Heng Yang Developments Pty Ltd v Red Earth Developments (Aust) Pty Ltd
[2022] VSC 231
•12 May 2022
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S ECI 2021 00262
| HENG YANG DEVELOPMENTS PTY LTD (ACN 609 308 590) | Applicant |
| v | |
| RED EARTH DEVELOPMENTS (AUST) PTY LTD (ACN 124 424 193) | Respondent |
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JUDGE: | Gorton J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 18 March 2022 |
DATE OF JUDGMENT: | 12 May 2022 |
CASE MAY BE CITED AS: | Heng Yang Developments Pty Ltd v Red Earth Developments (Aust) Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2022] VSC 231 (First Revision 20 May 2022) |
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ADMINISTRATIVE LAW – Appeal from a decision of the Victorian Civil and Administrative Tribunal (‘Tribunal’) – Where applicant sought to set aside default judgment for a second time – Where leave required to apply to set aside default judgment for a second time – Where Tribunal asked to only determine leave application not substantive application – Where Tribunal refused leave to apply to set aside default judgment – Whether Tribunal erred by not considering new evidence – Whether Tribunal erred by considering substantive application rather than leave application.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Ms G Costello QC and Mr A Burnett | Align Law Group |
| For the Respondent | Mr J A Silver | Wainwright Ryan Eid Lawyers |
TABLE OF CONTENTS
A. Introduction................................................................................................................................... 1
B. The background to the failed (first) application to set aside the default judgment....... 1
C. The initial application under s 120........................................................................................... 4
D. The application for leave to bring a second application under s 120 of the Act............. 7
E. Did the Senior Member err in law in dismissing the application for leave to bring a second application under s 120 of the Act?........................................................................................... 7
E.1Heng Yang’s additional material........................................................................................ 7
E.2The test for the grant of leave............................................................................................ 11
E.3The decision of the senior member – and whether it was attended with legal error 13
F. Disposition................................................................................................................................... 15
HIS HONOUR:
A. Introduction
Heng Yang Developments Pty Ltd (‘Heng Yang’), the applicant, engaged Red Earth Developments (Aust) Pty Ltd (‘Red Earth’), the respondent, to build two dwellings on a block in Eaglemont. Disputes arose between them. Red Earth commenced a proceeding in the Victorian Civil and Administrative Tribunal (‘the Tribunal’) and, when Heng Yang failed to file points of defence in time, obtained a default determination against Heng Yang (‘the default judgment’). Heng Yang unsuccessfully applied to have the default judgment set aside. It wanted to apply for a second time to have the default judgment set aside. Under the Victorian Civil and Administrative Tribunal Rules 2018 (‘the Rules’), Heng Yang needed the leave of the Tribunal to bring a second application. On 8 January 2021, the Tribunal refused to grant it that leave. Heng Yang has now applied to this Court under s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (‘the Act’) for leave to appeal against the decision of the Tribunal to deny it leave to bring a second application to set aside the default judgment. It was agreed that I would hear the application for leave, and the appeal if leave were granted, at the same time.
An appeal under s 148 of the Act is limited to an appeal on a question of law. In order to understand whether the Tribunal erred in law in refusing Heng Yang’s application for leave to bring a second application to set aside the default judgment, it is necessary to consider the circumstances that led to the default judgment and the first, failed, application to have it set side.
B. The background to the failed (first) application to set aside the default judgment
Between 26 July 2018 and 21 September 2018, Heng Yang and Red Earth engaged in a conciliation facilitated by the Domestic Building Dispute Resolution Victoria service. The conciliation did not lead to a resolution of the dispute between them.
On 1 March 2019, Red Earth’s solicitors wrote to Heng Yang’s solicitors, advised that Red Earth had retained some building consultants, and sought access to the Eaglemont properties so that they could ‘resolve this matter’. On 7 March 2019, Heng Yang’s solicitors replied saying that their client was ‘confused’ as to the purpose of the proposed inspection, and stating that their client was ‘no longer capable of producing access to the abovementioned property (or part thereof).’ The same day, Red Earth’s solicitors replied confirming that the inspection was to assist with the resolution of the issues that had been the subject of the conciliation. On 12 March 2019, Heng Yang’s solicitors replied saying that their client did not have ‘any rights of access in respect of the abovementioned property (or part thereof).’ Although one of the two properties had been sold by this time, Mr Ou, who was the sole director of Heng Yang, was living in the other one. For this reason, the letter from Heng Yang’s solicitors was misleading.
