Cookers Bulk Oil Systems Pty Ltd v MAS Imports & Exports Pty Ltd
[2022] VSC 475
•19 August 2022
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
S ECI 2021 04491
| COOKERS BULK OIL SYSTEMS PTY LTD (ACN 143 695 498) | Plaintiff |
| v | |
| MAS IMPORTS & EXPORTS PTY LTD (ACN 602 553 111) & ANOR (according to the Schedule of Parties) | Defendants |
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JUDGE: | Button J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | NA (determined on the papers) |
DATE OF JUDGMENT: | 19 August 2022 |
CASE MAY BE CITED AS: | Cookers Bulk Oil Systems Pty Ltd v MAS Imports & Exports Pty Ltd & Anor |
MEDIUM NEUTRAL CITATION: | [2022] VSC 475 |
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PRACTICE AND PROCEDURE – Default judgment sought pursuant to r 21.02 of the Supreme Court (General Civil Procedure) Rules 2015 – Default judgment sought pursuant to r 2.07(1) of the Supreme Court (Miscellaneous Civil Proceedings) Rules 2018 – Where no defence filed despite orders – Where allegations taken to be admitted – Whether facts establish entitlement to relief – Whether plaintiff is entitled to relief – Whether relief should be granted in foreign currency – Application granted.
CONTRACT – Breach of contract – Where contract provided for the supply of goods – Where party failed to supply goods – Whether party is entitled to damages for breach of contract to supply goods.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | No appearances | Tisher Liner FC Law |
| For the Defendants | No appearances | Williams Winter Solicitors |
TABLE OF CONTENTS
Introduction........................................................................................................................................ 1
Procedural background..................................................................................................................... 1
Affidavits............................................................................................................................................. 4
Applicable provisions and principles............................................................................................ 5
Consideration...................................................................................................................................... 8
Failure to serve a defence within the time limited................................................................... 8
Entitlement to relief based on the amended statement of claim............................................ 8
Relief to be granted....................................................................................................................... 9
HER HONOUR:
Introduction
The plaintiff (Cookers) commenced this proceeding against the first defendant (MAS) and the second defendant (Demir) by writ and statement of claim dated 29 November 2021. Cookers filed an amended statement of claim on 11 August 2022.
In broad outline, Cookers supplies oil and oil management systems to participants in the food industry. MAS was previously in the business of importing oil in bulk, as well as other food products.
Cookers alleges that it has a number of contracts with MAS for the delivery of various types of oil, that it paid deposits for delivery of the various containers of oil, and that, in breach of contract, MAS has failed to supply and deliver the containers of oil and also failed to repay deposits paid by Cookers. Those deposits were paid by Cookers in US dollars.
Cookers also alleges that MAS engaged in misleading or deceptive conduct in contravention of s 18 of the Australian Consumer Law (ACL) and that Demir (the sole director and shareholder of MAS) was involved in MAS’s alleged contraventions.
The relief sought by Cookers is the repayment of the deposits paid in respect of undelivered containers of oil, ‘further or alternatively’ damages, or compensation under s 236 of the ACL.
While MAS filed a notice of appearance in the proceeding, it has not filed a defence.
Procedural background
By summons dated 18 July 2022, Cookers sought judgment in default of defence against MAS pursuant to r 21.02 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (the Rules) and r 2.07(1) of the Supreme Court (Miscellaneous Civil Proceedings) Rules 2018 (Vic) (the Miscellaneous Rules). For reasons which follow, Cookers filed an amended summons dated 11 August 2022 seeking judgment in default of defence to its amended statement of claim, also dated 11 August 2022.
Both the original summons and the amended summons have been on notice to the defendants.
The Court was informed, by an email from Williams Winter (solicitors on the record for both MAS and Demir) dated 21 July 2022, that MAS ‘intends neither to consent to nor oppose the Plaintiff’s application’.[1]
[1]Email from Adam A Lopez of Williams Winter Solicitors to the Court dated 21 July 2022.
The summons was originally listed for hearing on 5 August 2022, but the hearing was deferred after the Court raised a number of arithmetic and cross-referencing errors in the statement of claim. Cookers sought the opportunity to amend its statement of claim to address those matters. The hearing of the summons was adjourned to 12 August 2022 to allow this to occur.
Cookers provided a draft of the amended statement of claim to the defendants on 5 August 2022.
By email dated 10 August 2022, Williams Winter, wrote to the Court and confirmed that MAS did not propose to file a defence. The email stated:
Dear Associate,
Further to the Plaintiff’s email immediately below, and your email of yesterday,[2] I confirm that, having considered the proposed amended statement of claim, it remains the first defendant’s position that it does not propose to file a defence.
[2]Which was an email enquiring as to whether, having considered the proposed amended statement of claim, it remained MAS’s position that it did not propose to file a defence.
