Secure Funding Pty Ltd v Dean - [2017] QSC 126

SUPREME COURT OF QUEENSLAND

CITATION:

Secure Funding Pty Ltd v Dean [2017] QSC 126

PARTIES:

SECURE FUNDING PTY LTD
ACN 081 982 872
(first plaintiff)
LIBERTY FINANCIAL PTY LTD
ACN 077 248 983

(second plaintiff)

v
GARY KEVIN DEAN
(first defendant)
DEBBIE KAY DEAN

(second defendant)

FILE NO/S:

BS No 6241 of 2013

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

19 June 2017

DELIVERED AT:

Brisbane

HEARING DATE:

28 April 2017

JUDGE:

Martin J

ORDER:

1.   The default judgment contained in order 3 of the orders made by Justice Douglas on 21 October 2013 is set aside.

2.   The default judgment contained in order 3 of the orders made by Justice Margaret Wilson on 11 November 2013 is set aside.

3.   The defendants are to pay the plaintiffs’ costs of the application.

4.   The defendants are directed to file and serve their Defence and Counterclaim by no later than 26 July 2017.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – DEFAULT JUDGMENT – SETTING ASIDE – GENERALLY – where the respondent lent $500,000 to the applicants – where the applicants defaulted on the loan – where the respondent successfully applied for default judgments against the applicants in 2013 – where the applicants brought an application to set aside the default judgments – whether the default judgments were regularly entered – whether the default judgments should be set aside even though regularly entered

Cook v D A Manufacturing Co Pty Ltd [2004] QCA 52

Cusack v De Angelis [2008] 1 Qd R 344

Deputy Commissioner of Taxation v Johnston (2006) 230 ALR 575

Embrey v Smart [2014] QCA 75

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

COUNSEL:

R Ivessa for the applicant/defendants

C Gobbo for the respondent/plaintiffs

SOLICITORS:

Colwell Wright for the applicant/defendants

Directly instructed by Liberty Financial Pty Ltd

In October and November 2013, default judgments were entered against the first defendant, Gary Dean, and the second defendant, Debbie Dean, respectively. Over two years later they filed this application to have those judgments set aside. It took more than a year for the application to be heard.
The applicants contend that the judgments were entered irregularly. In the alternative they submit that the judgments, if not entered irregularly, should be set aside in any case.
The basis of the claim upon which judgments were entered
In 2011, Secure Funding Pty Ltd lent $500,000 to the defendants to refinance a home loan. The loan was secured by a mortgage over property at Burleigh Waters.
In the same year the defendants, for themselves and in their capacity as directors of Eaglefarm Investments Pty Ltd, sought financial accommodation in the form of a floor plan facility and a refinance investment loan from Liberty Financial Pty Ltd. As part of the arrangement for the finance, the defendants guaranteed repayment of all money owing by Eaglefarm under the floor plan facility and…

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 Secure Funding Pty Ltd v Dean

Details

AGLC: Secure Funding Pty Ltd v Dean [2017] QSC 126
Case: [2017] QSC 126
Decision Date: 19 June 2017

CaseChat Overview and Summary

Secure Funding Pty Ltd brought proceedings against the Deans to recover a debt owed by them. The Deans did not defend the proceeding and default judgments were entered against them. The Deans subsequently brought an application to set aside the default judgments. The primary issue for the court to determine was whether the default judgments should be set aside. In considering this issue, the court was required to have regard to the matters set out in Deputy Commissioner of Taxation v Johnston, including whether the defendants had a satisfactory explanation for their failure to defend, whether the delay in making the application precluded them from obtaining relief, and whether they had a prima facie defence on the merits. The court found that the Deans had provided a satisfactory explanation for their failure to defend and that Mrs Dean had a prima facie defence on the merits. Accordingly, the court set aside the default judgments. The court ordered that the default judgments be set aside, that the Deans pay the plaintiffs' costs of the application and that they file and serve their Defence and Counterclaim by a specified date.

Orders

Orders of the court

1. The default judgment contained in order 3 of the orders made by Justice Douglas on 21 October 2013 is set aside.

2. The default judgment contained in order 3 of the orders made by Justice Margaret Wilson on 11 November 2013 is set aside.

