Exit Distraction Free Reading Mode
- Unreported Judgment
Nel v Dwyer Corporation Pty Ltd QDC 143
DISTRICT COURT OF QUEENSLAND
Nel v Dwyer Corporation Pty Ltd  QDC 143
MARIA JOHANNA NEL (Plaintiff)
DWYER COROPORATION PTY LTD ACN 010 839 139 TRADING AS DWYER QUALITY HOMES (Defendant)
District Court at Maroochydore
9 August 2019 (ex tempore)
2 and 9 August 2019
CIVIL PROCEDURE – APPLICATION – DEFAULT JUDGMENT – Application to set aside default judgment whether judgment irregular because of absence of cause of action – whether there is satisfactory explanation for defendant’s failure to defend – whether there has been any delay in making the application – whether the defendant has a prima facie defence on the merits – costs
Uniform Civil Procedure Rules 1999 (Qld) r 16, r 144, r 290
Cook v D A Manufacturing Co Pty Ltd & Anor  QCA 52, considered
Cusack v De Angelis  QCA 313; (2008) 1 Qd R 344, considered
Unique Product Marketing Pty Ltd v Bortek Sales Pty Ltd  QDC 314, considered
P Travis for the plaintiff
Axia Litigation Lawyers for the plaintiff
Emmett Grace Lawyers for the defendant
- On 18 December 2018, default judgment was entered against the defendant. The judgment was conditional on the damages being assessed. On 29 July 2019, the defendant applied to have the judgment set aside. It contends the judgment was entered irregularly. In the alternative, it contends the judgment should be set aside in any event.
The basis of the claim upon which the judgment was entered
- On 16 October 2018, Ms Nel filed a Claim and Statement of Claim in this court. It was served on Dwyer Corporation Pty Ltd on 19 October 2018.
- In the Statement of Claim, Ms Nel asserts she is the registered owner of a house located at 15-19 Pheasant Lane, Doonan. Dwyer Corporation Pty Ltd built the house. Ms Nel had contracted Dwyer Corporation Pty Ltd to do so in 2007. The contract included specification for the roof of the home. Ms Nel says the contract was varied by agreement, relevantly, on two occasions. One variation related to the ridge profile of the roof. The other related to the roof material.
- Ms Nel alleges that at all material times she relied on the expertise of Dwyer Corporation Pty Ltd to provide advice in respect of the variations and the implications of the variations on weatherproofing and durability and that Dwyer Corporation Pty Ltd provided no advice in that respect.
- Ms Nel alleges that she took possession of the property in December 2008. Within six months of occupying it, she identified that the roof was leaking. She notified Dwyer Corporation Pty Ltd of that leak and it carried out rectification works.
- Ms Nel pleads that no further leaks were identified between 2009 and 2016 but that on or around 4 June 2016, she discovered a second leak. Ms Nel claims that it was after this time that she discovered a latent defect. She seeks damages for negligence for loss and damage she claims to have suffered because Dwyer Corporation Pty Ltd breached a duty of care she says it owed to her.
The chronology of progress of this matter
- On 14 November 2018, Dwyer Corporation Pty Ltd filed a form headed Notice of Intention to Defend, but changed the substance of the form to assert that the dispute should be heard in QCAT. The form did not attach a defence as required by r 139(1)(b) of the Uniform Civil Procedure Rules 1999.
- On 22 November 2018, Dwyer Corporation Pty Ltd confirmed its intention by filing a Conditional Notice of Intention to Defend. That notice reasserted that the matter is one defined as a building dispute and, as such, should be heard in QCAT.
- On 28 November 2018, the solicitors for Ms Nel sent an email to Mr Dwyer, the sole director of Dwyer Corporation Pty Ltd. The email requested urgent service of the notices that had been filed with the court. No response was received to that correspondence.
- Dwyer Corporation Pty Ltd did not apply for an order under r 16 of the Uniform Civil Procedure Rules 1999 by 5 December 2018, being 14 days from the filing its Conditional Notice of Intention to Defend, as required by r 144(6) of the Uniform Civil Procedure Rules 1999. As such, its Conditional Notice of Intention to Defend became unconditional and it was required to file a defence by 13 December 2018.
