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[2019] VSC 294
General information, not legal advice.
Supreme Court of Victoria
2019-05-07
KAYE JA
Original judgment source is linked above.
PRACTICE AND PROCEDURE - Appeal against decision of Associate Justice dismissing application to set aside judgment obtained in default of defence - Whether judgment entered regularly - Whether Supreme Court has jurisdiction to hear proceeding - Whether proceeding an application in respect of co-owned property under Part IV of the Property Law Act 1958 (Vic) - Proceeding not an application under Part IV - No defence on the merits - Appeal dismissed.
1 This is an appeal by the first defendant and the second defendant from a decision of an Associate Justice which dismissed their application to set aside judgment entered against them in default of defence in the proceeding.[1]
2 The first plaintiff and the second plaintiff are brothers, and the first defendant is their sister. The second defendant is a company controlled by the first defendant. Until July 2018, the plaintiffs and the first defendant owned a family beach house at 331 Dromana Parade, Safety Beach ('the property') as tenants in common in equal shares. The third defendant in the proceeding is a conveyancer who was engaged by the first defendant to sell the property.
3 On 17 September 2018, the plaintiffs issued the proceeding alleging that the first defendant sold the property to a third party, Ayla Han ('Han'), without their knowledge or consent, and had forged their signatures on the transfer of land documents that were lodged with the Registrar of Titles. It is alleged that the second defendant is liable as a knowing recipient of the proceeds of the sale of the property, and that the third defendant is liable for misrepresentations allegedly made by her to the Registrar of Titles that she was authorised to execute the transfer of land documents on behalf of the plaintiffs.
4 After service of the proceeding, the solicitors for the first and second defendants filed an appearance on 21 September 2018. Pursuant to rule 14.04 of the Supreme Court (General Civil Procedure) Rules 2015, they had 30 days within which to file a defence. On 1 November 2018, the plaintiffs entered judgment for damages as the first and second defendants had failed to file any defence to the plaintiffs' claims. On 3 December, a summons was issued on behalf of the first and second defendants by which they made application to set aside the judgment. The first defendant swore an affidavit in support of that application, the contents of which I shall summarise shortly. However, at this stage, it is sufficient to note that in her affidavit she did not depose to any defence to the proceeding on the merits. Rather, on the hearing of the application before the Associate Justice, and on this appeal, it was contended on behalf of the first and second defendants that the default judgment was irregular. It was submitted that in the proceeding the plaintiffs seek an order that the first and second defendants account for the receipt by them of more than their just and proportionate share of co-owned property, and therefore the proper forum for the proceeding is the Victorian Civil & Administrative Tribunal ('VCAT'). It was submitted that s 234C(1) of the Property Law Act 1958 provides that this Court does not have jurisdiction to hear such applications.
5 The resolution of the issue, thus raised by the first and second defendants, involves the correct characterisation of the claims made by the plaintiffs in the proceeding. For that purpose, it is necessary to set out, in little detail, the contents of the statement of claim that is endorsed on the writ.
6 In paragraph 5 of the statement of claim, it is alleged that on 13 March 2018 the first defendant instructed the third defendant to draw up and prepare a contract of sale for the property to Mr Han. Paragraphs 6 to 9 contain the principal allegations of fact, and are in the following form:
PARTICULARS
A copy of the contract of sale is in the possession of the Plaintiffs' solicitors and may be inspected on appointment. The Plaintiffs did not know of or consent to the sale of the property.
The contract of sale purports to be executed by each of the Plaintiffs, by signing the said contract, which they did not sign.
The purported signature of each of the Plaintiffs on the contract of sale is a forgery.
The Plaintiffs never authorised Patrizia Trani to sell the property or act on their behalf to sell the Property. A deposit of $270,000 was received by Patrizia Trani from Ayla Han.
PARTICULARS
The Property has been sold and transferred to Ayla Han who has become registered as the sole proprietor of the Property and the Plaintiffs have been deprived of their interest in the Property.
