Ziegeler t/as Ziegco Pty Ltd v Recochem Incorporated

[2010] QCATA 78

CITATION: Ziegeler t/a Ziegco Pty Ltd v Recochem Incorporated [2010] QCATA 78

PARTIES:	Mr Gary Betram Ziegeler t/a Ziegco Pty Ltd (Appellant)
v
Recochem Incorporated (Respondent)

APPLICATION NUMBER:            APL117 -10              

MATTER TYPE:

HEARING DATE:   On the papers

HEARD AT:   Brisbane

DECISION OF: Judge Fleur Kingham, Deputy President

DELIVERED ON:   25 November 2010

DELIVERED AT:   Brisbane

ORDERS MADE:  1.Application for leave to appeal is granted;

2.    The Appeal is allowed;

3.    The decision in the Minor Civil Dispute Claim 37/10 is set aside; and

4.    The matter is remitted to the Tribunal for hearing.

CATCHWORDS : 

DECISION BY DEFAULT – LIQUIDATED DEBT – LEAVE TO APPEAL – where appellant did not file response to minor debt application – where respondent granted decision by default – where appellant seeks leave to appeal rather than set aside the decision – whether debt was a “liquidated debt” – whether error of law – whether leave to appeal should be granted

Queensland Civil and Administrative Tribunal Act 2009, ss 50, 51, 142(3)
Queensland Civil and Administrative Tribunal Rules  2009, r 45

Hope v Bathurst City Council (1980) 144 CLR 1, applied
Spain v UnionSteamship Co of New Zealand Ltd (1923) 32 CLR 138, applied

REASONS FOR DECISION

1. Mr Gary Bertram Zeigeler entered into an agreement with Rechochem Incorporated (Rechochem) for the supply of chemicals on credit. Mr Zeigeler signed a Guarantee & Indemnity in which he agreed to indemnify Rechochem for the costs of non-performance and be bound by certain terms and conditions concerning the supply of credit.

1. Mr Zeigeler failed to pay several invoices issued by Rechochem. Rechochem subsequently hired Credit Collection Services Australia (CCCA) to recover the outstanding invoices. Mr Zeigeler eventually paid them, but not before Rechochem incurred credit collection charges in the process.

1. Rechochem filed a Minor Debt Claim against Mr Zeigeler to recover the credit collection charges. Mr Zeigeler did not file a response within the specified period.[1]

   [1]Queensland Civil and Administrative Tribunal Rules 2009, r 45

1. Rechochem obtained a decision by default against Mr Zeigeler in the amount of $1,628.40 (inclusive of costs and interest). A person may recover a debt or liquidated demand of money if the debtor has not responded to the application within the specified period.[2]

   [2]Queensland Civil and Administrative TribunalAct 2009, s 50

1. Mr Zeigeler seeks leave to appeal the default decision. Leave is necessary because the decision arose from a minor civil dispute proceeding.[3] Mr Zeigeler could have applied to have the default decision set aside[4], which would have been a more appropriate course of action to challenge a decision of this kind.

   [3]Queensland Civil and Administrative TribunalAct 2009, s 142(3)(a)(i)

   [4]Queensland Civil and Administrative TribunalAct 2009, s 51

1. Rechochem relies on paragraph 3 of the Guarantee & Indemnity, which purports to bind Mr Zeigeler to indemnify Rechochem against any costs and expenses ‘arising out of or in connection with the non-observance or non-performance of the Applicant of the Application [the credit agreement] or of this indemnity and guarantee’. The agreement did not specify what those costs or expenses might be, or how they would be calculated.

1. Leave to appeal is granted where there is a reasonably arguable case of error in the primary decision and it is necessary to correct a substantial injustice to the applicant arising from that error.[5]

   [5]QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41

1. A decision by default cannot be entered unless it is for a debt or liquidated demand. A claim is “liquidated” when the sum is ascertained, or capable of being ascertained by calculation through the use of a formula.[6]  

   [6]Spain v UnionSteamship Co of New Zealand Ltd (1923) 32 CLR 138 at 142

1. In support of their application for a default decision, Rechochem filed an affidavit that it had served Mr Ziegeler with its application and an affidavit confirming that the amount claimed remained unpaid.

1. The difficulty that arises for Rechochem is that it has not filed any evidence, such as an affidavit or statement from the CCCA, verifying how the collections charges were actually calculated or even confirming the Rechochem was charged with a standard fee or hourly rate for the recovery process against Mr Zeigeler. This is especially relevant where the collection charges are purported to include future fees not yet incurred – i.e. ‘all further collection action which may be required including court action’.[7] The documents submitted by the CCCA also do not address these issues.

   [7]Affidavit of Rae McCaughey sworn 10 September 2010, paragraph 4

1. On that basis, the claim could not be “liquidated” and a decision by default could not be obtained. To grant it was an error of law.[8] Leave to appeal is granted, and the appeal is allowed.

   [8]Hope v Bathurst City Council (1980) 144 CLR 1

1. The decision by default in Minor Civil Dispute claim 37/10 made on 15 June 2010 is set aside. The matter is remitted to the Tribunal for a hearing on the merits. At the hearing, the parties may submit new or further evidence about the claim.