SCHLIETER v Awasum Pty Ltd

[2014] FCCA 1136

FEDERAL CIRCUIT COURT OF AUSTRALIA

SCHLIETER v AWASUM PTY LTD [2014] FCCA 1136

Catchwords:
CONSUMER LAW – Undefended – default judgment – costs ordered.

Legislation:

Competition and Consumer Act 2010 (Cth), Sch 2, ss.18, 54, 56
Federal Circuit Court of Australia Act 1999 (Cth), s.76
Federal Circuit Court Rules 2001 (Cth), rr.13.03, 13.03A, 13.03B(2), 21.02

Applicant: MALTE SCHLIETER

Respondent:

AWASUM PTY LTD

(ACN 136 440 474)

File Number: LNG 48 of 2013

Judgment of: Judge Hartnett

Hearing date: 23 May 2014

Delivered at: Melbourne

Delivered on: 23 May 2014

REPRESENTATION

Counsel for the Applicant: Mr Groves

Solicitors for the Applicant: M+K Dobson Mitchell Allport

The Respondent: No appearance

ORDERS

1. Judgment is entered for the Applicant.

2. The Respondent pay to the Applicant damages in the sum of $21,450 together with interest in the sum of $1,236.46 up to the date of entry of judgment this day and from this day a future sum calculated pursuant to s.77(3)(a) of the Federal Circuit Court of Australia Act 1999 (Cth).

3. The Respondent pay to the Applicant the costs of the proceedings fixed in the sum of $5,669 (inclusive of disbursements) and by reference to Part 1 of Schedule 1 of the Federal Circuit Court Rules 2001 (Cth) together with the further sum of $271 ordered to be paid by the Respondent to the Applicant on 25 March 2014.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

LNG 48 of 2013

MALTE SCHLIETER

Applicant

And

AWASUM PTY LTD
(ACN 136 440 474)

Respondent

REASONS FOR JUDGMENT

(Edited ex tempore reasons)

1. These proceedings commenced by the filing of an Application and Statement of Claim on 12 December 2013.  The Court was satisfied as to service of those documents upon the Respondent prior to the matter being first before the Court on 13 March 2014.  On that date, the Respondent was ordered to file and serve a notice of address for service within seven days.  The Respondent was also ordered to file and serve a response within 10 days, and the matter was adjourned to 25 March 2014 for further mention.  On 13 March 2014, Mr Naqvi, manager of the Respondent, appeared by telephone link on behalf of the Respondent.

2. On 25 March 2014, when the parties again appeared before the Court by telephone with Mr Naqvi appearing on behalf of the Respondent, though again without seeking the leave of the Court and allowed by the Court for that limited purpose only, the Court ordered that the Respondent comply with orders 1 and 2 of the earlier Orders made 13 March 2014 within seven days thereof, and that the costs of the application of that day be fixed in the sum of $271 and be paid by the Respondent to the Applicant forthwith. The matter was otherwise adjourned to 2 April 2014. On 2 April 2014, there was no appearance by or on behalf of the Respondent. Orders were made for the Applicant to file and serve any interlocutory application and supporting affidavit seeking default judgment (and pursuant to r.13.03 of the Federal Circuit Court Rules 2001 (Cth) (‘the Rules’)) against the Respondent on or before 28 April 2014. Pursuant to order 3 of those Orders, the solicitor for the Applicant was to serve the interlocutory application and supporting affidavit on the Respondent, to the registered address of the Respondent company and also to the business address provided by Mr Naqvi on the earlier appearance occasions, being 1/48 Lara Way Campbellfield in the State of Victoria.

3. The Application seeking default judgment was filed by the Applicant on 28 April 2014, together with a supporting Affidavit from the Applicant’s solicitor, Mr Christopher Groves, affirmed on 28 April 2014.  There is further relied upon by the Applicant, an Affidavit by Mr Groves affirmed 21 May 2014.  The Court is satisfied that the Applicant effected service in accordance with order number 3 of the earlier Orders on the evidence that is contained in an Affidavit sworn by Ms Katherine Ann Foster on 22 May 2014 which is also before the Court in these proceedings.

