The Plaintiff was injured on 10 December 2008 when he was required to move a pallet containing air conditioning ducts which had been delivered to the street outside a building site where he was working. The Plaintiff was employed by Austmec Air Conditioning Pty Ltd, an air conditioning company, which was a sub-contractor on the site.
The Plaintiff commenced proceedings on 9 December 2011 against Ichor Constructions Pty Ltd which was the principal contractor on the building site at 7 Eliza Street, Newtown.
On 26 September 2012 an Amended Statement of Claim was filed adding Crest Air Conditioning Pty Ltd as a Second Defendant. Crest was a sub-contractor who was to perform all of the air conditioning works on the site. Crest Air Conditioning had already been joined as a cross-defendant on 30 July 2012 by Ichor Constructions.
On 26 April 2013 a Further Amended Statement of Claim was filed adding Bravo Industries Pty Ltd as a Third Defendant. The Further Amended Statement of Claim was served on Bravo on 29 April 2013.
On 17 July 2013 Ichor Constructions amended its Cross-Claim to join Bravo as a Second Cross-Defendant.
Thereafter the solicitors acting for the Plaintiff sent correspondence to Bravo which amongst other things advised Bravo of when the proceedings would next be before the Court.
On 29 May 2013 Ms Mirela Zimonjic from the Plaintiff's solicitors spoke with a person called Alex at Bravo. Other evidence demonstrates that this person was Alex Godoy who was the Business Development Manager of Bravo. Alex told her that he was one of two managers at Bravo but would not provide his surname. He said that Bravo had obtained legal advice in the matter but had decided not to follow that legal advice and would not be attending Court. He said that Bravo had not engaged any lawyers and that they would "wait and see what happens".
The evidence discloses that Bravo was in contact with a solicitor Bruce Hanrahan of Dignan and Hanrahan at Campbelltown. The evidence could suggest that the solicitor advised Bravo that because it was not trading and did not apparently have any assets it did not need to file a defence. How that sits with what Mr Godoy told Ms Zimonjic is not easy to resolve.
On 4 February 2014 the Plaintiff's solicitors wrote to Bravo saying that they understood Bravo was insured with Calliden Insurance Ltd, and they urged Bravo to contact the insurer to notify them of the claim.
Having received nothing by way of an Appearance or a Defence from Bravo, on 26 February 2014 the Plaintiff's solicitors filed a Notice of Motion for default judgment in relation to Bravo. When the solicitors wrote serving the Notice of Motion they again recommended that Bravo contact its insurer.
Judgment was entered on 27 February with damages to be assessed.
On 25 August 2015 the proceedings were referred to Court ordered mediation which was to take place between 2 and 27 November 2015.
On 28 August the Plaintiff's solicitors wrote to Calliden notifying them of the claim and that default judgment had been entered against Bravo. They also notified Calliden that mediation had been ordered and urged Calliden to contact Bravo immediately.
No response was received from Calliden and on 29 October 2015 Ms Zimonjic telephoned them and spoke to a lady call Gloria. She confirmed that Court ordered mediation had been fixed for 5 November 2015. She subsequently sent an email to Gloria at Calliden. When there was no response to this, Ms Zimonjic again telephoned Calliden on 29 October and spoke to Ms Bianca Vasallo, a team leader at Calliden. Ms Vasallo advised that Calliden could not get involved until the insured contacted Calliden directly and that the Plaintiff's solicitors should contact Bravo directly.
Subsequently, Calliden became involved in the matter and they instructed a solicitor who has subsequently commenced to act in these proceedings, Ms Rosan Santangelo. The Plaintiff's solicitors were advised of this from a Ms Yoo at HBA Legal on 31 October.
A mediation was fixed for 5 November 2015. That had previously been advised to Calliden. In the conversation on 31 October, Ms Yoo confirmed that she was aware of that mediation. Ms Yoo attended the mediation on 5 November to represent Calliden, or Bravo through Calliden, and she informed the parties present that she had no instructions. Accordingly, the mediation was adjourned to 18 December to allow her firm to obtain instructions.
