Visa Global Logistics Pty Ltd v Zhang

[2017] FCCA 1334

FEDERAL CIRCUIT COURT OF AUSTRALIA

VISA GLOBAL LOGISTICS PTY LTD v ZHANG [2017] FCCA 1334

Catchwords:
ADMIRALTY – Carriage of goods by sea.

PRACTICE & PROCEDURE – whether default judgment should be entered against the defendant – whether the Court had jurisdiction to order the relief claimed – whether the defendant was in default – whether the amounts claimed were liquidated damages for the purpose of Rule 13.03B(2)(c)(i) of the Federal Circuit Court Rules 2001 (Cth).

Legislation:

Admiralty Act 1988 (Cth), ss.4, 9
Federal Circuit Court Rules 2001 (Cth), rr.4.09, 13.03B – div.13.1A

Applicant: VISA GLOBAL LOGISTICS PTY LTD

Respondent: ZHIWEI (MIKE) ZHANG

File Number: SYG 3091of 2016

Judgment of: Judge Emmett

Hearing date: 19 June 2017

Date of Last Submission: 19 June 2017

Delivered at: Sydney

Delivered on: 19 June 2017

REPRESENTATION

Counsel for the Plaintiff: David Parish

Solicitors for the Plaintiff: HWL Ebsworth

No appearance by or on behalf of the Defendant.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 3091 of 2016

VISA GLOBAL LOGISTICS PTY LTD

Applicant

And

ZHIWEI (MIKE) ZHANG

Respondent

EX TEMPORE

REASONS FOR JUDGMENT

1. By way of Application in a Case filed on 19 May 2017, the applicant seeks an order that Judgment be entered against the defendant for liquidated damages identified as follows:

   a)$117,359.40 being an amount in respect of unpaid invoices by Mactrends Australia Pty Ltd (“Mactrends”), whose debts were guaranteed by the defendant;

   b)$7723.27, being costs incurred by the applicant in issuing a statutory demand to Mactrends and the subsequent winding up of that company on 24 June 2015;  and,

   c)Interest on the liquidated damages at two per cent per month from the due date of each unpaid invoice issued to Mactrends and in respect of which demand was made upon the defendant on 11 August 2016.

2. Pursuant to Division 13.1A of the Federal Circuit Court Rules 2001 (Cth) (“the Rules”) the Court has power to enter Judgment on default. The considerations for the Court are: whether there is jurisdiction to make the orders sought; whether there has been a default committed within the meaning of the Rules; and whether the plaintiff appears to be entitled on the Statement of Claim to the quantums sought as liquidated damages pursuant to r.13.03B(2)(c)(i) of the Rules.

3. In relation to jurisdiction, s.9(1) of the Admiralty Act 1988 (Cth) (“the Act”) confers jurisdiction upon the Court in respect of actions in personam for a maritime claim. 

4. Pursuant to s.4(3)(f) of the Act, a “maritime claim” is defined as follows:

   “a claim arising out of an agreement that relates to the carriage of goods or persons by a ship or to the use or hire of a ship, whether by charter party or otherwise”

5. The claim, as reflected in the Statement of Claim filed on 9 November 2016, is for outstanding invoices issued by the plaintiff to Mactrends in respect of the carriage of goods by sea. The defendant was a director of Mactrends and has guaranteed any debt which Mactrends may incur to the plaintiff. 

6. In the circumstance, I am satisfied that the claim is a maritime claim and the Court has jurisdiction to make the orders sought.

7. In support of the claims made by the plaintiff, counsel for the plaintiff, Mr Parish, read the affidavit of Mr Joseph Alan Hurley affirmed 19 May 2017. The plaintiff also provided oral evidence from Ms Patricia La Sale who is the manager of accounts of the plaintiff in Melbourne.

8. Ms La Sale’s evidence was to the effect that there had been no payment made in respect of the outstanding amount on the invoices issued to the defendant. Ms La Sale also gave evidence that no payment had been made in respect of the interest which was accruing pursuant to clause 14 of the agreement between the plaintiff and Mactrends in respect of carriage of goods by sea. Clause 14 identified the interest rate at two per cent per month as liquidated damages on the amount outstanding to be calculated from the date due until payment was made in full. That agreement is annexed to the affidavit of Mr Hurley and marked annexure JH2-4.

