Leeds Street Pty Ltd v Byron Bay Property Sales Pty Ltd

Background of Mr Trewern

1. The principal witness for the applicant was Mr David Robertson Trewern. A little needs to be known about his background. In 1996 at the age of 23 he founded a company called DT which is now known as AKQA Australia and New Zealand. He became the chairman of DT in 2010. I do not know when he ceased to be the chairman of DT but he remained at DT until 2017 as a consultant. In 2015 he moved with his family to Byron Bay and continued advising, investing in a number of businesses and investing in development projects and charitable organisations.
2. In 2016, he conceived the idea of and created Fliteboard which is an internationally awarded electric hydrofoil surfboard. Fliteboard now has offices in Australia, in Amsterdam, and in the United States of America. Two months before the giving of evidence before me on 17 November 2023, Fliteboard was purchased by Brunswick Corporation from Mr Trewern. However, Mr Trewern has remained the chief executive officer of Fliteboard. His evidence continued in this fashion: "Q. Over the last few years, the business has consumed a lot of your time, correct? A. Absolutely. Q. Since COVID, you've found yourself regularly in Europe and the United States, promoting Fliteboard, getting investors involved. That sort of thing? A. Exactly. Q. You've attended boat shows in Fort Lauderdale, Sydney, Southhampton, Dubai, and other places around the world over the last 12 to 18 months, correct? A. Yes. Q. You attended the Cannes Yachting Festival this year? A. Yep. Q. Because you're travelling so much, you have access to your email on your phone, correct? A. Yep."
3. The evidence of Mr Trewern was replete with references to his being a very busy man, regularly travelling the world, receiving hundreds of emails every day. One might think, given his background, that he is a "high‑flyer", very successful businessman.

The Proceedings

1. These proceedings arise out of the purchase of a property at Byron Bay known as 4 Bay Lane, and the relationship of the applicant and the respondent arising from that property purchase.
2. A principal of the respondent is Ms Katherine Emma Vaubell. She affirmed an affidavit on 17 July 2023 which is Exhibit 1-1. That affidavit contains this matter: "8. BBPS sold David and Bethwyn Trewern a property at 30 Child Street, Belongil Beach, New South Wales in around 2015. Mr Trewern engaged BBPS to manage that property as a holiday rental. 9. Sometime the following year, Mr Trewern approached BBPS about managing a commercial property he had purchased at 4 Bay Lane, Byron Bay, New South Wales (Premises). The Premises comprised seven separate commercial tenancies, including Kura Japanese Restaurant. 10. I was subsequently put in contact with Mr Trewern's lawyer to draw up the paperwork for a management agreement with BBPS in respect of the Premises. Mr Trewern's lawyer advised me that 'The entity for receiving the rent will be Leeds Street Proprietary Limited as Trustee for the Trewern Superannuation Fund.' There was no mention of Trewern Bare [Proprietary Limited]. As such, we raised the agreement in the entity name. A copy of that email is annexed hereto and marked 'A'. 11. On 5 September 2016, I sent a draft proposed Commercial/Industrial Exclusive Management Agency Agreement for the Premises (which I refer to as a 'listing agreement') to Mr Trewern for him to review and sign if everything was in order. In the email, I also provided Mr Trewern with a general update regarding the Premises and informed him that BBPS had contacted all tenants and will be conducting an inspection and meeting of the tenants the following day. A copy of my email to Mr Trewern is annexed hereto and marked 'B'. 12. On or around the same date, I received an executed copy of the Commercial/Industrial Exclusive Management Agency Agreement between BBPS and Leeds Street back from Mr Trewern (the Agreement). A copy of the Agreement is annexed hereto and marked 'C'. 13. Under the terms of the Agreement, BBPS was granted the exclusive rights to lease and manage the premises."
3. I shall have more to say about the agreement between the applicant and the respondent later in these reasons. Suffice to say at this stage that the principal, being the owner of the property, is shown as "Leeds Street ATF Trewern Superannuation Fund". Neither its address, telephone number, facsimile number, mobile number or email address are given in the document.
4. Leeds Street Pty Ltd, the applicant, was never the legal owner of the fee simple in the property known as 4 Bay Lane, Byron Bay. However, nothing turns on that because when that lease agreement expired, Mr Trewern entered into another management agreement with the respondent with the same name shown thereon. Furthermore, clause 7 of the agreement is this: "The Principal warrants to the Licensee that the Principal has authority to enter into this agreement with the Licensee." Furthermore, as will become clear later in these reasons, Trewern Bare Pty Ltd, another company of which Mr Trewern and his wife are the directors and shareholders, sought to rely upon the management agreement between the applicant and the respondent in another part of these proceedings.
5. These proceedings arise out of an accident which befell the plaintiff, Mr Craig Fisher, on 24 March 2017. He commenced proceedings against Trewern Bare Pty Ltd on 24 March 2020, one day short of the expiration of the three-year limitation period for an action for damages for personal injury. He originally sued Trewern Bare Pty Ltd as the owner and occupier of the property known as 4 Bay Lane, Byron Bay.
6. Paragraphs 6, 7 and 8 of the originating process, the Statement of Claim filed on 24 March 2020, are these: "6. On or about 24 March 2017 the plaintiff did attend the Premises and when leaving at approximately 7pm, the plaintiff exited via the external staircase and did slip on the staircase falling to the ground below (the 'Incident'). 7. At the time of the Incident it was raining and the surface of the staircase was wet. 8. As a result of the Incident, the plaintiff did suffer severe injury, loss and damage."
7. No particulars of the injury, loss or damage suffered by the plaintiff are contained in any of the documents before me and it is likely that they were contained in a document providing particulars which has not been put before me.
8. To the Statement of Claim, Trewern Bare Pty Ltd filed a defence on 20 October 2020. On 3 March 2021 Trewern Bare Pty Ltd filed a cross‑claim. That cross‑claim was against the current respondent. Paragraphs 6 to 9 of Trewern Bare's cross‑claim against the respondent, the first cross‑claim in the substantive proceedings, are these: "6. At all material times Trewern was the absentee owner of the Property. 7. At all material times, the director of Trewern did not reside at or otherwise occupy the property and visited it rarely. 8. At all material times, BBPS was the only contracted property manager and/or managing agent for the property. PARTICULARS Commercial\Industrial exclusive management agency agreement dated 5 September 2016. 9. At all material times, Trewern delegated the care, management and control of the Property and the common area (including the subject external staircase) to BBPS."
9. Under the heading "Negligence" of the first cross‑claim, the following was pleaded: "12. On 9 January 2017, BBPS received an email from a tenant of the property advising that the external staircase had limited non‑slip strips remaining and that this was contributing to the stairs becoming slippery in wet conditions. PARTICULARS Email from Byron Massage Clinic to BBPS dated 9 January 2017. 13. On 9 January 2017, BBPS sent an email to the tenant confirming its intention to attend to additional\improved safety measures for the stairwell. PARTICULARS Email from Tia Melody of BBPS to Byron Massage Clinic, dated 9 January 2017. 14. On 10 January 2017, BBPS contracted All Jobs Local to install new non‑slip strips, 'Watch your step' and, 'Slippery when wet' signage to the staircase. PARTICULARS Email from BBPS to All Jobs Local, dated 10 January 2017. 15. On or around 23 January 2017, All Jobs Local installed new black and yellow anti-slip tape to the staircase. 16. All Jobs Local did not ultimately install the 'Watch your step' and 'Slippery when wet' signage. 17. Trewern says that, in the event that the plaintiff is found to have sustained injury, loss or damage as alleged and as pleaded in the statement of claim or at all (which is not admitted), then such injury, loss or damage was caused and\or contributed to by the negligence of BBPS, its employees, servants or agents. PARTICULARS OF NEGLIGENCE (a) For the purposes of this first cross‑claim only and without admission of liability, Trewern repeats against BBPS the particulars of breach of duty contained in paragraph 11(a) to (l) of the statement of claim; (b) For the purpose of this first cross‑claim only and without admission of liability, Trewern repeats against BBPS the particulars of precautions of risk of harm as pleaded at paragraph 14(a) to (e) of the statement of claim; (c) Failure to ensure that all jobs local installed the 'Watch your step' and 'Slippery when wet' signage, as instructed; (d) Failure to ensure that the external staircase was routinely and periodically inspected and/or cleaned to move the presence of water."
10. At this stage, I should say that the solicitors acting for Trewern Bare Pty Ltd, Clyde & Co, routinely referred to Trewern Bare Pty Ltd as "Trewern", which has a tendency to cause mischief because one might think that Mr David Trewern is being referred to. I shall refer to Trewern Bare Pty Ltd as TB rather than "Trewern".
11. On 28 April 2021, the respondent filed its defence to TB's cross‑claim. It would appear that the plaintiff was emboldened by the first cross-claim because on 4 March 2022, the plaintiff filed an amended statement of claim, largely repeating the allegations made against the respondent by TB in the first cross‑claim. The respondent filed a defence to the amended statement of claim on 6 April 2022.
12. On 10 June 2022, the respondent filed the second cross‑claim in these proceedings. The second cross-claim joined as the first cross‑defendant, TB, as the second cross-defendant, the applicant, and as the third cross‑defendant, Mr Shane Ewen Christie trading as All Jobs Local. The second cross-claim was served on the applicant's registered office on 14 June 2022. With the second cross-claim was filed an appropriate notice in accordance with the Service and Execution of Process Act 1992 (Cth).
13. The registered office of Leeds Street Pty Ltd is PKF Melbourne, level 12, 440 Collin Street, Melbourne, Victoria, 3000. That is the same registered office as TB. PKF would appear to be, from correspondence I have seen, in particular what is enclosed on their stationery, a very large firm of accountants in Melbourne.

