Castlemaine Perkins Ltd v Megadja & Muller [1990] QSC 49

10 30 40 50 60 l~~srr '·. P:r:s 1is:~·t . ~ C"111 t n,;•) 'r•·,,,., 811r-:::a 1 • CIVIL JURISDICTION BEFORE MR.JUSTICE WILLIAMS BRISBANE, 22 FEBRUARY 1990 (Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Chief Court Reporter,Court Reporting Bureau.) BETWEEN: CASTLEMAINE PERKINS LIMITED -and- MATILDA MEGADJA and STEVEN WAYNE MULLER JUDGMENT Plaintiff Defendants HIS HONOUR: By notice of motion filed 29 January 1990 the appellant, Steven Wayne Muller, a defendant in the action, sought to appeal against an order of a Master made on 8 November 1989. That appeal came before me as Chamber Judge on 12 February 1990. In consequence of part of the order of the Master of 8 November 1989, the action was remitted to the District Court; such order was to take effect from 18 November. But on 17 November the plaintiff, Castlemaine Perkins Limited, the respondent to the appeal now before me, entered judgment by default against the appellant for failure to comply with other parts of the Master's order. Thereafter the Registrar of the Supreme Court transmitted the file to the Registrar of the District Court where the matter was given a new number. That occasioned some problems on 29 January 1990 when the solicitors for the appellant sought to file the notice of -Govt. Printer, Qld. -1- 10 20 30 40 50 60 -- 1 of 10 -- 10 20 30 40 50 60 appeal and oth~r documents. Some of the documents sought to be filed had incorrect headings (one was even headed in the District Court at Mount Isa), and only the notice of appeal and affidavit of the appellant appear to have made the file. The summons and affidavits of Mugridge and Sutton referred to in the affidavit of M.J. Batten sworn 12 February 1990 cannot be located in the court though they were served on the solicitors for the respondent. In the circumstances I permitte, copies of the affidavits of Mugridge and Sutton to be filed by leave on 12 February 1990. I also received a photocopy of the summons which in fact bears the Supreme Court stamp. The summons seeks an order that the default judgment be set aside, that the order of the Master of 8 November 1989 be set as'ide, and that relief from the order of 8 November 1989 be granted pursuant to Order 45 of th~ Rules of the Supreme Court. At the outset counsel for the appellant also sought to rely on a notice of motion seeking an extension of time within which to appeal against the order of the Master, but no such document was either on the file or had been served on the respondent. It became clear that in all probability no such document had ever been prepared, and at the conclusion of the hearing counsel for the appellant sought to amend the notice of appeal by seeking an order for an extension of time. At this stage I would also mention that counsel for the appellant ultimately conceded that no notice of appeal to the Full Court had been filed notwithstanding the frequent reference to such an appeal in the affidavit of M.A. Mugridge. The foregoing comedy of errors pales into insignificance when the more relevant facts are recorded. -Govt. Printer, Old, -2- 10 20 30 40 50 60 -- 2 of 10 -- 10 30 40 50 60 The respondent-plaintiff commenced its action by specially endorsed writ issued 22 May 1987. The claim was for $100,335.1 payable pursuant to the terms of a guarantee dated 7 October 1985. The appellant entered an appearance on 6 November 1987 and delivered a defence on 2 December 1987. In para.l the appellant in effect denied executing the guarantee, but then in para.2 asserted in the alternative that he was induced to enter into the guarantee: ".:by the fraud and/or misrepresentation of the plaintiff ... (a) The plaintiff ... misrepresented to the defendant the legal effect of the said guarantee; (b) The agent of the plaintiff induced the defendant to enter into the said guarantee by means of fraud." It was clearly improper to make such a vague and uncertain allegation of misrepresentation and fraud in a pleading, and not surprisingly the respondent delivered a request for particulars of such allegations on 11 December 1987 No particulars were forthcoming from the appellant and the matter went to sleep until August 1989 when the respondent's solicitors gave a notice of intention to proceed. The appellant's solicitors were not thereby stirred into action, and on 2 November 1989 the respondent filed a summons returnable 8 November 1989 seeking an order that the particular previously requested be given. The summons was served on the solicitors for the appellant; Mugridge, a solicitor in the employ of the appellants' solicitors, admits that such summons and supporting affidavit were in its possession by 3 November 1989. The summons simply sought an order for particulars; it did not by its terms seek a self-executing order. ~-.JVt. Printer, Qld. -3- 10 20 30 40 50 60 -- 3 of 10 -- 10 20 30 40 so 60 The material filed on behalf of the appellant refers to internal problems in the office of the solicitors for the appellant, including the fact that there was some difficulty in locating the file. It is not necessary to elaborate on those problems. It is sufficient to record that the solicitors did not contact the solicitors for the respondent, who was then the applicant, nor did they appear on the return date of the summons. The inability to