Fode v Fode

[2011] VCC 1352

IN THE COUNTY COURT OF VICTORIA	Revised
AT MELBOURNE CIVIL DIVISION COMMERCIAL LIST GENERAL DIVISION

Case No. CI-11-03095

GEORGINA FODE	Plaintiff
v
MARKO FODE, MGD AUSTRALIA PTY LTD	Defendants
and MGD INTERNATIONAL PTY LTD

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JUDGE:	HIS HONOUR JUDGE ANDERSON
WHERE HELD:	Melbourne
DATE OF HEARING:	29 September 2011
DATE OF JUDGMENT:	29 September 2011 (revised 30 September 2011)
CASE MAY BE CITED AS:	Fode v Fode & Ors
MEDIUM NEUTRAL CITATION:	[2011] VCC 1352

REASONS FOR JUDGMENT

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Catchwords:  Practice and procedure – Application to set aside default judgment –
Substantial affidavit filed as to the merits of the defence – Plaintiff’s counsel
sought leave to cross-examine deponent on general issues – Leave to cross-
examine refused – Appropriate to set aside the judgment.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr D. Bongiorno	Kelly & Chapman
For the Third Defendant	Ms L. Barrett	Portelli & Co
HIS HONOUR:

1     The third defendant makes application to set aside a default judgment entered against both it and the second defendant on 25 July 2011 in the sum of $187,625 together with interest of $1,511.28.

2     The third defendant’s application is supported by an affidavit sworn by its sole director, Silvija Milina. In her affidavit, Ms Milina provides an explanation for the company’s failure to file an appearance. The application has not been contested on the basis that the explanation given is insufficient and, in my view, the affidavit appropriately explains the third defendant’s default.

3     The plaintiff seeks to cross examine Ms Milina on her affidavit. It is not suggested by the plaintiff that the untested affidavit does not raise a prima facie defence or, to apply the test for summary judgment in the Civil Procedure Act 2010, does not raise a defence that has a “real prospect of success” at trial. The plaintiff has not filed affidavit material. The only assertions in respect of the third defendant are those contained in the statement of claim.

4     In the statement of claim, it is alleged that the first defendant is the former husband of the plaintiff and “is and has at all times been in effective control of both the second and third defendants”. What follows are allegations that the plaintiff, at the first defendant’s request, lent to the second defendant the sum of $150,000 and that sum, together with accrued interest, is unpaid. The statement of claim alleges in relation to the third defendant that:

a.	The third defendant “paid the interest on the loan up until a date early in 2008”;
b.	From the incorporation of the third defendant on 14 August 2007, the company “took

over the business, assets and liabilities of the second defendant which

simultaneously ceased to trade”. From those facts, it is asserted that “the third
defendant thereby became liable to the plaintiff for the debt”.

5     All of these matters are addressed comprehensively in Ms Milina’s affidavit. Plaintiff’s counsel, Mr Bongiorno, made application to cross examine Ms Milina. He said in support of his application that, although this matter was not properly pleaded in the statement of claim, the plaintiff alleged that the third defendant was a “phoenix company” set up simply to assist the second defendant avoid legal liability to creditors, including the plaintiff.

6     Mr Bongiorno said that he wished to cross examine Ms Milina about the following matters:

a.	The circumstances in which the third defendant had come into existence;
b.	The relationship between the second and third defendants;
c.	The personal relationship between Ms Milina and the first defendant.

7     Each of these issues has been dealt with by Ms Milina. There is no answering material on the part of the plaintiff which would indicate that there are significant factual disputes in relation to the particular issues raised by Ms Milina. There is clearly a dispute as to whether the third defendant has assumed the obligations of the second defendant in circumstances where it has become responsible to the plaintiff in respect of those matters. At present, it is difficult to see how the plaintiff would be able to sufficiently cast doubt on what Ms Melina has said in her affidavit unless he has instructions on specific matters to put to the deponent.

8 List each year. These cases are primarily dealt with by four judges nominated as

This Court is a high volume court. Approximately 2,500 cases are issued in the Commercial tool of the court in its commercial jurisdiction, and its civil jurisdiction generally, is to set down contested matters for trial within about six months of the date upon which it becomes apparent that the case is defended. The pre-trial work of the Court would become unmanageable if, as a matter of course, deponents of affidavits in interlocutory applications were permitted to be cross examined. Of course, there will be cases where cross examination is appropriate upon an interlocutory application. This case is not one of them.

9     The judgment entered against the third defendant on 25 July 2011 in default of appearance will be set aside. I will give the parties time to consider the appropriate directions to be made which should follow the standard directions and include a date for trial and an interlocutory timetable.

Certificate

I certify that these 2 pages are a true copy of the reasons for decision of His Honour Judge

Anderson delivered on 29 September 2011 (and revised on 30 September 2011).

Dated: 30 September 2011

Hannah Christensen

Associate to His Honour Judge Anderson