Default Judgment against the Applicant

1. On 18 July 2022, those acting for the respondent applied for default judgment against the applicant. On 19 July 2022, default judgment was entered against the applicant. Exhibit 2-2 is an affidavit of Jane Elizabeth O'Neill affirmed on 21 July 2023. She is a partner in the firm of Colin Biggers & Paisley Pty Ltd who are the solicitors for the respondent. Her affidavit contains this matter: "26. On 20 July 2022, the day after default judgment was entered in favour of BBPS, the plaintiff, Trewern [TB], BBPS and All Jobs agreed to settle the claims as between them 'in principle' on the basis that judgment was entered for the plaintiff in a sum of $225,000 (all inclusive) to be paid in equal contributions of $75,000 by each of BBPS, Trewern [TB] and All Jobs. Additionally: (a) The first cross-claim was to be dismissed with no order as to costs; and (b) The second cross-claim against Trewern [TB] and All Jobs was to be dismissed with no order as to costs (but remain on foot against Leeds Street so as to preserve BBPS's rights with the respect to default judgment). 27. In the context of the 'in principle' settlement, it was agreed between the parties that the settlement would be recorded in a settlement agreement and formalised in a consent judgment. 28. On 22 July 2022, Clyde & Co wrote to us on a 'without prejudice' basis to: (a) State that 'As discussed previously, we do not presently hold instructions to act for Leeds Street'; (b) Advised that the second cross-claim had been brought to the attention of their 'client insurer' who is determining whether the policy responded; and (c) Request that BBPS refrain from taking any action against Leeds Street for a period of 14 days. A copy of that communication is annexed hereto and marked JEO-7 which, save for the passage above, has otherwise been redacted. 29. On 27 July 2022, I wrote to Clyde & Co to acknowledge their letter dated 22 July 2022 and to confirm that, as they had made it clear that they did not act for Leeds Street previously, I did not intend to respond to their proposal. 30. On 9 August 2022, Clyde & Co wrote to us to confirm that they were not instructed to act for Leeds Street. A copy of that correspondence is annexed hereto and marked JEO-8. Assessment Hearing - 22 August 2022 31. The matter was listed for an assessment hearing on 22 August 2022 before his Honour Judge Levy. 32. Ahead of the assessment hearing, on 19 August 2022, I caused Leeds Street to be served at its registered office with: (a) A letter confirming the matter was listed for an assessment hearing on 22 August 2022; and (b) All the materials that had been filed by BBPS in relation to the default judgment thus far, including a copy of the judgment entered on 19 July 2022, as stated in the affidavit of service of Ellie McCooey affirmed on 19 August 2022. 33. As at the time of the assessment hearing, the consent judgment had not been filed so his Honour stood the matter over until the November sittings."
2. The parties who had reached agreement executed a settlement agreement on 11 October 2022 and a consent judgment to that effect was filed and passed under the hand of the Registrar and the seal of the Court on 12 October 2022. The respondent paid the judgment sum in accordance with the consent judgment on 13 October 2022.
3. The assessment hearing was initially set for 14 November 2022. On 11 November 2022, Ms O'Neill sent a copy of an affidavit affirmed by her on 11 November 2022 to Leeds Street Pty Ltd, the applicant, at its registered office. On 14 November 2022, the applicant was sent a letter at its registered office confirming that the assessment hearing had been adjourned from 14 November to 16 November.
4. On 16 November, Priestley SC DCJ sitting in Lismore assessed the damages of the respondent to be $135,246.34. That would appear to be the total of the settlement which the respondent agreed to pay to the plaintiff, $75,000, and the balance of the sum were the costs incurred by the respondent in meeting the claims that had been made against it.
5. The judgment was formally entered by the Court on 22 November 2022 at 2.49pm. A notice to that effect was generated by the Registrar on 7 December 2022. A notice was sent to the defendant at its registered office on 7 December 2022 advising of the orders that had been made and enclosing a copy of the formal judgment recording the date that it was made and the date that it was entered and the amount of the judgment debt. The form of judgment passed under the hand of Priestley SC DCJ and under the seal of the Court. Elsewhere in the court book can be found a copy of the envelope bearing the postal address of the District Court at Lismore in which copies of the notice of order and the judgment were sent to the applicant at its registered office.

