Monks v Pieman Resources Pty Ltd

Case [2025] FCAFC 121

FEDERAL COURT OF AUSTRALIA

Monks v Pieman Resources Pty Ltd [2025] FCAFC 121  

File number(s): QUD 86 of 2025
Judgment of: HALLEY, MEAGHER AND WHEATLEY JJ
Date of judgment: 3 September 2025
Catchwords:  PRACTICE AND PROCEDURE – Application for leave to appeal default judgment entered pursuant to r 5.23 of Federal Court Rules 2011 (Cth) – where substantial noncompliance with request for particulars and notice to produce – where conduct deemed contumacious and contumelious – whether sufficient doubt to warrant reconsideration – whether substantial injustice would result if leave refused – application dismissed
Legislation:

Federal Court of Australia Act 1976 (Cth) ss 24(1A), 37M, 37N

Federal Court Rules 2011 (Cth) rr 20.31, 5.22, 5.23

Cases cited:

Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27

ARX18 v Minister for Home Affairs [2020] FCA 1351

Australian Coal and ShaleEmployees’ Federation v Commonwealth (1953) 94 CLR 621

Competition and Consumer Commission v ReckittBenckiser (Australia) Pty Ltd [2016] FCAFC 181

Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397; [1991] FCA 844

Ex parte Bucknell (1936) 56 CLR 221

Hastwell v Kott Gunning [2021] FCAFC 70

House v R (1936) 55 CLR 499

Hugo Boss AG v Hardge [2024] FCA 1325

Lenijamar Pty Ltd v AGC (Advances) Ltd (1990) 27 FCR 388

Macedonian Orthodox Community Church St Petka Incorporated v HisEminence Petar The Diocesan Bishop of The Macedonian Orthodox Diocese of Australia andNew Zealand (2008) 237 CLR 66; [2008] HCA 42

Mallet v Mallet (1984) 156 CLR 605

Melbourne City Investments Pty Ltd v Treasury Wine Estates Limited (2017) 252 FCR 1; [2017] FCAFC 98

Pieman Resources Pty Ltd v Monks [2025] FCA 88

Professional Administration Service Centres Pty Ltd v Commissioner of Taxation [2012] FCAFC 180; (2012) 295 ALR 52

Samsung Electronics Co Ltd v Apple Inc (2011) 217 FCR 238; [2011] FCAFC 156

Shakira v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] FCA 848

Shepherd v Watt [2022] FCAFC 78

Speedo Holdings BV v Evans (No 2) [2011] FCA 1227
Division: General Division
Registry: Queensland
National Practice Area: Commercial and Corporations
Sub-area: Commercial Contracts, Banking, Finance and Insurance
Number of paragraphs: 98
Date of hearing: 1 August 2025
Counsel for the Applicants: Ms B. K. Nolan
Solicitor for the Applicants: Green & Associates Solicitors
Counsel for the Respondents:  Mr D.E.F. Chesterman KC with Mr J. C. Peters
Solicitor for the Respondents:  Russells

ORDERS

QUD 86 of 2025
BETWEEN:

BRADLEY ROBERT MONKS

First Applicant

RODGER STUART JOHNSTON

Second Applicant
AND:

PIEMAN RESOURCES PTY LTD (ACN 631 444 089)

First Respondent

HELLYER GOLD MINES PTY LTD (ACN 125 516 636)

Second Respondent

HELLYER METALS LTD (ACN 660 575 073)

Third Respondent

ORDER MADE BY:

HALLEY, MEAGHER AND WHEATLEY JJ

DATE OF ORDER:

3 SEPTEMBER 2025

THE COURT ORDERS THAT:

1.The application for leave to appeal dated 11 February 2025 is dismissed.

2.The applicants are to pay the costs of the…

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Monks v Pieman Resources Pty Ltd [2025] FCAFC 121
Case
[2025] FCAFC 121
Decision Date

CaseChat Overview and Summary

The case of Monks v Pieman Resources Pty Ltd concerns an application for leave to appeal default judgments entered against the applicants. The applicants sought damages from the respondents for breaches of their duties as directors of the respondent companies, under various sections of the Corporations Act 2001 (Cth). The applicants failed to comply with a request for particulars and a notice to produce documents, and the primary judge ultimately granted default judgment against them. The applicants now seek leave to appeal from this decision.