- On 6 December 2018, the solicitor for Ms Nel wrote to Dwyer Corporation Pty Ltd notifying it of the obligation to file a defence by 13 December 2018 and advising that if it failed to do so, the solicitors would seek instructions to apply for default judgment. No response was received to this correspondence.
- Dwyer Corporation Pty Ltd did not file a defence by 13 December 2018.
- On 18 December 2018, default judgment was entered, conditional on the damages being assessed.
- On 5 July 2019, the court issued a Notice of Hearing – Assessment of Damages and set the hearing down for 19 July 2019.
- On 19 July 2019, Mr Dwyer appeared in person. His Honour Judge Long SC ordered that on or before 29 July 2019, Dwyer Corporation Pty Ltd file and serve any application to set aside the default judgment entered on 18 December 2018, together with supporting material to be relied upon. His Honour also ordered the application to be heard on 2 August 2019.
Was the judgment regularly entered?
- Dwyer Corporation Pty Ltd submits that the judgment was irregularly entered because parts of the Statement of Claim, being paragraphs 17(d), 17(e), 25(d) and 25(e) do not give rise to a cause of action. It submits there is no present damage, only possible future damage, and damages remain the “gist of a negligence action.” It submits that, as such, the Statement of Claim breaches r 150 of the Uniform Civil Procedure Rules 1999 as it does not plead any cause of action. It submits the plaintiff knew, or ought reasonably to have known, that she was not entitled to the judgment.
- In Cusack v De Angelis  QCA 313; (2008) 1 Qd R 344, Justice of Appeal Muir JA (with whom Justice Lyons agreed) considered the authorities relating to irregularly entered judgments and the entitlement to have them set aside. His Honour said:
“ It has been long accepted that a defendant is entitled to have an irregularly entered judgment set aside as of right, subject to the exercise of a power of amendment and the futility of interfering with the judgment. Such judgments are the product of the exercise of administrative acts performed without legal authority. Irregularity, as that term is used in relation to default judgments, normally results from a failure to comply with the rules of court relating to the entering of default judgments.
 But the concept of irregularity has been given a more extended meaning. A number of cases support the proposition that where judgment is entered for too large an amount, the defendant is entitled to have them set aside ex debito justitiae. In some of these cases such default judgments have been treated as having been irregularly entered.
 The cases in which default judgments have been held to be irregular are ones in which there was either some deficiency in the steps prerequisite to the entering of default judgment or an abuse of process or something akin to it resulting from the plaintiff’s obtaining a judgment to which the plaintiff knew or ought reasonably have known he or she was not entitled. …”
- A pleading must inform the other party of the claim made against that party, and the facts upon which the claim is based and which in law entitle the plaintiff to the relief sought. It must also disclose the nature and the amount of the damages claimed.
- In this case, the Statement of Claim pleads the content of the duty owed by Dwyer Corporation Pty Ltd, the breach of that duty by Dwyer Corporation Pty Ltd, that the breach caused Ms Nel’s loss or damage and the loss and/or damage suffered. It contains sufficient material facts to found a cause of action.
- For those reasons, I do not accept that the pleading is so deficient as to amount to an abuse of process or something akin to it. The judgment was regularly entered.
Should the judgment be set aside even though it was regularly entered?
- Under r 290 of the Uniform Civil Procedure Rules 1999 (Qld), the court may set aside or amend a judgment by default, on terms, including terms about costs and the giving of security, the court considers appropriate. The discretion is a broad.
- In Unique Product Marketing Pty Ltd v Bortek Sales Pty Ltd  QDC 314, His Honour Judge Shanahan identified a number of considerations that might be relevant to the exercise of the discretion, including:
- (a)whether there is a good reason why the defendant failed to file a defence;
- (b)whether there has been any delay by the defendant in bringing the application; and
- (c)whether the defendant has raised a prima facie defence on the merits (raising triable issues).