The Applicant's Case

1. The first paragraph of Mr Trewern's affidavit which is exhibit A-A commences with this: "My wife, Bethwyn, and I own a self-managed superannuation fund known as the Trewern Superannuation Fund ('the SMSF'). The second cross-defendant, Leeds Street Pty Ltd, is the trustee for the SMSF. Bethwyn and I are directors of Leeds Street Pty Ltd. Trewern Bare Pty Ltd, the first defendant and first cross-defendant, is the custodian of the SMSF. Bethwyn and I are also the directors of Trewern Bare Pty Ltd."
2. Again, all the pleadings indicate that Trewern Bare Pty Ltd was the owner of the property known as 4 Bay Lane, Byron Bay. It may be that Leeds Street Pty Ltd was the custodian of the SMSF. The exact nature of the relationship between Trewern Bare Pty Ltd and the applicant has never been adequately explained. I note that the Superannuation Industry (Supervision) Act 1993 (Cth) contains in Div 2, relating to interpretation, the following definition of "custodian": "In relation to a superannuation entity, means a person (other than a trustee of the entity) who, under a contract with a trustee or an investment manager of the entity, performs custodial functions in relation to any of the assets of the entity."
3. Counsel for the applicant was not able to direct me to that definition but it was found for me by my efficient Associate. Again, it appears likely that TB was the holder of the legal fee simple for the property in question. The income may have been going to the SMSF through one of either TB or the applicant but things are as clear as mud. For example, paragraph 3 of the same affidavit admits that Trewern Bare was the registered proprietor of the company under a "limited recourse borrowing arrangement and held the property on trust for the SMSF." Mr Trewern's affidavit contains this matter: "4. I am aware now, although I do not recall noticing or being aware at the time, that the named party to the agency agreement with BBPS is actually Leeds Street and not Trewern Bare, even though Trewern Bare is the legal owner of the property. 5. On becoming aware of the plaintiff's proceedings against Trewern Bare Pty Ltd, I spoke with Kath Vaubell, our managing agent at BBPS, about the proceedings. At that time, Ms Vaubell advised me to the effect that she would 'refer the matter to your insurance company.' I understood that our insurer then instructed solicitors, Clyde & Co, to represent our interest in the proceedings. 6. Over the following years I have had conversations with Kath Vaubell about the proceedings. During those conversations Ms Vaubell advised me to the effect that, 'The insurers are all trying to sue each other. You don't need to be involved, it is between the insurance companies and is not your issue.' 7. I understand that documents in the proceedings were also sent to Leeds Street Pty Ltd via our accountant in Melbourne. However, due to my conversations with Ms Vaubell I had believed there was nothing for us to do. My executive assistant, Jacqui Cozic, contacted Ms Vaubell and I am informed by Jacqui that Ms Vaubell advised her to the effect that, 'It is between the insurance companies, they are fighting it out. The documents would be for your records. There is nothing for you to do.' This was consistent with what Ms Vaubell had told me previously so I did not think there was anything that Leeds Street Pty Ltd needed to do. I thought that our insurance was covering everything. 8. On or about late 2022, I cannot recall exactly when, I was informed by Kath Vaubell that the proceedings had settled by the various insurers making a contribution to a settlement sum paid to the plaintiff. I believed that was the end of the matter. I certainly was not aware that any claim remained outstanding against Leeds Street. 9. On 22 May 2023, I became aware that BBPS had obtained default judgment against Leeds Street Pty Ltd in the sum of $135,246.34 on or about 16 November 2022. From my discussions with Ms Vaubell to the effect that there was nothing for us to do, I still had thought that our insurer was responding to all claims in relation to the matter. Jacqui received some correspondence in November via the accountant relating to the judgment which Jacqui has advised me she simply filed with the other documents. I was still of the understanding that it was all between insurance companies and there was nothing to do. 10. By letter dated 23 May 2023, BBPS served a Creditor's Statutory Demand for Payment of Debt attaching the default judgment, a copy of which is annexed and marked 'B'. Bethwyn saw the judgment attached to the statutory demand and picked up that it was against Leeds Street and not Trewern Bare, which made her look into the matter further and discover what had happened in that Leeds Street Pty Ltd had not been represented in the proceedings. 11. Since becoming aware of the default judgment against Leeds Street Pty Ltd, I have instructed S+P Walters Solicitors to apply to have the default judgment set aside and represent the interests of Leeds Street Pty Ltd in respect of the cross‑claim by BBPS. My solicitors have engaged counsel."
4. Subsequently, the conduct of the applicant's case has been taken over by Messrs Moray & Agnew acting on instructions from an insurer.
5. Essentially, Mr Trewern was saying that he had not read any of the correspondence sent to Leeds Street Pty Ltd of which he was a director, even correspondence that had been sent to its registered office and sent by his accountant to him, because of representations made to him by Ms Vaubell, a principal of the respondent. The only thing that made him aware of what had gone on was the service of a creditor's statutory demand for payment of a debt.
6. I have no jurisdiction in matters of bankruptcy or insolvency, but as I understand it, a creditor's statutory demand for payment of a debt can amount to the equivalent of a bankruptcy notice if served upon a corporation. That is what appears to have triggered the realisation by Mr Trewern that there had been a judgment entered against Leeds Street Pty Ltd that remained outstanding as at May 2023.
7. The applicant also relies upon an affidavit of Jacqueline Cozic of Lennox Heads affirmed on 5 July 2023. Ms Cozic was the executive assistant to Mr Trewern between 24 May 2022 and six months before being cross‑examined on 29 February 2024. Her affidavit contains this matter: "2. On or about 15 June 2022 I received an email from David's accountants in Melbourne introducing themselves, and advising that they had a 'huge' amount of paperwork received on David's behalf (in relation to these proceedings) and asking for our postal address. 3. In about late June, early July 2022, we received a bundle of documents from David's accountant regarding these proceedings. When we received the documents, David told me the person, Mr Fisher, who injured himself falling down some stairs on a property at 4 Bay Lane, Byron Bay which is owned by David's superannuation fund, David advised me to the effect, 'Call Kath Vaubell at Byron Bay Property Sales and ask her what you need to do.' 4. Shortly after this, I contacted Ms Vaubell by telephone and told her about the documents we had received. Ms Vaubell advised me of the situation and my understanding of her advice was to the following effect: 'Further, the insurance companies are fighting it out, it is all being handled by them. There's nothing for you to do.'"
8. The following paragraph of the affidavit of Ms Cozic is this: "On about 22 August 2022, we received a copy of a Notice of Orders dated [sic] from our accountants, PKF. I sent these in a 'high importance' email to Kat Vaubell that day, a copy of which is marked 'A'. Kath did not respond by email, however, she mostly communicates with us by way of telephone calls."
9. Annexure A is an email from Ms Cozic to Ms Vaubell sent on Friday 19 August 2022 at 11.04am. The subject is "Fwd: Notice of Order - Leeds Street Pty Ltd - Urgent attention." After a polite greeting, the substance of the email is this: "Can I just confirm that you are looking after all of this? I don't know about it unfortunately and David is now away. Thanks!"
10. On 27 July 2022 the Court sent to Leeds Street Pty Ltd at its registered address a notice of orders made. The substance of the notice is this: "On 19 July 2022 the following orders...were made: Judgment: Leeds Street Pty Ltd, second cross‑defendant, is liable to Byron Bay Property Sales Pty Ltd, first cross‑claimant, for damages and costs. Damages to be assessed. This matter is listed for assessment hearing on 22 August 2022 at 10am before the District Court-Civil at Lismore. Estimated duration: 30 minutes. Notice of motion filed 18 July 2022 granted 19.7.2022."
11. The last notation clearly refers to the date of the application for default judgment which was granted by the Registrar on 19 July 2022.
12. On 5 August 2022 at 11:32:27 Ms Siobhan de Jong at PKF, the applicant's registered office, sent an email to Mr Trewern. The subject of the email is in bold and is this: "Notice of Orders - Leeds Street Pty Ltd - Urgent Attention."
13. The sender of the email sent a copy of it to Ms Cozic. After greeting Mr Trewern with the words, "Good morning, David," the following is stated: "For your urgent attention, please find attached a notice of orders received on behalf of Leeds Street Pty Ltd."
14. Mr Trewern did not refer to that email in his affidavit and that was the email that was received by Ms Cozic on 5 August 2022 which she states in paragraph 5 of her affidavit she received "on or about 22 August 2022". What happened is that on 19 August 2022, a fortnight after it was sent to Ms Cozic by PKF, Ms Cozic sent it to Ms Vaubell and asked her if she could confirm that Ms Vaubell was looking after that and that she did not know anything about it and that David was "now away", meaning that Mr Trewern was probably overseas.
15. Despite the fact that the matter was marked "Urgent Attention", it was not read by Ms Cozic, and because she did not read it, she could not know that default judgment had been entered against Leeds Street, and she was sending it to Ms Vaubell a fortnight after she received it, albeit it was marked "Urgent Attention".
16. Ms Vaubell said in her evidence that she did not recall receiving the email of 19 August 2022, that it must have escaped her attention. Ms Cozic confirmed in her evidence that she did nothing to follow up her email of 19 August 2022 to Ms Vaubell by either email or telephone call. This is not good practice, indeed it is far from good practice, in fact one could almost describe it as negligent. Ms Cozic's affidavit continues in this fashion: "I subsequently received other documents from David's accountants [PKF] in relation to the proceedings in November and December 2022. I just filed them away thinking there was nothing for us to do and that the insurance companies were handling everything. I was under the impression that proceedings were in the final stages of the insurance companies settling the matter. I did not know the difference between Trewern Bare Pty Ltd and Leeds Street Pty Ltd in the matter."
17. According to Ms Cozic, it was Mrs Bethwyn Trewern who "picked up" in May 2023 that there was a judgment against Leeds Street Pty Ltd which was being pursued by the respondent for payment.
18. The system that appears to have been in place was that emails relating to the applicant were placed in an electronic folder. I do not know whether they went automatically into the electronic folder or whether they were placed there by someone, presumably Ms Cozic. The evidence tends to point to the emails being placed there by Ms Cozic.
19. As I pointed out, a relevant email was the email which enclosed the notice of orders made by this Court, the notice being dated 27 July 2022, pointing out the entry of the default judgment on 19 July 2022, which was sent to the applicant by PKF, the accountants in Melbourne, whose address was the registered office of the applicant. That was sent on 5 August 2022, however, it was only dealt with by Ms Cozic on 19 August 2022. She did not open the email to read the notice of orders that was marked for her urgent attention, but she merely forwarded it on to Ms Vaubell on 19 August 2022, but then did not follow up Ms Vaubell whom she had asked the question "Can I just confirm that you're looking after all of this?"
20. This system of dealing with matters that the accountants deem to be urgent was completely unsatisfactory. Furthermore, it was clear that Mr Trewern did not annexe to his affidavit any of the correspondence concerning the applicant that was contained in the folder of emails sent to him concerning the applicant company.
21. One will recall what Mr Trewern said on 22 May 2023. He first became aware that the respondent had obtained default judgment against Leeds Street Pty Ltd in the sum of $135,246.34 "on or about 16 November 2022". In fact, the applicant had been advised of the entry of the default judgment on 27 July 2022 when the Court sent the notice to that effect to the applicant's registered office in Melbourne. What I just quoted from Mr Trewern was in paragraph 9 of his affidavit of 7 June 2023, which is Exhibit A-A.
22. In the following paragraph, Mr Trewern said this: "By letter dated 23 May 2023, BBPS served a creditor's statutory demand for payment of debt attaching the default judgment, a copy which is annexed and marked 'B'. Bethwyn saw the judgment attached to the statutory demand and picked up that it was against Leeds Street and not Trewern Bare, which made her look into the matter further and discovered what had happened in that Leeds Street Pty Ltd had not been represented in the proceedings."
23. It appears to me that there is a slight discrepancy between the date in paragraph 9 and the date in paragraph 10, and it is likely that Mr Trewern only became aware of what his wife discovered on 23 May 2023, when he may have been overseas, and the date that he learned of it, when he was in somewhere such as Europe or the United States of America, and hence his day of discovery was a day before the date when his wife actually made discovery.
24. It must be borne in mind that Ms Bethwyn Trewern was, like her husband, a director of and a shareholder in the applicant company. How she became aware of mail sent to the applicant when her husband was not aware of mail being sent to the applicant has not been satisfactorily explained. For example, in Ms Vaubell's affidavit, which is Exhibit 1-1, Ms Vaubell said in [60] this: "On 22 May 2023, Bethwyn Trewern, Mr Trewern's wife, telephoned me and we had a conversation to the following effect: Bethwyn: I received the statutory demand in the mail. Me: I mentioned this back in December to David that our insurer was pursuing further. Who did the notices get delivered to and why did your lawyer or insurer not advise you? Bethwyn: I'm not sure as David was away. Me: I will contact your insurance broker."
25. In the following paragraph of the affidavit, Ms Vaubell attests to phoning the insurance broker, Mr Glover, and telling him that the Trewerns had received the creditor's statutory demand. That was, according to Ms Vaubell's affidavit, also news to Mr Glover.
26. The following paragraph [62] of Ms Vaubell's affidavit is this: "Later that same afternoon, Mr Trewern telephoned me from overseas and we had a conversation in words to the following effect: Mr Trewern: You've blind-sided me. You told me not to do anything about the notices so I thought you would action it for me. Me: David, I haven't blind-sided you. I never said to do nothing. I don't even know what notices you're talking about. I spoke to you back in December and I haven't seen or heard anything since, so I don't know how I can action something if I'm not across it. David, these actions are not from BBPS, and the money doesn't get paid to BBPS. This is our insurer pursuing the matter further. Why didn't you get advised of the notices from your lawyer or insurer?"
27. If Mrs Trewern could read the creditor's statutory demand and the annexures thereto, which included the judgment entered by Priestley SC DCJ, then I find it difficult to understand how either Mr Trewern or his administrative assistant, Ms Cozic, could not do the same. What prompted Mrs Trewern to read those documents on or about 22 May 2023 has not been adequately explained. No affidavit has been filed from Mrs Trewern, nor was any attempt made to call her to give evidence. As a director of the applicant, she would obviously be a material witness.
28. The evidence of Mr Trewern on the issue of the system in place for dealing with email correspondence and actual correspondence is completely unsatisfactory. It is clear that the solicitors acting for the respondent, Messrs Colin Biggers & Paisley, kept Ms Vaubell apprised of all that was happening in the proceedings once the respondent had been joined to them and was very properly seeking instructions. It is well-established that, although an insurer may appoint a solicitor to act for an insured company who is being sued for a liability for which the insurer had given cover to the insured, the solicitor acts primarily for the insured.
29. In Brown v Guardian Royal Exchange Assurance PLC [1994] 2 Lloyds Rep 325, Neill LJ at page 330, said this: "The policy and the instructions given to [Messrs Reynolds Porter Chamberlain (RPC), a firm of solicitors] established a tripartite arrangement on the following lines: (1) RPC became Mr Brown's solicitors for the purpose of defending the claim. As far as the outside world was concerned, the relationship was the usual one between a solicitor and his client and their communications were protected by legal professional privilege. (2) At some time a separate relationship of solicitor and client came into existence between RPC and the insurers. The insurers became liable to pay RPC's fees and in return RPC became liable to report the insurers about the progress of the case. (3) By accepting the benefit of legal representation made available in accordance with the terms of the policy, Mr Brown waived his rights quoad the insurers to claim legal professional privilege in relation to communications about the claim between himself and RPC during the period that representation under the policy continued."
30. Whilst Colin Biggers & Paisley were appointed by the insurer of the respondent, they still kept the respondent advised of the proceedings and sought formal instructions from the respondent.

