Westpac Banking Corporation v Global Resource Recycling Pty Ltd
[2004] QDC 574
•30/09/2004
[2004] QDC 574
DISTRICT COURT
CIVIL JURISDICTIONJUDGE ROBIN QC
No BD1544 of 2001
WESTPAC BANKING CORPORATION Plaintiff (ABN 33007475141) and GLOBAL RESOURCE RECYCLING PTY LTD First Defendant (ABN 12095672192) and CHARLES ARTHUR BLAKE Second Defendant BRISBANE
..DATE 30/09/2004ORDER Catchwords: Uniform Civil Procedure Rules r 283, r 290 - unsuccessful application for setting aside regularly entered default judgment - no defence shown - shadowy counterclaim suggested.
30092004 T11/TMP24 M/T CMS107/2004 (Robin DCJ)
HIS HONOUR: This is an application by the defendants under 1 rule 290 for the setting aside of a default judgment entered
by the Registrar under rule 283, presumably, on the 8th of
June 2004.
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The claim was filed on the 30th of April 2004 and served according to the affidavit of service of V S Rae by personal service on Mr Blake on the 6th of May 2004 at 32 Boundary Street, Tingalpa. Service was effected on the corporate defendant one minute later by handing documents to Mr Blake
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accompanied by his indicating his authorisation to accept the
documents on behalf of the company as a director.No notice of intention to defend was filed. It is not suggested by Mr Tucker who appears for the
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applicant/defendants that there is any irregularity about the
entering of judgment.The defendants, it seems, had put their affairs in the hands of James W Byrnes & Associates of Pyrmont, New South Wales;
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they are not a legal firm but sought to negotiate with the
plaintiff bank. Its solicitors by a letter of the 5th of May
2004 exhibited to Mr Tucker's affidavit made it clear that the
plaintiff would continue to prosecute the proceedings andindeed reserved its rights to enter judgment unless and until
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it had accepted in writing some proposal put to it.
Mr Tucker's affidavit which provides the only evidence in
support of the application deposes to his being informed by Mr
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Jim Byrnes "that he retained the services of a law firm based 1 in Brisbane to prepare a defence on behalf of the first and
second defendants, however communications between himself and
the law firm broke down and as such a defence was not filed on
behalf of the first and second defendants."
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There has been no identification of that law firm. It will be a comfort to the defendants to know that if that information supplied by Mr Byrnes is true, they may well have a sound claim against the law firm.
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The application, as Mr Tucker himself suggested, consistently with the annotations in the Butterworths practice, must be supported by an appropriate case in relation to the following matters: (1) whether or not the defendant has given a
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satisfactory explanation for its failure to appear; (2)
whether or not there has been any delay in making the
application and: (3) whether or not the defendant has a prima
facie defence on the merits to the claim on which the judgmentis founded.
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The delay is of the order of a few months. The explanation for failure to appear has been set out already. I would not be inclined to penalise the defendant applicants on the basis of delay of the dimensions encountered here, provided
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appropriate use had been made of the time allowed to elapse.
It is difficult to reach the view that that has happened here.
Mr Blake is said to be overseas but, modern communications
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being what they are, I am not persuaded that explains the 1 absence of an affidavit from him. I am not impressed by the
absence of an affidavit from Mr Byrnes. These matters of
course are tied up with factor 3. I agree with Mr Sheahan,
appearing for the plaintiff to resist the application, that
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what is put up is not a "defence" in the strict sense.
What is the argument on the merits mounted by Mr Tucker? It is that the plaintiff under consumer protection legislation has or arguably has the character of a "linked credit
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provider", and with it, responsibility for misrepresentations
which the defendants, according to Mr Byrnes, at all events,
may wish to say induced them to enter into certain
transactions including transactions in which the companybecame a borrower from the bank and that Mr Blake became a
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guarantor.
The loan moneys, it seems, were applied in payments of
$142,000 and $51,000 made on behalf of the defendant companyto Les McGill Auto Wholesale in February 2003. That entity,
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it seems, was to provide prime movers for the defendant
company which it would not operate itself, rather would make
available to a person called Brett Best, who would make use of
them in the transport industry and recompense the defendantcompany for providing the prime movers.
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It seems that the bank took no steps to ensure that the prime movers actually existed. No more did the defendant company and Mr Blake. What interested the latter pair, it is 30092004 T11/TMP24 M/T CMS107/2004 (Robin DCJ)
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ORDER
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suggested to the Court, was the income stream that might be 1 expected and perhaps the "tax effective" nature of the
enterprise. Investigations undertaken on behalf of the
plaintiff, as set out in a report dated 5th April 2004 of Skip
Investigations Pty Ltd, suggest that neither of the prime
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movers, over each of which the bank took security, existed.
In Mr Tucker's argument the legislation he refers to is capable of making the plaintiff a linked credit provider although it has not the slightest inkling itself that it is
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taking on that role. It can have that role with its heavy
potential liabilities inflicted on it by the representationsof others.
What Mr Byrnes says in a long letter of 13th of July 2004 to
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the plaintiff's solicitors which interestingly is totally
silent as to the steps supposedly taken to get a defence filed
is that "Noel Best ran a trucking sales business and later ran
a small transport company. It is our understanding that thistransport company had affiliations with finance brokers and
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various finance corporations where he became the agent for the
financiers such as Westpac, AGC and various other financial
companies. A proposal was put to Mr Blake and also a number
of other naïve investors that they should enter into anagreement to become the hirer of trucks which would be
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acquired by Mr Noel Best's business."
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30092004 T12/YRL21 M/T CMS107/2004 (Robin DCJ)
In my opinion this is not likely to be enough to trigger the 1 legislation that Mr Tucker relies on but it is not necessary
for the Court to say anything about that today.It seems to me that, at the most, that legislation will
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provide a basis for claims against the plaintiff which the
defendants may pursue if they are so advised.
I am not satisfied that they would amount to a "defence" and
Mr Tucker has not suggested that the legislation has the
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effect of providing defences as opposed to potential
cross-claims.
Those are so shadowy, as indeed is all of the material the
Court is asked to act on, that it is quite impossible for me,
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as things stand at the moment, to detect a defence on the
merits.Mr Tucker suggested that the Court might grant an adjournment to give him the opportunity of improving his client's material
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by providing affidavit evidence of persons closer to the
action, so to speak.I am not satisfied that he should have that opportunity and in part because at the outset he, I thought, quite deliberately
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declined to seek an adjournment to deal with the plaintiff's
voluminous material. As it happens that the plaintiff's
material does not bear on the shadowy and unsatisfactory
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nature of the material that he has been able to assemble for 1 his clients. It is an interesting question whether subsequent applications under rule 290 can be made. There is no express provision, as
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there is in the summary judgment part of the UCPR in rule
294(2), contemplating any second or later application.The present one now shall be dismissed and it will be with costs to be assessed.
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