SHIPWAY & LOCK (Civil Dispute) - [2013] ACAT 28

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

SHIPWAY & LOCK (Civil Dispute) [2013] ACAT 28

XD 12/878
Catchwords: CIVIL DISPUTE –ex parte judgment as distinguished from default judgement- whether ACAT failed to provide phone hook-up in substantive proceeding – whether the respondent provided reasonable explanation for delay in seeking to set aside ex parte judgement – whether judgement was against wrong respondent – criteria for setting aside ex parte judgement: whether the respondent had opportunity to present his case, and whether if the matter is re-heard might it reasonably make a difference to the decision.

List of Legislation: ACT Civil and Administrative Tribunal Act 2008, s.56
Corporations Act 2001 (Cth), ss.124 & 146

Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth), s.85.1,

List of Regulations: ACT Civil and Administrative Tribunal Procedural
Directions 2010 (No 1), Direction 43

List of Cases: Allesch v Maunz [
2000] HCA 40; 203 CLR 172; 173 ALR 648;

74 ALJR 1206
Cohen v McWilliam (1995) 38 NSWLR 476

Davies v Pagett (1986) 10 FCR 226
Perpetual Ltd v Marwa Dilati [2011] NSWSC 891

Tribunal: Mr A. Morris - Registrar

Date of Orders:  24 April 2013
Date of Reasons for Decision:       24 April 2013
AUSTRALIAN CAPITAL TERRITORY  )
CIVIL & ADMINISTRATIVE TRIBUNAL     )          XD 12/878

BETWEEN:
COLIN AND JOAN SHIPWAY
T/AS PROMORITONAL PRODUCTS
Applicants

AND:

PATRICK LOCK

Respondent

TRIBUNAL: Mr A. Morris - Registrar

DATE: 24 April 2013

ORDER

The Tribunal Orders that

Application to set aside the ex parte decision dismissed, and original decision affirmed.

………………………………..
Mr A. Morris - Registrar

REASONS FOR DECISION

The substantive matter arose when the applicants (“Adpro”) filed proceedings against the respondent (Mr Patrick Lock) on 20^th June 2012 for payment of $5,895.85, being a debt alleged of $5649.20 plus the filing fee ($123) and interest ($123.85 at that time).

On the 27^th July 2012 – a little outside the allowed time for a response to be filed, but no party has taken issue with that – Mr Lock filed a response which consisted effectively of a letter on Carwoola Council of Elders letter head, stating that he was responding on behalf of Carwoola Council of Elder’s [sic] as the Chairperson alleging it to be “a non-profit organization and hold[ing] no assets of any value outside of human resources”.
The response went on to allege that Mr Lock personally had no assets, and to apologise for the inconvenience. He effectively blamed government for letting his organisation down and not coming up with finances.
The matter was set for a conference at ACAT, to be held on 22^nd August 2012 at 2.00pm. Notice of this fixture was served on both parties by prepaid post on 9^th August 2012.
On 20^th August 2012, Mr Lock wrote a letter which was received as an attachment to an email at 4.34 pm at ACAT that day, stating that he “returned home early last week to find [notice of the conference]”. He stated that as “a mature date University student” he was completely tied up for “the next 8 weeks on a full schedule” to do with this work, and would consequently be unable to attend.
The letter went on to explain that he understood the need for a resolution to the matter, and expressed his embarrassment. He stated that Carwoola was a “non-profit organization” that held “... no assets other than human resources, our constitution has been written in a way that if I dissolve the organization we cannot be held all responsible for occurring bad debts I now want to take this measure as I would like to opportunity to rectify the situation at a later date but unfortunately I cannot enter into any formal agreement other than the handshake that was given that led to this.” Quite what some of this means is unclear, but I assume that there is a “do not” missing between “I” and “now”.
The following day (21^st August 2012), an officer of ACAT phoned Mr Lock at 12.15 pm and suggested that he could attend by way of phone hook-up. The record of that conversation shows that Mr Lock agreed that that could occur, but that he probably would not answer it. He then became agitated and aggressive, and threatened that he would dissolve the organisation “and no one would get anything”. He then terminated the conversation abruptly.
When this was reported to me, I emailed Mr Lock at 5.15 pm on 21^st August 2012 urging him to request a telephone hook-up and to be available when called. I also invited him to request an adjournment, if the selected date really posed a problem for him. No reply was received to that email.
The following afternoon, the conference was convened by a Senior Deputy Registrar. The applicants appeared, but there was no appearance by the respondent. Ex parte orders were made in favour of the applicants.
On 23^rd August 2012 at 11.40 am, Mr Lock emailed ACAT claiming to be “under the impression that ... were going to have a phone linkup yesterday at 2 PM ...”
An email was sent to Mr Lock at 4.01pm that day advising that ACAT had had no such request from him, and explaining how he could apply to set the ex parte orders aside. Mr Lock responded with an email telling the Tribunal to “fix the mistake on [your] part”. He also threatened to close Carwoola down.
I responded to this with a full explanation of how ACAT works, and again asked him to file material to set it aside. This did not immediately occur.
On 5^th March 2013, an application for interim or other orders was filed seeking that the default judgement of 23^rd August 2012 be set aside and that the applicants’ claim against the respondent be struck out.
The grounds relied on were:
a.that the respondent was not the proper party;
b.that the proper respondent was “Carwoola Council of Elders Aboriginal Corporation (ABN:20 868 894 399)” (“the Council”);
c.that that the time the debt was incurred, the respondent was acting in the capacity of a director/chairperson of the Council;
d.that pursuant to ss124 and 146 of the Corporations Act 2001 (Cth) the Council was responsible for the debt; and
e.at the time of the default judgement, the respondent was self-represented and not aware of the above principles.
The matter came before me on 20^th March 2012, and after hearing argument, I asked for submissions and reserved my decision.

