Javelin Asset Management Pty Ltd v Wilson
[2013] WADC 77
•16 MAY 2013
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: JAVELIN ASSET MANAGEMENT PTY LTD -v- WILSON [2013] WADC 77
CORAM: DEPUTY REGISTRAR HOGAN
HEARD: 10 MAY 2013
DELIVERED : 16 MAY 2013
FILE NO/S: CIV 2254 of 2012
BETWEEN: JAVELIN ASSET MANAGEMENT PTY LTD
Plaintiff
AND
BRETT WILSON
First DefendantCAROLYN WILSON
Second Defendant
Catchwords:
Practice and procedure - Setting aside judgment in default of appearance
Legislation:
Nil
Result:
Application to set aside judgment allowed
Representation:
Counsel:
Plaintiff: Mr M Curwood
First Defendant : Mr D R Chandler
Second Defendant : Mr D R Chandler
Solicitors:
Plaintiff: Price Sierakowski
First Defendant : D C Legal Pty Ltd
Second Defendant : D C Legal Pty Ltd
Case(s) referred to in judgment(s):
Hall v Hall [2007] WASC 198
DEPUTY REGISTRAR HOGAN: This is an interlocutory application, brought by way of chamber summons filed 8 March 2013, in which the defendants, Brett and Carolyn Wilson, apply for orders:
1.that the default judgement entered against the defendants be set aside;
2.any other ancillary orders that the Court sees fit;
3.costs.
The defendants filed two affidavits in support of the application:
(i)the affidavit of Ahilan St George sworn 18 January 2013, (the St George affidavit);
(ii)the affidavit of Carolyn Wilson (the Wilson affidavit) sworn 30 April 2013.
In opposition to the application, the plaintiffs filed:
(i)the affidavit of Robert Gould (the Gould affidavit) sworn 12 April 2013; and
(ii)the affidavit of Mark Drewett Kendrew (the Kendrew affidavit) sworn 9 May 2013.
Claim
The plaintiff's claim is for $208,541.56 plus interests and costs.
The claim is said to have arisen from a 'term of loan deed' between the Wilsons and Great Southern Finance Pty Ltd (GSF) alleged to have been assigned to Javelin Asset Management (JAM).
No appearance was entered by the Wilsons after service and as a result JAM sought and on 6 December 2012 obtained a default judgment against the Wilsons.
The judgment on its face is regular and the authorities clearly indicate that where there is a regular judgment it will not be set aside unless there is an affidavit supporting it, setting out an arguable defence. The affidavit in support of the application to set aside judgment must disclose the defences upon which the defendants rely.
By an application filed 8 March 2013 the Wilsons sought to set the default judgment aside.
Affidavit of Ahilan St George
The affidavit of Ahilan St George, solicitor for the Wilsons, sworn 18 January 2013 contains numerous errors and is of limited assistance to the court.
The St George affidavit purports to provide a draft defence, and refers to default judgment having been granted for failing to file a defence, however, the court observes that no statement of claim has been filed and the draft defence refers to documentation which does not appear to be relevant to the matter before the court.
It was not disputed by JAM that any failure on the part of the Wilsons was due to the default of the solicitor, though it is true that the St George affidavit fails to depose to any reason for the failure to file an appearance.
It must be noted that the affidavit, purportedly sworn on 18 January 2013 annexes 'a letter from Price Sierakowski sent on 29 January 2013.' Annexure A to that affidavit is a 'true copy of the defence of Carolyn Wilson' and is described as constituting 'the annexure marked 'A' referred to in the affidavit of Ahilan St George sworn 6 February 2013'. The document described as constituting the annexure marked 'B' also refers to the affidavit of Ahilan St George sworn 6 February 2013.
The recorded date of swearing of the affidavit is almost certainly incorrect. There may have been an explanation for the inconsistency but none was proffered to the court.
Notwithstanding the shortcomings of the affidavit, I accept, for the purposes of this application that the failure to file an appearance was due to the default by the solicitors for the Wilsons, not the Wilsons themselves.
Wisely, the defendants did not rely for the purposes of this application on the draft defence attached to the St George affidavit.
The St George affidavit attempted to set out the reason for not entering an appearance (although he deposed to the failure to file a defence it was not in issue that the default of the solicitors was regarding the failure to file an appearance) as follows:
4.On or about 27 September 2012, I received documentation from Carolyn Wilson, being a writ of summons which was served on her regarding enforcement action that was being taken against her by Javelin Asset Management.
…
6.On or about 23 October 2012, DC Legal received the retainer to begin working on the specific matter whereby Wilson was being pursued by Javelin Asset Management.
…
9.On 14 December 2012, I left for holiday for the end of the year. I printed it (the defence) out prior to leaving on holiday on 14 December 2012. I left instructions for the defence to be signed by the defendant and filed.
10.In my absence, it was overlooked that defence needed to be sent.
11.When I returned from holiday on 17 January 2012, Mrs Wilson had been served with a default judgment.
