Icon Water Limited v Preston - [2018] ACAT 133

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

ICON WATER LIMITED v PRESTON (Civil Dispute) [2018] ACAT 133
XD 1155/2018
Catchwords: CIVIL DISPUTE — application for default judgment to be set aside — civil jurisdiction and energy and water jurisdiction of tribunal — relevant test to set aside default judgment — reasonable excuse for not responding to substantive proceedings — reasonable prospect of successfully defending substantive proceedings

Legislation cited: ACT Civil and Administrative Tribunal Act 2008 s 56
Utilities Act 2000 s 179

Subordinate

Legislation cited: ACT Civil and Administrative Tribunal Procedural Directions 2010 (No 1)

Cases cited:Adams v Kennick Trading (International) Ltd (1986) 4 NSWLR 503
Allesch v Maunz [2000] HCA 40
Commissioner for Social Housing v Hutchings & Gottschalk‑Krutsky [2016] ACAT 88
Day and Munday Trading As Gone Postal & Proactive Airconditioning Pty Ltd [2013] ACAT 40
Gordon Lando v Krown Living Pty Ltd & Ors [2016] ACAT 60
Hardship Applicant 13312 v Icon Water Limited [2018] ACAT 83
Kang v R&D Regional Constructions Pty Ltd [2013] ACAT 24
Powley & Anor v Reynolds [2018] ACAT 103

Tribunal:Senior Member H Robinson

Date of Orders:  14 December 2018
Date of Reasons for Decision:         21 December 2018
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL       )          XD 1155/2018

BETWEEN:
ICON WATER LIMITED
Applicant

AND:
NORA KLARA PRESTON
Respondent

TRIBUNAL:Senior Member H Robinson
DATE:14 December 2018
ORDER

The Tribunal orders that:

The interim application is dismissed.

……………Signed…………..
Senior Member H Robinson

REASONS FOR DECISION

This is an interim application seeking orders to stay the enforcement of and/or set aside a default judgment entered against the respondent pursuant to direction 43.2.1 of the ACT Civil and Administrative Tribunal Procedural Directions 2010 (No 1).
The parties consented to the matter being decided in chambers, without an oral hearing, on the documentary material submitted by the parties on tribunal file XD1588/2018 (tribunal file).

Background

On 20 August 2018 the applicant filed an application seeking to recover from the respondent an amount of $1,433.30 for allegedly unpaid water consumption and supply bills, plus the tribunal filing fee and interest (the application).
The tribunal file shows that registry mailed the application to the respondent’s home address in Kambah on 22 August 2018. It was not returned as undelivered. The application was accompanied by a covering letter which advised that (amongst other things):
(a)a response to the application must be filed by close of business, Friday 21 September 2018; and
(b)if no response is received by that date, default judgment may be entered.
The respondent failed to submit a response to the application by 21 September 2018, or at all.
On 18 October 2018 the applicant lodged an application for default judgment. Default judgment was entered on that day (default judgment).
The application for default judgment was filed with the tribunal two days after the Tribunal, sitting in its Electricity and Water Jurisdiction, dismissed a complaint by the respondent against her electricity provider[1] (EW Complaint).
[1] EW 56 of 2018
On 28 October 2018, the respondent emailed the tribunal’s general mailbox and effectively advised that she had not received any documents relating to the application prior to receiving the default judgment.[2] She asked that the judgment be ‘dismissed’, and provided a medical certificate attesting to a period of ill health. A registry officer responded to her on 29 October 2018, advising that she should make an application to have the default judgment set aside, and suggesting that she seek advice from Legal Aid.
[2] Email from respondent to ACAT Registry 28 October 2018, 11.34am
On 2 November 2018, the respondent sent a similar email to the tribunal’s civil registry.[3] She asked that the default judgment be set aside, and suggested that the matter belonged instead in the ACAT’s Energy and Water Complaints jurisdiction.
[3] Email from respondent to ACAT Registry 2 November 2018, 3.42pm
On 5 November 2018, the respondent filed an ‘application for interim and other orders’ pursuant to which she sought to have the default judgment set aside for “[f]ailing to follow process” (first interim application).
The first interim application was listed for hearing on 20 November 2018. Neither party attended the hearing on that day. The presiding tribunal member noted that the respondent had advised registry that she had not had time to access legal advice, and on that basis she adjourned the proceedings to 27 November 2018. The orders of 20 November 2018 stated that “if there is no appearance by the applicant on the next occasion, orders will be made in her absence.” This order should probably have referred to the ‘respondent’ rather than the applicant, but it is clearly intended to refer to the applicant for interim orders, that is, Ms Preston.
On 27 November 2018 there was, again, no appearance by either party. Accordingly, the first interim application was dismissed. The consequence of this was that the default judgment entered on 18 October 2018 continued to stand.
Subsequent to the 27 November 2018 decision, there was further correspondence between the tribunal and the respondent. By way of an email dated 4 December 2018, the respondent was provided with another copy of the form for the application for interim or other orders. Registry advised the respondent that:
You can use this application to ask the Tribunal to:
1.       to set aside the judgment of 22 October 2018, explaining why you did not respond to the original application
2.       to request that the Registrar place an urgent stay on the default judgment (this is generally rare, as if enforcement proceedings are underway in the Magistrates Court, it is more likely that you would be required to apply through the Magistrates Court for a stay of the enforcement proceedings in that Court)
3.       to explain why you were not in attendance at the two hearing dates of your first application for interim orders.
Your application for interim or other orders will be listed for hearing and you are required to attend the Tribunal to speak to your application. If you do not attend, the application may be dismissed again.

