Hearse and Anor v Pallister and Ors
[2009] NSWSC 406
•20 May 2009
CITATION: HEARSE & ANOR v PALLISTER & ORS [2009] NSWSC 406 HEARING DATE(S): Friday 6 February 2009
JUDGMENT DATE :
20 May 2009JURISDICTION: Common Law JUDGMENT OF: Hall J at 1 DECISION: That the judgment entered against the second defendant on 27 May 2008 be set aside. That the judgment entered against the second defendant on 2 July 2008 be set aside. CATCHWORDS: PROCEDURE – judgments and orders – amending, varying and setting aside - application to set aside judgment pursuant to UCPR r 36.16(2)(b) on the ground that it was entered in party’s absence – where second defendant had arguable and bona fide defence on the merits – where second defendant denied knowledge of the hearing date – where explanation for failure to attend satisfactory – judgment set aside LEGISLATION CITED: Conveyancing Act 1919 CASES CITED: Baloglow v Konstanidis [2001] NSWCA 451
BP Australia Limited v Brown (2003) 58 NSWLR 322
Cameron v Cole (1943) 68 CLR 571
Ciavarella v Polimeni [2008] NSWSC 234
CTM Nominees Pty Ltd v Galba Pty Limited (1982) 2 BPR 9588
Daniels v Trefusis [1914] 1 Ch D 788
Emmanuel Paneras & Anor v Eastern Suburbs Property Developments Pty Ltd & 3 Ors [2009] NSWSC 105
Grindell v Bass [1920] 2 Ch 487
Halloran v Minister Administering National Parks and Wildlife Act 1974 (2006) 229 CLR 545
Licata v Madeddu (1986) ANZ Conv R 438
North v Loomes [1919] 1 Ch 378
Notter v Girault [2004] NSWSC 863
Painter v Abel (1863) 2 H&C 113
Smith v Webster (1876) 3 Ch D 49
Thompson v White [2007] NSWSC 733PARTIES: Phillip Baden HEARSE & ANOR v
Mark James PALLISTER & ORSFILE NUMBER(S): SC No 12574 of 2006 COUNSEL: P: R W Tregenza
2D: A McInerney
3-5D: G Curtin/G DillworthSOLICITORS: P: Lander & Lander
2D: Ellison, Tillyard Callanan
3-5D: Henry Davis York
IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISIONHALL J
WEDNESDAY 20 MAY 2009
No 12574 of 2006
PHILLIP BADEN HEARSE & ANOR v MARK JAMES PALLISTER & ORS
JUDGMENT
(Application by second defendant to have the judgment of 27 May 2008 set aside)
1 HIS HONOUR: By notice of motion filed on 17 October 2008, the second defendant (“Mrs Pallister”) seeks orders for the setting aside, or alternatively for the variation or stay of execution, of a judgment obtained by the plaintiffs in these proceedings.
Background
2 It is necessary to set out the history of this matter. The plaintiffs brought proceedings by further amended statement of claim filed on 6 July 2006 against the first and second defendants, Mr Mark James Pallister and Mrs Vanessa Joan Pallister. The plaintiffs’ claim was for damages and for interest thereon in respect of the defendants’ failure to complete a contract of the sale of land at Clontarf, Sydney.
3 The first and second defendants filed cross-claims on 29 September 2006 against the third to fifth defendants, solicitors, trading as Staunton & Thompson. The third defendant was Mr Dennis Michael Staunton, the fourth defendant was Bruce Lochart Thompson and the fifth defendant was Andrew Richard Corish. As discussed below, Mrs Pallister disputed the authority of Mr Staunton, the solicitor who was engaged by her husband, Mr Pallister, to act as her solicitor, and in particular, to add her name to the contract as purchaser. An amended defence was filed on behalf of the first and second defendants on 8 March 2007.
4 The defendants were represented by Somerville & Co, lawyers until 25 September 2007. Those solicitors ceased to act for them by Notice of Ceasing to Act filed on 25 September 2007.
5 At the hearing before myself on 7 November 2007, the first and second defendants did not appear. The hearing was adjourned in order to permit inquiries to be made and, if necessary, for evidence to be obtained confirming that the defendants had been informed of the hearing dates.