That email followed an earlier email from Williams Winter to the plaintiff’s solicitors dated 2 February 2022, in which Williams Winter stated ‘[w]e further confirm our instructions that the First Defendant shall not file any Defence’.
As already noted, an amended statement of claim was filed on 11 August 2022. An amended summons was also filed on 11 August 2022, correcting details of the sums claimed so that they corresponded with the amended statement of claim.
On 11 August 2022, orders were made by consent following MAS’s confirmation of 10 August 2022 that it did not propose to file any defence to be amended statement of claim. Those orders gave the necessary leave to the plaintiff to file the amended statement of claim and amended summons and, in anticipation of the amended summons being heard on 12 August 2022, and in light of the confirmation that MAS did not intend to file any defence, provided for MAS to serve any defence to the amended statement of claim by 5:00pm on 11 August 2022.
However, it was necessary to again adjourn the hearing of the (by then amended) summons as the Court was informed on 12 August 2022 that the amended statement of claim had only just been served on the defendants and, as such, had only been served after the time fixed by the 11 August 2022 orders for the first defendant to file and serve any defence.
The parties appeared on 12 August 2022 (which was a Friday), and the hearing proceeded, in effect, as a directions hearing. At that directions hearing, MAS reconfirmed its position that it did not intend to file a defence to the amended statement of claim and consented to an order that it file any defence by 15 August 2022 (which was the following Monday). Procedural directions determined at the directions hearing on 12 August 2022 (in respect of which orders were formally authenticated on 15 August 2022) further provided for the plaintiff to serve further affidavit material in support of its amended summons and for the amended summons to be listed for hearing at 2:30pm on 19 August 2022.
The plaintiff filed brief written submissions in support of the application for judgment in default of defence on 18 August 2022.
The solicitors for MAS sent an email to the Court at 11:44am on 18 August 2022, in which they confirmed (once again) that MAS did not intend to file any defence or any submissions in opposition to the amended summons, and consented to an order that MAS pay Cookers’ costs on a standard basis. The email was in the following terms:
Dear Associate,
We refer to your email of even date[3] and confirm as follows:
1.The Defendants were served with the Plaintiff’s Outline of Submissions at 11:23 am today;
2.The First Defendant still does not intend to file any defence in the proceeding or file any submission in opposition to the Amended Summons; and
3.With reference to paragraph 12 of the Plaintiff’s Submissions (specifically, that it seeks its costs against the First Defendant “on a standard basis”), the First Defendant consents to the Plaintiff’s proposed order 4 in its Amended Summons (viz., that the First Defendant “pay the Plaintiff’s costs”, i.e., on a standard basis).
[3]Which was an email enquiring as to the status of submissions on the amended summons.
Affidavits
Cookers relied on affidavits of its solicitor, Madeleine Mary Brown, affirmed on 18 July 2022 (First Brown Affidavit) and on 16 August 2022 (Second Brown Affidavit). In the First Brown Affidavit, Ms Brown deposed to:
(a) service of the writ on MAS on 29 November 2021;
(b) the filing of an appearance for MAS on 7 December 2021;
(c) orders having been made by Judicial Registrar Steffensen on 13 January 2022 requiring the defendants to file and serve their defences by 28 January 2022;
(d) correspondence with MAS’s solicitors, including correspondence in which MAS’s solicitors stated that MAS ‘shall not file any Defence’; and
(e) having searched the Court’s file and having confirmed that no defence was filed by MAS.
In the Second Brown Affidavit, Ms Brown deposed to:
(a) the procedural background set out above regarding the orders made on 11 August 2022 and the amendments made to the statement of claim and the summons;
(b) the further email of 10 August 2022 (referred to above) from MAS’s solicitors confirming that it did not propose to serve a defence to the amended statement of claim;
(c) having searched the Court’s file and having confirmed that, as at 16 August 2022 (being the day after MAS’s defence was due), no defence has been filed;
(d) the plaintiff seeking, in default of a defence, final judgment against MAS in the amount of US$493,369.00 with interest[4] and costs;
(e) interest on the amount claimed by the plaintiff calculated at the rate of 10%, pursuant to section 2 of the Penalty Interest Rates Act 1983 (Vic), from the commencement of the proceeding by writ filed on 29 November 2021 to 16 August 2022, being US$35,279.26 assessed on a daily amount of interest accruing on the debt in the amount of US$135.17 per day; and
(f) the daily amount of interest accruing which, subject to any future payment under the judgment, would accrue after 16 August 2022 in the amount of US$144.84.[5]
[4]As such, the plaintiff was no longer seeking conversion of the US dollar sum into Australian dollars.
[5]For reasons that were not explained, Ms Brown’s calculations assume, in effect, judgment being given on 16 August 2022 (cf 19 August 2022).
Consistent with its position that it did not intend to file any defence or actively oppose the application for judgment in default of defence, MAS did not file any material on Cookers’ application.