The second interim application

On 4 December 2018 the respondent lodged a further application for interim orders (the second interim application) this time seeking:
Urgent stay on orders. All Icon applications dismissed against me.
The grounds relied upon in the second interim application are stated to be:
Bias. No parties attended. Icon instigated these matters, dismiss Icon’s applications against me. They are a big rich firm, we are pensioners who need our money to buy food and for emergencies. Please refer to previous Interim Application and attachments… I wasn’t aware of the new hearing date that still didn’t give any time to have an application for a solicitor processed. Please place this matter on hold until March 2019.
After filing the second interim application, the respondent sent a number of further emails to registry, which she asked be brought to the attention of the determining Tribunal in connection with this proceeding.[4] She also asked the electricity and water complaint file, including information of her financial hardship and correspondence and attachments, be considered.[5]

Setting aside a default judgement

[4] Emails from respondent to ACAT registry: 5 December 2018, 12:14pm; 11 December 2018, 5:11am; 11 December 2018, 11:34am; 11 December 2018, 4:43pm; 11 December 2018, 8:01pm
[5] Email from respondent to ACAT registry 11 December 2018, 11:34am

‘Default judgment’ is obtained pursuant to direction 43 of the ACT Civil and Administrative Tribunal Procedural Directions 2010 (No 1). As the use of the word ‘default’ in the name indicates, it is entered when the respondent is “in default” – that is, when the respondent has failed to file a response within the required time. It is principally an administrative process to streamline dealing with undefended applications, allowing the determination of a matter without a hearing on the merits.[6]
[6] Kang v R&D Regional Constructions Pty Ltd [2013] ACAT 24; Day and Munday Trading As Gone Postal & Proactive Airconditioning Pty Ltd [2013] ACAT 40 [18]-[19]; Commissioner for Social Housing v Hutchings & Gottschalk-Krutsky [2016] ACAT 88 [50]-[59]
In considering whether the set aside a default judgment (and also an ex-parte decision), the Tribunal usually applies the test founded on the High Court’s reasoning in Allesch v Maunz[7]. A form of this test was set out in practical terms by the Tribunal in Powley & Anor v Reynolds as follows:
… the Tribunal exercises the power [to set aside a decision] only where it is in the interests of justice to do so. It must be exercised “reasonably and rationally, having regard to the area of jurisdiction in which the tribunal is sitting.” Factors such as the reason/s for why the party was absent, whether their attendance would have made any difference to the outcome and the time that has passed between when the orders were made and the filing of the application to have the orders set aside are all relevant.[8]
[7] [2000] HCA 40 [23] per Gaudron, McHugh, Gummow and Hayne JJ; and [44] per Kirby
[8] [2018] ACAT 103 [30]
Most of the case law surrounding this test applies to the setting aside of ex-parte orders (orders in the absence of a party at a hearing) pursuant to section 56 of the ACT Civil and Administrative Tribunal Act 2008, rather than to setting aside default judgments entered through an administrative process. It is likely that the interests of justice may weigh more favourably on the side of a party who is seeking to set aside a default judgment than a decision made after an ex-parte hearing, given that there has been no meritorious consideration of the claim.
Still, even accepting the burden on the respondent in relation to this interim application is a light one, it still has to be met. The Tribunal must look at the whole of the relevant circumstances and decide whether or not sufficient cause has been shown for the tribunal to conclude that it is in the interests of justice to set the default judgment aside. This includes, at least, consideration as to whether there is a real ground of defence and an adequate explanation for the default.[9]

Consideration

[9] Adams v Kennick Trading (International) Ltd (1986) 4 NSWLR 503 [506]-[507]

