Ali v Twiyo Trading Trust[2018] QCATA 67

REASONS FOR DECISION

What is this appeal about?

1. [1]
   On 1 August 2017, the Tribunal refused an application by Daniel Ali to set aside a default judgement against him in favour of Twiyo Trading Trust for $25,000. 
2. [2]
   Mr Ali wants to appeal that decision.
3. [3]
   Because this is an appeal from a minor civil dispute, leave is required.^[1]
4. [4]
   In determining whether to grant leave, the Tribunal will consider established principles including:

1. a)
   whether there is a reasonably arguable case of error in the primary decision;^[2]

1. b)
   whether there is a reasonable prospect that the appellant will obtain substantive relief;^[3]

1. c)
   whether leave is needed to correct a substantial injustice caused by some error;^[4] and

1. d)
   whether there is a question of general importance upon which further argument, and a decision of the Appeal Tribunal, would be to the public advantage.^[5]

Does the Appeal Tribunal have jurisdiction to hear an appeal of a decision to not set aside a decision by default?

5. [5]
   Darren Bartsch made submissions on behalf of the Twiyo Trading Trust. He submitted that a decision to set aside a decision by default cannot be appealed.
6. [6]
   Section 142(2) of the QCAT Act relevantly provides that a party to a proceeding cannot appeal against a decision to set aside a default decision.
7. [7]
   However, the decision appealed against is a decision to not set aside a decision by default. The effect of not hearing an appeal against a decision to not set aside a default decision would be to finally determine parties’ rights without a proper hearing. That would be contrary to the Tribunal’s mandate to act fairly and observe the rules of natural justice.^[6] That cannot be the effect of section 142(2) of the QCAT Act.
8. [8]
   Section 142(2) of the QCAT Act does not apply to a decision to not set aside a decision by default. The Appeal Tribunal does have jurisdiction to hear an appeal of a decision to not set aside a decision by default.  

Did the Tribunal fail to take into account a relevant consideration in not setting aside default judgement?

9. [9]
   The Tribunal may set aside a default decision upon application by a Respondent.^[7] In deciding an application to set aside a default judgement, a relevant consideration is whether default judgement has been regularly entered.
10. [10]
    On 6 June 2017, and before judgement was entered by default, Mr Ali had applied to the Tribunal to strike out the original Application on the grounds that the Applicant was not a legal entity with the capacity to sue or be sued. Although the Application to strike out was dismissed, the legal capacity of the applicant was still a relevant issue in deciding whether to set aside the default judgement, because a judgment entered in favour of a party who has no entitlement to it is irregular.^[8]
11. [11]
    The Applicant is a trust. A trust is not a separate legal entity but a description of a legal relationship characterised by a collection of duties, disabilities, rights and powers in relation to some specific property imposed upon, or accorded to, an existing legal person, the trustee.^[9]
12. [12]
    A consequence of a trust not being an entity separate from the trustee or beneficiaries is that it cannot be a party to legal proceedings. This raises issues about the capacity of the Applicant to obtain judgement for itself,^[10] and whether Mr Ali is entitled to have the judgement set aside as of right for being irregularly entered.^[11]
13. [13]
    Unfortunately, it is not evident here that the Tribunal considered the issue of the legal capacity of the Applicant to have a judgement entered in its favour. This means that in exercising the discretion whether to set aside the default judgement, the Tribunal failed to take into account a relevant consideration. This failure to take into account a relevant consideration is an error of law.^[12]  
14. [14]
    For this reason, leave to appeal must be granted to correct a substantial injustice caused by the error. The appeal must be allowed and the matter remitted to the Tribunal for determination according to law.^[13]

Should the Appeal Tribunal grant leave to appeal?

15. [15]
    Leave to appeal is granted and the appeal allowed.
16. [16]
    The Order refusing the Application to set aside the default judgement should be set aside.
17. [17]
    The Application to set aside the default judgement should be remitted for rehearing before the Tribunal, where a determination can be made after giving all parties an opportunity to make submissions about the Applicant.

What is the appropriate Order?

18. [18]
    The appropriate Orders are:

    1. a)
       Leave to appeal granted;

    1. b)
       Appeal allowed;

    1. c)
       The Order refusing the Application filed on 20 July 2017 to set aside the default judgement entered on 27 June 2017 is set aside; and

    1. d)
       The Application filed on 20 June 2017 to set aside the default judgement entered on 27 June 2017 is remitted to the Tribunal for determination according to law.