The University of Western Australia v TSW Analytical Pty Ltd

[2014] WADC 29

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CIVIL

LOCATION:   PERTH

CITATION:   THE UNIVERSITY OF WESTERN AUSTRALIA -v- TSW ANALYTICAL PTY LTD [2014] WADC 29

CORAM:   DEPUTY REGISTRAR HEWITT

HEARD:   5 MARCH 2014

DELIVERED          :   20 MARCH 2014

FILE NO/S:   CIV 3792 of 2013

BETWEEN:   THE UNIVERSITY OF WESTERN AUSTRALIA

Plaintiff

AND

TSW ANALYTICAL PTY LTD
Defendant

Catchwords:

Practice and procedure - Application to set aside regular judgment - Turns on its own facts

Legislation:

Nil

Result:

Judgment reduced and leave given to defend part of the claim

Representation:

Counsel:

Plaintiff:     Ms P Martino

Defendant:     Mr D Thompson

Solicitors:

Plaintiff:     P A Martino

Defendant:     Thompson Downey Cooper

Case(s) referred to in judgment(s):

1. DEPUTY REGISTRAR HEWITT:  This action commenced by a writ which was filed on 26 November 2013.  It was duly served and the defendant failed to file an appearance.  As a consequence, judgment was entered against the defendant on 11 December 2013.  On 30 December 2013 the defendant applied to set aside that judgment and it is that application which is before me for decision. 

2. The judgment is a regular judgment and as a consequence it is necessary to provide an explanation for the failure to comply with the rules, to demonstrate that there is a defence on the merits, and finally to explain any delay in bringing the application.  As for the first and last of those points it is clear to me on reviewing the materials that the failure to file a defence was due to misadventure, there was no delay in bringing the application to set aside the judgment and I consider those aspects to be satisfactorily explained.  The real issue between the parties is whether or not there is a defence on the merits.  Consideration of that aspect of the claim requires a review of the nature of the relationship between the parties.  The plaintiff is a university and over a number of years it entered an agreement with the defendant under the terms of which it employed certain staff which were made available to the defendant together with the use of certain facilities within the university campus in return for payments by the defendant for the provision of those staff and facilities.  It was intended between the parties, as it attested by the affidavit of Mr C J Scadding sworn 30 December 2013, sworn in support of the application, at par 11 that the arrangement was intended to be cost neutral.  That is, as I discern it from the papers, that the university would neither profit nor lose through the arrangement which it entered with the defendant.  The dealings between the parties commenced in 2007 and continued until the end of June 2013.  The arrangement was put into effect by a calculation of the amount to be paid by the university for any particular period (and the periods varied from time to time) and the payment of the amounts so calculated by monthly instalments.  The plaintiff's claim is that the monthly instalments which were payable for December 2012 and the whole of the period from January 2013 to June 2013 remain unpaid.  Subject to an additional sum to which I shall refer later, that is the amount of the claim for which judgment was entered.  Facts before me clearly establish that in so far as the university has a claim for the relevant period, that claim is unpaid.  It is therefore necessary to examine the basis upon which the defendant advances a defence to the plaintiff's claim.  The first ground of the defence which is advanced by the defendant is that the writ issued by the university was not properly authorised by that institution.  That proposition has been soundly debunked by an affidavit filed on behalf of the plaintiff and I take it, is no longer pursued but I find it surprising that such a proposition was ever aired given the flimsy nature of the evidence advanced to support it.

3. The next proposition advanced is that there is no legally enforceable agreement between the parties.  The arrangements, if I might call them that, between the plaintiff and the defendant, commenced in 2007 and continued until June 2013.  In the course of that time, the plaintiff employed a number of employees whose services were made available to the defendant and permitted the defendant a use of a portion of its premises.  Calculations of the amount due from the defendant to the plaintiff were made from time to time and several million dollars were paid over the currency of the agreement by the defendant to the plaintiff.  To propose that there is no legally enforceable agreement between the parties strikes me as preposterous.  The defendant requested the plaintiff to engage certain personnel, to make their time available in pursuit of its own business, to make certain facilities available in the pursuit of its private business, and paid several million dollars over the course of the time in which it occupied those premises.  How it could possibly be said that there was no intention to create legally enforceable relations escapes me and I regard the proposition as so patently untenable as to not be worthy of further consideration.

4. The plaintiff's claim relates to the last month in December 2012 and the following six months in 2013.  In relation to December 2012, it is notable that by an email dated 25 March 2013, Mr C Scadding of the defendant informed an employee of the plaintiff, Ms A Rorrison as follows:

   We had planned to pay December invoices last week but we are waiting on a payment from one of our clients (cash flow merry go round) and they didn't come through for us so I had to push it.  The pipeline of work is strong so from my point of view the long term looks OK.  Timing is the hard bit. 

