DAVID ALAN COLLISON as administrator of the estate of DIANE CAROL COLLISON -v- COLLISON [2024] WASC 87 (22 March 2024)

1. Against the foregoing background, the plaintiff commenced these fresh proceedings in the Court and filed an ex parte motion for default judgment. The motion was, in effect, filed pursuant to O 13 r 9(1) RSC.
2. In the ex parte motion, the plaintiff seeks the following orders:
   1. There be judgment for the plaintiff against the defendant in the sum of $550,000 together with interest thereon at the rate of 6% compounding monthly from 9 March 2020 until payment.
   2. The defendant do account on a wilful default basis of the real and personal estate of the deceased from 21 March 2019 (the date of death of the deceased).
   3. An order that the plaintiff is entitled to be indemnified by the estate of the deceased in respect of his costs of and related to this action and the account on a trustee basis.
   4. The defendant do pay the plaintiff's costs of the action and the account including all reserved costs on an indemnity basis and further that such costs are to include all costs except so far as they are of an unreasonable amount or have been unreasonably incurred so that subject to the above exceptions the plaintiff will be completely indemnified by the defendant for his costs.
   5. There be liberty to apply
3. The relief sought at [1] and [2] above in the ex parte motion mirrors the relief sought by the plaintiff in the statement of claim. Specifically, the plaintiff seeks the following equitable relief in the statement of claim (in addition to claims for costs):[7]
   1. An order for an account on a wilful default basis of the real and personal estate of the deceased from 21 March 2019 (the date of death of the deceased).
   2. Payment of money taken by the defendant from the estate of the deceased in breach of trust together with interest thereon at the rate of 6% compounding monthly from 9 March 2020 until payment.
4. I pause at this point to observe that, for a lengthy portion of the earlier Probate Proceeding, Michael took no active part, despite efforts made by David to elicit responses from him. That has also been the case for the duration of the present proceedings - no appearance has been entered in the proceedings on behalf of Michael. It also became necessary for orders to be made for substituted service of the proceedings, as explained below.[8]
5. Turning then to the evidence filed in support of the ex parte motion, four affidavits were filed by the plaintiff, all sworn by Mr Riccardo Mathew Martino. Mr Martino is a legal practitioner employed by the law firm which acts for the plaintiff.
6. Three of those affidavits are affidavits of service, which verify the service steps which were personally undertaken by Mr Martino.[9] The fourth affidavit is a substantive affidavit, which was sworn on 8 March 2024. That affidavit attaches the reasons for my earlier decisions, to which I have referred, and a copy of the affidavit of David Alan Collison sworn on 8 June 2023 in support of the application the subject of my decision delivered on 7 September 2023 in the Probate Proceeding.[10]
7. All of these affidavits were relied upon by counsel for the plaintiff at the hearing on 19 March 2024.

1. Order 13 RSC is headed 'Judgment in default of appearance to writ'. The Order, in its current form, was inserted by an amendment which came into effect in November 2016, wholly replacing the Order in its earlier form. The same amendment also introduced O 4AA to the Rules, which pertains to mortgage actions.
2. Pursuant to the procedure in O 13 RSC, where a proceeding has been commenced by writ of summons and the claims fall within O 13 r 2 to O 13 r 6 RSC, the plaintiff is entitled to enter judgment in default where the defendants has failed to enter an appearance within the time limited for appearing.[11] For example, O 13 r 2 RSC is engaged where the writ is indorsed with a claim for a liquidated demand only.
3. The process for entry of default judgment where rule 2 to rule 6 are engaged is relatively ministerial, provided there is proper compliance with the requirements expressed in those particular rules and elsewhere in O 13 as applicable. That is explicable given the nature of the claims which fall within those rules.
4. Where the claim does not fall within any of rule 2 to rule 6, the Rules provide an alternative pathway to pursue judgment in default of appearance. That procedure is found in O 13 r 9 RSC. Under the Rules which were in effect prior to November 2016, the applicable rule was rule 8. That rule was stated in different terms to the present rule 9, although the language was not substantively different in its effect. The rule requires a plaintiff to file a motion seeking judgment against the defendant and will apply where a plaintiff is seeking equitable or discretionary remedies.
5. It is thus necessary for an applicant for default judgment under O 13 r 9 RSC to persuade the court that it should exercise the discretion to grant the relief which is sought,[12] in contrast to the position where the applicant proceeds pursuant to O 13 r 2 to O 13 r 6, which will involve a request for default judgment made through the Registry.
6. The position is helpfully explained as follows in a leading text on civil procedure, summarising the position across the various Australian States and Territories:[13]

