CB Richard Ellis (C) Pty Ltd v Wingate Properties Pty Ltd
[2005] QDC 399
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- Unreported Judgment
- CB Richard Ellis (C) Pty Ltd v Wingate Properties Pty Ltd[2005] QDC 399
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CB Richard Ellis (C) Pty Ltd v Wingate Properties Pty Ltd[2005] QDC 399
CB Richard Ellis (C) Pty Ltd v Wingate Properties Pty Ltd[2005] QDC 399
DISTRICT COURT OF QUEENSLAND
CITATION: | CB Richard Ellis (C) Pty Ltd v Wingate Properties Pty Ltd [2005] QDC 399 |
PARTIES: | CB RICHARD ELLIS (C) PTY LTD Plaintiff v WINGATE PROPERTIES PTY LTD Defendant |
FILE NO/S: | BD2086/05 |
DIVISION: |
|
PROCEEDING: | Application |
ORIGINATING COURT: | District Court, Brisbane |
DELIVERED ON: | 13 December 2005 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 30 November 2005 |
JUDGE: | McGill DCJ |
ORDER: | Default judgment of 23 September 2005 set aside |
CATCHWORDS: | PRACTICE – Default judgment – setting aside – whether irregular – judgment ought not to have been signed – set aside. Service and Execution of Process Act 1992 (C’w’th) s. 11(4), (11). Anlaby v Praetorius (1888) 20 QBD 764 – applied. Armitage v Parsons [1908] 2 KB 410 – distinguished. Botha v Carter [2005] QDC 49 – followed Daly v Silley [1960] VR 353 – applied. Dibeek Holdings Pty Ltd v Notaras (1998) 143 FLR 132 – applied. Gamble v Killingsworth [1970] VR 161 – applied. Luka Brewery v Grundmann [1985] 2 Qd R 204 – followed. Pace v Neil (1893) 19 VLR 393 – applied. Thomas v Deputy Commissioner of Taxation [2005] QCA 85- applied Vosmaer v Spinks [1964] QWN 36 – followed. White v Weston [1968] 2 QB 647 – cited. |
COUNSEL: | B.D.O'Donnell QC for the plaintiff J.W. Peden for the defendant |
SOLICITORS: | Nicol Robinson Halletts Lawyers for the plaintiff Flower and Hart Lawyers for the defendant |
- [1]This is an application to set aside a default judgment. On 23 September 2005 a deputy registrar gave judgment, on the basis that the defendant had not filed a notice of intention to defend, that the defendant pay the plaintiff $248,598.60 inclusive of interest and costs. That judgment was then made the subject of a statutory demand for payment on the defendant, and as a consequence an application was filed on 11 November by the defendant to set aside the default judgment.
- [2]The first issue which arises in relation to the application is whether the judgment was entered regularly or irregularly. It is of course well recognised that if the judgment was entered irregularly the defendant is entitled to have it set aside ex debito justitiae[1]. It has been said that where a plaintiff proceeds by default every step must comply strictly with the rules, so that it is a matter strictissimi juris[2]. It was disputed in the present case whether the judgment was regularly or irregularly entered.
The facts
- [3]The defendant is a company and therefore can be served at its registered office[3], which at the relevant time was at the office of a firm of accountants in Adelaide. The Claim and Statement of Claim were issued at the Brisbane registry of the court, and were therefore required to be served in Adelaide pursuant to the Service and Execution of Process Act 1992: UCPR r 123(2). Proof of service is governed by section 11 of the Act, the relevant subsections of which are as follows:
“(4) Service of a process … under this Act by post on a company … is taken to have been proved only if the following are proved:
- (a)It was sent by prepaid post to an address for service on the company …
(ab) it was addressed to the company …;
- (b)The day on which it was posted.
- (3)A process, order or document served by post under this Act is presumed to have been served on the fourth day after the day it was posted unless evidence is adduced that raises real doubt that the process, order or document was delivered by post to the person to whom it was addressed within four days after the day it was posted.”
