Australian Access Capital Company Pty Ltd v Orio Mortgage Finance Company Pty Ltd
[2016] FCA 534
•16 May 2016
FEDERAL COURT OF AUSTRALIA
Australian Access Capital Company Pty Ltd v Orio Mortgage Finance Company Pty Ltd [2016] FCA 534
File number: VID 1 of 2015 Judge: MURPHY J Date of judgment: 16 May 2016 Catchwords: PRACTICE AND PROCEDURE – failure to meet time limits in self-executing order – failure to meet time limits in stay of judgments and orders – refusal to adjourn application to set aside judgments and orders – judgments and orders stand Date of hearing: 12 May 2016 Registry: Victoria Division: General Division National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Category: Catchwords Number of paragraphs: 24 Counsel for the Applicants: Mr R Shepherd Solicitor for the Applicants: Mason Sier Turnbull Counsel for the Respondents: The Respondents did not appear ORDERS
VID 1 of 2015 BETWEEN: AUSTRALIAN ACCESS CAPITAL COMPANY PTY LTD
First Applicant
GLADYS LIU
Second Applicant
AND: ORIO MORTGAGE FINANCE COMPANY PTY LTD
First Respondent
ORIO HOLDINGS PTY LTD
Second Respondent
SPIROS PSEVDOS
Third Respondent
JUDGE:
MURPHY J
DATE OF ORDER:
12 MAY 2016
THE COURT ORDERS THAT:
1.The Respondents’ interlocutory application dated 15 April 2016 is dismissed.
2.The Respondents pay the Applicants’ costs thrown away of the interlocutory application to set aside judgment, including the costs of today, fixed in the sum of $8,905.
3.Parts of paragraphs 14, 16 and 20 of the reasons for judgment herein, which relate to medical conditions suffered by the Third Respondent, be redacted and suppressed from publication.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT (revised from transcript)
MURPHY J:
This is a matter in which there has been a lengthy history of adjournments, delay and failure to comply with orders by the respondents. The respondents now apply to adjourn their application to set aside default judgment for the applicants and orders made on 10 March 2016 and 8 April 2016. For the reasons I explain, the respondents’ application is refused.
The history of delay
The Originating Application and Statement of Claim were filed on 5 January 2015 and served on the first respondent, Orio Mortgage Finance Company Pty Ltd, and the second respondent, Orio Holdings Pty Ltd, on 6 January 2015. They were served on the sole director of those companies, the third respondent, Spiros Psevdos, on 13 January 2015.
On 5 February 2015 I made orders, by consent, requiring, amongst other things, the respondents to file and serve their Defences by 6 March 2015, and referring the proceedings to a mediation to be concluded by 8 May 2015. The respondents did not file their Defences within the time provided.
On 9 April 2015 the applicants applied for judgment against the first and second respondents in the sum of $1.3 million and interest in the sum of $486,021.92, plus costs. They also applied for judgment against Mr Psevdos with damages to be assessed. The applicants put on detailed affidavits in support of their application.
On the return of the interlocutory application on 5 June 2015 I refused to grant default judgment at that time, but I made self-executing orders that judgment be given for the applicants unless the respondents filed and served their Defences by 30 June 2015. The respondents filed a joint Defence one day before the expiry of that time, on 29 June 2015.
However, the Defence was inadequate, largely comprising bald denials without proper particularisation of the grounds. The applicant sought further and better particulars of the Defence and the respondents failed or refused to provide the same. On 20 August 2015 I made orders for the respondents to provide further and better particulars of the Defence by 11 September 2015. I also made an order, again, referring the matter to mediation to be concluded by 16 October 2015.
The respondents failed to provide further and better particulars of their Defence. Further, the respondents did not attend the mediation that was to be held on 23 November 2015. Mr Psevdos failed to travel to Melbourne for the mediation. According to correspondence from his solicitor he failed to attend despite assuring his solicitors that he would do so. The mediation could not proceed.
On 26 November 2015 the applicants filed another interlocutory application for judgment in default, made returnable on 4 December 2015. That application was adjourned by consent to 29 January 2016.
On 29 January 2016 Mr Psevdos appeared and I granted leave for him to appear for the first and second respondents. I made self-executing orders that judgment be given for the applicants against:
(a)the first and second respondents in the sum of $1.3 million plus interest in the sum of $807,576.43 and further interest under the Practice Note CM 16 from 8 November 2015 until the date of judgment; and
(b)against Mr Psevdos in an amount to be assessed;
unless, within 30 days, the respondents filed further and better particulars of their Defence and paid the costs thrown away of the mediation fixed in the sum of $13,445.10. I fixed 8 April 2016 as the date for the assessment of damages.
The respondents, again, did not meet the time limits in the orders. On 10 March 2016 I gave judgment for the applicants against the respondents in terms of the self-executing orders earlier made.
On 7 April 2016, the day before the assessment of damages was fixed for hearing, Mr Psevdos filed an interlocutory application seeking an adjournment of the assessment of damages pending provision of further and better particulars of the respondents’ Defence and an application to set aside the judgments.