Meanwhile, on 8 March 2019, Mr Ou applied to the Australian Securities and Investments Commission (‘ASIC’) to have Heng Yang voluntarily deregistered. In making that application, Mr Ou declared that Heng Yang had assets of less than $1,000, no outstanding liabilities, and was not a party to any legal proceedings. Although it was true (so far as I know) that Heng Yang was not at that time party to any legal proceedings, it must have been apparent to Mr Ou that Red Earth claimed that it was owed money by Heng Yang. Further, as will be seen, Heng Yang has since filed a counterclaim in which it asserts that it is owed money by Red Earth of some $403,479, which is considerably more than $1,000. Mr Ou’s willingness to sign the declaration he did in those circumstances raises a question as to his reliability.
On 9 May 2019, Red Earth commenced a proceeding in the Tribunal against Heng Yang by filing a form headed ‘Application to the Building and Property List’ (‘the Application’). The Application was filed with a company search and points of claim. The Application itself indicated that Red Earth was seeking a monetary amount of over $1.3 million. The points of claim indicate that the claim was for $194,970 owing under a building contract, $139,696 for expenses incurred plus a profit margin that had not been invoiced, and $995,839 for ‘restitution on a quantum meruit’. The Application referred to the points of claim as a ‘supporting document’. The Application gave the address of Heng Yang’s registered office in Nunawading. Despite the fact that both parties had previously been represented by solicitors at the conciliation and the correspondence regarding access to the properties had been between solicitors, the Application prepared by Red Earth or its solicitors stated that Red Earth did not know whether or not Heng Yang was represented by a lawyer.
On 10 May 2019 Red Earth’s solicitors:
(a) posted the Application to the address of Heng Yang’s registered office in Nunawading. The covering letter said that it enclosed not just the Application but also the points of claim. It seems to have been common ground that the copy of the Application sent had not been stamped by the Tribunal;
(b) copied that letter and its attachments to Mr Ou at his residence in one of the developments in Eaglemont; and
(c) emailed Heng Yang’s solicitors a copy of the Application that, the email said, had been ‘filed yesterday’.
As is customary, the Tribunal itself also served the material on Heng Yang by posting it to Heng Yang at its registered office. I infer that the Tribunal also posted to that address notice that there would be a directions hearing in the matter on 3 June 2019.
Then, on or about 30 May 2019, Heng Yang changed its registered office from the Nunawading address to the address of its solicitors and informed ASIC of this change. Neither Heng Yang nor its solicitors informed the Tribunal or Red Earth of this change of address.
The Tribunal proceeding came on for directions on 3 June 2019. Red Earth appeared. Heng Yang did not appear. The Tribunal ordered Heng Yang to file points of defence by 15 July 2019, failing which an order would be made determining the proceeding in favour of Red Earth with the quantum of damages to be assessed. Again, I infer that the Tribunal posted this order to Heng Yang at the Nunawading address. By this time, as noted above, Heng Yang had changed its address, but had not informed the Tribunal nor Red Earth of this fact.
Heng Yang did not file any points of defence. On 12 September 2019, Red Earth’s solicitors emailed the Tribunal, referred to the 3 June 2019 order, noted that no points of defence had been filed or served, and sought an ‘update’ including when it could expect an order to be made ‘determining the matter’ in its favour. Contrary to proper practice and the Tribunal’s own practice notes, this email was not copied to Heng Yang. On 13 September 2019, the Tribunal, in chambers, ordered that the proceeding be ‘determined’ in favour of Red Earth with the quantum of damages to be assessed.
Having obtained the default judgment, Red Earth emailed it to Heng Yang’s solicitors on 17 September 2019, and also posted it to Heng Yang at its solicitors’ address, given that that was now the registered address of Heng Yang. The email covering message to the solicitors referred to Heng Yang as their client. This was the first communication between Heng Yang and Red Earth, or their solicitors, in the four months since 10 May 2019.
