Zangel Pty Ltd v Orica Australia Pty Ltd - [2002] WADC 214

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: ZANGEL PTY LTD -v- ORICA AUSTRALIA PTY LTD [2002] WADC 214

CORAM: WILLIAMS DCJ

HEARD: 2 AUGUST 2002

DELIVERED : 11 OCTOBER 2002

FILE NO/S: CIV 1838 of 2000

BETWEEN: ZANGEL PTY LTD
Plaintiff
AND
ORICA AUSTRALIA PTY LTD
Defendant

Catchwords:

Practice - Western Australia - Practice under Rules of the Supreme Court - Appeal from order of Registrar setting aside default judgment entered by the plaintiff

Legislation:

Nil

Result:

Appeal dismissed

Representation:

Counsel:

Plaintiff: Mr M C Hotchkin
Defendant: Mr I R Freeman

Solicitors:

Plaintiff: Hotchkin Hanly
Defendant: Phillips Fox

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

Acclaim Holdings Pty Ltd v Vlado Pty Ltd (1989) 1 WAR 128
Anlaby v Praetorius (1888) 20 QBD 764
Bridgetown-Greenbushes Friends of the Forest Inc v Executive Director of the Department of Conservation and Land Management (1997) 18 WAR 126
Chitty v Mason [1926] VLR 419
Currie v May [1914] VLR 17
Hazart Pty Ltd v Rademaker (1993) 11 WAR 26
Palmer v Prince [1980] WAR 61
Parker v Transfield Pty Ltd [2000] WASCA 382

Case(s) also cited:

ACN 076 676 438 Pty Ltd (in liq) v A-Comms Teledata Pty Ltd; [2000] WASC 214
Bolt & Nut Co (Tipton) Ltd v Rowlands, Nicholls & Co Ltd [1964] 2 QB 10
Hughes v Justin [1894] 1 QB 667
Kostokanellis v Allen [1974] VR 596
Macquarie Bank Ltd v Beaconsfield [1992] 2 VR 461
Renowden v McMullin (1970) 123 CLR 584
Smith & Snipes Hall Farm Ltd v River Douglas Catchment Board [1949] 2 KB 500
White v Weston [1968] 2 QB 647

WILLIAMS DCJ: This is an appeal on the part of the plaintiff against the decision by the learned Registrar delivered on 11 April 2002 in this Court whereby the learned Registrar set aside the default judgment entered by the plaintiff against the defendant on 15 November 2000.