6 Mr J C Thompson of counsel, who appeared for the plaintiffs at the hearing on 7 November 2007, referred to letters Mr Lander sent by ordinary post on 27 September 2007 and 30 October 2007 to Mrs Pallister at the address 2 Dunara Gardens, Point Piper. He said there had been no response to the letter and that his instructions were that they had not been returned.
7 Similarly, Mr G Curtin of counsel, who appeared for the third to fifth defendants, informed the Court that a notice to produce had been served on both the first and second defendants on or about 5 October 2007 at the same address. Mrs Pallister had produced documents in response to the notice on 23 October 2007.
8 The address used was the address provided by Mr Pallister to ASIC as his address when appointed a director of the company Prestige Publishing Pty Limited.
9 At the hearing on 7 November 2007, I made a direction that inquiries be made to ensure that notice had been given to the first and second defendants of the hearing date. The plaintiffs subsequently sought and obtained leave to rely upon two affidavits sworn respectively by Mr Alexander Haslam and Mr Peter Jonathan Lander on 7 November 2007.
10 Mr Haslam gave evidence that advice of the hearing date of 7 November 2007 had been provided to Mrs Pallister by the firm of solicitors who had previously acted for the first and second defendants, Somerville & Co, by way of email on 22 June 2007. The email address to which the email had been sent was [email protected].
11 Mr Lander’s affidavit evidence referred to two letters sent by Mr Lander to Mr and Mrs Pallister on 27 September 2007 which attached a draft schedule of damages, a schedule of issues in dispute and a chronology of events. A further letter was sent on 30 October 2007 to Mrs Pallister personally inquiring whether she intended to appear at the hearing on 7 and 8 November 2007.
12 On the basis of the evidence in the affidavits, I was satisfied that the second defendant had been informed by her former solicitors of the dates for the hearing.
13 By judgment given on 7 November 2007, I determined that the hearing should proceed on an “undefended basis”: [2008] NSWSC 504 at [2].
14 The following affidavits were relied upon by the plaintiffs at the final hearing:-
(a) Affidavit of Peter Jonathan Lander sworn 16 January 2007;
(b) Affidavit of Robin Mignon Hayes Hearse sworn 22 January 2007;
(c) Affidavit of Phillip Baden Hearse sworn 23 January 2007.
15 The evidence of Mr Lander, the solicitor who had acted for the plaintiffs on the purchase of the subject property, was relied upon as establishing the primary facts, particularly in relation to the alleged addition of Mrs Pallister to the contract of sale.
16 Mr Lander’s affidavit annexed a letter marked “C” from Mr Staunton to Mr Lander dated 16 December 2004 in which Mr Staunton informed Mr Lander that he was ready to exchange subject to three conditions, one of which was:-
- “ 3. Purchaser: Vanessa Joan Pallister will probably be added as a joint purchaser pursuant to Section 18(3) of the Duties Act prior to completion .”
17 The contracts were exchanged on 16 December 2004. A letter from Mr Staunton to Mr Lander dated 19 January 2005 was annexed to Mr Lander’s affidavit at “G”, which stated:-
- “ We enclose an unstamped Transfer for execution by the Vendors. Please return the Transfer to us for stamping purposes.
- Please note that we have added Mrs Pallister as a joint purchaser pursuant to S.18(3) of the Duties Act, 1997. Please amend the counterpart Contract accordingly.”
18 The evidence arguably indicated, at least on a prima facie basis, that Mrs Pallister had been made a party to the contract of sale, although the evidence did not specifically establish that Mr Staunton had actual authority from Mrs Pallister to him to act on her behalf.
19 The plaintiffs’ claim at hearing was one for damages based on the contractual provisions in clause 8 and Special Condition 2(b) of the contract ([2008] NSWSC 504 at [45]). Following a failed sale and subsequent resale, clause 9.3 of the contract allowed the plaintiffs/vendors to either claim for liquidated damages pursuant to the contract or claim for unliquidated damages at common law. Although plead in the alternative, at hearing, the plaintiffs elected to claim liquidated damages in accordance with clause 9.3.1 ([2008] NSWSC 504 at [49]).
20 Pursuant to UCPR rule 29.7(3), if in relation to a liquidated claim the plaintiff appears but a defendant does not appear, the Court may, without proceeding to trial, give judgment against that defendant on the evidence of:-
(2) any payments made or credits accrued since the commencement of the proceedings in reduction of the amount of the plaintiff’s claim or costs.