C. The initial application under s 120
On 23 October 2019, Heng Yang applied to the Tribunal under s 120 of the Act for an order that the default judgment be set aside. Section 120 of the Act provides that:
(1) A person in respect of whom an order is made may apply to the Tribunal for a review of the order if the person did not appear and was not represented at the hearing at which the order was made.[1]
[1]It was accepted that this section applies where the Tribunal makes an order in chambers pursuant to an earlier self-executing order, at least where the self-executing order was made in the absence of the claimant.
…
(4)The Tribunal may –
(a) hear and determine the application if it is satisfied that –
(i)the applicant had a reasonable excuse for not attending or being represented at the hearing; and
(ii) it is appropriate to hear and determine the application having regard to the matters specified in subsection (4A); and
(b) if it thinks fit, order that the order be revoked or varied.
(4A)For the purpose of subsection 4(a)(ii), the matters are –
(a) whether the applicant has a reasonable case to argue in relation to the subject-matter of the order; and
(b) any prejudice that may be caused to another party if the application is heard and determined.
The application to set aside the default judgment was heard by a senior member of the Tribunal on 28 November 2019. Heng Yang produced proposed points of defence, but otherwise led no evidence to suggest that it had a defence on the merits. Be that as it may, the application proceeded with it being accepted that that Heng Yang had a reasonable case to argue,[2] and the issues joined were whether or not Heng Yang had ‘a reasonable excuse for not attending or being represented at the hearing’[3] and the question of prejudice.[4] No specific prejudice was alleged by Red Earth. Heng Yang called Mr Ou, its director, who gave oral evidence and was cross-examined. Red Earth filed affidavit material that exhibited the various correspondence and company searches. It also produced documents from Australia Post that established that the letter its solicitors had sent to Mr Ou at the Eaglemont address had not been returned, but that the letter it had sent to Heng Yang at the Nunawading address had been returned after it had not been collected from the local post office after ten business days (remembering that the Tribunal had served the application material itself as well).
[2]Victorian Civil and Administrative Tribunal Act 1998 (Vic) s 120(4A)(a).
[3]Ibid s 120(4)(a)(i).
[4]Ibid s 120(4A)(b).
Mr Ou, who is an experienced architect, accepted that he had received the Application at his Eaglemont address, but said that (despite the terms of the covering letter and the terms of the Application itself) the Application did not attach the points of claim. He said that he emailed what he had received to his solicitors, and that they had discussed what to do. In essence, he said, they decided to change Heng Yang’s address to the solicitor’s address so that they could receive any documents relating to the Tribunal application, but otherwise to do nothing. He said that his belief was that because the material that they had received was missing the points of claim, he believed the application was or may have been only ‘a negotiating tactic’. He said that he acted on the legal advice that he received. He said that he had not been aware of the directions hearing or the order made at the directions hearing, that he would have expected to receive any communications at his Eaglemont address, and that he believed that by notifying ASIC of the change of address of Heng Yang any subsequent correspondence would go to his solicitors. He denied that he was trying to ‘hide’ from the Tribunal.
Mr Ou’s credit was attacked. It was suggested, in essence, that he and his solicitor had made a conscious decision to avoid engaging with the Tribunal proceeding. In the course of his cross-examination, the point was made that Mr Ou’s solicitor was not giving evidence. From the transcript, it is apparent that Red Earth had asked that Mr Ou’s solicitor make himself available for cross-examination, but he was overseas at the time that the application came on for hearing. Red Earth invited the Tribunal to draw a Jones v Dunkel[5] inference against Heng Yang from his absence.
[5](1959) 101 CLR 298.
