Bodycorp Repairers Pty Ltd v Maisano
[2018] VCC 826
•12 June 2018
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
EXPEDITED LIST
Case No. CI-16-03922
| BODYCORP REPAIRERS PTY LTD | First Plaintiff |
| ANTONIO MURDACA | Second Plaintiff |
| v | |
| ANUNIZIATO MAISANO & ORS | Defendants |
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JUDGE: | HIS HONOUR JUDGE MACNAMARA | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 16, 17 May 2018 | |
DATE OF JUDGMENT: | 12 June 2018 | |
CASE MAY BE CITED AS: | Bodycorp Repairers Pty Ltd & Anor v Maisano & Ors | |
MEDIUM NEUTRAL CITATION: | [2018] VCC 826 | |
REASONS FOR JUDGMENT
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Subject:Civil Procedure
Catchwords: Application to set aside default judgment; judgment in default of appearance; judgment to set aside earlier judgment on basis it was procured by fraud; whether arguable defence disclosed; whether explanation given as to reason for failure to enter appearance
Legislation Cited: Bankruptcy Act 1966; Civil Procedure Act 2010;
Cases Cited:Murdaca & Anor v Maisano & Anor [2004] VSCA 123; Bodycorp Repairers Pty Ltd and Antonio Murdaca v Anuniziato Enzo Maisano and Ors [2017] VCC 631; Cabassi v Vila (1940) 64 CLR 139; D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1; Bodycorp Repairers Pty Ltd & Anor v Maisano & Ors [2018] VCC 448; Bodycorp Repairers Pty Ltd v Maisano [No 13] [2018] VSC 96; Clone Pty Ltd v Players Pty Ltd (in Liquidation) (Receivers & Managers Appointed) [2018] HCA 12; Evans v Bartlam [1937] AC 473; Lubura v Nezirevic [2013] VSCA 215; Kostokanellis v Allen [1974] VR 596; Bodycorp Repairers Pty Ltd v Maisano (No 13) [2018] VSC 96; Kuek v Devflan Pty Ltd & Anor [2012] VSC 327; Collins Book Depot Pty Ltd v Bretherton [1938] VLR 40; Evans v Bartlam [1937] AC 473; Everett v Ribbands (1946) 175 LT 143
Judgment: 1. Within 14 days the parties to bring in short Minutes to give effect to these reasons. 2. Costs reserved.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Remy van de Wiel QC Mr J. Levine | Maciel Pizzorno & Co |
| For the First Defendant For the Third Defendant | Self-Represented Mr J. Vagg | Oakley Thompson |
HIS HONOUR:
Background
1 On 5 December 2000, solicitors Oakley Thompson & Co issued a Writ in this Court on behalf of two plaintiffs, Mr Michael Maisano and Mr Rodney Attard. The defendants were Mr Antonio Murdaca and Bodycorp Repairers Pty Ltd (“Bodycorp”) (Proceeding 7955 of 2000). According to the Statement of Claim, the plaintiffs were partners carrying on business under the name Central Malvern Accident Repair Centre. The partnership was said to carry on business from premises at 1439 Malvern Road, Glen Iris. It was said that Bodycorp had granted Mr Maisano a franchise to carry on business under the name “Bodycorp” from premises in Moorabbin in early to mid-1997. (Paragraph 5)
2 In mid-October 1997, it was said:
“The defendants sought to induce the plaintiffs to take over, conduct and enter into a franchise agreement with [Bodycorp] in respect of the automotive repair and panel beating business … which was conducted on and from the Malvern premises.” (Paragraph 6)
3 On 11 June 2002, Judge Harbison granted the plaintiffs leave to file an Amended Statement of Claim which was done on 18 June 2002 which included relatively minor amendments. According to that Amended Statement of Claim, in the second week of October 1997 the defendants made a series of representations to the plaintiffs relative to the Malvern business including the following:
…
(b) The second defendant [Bodycorp] would ensure that as operators of the Malvern business, the plaintiffs would have the benefit of “insurance company recommendations”;
(c) The second defendant [Bodycorp] would secure for the plaintiffs as the operators of the Malvern business “insurance company repair work” and “insurance company recommendations” from “AAMI”, “CIC Insurance”, “Royal Sun Alliance Insurance” and “Allstates Insurance” and a sign stating that the Malvern business was an accredited AAMI repairer;”
4 The matter eventually came on for hearing before the late Judge Hanlon. As was his Honour’s custom, he delivered his judgment ex tempore at the conclusion of the trial. His reasons appear at pages 297 to 304 of the trial transcript (16 October 2002). At page 297 his Honour said:
“Mr Murdaca approached Mr Maisano in relation to the business which became the subject of this dispute with a proposal that arrangements similar to those which governed the transaction at Moorabbin should govern the transaction concerning the carrying on of the business in Malvern Road … Mr Murdaca’s word that the business would be governed in all respects in the same considerations [sic] as those which governed the Moorabbin business which included designation of the business at the premises would be an AAMI recommended repairer and that a sign to that effect would be obtained and could be placed on display at the premises.” (Transcript “T” 297-8)
5 His Honour then turned to correspondence from motor insurer AAMI which his Honour said were “at the very core of this dispute”. (T298) He quoted one of the letters which he said established:
“… beyond a peradventure that at the time of writing the workshop [in Malvern Road] in question was not the site of a recommended repairer from AAMI and any sign which was on or about the premises to the effect that it was a site of recommended repairer was inoperative …” (T299)
6 His Honour conceded:
“… that an effort was being made to obtain the recommendation which had been represented to be one which would be operative to cover the running of the business in the interests of Mr Maisano and Mr Attard.” (T299)
7 Next, his Honour quoted a letter from AAMI to Bodycorp which stated inter alia:
“AAMI will not be adding repairers to our existing recommended repairer panel until further notice.” (T300)
8 That is, there was a moratorium on AAMI’s appointing further authorised or preferred repairers. (T300) This led his Honour to make the following finding:
“It is my view that those documents compel the construction that AAMI was not about to grant recommended repair work status to the works at the corner of Malvern Road and anyone who said that an application was in the works and was going to be processed favourably would be telling lies.” (T301)
9 His Honour, therefore, found that Messrs Maisano and Attard “were misled”. (T303) His Honour continued:
“Mr Murdaca must have known that the prospects of the promises he made being fulfilled were not open at all in the foreseeable future, and he induced Mr Maisano and Mr Attard to enter into the obligations concerned in the agreement concerning the running of the shop which was on a basis which was impossible to fulfil, certainly for the future as far as it could be foreseen at the time that the representations were made.” (Ibid)
10 His Honour concluded:
“The court finds that Mr Murdaca is personally liable as a person involved in the contravention by Bodycorp of the Trade Practices Act and both he and his company are liable to pay to the plaintiffs in this case the sums which they claim as being entitled.” (T304)
11 His Honour accepted the particulars of loss and damage propounded by plaintiffs’ counsel and entered judgment for $79,083.42 plus interest.
