Cook and Cook v Bennett

[1992] QCA 326

[1992] QCA 326

COURT OF APPEAL

FITZGERALD P

PINCUS JA
AMBROSE J

CA No 72 of 1992

MAXWELL LEONARD COOK and

GLENYCE DEVELLE COOK  Plaintiffs (Respondents)

and

KIM STEPHEN BENNETT  First Defendant (Appellant)

and

PETER LAWRENCE JOHNSTON  Second Defendant (Appellant)

and

JOHN ANGUS REYMENT  Assignee (Respondent)

BRISBANE

DATE 03/09/92

JUDGMENT

030992

THE PRESIDENT:  At material times, Maxwell Leonard Cook and Glenyce Develle Cook controlled the Family Security Friendly Society.  The applicants, Kim Stephen Bennett and Peter Lawrence Johnston, are the directors of a South Australian financial consultancy, Bennett Johnston Consultants Pty. Ltd.  Between June 1988 and June 1990, Mr and Mrs Cook advanced $280,000 to the applicants.  According to the documentation executed, the money was lent and repayable with interest on demand.  However, the applicant, Johnston, swore that the money advanced was not repayable, interest was not payable, and the documents were only executed to satisfy various purposes of the Cooks.

Action 779 of 1991 was commenced in this Court on 3 May 1991. The Cooks were the plaintiffs, and the applicants were the defendants.  An appearance was entered by the applicants on 7 June 1991, but they failed to deliver a defence, and judgment in default was entered in favour of the Cooks on 23 January 1992 for $334,508.09, together with $441.09 for costs.  Notice of the judgment was immediately given to the applicants.

The respondent, John Angus Reyment, who is the administrator and trustee of the property of the Family Security Friendly Society had instituted a different action in this Court against the Cooks and a number of associated companies.  The trial of that action commenced on 9 March 1992 and proceeded until 20 March when it was settled.  One of the terms of settlement was that the Cooks assigned absolutely to the respondent, Reyment, all their rights, title and interest in the judgment debt in action 779 of 1991.  Notice of the assignment was given to the applicants on 31 March.

By a summons filed on 1 April 1992, the applicants sought to have the judgment in favour of the Cooks in action 779 of 1991 set aside but the application was dismissed by White J. on 7 April.  It is common ground that the time for appeal expired after 10 days, but the applicants did not file and serve a notice of appeal until 28 April.  The applicants now seek orders (i) extending the time for the institution of the appeal and (ii) allowing the appeal and setting aside the judgment.

The applicants failed to explain their default in delivering a defence.  On 26 June 1991, they had requested an extension of one month for that purpose, but did not act in the seven months between that request and the default judgment on 23 January 1992, despite the fact that they had been warned by the Cooks' solicitors that strict compliance with the rules was required.

Further, the applicants did not satisfactorily explain their delay in making the application to set aside the judgment for two months after they were aware that it had been entered, during which time the Cooks assigned the judgment debt to the respondent, Reyment.  Although the applicants had threatened the Cooks that they intended to apply to set aside the judgment some weeks earlier, they did not act until after the assignment had been effected because, they said, they were too busy.

Finally, their only explanation for their failure to appeal within time is that initially it was thought that they had a longer period and they spent some time obtaining material to brief counsel, obtaining advice and instructions to proceed with the appeal, and having counsel prepare a notice of appeal.

The primary Judge described the defence sought to be raised by the applicants as "shadowy" and described as unsatisfactory the absence of any evidence in support from the first applicant.  She was further concerned at the prejudice of the respondent, Reyment, and the investors in the Family Security Friendly Society who are intended to benefit from the settlement entered into in compromise of the litigation between Reyment and the Cooks.

It is possible that insufficient weight was given to the first of the factors in favour of the applicants and that the financial significance of the prejudice to the respondent, Reyment, and those whom he represents, was overemphasised.  Where there are no other material circumstances, mere delay will not ordinarily persuade the Court not to set aside a default judgment.  However, when the balance is adjusted, it remains the fact that either the applicants or Reyment will be prejudiced by the amount recoverable from the applicants under the judgment depending on whether it stands or is set aside.

Further, the essential cause of the present difficulty is that applicants' persistent pattern of delay which is not satisfactorily explained.

In the circumstances, the discretion which falls for exercise should not be exercised in favour of the applicants.

Accordingly, the application for an extension of time should be refused, and the appeal dismissed with costs.

PINCUS JA:  I agree.

AMBROSE J:  I agree.

THE PRESIDENT:  The order of the Court is that the application for an extension of time is refused and the appeal dismissed with costs.

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