- Although these matters may inform the exercise of the discretion, there is no requirement for the defendant to satisfactorily address each of them. In Cook v D A Manufacturing Co Pty Ltd & Anor, Justice of Appeal Williams (with whom Chief Justice de Jersey and Justice of Appeal McPherson agreed) said:
“Of more importance for present purposes is the significance which courts in recent times have placed on the fact that the applicant is able to demonstrate an arguable defence on the merits. McPherson J in National Mutual Life Association of Australasia Ltd v Oasis Developments Pty Ltd  2 Qd R 441 at 449-50, citing Attwood v Chichester (1878) 3 QBD 722 and Rosing v Ben Shemesh  VR 173, said that the issue whether the applicant defendant had a prima facie case on the merits “is the most cogent” of the three matters referred to by Kelly J in Aboyne Pty Ltd v Dixon Homes Pty Ltd  Qd R 142. In Aboyne Kelly J had referred to the three relevant considerations being whether the defendant had given a satisfactory explanation for failure to appear, any delay in making the application, and whether the defendant had a prima facie defence on the merits. McPherson J went on to say: “It is not often that a defendant who has an apparently good ground of defence would be refused the opportunity of defending, even though a lengthy interval of time had elapsed provided that no irreparable prejudice is thereby done to the plaintiff”. That passage has received the express approval of this court (Davies, McPherson and Pincus JJA) in National Australia Bank Ltd v Singh  1 Qd R 377 at 380. (See also Troiani v Alfost Properties Pty Ltd  QCA 281.)
Has there been a satisfactory explanation for the failure to defend?
- Until recently, Dwyer Corporation Pty Ltd was a self-represented corporate litigant with a sole director, Wayne Geoffrey Dwyer.
- At the initial hearing of the application on 2 August 2019, the recently engaged legal representatives for Dwyer Corporation Pty Ltd failed to provide admissible evidence providing an explanation for the failure to defend. The hearing was adjourned by one week.
- In an affidavit filed on 7 August 2019, Mr Dwyer deposed to having brain surgery in October 2018 and to having not seen the letter from the solicitors for Ms Nel dated 6 December 2018.
- In light of that explanation, Ms Nel does not now contest the application to set aside the default judgment.
- I consider the explanation to be satisfactory.
Has there been a delay in making the application?
- In his recent affidavit filed 7 August 2019, Mr Dwyer deposes that he became aware of the default judgment when Ms Nel made an application to proceed with respect to the assessment of damages in July 2019. At that time, he wrote a letter to the court claiming that Dwyer Corporation Pty Ltd nor any of its agents or directors has received any further notification or correspondence with respect to the claim. He requested the court acknowledge receipt of the correspondence and inform him of the court’s intentions on where to go from there. He also appeared in person at the next mention date, at which time this court gave him an opportunity to engage solicitors to make an application to have the default judgment set aside.
- Subsequently, Dwyer Corporation Pty Ltd engaged solicitors and the application to set aside judgment was filed on 29 July 2019. It was returnable on 2 August 2019.
- In light of Mr Dwyer’s evidence about his brain surgery, I do not consider the conduct of Dwyer Corporation Pty Ltd to be so egregious as to shut it out on an application such as this.
Does Dwyer Corporation Pty Ltd have a prima facie defence on the merits?
- Mr Dwyer’s affidavit filed 7 August 2019 attaches a draft defence. In the body of his affidavit, he disputes Dwyer Corporation Pty Ltd breached its duty of care in agreeing to vary the roof tiles and the pitch of the upper roof. He asserts that it was Ms Nel’s own conduct that resulted in the leaks, including Ms Nel’s conduct in changing the roof tiles, installing solar panels and cutting the sarking from beneath the roof tiles.
- Mr Dwyer’s evidence in this regard contradicts that given by Ms Nel’s expert.
- In correspondence written to Dwyer Corporation Pty Ltd on 7 August 2019, the solicitors for Ms Nel expressed the view that the defence had little to no prospects of success, but accepted that the bar for satisfying the court of a prima facie defence on the merits is low in an application to set aside default judgment.
- Dwyer Corporation Pty Ltd has shown a prima facie defence.
What orders should be made?
- For the reasons provided above, I am satisfied that an order should be made setting aside the judgment by default.
- Ms Nel seeks its costs of obtaining default judgment and the costs of and incidental to the application to set aside default judgment. It seeks those costs on the standard basis, other than with respect to the appearance on 9 August 2019, which it seeks on an indemnity basis.
