Victorian Civil and Administrative Tribunal|2004-11-08

Kormilas v Housing Guarantee Fund Ltd [2004] VCAT 2184 (8 November 2004)

Domestic building - judgment in default - application to re-open

Brady Constructions Pty Ltd (Formerly T/as Brady Construction Company Pty Ltd)

3. Direct that this matter be listed for further directions as soon as reasonably convenient.

1. In this matter application is made by the Fifth Respondent - known previously as Koukourou & Partners Pty Ltd - that orders I made on 5 March 2004 be set aside.

2. Those orders provided that, as between the Second and Fifth Respondents, the proceeding was to stand determined in favour of the former from that day. As well, I ordered the Fifth Respondent to pay the Second Respondent's costs of the proceeding.

3. The orders which I made on that date followed the Fifth Respondent's non-compliance with certain existing directions including a failure to deliver Points of Defence. It also followed the Fifth Respondent's expressed intentions conveyed in a solicitor's letter dated 2 March 2004 and by Counsel.

4. The orders made on the date in question record "No appearance" for the Fifth Respondent. They do, however, at the same time record an appearance by Counsel for Russell Kennedy solicitors whose letter of 2 March was placed on file.

5. The Fifth Respondent informed the Tribunal, via that letter, that it wished to withdraw its application (which on 27 February 2004 had been set aside for separate hearing). The Fifth Respondent in the letter informed the Tribunal that it had ceased trading some time ago and that it had no remaining assets. It was expected, the letter said, that the Fifth Respondent would be deregistered at some stage in March 2004. The solicitors notified that: "Our client is not able to take further part in the proceedings. Whilst it denies all allegations against it, the company is not able to fund any legal representation nor meet any award of damages that might be made against it in this proceeding."

6. It was in these circumstances that the orders I made on 5 March were made.

7. No appeal was instituted in respect of those orders.

8. It appears that the Fifth Respondent did in fact become de-registered. It appears also, though, that orders made by Registrar Wood in the Federal Court on 2 September 2004, have re-instated the registration of the Fifth Respondent as "ACN 007 739 157 Pty Ltd". I am told that achieving that re-instatement has proved an expensive exercise.

9. I am informed now that the Joined Party - Gerling Insurance Australia Pty Ltd - wishes to conduct the defence of the Fifth Respondent in respect of the claims made by the Second Respondent. It cannot do this, however, if the orders of 5 March remain in place. Hence the application being made to have them set aside.

10. In support of that application I have read the affidavit of Peter Moriarty, solicitor, sworn 19 October 2004, and I have duly considered it contents and the submissions made.

11. Reliance is placed on s120 of the Victorian Civil and Administrative Tribunal Act 1998 which reads as follows:

120. Re-opening an order on substantive grounds

(1) A person in respect of whom an order is made may apply to the Tribunal for a review of the order if the person did not appear and was not represented at the hearing at which the order was made.

(2) An application under sub-section (1) is to be made in accordance with, and within the time limits specified by, the rules.

(3) The rules may limit the number of times a person may apply under this section in respect of the same matter without obtaining the leave of the Tribunal.

(a) hear and determine the application if it is satisfied that the applicant had a reasonable excuse for not attending or being represented at the hearing; and

(b) if it thinks fit, order that the order be revoked or varied.

(5) Nothing in Division 3 of Part 3 applies to a review under this section.

Reliance also is placed on s80:

(1) The Tribunal may give directions at any time in a proceeding and do whatever is necessary for the expeditious or fair hearing and determination of a proceeding.

(2) The Tribunal's power to give directions is exercisable by any member.

(3) The Tribunal may give directions under this section requiring a party to produce a document or provide information in a proceeding for review of a decision despite anything to the contrary in section 106(1) or any rule of law relating to privilege or the public interest in relation to the production of documents.

12. It seems to me that the power to give directions under s80 requires an extant proceeding for its exercise. But, as at present, there is no extant proceeding between the Second and Fifth Respondents because that proceeding, as between them, was concluded by my 5 March orders. Therefore, it seems to me, that in order for directions to be able to be made I must first grant the application for re-hearing brought under s120.

13. However, I am not satisfied that the case for a re-hearing under s120 of the Act has been made out.

14. It is for the Applicant, claiming a right to have a matter re-opened, to satisfy the Tribunal that it meets the requirements of the section. In the first place, however, I am not satisfied that it can be said that the Applicant "did not appear and was not represented" at the hearing on 5 March. Those requirements, I consider, are cumulative - the Applicant must not have appeared at the hearing and must not have been represented at it either. See also s120(4)(a). But the Applicant has not satisfied me that it did not appear. It is true that the orders note "No appearance" on behalf of the Fifth Respondent but that is only technically so and is in the nature of merely a file entry. In reality, I consider the Applicant did "appear" - it was represented by solicitors who instructed Counsel. It has appeared also on this occasion by the same Counsel. But even if this is not so, I consider the Applicant was at least "represented" at the hearing on 5 March - as I say it was represented by solicitors who happened to instruct Counsel.