12 The defendant filed a notice of appeal to the Court of Appeal, the hearing of which came on before the court on 21 June 2004. The principal judgment in the Court of Appeal was delivered by Nettle JA who allowed the appeal only to the extent of reducing the damages award by “$20,558 in respect of superannuation outgoings”. The judgment as varied, therefore, stood at $58,525.42 plus interest. [2004] VSCA 123 [42]
This proceeding
13 On 31 August 2016, that is, some 12 years after the original proceeding had finally been disposed of by the Court of Appeal and almost 20 years since the occurrence of the events giving rise to the damages award in the original proceeding, solicitors acting for Bodycorp and Mr Murdaca commenced the present proceeding. The first two defendants were Mr Maisano and Mr Attard. There were some 10 defendants in total including Oakley Thompson, AAMI and a number of individuals who gave evidence before Judge Hanlon. The relief sought was as follows:
“AThe judgment dated 16 October 2002 be set aside
BThe proceeding be reinstated and dismissed
CA stay of all proceedings arising out of the judgment dated 16 October 2002
DDamages
ECosts”
14 The Statement of Claim included allegations that a number of persons who were sued as defendants had given false evidence before Judge Hanlon and that the judgment in favour of Messrs Maisano and Attard was obtained by:
“(a) the deliberate non-disclosure of relevant documents;
(b) the deliberate calling of false evidence;
(c) the inducement of the giving of false evidence.”
15 These matters, it was said, indicated:
“… a conspiracy between AAMI and Maisano, acting through their legal representatives to injure Bodycorp and Murdaca in their business with a view to enabling AAMI and Maisano to repudiate their respective agreements with Bodycorp with little fear that Bodycorp or Murdaca would have the financial capacity to bring effective proceedings for damages.” (paragraph 32)
16 Mr Maisano and Attard were said to have agreed to give false evidence “for the purpose of the conspiracy” and
“(b) AAMI through its employees, servants and agents, Martin, Belville and Oswald [5th, 7th and 8th defendants respectively] procured and gave false evidence for the purposes of the conspiracy; and
(c) AAMI through its solicitor, Adam [the 6th defendant] procured false evidence for the purpose of the conspiracy.”
17 By a series of summonses all defendants, except for Mr Attard and Mr Maisano, sought summary judgment against the plaintiffs, Bodycorp and Mr Murdaca, upon a number of grounds. Those summonses were heard by Judge Lewitan who, on 29 May 2017, granted the relief sought; that is, she summarily dismissed the claims against all defendants other than Messrs Maisano and Attard and removed them as parties to the proceeding. [2017] VCC 631. Her Honour held that the only remedy for a judgment obtained by fraud was to have it set aside in accordance with the court’s equitable powers. No damages claim could be brought against non-party witnesses for giving false evidence. She referred to the statement in the High Court of Australia to the effect that no action could be brought against witnesses relative to the evidence which they gave:
“… however false and malicious it may be, any more than [an action] lies against judges, advocates or parties in respect of words used by them in the course of such proceedings or against juries in respect of their verdicts.” Cabassi v Vila (1940) 64 CLR 139, 140
18 Her Honour regarded this principle as precluding Bodycorp and Mr Murdaca from bringing the damages claim for conspiracy against the defendants other than Messrs Murdaca and Attard. Her Honour held that advocates immunity as established by the decision of the High Court of Australia in D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1, precluded the damages claim against Oakley Thompson and Mr Adams. Insofar as the Statement of Claim alleged that there had been a failure to produce or a suppression of documents which ought to have been placed before Judge Hanlon for a variety of reasons, her Honour held that none of these matters was made good. Her Honour refused an application to amend the plaintiffs’ statement of claim [117].
19 Meanwhile, the Writ had been served by email on Mr Maisano but not, it seems, upon Mr Attard. The plaintiffs issued a summons filed 7 April 2017 headed “Summons pursuant to Regulation 22.04” seeking summary judgment, alternatively judgment in default of appearance or defence against the first defendant, Mr Maisano. Eventually, this summons came on for hearing before me on 15 June 2017. Whilst I concluded that Mr Maisano had been served with the Writ and had not entered an appearance within the time limited within the Rules, nevertheless I dismissed the summons. Grant of a summary judgment under Order 22 would have required me to find that Mr Maisano’s defence had no real prospect of success. Since he had not filed a defence, not even having filed an appearance, there was no basis upon which I could reach that conclusion. In broad terms, there seemed to be grounds for entering a judgment in default of appearance against him. However, I was of the view that the judgment of Judge Hanlon, which it was sought to set aside, constituted joint property which could not be dealt with in the absence of having the other co-owner, Mr Attard, before the court. Mr Attard had not been served. To make a determination as to the standing of a judgment which was either held jointly by Mr Attard or by him in common with Mr Maisano would have been, in my view, in breach of the rules of natural justice.
20 During the hearing of the summons, I was informed that Mr Attard had been located. Presumably, this led to his being served with the Writ. The plaintiffs then issued a further summons on 15 November 2017 which was addressed not merely to Mr Maisano, as the summons that had come on for hearing before me was, but also to Mr Attard. Mr Attard had filed an appearance and the summons was served upon him. Mr Maisano had still filed no appearance. The summons was not served upon him, though, as we shall see, according to the plaintiffs he was aware that it was to be heard.
21 This second plaintiffs’ summons came on for hearing before Judge Cosgrave on 31 January this year. In making orders upon the summons, Judge Cosgrave noted in the “Other Matters” section:
“The Court notes although the First Defendant [Mr Maisano] was not represented, the court was satisfied that the First Defendant was served with the Writ and Statement of Claim.”
22 Mr Attard was represented before his Honour by Mr Lionel Wirth of counsel and Mr Levine of counsel represented the plaintiffs. His Honour ordered:
“(1) The judgment of His Honour Judge Hanlon made on 16 October 2002 in favour of the First Defendant is set aside.
(2) The First Defendant pay the Plaintiff damages to be assessed.
(3) The First Defendant pay the Plaintiff’s costs to be agreed or in default of agreement to be taxed.
(4) By consent, the judgment of His Honour Judge Hanlon made on 16 October 2002 in favour of the Second Defendant is set aside.
(5) There be no order as to costs between the Plaintiff and the Second Defendant.”
23 In the wake of his Honour’s orders, the solicitors for Bodycorp and Mr Murdaca wrote to Oakley Thompson in a letter dated 14 March 2018 stating inter alia:
“We have been instructed that your firm has received the sum of $120,883.80 pursuant to the costs orders of Judge Hanlon dated 16 October 2002.
We enclose for your information a copy of the orders of Judge Cosgrave made 31 January 2018, in which the orders of Judge Hanlon (as varied by the Court of Appeal) were set aside.
We therefore have been instructed that your firm is indebted to our client for the sum of $120,883.80 plus interest of $199,587.29.”
24 The letter said that failing payment of that sum within seven days:
“We are instructed to issue proceedings to recover the said sum without further notice.”
25 I was told during the hearing of the present application that this demand for payment is based upon a cause of action for “moneys had and received”.
26 Presumably, Mr Maisano was acquainted with what had transpired before Judge Cosgrave. He filed a summons on 5 March 2018 seeking an order that the judgment entered against him by Judge Cosgrave be set aside. That summons came on for hearing before Judge Anderson on 10 April 2018. His Honour explained the procedural background and stated:
“I was unable to complete the hearing and the matter was adjourned and relisted as a special fixture before the Commercial Division Duty Judge on 16 and 17 May 2018.” [2018] VCC 448 [1]
27 Mr Maisano’s summons came on before me on those dates. Mr Maisano represented himself. The plaintiff were represented by Mr Remy van de Wiel QC and Mr Jeffrey Levine. Mr Vagg of counsel, representing Oakley Thompson & Co, sought an order that he his client be added as a party to Mr Maisano’s summons which Oakley Thompson & Co wished to support. He submitted that such a joinder was in accordance with the step taken by Riordan J in similar circumstances in a proceeding between the same parties in Bodycorp Repairers Pty Ltd v Maisano [No 13] [2018] VSC 96 over the objection of Messrs van de Wiel and Levine for the plaintiffs. I acceded to that application for reasons which I then gave.