The Respondent's Evidence

1. In her affidavit, Ms Vaubell attested to first becoming aware that Mr Fisher, the plaintiff, had commenced proceedings against TB on 8 May 2020 when she received an email from Justin McCartney at PKF Melbourne which enclosed letters from the solicitors acting for the plaintiff addressed to TB at the offices of the accountant in Melbourne enclosing the statement of claim and similar correspondence. Ms Vaubell's affidavit continues thus: "23. Mr McCartney's email stated that: (a) He had spoken to Mr Trewern and he was unaware of the accident; and (b) The matter should be brought to the insurer broker [sic] as a matter of urgency. A copy of the email (and attachments) is annexed hereto and marked 'I'. 24. Upon receipt of Mr McCartney's email, I: (a) Immediately telephoned Mr Glover to inform him of the proceedings against [TB] and forwarded him a copy of Mr McCartney's email; and (b) Emailed Mr McCartney back the same day to confirm that I had actioned his request and to confirm that we did not recall having any details on Mr Fisher's incident either. A copy of my email is annexed hereto and marked 'J'. At the time of sending this email I overlooked the fact that BBPS had previously sent Mr Trewern a copy of the letter of Slater and Gordon on behalf of Mr Fisher dated 18 December 2018."
2. The affidavit continues to outline what assistance Ms Vaubell gave to TB and Mr Trewern and Mr McCartney in assisting them to defend the proceedings commenced by the plaintiff. The affidavit goes on to say this: "29. In or around December 2020, I became aware that [TB] intended to issue a cross‑claim against BBPS in the proceedings. This was in the context of a conversation with Mr Trewern in which he said words to the effect that, 'My insurer is going to be pursuing you. I don't want them to, but there is nothing I can do about it'. 30. On 3 March 2021, BPPS (as said) was served with a cross‑claim by Clyde & Co on behalf of [TB] in the proceedings (first cross‑claim). 31. On 21 April 2021, I referred the first cross-claim to BBPS's insurer who subsequently arranged for Colin Biggers & Paisley (CBP) to be appointed to act on behalf of BPPS. 32. On 28 April 2021 I provided CBP with instructions to file a defence to the first cross‑claim on behalf of BBPS as I thought I was required to do under BBPS's policy. 33. I was subsequently informed by CBP that Mr Fisher had joined BBPS in the proceedings directly as a defendant by way of an amended statement of claim filed on 4 March 2022 (ASOC). 35. On 1 April 2022, I provided CBP with instructions to file the defence to the ASOC on behalf of BPPS as I felt I was required to do under BBPS's policy. 36. On 7 June 2022, CBP recommended that BBPS file a cross‑claim against [TB], All Jobs Local and Leeds Street. In doing so, CBP informed me that they were seeking to enforce the contractual indemnity under the Agreement in BBPS's favour against Leeds Street as the contracting party. 37. On 9 June 2022, I provided CBP with instructions to file the cross‑claim against Trewern, All Jobs Local and Leeds Street on behalf of BBPS (second cross‑claim) as I felt I was required to do under BBPS's policy. 38. I did not have any discussions with Mr Trewern regarding the second cross‑claim."
3. In cross‑examination, Ms Vaubell made it clear that the last paragraph which I quoted was in reference to the time when she gave those instructions to Colin Biggers & Paisley rather than at any time subsequently. Ms Vaubell's affidavit goes on to tell me that Colin Biggers & Paisley informed her that the proceedings were scheduled for mediation on 19 July 2022, that on 14 July 2022 Colin Biggers & Paisley provided to her their recommendations for the mediation, including in relation to settlement, and that she provided to Colin Biggers & Paisley on 14 July 2022 instructions to proceed as they had recommended.
4. The affidavit then continues with this material: "42. On 18 July 2022, CBP informed me that: (a) In the course of writing to Leeds Street to assert the contractual indemnity under the Agreement, they became aware that Leeds Street was not legally represented; (b) It was open to BBPS to apply for default judgment against Leeds Street given no appearance or defence to the second cross‑claim had been filed; and (c) BBPS could still proceed to the mediation and attempt to settle the matter, then we would write to Leeds Street and seek to enforce any default judgment entered. 43. On 18 July 2022, I provided CBP with instructions to proceed as they had recommended. 44. I did not have any discussions with Mr Trewern or Jacqueline Cozic, Mr Trewern's assistant, regarding the application for default judgment against Leeds Street."
5. Again, the affidavit goes on to tell me of Colin Biggers & Paisley keeping Ms Vaubell informed about the settlement of the plaintiff's claim and of the obtaining of default judgment against the applicant on 16 August 2022. It is clear that Colin Biggers & Paisley kept Ms Vaubell, a principal of the respondent, up to date with developments in the proceedings. It appears to me to be highly unlikely that from the time that she was aware that she had instructed Colin Biggers & Paisley to obtain a default judgment against the applicant, that she would have told either Mr Trewern or Ms Cozic, or indeed anybody, that the fight was merely between "insurers" and that there was nothing that Mr Trewern or Ms Cozic or the applicant ought to do in connection with the proceedings.
6. In another section of her affidavit, Ms Vaubell said this: "54. On 18 November 2022 and 19 December 2022, CBP recommended that BBPS enforce the default judgment against Leeds Street by way of a statutory demand. 55. In early December 2022, I recall speaking with Mr Trewern about something to do with the Premises and the subject of the proceedings came up in conversation again. We exchanged words to the following effect: Me: It appears that our insurers are pursuing you further. I'm not sure what this will entail. I've advised our insurers that our office did not want to pursue this, however, we have no choice. In that conversation I did not advise Mr Trewern that he 'should do nothing'. Mr Trewern and I discussed that the matter had been going on for so many years and it seemed to be going around in circles with each party's insurer basically suing each other. 57. I decided to seek some independent legal advice concerning CBP's recommendation to issue a statutory demand against Leeds Street. 58. Following receipt of that advice, I instructed my solicitor to inform CBP to proceed as recommended as I understood this to be BPPS's obligation under its policy (and believe my solicitor did so on 24 March 2023)."
7. It was only after those instructions from Ms Vaubell were given to Colin Biggers & Paisley through her personal solicitor that Colin Biggers & Paisley served the statutory demand on Leeds Street, on the applicant on behalf of the respondent. It is clear that the solicitors acting for the respondent kept Ms Vaubell, a principal of the respondent, fully advised as to what they recommended be done and sought her formal instructions, which were given. Clearly, Clyde & Co were acting for TB but what interaction Clyde & Co had with Mr Trewern is completely unexplained and the applicant has adduced not a scintilla of evidence from anybody at Clyde & Co as to what advice they gave to Mr Trewern who was a director and shareholder of both TB and the applicant. I draw an adverse inference against the applicant for its failure to adduce any evidence from Clyde & Co as to what advice was given to Mr and Mrs Trewern by that firm of solicitors concerning their conduct of the proceedings on behalf of TB.

Applicable Law

1. I turn now to consider the applicable law on this application. Mr Le Plastrier, who appeared for the respondent, drew my attention to Jones v Riley [2022] NSWDC 323, a decision of Abadee DCJ. Commencing at [50] his Honour said this: "50 Fundamentally, the question is whether it is in the interests of justice to allow the party seeking to set aside a default judgment to be permitted to defend the proceedings on the merits: Dai v Zhu [2013] NSWCA 412 at [83]; J & M McNamee Holdings Pty Ltd v Mungerie Vale Pty Ltd [2019] NSWCA 283 at [49]. 51 That said, conventionally understood, applications under r 36.16 of the Uniform Civil Procedure Rules 2005 (NSW) invite consideration of three principal considerations: (a) whether the applicant has an arguable defence (which is bona fide asserted and gives rise to a triable issue); (b) whether an applicant has provided an adequate explanation for failing to file a defence; (c) the length of delay; and (d) whether the respondent would be prejudiced if the default judgment was set aside."
2. The footnote supporting the initial statement in [51] refers to the decisions of Adams v Kennick Trading (International) Ltd (1986) 4 NSWLR 503 and to J & M McNamee Holdings Pty Ltd v Mungerie Vale Pty Ltd trading as Greenwood Group Realtors [2019] NSWCA 283. In Adams v Kennick Trading Hope JA said this at 506: "Courts with jurisdiction to hear and determine proceedings for the recovery of debts generally have rules providing for default judgments, and for the setting aside of default judgments in appropriate circumstances. The latter task is almost always discretionary. Sometimes the rules specify grounds each of which must be made out to obtain the relief. In other cases all of the circumstances of the case have to be regarded and the discretion exercised in the light of a conclusion reached upon all of them. Thus the Common Law Procedure Act 1899, s 25, made provisions for the obtaining of a judgment by default and s 25(3) provided: '(3) Provided that the Court or a Judge may either before or after the final judgment let in the defendant to defend, upon an application supported by satisfactory affidavits accounting for the non‑appearance and disclosing a defence upon the merits.' In a case to which such provision as this applied, failure to establish either ground would deny relief to the defaulting judgment debtor: Cuttle v Brandt (1947) 64 WN (NSW) 96. However the same decision is also authority for the proposition that where the Court has a general discretion not requiring the establishment of each of the specified grounds, the failure to establish one such ground is a matter to be taken into account with all the other circumstances, but the decision has to be reached upon the whole of the relevant material. In the present case the claimant's application was made under the District Court Rules, pt 13, r 1(2), which provides: '(2) A default judgment under this rule may, on sufficient cause being shown, be set aside, on terms, by order of the Court.' A Court exercising jurisdiction under this subrule has to look at the whole of the relevant circumstances and decide whether or not sufficient cause has been shown. The existence of bona fide ground of defence and an adequate explanation for the failure to defend any delay are the most relevant matters to consider, but there may be other matters: see, for example, Reinehr Industrial Lease and Finance Pty Ltd v Jordan (Court of Appeal, 4 June 1964, unreported) noted Ritchie's Supreme Court Procedure (NSW) practice decisions 8505. A refusal of relief to an applicant is not automatically justified because he has failed to establish one relevant matter, such as an adequate explanation for the failure to defend or for the delay; such a failure must be considered in the light of all the circumstances. The absence of any adequate explanation particularly if it is coupled with prejudice, may justify the denial of relief, but only when considered with all the other relevant circumstances in the case, bearing in mind what Lord Wright said in Evans v Bartlam [1937] AC 473 at 489: '…if merits are shown the Court will not prima facie desire to let a judgment pass on which there has been no proper adjudication.'"
3. Hope JA went on to refer to the decision of Simpson v Alexander (1926) 26 SR (NSW) 296 at 301, and quoted from the judgment of the first Street CJ. In J & M McNamee Holdings Pty Ltd v Mungerie Vale Pty Ltd, Gleeson JA with whom Brereton JA and Simpson AJA said this: "Principles - setting aside a default judgment [48] It is well established that the considerations relevant to an application to set aside a default judgment include whether the applicant has a bona fide ground of defence, an adequate explanation for the failure to defend and the length of any delay: Adams v Kennick Trading (Int) Ltd (1986) 4 NSWLR 503 at 506 (Hope JA; Glass JA agreeing). Whether the plaintiff will be prejudiced if the default judgment were set aside is also relevant. [49] Fundamentally, the question is whether it is in the interests of justice to allow the party seeking to set aside a default judgment to be permitted to defend the proceedings on the merits: Dai v Zhu [2013] NSWCA 412 at [83] (Sackville AJA; Barrett and Leeming JJA agreeing), citing, with approval, the remarks in Reinher Industrial Lease & Finance Pty Ltd v Jordan (Court of Appeal (NSW), 4 June 1974, unrep). [50] Two further matters referred to by Sackville AJA in Dai v Zhu should be mentioned. One is the observation by his Honour at [89] that the rationale for the requirement that the applicant for relief demonstrate a bona fide ground of defence is that, "In the exercise of its 'unfettered, though judicial, discretion' the Court will consider … (a) whether any useful purpose would be served by setting aside the default judgment, and (b) how it came about that the applicant found himself bound by a judgment regularly obtained". [51] The other matter, which is related to this, is his Honour's observation at [92] that, "In determining whether the defendant has a bona fide defence on the merits, the Court does not embark on a hearing of the full merits of the case … [A]ll that is necessary is for the defendant to show that the defence is asserted bona fide and that there is an arguable or triable issue. His Honour continued at [92]: The nature of the evidence required in a particular case may depend on the circumstances, including the cogency of the defendant's explanation for the delay or failure to comply with orders of the Court. [52] It is also to be accepted that the application of these principles must now be subject to the provisions of the Civil Procedure Act 2005 (NSW). In Dai v Zhu , Sackville AJA gave as an example at [93], that there may be circumstances where it would be contrary to "the just determination of the proceedings", referring to s 57(1)(a) of the Civil Procedure Act 2005 (NSW), to require a defendant to adduce affidavit evidence demonstrating a bona fide defence and in such cases the Court would be unlikely to reject the defendant's application to set aside a default judgment solely on the ground that no such affidavit had been filed whilst emphasising each case must of course depend on its own facts."