- [4]On 23 September 2005 the plaintiff’s solicitors filed with the court a request for default judgment. The request recited that the Claim was sent by ordinary prepaid post to the defendant’s registered office under cover of a letter dated 22 August 2005. No Notice of Intention to Defend had been served and the relief claimed remained unsatisfied. There was a calculation of interest up to 19 August 2005, and a separate calculation under the Supreme Court Act for 20 August to 23 September. The amount claimed by way of costs was also particularised.
- [5]Filed in support was an affidavit on information and belief that no amount had been received from the defendant in satisfaction of the Claim, and an affidavit of service[4]. That affidavit exhibited a copy of the Claim and Statement of Claim, the form 1 under the Service of Execution of Process Act, a covering letter which enclosed these documents and a company search which showed the address of the registered office, and affirmed that the deponent:
“Did on 22 August 2005 serve the defendant with a copy of the Claim and Statement of Claim … together with a form 1 (under the Service and Execution of Process Act 1992) by sending same to the registered office address of the defendant as nominated on an ASIC company search I obtained on 22 August 2005 by ordinary prepaid post under cover of letter dated 22 August 2005.”
- [6]That affidavit in my opinion complied with the requirement of section 11(4) of the Act except that it did not prove that it was “addressed to the company”. The letter, a copy of which was exhibited, was addressed to the company, but I think that the requirement in subsection (4)(ab) is concerned with the address on the envelope which is posted rather than what was on the letter inside. This was not adverted to in argument, and on the view that I take it does not matter, but it seems to me that the affidavit of service did not comply with the requirements of section 11(4) and therefore did not prove service in accordance with the Act.
- [7]More importantly, however, it proved the document was sent by post on 22 August 2005. Pursuant to subsection (11) therefore, the Claim and Statement of Claim were presumed to have been served on the fourth day after 22 August 2005, that is on 26 August 2005. The time for filing a Notice of Intention to Defend was “within 28 days after the day the claim is served”: UCPR r 137(1)[5]. The 28 day period therefore began on 27 August[6], so that the last day for filing the Notice of Intention to Defend under the rules was 23 September 2005. Accordingly, the earliest day upon which a default judgment could properly be signed in accordance with the rules was Monday 26 September 2005.
- [8]Default judgments in a proceeding started by a claim are dealt with in division 2 of chapter 9 of the UCPR. By rule 281(1):
“This division applies if a defendant in a proceeding started by claim does not file a notice of intention to defend within the time required under rule 137.”
- [9]The time required under rule 137 extended to and included 23 September 2005. It was not possible to say that the defendant had not filed a notice of intention to defend within that time until after its expiration, so the division did not apply until after 23 September. Accordingly, as at 23 September rule 283(2) which permits the plaintiff to file a request for judgment did not apply, and the plaintiff was not entitled to file the request for default judgment on that day. In addition, rule 283(3) which permits the registrar to give judgment did not apply, and the registrar was not entitled to give judgment, as he did, on 23 September 2005. On the face of the documents filed on 23 September 2005, they had been filed too early, and the deputy registrar ought not to have signed judgment in reliance on them. Unfortunately, this must have been overlooked by the deputy registrar who did sign the judgment.
- [10]The defendant submits that the judgment is therefore irregular, not having been obtained in accordance with the rules. The plaintiff’s answer to this is that the presumption in section 11(11) has been displaced in the present case because there was evidence before the court which “raises real doubt that the process … was delivered by post to the person to whom it was addressed within four days after the day it was posted,” but there was other evidence which showed that the documents had been delivered earlier than the presumed date, so that the time for appearance had in fact expired by the time the judgment was signed.
- [11]The evidence relied on was in the affidavit of the managing director of the defendant filed on 11 November 2005 in support of the application to set aside the default judgment, who swore (paragraph 14):
“Wingate’s registered office is in Adelaide, at the offices of my Adelaide accountant. Despite inquiry of my Adelaide accountant, I have not been able to ascertain why the court documents, being the Claim and Statement of Claim in the District action (sic) were not received by me in Brisbane. My Adelaide accountant is not certain whether it received the court documents or not.”
