Reid v Jensen - [2002] QDC 334

DISTRICT COURT OF QUEENSLAND

CITATION: Reid v Jensen [2002] QDC 334

PARTIES:
GRANT REID AS TRUSTEE FOR THE COVERDALE SUPERANNUATION FUND

Plaintiff

and

PETER JENSEN

Defendant

FILE NO/S: 148 / 2002

DIVISION: Civil Jurisdiction

PROCEEDING: Application

ORIGINATING COURT: District Court Southport

DELIVERED ON: 28 June 2002

DELIVERED AT: Southport

HEARING DATE: 24 May, 12 June 2002

JUDGE: Judge Alan Wilson SC

ORDER:

CATCHWORDS:
Cases considered:

Building Guarantee and Discount Co Ltd v Dolesji (1967) VR 764

Champion v Fay [1983] 2 Qd R 416 (FC)

Chitty v Mason (1926) VLR 419, at 423

City Mutual Life Assurance Society Ltd v Giannarelli (1977) VR 463

National Mutual Life Association of Australasia Ltd v Oasis Developments Pty Ltd [1983] 2 Qd R 441, at 449

Prus-Butwilowicz v Moxey (2002) QDC 166

Yankee Doodles Pty Ltd v Blemvale Pty Ltd, unreported (SC (Qld) 23 June 1999, BC 9903401)

COUNSEL:
Mr Campbell for the applicant defendant

Respondent plaintiff in person

SOLICITORS:
Baxters Solicitors for the applicant defendant

Respondent plaintiff self-represented

The defendant applies to set aside a default judgment obtained by the plaintiff on 27 March 2002. The defendant submits, first, that it should be set aside ex debito justitiae for two reasons: that the judgment by default was entered for the wrong amount; and/or that the plaintiff’s cause of action is not made out in the pleadings.
In the alternative the defendant says he has given a satisfactory explanation for his failure to appear; the delay in applying to set the judgment aside is short; and, he has a prima facie defence on the merits, which he should be allowed to argue.
Relevant History
On 22 February 2002 the respondent plaintiff commenced an action claiming $210,000 arising from a transaction in which he purchased all the defendant’s interest in a mortgage over real property on the Gold Coast. The defendant, it is alleged, was to act as the plaintiff’s solicitor in this transaction. The statement of claim alleges, relevantly:
4.       By agreement in writing made on or about the 18^th December, 2000 it was agreed between the plaintiff and the defendant as follows:
a)that the plaintiff would purchase from the defendant all of his right, title and interest in and to Mortgage No. 04386698 for the sum of $189,874.50, and
b)that in respect of the transaction aforesaid, the defendant would act as the solicitor for the plaintiff
c)that under the terms of the mortgage the plaintiff would receive the sum of $210,000.00 as repayment of principal plus interest on 1^st November 2001 from the mortgagor.
5.       It was a term of the retainer referred to in paragraph 4(b) hereof that the defendant would when so acting on behalf of the plaintiff behave in all respects as a reasonably competent and/or diligent solicitor.
6. Acting under and in pursuance with the agreement referred to in paragraph 4(a) hereof, the plaintiff duly paid to the defendant the said sum of $189,874.50.
7.       The defendant has neglected, failed and/or refused to transfer…

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.

Continue reading Reid v Jensen

Details

AGLC: Reid v Jensen [2002] QDC 334
Case: [2002] QDC 334
Decision Date: 28 June 2002

CaseChat Overview and Summary

In the matter of Reid v Jensen, the plaintiff, Reid, sought to set aside a default judgment that was allegedly irregularly entered. The defendant, Jensen, a solicitor, was the subject of the application. The dispute arose from a mortgage transaction involving a property owned by Ms Helen Thompson. The plaintiff contended that the judgment was irregular because it included an amount that was not properly claimed in the statement of claim.

The primary legal issue before the court was whether the default judgment could be set aside due to its irregularity. The court considered whether the judgment complied with the rules and was for the relief to which the plaintiff was entitled on the pleadings. The court also assessed if the judgment was entered for an amount not claimed in the pleadings, which would render it irregular. The defendant did not object to the material presented by the plaintiff, including affidavits and correspondence that indicated the plaintiff had disbursed a lower sum than claimed in the statement of claim.

The court concluded that the default judgment was indeed irregular because it included an amount not claimed in the pleadings. The correspondence between the parties showed that the defendant had agreed to transfer the mortgage for a principal sum of $189,874.50, not the $210,000.00 stated in the claim. The court held that an irregular judgment may be set aside in the interests of justice, regardless of the merits of the defendant’s case. Therefore, the court ordered the judgment to be set aside and any enforcement of it to be stayed, pending the re-hearing of the application on amended terms.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

The affidavits filed by the plaintiff on his own behalf include material from the Registrar of Titles, and the Queensland Law Society showing the defendant held a Practicing Certificate as a solicitor at the time of the transaction referred to in the pleadings, and until 25 July 2001; and, that the transactions touching the subject property alleged to be the subject of the mortgage purchased by the plaintiff are confused. In particular, the owner of the land, Ms Helen Thompson, asserts the original mortgage to the defendant was obtained fraudulently; that a mortgage earlier in time than the defendant’s was fraudulently released (affidavit Arthur William Sibley, filed 21 May 2002); and, that other persons in addition to the plaintiff also claimed they were entitled to be registered as first mortgagees over Ms Thompson’s land. No specific objection was taken to this material by Mr Campbell of counsel, who appeared for the defendant but he submitted, and I agree, that it has no real relevance to this application.Judgment Irregularly Entered The application is brought under UCPR 290 which provides:“The Court may set aside or amend a judgment by default under this Division, and any enforcement of it, on terms, including terms about costs and the giving of security, the Court considers appropriate.” The Court has an inherent jurisdiction to set aside irregular judgments: Champion v Fay [1983] 2 Qd R 416 (FC). The position was well summarised by Dixon AJ (as he then was) in Chitty v Mason (1926) VLR 419, at 423:“A distinction is drawn between a summary judgment obtained in accordance with the rules, that is, a judgment regularly obtained and in good faith and one which is irregularly obtained or obtained in bad faith. The former will not in general be set aside except upon an affidavit of merits by the defendant; that is, upon his showing the Court he has a fairly arguable defence. The latter will be set aside in the interests of justice irrespective of the merits of the defendant’s case.” Mr Campbell referred me to, and relies upon, The Laws of Australia para 5.5(33):“For a default judgment to be regular, it must comply strictly with the rules and be for the relief to which the plaintiff is entitled on the pleading. The record must show the plaintiff to have a right to judgment, and the judgment entered must follow the relief claimed. If these requirements are not met, the judgment is irregular and it will be set aside.… A judgment signed for too much is irregular.… When the defendant seeks to set aside an irregular judgment, the only onus is to point to the irregularity.” The defendant relies upon the statement of claim, and the two figures of $189,874.50, and $210,000.00 for his first assertion that judgment was entered for too much. The pleading, and other evidence willingly adduced by the plaintiff certainly shows he only disbursed the lower sum to the defendant but the circumstances in which that occurred are revealed in correspondence between him and the defendant, exhibited to his affidavits. In a letter to the plaintiff 14 December 2000 the defendant said, relevantly:“I am the registered mortgagee of 23 Edinburgh Road, Benowa owned by Ms Helen Thompson. You have a copy of the mortgage which secures repayment of $210,000 by 1 November 2001 and payment of monthly interest payments at 11 per cent p.a.…The owner is a woman being maintained by her estranged husband. She intends to sell the property within the term of the mortgage and buy a cheaper home. The husband has deposited the amount of the interest for the term of the mortgage in my trust account as security for payment.I can guarantee payment of the interest to anyone who takes over the mortgage because I have the money in hand.”On 16 December 2000 the plaintiff wrote to the defendant saying, inter alia:“We confirm our advice to you that the Coverdale Superannuation Fund will be prepared to purchase your interests in the above first registered mortgage for the principal sum of $210.000.”On 18 December 2000 the defendant again wrote to the plaintiff saying relevantly:“As agreed, Mortgage 704386698 will be transferred to you as undisclosed trustee of the Coverdale Superannuation Fund for $210,000.00 today.Prepaid interest of $20,125.50 for the period from today until 1 November 2001 can be deducted from the price leaving a balance of $189,874.50 payable as I direct. I will not require any adjustment or refund of prepaid interest if the principal sum is paid before 1 November 2001.…I am enclosing copies of the transfer in your favour and insurance papers noting your interest as first mortgagee.The stamp duty, lodgement fee and any other expenses associated with the transfer will be paid by me.Following settlement, I will act for you to have the transfer stamped and registered and to enforce the mortgage if requested and I will not advise or represent the mortgagor.”On the same day, 18 December, the plaintiff sent a message to the defendant reading, relevantly:“Note that you can sign transfer as my solicitor. Please hang onto the file for me.”

Ratio Decidendi

Legal Principle Established

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CITATION:	Reid v Jensen [2002] QDC 334
PARTIES:	GRANT REID AS TRUSTEE FOR THE COVERDALE SUPERANNUATION FUND Plaintiff and PETER JENSEN Defendant
FILE NO/S:	148 / 2002
DIVISION:	Civil Jurisdiction
PROCEEDING:	Application
ORIGINATING COURT:	District Court Southport
DELIVERED ON:	28 June 2002
DELIVERED AT:	Southport
HEARING DATE:	24 May, 12 June 2002
JUDGE:	Judge Alan Wilson SC
ORDER:
CATCHWORDS:	Cases considered: Building Guarantee and Discount Co Ltd v Dolesji (1967) VR 764 Champion v Fay [1983] 2 Qd R 416 (FC) Chitty v Mason (1926) VLR 419, at 423 City Mutual Life Assurance Society Ltd v Giannarelli (1977) VR 463 National Mutual Life Association of Australasia Ltd v Oasis Developments Pty Ltd [1983] 2 Qd R 441, at 449 Prus-Butwilowicz v Moxey (2002) QDC 166 Yankee Doodles Pty Ltd v Blemvale Pty Ltd, unreported (SC (Qld) 23 June 1999, BC 9903401)
COUNSEL:	Mr Campbell for the applicant defendant Respondent plaintiff in person
SOLICITORS:	Baxters Solicitors for the applicant defendant Respondent plaintiff self-represented