Defence on the Merits

1. The first consideration is what is the defence on the merits being proposed by the applicant. If the relief claimed be granted, the defendant seeks to rely on a defence to the second cross‑claim which is annexed to the affidavit of Mr Trewern which is Exhibit A-A and is Annexure D to that affidavit. The second plea in this proposed defence admits that the applicant was the "registered owner of the premises", but that is erroneous and untrue as Mr Simpson who appeared for the applicant frankly admitted. This proposed defence was drawn by a solicitor with SP Walters of Lismore rather than Messrs Moray & Agnew who now act for the applicant.
2. The relevant defence is contained in plea numbered 9 in this proposed defence which is this: "9. In relation to paragraph 18 of the SCC, the second cross-defendant denies that it is liable to indemnify the cross-claimant as alleged (or at all) because: a. Section 55 of the Property and Stock Agents Act 2002 (NSW) prevents a claim for a sum or reimbursement for expenses or charges of the kind alleged by the cross-claimant here otherwise than under an agency agreement that complies with the applicable requirements of the regulations and the alleged agreement failed to comply with those requirements. Particulars In breach of the requirements of Schedule 7 to the Property, Stock and Business Agents Regulation 2014 (NSW) the alleged agreement failed: i. To specify the address of the person on behalf of whom the agent is acting; and ii. To include a term that complied with clause 8(1) of Schedule 7 in relation to the claim for a sum or reimbursement for expenses or charges of the kind alleged by the cross-claimant here. b. Further or alternatively, even if the alleged indemnity is otherwise enforceable (which is denied), it does not extend to the expenses and charges claimed by the cross-claimant because: i. They were not incurred by it in the course of or arising from the exercise or performance of any authorities or duties under the alleged agreement (no relevant authority or duty of the cross-claimant having been alleged in the SCC); ii. Further or alternatively, any relevant authorities or duties being exercise[d] or performed by the cross-claimant were authorities from or duties to the first cross-defendant (the registered owner of the premises) and not the second cross-defendant; iii. Further or alternatively, the expenses and changes claimed by the cross-claimant arose from a failure or omission by the cross-claimant to exercise or perform its authorities and duties under the alleged agreement and not from their exercise or performance."
3. This of course requires me to consider whether this is an arguable defence.
4. I turn then to the agreement which was said on its first page to commence on 1 September 2016 and is dated on 1 September 2016 by both a signature on behalf of the principals and a signature of the agent and is dated 1 September 2016, but on the final page of the document which appears on page 84 of the court book bears date 5 September 2016. Nothing turns on that.
5. The first part of the document contains a number of boxes. The first box is A and grants agency rights to the respondent over the property known as 4 Bay Lane, Byron Bay. I have already commented on the name of the principal inserted in the agreement. Nothing again turns on that at the current time.
6. Box B is headed, "Authority\duties of licensee." It provides this: "Principal authorises the Licensee, on behalf of the principal, from time to time to carry out the duties as set out in clause 4.1 of part 2 of this Agreement for each tenancy to: Obtain references Yes Select tenants No Submit tenants to the principal Yes Sign a lease on behalf of the principal except any lease to be registered at the Land and Property Management Authority No Seek principal's instructions concerning any re-lettings Yes Other: as per lessor's instructions, on the right-hand side Yes" [The words 'as per lessor's instructions' have been typed into the document and do not appear to be part of the original printing of the document.]
7. Box C refers to the licensee's remuneration which I need not quote. Box D is headed, "Expenses and charges" and gives a cross‑reference to clause 2.3 of part 2 of the agreement which is essentially the principal terms and conditions of the agreement.
8. Under the heading to box D is this matter (which I have laid out in table form for ease of interpretation): Advertising per leasing - at cost but not exceeding. To be agreed. Office expenses [clause 1.2] as incurred but not exceeding: To be agreed. Other. As per lessor instructions government and other imposts [clause 1.1] as charged.