(1) the amount then due to the plaintiff in respect of the cause of action for which the proceedings were commenced, and
21 On 27 May 2008, I determined the proceedings in favour of the plaintiffs in the absence of the defendants: [2008] NSWSC 504.
22 On 2 July 2008, I ordered that there was to be judgment in favour of the plaintiffs against the first and second defendants in the amount of $652,922.92 and that the first and second defendants pay the plaintiffs’ costs of the proceedings on a party/party basis.
23 I also ordered that there was to be judgment in favour of the third, fourth and fifth defendants on the plaintiffs’ claim against them and the plaintiffs were ordered to pay their costs on a party/party basis. An order was made against the first and second defendants in the nature of an indemnity in respect of the plaintiffs’ liability under the first costs order to which I have referred.
24 Mrs Pallister now seeks an order setting aside, or alternatively a variation or stay of execution, of the orders and judgment made by myself on 27 May 2008 and 2 July 2008. The relief is sought pursuant to UCPR rule 36.16(2)(b) on the basis that the Court may set aside or vary a judgment or order after it has been entered or made in the absence of a party whether or not the absent party had notice of the relevant hearing or of the application for the judgment or order.
25 Mrs Pallister denies that she had any knowledge that the trial had been fixed for hearing for 7 November 2007. She also claims that she has a good arguable defence to the plaintiffs’ claim.
Evidence on the application
26 The following affidavits are relied upon in support of Mrs Pallister’s application under UCPR 36.16(2):-
(1) Robyn Hearse sworn 23 January 2007;
(2) Phillip Hearse sworn 23 January 2007;
(3) Peter Lander sworn 16 January 2007;
(4) Dennis Staunton sworn 6 November 2007;
(5) Vanessa Pallister sworn 12 November 2008; and
(6) Vanessa Pallister sworn 30 January 2009.
27 The affidavit of Mr Lander sworn 29 January 2009 was filed on behalf of the plaintiffs.
Power to make the orders
28 Division 4 of the UCPR is concerned with the setting aside and variation of judgments.
29 Relevantly rule 36.16 sets out the powers of the Court to set aside or vary a judgment or order after it has been entered. In that regard subsection 2 is in the following terms:-
“(2) The court may set aside or vary a judgment or order after it has been entered if:-
(b) it has been given or made in the absence of a party, whether or not the absent party had notice of the relevant hearing or of the application for the judgment or order. ”
Principles applying to the exercise of the discretion
30 The Court's discretion to set aside a judgment or order under UCPR 36.16(2)(b) is premised upon the fundamental principle of justice that a person who is likely to be affected adversely by an order of the Court has a right to be heard before the order is made: see Cameron v Cole (1943) 68 CLR 571; BP Australia Limited v Brown (2003) 58 NSWLR 322.
31 An application to set aside a judgment requires the applicant to satisfactorily explain the failure to defend the proceedings, and establish the existence of an arguable (and bona fide) defence on the merits: Emmanuel Paneras & Anor v Eastern Suburbs Property Developments Pty Ltd & 3 Ors [2009] NSWSC 105 at [46].
Failure to attend hearing
32 It is the plaintiffs’ submission that Mrs Pallister did have actual notice of the hearing date and in such circumstances, the Court’s discretion to set aside the judgment should not be exercised.
33 In her affidavit sworn 12 November 2008, Mrs Pallister stated that the first notice she had that the proceedings had been heard and determined on 7 November 2007 was on 22 August 2008 when she was served on that day with a bankruptcy notice. The Bankruptcy Notice in evidence on this application was dated 19 August 2008.
34 Mrs Pallister denied having received any notification, whether oral or in writing, from Somerville & Co advising her of a hearing to take place on 7 and 8 November 2007. She further denied that any person advised her that the proceedings had been set down for hearing on those dates and denied receiving any written communication to that effect.
35 Mrs Pallister, in particular, denied that the email address [email protected] was an email address used by her on 22 June 2007.
36 She stated that, if an email was sent by Mr Somerville, or his firm, to [email protected] on 22 June 2007 (which she did not admit), then she denied that she opened or read any such email sent to that address.
