National System Investments Pty Ltd v Krepp

[2014] VCC 861

IN THE COUNTY COURT OF VICTORIA Revised
(Not) Restricted
Suitable for publication

AT MELBOURNE

COMMERCIAL LIST
GENERAL DIVISION

Case No. CI-13-02476

NATIONAL SYSTEM INVESTMENTS PTY LTD	Plaintiff
v.
GLEN KREPP and TERENCE PARKER	Defendants

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JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	11 June 2014
DATE OF JUDGMENT:	11 June 2014 (revised 12 June 2014)
CASE MAY BE CITED AS:	National System Investments Pty Ltd v. Krepp & Anor
MEDIUM NEUTRAL CITATION:	[2014] VCC  861

REASONS FOR JUDGMENT

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Catchwords:             Practice and procedure – Application to set aside default judgment – Whether defence shown on the merits.           

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr A. Muller	HWL Ebsworth
For the Second Defendant	Mr T. Parker in person

HIS HONOUR:

1The primary matter for consideration today is whether the second defendant, Mr Parker, should have the default judgment entered against him for damages to be assessed on 3 July 2013 set aside.

2The hearing date for the assessment of the plaintiff’s damages had been adjourned on 5 February and 28 April 2014. On 5 February 2014, Mr Parker and the first defendant Mr Krepp, both appeared in person. Mr Parker was then, and remains, in custody and was brought to Court pursuant to a gaol order. Both Mr Krepp and Mr Parker indicated that they wished to make application to set aside the default judgment.

3On 28 April 2014, the plaintiff consented to the setting aside of the judgment against Mr Krepp. Mr Parker’s application was adjourned until today on the basis that he must file any affidavit material in support of the application by 21 May 2014. Mr Parker filed an affidavit on that day.

4The plaintiff’s claim arises from the use of premises at Hallam as a methamphetamine laboratory. Mr Parker is in custody awaiting trial for offences including that he conducted a methamphetamine laboratory at the premises.

5The plaintiff’s claim against Mr Krepp in the proceeding was primarily based upon a lease between the plaintiff and Mr Krepp in respect of the premises at Hallam and breaches of terms of the lease which resulted in damage to the premises requiring extensive rectification works.

6The claim against Mr Parker is in negligence and essentially alleges that Mr Parker carried out works at the premises without the consent of the plaintiff arising from the use of part of the premises as a drug laboratory.

7The plaintiff makes the following allegations in the statement of claim:

“19.     The Second Defendant owed the Plaintiff a duty of care in his occupation and use of the premises:

(a)       Not to cause physical damage to the premises;

(b) Not to engage in conduct within the premises that would cause physical damage to the premises;

(c) Not to allow conduct within the premises that would cause physical damage to the premises.

20.By reason of the conduct of the Second Defendant in using the premises as a methamphetamine laboratory as alleged the Second Defendant breached his duty of care owed to the Plaintiff.

21.By reason of the breach of duty by the Second Defendant the Plaintiff has suffered loss and damage.”

8Mr Parker had maintained that judgment against him should be set aside on the basis that:

a.he was not served with the writ and it did not come to his notice until January 2014;

b.in any event, he had a defence on the merits because he had not occupied the premises and had not used the premises as a methamphetamine laboratory.

9On 28 April 2014, Mr Parker was represented by Mr Conley of counsel, through the Victorian Bar Pro Bono Scheme. The proceeding was adjourned on that day only after Mr Parker gave oral evidence indicating that there was some basis that he should be entitled to have judgment set aside. He gave evidence specifically that he had not been served with the writ and did not become aware of it until earlier this year.

10The matter proceeded today, firstly on the question of whether Mr Parker had been served with the writ. Ms Pippa Sampson, a solicitor, gave evidence that the affidavit of service of the writ sworn by her on 23 May 2013 was correct. She said that during the hearing of a freezing order application, she had taken the opportunity to serve Mr Parker and Mr Krepp personally with the writ in a conference room outside court on 21 May 2013. She gave detailed evidence of the circumstances in which service was effected. Ms Sampson was cross-examined by Mr Parker. At the completion of Ms Sampson’s evidence, Mr Parker declined to give evidence and I indicated that I was satisfied that the writ had been served upon him.