3. The defendants are to pay the plaintiffs’ costs of the application.

4. The defendants are directed to file and serve their Defence and Counterclaim by no later than 26 July 2017.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

The pleading was not defective. The judgments were regularly entered. This leads to the second part of the applicants’ argument.Should the judgments be set aside even though regularly entered? Rule 290 of the Uniform Civil Procedure Rules 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.” It is generally accepted that the discretion to set aside a regularly entered judgment is unfettered by the provisions of that rule. But, over time, a number of matters have been recognised as being relevant to the exercise of that discretion. In Deputy Commissioner of Taxation v Johnston,[3] Atkinson J said:“… There are three matters which will usually be relevant to the exercise of the discretion:(1)whether the defendant has given a satisfactory explanation of the failure to defend;(2)whether the defendant’s delay in making the application to set aside precludes it from obtaining relief; and(3)whether the defendant has a prima facie defence on the merits.”[4][3] (2006) 230 ALR 575.[4] At 576. The defendants need not demonstrate each of the above matters. Rather, they inform the exercise of the discretion.[5] [5] Cook v D A Manufacturing Co Pty Ltd [2004] QCA 52 at [16]. In considering those matters, one must also bear in mind what was said on this subject by McPherson J (as he then was) in National Mutual Life Association of Australasia Limited v Oasis Developments Pty Ltd,[6] namely, that an applicant seeking to set aside a judgment obtained in default of appearance is required to show by affidavit a defence on the merits, that is a “prima facie” or “substantial” defence. That is the most important aspect of any application to set aside a default judgment for, as his Honour noted:“[It will] not be often that a defendant who has an apparently good ground of defence will be refused the opportunity of defending, even though a lengthy interval of time had elapsed in making his application provided no irreparable prejudice is thereby done to the plaintiff.”[7][6] [1983] 2 Qd R 441.[7] At 449.Has there been a satisfactory explanation for the failure to defend? Mr Dean suffered a heart attack a few months before being served with the claim in these proceedings. He says that he had an operation and that he was medicated, extremely anxious, and unable to perform his job. He also says that he was unable to cope at the time he should have been instructing solicitors to prepare a defence. Mrs Dean says: “When I was served with the plaintiff’s claim in these proceedings, I felt there was nothing I could do about it. The plaintiffs are very large companies, and I felt there was no use fighting them. I had no financial resources available to hire a lawyer to see if I had a defence. Even if I had a defence, I couldn’t afford to fight them about it in Court.” She went on to say that she presumed that the amount claimed was overstated and that there had to be some “accounting later for the amount they received from such a sale”.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Secure Funding Pty Ltd v Dean [2017] QSC 126
PARTIES:	SECURE FUNDING PTY LTD ACN 081 982 872 (first plaintiff) LIBERTY FINANCIAL PTY LTD ACN 077 248 983 (second plaintiff) v GARY KEVIN DEAN (first defendant) DEBBIE KAY DEAN (second defendant)
FILE NO/S:	BS No 6241 of 2013
DIVISION:	Trial Division
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	19 June 2017
DELIVERED AT:	Brisbane
HEARING DATE:	28 April 2017
JUDGE:	Martin J
ORDER:	1. The default judgment contained in order 3 of the orders made by Justice Douglas on 21 October 2013 is set aside. 2. The default judgment contained in order 3 of the orders made by Justice Margaret Wilson on 11 November 2013 is set aside. 3. The defendants are to pay the plaintiffs’ costs of the application. 4. The defendants are directed to file and serve their Defence and Counterclaim by no later than 26 July 2017.
CATCHWORDS:	PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – DEFAULT JUDGMENT – SETTING ASIDE – GENERALLY – where the respondent lent $500,000 to the applicants – where the applicants defaulted on the loan – where the respondent successfully applied for default judgments against the applicants in 2013 – where the applicants brought an application to set aside the default judgments – whether the default judgments were regularly entered – whether the default judgments should be set aside even though regularly entered Cook v D A Manufacturing Co Pty Ltd [2004] QCA 52 Cusack v De Angelis [2008] 1 Qd R 344 Deputy Commissioner of Taxation v Johnston (2006) 230 ALR 575 Embrey v Smart [2014] QCA 75 National Mutual Life Association of Australasia Limited v Oasis Developments Pty Ltd [1983] 2 Qd R 441
COUNSEL:	R Ivessa for the applicant/defendants C Gobbo for the respondent/plaintiffs
SOLICITORS:	Colwell Wright for the applicant/defendants Directly instructed by Liberty Financial Pty Ltd