Cellnet Group Ltd v Shea

[2011] QDC 68

[2011] QDC 68

DISTRICT COURT

CIVIL JURISDICTION

JUDGE ROBIN QC

No 3401 of 2007

CELLNET GROUP LIMITED	Plaintiff
and
MICHAEL SHEA	Defendant

BRISBANE

..DATE 31/03/2011

ORDER

CATCHWORDS

Uniform Civil Procedure Rules r 292

Plaintiff seeks summary judgement including amounts for a "service fee", the equivalent of interest, at a high rate - service fee not allowed where claim and statement of claim suggest more modest interest was claimed under the Supreme Court Act 1995 s 47 - defendant did not appear

HIS HONOUR:  The Court makes an order in terms of the initialled draft which gives the plaintiff summary judgment under rule 292 for $217,045.74, $54,639.60 of which is interest.  The order also provides for costs to be assessed on the indemnity basis.

The defendant is sued as guarantor of the obligations of a company which purchased goods from the plaintiff company from around mid October 2005. 

The material which was served on the defendant, who is now self acting, establishes a case for the judgment sought. 

The defence which was filed on the 11th of December 2009 by solicitors then acting for Mr Shea was one of those totally unsatisfactory and unconvincing "do not know" pleadings.

The plaintiff has the advantage of having in recent days obtained admissions in a telephone conversation between Mr Shea and the solicitors that the money was owing, that there was no defence except that he was without funds.  He also said that he didn't want a judgment against him but he hasn't appeared today when called to persuade the Court that on some basis there shouldn't be a judgment.  He's been served with the relevant material and could have responded to it. 

The service, as noted, doesn't extend to the recent affidavit about the conversation and it ought to be made clear that without that the plaintiff would still be adjudged entitled to the relief which it obtains.  That is something less than the relief which was sought. 

The Court has the responsibility of ensuring absent defendants aren't subjected to judgment in an amount larger than what might be appropriate.  It would have been expected that the Court would query the claim for indemnity costs.  That is supported by clause 8 of the relevant terms and conditions of credit which provides:

"That the applicant agrees to pay any and all costs, commissions and legal costs and expenses on a full indemnity basis whatsoever arising from the collection of any overdue moneys.  Such interest, costs and commissions and legal expenses may be recovered as a liquidated debt."

The reference to "such interest" does not pick up any other reference to interest in the document and can only be read as picking up the proceeding paragraph, which is: 

"7.  That the applicant agrees that an account service charge of 1.5 per cent per month may be imposed by Cellnet in the event that clause 1 is not complied with" - clause 1 being the payment provision. 

That "service charge" appears to me to be the equivalent of interest and at a handsome rate far exceeding that of the rate applicable under section 47 of the Supreme Court Act 1995.

The plaintiff's claim was for the aggregate of $130,972.80, the price of goods sold and delivered for which payment hadn't been received and 15 monthly amounts of $1,964.59 being the service charge to and including November 2007, the month in which the claim was issued.

Interest was sought in both the claim and the prayer for relief in the statement of claim on that aggregate of $162,669.94 being $14,878.83 from the 1st of September 2006 to the 19th of November 2007 under the Supreme Court Act 1995 s 47 and thereafter at $35.88 per day.

The plaintiff appears to me, by presenting its claim to Mr Shea in that way, to have abandoned any claim to interest in the form of the "service fee" after 19th of November 2007.  Notwithstanding that, the draft order presented to the Court by Mr Greinke claimed what otherwise would have been the service charge amount as interest.  I don't think that's appropriate in the circumstances of the documents that have been presented to the defendant.  In other words, he shouldn't be suffering a judgment which exceeds anything he has been alerted to.  The interest amount reduces to $54,639.60. 

Mr Greinke conceded that the plaintiff could not obtain for the same period interest under the Supreme Court Act and interest or a "service charge" under a contract, and in the result the plaintiff doesn't obtain that double interest. It's the case that, as things work out, there's an element of interest on interest, but that's something which, in my experience, is common and which the defendant was fully alerted to.

...

HIS HONOUR:  So, order as per initialled draft.

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