Pieman Resources Pty Ltd v Monks

Case [2025] FCA 88

FEDERAL COURT OF AUSTRALIA

Pieman Resources Pty Ltd v Monks [2025] FCA 88

File number: QUD 397 of 2024
Judgment of: DERRINGTON J
Date of judgment: 30 January 2025
Date of Publication of Reasons: 17 February 2025
Catchwords: PRACTICE AND PROCEDURE – default judgment – contumacious non-performance of court orders – persistent delay – no explanation for non-performance of orders or delay – judgment given
Legislation:

Corporations Act 2001 (Cth)

Federal Court of Australia Act 1976 (Cth)

Federal Court Rules 2011 (Cth)
Cases cited:

Chamberlain Group, Inc v Giant Alarm System Co, Ltd (No 2) [2019] FCA 1606

Dye v Commonwealth Securities Limited [2010] FCA 720

Engineered Thermal Systems Pty Limited v Salmon, In the Matter of Salmon & Speck Pty Ltd (In Liq) [2012] FCA 1159

Fraser-Kirk v David Jones Limited (2010) 190 FCR 325

Hugo Boss AG v Hardge [2024] FCA 1325

Kumova v Davison (No 2) [2023] FCA 1

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

Maylord Equity Management Pty Ltd v Parazelsus Ltd [2014] FCA 979

Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v AAM17 (2021) 272 CLR 329

Professional Administration Service Centres Pty Ltd v Commissioner of Taxation (2012) 295 ALR 52

SpeedoHoldings B.V. v Evans (No 2) [2011] FCA 1227

Spencer v Bamber [2012] NSWCA 274
Division: General Division
Registry: Queensland
National Practice Area: Commercial and Corporations
Sub-area: Commercial Contracts, Banking, Finance and Insurance
Number of paragraphs: 53
Date of hearing: 30 January 2025
Counsel for the Plaintiffs: Mr V Brennan
Solicitor for the Plaintiffs: Taylor David Lawyers
Solicitor for the Defendants: Mr A Stewart of Stewart Law

ORDERS

QUD 397 of 2024
BETWEEN:

PIEMAN RESOURCES PTY LTD ACN 631 444 089

First Plaintiff

HELLYER GOLD MINES PTY LTD ACN 125 516 636

Second Plaintiff

HELLYER METALS LTD ACN 662 575 073

Third Plaintiff
AND:

BRADLEY ROBERT MONKS

First Defendant

RODGER STUART JOHNSTON

Second Defendant

ORDER MADE BY:

DERRINGTON J

DATE OF ORDER:

30 JANUARY 2025

THE COURT ORDERS THAT:

1.Pursuant to r 5.23 of the Federal Court Rules 2011 (Cth), judgment be entered against the first defendant in the amount of $2,358,695.75.

2.The first defendant pay the plaintiffs’ interest on the judgment amount referred to in paragraph 1, in the amount of $106,053.42.

3.Pursuant to r 5.23 of the Federal Court Rules 2011 (Cth), judgment be entered against the first and second defendants in the amount of $2,880,000.

4.The first defendant and the second defendant pay the plaintiffs’ interest on the judgment amount referred to in paragraph 3, in the amount of $129,492.69.

5.The defendants pay the plaintiffs’ costs of the proceeding on the standard basis, as agreed or as taxed.

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


REASONS FOR JUDGMENT

DERRINGTON J:

Introduction

  1. These are the amended and revised reasons for judgment given on 30 January 2025, in respect of the plaintiffs’ application for default judgment against the defendants.  Whilst these reasons refine and develop…

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AGLC
Pieman Resources Pty Ltd v Monks [2025] FCA 88
Case
[2025] FCA 88
Decision Date

CaseChat Overview and Summary

In the matter of Pieman Resources Pty Ltd v Monks, the Federal Court was tasked with determining whether the plaintiffs were entitled to a default judgment against the defendants due to the defendants' contumacious non-compliance with court orders and persistent delays in the proceedings. The plaintiffs sought damages from the defendants, who were directors of the plaintiffs, for alleged breaches of their duties, including misapplication of company funds. Despite the plaintiffs' valid claims, the defendants failed to file a defence within the required timeframe and subsequently did not comply with various court orders, including a notice to produce documents and a request for further particulars.

The legal issues the court needed to decide involved whether the defendants' non-compliance with court orders justified the granting of a default judgment. The defendants provided minimal justification for their failure to comply with the court's orders, offering sparse and opaque explanations that did not adequately account for their persistent delays. The court noted the defendants' acknowledgment of the gravity of their non-compliance but found their subsequent attempts to comply with the orders to be derisory. The court also observed that the defendants did not provide a substantive explanation for their contumacious behaviour, nor did they demonstrate any meaningful efforts to rectify their non-compliance.

The court concluded that the defendants' persistent delays and lack of explanation warranted the granting of a default judgment. The defendants' failure to provide any substantial basis for their non-compliance left the court with no choice but to deem the plaintiffs' claims as admitted. As a result, the court ordered that judgment be entered against the defendants for the amounts claimed by the plaintiffs, along with interest and costs. The court's decision underscores the importance of adhering to court orders and the consequences of persistent non-compliance in legal proceedings.

Orders

Orders of the court

1. Pursuant to r 5.23 of the Federal Court Rules 2011 (Cth), judgment be entered against the first defendant in the amount of $2,358,695.75.