7 By paragraphs 11 to 13 of the statement of claim, it is further alleged that, in order to induce the third defendant to prepare the contract of sale, the first defendant knowingly made false representations to her that the plaintiffs had agreed and consented to the sale of the property to Ayla Han and that she was authorised by the plaintiffs to sell the property to him. It is alleged that as a result of the representations, Ayla Han became registered as the sole proprietor of the property, as a consequence of which the plaintiffs have suffered loss and damage. By paragraphs 16 to 17, it is alleged that the second defendant knew that the plaintiffs had not authorised or consented to the sale of the property and had not executed the contract of sale, and that the second defendant knowingly assisted the first defendant in her fraudulent conduct in selling the property, and had received the sum of $1,080,139 knowing of the first defendant's fraudulent action in selling the property. In paragraphs 18 and 19, it is pleaded that, further or alternatively, the first and second defendants hold two thirds of the proceeds of the sale on a resulting and/or constructive trust, or as monies had and received by it them the use of the plaintiffs,
8 In the statement of claim, the plaintiffs also plead causes of action against the third defendant in negligence, and alleging a contravention by the third defendant of the Competition and Consumer Act 2010 (Cth) ('Australian Consumer Law').
9 In her affidavit in support of the application to set aside judgment, the first defendant acknowledged that she had received a copy of the writ in the proceeding, together with a summons issued on behalf of the plaintiffs seeking a restraining or freezing order against her and the second defendant. She deposed that a firm of solicitors were retained by her in respect of the applications for the freezing orders, but that they were not retained further as she could not afford their fees. She then stated as follows:
I deny the claim of fraud made by the applicants.
10 In the balance of her affidavit, the first defendant set out a number of matters which, plainly, do not constitute a defence on the merits of the proceedings. In particular, she described differences that arose between herself and the plaintiffs in December 2016 as to her right to access and use the beach house for Christmas 2016. In the next two months, she alleged, there were threats by the first plaintiff's solicitors to sell the property, and she, herself, had made an offer to purchase it. In July and August 2017, her solicitors sent a letter to the plaintiffs' solicitors stating that she would be agreeable to the sale of the beach house at a fixed price. She then deposed as follows:
11 As mentioned, at the hearing before the Associate Justice, it was submitted on behalf of the first and second defendants that the judgment entered against them was irregular, as the Supreme Court does not have jurisdiction to hear the plaintiffs' claims in the proceeding by reason of s 234C of the Property Law Act 1958. In particular, it was submitted that the plaintiffs, in the statement of claim, alleged that the defendants had acted fraudulently, and the plaintiffs thus sought that the first and second defendants' account for their receipt of more than their 'just and proportionate' share of the proceeds of the sale pursuant to s 28A of the Property Law Act 1958. It was contended that the proceeding thus came within the ambit of Part IV of the Property Law Act 1958, so that as a consequence of s 234C, the Court did not have jurisdiction to hear it.
12 In response, it was contended on behalf of the plaintiffs that the proceeding was not a claim under Part IV of the Property Law Act 1958 seeking an accounting from the first and second defendants for the moneys they had fraudulently appropriated; rather, the proceeding was for damages resulting from the fraudulent conduct of the first and second defendants as alleged in the statement of claim, and the proceeding against the third defendant was for breach of duty. Thus, it was submitted, s 234C does not apply to the proceeding, and the Court has jurisdiction to hear it.
13 In her reasons for judgment, the Associate Justice concluded that the proceeding is not an application under Part IV of the Property Law Act 1958. Her Honour observed that the powers invested in VCAT, to hear proceedings under Part IV of the Act, may only be exercised in relation to an application made by a co-owner under s 225 of the Act, which enables a co-owner to apply for the sale and division of proceeds among co-owners, or the physical division of land or goods among co-owners. Her Honour noted that this proceeding is not such a proceeding, but, rather, it is a proceeding seeking damages for alleged fraud. In particular, the plaintiffs do not seek relief in the nature of sale or division of the property.[2]
14 Further the Associate Justice held that even if the action is a proceeding to which part of the Act does apply, it is a proceeding of sufficient complexity to justify it being heard by the Court pursuant to s 234C(4) of the Act.[3] Her Honour considered that it was not necessary for the plaintiffs to have brought an application to the Court for a declaration that the Court has jurisdiction under s 234C(4) to hear the proceeding.