37 In her affidavit sworn on 30 January 2009, Mrs Pallister stated that she first commenced to use her mobile number (details of which are identified in her affidavit) after her husband, Mr Mark Pallister, gave her a Blackberry to use and advised her of the telephone number attached to it.
38 Mrs Pallister stated that the first time she became aware there was an email address attached to the account with Vodafone from her mobile number was after she had read Mr Haslam’s affidavit in about November 2008. She noted the reference by Mr Haslam to the email address [email protected] and the suggestion that Mr Somerville had sent emails to that address and had received a response. She denied:-
(1) That she had sent, or read the contents of, any email sent to or from the email address known by that address.
(3) She denied that she had ever tried to access the email address.(2) She denied that she knew how to access that email address.
39 In paragraph 14 of her affidavit, she stated:-
- “I have no knowledge of the email address, [email protected] , and I have never used the email address. If it is true that this was an email address which was attached to the Vodafone account … I have not ever had access to this email address, nor was I ever aware that such an email address existed.”
40 In paragraph 16 of her affidavit sworn 30 January 2009, she stated that her husband had dealt with Somerville & Co concerning these proceedings and that throughout various periods out of the last five years she and her husband had been estranged. She added that Mr Pallister spend large periods of time overseas on business and that, for much of that time, they lived in separate homes in different states.
41 In cross-examination, Mrs Pallister stated that her husband, in sending email messages to her, always used the Quick Trak mail address. She, in accordance with her affidavit evidence, stated that she did not use the address [email protected].
42 She also stated in cross-examination that her husband had never informed her about the hearing dates.
43 Mrs Pallister also denied in cross-examination that she had read an email dated 13 August 2007 sent from Somerville & Co. She said she had never seen the email. She further denied that she knew in June and August 2007 that the proceedings had been set down for hearing on 7 and 8 November 2007. She added that her husband did not advise her of the hearing dates.
44 Pursuant to a subpoena to produce, Somerville & Co produced documents including correspondence between that firm and Mr and Mrs Pallister. The email address used for Mrs Pallister was [email protected].
45 On 19 June 2007, Somerville & Co sent a letter to Mr and Mrs Pallister noting their availability on 7 and 8 November 2007 as possible dates for the hearing, and requesting that they advise of their availability during February and March 2008 (the email was marked as Exhibit C).
46 On 20 June 2007, Mr Pallister replied by email stating his preference for February or March, and stating that there would be a chance that he would be in South Africa in November. Mrs Pallister did not reply (the email was marked as Exhibit D).
47 On 22 June 2007, Somerville & Co sent a letter by email to Mr and Mrs Pallister informing them that the Registrar fixed 7 and 8 November 2007 as the hearing dates for the matter (the email was marked as Exhibit A).
48 On 13 August 2007, Somerville & Co sent a letter by email confirming that the matter had been listed for hearing on 7 and 8 November 2007 (tendered and marked as Exhibit B).
49 In summary, it was Mrs Pallister’s evidence that she did not receive any notification from Somerville & Co or any other person advising her that the proceedings were fixed for hearing on 7 and 8 November 2007. It was not until the bankruptcy notice was served upon her on 22 August 2008 that she asserts she became aware of the proceedings having been heard.
50 It is not disputed that Mrs Pallister had a Blackberry device which she used to make phone calls and to send text messages and emails. Mrs Pallister denies, however, that she knew that the email address [email protected] was an email address attached to her Blackberry device until 12 November 2007 when she read the affidavit of Alexander Haslam sworn 7 November 2007. It is her evidence that she does not know how to access that email account and has not tried to do so. Mrs Pallister used her Blackberry handset in its email capacity but used a different email address connected with her husband’s business, Quick Trak.
51 Accordingly, Mrs Pallister asserts that she did not receive any of the email letters sent by Somerville & Co or the plaintiffs’ lawyers.
52 Mrs Pallister admitted to having received letters from Henry Davis York dated 27 September 2007 and November 2007, which she forwarded to Mr Pallister who she understood was dealing with the present proceedings (affidavit of Michael Callanan sworn 24 October 2008, paras 21 and 22). Those letters did not advise that the proceedings were listed for hearing on 7 November 2007. Mrs Pallister redirected any mail which was addressed to Mr Pallister or to Mr Pallister and herself jointly to Mr Pallister at his new address.