1. Other boxes on page 3 of the document are headed "Other Services" with a cross-reference to clause 3.1, "Advertising and Promotion", with a cross-reference to clause 3.2, "Inspections" with a cross-reference to clause 3.3. Box H has a heading "Limit on Cost of Repairs/Maintenance" with a cross-reference to clause 4.1(g) and typed in is the matter "$500".
2. The next box relates to terms and conditions of tenancy. Relevant clauses have been marked "TBA", that is, "to be agreed". The next box concerns the principal's outgoings but it has not been completed at all. The next box refers to remittances but it has not been completed at all, nor has the final box, "Disclosure of Rebates, Discounts and Commissions". All that has been filled in is in respect of the "Source of the rebate", "Nil," and the "Estimated amount of rebates, discounts or commissions" is "Nil".
3. Clause 2 of part 2 of the agreement is headed "Licensee's Remuneration, Expenses and Charges". Clause 2.3 is this: "Expenses and Charges and Other Services - The licensee is entitled to reimbursement for the expenses and charges and fees on other services as set out in items D and E of the particulars as and when they are incurred by the licensee. Such services and amounts cannot be varied except with the agreement in writing of the principal."
4. Clause 4 of part 2 is headed "Authority of Licensee to Manage". It is this: "4.1 Subject to the limitations contained in this agreement the Principal authorises the Licensee, on behalf of the Principal, from time to time to duties as set out below: (a) Undertake the initial and other inspections of the property (b) Furnish tax invoices, as required, in respect of money payable under the lease (c) Pay disbursements, expenses incurred in connection with the Licensee's management of the Property as set out in Item D and for the accounts for amounts owing as set out in Item [?]. (d) Receive, claim and disburse bond, security deposit or bank guarantee as required under the Lease (e) Monitor rent reviews provided in the Lease and the rent review on renewal of the Lease (f) Collect the rent and all other money (I,e, outgoings and the like) (g) Effect repairs to and maintain the property by engaging tradespersons to do so but limited to the expenditure as set out in Item H without obtaining the Principal's consent. (h) Serve notices for breaches of the Lease including termination of the lease and furnish the Principal with all notices served (i) Undertake the necessary steps to obtain vacant possession and recover any money owing to the Principal in relation to the tenancy of the Property (j) Complete and maintain an inventory of fixtures, fittings and chattels to be included with the Property (k) Communicate with the Principal's solicitor/conveyancer concerning any lease and take all steps necessary to have the tenant enter into and sign the Lease as directed by the Principal 4.2 Unless the Principal otherwise agrees or directs the matters stated in Item I of the Particulars are to apply to each letting of the Premises. 4.3 The Principal, without limited the operation of this Agreement, approves for use under this Agreement the forms of leases (completed to accord with this Agreement and otherwise completed as the Licensee considers appropriate) produces from time to time by industry bodies. 4.4 The powers and authorities of the Licensee under this Agreement may be exercised through the employees and agents of the Licensee. 4.5 The agent is authorised to utilise the services of another licensed agent to perform the duties and services as set out in this agreement, but only one licensees remuneration (Part 1 Item C and Part 2 Clause 2) applies."
5. I must draw attention to clause 4.1(g), which authorises the respondent to effect repairs and maintain the property by engaging tradespersons to do so but limited to the expenditure as set out in item H without obtaining the principal's consent. Item H, of course, is the limitation of $500. In other words, according to clause 4.1(g), the respondent was entitled to engage tradespersons to incur a cost of no more than $500 but, if beyond that, the applicant's consent would have to be obtained.
6. Clause 8 of part 2 of the agreement is headed "Indemnity". The relevant clause is this: "The Principal will keep the Licensee indemnified against all actions, claims and demands brought against, and all costs, losses and liabilities incurred by the Licensee in the course of or arising from the exercise or performance of the Licensee's authorities or duties under this agreement."
7. The meaning of the words "in the course of or arising from" are well known. The words "in the course of" denote a temporal connection between the performance of the term and the activities of the principal and the performance of the duties of the licensee (respondent), and the words "arising from" denote a causal connection between the activities of the licensee (respondent) and the work done by it under the agreement.
8. The indemnity is twofold. The first indemnity is against "all actions, claims and demands brought against the licensee," although those two words do not appear in the document. The next word is the conjunction "and" and then are the words "all costs, losses and liabilities incurred by the licensee". As has been submitted on behalf of the respondent, there are two different indemnities contained in the clause. The first ablative phrase is "against all actions, claims and demands brought against [the licensee]" is apt to indemnify the licensee against claims made against it by a third party or, as Mr Le Plastrier expressed it, "the passive liability of the licensee".
9. The second ablative phrase is "[against] all costs, losses and liabilities incurred by the licensee," which is an indemnity against costs incurred by the licensee itself, losses incurred by the licensee itself and liabilities incurred by the licensee, for example, a liability which could arise in the same way as a cost, that is, a charge for doing something that it did in the performance of its duties. As Mr Le Plastrier described it, it was an indemnity against the activities of the licensee itself, which led to the liability to pay costs or to reimburse for losses or other liabilities.
10. It is common in English not to repeat a preposition after a conjunction has been used. For example, one can refer to Jack and Jill's car. That means a car belonging to both Jack and Jill. One could describe it equally as "the car of Jack and Jill" but that, in itself, means the car of Jack and of Jill. Idiomatically in English we do not repeat the preposition before the second half of a pairing such as Jack and Jill and, here, in this indemnity clause, the word "against" has not been repeated in front of the second ablative phrase. I accept entirely the submission of Mr Le Plastrier as to how this indemnity clause is to be construed, although I have used different terminology than Mr Le Plastrier did.
11. The applicant submits that the indemnity clause does not apply to the current claim and relies upon Libra Collaroy Pty Ltd v Bhide [2017] NSWCA 196. I must point out that the facts of that case are completely different to the facts of the current case. I take this statement of the relevant facts from the headnote of the case in Caselaw: "Libra Collaroy Pty Limited trading as Elders Real Estate (Elders), appealed from a decision of the District Court in which his Honour Judge Curtis found Elders was liable for damage suffered by four people (plaintiffs) who were injured in the collapse of a balcony on the evening of 15 June 2012 at a residential property in Collaroy (property). The balcony collapsed, in short, due to weathered deterioration of the structural beams and metal fixings. Elders managed the property pursuant to a Management Agreement executed on 14 June 2005 with its owners, the first and second respondents, Mr and Mrs Bhide. At the time of the balcony's collapse, the third respondent, Ms Joanne Gillies, was the tenant. The four plaintiffs were Ms Gillies' daughter, Sanchia Gillies, and her three friends. The Bhides bought the property in 1999. It was a two-storey residence, constructed in 1995, with a timber balcony on the north side of the upper level (balcony). The balcony was constructed with untreated Oregon timber which, due to its lack of durability, is unsuited for weather-exposed structural members and is highly prone to rot. On 9 November 2005, the Bhides entered into a tenancy agreement to lease the house to Ms Gillies and her husband, Mr Gillies. When the lease was renewed on 10 December 2010, Ms Gillies became the sole lessee. In the years following the purchase of the property, a number of issues arose concerning the state of repair of the walking surface of the balcony and, too, concerning the structural adequacy of the balcony. Early in the piece with the Bhides' approval, Elders arranged for it to be braced to minimise sideways movement. Thereafter, periodically Elders obtained quotes for repairs to the balcony which they provided to the Bhides. In 2001, a quote noted "top edges of Oregon supporting beams are rotting out"; in 2004, another quote advised that "repairing the joists [as opposed to replacing the deck was] a temporary measure"; in 2007, another quote recorded that the "supporting timbers [could]…fail over time." In 2010, Mr Gillies and Ms Gillies communicated to Elders their concerns about the structural adequacy of the major supporting cross beam holding the upper deck contending it had substantial wood rot which was not easily noticed and required inspection. In February 2012, Ms Gillies complained in an email to Elders both about the deterioration in the walking surface of the deck and, too, that the "[metal bracing] underneath [the deck] is also precarious and the deck is not fully supported." Elders arranged for a carpenter to inspect the deck with a view to the walking surface being replaced. The carpenter did not have the expertise, and was not retained, to advise on the structural adequacy of the balcony. By the time of the balcony's collapse, the carpenter had provided two quotes to Elders, one to repair the walking surface of the deck, the other to construct a pergola over it to prevent it from getting wet. The quotes were forwarded to the Bhides on the morning the balcony collapsed. Each plaintiff commenced proceedings against Elders and the Bhides seeking damages for personal injury (plaintiffs' proceedings). Ms Gillies also brought proceedings against Elders and the Bhides claiming to have suffered psychiatric injury as a consequence of seeing her daughter injured at the accident scene (Ms Gillies' proceedings). A number of cross-claims were filed as between Elders, the Bhides, Mr Windred (a carpenter who did some maintenance work on the deck of the balcony in 2008) and Ms Gillies (only in the plaintiffs' proceedings). The details of these cross-claims are set out below. As the primary judge's finding in Mr Windred's favour is not challenged, it is not necessary to set out the details of any cross-claims against him. In Ms Gillies' proceedings, there were two cross-claims. First, the Bhides cross-claimed against Elders seeking, relevantly, indemnity by reason of Elders' failure to use reasonable care and skill in managing the property and for its breach of the Management Agreement including for breach of an implied term to use reasonable care and skill in performing the work for which it provided. They also sought contribution pursuant to s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) (1946 Act) in respect of any liability to Ms Gillies. Secondly, Elders brought a cross-claim seeking indemnity from the Bhides pursuant to an indemnity provision in the Management Agreement and also contribution from them as joint tortfeasors pursuant to s 5 of the 1946 Act. In the plaintiffs' proceedings, there were two relevant cross-claims. First, the Bhides filed a cross-claim seeking contribution from Elders and Ms Gillies pursuant to s 5 of the 1946 Act. Secondly, Elders brought a cross-claim seeking contribution from the Bhides and Ms Gillies as joint tortfeasors pursuant to, inter alia, s 5 of the 1946 Act. In defence to the Bhides' cross-claims, Elders pleaded that, to the extent the Bhides suffered any loss or damage in the manner particularised in their cross-claim, and if that loss or damage was due to Elders' negligence, any damages to which they might be entitled should be reduced by reason of their contributory negligence. All the proceedings were dealt with as one for directions and hearing purposes. The question of liability was determined separately in advance of damages issues. The primary judge found that, by reason of the Management Agreement, Elders had accepted the delegation and authority to arrange repairs and maintenance in accordance with the Bhides' obligations to repair the property and, accordingly, owed to the plaintiffs a duty to exercise reasonable care in maintaining the premises. His Honour held that in the light of the balcony's maintenance history, and pursuant to the express terms of the Management Agreement, Elders was liable in negligence to each of the plaintiffs and Ms Gillies. His Honour also held that the collapse of the balcony resulted from breach of the contractual duty to exercise reasonable skill and care Elders owed to the Bhides pursuant to the Management Agreement."
12. The relevant parts of the management agreement in that case are set out in [25] in the judgment of McColl JA. That paragraph is this: "25. The Management Agreement relevantly provided: "1. The Principal, who warrants that they have authority to enter into this Agreement hereby appoints and authorises the Agent and the Agent's employees from time to time exclusively to let and manage the premises in accordance with this Agreement. 4. The agent shall be entitled to the following fees: … (c) for the provision of all ongoing usual property management services in respect of the premises: (i) a management fee of 4.4% (incl GST) of all monies collected on behalf of the landlord; and … 12. The Agent is authorised to arrange and pay for repairs and maintenance to be done in accordance with the Principal's obligations or as otherwise instructed provided that any expenditure in excess of $ for any item shall not be incurred without prior approval of the Principal except in an emergency and where the repairs are urgently required. [4] 17. The Principal undertakes to indemnify and keep indemnified the Agent against all actions suits, proceedings, claims, demands, costs and expenses whatsoever which may be taken or made against the Agent in the course of or arising out of the performance or exercise of any of the powers duties or authorities of the Agent" (indemnity provision). [Emphasis added.]"
13. The relevant principle that the applicant is relying upon was not established by the judgment of the Court of Appeal. Mr Simpson was relying upon the finding of the trial judge, Curtis DCJ. At [94] McColl JA said this: "As to the Bhides' liability to Elders, the primary judge held that the indemnity provision was against liability arising out of the proper performance of the agent's duties, but that it did not apply where, as in the present case, Elders had failed to perform its duties properly. Elders does not challenge this finding."
14. The facts of the current case can be distinguished from those in that case. Furthermore, there is, in my view, a substantial difference. There is, in my view, significant force in what was submitted by Mr Le Plastrier that, to say that there had been default by the respondent in the management and control of the applicant's premises thereby disentitling the respondent to rely on the indemnity clause would render any indemnity clause otiose because often a liability arises from a nonfeasance rather than a misfeasance and, in any event, the management agreement in the current case merely required the respondent to engage tradespersons to effect repairs and maintenance.
15. One might infer a term that the tradesperson engaged was one not known by the principal to be unqualified or incompetent, but it is not alleged that the tradesman retained in the current case by the respondent was incompetent or ineffective, merely that he did not do what he had been asked to do by the respondent. It is hard to imagine how any liability could attach to a managing agent if everything was done satisfactorily. It is not alleged that the respondent ought to have gone out and inspected the work after it had been done by the tradesperson involved and no such term could be implied.
16. For example, assuming that a tenant advised the managing agent that a power point did not work, the managing agent might hire an electrician to go out and to carry out any repair to the power point. Little would be achieved by the power point being inspected by the agent after the tradesman had repaired it because any repair work would have been done within the wall to which the power point was attached and, clearly, the power point cover would have been reattached by the electrician. If the electrician had not done the job properly, when an appliance was plugged into the power point and the power turned on, and either the person turning on the power point was electrocuted or the appliance which was plugged in exploded, because of malfeasance by the electrician in repairing the power point, it is hard to see how anything that the managing agent could have done by way of inspection after the job could have changed the position at all.
17. Another example might be this. Assume that during a storm a tile was dislodged from the roof of a building thus allowing water to be admitted into the roof cavity, which could affect the ceiling of part of a tenancy. One can also postulate a branch of a tree blown down during a storm striking a roof and breaking or dislodging tiles. Clearly, the agent would have to engage a roof tiler to repair it. The idea of a managing agent climbing onto the roof of the tenancy to inspect whether the new tiling had been done satisfactorily, in my view, is contrary to common sense, especially where, as in the current case, the property was multi‑storeyed and the idea that the managing agent would climb up a very lengthy ladder to inspect whether the roof tiler had done his job properly is, in my view, fanciful. I do not accept that the bare principle relied upon by the applicant arising from the decision in Libra Collaroy Pty Ltd v Bhide as postulated by Curtis DCJ is correct in the circumstances of the current case or, indeed, probably at all.

