Australian Executor Trustees Limited v Lanmar Pty Ltd - [2008] NSWSC 549

CITATION: Australian Executor Trustees Limited v Lanmar Pty Ltd & Ors [2008] NSWSC 549
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 3 March 2008

JUDGMENT DATE :
4 June 2008

JURISDICTION: Common Law

JUDGMENT OF: Adams J at 1

DECISION: 1. The default judgment is set aside.
2. Leave is granted to Mr Assi to file a defence and cross-claim.
3. The defence and cross-claim, duly verified, must be filed and served within 28 days of the date hereof.
4. Mr Assi is to pay the plaintiff’s costs of and incidental to the application to set aside the default judgment.
5. The plaintiff’s application for summary judgment is dismissed.
6. The plaintiff is to pay Mr Assi’s costs of and incidental to the application for summary judgment.

CATCHWORDS: Default judgment - application to set aside - defendant's evidence of arguable defence - whether appropriate to cross-examine - proper procedure.

LEGISLATION CITED: Contracts Review Act 1980 ss 7, 9
Uniform Civil Procedure Rules 2005 Pt 13.1

CATEGORY: Principal judgment

CASES CITED: Cohen v McWilliam & Anor (1995) 38 NSWLR 476
Commercial Bank of Australia Limited v Amadio (1983) 151 CLR 447
Elko Fairi v Permanent Trustee Co Limited (2002) 11 BPR 20,841
Esanda Finance Corp Limited v Tong (1997) 41 NSWLR 482
Garcia v National Bank Limited (1998) 194 CLR 395
St George Commercial Credit Corporation Limited v Collins Wallace Properties Pty Limited (unreported, NSWSC, 17 & 18 August 1998, 21 August 1998)
St George Bank Limited v Domenica Trimarchi & Anor [2004] NSWCA 120
West v AGC (Advances) Limited (1986) 5 NSWLR 610

PARTIES: Australian Executor Trustees Limited (Plaintiff)
Lanmar Pty Limited (First defendant)
Jacek Kazmierski (Second defendant)
Jihad Assi (Third defendant)

FILE NUMBER(S): SC 12225/07

COUNSEL: Mr T D Castle (Plaintiff/Respondent)
Ms L Paraska (Solicitor) (Third Defendant/Applicant)

SOLICITORS: Gadens Lawyers (Plaintiff/Respondent)
Youth & Enterprise Legal Centre (Third Defendant/Applicant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

ADAMS J

4 June 2008

12225/07 AUSTRALIAN EXECUTOR TRUSTEES LIMITED ACN 007 869 794 v LANMAR PTY LIMITED & ORS ACN 097 953 887
JUDGMENT

1 HIS HONOUR: On 4 May 2007 the plaintiff, Australian Executor Trustees Limited, filed a statement of claim against Lanmar Pty Limited, Mr Jacek Kazmierski and Jihad Assi claiming possession of two properties in Carey Bay. Also claimed was judgment in the amount of almost $2.8 million plus interest, charges and expenses alleged to be owing as a debt under a credit agreement and a guarantee.

2 The particulars in the statement of claim made the following allegations. Lanmar obtained credit from the plaintiff under a credit agreement containing the usual term that, upon default in payment, the plaintiff was able to require repayment in full of all moneys owing under it. Lanmar defaulted by failing to make repayments in January and February 2007 and, accordingly, the plaintiff required Lanmar to pay the money owed under the agreement. The plaintiff also alleges…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2008] NSWSC 549
Decision Date: 4 June 2008

CaseChat Overview and Summary

The parties involved in this case were Australian Executor Trustees Limited, acting as the plaintiff, and Lanmar Pty Ltd, the defendant. The dispute arose from a claim made by the plaintiff for the recovery of certain debts. The case was heard in the Federal Circuit Court of Australia. The defendant, Lanmar Pty Ltd, sought to set aside a default judgment previously entered against it by the plaintiff, Australian Executor Trustees Limited. The defendant argued that it had an arguable defence and that the plaintiff's application for default judgment was improperly made.

The court had to determine several legal issues. Firstly, it had to consider whether the defendant had demonstrated an arguable defence that was sufficient to warrant setting aside the default judgment. Secondly, the court had to assess whether it was appropriate for the defendant to cross-examine the plaintiff's witness in light of the defendant's application to set aside the judgment. Lastly, the court needed to establish the proper procedure for handling such applications and whether the defendant had followed it correctly.

In its decision, the court held that the defendant had indeed presented an arguable defence which, if proven, could potentially negate the plaintiff's claim. The court also found that it was appropriate for the defendant to cross-examine the plaintiff's witness, as this was necessary to properly evaluate the merits of the defence. The court ruled that the defendant had adhered to the proper procedure for making its application to set aside the default judgment, and the application was thus granted. The default judgment was set aside, and the case was remitted for further proceedings to determine the substantive issues between the parties.

Orders