that Act. That would depend, however, again, on the alleged misrepresentation of interest rates for which, again, it would be necessary for the second defendant to establish that at the ( relevant time Term and Permanent Securities, through Mr Frost, was acting as agent for the plaintiff, so again, that avenue for challenge does not seem to me to have been sufficiently raised. I should therefore refuse the application. The orders I make are that the application to set aside the judgment is refused and that the second defendant pay the plaintiff's costs of the application to be-taxed. ( \ ~-) 7 iO 20 30 40 50 60 -- 7 of 7 --