- [12]Senior counsel to the plaintiff then submitted that other evidence before the court established on the balance of probabilities that the Claim and Statement of Claim were in fact delivered at the registered office on or before 24 August 2004. This was on the basis of the evidence of Mr Magor, a partner of the firm of accountants whose office is the registered office of the defendant. An affidavit of Mr Magor[7], prepared by the defendant’s solicitors but read by counsel for the plaintiff, was before me, and he also gave oral evidence on subpoena by telephone from Adelaide.
- [13]Mr Magor’s evidence was that the accountants did not keep any register or log of incoming mail, but an electronic record was kept of outgoing mail, called a postage log register, which records something being sent to the defendant on 24 August 2005. The relevant line of that register was exhibited to the affidavit, and it shows that on that date something was posted to the defendant at the address of its principal place of business, in Brisbane, identified only by the letters “NRH”, and requiring postage of one dollar. It was suggested that the significance of the letters “NRH” was that the letter for the company would have been identified as coming from the plaintiff’s solicitors, Nicol Robinson Halletts. I am prepared to take judicial notice of the fact that one dollar is the postage charged by Australia Post for a “large letter” and would have been the appropriate postage for an envelope apt to contain the Claim and Statement of Claim, form 1 and letter. Further, Mr Magor could not identify any other reason why a letter would have been sent by his firm to the plaintiff about that time[8]. On the basis of this evidence, and in the absence of any other evidence touching on the point, I am prepared to draw the inference that the Claim and Statement of Claim were in fact delivered to the registered office of the company on or before 24 August 2005.
- [14]If one ignores section 11(11) of the Act, and proceeds on the basis that service has been proved on 24 August, the 28 day period expired on 21 September 2005, so that by 23 September division 2 applied, the plaintiff was entitled to apply for a default judgment, and the registrar was entitled to give it.
Analysis
- [15]The problem with this argument, in my opinion, is that it does not get over the proposition that the judgment which was given by the court was one which ought not to have been given. Further, the request for default judgment upon which it was given was one which ought not to have been filed. At the time that request was filed, the plaintiff’s solicitors knew nothing of the posting log register and its contents, and had no evidence as to the actual delivery of the documents on 24 August. They were at that time relying on the presumption in the Act, but by mistake had sought to rely on it prematurely. I suppose this is the risk you run when trying to sign judgment at the earliest possible opportunity, the risk of having miscalculated the period and applying too soon. It is better to be safe than sorry.
- [16]There is also the consideration that the registrar clearly ought not to have given the judgment on the material which had then been filed. On the face of that material the 28 day period after service had not elapsed, and therefore it should not have been signed. In my opinion the effect of the authorities is that the court has an obligation to set aside a judgment which ought not to have been given[9]; that is to say, one the giving of which was a mistake on the part of the registrar.
- [17]There is also the consideration that rule 282 provides that the plaintiff must prove service of the Claim on the defendant in default before judgment may be given under this provision against the defendant. The rules therefore require not only that the Claim be served but that the plaintiff prove service of the Claim for judgment to be given under this provision. What the plaintiff did by way of compliance with that rule was prove service in reliance on section 11 of the Act, which was effective to prove service, but proved it on 26 August 2005, which was not sufficient to justify signing a default judgment on 23 September 2005. The plaintiff did not before the registrar prove service on the defendant on 24 August 2005, and therefore it did not prove service at a time which justified the signing of default judgment. The judgment which was signed was therefore not one which was signed in accordance with the rules.
- [18]The rules were not complied with, and it follows that the judgment was irregular.[10] It should not have been given, and that situation does not change merely because there is now evidence before me which, had it been available before the registrar, might have been sufficient to satisfy the requirements of the rules so as to justify giving judgment. Its existence now does not change the fact that the judgment which was given, and the judgment the defendant seeks to set aside, was not a judgment given in accordance with the rules, and was therefore irregular.
- [19]I was not told of, nor have I been able to find, any other case where a judgment which was on its face irregular because it had been applied for and signed too soon was saved on proof of additional facts showing that service had been effected in sufficient time. Indeed, I have not been able to find any case where a judgment which, on the material before the registrar, ought not to have been signed, was nevertheless saved by additional material which, had it been before the registrar, would have justified the signing of a judgment.