Procedural matters
28 What is referred to in this Court as an “appearance” or a “notice of appearance” is no more and no less than what has, in the Magistrates’ Court and its predecessors, traditionally been described as “notice of intention to defend”. It is a single page document merely giving notice of a defendant’s intention to defend the proceeding. It does not require the defendant to disclose in any way the substance of his or her defence or require any legal drafting so long as the appropriate court heading and the name of the defendant and the defendant’s address for service is completed.
29 The face of the Writ that commenced this proceeding addressed “To the defendants” states:
“IF YOU INTEND TO DEFEND the proceeding, or if you have a claim against the plaintiff which you wish to have taken into account at the trial, YOU MUST GIVE NOTICE of your intention by filing an appearance within the proper time for appearance stated below.
…
“IF YOU FAIL TO FILE AN APPEARANCE within the proper time, the plaintiff may OBTAIN JUDGMENT AGAINST YOU on the claim without further notice.
THE PROPER TIME TO FILE AN APPEARANCE is where you served the writ in Victoria, is within ten (10) days after service.”
30 The default judgments which may be entered are provided for in Order 21 of the Court’s Rules. Rule 21.01 entitles a plaintiff attending the Registry to enter a judgment in default of appearance. Where the claim is for recovery of a debt or for the recovery of land, a plaintiff is entitled by filing documents in the court registry to obtain a default judgment for the payment of the debt or the recovery of the land. (Rule 21.03) Where the claim is for damages, the plaintiff may in default of appearance within the 10 day time limit, “enter interlocutory judgment … for damages to be assessed.” (Ibid)
31 In the present instance, Rule 21.03 had no application because the Statement of Claim sought recovery of no debt or possession of no land. Whilst it did include a claim for damages, it sought additional relief by way of setting aside Judge Hanlon’s judgment. The plaintiff’s default action was governed by Rule 21.04 which provides:
“21.04 Judgment other than for recovery for debt, damages or property
(1)Where a claim is made other than for the recovery of a debt, damages or any property, whether or not a claim for such recovery is also made in the proceeding, and the plaintiff is entitled to judgment on that claim against any defendant in accordance with Rule 21.01 or 21.02, the Court may give judgment for the plaintiff upon the statement of claim.
(2)An application for judgment under paragraph (1) may be made without notice to the defendant.”
32 Entry of judgment under this Rule is made not administratively but by application to the court, in this case by way of the summons which came on before Judge Cosgrave. Despite Mr Maisano’s repeated complaints about his not having been served with a copy of the relevant summons, there was no obligation upon the plaintiffs to serve him. The rationale for sub-Rule (2) is presumably that in failing to enter an appearance, that is, failing to give notice of any intention to defend a proceeding, a defendant has effectively conveyed to the plaintiff and to the court that he or she does not desire to participate in the adjudication at all.
Setting aside judgments for fraud
33 The jurisdiction to set aside an earlier judgment on the ground that it has been obtained by fraud was recently considered by the High Court of Australia in the case of Clone Pty Ltd v Players Pty Ltd (in Liquidation) (Receivers & Managers Appointed) [2018] HCA 12 handed down as recently as 21 March this year. The Court, Kiefel CJ, Gageler, Keane, Gordon and Edelman JJ delivered a joint judgment. Their Honours cited with apparent approval a dictum of Sir John Rolt LJ in Patch v Ward (1867) LR 3 Ch App 203, 212-13, where his Lordship said:
“I think, for the reasons which have been given by my learned brother, that the fraud must be actual positive fraud, a meditated and intentional contrivance to keep the parties and the Court in ignorance of the real facts of the case, and obtaining that decree by that contrivance. Mere constructive fraud not originating in actual contrivance, but consisting of acts tending possibly to deceive or mislead without any such intention or contrivance, would probably not be sufficient — at all events I think could not, after such delay as has occurred in this case, be deemed sufficient — to set aside the order which has been made. What, therefore, the Appellant has to do is to satisfy the Court that the decree was obtained by the positive and actual fraud and contrivance of the party obtaining it.”
34 In Wentworth v Rogers (No 5) (1986) 6 NSWLR 534, the New South Wales Court of Appeal, Kirby P (as he then was), Hope and Samuels JJA considered the jurisdiction to set aside a judgment for fraud. Kirby P stated some six principles:
“First, the essence of the action is fraud. As in all actions based on fraud, particulars of the fraud claimed must be exactly given and the allegations must be established by the strict proof which such a charge requires: Jonesco v Beard [1930] AC 298 at 301; McHarg v Woods Radio Pty Ltd (at 497).
Secondly, it must be shown, by the party asserting that a judgment was procured by fraud, that there has been a new discovery of something material, in the sense that fresh facts have been found which, by themselves or in combination with previously known facts, would provide a reason for setting aside the judgment: see Lord Selborne LC in Boswell v Coaks (No 2) (1894) 6 R 167 at 170, 174; 86 LT 365 at 366, 368; Cabassi v Vila (1940) 64 CLR 130 at 147; McDonald v McDonald (1965) 113 CLR 529 at 533; Everett v Ribbands (1946) 175 LT 143 at 145, 146; Birch v Birch [1902] P 130 at 136, 137-138; Ronald v Harper [1913] VLR 311 at 318. This rule has an ancient lineage: see, eg, Shedden v Patrick (1854) Macq 535 at 615, 622; Halsbury’s Laws of England, 4th ed, vol 26, par 560 at 285. It is based upon a number of grounds. There is a public interest in finality of litigation. Parties ought not, by proceeding to impugn a judgment, to be permitted to relitigate matters which were the subject of the earlier proceedings which gave rise to the judgment. Especially should they not be so permitted, if they move on nothing more than the evidence upon which they have previously failed. If they have evidence of fraud which may taint a judgment of the courts, they should not collude in such a consequence by refraining from raising their objection at the trial, thereby keeping the complaint in reserve. It is their responsibility to ensure that the taint of fraud is avoided and the integrity of the court’s process preserved.
Thirdly, mere suspicion of fraud, raised by fresh facts later discovered, will not be sufficient to secure relief: Birch v Birch (at 136, 139); McHarg v Woods Radio Pty Ltd (at 498); Ronald v Harper (at 318). The claimant must establish that the new facts are so evidenced and so material that it is reasonably probable that the action will succeed. This rule is founded squarely in the public interest in finality of public litigation and in upholding judgments duly entered at the termination of proceedings in the courts.
Fourthly, although perjury by the successful party or a witness or witnesses may, if later discovered, warrant the setting aside of a judgment on the ground that it was procured by fraud, and although there may be exceptional cases where such proof of perjury could suffice, without more, to warrant relief of this kind, the mere allegation, or even the proof, of perjury will not normally be sufficient to attract such drastic and exceptional relief as the setting aside of a judgment: Cabassi v Vila (at 147,148); Baker v Wadsworth (1898) 67 LJQB 301; Everett v Ribbands (at 145, 146). The other requirements must be fulfilled. In hard fought litigation, it is not at all uncommon for there to be a conflict of testimony which has to be resolved by a judge or jury. In many cases of contradictory evidence, one party must be mistaken. He or she may even be deceiving the court. The unsuccessful party in the litigation will often consider that failure in the litigation has been procured by false evidence on the part of the opponent and the witnesses called by the opponent. If every case in which such an opinion was held gave rise to proceedings of this kind, the courts would be even more burdened with the review of first instance decisions than they are. For this reason, and in defence of finality of judgments, a more stringent requirement than alleged perjury alone is required.