If the plaintiff's claim is other than for the recovery of a debt, damages, land or goods, the plaintiff has to apply to the court for judgment if the defendant defaults.

Equitable, and often statutory, remedies are discretionary. The court must therefore retain control over whether the plaintiff is granted relief and exercise its discretion cautiously: Speedo Holdings BV v Evans (No 2) [2011] FCA 1227 at [20]. The rules concerning default judgments maintain the distinction as between equitable and discretionary relief, and common law claims: Gamble v Killingsworth and McLean Publishing Co Pty Ltd [1970] VicRp 22; [1970] VR 161 at 170 per McInerney J. A default judgment is appropriate for a common law claim because the remedy is damages and non-discretionary. Where the plaintiff has to apply to the court it gives the judgment that is justified having regard to the originating process and statement of claim. All the facts and circumstances that qualify the plaintiff for relief must be stated in the originating process or statement of claim. In the absence of any pleading from the defendant, the plaintiff's allegations are taken as admitted. An entitlement to relief must be disclosed on the plaintiff's pleading. Evidence is not admissible to support or supplement the pleaded facts, unless the rules otherwise provide. The court grants only the relief claimed in the originating process and to which the statement of claim shows an entitlement. Any gap between the relief claimed and the allegations of fact in the statement of claim cannot be remedied by evidence.

...

The court retains its discretion whether to give judgment even if the plaintiff is prima facie entitled to judgment on the pleadings. With a discretionary remedy, the court must be sufficiently informed of the circumstances to properly exercise its discretion to grant or withhold the remedy. Evidence for this purpose is often necessary. There is though a limit. Evidence cannot be given to expand on the facts alleged in the statement of claim, alter the basis of the claim for relief or allege facts that could have been, but were not, originally pleaded: Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2015] FCAFC 114; (2007) 161 FCR 513 at [42]. (footnotes omitted)

1. The plaintiff has not sought to rely upon rules 2 to 6 to obtain default judgment on this application, nor could he have done, in my view. The claims advanced by the plaintiff in the statement of claim fall outside those rules. The remedies pleaded are discretionary and reliance must be placed on O 13 r 9 RSC. Although counsel for the plaintiff contended otherwise, I do not regard the claim for judgment in respect of the funds transferred from the Estate by Michael as being a claim for a liquidated sum, which might otherwise attract O 13 r 2 RSC. I accept the amount in question can be ascertained, but that does not signify by itself that the sum is liquidated. The nature of the claim must be assessed.[14] In the present case, the amount sought is in the nature of compensation assessed by the Court for loss occasion by the defendant's breach, not a claim for a liquidated demand.
2. It is appropriate to now set out the full terms of O 13 r 9 RSC, which are as follows:

9 . Writs for other claims

(1) If the writ is indorsed with a claim to which none of rules 2 to 6 apply, then, if a defendant fails to enter an appearance within the time limited for appearing, the plaintiff may, on complying with subrule (2) --

(a) apply to the Court on motion for judgment against the defendant for the relief sought and costs; and

(b) proceed with the action against the other defendants, if any, unless the defendants are sued in the alternative.

(2) In order to enter judgment under this rule --

(a) if the statement of claim was not indorsed on or served with the writ, the plaintiff must serve the statement of claim on the defendant; and

(b) the plaintiff must produce a certificate issued by the proper officer on the day of the hearing stating that no appearance has been entered by the defendant against whom it is sought to enter judgment.