15 Her Honour concluded that the default judgment was regular, and the first and second defendants had not adduced any evidence to indicate that they have an arguable defence to the claims brought by the plaintiffs. Accordingly, she dismissed the application by the first and second defendants to set aside the default judgment.[4]
16 By their notice of appeal, the first and second defendants rely on five grounds, which may be paraphrased as follows:
(1) The Associate Justice should have found that this Court does not have jurisdiction to hear the proceeding.
(2) The Associate Justice erred in holding that an application under Part IV of the Property Law Act had to involve the sale or division of a co-owned property.
(3) The Associate Justice should have found that s 234C(4) of the Property Law Act was a condition precedent to the Supreme Court entering judgment in the proceeding.
(4) The Associate Justice erred in holding there were special circumstances which justify the Court hearing the proceeding pursuant to s 234C(4).
(5) The Associate Justice erred in holding that the first and second defendants did not have an arguable defence.
17 In support of the appeal, counsel for the first and second defendants submitted that the Associate Justice erred in failing to conclude that the judgment entered against his clients was not regular, on the ground that this Court does not have jurisdiction to hear the claims made by the plaintiffs in the proceeding. In support of that submission, counsel repeated the contentions that he had relied on before the Associate Justice. In particular, counsel contended that the claims made by the plaintiffs in the proceeding come within Division 2 and Division 3 of Part IV of the Act. In that respect, counsel noted that where a co-owner makes an application to the Tribunal for an order or orders under Division 2, pursuant to s 225(1) of the Act, the relief provided by the Tribunal is not confined to that specified in s 225(2), but extends to the relief prescribed by ss 230 to 233. Counsel contended that the relief, specified by those provisions, is broad enough to encompass the claims made by the plaintiffs in the current proceeding.
18 Counsel further submitted that, in any event, the claims made by the plaintiffs, against the first and second defendants, are, in essence, a claim for an accounting, in respect of which the Tribunal has exclusive jurisdiction pursuant to s 234(1). He contended that insofar as the relief, sought by the plaintiffs, is additional to, or extends beyond a claim for an accounting, the Tribunal has jurisdiction to provide that relief pursuant to its incidental powers.
19 Finally, counsel contended that the Associate Justice erred in holding that the lack of jurisdiction of the Court could be 'cured' by resort to s 234C(4). He submitted that in order that a plaintiff be able to avail of that provision, it would be necessary for the Court to have declared that special circumstances exist which justify the Court having during the proceeding under s 234C(4)(b), before judgment was entered. Otherwise, it was submitted, the judgment entered in the case was irregular, and that irregularity could not, subsequently, be remedied by resort to s 234C(4).
20 In response, counsel for the plaintiffs submitted that the Associate Justice was correct to conclude that the claims made by the plaintiffs in the proceeding do not constitute, and may not be characterised as, claims made under Division 2 or Division 3 of Part IV of the Act. He noted that s 225(1), and s 234(1), of the Act provide for a co-owner of land to apply to VCAT 'for an order or orders under this Division'. In the present proceeding, the plaintiffs did not claim orders under Division 2 or Division 3 of Part IV of the Act. In particular, in the prayer for relief in the statement of claim, the plaintiffs do not seek orders under Part IV of the Act.
21 Counsel further contended that the proceeding does not constitute a dispute between co-owners of the property. Rather, it comprises a claim by the plaintiffs against the first and second defendants for damages for fraud, and a claim against the third defendant for damages for breach of duty. The claims made by the plaintiffs could not be characterised as coming within the applications provided for in Division 2 and Division 3 of Part IV of the Act.
22 Counsel further contended that, if, contrary to those submissions, s 234C(1) applies to the current proceeding, the Associate Justice was correct to conclude that s 234C(4) applied. He contended that it was not necessary, in such a case, that the plaintiffs obtain a declaration or order that special circumstances exist under s 234C(4)(b); rather, he contended, it was sufficient if, as in this case, the Court, on hearing the application to set aside the default judgment, formed that view.