Applicable provisions and principles
Pursuant to r 2.07(1) of the Miscellaneous Rules, judgment in default of appearance or pleading is not to be entered in a proceeding in the Commercial List managed by a Commercial List judge unless the judge so orders. The effect of the rule is that judgment in default of appearance or defence cannot be entered administratively in matters governed by the rule.[6] This is such a matter.
[6]Victorian WorkCover Authority v White [2021] VSC 458, [2]–[3] (Connock J).
In this proceeding, Cookers seeks recovery of a debt or damages in a foreign currency. Ordinarily, r 21.03(1) of the Rules applies where a claim is made for recovery of a debt, damages or any property and the plaintiff is entitled to judgment pursuant to rr 21.01 or 21.02 of the Rules. However, where recovery of a debt or damages in a foreign currency is claimed, r 21.03(1) is disapplied by r 21.03(1.2) of the Rules, which provides:
Paragraph (1) [ie r 21.03(1)] does not apply to a claim for the recovery of a debt or damages in a currency not Australian dollars, and if the plaintiff is entitled to judgment on the claim against any defendant in accordance with Rule 21.01 or Rule 21.02, the Court may give judgment for the plaintiff under Rule 21.04 as if the claim were a claim to which that Rule applies.
Accordingly, the first enquiry is whether Cookers is entitled to judgment in accordance with (relevantly) r 21.02, which addresses judgment in default of defence.[7] If it is, then judgment may be given under r 21.04 of the Rules as if Cookers’ claim were a claim to which that rule applies. The deeming is necessary as r 21.04 refers to claims made ‘other than for the recovery of a debt, damages or any property’.
[7]Rule 21.01 of the Rules is concerned with judgment in default of appearance.
Rule 21.04 provides:
(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.
Rule 21.02 provides as follows:
(1) Where any defendant, being required to serve a defence, does not do so within the time limited, the plaintiff may enter or apply for judgment against that defendant in accordance with this Order.
(2) Judgment shall not be entered or given for the plaintiff unless an affidavit proving the default is filed.
(3) Paragraphs (1) and (2) shall apply, with any necessary modification, where—
(a) the defendant has served a defence; and
(b) by or under an order of the Court the defence is struck out.
Bringing these matters together, the relevant enquiries are:
(a) whether MAS has failed to serve a defence within the time so limited;
(b) if MAS failed to serve a defence within the time so limited, whether Cookers has established an entitlement to relief on its statement of claim; and
(c) if so, what relief should be granted.[8]
[8]Kirk v PBP Accounting Solutions Pty Ltd [2015] VSC 173 (Kirk), [4] (Macaulay J).
While the failure of a defendant to file a defence relieves the plaintiff of the need to establish the pleaded facts, the pleaded facts still need to establish an entitlement to the relief claimed. His Honour, Macaulay J (then in the Trial Division) explained the position as follows in Kirk:
Because every allegation in a pleading that is not denied is taken to be admitted — except as to the fact of an amount of any damage suffered — the facts alleged in the statement of claim are taken to be established without the need for verification. Judgment may be obtained if the alleged facts establish the entitlement to the relief claimed and, generally, only for the relief claimed.[9]
[9]Kirk, [20]; see also Bass Coast Shire Council v Hollole [2017] VSC 803 (Bass Coast), [4] (Mukhtar AsJ).
In Kirk, Macaulay J did not grant all relief sought by the plaintiffs, but rather granted relief which his Honour considered ‘appropriate’ based on the facts established by admissions,[10] but did not grant certain other relief sought by the plaintiffs in that case because it was not supported by the facts.[11]
[10]Kirk, [33].
[11]Kirk, [34].
The Court has a discretion as to whether to award any relief established on the amended statement of claim.[12]
[12]Wiedenhofer v Commonwealth (1970) 122 CLR 172, 174–5 (Gibbs J). See also Kirk, [4]; Bass Coast, [4].
Consideration
Failure to serve a defence within the time limited
There is no doubt that MAS has not served a defence within the time required by this Court’s orders.
MAS failed to file a defence to the statement of claim (as originally formulated) by 28 January 2022, being the state required under the orders made by Steffensen JR (as her Honour then was) on 13 January 2022.
However, and critically, as Cookers moves for judgment in default of defence to the amended statement of claim, the evidence is also clear that MAS has not filed a defence to the amended statement of claim within the time fixed pursuant to the orders made on 15 August 2022. Accordingly, this criterion has been satisfied.
Entitlement to relief based on the amended statement of claim
As noted, Cookers’ application is confined to seeking judgment in the amount of the deposits paid to MAS for containers of oil which were not supplied and delivered to Cookers. It does not seek, and has made no attempt to support, judgment for the other heads of loss and damage referred to in the amended statement of claim (which included the additional costs it incurred in obtaining replacement oil from another supplier, and costs associated with facilitating foreign exchange payments).[13]
[13]Amended Statement of Claim, particulars to [40].