The Tribunal refused the application because the senior member was not satisfied, on the material then before him, that Heng Yang had a reasonable excuse for not attending the directions hearing on 3 June 2019. The senior member, citing Avonwood Homes v Milodanovic,[6] noted that the Tribunal ought to adopt a liberal approach where, for example, ‘the failure to attend is due to oversight or accident or the reliance upon one’s solicitors’, but not where the failure arises from a party ‘hiding themselves’ from the other party and the Tribunal. The senior member thought that Mr Ou was an ‘unsatisfactory witness’ and was not satisfied that his evidence was credible. The senior member noted that Mr Ou’s solicitor ‘did not give evidence to explain his involvement in the matter or his understanding in regard to the proceedings.’ The senior member rejected Mr Ou’s evidence that he believed that the absence of points of claim meant the document provided to him might only be a negotiating tactic and that it was not a ‘legal document’, and that neither of the letters sent by the Tribunal to the Nunawading address had come to his attention. The senior member instead concluded that Heng Yang, through Mr Ou, was more likely seeking to avoid Red Earth and the Tribunal perhaps in the hope that the deregistration of Heng Yang would frustrate the proceeding. The senior member then said, in the alternative, that if Mr Ou were as he claimed unaware of the 3 June 2019 hearing, then that was as a result of a deliberate choice on his part to cut himself off from any knowledge of the proceeding.
D. The application for leave to bring a second application under s 120 of the Act
[6][2005] VCAT 1297.
Heng Yang wished to apply for a second time under s 120 of the Act to set aside the default judgment, this time supported by evidence from its solicitor, Mr Chiang. Rule 4.24 of the Rules provides that a second application cannot be brought without leave of the Tribunal. Heng Yang’s application for leave came before the same senior member on 2 October 2020.
The transcript reveals that the senior member was initially inclined to hear the application for leave to bring a second application under s 120 of the Act, and the application under s 120 itself if leave were granted, at the same time. However, counsel for Red Earth explicitly sought the contrary, and counsel for Heng Yang did not oppose that course. The senior member did not impose his initial inclination on the parties. Accordingly, the only application that was before the senior member was the application, required by r 4.24, for leave to bring, at some later time, a second application under s 120 of the Act to set aside the default judgment.
E. Did the senior member err in law in dismissing the application for leave to bring a second application under s 120 of the Act?
E.1 Heng Yang’s additional material
Finality in litigation is important. The issues which may be considered in determining whether an application is an abuse of process are not closed.[7] A second application brought on the same material would, save perhaps in exceptional cases, be an abuse of process.[8] But in its proposed second application, Heng Yang would be better prepared. It relied on, or proposed to rely on, the following additional material:
[7]D A Christie Pty Ltd v Baker [1996] 2 VR 582, 606 (Hayne JA).
[8]Ibid 604 (Hayne JA), 611–2 (Charles JA).
(a) an affidavit sworn by the occupier of the Nunawading address, who swore that he had received mail not addressed to him, had kept it for a period of time and had then thrown it out (that is, he had not returned it to the sender). He also swore that he had not met Mr Ou until after January 2020, and that he had not given Mr Ou any mail; and
(b) an affidavit sworn by Heng Yang’s solicitor, Mr Chiang, who swore that:
(i) the copy of the Application that he had received had not been stamped, and did not attach a points of claim. He had received a scanned copy from Mr Ou of the documents that Mr Ou had received, and they, too, had not been stamped and did not include a points of claim;
(ii) he, honestly even if mistakenly, believed that the Application in that form would not be accepted for filing by the Tribunal. He considered that service was ‘incomplete’. He assumed that Red Earth or its solicitors would provide him or Mr Ou with a complete application in due course or at least notice of any hearing, and he believed that he would receive further correspondence from Red Earth’s solicitors;
(iii) Red Earth’s solicitors well knew that he was acting for Heng Yang, and he had not appreciated at the time that the Application provided to him had not included his details on it as Heng Yang’s solicitor;
(iv) he met with Mr Ou on 13 May 2019, and discussed with him the ‘incomplete’ application. Mr Ou explained that he no longer lived at the Nunawading address. He advised Mr Ou to change the address to his office ‘to ensure that all future documents would be received’. He had not appreciated that the change of address would take Red Earth’s solicitors or the Tribunal by surprise. He had ‘no intention to advise his client to avoid service’;
(v) he had not appreciated that Red Earth would ‘proceed to snap on judgment’ given that they were aware that he was acting and that Heng Yang had ‘foreshadowed’ a defence and counterclaim in the conciliation; he expected that Red Earth would know from the earlier conciliation process that Heng Yang had ‘every intent’ to defend the proceedings, and that there was a live issue at least because there was another written contract between the parties which had been executed after the contract that Red Earth was relying on. He exhibited the second contract. It was for a fixed price that was less than the amount that Red Earth was claiming;
(vi) he also observed that Red Earth’s solicitors were required by the Tribunal’s practice note to copy to him any correspondence it had with the Tribunal, and he had not received any such communications, and that he had expected that if there were such correspondence it would be copied to him. He had not been aware of the directions hearing on 3 June 2019, and was not aware of it or the orders made until they were provided by Red Earth’s solicitors on 19 September 2019; and
(vii) he had not been able to attend the 28 November 2019 hearing as he had a long-standing commitment to attend a wedding overseas, and he was on a flight and in transit on that day.