53 Mrs Pallister admits to being served with a notice to produce on 5 October 2007 at her Point Piper address. She produced documents to the court. The notice to produce did not refer to the hearing dates.
54 Vodafone Pty Ltd produced documents pursuant to a subpoena which confirmed that the email address [email protected] was an email address connected to the Blackberry used by Mrs Pallister.
55 Mr Curtin cross-examined Mrs Pallister upon entries in the Vodafone records (Exhibits 1 and 2). Those records did not contradict Mrs Pallister’s evidence to the effect that she had not received or read email correspondence from Somerville & Co. Mr Curtin relied upon the following:-
• Somerville & Co obtained the particular email address from someone – either Mr Pallister or Mrs Pallister.
• There was no affidavit evidence from Mr Pallister and he was not called to give evidence. A Jones v Dunkel inference should be drawn where the evidence was that Mrs Pallister, though separated from her husband, had lunch with him on the day of the hearing.
• On the basis of Vodafone records VP1 to Mrs Pallister’s affidavit sworn 30 January 2009, in particular, pp.45, 50 and 51, the email address, [email protected] , was an email address connected to the Blackberry which Mrs Pallister used.
• An entry on p.1 of Exhibit 1 (p.33) would support an inference that the email from Somerville & Co of 22 June 2007 notifying the hearing date was read by Mrs Pallister. However, the entry, it was accepted, may have been consistent with utilising the email address to have sent a message.
• The fact that some entries showed that the email was activated was said to undermine Mrs Pallister’s evidence that she never used that email address.
• That any untruthful evidence given by Mrs Pallister on this application would be directly relevant to the exercise of the discretion and that it would lead to its rejection.• Accordingly, the Court would have grave doubt as to Mrs Pallister’s honesty in the absence of corroborative evidence such as evidence from Mr Pallister to corroborate her that he never told her of the email address or the hearing dates.
56 Ms Malvide Matos, a Vodafone Liaison Analyst, gave oral evidence at the hearing of the notice of motion on 6 February 2009. The Vodafone call records for Mrs Pallister’s mobile number were tendered and marked as Exhibit 1.
57 Exhibits 1 and 2 are derived from a disc produced by Vodafone. That material was used to establish that the address [email protected] was an email address connected to the Blackberry which Mrs Pallister used.
58 Ms Matos gave evidence that the notation “Blackberry1” which appears on the call record for 22 June 2007 means that the email application on the Blackberry was activated, that is, an email was either sent or read on that handset. The notation would not be recorded if an email were only received. It was submitted by the plaintiffs that this gives rise to an inference that Mrs Pallister had read the email sent to her on 22 June 2007 from Somerville & Co.
59 The entries in Exhibit 2 established a few dates upon which the address had been “activated”. Based on this evidence, Mr Curtin submitted that I could draw an inference that Mrs Pallister had read the email from Somerville & Co sent on 22 June 2007.
60 However, Ms Matos explained that it was not possible to know which email address the notation “Blackberry1” referred to, or which particular email was read or sent. Mr McInerney, submitted on Mrs Pallister’s behalf that no inference could be drawn from Ms Matos’ evidence that the email account for [email protected] was activated. It was equally possible that Mrs Pallister had read or sent an email from another email account.
61 On analysis, the evidence to which I have referred:-
(1) Does not affirmatively establish that Mrs Pallister received and read the email from Somerville & Co.
(2) The entries “Blackberry1” in Exhibit 1 do not distinguish between the sending and reading of emails sent to the address on any particular occasion.
(4) Additionally, the absence of evidence which was corroborative of Mrs Pallister’s evidence on an application to set aside judgment on the matters to which Mr Curtin referred does not, in my opinion, provide a sufficient basis for rejecting her evidence in circumstances where her credibility has not otherwise been demonstrated as lacking substance.(3) Even if the “Blackberry1” entries in Exhibit 1 are inconsistent with Mrs Pallister’s account of not having ever having used the email address, that is insufficient, for the purposes of an application such as the present, to support a finding that her evidence of not having read any email sent to the address in question by Somerville & Co was false.