While the amended summons and supporting affidavits refer to the sum sought as a ‘debt’, the claims in question are pleaded as breach of contract claims, sounding in damages. In my view, nothing turns on the inapt description of the nature of the claim in the amended summons and supporting affidavit.
By its amended statement of claim, Cookers pleaded:
(a) the entry into specific contracts for the supply of containers of oil in specified quantities and types and at specified prices;
(b) that the deposits referable to each such contract were paid;
(c) that MAS failed to supply or deliver the oil in question pursuant to each such contract;
(d) that MAS’s failure to supply the oil constituted a breach, or alternatively repudiation, of each of the relevant contracts; and
(e) that Cookers suffered loss or damage by reason of MAS’s breach of the specific contracts, with the particulars referring to the deposits paid (as well as other heads of damage, which are not relevant as Cookers has confined its claim to judgment in default of defence to the deposits).
As may be seen, Cookers has pleaded a straightforward claim in contract. As these facts are taken to have been established, Cookers is entitled to judgment on its contract claims so far as it seeks damages in the sum of the deposits which it paid.
As the pleaded facts establish an entitlement to judgment in the sum sought based on the claims in contract, it is not necessary to decide whether the pleaded facts would have supported judgment in the same amount based on the claims made against MAS under the ACL. Nevertheless, I should record that I have significant reservations about whether the facts as pleaded would have established any entitlement to relief under the ACL. That is because the misleading or deceptive conduct claims were pleaded in a manner which — erroneously — assumed that the mere fact of non-compliance with a contract establishes that MAS engaged in misleading or deceptive conduct.[14]
[14]Statement of Claim, [43]–[44], [48]–[52].
Relief to be granted
While the Court retains a discretion regarding whether to grant judgment in default of defence in the present circumstances, I see no reason why Cookers should not have the benefit of a judgment in the amount sought in US dollars and an order that MAS pay its costs of the proceeding on a standard basis, to be taxed if not agreed.
The various pleaded contracts were for the supply of containers of oil priced in US dollars. As noted, the deposits were paid in US dollars. While Cookers initially put forward converted figures in Australian dollars, in my view, it is appropriate that judgment in Cookers’ favour be expressed in US dollars for three reasons. First, Cookers subsequently confirmed (by the Second Brown Affidavit) that it did not press for conversion of the sums into Australian dollars. Secondly, US dollars is the currency which best reflects Cookers’ loss and is the currency specified in the various contracts.[15] Thirdly, as Cookers has not put on evidence to substantiate the exchange rates used by it in its amended statement of claim, amended summons and its affidavits, I would not, in any event, have the evidence before me to convert the US dollars to Australian currency on any reliable basis.
[15]See the discussion of the appropriate currency in which to give judgment in Orica Australia Pty Ltd v Limit [No 2] Ltd [2011] VSC 65, [25]–[26] (Pagone J); BHPB Freight Pty Ltd v Cosco Oceania Chartering Pty Ltd [No 4] (2009) 263 ALR 63; [2009] FCA 1448, [4]–[5] (Finkelstein J).
In relation to the matter of interest, as noted, Cookers seeks interest at the statutory rate from the date on which it commenced this proceeding. There is no reason[16] to depart from the usual position and fix any different rate, or award interest only for some lesser period of time.
[16]The award of interest is here governed by s 60 of the Supreme Court Act 1986 (Vic) as Cookers seeks interest from the date of the commencement of this proceeding.
Judgment will be given for Cookers against MAS in the sum of US$528,918.60,[17] consisting of:
[17]This is the sum of US$528,648.26 deposed to by Ms Brown as being the amount of the deposits with interest to 16 August 2022, and adding another two days’ interest (up to and including 19 August 2022). The date of commencement of the proceeding (ie 29 November 2021) is not to be counted for the purpose of calculating interest: see Interpretation of Legislation Act 1984 (Vic) s 44(1).
(a) US$493,369.00, being the principal amount sought against MAS in the amended statement of claim; and
(b) US$35,549.60, being interest pursuant to s 60 of the Supreme Court Act 1986 (Vic) at the rate specified under s 2 of the Penalty Interest Rates Act 1983 (Vic) from the commencement of the proceeding to the date of judgment.[18]
[18]Post-judgment interest flows automatically under s 101(1) of the Supreme Court Act 1986 (Vic).
SCHEDULE OF PARTIES
S ECI 2021 04491
BETWEEN:
| COOKERS BULK OIL SYSTEMS PTY LTD (ACN 143 695 498) | Plaintiff |
| - and - | |
| MAS IMPORTS & EXPORTS PTY LTD (ACN 602 553 111) | First Defendant |
| HASAN DEMIR | Second Defendant |
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