Second Defence

1. The next defence to be considered is that relying upon the provisions of the Property and Stock Agents Act 2002 and the regulations thereunder. The relevant part of the statute is this: "Part 4 Agency agreements Division 1 Requirements for agency agreements 54 Definitions In this Division - commission means remuneration by way of commission, fee, gain or reward for services performed by a licensee in the capacity of licensee. expenses means any sum or reimbursement for expenses or charges incurred in connection with services performed by a licensee in the capacity of licensee. 55 No entitlement to commission or expenses without agency agreement (1) A licensee is not entitled to any commission or expenses from a person for or in connection with services performed by the licensee in the capacity of licensee for or on behalf of the person unless - (a) the services were performed pursuant to an agreement in writing (an agency agreement) signed by or on behalf of - (i) the person, and (ii) the licensee, and (b) the agency agreement complies with any applicable requirements of the regulations, and (c) a copy of the agency agreement signed by or on behalf of the licensee was served by the licensee on that person within 48 hours after the agreement was signed by or on behalf of the person. Note - Section 55A allows a court or tribunal to order that commission and expenses are recoverable in certain circumstances despite subsection (1). (2) The regulations may make provision for or with respect to regulating the form of agency agreements and the terms, conditions and other provisions that an agency agreement must or must not contain. Without limiting this subsection, the regulations may prescribe one or more standard forms of agency agreement. (3) Without limiting the means by which a copy of the agency agreement may be served on a person, it may be served by electronic means or by such other means as the regulations may allow. (4), (5) (Repealed) 55A Relief from disentitlement to commission and expenses (1) A court or tribunal before which relevant proceedings are taken may order that commission or expenses are wholly or partly recoverable by a licensee who would otherwise not be entitled to the commission or expenses (under section 55) because of - (a) a failure by the licensee to serve a copy of the relevant agency agreement on the person within 48 hours after it was signed by or on behalf of the person, or (b) a failure of the relevant agency agreement to comply with the requirements of the regulations. (2) A court or tribunal is not to make such an order in circumstances of a failure to serve a copy of the agency agreement within the required time unless satisfied that - (a) the failure was occasioned by inadvertence or other cause beyond the control of the licensee, and (b) the commission or expenses that will be recoverable if the order is made are in all the circumstances fair and reasonable, and (c) failure to make the order would be unjust. (3) A court or tribunal is not to make such an order in circumstances of a failure of the agency agreement to comply with the requirements of the regulations unless satisfied that - (a) the failure is a minor failure, and (b) no loss has been suffered as a result of the failure by the person for whom or on whose behalf the services concerned were performed, and (c) failure to make the order would be unjust. (4) Proceedings are relevant proceedings if they are proceedings taken by a licensee for the recovery of commission or expenses from a person or proceedings on a consumer claim relating to commission or expenses (as referred to in section 36) in relation to which a licensee is a respondent."
2. The applicant also relies upon the Property and Stock Agents Regulation 2014 Sch 7 which is in these terms: "1 Identification of property, business or professional practice The agreement must specify the address of the property, business or professional practice to which the agreement applies or must contain such other description of the property, business or professional practice as clearly identifies it. This clause does not apply to an agency agreement to act for the buyer of land. 2 Names of parties to agreement The agreement must specify the names of each of the parties to the agreement (including the licensee). 3 Information identifying parties The agreement must specify the address of the person on behalf of whom the agent is acting, the licensee's licence number and any business name under which the licensee conducts business. 4 Authority of the person on behalf of whom the agent will act to enter into agreement The agreement must contain a statement to the effect that the person on behalf of whom the agent is acting warrants that the person has authority to enter into the agreement. 5 Authorisation for licensee to act on behalf of person The agreement must contain a term containing particulars of the extent of the authority of the licensee to act as agent on behalf of the person on behalf of whom the agent is acting in providing services under the agreement. 6 Period of duration of the agreement The agreement must contain a term indicating the period for which the agreement remains in force or indicating that the agreement remains in force until terminated. 7 Termination of the agreement If the agreement provides for its termination by a party to the agreement, the agreement must indicate how and when it can be terminated. 8 Reimbursement of licensee (1) If the licensee is to be entitled to any sum or reimbursement for expenses or charges incurred by the licensee in connection with services provided under the agency agreement, the agreement must include a term that - (a) states that the licensee is so entitled, and (b) describes those services, and (c) specifies the amount to which the licensee is so entitled and when it is payable, and (d) states that those services and amounts cannot be varied except with the agreement in writing of the person on behalf of whom the agent is acting. (2) Subclause (1) (d) does not apply to an agency agreement for the exercise of the functions of a strata managing agent. 9 Remuneration (1) The agreement must include a term specifying - (a) the circumstances in which the licensee is entitled to remuneration (by way of commission or otherwise) for services performed under the agreement, and (b) the amount of the remuneration or the way in which it is to be calculated, and (c) when the remuneration is payable. (2) If the agreement relates to the sale or purchase of residential property and provides for payment of commission to the agent calculated as a percentage of the sale or purchase price, the term must also specify the amount of the remuneration to which the licensee will be entitled calculated on the basis of a specified estimated sale or purchase price for the property."
3. One will note in s 54 of the Act the definition of "expenses". That definition is apt to describe expenses incurred by the managing agent in the performance of his or her or its work rather than, for example, an expense arising out of the conduct of litigation, such as, for example, lawyers' fees. One will note, even if the applicant's contention be correct, that the Court still could give relief from disentitlement to commission or expenses pursuant to s 55A. The applicant relies upon, in particular, clause 3 of Schedule 7 of the regulation. The signed management agreement does not state the address of the applicant but, in the circumstances of this case, there does not appear to have been any problem in communication between the applicant and the respondent or, indeed, between the respondent and the applicant. It is common in commerce these days to rely upon emails rather than formal postal communication. That is probably, if applicable, something that would be readily excused by the Court.
4. The applicant also relies on clause 8 of Schedule 7 of the regulation and it is alleged in these proceedings that the incurring of legal costs, which were incurred by the respondent and form part of the judgment debt currently owed by the applicant to the respondent, were not disclosed in the agency agreement, nor was any attempt to comply with clause 8 made as far as legal expenses were concerned. I utterly reject that contention.
5. What is referred to there is a reimbursement of expenses as defined in s 54 of the Act, that is, what I regard as the second potential liability of the respondent, the expenses which each incurred in seeking to carry out the management agreement. To categorise legal costs arising out of an action brought against the agent is, in my view, nonsense because it would require the parties to the agency agreement at the time they entered any agreement to foresee that there would be litigation, as to in which court the litigation was, and as to the likely scale of the costs. That is just "crystal ball gazing", words used by Mr Le Plastrier I hasten to add, and clearly not something that would be within the contemplation of a property owner and a managing agent when entering into an agency agreement.
6. As I said, the indemnity clause has two parts to it. One relates to liability that is sought to be visited upon the agent by a third party and the other is the liability for the costs that the agent itself incurred arising from attempting to perform its duty under the agreement.
7. What the Act and the regulation relate to are the latter and not the former, the second ablative phrase in clause 8 of the Commercial/Industrial Exclusive Management Agency Agreement dated both 1 September 2016 and 5 September 2016.
8. It follows that in my view there is no arguable defence and that is the first thing that the applicant must establish. The second thing that the applicant must establish is an adequate explanation for the delay; the explanation for the delay is completely inadequate.