Mr Chiang also produced documentation that showed that Mr Ou had ceased residing at the Nunawading address in early August 2018.
It was implicit, if not explicit, that Mr Chiang had conveyed to Mr Ou his thoughts as set out above, and that Mr Ou’s beliefs that he expressed at the first application were informed by the discussion that he had had with Mr Chiang.
Mr Chiang was cross-examined. In the course of his oral evidence, Mr Chiang swore that:
(a) although with hindsight he would have done things differently, and he may have been wrong, the matters set out above were matters that he ‘genuinely and honestly’ believed at the time. He genuinely believed that the documents had not been validly served, and he honestly did not think that there was anything further that he had to do until he received either a ‘full version’ of the Application (ie, a stamped version and a version attaching points of claim) or further correspondence. He believed that an application had to include points of claim and he did not believe that there was a proceeding on foot. He believed that the service of the (unstamped) application was a form of negotiating tactic, much like a solicitor saying that they had an application ‘in their hand’ or ‘ready to go’. If he had thought that there was a risk of having default judgment entered, he would have done something to prevent it. He believed that any further communications would come to him, because up until then the parties have been communicating through their solicitors. He did not turn his mind to the question of whether the Tribunal might have served the documents on Heng Yang at its registered office in Nunawading, because Mr Ou had received the documents at his Eaglemont address, and Red Earth knew that Mr Ou was at that address and did not live at the Nunawading address;
(b) he had thought that Mr Ou’s evidence would have been sufficient on the first application. He didn’t turn his mind to his own role until that application had failed, and confirmed that he was overseas when the first application was heard; and
(c) both he and Mr Ou had kept the same email addresses and would have been contactable at those addresses, which were known to Red Earth.
Mr Chiang was cross-examined about the letters that were to the effect that Heng Yang could not provide access to the Eaglemont properties, despite the fact that Mr Ou was living in one of them at the time. There was no cross-examination directed at the question of whether or not there was a real issue between the parties on liability.
The way the case was presented, it was clear that the senior member would or could also have regard to the evidence that had been given orally by Mr Ou on the hearing of the first application under s 120 of the Act.
E.2 The test for the grant of leave.
Because the dismissal of Heng Yang’s first application was an interlocutory order,[9] Heng Yang, but for r 4.24, would have been able to bring a second application unless the second application would amount to an abuse of process.[10] It follows that in most, if not all, applications for leave to bring a second application, the outcome of the application for leave will turn on whether the proposed second application under s 120 would be an abuse of process. For practical purposes, this means that, by reason of r 4.24, the question of whether or not a second application is an abuse of process is decided on the application for leave, rather than on any application by a respondent to have it struck out.[11]
[9]Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246, 248 (Gibbs CJ), 255–6 (Mason J); Racovalis v Rescom Mortgages Pty Ltd (2010) 28 VR 250.
[10]D A Christie Pty Ltd v Baker [1996] 2 VR 582, 603 (Hayne JA), 606 (Charles JA).
[11]The need to obtain leave may effect a reversal of the onus (cf Williams v Spautz (1992) 174 CLR 509, 529 (Mason CJ, Dawson, Toohey and McHugh JJ)). It is not necessary to determine whether this is so.