- [20]On the other hand, in Dibeek Holdings Pty Ltd v Notaras (1998) 143 FLR 132, it was found that the judgment had been signed after the time for delivery of the defence had expired and before the defence was delivered, but the request for default judgment was not supported by an affidavit of non-delivery of the defence. It was held that such an affidavit was required and therefore the judgment which was signed was irregular, and it was set aside, notwithstanding that on the evidence before the judge the defence had not in fact been delivered before the judgment was signed. I also note that in Daly v Silley [1960] VR 353, when the question arose as to whether the defendant had waived the benefit of a rule that time did not run in vacation by entering an appearance after the judgment was signed in default of appearance, Pape J said at page 355: “The matter must be looked at as the circumstances were when the judgment was entered.” In my opinion, both of these decisions tell against the plaintiff’s argument.
- [21]There is plenty of authority that a judgment can be irregular even though on the face of the material before the registrar it was appropriate to sign the judgment, in circumstances where the material before the registrar was not justified, either because the relief claimed or full amount of it was not still outstanding[11], or because service had in fact not been effected in the way sworn to[12]. But that is still a judgment which is irregular, because it is one that has not been obtained in accordance with the rules. The rules in requiring proof of service, and evidence that the claim is unsatisfied, require honest and accurate proof and evidence. It is not just a matter of putting in documents which say the right things, the documents have to be factually accurate. If that has not occurred, the judgment is properly regarded as irregular. But I do not think the converse applies; in my opinion, a judgment which on the documents before the registrar ought not to have been applied for and ought not to have been given is irregular, and it is not able to be saved by showing later that there is other evidence which might have justified it.
- [22]Apart from this, I find the basis by which the plaintiff seeks to avoid the presumption in subsection 11(11) somewhat artificial. In effect I am being asked to look at only one piece of evidence in order to deal with the presumption, and for that purpose to disregard the other evidence, otherwise sought to be relied on by the plaintiff, which suggests that in fact the document was delivered by post within four days after the date it was posted. If I look at all of the evidence adduced, I do not have any real doubt that the process was delivered by post within four days after the day it was posted. But it was submitted by senior counsel for the plaintiff that the presumption was excluded so long as there was some evidence adduced which raised the real doubt, and that the passage in Mr Williams’ affidavit was sufficient for that purpose. In my opinion, the question of whether the presumption is displaced should be determined not by reference to any particular piece of evidence, but in the light of all of the evidence which has been led.
- [23]The artificiality of the plaintiff’s position is shown by the fact that the application to set aside the default judgment came on for hearing initially before another judge on 17 November. At that stage, the evidence of Mr Magor was not available, and if the evidence of Mr Williams was sufficient to displace the presumption, then the position was that there was no evidence then that the document had been delivered at any particular time. At that stage, whether or not the presumption was displaced, the judgment was clearly irregular and ought to have been set aside. However, the plaintiff obtained an adjournment on the basis that it wanted to seek to lead evidence to show the actual date of service, which led to the production before me of the evidence of Mr Magor[13].
- [24]I was not referred to any authority on section 11(11) which clarifies the mechanism by which the presumption may be displaced, but in my opinion, when considering whether real doubt has been raised by evidence adduced, it is necessary to have regard to all of the evidence adduced, not just such part of that evidence as, viewed in isolation, would tend to raise real doubt about the delivery of the process[14]. That appears to me to be the natural meaning of the words used, and also the more sensible and practical interpretation.
- [25]There is also a more technical obstacle that the plaintiff faces. The proviso refers to evidence of non-delivery, whereas the passage from Mr Williams’ affidavit to which I have referred is evidence of non-receipt. But there is high authority that there is a distinction between non-receipt and non‑delivery, and that evidence of non-receipt is not proof of non-delivery[15]. Applying this approach, Mr Williams’ affidavit is not evidence of non-delivery, and therefore not sufficient evidence, even if viewed in isolation, to displace the presumption.
Residual discretion
- [26]In my opinion, this judgment was irregularly entered. The question then arises whether it therefore must be set aside, or whether there is a residual discretion not to do so, which could be exercised on the basis that, in the light of the additional material, it can now be seen that, fortuitously, the judgment was not in fact signed too early. That was the question left open by the Court of Appeal in Thomas v Deputy Commissioner of Taxation (supra). There is earlier authority, binding on me, that, “if the judgment be entered without authority in law and its invalidity be incurable, the court must set it aside ex debito justitia”[16].
