Garland and Anor v Butler McDermott Lawyers
[2011] QCATA 151
•13 May 2011
| CITATION: | Garland and Anor v Butler McDermott Lawyers [2011] QCATA 151 |
| PARTIES: | Howard John Garland Sandra May Garland (Applicants/Appellants) |
| v | |
| Butler McDermott Lawyers (Respondent) |
| APPLICATION NUMBER: | APL044-11 |
| MATTER TYPE: | Appeals |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Justice Alan Wilson, President |
| DELIVERED ON: | 13 May 2011 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | 1. Application for leave to appeal allowed; 2. Appeal allowed; 3. Set aside the decision of 3 February 2011 to refuse the application to set aside the decision by default of 28 December 2010; and, also, set aside that decision by default; and, 4. Dismiss the proceeding which led to that decision by default, namely the application for Minor Civil Dispute – Minor Debt filed by the respondents in Nambour on 5 February 2010 and described as Nambour Claim 17/10. |
| CATCHWORDS: | APPEAL – LEAVE TO APPEAL – MINOR CIVIL DISPUTE – DEFAULT JUDGMENT – SETTING ASIDE – where the respondent obtained a default judgment against the applicants – whether default judgment should have been set aside – nature of discretion arising under s 51 of the Queensland Civil and Administrative Act 2009 Queensland Civil and Administrative Act 2009, ss 50, 51, 146 AON Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175, cited |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers, pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act).
REASONS FOR DECISION
Butler McDermott Lawyers are a firm of solicitors in Nambour. They acted for Mr and Mrs Garland in 2005, and later, in connection with problems they were having with a wall constructed by a neighbour.
In April 2008 the solicitors sent the Garlands a bill for $703.50, which they did not pay.
On 5 February 2010 the solicitors began proceedings in QCAT’s Minor Civil Disputes jurisdiction for the recovery of their fees. The application form carried a warning to Mr and Mrs Garland, as the respondents, advising them that they must ‘respond’ to the application within 28 days or the applicant could apply to the Tribunal for a decision by default against them. (Otherwise, as will later be seen, the form used by the solicitors was markedly different from QCAT’s published form.)
Rule 45 for the Queensland Civil and Administrative Tribunal Rules 2009 provides that, if a respondent to an application for a minor debt wishes to respond, they must do so in the approved form within 28 days. That was the rule with which Mr and Mrs Garland did not comply, either within the 28 days or, indeed, at any time before 23 December 2010, 11 months after they were served,[1] when the solicitors sought a judgment by default.
[1] Service was affected on 18 February 2010.
The judgment by default was awarded to them on 28 December 2010. On 5 January 2011 Mr and Mrs Garland filed an application to set it aside which was refused by a Magistrate, sitting as a QCAT Ordinary Member, on 3 February 2011.
Mr and Mrs Garland seek leave to appeal that decision. Leave is necessary: QCAT Act, s 142(3)(a)(i).
Leave to appeal will ordinarily only be granted where there is some question of general importance upon which further argument, and a decision of the Appeal Tribunal, would be to the public advantage; or, there is a reasonably arguable case of error in the primary decision and a reasonable prospect that the applicant would obtain further substantive relief. Another question sometimes asked is: is leave necessary to correct a substantial injustice to the applicant, caused by some error?
By direction, the Garlands’ application for leave to appeal (and the appeal if leave is granted) were addressed by written submissions from the parties. Mr and Mrs Garland filed lengthy submissions setting out correspondence between them and the solicitors, and the solicitors and other parties, in connection with the original matter for which the lawyers were retained.
The primary assertion in their submission is that the solicitors were not retained for the purposes of the work to which their bill relates and are not, therefore, entitled to payment. The submissions contain a large number of assertions of fact, on the lines that they called the solicitors’ office on a number of occasions explaining that no further work was necessary; were unable, on each occasion, to speak to the partner they had originally retained; but, were assured that their messages and instructions would be passed on to her.
[10] As to their failure to file a response under r 45, Mr and Mrs Garland say that the lawyers ‘used their own forms’; that they ‘responded to the lawyers with a letter within a 28 day period’; that they would not have made the mistake of failing to file a response if the lawyers had used the ‘standard QCAT forms’; and, that they were not aware that QCAT had a website or an information line or, indeed, an address to which they might have directed enquiries about procedural matters.
[11] Under s 51 of the QCAT Act the Tribunal may, on application by a respondent, set aside or amend a decision by default on terms, including terms about costs and the giving of security, that the Tribunal considers appropriate. The section is in very similar terms to r 290 of the Uniform Civil Procedure Rules 1999.
[12] Decisions on r 290 show that, among the factors relevant to the discretion arising under it are whether or not there is a good reason for the respondent’s failure to file a response; any delay in bringing the application; the respondent’s conduct in the proceedings before and after judgment; the respondent’s good faith; whether the respondent has raised a defence on the merits; and whether the applicant would be severely prejudiced if the judgment was set aside, in a way which could not be adequately compensated by, say, costs. It has been suggested that the question whether or not the respondent has a good defence may be the most important of these factors.[2]
[2]National Mutual Life Association of Australasia Ltd v Oasis Developments Pty Ltd [1983] 2 QD R 441, per McPherson J at 441.
