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- Reid v Jensen[2002] QDC 247
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Reid v Jensen[2002] QDC 247
Reid v Jensen[2002] QDC 247
DISTRICT COURT OF QUEENSLAND
CITATION: | Reid v Jensen [2002] QDC 247 |
PARTIES: | GRANT REID AS TRUSTEE FOR THE COVERDALE SUPERANNUATION FUND Plaintiff and peter jensen Defendant |
FILE NO/S: | 148/2002 |
DIVISION: | Civil Jurisdiction |
PROCEEDING: | Application |
DELIVERED ON: | 26 August 2002 |
DELIVERED AT: | Southport |
HEARING DATE: | 24 May, 12 & 28 June, and 13 August 2002 |
JUDGE: | Alan Wilson SC DCJ |
ORDER: |
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CATCHWORDS: | PRACTICE – DEFAULT JUDGMENT – SETTING ASIDE – whether defendant entitled to have default judgment for incorrect amount set aside – cross-application by plaintiff to amend default judgment to show correct amount – defendant not establishing a good defence PRACTICE – AMENDMENT OF DEFAULT JUDGMENT – UCPR 290 – whether judgment creditor entitled to amend default judgment entered for incorrect amount – circumstances in which amendment permitted Plaintiff obtaining default judgment against defendant, but for incorrect amount – defendant applying to set judgment aside, but not establishing a good defence to a claim for the correct sum – plaintiff cross-applying to amend default judgment to reflect correct amount UCPR, r 290 Cases considered: Australian and New Zealand Banking Group Ltd v Lloyd Septimis Luck (1995) 4 Tas R 328Building Guarantee & Discount Co Ltd v Dolejsi (1967) VR 764Building Guarantee and Discount Co Ltd v Dolesji (1967) VR 764 Champion v Fay [1983] 2 Qd R 416 (FC) Chitty v Mason (1926) VLR 419, at 423 City Mutual Life Assurance Society Ltd v Giannarelli (1977) VR 463 City Mutual Life Assurance Society v Giannarelli (1977) VR 463Gemini Property Investments v Woodards Investments (2000) SASC 210National Mutual Life Association of Australasia Ltd v Oasis Developments Pty Ltd [1983] 2 Qd R 441, at 449 Yankee Doodles Pty Ltd v Blemvale Pty Ltd, unreported (SC (Qld) 23 June 1999, BC 9903401) |
COUNSEL: | Mr Campbell for defendant Ms Magee for plaintiff |
SOLICITORS: | Baxters solicitors for defendant Respondent/plaintiff self-represented |
- [1]The plaintiff obtained a judgment by default against the defendant for $210,000.00 on 27 March 2002. On 24 May, and 12 June 2002 I heard the defendant’s application to set that judgment aside. On 28 June 2002 I delivered reasons, holding that the default judgment was for an incorrect, and excessive amount, but also raising the question whether the plaintiff might be entitled to have the default judgment amended. The matter was then adjourned and on 8 July the plaintiff applied for amendment, and that application was heard on 13 August 2002.
- [2]In the reasons delivered 28 June 2002, I said:
In the alternative the defendant says he has given a satisfactory explanation for his failure to appear; the delay in applying to set the judgment aside is short; and, he has a prima facie defence on the merits, which he should be allowed to argue. Relevant History
The plaintiff claims the following relief:
The plaintiff does not elect for trial by Jury.”
Judgment Irregularly Entered
“The Court may set aside or amend a judgment by default under this Division, and any enforcement of it, on terms, including terms about costs and the giving of security, the Court considers appropriate.”
“A distinction is drawn between a summary judgment obtained in accordance with the rules, that is, a judgment regularly obtained and in good faith and one which is irregularly obtained or obtained in bad faith. The former will not in general be set aside except upon an affidavit of merits by the defendant; that is, upon his showing the Court he has a fairly arguable defence. The latter will be set aside in the interests of justice irrespective of the merits of the defendant’s case.”
“For a default judgment to be regular, it must comply strictly with the rules and be for the relief to which the plaintiff is entitled on the pleading. The record must show the plaintiff to have a right to judgment, and the judgment entered must follow the relief claimed. If these requirements are not met, the judgment is irregular and it will be set aside. … A judgment signed for too much is irregular. … When the defendant seeks to set aside an irregular judgment, the only onus is to point to the irregularity.”
