The Reserve Vault P/L v Barrier Reef Arts P/L

The Reserve Vault P/L brought an appeal against the decision of the District Court of Queensland, which had dismissed its application to set aside a summary judgment granted to Barrier Reef Arts P/L. The appeal was heard by the Queensland Court of Appeal, which was required to determine whether the primary judge had correctly applied the law in instructing the appellant to provide a reasonable explanation for its failure to attend the hearing and whether the judge had failed to inform the appellant of the need to show an arguable defence. The primary judge had ruled that the appellant must provide a reasonable explanation for its failure to attend the hearing and show a sufficient basis for the judgment not to be maintained. The appellant argued that it was not legally represented at the hearing and that the primary judge had failed to inform it of the need to show an arguable defence.

The Court of Appeal held that the primary judge had failed to adequately explain to the appellant that it was required to show an arguable defence, rather than merely a reasonable explanation for its failure to attend. The Court held that the primary judge should have informed the appellant of the need to show an arguable defence and that the failure to do so was a material error in the proceedings. The Court found that the primary judge had not adequately considered the appellant’s lack of legal representation and that this was another material error in the proceedings. The Court held that the appeal should be allowed, and the judgments and orders of the District Court pronounced and made on 9 June and 4 August 2011 be set aside except in so far as they relate to costs. The Court also held that the costs in the appeal be the parties’ costs in the cause and that the security for costs given by the appellant pursuant to the order made on 30 August 2011 be discharged. Finally, the Court ordered that the appellant file and serve an amended defence and counterclaim, if any, within 14 days of today’s date.