Perpetual Trustees Victoria Ltd v Pilcher
[2005] VSC 244
•23 June 2005
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
PRACTICE COURT
No. 4356 of 2005
| PERPETUAL TRUSTEES VICTORIA LIMITED | Plaintiff |
| V | |
| EDWARD ARTHUR PILCHER AND OLIVE ISOBEL PILCHER | Defendants |
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JUDGE: | Cummins J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 22 June 2005 | |
DATE OF JUDGMENT: | 23 June 2005 | |
CASE MAY BE CITED AS: | Perpetual Trustees Victoria Limited v Pilcher & Anor | |
MEDIUM NEUTRAL CITATION: | [2005] VSC 244 | |
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr M. Sifris SC with Mr H. Austin | Deacons |
| For the Defendants | Mr D. Guidolin | Ansell and Associates |
HIS HONOUR:
This is an appeal filed 3 June 2005 by the plaintiff, Perpetual Trustees Victoria Limited from an order of Master Evans made on 30 May 2005 in which the Master ordered that a judgment obtained by the plaintiff against the defendants dated 21 March 2005 be set aside, and consequential orders. The two defendants are Mr Edward Arthur Pilcher and Mrs Olive Isobel Pilcher, both elderly persons.
The proceeding in this matter was commenced by a writ filed on 28 January 2005 by the plaintiff against the defendants in which the mortgage dated 22 August 2003 of the defendants to the plaintiff in security for a facility, being over their home at Clifton Springs, was pleaded, and default of payments were pleaded, and the claim of the plaintiff against the defendants was for the sum of $182,673.98, together with interest.
A notice of appearance was filed by solicitors of Geelong on behalf of the defendants on 11 February 2005. However no further curial step was taken on behalf of the defendants. Thus it was, on 21 March 2005, at the instance of the plaintiff, a default judgment was obtained in the sum I have stated, together with interest and costs, and a further default judgment that the plaintiff recover possession of the relevant land. A warrant of possession was issued on 24 March 2005.
The circumstances founding that default judgment were deposed by Mr D.J. Lynch, solicitor and practice manager of the firm of legal practitioners for the plaintiff, sworn 21 March 2005. The affidavit was not misleading in any respect.
A summons was issued on behalf of the defendants, filed 11 May 2005, for an order that the judgment be set aside, and consequential orders. Counsel for both the plaintiff and the defendants appeared before Master Evans on 30 May 2005 and, having heard the representatives of the parties the Master, as I have said, on that day ordered that the judgment entered in default of 21 March 2005 be set aside, and made consequential orders.
As to the substance of the plaintiffs' claim, an affidavit of Mr Lynch filed 27 May 2005 sets out the substance of the claim, as does an affidavit of Mr I. Robertson sworn 26 May 2005, he being the National Credit Manager, Prime Finance, of Interstar Wholesale Finance Limited. The substance of the affidavits is that the deponents maintain that there is no defence to the proceeding. Various exhibits were exhibited to the respective affidavits, including the lack of relationship, the plaintiff says, between the Pilchers on the one hand and Perpetual Trustees Victoria Limited on the other, in that interposed between them constituting effectively two fire walls, or at least one large fire wall, was R. Wynhoven and Associates Pty Ltd, trading as Seed Home Loans, and Mortgage Management Corporation Pty Ltd, the mortgage originator. In paragraph 20.6 of the deed between Interstar Securities Australia Proprietary Limited and the originator, Interstar being the manager, is provided: "Nothing herein contained shall be deemed or construed by the parties hereto or by any other persons creating a relationship or partnership or of principal and agent".
Thus it is on the substance of the matter, that is to say whether there is a defence to the proceeding, that Mr Sifris, senior counsel, leading Mr Austin in most comprehensive and well formulated submissions, put to the court that it is demonstrable that there is no defence herein either in fact or in law.
On behalf of the defendants an affidavit of Mr P.H. Ansell, solicitor of Geelong, sworn 11 May 2005, has been filed. Relevantly it sets out the intercourse between the solicitors for the defendants and those for the plaintiff during the second half of 2004. He sets out that the defendants consulted him in relation to their financial difficulties with the plaintiff, and sought his advice. He contacted by letter dated 24 June 2004 Interstar Securities Australia, being Exhibit 2 to his affidavit. He deposed - indeed it is the fact, as Mr Sifris pointed out correctly - that the plaintiff, through its mortgage management company, was fair and sympathetic to the difficulties of the defendants, and agreed to accept some monthly payments while the defendants were determining their financial and legal position.
On 5 October 2004 the solicitor wrote to the plaintiff seeking a meeting in order to resolve the difficulties. On 22 November 2004 the solicitors for the plaintiff wrote that for the defendant requesting further information, as Exhibit 4 to the affidavit. A meeting was held on 22 September 2004 at the offices of the plaintiff’s solicitors, but unfortunately no agreement was able to be reached. Mr Ansell deposed that at the conclusion of that meeting he confirmed to Mr Lynch of the plaintiff’s solicitors that if proceedings were issued he would accept service of the documents on behalf of Mr and Mrs Pilcher. On 1 February 2005 Deakins served by post on the office of the defendants' solicitors the writ I have rehearsed. The affidavit of Mr Ansell proceeds, "As I had agreed to accept service of the writ on behalf of the defendants I confirmed to Deakins by letter dated 4 February 2005 that I had accepted service". On 11 February 2005 a notice of appearance on behalf of the defendants was filed.