The Interlocutory Applicant’s (Mr Lock’s) Position

The applicant (in the interlocutory proceedings, being the respondent to the substantive matter) made a number of submissions, seeking to explain the delay by way of Mr Lock not being able to obtain timely legal advice.
Additionally, arguments are presented as a basis to set aside “default judgement” on the argument that there are “real issue[s] to be tried in this matter”.
I note that the applicant’s documents refer to annexures “A” and “B”, which did not accompany the submission. However, their content is clearly defined in the text, and little turns on their omission.
The interim application, however, is confusingly and incorrectly drawn, and is not a document that assists the Tribunal in attempting to assess Mr Lock’s position. I shall deal with this below.

The Respondents’ Position

The respondents to the interim application did not file a legalistic submission, but merely affirmed that they believed that Mr Lock must have had knowledge of his funding position when he placed the orders. They argue that in the interests of justice, the ex parte decision should stand.

Decision

In the first place, I think it would assist proceedings to correct a couple of misconceptions in Mr Lock’s submissions. In the first place, we are not dealing with setting aside a default judgement. What has been obtained by Adpro is an ex parte judgement. The two are quite different.
A default judgement arises when no response is received to an application that is filed. It is obtained pursuant to Direction 43 of the ACT Civil and Administrative Tribunal Procedural Directions 2010 (No 1). The decision that is being questioned in this matter is not a default judgement. It is an ex parte judgement.
An ex parte decision arises when both parties have submitted applications and responses, but the respondent failed to further prosecute its position appropriately in the tribunal process. This situation is one that is covered in section 56(c) of the ACT Civil and Administrative Tribunal Act 2008 (“the ACAT Act”).
Parties should note that the “bar is set much higher” for setting aside a decision when it is an ex parte decision rather than a default decision that is in question. A default decision is usually readily set aside, as it is generally inequitable for a party to be deprived of a chance to put a case only by reason of not having done so in time, whereas an ex parte decision is one reached after an (albeit possibly incomplete) inquiry into facts, and a decision being made on those facts, as submitted by both sides of a dispute. It is more unusual to set such a decision aside, and would only occur if the conditions in section 56(c) of the ACAT Act were met.
Notwithstanding the wording in the Application for Interim or Other Orders, noting that the section of the Act relied on is in fact section 56, I am assuming the incorrect application sought is in fact an oversight, and I am treating it as an application to set aside an ex parte decision.
The oral submissions on behalf of the applicant appear to have 3 main areas to consider, namely:
I shall deal with these seriatim.

