Moore v Precision Painting Contractors Pty Ltd
[2016] FCCA 2909
•11 November 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MOORE v PRECISION PAINTING CONTRACTORS PTY LTD | [2016] FCCA 2909 |
| Catchwords: INDUSTRIAL LAW – Default judgment entered – application to set aside default judgment – non-compliance with Orders of the Court for filing submissions as well as history of delay and non-compliance generally by Respondent including when legally represented – Application dismissed. |
| Legislation: Federal Circuit Court Act 1999 (Cth), s.78(2) |
| Cases cited: Deputy Commissioner of Taxation v Awad (2001) 47 ATR 310 Evans v Bartlam [1937] AC 473 Hobartville Stud Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358 |
| Applicant: | SHANE MOORE |
| Respondent: | PRECISION PAINTING CONTRACTORS PTY LTD |
| File Number: | CAG 2 of 2016 |
| Judgment of: | Judge Neville |
| Hearing date: | 8 August 2016 |
| Date of Last Submission: | 15 August 2016 |
| Delivered at: | Canberra |
| Delivered on: | 11 November 2016 |
REPRESENTATION
| Counsel for the Applicant: |
| Solicitors for the Applicant: | Self-represented/CFMEU (by leave) |
| Counsel for the Respondent: | Mr B Buckland (on 8th August 2016) |
| Solicitors for the Respondent: | Rachel Bird & Co, Canberra |
ORDERS
The Respondent’s Application in a Case, filed 8th July 2016, be dismissed.
Pursuant to s.78(2) of the Federal Circuit Court of Australia Act 1999 (Cth), and pursuant to Part 29 of the Federal Circuit Court Rules 2001 (Cth) (Rules 29.05 and 29.11 in particular), the Sheriff or other similar officer is authorised to seize and sell, in satisfaction of the judgment debt in this proceeding entered on 5th April 2016, such personal property that the Respondent has a legal or beneficial interest in, such Order being in terms of the annexure to these reasons styled “Form 2.59 Seizure and sale order.”
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT CANBERRA |
CAG 2 of 2016
| SHANE MOORE |
Applicant
And
| PRECISION PAINTING CONTRACTORS PTY LTD |
Respondent
REASONS FOR JUDGMENT
Introduction
By way of an Application in a Case, filed 8th July 2016, the Respondent seeks to set aside a default judgement that was entered against it on 5th April 2016 for the sum of $4249.58 in relation to, among other things, non-payment of wages, and non-payment of travel allowance, pursuant to a “Greenfields agreement.” However, because of the Respondent’s failure to comply with Orders for the filing of written submissions, noting that the Applicant has complied with all relevant Orders and formally to file a Response to the substantive Application, it is impossible to consider the Respondent’s Application. Instead, that Application must be dismissed and the Orders made as sought by the Applicant.
Brief Procedural History
The procedural history of the matter unfortunately details a consistent lack of engagement by the Respondent.
The substantive Application (under the Fair Work Act 2009 (Cth) (“the Act”)) and Form 5 was filed by the Applicant in the small claims jurisdiction of the Fair Work Division of the Court on 19th January 2016.
The first Court date was 8th February 2016. On that occasion there was no appearance by the Respondent; an Affidavit of Service was filed on 21st January 2016.
Orders were made on 8th February 2016 that, absent the Respondent filing any Response within 21 days, default judgment would be entered in favour of the Applicant.
The Applicant filed a further Affidavit of Service confirming that the Orders of 8th February 2016 had been served upon the Respondents. No correspondence or material was filed by the Respondent. Accordingly, default judgment was entered on 5th April 2016.
On 15th April 2016, the Applicant filed an Application in a Case seeking Orders, pursuant to s.78(2) of the Federal Circuit Court Act 1999 (Cth), to enforce the sum specified in the default judgment that was entered on 5th April 2016. Somewhat curiously, there is no reference, so far as I can see, to any reference by the Applicant to this Court’s Rules, and in particular Part 29 regarding enforcement.[1]
[1] See further r.29.11, “Execution generally”, Federal Circuit Court Rules 2001 (Cth).