4. The Applicant applies for default judgment against the Respondent under division 13.1A of the Rules. Sub- rule 13.03B(2) of the Rules provides that:-

   “(2) If a respondent is in default, the Court may:

   (a) order that a step in the proceeding be taken within the time limited in the order; or

   (b) if the claim against the respondent is for a debt or liquidated damages—grant leave to the applicant to enter judgment against the respondent for:

   (i) the debt or liquidated damages; and

   (ii) if appropriate—costs; or

   (c) if the proceeding was commenced by an application supported by a statement of claim or the Court has ordered that the proceeding continue on pleadings—give judgment against the respondent for the relief that:

   (i) the applicant appears entitled to on the statement of claim; and

   (ii) the Court is satisfied it has power to grant; or

   (d) give judgment or make any other order against the respondent; or

   (e) make an order mentioned in paragraph (b), (c) or (d) to take effect if the respondent does not take a step ordered by the Court in the proceeding in the time limited in the order.”

5. Rule 13.03A of the Rules defines when a respondent is in default. The Applicant submits, and the Court finds, that the Respondent is in default by:-

   a)failing to file and serve a notice of address for service;[1]

   b)failing to file and serve a response;[2]

   c)failing to file and serve a Respondent’s genuine steps statement;[3]

   d)failing to comply with Orders of 13 March 2014;

   e)failing to comply with Orders of 25 March 2014; and

   f)by reason of the above failures, not defending the proceedings with due diligence or at all.

   [1] Federal Circuit Court Rules 2001 (Cth), r.6.01.

   [2] Federal Circuit Court Rules 2001 (Cth), r.4.03.

   [3] Federal Circuit Court Rules 2001 (Cth), r.4.10.

6. The Court notes that these proceedings first commenced on 12 December 2013, and that today is 23 May 2014. No steps have been taken by the Respondent, save its manager’s appearance at two of three scheduled directions hearings in these proceedings.  It is incumbent upon the Court to avoid undue delay and ensure a proper and efficient use of public resources.  No legal representation for the Respondent company has been obtained.

7. There is no explanation from the Respondent of the reason for its default, nor is there any identifiable meritorious defence to the claim on the evidence before the Court.  The Court accepts the Applicant’s submissions that the Respondent’s defaults are sufficiently serious and numerous so as to warrant the entry of default judgment.  Those submissions are set out in the Outline of Submissions filed by the Applicant’s solicitors on 21 May 2014. 

8. Rule 13.03B(2) of the Rules, as currently enacted, is construed in the manner stated by Heerey J when considering a similar provision in Arthur v Vaupotic Investments Pty Ltd [2005] FCA 433 at [3] as follows:-

   “Since the proceeding was commenced by an application supported by a statement of claim I am empowered to give judgment against the first and second respondents. The rule does not require proof by way of evidence of the applicant's claim; rather that on the face of the statement of claim there is a claim for the relief sought and, of course, that the court has jurisdiction to grant that relief.”

9. I am satisfied on the face of the Statement of Claim that there is a valid claim for the relief sought.  I am also satisfied that this Court has the necessary jurisdiction to make the orders as sought by the Applicant, being damages orders. 

10. The application concerns a claim by the Applicant for damages in respect of the purchase of a tractor by the Applicant from the Respondent for the sum of $20,000, together with a further sum of $1,450 for the cost of delivering the tractor to the Applicant. The Applicant alleged, amongst other things, a breach of agreement by the Respondent; representations made by the Respondent which it claimed were misleading or deceptive, or likely to mislead and deceive, contrary to s.18 of the Australian Consumer Law as found in Schedule 2 to the Competition and Consumer Act 2010 (Cth) (‘the Australian Consumer Law’) which did in fact mislead and deceive the Applicant; and a breach of ss.54 and 56 of the Australian Consumer Law. The Applicant sought a damages payment, interest and costs on the application.

11. In respect of the question of costs, the Court makes an order for costs pursuant to r.21.02 of the Rules. Pursuant to r.21.02(2)(a) of the Rules, the Court has fixed the quantum of costs and notes that the method by which same was calculated was by reference to this Court’s scale of costs, as set out in Schedule 1, Part 1 of the Rules. In respect of the calculation of interest, that was calculated by reference to pre-judgment interest, pursuant to s.76 of the Federal Circuit Court of Australia Act 1999 (Cth), calculated at the rate applicable in the Federal Court of Australia, and post-judgment interest calculated as referred to in the orders themselves.

I certify that the preceding eleven (11) paragraphs are a true copy of the reasons for judgment of Judge Hartnett

Associate: 

Date: 12 June 2014