Failure to provide a phone hook-up

The question of the phone hook-up is somewhat ingenuous, and a significant part of the application quotes an ACAT email out of context.
The submission reads: “... [Mr Lock] submits that it was evident that he was of the view that the telephone linkup would occur. This was acknowledged in the reply which provided: ‘Certainly from our end it was not clear to us that you have accepted (sic) to option of a telephone hook-up’.”
With respect, this is a partial quote of a longer email on 24^th August 2012 and is taken out of context. The actual quote is immediately followed by the sentence “We understood that you had said that you were unlikely to answer the phone”.
But effectively, this is a flawed submission. With the best will in the world, I cannot read that quote as evidence of ACAT having understood that there even might be a telephone hook-up. The clear meaning of the words, plus their context tells me that “an option of a phone hook-up was offered to Mr Lock, and he did not accept it”.
The words occur in an explanatory email, sent after the event (or rather the non-event). Prior to the conference, there was an email which it would be more appropriate to quote:
a.On 21^st August 2102 (before the conference) an email was sent following receipt of Mr Lock’s letter the body of which in full states (omitting formal parts):
“Thank you for your letter of 20^th August 2012, advising of the many demands on your time, and your inability to attend ACAT. I understand that an ACAT officer spoke with you about it and suggested a telephone hook-up. However, you advised that you probably wouldn’t answer it, as you are short of time.
Whilst I understand that you are short of time, the applicants are short of money, and whether you owe it to them or not is what we have to work out. The claim is a serious one, and has been lodged with ACAT in the expectation that we will take it seriously, and assist the parties to work towards resolution of the matter.
It is indeed a problem that you may have been let down by others, but unless you are present to discuss this, it is not possible for ACAT to put your position to the applicants; If you are not here, or represented, you run the risk of having a judgement entered against you, personally, inasmuch as it is you that the applicants have brought action against.
I therefore urge you to attend personally, or if you really cannot do so, to ask for a telephone hook-up so that you can at least be present by phone, and to be certain to be available when called. If you choose this latter option, you should provide us with a suitable telephone number.
I hope that you can assist ACAT by participating in its processes. If you are really unable to do so because of an appointment conflict (not just that you are “too busy”), you might let me know when you can do so, so that I can move the conference. I would accept any (reasonable) time within a couple of days of the present date (other than Thursday morning, when I will be unavailable).
(highlight added for emphasis)
In fact, the whole of the rest of the cherry-picked correspondence represented an elaborate explanation of why there was no phone call, and how Mr Lock could rectify this. He did nothing.
Neither did he immediately do anything when ex parte judgement was sought and given, though he was advised of its existence on 23^rd August 2012.
I also note that during the Registrar’s Motions list, Mr Lock admitted that he was at the time actually lying about his reasons for not coming to the conference. Far from being tied up with academia and doctoral research, Mr Lock admitted that he just was too preoccupied with other matters to give this case any priority.
Had he admitted this at the time, ACAT could and probably would have attempted to fit in with this need. But if you do not tell ACAT the truth, you cannot reasonably expect ACAT and the disadvantaged other party (or parties) to look favourably on subsequent applications in proceedings.

Delay in Seeking to set aside ex parte decision.

