Ballandean Investments P/L v City Pacific Limited (in liq)

Ballandean Investments P/L, as the appellant, sought a declaration and orders from the Queensland Supreme Court that no moneys were owed under a mortgage registered in favour of City Pacific Limited, the first respondent. The mortgage was expressed as being granted to City Pacific Limited in its capacity as the responsible entity of a managed investment fund. Following the first respondent's liquidation, City Pacific Limited in Liquidation, the second respondent, replaced the first respondent as the responsible entity. The appellant argued that no moneys were owed under the mortgage and, after the first respondent failed to file a defence, obtained a default judgment. The second respondent then sought to set aside the default judgment, arguing that the rights under the mortgage had vested in it by virtue of its substitution as the responsible entity, and that the default judgment was irregularly entered. The second respondent also claimed that it had an arguable defence justifying the exercise of the Court's discretion to set aside the default judgment.

The court was required to determine several legal issues. Firstly, whether an application to set aside a contested default judgment could be heard by a judge of the Trial Division, or whether it had to be heard by the Court of Appeal. Secondly, whether the rights under the mortgage became vested in the second respondent by virtue of its substitution as the responsible entity. Thirdly, whether the default judgment was irregularly entered. Fourthly, whether the second respondent had an arguable defence justifying the exercise of the Court's discretion to set aside the default judgment.

The court found that the application to set aside the contested default judgment could be heard by a judge of the Trial Division. The court also found that the rights under the mortgage did not vest in the second respondent by virtue of its substitution as the responsible entity. The court further found that the default judgment was not irregularly entered. Finally, the court found that the second respondent did not have an arguable defence justifying the exercise of the Court's discretion to set aside the default judgment. The appeal was dismissed with costs.

The court made no orders other than to dismiss the appeal with costs.