23 The power of the Court, to set aside a judgment entered in default of delivery for the defence, under r 21.07 of the Supreme Court (General Civil Procedure) Rules 2015 ('the Rules'), is discretionary. Ordinarily, where a judgment has been entered irregularly, the Court will set aside the judgment as a matter of course, ex debito justitiae.[5] Otherwise, in the case of a judgment that has been regularly entered, in determining whether to set aside the judgment, the Court will take into account, in the exercise of its discretion, the reasons for the default, whether the application to set aside judgment was promptly made after it first came to the attention of the defaulting defendant, and, particularly, whether the defendant has a defence to the proceeding on the merits. In the absence of an affidavit, or other material, demonstrating a defence on its merits, there will be no useful purpose in setting aside the default judgment.[6]
24 The present appeal, against the decision of the Associate Justice, is brought under r 77.06 of the Rules. Such an appeal is by way of rehearing, so that in order to succeed, the appellants must demonstrate that the Associate Justice made a material error in her decision not to set aside the judgment entered against the first and second defendants.[7]
25 The issue, as to whether this Court has jurisdiction to hear the proceeding, turns on the correct application of s 234C(1) of the Property Law Act 1958. Depending on the resolution of that question, it may also involve the issue of the application of s 234C(4). Those provisions fall within Division 4 of Part IV of the Property Law Act 1958. That Part was introduced into the Act by s 5 of the Property (Co-ownership) Act 2005. Before the enactment of that provision, Part IV of the Property Law Act 1958 had, for a number of decades, made provision for the partition of property which was the subject of co-ownership.
26 In its present form, ss 234C(1), (4) and (5) of the Act provide:
(1) Subject to this section, the Supreme Court and the County Court do not have jurisdiction to hear an application under this Part.
...
(4) The Supreme Court and the County Court have jurisdiction to hear an application under this Part if -
(a) in any proceeding which has commenced in the Supreme Court or the County Court (as the case requires), the issue of coownership of land or goods arises in the course of that proceeding; or
(b) in the opinion of the Supreme Court or the County Court (as the case requires), special circumstances exist which justify the Supreme Court or the County Court hearing the application.
(5) For the purposes of subsection (4), special circumstances means circumstances in which -
(a) the matter which is the subject of the application is complex; or
(b) the matter which is the subject of the application, or a substantial part of that matter, does not fall within the jurisdiction of VCAT.
27 The question, then, is whether the present proceeding constitutes an 'application' under Part IV of the Act, and, if so, whether the Court, in any event, has jurisdiction to hear it by virtue of s 234C(4).
28 Division 1 of Part II contains a number of preliminary provisions, including a definition section (s 222). Division 2 is concerned with applications for an order for the sale or division of co-owned land or goods. Specifically, s 225(1) provides that a co-owner of land (or goods) may apply to VCAT for an order to be made in respect of the land or goods. Section 225(2) provides that such an application may request the sale of the land (or goods) and the division of the proceeds among the co-owners, or the division of the land or goods among the co-owners, or a combination of both. By s 228(1), VCAT may make any order it thinks fit to ensure that a just and fair sale or division of land (or goods) occurs. Section 232 empowers VCAT to make particular orders in respect of the sale of the land or goods, and prescribing the method by which the sale is to occur, and other associated matters. Section 233(1) provides that in any proceeding under Division 2, VCAT may order that compensation or reimbursement be made by a co-owner to another co-owner, that one or more co-owners account to the other co-owners 'in accordance with s 28A', and that an adjustment be made to a co-owner's interest in the land (or goods) to take account of amounts paid by co-owners to each other during the period of the co-ownership.
29 Division 3 of Part IV makes provision for a claim for an accounting between co-owners. Relevantly s 234 provides:
(1) A co-owner of land or goods may apply to VCAT for an order under this Division to be made for an accounting in accordance with section 28A.
(2) An application under this section may be made whether or not an application is made under Division 2.
30 Section 234B provides in respect of any such application:
(1) In any proceeding under this Division, VCAT may make any order it thinks fit to ensure that a just and fair accounting of amounts received by co-owners in respect of the land or goods occurs.
(2) Without limiting VCAT's powers, it may -
(a) order a co-owner who has received more than the share of rent or other payments from a third party in respect of the land or goods to which that coowner is entitled to account for that rent or other payments to the other coowners; and
(b) make any order it considers just and fair for the purposes of an accounting by a co-owner who has received more than that co-owner's just and proportionate share to the other coowners of the land or goods.
31 Relevantly, it can be seen that s 233(1)(b), and s 234(1), refer to the accounting provision contained in s 28A of the Act. That section provides as follows:
(1) A co-owner is liable, in respect of the receipt by him or her of more than his or her just or proportionate share according to his or her interest in the property, to account to any other co-owner of the property.
32 The question whether, pursuant to s 234C(1) of the Act, the Court does not have jurisdiction to hear the current proceeding, depends on the resolution of the question whether the proceeding constitutes an application under Division 2 or Division 3 of Part IV of the Act.
33 Plainly, and contrary to the submissions made by counsel for the first and second defendants, the proceeding could not be characterised as an application under Division 2 of Part IV of the Act. Section 225(2) prescribes that an application, made pursuant to subsection (1), may request the sale of the land, the physical division of the land, or a combination of those two forms of relief. As the property has already been sold, the plaintiffs did not - and could not - claim any of that form of relief. In order to bypass that issue, counsel for the first and second defendants relied on the range of orders that may be made by VCAT, under sections 228 to 233 of the Act, in respect of an application under s 225(1). However, each of the orders, prescribed by those sections, are directed to relief that may be provided in respect of an application to VCAT for either a sale or division of the land. Sections 228 to 233 may be properly described as 'machinery' type provisions, enabling VCAT to make appropriate orders to facilitate either the sale of land (or goods), or the physical division of the land (or goods). They do not broaden the nature of the application provided for by s 225.
34 It follows that the proceeding could not be properly characterised as an application under Division 2 Part IV of the Act.
35 Accordingly, the critical question is whether the proceeding may be characterised as an application by the plaintiffs, pursuant to s 234(1) of the Act, for an 'accounting' in accordance with s 28A. The answer to that question involves a consideration of the elements of the causes of action pleaded by the plaintiffs in the statement of claim, and the nature of the relief sought by them. A simple examination of the statement of claim, and a consideration of the relief claimed by the plaintiffs, dictate the conclusion that, contrary to the submissions made on behalf of the first and second defendants, the proceeding instituted by the plaintiffs does not include, or constitute, an application under s 234(1) of the Act, for an accounting in accordance with s 28A. Nor, on a proper analysis, could it be maintained that the causes of action relied on by the plaintiffs, and the relief sought by them, could in some way be equated to, or include, the application contemplated under s 234(1).
36 It is trite, but important, to bear in mind that the application for an accounting, provided for under s 234(1) of the Act, comprises a statutory right of action available to a co-owner of land. Such a cause of action is exclusively a creature of the Act. The elements of that cause of action, and the relief provided by it, are defined by the applicable provisions of the Act.
37 By paragraphs 6 to 9 of the statement of claim, the plaintiffs allege, and rely on the fact, that the first defendant, without their authority, fraudulently executed a contract of sale to Mr Han in respect of the property, and thus caused Mr Han to be registered as the sole proprietor of the property, and Pepper Finance Corporation Limited to be registered as the mortgagee of it. The cause of action, pleaded in paragraphs 10 to 15 of the statement of claim, alleges that the first defendant fraudulently represented to the third defendant that the plaintiffs had agreed and consented to the sale of the property to Mr Han, thereby causing the third defendant to prepare the contract of sale, and execute a transfer of land on behalf of the plaintiffs, transferring it to Mr Han.
38 In paragraphs 16 to 17, it is pleaded that the second defendant knowingly assisted the first defendant in her fraudulent conduct in selling the property to Mr Han. It is thus alleged that the second defendant was a party to that conduct, and as such is liable for the loss and damage caused by it. In paragraph 19, it is further pleaded that accordingly the first and second defendants held and hold two thirds of the proceeds of sale on a resulting or constructive trust for the plaintiffs.