Fifthly, it must be shown by admissible evidence that the successful party was responsible for the fraud which taints the judgment under challenge. The evidence in support of the charge ought to be extrinsic: cf Perry v Meddowcroft (1846) 10 Beav 122 at 136-139; 50 ER 529 at 534, 535. It is not sufficient to show that an agent of the successful party was convicted of giving perjured evidence in the former proceeding, the result of which it is sought to impeach. It must be shown that the agent, in so acting, was in concert with the party who derived the benefit of the judgment: Ronald v Harper (at 318); Shedden v Patrick (at 643).
Sixthly, the burden of establishing the components necessary to warrant the drastic step of setting aside a judgment, allegedly affected by fraud or other relevant taint, lies on the party impugning the judgment. It is for that party to establish the fraud and to do so clearly. In summary, he or she must establish that the case is based on newly discovered facts; that the facts are material and such as to make it reasonably probable that the case will succeed; that they go beyond mere allegations of perjury on the part of witnesses at the trial; and that the opposing party who took advantage of the judgment is shown, by admissible evidence, to have been responsible for the fraud in such a way as to render it inequitable that such party should take the benefit of the judgment.”
(1986) 6 NSWLR 534, 538-9
35 In Clone’s case, the High Court of Australia reiterated the rule that actual fraud as distinct from something less, such as “misconduct” is essential as a ground to set aside a judgment under this jurisdiction.
Submissions by Mr Maisano
36 Mr Maisano was self-represented. He seems to have been in the eye of the litigious storm with a large volume of litigation involving Mr Murdaca and Bodycorp on the one hand and him and other players in the drama, such as AAMI and Oakley Thompson, on the other. He has prepared a number of filed outlines of submissions. Nevertheless, he is not a qualified legal practitioner and the nature of this proceeding requires a number of very fine distinctions to be made. Most notably, in a proceeding which seeks to set aside a judgment on the basis of its having been obtained by fraud, the arguments which may properly be considered and the evidence which may be admitted, are not those which could be received on a rehearing de novo nor even upon an orthodox appeal to the Court of Appeal. Mr Maisano’s submissions were therefore given at a level of generality and understandably without a fine appreciation of the legal principles or the operation of the Court’s Rules.
37 At the forefront of Mr Maisano’s submissions was a complaint that he had not been served with the summons heard by Judge Cosgrave. This appears to be uncontested though, as previously noted, it is the plaintiffs’ contention that Mr Maisano was aware of the summons and that it was to be heard. I am not aware that Mr Maisano distinctly admitted this or distinctly denied it.
38 Judge Anderson in the circumstances described above had given directions for the parties to file further material prior to the adjourned date for the hearing of Mr Maisano’s summons in May. Mr Maisano had sworn and filed two affidavits in March in support of his summons but he did not avail of the opportunity to file any further affidavits following Judge Anderson’s order.
39 In the first of those affidavits, Mr Maisano complained that a letter covering Judge Cosgrave’s orders was “the first I knew of any hearing on 30 January 2018”. (paragraph 2) He referred to admissions made before the Court of Appeal by senior counsel for the plaintiffs that the summons had not been served upon him. He said:
“The order says that there was no appearance for the first defendant, but how can I appear when I am not served and have no notice?” (paragraph 5)
40 Mr Maisano complained that the plaintiffs had continued to engage “in false and misleading practice”. He said that the plaintiffs had sought to have one Stephen Morrish “sign a false affidavit”. (paragraph 7) Mr Maisano’s affidavit of 5 March then referred to an affidavit which he swore on 3 April 2017 which he said he provided to the second plaintiff, Mr Murdaca, “to assist him against AAMI and in exchange for him giving me immunity so I wouldn’t have to be involved in any more court cases.” (paragraph 8) Mr Maisano explained during the hearing before me that the “immunity” referred to entailed Mr Murdaca, and presumably Bodycorp, not seeking to recover any debts or damages against Mr Maisano.
41 According to Mr Maisano:
“I have never said that I lied in court or gave any false evidence, and I wasn’t going to defend this case because Mr Murdaca was giving me immunity in relation to it.” (Ibid)
42 As I understand this passage, Mr Maisano was not denying that he had said he was not going to defend this proceeding. Indeed, he stated this as a fact in an affidavit. Rather, he was saying that his decision not to defend was conditional upon his being granted “immunity”. Speaking of the affidavit sworn 3 April 2017, Mr Maisano said:
“I wasn’t given an opportunity to check the affidavit and trusted that what I said to Mr Murdaca, was the only thing in it. He didn’t give me a copy of the affidavit afterwards either.” (Ibid)
43 Mr Maisano referred to a further request in “June last year”, viz 2017. Mr Murdaca said he furnished the further affidavit but Mr Murdaca was “continuing to fabricate a case of fraud against me.” (paragraph 12) He referred to “a case of fraud which never happened”. (paragraph 13) Mr Maisano referred to the outcome of proceedings before Riordan J and the Court of Appeal.
44 In his second affidavit sworn 20 March 2018, in that affidavit he deposed to a conversation that he had with Mr Murdaca after receiving an email with the Writ. According to Mr Maisano:
“During our conversation, Murdaca told me that ‘it was for his case against AAMI’. I asked him “Do I have to reply?’ and he said ‘No, it is just to get the judgment against AAMI set aside because of Barry Martin’s file notes’. I can’t recall the exact date of the conversation but it was definitely in late 2016. (paragraph 7)
45 This, said Mr Maisano, was the explanation for his failing to file and appear. In the second affidavit, Mr Maisano returned to the issue of the April 2017 affidavit, complaining:
“I wasn’t given a chance to read it but I say that some of the details on the first page were wrong so I told Tony Isaacs and he changed it. I then signed on the pages where he told me to and Murdaca escorted me from his office approximately 5 minutes after I arrived. I was not given a copy of the affidavit.” (paragraph 11)
46 Mr Maisano continued:
“Once Murdaca reneged on our deal, I told him a number of times that I would defend his baseless case.” (paragraph 13)
47 He continued:
“I don’t know how it can be said that I have not put in an appearance when I emailed the Court and filed an affidavit in the proceeding, unless the plaintiffs didn’t tell Judge Cosgrave about my 14 June 2017 affidavit.” (Ibid)
48 Mr Maisano said that he would have joined with the other defendants in their summary judgment application before Judge Lewitan except that:
“… Murdaca promised me that he would release me from any further court actions.” (paragraph 18)
49 In his submissions on behalf of the plaintiffs to which I will return presently, Mr Levine repeatedly stressed Mr Maisano’s failure to take the simple step of filing the one page document which would have constituted an appearance in the proceeding and which would have prevented the entry of default judgment against him had it been found at any time up to the time of the hearing before Judge Cosgrave. I pressed Mr Maisano on that point when he made submissions in Reply. He told me that it was only a few weeks previously in a hearing before Derham JA that it had been explained to him what an appearance was. This was a statement from the Bar table, not on oath, but some of the passages from his second affidavit, which I have quoted above, appeared to indicate a misconception on his part, at least as at the date of swearing of the affidavits, as to what constituted entering an appearance.
Submissions of Oakley Thompson & Co Pty Ltd
50 In support of Mr Maisano’s application, Mr Vagg of counsel, on behalf of Oakley Thompson & Co Pty Ltd, referred to the finding of “informal” service made by Judge Anderson [2018] VCC 448, where his Honour stated as follows:
The Writ was served by email on Mr Maisano. It appears that no affidavit of service was sworn at the time of service, although later affidavit material was filed deposing to further matters which the plaintiffs relied upon as constituting ‘informal service’ pursuant to Rule 6.11.” [8]
51 Accordingly, submitted Mr Vagg, the entry of judgment in the present case ought not to be regarded as entirely “regular”. According to Mr Vagg, the considerations before the court and considering whether to set aside a judgment in default of appearance under Rule 21.07 were:
(a)whether there is a defence on the merits;
(b)the reasons for the default;
(c)whether the application to set aside was made promptly; and
(d)whether, if judgment is set aside, a suitable award of costs and the giving of security would be adequate to cover the prejudice to the plaintiff in having the judgment set aside.