It was not suggested that the application was brought for an improper purpose. Accordingly, the question for the senior member became whether allowing a second application by Heng Yang would bring the administration of justice into disrepute or would be unjustifiably oppressive to Red Earth.[12] This is a broad question. In order to determine whether or not the second application would be an abuse of process in this way, the senior member could have regard to matters including the following:[13]
[12]PNJ v The Queen (2009) 252 ALR 612; [3] (French CJ, Gummow, Hayne, Crennan and Kiefel JJ); Walton v ACN 004 410 833 Ltd (formerly Arrium Ltd)(In liq) (2022) 399 ALR 1, 33 [130] (Edelman and Steward JJ).
[13]See, eg, Racovalis v Rescom Mortgages Pty Ltd (2010) 28 VR 250, 255 [30] (Harper JA and Emerton AJA).
(a) the nature of the additional material and whether it was of sufficient significance to justify the application being heard, in the sense that the proposed second application was not ‘foredoomed to fail’;[14]
[14]Walton v Gardiner (1993) 177 CLR 378, 393 (Mason CJ, Deane and Dawson JJ).
(b) whether the additional material had been available to be presented at the initial application, and if so, the reason for which the additional material was not presented at the first application;[15]
[15]The test is not as strict as that which applies when fresh evidence is sought to be led on an appeal from a final judgment: D A Christie Pty Ltd v Baker [1996] 2 VR 582, 611 (Charles JA).
(c) the extent of any delay and whether a fair determination of the issues may still be had;
(d) the interest in the finality of litigation, including whether Heng Yang was ‘judge shopping’[16] and the danger of conflicting decisions;
(e) whether the proposed second application would prejudice Red Earth or was vexatious or oppressive, including in the sense that it would be ‘manifestly unfair’ to require Red Earth to face a second application.[17] In this context, the conduct of both parties was potentially relevant; and
(f) the fact that the parties accepted that Heng Yang had an arguable defence, and that if the application were not able to be brought, there could be no adjudication of the case on its merits.[18]
[16]D A Christie Pty Ltd v Baker [1996] 2 VR 582, 602 (Hayne JA); Phillip Morris Ltd v A-G (Vic) (2006) 14 VR 538, 549–552 [51]–[63] (Maxwell P).
[17]See, eg, Walton v Gardiner (1993) 177 CLR 378, 393 (Mason CJ, Deane and Dawson JJ); Connellan v Murphy [2017] VSCA 116.
[18]See Racovalis v Rescom Mortgages Pty Ltd [2009] VCC 1530, [42]–[46] (Judge Ginnane). His Honour’s approach was endorsed by the Court of Appeal in Racovalis v Rescom Mortgages Pty Ltd (2010) 28 VR 250.
The senior member, on the limited application that he was hearing, was entitled to consider whether Heng Yang had a reasonable prospect of succeeding in any application to set aside the default judgment. But it was not otherwise his role to determine whether or not the application would succeed.[19] It was entirely possible, of course, that if he gave leave, the application itself would be heard by another member of the Tribunal.
[19]Cf Lorich v Buildspect Consulting Pty Ltd (Civil Claims) [2019] VCAT 1088, [27] (Senior Member Vassie).
An unusual aspect of this case is that the default judgment was only for damages to be assessed, and it seemed to be common ground before me that Heng Yang remains entitled to bring its counterclaim in a separate proceeding. I was informed that it had done so. So the issues that would underlie Heng Yang’s defence to Red Earth’s claim, for which Red Earth has default judgment, such as which contract is the contract that applies, may well be ventilated in the Tribunal anyway, even if the default judgment is not set aside. Or there may be some form of estoppel that would prevent that. In my view, this was a matter of some potential significance, although I note that neither party explored this matter in argument before the senior member, and so I say no more about it.
E.3 The decision of the senior member – and whether it was attended with legal error
The senior member dismissed the application for leave. His reasoning was, in summary, that:
(a) he had dismissed the first application on the basis that Heng Yang did not have a reasonable excuse for not attending the hearing;[20] and
[20]Red Earth Developments (Aust) Pty Ltd v Heng Yang Developments Pty Ltd (Building and Property) [2021] VCAT 15, [9] (Senior Member Walker).