(3) On a judgment under this rule, the plaintiff may issue execution on the judgment, except as provided in subrule (4).

(4) If there is more than one defendant, judgment entered under this rule cannot be enforced against any defendant without leave of the Court.

1. As is apparent from the text, there are five procedural requirements which must be satisfied by an applicant for default judgment seeking orders pursuant to O 13 r 9 RSC. I have identified those requirements in the table below:

The proceeding must have been commenced by writ of summons.

Service on the defendant of the writ is established by affidavit, together with indorsement of service in accordance with O 9 r 1(4), or the plaintiff produced the writ indorsed by the defendant's solicitor with a statement that the defendant's solicitor accepts service of the writ on the defendant's behalf.

There has been no appearance filed by the defendant within the time limited for appearing.

If the statement of claim was not indorsed on or served with the writ, the plaintiff must serve the statement of claim on the defendant.

The plaintiff must produce a certificate issued by the proper officer on the day of the hearing stating that no appearance has been entered by the defendant against whom it is sought to enter judgment.

1. Only upon satisfaction of these requirements is it then necessary for the Court to consider the exercise of the discretion whether to grant default judgment.

1. I will first address the procedural requirements applicable to the present motion under O 13 r 9 RSC.
2. The first requirement (as set out in the above table) is plainly satisfied as the present proceedings were commenced by writ.[15]
3. The second requirement, as to service, has two alternatives. I am satisfied the first alternative has been satisfied by the plaintiff. The proceedings were effectively served on the defendant on 5 February 2024,[16] pursuant to the orders for substituted service made by Registrar Nelson on 2 February 2024.[17] The defendant was served with a copy of the writ of summons, the statement of claim and a sealed copy of the orders for substituted service. The writ was also appropriately indorsed in accordance with O 9 r 1(4) RSC.
4. The third requirement, as to the failure to enter an appearance, is satisfied. Pursuant to the orders of Registrar Nelson referred to above, the defendant was required to enter an appearance within 14 days of service, that is by no later than 19 February 2024.[18] No such appearance was filed within the time prescribed.
5. The fourth requirement, as to service of the statement of claim, is satisfied.[19] The statement of claim was served on 5 February 2024, pursuant to the orders for substituted service, as noted above.
6. The fifth requirement is also satisfied, but requires some short explanation. The relevant sub-rule requires that the plaintiff must produce a certificate issued by the proper officer on the day of the hearing stating that no appearance has been entered by the defendant against whom it is sought to enter judgment. There is an evident purpose behind this requirement, namely to ensure that, between the time at which the plaintiff has filed the motion for default judgment and the date of the hearing, the defendant has not filed a memorandum of appearance to the action. Where such an appearance is filed, albeit out of time as required by the Rules, it will invariably be inappropriate for the Court to proceed to enter default judgment.
7. In the present matter, no certificate was adduced by the plaintiff. I initially indicated to counsel for the plaintiff that I was prepared to take notice that no appearance had been filed by reference to my own review of the Court's electronic case management system (defined as 'ECMS' in O 1 r 4 RSC), and from the review undertaken by my associates.
8. However, following the hearing on 19 March 2024, I formed the view that the requirement for a certificate to be obtained was sufficiently important to make enquiries of the Court's Registry on my own motion in this regard. I was duly provided with a certificate under O 13 r 9(2)(b) RSC, which confirmed that, as at 12.35 pm on 19 March 2024, no memorandum of appearance had been filed by the defendant with the Court.
9. I accordingly regard the fifth requirement as having been satisfied.
10. As to service of the motion and supporting papers, the affidavits of Mr Martino sworn on 8 March 2024 and 14 March 2024 demonstrate that the motion, the substantive supporting affidavit of Mr Martino and the notice of the hearing were properly served on the defendant.

1. I turn now to whether the discretion to grant default judgment should be exercised in favour of the plaintiff. This requires that I be satisfied that the essential elements of the cause or causes of action asserted by the plaintiff have been made out, and then to assess whether it is appropriate, having regard to all the circumstances of the case and on the material before the Court, that the relief should be granted in the absence of the defendant and without further steps being taken in the proceeding.
2. The claims made by the plaintiff in the present matter are for breach of trust by the defendant, in his capacity as the former administrator of the Estate. At its core, the allegation is that the defendant misappropriated a significant sum from the Estate for his own use, and has not accounted for that money, despite opportunity to do so.
3. In seeking to persuade the Court to grant the default judgment which is sought, the plaintiff relies upon the affidavit of Mr Martino sworn 8 March 2024, to which I have referred above. There are a number of factual matters deposed to in the affidavit, with reference made to the conclusions reached in my earlier reasons and also to the affidavit sworn by David Collison on 8 June 2023 which was relied upon before me in the Probate Proceeding.
4. Before I address these factual matters, a preliminary observation should be made. By failing to appear to the proceedings, the defendant is taken to have admitted the allegations of fact contained in the statement of claim, and those facts should be taken to have been established: City of Stirling v Dueschen[20] and Faithfull v Woodley.[21] This is an important proposition to be borne in mind in applications such as the present. Indeed, there is authority to the effect that, at least generally speaking, no evidence can properly be called by the applicant to establish the facts in the statement of claim: Boschetti v Carr.[22] There are long standing authorities which emphasise this proposition, such as Young v Thomas[23] in which Bowen LJ explained the point as follows:

There is no doubt that, in determining the rights of the parties in the action, the statement of claim alone is to be looked to, and the reason of this rule is obvious, namely that the facts stated therein are taken to be admitted by the defendant; and as has been decided by Lord Justice Kay in Smith v Buchan (1888) 36 WR 631 no evidence can be admitted as to those facts.

1. The proposition is not absolute, on my reading of the authorities.
2. That is, where the court is being asked to exercise a discretion whether to grant the relief sought, facts relevant to the grant of that relief (which are not deemed to be admitted) may be brought to the attention of the court by way of affidavit: Phonographic Performance Ltd v Maitra.[24] I consider it is open to the plaintiff, in the present application, to rely upon matters beyond the admitted pleadings in support of the discretionary relief sought. Support for this approach can be found in the passages from Australian Civil Procedure which I have extracted earlier in these reasons.
3. In light of the foregoing, it is appropriate that I turn first to the matters pleaded in the statement of claim, and then to the additional matters adduced on affidavit by the plaintiff.
4. On the face of the pleading, I take the following matters to be admitted for the purposes of the present default judgment application:

(a) The plaintiff and the defendant are the only children of Mrs Collison, who died on 21 March 2019, and are the only beneficiaries of her estate.[25]

(b) Administration of the Estate was initially granted to the defendant on 12 June 2019, in the Probate Proceeding. The defendant failed to file accounts of the Estate, despite various orders of the Court being made (between about 2020 and about 2023) to require that this be done.[26]

(c) On 3 February 2023, the Court revoked the letters of administration granted to the defendant over the estate of Mrs Collison and appointed the plaintiff as administrator of that estate. The grant was made in the Probate Proceeding. The plaintiff is therefore, at present, the administrator of the intestate estate of Mrs Collison.[27]

(d) Between 5 August 2019 and 9 March 2020 the defendant, whilst administrator of the estate of Mrs Collison took from the estate for his own use not less than $550,000. This is at least apparent from a document entitled 'Form 4 Amended Accounts of Administrator' which was prepared by the defendant and then filed with the Court by the defendant in the Probate Proceeding. Within that document, under the section labelled 'Part B - Portion of Estate distributed in specie', there is a reference to the sum of $550,000 as having been distributed to 'DCH Trust', described as 'Total distribution on separate Trust (investment, securities & equities)'.[28]

(e) The trust in question was established by a trust deed dated 23 July 2019. That deed purported to establish a discretionary trust called the DCH Capital Family Trust of which the defendant was both the trustee and appointor.[29]