52 The most important consideration, he said, was the existence of a meritorious defence. Evans v Bartlam [1937] AC 473, 489 adopted by Warren CJ in Lubura v Nezirevic [2013] VSCA 215 [3]; Kostokanellis v Allen [1974] VR 596.
53 Mr Vagg said the present application was “analogous to another claim brought by them in the Supreme Court of Victoria” which was determined adversely to them by Riordan J [2018] VSC 96. In that case, he submitted, Riordan J summarised the principles stated by Kirby P in Wentworth v Rogers (No 5) as follows: First, it must be shown that there are fresh facts which were not considered by the original trial court and not known to the applicant until after conclusion of the trial; secondly, it must be shown that it was the fraud of the successful party in the original trial which was causative of the facts not being known by the applicant; and thirdly, it must be shown that the fresh facts were so material by themselves or in combination that, if proven, the applicants would have succeeded. Precise particulars were required to justify taking the drastic step of setting aside a judgment. Mr Vagg submitted that Riordan J had concluded that if an applicant has evidence of fraud at the time of the trial, it could not fail to raise objection at the time and keep the complaint in reserve. Next, he said that Riordan J had stated that it must be proven that the perpetrator of the fraud was the successful party and it was not sufficient to show that an agent was convicted of perjury; it had to be shown that he was acting in concert with the successful party. Proof of perjury is not, on its own, sufficient. According to Mr Vagg, Mr Maisano’s affidavits did not show that any of the evidence given by the relevant witnesses was false.
54 In any event, he said that none of the matters revealed in the Maisano affidavit could have “caused a different result” if they had been adduced at trial. Mr Vagg said that Judge Hanlon made no finding that Maisano and Attard operated the business under a franchise agreement. Rather, he said, they occupied the store as tenants. In any event, the legal form of their occupancy of the Malvern store would not affect his Honour’s findings as to the representations made. As to the argument that Judge Hanlon should not have accepted the evidence of Messrs Belville, Martin and Oswald that the store was not subsequently placed “on trial” as recommended repairer after Maisano and Attard had left, he said that Judge Hanlon had found that events occurring after Maisano and Attard had left were irrelevant to the determination of the case before him.
55 Mr Vagg noted a finding made by Riordan J in 2018 judgment at [77](d)B]:
“I am not positively persuaded that Maisano was not telling the truth in his evidence before me, or in his evidence in the trial of [the 2005 Supreme Court proceeding].”
56 Mr Vagg observed that the underlying events “occurred approximately 20 years ago”. He said the plaintiffs gave no explanation of the delay in bringing this matter forward. He submitted that the Court of Appeal found in 2004 there was ample evidence before Judge Hanlon to support the findings which he made. In light of the determinations of the Court of Appeal in 2004, of this Court in 2017 (Judge Lewitan) and Riordan J in the Supreme Court in 2018, Mr Vagg said, “axiomatically” Mr Maisano had a defence on the merits. He submitted I should take the step which Riordan J took and dismiss the plaintiffs’ claim against Mr Maisano “on its own motion”.
57 As to the failure to serve the summons on Mr Maisano, Mr Vagg referred to Rule 22.04 of the Court’s Rules obliging a plaintiff to serve a summons under that Order upon the defendant “not less than 14 days before the date for hearing named in the summons”, this Rule, he submitted, was relevant because aside from the invocation of Rule 21.04, on the basis of which Judge Cosgrave entered judgment, the summons also invoked the court’s powers under Order 22.
Submissions on behalf of the plaintiffs
58 The plaintiffs’ submissions in opposition to Mr Maisano’s summons were made in their entirety by their junior counsel, Mr Levine.
59 Mr Levine submitted, first, that the judgment as entered was regular. He referred to Rule 21.04(2).
60 Mr Levine agreed generally with the considerations delineated in Mr Vagg’s submissions as to the relevant considerations for the determination of an application such as the present.
61 Turning to the primary consideration, namely, the existence or otherwise of defence on the merits, he said that Mr Maisano had “failed to file an affidavit deposing that there is a defence on the merits. [He] has also failed to exhibit a proposed defence”. Indeed, said Mr Levine, there was ample material emerging from Mr Maisano himself which was supportive of the plaintiffs’ case. He referred first to Mr Maisano’s affidavit dated 3 April 2017. That affidavit was sworn in the present proceeding but was also exhibited as AM‑B18 to an affidavit of Mr Murdaca sworn 10 March 2018. Mr Levine noted a statement in paragraph 3 of the Maisano affidavit:
“I have no intention of defending this proceeding. I waive any privilege in respect of this affidavit, and I am content to have it filed in Supreme Court proceeding SCI 2016 02044.” (paragraph 3)
62 He noted a statement attributed by Mr Maisano in this affidavit to Mr Murdaca in October 1997:
“I have confirmed with Gino [Francese]. He has agreed to renovations as long as it does not exceed $60,000. Do not exceed $60,000 otherwise you will wear it yourself.” (paragraph 15)
63 He noted amongst the costs which were allowed for at trial were the costs of fitting out the premises borne, according to the findings made by Judge Hanlon, by Mr Maisano and Mr Attard. At paragraph 17 of the same affidavit, according to Mr Levine, Mr Maisano had said:
“I had believed that Bodycorp Malvern would become an AAMI recommended repairer, because of the statements made by AAMI …” (paragraph 17)
64 At paragraph 19 of the same affidavit, Mr Maisano stated:
“I really only really (sic) took notice of what AAMI told me.” (paragraph 19)
65 In paragraph 23, Mr Maisano deposed that Mr Timothy Davies of Oakley Thompson said:
“ ‘We should see about suing Bodycorp.’ He said, ‘We will make them pay for your renovations. That is what all the claim is all about.’ He said, ‘You will get an extra 40,000 for the renovations from Bodycorp.’ I said, ‘But I got that money from Gino Francese and not Tony.’ He said, ‘I have checked the company search, and Troyman is Tony Murdaca’s company and the representations were made by Bodycorp and you have to sue them.’ “ (paragraph 23)
66 He also referred to paragraph 26 of this affidavit where Mr Maisano said:
“During the trial, my counsel, Mark Ravech, Timothy Davies and Ken Adams were present, when they had conferences with the AAMI witnesses, Philip Oswald, Robert Belville and Barry Martin. I went in and out of the conference room. Mark Ravech went through notes of evidence that they would give.” (paragraph 26)
This, said Mr Levine, was indicative of coaching.
67 Next, Mr Levine took me to an affidavit sworn once again in this proceeding by Mr Maisano on 14 June 2017 which was Exhibit AM-B14 to Mr Murdaca’s affidavit of 10 March 2018 where, referring to the April affidavit, to which Mr Levine had just taken me, Mr Maisano said:
“In April of this year I was contacted by the plaintiff Mr Tony Murdaca in relation to giving a reply to file notes that I had previously been shown in 2014 by his associate, Jim Miller. I answered them in the form of an affidavit with his assistance to the best I could recall the events.” (paragraph 8)
68 Mr Levine then took me to a judgment of Elliott J in a proceeding between Oakley Thompson & Co as plaintiff, and Mr Maisano and Bodycorp as defendants, in which Oakley Thompson & Co sought to be allowed to pursue a taxation of costs in the Costs Court against Bodycorp, plaintiff in an earlier proceeding. According to his Honour:
“Oakley Thompson seeks to do so on behalf of Oakley Thompson’s former client [viz Mr Maisano], alternatively in its own right. [2015] VSC 210, [1]
69 Mr Levine referred to findings made by his Honour at paragraphs 131 and 133 of his judgment, referring to what he described as “Mr Maisano’s further affidavit”, that is, the one sworn 17 November 2014, which reference would be made below, as follows:
“131 Fourthly, it was suggested that reliance by Oakley Thompson upon Maisano’s Further Affidavit was improper and breached the implied undertaking to keep documents in another proceeding confidential. The implied undertaking applies to discovered documents and also documents produced under a rule of court or court order. However, Maisano’s Further Affidavit was not produced under compulsion in another proceeding, but was provided voluntarily. Given this fact, this submission was misconceived.