9. In compliance with service upon the defendant of the Orders made by me on 24 May 2017, Mr Parish read the affidavits of: Heidi Dopson affirmed 26 May 2017; Joseph Khoury sworn 29 May 2017; Jerome Mark Edward Swan sworn 2 June 2017; a further Affidavit of Service sworn 2 June 2017 by Jerome Mark Edward Swan; and the Affidavit of Service of Reon James Burgess Viles affirmed 2 June 2017.

10. In the circumstances, I am satisfied that service has been duly effected on the defendant and the defendant is aware of the Orders made by me on 24 May 2017 which were in the following terms:

    “1. The defendant file and serve any evidence by way of affidavit in relation to the plaintiff's Application in a Case filed on 19 May 2017 by 7 June 2017.

    2. Each of the plaintiff and defendant file and serve written submissions in relation to the plaintiff's Application in a Case by 13 June 2017.

    3. The plaintiff's Application in a Case seeking default judgment is set down for hearing on 19 June 2017 at 10.00am, before me.

    4. In the event that there is no appearance by or on behalf of the defendant, the Application in a Case may proceed in his absence and default judgment be entered against the defendant without further notice.”

11. I am also satisfied on the evidence before me that the defendant has been duly served, in accordance with directions made by me on 23 February 2017, with the Application in a Case filed 19 May 2017 seeking that Judgment be entered against the defendant in the amounts sought in the Statement of Claim, together with the affidavit of Joseph Alan Hurley affirmed 19 May 2017.

12. Based on the evidence before me, I am also satisfied that the defendant was duly served with the Application filed on 9 November 2016 and the Statement of Claim filed on 9 November 2016, together with another affidavit of Joseph Alan Hurley sworn 21 February 2017 and a Notice filed by the plaintiff pursuant to r.4.09 of the Rules.

13. The Orders made by me on 23 February 2017 required the defendant to file a Notice of Address for Service within 28 days. As referred to above, the Orders made by me on 24 May 2017 required the defendant to file and serve any evidence in relation to the plaintiff’s Application in a Case filed on 19 May 2017. The Orders also stated that in the event there was no appearance by or on behalf of the defendant at today’s hearing, the plaintiff’s Application in a Case may proceed in his absence and default Judgment be entered against him without further notice.

14. There has been no compliance by the defendant with Orders made by the Court. The defendant has also failed to file an Address for Service or a Response in accordance with the time limit imposed by the Rules.

15. In the circumstances, I am satisfied that the defendant is in default of Orders of the Court and compliance with the Rules.

16. On the face of the Statement of Claim, the plaintiff is entitled to the liquidated amount of the invoices, being $117,359.40. Based on the evidence before me of Ms La Sale, I am satisfied that that amount remains outstanding.

17. I am also satisfied that the claim for interest in paragraph 12(c) of the Statement of Claim in the amount of $61,026.88 is a claim for liquidated damages which is made in accordance with the agreement entered into between Mactrends and the plaintiff in relation to the carriage of goods by sea provided by the plaintiff to Mactrends in the period between December 2014 to February 2015; and, which was guaranteed by the defendant.

18. In relation to the sum sought in the Statement of Claim in paragraph 12(b), expressed to be an amount of $7,723.27 as costs incurred by the plaintiff in issuing a statutory demand to Mactrends and the subsequent winding up of that company, Ms La Sale gave evidence that there is no identifiable amount of costs owed by the defendant to the plaintiff. 

19. In the circumstances, I am not satisfied that there is a liquidated sum owing either on the face of the Statement of Claim or on the evidence before me in respect of claims for those costs.

20. Accordingly, Judgment should be entered against the defendant in accordance with r.13.03B(2)(c)(i) of the Rules in the following amounts:

    a)$117,359.40; and

    b)$61,026.88.

I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of Judge Emmett

Date: 10 July 2017