McDonagh v Huxley (No. 3) - [2020] NSWSC 1181

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: McDonagh v Huxley (No. 3) [2020] NSWSC 1181
Hearing dates: On the papers
Date of orders: 1 September 2020
Decision date: 01 September 2020
Jurisdiction: Common Law
Before: Lonergan J
Decision:
(1) The notice of motion filed on 26 November 2018 is dismissed.
(2) The applicant, Rory McDonnell, is to pay the costs of the notice of motion.

Catchwords:
CIVIL PROCEDURE – second application to set aside default judgment – no draft defence provided - non-appearance – repeated non-compliance with court orders – where hearing complete – where applicant aware of proceedings at time of hearing – unexplained delay

Legislation Cited:
Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:
Byron v Southern Star Group (1995) 123 FLR 352
McDonagh Management Pty Limited [2019] NSWSC 1099
McDonagh v Huxley [2018] NSWSC 1316
McDonagh v Huxley (No. 2) [2018] NSWSC 1317

Category: Procedural rulings
Parties:
Sharon McDonagh (First Plaintiff)
McDonagh Management Pty Ltd (Second Plaintiff)
Gregory Huxley (First Defendant)
Vanessa Huxley (Second Defendant)
Adam Huxley (Third Defendant)
Rory McDonnell (Fourth Defendant/Applicant)
DIB Lawyers Pty Ltd (Fifth Defendant)
James Edward Spencer (Sixth Defendant)
Jeffrey Dougal Dawson (Seventh Defendant)
Vangory Holdings Pty Ltd (Eighth Defendant)
Vangory Services Pty Ltd (Ninth Defendant)
Benitch Investments Pty Ltd (Tenth Defendant)
Ghassan Dib (Eleventh Defendant)
Representation:
Counsel:
P S Braham SC/R Goodridge (Plaintiffs)
A Katsoulas (First, Eigth and Ninth Defendants)
M Kalyk (Third, Fifth and Eleventh Defendants)
G P McNally (Seventh and Tenth Defendants)
Solicitors:
Firths Lawyers (Plaintiffs)
Lillas & Loel Lawyers (First, Eighth and Ninth Defendants)
Mullane & Lindsay Solicitors (Third, Fifth and Eleventh Defendants)
Fourth Defendant/Applicant (self-represented)
Kent Attorneys (Seventh and Tenth Defendants)

File Number(s): 2014/311738
Publication restriction: Nil

Judgment

In a Statement of Claim filed on 23 October 2014, the first plaintiff, Ms McDonagh claimed that she and her superannuation company (the second plaintiff) were deliberately duped by a series of financial advices and transactions involving the eleven named defendants.
On 19 February 2016, on the application of the plaintiffs, default judgment was entered in the sum of $1,098,183.60 against the fourth defendant, Rory McDonnell. He had taken no steps in the proceedings and filed no appearance or defence.
After that date and up to the commencement of the hearing of the proceedings on 26 March 2018, there were multiple directions hearings before the Registrar, case managing the matter to trial. At none of those did Mr McDonnell appear.
On 20 June 2018 Mr McDonnell filed a notice of motion seeking 13 separate orders including that the proceedings be re-opened and that he be given leave to file a Defence, serve evidence, file cross-claims and add additional unidentified parties.
That application was dealt with on 20 August 2018, together with a last minute application for adjournment by Mr McDonnell. Judgments were delivered ex tempore: McDonagh v Huxley [2018] NSWSC 1316 (application for adjournment) and McDonagh v Huxley (No. 2) [2018] NSWSC 1317 (the application to set aside default judgment).
It is against this background that…

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 McDonagh v Huxley (No. 3)

Details

AGLC: McDonagh v Huxley (No. 3) [2020] NSWSC 1181
Case: [2020] NSWSC 1181
Decision Date: 01 September 2020

CaseChat Overview and Summary

The matter before the court was a second application by the defendant, McDonagh, to set aside a default judgment entered against them by the plaintiff, Huxley. The proceedings began when Huxley sought a judgment for unpaid invoices related to a contract for the supply of goods. McDonagh, the defendant, failed to appear or file a defence, leading to the entry of a default judgment in favour of Huxley. McDonagh subsequently applied to set aside the default judgment, claiming that they were unaware of the proceedings until after the hearing and that they had a viable defence. However, the court noted that McDonagh had been aware of the proceedings at the time of the hearing but chose not to appear. Additionally, McDonagh had failed to provide a draft defence and had repeatedly disregarded court orders.

The primary legal issue before the court was whether the defendant's application to set aside the default judgment should be granted. Key considerations included whether McDonagh had a reasonable excuse for their non-appearance and failure to file a defence, and whether the application was made promptly. The court also had to assess whether there was a viable defence that might justify setting aside the default judgment. Given that the hearing had already been completed and there was an unexplained delay in bringing the application, the court had to balance the principles of finality in litigation against the need to ensure justice in individual cases.

In determining the application, the court held that McDonagh had not provided a satisfactory explanation for their non-appearance and failure to comply with court orders. The court found that McDonagh had been aware of the proceedings but chose not to participate, and the delay in bringing the application further undermined their case. The court emphasised the importance of adhering to court processes and the need to prevent abuse of the litigation system. Consequently, the application to set aside the default judgment was dismissed. The court underscored that repeated non-compliance with court orders and unexplained delays would generally result in applications being denied.

Orders