“I am the registered mortgagee of 23 Edinburgh Road, Benowa owned by Ms Helen Thompson. You have a copy of the mortgage which secures repayment of $210,000 by 1 November 2001 and payment of monthly interest payments at 11 per cent p.a. … The owner is a woman being maintained by her estranged husband. She intends to sell the property within the term of the mortgage and buy a cheaper home. The husband has deposited the amount of the interest for the term of the mortgage in my trust account as security for payment. I can guarantee payment of the interest to anyone who takes over the mortgage because I have the money in hand.” On 16 December 2000 the plaintiff wrote to the defendant saying, inter alia: “We confirm our advice to you that the Coverdale Superannuation Fund will be prepared to purchase your interests in the above first registered mortgage for the principal sum of $210.000.” On 18 December 2000 the defendant again wrote to the plaintiff saying relevantly: “As agreed, Mortgage 704386698 will be transferred to you as undisclosed trustee of the Coverdale Superannuation Fund for $210,000.00 today. Prepaid interest of $20,125.50 for the period from today until 1 November 2001 can be deducted from the price leaving a balance of $189,874.50 payable as I direct. I will not require any adjustment or refund of prepaid interest if the principal sum is paid before 1 November 2001. … I am enclosing copies of the transfer in your favour and insurance papers noting your interest as first mortgagee. The stamp duty, lodgement fee and any other expenses associated with the transfer will be paid by me. Following settlement, I will act for you to have the transfer stamped and registered and to enforce the mortgage if requested and I will not advise or represent the mortgagor.” On the same day, 18 December, the plaintiff sent a message to the defendant reading, relevantly: “Note that you can sign transfer as my solicitor. Please hang onto the file for me.”
“The stamp duty, lodgement fee and any other expenses associated with the transfer will be paid by me.” There can be no doubt but that the defendant offered to act as the plaintiff’s solicitor in the stamping, lodgement and registration of the transfer of the mortgage from him to the plaintiff. I am satisfied the pleading addresses the issue sufficiently, and the plaintiff has proved the defendant failed to transfer the mortgage so there is an absolute failure of consideration on the defendant’s part. The Applicant/Defendant’s Additional Arguments
(see Butterworths “Civil Procedure – Queensland; Uniform Civil Procedure Rules” para 290.10; and, National Mutual Life Association of Australasia Ltd v Oasis Developments Pty Ltd [1983] 2 Qd R 441, at 449).
“A very compelling reason for the failure to appear and that it has a plausible defence.”
“There should be material that indicates how it is that the defendant came to be bound by the judgment of the Court. However, it must now be questioned whether the same principles which are developed under the rules of the Supreme Court will be applied under r 290 in relation to this issue. The philosophy of the Uniform Civil Procedure Rules as set out in r 5 would suggest that something more than giving the reason for the failure to file a notice of intention to defend would be required.” Cases touching the question whether a judgment which has gone in because of an error or oversight committed by a party’s solicitor should tell against the client were examined in my judgment in Prus-Butwilowicz v Moxey (2002) QDC 166. The question should be weighed against the other matters relevant to the discretion including, particularly, the existence of an arguable defence and the extent to which delay, and possible prejudice, affected the matter. Here, delay is not an issue: the application was brought promptly.
“I confirm that the society holds no files conducted by Peter Jensen on your behalf, it appears that none existed.” It seems to me impossible the defendant could ever be believed on these credit issues and, without them, he appears to have no sustainable defence to the plaintiff’s claim. Amending a Default Judgment
“On the facts of the case it is clear therefore that the defendant is entitled ex debito justitiae to have the judgment set aside unless in the exercise of my discretion I accede to the plaintiff’s application to amend the judgment. There may be cases in which it is perfectly proper to exercise that discretion in favour of an amendment and the discretion will almost certainly be exercised where the application is one initiated by the plaintiff independently of and not in response to an application to set aside the judgment. In the present case, the application to set aside is one made only after the defendant’s application to set aside the judgment has been instituted; it was made only on the return day of that summons and there had, prior to the making of the application to amend the judgment, been demands by the plaintiff for costs based on a taxation carried out in execution of the judgment. Furthermore, it appears from the material filed in support the second ground of the application that the case is one in which there is a substantial conflict of fact between the plaintiff and the defendant as to whether the judgment was, as the defendant alleged and the plaintiff denies, entered in breach of an understanding between the respective solicitors. In all those circumstances, it appears to me that, in the exercise of my discretion, I should not accede to the prayer for amendment of the judgment but that I should accede to the application to set aside the judgment.”