Let me say at the outset that I do not regard the period between 11^th December 2012 and 6^th March 2013 as the period about which delay can be alleged. I understand the difficulties faced by litigants in getting suitable appointments over the Christmas holiday period, as well as the tragically underfunded status of legal aid and similar bodies.
However, I am less impressed by the delay between the period 23^rd August 2012 and 11^th December 2012 – a period just shy of 4 months.
Whilst I understand that few civilisations have risen and fallen in 4 months, within the context of a business debt a period of this duration assumes more significance. And I am also somewhat unimpressed that it was the actual seeking of the money that caused the movement by Mr Lock in the first place. Nothing suggests that he was ever going to seek to have the matter set aside of his own volition. It was only when Adpro were put to yet more expense in the matter that he did anything.
I was referred to the case of Perpetual Ltd v Marwa Dilati [2011] NSWSC 891 specifically at paragraph 22. However, I am not certain that this is appropriate. This case refers to the setting aside of a default judgement, and I have already pointed out that the creature with which we are dealing here is not a default, but an ex parte decision. Similarly, the reliance on the cases cited both in the Marwa case, and by the applicant, being Davies v Pagett (1986) 10 FCR 226 and Cohen v McWilliam (1995) 38 NSWLR 476 whilst representing expressions of the law that the Tribunal lives by represent only expressions of law in respect of default judgements.
Effectively, I think that the entire submission of the applicant on this point is misconceived.
A more appropriate case to which I might have been referred is that of Allesch v Maunz [2000] HCA 40; 203 CLR 172; 173 ALR 648; 74 ALJR 1206 (3 August 2000), actually cited in this decision from ( and maunz)
In that case, rather than talking of a default judgement, the matter concerned a Family Court matter under section 79A of the Family Law Act 1975 (Cth) which section effectively permits setting aside of an order of the Court if there has been a “miscarriage of justice”. In practice, this most often arises because of a decision being made in the absence of pleadings or representation from another party.
In that case, Kirby J stated that
“It is a principle of justice that a decision-maker, at least one exercising public power, must ordinarily afford a person whose interests may be adversely affected by a decision an opportunity to present material information and submissions relevant to such a decision before it is made. The principle lies deep in the common law. It has long been expressed as one of the maxims which the common law observes as "an indispensable requirement of justice". It is a rule of natural justice or "procedural fairness". It will usually be imputed into statutes creating courts and adjudicative tribunals. Indeed, it long preceded the common and statute law. Even the Almighty reportedly afforded Adam such an opportunity before his banishment from Eden.” (para 35).
Kirby J makes the point that these points in context are not contested. They are a given. But he elects to use them as “the starting point for legal analysis.”

However, in paragraphs (part) 38 through 40, he holds:
“... Sometimes, through stubbornness, confusion, misunderstanding, fear or other emotions, a party may not take advantage of the opportunity to be heard, although such opportunity is provided. Affording the opportunity is all that the law and principle require.
Decision-makers, including the courts, cannot generally force people to protect their own rights, to adduce evidence or other materials, to present submissions or to act rationally in their own best interests. This consideration may be especially relevant in relation to the Family Court where emotions, often engendered by the highly personal issues involved, can sometimes cloud rational thought.
Nor are courts obliged to delay proceedings indefinitely because one party, although proved to be on notice of the proceedings, refuses or fails to appear in person or to be represented by a lawyer or some other individual permitted to speak for them who can explain the need for an adjournment. The rights of other parties are commonly involved. In the Family Court, the rights of non-parties (especially children) may be affected. Additionally (as this Court has itself accepted), the rights of the public in the efficient discharge by courts of their functions must be weighed against unreasonable delay in concluding litigation.”
Further into the decision he states (paras 49 and 50):
“If no reasonable explanation is given for the default, it is not an injustice to deny the party in default a second opportunity to be heard. That opportunity is taken to have been waived or forfeited. Nowadays, the consideration of the reasonableness of an explanation will take into account the legitimate interests of any other party affected by the court's order (including any innocent third parties) as well as the general public. The interests at stake include a general respect for the finality of judicial orders and for the efficient management of judicial proceedings that is consistent with their fundamental objectives, including the attainment of justice.
Similarly, there will be no miscarriage of justice if the party affected by the impugned order cannot demonstrate an arguable case that reopening the matter might reasonably produce a materially different result which is more favourable to that party. If the process by which that order is made is flawed, but it is not shown that the outcome might reasonably be materially different, the party offended by the process may be upset by a sense of procedural injustice. However, upon analysis, that feeling will not find reflection in the ultimate disposition of the rights and duties of the parties with which the law is finally concerned. Correction concentrates on any supposed error in the ultimate judicial orders and not exclusively on the procedures leading to, or reasons given for, those orders.”