132 Finally, it was submitted an adverse inference should be drawn by reason that the person responsible for creating the trust ledgers at Oakley Thompson was not called as a witness. The accuracy or otherwise of the trust ledgers was not a matter for determination in this proceeding. There is no substance to this submission.
133 With respect to Maisano, there are serious issues as to his credibility which immediately arise from the contents of Maisano’s Further Affidavit. By reason of the contents, either his sworn evidence in that affidavit was truthful (which necessarily means the evidence he gave in the Bodycorp Proceeding was untruthful), or his evidence in Maisano’s Further Affidavit was untruthful. On either scenario, Maisano must have given untruthful sworn evidence.” (Footnotes deleted)
70 Mr Levine took me to the affidavit of 17 November 2014 referred to by Elliott J in the passages quoted from his judgment. This affidavit is sworn in proceeding No 20130141 of 2014 in the Supreme Court of Victoria Court of Appeal relative to an application for leave to appeal by Bodycorp, the respondents to which were AAMI and Mr Martin. Mr Levine took me to the following passages in that affidavit of Mr Maisano:
“I took on that shop [viz the premises in Malvern Road] and gave a half share to the manager of the Moorabbin Shop, Rodney Attard. I took over that shop under a licence agreement of $1,500 per month. The proprietor of this shop was Troyman. … I had visits from Mr Michael Andrus, AAMI Branch Manager, who constantly called in to check on the progress and how long it would be before we would open for business. At this time I recall that the new repairer manager was Barry Martin. (H)e replaced Darren Perryman. Other AAMI people that attended were, Trevor Scott, Assessor and Jillian Sullivan from All States Auto Management. They were all impressed with the work I was doing to the shop and all commented at the quality of the work and the improvement to the shop. The renovations were completed mid to late December 1997. (paragraph 4)
And:
“In about April 1998, I noticed that there was some resistance from some of the AAMI assessors to allow us to quote for the Malvern shop. I made enquiries with Barry Martin of AAMI as to what the problems were. (H)is reply to me was that they were not going to support the Malvern shop and I was shocked to hear that because the shop was up to standards, I had a sign at Moorabbin, everyone was pushing for me to open the shop including Barry Martin. I made contact with Tony Murdaca and told him what Barry Martin had told me. He told me to leave it with me and that he would make some enquiries.” (paragraph 5)
And:
“I was asked to go to a meeting at Mr Franceses (sic) restaurant to discuss the reasons why I wanted to leave. I was also asked to produce all the invoices for the expenses of the renovations. Mr Francese only paid $19,000 and deducted $6,000 for outstanding leasing payments as settlement for the renovation costs. I left the Malvern shop on or about the 29 May 1998 and I am aware that the business was taken over by Miss Debbie Holzer.”
71 Mr Levine also referred to a statutory declaration which, according to the Maisano affidavit, was “signed on 1/9/98”. (paragraph 16) The declaration was exhibited to the Maisano affidavit. The copy of the original was indecipherable and Mr Levine referred me to a re-typed version. He referred to paragraph 7 of the declaration which said:
“During the negotiations in respect of the acquisition of the sub-lease interest I discussed with Mr Murdaca, in the presence of Ralph Murdaca and an investor by the name of ‘Gino’, that Bodycorp would spend up to $60,000 upgrading the Malvern premises which were in a dilapidated condition.” (paragraph 7)
72 In paragraph 6 of the declaration, Mr Maisano referred to the Malvern Road premises as “BJ’s”:
“Mr Murdaca informed Mr Attard and me in early November 1997 that BJ’s was on trial to become an AAMI Recommended Repairer. Mr Murdaca said that BJ’s was due to come up for an AAMI Recommended Repairer sign. Mr Murdaca said words to the effect ‘because you are already an AAMI Recommended Repairer and the shop is on trial it will only be a short while until you get the (AAMI) Recommended Repairer Sign.”
73 Mr Levine stated that Mr Maisano had given no explanation:
“Whether given his propensity to give untruthful sworn evidence, that any reliance can now be placed on the affidavit material that he has filed in support of his application to set aside judgment.”
74 Mr Levine took me to a transcript of Mr Maisano’s evidence in chief before Riordan J on 7 February 2018 at Transcript (“T”) 138 of the hearing before his Honour where he was asked if to the best of his recollection the contents of the statutory declaration were true, and he replied: “Absolutely, absolutely.” (L18-20).
75 Mr Levine contended that aside from what he said was a lack of any defence on the merits to the plaintiffs’ claim, Mr Maisano had not given any explanation or any acceptable explanation for his failure to file a notice of appearance. Mr Levine stressed that he could have taken that step at any time until Judge Cosgrave made his determination. Insofar as Mr Maisano sought to explain his failure by alleging some sort of “deal” or “understanding” with Mr Murdaca that if he cooperated and refrained from filing a notice of appearance he would be granted “immunity”, this could not explain Mr Maisano’s continued failure to file an appearance for months after it was clear he was being denied immunity.
76 Mr Levine took me to email correspondence showing that any apparent understanding or agreement between Mr Murdaca and Mr Maisano had, to Mr Maisano’s understanding, broken down by no later than the middle of last year. Even if Mr Maisano had been under the impression that Mr Murdaca was granting him “immunity”, at some earlier stage the correspondence, according to Mr Levine, showed that he had been disabused of any such understanding by the middle of last year, yet he still filed no appearance.
77 Mr Levine submitted the Rules did not oblige his client to give Mr Murdaca notice of its summons to obtain judgment in default of appearance. He referred to Janaco Pty Ltd v Comande [2013] VSC 4 per Lansdowne AsJ at [19]. He said that the plaintiffs had served Mr Maisano with notice of its summons dated 7 April 2017 for judgment in default of defence. [This is apparently the summons that came on for hearing before me last year.]
78 Mr Levine said:
“The Plaintiff did provide the first Defendant with notice of the application by email dated 17 November 2017 and 15 December 2017. [On 17 November 2017, Mr Murdaca emailed Mr Maisano inter alia ‘Court dates the 27 of oct setting aside of county court judgment. Attard has been served’. (Exhibit AM-B16 to Mr Murdaca’s affidavit of 10 March 2018) On 15 December 2017, Mr Murdaca sent another lengthy email to Mr Maisano stating inter alia, ‘With all of the current matters as for the county court matter it has been adjourned til the new year’.”] (Exhibit AM-B17)
79 Mr Levine referred to the statement in Mr Maisano’s affidavit in April 2017 that he did not intend to defend the proceeding.
80 Mr Levine took me to a bundle of file notes exhibited as TM 9 to Mr Murdaca’s affidavit sworn 27 January 2017. These were documents which, according to Mr Murdaca’s affidavit (paragraph 22), should have been produced by AAMI officers, Mr Barry Martin and Mr Philip Oswald, in response to a subpoena for production of documents. These documents, he said, showed that contrary to the finding made by Judge Hanlon that the Malvern Road shop was not accorded accreditation as an AAMI preferred repairer because of a general moratorium on new appointments in 1997/98, the real reason was a desire by AAMI or some of its officers to “sever all ties” with Bodycorp and its franchisees.