(b) the evidence given by Mr Chiang ‘added nothing of any substance’ to the evidence that was before him on the previous occasion; that it did not ‘affect the chain of reasoning that led to the rejection of the first application’, and that any further application would be ‘on what is essentially the same material’.[21] That chain of reasoning included:
[21]Ibid [40]–[41], [49].
(viii) a finding that Mr Ou had in fact been aware of the existence of a valid proceeding, but was trying to ‘avoid it’ and that was the reason for which he took no steps;[22] and
(ix)a finding that if Mr Ou had been unaware of the 3 June 2019 hearing, then that was because of a deliberate choice on his part to ‘cut himself off from any knowledge of the proceeding’.[23]
[22]Ibid [43(c)], [47].
[23]Ibid [41] discussing Red Earth Developments (Aust) Pty Ltd v Heng Yang Developments Pty Ltd (Building and Property) [2020] VCAT 65, [81]–[82] (Senior Member Walker).
Consistently with this, the senior member was not moved by the fact that the allegations would not be tested on the merits because he concluded that this was because Mr Ou had ‘settled on another course’.
The senior member did not dismiss the application for leave on the basis that although the new evidence was significant, there was no proper reason for which it was not called on the first application.
In my view, the conclusion that the evidence by Mr Chiang ‘added nothing of any substance’ to the material before the Tribunal on an application under s 120 of the Act was not open to the Tribunal. In the first application, Mr Ou had said that he did not believe that a proceeding was validly on foot. That evidence was, on that occasion, to be considered in circumstances where his solicitor, with whom he had discussed the matter, had failed without explanation to give evidence. Not only did Mr Chiang’s evidence preclude the drawing of a Jones v Dunkel inference against Mr Ou, the clear implication from their evidence, when considered together, was that Mr Ou had been given, and had relied on, legal advice from an experienced solicitor to the effect that:
(a) there was no valid proceeding on foot;
(b) that he was entitled to assume that any further documentation would be provided to his solicitors; and
(c) that in the meantime he was entitled not to take any further steps.
That added substantially to the material that fell to be considered when determining whether Heng Yang had a ‘reasonable excuse’ for not attending before the Tribunal.
Also, the evidence from the occupant of the Nunawading premises that he had not met Mr Ou, had not given him any mail, and had disposed of some mail, added substance to Mr Ou’s evidence that he had never in fact received the documents sent to that address.
I consider, with respect, that the senior member has approached the matter as if corroborative evidence was not new evidence in the relevant sense, because it dealt with the same issues and supported the same arguments. In my view, that does not follow. Where an issue is disputed, and has been decided against a party, additional corroborative evidence can be, and here was, fresh evidence in the relevant sense.
Either that, or the senior member has, with respect, in substance, determined whether or not any second s 120 application would in fact succeed, when the issue before him was not whether or not it would succeed, but rather whether or not it ought to be permitted to be made. The question was not whether the new evidence would cause him to come to a different result to that earlier obtained — to change his mind — but was instead whether permitting the matter to be being looked at for a second time, whether by him or someone else, would bring the administration of justice into disrepute.
It should be borne in mind that the limited scope of the application was expressly stated at its outset, and that it could not be assumed that it would inevitably be the same senior member who would hear any second application under s 120 of the Act. The result would have been unimpeachable if the parties had acceded to the senior member’s initial inclination to hear together the application for leave and, if leave be granted, the application itself. But they did not.
I do not consider that the senior member dismissed the application for leave on the basis that the evidence could not lead any tribunal member acting reasonably to set aside the default judgment.
It follows from the above that, in my view, the senior member either misdirected himself on the test to be applied, or made a material finding that was not open. These are errors of law.[24] The matter should be remitted to the Tribunal for a redetermination of the application for leave to bring a second application under s 120 of the Act.
F. Disposition
[24]See, eg, Miller v Martin [2021] VSCA 108, [72] (Tate, Niall and Kennedy JJA).
I will give Heng Yang leave to appeal and allow the appeal. I will set aside the decision of the Tribunal made on 8 January 2021 and remit Heng Yang’s application for leave to bring a second application under s 120 of the Act to the Tribunal to be re-determined.
I will hear the parties on the form of order and on the question of costs.
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