- Ms Nel submits that the supporting material relied upon by Dwyer Corporation Pty Ltd at the hearing on 2 August 2019 was wholly inadequate. When that became apparent, Dwyer Corporation Pty Ltd sought and was granted an adjournment to enable it to file further supporting material.
- Upon consideration of the further supporting material, Ms Nel, via her solicitors, wrote to the solicitors for Dwyer Corporation Pty Ltd offering to consent to the default judgment being set aside. The offer was conditional upon Dwyer Corporation Pty Ltd agreeing to pay Ms Nel’s costs of obtaining default judgment and the costs of and incidental to the application to set aside default judgment to be assessed on the standard basis, and to identified future directions for the progression of the matter.
- Dwyer Corporation Pty Ltd did not respond to Ms Nel’s offer.
- Dwyer Corporation Pty Ltd accepts that a self-represented litigant is expected to conduct its own litigation responsibly. However, it submits each party should bear its own costs given Mr Dwyer provides a compelling explanation for his failure to enter a defence or generally conduct the matter judiciously in late 2018 and he acted promptly in July 2019.
- Ms Nel is blameless in the application. It had to be brought because of the manifest failings of Dwyer Corporation Pty Ltd in not protecting its own interests. However, given the lack of response to the early correspondence and the explanation for the lack of response, I am not persuaded to order Dwyer Corporation Pty Ltd to pay the cost of the application for default judgment.
- With respect to the cost of the application to set aside default judgment, I accept Ms Nel’s submissions about the wholly inadequate material filed by the solicitors for Dwyer Corporation Pty Ltd. As to the lack of response to an offer justifying indemnity costs, the affidavit of Ms Raphael does not establish when the email attaching the letter was sent. During the course of the hearing, Ms Raphael sought to clarify the statements in her affidavit. She confirmed that the email was sent around 9 pm on 7 August 2019. She also indicated that although there was no formal response, she spoke to Mr Johnston, the solicitor for Dwyer Corporation Pty Ltd about the offer around midday. He indicated that he had not had an opportunity to obtain instructions about it. I am not persuaded that appropriate time was allowed for a response. Further, an appearance would have been required in any event, as I do not consider the proposed directions that formed part of the offer to be appropriate.
- The following orders are made:
- (a)Pursuant to rule 290 of the Uniform Civil Procedure Rules 1999, the default judgment of 18 December 2018 is set aside.
- (b)The proceedings be transferred to Brisbane and placed on the Commercial List.
- (c)The defendant pay the plaintiff’s costs of and incidental to the application to set aside the default judgment, to be assessed on the standard basis.
- (d)The defendant is to file and serve a defence by 16 August 2019.
- (e)The plaintiff is to file and serve any reply by 30 August 2019.
- (f)The parties perform their duty of disclosure by delivering a list of documents to the other party by 4pm on 13 September 2019.
- (g)The proceeding be listed for review in Brisbane before me at 9.15am on 20 September 2019.
 Vosmaer v Spinks  QWN 36 and Anlaby v Praetorius (1888) 20 QBD 764 (CA).
 Vosmaer v Spinks  QWN 36 and Anlaby v Praetorius (1888) 20 QBD 764 (CA).
 Muir v Jenks  2 KB 412 (CA); Armitage v Parsons  2 KB 410; Hughes v Justin  1 QB 667; Frisch v Bowman  St R Qd 242; Bolt & Nut Co (Tipton) Ltd v Rowlands, Nicholls & Co Ltd  2 QB 10 and Building Guarantee & Discount Co Ltd v Dolejsi  VR 764.
 Cf Anson v Trump  1 WLR 1404 at 1409.
 Cook v D A Manufacturing Co Pty Ltd & Anor  QCA 52, .
 Cook v D A Manufacturing Co Pty Ltd & Anor  QCA 52,  and .
  QCA 52, .
- Published Case Name:
Nel v Dwyer Corporation Pty Ltd
- Shortened Case Name:
Nel v Dwyer Corporation Pty Ltd
 QDC 143
09 Aug 2019