1. The foregoing matters are sufficient to establish a prima facie case against Michael for a wilful breach of trust, and to permit an account to be ordered on a wilful default basis. The contents of the document entitled 'Form 4 Amended Accounts of Administrator' are particularly compelling, when it is appreciated that the document was prepared by the defendant himself.
2. Of course, an account on a wilful default basis is available without demonstrating conscious wrongdoing - it is sufficient for the account to be based on a wilful default footing if there is any breach of trust by omission proved which has caused loss to the estate. As explained by E M Heenan J in In Re Ellis; Ellis v Ellis,[30] in such a case 'the accounting party will be made liable not merely for any receipts or payments actually received or made but in respect of the value of property or income which should have been derived by the estate but for the wilful breach and to make reparation, often with interest, for opportunities so incurred.'
3. The facts in the statement of claim, which must be taken to be admitted, demonstrate that Michael made multiple payments from the funds held by the Estate, to a trust for his own use, without authority. That isa breach of duty on his part, and he is personally liable to account to the Estate for those funds.
4. Having regard to the equitable nature of the remedies sought by the plaintiff, I consider it appropriate to have regard to some of the additional evidence adduced by the plaintiff on affidavit, for the purpose of informing the exercise of the Court's discretion whether to grant the relief which is sought. In this respect, I accept as established (for the purposes of determining the present application) the following additional matters:

(a) Michael has not communicated with David regarding the estate for several years.

(b) Michael has failed to fully account for the monies he took from the estate between August 2019 and March 2020.

(d) David did not authorise Michael to take any share of the estate he may have been entitled to by way of distribution and being transferred into a separate trust, the DCH Capital Family Trust.

(e) David's solicitors wrote to Michael on 14 January 2020 to inform him that no payments should be made to the DCH Capital Family Trust, and that Michael would be in breach of his duties as administrator if he refused to pay the relevant bequest to David directly. Notwithstanding that letter, some 14 further payments totalling $505,000 were made thereafter by Michael to the DCH Capital Family Trust.

1. These additional matters provide me with further comfort that the discretion to grant the remedies should be exercised in favour of David, at this early stage of the proceedings, and in the absence of having heard from Michael. I am thus satisfied the plaintiff has demonstrated an entitlement to the account remedy which is sought at [2] of the ex parte motion, and to the order for judgment in the sum of $550,000 which is sought at [1] of the ex parte motion (on basis that this amount represents a portion of the amount which would be the subject of the account in due course). Further directions will need to be made to facilitate the process for the account to be taken, of course.
2. It is appropriate in the circumstances to make an immediate order for judgment in respect of the specific sum, given the factual matters adduced by the plaintiff in this regard. The alternative is to require the plaintiff to pursue the account, which would delay the plaintiff's ability to enforce the recovery of the sum appropriated by Michael from the estate which is already known. That seems inappropriate, in my view, given the force of the evidence adduced in support of this aspect of the claim and the delay which has transpired since the transfers were made by Michael (which was in the first half of 2020).
3. In the event the order for judgment in respect of the $550,000 was inconsistent with the remedy of account, it would be necessary to require the plaintiff to make an election between the remedies. But that is not the case. Provided the taking of the account recognises, in due course, the relief now ordered to require payment of the sum of $550,000, and there is no double recovery, then I see no obstacle to orders being presently made to order payment of the sum of $550,000 and for an account to be taken.

1. The plaintiff should have his costs of the ex parte motion and of the hearings on 19 March 2024 and 22 March 2024. It is not appropriate for the costs of the action as a whole, or the costs of the account, to be ordered as yet. Those orders should await the outcome of the account and the conclusion of the entirety of the action.
2. The ex parte motion initially sought costs on an indemnity basis (at [4]), but counsel for the plaintiff abandoned the indemnity costs claim at the hearing, properly in my view.
3. I have amended the costs orders accordingly, to reflect the matters referred to at [47] and [48] above.
4. Finally, I note the plaintiff seeks interest on a compound basis. The plaintiff relies upon the established authority in support of the application in this regard.[31] The plaintiff submits that interest may be awarded on a compound basis in the exercise of the Court's equitable jurisdiction where a person has improperly profited from his fiduciary position.
5. In my view, the circumstances of the plaintiff's claim in this case provide a strong basis for the exercise of the discretion to award interest on the basis which is sought. That is, interest at the rate of 6% compounding monthly from 9 March 2020 until payment, with 9 March 2020 being the date of the last of the payments made by the defendant in breach of trust.[32]