Having read the first and second applications for interim orders, the emails between the respondent and the tribunal, and the electricity and water complaints information on the tribunal file, I surmise that the basis the respondent wants the default judgment set aside on the basis that:
(a)she was unaware of the application prior to the default judgment being entered; or
(b)to the extent that she was aware of the matter, she assumed that it was related to the complaint process being undertaken in the ACAT Energy and Water Complaints jurisdiction; or
(c)(perhaps) she was under the impression that an outcome of that complaint process was that her utility debts were on hold; and
(d)the facts are unclear and the matter requires a hearing; and
(e)she is medically unwell and unable to participate in the proceedings; and
(f)she is in any case in a vulnerable financial position and unable to pay.
Grounds (a), (b) and (c) are related, and go toward the question of whether the respondent had a reasonable excuse for not filing a response or participating in proceedings to date.
An example of the respondent’s submissions on these points is found in one of her 11 December 2018 emails to the civil registry, in which she refers to her interactions with the Energy and Water Hardship jurisdiction as follows:
I sent them the further information giving them cause to investigate Icon and to dismiss Icon’s claims against me.
…
I was still waiting to hear back from them when all of a sudden I received your letter telling me that you had ordered default judgment against me and ordered me to pay Icon, including their filing fee.
I repeatedly asked you to not only order an immediate/urgent stay to protect me and to immediately dismiss all of Icon’s claims against me and to order ewcomplaints to investigate and to dismiss Icon’s claims against me.[10]
[10] Email from respondent to ACAT registry 11 December 2018, 4:43pm
Having reviewed the relevant electricity and water jurisdiction documents that the respondent asked be considered on this file, I am satisfied that:
(a)the respondent has not had an electricity and water hardship arrangement since at least 2009; but
(b)the respondent did lodge a complaint in 2018 in relation to her energy supplier;
(c)that complaint was dismissed on 16 October 2018 – well after the deadline for filing a response in this matter, but only two days before the application for default judgment was made; and
(d)the respondent has made representations to various parties about the combined utilities concession and a water and sewage rebate.
Although the E & W Complaint was about her electricity service, not the water in issue in this case, it appears that the introduction of a combined utilities rebate may have caused her some confusion, and I accept she conflated the two different utility accounts. I accept that she thought (albeit incorrectly) that all her utilities bills were either the subject of the complaint with the tribunal’s Energy and Water Hardship jurisdiction, or that she had made a separate complaint about water, and some kind of process had commenced in that jurisdiction that prevented enforcement of her debts.
Additionally, the respondent supplied to the tribunal a medical certificate, dated 3 July 2018, stating that she will be unfit for work, school or ‘usual activities’ from 25 June 2018 to 24 September 2018. In light of the dates of the certificate, I am prepared to accept that the respondent had a medical condition that may[11] have compromised her capacity to file a response, although nothing has been produced that suggests a longer period of incapacity.
[11] I can put it no higher than that, as the medical certificate provides no detail on the nature of the illness or the practical restrictions in places on her day to day activities
Having regard to the medical certificate and the respondent’s confusion about the Tribunal’s differing jurisdictions, and the status of her utilities complaint, I am satisfied that she has a reasonable excuse for her failure to submit a response to the civil claim.
The alternative position is that she did not receive the application at all. Such a contention usually requires the maker to provide a sworn statement or give evidence on oath or affirmation. The respondent has not filed a signed witness statement or statutory declaration to this effect, and circumstances under which this matter is being decided – in chambers – means that I cannot ask her to give evidence on oath or affirmation either. Still, ultimately, I am satisfied that she in any case had a reasonable excuse for failing to file a response I do not require further evidence on this point.