Principles applicable in relation to appeals

The jurisdiction exercised by the Registrar of the District Court in relation to interlocutory matters is a delegated jurisdiction. A condition of the delegation of this jurisdiction is the provision for a complete review de novo before a Judge of the District Court. In conducting such an appeal, each party may rely on evidence given in affidavit or orally before the Registrar. Furthermore, a rehearing of the matter would also permit the admission of further evidence, without leave, subject to the discretion of the Judge to exclude such evidence where it is irrelevant or where it would be unjust to admit it. It would be wrong to adopt a more restrictive approach: Hazart Pty Ltd v Rademaker (1993) 11 WAR 26 per Malcolm CJ at 28-29.
The grounds of appeal are as follows:
"1.The learned Registrar erred in finding that the judgment was irregular because the endorsement of Writ had two alternative mutually exclusive causes of action, and that the default judgment had not differentiated between them when it was entered, in that:
(a)there had been no failure to comply with the requirements of the Rules of the Supreme Court;
(b)the claims were not mutually exclusive;
(c)there was no prospect of the measure of damages being different, depending on each claim."
The plaintiff's claim against the defendant was endorsed as follows:
(a)damages for breach of a warranty dated 13 July 1993 made by the defendant for the benefit of the plaintiff as registered proprietor and assignee of all rights and interests in the land known as Belridge Shopping Centre, Gwendoline Drive, Beldon, in respect of rectification of defective workmanship undertaken by the defendant at Belridge Shopping Centre in or around August 1996 to June 1997;
(b)alternatively, damages for breach of a contract made in or around August 1996 between the defendant and the plaintiff as registered proprietor and assignee of all rights and interests in the land known as Belridge Shopping Centre, Gwendoline Drive, Beldon, by the defendant in respect of rectification of defective workmanship undertaken by the defendant at Belridge Shopping Centre in or around August 1996 to June 1997.
If a judgment is entered irregularly the defendant is entitled to have it set aside as of right (ex debito justitiae) and without terms: Chitty v Mason [1926] VLR 419 at 423.
If a judgment in default has been entered irregularly the Court is not obliged to enquire whether or not there is a good defence on the merits: Anlaby v Praetorius (1888) 20 QBD 764; Acclaim Holdings Pty Ltd v Vlado Pty Ltd (1989) 1 WAR 128.
If alternative claims are made against the defendant the plaintiff must elect upon which he or she will take judgment and abandon the other: Currie v May [1914] VLR 17 at 19.
In my view it would be impossible to determine the assessment of damages in favour of the plaintiff owing to the fact that two causes of action are made in the alternative. It follows in my view that the judgment is irregular and should be set aside as of right.
The plaintiff is required to identify the cause of action on which judgment is to be entered. It has not done so and it follows in my view that the judgment is irregular.
It follows in my view that this ground of appeal fails.
"2.The learned Registrar erred in finding that there had been a sufficient explanation for the delay in bringing an application to set aside the default judgment."
A judgment regularly entered will be set aside on affidavit evidence of the defendant:
(a)explaining his failure to comply with the rules;
(b)adducing evidence that the defendant has a prima facie defence: Palmer v Prince [1980] WAR 61 at 62.
The defence must demonstrate that if the default judgment was set aside and the matter was argued on its merits, the defendant would have a real prospect of success: Parker v Transfield Pty Ltd [2000] WASCA 382 at 3, 58, 59.
It is common ground between the parties that the application for the judgment in default of appearance was not served on the defendant. The first time that the defendant became aware of the application was when in‑house lawyer Ian Taylor in Clayton, Victoria, received a case management reminder notice from the District Court of Western Australia on 28 June 2001.
The affidavit of Ian Rolyat Taylor, sworn 27 September 2001, explains the defendant's delay in filing its appearance as follows:
1.On 28 June 2001 Ian Taylor rang Stephen Farrell at Hotchkin Hanly and Stephen Farrell described in general terms the nature of the action and advised that judgment in default had been entered (par 5).
2.Stephen Farrell said that there was an affidavit of service which stated that the writ of summons had been served on Andrew Haynes in the Melbourne office on 23 October 2000. Andrew was the personal assistant for the company secretary at the time and was no longer an employee of Orica (pars 6-7).
3.Ian Taylor was not the in-house lawyer at the time that Orica's lawyers had been involved in the matter. Lyle King advised Ian Taylor that David Plunkett, the in‑house lawyer at the time, had some involvement in the matter although he had not advised him that this was a matter requiring his attention when he left the company and Ian Taylor took over his role (par 11).
It is apparent from the plaintiff's affidavit that the application for default judgment filed on 9 November 2001 was not served on the defendant (par 25). It is also apparent that the plaintiff's solicitors did not warn the defendant that they were intending to enter default judgment or give the defendant an opportunity to seek that the plaintiff refrain from taking precipitous action.
In summary the defendant was not aware that the writ of summons was served on Orica's head office in Melbourne and did not have any reason to suspect that this would occur as discussions were still on foot between the plaintiff and the defendant. On becoming aware of the existence of the default judgment the defendant promptly took steps to apply to set it aside.
There is no evidence to suggest that any prejudice the plaintiff may suffer cannot be cured by costs orders and interest.
This ground of appeal is dismissed.
"3.The learned Registrar erred in finding that the plaintiff may not have standing in this action."
The question of standing of any party to obtain relief is as much a question of fact as of law: Bridgetown-Greenbushes Friends of the Forest Inc v Executive Director of the Department of Conservation and Land Management (1997) 18 WAR 126 at 132. It is a factual matter that the plaintiff instituting proceedings is not the same company which entered into the original warranty dated 13 July 1993.
Accordingly it may well be the case that the plaintiff does not have the capacity to sue for the relief sought. For example there is no evidence of a valid assignment of rights to the plaintiff under either endorsement (a) or (b) in the writ.
In my view this ground of appeal also fails.