In Allesch, Kirby J ultimately found that the matter should on the facts in that case, be reopened. But in this matter, the facts to me suggest a different outcome.
In the present case, Mr Lock has had several opportunities to correct the record, and to manage his matter. I outline them seriatim:
In short, there were a large number of things that Mr Lock could have done to alleviate this mess. He did none of them, leaving the Shipways to continue to incur loss and costs. This it seems to me is what Kirby J’s “Affording the opportunity is all that the law and principle require” statement envisages.
To further paraphrase Kirby J in Allesch, Mr Lock has not provided a reasonable explanation for the default. Thus I hold that it is not an injustice to deny him a further opportunity to be heard. That opportunity is taken to have been waived or forfeited.
The Correct Respondent?
The pleadings in that document go on to discuss an entity entitled “the Carwoola Council of Elders Aboriginal Corporation (ABN: 20 868 894 399) ‘the Council’”. They assert that this entity is the proper respondent, under sections 124 and 146 of the Corporations Act 2001 (Cth).
Quite why they assert this is unclear. There is no evidence provided, either in the pleadings or at the hearing that the Council is in fact a corporation at all. However, at the hearing, Mr Jones, appearing for the respondent, resiled from his Corporations Act position, and instead sought to characterise the entity as an Aboriginal and Torres Strait Islander (ATSI) Corporation, under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (“CATSI Act).
At no time did Mr Jones, or in his written submissions, Mr Solomon, provide any evidence that the entity was in fact an ATSI Corporation. It was submitted as a fact, with no evidence presented to back it up.
So I did some searching of my own. It took some time, but it transpired that there is indeed an entity called the “Carwoola Council of Elders Aboriginal Corporation (ABN: 20 868 894 399)”. It is registered entity 3374, registered on 30^th January 1999, and the Secretary, and one of the Directors is indeed Patrick Lock. ( council of elders&icn=3374&town=&postcode=).
The correct name of the entity is the “Carwoola Council of Elders Aboriginal Corporation”. This is important.
A little searching of the CATSI Act reveals a number of issues, namely:
i."Aboriginal corporation";
ii."Torres Strait Islander corporation";
iii."Aboriginal and Torres Strait Islander corporation";
iv."Torres Strait Islander and Aboriginal corporation";
v."Indigenous corporation".
The name of the entity is the problem here. In all of the correspondence that Adpro have had with Mr Lock, the relevant entity was stated as being “Carwoola Council of Elders ABN 20868894399”. Nowhere can I find that Mr Lock or any other person on behalf of the entity or Mr Lock ever called the entity “Carwoola Council of Elders Aboriginal Corporation”. Nowhere were the words “Aboriginal Corporation” ever quoted or used.
A reading of section 85.1 of the CATSI Act shows that section 85.1(3) uses the word “must” when referring to what should constitute an ATSI corporation’s name. In the preceding section, it notes that the corporation “may” have certain other attributes to its name, but it “must” have one of the given phrases – in this case, “Aboriginal corporation” as a part of its name.
Moreover, at s85.1(7) of the CATSI Act, it notes that the requirements must be met by an ATSI corporation “at all times after registration”. It would seem that the Carwoola Council of Elders did not comply with this requirement
Even when the proceedings were issued they were issued against Patrick Lock of an address for “Carwoola Council of Elders”. Mr Lock in his response, accepted the process, and pleaded that the Carwoola Council of Elders was a non-profit organisation, and that he was the chairperson. He did not assert a corporate identity, nor that he was in fact a Director, and its contact officer/Secretary. He made no mention of the words “Aboriginal corporation”
It was suggested to me in submissions that Mr Lock being stressed and ignorant did not appreciate or might not have appreciated the subtle distinctions of the legal and corporate world. However, in other correspondence in this matter, Mr Lock asserts that he holds Baccalaureate and Master’s degrees in education, and that he was undertaking his doctorate in an unspecified field. Clearly, Mr Lock is not an unsophisticated client. He is learned and presumably aware of the values in titles and responsibilities.
He must also, by reason of being a secretary and director, be held to understand his responsibilities. These are not roles to be assumed lightly, and neither is it appropriate to evade responsibility for such positions by claiming ignorance.
There was nothing in Mr Lock’s behaviour or assertions that would indicate to a supplier that he was acting on behalf of a registered corporation. He never asserted it, though he must have known of his status as the Secretary. He never used letterhead that was correctly titled. He never alleged that the organisation had a more complete name. His whole behaviour was that of a person contracting effectively on his own behalf for an unincorporated business-named entity to get some merchandise for distribution at a picnic.