15. I consider, therefore, that the Fifth Respondent, in reality, did appear at the 5 March hearing. I consider, in that regard, that the recorded "No appearance" on 5 March entered in Tribunal records is a mistake. But even if this is not so, I consider that the Fifth Respondent was at least "represented" on 5 March. So, therefore, even if the Fifth Respondent did not "appear" (and the Tribunal record is correct in marking "No appearance") it was "represented" in which case the Fifth Respondent is not within s120(1) at the outset in that both conditions must be satisfied and I am not persuaded by the Fifth Respondent, by its arguments, that both are satisfied - one, arguably, might be satisfied, but not the other.

16. If, however, I am wrong in this and the Fifth Respondent does satisfy both conditions, can it be said that it has a "reasonable excuse" for not attending and not being represented? The affidavit of Peter Moriarty is not very explicit on this point. No other document on file assists me greatly at all either. It was put to me, in effect, that the Fifth Respondent was, on 5 March, dealing with other matters - such as readying itself to be put out of existence. It had no funds, it is asserted, moreover. However I cannot see how these can be matters that constitute a "reasonable excuse" under s120(4)(a). Or, at least, I am not persuaded by the Applicant on the materials, or having regard to the submissions, that it did have a "reasonable excuse", assuming that s120(1) otherwise is satisfied in the first place. Certainly the Fifth Respondent knew that the 5 March hearing was due on. Generally, impecuniosity is not a ground for saying a party should not appear - although it may be a ground for saying a party understandably is not intending to be represented. In any event, impecuniosity on the part of the Fifth Respondent rests in assertion only, from my perspective, in the letter from the solicitors of 2 March. I have not been provided with any proofs in that regard, although I can speculate, but speculation is not enough.

17. Lastly, an application under s120 must be made within 14 days of a party becoming aware of an order. See the Regulations: reg 4.18(1). No application under s120 was made within 14 days after the orders on 5 March were made. The Fifth Respondent was not deregistered until 23 March. There is nothing to say that until that date the Fifth Respondent might not have made application under s120 or might have done or did anything about doing so.

18. Indeed, this is an answer, I consider, also to an application for an extension of time under s126 which I apprehend also was made, so far as necessary. After 5 March, until 23 March when deregistration took place, I have nothing in the way of any explanation for any delay involved beyond the 14 day period. Presumably the orders made on 5 March were not significant in the Fifth Respondent's reckonings because it was going out of business as it knew and was ceasing to exist which happened as of 23 March. But then there is nothing at all recorded as happening to the Fifth Respondent - for obvious reasons - until 2 September when it was re-instated. But the application for a rehearing under s120 was not then even instituted without delay or within 14 days, and there is no explanation provided, that I can see, for any delay after that date. Or, at least, I am unable on the materials to identify any justifiable or reasonable excuse for such delay.

19. I consider, therefore, that the Fifth Respondent has failed to make application under s120 (if otherwise within that provision) within the time permitted and I consider also that I should not extend that time under s126. If I am required to consider the merits of any proposed defence by the Fifth Respondent (if I assume there was no delay or that there is a reasonable explanation for any delay) I must indicate that all I have is the assertion that in the view of Mr Moriarty "Koukourou has a good defence to Brady's claims" but, apart from the annexed proposed Points of Defence, I have nothing else in that regard. I do not believe that I am bound simply to accept Mr Moriarty's assertion even though he is an experienced and competent lawyer. As he indicates, however, he acts, in any event, for the insurer of the Fifth Respondent and, as is apparent, the insurer is not a disinterested party in wanting to have the orders made against the Fifth Respondent set aside. There is no sufficient evidence, therefore, on which I can properly form a view about the merits of the case from the Fifth Respondent's point of view.

20. For these reasons, I consider I should not allow the application under s120 which I dismiss. I appreciate that this may impact on the Joined Party but that is something that may have occurred as long ago as 5 March this year in any event.

21. In consequence no occasion arises, in my view, to make any directions under s80.

23. I direct that this proceeding be listed for further directions as soon as may be convenient because I am not clear now about what directions may be necessary in order to keep the hearing date of 25 January 2005 intact in view of my decision on this application.

Kormilas v Housing Guarantee Fund Ltd [2004] VCAT 2184

At a glance

Court

Decision date

Source

Judgment (38 paragraphs)

Kormilas v Housing Guarantee Fund Ltd [2004] VCAT 2184 (8 November 2004)

Parties