39 Pausing there, the allegations, thus made by the plaintiffs, do not, in their terms, plead an entitlement to an accounting in respect of the proceeds of the sale of the property, or the use of it by the first defendant. Rather, plainly, paragraphs 6 to 17 plead a cause or causes of action, a central element of which is the allegation that the first defendant and second defendant fraudulently brought about the sale of the property to Mr Han, and the registration of Mr Han as the proprietor of it. The precise nature of the cause or causes of action relied on by the plaintiffs is a little unclear. However, the elements pleaded by the plaintiffs would be sufficient to constitute a claim, or claims, in injurious falsehood.[8] It is to be observed that the origins of that cause of action lie in the tort of slander of title.[9]
40 In addition, the nature of the relief sought by the plaintiffs in that cause of action could not be equated to a claim for an accounting to them by the first and second defendants. The particulars of loss, pleaded under paragraphs 9 and 14 of the statement of claim, constitute a claim by the plaintiffs against the first defendant for compensation for loss of their interest in the property. The damages, which might be awarded to the plaintiffs in respect of that claim, may not necessarily equate to the proportionate share of each plaintiff to the purchase price paid by Mr Han to the first and second defendants. If, for example, the reasonable market value of the property, at the time of the sale of it, exceeded the contract price paid by Mr Han, the plaintiffs would be entitled to damages proportionate to their share of that fair market price. In addition, they may also be entitled to other consequential damages resulting from the fraud of the first and second defendants, including, for example, damages for loss of use of the property, and other expenses resulting from the fraud committed by the first and second defendants.
41 Equally, the claims for relief against the first and second defendants, in paragraphs 18 and 19 of the statement of claim, also could not be characterised as relief in the form of an accounting. Rather, the cause of action pleaded in paragraph 18, based on a constructive trust, is a claim founded in equity, based on the proposition that the share of each plaintiff of the sale price constituted a trust fund held by the first and second defendants on their behalf. The cause of action pleaded in paragraph 19, for money had and received, is based on a claim in quasi contract (or unjust enrichment).
42 Contrary to the submissions made by counsel for the first and second defendants, the characterisation of the nature of the causes of action pleaded by the plaintiffs, and the relief sought by them, is a matter of substance, and not a matter purely of form. The causes of action, relied on by the plaintiffs, dictate the elements and material facts which must be established by the plaintiffs, and the form of relief to which they were entitled. While it is possible that the relief, granted to the plaintiffs, in respect of those causes of action, may include an amount equivalent to the monies to which they might be entitled under an accounting pursuant to s 28A of the Act, that consideration does not, relevantly, have the effect that the causes of action relied on by the plaintiffs amounted to, or could be equated to, the statutory cause of action for accounting provided for by s 28A and s 234(1) of the Act. As I have explained, the causes of action relied on by the plaintiffs, and the relief sought by them, were, by their nature, different and distinct to the statutory right provided for by s 234(1) of the Act.
43 For those reasons, the Associate Justice was correct to conclude that the claim made by the plaintiffs, in the proceeding, does not constitute a claim for an accounting under s 234C(1) in accordance with s 28A of the Act. It follows that in the proceeding the plaintiffs do not make an application which may be characterised as an application under Part IV of the Act. Accordingly, s 234C(1) of the Act does not preclude the jurisdiction of the Court to hear and determine the proceeding brought by the plaintiffs.
44 For the purpose of completeness, I should also add that if, contrary to that conclusion, the claim brought by the plaintiffs could be characterised as one falling within Part IV of the Act, I would readily accept that, pursuant to s 234C(4), the Court has jurisdiction to hear it. In my view, it is plain from the structure of the proceeding, and the issues that arise in it, that special circumstances do exist which justify the Court hearing the application.
45 In Re F Vitale & Sons Pty Ltd & Ors,[10] Sifris J helpfully outlined the appropriate approach to the determination of that issue as follows:
In my opinion, the matters before VCAT are complex and fall within both dictionary definitions, essentially by virtue of their connection to the oppression proceedings, and in particular and as a consequence the extent and nature of the relief to be granted. The Court (or VCAT) is required and empowered to make 'any order it thinks fit to ensure a just and fair sale or division of land' (s 228(1)). The proper exercise of this broad discretion requires the Court to consider all relevant matters including the content and context of the dispute. This is what clearly makes the matter complex whether or not a buy out is available. Even if it is not, the matter is still complex.