5. That email was in response to a letter from Ms Rorrison raising concerns about arrears.  To my mind that email seriously undermines the proposition advanced by the defendant that it has some defence to the claim for the December invoice.  Towards the end of March 2013 it was clearly playing for time. 

6. As to the invoices relating to the 2013 period, the actual amounts were agreed between the parties and in fact the total amount claimed is that calculated and propounded by Mr Scadding himself as is reflected in his email dated 14 February 2013, again to Ms Rorrison in which he calculates the amount required to be payable by his company to the plaintiff to be $533,678.20 not inclusive of GST.  What is clear from the materials is that the defendant accepted the services of the relevant staff, occupied the premises and carried out its business as anticipated and consistent with the existing arrangements which were between the parties.  It is also completely clear that no payment was made by the defendant to the plaintiff in regard to that matter.

7. It appears to me that it is clear that there was a contract between the plaintiff and the defendant, the defendant received the benefit of that contract, the amounts payable under the terms of the contract were those suggested by the defendant and adopted by the plaintiff and payment has not been made.  I therefore look to some basis upon which it might be said that there is a defence to that aspect of the claim.  The first proposition advanced is that certain of the employees of the university were either not available to work or devoted a certain amount of their time on UWA business.  Amongst the reasons for failing to attend to the business were long service leave, maternity leave and so forth.  It is notable that one of the individuals, one Rachel Green who was away on maternity leave from February 2013 to July 2013, is the wife of the deponent of the affidavit.  He presumably knew when he submitted his estimates for the period January to July 2013 that his wife was pregnant.  A more straightforward answer is however, that the university undertook to employ these people and make their services available to the company.  On Mr Scadding's own affidavit that was to be on an income neutral basis.  Maternity leave, long service leave, holiday leave, and so forth are all entitlements of the employees and obligations of the employer and clearly are expenses undertaken by the university in fulfilment of its arrangement with the defendant.  As for the allegation that a certain amount of time was spent on university business, it is notable that none of these matters have ever been mentioned by the defendant in any correspondence which has been bought to my attention, nor were these matters taken into account by the defendant when calculating the proper amount payable by the defendant to the plaintiff.  I find the proposition is so wanting in particulars and so vague as to not constitute a proper defence and, as I have mentioned, is flawed in many respects.  Therefore in so far as the defendant relies on those matters I find that they do not set out a basis of defence with any merit. 

8. Exhibited to the affidavit of Mr Scadding sworn 30 December 2013 is a copy of a letter dated 12 December 2013 setting out a claim for $3,266,423 for analytical measurement service to UWA and its post‑graduate research staff.  The claim is totally unparticularised and is merely no more than a series of numbers.  I find that there is no basis of a defence in the materials with which I have been presented on that basis.

9. There is however one matter to which I consider that the defendant has raised a triable issue, that relates to invoice 055000288 (in the sum of $30,045.79) which consists of a review of disbursements from 1 January 2009 to 30 September 2013 an accounting exercise effectively to square the ledger for that period.  That is a matter in which I think the plaintiff should be required to justify both the basis of the accounting and the accounting itself and the defendant should be entitled to question those matters.

10. On reviewing all these materials I am unable to discern any proper basis upon which this defendant could be said to have a defence on the merits for the bulk of the claim.  Many of the propositions which have been advanced in my view do not reflect favourably on the defendant and I refer particularly to the allegations that there was never any contractual basis between the parties, the allegation that the writ was issued without authority (the evidence of which was either scanty or non-existent), the suggestion that the defendant has a huge counterclaim against the plaintiff, the proposition that many of the normal incidents of employment such long service leave etc should not be visited on the defendant, notwithstanding that by the defendant's own testimony the arrangement was intended to be income neutral, the fact that the deponent of the affidavit submitted estimates for the claimant for the period January 2013 to 30 June 2013 which contained allowances for his then pregnant wife such that (on the defendant's case) she would receive income from the university without any obligation of the defendant to repay that sum.  All in all I consider that the defendants have not advanced any defence on the merits save for that portion detailed above. 

11. I consider the plaintiff's case is simple.  There was an agreement which was contractually binding between the parties, sums of money were to be paid by the defendant to the plaintiff and there has been default in such payments.  In my view the appropriate way to dispose of this application is to reduce the amount of the judgment by $30,045.79 and grant the defendant leave to defend that portion of the claim.