In terms of her reasons for non-attendance at the two hearings on the first interim application, the respondent said she was unable to attend on 20 November 2018 as she had not had time to obtain legal representation, and she was both unaware of the hearing on 27 November 2018, and she still had not had time to obtain legal assistance. Being unable to obtain legal representation is rarely a reasonable reason for failing to attend the Tribunal, particularly on multiple occasions. While the Tribunal understands the respondent’s desire to obtain legal assistance, a party sued for non-payment of a debt cannot avoid prosecution of the claim simply by stating an inability to attend the hearing.[12] Still, the respondent’s non-attendance on 20 and 27 November 2018 do not necessarily prevent consideration of the second interim application on its merits[13]. Ultimately it is her reasons for not responding to the substantive proceedings that are of greater concern at this point, and they are reasonable.
[12] Gordon Lando v Krown Living Pty Ltd & Ors [2016] ACAT 60
[13] Noting however that multiple similar, unprosecuted applications may potentially be determined without hearing pursuant to section 54 or struck out pursuant to section 32 of the ACT Civil and Administrative Tribunal Act 2008
I therefore turn to the second consideration — whether the respondent’s participation in the substantive proceedings could have made a difference to the outcome. This causes me much greater concern.
The only ground of defence adequately articulated by the respondent is that she is suffering from financial hardship and is unable to pay the debt. She appears to argue that, on this basis, the applicant has a moral or ethical duty to offer her relief. She contends:
I’m suffering from financial hardship with no spare money left to pay for anything else other than to buy food and before Xmas to assist my family.
Other pensioners suffer the same financial hardships.
We would appreciate your assistance by dismissing all applications made by Icon against me.
Icon are a big rich company, they don’t need pensioners money to survive.
Rather than spending consumers money on expensive helicopters, changing names to look as though they are 3 different companies when they are all still ACTEWagl, solicitors, filing fees, this big rich company could have given all that money back to the pensioners and the low waged income earners by waiving the water rates and only charging for the minimal water usage, especially when a pensioner asks them for assistance letting them know that they are taking food out of our mouths.
I’m already freezing each year in the winter months.
I have no remunerations from my voluntary community work that I never claim back on giving my pension back to the community and taxpayers.
We ask for your kind assistance to disallow any further financial hardships committed by these big rich utility companies/retailers by dismissing all of their applications against me.
Do we have the urgent stay on the default judgment and money that they are asking from me?[14]
[14] Email from respondent to ACAT registry 11 December 2018, 5:11am
I accept the respondent’s evidence that she is suffering considerable financial hardship. However, the application before the tribunal is a debt application for the recovery of debt arising from services supplied under contract. It is not a defence to such a claim to plead that you cannot pay. It is not the Tribunal’s role, at least sitting in this civil jurisdiction, to assess the applicant’s priorities in seeking to recover this debt, or to consider whether it is fair or reasonable that the respondent be asked to pay it. The respondent points to no legal or contractual basis for her contention that she should not be required to pay. This part of the respondent’s position is legally unsustainable and is bound to fail.
In her correspondence, the respondent also suggests that elements of the case are in dispute. Unfortunately, she does not outline the basis for that contention. Nowhere does she contend that she did not consume the water or sewage services, or that she was not resident at the property at which the services were supplied. She makes no claim for breach of contract by the applicant, and does not set out any basis for a counterclaim or set-off. It the absence of further information, I cannot conclude that there are real issues in dispute.
It is impossible to discern any other basis for the respondent’s defence to the debt recovery claim. Consequently, on the information before me, I simply cannot conclude that the respondent has any reasonable prospects of successfully defending this matter, should I set aside the judgment.