The legal issues in this case revolve around the primary judge's exercise of discretion in entering default judgment against the applicants. The applicants argue that the primary judge fundamentally miscarried in his evaluative exercise, that the primary judge treated delay as dispositive of the application, and that judgment should not have been entered summarily in the reasonable exercise of the discretion. The applicants also submit that this is a discretionary error, and that there is a serious question to be tried.

The court rejected the applicants' arguments and dismissed their application for leave to appeal. The court found that the applicants had not substantially complied with the Court's orders, and that the proceeding was not at an advanced stage, with no evidence having been filed and served. The court found that the primary judge had properly exercised his discretion in entering default judgment against the applicants, and that there was no sufficient doubt to warrant reconsideration of the primary judge's decision. The court found that the primary judge had considered relevant and material matters in exercising his discretion, and that the applicants had not adduced any specific evidence of prejudice beyond the self-evident detriment of the entry of judgment in those amounts against them.

The court ordered that the application for leave to appeal dated 11 February 2025 be dismissed, and that the applicants pay the costs of the respondents, as taxed or agreed.

Orders

Orders of the court

1. The application for leave to appeal dated 11 February 2025 is dismissed.

2. The applicants are to pay the costs of the respondents, as taxed or agreed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

For the reasons that follow, we do not accept that leave to appeal should be granted to the applicants.B. BACKGROUND FACTS On 18 July 2024, the respondents commenced the proceeding. The respondents sought damages from the applicants for breaches of their duties as directors of the respondent companies. Those duties were identified as being, variously, directors’ duties, fiduciary duties and statutory duties under s 180, s 181 and s 182 of the Corporations Act 2001 (Cth). The conduct of the applicants giving rising to the alleged breaches of duties was, in broad terms, misapplying company funds for their own purposes and benefit. On 15 August 2024, the applicants consented to an order that they file and serve their defence by 29 August 2024. The applicants did not file and serve their defence by 29 August 2024. On 6 September 2024, the applicants consented to orders that the time for them to file their defence be extended to 4.00 pm on 12 September 2024, and that if a defence was not filed by that time, the respondents “may apply for default judgment”. On 12 September 2024, the applicants filed their defence. On 25 September 2024, the respondents requested further and better particulars of the defence (Request for Particulars) and filed, pursuant to r 20.31 of the Federal Court Rules 2011 (Cth) (the Rules), a notice requiring production of certain documents to which reference was made in the defence (Notice to Produce). The applicants failed to answer the Request for Particulars or produce the documents sought in the Notice to Produce or otherwise comply with the requirements of r 20.31 of the Rules. On 10 October 2024, the applicants consented to orders that they file and serve a response to the Request for Particulars and respond to the Notice to Produce by 4.00 pm on 18 October 2024 (First Extension Orders). The applicants failed to comply with First Extension Orders. No response was provided to the Request for Particulars. A purported response was made to the Notice to Produce, but it lacked the degree of detail required by r 20.31(2) of the Rules, and the applicants do not contend that it was sufficient to constitute compliance with the First Extension Orders. In or about November 2024, the applicants changed their legal representatives. On 3 December 2024, the matter was listed for further case management to address the applicants’ failure to comply with the First Extension Orders. Mr Andrew Stewart, solicitor, appeared for the applicants. He had taken over conduct of the proceeding on behalf of the applicants on or about 12 November 2024. In the course of the case management hearing, Mr Stewart had the following exchanges with the primary judge:HIS HONOUR: Well, given that there’s been no formal application made, I suppose I shouldn’t give judgment. But there’s an outstanding request for further and better particulars that your clients consented to provide by 25 September 2024. What about that, is that - - -MR STEWART: And that’s something that I will be finalising today with my clients.HIS HONOUR: So you will comply with those by the – you will comply with orders 1 and 2 by the 10th – by 13 December?MR STEWART: Yes, your Honour. …MR STEWART: Your Honour, I’ve only just come onto – on record, about two and a half weeks ago. I’m progressing the matter. Orders will be complied with. A number of other applications I’ve been corresponding with my friend. It’s not a straightforward matter. And like I said, we don’t gavel [sic] with costs for the delay in having to appear today. But the matter should be in the course in the usual way.