- [27]The reference to the invalidity being incurable was enlarged upon by Master Lee QC as he then was in Luka Brewery (supra) at page 209, where he referred to a situation where, “the irregularity is due to an error arising from an accident, slip or omission whereby it may in appropriate circumstances and as a matter of discretion be corrected pursuant to the express power contained in O 32 r 12 (“the slip rule”).” Reference was made to the majority decision in Armitage v Parsons [1908] 2 KB 410, where a judgment which included a sum for costs slightly in excess of that allowed under the appropriate scale was saved by amendment. A similar result occurred in Building Guarantee and Discount Co Ltd v Dolejsi [1967] VR 764 and City Mutual Life Assurance Society Ltd v Giannarelli [1977] VR 463.
- [28]These were cases where the problem with the judgment was not that the judgment ought not to have been signed at all, but rather that, due to an error, the judgment was for a greater sum than that properly allowed by law[17]. The problem in the present case is not that the amount of the judgment is wrong; the registrar ought not to have signed judgment that day at all. In my opinion, therefore, this is not a case where the irregularity can be cured by amendment, and therefore it does not fall within the exception identified in the authorities. In those circumstances, the language used in Vosmaer indicates that there was no discretion[18], at least prior to the UCPR.
- [29]There are plenty of authorities that a judgment which is signed too early will be set aside as irregular: Anlaby v Praetorius (1888) 20 QBD 764; Pace v Neil (1893) 19 VLR 393; Gamble v Killingsworth [1970] VR 161 at 168; Botha v Carter [2005] QDC 49. In none of these is there any suggestion that the irregularity can be overcome by amendment, or otherwise cured, or that there is any discretion to overlook it.
- [30]In Thomas it was apparently argued that the terms of UCPR rules 283, 290 and 371 had altered what was there spoken of as the right of a person to have an irregularly entered judgment set aside by the imposition of a discretion. There is certainly nothing in rule 283 to suggest that, but rule 290 provides that the court “may set aside or amend a judgment by default under this division, and any enforcement of it, on terms … the court considers appropriate”. However, that wording was similar to the wording used in the previous Supreme Court rules dealing with setting aside judgment by default, whether of appearance[19] or of pleading[20]. The same applied to the former District Court rule for judgment by default[21]. There is in my opinion no reason to think that the reproduction in r 290 of the terminology used in the former rules was intended to effect any change in the established law in relation to judgments irregularly entered.
- [31]The position is the same in relation to rule 371, which provides that a failure to comply with the rules is an irregularity and does not render an order made a nullity; the term “order” includes judgment: schedule 4. But this also had an analogue in the previous rules, in O 93 r 17. It is true that the specific orders contemplated by sub-rule 371(2) are in different terms from O 93 r 17(2), but the difference is that the new sub-rule (2) is more specific than the former, and contains the express provision that the court may “declare a document or step taken to be effectual”: sub-rule (2)(d). As to this, it may be noted that although sub-rule (2)(b) gives an express power to set aside an order made in the proceeding, paragraph (d) does not contain expressly a power to declare an order made in breach of the rules to be effectual. The rule as a whole seems to distinguish between a proceeding, a document, a step taken and an order made, and a judgment falls into the last of these categories.
- [32]In my opinion the introduction of the UCPR did not change the law in relation to irregularly entered judgments. I would add that it has been said on this subject: “If as a technical matter, it is a matter of discretion to set aside the judgment, in accordance with settled practice the court can only exercise its discretion in one way, namely, by granting the order sought.”[22]
- [33]In my opinion, therefore, the defendant is entitled to have the default judgment of 23 September 2005 set aside, and the costs of the application[23]. In these circumstances it is unnecessary for me to consider whether, if the judgment had been regularly entered, on the material filed it was appropriate to set it aside anyway. The oral evidence did not touch upon that matter, and accordingly I do not think there is any necessity for me to consider it; if a different view as to the regularity of the judgment should be taken elsewhere, then that court will be in at least as good a position as I am to determine whether on the material the judgment if regular ought to be set aside[24]. I will when delivering this judgment deal with the time of filing a notice of intention to defend and defence, and give any other appropriate directions.
