HT Contracting v Palta - [2025] QSC 55

SUPREME COURT OF QUEENSLAND

CITATION:

HT Contracting v Palta [2025] QSC 55

PARTIES:

HT CONTRACTING PTY LTD ACN 163 131 191

(Respondent Plaintiff)

v
RAKESH PALTA

(Applicant First Defendant)
and
CONCAST PTY LTD ACN 642 829 598

(Second Defendant)

FILE NO:

SC No 33 of 2023

DIVISION:

Trial

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court of Queensland

DELIVERED ON:

25 March 2025

DELIVERED AT:

Cairns

HEARING DATES:

21 October 2024, 6 December 2024, 11 December 2024

JUDGE:

Henry J

ORDERS:

1.   The default judgment entered against the First Defendant is set aside.

2.   The First Defendant will file and serve any Notice of Intention to Defend and Defence by no later than 4pm 9 April 2025.

3.   I will hear the parties as to costs, if costs are not agreed in the meantime, at 9.15am 23 April 2025 (out of town parties having leave to appear via video link).

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – JUDGMENTS AND ORDERS – AMENDING, VARYING AND SETTING ASIDE JUDGMENTS AND ORDERS – ACTIONS TO REVIEW OR SET ASIDE JUDGMENT OR ORDER – where default judgment was granted in favour of the plaintiff – where no notice of intention to defend or defence was filed – where the first defendant applies to set aside summary judgement – whether default judgment was irregularly entered – whether first defendant has given a satisfactory explanation for failure to file a notice of intention to defend in time – whether first defendant has a prima facie defence on the merits

Competition and Consumer Act 2010 - Schedule 2 The Australian Consumer Law (Cth), s 20, s 21

Uniform Civil Procedure Rules 1999 (Qld), r 283, r 284, r 290

Browning v Australia and New Zealand Banking Group Ltd [2014] QCA 43, cited
Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; [1983] HCA 14, cited
Cusack v De Angelis [2008] 1 Qd R 344; [2007] QCA 313
De Castro v Burtenshaw Super Pty Ltd [2023] QCA 218, applied
Embrey v Smart [2014] QCA 75, cited

Stubbings v Jams 2 Pty Ltd (2022) 276 CLR 1; [2022] HCA 6, cited

COUNSEL:

P Travis for respondent Plaintiff

J Sheridan (21 October), M Jonsson KC (6 & 11 December) for applicant First Defendant

SOLICITORS:

Parsons and Partners for respondent Plaintiff

Harding Property Law for applicant First Defendant

Rakesh Palta is one of two guarantors upon a loan by a company, HT Contracting, to another company, 79 Grand Hotel. The loan was not repaid. HT Contracting filed a claim for the loan debt plus interest against Mr Palta and the other guarantor, Concast Pty Ltd.
Notices of intention to defend were not filed and HT Contracting successfully applied for default judgment against each guarantor.
Both guarantors applied to have the default judgment set aside. It was set aside by consent in respect of the second guarantor Concast, but Mr Palta’s application to set it aside remains in contest.
Rule 290

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 HT Contracting v Palta

Details

AGLC: HT Contracting v Palta [2025] QSC 55
Case: [2025] QSC 55
Decision Date: 25 March 2025

CaseChat Overview and Summary

The case of HT Contracting v Palta involved a dispute over a default judgment entered in favour of the plaintiff, HT Contracting, against the first defendant, Palta. The plaintiff sought to enforce a loan agreement through the court after the borrower, 79 Grand Hotel, failed to repay the loan. Palta, who had executed a Deed of Guarantee and Indemnity, applied to set aside the default judgment on the grounds that it was irregularly entered, and that he had a satisfactory explanation for his failure to file a notice of intention to defend in time. The court was required to determine whether the default judgment was irregularly entered, whether Palta had provided a satisfactory explanation for his failure to file a notice of intention to defend, and whether Palta had a prima facie defence on the merits. The court found that the default judgment was not irregularly entered as it was made under the correct rule. However, Palta provided a satisfactory explanation for his failure to file a notice of intention to defend in time, and the court found that Palta had a prima facie defence on the merits. As a result, the court set aside the default judgment and ordered Palta to file and serve any Notice of Intention to Defend and Defence by a specified date. The court also scheduled a hearing to determine the costs of the proceeding.

Orders

Orders of the court

1. The default judgment entered against the First Defendant is set aside.

2. The First Defendant will file and serve any Notice of Intention to Defend and Defence by no later than 4pm 9 April 2025.

3. I will hear the parties as to costs, if costs are not agreed in the meantime, at 9.15am 23 April 2025 (out of town parties having leave to appear via video link).