62 I, accordingly, accept, for the purposes of the present application, that Mrs Pallister has satisfactorily explained her failure to appear and defend the proceedings on 7 and 8 November 2007.
Arguable Defence on the Merits
63 Mrs Pallister submitted the following defences were open to the Court, and were not considered by the Court on the merits:-
(1) That she was not a party to the contract for sale.
(2) That the contract was unenforceable against her pursuant to ss.23C and 54A of the Conveyancing Act 1919.
64 In her affidavit sworn on 12 November 2008, Mrs Pallister denied that she was a party to the Contract for Sale or that she had signed it and further denied that she was a party to the transfer or had signed it.
65 Furthermore, Mrs Pallister stated that Mr Dennis Staunton, who acted for her husband on the purchase, had no authority to act or to do any act on her behalf in respect of the contract or the transfer. She stated that she denied that Mr Staunton was ever retained by her to act on her behalf in respect of the purchase or transfer of the property. Further, she stated that her instructions were never sought by Mr Staunton to add her as a party to the contract and denied that he had authority to include her as a contracting party. Furthermore, she stated that Mr Staunton never sought instructions from her to sign the transfer on her behalf.
66 The plaintiffs have accepted that Mrs Pallister has an arguable defence.
67 Mrs Pallister did not sign the contract or the transfer in registrable form. Accordingly, it was submitted that the contract for purchase was unenforceable against her: ss.23C and 54A, Conveyancing Act. The decisions of Baloglow v Konstanidis [2001] NSWCA451; Thompson v White [2007] NSWSC 733 and Halloran v Minister Administering National Parks and Wildlife Act 1974 (2006) 229 CLR 545 were relied upon.
68 The affidavit of Mr Dennis Staunton sworn 6 November 2007 was said to further establish that Mrs Pallister was not a party to the contract to purchase. Mr Staunton was acting on Mr Pallister’s instructions for the purchase. Paragraph 23 of Mr Staunton’s affidavit is in the following terms:-
- “ After the meeting with Mr Pallister on 16 December 2004, I sent a letter to the vendor’s solicitors requesting some amendments to the Contract and advising that Mrs Pallister would likely be added as a joint purchaser pursuant to Section 18(3) of the Duties Act prior to completion … I accept that, in hindsight, I ought to have used the expression ‘joint transferee’ rather than the use of the term ‘joint purchaser’.
- Although I have no note on my file, I specifically remember a conversation I had with Mr Pallister after exchange of Contracts between 20 December 2004 and 4 January 2005. I recall Mr Pallister said words to the effect:
- ‘Go ahead and add Vanessa as a transferee in the Transfer.’”
69 It is contended for Mrs Pallister that Mr Staunton had no authority from her to act, or do any act on her behalf, in respect of the contract for purchase. There was no evidence that Mrs Pallister instructed Mr Staunton in relation to any matter. Reliance was placed on the legal principle that a solicitor is not authorised to make a contract on behalf of a client without express authority. In this respect, reference was made to Painter v Abel (1863) 2 H&C 113; CTM Nominees Pty Ltd v Galba Pty Limited (1982) 2 BPR 9588; Ciavarella v Polimeni [2008] NSWSC 234; Licata v Madeddu (1986) ANZ Conv R 438; Notter v Girault [2004] NSWSC 863.
70 Accordingly, by reason of the absence of any evidence of actual authority in Mr Staunton to act on Mrs Pallister’s behalf, it was submitted by Mr McInerney that there was no evidence before the Court on 7 November 2007 that would have supported the entry of judgment against her. In such circumstances, it was submitted that under UCPR rule 29.7(2), there ought to have been evidence tendered which established the claim.
71 The effect of the lack of authority is, on Mrs Pallister’s submission, that the requirements of the statute of frauds are not met. See the decisions of Smith v Webster (1876) 3 Ch D 49; Daniels v Trefusis [1914] 1 Ch D 788; Grindell v Bass [1920] 2 Ch 487 and North v Loomes [1919] 1 Ch 378.
72 It was submitted that the balance of convenience favoured the grant of relief pursuant to UCPR 36.16(2)(b). Bankruptcy proceedings had been commenced against Mrs Pallister by the plaintiffs, which, if successful, will result in the sale of her properties. Additionally, it was contended that as Mrs Pallister has defences to the claim against her which were not determined on their merits, the relief sought should be granted.