Evidence

Evidence Before The Court

The respondents’ application for default judgment was heard by the primary judge on 30 January 2025. Mr Stewart appeared for the applicants.C. EVIDENCE RELIED ON BY THE APPLICANTS The applicants relied on affidavits from Mr Stewart and Mr Rodger Johnston, the second applicant, both sworn on 29 January 2025 and filed at 4.00 pm and 6.00 pm, respectively, in response to the respondents’ application for default judgment. Mr Stewart gave the following evidence:(a)on approximately 12 November 2024, he was engaged by the applicants and obtained access to the file from the previous solicitors in a piecemeal manner over the subsequent two weeks; (b)on 4 December 2024, he emailed the applicants raising with them the need to comply with the Court’s orders with respect to the Request for Particulars and the Notice to Produce; (c)on or about 5 December 2024, he underwent surgery and then returned to work “in full capacity” the following week; (d)on 13 December 2024, he emailed the applicants following up on the need for them to respond to the Request for Particulars and the Notice to Produce. He received a response from the applicants later that day, but it “wasn’t a full and detailed response”; (e)he subsequently sought further information and clarification from the applicants and, given the “nature and complexity of the proceedings”, formed the view that counsel needed to be briefed and any response to the Request for Particulars and the Notice to Produce” would need to be settled by counsel; (f)on 18 December 2024, he engaged counsel to appear in the proceeding and a related Supreme Court proceeding but counsel returned his brief on the following day because he was “jammed in another matter” and was under a mistaken belief that the matter was only listed for a case management hearing; (g)he informed the applicants prior to the Christmas and New Year break that alternative counsel would need to be briefed and sought further documents and responses from the applicants to the Request for Particulars; (h)from 9 January to 27 January 2025 (inclusive), he was overseas but was able to arrange for a second counsel to be briefed on 20 January 2025. This counsel, however, returned the brief on 22 January 2025 after “observing the amount of work involved and his lack of capacity to take on the substantial matters observed in the proceedings”;(i)later on 22 January 2025, a third counsel was retained, but his brief “did not include all the material relevant to the proceedings” because he had been focusing on the “Supreme Court proceedings on 28 January 2025” before turning his attention to this proceeding; (j)on 29 January 2025, the third counsel returned his brief on the basis that he “did not have time and the capacity to prepare and appear adequately” at the hearing on 30 January 2025. Mr Stewart annexed to his affidavit a response to the Request for Particulars and the Notice to Produce and stated that (a) although they had not yet been settled by counsel, he believes that “it is an adequate response”, and (b) he has “instructions and verily believe[s] that there is a serious question to be tried”. Mr Stewart did not annex to his affidavit any email communications that he had with the applicants in relation to the Second Extension Orders.