I am satisfied that the reason for the failure to enter an appearance necessitates looking at the merits of the Wilsons' defence.
Considerations
The court has an unfettered discretion to set aside a default judgment to be exercised so as to do justice between the parties in the circumstances of the case (O 13 r 10 of the Rules of the Supreme Court 1971; Hall v Hall [2007] WASC 198, 63 (Newnes J)).
There are three relevant considerations for the court:
(a)the defendant's case;
(b)the reasons for failure to enter an appearance; and
(c)prejudice.
Prejudice
The Wilsons proposed that any prejudice suffered by the default judgment being set aside can be addressed by a costs order of that application in favour of the plaintiff.
Explanation of non‑appearance
The Wilsons were served with the writ on 27 September 2012 and immediately forwarded the papers to their solicitors. Failure to enter an appearance was the fault of their solicitors and not the Wilsons.
The defendant's grounds of defence
It is not the task of the court in this application to form a provisional view of the likely prospects of success of the Wilsons.
The primary consideration for the court is the merits of the Wilsons' case which would be made if the default judgment is set aside. The relevant test is that their case is inherently credible, and, if the Wilsons' evidence were accepted at trial, the defendant would have a real prospect of success.
The Wilson affidavit deposes to the general facts and matters upon which the Wilsons primarily rely for their defence.
The plaintiff's writ is generally endorsed and claims that that on or about 18 June 2004 the Wilsons and GSF entered into a 'term of loan deed' and on 31 March 2009 GSF assigned the 'term of loan' deed to JAM. The writ claims that the Wilsons are in breach of their obligations under the 'term of loan' deed.
The Wilsons deny that there is an enforceable 'term of loan deed' between them and GSF.
Primarily, the defendants argue that the Wilsons and GSF did not execute any 'term of loan deed'. That GSF requested, on numerous occasions for the loan deed to be signed (see Wilson affidavit pars 47 – 48, 51 – 53 and pages 36 – 37 and the Gould affidavit at pars 6 – 8 and pages 10 – 13) is evidence of the absence of an executed loan deed.
The Wilsons claim that they had no intention to enter into legal relations with GSF and that they did not complete the GSF application form dated 18 June 2004.
In the alternative, the Wilsons contend that the terms of any alleged 'term of loan deed' or any other agreement between the defendants and GSF are too uncertain to be enforceable.
The Wilsons allege that if there is an agreement between them and GSF any such agreement between the Wilsons and GSF is void because of unconscionable conduct by GSF. The unconscionable conduct of which they complain was the demand for and acceptance of monies in the absence of an enforceable deed.
Plaintiff's case
In opposition to the defendants' application to set aside default judgment, the plaintiff filed the Gould and Kendrew affidavits.
Javelin Asset Management argued that whilst the reason for the delay in the entry of an appearance was a default on the part of the solicitor there is no explanation in the St George affidavit for the failure to file an appearance.
The plaintiff argued that whilst it had not been provided with a copy of the loan deed signed by the defendants, there had been an agreement between the parties, as evidenced by the acknowledgement in the Wilson affidavit that:
38.On 27 August 2004 I received via ordinary mail certificates relating to my purported investment in the Great Southern Managed Investment Plantation Scheme of 2004. The said certificate stated that I had acquired 67 wood lots at an average price of $201,000. The certificate stated that the 67 wood lots had been paid for in full. The certificate also stated that the application fee was $3,000 plus GST and that the first instalment of $2,847.30 had also fallen due.
…
49.On 18 December 2004 a Notice of Assessment for personal tax year ending 30 June 2004 with refund cheques attached arrived in the mail … now we had a refund of over $30,000 from the ATO … I suspected the large personal refund cheques were due to the Great Southern Investment.
…
54.… we have already paid over $168,000 to Great Southern …
The plaintiff argued that the receipt of details of the allotment, the GST and tax refunds and the reference, in par 55 of the Wilson affidavit, to the loan deed being signed, is sufficient evidence of the existence of the 'term of loan deed'.
The plaintiff argued that if the court were to set aside the default judgment it ought to be conditional upon payment of an amount into court. The plaintiff acknowledged that the defendants had no notice of this application.
Whilst there appears to be evidence that there has been part performance of some part of a possible agreement between the Wilsons and GSF, subsequently assigned to JAM, it is unclear what agreement that might constitute.
Particularly in circumstances where there is no evidence that the loan deed dated 'on or about 18 June 2004' is in existence, it must be said that there is 'a real chance' that the Wilsons' version of the case may be preferred at trial.
Therefore I consider that the defendant has established a prima facie defence on the merits.
That being the case, I consider that the default judgment ought to be set aside.
Responsibility for the failure to enter an appearance was as a consequence of the default of the solicitors, I consider that the Wilsons bear no responsibility for that initial failure.
As to costs, subject to hearing from the defendants' representative, my view is that costs orders ought to be made as follows:
The defendants' solicitors do pay the plaintiff's costs of the entry of judgment thrown away and resisting the application to set the default judgment aside.
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