[13] The discretion arising under s 50 of the QCAT Act and, in particular, in the Minor Civil Disputes jurisdiction may, arguably, involve a slightly different approach. That jurisdiction is plainly intended, under the QCAT Act, to offer speedy justice in claims involving, in comparative terms against the Courts hierarchy, the smallest sums about which citizens are in dispute.
[14] Two other factors may also influence the nature of the discretion: the first is the emphasis, in the QCAT Act, on requirements that the Tribunal act quickly, and with as little formality and technicality as is consistent with a fair and proper consideration of the issues before it.[3]
[3] QCAT Act, ss 3, 4 and 28.
[15] The second is the decision of the High Court in AON v ANU[4] in which the Court said[5] that questions of delay, and cost for society in general, are to be regarded as important considerations in the exercise of a court’s discretion to excuse procedural failings. That decision was made in the context of a late application to amend pleadings but, in proceedings governed by legislation like the QCAT Act (which places such a heavy emphasis on speed, and limiting costs) and in a jurisdiction like this one involving many thousands of applications each year, the nature of the discretion to set aside default judgments may need to be considered in light of similar factors.
[4]AON Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175.
[5] At 214-215.
[16] As it happens these matters do not need to be addressed at length, here, for reasons I will now explain. In their original Minor Debt application the solicitors did not use the QCAT form but a variant of it which they, apparently, had prepared themselves. It did not contain important information which appears in the published QCAT form. In my view the failure to include the material involved a breach of the QCAT rules, of sufficient seriousness to mean that the decision to refuse the original application to set aside the default decision was, with respect, wrong.
[17] Under QCAT’s r 7, an application to QCAT must be made in the approved form.
[18] There are a number of important differences between the approved form (Form 3) and the form used by the solicitors, and served upon Mr and Mrs Garland. Those differences are:
(a)The failure to include, anywhere in the form or (as Form 3 itself provides) at the bottom of each page the relevant information about the location of QCAT’s website, or its 1300 telephone number; and
(b)The failure to include, at the top of the third page, a large warning (in a box with borders outlined in bold) to respondents that they must complete and lodge a Form 7 (response to Minor Civil Dispute) within 28 days after they receive the application.
[19] The warning in the form used by the solicitors was, instead, at the bottom of page 2 and was phrased in different terms: it does not refer to the need for respondents to complete and lodge Form 7, or the title of that form: ‘Response to Minor Civil Dispute’.
[20] Mr and Mrs Garland were not, then, informed when they received the solicitors’ Form 3 that they needed to actually complete and file a form of response rather than – as the evidence establishes – simply respond in a letter in the stipulated period. (The fact that they did write a form of response within the 28 day period tends to support their submission that, had they known of the need to prepare, file and serve a form of response in Form 7, they would have done so.)
[21] Similarly, the failure to advise them in the Form 3 of the location of the website and the 1300 number is, in the context of default proceedings, of potential importance; and, again, Mr and Mrs Garlands’ contention that if they had been informed of those things they would have made use of them is supported by the things they did do.
[22] The discretion arising under s 51 is a wide one. For the reasons discussed earlier, the factors which influence QCAT’s exercise of that discretion may be different from those used by the Courts, because of both the terms of the QCAT legislation and the recent decision of the High Court in AON v ANU. As it happens those considerations are not of particular importance here, because this case involves more fundamental questions about QCAT’s procedure.
[23] It will always be important, in the Minor Civil Disputes jurisdiction, to balance the call in the QCAT Act for inexpensive and speedy resolution of these kinds of disputes against the need to ensure procedural fairness and observation of the principles of natural justice, to an appropriate extent.
[24] Where speedy resolution is a paramount consideration, providing immediate information in the initial forms that a party receives is, obviously, a matter of importance – as is information which will help unrepresented parties find out what they must do, in their own interests.
[25] Where, as here, the respondents were not properly directed to the correct form of response and wrongly, but unsurprisingly, believed they had complied by responding in the form of a letter; and where they were not told about a website and a toll free number they could contact if they had any queries about the form of their response, there are strong grounds for concluding that the use of a non-regulation form has denied Mr and Mrs Garland the proper level of procedural fairness.
[26] The learned Magistrate who refused the application to set aside the default decision was, with respect, in error. The error is readily understood – it is only when the original application form is compared with the correct form that the defects in the former become apparent.
[27] The appeal itself should also be allowed. The incorrect exercise of the discretion involves an error of law because it involved a failure to consider a relevant factor in arriving at the decision to refuse to set aside the default judgment.[6]
[6] Perry v Comcare [2006] FCA 33 per Greenwood J at [39].
[28] Under s 146 of the QCAT Act this Appeal Tribunal may confirm or amend the decision or set it aside and substitute its own.
[29] Here, the decision to refuse to set aside the default judgment was mistaken. The original application could only, now, be remedied if the solicitors filed and served a new application in the correct form. In those circumstances it is also appropriate to order that the original application for determination of a Minor Civil Dispute be dismissed.
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