IN THE DISTRICT COURT

HELD AT SOUTHPORT

QUEENSLAND APPEAL NO. 664 of 1999

Before NEWTON D.C.J.

[RE:   DAY & ANOR  –V-  BELL]

BETWEENGEOFFREY NEWTON DAY

First Appellant

ANDNORMAN SMITH

Second Appellant

ANDPHILLIP BELL

Respondent

REASONS FOR JUDGMENT

Judgment delivered 28 February 2000.

IN THE DISTRICT COURT

HELD AT SOUTHPORT

QUEENSLANDNO. 664 of 1999

BETWEENGEOFFREY NEWTON DAY

First Appellant

ANDNORMAN SMITH

Second Appellant

ANDPHILLIP BELL

Respondent

REASONS FOR JUDGMENT – NEWTON, D.C.J.

Delivered the 28^th day of February 2000.

The respondent obtained judgment by default against the appellants on 19 January 1998 in the Southport Magistrates Court.   On that date the Deputy Registrar was satisfied that no defence to the plaint had been filed and that service had been proved.   He proceeded to assess damages for the plaintiff (respondent) and gave judgment by default for the plaintiff on the claim for $6,950.00 together with interest and costs.   A subsequent application to a magistrate to have the default judgment set aside was refused.   The appellant now seeks to appeal against that refusal.    A preliminary point has arisen which requires determination before the appeal can further proceed.   That preliminary point raises the question of whether the judgment by default was entered irregularly by the Deputy Registrar on 19 January 1998.

By his plaint the respondent sought damages against the appellants for misleading and deceptive conduct arising pursuant to the Trade Practices Act or the Fair Trading Act in relation to the sale to him of a computer program for use in stock market options trading.   The causes of action against each of the appellants were pleaded in terms of their being “knowingly concerned” in the allegedly misleading and deceptive conduct of a company named as first defendant.   No damages for breach of contract were claimed against the appellants, although these were claimed as against the first defendant.  The plaint alleged that the first appellant was a director of the first defendant and that he had designed the computer program and was aware of its true operation and capabilities.   The second appellant was said to be a director of the first defendant responsible for its business operations and thus aware of the true operation and capabilities of the program.   The plaint alleged that contrary to certain representations by the first defendant the program was not capable of performing.   By relying on these representations the respondent pleaded that he had suffered loss and damage because he had (inter alia) been deprived of the purchase price of the program of $6,950.00.

In an affidavit and request for judgment filed on behalf of the respondent, the amount said to be due in respect of the cause of action alleged in the plaint was set out as follows:

To this total were added amounts for costs and interest.   Judgment accordingly was duly entered against the appellants.   Complaint is now made that this judgment was entered irregularly.

The appellants submit that at best, with appropriate affidavit material, the respondent was entitled to have judgment entered for damages to be assessed, i.e. interlocutory judgment for damages.   Instead, judgment was entered for a specific amount as “liquidated damages”.   The appellants submit that this was wrong as in the plaint there was no such claim for a debt, or a liquidated demand, or liquidated damages, against either.   The only claim against the appellants was for damages not exceeding the jurisdiction of the Court in accordance with section 82 of the Trade Practices Act 1974 and section 99 of the Fair Trading Act 1989 (Qld).

Default proceedings are matters strictissimi juris and when a plaintiff proceeds on default every step of the proceedings must strictly comply with the Rules.   Where such compliance has not been observed all courts (including the Magistrates Court) has an inherent jurisdiction to set aside an irregular judgment:  Champion v Fay [1983] 2 Qd.R. 416 at 417 per Connolly J.

In Spain v Union Steamship Co. of New Zealand Ltd (1923) 32 C.L.R. 138 at 142 the joint judgment of Knox C.J. and Starke J. acknowledged the correctness of a statement in Odgers (Pleading and Practice) 5^th ed., p. 41 that “whenever the amount to which the plaintiff is entitled ………. can be ascertained by calculation or fixed by any scale of charges, or other positive data, it is .……… liquidated.”

By contrast, an action for unliquidated damages is one “in which the amount to be recovered depends on all the circumstances of the case, and no-one can say positively beforehand whether the plaintiff will recover a farthing, or forty shillings or a hundred pounds.": Dalgety Futures v Poretsky [1980] 2 N.S.W.L.R. 646 at 649 per Rogers J. further accepting the statement of the principle in Odgers.

Counsel for the appellants contends that a claim for damages under section 82 of the Trade Practices Act 1974 can only be a claim for unliquidated damages.

Section 82 provides relevantly as follows:

 “(1) A person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Part IV or V may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention.”

In Marks and Ors v G10 Australia Holdings Ltd and Ors (1998) 158 ALR 333 at 344, 346-348 McHugh, Hayne and Callinan JJ stated that the section provides, in effect, that the loss or damage that may be recovered by action is the amount of the loss or damage suffered   “by conduct of” another person that was done in contravention of Part IV or Part V.   It requires examination of whether a person has suffered loss or damage “by conduct of another person” that was engaged in the contravention of one of the identified provisions of the Act.   That inquiry will seek to identify a causal connection between the loss or damage alleged to have been suffered and the contravening conduct.   The question is what loss or damage has been caused by the conduct contravening the Act.   It follows that a comparison should be made between the position in which the party that allegedly has suffered loss or damage is and the position in which that party would have been but for the contravening conduct.   The central inquiry is what consequence has the contravention of the Act had on the party in question.   That requires comparison between the position in fact of the party which alleges loss and the position that would have obtained had there been no contravention.

In my opinion, nothing said by their Honours in the joint judgment referred to is authority for the  proposition that any claim for damages under section 82 must be a claim only for unliquidated damages.  I cannot see why such a claim may not include a component in respect of liquidated damages recoverable as a specified sum.   It should be remembered that paragraph 32 of the plaint alleges that by relying on the representations the respondent suffered loss and damage because:

1. (a)
   he has been deprived of the purchase price of the program of $6,950.00;
2. (b)
   he has been deprived of the ability to pursue other investment opportunities;
3. (c)
   he has been and is required to pay interest on his visa account; and

4. (d)
   he has lost the sum of $3,000.00 on unprofitable trading on the stock market.

It is only in respect of (a) that default judgment was entered.   It was, in my view, open to the Deputy Registrar to enter judgment for the amount of the purchase price under the provisions of Rule 157 of the Magistrates Court Rules 1960.

He would not have been entitled to do so had the plaint not included a liquidated demand as part of the relief claimed against the appellants.   That part or component of the relief claimed against them which seeks damages must be assessed as the appellants by not appearing or defending are deemed to have admitted the claims against them in the sense of their liability for damages and not the quantum thereof:   Watson Specialised Tooling Pty Ltd  v  Stevens [1991] 1 Qd.R.85 at 93-94 per Lee J.

Rule 157 of the Magistrates Courts Rules 1960 (which was in force as at the date of entry of default judgment) did not require that the plaint be endorsed for a liquidated demand only as was the case under Order 15 Rule 3 of the Supreme Court Rules.

I am satisfied that the default judgment entered by the Deputy Registrar on 19 January 1998 was not entered irregularly.   I will hear argument in due course with respect to costs.