Telco Australia Limited v Favell - [2002] QSC 208

SUPREME COURT OF QUEENSLAND

CITATION:

Telco Australia Limited v Favell & Anor [2002] QSC 208

PARTIES:

TELCO AUSTRALIA LIMITED
(ACN 075 419 715)
plaintiff
GRAHAM DOUGLASS FAVELL
first defendant
TAUTA PAERAU
second defendant

FILE NO/S:

No. 697 of 2002

DIVISION:

Trial Division

PROCEEDING:

Application to set aside default judgment

ORIGINATING COURT:

Brisbane

DELIVERED ON:

18 June 2002

DELIVERED AT:

Brisbane

HEARING DATE:

17 June 2002

JUDGE:

Holmes J

ORDER:

The application is dismissed.

CATCHWORDS:

PROCEDURE – SUPREME COURT PROECDURE – QUEENSLAND – JURISDICTION AND GENERALLY – SETTING ASIDE JUDGMENT
Setting aside default judgment – lack of satisfactory explanation for delay in appearance – merits of defence – construction of deed of settlement - applicant entering deed as trustee – whether liability limited to assets of trust – whether action for amount owing under deed properly brought in debt or specific performance – whether defence under Contracts Review Act 1980 (NSW).

Contracts Review Act 1980 (NSW)
Trustee Act 1925 (NSW)
Trusts Act 1973

Helvetic Investment Corporation Pty Ltd v Knight (1984) 9 ACLR 773.
Workman Clark & Co Ltd v Brazileno [1908] 1 KB 968
Turner v Bladin (1951) 82 CLR 463

COUNSEL:

Mr Bickford for the applicant second defendant
Mr Hack SC for the respondent plaintiff

SOLICITORS:

McDonald Balanda & Associates for the applicant second defendant
Hopgood Ganim Lawyers for the respondent plaintiff

The default judgment

The applicant second defendant seeks to set aside a default judgment obtained against him on 19 April 2002. The Deputy Registrar gave judgment on that date for an amount of $410,909.74, the applicant not having filed a notice of intention to defend. There is no contention that the judgment was irregularly entered. The judgment was given on a claim and statement of claim filed on 18 January 2002. The respondent plaintiff had claimed the sum of $400,000 said to be owing under a deed of settlement signed by the applicant in his capacity as trustee of three trusts, the Shavell Family Trust and two other trusts associated with Mr Favell. He was not a defendant to the proceedings settled by the deed. Those proceedings had been brought against the first defendant, Mr Favell, the trustee of the NTM USA Trust, National Telephone and Marketing Inc, and Derwint Pty Ltd as trustee of the Shavell Family Trust.

The deed provided for the trusts, including the three for which the applicant had signed as trustee, the defendants to the proceeding being settled, and a number of companies associated with Mr Favell to make a series of payments to the respondent plaintiff. One such payment, in an amount of $400,000, was to be made on 10 January 2002. It is that payment in respect of which the respondent obtained its default judgment against the applicant.

The entering of the deed as trustee

The applicant’s material explains that he had been in business with Mr Favell and agreed to act as trustee of various trusts. He was not a beneficiary of any of them, and was not…

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.

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Details

Case: [2002] QSC 208
Decision Date: 18 June 2002

CaseChat Overview and Summary

The case of Telco Australia Limited v Favell involved a dispute between Telco Australia Limited, the plaintiff, and Favell, the defendant. The matter was heard in the Supreme Court of Queensland, which was asked to consider an application to set aside a default judgment. The crux of the dispute was whether the defendant could provide a satisfactory explanation for his delay in appearing in court, and whether the merits of his defence could be considered. The case also involved the interpretation of a deed of settlement, specifically whether the defendant’s liability was limited to the assets of a trust, and the proper course of action to pursue in recovering the amount owed under the deed.

The legal issues before the court were multifaceted, requiring the court to determine if the defendant's explanation for his delay in appearing was sufficient to warrant setting aside the default judgment. Additionally, the court had to interpret the deed of settlement to ascertain the extent of the defendant's liability and whether the appropriate legal action was one for debt or specific performance. Finally, the court needed to decide if the defendant's potential defence under the Contracts Review Act 1980 (NSW) was applicable.

The court found that the defendant's explanation for his delay was not satisfactory and therefore dismissed the application to set aside the default judgment. The court further held that the deed of settlement indicated that the defendant's liability was limited to the assets of the trust, and that the action for the amount owed should have been brought in debt rather than for specific performance. The court also ruled that the defendant's potential defence under the Contracts Review Act 1980 (NSW) was not relevant to the proceedings. Consequently, the application to set aside the default judgment was dismissed.

The final orders of the court were that the application to set aside the default judgment was dismissed. The court did not entertain the merits of the defendant's defence, finding that the lack of a satisfactory explanation for the delay in appearance was sufficient grounds for dismissal. The court also noted that the proper course of action for recovering the amount owed under the deed of settlement was an action in debt.

Orders

Orders of the court

The application is dismissed.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Telco Australia Limited v Favell & Anor [2002] QSC 208
PARTIES:	TELCO AUSTRALIA LIMITED (ACN 075 419 715) plaintiff GRAHAM DOUGLASS FAVELL first defendant TAUTA PAERAU second defendant
FILE NO/S:	No. 697 of 2002
DIVISION:	Trial Division
PROCEEDING:	Application to set aside default judgment
ORIGINATING COURT:	Brisbane
DELIVERED ON:	18 June 2002
DELIVERED AT:	Brisbane
HEARING DATE:	17 June 2002
JUDGE:	Holmes J
ORDER:	The application is dismissed.
CATCHWORDS:	PROCEDURE – SUPREME COURT PROECDURE – QUEENSLAND – JURISDICTION AND GENERALLY – SETTING ASIDE JUDGMENT Setting aside default judgment – lack of satisfactory explanation for delay in appearance – merits of defence – construction of deed of settlement - applicant entering deed as trustee – whether liability limited to assets of trust – whether action for amount owing under deed properly brought in debt or specific performance – whether defence under Contracts Review Act 1980 (NSW). Contracts Review Act 1980 (NSW) Trustee Act 1925 (NSW) Trusts Act 1973 Helvetic Investment Corporation Pty Ltd v Knight (1984) 9 ACLR 773. Workman Clark & Co Ltd v Brazileno [1908] 1 KB 968 Turner v Bladin (1951) 82 CLR 463
COUNSEL:	Mr Bickford for the applicant second defendant Mr Hack SC for the respondent plaintiff
SOLICITORS:	McDonald Balanda & Associates for the applicant second defendant Hopgood Ganim Lawyers for the respondent plaintiff