On 6th June 2016, the principal of the Respondent appeared before the Court and confirmed that his address for service was correct. The Respondent was ordered to file any Application to set aside the default judgment within 14 days.
There was no compliance with the Orders of 6th June 2016. The Respondent failed to provide the Court with any basis for setting aside the default judgment. The Respondent was given another opportunity to file an Application to set aside default judgment at the next mention date on 5th July 2016. On that occasion, Counsel appeared on behalf of the Respondent. The Applicant was awarded costs for this appearance.
The Respondents finally filed an Application in a Case on 8th July 2016 by which it sought Orders that the default judgment be set aside. An Affidavit in support of the Application in a Case, which was sworn by Mr Shero, the “sole director” of the Respondent, was filed in which he deposed that (a) he had not been served with a copy of pleadings in this matter and (b) his first solicitors that he had instructed in May 2016 did not follow his instructions. He also said (par.3) that he “did not dutifully prosecute the respondent’s defence prior to the entry of default judgment against the respondent on 5 April 2016.”
Mr Shero further deposed that (i) he had instructed solicitors to oppose the default judgment Application but those lawyers did not act upon his instructions, and (ii) in relation to the substantive claim by the Applicant, there were two defences available to resist the Applicant’s claim: first, all claims were settled in May 2015 by payment to the Applicant’s union representative by cheque in the sum of $5000; secondly, the Respondent contends that the Applicant was not entitled to the funds sought because of incorrect classification, incorrect calculation of the sum claimed, and that the Applicant did not attend work “on several occasions” and thereby he had “repudiated his employment with the Respondent.”
The Respondent filed a draft Response seeking that the Applicant’s claim be dismissed and new orders be made. The draft Response set out the matters referred to in the previous paragraph.
On 8th August 2016, the matter came back before the Court with both parties represented. Orders were made for both parties to file an Outline of Written Submissions of no more than 2 pages in relation to whether the Court should set aside its default judgment.
The Applicant filed submissions on 15th August 2016. However, to date, the Respondent has failed to file any further material.
Orders sought by the Applicant
In the Response to the Respondent’s Application in a Case filed on 15th August 2016, the Applicant seeks that the default judgment entered against the Respondent stand.
As earlier noted, by Application in a Case, filed 15th April 2016, the Applicant sought an Order, pursuant to s.78(2) of the Federal Circuit Court of Australia Act 1999 (Cth) that a seizure and sale order be made to enforce the payment of the default judgment debt. The Applicant also filed a draft Order sought on 15th April 2016 in relation to the seizure and sale order, indicating that the total owing was $4,400.09 including the interest accrued at that date, which was $6.51.
Submissions filed by the Applicant
The Applicant in the substantive proceedings filed submissions in relation to the Application in a Case filed on 15th April 2016 for a seizure and sale order on 1 July 2016. These are set out in full as follows (footnotes omitted):
1) The Applicant moves the court for an order under s 78(2) of the Federal Circuit Court Act 1999 (CTH) (the Act) to enforce a judgment of Neville J made in his favour on 5 April 2016. The order sought is what is known as a 'seizure and sell' order under the Court Procedure Rules 2006 (ACT).
Jurisdiction and power to enforce orders
2) Section 78(2) of the Act reposes power in the Court, subject to the Rules, to make orders enforcing its judgments in the same manner as judgments of Supreme Courts of States or Territories. Nothing under the Federal Circuit Court Rules 2001 (CTH) deals with the enforcement of orders of the Court, save for orders made in family law and child support proceedings.
3) In Official Receiver v Maher & Anor (No. 3) [2011] FMCA 603 the Court outlined that s 78 allowed the Court to grant enforcement remedies available to a relevant State or Territory Supreme Court. It was also held that the mode of procedure the Court applied in respect to enforcement of a judgment was that set out by the applicable legislation and rules applying to the relevant Supreme Court.
4) The respondent debtor in this matter conducts a business in the Australian Capital Territory (ACT). The addresses at which property of the respondent are believed by the Applicant to be located are within the ACT. The 'State or Territory Supreme Court' referred to in s 78(2) is therefore the Supreme Court of the ACT and its powers, processes and procedures in respect to the enforcement of judgments are vested in the Court by s 78(2).