Delay

1. I should just point out a number of things in the oral evidence of Mr Trewern and these relate to how the reading of emails sent to him were filtered through to him. It is not done automatically but it is done by his executive assistant, relevant to this case, Ms Cozic. At the transcript of 29 February 2024 at page 54, Mr Trewern was being asked questions about emails that were sent to his email address. Commencing at line 22, I asked this question, and the following evidence was given: "Q. But you don't disagree that they [emails] were sent to your email address, it's just that your email gets filtered and a lot of it is‑‑ A. Yeah, I have a folder. Q. --unanswered, correct? A. I have a folder. That's right. I have a folder called 'Leeds Street' and what my EAs will do with - I've got probably 100 folders - is that...she'll leave it in my inboxes for me to read. If it's not for me to read it will go into one of those folders. In total, I'm guessing there's 20, 30, 40,000 emails in my email system. And if they're in one of those folders, I'm not going to read them. If they're in my inbox, I will read them. That's the system and the way that we work. LE PLASTRIER Q. Can I just clarify something? There is a folder that is accessible on your phone in your email account called 'Leeds Street', correct? A. Absolutely. Q. And you made a conscious choice to not read the contents of that folder? A. Absolutely. It's got 1,000 emails in it and my - and, and I've got hundreds of folders that have got thousands of emails in them, and that would be humanly impossible for anybody to do...I already work - I already work 120 hours a week and I...can only do so much..."
2. It is clear from that evidence and evidence given earlier that the emails sent to Mr Trewern were filtered by his executive assistant Ms Cozic and none of the relevant emails, according to Mr Trewern, were ever received by him. They included the email of 5 August 2022 sent by PKF to him which enclosed a notice of the entry of default judgment by this Court, the emails of November and December 2022 advising him of the assessment hearing on 16 November 2022 before Priestley SC DCJ, and the email of December 2022 from PKF, the accountants in Melbourne, to Mr Trewern enclosing a copy of the judgment that had been entered against the applicant by Priestley SC DCJ.
3. They are critical letters which he actually failed to answer or failed to read because he was relying upon Ms Cozic to filter out anything which she, in the exercise of her judgment, did not believe he need be bothered by. That includes the email from PKF of 5 August 2022, the annexure to which she did not read but advised of the entry of default judgment against the applicant and which she attended to two weeks later by sending it to Ms Vaubell for her comment or assistance in interpreting which, considering the substance of the email which was the notice attached to it, was in the circumstances extremely foolish.
4. This system established by Mr Trewern was bound to cause problems and did so because he left the decision‑making process as to what he read to his executive assistant who knew very little about much. She said that she thought she did her job extremely well, but minds may differ on that opinion because of the way she dealt with the email addressed to Mr Trewern enclosing a copy of the notice of the entry of default judgment against the applicant. As I said, I am not persuaded that there has been an adequate disclosure of an adequate reason for the delay in the filing or lack of filing of the defence.
5. A curious thing too about Mr Trewern's evidence is the way that the cross‑examination ended. One will recall that according to Mr Trewern's affidavit, the first thing that drew his attention to what had occurred was when he saw the creditor's statutory demand for payment of debt which can be found in annexure B to Mr Trewern's affidavit, Exhibit A‑A, and the relevant notice commences on page 38 of the current court book. Clauses 3, 4 and 5 of the creditor's statutory demand for payment of the debt are these: "3. The Creditor requires the Company, within the statutory period after service on the Company of this demand: (a) to pay the Creditor the amount of the debt; or (b) to secure or compound for the amount of the debt, to the Creditor's reasonable satisfaction. 4. The Creditor may rely on a failure to comply with this demand within the period for compliance set out in subsection 459F(2) as grounds for an application to a court having jurisdiction under the Corporations Act 2001 (Cth) for the winding up of the Company. 5. Section 459G of the Corporations Act 2001 (Cth) provides that a company served with a demand may apply to a court having jurisdiction under the Corporations Act 2001 (Cth) for an order setting the demand aside. An application must be made within the statutory period after the demand is served and, within the same period: (a) an affidavit supporting the application must be filed with the court; and (b) a copy of the application and a copy of the affidavit must be served on the person who served the demand. A failure to respond to a statutory demand can have very serious consequences for a company. In particular, it may result in the company being placed in liquidation and control of the company passing to the liquidator of the company." Clearly, the notice is equivalent to a bankruptcy notice, and a failure to comply with the notice could lead to the winding up of Leeds Street Pty Ltd, the applicant. That was what generated the response that led to the filing of the current application.
6. The last part of the cross‑examination of Mr Trewern is this, commencing at page 56 of the transcript of 29 February 2024 at line 33: "Q. I suggest to you that what you did was you affirmed an affidavit which contains a confected story that blames Ms Vaubell and now in the witness box also Ms Cozic, and now also in the witness box Clyde & Co to cover up your incompetence as a director and to find a way to protect Leeds Street from being wound up, do you agree with that or do you reject that? A. I reject that. LE PLASTRIER: Pardon me, your Honour. No further questions. WITNESS: Why would it be - why would Leeds Street be wound up? I don't understand. There's not - but that's never been raised."
7. For a very successful businessman, who commenced this application because of the threat to wind up Leeds Street, to say what he did at the end of that cross‑examination is extraordinary and, I am unable to accept him as being an accurate, reliable witness who is seeking to tell me the whole truth.
8. Other evidence on which Mr Trewern relied were the various exigencies of life which occurred to him. For example, consider these questions and answers. The first is at the foot of page 13 of the transcript of 29 February 2024: "Q. You have no basis to contradict an assumption that this email was received at the email address that you can access on your telephone? A. As I explained in the last cross‑examination, I have a personal assistant. They get hundreds of emails a day. I operate a business in 90 countries and I only see the emails that are, that are sent that are, that go through to me after being filtered by my personal assistant so I don't recall if I saw this email or not."
9. Two questions later was this: "Q. Do you have any basis to tell the Court that this email in particular was not received to your phone? A. No, I, no, other than what I've just explained, right, which, which is that I might look at my phone five times a day 'cause I'm in a meeting. In between those meetings my personal assistant's job is go through my emails and deal with them and only let the emails come through to me that I personally need to see by her judgment."
10. On page 23 of the same transcript is this statement after he sought to answer a question: "I mean, I've got...a very busy job doing all sorts of - involved in lots of businesses, investments and things and I rely upon the advisers around me and experts that are paid well to manage these things on my behalf. And then I take my responsibilities seriously when things are brought to my attention. And when this letter came to my home address I immediately took it seriously and immediately made inquiries as to what was going on and if I'd seen the email I would have made those same inquiries at that date and not at the later date."
11. Again the witness was protesting how busy he is but he said that if something came to his attention, he would have dealt with it "immediately", but he left the job of what he saw to be done to his personal assistant who really had no idea what she was doing. This system that he had put in place was just not tenable.
12. As I have said towards the beginning of these reasons, UCPR 36.16 is the rule primarily relied upon by the applicant, it is this: "36.16 Further power to set aside or vary judgment or order (cf SCR Part 40, rule 9) (1) The court may set aside or vary a judgment or order if notice of motion for the setting aside or variation is filed before entry of the judgment or order. (2) The court may set aside or vary a judgment or order after it has been entered if - (a) it is a default judgment (other than a default judgment given in open court), or (b) it has been given or made in the absence of a party, whether or not the absent party had notice of the relevant hearing or of the application for the judgment or order, or (c) in the case of proceedings for possession of land, it has been given or made in the absence of a person whom the court has ordered to be added as a defendant, whether or not the absent person had notice of the relevant hearing or of the application for the judgment or order. (3) In addition to its powers under subrules (1) and (2), the court may set aside or vary any judgment or order except so far as it - (a) determines any claim for relief, or determines any question (whether of fact or law or both) arising on any claim for relief, or (b) dismisses proceedings, or dismisses proceedings so far as concerns the whole or any part of any claim for relief. (3A) If notice of motion for the setting aside or variation of a judgment or order is filed within 14 days after the judgment or order is entered, the court may determine the matter, and (if appropriate) set aside or vary the judgment or order under subrule (1), as if the judgment or order had not been entered. (3B) Within 14 days after a judgment or order is entered, the court may of its own motion set aside or vary the judgment or order as if the judgment or order had not been entered. (3C) Despite rule 1.12, the court may not extend the time limited by subrule (3A) or (3B). (4) Nothing in this rule affects any other power of the court to set aside or vary a judgment or order."
13. Clearly judgment had been entered so UCPR 36.16(1) is inapplicable. UCPR 36.16(2)(b) is applicable. This notice of motion, as I have already pointed out, was made 14 days after the judgment was entered so UCPR 36.16(3A) is inapplicable. UCPR 36.16(3B) is also inapplicable as this is not an application of the Court's own making. Otherwise, the determination under UCPR 36.16 is made in accordance with established common law principles which I discussed earlier in these reasons.
14. In the alternative, the applicant relies upon UCPR 36.15. That rule is this: "36.15 General power to set aside judgment or order (cf DCR Part 13, rule 1, Part 31, rule 12A; LCR Part 11, rule 1, Part 26, rule 3) (1) A judgment or order of the court in any proceedings may, on sufficient cause being shown, be set aside by order of the court if the judgment was given or entered, or the order was made, irregularly, illegally or against good faith. (2) A judgment or order of the court in any proceedings may be set aside by order of the court if the parties to the proceedings consent."
15. There is no suggestion that the order was made irregularly or illegally or against good faith. As far as I perceive the evidence to be, it is only the contention of the applicant that it was made against good faith because the applicant desisted from doing anything because of representations made to it by Ms Vaubell. However, I do not accept that any representation was made to either Mr Trewern or Ms Cozic after Ms Vaubell gave instructions to Colin Biggers & Paisley to proceed to seek default judgment against the applicant and indeed in December 2012, Ms Vaubell pointed out to Mr Trewern that although it was not her personal preference, the proceedings had been taken against the applicant on the advice of her solicitors and that ought to have drawn immediately to the attention of Mr Trewern the need to make inquiries as to what had happened. If so, there may have been an application shortly after the entry of the default judgment on 22 November 2022, an application to set the judgment aside which may have been considered more favourably, but, of course, there was then a further six months' delay before anything occurred.
16. In my view, the only appropriate order in this case is that the application be dismissed. The application is dismissed.
17. Costs will follow the event.

Assumption of Application by Insurer

1. One of the things that also concerned me was the assumption of the current application by an insurer. Something said to me by Mr Simpson indicated that it may have been the same insurer that had acted for TB. I asked Mr Simpson the ancient question, cui bono, for whose benefit was the current application being made? If it is by the same insurer that was indemnifying TB, then why did it not indemnify the applicant at the time that Clyde & Co were representing TB? If there has been a change of attitude by the insurer, the reason for that has never been explained.
2. Certain aspects of the Civil Procedure Act must be kept in mind. The Civil Procedure Act 2005 s 58 provides this: "Court to follow dictates of justice (1) In deciding - (a) whether to make any order or direction for the management of proceedings, including - (i) any order for the amendment of a document, and (ii) any order granting an adjournment or stay of proceedings, and (iii) any other order of a procedural nature, and (iv) any direction under Division 2, and (b) the terms in which any such order or direction is to be made, the court must seek to act in accordance with the dictates of justice. (2) For the purpose of determining what are the dictates of justice in a particular case, the court - (a) must have regard to the provisions of sections 56 and 57, and (b) may have regard to the following matters to the extent to which it considers them relevant - (i) the degree of difficulty or complexity to which the issues in the proceedings give rise, (ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities, (iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties, (iv) the degree to which the respective parties have fulfilled their duties under section 56 (3), (v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings, (vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction, (vii) such other matters as the court considers relevant in the circumstances of the case."
3. It may be a moot point as to whether the current application were the subject of s 58, but in general the Court always must act in accordance with the dictates of justice. Under s 58(2)(b)(iv), the Court is to have regard to whether the respective parties have fulfilled their duties under s 56(3). That provision is this: "A party to civil proceedings is under a duty to assist the court to further the overriding purpose and, to that effect, to participate in the processes of the court and to comply with directions and orders of the court."
4. The overriding purpose is, of course, set out in s 56(1) and it is "to facilitate the just, quick and cheap resolution of the real issues in the proceedings". This whole procedure before me, the whole procedure commenced by the notice of motion filed on 8 June 2023 has not, in my view, been attended to in accordance with the overriding purpose of a just, quick and cheap resolution of the real issues in the case, especially when it is hard to see how the matter could really assist anybody. [Counsel addressed on costs]

Costs

1. This is the 30th year in which I have had cause to observe that nothing excites the zeal, the ardour and the passion of members of the legal profession more than an argument about costs. Earlier today I dismissed the notice of motion before me which sought leave to set aside a judgment entered. The judgment could be called a default judgment, but as I pointed out in the reasons that I gave yesterday and today, it was not a straightforward default judgment.
2. A default judgment was entered for damages to be assessed. Those damages were eventually assessed by Priestley SC DCJ at Lismore on 16 November 2022 and judgment was entered on 22 November 2022. The current application was commenced by a notice of motion filed on 8 June 2023. It initially came on for hearing before Priestley SC DCJ at Lismore on 25 August 2023 in a civil sittings of the Court but was not reached because his Honour appears to have been overwhelmed with a number of criminal matters. The matter was then transferred to Sydney and came on for hearing before me on 17 November 2023. I made the order dismissing the application earlier today, the sixth day that the matter has been before me.
3. The successful respondent to the notice of motion seeks an indemnity costs order against the applicant in respect of the whole of the proceedings before me in respect of the notice of motion and seeks a gross sum costs order in the sum of $107,914.60: see Exhibit C2. In the alternative, the respondent seeks an indemnity costs order from 21 November 2023 because of an offer of compromise made in accordance with the principles outlined in Calderbank v Calderbank [1975] 3 All ER 333. The offer of compromise was certainly much more advantageous to the applicant, which has been unsuccessful, than the order which has been made which essentially preserves the judgment entered against the applicant on 22 November 2022 which was relatively only slightly less than the offer of compromise made.
4. It is conceded by the solicitor for the applicant that the respondent is entitled to its costs on the indemnity basis at least since 21 November 2023 and prior to that on the ordinary basis.
5. These proceedings have been protracted and they have been exhausting. I have had to try to decide this matter while I have been attending to other work which has caused, for example, late starts on a number of days and late finishes on a number of days. It is now almost 4:30pm. Should the matter proceed, I will need probably to hear further submissions from the solicitor for the applicant and from the learned counsel for the respondent.
6. This case will be determined in accordance with the ancient principle that interest reipublicae ut sit finis litium. Accordingly, I order the applicant to pay the respondent's costs on the ordinary basis until 21 November 2023 and thereafter on an indemnity basis.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 12 August 2024