Sandhu v S&S TPT Pty Ltd[2024] QCATA 120

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

1. [1]
   This is an appeal from a decision of an adjudicator in the minor civil disputes jurisdiction. The adjudicator refused an application to set aside a default decision entered against Mr Sandhu. Mr Sandhu appeals the decision.
2. [2]
   Because this is an appeal from a decision in the minor civil disputes jurisdiction, leave to appeal is required.^[1] The considerations relevant to granting leave to appeal are well established:

   1. Is there a reasonably arguable case of error in the primary decision?^[2]
   2. Is there a reasonable prospect that the applicant will obtain substantive relief?^[3]
   3. Is leave necessary to correct a substantial injustice to the applicant caused by some error?^[4]
   4. Is there a question of general importance upon which further argument, and a decision of the appellate court or tribunal, would be to the public advantage?^[5]
3. [3]
   If leave to appeal is granted, in deciding the appeal on a question of law the Appeal Tribunal may confirm or amend the decision, set aside the decision and substitute its own decision or set aside the decision and remit the matter to the tribunal for reconsideration.^[6] The Appeal Tribunal may set aside the decision and substitute its own decision only if this results in the disposition of the appeal entirely in the appellant’s favour.^[7] An appeal on a question of fact or mixed law and fact must be conducted by way of rehearing.^[8] The Appeal Tribunal may confirm or amend the decision, set aside the decision and substitute its own decision or set aside the decision and remit the matter to the tribunal for reconsideration.^[9]

The proceeding below

4. [4]
   The dispute between the parties arose out of the hire of a truck. S&S says that Mr Sandhu hired the truck. Mr Sandhu says he did not and that the hirer was a company albeit one with which he is connected.
5. [5]
   The chronology of events below is summarised as follows:

6. [6]
   Reasons were given by the adjudicator in refusing the application to set aside the default decision. The adjudicator found that the reopening decision on 22 February 2023 finally adjudicated the application to set aside the default decision. The adjudicator found that the application to set aside the default decision filed by Mr Sandhu on 1 March 2023 was an abuse of process. By way of obiter remarks, the adjudicator observed that it was open to Mr Sandhu to appeal the reopening decision. The adjudicator observed, again in obiter remarks, that ‘it may be’ that a component of S&S’s claim was beyond the jurisdiction of the tribunal. This, said the adjudicator, related to a claim by S&S for the cost of replacement of a GPS unit fitted to the vehicle the subject of the hire arrangement. The adjudicator also observed that if the dispute between the parties was in fact a consumer trader dispute, the claim would be within jurisdiction. The adjudicator expressed no concluded view on this issue.

Consideration

7. [7]
   Mr Sandhu says that the adjudicator erred in finding that it was not open to Mr Sandhu to make a second application to set aside the default decision.
8. [8]
   In Carr v Finance Corporation of Australia Ltd (No. 1)^[10] the High Court held that a judgement by default is not a final judgement. A default judgement does not finally determine the rights of the parties. An order refusing to set aside a default judgment does not as a matter of law finally dispose of the rights of the parties, as it is open to the disappointed respondent to apply again to have the judgment set aside.^[11] Gibbs CJ stated:

In practice, in some cases a second application of that kind might be successful, for example, when the first application had been dismissed on a technicality. In other cases, however, the second application would be doomed to failure because the issues of substance which it raised would have been decided adversely to the defendant in the first application.

9. [9]
   The first point to note is that the initial application by Mr Sandhu was not to set aside the default decision, but to reopen the proceeding. A party to a proceeding may apply to the tribunal for a proceeding to be reopened if the party considers a reopening ground exists for the party.^[12] A reopening ground means:

   1. the party did not appear at the hearing of the proceeding and had a reasonable excuse for not attending the hearing; or
   2. the party would suffer a substantial injustice if the proceeding was not reopened because significant new evidence has arisen and that evidence was not reasonably available when the proceeding was first heard and decided.^[13]
10. [10]
    The reopening provisions of the QCAT Act only apply  if a proceeding has been heard and decided by the tribunal.^[14] Where a default decision is entered there has been no determination of the merits and the matter has not been heard and decided. Accordingly, it was not open to Mr Sandhu to apply to reopen the proceeding. It is not for this Appeal Tribunal to examine the decision to refuse Mr Sandhu’s reopening application however it is clear that it was not brought by Mr Sandhu as an application to set aside the default decision. The adjudicator erred in proceeding on the basis that it had. Even if the earlier application for reopening was treated as an application to set aside the default decision, as I have explained, there was no impediment to Mr Sandhu bringing the subsequent application.
11. [11]
    It follows from the foregoing that the adjudicator erred in finding that it was not open to Mr Sandhu to bring the application to set aside the default decision. Leave to appeal should be granted to correct a substantial injustice. Mr Sandhu was entitled to have the application to set aside the default decision determined on the merits.
12. [12]
    Before addressing the substantive grounds of appeal it is necessary to say something about the relevant matters to be taken into consideration when a party applies to set aside a default decision.
13. [13]
    In Deputy Commissioner of Taxation v. Johnston^[15] Atkinson J set out the three matters usually relevant to the exercise of the discretion to set aside a default judgment:

    1. whether the defendant has given a satisfactory explanation of the failure to defend;
    2. whether the defendant’s delay in making the application to set aside precludes it from obtaining relief; and
    3. whether the defendant has a prima facie defence on the merits.
14. [14]
    Atkinson J stated:

As the cases referred to in the footnotes show, the defendant must demonstrate "a very compelling reason" for the failure to appear and that it has a plausible defence either in law or in fact. Before allowing a defendant to come in and defend, the court should have before it material which enables it to say how it came about that the defendant found itself bound by a regularly entered judgment; that the defendant genuinely desires to be allowed to come in and present its case; and that issues are raised in such a form as to require serious consideration of the defence put forward. The affidavit material in support of an application to set aside judgment entered into in default of appearance must set out all the defences on which the defendant intends to rely and briefly set out the facts by which the defendant seeks to establish such defences. A mere statement by the defendant that he or she has a good defence is not sufficient to justify a review of the exercise of judicial discretion.^[16]

15. [15]
    It is to be noted that her Honour referred to ‘a regularly entered judgment’ and I will return to this aspect of the proceeding below later in these reasons.
16. [16]
    In support of the application to set aside the default decision Mr Sandhu filed an affidavit exhibiting a number of documents. The matters deposed to by Mr Sandhu may be summarised as follows:

    1. Mr Sandhu was a shareholder in A1 Aussie Trucks Pty Ltd;
    2. A1 Aussie Trucks Pty Ltd hired a truck from S&S between various dates from December 2020 to March 2021;
    3. For a period of approximately two months, at the request of S&S, the truck was stored at the premises of A1 Aussie Trucks Pty Ltd;
    4. Mr Sandhu did not utilise the truck for personal use;
    5. Various employees of A1 Aussie Trucks Pty Ltd used the truck, which was recorded in a logbook;
    6. In June 2021 S&S invoiced A1 Aussie Trucks Pty Ltd for the use of the truck totalling $10,650.74;
    7. Subsequently, in June 2021, S&S sent a letter of demand to A1 Aussie Trucks Pty Ltd claiming a total amount of $22,347.22 for the hire of the truck;
    8. S&S subsequently commenced the proceeding for a minor civil dispute in QCAT claiming $24,261.22 which included an amount of $1,914.00 for a GPS unit said by S&S to be missing from the truck when it was returned;
17. [17]
    It is relevant to note that in neither the affidavit nor the application to set aside the default decision does Mr Sandhu offer an explanation for his failure to file a response other than the somewhat cryptic submission, ‘I have never received any notice for the claim or any court appearance previously’ and the provision of a medical certificate exhibited to his affidavit. It should be noted that Mr Sandhu makes no mention in his affidavit of a medical condition being causative of his failure to file a response. Nor is the medical certificate particularly persuasive from an evidentiary perspective. It simply refers to Mr Sandhu receiving medical treatment during the period from June 2022 to March 2023 and his being unfit to continue in his usual occupation. There is no reference to a specific diagnosed medical condition nor is the certificate at all clear as to whether Mr Sandhu was unfit for work for the entire period referred to and whether the medical condition prevented him from engaging in the minor civil dispute proceeding.
18. [18]
    The failure by Mr Sandhu to present a satisfactory explanation for his failure to file a response in the minor civil dispute proceeding would have, but for the issue to which I will now refer, been fatal to the appeal.
19. [19]
    It is not contentious that the agreement for the hire of the truck, regardless of whether Mr Sandhu or A1 Aussie Trucks Pty Ltd was the hirer, was oral. In the application for minor civil dispute S&S says that it was a term of the hire agreement that the vehicle was required to be returned at the end of the hire period in the same condition as at the commencement of the hire period. The original claim by S&S did not include an amount for the GPS unit which S&S says was missing from the vehicle when it was returned. The claim for the GPS unit arose at the time S&S applied for the default decision. In correspondence from S&S to the Tribunal registry S&S advises that the total amount claimed included ‘replacement cost of MT data unit is 1740 plus GST $174 that is $1914 in total.’
20. [20]
    Section 50 of the QCAT Act is concerned with decisions by default for debts or liquidated demands of money. An applicant may apply for a decision by default in circumstances where a respondent has not responded to an application.^[17] The principal registrar may make a decision.^[18] A default decision given under s 50(3) is taken to be the final decision of the tribunal in the proceeding.^[19] Section 50A is concerned with decisions by default for unliquidated damages. If a respondent has not responded to an application within the period stated in the rules, the applicant may apply for a decision by default conditional on the assessment by the tribunal of the unliquidated damages.^[20] The principal registrar may decide the application.^[21] In giving a decision by default the tribunal must assess the unliquidated damages.^[22] The tribunal may, on application by a respondent, set aside a decision by default on terms the tribunal considers appropriate.^[23]
21. [21]
    In Financial Advisers Australia v Mooney & Anor^[24] the Appeal Tribunal said the following about the distinction between debts or liquidated demands and claims for unliquidated damages:

A debt or liquidated demand within the QCAT Act has been described as a “sum of money that can be calculated by reference to a formula, schedule or some other yardstick”. The antithesis of a debt or liquidated demand is an amount ascertainable only by discretionary assessment such as unliquidated damages. It is the nature of the claim, rather than its prospects of success, that determines jurisdiction. The claim must in law be a debt or liquidated amount – merely claiming a specific amount is not conclusive. (footnotes omitted)

22. [22]
    QCAT Practice Direction No 9 of 2010 is concerned with decisions by default for unliquidated damages. Unliquidated damages are described in the practice direction in the following terms:

Unliquidated damages arise when a claim is made for a sum which cannot be determined without consideration, by the Tribunal, of the applicant’s evidence in support of the claim – for example, a claim in which the precise amount which should be awarded cannot be determined from the terms of a prior agreement between the parties, or some other standard; and must be calculated by reference to invoices, quotations or the like.

23. [23]
    What is clear is that an application for a decision by default under s 50 of the QCAT Act cannot include a claim for unliquidated damages.^[25] The application for decision by default filed by S&S was brought pursuant to s 50.^[26] 
24. [24]
    I accept for the purposes of the appeal the assertion by S&S that the verbal agreement for hire contained no stipulation in relation to the value of the GPS unit or the amount payable to S&S in the event the unit was not returned with the vehicle. The claim for the value of the GPS unit was a claim for unliquidated damages and required the Tribunal to assess S&S’s entitlement to damages by reference to, for example, quotes or invoices. The request for decision by default was brought pursuant to s 50 of the QCAT Act. An application for decision by default pursuant to s 50 cannot include a claim for unliquidated damages. The default decision was irregularly entered and must be set aside. As I have earlier observed, the adjudicator questioned by way of obiter remarks whether the claim by S&S was for a debt or liquidated demand of money. The adjudicator erred, firstly in declining to deal with the application to set aside the default decision on the merits and secondly in failing to identify that the default decision had been irregularly entered and setting aside the decision.
25. [25]
    It follows from the foregoing that the appeal must be allowed and the decision made 12 April 2023 set aside. The application to set aside the default decision filed 1 March 2023 is allowed, the default decision entered on 22 December 2022 is set aside and the matter remitted to the Tribunal to be progressed in the minor civil disputes jurisdiction. 
26. [26]
    I would add the following observations. There remains on foot the minor civil dispute proceeding commenced in the Ipswich Magistrates Court naming A1 Aussie Trucks Pty Ltd as respondent. Whether that proceeding continues is a matter for S&S. If it does, consideration should be given to applying to have that proceeding and the remitted proceeding consolidated. As to the claim for unliquidated damages by S&S relating to the GPS unit, I would also observe that a trader cannot sue a consumer for an unliquidated claim, although it may sue the consumer for a debt or liquidated demand under paragraph 1(a) of the definition of ‘minor civil dispute’.