Ali v Twiyo Trading Trust

[2018] QCATA 67

CITATION:

Ali v Twiyo Trading Trust [2018] QCATA 67

PARTIES:

Daniel Farook Ali
(Appellant)

v

Twiyo Trading Trust

(Respondent)

APPLICATION NUMBER:

APL271-17

MATTER TYPE:

Appeals

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Member Hughes

DELIVERED ON:

8 May 2018

DELIVERED AT:

Brisbane

ORDERS MADE:

1.    Leave to appeal granted.

2.    Appeal allowed.

3.    The Order refusing the Application filed on 20 July 2017 to set aside the default judgement entered on 27 June 2017 is set aside.

4.    The Application filed on 20 July 2017 to set aside the default judgement entered on 27 June 2017 is remitted to the Tribunal for determination according to law.

CATCHWORDS:

APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – interference with discretion of Tribunal below – where application to set aside default judgement – where relevant consideration is whether default judgement regularly entered – where legal capacity of applicant relevant issue – where applicant is trust – where trust cannot be party to legal proceedings – where not evident that Tribunal considered whether legal capacity of applicant to have judgement entered in its favour – where Tribunal failed to take into account relevant consideration 

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 28, s 51, s 143, s 146

Anlaby v Praetorius (1888) 20 QBD 764
Aviation Services of Australia Pty Ltd v Byrt [2009] QSC 387
Bradlyn Nominees Pty Ltd v Saikovski
[2012] QCATA 39
Cachia v Grech [2009] NSWCA 232
Ballandean Investments Pty Ltd v City Pacific Limited (in liq) & Anor [2010] QCA 113
Cusack v De Angelis [2008] 1 Qd R 344
DCT v Balnaves, unreported [1998] 1388 FCA, Mansfield J, 30 October 1998
Glenwood Properties Pty Ltd v Delmoss Pty Ltd [1986] 2 Qd R 388
Hughes v Justin [1894] 1 QB 667
Kuswardana v Minister for Immigration & Ethnic Affairs (1981) 35 ALR 186
McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd [1989] 2 Qd R 577

QUYD Pty Ltd v Marvass Pty Ltd [2009]
1 Qd R 41

APPEARANCES:               

This matter was heard and determined on the papers pursuant to section 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld).

REASONS FOR DECISION

What is this appeal about?

1. On 1 August 2017, the Tribunal refused an application by Daniel Ali to set aside a default judgement against him in favour of Twiyo Trading Trust for $25,000. 

2. Mr Ali wants to appeal that decision.

3. Because this is an appeal from a minor civil dispute, leave is required.[1]

   [1]Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’), s 143(3).

4. In determining whether to grant leave, the Tribunal will consider established principles including:

   a)whether there is a reasonably arguable case of error in the primary decision;[2]

   b)whether there is a reasonable prospect that the appellant will obtain substantive relief;[3]

   c)whether leave is needed to correct a substantial injustice caused by some error;[4] and

   d)whether there is a question of general importance upon which further argument, and a decision of the Appeal Tribunal, would be to the public advantage.[5]

Does the Appeal Tribunal have jurisdiction to hear an appeal of a decision to not set aside a decision by default?

[2]QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41.

[3]Cachia v Grech [2009] NSWCA 232, 2.

[4]QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41.

[5]Glenwood Properties Pty Ltd v Delmoss Pty Ltd [1986] 2 Qd R 388, 389; McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd [1989] 2 Qd R 577, 577, 580.

1. Darren Bartsch made submissions on behalf of the Twiyo Trading Trust. He submitted that a decision to set aside a decision by default cannot be appealed.

2. Section 142(2) of the QCAT Act relevantly provides that a party to a proceeding cannot appeal against a decision to set aside a default decision.

3. However, the decision appealed against is a decision to not set aside a decision by default. The effect of not hearing an appeal against a decision to not set aside a default decision would be to finally determine parties’ rights without a proper hearing. That would be contrary to the Tribunal’s mandate to act fairly and observe the rules of natural justice.[6] That cannot be the effect of section 142(2) of the QCAT Act.

   [6]QCAT Act s 28(2), (3).

4. Section 142(2) of the QCAT Act does not apply to a decision to not set aside a decision by default. The Appeal Tribunal does have jurisdiction to hear an appeal of a decision to not set aside a decision by default.

Did the Tribunal fail to take into account a relevant consideration in not setting aside default judgement?

1. The Tribunal may set aside a default decision upon application by a Respondent.[7] In deciding an application to set aside a default judgement, a relevant consideration is whether default judgement has been regularly entered.

   [7]QCAT Act s 51.

2. On 6 June 2017, and before judgement was entered by default, Mr Ali had applied to the Tribunal to strike out the original Application on the grounds that the Applicant was not a legal entity with the capacity to sue or be sued. Although the Application to strike out was dismissed, the legal capacity of the applicant was still a relevant issue in deciding whether to set aside the default judgement, because a judgment entered in favour of a party who has no entitlement to it is irregular.[8]

   [8]Ballandean Investments Pty Ltd v City Pacific Limited (in liq) & Anor [2010] QCA 113, (Holmes JA, as Her Honour then was) [27]; citing with approval Anlaby v Praetorius (1888) 20 QBD 764, 769 and Hughes v Justin [1894] 1 QB 667, 669-670.

3. The Applicant is a trust. A trust is not a separate legal entity but a description of a legal relationship characterised by a collection of duties, disabilities, rights and powers in relation to some specific property imposed upon, or accorded to, an existing legal person, the trustee.[9]

   [9]DCT v Balnaves, unreported [1998] 1388 FCA, Mansfield J, 30 October 1998.

4. A consequence of a trust not being an entity separate from the trustee or beneficiaries is that it cannot be a party to legal proceedings. This raises issues about the capacity of the Applicant to obtain judgement for itself,[10] and whether Mr Ali is entitled to have the judgement set aside as of right for being irregularly entered.[11]

   [10]       Aviation Services of Australia Pty Ltd v Byrt [2009] QSC 387, [22] (Martin J).

   [11]Cusack v De Angelis [2008] 1 Qd R 344, [36] (Muir JA).

5. Unfortunately, it is not evident here that the Tribunal considered the issue of the legal capacity of the Applicant to have a judgement entered in its favour. This means that in exercising the discretion whether to set aside the default judgement, the Tribunal failed to take into account a relevant consideration. This failure to take into account a relevant consideration is an error of law.[12]   

   [12]Kuswardana v Minister for Immigration & Ethnic Affairs (1981) 35 ALR 186.

6. For this reason, leave to appeal must be granted to correct a substantial injustice caused by the error. The appeal must be allowed and the matter remitted to the Tribunal for determination according to law.[13]

   [13]QCAT Act, s 146(c).

Should the Appeal Tribunal grant leave to appeal?

1. Leave to appeal is granted and the appeal allowed.

2. The Order refusing the Application to set aside the default judgement should be set aside.

3. The Application to set aside the default judgement should be remitted for rehearing before the Tribunal, where a determination can be made after giving all parties an opportunity to make submissions about the Applicant.

What is the appropriate Order?

1. The appropriate Orders are:

   a)Leave to appeal granted;

   b)Appeal allowed;

   c)The Order refusing the Application filed on 20 July 2017 to set aside the default judgement entered on 27 June 2017 is set aside; and

   d)The Application filed on 20 June 2017 to set aside the default judgement entered on 27 June 2017 is remitted to the Tribunal for determination according to law.