5) The Court Procedures Act 2004 (ACT) allows for the making of rules regulating the practice and procedure of ACT courts.3 The Court Procedure Rules 2006 (ACT) are the relevant rules made under the Court Procedure Act. Regulation 4 of the Court Procedure Rules provides that those rules apply to proceedings in the Supreme Court of the Australian Capital Territory.
6) Enforcement orders under the Civil Procedure Rules are dealt with in Part 2.18. These include a 'seizure and sell order'’. Regulation 2050 sets out the requirements for the making of enforcement orders in respect to what are called 'money orders'. A money order means an order for the payment to a person of an amount of money. The judgment debt in the present matter is a 'money order'.
7) Regulation 2050 sets out the requirements for what must be contained in an enforcement order. These include:
a) the name of the enforcement debtor (defined to mean the person required to pay an amount under the money order, namely, the respondent in the present matter);
b) the amount recoverable under the order;
c) costs relating to the enforcement order;
d) the amount of interest on the order debt.
8) Application for seizure and sale orders are dealt with by regulation 2200. On application by a judgment creditor, the court may make a seizure and sale order authorising an enforcement officer to seize and sell the judgment debtor's property in satisfaction of the judgment debt.
9) Regulation 2201 details what must accompany an application for such a seizure and search order to include:
a) a draft of the order sought;
b) an affidavit in support.
10) By regulation 2201(5), the accompanying affidavit and draft order need not be served on anyone unless the court otherwise orders. Regulation 2201 (6) stipulates that unless the court otherwise orders, an application for a seizure and sale order must be dealt with without a hearing and in the absence of the parties.
The present application
11) The Applicant is a person in whose favour a judgment of the Court has been given for the purposes of s 78(2). He is thus entitled to the remedies for enforcement of the judgment available in the Supreme Court of the ACT.
12) The application in a case is accompanied by a draft order and affidavit in support, as required by regulation 2201. The draft order sets out the matters required by regulation 2050. The factual bases for the matters detailed in the order are attested to in the affidavit in support. That affidavit also sets out the matters required by regulation 2201(2).
13) In the circumstances, the Applicant submits the Court ought make an enforcement order in the terms provided in the draft order.
On 15th August 2016, the Applicant’s union (CFMEU) filed further submissions in compliance with Orders made on 8th August 2016 regarding whether the default judgement entered on 5th April 2016 should be set aside. These further submissions are as follows (footnotes omitted):
1) The Respondent applies pursuant to r 16.05(2) of the Federal Circuit Court Rules 2001 (Cth) to set aside a default judgment validly entered on 5 April 2016. The ultimate question is whether the interests of justice require a respondent be permitted to contest an applicant's claim notwithstanding that it has failed to file a defence within time. 1 A number of factors are salient in determining where the interests of justice lie, including whether: (a) the respondent has provided the Court with a proper and satisfactory explanation for its delay in filing a defence and in applying to set aside the judgment; 2 (b) the respondent has demonstrated a reasonably arguable defence to the claim with some reasonable prospect of success; ( c) it would be futile to set aside the judgment; (d) the propose proposed defence is asserted bona fide.
No adequate explanation for delay
2) Mr Shero in his 7 July 2016 affidavit offers no explanation whatsoever for the Respondent's delay in filing a response. He simply 'accepts' he was dilatory and undutiful. The application was served on the Respondent on 20 January 2016.4 The Court's orders of 8 February, directing the Respondent to file a Response by 29 February, were served on the Respondent on 19 February 2016.5 Mr Shero seemingly acknowledges that he was aware of the proceedings and Application before judgment was entered. He sat on his hands in full awareness of the proceedings and the proposed orders if a Response was not filed. This is the antithesis of a proper and satisfactory explanation for a failure to file a response in time.
