Partners Wealth Group Pty Ltd v Armstrong - [2024] WASC 462

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   PARTNERS WEALTH GROUP PTY LTD -v- ARMSTRONG [2024] WASC 462
CORAM:   HOWARD J
HEARD:   28 NOVEMBER 2024
DELIVERED          :   4 DECEMBER 2024
FILE NO/S:   CIV 1304 of 2024
BETWEEN:   PARTNERS WEALTH GROUP PTY LTD
Plaintiff
AND
BENJAMIN ARMSTRONG
Defendant

Catchwords:

Practice and procedure - Application to set aside default judgment - Default judgment sought without notification or conferral - Defendant attempting to rely on proposed defence - Turns on own facts

Legislation:

Rules of the Supreme Court 1971 (WA), O 13 r 14

Result:

Default judgment set aside

Category: B

Representation:

Counsel:

Plaintiff	:	Ms R O'Brien
Defendant	:	Mr J Jo

Solicitors:

Plaintiff	:	Partners Legal Solutions
Defendant	:	DFG Legal

Case(s) referred to in decision(s):

Smith v Nomad Modular Building [2007] WASCA 169
Starrs v Retravision (WA) Ltd [2012] WASCA 67

HOWARD J:

(These reasons were delivered extemporaneously and have been lightly edited from the transcript.)

By a writ of summons endorsed with a statement of claim, the plaintiff commenced these proceedings against the defendant on 18 March 2024.
In outline, the plaintiff pleaded:
1.the defendant was employed by it as a financial advisor from about 22 April 2014 until about 23 January 2024;
2.the defendant was employed pursuant to a written employment agreement;
3.the defendant owed the plaintiff equitable duties;
4.in January 2024, the defendant joined a direct competitor of the plaintiff in a similar role as his position with the plaintiff;
5.on dates not precisely known in 2023 and 2024, the defendant solicited, encouraged or otherwise took steps to induce the plaintiff's clients away from the plaintiff;
6.the defendant, in so doing, breached the employment agreement and his equitable duties; and
7.as a result, the plaintiff had suffered loss or damage.
By its Prayer for Relief, the plaintiff seeks:
1.damages;
2.equitable compensation;
3.account of profits;
4.an injunction restraining the defendant from continuing to breach the employment agreement and his equitable duties; and
5.other ancillary relief.
The defendant did not enter an appearance.
By application dated 2 April 2024, the plaintiff sought default judgment with damages to be assessed. It is accepted that that application was made by the plaintiff without notice to the defendant's solicitors, or without conferral on the same, and was made very close in time to the earliest opportunity on which it could be made.[1]
[1] Affidavit of M O Ferguson sworn 2 April 2024 (Mr Ferguson's first affidavit) [5].
It seems to me that if the plaintiff's solicitors had extended what is sometimes said to be a 'courtesy' to the defendant's solicitors, then the overall matters in dispute might have been able to be progressed more expeditiously than they have been.
Nonetheless, the application for default judgment was supported by an affidavit of its solicitor made 2 April 2024, deposing to service of the writ on the defendant. After correspondence between the Court and the plaintiff's solicitors, there was a further affidavit of the plaintiff's solicitor filed 18 April…

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.

Keep reading for free

Create a free CaseChat account to read Partners Wealth Group Pty Ltd v Armstrong and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2024] WASC 462
Decision Date: 4 DECEMBER 2024

CaseChat Overview and Summary

Partners Wealth Group Pty Ltd (PWG) sought a default judgment against Armstrong in the Supreme Court of Western Australia. Armstrong had failed to respond to the originating application and had been served with the documents. PWG's application was made under Order 13 of the Supreme Court (General Civil Procedure) Rules 2006 (WA). The basis of PWG's claim was an alleged breach of post-employment restraints contained in a written employment agreement between the parties. Armstrong sought to set aside the default judgment on the basis of a proposed defence, which included that any restraint of trade clauses were unfair, unreasonable and unenforceable, and that there was an agreement between the parties that if Armstrong left the business, he could take with him the clients he had brought to the business. The court had to decide whether the default judgment could be set aside and whether there was a defence on the merits that could be relied upon. The court noted that the contractual defence relied upon by Armstrong was weak, as there was a letter of offer and written employment agreement which did not support his claim. However, the court found that the default judgment was obtained irregularly, as Armstrong had not been given the opportunity to be heard on the merits of the case. The court concluded that the irregular entry of the default judgment was significant and ought to be set aside. The court ordered that the default judgment be set aside and the matter be listed for further directions.

