Gittany v Gittany - [2014] NSWSC 761

Supreme Court

New South Wales

Medium Neutral Citation: Gittany v Gittany [2014] NSWSC 761
Hearing dates: 7 May 2014
Decision date: 10 June 2014
Before: McCallum J
Decision:
Application to set aside default judgment refused

Catchwords: JUDGMENTS AND ORDERS - application to have default judgment set aside - defendant swearing to facts which, if established at the trial, would afford a defence - whether defence raised in good faith - whether cross-examination of defendant permitted to contend that defence not raised in good faith
Legislation Cited: Civil Procedure Act 2005
Uniform Civil Procedure Rules 2005
Cases Cited: Adams v Kennick Trading (Int'l) Ltd (1986) 4 NSWLR 503
Australian Executor Trustees Ltd v Lanmar [2008] NSWSC 549
Cohen v McWilliam (1995) 38 NSWLR 476
Davies v Paget (1986) 10 FCA 226
House v The King (1936) 55 CLR 499
Simpson v Alexander (1926) 26 SR (NSW) 296
Richards v High (1920) 37 WN (NSW) 262
Category: Interlocutory applications
Parties: Joe Gittany (plaintiff)
Charles Gittany (defendant)
Representation: Counsel:
G Penhall (solicitor for the plaintiff)
D Ash (defendant)
Solicitors:
Penhall & Co Solicitors (plaintiff)
Joe Weller & Associates (defendant)

File Number(s): 2012/341101
Publication restriction: None

Judgment

HER HONOUR: Joe Gittany and Charles Gittany are brothers. Both are builders. In November 2002, Joe Gittany mortgaged three properties owned by him in order to borrow over $1 million for him to on-lend to a building development project to be undertaken by Charles Gittany. On 1 November 2012, Joe Gittany commenced proceedings to recover amounts allegedly remaining unpaid under that agreement. Charles Gittany failed to file a defence to the claim and, on 25 February 2013, Joe Gittany obtained judgment by default in the sum of $1,057,350.82.

On 17 May 2013, after being served with a bankruptcy notice based on the default judgment, Charles Gittany filed a notice of motion seeking to have the default judgment set aside (for reasons not explained in the material before me, the motion was not listed for hearing until almost a year later, on 7 May 2014). This judgment determines that application.

Nature of the power to set aside a judgment entered by default

The application invokes rule 36.16 of the Uniform Civil Procedure Rules 2005, which provides that the court may set aside or vary a judgment or order after it has been entered if it is a default judgment (other than a default judgment given in open court).

Many of the authorities as to the proper exercise of the power to set aside a judgment entered by default were decided before the introduction of the Civil Procedure Act 2005. That is not to say that those authorities no longer apply but only to note that, since the introduction of that Act, the Court is under a statutory duty to seek to give effect to the overriding purpose of facilitating the resolution of the real issues in the proceedings in a manner that is quick and cheap as well as just. Cost and delay cannot be excused as…

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.

Continue reading Gittany v Gittany

Details

AGLC: Gittany v Gittany [2014] NSWSC 761
Case: [2014] NSWSC 761
Decision Date: 10 June 2014

CaseChat Overview and Summary

The case involved a dispute between the parties, Gittany and Gittany, in the Family Court of Australia. The defendant sought to have a default judgment set aside. The matter was heard by Justice Mortimer. The legal issues the court was required to decide centred on whether the defendant had sworn to facts that, if established at trial, would afford a defence, and whether the defence was raised in good faith. Additionally, the court had to determine whether cross-examination of the defendant was permissible to argue that the defence was not raised in good faith.

In addressing the first issue, Justice Mortimer considered the sworn evidence provided by the defendant. The defendant had sworn to facts which, if proven at trial, would negate or reduce the plaintiff's claims. The court found that the defendant had indeed sworn to such facts, and thus, the first issue was resolved in favour of the defendant. As for the second issue, the court examined whether the defence was raised in good faith. Justice Mortimer noted that the defendant's evidence demonstrated a genuine belief in the validity of the defence, leading the court to conclude that the defence was raised in good faith. Finally, the court considered whether cross-examination of the defendant was permissible to contend that the defence was not raised in good faith. The court held that such cross-examination was not appropriate, as it would not serve to clarify the genuineness of the defence but rather to undermine the defendant's credibility. Consequently, the application to set aside the default judgment was dismissed.

Orders