Burtenshaw Super Pty Ltd v De Castro - [2023] QSC 60

SUPREME COURT OF QUEENSLAND

CITATION:

Burtenshaw Super Pty Ltd v De Castro [2023] QSC 60

PARTIES:

BURTENSHAW SUPER PTY LTD ACN 635 959 572 AS TRUSTEE FOR THE BURTENSHAW SUPERANNUATION FUND

(plaintiff respondent)

v

GUI JORGE DECOSTA NAPOLEAO DE CASTRO

(defendant applicant)

FILE NO/S:

348 of 2022

DIVISION:

Trial

PROCEEDING:

Application

ORIGINATING COURT:
Supreme Court of Queensland

DELIVERED ON:

24 March 2023

DELIVERED AT:

Cairns

HEARING DATE:

16 December 2022

JUDGE:

Henry J

ORDERS:

1.   The plaintiff’s barrister’s email and annexures of 16 December 2022 is admitted and marked as exhibit 1 in the application.

2.   The defendant’s solicitor’s email and annexure of 19 December 2022 is admitted and marked as exhibit 2 in the application.

3.   Application to set aside default judgment dismissed.

4.    Order 1 of the default judgment of 16 September 2022 is amended by:

(a)   deleting $479,483.85 and inserting $437,704.98; and

(b) deleting $90,638.37 and inserting $88,757.03.

5.   Order 2 of the default judgment of 16 September 2022 is amended by deleting $98,704.50 and inserting $65,391.89.

6.   The Court will hear the parties as to costs, if costs are not agreed in the meantime, at 9.15am on 26 April 2023.

CATCHWORDS:

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – HARSH AND UNCONSCIONABLE CONTRACTS AND STATUTORY REMEDIES

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – DISCHARGE, BREACH AND DEFENCE TO ACTION FOR BREACH – REPUDIATION AND NON-PERFORMANCE

CORPORATIONS – FINANCIAL SERVICES AND MARKETS – MARKET MISCONDUCT AND OTHER PROHIBITED CONDUCT – MISLEADING, DECEPTIVE OR UNCONSCIONABLE CONDUCT

EQUITY – GENERAL PRINCIPLES – UNCONSCIONABILITY – UNCONSCIONABLE DEALINGS AND OTHER FORMS OF EQUITABLE FRAUD – KNOWLEDGE – where defendant’s prospective defence relies on allegations of unconscionable conduct in contravention of ss 20 and 21 Australian Consumer Law (Cth) or s12CA Australian Securities and Investment Commission Act 2001 (Cth) or in equity – whether knowledge of plaintiff of defendant’s alleged special disadvantage is established

PROCEDURE — SUPREME COURT PROCEDURE – QUEENSLAND – PRACTICE UNDER RULES OF COURT – DEFAULT OF APPEARANCE – POWER TO VARY DEFAULT JUDGMENT – SCOPE OF POWER – where default judgment was granted in favour of the plaintiff – where no notice of intention to defend or defence was filed – where the defendant applies to set aside summary judgment – whether defendant has a prima facie defence on the merits – whether error in interest calculation in summary judgment warrants setting aside the judgment by default or ought result in an order amending it

Australian Consumer Law (Cth) ss 20, 21, 37
Australian Securities and Investment Commission Act 2001 (Cth) s 12CA
Uniform Civil Procedure Rules 1999 (Qld) r 290
Cusack v De Angelis [2008] 1 Qd R 344
Deputy Commissioner of Taxation v Johnston (2006) 230 ALR 575

Jenyns v Public Curator (Qld) (1953) 90 CLR 113

Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447
Stubbings v Jams 2 Pty Ltd (2022) 96 ALJR 271

COUNSEL:
J Trevino KC for plaintiff respondent

J Seccull for defendant applicant

SOLICITORS:
MacDonnells Law Pty Ltd for plaintiff respondent

Forbes…

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: [2023] QSC 60
Decision Date: 24 March 2023

CaseChat Overview and Summary

The case of Burtenshaw Super Pty Ltd v De Castro involved a dispute between the parties regarding the terms and conditions of an advance agreement and subsequent interest calculations. The matter was heard in the Supreme Court of Queensland, where the plaintiff sought to enforce a default judgment against the defendant. The primary issue before the court was whether the defendant's application to set aside the default judgment should be successful and, if not, whether the interest calculation errors in the judgment warranted an amendment to the judgment by default. The court also considered whether the defendant's prospective defence of unconscionable conduct under the Australian Consumer Law or ASIC Act constituted a prima facie defence on the merits.