The third, fourth and fifth defendants
73 So far as the proceedings between the third to fifth defendants are concerned, initially Mr Tregenza submitted in his written submissions that the third to fifth defendants would suffer prejudice if the judgment was set aside. As a consequence of Mrs Pallister failing to appear, Mr Tregenza argued that the plaintiffs’ claim against the third to fifth defendants was dismissed. Had Mrs Pallister appeared and succeeded, the plaintiffs would have pressed their case against the third to fifth defendants, with, in Mr Tregenza’s submission, strong prospects of success.
74 However, at the hearing of the notice of motion, Mr Tregenza stated that in the event that the judgment against Mrs Pallister was set aside, the third, fourth and fifth defendants consented to the setting aside of the orders made on 2 July 2008 in their favour as against the plaintiffs except to the extent of orders relating to the costs of the third, fourth and fifth defendants of 7 and 8 November 2007.
Decision
75 The evidence on this application establishes on the probabilities that Mrs Pallister did not receive notice by email or otherwise of the fact that the proceedings had been set down for hearing on 7 November 2007. It is implicit in that finding that I accept Mrs Pallister’s evidence to which I have earlier referred.
76 The evidence also establishes that Mrs Pallister has a good arguable defence to the proceedings based, in particular, upon the evidence that establishes that she did not engage or authorise Mr Staunton to act on her behalf and she was not a signatory to the Contract for Sale as a co-purchaser.
77 I therefore consider that it is appropriate and necessary to exercise the power to set aside the judgment against Mrs Pallister. Firstly, the explanation given by her for her failure to appear at the hearing is satisfactory and it should be accepted. Secondly, Mrs Pallister has a bona fide arguable defence on the merits which has not been adjudicated. Thirdly, the delay in making this application was short. Fourthly, the degree of prejudice which the plaintiffs contend they have suffered has to be fairly weighed against the general interests of justice in the circumstances of the case. The general interests of justice outweigh any possible prejudice to the plaintiffs.
78 Accordingly, I make the following orders:-
(2) That the judgment entered against the second defendant on 2 July 2008 be set aside.
(1) That the judgment entered against the second defendant on 27 May 2008 be set aside.
Costs
79 On 2 July 2008, I made the following costs orders:-
(1) The first and second defendants pay the plaintiffs’ costs of the proceedings on a party/party basis.
(2) The plaintiffs pay the third, fourth and fifth defendants’ costs on a party/party basis.
(4) The cross-claimants, Mr and Mrs Pallister, pay the cross-defendants’ (Mr Staunton, Mr Thompson and Mr Corish) costs in respect of the first and second cross-claims.(3) The first and second defendants indemnify the plaintiffs in respect of the costs order against the plaintiffs to pay the third, fourth and fifth defendants’ costs.
80 The parties have not developed the basis for the contention that the costs orders made in favour of the plaintiffs should or should not be set aside. The question as to whether or not those costs orders should remain or whether they should be set aside raises for consideration questions as to whether or not, as has been contended by Mr McInerney for Mrs Pallister, it was incumbent upon the plaintiffs to have adduced evidence additional to that relied upon at the hearing on 7 November 2007 in order to establish that Mr Staunton had actual authority from Mrs Pallister to include her as a joint purchaser of the property.
81 Mr McInerney submitted that the plaintiffs proceeded upon the basis that either there was sufficient evidence to establish that Mrs Pallister was a co-purchaser of the property with her husband or that it was unnecessary to adduce further evidence to establish the authority of Mr Staunton.
82 The following points arise and the parties should, in my opinion, have the opportunity of making any further submissions on costs including:-
(2) Whether it was incumbent on the plaintiffs to adduce evidence demonstrating that actual authority was given by Mrs Pallister to Mr Staunton.
(1) Whether the plaintiffs were entitled to rely upon the letter sent by Mr Staunton to Mr Lander on 19 January 2005 as sufficient prima facie evidence that Mr Staunton had the requisite authority.
83 Accordingly, I propose to permit the parties to make any further submissions on the above matters and in relation to the orders for costs made against the plaintiffs in favour of the third, fourth and fifth defendants and the order made against Mrs Pallister to indemnify the plaintiffs in that respect.
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