[14] Starrs v Retravision (WA) Ltd [2012] WASCA 67 [36] (Allanson J, with whom Pullin & Murphy JJA agreed). [15] This was the equivalent provision to the current O 13 r 14. [16] In argument in Court on 28 November 2024, that was referred to as the contractual defence, or interpretation issue, ts 12 and 16 - 17. [17] Affidavit of B Armstrong sworn 4 September 2024 (Mr Armstrong's first affidavit) [54] and Attach 'BA‑11'; ts 12 and 20. [18] Mr Armstrong's first affidavit, Attach 'BA-1'. [19] Mr Armstrong's first affidavit, Attach 'BA‑2'.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Order 13 r 14 provides as follows:14.Setting aside or varying default judgmentThe Court may, on whatever terms it thinks just, set aside or vary any default judgment entered under this Order. The Court of Appeal in Starrs v Retravision (WA) Ltd[14] stated:Whether judgment was regularly or irregularly entered may be significant. Under O 13 r 10 of the Rules of the Supreme Court 1971 (WA)[15] the court may set aside or vary a judgment entered in default of appearance, on such terms as it thinks just. That discretion is not qualified. But as a general rule, a judgment regularly entered will not be set aside unless the court is satisfied that there is a defence on the merits. That rule may be departed from in "rare but appropriate cases". A judgment irregularly entered, however, "ought not be on the records of the court and therefore if a judgment in default of appearance or pleading has been entered irregularly, it will be set aside ex debito justitiae". Not every irregularity in the means by which a judgment in default is obtained will necessarily entitle the defendants to have the judgment set aside as of right. In an appropriate case, the court may amend an irregularly entered judgment rather than set it aside. (citations omitted) [14] Starrs v Retravision (WA) Ltd [2012] WASCA 67 [36] (Allanson J, with whom Pullin & Murphy JJA agreed).[15] This was the equivalent provision to the current O 13 r 14. The proposed defence pleads:1.that the plaintiff and defendant agreed that if the defendant left the plaintiff's business, he could take with him those clients which he had brought to the business;[16]2.the restraint period and restraint areas sought to be enforced were unfair, unreasonable and unenforceable; and3.a denial that, factually, he solicited, encouraged or induced any clients away from the plaintiff in breach of his obligations.[17][16] In argument in Court on 28 November 2024, that was referred to as the contractual defence, or interpretation issue, ts 12 and 16 - 17.[17] Affidavit of B Armstrong sworn 4 September 2024 (Mr Armstrong's first affidavit) [54] and Attach 'BA‑11'; ts 12 and 20. The first matter of defence, the contractual defence, was, as I said in the course of argument, weak. On 26 February 2014, the plaintiff sent a letter of offer to the defendant.[18] The letter of offer included the following:EQUITY OPPORTUNITYSubject to meeting your KPI's within the first 2‑3 years, we will consider an option for you to acquire equity in a division of the PWG WA business. This will result in a transfer of equity for the value of the client book you bring to PWA WA.In the event you depart the business, these clients will be quarantined for you.[18] Mr Armstrong's first affidavit, Attach 'BA-1'. There was then a later written employment agreement entered into in 2014.[19][19] Mr Armstrong's first affidavit, Attach 'BA‑2'. Relevantly, the written agreement contained cl 36 as follows:36.ENTIRE AGREEMENT36.1To the extent where permitted by law, this Agreement:(a)embodies the entire understanding between the parties, and constitutes the entire terms agreed between the parties; and(b)supercedes any prior written or other agreement between the parties.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.