81 Aside from any other consideration, according to Mr Levine, the default judgment ought not be set aside because of the costs incurred by the plaintiffs. Mr Levine referred to a finding made by Elliott J to the effect that Mr Maisano held equity in a property which, according to Mr Levine, was 29 Park Road, Mount Martha sold in 2014. This property had apparently been registered in Mr Maisano’s name but was transferred to his sister in 2010. Mr Levine contended that the disposal in 2014 was a disposition in fraud of creditors. I asked which creditor was defrauded, given that the present proceeding had not been commenced until 2016, and Mr Levine responded that the relevant creditor was Oakley Thompson & Co. I took this matter up with Oakley Thompson’s counsel, Mr Vagg, who stated that, by reliance upon a caveat which it had lodged against the title of that property, Oakley Thompson was paid out approximately $80,000. In Mr Vagg’s submission, therefore, Oakley Thompson had not been defrauded. At any rate, Mr Levine contended that there would be prejudice in setting aside the default judgment because of a five year limitation in s120 of the Bankruptcy Act 1966 to setting aside settlements by persons who are later bankrupt.
82 Mr Levine said, “The Plaintiff [sic] has incurred considerable legal costs that it may never recover unless the costs are paid up front …” He submitted that no order setting judgment aside should be made, save upon terms that it be conditional; viz, the order would stand unless and until Mr Maisano paid the plaintiffs’ costs which should be fixed in a range of $75,000 to $100,000.
83 I asked Mr Levine whether the costs as nominated related solely to the application which was before me. He said that it did. His written submission referred inter alia to a memorandum of fees which he rendered (being AM-B32 exhibited to the affidavit of Mr Murdaca dated 26 March 2018) in the sum of $47,520.
84 Finally, Mr Levine referred to the Civil Procedure Act 2010 and its overriding purpose. He stressed the imperative to avoid undue delay. He referred to the statement by Mukhtar AsJ in Kuek v Devflan Pty Ltd & Anor [2012] VSC 327 where his Honour spoke of exceptional circumstances where delays were “too great to be excused”. This, according to Mr Levine was the situation here relative to the conduct of Mr Maisano. Therefore, said Mr Levine, in light of these egregious breaches of the terms and spirit of the Civil Procedure Act 2010 by Mr Maisano, his application should be denied for this reason alone.
Conclusion
85 It is appropriate first to consider precisely what is alleged in the plaintiffs’ Statement of Claim. The power exercised by the Court under Rule 21.04 is to “give judgment for the plaintiff upon the statement of claim”. It will be recalled that one of the requirements to make good a claim to set aside a judgment for fraud, as stated by Kirby P, as he then was, in Wentworth, is that a successful case to achieve the “drastic step of setting aside a judgment” must “go beyond mere allegations of perjury on the part of witnesses at trial; [so] that the opposing party who took advantage of the judgment is shown, by admissible evidence, to have been responsible for the fraud …” (1986) 6 NSWLR 534, 539
86 In the present case, the Statement of Claim alleged false evidence by the plaintiffs before Judge Hanlon, namely Mr Attard and Mr Maisano, together with a Mr Martin, a Mr Belville and a Mr Oswald. Each of those persons was named as a defendant in the proceeding. The allegations of false evidence are to be found at paragraph 14 of the Statement of Claim. In paragraph 15 it was alleged that the defendants, Oakley Thompson, Davies and Broadbent, were aware that the evidence was false and failed to take any steps “to correct the false evidence given”. The defendants, other than Mr Maisano, have now had the advantage of summary dismissals by Judge Lewitan. What is material for present purposes is that the Statement of Claim does not allege, as would appear to be necessary in accordance with the statement of principle by Kirby P quoted above, that in giving the false evidence, these other persons acted at the behest or request of Mr Maisano. To put it another way, even if everything which is alleged in the Statement of Claim, insofar as they relate to evidence other than Mr Maisano’s, is taken as proven by reason of Mr Maisano’s failure to file an appearance, the matters alleged in the Statement of Claim are not sufficient to make out an entitlement for the plaintiffs to have Judge Hanlon’s judgment set aside according to the principles in Wentworth insofar as the application relies on fraud by non-party witnesses.
87 Insofar as the Statement of Claim relies on allegedly false evidence by Mr Maisano in his affidavit sworn 20 March 2018 (paragraph 21), he said:
“I have never given false evidence in relation to this matter and I have never withheld any documents.”
88 This denial is, to say the least, lacking in specificity. As noted above, he gave explanations as to how he came to swear affidavits (at least three in number) at odds with the case which he made before Judge Hanlon. Mr Levine’s contention is that these denials were simply insufficient to constitute an affidavit as to the merits of a defence. Insofar as this submissions proceeds from the premise that where a default judgment has been regularly entered, an affidavit as to merits of appropriate specificity is essential, the contention must be rejected. In Collins Book Depot Pty Ltd v Bretherton [1938] VLR 40, Martin J, referring to the speeches of the Law Lords in Evans v Bartlam [1937] AC 473, and in particular the speech of Lord Russell of Killowen, rejected the view that such an affidavit was essential. [1938] VLR 40, 32-3. Bretherton’s case was very different from the present. The defendant failed to enter an appearance because of an error made by a clerk employed by his solicitor. He was unable to swear an affidavit as to merits because he was sued as executor of an estate and was not, at the time of his application, armed with facts which would constitute a defence. This constitutes no analogy with the present case.
89 Here, there are other reasons why an affidavit as to merits ought not be regarded as essential. The case against these plaintiffs was proven albeit, according to them, on the basis of fraudulent evidence before Judge Hanlon. The transcript of the proceeding before his Honour still appears to be extant. Portions of it were placed before me for the purposes of this application. That material given on oath constitutes a basis for rejecting the plaintiffs’ claim in the present proceeding.
90 The plaintiffs’ claim here depends also upon fraud constituted by the suppression of documents. These allegedly suppressed documents were considered by Judge Lewitan in her determination. She concluded, as noted above, for a variety of reasons that there was no fraudulent conduct entailed in the non-production of those documents before Judge Hanlon. Her Honour’s judgment is under appeal. The plaintiffs do not accept the conclusions which she reached and continue to challenge them. However, the existence of her carefully considered judgment on these points, on any view, must constitute the existence of a reasonable defence insofar as the plaintiffs’ claim here depends upon alleged suppression of documents. This point was made by Mr Vagg on behalf of Oakley Thompson.
91 Mr Levine took me to other matters which he said were indicative of fraud. One of them related to the ground for AAMI’s refusal to accord the Malvern Road premises preferred repairer status. Judge Hanlon found that this was the result of a general moratorium imposed by AAMI. File notes from AAMI indicated, according to Mr Levine, that the true reason was a desire on AAMI’s part to sever connections with the Bodycorp group. No doubt, a finding by Judge Hanlon along these lines would have put a somewhat different complexion on matters. Nevertheless, the underlying consideration which led to his Honour’s conclusion, namely, that preferred repairer status would not be forthcoming for the Malvern Road premises, would have stood undisturbed. It is not evident, therefore, that these considerations would have affected the decision which he made.
