Konica Minolta Business Solutions Australia Pty Ltd v Vongkeneta

[2013] NSWSC 486

Supreme Court

New South Wales

Medium Neutral Citation:	Konica Minolta Business Solutions Australia Pty Ltd v Vongkeneta [2013] NSWSC 486
Hearing dates:	24 April 2013
Decision date:	24 April 2013
Jurisdiction:	Equity Division
Before:	Hallen J
Decision:	See Paragraphs 65 to 68
Catchwords:	Claims for money judgment against three Defendants - No appearance by first and second Defendants at the trial - Claim against third Defendant resolved by agreement of the Plaintiff and the third Defendant - Trial proceeds in absence of first and second Defendants - No Appearance or Defence filed by first and second Defendants - Deemed admissions, as well as evidence read and documents tendered at the trial - Plaintiff entitled to relief sought against first and second Defendants
Legislation Cited:	Uniform Civil Procedure Rules 2005
Cases Cited:	Anton Fabrications (NSW) Pty Ltd, Re; Bentley Smythe Pty Ltd v Anton Fabrications (NSW) Pty Ltd [2011] NSWSC 186 French Consulting Pty Limited v Lawson Stuart Donald [2011] NSWSC 584 Smirski v Macander [2010] NSWSC 929 Ward v Ward [2011] NSWSC 107 Wily v King [2010] NSWSC 352
Category:	Principal judgment
Parties:	Konica Minolta Business Solutions Australia Pty Limited (Plaintiff) Linda Sisaveth Vongkeneta (first Defendant)Houmchanh Simmalavong (aka Eddie Simmalavong) (second Defendant) Sutari Vongkeneta (third Defendant)
Representation:	Counsel: Mr P Newton (Plaintiff) Solicitors: Middletons (Plaintiff) LAC Lawyer Pty Ltd (third Defendant)
File Number(s):	2012/234933

Judgment - EX TEMPORE

1. HIS HONOUR: In these proceedings, the Plaintiff, Konica Minolta Business Solutions Australia Pty Limited, sues three Defendants, being Linda Sisaveth Vongkeneta, her husband, Houmchanh Simmalavong (also known as Eddie Simmalavong), and her daughter (and his stepdaughter), Sutari Vongkeneta. (The first and second Defendants have two other daughters, being Suriya and Sutara, who are not parties to the litigation.)

1. The claim against the first and second Defendants is for $3,638,572.20 plus interest, as well as for declarations that a property described as "the Edensor Park property" is held by them on trust for the Plaintiff absolutely; or in the alternative, that the Edensor Park property is held upon trust up to the amount claimed (plus interest); or alternatively, subject to a charge for the amount claimed (plus interest).

1. The Plaintiff accepts that it will take any such interest subject to any existing registered encumbrance on title to the Edensor Park property.

1. As against all Defendants, the Plaintiffs sought a declaration that a transfer of land described as "the Homebush property", by the first and second Defendants to the third Defendant, is void; further or alternatively that the Homebush property is held by them, or her, on trust for the Plaintiff absolutely; or in the alternative, that the Homebush property is held on trust up to the amount claimed (plus interest); or alternatively, subject to a charge for the amount claimed (plus interest).

1. As against the third Defendant, the Plaintiff sought a declaration that the Homebush property is held by the third Defendant on trust for the Plaintiff for an amount calculated as the difference between the price paid by her for the purchase of the Homebush property and its market value at the date of transfer; or further or alternatively that the interest of the first and second Defendants', or that of the third Defendant in the Homebush property, is held subject to a charge for the amount claimed (plus interest). (The Plaintiff accepts that it will take any such interest subject to any existing registered encumbrance on title to the Homebush property.)

1. As against all Defendants, the Plaintiff sought an order for costs and interest on those costs.

1. The Plaintiff filed the Statement of Claim on 13 September 2012. Prior to that date, it had filed a Summons on 27 July 2012, seeking an asset freezing order. It obtained such an order, as well as other orders, on that date. Subject to some amendments made to the form of the orders that were made initially, most of the orders have been continued since then, most recently on 5 February 2013. The terms of the order are such that they expire at 4:00 p.m. today

1. Of course, because the first and second Defendants did not file an Appearance or a Defence, within 28 days after service on each of the Statement of Claim or such other time as the court directed for the filing of a defence, each was regarded as being "in default": Uniform Civil Procedure Rules 2005 ("UCPR") rule 16.2(a). In addition, by her, and his, failure to file a defence traversing the allegations of fact in the Statement of Claim, each of those allegations of fact is taken to be admitted as against each of them: UCPR rule 14.26(1). Finally, pursuant to UCPR rule 16.3, which deals with the case where a defendant is in default, it allows the Plaintiff to apply for judgment under UCPR Part 16 "according to the nature of his or her claim for relief". Unless the court otherwise orders, such an application for judgment must be accompanied by an affidavit of service of the statement of claim and an affidavit in support of the application.