The solicitor, Mr Ansell, deposed further, "On 14 February I telephoned Mr Dermot Lynch of Deakins to confirm that the notice of appearance had been filed and had been forwarded to his office. During this conversation I said that a defence will be filed in due course".
The affidavit proceeds that during the course of the next week the solicitor prepared a brief for counsel to draw a defence and forwarded it to counsel. The defendants' solicitor deposed further that he was aware that a defence must be filed and of the time limits imposed by the Rules, and that judgment may be entered if a defence is not filed within time. However, as the defendants' solicitor further deposed, he said that he incorrectly assumed that, given the antecedent matters, no judgment would have sought to have been entered without the plaintiff’s solicitors first informing him of that proposed step. He heard nothing and, as I have rehearsed, the plaintiff’s solicitors heard nothing either. The first thing the defendants' solicitor knew of the judgment entered was on 21 April 2005. His clients were in a deleterious financial and personal and medical state in this period.
A defence was forwarded by facsimile, but not filed in the court, to the plaintiff's solicitor on 27 April 2005. In fact a defence of a different sort - in that paragraphs 16, 17 and 18, being the Amadio matters, are contained in the defence – is now propounded by the defendants.
In my view, first, the plaintiff’s solicitors did not mislead the Court in any way at any time, and did not mislead the court in the affidavit of Mr Lynch on 21 March 2005, being the foundation of the judgement which was entered. Second, the plaintiff's solicitors did not at any time act improperly. Third, the judgment obtained was not "snapped on" in the terms of Kearney J in Hogg v. J. Isherwood-Hicks Pty Ltd.[1] Fourthly, there was no positive act by the solicitors for the plaintiff which could be construed as indicating to the defendants’ solicitor that the plaintiff would hold its hand, as is contemplated by authority.
[1](1992) 108 F.L.R.262.
However, I do consider in the holistic circumstances it was inappropriate - not improper but inappropriate - for the default judgment to be sought to be obtained without first informing the solicitors for the defendant. That is not because the plaintiff's solicitors have a duty to look after clients on the opposing side; nor is it because the plaintiff's solicitors have a duty to inform the appellant's solicitors of the provisions of the Rules. However, I do consider in the particular circumstances of this case - absent, as I have said, any misconduct at all by the plaintiff’s solicitors - that given the history of the matter in the second half of 2004 and early 2005 it was appropriate for the plaintiff’s solicitors to inform the defendants' solicitors before default judgment was sought.
That is because the plaintiff’s solicitors were apprised of the circumstance that there was a solicitor acting for the defendants. A notice of appearance had been filed. The defendants did propose to defend the action. There was no overt or objective indication that this was merely a delaying tactic by formal utilisation of the Rules on behalf of the defendants. Further, the defendants' solicitor informed the plaintiff's solicitor that the defendants prepared to defend the action. In those holistic circumstances I consider it was inappropriate for the plaintiff’s solicitor to enter judgment, and on that count I conclude, as a matter of law, that the judgment has been irregularly obtained. Not improperly obtained, but irregularly obtained. That being so, in my view as a matter of law that disposes of this appeal.
On the matter of substance it is unnecessary to proceed with finality to the issue of whether there is a substantive defence on the materials before me. Suffice it to say that I am certainly not persuaded there is no defence. That is because of the prospect of data being obtained by way of discovery, building upon the demonstrably deleterious circumstances of the two defendants, as contemplated by Amadio. It will need to be determined in the future whether knowledge is to be imputed as contemplated by Amadio to the plaintiff of those circumstances, depending upon the establishment of proofs. It would, in my view, be wrong to conclude at this juncture that such a prospect on behalf of the defendants was hopeless. I am not persuaded that there is not an arguable defence. As I say, however, because the judgment was irregularly obtained it is unnecessary to deal finally with that matter.
Finally, Mr Guidolin on behalf of the defendants submitted that in any event the appeal is otiose because under Rule 77.58 an appeal is not a stay, and the defence was in fact filed on 20 June 2005, and was effectively one week late. That may be characterised as a triumph of form over form. However, the central matter in my view, is that the judgment was not obtained regularly, or more correctly as obtained irregularly, and on that account I dismiss the appeal and restore the order below of the Master.
As costs follow the event I order that the costs of the defendants of the appeal be paid by the plaintiff.
Mr Guidolin, are there any consequential orders which are sought?
MR Guidolin: Not by the defendants.
HIS HONOUR: All right, thank you very much. Mr Austin, no consequential orders?
MR AUSTIN: No, Your Honour.
HIS HONOUR: Thank you very much. I am obliged to you all.
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