According to the Plaintiff's solicitor's affidavit, the lawyers, including barristers from the other parties, were all ready to proceed with the mediation on that day.
The matter subsequently came before the Court on 10 November 2015 and Ms Yoo attended as amicus. It was confirmed that the mediation had been adjourned to 18 December.
In the meantime, on 8 December Bravo filed the motion, with which I am now concerned, to set aside the judgment.
On 14 December, Ms Santangelo telephoned Ms Zimonjic and requested that the mediation be adjourned as there was an insurance issue that she needed to deal with. She informed Ms Zimonjic that she would not be able to do anything at the mediation on 18 December 2015. As a result of that conversation and some subsequent emails, the Plaintiff's solicitor wrote to the remaining Defendants concerning the inability of Bravo's solicitors to take part meaningfully in the mediation on 18 December. It was agreed, therefore, with the remaining parties that the mediation should not go ahead on that day.
Affidavits in support of the Notice of Motion to set aside the judgment were not filed and served until 28 and 29 January 2016.
The principles concerning applications to set aside a default judgment are well known but have been re-stated recently by Justice McColl in Dunwoodie v Teachers Mutual Bank Limited [2014] NSWCA 24 at [43] to [46]. The two significant matters that the Court must determine are whether the applicant has a bona fide ground of defence and whether the applicant has an adequate explanation for the failure to defend, and the length of any delay.
The Plaintiff does not oppose judgment being set aside in the present case but seeks terms. I note that although judgment for unliquidated damages has been given in favour of the Plaintiff against Bravo the determination of those damages has been directed to be heard at the time the remainder of the proceedings against the other Defendants are heard. In that regard, the Plaintiff does not suffer any prejudice by this judgment being set aside and I consider that the Plaintiff has behaved in an entirely appropriate way in saying that he does not oppose the setting aside of the judgment.
I consider that the matters in Mr Bravo's affidavit of 29 January 2016 demonstrate, in any event, that Bravo has an arguable defence in the matter.
On the other hand, the explanation for the delays and the approach that has been taken by Bravo to the matter are entirely unsatisfactory. Even accepting that Mr Hanrahan gave the advice that because Bravo had no assets and was not trading it did not need to do anything in the matter, the failure of Mr Bravo to contact his insurer when urged to do so on at least two occasions by the Plaintiff, is not explained.
The matter has not been assisted by the approach that Calliden took to the matter in not wishing to become involved until notified by Bravo despite being informed of the claim and the existence of its policy in August 2015.
All of these matters, in my opinion, brought about the adjournment and the ultimate abandonment, at least for the present, of the mediation in November and December 2015.
The High Court made clear in RT Company Pty Ltd v Minister of State of the Interior (1957) 98 CLR 168 at 170 that the reasons and the cause of the delay in failing to defend or apply to set aside the judgment may be taken into account in the terms which are imposed on a defendant seeking to set aside a judgment.
In my opinion, it is reasonable in the circumstances set out earlier that the Third Defendant should pay the Plaintiff's costs thrown away by reason of obtaining the judgment and that those costs should include the Plaintiff's costs thrown away by reason of the mediation being adjourned and then abandoned in November/December 2015. That adjournment and abandonment was occasioned solely by reason of the delay of Bravo and its insurer in seeking to defend the proceedings.
The orders that I make are:
1. The judgment entered on 27 February 2014 in favour of the Plaintiff against the Third Defendant is set aside and the Third Defendant is allowed in to defend;
2. The Third Defendant is to pay the Plaintiff's costs thrown away by reason of the default judgment and those costs are to include the Plaintiff's costs thrown away by reason of the two adjournments of the mediation in November and December 2015.
3. The Third Defendant should pay the Plaintiff's costs of the Notice of Motion dated 8 December 2015.
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Decision last updated: 20 May 2016