Salinga Pty Ltd v Aviation Consolidated Holdings Pty Ltd
[2021] VCC 220
•10 March 2021
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. CI-20-03493
| Saligna Pty Ltd (in its capacity as trustee of the Wood Family Trust trading as Design Consortia Australia) | Plaintiff |
| v | |
| Aviation Consolidated Holdings Pty Ltd & Ors according to the attached schedule | Defendants |
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JUDGE: | Judicial Registrar Burchell | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 21 January 2021, written submissions 18 February and 3 March 2021 | |
DATE OF JUDGMENT: | 10 March 2021 | |
CASE MAY BE CITED AS: | Salinga Pty Ltd v Aviation Consolidated Holdings Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2021] VCC 220 | |
REASONS FOR RULING
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Subject: PRACTICE AND PROCEDURE
Catchwords: Judgment in default of defence – Setting aside judgment in default of defence – whether error in statement of claim an irregularity
Legislation Cited: County Court General Civil Procedure Rules 2018 (Vic) r 21.07; Building and Construction Security of Payment Act 2002 (Vic) ss 9, 14, 16 and 17.
Cases Cited:Seabay Properties Pty Ltd v Galvin Constructions Pty Ltd [2011] VSC 183; Gantley Pty Ltd v Phoenix International Group Pty Ltd [2010] VSC 106; Jotham Property Holdings Pty Ltd v Cooperative Builders Pty Ltd & Ors [2013] VSC 552; Plowman v Palmer (1914) 18 CLR 339; Clayton v Th. C. Denton & Co Pty Ltd[1972] VR 46; Lam v Gulic (1979) 25 ACTR 46; Jindra v Tech-Rentals Pty Ltd [1999] VSC 206; Fenato v Chief Commissioner of State Revenue (2010) 78 NSWLR 20; Deputy Commissioner of Taxation v Thai (1993) 26 ATR 108.
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APPEARANCES: | Counsel | Solicitors |
| For the plaintiff | Ms C Gobbo | Findlay Arthur Phillips Pty Ltd |
| For the defendants | Mr D Deller | John Dimitropoulos |
JUDICIAL REGISTRAR:
1 By a writ dated 6 August 2020, the plaintiff sought judgment against the defendants under s 17(2)(a)(i) of Building and Construction Security of Payment Act 2002 (Vic) (“SOP Act”).
2 On 4 November 2020, the plaintiff obtained judgment in default of defence. By a summons dated 4 December 2020, the defendants apply to set aside that judgment on the basis that it is irregular.
3 On the affidavit materials, the dispute initially appeared to focus on the defendants’ claim that they had not been served with a payment claim from the plaintiff “Salinga Pty Ltd” [sic] (SOP Act s 14), and that no debt was due (SOP Act s 17). The contract and the payment claims were issued by Design Consortia Australia. The proposed defence claimed that the plaintiff was a different legal entity to Design Consortia Australia and that s 17 had not been engaged.
4 The plaintiff’s affidavit in response clarified that the writ wrongly referred to “Salinga Pty Ltd” instead of “Saligna Pty Ltd” (in its capacity as trustee of the Wood Family Trust trading as Design Consortia Australia) and deposed to the corporate trust structure. The company searches disclosed that the plaintiff was the trustee of the Wood Family Trust, the owner of the business name “Design Consortia Australia,” which conducts its business under the ABN 97 475 490 775. As such, the plaintiff had standing to sue in its capacity as trustee.
5 During oral submissions, the defendants’ arguments evolved such that, they contended, the default judgment should be set aside on three grounds. First, the specification of the cause of action and relief sought in the statement of claim (“SOC”) was imprecise by pleading s 17(2)(a)(i) of the SOP Act instead of s 16(2)(a)(i). Second, that the plaintiff, Saligna Pty Ltd, brings the claim in a representative capacity as the trustee of the Wood Family Trust trading as Design Consortia Australia, but this capacity is not reflected in the name of the plaintiff in the proceeding, nor is it pleaded as a material fact. Third, there is a defence on the merits in relation to reference dates.
6 The alleged irregularity is that the SOC misstated the claim as under s 17(2)(a)(i) of the SOP Act, when it was under s 16(2)(a)(i). This argument became the primary focus. Counsel for the plaintiff sought time to provide short written submissions in response the oral submissions of the defendants (that the default judgment is irregular because of the references to s 16 in lieu of s 17 of the SOP Act).
7 Given the novel interplay between r 21.07 of the County Court General Civil Procedure Rules 2018 (Vic) (“the Rules”) and the SOP Act, the court granted leave to the parties to provide written submissions confined to the irregularity issue.
8 The plaintiff responded that the court can correct and disregard the irregularity pursuant to r 36.01 of the Rules (in the same manner as amending the name of the plaintiff to correct the typographical error and its representative capacity).
9 In my view, the judgment must be set aside with no order as to costs. I order that the costs of the application to set aside the default judgment are the parties’ costs in the proceeding, unless either party has a basis for seeking a different order as to costs. Pursuant to r 36.01(4) of the Rules, the plaintiff has leave to amend the writ and statement of claim to amend the name of the plaintiff to “Saligna Pty Ltd (ACN 006 730 338) (in its capacity as trustee of the Wood Family Trust trading as Design Consortia Australia” in lieu of “Salinga Pty Ltd”. The proceeding is transferred to the Building Cases List forthwith. The defendants have leave to file and serve a defence in the proceeding.
10 I outline my reasons below. I invite the parties to submit proposed orders to give effect to these reasons, including orders adjourning the proceeding to a subsequent administrative mention, and orders indicating whether an amended SOC should be filed or if the matter should be discontinued and a new proceeding commenced by originating motion in the Building Cases List.
Factual background
11 The defendants rely upon an affidavit of George Ters, their director, sworn 27 November 2020. In opposition, the plaintiff relies upon an affidavit of David Wood, its director, sworn 12 January 2021.
12 On 1 July 2017, the plaintiff entered a written contract with the first defendant (“ACH”) to undertake construction work at 26-34 Buckley Street.
13 Under the heading of the contract titled “Progress Payments”, the contract stipulated that invoices for professional fees and disbursements incurred “would usually be rendered monthly… and would require payment within 14 days of the date of service”. The day on which invoices were to be sent was otherwise unclear.
14 During the works, the plaintiff issued payment claims to the second defendant (“BSD”) as follows:
a) invoice no. 18552 dated 30 November 2018 in the sum of $266,929.66;
b) invoice no. 19558 dated 17 May 2019 in the sum of $32,129.46; and
c) invoice no. 19566 dated 24 October 2019 in the sum of $38,614.38.
15 The defendants failed to issue a payment schedule or make payment.
16 On or about 7 July 2017, the plaintiff entered an oral contract with the third defendant (“GPDG”) to undertake construction works at 3 McNab Avenue.
17 The plaintiff alleges that the contract arose in a conversation between Mr Ters of GPDG and Mr Wood of the plaintiff on 7 July 2017.
18 According to the plaintiff, Mr Ters requested that the plaintiff provide similar works at McNab Avenue to those at Buckley Street. However, it is unclear whether the men discussed reference dates.
19 During the works, the plaintiff issued payment claims to GPDG as follows:
a) invoice no. 18551 dated 30 November 2018 in the sum of $30,423.64;
b) invoice no. 18553 dated 30 November 2018 in the sum of $153,073.80;
c) invoice no. 19560 dated 17 May 2019 in the sum of $20,574.80;
d) invoice no. 19561 dated 14 May 2019 in the sum of $1,460.94; and
e) invoice no. 19562 dated 14 May 2019 in the sum of $4,709.64.
20 On 20 September 2018, GPDG made part-payment of invoice no. 18553 in the sum of $55,000. GPDG also made payments of $50,000 on 30 July 2019, and $60,000 on 4 November 2019. The sum of $45,242.85 remains outstanding.
21 Mr Ters deposed that the defendants were not served with any of the payment claims by the plaintiff. Mr Wood responds that Mr Ters’ evidence is false by providing an analysis of the corporate trust structure.
22 On 5 August 2020, the plaintiff commenced proceedings in the County Court seeking judgment on the payment claim under s 17(2)(a)(ii) of the SOP Act.
23 On 25 August 2020, the defendants filed a notice of appearance. However, they failed to file a defence in time.
24 The plaintiff agreed to extend the time for the filing of the defence to 28 October 2020 at 4.00pm. On 14 October 2020, I made consent orders to that effect. Nonetheless, the defendants failed to file a defence by 28 October 2020.
25 On 4 November 2020, the plaintiff obtained judgment in default of defence. The defendants now apply to set aside that judgment.
The legal context
26 Pursuant to r 21.07 of the Rules, the court may set aside a judgment in default of defence.
27 The court distinguishes between a judgment entered regularly and one entered irregularly.[1]
[1]Chitty v Mason [1926] VLR 419, 423 (Dixon AJ); Gamble v Killingsworth & McLean Publishing Co Pty Ltd [1970] VR 161, 168.
28 Where a judgment is irregular, it must be set aside ex debito justitiae, despite the merits of any defence.[2] This is because an irregular judgment “ought not to be on the records of the court.”[3]
[2]RT Co Pty Ltd v Minister for the Interior (1957) 98 CLR 168, 170.
[3]Chitty v Mason [1926] VLR 419, 423 (Dixon AJ).
29 Where a judgment is entered regularly, the court will consider:
a) Whether there is a defence on the merits.
b) The reasons for the default.
c) The promptness of the application.
d) Whether, if the judgment were set aside, the plaintiff would suffer prejudice that is incurable by an order for costs or security for costs.[4]
[4]Kostokanellis v Allen [1974] VR 596; Lubura v Nezirevic (2013) VR 593 [3] (Warren CJ).
30 The dominant consideration is whether there is a defence on the merits.[5] The defendants need only demonstrate that they have a prima facie defence; their defence need not be bound to succeed.[6]
Was the judgment entered irregularly?
[5]Lubura v Nezirevic (2013) VR 593 [4] (Warren CJ); Evans v Bartlam [1937] AC 473, 489 (Wright LJ).
[6]Lubura v Nezirevic (2013) VR 593 [4] (Warren CJ).
31 As noted above, the alleged irregularity is that the SOC misstated the section under which the claim was made.
32 Specifically, paragraphs 16, 17, 25 and 26 of the SOC misstated that the claim was under s 17(2)(a)(i) of SOP Act, when it was in fact under s 16(2)(a)(i).
33 The defendants observe that unlike the cases concerning errors and oversights in court documents, this judgment was entered contrary to the SOP Act.
34 Section 16(2)(a) of the Act provides that a claimant may recover from a respondent any unpaid portion of an amount claimed in a payment claim where the respondent fails to submit a payment schedule within time (or at all) in response to the payment claim. Section 17(2)(a) provides that where a respondent provides a payment schedule within time, a claimant may recover from the respondent any unpaid portion of the amount which the payment schedule states the respondent proposes to pay to the claimant.
35 The defendants refer to Jotham Property Holdings Pty Ltd v Cooperative Builders Pty Ltd & Ors[7], in which Vickery J held (at [73]) that:
“the Act gives very valuable, and commercially important, advantages to builders and subcontractors. It alters the balance of power in favour of those parties in relation to progress payments in a significant way. In recognition of this position, the availability of the rights conferred by the Act are governed by, and depend upon, the observance of clear specifications of time and the other requirements expressed in the Act, either in mandatory terms or as defined prohibitions. These provisions are to be found at each stage of the regime for enforcement of the statutory right to progress payments. Such provisions, in accordance with the legislative purpose expressed in the text of each, call for strict observance.” [Emphasis added]
[7][2013] VSC 552.
36 The defendants indicate that the court cannot have been satisfied that the circumstances in s 17(1) existed when judgment was entered because:
a) The defendants did not provide a payment schedule to the plaintiff.
b) Therefore, there was never a “payment schedule” or “scheduled amount” within the meaning of s 17.
c) The plaintiff did not commence proceedings under s 17(2)(a)(i).
d) There was never a debt due under s 17.
e) There was never a cause of action under s 17.
37 The defendants then address the plaintiff’s reliance upon r 2.01: “A failure to comply with these rules is an irregularity and does not render a proceeding or any step taken, or any document, judgment or order in the proceeding, a nullity.”
38 The defendants respond that r 2.01 applies to breaches of the Rules, rather than breaches of the SOP Act.
39 The defendants contend that the irregularity involves more than a contravention of the Rules or a “technical defect”. Rather, the judgment contravened s 17(4)(a) of the SOP Act, in circumstances where the Act compels strict compliance.
40 The defendants refer to the statement of Isaacs J (with whom Rich J agreed) in Plowman v Palmer[8]:
“A proceeding taken, where such proceeding is entirely forbidden or excluded by the rules or is not permitted at all at the time it is taken, would be more than mere non-compliance with the rules.
the test is: Is there jurisdiction at the time to do the act impeached, even though prior precautions for the protection of a party, or other formalities, are directed; or is the act complained of, in the circumstances entirely unprovided for or prohibited at the time it is done?”
[8](1914) 18 CLR 339.
41 The defendants conclude that the judgment must be set aside with costs.
42 The plaintiff responds that the court can correct and disregard the error. In support of that contention, the plaintiff cites the following principles:
a) For some minor or technical defects, the court requires that there be a defence on the merits (some useful purpose for setting aside the judgment).[9]
[9]Australia and New Zealand Banking Group Limited v Kostovski, (Supreme Court of Victoria, unreported, Chernov J, 2 July 1997).
b) The court may disregard an irregularity if justice so warrants,[10] pursuant to its inherent jurisdiction.[11]
c) The court need not order that the irregularity be corrected before it examines the substance of the matter.[12]
d) The court may disregard an irregularity if it does not prejudice the defendant (because it has not been induced to change its position).[13]
e) The main purposes of pleadings is to notify the other party of the opposing case, to avoid surprise to the other side, to define the issues at trial, to ensure relevant evidence is admissible at trial, and to conduct the trial efficiently, within permissible bounds.[14]
f) However, the courts do not take an unduly technical or restrictive approach to pleadings. Accordingly, a party is not strictly bound to the literal meaning of the case it pleaded.[15]
g) The courts do not assess a pleading with the same degree of scrutiny as an Act of Parliament.[16]
[10]Boral Resources (Vic) Pty Ltd v Construction, Forestry, Mining and Energy Union [2014] VSC 429.
[11]Ibid.
[12]Ibid at 5.
[13]McKay & Ors v Barker [2014] VCC 2266.
[14]Dare v Pulham (1982) 148 CLR 658, 664-5.
[15]Thomson v STX Pan Ocean Co Ltd [2012] FCAFC 15.
[16]Arthur Young v Tieco International (1995) 182 LSLJ 367 [370] (Lander J).
43 The plaintiff also cites situations in which the courts have disregarded technical defects:
a) A County Court writ mistitled “In the Supreme Court of Victoria at Melbourne”.[17]
b) A writ omitting the proceeding number.[18]
c) A judgment which overstated the amount due.[19]
[17]Ibid.
[18]National Australia Bank Limited v Meehan (Full Court, Supreme Court of Victoria, Ormiston and O’Bryan JJ, unreported, 4 February 1994).
[19]Starrs v Retravision (WA) Ltd [2012] WASCA 67.
44 The plaintiff concludes that the SOC contains nothing more than a typographical error and otherwise pleads a good cause of action. The plaintiff notes that:
a) It submitted a payment claim under s 14(1) of the SOP Act.
b) The claim adequately identified the construction work to which it related.[20]
c) The defendant failed to issue a payment schedule.
d) The defendant does not have a substantive defence on the merits. Rather, it pleads a technical point: that it was not served with a payment claim under s 14 of the Act, and no debt is due under s 17.
[20]Seabay Properties Pty Ltd v Galvin Constructions Pty Ltd [2011] VSC 183. cf Gantley Pty Ltd v Phoenix International Group Pty Ltd [2010] VSC 106.
45 I agree with the defendants. The judgment is incurable and must be set aside.
46 The starting point is that the courts compel stringent compliance with the Rules: “a plaintiff obtaining judgment by default must comply strictly with the rules of court in every respect.”[21]
[21]Jindra v Tech-Rentals Pty Ltd [1999] VSC 206 [7].
47 In Clayton v Th. C. Denton & Co Pty Ltd,[22] Crockett J held:
“The right of a plaintiff to enter judgment without proof of his claim upon non-compliance with a time limit is a measure giving a special privilege to the plaintiff and operating to the drastic disadvantage of the defendant. Accordingly, rules providing such a right ought to be construed strictly as against a plaintiff.”
[22][1972] VR 46.
48 Similarly, in Lam v Gulic,[23] Blackburn CJ held:
“In my opinion, it makes no difference that the irregularity is in the amount of the judgment, nor that the reason for the irregularity was a careless slip by the plaintiff’s solicitors. I do not think there are degrees of irregularity in judgments; a judgment is either regularly or irregularly entered. The contention of the plaintiff’s counsel, that I should exercise my discretion to allow him to move for an order under the slip rule, made, as it is, as a last minute method of shutting out a defence which on the evidence appears to have some merit, appears to me to be out of accord with procedural justice. The entry of judgment in default is a serious and important step, and if the judgment is vitiated by an error which could have been avoided by proper care on the part of the plaintiff’s solicitors, it does not lie in the mouth of the plaintiff to say that the defendant should not be allowed to enter an appearance which she could have entered at any time before the entry of valid judgment.”
[23](1979) 25 ACTR 46, 48.
49 Where there is no defence to a SOC, each of the allegations in the SOC are taken to be admitted. These admissions then form the basis of the default judgment. Therefore, the specification of the causes of action and relief sought in the SOC must be precise.
50 A default judgment entered on a SOC which does not plead all material facts necessary to establish a cause of action for the relief sought will be irregular and set aside. The court must give careful consideration to the SOC to ensure that all material facts are pleaded and that appropriate relief is expressly claimed.
51 Indeed, three authorities reinforce the strictness of the courts as to deficiencies in pleadings.
52 In Jindra v Tech-Rentals Pty Ltd[24], the plaintiff erroneously referred to a counterclaim as a “counterclaim,” rather than an “amended counterclaim”. The judgment in default of defence stated that it was obtained “In default of defence to counterclaim,” rather than “In default of defence to amended counterclaim.” The plaintiff submitted that the irregularity was a mere slippage and could be rectified. Warren J (as she then was) rejected that submission and set aside the judgment.[25] Her Honour reinforced – with reference to Clayton and Lam – that the courts expect stringent compliance with the Rules.[26]
[24][1999] VSC 206.
[25]Ibid [10].
[26]Ibid.
53 In Fenato v Chief Commissioner of State Revenue,[27] the New South Wales Court of Appeal held that the plaintiff failed to plead the material facts of a land tax claim.[28] Due to that deficiency, the court set aside the judgment.[29]
[27](2010) 78 NSWLR 20.
[28]Ibid [84].
[29]Ibid [87].
54 In Deputy Commissioner of Taxation v Thai,[30] the New South Wales Supreme Court held that the plaintiff failed to plead the material facts of tax claims, and failed to disclose a cause of action.[31] Because of those deficiencies, the court set aside the judgment.[32]
[30](1993) 26 ATR 108.
[31]Ibid 111.
[32]Ibid 117.
55 In my view, the irregularity in the present case mirrors the irregularities above and the judgment must be set aside. This is because:
a) The SOC breaches a fundamental rule of pleadings – it fails to identify the correct provision under which the claim is made (r 13.02).
b) The courts demand strict compliance with the Rules (Clayton, Lam, and Jindra).
c) The SOC fails to disclose a cause of action. It was pleaded on the wrong statutory basis, and the plaintiff failed to establish reference dates (discussed below). The material facts do not establish entitlement to the relief sought (Thai).
d) The SOC is inimical to the purpose of pleadings – to inform the opposing side of the claim.[33] It created a misleading impression that the claim was for want of a payment schedule, when it was for failure to make payment in response to a payment claim.
e) The SOC and judgment breach s 17 of the SOP Act (the jurisdictional basis of the claim). The SOP Act demands strict compliance with its formal requirements (Jotham Property).
[33]Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279, 286.
56 Given the matters above (and primarily because the SOC do not support the claim for debt) the judgment must be set aside as irregular.
Even if the judgment were regularly obtained, should the judgment be set aside?
Defence on the merits
57 On this issue, the defendants submitted that they were not served with the payment claims by the plaintiff, and that no debt is due. However, the defendants did not press that defence at the hearing of this matter.
58 Instead, the defendants claim that the plaintiff has failed to establish whether the payment claims had reference dates.
23 Generally speaking, the available defences to a SOP claim concern either the nature of the underlying contract or the form and service of the purported payment claim, and thus whether the payment claim is effective to trigger the procedures established by Part 3 of the Act.[34] More particularly, the defences to a payment claim enlivened by the formal requirements of the Act are, in substance, that the payment claim:
[34]Southern Han at [62].
a) does not relate to a “construction contract” (including because it does not involve carrying out “construction work”), or it relates to a construction contract excluded from the operation of the Act under s7 (for example, a construction contract that forms part of a loan agreement, or one that is a domestic building contract under the Domestic Building Contracts Act 1995);
b) fails to satisfy the formal requirements of s14(2) (for example, by failing to identify the construction work or failing to state that it is made under the SOP Act);
c) was made when no valid reference date existed,[35] including where it is served before an applicable reference date or relies on a reference date that has already been used up by an earlier payment claim;[36]
d) includes variations that are “excluded amounts” under s10B of the Act; and
e) was not validly served on the respondent under either the terms of the contract or under s50 of the Act.
[35]Southern Han at [61]-[62]; Vanguard Developments v Promax [2018] VSC 386, Kennedy J at [121].
[36]SOP Act s14(8).
59 In my view, the following formal requirements of the SOP Act are satisfied:
a) The payment claims were served under s 14(1) (the defendants pleaded that they were not served but did not press that at the hearing following the explanation of the plaintiff’s corporate trust structure).
b) The payment claims adequately identified the construction work to which they relate (s 14(2)(c)). The invoices are highly detailed and break down the work to a significant degree. A reasonable person, in the position of the defendant, would readily comprehend the work to which they related.[37] The identification requirement is not a stringent one.[38]
[37]John Beever (Aust) Pty Limited v Paper Australia Pty Ltd [2019] VSC 126 [83] (Lyons J).
[38]Gantley Pty Ltd v Phoenix International Group Pty Ltd [2010] VSC 106 [51] (Vickery J).
c) The payment claims indicated the amount claimed (s 14(2)(d)).
d) The payment claims stated they were made under the Act, as follows: “This is a payment claim under the Building and Construction Security of Payment Act 2002 (Vic)” (s 14(2)(e)).
e) There is no evidence that the payment claims contain excluded amounts (s 14(3)(b)).[39]
[39]Yuanda Vic Pty Ltd v Façade Designs International Pty Ltd [2021] VSCA 44 (at [27]).
60 However, I find that the plaintiff has failed to plead that the payment claims had reference dates. The Buckley Street contract and the oral contract between Mr Ters and Mr Wood also failed to discuss reference dates. Accordingly, the reference dates are determined by the Act (s 9(2)).
61 Section 9(2) applies as follows:
(b) subject to paragraphs (c) and (d), if the contract makes no express provision with respect to the matter, the date occurring 20 business days after the previous reference date or (in the case of the first reference date) the date occurring 20 business days after—
(i) construction work was first carried out under the contract; or
(ii) related goods and services were first supplied under the contract;
or
(c)in the case of a single or one-off payment, if the contract makes no express provision with respect to the matter, the date immediately following the day that—
(i) construction work was last carried out under the contract; or
(ii) related goods and services were last supplied under the contract;
or
(d) in the case of a final payment, if the contract makes no express provision with respect to the matter, the date immediately following—
(i) the expiry of any period provided in the contract for the rectification of defects or omissions in the construction work carried out under the contract or in related goods and services supplied under the contract, unless subparagraph (ii) applies; or
(ii)the issue under the contract of a certificate specifying the final amount payable under the contract a final certificate; or
(iii) if neither subparagraph (i) nor subparagraph (ii) applies, the day that—
(A) construction work was last carried out under the contract; or
(B) related goods and services were last supplied under the contract.
62 In any event, there is no evidence before the court of reference dates, or when the works were completed. Reference dates were not pleaded in the SOC and are absent from the affidavits. Therefore, on the material currently before the court, there is a prima facie defence on the merits: that the payment claims did not have available reference dates.
63 This factor weighs in favour of the default judgment being set aside as a primary consideration.
Reasons for the default
64 In relation to the explanation for the default, Mr Kers deposes that the defendants’ solicitor, John Dimitropoulos, overlooked the date for a defence. In my view, such omission of the solicitor responsible falls short of the standard of professional conduct expected of solicitors. However, a party generally ought not to be shut out from litigating their defence where the solicitor was responsible for the default, rather than the party.[40] This would weigh in favour of the default judgment being set aside.
[40]White v Dortenzio [2004] VSC 381.
Promptness of the application
65 As to the promptness of the application, the plaintiff obtained judgment in default of defence on 4 November 2020.
66 Later that day, the solicitors for the plaintiff served the judgment upon the defendants’ solicitor, John Dimitropoulos.
67 On 5 November 2020, Ms Raymer (solicitor for the plaintiff) received an email from Mr Dimitropoulos indicating that he was preparing an application to set aside the judgment.
68 On 9 November 2020, Ms Raymer received a further email from Mr Dimitropoulos indicating that Mr Ters had arrived in Melbourne; that he was drafting an affidavit in support; and that Mr Dimitropoulos anticipated the affidavit would be filed by the following afternoon.
69 On 12 November 2020, Ms Raymer received a further email from Mr Dimitropoulos indicating that "we have drafted the documentation and we intend to request Counsel to review and or settle", and "we will submit and serve the documentation as soon as practically possible having regard to my work circumstances."
70 On 18 November 2020, Ms Raymer emailed Mr Dimitropoulos indicating that the brief was with Mr Deller and that he was reviewing the material with a view to expedite the application. Mr Dimitropoulos stated that "the failure to file the Defence was an administrative error on the part of our office" and "we propose to provide you with an update after we confer with Mr Deller on Monday next".
71 On 26 November 2020, Mr Dimitropoulos emailed Ms Raymer attaching the draft Affidavit of George Ters. The email stated: "we expect to have this Affidavit sworn later today or tomorrow," and “we will then proceed to file same with the Application and serve your office".
72 On 30 November 2020, Mr Dimitropoulos advised the court that the defendants were ready to file their application and sought a return date.
73 On 8 December 2020, Mr Dimitropoulos served the summons and affidavit of Mr Ters upon Ms Raymer.
74 In those circumstances, the application was made promptly, within just over a month of the judgment. This weighs in favour of setting aside the default judgment.
Prejudice
75 The plaintiff has not identified any prejudice it might suffer if the judgment were set aside.
76 On balance, had I concluded that the judgment was regularly entered, I would have set it aside.
Conclusion
77 Where a default judgment is set aside, a regularly entered default judgment usually requires the defendants to pay the costs thrown away. In the present case, I have found that the default judgment is irregular. Accordingly, the plaintiff ought to bear its own costs thrown away by reason of entry of the default judgment. In the circumstances of this case, I also propose that the costs of the application to set aside be the parties’ costs in the proceeding.
78 I order that the judgment in default of defence dated 4 November 2020 is set aside with no order as to costs, and the costs of the application to set aside be the parties’ costs in the proceeding. Further, pursuant to r 36.01(4) of the Rules, the plaintiff has leave to amend the writ and statement of claim to amend the name of the plaintiff to “Saligna Pty Ltd (ACN 006 730 338) (in its capacity as trustee of the Wood Family Trust trading as Design Consortia Australia” in lieu of “Salinga Pty Ltd”. The proceeding is transferred to the Building Cases List forthwith. The defendants have leave to file and serve a defence in the proceeding.
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Certificate
I certify that these 15 pages are a true copy of the judgment of Judicial Registrar Burchell delivered on 10 March 2021.
Dated: 10 March 2021
Sean Bricknell
Associate to the Judge in Charge of the Building Cases List
SCHEDULE OF PARTIES
| Salinga Pty Ltd | Plaintiff |
| and | |
| Aviation Consolidated Holdings Pty Ltd | First defendant |
| and | |
| BSD Land Pty Ltd | Second defendant |
| and | |
| GPDG Pty Ltd | Third defendant |
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