locate the file is no excuse; the solicitors could have searched the court file or contacted the solicitor on the other side to obtain any necessary information (even, for example, their client's address). On 8 November 1989 the Master was faced with a deficient pleading, part of which at least could have been peremptorily struck out, and the non-appearance of anyone to answer the summons for further particulars. In those circumstances he made a self-executing order. Such orders are not lightly made, but in this case it was probably generous to the appellant. He ordered that the appellant provide further particulars within seven days, failing which the whole of his defence and also his entry of appearance would be struck out and he would be placed in the same position as if he had not entered an appearance. Mugridge deposes to the fact that "shortly after the 10th November 1989" the appellants' solicitors received a letter from the plaintiff's solicitors setting out the terms of the Master's order. Apparently because they had not yet located the file the solicitors for the appellant did nothing. The plaintiff obtained default judgment pursuant to Order 15 Rules 3 and 4 for the amount claimed on 17 November 1989. -Govt. Printer, Qld. -4- 10 20 30 40 50 60 -- 4 of 10 -- 10 20 30 40 50 60 Mugridge deposes to the fact that the appellants' received notification of the fact that judgment had been obtained when a copy thereof was received shortly after 21 November 1989. He also asserts that on the same date the solicitor~ received for the first time a copy of the order of the Master of 8 November 1989. Still they did nothing. Mugridge deposes that the relevant file was located on 24 November 1989. His affidavit contains a lot of detail as to what was done and not done thereafter. As 1 have already said, no appeal to the Full Court was lodged. No positive step was taken until 29 January 1990 when the appeal from the Master's decision was filed. In my view the material does not establish any real justification for the failure for a period of about two months to take any step towards setting aside either the Master's order or the default judgment. It would appear that by early December counsel had advised an appeal to the Full Court but the solicitors did not act in accordance with that advice. Affidavits have been sworn by the appellant and by C. Howard, P.E. Muller and H.A. Muller in which statements are to be found which support the contention that the signature on the guarantee was not that of the appellant. The statutory declaration of the v. Saxon is to similar effect. But the respondent has filed an affidavit by one G.S. Klooger, a solicitor of this court, to the effect that he witnessed the appellant's signature to the document. Thus on the issue raised by para.l of the original defence there would clearly be a triable issue, depending largely on findings as to credibility, if the matter were allowed to proceed. •·JV!. Printer, Qld. -5- 10 20 30 40 50 60 -- 5 of 10 -- 10 20 30 40 50 60 Before me the appellant did not seek to furnish particulars of the previously alleged fraud and misrepresentation, and counsel intimated that if the appellant was permitted to defend the only issue would be that raised by para.l of the original defence. In so far as I am concerned with an application to set aside a default judgment, it is relevant to consider at the outset whether the default judgment was regularly or irregularly obtained. I am concerned that there was no appearance on behalf of the appellant before the Master on 8 November 1989, and the only material before me - affidavit of Mugridge - suggests that the Master's order was not served until after the default judgment had been obtained. It seems clear that there is no need to serve an order in terms such as that made here where the party adversely affected thereby was present, either personally or by a legal representative, at the time the order was made. (Farden v. Richter (1889) 23 Q.B.D. 124). But Huddleston, B. recognised at 128 that it would be at least "unfair" to enter default judgment where the party was unaware of the terms of the order. I am inclined to the view that it was irregular to enter default judgment in this case without prior service on the appellant of a copy of the order, but it is not necessary that I reach a definite conclusion. I am prepared to proceed on the basis that the judgment was regularly entered. In such circumstances the appellant must show a defence on the merits and the default judgment will be set aside only after consideration of the principles discussed in cases such as Rubin v. Eacott (1912) 15 C.L.R. 386, Evans v.Bartlam. (1937) A.C. 473, Aboyne Pty. Ltd. v. Dixon Homes Pty. Ltd. (1980) Qd.R. 142 and National Mutual Life Association of Australasia -Govt. Printer, Qld. -6- 10 20 30 40 50 60 -- 6 of 10 -- 10 Limited v. Oasis Developments Pty. Ltd. (1983) 2 Qd.R.441. In so far as such principles are relevant here, I am satisfied that the appellant has shown a good defence on the mer±ts in so far as the issue raised by para.l of his original defence is concerned. I am further satisfied that he has given a satisfactory explanation for his failure to appear before the Master and his failure to provide the further particulars ordered. Personally he was not aware of either requirement. There