The defendant's defence on the merits

Although the plaintiff did not file a statement of claim it appears from the endorsement on the writ of summons filed on 12 July 2000 that the plaintiff is claiming damages for breach of warranty dated 13 July 1993 in relation to the Belridge Shopping Centre ("Belridge") for rectification of defective workmanship undertaken by the defendant from August 1996 to 1997, alternatively damages for breach of contract made in or around August 1996 in respect of rectification of the defective workmanship.
Lyle King, commercial sales manager of Dulux, deposes as to the works undertaken during that time and the events leading up to the issue of the writ of summons. Lyle King deposes in his affidavit sworn on 26 September 2001 that:
1.Dulux entered into a contract with the owners of Belridge to supply Dulux paint. The contract was a standard 40‑page performance warranty valid for seven years.
2.In 1996 Dulux agreed to repaint some of the walls to fix some alleged peeling of the coating which was caused by the original painter when Belridge was first painted in 1993 (par 6).
3.Although the problems were due to the original painter's workmanship Dulux agreed to repairs and painting at Dulux's cost as a gesture of good will. Dulux continued to liaise with the plaintiff in relation to areas that were allegedly missed in 1996 - 1997 (pars 7 to 10).
4.In July 2000 Lyle King received a letter from the plaintiff's solicitors advising that they had issued a writ against Dulux in relation to the work performed at Belridge in 1996 and 1997 but would not serve it if matters were attended to in three months (par 10).
5.Lyle King responded to that letter and arranged for a site meeting to take place in July 2000. In August 2000 Dulux were awaiting the plaintiff's assistance to identify areas that needed to be repainted (par 11).
6.The next Lyle King heard about the matters was when he was contacted by several painters requesting information to repaint Belridge in February 2001. Lyle King again attempted to contact the plaintiff in February 2001 after receiving those calls but he had been unable to contact him (par 24).
In those circumstances there is an arguable defence, namely that there was no aspect of the defendant's work that required repainting or alternatively, the defendant was deprived of the opportunity to repaint by reason of the plaintiff's conduct.
In any event the contract-warranty in place excludes any liability on behalf of Dulux for workmanship and there is a procedure in place for giving notices of the claim. The plaintiff's cleaning contract is excluded by an express clause in the contract which stipulates that "Dulux shall not be liable to remedy any defects in any Dulux products if the defect is the result of poor performance, workmanship or quality control procedures of the applicator, the contractor or anyone else associated with the project" (par 14).
The plaintiff's affidavit in response sworn on 16 November 2001 does not particularise in any detail the plaintiff's claim against the defendant and states in general terms the allegations of defects in the rectification in 1997. The affidavit does not address the matters raised in Lyle King's affidavit sworn on 26 September 2001 that Dulux does not warrant for workmanship and glosses over the attempts made by Dulux to resolve the matter at a site meeting. The affidavit does not detail the attempts made by Dulux to contact the plaintiff in relation to the areas that they alleged required repainting. In doing so, it emphasises that there are disputes between the parties that ought properly to be resolved after trial.
In my view it is in the interests of justice that the plaintiff's appeal be dismissed and that the orders of the learned Deputy Registrar made on 11 April 2002 be allowed to stand in order for the defendant to be given the opportunity of defending the claim against it on its merits.