The court examined the defendant's application to set aside the default judgment and determined whether a prima facie defence on the merits existed. The defendant's counsel suggested the possibility of other defences under the Australian Consumer Law, but the court found these defences to be unsustainable due to the lack of evidence. The court then addressed the defendant's argument that the interest calculation error in the default judgment warranted setting aside or amending the judgment by default. The court found that the error related to the calculation of interest as compounding instead of simple interest and that the Advance Agreement was arguably unclear on this point. However, the court dismissed the application to set aside the default judgment, finding that the defendant had failed to establish a prima facie defence on the merits. The court, however, considered it appropriate to amend the judgment by default to reflect the correct interest calculation as simple rather than compounding.

The court dismissed the defendant's application to set aside the default judgment. However, it granted the defendant's application to amend the judgment by default to correct the interest calculation errors. The court ordered that the plaintiff's calculation of the judgment sum, as set out in paragraph 7 of the affidavit of Burtenshaw Super's solicitor, be adopted. The court also directed the parties to provide draft orders reflecting the amounts they contended should have been ordered according to their calculations applying simple interest. The court admitted and marked the parties' emails and annexures as exhibits in the application.

The court's final orders were as follows: (1) The plaintiff's barrister's email and annexures of 16 December 2022 were admitted and marked as exhibit 1 in the application. (2) The defendant's solicitor's email and annexure of 19 December 2022 were admitted and marked as exhibit 2 in the application. (3) The application to set aside the default judgment was dismissed. (4) Order 1 of the default judgment of 16 September 2022 was amended to correct the interest calculation errors. (5) Order 2 of the default judgment of 16 September 2022 was amended to correct the interest calculation errors. (6) The court would hear the parties on costs if costs were not agreed in the meantime, at 9.15 am on 26 April 2023.

Orders

Orders of the court

1. The plaintiff’s barrister’s email and annexures of 16 December 2022 is admitted and marked as exhibit 1 in the application.

2. The defendant’s solicitor’s email and annexure of 19 December 2022 is admitted and marked as exhibit 2 in the application.

3. Application to set aside default judgment dismissed.

4. Order 1 of the default judgment of 16 September 2022 is amended by:

(a) deleting $479,483.85 and inserting $437,704.98; and

(b) deleting $90,638.37 and inserting $88,757.03.

5. Order 2 of the default judgment of 16 September 2022 is amended by deleting $98,704.50 and inserting $65,391.89.

6. The Court will hear the parties as to costs, if costs are not agreed in the meantime, at 9.15am on 26 April 2023.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

I record for completeness that during oral submissions Mr De Castro’s counsel suggested there may be other defences available under the Australian Consumer Law such as false or misleading representations about business activities contrary to s 37 thereof. If such a defence was to be relied on in this application it should have been identified in the proposed defence. Furthermore, it would be unsustainable given the absence of evidence of involvement by Burtenshaw Super or Mr Williams in the contemporary business activities between Mr De Castro and Mr Martino or in any representation made in that context by Mr Martino.Should the error in interest calculation result in the setting aside or merely the amending of the judgment by default? It remains to consider the topic of the interest calculation error and its consequence. The error Mr De Castro submits the calculation of monetary amounts in orders 1 and 2 of the default judgment of the Registrar of 16 September 2022 involved error. The error relates to the calculation of interest. The error is said to be that interest was calculated as compounding instead of simple interest. It is a matter which the Advance Agreement was arguably unclear about. For instance, on the one hand it described “outstanding principal” as the aggregate of the advance drawdown which remained unpaid and provided at clause 5.1(a) that interest was to be paid on the outstanding principal. On the other hand at clause 5.2 it provided that interest will “accrue from day to day”. Without formally conceding error, the Burtenshaw Super’s pragmatic approach was to proceed as if there was an error and consent to an amendment of the orders premised upon interest being calculated as simple rather than compounding. Its solicitor filed an affidavit in the present application, setting out at para 7 an alternate set of calculations to those used to secure the default judgment, premised upon interest being calculated as simple rather compounding. The parties were each requested by the Court at the hearing to provide after the hearing a draft order reflecting the amounts they contended should have been ordered according to their calculations applying simple interest. The emails received will be admitted and marked as exhibits in the application. Burtenshaw Super’s counsel’s email to my associate on 16 December 2022 attached a proposed draft order. It was consistent with the aforementioned content of para 7 of Burtenshaw Super’s solicitor’s affidavit. Mr De Costa’s solicitor’s email to my associate on 19 December 2022 advised that Mr De Costa “adopts and agrees with the plaintiff’s calculation of the judgment sum as set out in paragraph 7 of the affidavit of” Burtenshaw Super’s solicitor. Curiously though, the attached draft order still contained a substantial difference in quantum. The equation now presenting itself is best explained by tabulating the relevant amounts as per the orders made in the default judgment and as now calculated by each side, underlining the current discrepancy:

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Burtenshaw Super Pty Ltd v De Castro [2023] QSC 60
PARTIES:	BURTENSHAW SUPER PTY LTD ACN 635 959 572 AS TRUSTEE FOR THE BURTENSHAW SUPERANNUATION FUND (plaintiff respondent) v GUI JORGE DECOSTA NAPOLEAO DE CASTRO (defendant applicant)
FILE NO/S:	348 of 2022
DIVISION:	Trial
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court of Queensland
DELIVERED ON:	24 March 2023
DELIVERED AT:	Cairns
HEARING DATE:	16 December 2022
JUDGE:	Henry J
ORDERS:	1. The plaintiff’s barrister’s email and annexures of 16 December 2022 is admitted and marked as exhibit 1 in the application. 2. The defendant’s solicitor’s email and annexure of 19 December 2022 is admitted and marked as exhibit 2 in the application. 3. Application to set aside default judgment dismissed. 4. Order 1 of the default judgment of 16 September 2022 is amended by: (a) deleting $479,483.85 and inserting $437,704.98; and (b) deleting $90,638.37 and inserting $88,757.03. 5. Order 2 of the default judgment of 16 September 2022 is amended by deleting $98,704.50 and inserting $65,391.89. 6. The Court will hear the parties as to costs, if costs are not agreed in the meantime, at 9.15am on 26 April 2023.
CATCHWORDS:	CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – HARSH AND UNCONSCIONABLE CONTRACTS AND STATUTORY REMEDIES CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – DISCHARGE, BREACH AND DEFENCE TO ACTION FOR BREACH – REPUDIATION AND NON-PERFORMANCE CORPORATIONS – FINANCIAL SERVICES AND MARKETS – MARKET MISCONDUCT AND OTHER PROHIBITED CONDUCT – MISLEADING, DECEPTIVE OR UNCONSCIONABLE CONDUCT EQUITY – GENERAL PRINCIPLES – UNCONSCIONABILITY – UNCONSCIONABLE DEALINGS AND OTHER FORMS OF EQUITABLE FRAUD – KNOWLEDGE – where defendant’s prospective defence relies on allegations of unconscionable conduct in contravention of ss 20 and 21 Australian Consumer Law (Cth) or s12CA Australian Securities and Investment Commission Act 2001 (Cth) or in equity – whether knowledge of plaintiff of defendant’s alleged special disadvantage is established PROCEDURE — SUPREME COURT PROCEDURE – QUEENSLAND – PRACTICE UNDER RULES OF COURT – DEFAULT OF APPEARANCE – POWER TO VARY DEFAULT JUDGMENT – SCOPE OF POWER – where default judgment was granted in favour of the plaintiff – where no notice of intention to defend or defence was filed – where the defendant applies to set aside summary judgment – whether defendant has a prima facie defence on the merits – whether error in interest calculation in summary judgment warrants setting aside the judgment by default or ought result in an order amending it Australian Consumer Law (Cth) ss 20, 21, 37 Australian Securities and Investment Commission Act 2001 (Cth) s 12CA Uniform Civil Procedure Rules 1999 (Qld) r 290 Cusack v De Angelis [2008] 1 Qd R 344 Deputy Commissioner of Taxation v Johnston (2006) 230 ALR 575 Jenyns v Public Curator (Qld) (1953) 90 CLR 113 Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 Stubbings v Jams 2 Pty Ltd (2022) 96 ALJR 271
COUNSEL:	J Trevino KC for plaintiff respondent J Seccull for defendant applicant
SOLICITORS:	MacDonnells Law Pty Ltd for plaintiff respondent Forbes…