3) Mr Shero also fails to adequately explain the substantial delay in seeking to set aside the default judgment. It is implicit from paragraph [4] that he was aware of the judgment's existence and only took some action on 10 May 2016 after being served with an application for enforcement. Apportioning blame to legal practitioners who have not filed any notice of acting in the matter is inappropriate. It is curious Mr Shero made no mention of instructing Mr Hohnen when he appeared in person before the Court on 6 June. The Respondent is thus guilty of unacceptable delay in seeking to set aside the default judgment. In the circumstances, the Respondent's application fails at the threshold as no adequate explanation is provided for its delay in filing a response and in applying to set aside the default judgment.
Reasonably Arguable Defence
4) Next, the Respondent's proposed response does not raise an arguable triable issue. Mr Shero fails to depose to the facts necessary for there to have been an accord and satisfaction in respect to the Applicant's claims. He does not attest to any evidence about the content of conversations with the unnamed union official or detail facts that would point to the unnamed union official having actual or ostensible authority to settle all of Mr Moore's claims. It is legally unsound to say that presenting a cheque to a third party as an offer to settle claims against another person can, without more, result in an accord and satisfaction. In any event, Mr Shero's 'offer' was rejected by the return of the cheque.
5) The second limb to the Respondent's proposed response consists of a series of bald assertions. Nothing is put in evidence by Mr Shero to establish prima facie that Mr Moore was wrongly classified as a CW3. Further, nothing is put to show that the Applicant incorrectly calculated his entitlements. Finally, no evidence is provided detailing which, if any, days Mr Moore failed to attend work and how this impacts on the amount claimed. In the circumstances, the Respondent has failed to articulate the basic facts necessary to satisfy the Court that it has a reasonably arguable defence. This conveys that setting aside the judgment would be futile.
6) In the circumstances, the Application in a Case should be dismissed.
Consideration
In the absence of compliance by the Respondent with the Orders of the Court, dated 8th August, together with the repeated opportunities afforded to the Respondent, I need only note the following very summarily.
It has long been recognised that a Court has an unfettered discretion whether to set aside a default judgment.[2] The same principles apply whether the amount sought by an Applicant is very large, or as here, relatively small. The principles to consider in relation to an application to set aside such a judgment have also been long-established. For example, in Vacuum Oil Pty Co Ltd v Stockdale Jordan CJ said:[3]
The question is whether, upon the material that has been placed before the Court there is a real likelihood that it would be unjust to the defendant to allow the judgment to stand. If so, it should be set aside on such terms as will minimise the possibility of injustice to the plaintiff. If not, the Court should not interfere.
[2] Evans v Bartlam [1937] AC 473 (House of Lords).
[3] Vacuum Oil Pty Co Ltd v Stockdale (1942) 42 SR (NSW) 239 at p.243-244.
In general terms, in determining whether to set aside a default judgment, the Court is required to have regard to the following:[4]
(a)The Respondent’s reason for failing to comply with Court Orders;
(b)Whether there has been undue delay in applying to set aside the default judgment;
(c)Whether the Applicant would be prejudiced in such a way that could not be compensated in costs.
[4] Among other cases that have commented on such principles, see Deputy Commissioner of Taxation v Awad (2001) 47 ATR 310 at [4] – [7] and the cases there cited; and specifically in relation to costs as “compensatory”, Hobartville Stud Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358.
Apart from the Applicant not relevantly referring to Part 29 of this Court’s Rules in relation to enforcement (to which I have earlier referred), precisely because of the multiple opportunities afforded to the Respondent in the course of the matter, and even more so because of the failure to comply with the Orders of 8th August 2016 (the Respondent being legally represented at the Court event on that occasion), the Applicant’s submissions should be accepted, and consequential Orders made as sought by him. These Orders shall include those as set out in the Application in a Case, filed 15th April 2016 regarding enforcement of the default judgment. The Applicant’s submissions deal with the matters of delay and failing to comply with Court Orders. Such matters need not be repeated in circumstances where the Respondent has provided no submissions, and the Court has accepted the submissions of the Applicant.
Disposition
The Respondent’s Application in a Case, filed 8th July 2016, should be dismissed. Further, Orders as per the Application in a Case, filed 15th April 2016, should also be made, with an additional reference to Part 29 of this Court’s Rules.
I certify that the preceding twenty-three (23) paragraphs are a true copy of the reasons for judgment of Judge Neville
Date: 11th November 2016
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