Indeed, even when relationships broke down between Adpro and Mr Lock, he continued to argue that he was responsible for obtaining funds and sponsorship, and that he was undertaking the communications with Senator Faulkner’s office and Mr Manikis of the ACT.
In the letter sent to ACAT on 20^th August 2012, well after legal proceedings had been commenced, Mr Lock continued to assert that it was his handshake agreement that cemented the agreement with Adpro. He still maintained, even after he might have had cause to focus on some other entity’s existence, that the matter was between himself and Adpro, with the vaguely asserted hope that more funding would be sought in the future.
I note that section 99.1of the CATSI Act allows that the “corporation’s power to make, vary, ratify or discharge a contract may be exercised by an individual acting with the corporation’s express or implied authority and on behalf of the corporation. This power may be exercised without using a common seal”. But I suggest that for this to happen, the individual must assert or put on notice the party with whom s/he is dealing that s/he is in fact doing that. It is not acceptable to come back after proceedings have commenced for non payment and assert that the suppliers were after all dealing with a hidden agency whom they should have sued.
Having gone this far, I looked at a linked page of documents filed by the corporation ( Specifically, I went to the page of filed annual returns, and noted that Annual Return for the year to 30^th June 2012 did not disclose this debt. As the debt arose sometime in March 2012, and was a source of friction and debate between the parties all the way through to the issue of proceedings on 20^th June 2012, one might have assumed that it might be shown as a contingent liability of the corporation. So I deduce that the Corporation itself did not regard this contract as one of its own, as it has failed to disclose it. Mr Lock apparently did not count it as a Corporation liability.
So in summary, whilst there does indeed exist a body known as the “Carwoola Council of Elders Aboriginal Corporation” there was no reasonably possible way in which the Shipways (Adpro) could have ascertained that this was the same body as “Carwoola Council of Elders” for whom Mr Lock fronted and with whom they dealt. If there had been any vestige of a possibility that had they exercised diligence they could have ascertained that there was an incorporated entity behind the transaction, I might have had little hesitation in setting the mater aside (notwithstanding Mr Lock having lied about the reason for not attending the conference). But even if they had known about the existence of the Aboriginal corporation, there is no assurance that they would have assumed that Mr Lock was representing that entity. As far as they were concerned, they were dealing at all times with an individual claiming to represent a loose group of people running a seafood luncheon party.
Even at the event, which Mr and Ms Shipway attended, they saw nothing to indicate otherwise. From the account in the application, it was a very casual event, with no structure.
In summary, for me to set aside an ex parte judgement in general, I should be satisfied of two things, namely, that Mr Lock had opportunity to present his case in the first place, and that if he did have a rerun, that it might reasonably make a difference to the result. In this particular case, I need to consider whether on the evidence the substantive applicants have served the right party.
I find that Mr Lock has been afforded every chance to be present and present his case initially, and that he himself was the architect of any failure in that regard. I also find that if the matter did have another airing, the outcome would not be likely to be different.
Finally, I find that irrespective of the existence of “Carwoola Council of Elders Aboriginal Corporation (ABN: 20 868 894 399)”, I am not convinced that it was remotely likely that this entity contracted with Adpro through its agent Patrick Lock. I hold that the contract was formed between Colin and Joan Shipway trading as Adpro Promotional Products and Patrick Lock representing himself as Chairperson of an unincorporated association known as “Carwoola Council of Elders (ABN: 20 868 894 399)”.
Finally, I note that in the antepenultimate paragraph of the submissions, it is stated that “Consideration should also be given to section 21(1) of the Human Rights Act 2004 (ACT)...”. Nothing in this submission however tells me exactly what I should be considering. I suggest that in the absence of more detailed submissions I have considered this issue in general terms within the context of this decision.
For these reasons, I dismiss the application to set aside the ex parte decision, and affirm the decision.
………………………………..
Mr A. Morris
Registrar

PUBLICATION DETAILS

TO BE PUBLISHED

To be completed by Tribunal Staff

PART A

FILE NUMBER:

PARTIES, APPLICANT:

PARTIES, RESPONDENT:

COUNSEL APPEARING, APPLICANT

COUNSEL APPEARING, RESPONDENT

SOLICITORS FOR APPLICANT

SOLICITORS FOR RESPONDENT

TRIBUNAL MEMBERS:

DATES OF HEARING:

PLACE OF HEARING:

PART B

RECOMMENDATION:

FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )

COMMENTS: