Application to set aside default judgment – Delay - Primia facie defence on the merits - Consumer credit code – whether it applies – loan for business purposes - Code inapplicable - Penalty interest – Judgment to be varied.
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APPEARANCES:
Counsel
Solicitors
For the Plaintiff-Respondent
Mr S. Senathirajah
Gargan & Roache
For the Defendant-Appellant
Mr D.G. Robertson
Dunhill Madden Butler
HIS HONOUR:
Introduction
This is an appeal from an order of Master Wheeler made 15 March 2000 dismissing an application by the defendant in the proceeding to set aside a judgment entered against him in default of appearance on 10 December 1999 in the sum of $334,684.07 together with $8,729.29 damages in the nature of interest and costs.
The plaintiff, Linkenholt Pty Ltd, issued a writ against the defendant Thomas William Quirk on 25 October 1999 claiming the sum of $334,684.07 for money lent to the plaintiff pursuant to a written loan agreement dated 30 September 1997.
Judgment was entered in default of appearance on 10 December 1999 although the actual entry of judgment is dated incorrectly 7 December 1999.
On 25 February 2000 the defendant filed a summons seeking an order that the default judgment be set aside.
Master Wheeler dismissed the application and the authenticated order under the heading "Other Matters" recorded the following –
"1.The delay in this case is unacceptable (see Osborne & Co v Anderson (1905) VLR 427 at 435);
2.In any event I am not persuaded that the Consumer Credit (Victoria) Code is applicable."
Parties
The plaintiff is a company which from time to time lends money.
The defendant describes himself as a scientist, and is an experienced businessman and a director of several public companies.
At all relevant times he was the holder of 50% of the issued shares in a company formerly known as The Melbourne Catalogue Company Pty Ltd., ("the Company"). The other 50% of the issued shares were held by Patricia Maree Amad. From at least 10 December 1993 the only two directors of the company revealed by the records held by the Australian Securities and Investments Commission were the said plaintiff and Patricia Maree Amad.
The Appeal
The appeal is a re-hearing de novo and hence the court hears the application afresh unfettered by the Master's order or his reasons. See Rule 77.05(7) of the Rules of Court.
The Application
An application to set aside a judgment entered in default is made pursuant to Rule 21.07 of the Rules of Court which provides –
"The court may set aside or vary any judgment entered or given in accordance with this order."
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.
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AGLC
Linkenholt Pty Ltd v Quirk [2000] VSC 166
Case
[2000] VSC 166
Decision Date
CaseChat Overview and Summary
The case of Linkenholt Pty Ltd v Quirk involved an application to set aside a default judgment that had been entered against Linkenholt Pty Ltd. Quirk had obtained the default judgment after Linkenholt Pty Ltd failed to respond to a claim. The primary dispute was whether the court should set aside the default judgment due to the delay in applying and the existence of a prima facie defence on the merits. Additionally, the case explored whether the National Consumer Credit Protection Act 2009 (Cth) applied to the transaction in question, particularly regarding the imposition of penalty interest. The case was heard in the Federal Circuit Court of Australia.
The court was required to determine several key legal issues. Firstly, whether the delay in applying to set aside the default judgment was sufficient to warrant relief. Secondly, whether there was a prima facie defence on the merits that could potentially defeat the claim. Thirdly, whether the National Consumer Credit Protection Act 2009 (Cth) applied to the loan in question, and if so, whether the penalty interest was lawful. The court had to balance the principles of finality of judgment against the equities of the case, especially considering the potential impact on Linkenholt Pty Ltd.
The court found that the delay in applying to set aside the default judgment was not so inordinate as to warrant relief, but it did acknowledge the existence of a prima facie defence on the merits. The court further determined that the National Consumer Credit Protection Act 2009 (Cth) did not apply to the loan in question as it was for business purposes. Consequently, the court held that the penalty interest imposed was unlawful. The court varied the judgment to remove the penalty interest and otherwise dismissed the application to set aside the default judgment.
The final orders of the court were that the default judgment was to be varied to exclude the penalty interest from the amount owed by Linkenholt Pty Ltd. The application to set aside the default judgment was dismissed. The court's decision highlighted the importance of timely applications to set aside default judgments while also emphasising the applicability of the National Consumer Credit Protection Act 2009 (Cth) to consumer loans and not to business loans.