is also an explanation for the solicitor's failure to appear before the Master and, though it may evidence some negligence, it is not such as to preclude the appellant from 10 .,20 20 30 40 50 60 now having the default judgment set aside. Finally, I am satisfied that the delay in making these applications is not such as to preclude the appellant from obtaining relief. But this is not a case of simply setting aside a default judgment, and the judgment of the Full Court in K.G.K. Constructions Pty. Ltd. v. East Coast Earthmoving Pty. Ltd. (1985) 2 Qd.R. 13 must be considered. In that case the order provided that if certain steps were not taken by a certain date, the defence should be struck out. Upon the defendants' default, the plaintiff obtained from a judge interlocutory judgment as on default of defence for damages to be assessed. The defendant appealed to the Full Court against the initial order and against the interlocutory judgment.' Relevantly McPherson J. (with whom Campbell C.J. and Sheahan J. agreed) {pointed out at p.16 that even if the default judgment were set aside, the defendant could not deliver another defence whilst the earlier order stood. It was necessary to set aside or vary the self-executing order before a further defence could be delivered. ··, Qld. -7- 30 40 50 60 -- 7 of 10 -- 10 20 30 40 50 60 McPherson J. considered that the Full Court "has and in appropriate cases should exercise the power to allow an appeal against a self-executing order even where the time limited by that order has expired without the condition being fulfilled, at least ·in cases where non-fulfillment of the order does not of itself spell the end of the action." (p.18). He went on to conclude "that an appeal against a self-executing order may succeed if it is shown that the order has in the result, by reason of supervening:events perhaps not readily foreseeable at the time the order was made, subsequently operated in a manner that has turned out to be unjust." Those remarks are pertinent here where it could be said that the failure of his legal advisers to give particular of one possible defence has deprived the appellant of the right to a trial on another ground of defence which has some substance. But in K.G.K. the Court was able, without allowing the appeals, to achieve the des~red result by granting relief pursuant to order 45 R.l against the interlocutory judgment. Pursuant to that order the Court set aside the default judgment and the self-executing order, and further gave necessary directions. It appears to me to be appropriate to deal with this case in that way. As I have already pointed out, the appellan would have in any event a good case for having the default judgment set aside. It is therefore not necessary to consider the question of an extension of time to appeal against the Master's order of 8 November 1989. 0 ter, Qld. -8- 10 20 30 40 50 60 -- 8 of 10 -- 10 i20 30 40 50 60 On the appellant's summons I would make the following orders: (1) set aside the default judgment of 17 November 1989; (2) pursuant to order 45 R.l relieve the appellant by setting aside so much of the Master's order of 8 November 1989 as directed,that in the event of non-compliance with the said order the notice of defence and entry of appearance be struck out and that the appellant be placed in the same position as if he had not entered an appearance, and that in lieu thereof it be ordered that in the event of non-compliance with the said order para.2 of the defence be struck out. In the circumstances I would merely order that the notice of appeal against the Master's order of 8 November 1989 be dismissed. The hearing before me was occas±6ned•i by default and delay on the appellant's side, and he was seeking the indulgence of the Court. In those circumstances the appellant should pay the respondents' taxed costs of both the summons~and the notice of motion, and also the costs of entering the judgment of 17 November 1989. On the material before me the appellant appears to have a good case for saying that his solicitor and not he personally should bear those costs together with~the appellant's own costs relating thereto. I do not make any final order in that regard because all the relevant facts may not be before me. lter, Old. -9- 10 20 30 40 50 60 -- 9 of 10 -- 10 20 30 40 so 60 My orders will therefore be: (1) on the summons set aside the default judgment of 17 November 1989; (2) pursuant to order 45 R.l relieve the appellant by setting aside so much of the Master's order of 8 November 1989 as ditected, that in the event of non-compliance with the said order the notice of defence and entry of appearance be struck out and that the appellant be placed in the same position as if he had not entered an appearance, and that in lieu thereof in the event of non-compliance with the said order para.2 of the defence be struck out; (3) the applicant/defendant pay the respondent/plaintiff's costs of and incidental to the summons to be taxed and also the plaintiff's taxed costs of entering judgment of 17 November 1989. On the notice of appeal the order will be: appeal dismissed with costs. I further order that Exhibit 2 be released to the solicitors for the plaintiff Castlemaine Perkins Limited upon an undertaking to return it forthwith to the Court if required. -10- 10 20 30· 40 so 60 -- 10 of 10 --