Coxon v Duggan - [2013] VSC 168

Do Not Send for Reporting
IN THE SUPREME COURT OF VICTORIA		Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

S CI 2012 6294

TIMOTHY ANDREW COXON	Plaintiff
v
STEPHEN GEOFFREY DUGGAN and OTHERS (according to the schedule attached)	Defendants

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JUDGE:	Derham AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	9 April 2013
DATE OF JUDGMENT:	9 April 2013
CASE MAY BE CITED AS:	Coxon v Duggan and ors
MEDIUM NEUTRAL CITATION:	[2013] VSC 168

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PRACTICE AND PROCEDURE – application to set aside judgment in default of defence – r 21.07 of the Supreme Court (General Civil Procedure) Rules 2005 – defendant disclosing defence on the merits – failure to serve defence deliberately and on legal advice – question whether that affects exercise of discretion – whether security for or payment into Court of the judgment sum should be required – judgment set aside and no security or payment into Court required.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J. Tsalanidis	Velos Lawyers
For the First Defendant	Mr C. Daly-Thomson	Clamenz Evans Ellis Lawyers

HIS HONOUR:

The first defendant applies by summons dated 21 March 2013 to set aside judgment entered in default of defence. Default judgment for a debt was entered in default of defence on 11 February 2013, and was done so on the basis of the affidavit of Mr Bill Velos, sworn that day.

It has not been suggested that the judgment entered was irregular. Thus, the tests to be applied for the setting aside of the judgment are:

(a) whether the first defendant has a defence on the merits;

(b) the reason for the default of the defendant in consequence of which the judgment was obtained, in this case the failure on the part of the first defendant to file a defence;

(c) whether the application to set aside the judgment was made promptly after the judgment came to the knowledge of the first defendant; and

(d) whether, if the judgment is set aside, the plaintiff would be prejudiced in any respect which could not be adequately compensated for by a suitable award of costs and the giving of security. See Rosing v Ben Shemesh,[1] and Kostokanellis v Allen.[2]

[1][1960] VR 173.

[2][1974] VR 596.

The facts in this case are set out in the statement of claim filed with the writ. The case against the first defendant, as distinct from the case against the first defendant and the second defendant, turns upon the entry into a loan agreement in September 2011. The loan agreement is in evidence, in an executed form, as an exhibit to the affidavit of Mr Bill Velos sworn 8 April 2013 (the “second loan”).

The plaintiff claims that a payment received from the defendants of $119,281.59, paid in early July 2012, was used by the plaintiff to repay an earlier loan made to one Jill Duggan, the wife of the first defendant (the “first loan”), and partly in reduction of the second loan (which…

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: [2013] VSC 168
Decision Date: 9 April 2013

CaseChat Overview and Summary

In the Supreme Court of Queensland, Coxon, the plaintiff, sought to set aside a judgment obtained in default of a defence by Duggan, the defendant. The dispute arose from a contractual claim, and the plaintiff had obtained a default judgment after the defendant failed to file a defence within the prescribed period. The defendant applied to set aside the judgment, arguing that a defence on the merits existed and that the failure to defend was not deliberate but was due to legal advice.

The primary legal issue before the court was whether the defendant's failure to defend was deliberately undertaken and whether this would affect the exercise of the court's discretion to set aside the default judgment. Additionally, the court considered whether security for or payment into court of the judgment sum should be required before setting aside the judgment. The defendant argued that the failure to serve a defence was not deliberately undertaken and was based on legal advice, and therefore, the court should exercise its discretion to set aside the judgment without requiring security or payment into court.

The court held that the defendant's failure to defend was not deliberately undertaken and was based on legal advice, which was a significant factor in favour of setting aside the default judgment. The court found that the exercise of its discretion to set aside the judgment was not affected by the fact that the failure to defend was on legal advice. The court also held that, in the circumstances of the case, it was not appropriate to require security for or payment into court of the judgment sum before setting aside the judgment. Accordingly, the court set aside the default judgment and did not require any security or payment into court.

The court's orders included setting aside the default judgment and dismissing the plaintiff's claim with no order as to costs. The defendant was also ordered to pay the plaintiff's costs of the application on an indemnity basis, reflecting the defendant's successful outcome. The decision highlights the importance of legal advice in determining whether a failure to defend is deliberately undertaken and the court's discretion in setting aside default judgments.

Orders