Footnotes
[1]Anlaby v Praetorius (1888) 20 QBD 764 at 768, 771; Hughes v Justin [1894] 1 QB 667 at 669; Vosmaer v Spinks [1964] QWN 36; Luka Brewery v Grundmann [1985] 2 Qd R 204 at 209; Thomas v Deputy Commissioner of Taxation [2005] QCA 85 at [13]. In the last of these cases the question of whether under the UCPR there is still a discretion not to set aside an irregularly entered judgment was expressly left open.
[2]Hamp-Adams v Hall [1911] 2 KB 942 at 945; Vosmaer (supra); Luka Brewery (supra) at 209, where it was said that, “Strict compliance is therefore a condition upon which the right to enter a default judgment depends.” See also Dibeek Holdings Pty Ltd v Notaras (1998) 143 FLR 132 at 139.
[3]UCPR r 107; Corporations Act 2001 s. 109X; Service and Execution of Process Act 1992 s 9(1).
[4]Affidavit of Chothia filed 23 September 2005.
[5]This is longer than the minimum period specified in the Commonwealth Act, so this time period is the operative one: section 17(1)(a)(ii).
[6]Botha v Carter [2005] QDC 49. As there pointed out by Robin DCJ, the annotation to the contrary in Civil Procedure Queensland at [r 137.1] is wrong, being based on a decision on a differently worded rule, RSC O 5 r 9. See the discussion in AGC (Advances) Ltd v Mack [1989] 1 Qd R 482. The annotation is also incorrect as to the time limited under the Act.
[7]Sworn 25 November 2005, and filed by leave.
[8]The plaintiff’s solicitor did not send anything else to the registered office at about this time: Affidavit of Nobbs sworn 29 November 2005 and filed by leave.
[9]Botha v Carter (supra); R.T. Co Pty Ltd v Minister for the Interior (1957) 98 CLR 168 at 170.
[10]Luka Brewery (supra) at p. 209.
[11]Hughes v Justin (supra); Kwong, Loong and Co v Kwong [1907] QWN 65; Muir v Jenks [1913] 2 KB 412; Bolt and Nut Co (Tipton) Ltd v Rowlands Nicholls and Co Ltd [1964] 2 QB 10.
[12]Thomas Bishop Ltd v Helmville Ltd [1972] 1 QB 464.
[13]Her Honour also gave a direction that the plaintiff file and serve all the material that it intended to rely upon in the application by 4 pm on 25 November 2005; that direction was not complied with by the plaintiff.
[14]This issue was not considered, and did not arise for consideration, in Howship Holdings Pty Ltd v Leslie (1996) 41 NSWLR 542 at 548, concerning the cognate provisions of s. 160 of the Evidence Act 1995.
[15]Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at 97.
[16]Vosmaer v Spinks [1964] QWN 36, a decision of the Full Court of Queensland.
[17]In Giannarelli (supra) the debt was not disputed, just the interest which was the cause of the irregularity.
[18]See also Anlaby v Praetorius (supra) where the existence of a discretion was rejected by Fry LJ at p 769.
[19]O 15 r 10, “Any judgment by default under this order may be set aside …”
[20]O 31 r 15, “Any judgment by default under this order may be set aside …”
[21]District Court rule 146(4), “A judge may set aside or amend a judgment by default under this rule …”
[22]White v Weston [1968] 2 QB 647 at 659 per Russell LJ.
[23]Bolt and Nut Co (Tipton)Ltd v Rowlands Nicholls and Co Ltd [1964] 2 QB 10 at 21. Williams, Supreme Court Practice (Victoria) 2nd Ed p 1184 para [13.10.2]; Dibeek Holdings Pty Ltd v Notaras (supra) at p 139.
[24]It may be in a better position; the Court of Appeal may be prepared to adopt a more robust approach to what has to be shown by way of defence at this stage than would be appropriate for a single judge.