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

The first and third of those considerations are in issue here. Resolution of the application therefore requires determination of these issues:1. Was the default judgment irregularly entered?2.Has Mr Palta given a satisfactory explanation for the failure to file a notice of intention to defend in time?3.Does Mr Palta have a prima facie defence on the merits?Was the default judgment irregularly entered?Why is it alleged the judgment was irregularly entered? Mr Palta submits the default judgment was irregularly entered because it was made under the wrong rule. The request for default judgment was made under r 283 of the Uniform Civil Procedure Rules. That rule is concerned with where ‘the plaintiff’s claim against the defendant in default is for a debt or liquidated demand, with or without interest’. In contrast, r 284 applies where ‘the plaintiff’s claim against the defendant in default is for unliquidated damages’. A consequential difference between the operation of those two rules is that default judgment under r 283 will specify the amount of the judgment, whereas a default judgment given under r 284 is conditional upon the Court making an assessment of damages owing. Mr Palta submits the default judgement should have been made under r 284, not r 283. He contends the claim is in the nature of a claim for unliquidated damages because it is a claim for monies allegedly due upon a contractual right of indemnity rather than a claim for a debt or a liquidated demand. HT Contracting, on the other hand, submits that there was no irregularity because the application for default judgment was ‘for a debt’ and thus properly made under r 283. Determination of this issue requires appreciation of the nature of the parties’ agreements, the nature of the claim and the nature of the application for default judgment. What was agreed? In late March 2022 the borrower, 79 Grand Hotel, entered into a loan agreement with HT Contracting as lender, the agreement being described as an ‘Advance Agreement’. At that time Mr Palta and Concast also executed the Advance Agreement and entered into separate Deeds of Guarantee and Indemnity with HT Contracting. Each were purportedly made jointly and severally liable, along with the borrower, for the payment of the monies payable to HT Contracting under the Advance Agreement. The Advance Agreement provided for the lending on conditions of $960,000 consisting of an initial advance of $420,000 and a balance of $540,000. The Advance Agreement provided for the payment of 18 per cent interest per annum on the amount loaned and a default interest rate of 24 per cent per annum in the event of default. The $420,000 was allegedly due to be repaid within 60 days of the date of the first draw-down, by 31 May 2022, and the balance within nine months of the date of the first draw-down, by 3 January 2023. No repayments were made. In the event of 79 Grand Hotel’s default under the Advance Agreement, the agreement conferred the right upon HT Contracting to, in turn, exercise its rights under the collateral security referred to in the agreement, which security included each of the Deeds of Guarantee and Indemnity entered into by Mr Palta and by Concast.What was the nature of the claim?

Ratio Decidendi

Legal Principle Established

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CITATION:	HT Contracting v Palta [2025] QSC 55
PARTIES:	HT CONTRACTING PTY LTD ACN 163 131 191 (Respondent Plaintiff) v RAKESH PALTA (Applicant First Defendant) and CONCAST PTY LTD ACN 642 829 598 (Second Defendant)
FILE NO:	SC No 33 of 2023
DIVISION:	Trial
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court of Queensland
DELIVERED ON:	25 March 2025
DELIVERED AT:	Cairns
HEARING DATES:	21 October 2024, 6 December 2024, 11 December 2024
JUDGE:	Henry J
ORDERS:	1. The default judgment entered against the First Defendant is set aside. 2. The First Defendant will file and serve any Notice of Intention to Defend and Defence by no later than 4pm 9 April 2025. 3. I will hear the parties as to costs, if costs are not agreed in the meantime, at 9.15am 23 April 2025 (out of town parties having leave to appear via video link).
CATCHWORDS:	PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – JUDGMENTS AND ORDERS – AMENDING, VARYING AND SETTING ASIDE JUDGMENTS AND ORDERS – ACTIONS TO REVIEW OR SET ASIDE JUDGMENT OR ORDER – where default judgment was granted in favour of the plaintiff – where no notice of intention to defend or defence was filed – where the first defendant applies to set aside summary judgement – whether default judgment was irregularly entered – whether first defendant has given a satisfactory explanation for failure to file a notice of intention to defend in time – whether first defendant has a prima facie defence on the merits Competition and Consumer Act 2010 - Schedule 2 The Australian Consumer Law (Cth), s 20, s 21 Uniform Civil Procedure Rules 1999 (Qld), r 283, r 284, r 290 Browning v Australia and New Zealand Banking Group Ltd [2014] QCA 43, cited Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; [1983] HCA 14, cited Cusack v De Angelis [2008] 1 Qd R 344; [2007] QCA 313 De Castro v Burtenshaw Super Pty Ltd [2023] QCA 218, applied Embrey v Smart [2014] QCA 75, cited Stubbings v Jams 2 Pty Ltd (2022) 276 CLR 1; [2022] HCA 6, cited
COUNSEL:	P Travis for respondent Plaintiff J Sheridan (21 October), M Jonsson KC (6 & 11 December) for applicant First Defendant
SOLICITORS:	Parsons and Partners for respondent Plaintiff Harding Property Law for applicant First Defendant