1. Only the third Defendant filed a Defence to the Statement of Claim. She did so on 24 October 2012. In answer to the claim made against her, the third Defendant, at paragraph 54, pleaded that:

(a) If the first and/or second Defendant were indebted to the Plaintiff, as alleged in the Statement of Claim (which was not admitted), she was not aware of the circumstances giving rise to that indebtedness at the time the Homebush property was transferred to her.

(b) The first and second Defendants sold the Homebush property to her for $260,000.

(c) The third Defendant had borrowed $200,000 from the National Australia Bank Limited ("the NAB"), which amount was paid to the prior mortgagee of the Homebush property to secure the discharge of its mortgages registered on the title to the Homebush property ("the NAB Loan").

(d) As security for the loan from the NAB, she provided to the NAB, a mortgage that was registered on the title to the Homebush property.

(e) The third Defendant remains liable to the NAB under the NAB Loan and Mortgage.

1. On the evening before the commencement of the hearing, the Court was advised that the claim of the Plaintiff against the third Defendant had been resolved and that "the Plaintiff and the third Defendant will seek orders in accordance with Short Minutes of Orders" (a copy of which were provided).

1. At the hearing, Mr Sher, solicitor, appeared for the third Defendant. There were then further discussions between him and the legal representatives of the Plaintiff, which resulted in amended orders being signed. The Short Minutes of Order were identified as being made between the Plaintiff and the Third Defendant.

1. By consent of the Plaintiff and the third Defendant, I made the relevant declaration and order in the Short Minutes of Order between the Plaintiff and the third Defendant as well as other notations, which appear at the conclusion of these reasons for judgment, sought by the Plaintiff and the third Defendant, and, thereafter, excused Mr Sher, on behalf of the third Defendant, from further attendance.

1. The trial then proceeded only as against the first and second Defendants.

1. The first and second Defendants have not appeared themselves, or by a legal practitioner, at any time, since the proceedings commenced. Nor did they appear at the trial. (They were not outside the Court when the matter commenced and when called, later, there was no appearance by, or on their behalf.)

1. Evidence reveals that the first and second Defendants (and their two minor children) left Australia on 15 July 2012 and flew to Bangkok, Thailand. There is no evidence that the first and/or second Defendant has, or have, returned.

1. UCPR rule 29.7, relevantly, provides:

"Procedure to be followed if party is absent

(1) This rule applies when a trial is called on.

(2) If any party is absent, the court:

(a) may proceed with the trial generally or so far as concerns any claim for relief in the proceedings, or

(b) may adjourn the trial. ..."

1. I have previously held, in French Consulting Pty Limited v Lawson Stuart Donald [2011] NSWSC 584, at [14]:

"The clear purpose of UCPR rule 29.7 is the efficient dispatch of Court business. However, in despatching Court business, I cannot ignore the right of a defendant to be informed, or, at least, to be made aware, of a trial date. It is a fundamental principle that a party who may be adversely affected by the making of court orders has a right to be heard: Cameron v Cole [1944] HCA 5; (1944) 68 CLR 571, in which Rich J said (at 589):

'It is a fundamental principle of natural justice, applicable to all courts whether superior or inferior, that a person against whom a claim or charge is made must be given a reasonable opportunity of appearing and presenting his case. If this principle be not observed, the person affected is entitled, ex debito justitiae, to have any determination which affects him set aside, and a court which finds that it has been led to purport to determine a matter in which there has been a failure to observe the principle has inherent jurisdiction to set its determination aside. ... In such a case that has been no valid trial at all.'"

1. At [39] - [40], I added:

"This conclusion may be reached in another way. I refer, again, to what was said by Ward J in In the matter of Anton Fabrications (NSW) Pty Ltd - Bentley Smythe Pty Ltd v Anton Fabrications (NSW) Pty Ltd at [12]:

"As noted in the commentary in Ritchie's, a party fails to appear, for the purpose of the Rule 29.7 , if that party fails to provide the Court with an apparently credible explanation, for that non-attendance. By way of example of a lack of credible explanation reference is made to Magjarraj v Asteron Life Ltd [2009] NSWSC 1433 at [22] where the court had been provided with an inadmissible doctor's certificate asserting incapacity resulting from an undisclosed medical condition."

It seems to me to be an "apparently credible explanation for non-attendance" if it could be established that a defendant is unaware of the date of the trial. It cannot be said, in the present case, that the first Defendant was aware of, or otherwise had knowledge of, the date of trial, but chose not to attend court."

1. In the circumstances, the first issue to address is whether I am satisfied that it is appropriate to proceed in the absence of the first and second Defendants or anyone representing each of them.

1. Clearly, the first and second Defendant was each "absent", that is, she and he was not physically present at the trial and was not represented. I consider a party is "absent" within the meaning of the rule, when the trial is called on, only if it can be shown that he, or she, has knowledge, or notice, of the date of the trial, and is not physically present, or not represented. In other words, before the rule can be relied upon, there should be proof that the absent party has been given reasonable notice of, or has knowledge of, the date of the trial.

1. To demonstrate that the first and second Defendant had been served with the Statement of Claim, the Plaintiff relied upon an affidavit of Morrie Fahd who deposed to having served the first and second Defendants in accordance one of the methods of service that had been prescribed in orders made on 30 August 2012.

1. In relation to the notification of the hearing date, the Plaintiff relied upon an affidavit of Anthony Peterson, a solicitor, who deposed to having sent, on 5 February, 2013, certain copy documents, including a copy of orders made on 5 February 2013, to the first and second Defendants, also in accordance with one of the methods of service that had been prescribed by the asset freezing orders.

1. In the orders made on 5 February 2013, the following paragraph appears:

"2 Subject to the next paragraph, this order has effect up to and including 4:00 p.m. on 24 APRIL 2013 (the Hearing Day). On the Hearing Day at 10:00 a.m. there will be a further hearing in respect of this order before the Court."

(Paragraph 3 of the Orders is not relevant.)

1. There is also evidence that the Plaintiff has, unsuccessfully, sought details of the precise whereabouts of the first and second Defendants from the third Defendant. (Mr Sher, without objection, indicated from the bar table that his instructions were to the effect that the third Defendant had no contact with either the first or second Defendants.)

1. I am satisfied from all of the evidence I have read, that all reasonable attempts have been made to give each of the first and second Defendants notice of the date of the trial. Overall, I am satisfied that attempts have been made, fruitlessly, to provide each with the documents to be relied upon, and to allow her, and him, to participate in the proceedings.

1. The Plaintiff has also established that all reasonable attempts have been made to notify the first and second Defendants of the date for the trial and that it was to then proceed.

1. No apparently credible explanation for non-attendance has been advanced and I am of the view that neither of the first or second Defendants has sought, or seeks, to participate in the proceedings. In this regard, I bear in mind that neither has appeared at any of the interlocutory, or directions, hearings that have occurred since the proceedings were commenced.

1. Finally, I have not forgotten what I wrote in Smirski v Macander [2010] NSWSC 929 at [34]:

"It is to be remembered that the primary considerations on whether to proceed ex parte concern whether there is urgency; whether irreparable damage would flow from making an ex parte order; whether hardship would flow to a party against whom an order is made and whether such an order can be set aside: Ndjamba v Toyota Finance Australia Ltd [2010] NTSC 23, per Blokland J at [8]."

1. No particular urgency is disclosed. However, if the allegations of fact alleged against the first Defendant are established, the Plaintiff has had moneys, to which it was entitled, taken from its account, over several years, ending in early 2012. Additionally, the proceedings were commenced over nine months ago.

1. There is no ground on which it would be appropriate for the court to adjourn the trial. It is unlikely that either of the first or second Defendants would appear to meet the allegations made, even if a further opportunity was given. Thus, there would be no point in the Court, of its own motion, adjourning the matter, and I have proceeded to hear the matter in the absence of the first and second Defendants.

1. The Plaintiff has been required to prove the claim so far as the burden of proof lies upon it and if it does so against the first and second Defendant, it is entitled to the relief claimed and such other relief as is consistent therewith: Re Anton Fabrications (NSW) Pty Ltd; Bentley Smythe Pty Ltd v Anton Fabrications (NSW) Pty Ltd [2011] NSWSC 186, per Ward J, at [11]. Of course, as previously stated, the failure of defendants who do not appear to plead to allegations in the Statement of Claim founds deemed admissions of the allegations in the Statement of Claim: Ward v Ward [2011] NSWSC 107 at [28]. The evidence has been read so that the Court can be satisfied that the orders and declarations sought are appropriate.

Background Facts

1. Of course, it is to be remembered that "[T]he philosophy underlying rule 16.6 is that, because provision is made for the filing of a defence in response to a statement of claim and the statement of claim, of its nature, should contain all allegations necessary to make good the entitlement to the asserted cause of action, failure to file a defence should be taken to represent acceptance of the statement of claim and admission of the several allegations in it": Wily v King [2010] NSWSC 352, per Barrett J (as his Honour then was) at [16].

1. In addition to the deemed admissions that arose from the first and second Defendants' failure to plead to the Statement of Claim, the Plaintiff, on the hearing, read affidavit evidence and tendered documentary evidence in support of its claim. The following facts have been established as against the first and second Defendants by that evidence.

1. The Plaintiff is a company registered under the Corporations Act 2001 having the legal capacity and powers of an individual both in and outside Australia.

1. At all relevant times, the Plaintiff was a supplier of multifunctional digital imaging solutions. It employed about 400 people.

1. During the period between about 6 March 1995 and 9 March 2012, the Plaintiff employed the first Defendant as a payroll/office administrator. As part of her job, she managed "payroll related payments" (the payment of wages and salaries to the Plaintiff's employees and of parental leave payments, charity donations and allowances), as well as "statutory payroll payments" (payment of payroll tax, group tax and worker's compensation).

1. The second Defendant never worked for the Plaintiff and was never employed or contracted by it to perform any work on its behalf. It may be that he was in the business of importing and exporting wine.

1. At the commencement of her employment, the first Defendant's salary was $34,500 (exclusive of superannuation) and at the time of her resignation, in February 2012, it was $75,000 plus $6,750 (superannuation guarantee charge). At no time, was she entitled to receive any commissions.

1. During the period of her employment, the first Defendant had access to the Plaintiff's payroll records and managed the Plaintiff's payroll (except for April 2008, December 2010 to January 2011 and September to October 2011, during which times, she was on leave).

1. During the period between 3 March 2006 and 22 February 2012, the total salary due and paid by the Plaintiff to the first Defendant was approximately $400,970.

1. Since about August 2003, the first and second Defendants were the registered proprietors of the Edensor Park property.

1. In about December 2003, the first and second Defendants became the registered proprietors of the Homebush property.

1. In about February 2012, the first Defendant transferred the Homebush property to the third Defendant.

1. Since in about August 2003, the first and second Defendant held, and conducted with the Australia and New Zealand Banking Group Limited ("the ANZ Bank"), an Equity Manager Account ("the ANZ account");

1. The second Defendant held in his sole name, and conducted, with the ANZ Bank, an account ("the second ANZ account").

1. Since in about August 2003, the ANZ Bank held a first registered mortgage over the Edensor Park property, which mortgage secured all money owing by either or both of the first and second Defendants to it, including amounts owing by the Defendants and debited to the ANZ account and to the second ANZ account.

1. Since in about May 2004, the ANZ Bank held a second registered mortgage over the Edensor Park property, which mortgage secured all money owing by either or both of the first and second Defendants to it, including amounts owing by the Defendants and debited to the ANZ account and to the second ANZ account.

1. The first and second Defendant hold a term deposit with the ANZ Bank of $100,000, said to be held in trust for Sutari, Sutara & Suriya. However, there is no evidence of any document, or written instrument, creating, or evidencing, any such trust.

1. The first and second Defendant hold a Progress Saver Account with the ANZ Bank, which has a credit balance of no less than $10,915.48, also said to be held in trust for Sutari, Sutara & Suriya. However, there is no evidence of any document, or written instrument, creating, or evidencing, any such trust.

1. Each of these accounts is the subject of the asset freezing order previously referred to.

1. Prior to and since 6 March 1995, the Plaintiff conducted an account with Westpac Banking Corporation, from which account payments were made to employees of the Plaintiff ("the Wages account").

1. During her employment with the Plaintiff, the first Defendant caused payments to be made from the Plaintiff's money to herself and other employees of the Plaintiff and caused transfers of funds from the Wages account into accounts held by herself and the second Defendant.

1. During the period between March 2006 and February 2012, the first Defendant, without the knowledge, consent, or authority of the Plaintiff, caused to be transferred various amounts totalling $3,628,565.48, in addition to the amount of her own salary, from the Wages account into the ANZ account and the amount of $10,006.72 to be transferred from the Wages account into the second ANZ account, making a total amount transferred of $3,638,572.20. It appears that there were some 81 unauthorised transactions.

1. Over the years, the first and second Defendant withdrew, or transferred, sums of money from their joint account with the ANZ Bank, which sums were used for their own benefit. I am satisfied that the first Defendant implemented a scheme to orchestrate and effect the transfer of moneys, from the Wages account, to the joint bank account held by her and the second Defendant, and, in respect of the amount of $10,006.72, to the account in the name of the second Defendant.

1. It has been possible to trace, with reasonable exactitude, the movement of money from the Wages account directly to the first and second Defendant's joint bank account with the ANZ Bank. More difficult is to trace what happened from there.

1. There is no direct evidence of what use the first Defendant made of the moneys taken from the Wages account. From time to time, the balance owing on that account varied from being in credit to being in debit. The greatest credit balance was $20,968.98. The greatest debit balance was $445,215.37.

1. However, all the surrounding circumstances point inexorably to the conclusion that the first and second Defendants had received, by the date of the trial, amounts totalling $3,638,572.20.

1. Bearing in mind the income of the first Defendant, the likely source of repayments of the debit balances, by the first and second Defendants, was money taken from the Plaintiff. No suggestion otherwise has been advanced.

1. Because all moneys owing by the first and second defendants to the ANZ Bank were secured by the first and second mortgages registered on the title to the Edensor Park property, the sums of money taken from the Plaintiff's account by the first Defendant, in all probability, reduced the indebtedness of the first and second Defendants secured by those mortgages over that property.

1. The Plaintiff has not recovered any moneys from the first and/or second Defendants.

Determination

1. The Plaintiff is entitled to the relief it seeks on, at least, the following bases:

(a) As money had and received by the first and second Defendants to her, his or their, use, on the basis that the money was transferred to the first and second Defendant's joint bank account with the ANZ Bank, or in the case of $10,006.72, to the account of the second Defendant, without the knowledge, consent, or authority, of the Plaintiff;

(b) The first Defendant's personal obligation to account to the Plaintiff for the sums received by her, which obligation is of the same kind as owed by an express trustee who misapplies the trust estate.

1. The Plaintiff seeks a money judgment in the amount of $3,638,572.20, plus interest calculated at the lowest rate prescribed by the UCPR (for ease of calculation). I have been provided with calculation of the amount of interest, based upon that rate of interest, being $298,661.98.

1. In its Statement of Claim, interest on costs is also sought. However, I am unable to make any order for interest on the Plaintiff's costs since there is no evidence that has been read going to the amount of costs that has been paid by the Plaintiff and when. No application was made for such an order, in any event, at the hearing.

1. In relation to the part of the claim by the Plaintiff against the first and second Defendants, I am satisfied that the relevant orders proposed by the Plaintiff in Short Minutes of Order between the Plaintiff and the first and second Defendants, dated 24 April 2013, should be made.

1. I make orders in terms of paragraphs 1, 2, 7, 9 and 11 and I make declarations in terms of Paragraphs 3, 6, and 8 of those Short Minutes of Order.

1. In relation to the part of the claim between the Plaintiff and the third Defendant, by consent the Court:

(a) Orders in terms of Paragraphs 5 and 10 of Short Minutes of Order between the Plaintiff and the third Defendant, dated 24 April 2013, signed by the legal representative of each of the Plaintiff and the third Defendant.

(b) Notes the agreement of the Plaintiff and the third Defendant that in the event the third Defendant has knowledge of, or becomes aware of, the address of either or both of the first and second Defendants, on or before Monday, 1 July 2013, she will inform the Plaintiff by its solicitor of that address.

(c) Notes that there is an inter partes agreement between the Plaintiff and the third Defendant under which the third Defendant has certain obligations to be completed before Monday, 1 July 2013, failing which further orders against the third Defendants are intended to be made by consent.

(d) Stands over the Plaintiff's proceedings as against the third Defendant to the Registrar's list on Monday, 1 July 2013.

1. As earlier stated, the asset freezing orders were continued until 4:00 p.m. today. In order to avoid the orders having to be continued, I order that these orders be entered forthwith.

1. I also order that the exhibits and the Court Books be returned.

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Decision last updated: 06 May 2013