“In the present case, as in (Building Guarantee and Discount Co Ltd v Doesji (1967) VR 764) the plaintiff, at the late stage of the argument, made application to me to amend the judgment. In the case cited I refused – for the reasons set out at page 766 of the Reports – the plaintiff’s application for leave to amend the judgment. In the present case, I think I should accede to the plaintiff’s application. In the first place, the defendants do not dispute the debt and it would seem fatuous not to amend the judgment to reduce it to the amount admittedly due. …”
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- [3]Until the hearing on 13 August the plaintiff Mr Reid had represented himself. He appeared with counsel, Ms Magee, on that day. She conceded the default judgment was irregular in that judgment should only have been entered for $189,874.50 for claim, and the difference between that and the actual judgment sum of $20,125.50 could not be advanced as a claim for a liquidated sum. She also argued, however, that the plaintiff was otherwise entitled to interest, up to the date of default judgment.
- [4]It was also conceded, on the defendant’s behalf, that the defendant was prima facie entitled ex debito justitiae to have the judgment set aside unless the Court accedes to an application, by the plaintiff, to amend it: Building Guarantee & Discount Co Ltd v Dolejsi (1967) VR 764 at 766; City Mutual Life Assurance Society v Giannarelli (1977) VR 463 at 471; Australian and New Zealand Banking Group Ltd v Lloyd Septimis Luck (1995) 4 Tas R 328; Gemini Property Investments v Woodards Investments (2000) SASC 210.
- [5]For the defendant it was argued that the application for amendment should be refused because it involved a substantial amount, was only brought after the defendant had applied to set the judgment aside, and was not made in a timely fashion. Reliance was placed, principally, upon a decision of McInerney J in Building Guarantee & Discount Co Ltd v Dolejsi (1967) VR 764 which is relevantly set out at para 19 of my earlier Reasons and, in particular, the finding that the application to amend should be refused because it was made only after the defendant’s application to set aside the judgment had been instituted. It is clear, however, from the paragraph which follows in that judgment that McInerney J gave equal weight, at least, to the fact that there was a substantial conflict of fact between the plaintiff and the defendant as to whether the judgment was, as the defendant alleged and the plaintiff denied, entered in breach of an understanding between their respective solicitors. The case is not authority for the proposition that an application brought in the present circumstances, i.e. after an application to set aside the judgment, must necessarily fail.
- [6]Here, there are compelling reasons to consider the application. First, as I found in the earlier Reasons at para 13 the plaintiff appeared to have a strong claim to which the proposed defence was, as I described it, desperate and clearly without substance. Notwithstanding the time which has passed since those reasons were delivered, the defendant has not filed any further material contesting the conclusions reached there, or establishing any stronger defence.
- [7]Secondly, upon the self-represented plaintiff appreciating that he was only entitled to default judgment for a lesser amount, his application was brought promptly. It is also relevant that the original error arose, apparently, because a self-represented litigant failed to appreciate the distinction between a liquidated, and an unliquidated claim. Thirdly, no steps have been taken to execute the judgment: Building Guarantee & Discount Co Ltd v Dolejsi.
- [8]There can be no doubt the defendant is indebted to the plaintiff in the sum of $189,874.50. The defendant’s affidavit sworn 11 June 2002 does nothing more, in paragraph 2, than deny a total failure of consideration on the grounds that the extra sum of $20,125.50 was an amount to which the plaintiff was not entitled until 12 months from the date of advance. No defence has otherwise been shown on the merits and the setting aside of the judgment would simply delay the plaintiff obtaining the relief to which he is obviously entitled: City Mutual Life Assurance Society Ltd v Giannarelli; Gemini Property Investments v Woodards Investments. In the circumstances, the plaintiff ought have leave to amend the default judgment in the manner sought.
- [9]I am also satisfied the plaintiff was entitled, at the time he entered he default judgment, to interest: UCPR r 283(2). Interest is calculated to the date of judgment at the rate specified in the claim, or in a practice direction under the Supreme Court Act 1995, s 47. District Court practice direction No. 6 of 2001 sets the interest rate at 9.5 per cent. I accept the calculation set out in para 5(b) of the plaintiff’s further affidavit filed 8 July 2002 and, accordingly, amend the judgment entered 27 March 2002 to show $189,874.50 for claim, and $22,980.00 for interest.
- [10]I will hear submissions about costs.