There are other, broader considerations of justice, including the weighty factor that the respondent has not had a full hearing. However, there appears to be little purpose served by setting aside the default judgment and recommencing a proceeding that will incur further cost for all concerned, including the taxpaying public who fund this tribunal, where the respondent has articulated no defence to the claim and (on the basis of what she has submitted) is bound to fail.
If the respondent were seeking, instead of a complete dismissal, a payment plan, or a commercial settlement, then I may be able to conclude that a set aside or a stay would serve the purpose of allowing the respondent to negotiate a settlement. However, in this case, the respondent simply maintains that she wants the debt withdrawn.
I note that an electricity and water complaints resolution process is available through the tribunal’s Energy and Water division, as established under the Utilities Act 2000. The remedies available in this jurisdiction include hardship assistance under section 179. The nature of the relief available to homeowners was discussed recently in Hardship Applicant 13312 v Icon Water Limited [2018] ACAT 83. The Tribunal observed that:
15.    The Tribunal noted that the applicant’s position is that she cannot afford to make regular payments for water at the level required. The Tribunal considers that she is in this position because of her choice to house her extended family without asking for regular financial contributions from the adult children, whether from their wages, their Centrelink benefits or their family tax benefits. The applicant could also address her position in the medium term by downsizing and releasing some of the equity in her home.
16.    As a matter of public policy, the Tribunal considered that it is not the role of ACAT to maintain, in their own house, home owners who are not able to meet their ongoing utility and mortgage costs. This would be give rise to substantial inequity between home owners and private renters, who almost inevitably face eviction if they fail to pay their rent.
17.    In some special cases, the tribunal does support customers who are unable to pay for their reasonable cost of energy and water consumption; this is managed through the tribunal’s “Under-Consumption Discharge” policy... This form of support is usually associated with unusually high medical expenses (for example, families with a child who receives treatment in a Sydney hospital), high pharmaceutical expenses (outside the safety net), or lack of any income (victims of domestic violence, residents without permanent residence), etc.
It is not the role of the Tribunal, in this jurisdiction, to consider an application under the Utilities Act 2000. However, on current authority, it appears unlikely that a claim based purely on an inability to pay, or the alleged injustice of being required to pay, would be successful.
The default judgment process is intended to ensure that court and tribunal processes are not hampered by a party’s unreasonable avoidance or delay. It can sometimes, and perhaps even regularly, work an injustice by denying a party a right to a full hearing. Accordingly, the test for setting side default judgments is a liberal one. But even a low bar must be met. To set aside this default judgment, or grant a stay, I must have some basis for concluding that there may be a different outcome if the respondent were offered a hearing. I cannot be so satisfied. Indeed, having read the applicant’s submissions, I cannot see how any alternative outcome is possible.
Accordingly, I dismiss the interim application to set aside the default judgment of 16 October 2018. That judgment stands.
It is open to the respondent to file a further application to set side this default judgment. However, in order to have reasonable prospects of success, the respondent will need to clearly turn her mind to the legal basis upon which she says the debt is not payable. She should note, however, that multiple unsuccessful or unprosecuted applications may potentially be determined without hearing pursuant to section 54 of the ACT Civil and Administrative Tribunal Act 2008 or struck out pursuant to section 32 of that Act.
………………………………..

Senior Member H Robinson