The relationship between the matters relevant to the relief sought under Part IV of the PLA and the matters relevant to the oppression claims create a complexity of issues that should not be determined separately in two fora. This is not simply a matter of convenience. As pointed out, it is relevant to the proper exercise of the Court's discretion.[11]
46 In the present case, as discussed, the issues raised by the plaintiffs, in the statement of claim, travel well beyond what, on any view, could be regarded as a claim for an accounting. The claim against the second defendant could not come within Part IV of the Property Law Act, as the second defendant had not been a co-owner of the property. In addition, the plaintiffs seek relief against the third defendant based on an alleged breach of duty of care by her to them, and a contravention of the Australian Consumer Law. In response the third defendant, in her defence, has pleaded (inter alia) that in the event that she is found liable to the plaintiffs, the first and second defendants are concurrent wrongdoers for the purposes of s 24AH(1) of the Wrongs Act 1958 and s 87CB(3) of the Competition and Consumer Act 2010 (Cth), so that the third defendant's liability is limited to an amount reflecting the proportion of the damage or loss sustained by the plaintiffs that the Court considers just having regard to the extent of the third defendant's responsibility for that loss and damage.
47 In that way, the matter which is the subject of the proceeding is complex. Further, a substantial part of the matter does not fall within the jurisdiction of VCAT. Accordingly, if - contrary to the conclusions that I have reached - the claim asserted by the plaintiffs against the first defendant includes a claim under Part IV of the Act, special circumstances would exist which would justify the Court hearing the proceeding. Consequently, s 234C(4) of the Act would apply, so that the Court would have jurisdiction to hear it.
48 Contrary to the submissions made on behalf of the first and second defendants, it was not necessary for the plaintiffs to obtain a declaration from the Court that it had jurisdiction to hear the application, under s 234C(4) of the Act, before the plaintiffs entered judgment in default of delivery of the defence. On its plain terms, s 234C(4) does not require a party to obtain such a declaration before it issues the proceeding in the Court, or takes a step in it. Where, in a case such as this, the only substantive step that has been taken, after issue of the proceeding, is the entry of judgment, and the defaulting party seeks to set aside that judgment, it is sufficient that the Court, at that stage, forms the requisite opinion that special circumstances exist which justify the Court hearing the proceeding pursuant to s 234C(4).
49 It follows, from the foregoing, that the Associate Justice was correct to hold that the claim made by the plaintiffs in the proceeding comes within the jurisdiction of the Supreme Court. Accordingly, the judgment entered in default of delivery of the defence against the first and second defendants was regular. The first and second defendants have not satisfactorily explained the failure by them to serve and file a defence within the time prescribed by the rules. They have not deposed to any arguable defence to the claims made by the plaintiffs in the statement of claim. Thus, it would be futile to set aside the default judgment entered against them.
50 Accordingly, the first and second defendants have not demonstrated any error in the decision by the Associate Justice to dismiss their application to set aside the default judgment. As a result, the appeal against the decision of the Associate Justice must be dismissed.
[1] Trani v Trani [2019] VSC 2 ('Reasons').
[5] Gamble v Killingsworth [1970] VicRp 22; [1970] VR 161, 168-9 (McInerney J) ('Gamble').
[6] Gamble [1970] VicRp 22; [1970] VR 161, 168; Rosing v Ben Shemesh [1960] VicRp 28; [1960] VR 173, 176; Evans v Bartlam [1937] AC 473, 489 (Lord Wright); Kostakanellis v Allen [1974] VicRp 71; [1974] VR 596, 602-5.
[7] Oswal v Carson [2013] VSC 355 [8]; Vella v Wybecca Pty Ltd [2014] VSC 443 [14]; Glass (a Pseudonym) v Chief Examiner [2015] VSC 29.
[8] Ratcliffe v Evans [1892] 2 QB 524, 528 (Bowen LJ) ('Ratcliffe'); Hall-Gibbs Mercantile Agency Ltd v Don [1910] HCA 66; (1910) 12 CLR 84 ('Hall-Gibbs'); Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388, 404-6 (Gummow J), 423-5 (Kirby J).
[9] Ratcliffe [1892] 2 QB 524, 527-8l Hall-Gibbs [1910] HCA 66; (1910) 12 CLR 84, 95 (Barton J), 102-3 (O'Connor J).
[11] Ibid [25]-[26] (citations omitted).
Trani & Anor
Trani & Anor [2019] VSC 294
(1910) 12 CLR 84
(2001) 208 CLR 388