Decision

Reasons for decision

This is an application for leave to appeal and, if leave is granted, an appeal from the orders of a judge of this Court made on 30 January 2025 entering default judgment against the defendants. The primary judge pronounced brief reasons on the transcript on that date and subsequently published formal written reasons on 17 February 2025: Pieman Resources Pty Ltd v Monks [2025] FCA 88 (Primary Judgment or PJ). In these reasons for judgment, the plaintiffs in the proceeding before the primary judge are referred to as the respondents, and the defendants in the proceeding before the primary judge are referred to as the applicants. The applicants submit that this is a classic case of a House v R (1936) 55 CLR 499 (Dixon, Evatt and McTiernan JJ) discretionary error: the evaluative exercise undertaken by the primary judge fundamentally miscarried, the primary judge treated delay as dispositive of the application, the case presents an opportunity to re-affirm the nature of “case management as judicial craft, not procedural algorithm”, and judgment in the proceeding should not have been entered summarily in the reasonable exercise of the discretion. For the reasons that follow, we do not accept that leave to appeal should be granted to the applicants.B. BACKGROUND FACTS On 18 July 2024, the respondents commenced the proceeding. The respondents sought damages from the applicants for breaches of their duties as directors of the respondent companies. Those duties were identified as being, variously, directors’ duties, fiduciary duties and statutory duties under s 180, s 181 and s 182 of the Corporations Act 2001 (Cth). The conduct of the applicants giving rising to the alleged breaches of duties was, in broad terms, misapplying company funds for their own purposes and benefit. On 15 August 2024, the applicants consented to an order that they file and serve their defence by 29 August 2024. The applicants did not file and serve their defence by 29 August 2024. On 6 September 2024, the applicants consented to orders that the time for them to file their defence be extended to 4.00 pm on 12 September 2024, and that if a defence was not filed by that time, the respondents “may apply for default judgment”. On 12 September 2024, the applicants filed their defence. On 25 September 2024, the respondents requested further and better particulars of the defence (Request for Particulars) and filed, pursuant to r 20.31 of the Federal Court Rules 2011 (Cth) (the Rules), a notice requiring production of certain documents to which reference was made in the defence (Notice to Produce). The applicants failed to answer the Request for Particulars or produce the documents sought in the Notice to Produce or otherwise comply with the requirements of r 20.31 of the Rules. On 10 October 2024, the applicants consented to orders that they file and serve a response to the Request for Particulars and respond to the Notice to Produce by 4.00 pm on 18 October 2024 (First Extension Orders).

Ratio Decidendi

Legal Principle Established

The applicants’ reliance on the decision of the Full Court in Professional Administration Service Centres Pty Ltd v Commissioner of Taxation [2012] FCAFC 180; (2012) 295 ALR 52 (Edmonds, McKerracher and Nicholas JJ) is also misplaced. Unlike the position as stated in Professional Administration Service at [43] and [50], in this case (a) there had not been substantial compliance with the Court’s orders, (b) the proceeding was not at an advanced stage, no evidence had been filed and served, and (c) the primary judge did refer and have regard to the principles in Lenijamar at PJ [45] and [50]. The dispositive reasoning of the primary judge in exercising the discretion of the Court to grant default judgement is at PJ [52]:In this case, there is more than sufficient justification to warrant the exercise of discretion of the Court to grant judgment. The delay is, as was said on 3 December, contumacious and contumelious. That was compounded by further delay and non-compliance, despite assurances of immediate compliance. The lack of any evidential foundation supporting a justification for the further non-compliance and delay is remarkable and significant. So too is the absence of evidence that the defendants made any real attempt to observe the timeframes imposed by this Court; timeframes that were, it should be noted, amended and extended for their benefit. The fact there has been some late minor attempt to comply is relevant; however, when considered in the broader context, it is not sufficient to dissuade the exercise of the discretion in r 5.23(2) of the Rules in this case. The matters that the primary judge considered at PJ [52] were both relevant and material matters that his Honour was entitled to take into account in exercising the Court’s discretion. The primary judge did not expressly consider in his dispositive reasoning the impact of the entry of default judgment, but the impact on the applicants was self-evident in the orders that his Honour made on 30 January 2025. It cannot sensibly be suggested that his Honour was not acutely aware that when he made the orders entering judgment against the first applicant in the amount of $2,358,695.75 and interest of $106,053.42 and against the second applicant in the amount of $2,880,000.00 and interest of $129,492.69, it would have a material impact on the financial position of the applicants. Moreover, the applicants did not adduce any specific evidence of prejudice at the hearing of the default judgment application, beyond the self-evident detriment of the entry of judgment in those amounts against them. The discretion exercised by the primary judge pursuant to r 5.23(2) of the Rules had to be exercised in a manner consistent with the interests of justice, and in particular, the overarching purpose. It did not require or demand any form of evaluative assessment of all alternative sanctions or measures to address default, in every case of default. Nor did it require an assessment to be made of whether the default might be capable of being remedied, and, if so, what mechanisms might be employed to enable a party in default to remedy the default. Almost any default, given sufficient time and resources, is capable of being remedied.