11The hearing then concentrated on the question of whether Mr Parker had an arguable defence. Mr Parker, in his affidavit sworn 21 May 2014, stated that he “was never in possession” of the premises nor engaged in any illegal activity, namely “the methamphetamine laboratory”, between the dates of 1 August 2012 to 19 March 2013. Mr Parker also stated that he “did not at any stage have control, possession or ownership of the premises at Hallam” .

12Mr Parker referred to certain items, including two cars and a boat, that were found in or adjacent to the premises which, apparently, belong to him. Mr Parker’s affidavit exhibited a number of documents, including a police statement of Mr Krepp, which stated that Mr Parker had used part of the premises for his own business and had agreed to share the rent with Mr Krepp and that they each had separate sections of the premises which they used.

13When police raided the premises on 14 March 2014, Mr Parker was arrested. Mr Parker said that, at the time he was “standing in the driveway out front of premises”. Mr Parker said that there is no evidence that he has “been inside those premises”, referring to the methamphetamine laboratory section of the premises. He said that there was no forensic evidence that has been disclosed in the criminal proceeding which connected him with that part of the premises.

14Plaintiff’s counsel, Mr Muller, has referred to matters raised by Steven Glen Ambrose, a director of the plaintiff, in an affidavit sworn 17 May 2013 which connect Mr Parker to the premises, including that:

a.Mr Parker introduced himself to Mr Ambrose on 30 July 2012 as Mr Krepp’s business manager;

b.after an inspection of the premises by Mr Ambrose, Mr Parker signed a condition report.

15In the circumstances, there is substantial evidence to connect Mr Parker to the premises, including the meeting between Mr Ambrose and Mr Parker on 30 July 2012, Mr Krepp’s police statement in relation to the sharing of the premises and rent and the storage of substantial personal assets of Mr Parker at the premises. None of these matters have been addressed in Mr Parker’s recent affidavit. In addition, Mr Parker effectively conceded proper service of the writ although he had, at the hearing on 28 April 2014 and in his recent affidavit, denied on oath that he had been served with the writ.

16Nevertheless, the plaintiff’s case rests upon the allegation that Mr Parker used the premises as a methamphetamine laboratory and it is likely that the substantial damages sought by the plaintiff relate to the costs of rectifying the premises as a consequence of that use of the premises.

17The fact that Mr Parker has been in custody for a substantial period for unrelated offences generally provides an explanation for his failure to file an appearance in the proceeding, which led to the default judgment. There was certainly evidence that Mr Parker had attempted to obtain legal representation and, apart from the representation he had on the last occasion, he has essentially been required to represent himself in the proceeding including the application to set aside judgment.

18This is the third occasion the application has been before the Court and I consider that there must be some resolution of it. In my view, that requires the judgment to be set aside and the matter to be set down for trial, although the material in support of the application and the manner in which Mr Parker has pursued this application have been less than satisfactory.

19Mr Parker has indicated that his criminal trial is fixed for 2 February 2015. The first available date upon which the civil proceeding could be fixed for trial is also in February 2015. I propose to fix this matter for trial in April 2015. Mr Parker has raised the possibility that the criminal proceeding may be discontinued. If in fact the criminal proceeding goes ahead, and if Mr Parker were to be convicted of criminal offences, it may be that proof of conviction could be used to substantiate the allegation made by the plaintiff in this proceeding.

20I propose to make the following orders:

1.The judgment entered against the second defendant on 3 July 2013 in default of appearance is set aside.

2.The proceeding as between the plaintiff and the second defendant is fixed for trial on 13 April 2015 as a Cause before His Honour Judge Anderson. No setting down for trial fee is to be paid.

3.By 4pm on 17 July 2014, the second defendant is to file and serve a defence.

4.If the parties wish to pursue any further interlocutory steps, they may make application in writing to the Commercial List Duty Judge and further directions will be given “on the papers”.

5.The second defendant must pay the plaintiff’s costs of the application to set aside judgment, including costs reserved on 5 February 2014 and 28 April 2014 and the costs of the hearing today, to be assessed by the Costs Court in default of agreement.

6.At the request of Mr Parker, the plaintiff’s solicitor informed the Court that the contact details for service of documents on the plaintiff are as follows:

HWL Ebsworth Solicitors

Ref: 292155

Address: Level 26, 530 Collins Street, Melbourne 3000

Email: [email protected]

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Certificate

I certify that the preceding 4 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 11 June 2014 and revised on 12 June 2014.

Dated: 12 June 2014

Catherine Kusiak    

Associate to His Honour Judge Anderson