1. For the foregoing reasons, I will grant judgment in default of appearance to the plaintiff, as follows (such judgment to include the statements required by O 13 r 12 RSC):
   1. Default judgment pursuant to Order 13 rule 9(1) of the Rules of the Supreme Court 1971 (WA) be entered against the defendant.
   2. The defendant is ordered to pay the plaintiff the sum of $550,000, being the amount transferred by the defendant to the DCH Capital Family Trust from the estate of the deceased, together with interest thereon at the rate of 6% p.a. compounding monthly from 9 March 2020 (being the date of the last payment made by the defendant in breach of trust) until payment in full.
   3. The plaintiff is entitled to an account as against the defendant on a wilful default basis of the real and personal estate of the deceased on and from 21 March 2019 (being the date of death of the deceased).
   4. The plaintiff has liberty to apply for directions as to the taking of the account referred to in order 3 above.
   5. The defendant shall pay the plaintiff's costs of the action to date and the ex parte motion dated 23 February 2024, including all incidental and reserved costs, to be assessed, if not agreed.
   6. The plaintiff is entitled to be indemnified by the estate of the deceased in respect of his costs of, and related to, the action to date and the ex parte motion dated 23 February 2024 on a trustee basis.
   7. The plaintiff has liberty to apply generally.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] With no disrespect to the parties, who share the same family name, I will refer to each of them by their first names.

[2] Probate proceeding PRO 3146 of 2019 (Probate Proceeding).

[3] In the Estate of Diane Carol Collison v Collison [2023] WASC 32.

[4] In the Estate of Diane Carol Collison v Collison [No 2] [2023] WASC 337 [22] - [32].

[5] In the Estate of Diane Carol Collison v Collison [No 2] [61] - [83].

[6] In the Estate of Diane Carol Collison v Collison [No 2] [83].

[7] Statement of claim, Prayer for relief [1] and [2].

[8] Orders of Registrar Nelson made on 2 February 2024.

[9] Affidavits of Mr Martino sworn 6 February 2024, 8 March 2024 and 14 March 2024.

[10] In the Estate of Diane Carol Collison v Collison.

[11] O 13 r 1(1), r 1(2) and r 2 to r 6 RSC.

[12] Gamble v Killingsworth and McLean Publishing Co Pty Ltd [1970] VicRp 22; [1970] VR 161, 170.

[13] B Cairns, Australian Civil Procedure (12th Ed, 2019), 601 - 603.

[14] Rothenberger Australia Pty Ltd v Poulsen [2003] NSWSC 788; (2003) 58 NSWLR 288 [27].

[15] Writ of Summons filed 12 October 2023.

[16] Affidavit of Mr Martino sworn 6 February 2024, [1] and [2].

[17] Orders of Registrar Nelson made on 2 February 2024, [1] - [3].

[18] Orders of Registrar Nelson made on 2 February 2024, [4].

[19] Affidavit of Mr Martino sworn 6 February 2024, [1].

[20] City of Stirling v Dueschen [2011] WASC 126 [48].

[21] Faithfull v Woodley [1889] UKLawRpCh 192; (1890) 43 Ch D 287, 289.

[22] Boschetti v Carr [2002] WASC 211 [30].

[23] Young v Thomas [1892] UKLawRpCh 60; [1892] 2 Ch 134, 137.

[24] Phonographic Performance Ltd v Maitra [1998] EWCA Civ 137; [1998] 2 All ER 638, 644.

[26] Statement of claim, [3] - [6].

[27] Statement of claim, [2] and [8].

[30] In Re Ellis; Ellis v Ellis [2015] WASC 77 [126].

[31] Nattrass v Nattrass [1999] WASC 77.