On 8 April 2016, over the respondents’ objection, I assessed the damages and ordered the respondents to pay the applicants’ costs. However, based on Mr Psevdos’ strenuous submissions that he would comply with the orders and properly set out the basis of the respondents’ Defence, I stayed the judgments of 10 March 2016 and Orders 1-5 of the orders of 8 April 2016 (“the judgments and orders”) on condition that the respondents’ file and serve their:
(a)any interlocutory application to set aside the judgment and orders by 15 April 2016; and
(b)any Amended Defence or any affidavit in support of the application to set aside the judgments and orders, by 6 May 2016.
The directions hearing was adjourned to 12 May 2016, at which time the application by the respondents to set aside the judgments and orders was to be heard.
The respondents filed and served an interlocutory application to set aside the judgments and orders within the time limit of the orders, but they did not file an Amended Defence or an affidavit in support of the application to set aside the judgment and orders. The applicants were left in the position that the respondents have never put on a proper Defence and have not been properly informed of the grounds of the Defence, even though the proceedings have been on foot for more than a year.
The application for an adjournment
On 9 May 2016 my chambers received an email from Dr Zachariasz Baran, the treating doctor of Mr Psevdos, which attached a short medical report dated that day. The report states, amongst other things, as follows:
XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX
XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX
XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX
XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX
Mr Psevdos did not flag any application for an adjournment before the medical report arrived in chambers and made no proper application for an adjournment supported by evidence on affidavit. The medical report did not provide an explanation for the respondents’ failure to prepare an amended Defence or an affidavit over the four weeks prior, referring only to the previous two weeks.
On 11 May 2016 Mr Psevdos sent an email to chambers attaching a letter he had sent to the Federal Circuit Court on 14 December 2015. In the email he said that he suffered from what he described as XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX XXXXX XX. He said that he had requested Dr Baran to make representations on his behalf.
The same day, at 11.12 pm, Dr Baran sent an email to chambers in which he said that he had attended Mr Psevdos on an urgent home visit that evening. He confirmed his previous assessment that Mr Psevdos was not fit to travel to Melbourne or to appear before the Court. Dr Baran requested to appear by telephone to support Mr Psevdos’ application for an adjournment, and sought orders that the hearing be vacated and relisted no sooner than seven days later and that any documents be filed no sooner than 16 May 2016.
The refusal to adjourn the application
Dr Baran’s concern for his patient is commendable. However, he is not legally qualified and cannot appear for the respondents, particularly when the first and second respondents are companies. Of course, Dr Baran could give evidence if called by a party, but no party sought to call him. It is also unnecessary for Dr Baran to give evidence, in my view. I have no reason to doubt his diagnosis of Mr Psevdos’ condition or his opinion as to Mr Psevdos’ inability to attend Court on 12 May 2016. I take his correspondence into account in reaching my decision.
I gave judgment in this matter on 10 March 2016 as a result of the respondents’ long-standing failure to properly articulate a Defence, going back to 29 June last year. On 8 April 2016 I made orders assessing damages against the respondents. Notwithstanding the respondents’ repeated failure to comply with Court orders, I granted a stay of the judgments and orders subject to the respondents, by 6 May 2016, putting on either a properly particularised Amended Defence or an affidavit which adequately articulated the respondents’ Defence.
Based on Mr Psevdos’ assurances I allowed him four weeks to put on these materials, and I made it clear to him that if he did not do so within the time allowed the stay on the judgments and orders would automatically lift. Mr Psevdos agreed that four weeks was sufficient time, and he made no mention of XXXXX X XXXXX XX XXXXX X XXXXX X which might affect his ability to meet that time limit.
Again, the respondents failed to comply with the time limits set in the orders. The stay on the judgments and orders lifted by operation of the orders of 8 April 2016 and the applicants became free to enforce the judgments and orders.
Based upon their performance to date I have no confidence that the respondents will take any step to defend the proceeding in a timely manner. Nor do I have any confidence that they will prosecute the application to set aside the judgments and orders in a timely way. The respondents have had repeated opportunities to put on a proper Defence and have never done so. The respondents have already put the applicants to too much expense and delay in a matter in which they are yet to put on a properly articulated Defence.
In the circumstances, it is appropriate to dismiss the respondents’ application to set aside the judgments and orders. Such dismissal does not, however, mean that they cannot commence a fresh application to set aside judgments pursuant to rule 39.04 or rule 39.05. Any such application is a matter for another day.
In passing I also note that the Federal Circuit Court dismissed Mr Psevdos’ application to set aside a bankruptcy notice against him: Psevdos v Commonwealth Bank of Australia (2016) FCCA 978 (Heffernan J) on 28 April 2016. The hearing of the creditor’s petition against Mr Psevdos is listed for 30 May 2016. While this is not a matter of great significance to my decision it also points to the conclusion that it is unlikely that Mr Psevdos will prosecute an application to set aside the judgment entered against him.
I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Murphy. Associate:
Dated: 16 May 2016
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