2. The first defendant pay the plaintiffs’ interest on the judgment amount referred to in paragraph 1, in the amount of $106,053.42.

3. Pursuant to r 5.23 of the Federal Court Rules 2011 (Cth), judgment be entered against the first and second defendants in the amount of $2,880,000.

4. The first defendant and the second defendant pay the plaintiffs’ interest on the judgment amount referred to in paragraph 3, in the amount of $129,492.69.

5. The defendants pay the plaintiffs’ costs of the proceeding on the standard basis, as agreed or as taxed.

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

Background

Background to the litigation

The relief sought was confined to the money claims made in the statement of claim, but, as indicated by Mr Brennan for the plaintiffs, no judgment was sought in respect of parts K and L of the pleading, which, for the purposes of this application, have been abandoned. Mr Brennan also very properly identified that, due to an arithmetical error in the pleading, the sum claimed on the application was lower than the amount pleaded. The background and incidents of default The defendants failed to comply with a number of the Court’s orders made in the course of the litigation. In order to appreciate their significance, it is important that some context be given. The plaintiffs commenced the action on 18 July 2024, seeking damages from the defendants for breaches of their duties as directors of the plaintiffs. Those duties were identified as being, variously, director’s duties, fiduciary duties and statutory duties, the latter being those imposed by ss 180 – 182 of the Corporations Act 2001 (Cth). In broad terms, the allegations concerned the defendants’ alleged misapplication of company funds for their own purposes and benefit. In the course of the hearing, Mr Stewart quite properly acknowledged, as indeed was the case, that the statement of claim filed in the proceedings articulates good causes of action in a number of respects, such that, if the allegations in the statement of claim were in fact made out, the plaintiffs would be entitled to judgment. Be that as it may, there was no admission that the plaintiffs were entitled to judgment. On 15 August 2024, the defendants consented to an order that they file and serve their defence by 29 August 2024. That did not occur. Substantial correspondence ensued between the parties, culminating in the defendants consenting to orders that, should they fail to file a defence by 12 September 2024, the plaintiffs “may apply for default judgment”. On 12 September 2024, the defendants filed a defence. On 25 September 2024, the plaintiffs responded by filing, pursuant to r 20.31 of the Rules, a notice requiring production of certain documents to which reference was made in the defence. The plaintiffs also sent to the defendants’ solicitors on 25 September a request for further and better particulars of the defence. The defendants were required to provide the particulars by 9 October 2024 at the latest. The defendants did not produce the documents sought by the notice to produce. Nor did they attempt to comply with r 20.31(2) of the Rules, which relevantly provides: 20.31 Notice to produce document in pleading or affidavit…(2)The second party must, within 4 days after being served with the notice to produce, serve the first party with a notice:(a) stating:(i)a time, within 7 days after service of the notice, when the document may be inspected; and(ii) a place where the document may be inspected; or(b) stating:(i)that the document is not in the second party’s control; and(ii)to the best of the second party’s knowledge—where the document is and in whose control it is; or(c)claiming that the document is privileged and stating the grounds of the privilege.The documents were not claimed to be privileged.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

The consequence of that was that on 17 December 2024, the plaintiffs filed this application for a default judgment.The plaintiff is entitled to default judgmentWhat the defendants did between 3 and 13 December 2024 It is unfortunate, that in response to the application, the defendants failed to identify any substantive basis for their non-compliance with the Court’s orders, both of 10 October 2024, and as extended by the orders of 3 December 2024. The affidavit of Mr Stewart of 29 January 2025 tends to skirt around the issue. In it, he did not make any mention of a meeting with his clients on 3 December 2024, as he had suggested to the Court that he was going to have. Instead, he notes that he sent an email on 4 December 2024 to his clients about the matter. He does not annex that email to his affidavit. He says that it was directed to requiring his clients to provide him with the necessary information to enable him to respond to or comply with the orders of the Court. Mr Stewart suggests that no response to his email was forthcoming, because his affidavit then says that, on 13 December 2024, he sent a further request to his clients, asking them to comply with his request for information so that he could comply with the orders of the Court. If that is the order of things, it shows that any attempt to comply with the Court’s orders of 3 December were derisory, to say the least. It is bordering on bizarre that when a party is told that their non-compliance with previous orders during the proceedings is contumelious and contumacious, that they will not then seek to promptly attend to the Court’s further order. This is particularly so when the party acknowledges the gravity of the non-compliance and assures the Court that any further orders will be attended to as a matter of priority. Though Mr Stewart gave evidence that when he sent the second email to his clients on 13 December 2024, he believed he could still comply with the orders. I find that to be aspirational, at best. It should be mentioned that Mr Stewart indicated in his affidavit that he underwent a medical procedure in the week of 2 December 2024. The effect of that evidence was not made clear, and he does not claim that it prevented compliance with the orders in any way. Indeed, it is axiomatic that it didn’t have that effect because, as Mr Stewart indicated, as far as he was concerned, it was his clients who were causative of any delay, having not responded to his request for material on 4 December. In this case, the occurrence of the medical procedure is irrelevant. Mr Stewart further claimed that the issues involved in the response to the request for particulars were difficult and complex, such that he needed the assistance of counsel. If that was so, it would have been obvious from the pleadings, and did not require reference to anything said by his clients to cause him to reach that conclusion. Nevertheless, all of that remains opaque and the Court is left with very sparse evidence about what occurred.

Ratio Decidendi

Legal Principle Established

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