92 Mr Levine also referred to the position of Mr Attard, taking me to correspondence from his solicitors and an affidavit in which he verified the correctness of that correspondence. The effect was, if accepted, that Mr Attard was not a genuine proprietor of the business at Malvern Road and therefore not a proper plaintiff. This material, if known to Judge Hanlon, might have led to his giving judgment to Mr Maisano, alone, and not in favour of Mr Attard, but it would not appear to exculpate the plaintiffs. More pertinently, the status of Mr Attard was not a matter relied on in the plaintiffs’ Statement of Claim. No doubt it would be appropriate to give that matter appropriate weight in favour of the plaintiffs and against the present application if it could be concluded that the plaintiffs might expect leave to amend their Statement of Claim as a matter of course. If the issue of Mr Attard’s status was a “knock-out blow” it would be pointless to set aside a judgment which would inevitably be restored. Here, one cannot necessarily assume that leave to amend would be granted. Judge Lewitan, in giving her determination, refused the plaintiffs leave to amend. The exceptional circumstances attending this proceeding, seeking as it does to re-agitate events occurring now over 20 years ago and after a contested trial and an appeal to the Court of Appeal, make it far from certain that such leave would be forthcoming. Accordingly, I put the matter of Mr Attard’s status to one side.
93 More generally, Mr Levine contended that Judge Hanlon’s judgment depended upon the view that Messrs Attard and Maisano were franchisees of Bodycorp, whereas he said in fact they were mere sub-lessees or sub-licensees. In my view, it is at least arguable that Judge Hanlon’s decision did not depend upon the status under which he found Messrs Maisano and Attard came to become involved with the Malvern premises. He found that they had been given to understand that AAMI recommended repairer status would be granted and that a sign to that effect would be provided and:
“As a result of the falsification of the facts, Mr Maisano, together with Mr Attard, his partner, were induced to enter into the arrangements governing the running of the shop to their financial detriment because no such recommendation was forthcoming from AAMI, nor was any sign forthcoming.” (T298)
94 A consideration which favours the success of this application is that the grant of judgment in default of appearance is discretionary. Everett v Ribbands (1946) 175 LT 143 is an example where that discretion was exercised in the negative. Lord Goddard CJ declined to enter a default judgment in a proceeding seeking to set aside an earlier judgment for fraud. His discretionary determination was upheld by the English Court of Appeal. (Morton and Somervell LJJ) In dismissing an application made by the same plaintiffs to set aside another judgment as part of the broader struggle between them and Mr Maisano, AAMI and others, Riordan J said:
“[85]Even if I was not prepared to summarily dismiss Bodycorp’s claim against Maisano, I would not have been prepared to enter judgment in default of appearance or defence for the following reasons:
(a) Although said in the context of parties seeking to set aside a judgment by consent on appeal, the Court needs ‘to be affirmatively satisfied that there should be a rehearing, given the potential cost and resource implications involved’ before setting aside a judgment of the Court. I consider that this principle would apply with at least equal force to an unopposed application in the trial division to set aside a judgment for fraud.” [emphasis added] ([2018] VSC 96)
95 His Honour’s pronouncement to this effect was made after the judgment which this application seeks to set aside was granted.
96 Mr Levine contended that Mr Maisano was shown to have no credit whatsoever as a witness. I have already recorded the multiple contradictions which are to be found in his evidence, contradictions of the case made before Judge Hanlon, and of intermediate positions taken up since Judge Hanlon’s judgment and before the present application. An application such as the present, however, is not an occasion on which it is proper to make determinations as to credit, and Mr Levine’s submission invites me to do that. As the learned editors of Civil Procedure Victoria state:
“On the hearing of the application to set aside it is not permissible for the court to seek to resolve disputed questions of fact: Lau v Citic Australia Commodity Trading Pty Ltd [1999] VSCA 34.” [I 21.07.20 3345 (Service 307)]
97 For the reasons explained, I believe that Mr Maisano has established a defence on the merits, albeit in the context of a gravely compromised credibility. Riordan J in similar circumstances said, as quoted above, that he could not be satisfied that the latest position taken by Mr Maisano in denial of fraud involved in obtaining the judgment from Elliott J was not true.
98 Further, in my view, an explanation has been shown as to why this matter was allowed to go by default. It seems, and this was not challenged by Mr Levine for the plaintiffs, that at least initially, Mr Maisano intended not to defend this proceeding and let it go by default on the basis that he had been granted “immunity”. Once it appeared that this was not the case, and he was aware that he was not being granted immunity, this explanation fails to account for his continued failure to file a notice of appearance. The other material, however, indicates that he seems to have been labouring under a misconception as to what entering an appearance entailed. According to the case which he advanced, it was sufficient for him to manifest in some fashion a wish to defend the proceeding. This is not a very compelling or convincing explanation, and it is not directly deposed to in any affidavit. Nevertheless, in my view, in the rather unusual circumstances of the present proceeding, it is sufficient.
99 Accordingly, the application to set aside the default judgment is granted.
100 The next question is whether it should be granted upon the conditions suggested by Mr Levine; namely, that the judgment not be set aside unless Mr Maisano paid costs to the plaintiffs fixed in the range of $75,000 to $125,000.
101 Given the sums of money involved in this proceeding and in Judge Hanlon’s judgment, this sum of money seemed, to say the least, out of proportion. I did not have the opportunity of plumbing the depths of the enmity which exists between these parties. As long ago as 2002, Judge Hanlon railed against the disproportionate expenditure that was undertaken in the course of their disputation. He said:
“It is unfortunately a commonplace in this court to find people squabbling over amounts of money in pursuit of which they spend almost as much, if not as much, on the expenses of litigation as has been the subject of the supposed loss and this is one such case. I express my surprise that mature people would indulge in expenditure of money on such a matter when far better use could be found for it, but such is the way of the world that exists in our society, as I say, this type of thing becomes a commonplace and it falls to the court to resolve it if the parties cannot be sensible and resolve it between themselves.” (T297)
102 His Honour’s words apply with equal force now, multiplied several times over.
103 The default judgment, here in dispute, is not merely a private matter between Mr Maisano, on the one hand, and Mr Murdaca and Bodycorp, on the other. It has ramifications for a large number of former defendants as to their standing and credibility. It has ramifications for the justice system insofar as a judgment obtained after a contested hearing which survived an appeal to the Court of Appeal is being impeached. Imposition of the suggested condition might stultify Mr Maisano’s application to set aside the default judgment. He presented himself as a self-represented litigant devoid of resources and unable to fund representation. Aside from the public interest in having the attack upon Judge Hanlon’s judgment properly ventilated and adjudicated upon, rather than merely going by default, the interests of Oakley Thompson are affected. The plaintiffs have proceeded upon the view that the setting aside of Judge Hanlon’s judgment bestows a right to recover costs taken by Oakley Thompson from the fruits of Judge Hanlon’s judgment plus interest as moneys had and received.
104 The plaintiffs and their counsel would say, no doubt, that Oakley Thompson could themselves pay the plaintiffs’ costs, thereby removing the hurdle to setting aside the default judgment. No doubt they could. Those costs would be allocated to the plaintiffs, not provisionally, but finally. They would have a vested entitlement to them which could not be disturbed based upon anything further which might transpire or be determined in the proceeding. The default which led to those costs being incurred was a default of Mr Maisano, and not of Oakley Thompson. In my view, it would not be a just outcome to cast the burden of those costs upon Oakley Thompson as a condition of their being able to parry the plaintiffs’ attack by having the default judgment set aside.
105 On the question of costs, generally, the argument that the costs incurred on this application are the result of Mr Maisano’s failure to take the steps which the Rules require a defendant in his position to take, seems very strong indeed. I did not hear any submissions from Mr Maisano on the question of costs. In the circumstances I propose reserving the costs for further argument to give him the opportunity to put any matters before me which he desires to on the question. For present purposes I determine only that the application to set aside the judgment succeeds, without any condition that an amount of fixed costs be paid to the plaintiff before the judgment is set aside.
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