Quin v Buchanan, in the matter of Queensland Roads, Earthmoving and Civil Construction Pty Ltd

REASONS FOR JUDGMENT 1 These oral reasons will be reproduced for the benefit of the defendant, Mr Buchanan, who informed the Court, by an email from his former lawyers ten minutes ago, that he would not be attending this morning. 2 On 22 May 2015, I made orders, including the following by consent of the parties: 1. By 4.00 pm on 23 June 2015, the Defendant is to file and serve a detailed defence and provide any documentary evidence to be relied on in support of his defence. 3 This matter was due to return for directions in August after a mediation. It is likely that the reason why the parties agreed to the order concerning documentary evidence was to assist the mediation. 4 This matter was brought back for directions on 15 July 2015. One of the reasons for the relisting for directions was that Mr Buchanan had failed to comply with the requirements of Order 1 above. He failed to provide any documentary evidence to be relied upon in support of his defence. As I explained in my judgment on 15 July 2015, the most appropriate course was to make a self-executing order. This was not opposed: Quin v Buchanan, in the matter of Queensland Roads, Earthmoving and Civil Construction Pty Ltd (In Liq) [2015] FCA 722. 5 The self-executing order 1 of the 15 July 2015 that I made was as follows: Unless the defendant complies with the requirements of order 1 of the Orders made … on 22 May 2015 by 4.00 pm on 29 July 2015, the plaintiff shall be entitled to enter judgment against the defendant in the form of the relief sought in the originating process filed 11 May 2015. 6 The liquidator says that Mr Buchanan has failed to comply with that order. The matter was listed for directions this morning in relation to that failure to comply. 7 Until this morning Mr Buchanan and his lawyers had not communicated anything to the Court. Thirty minutes before this hearing, Mr Buchanan's lawyers emailed the Court to say that they were no longer instructed and would not appear this morning. They did not offer to appear, as is common, to inform the Court of this matter or of any other matter that could assist the Court prior to coming off the record. They emailed the Court again, ten minutes ago, explaining that although they no longer act for Mr Buchanan, Mr Buchanan seeks an adjournment because he is presently out of town and not able to appear personally at the hearing. Notice of these matters, by email, ten minutes before the hearing is unsatisfactory. It is even more unsatisfactory for a matter involving $140,000 to incur the further expenses that would arise from an adjournment. I decline to grant the adjournment since, as I will explain, there is no prejudice to Mr Buchanan by proceeding today. 8 The lawyers for the liquidator now apply for default judgment under rules 5.08 and 5.23 of the Federal Court Rules 2011 (Cth). Read together, those rules give a broad power, in the interests of justice, to order default judgment. 9 On the material before me, however, I am not satisfied that default judgment should be ordered. In particular, the lawyers for the liquidator have provided two affidavits explaining the alleged non-compliance with Order 1. They explain that at 3.55 pm on 29 July 2015, Mr Buchanan's lawyers provided five documents to accompany the defence. Those documents totalled 11 pages. Mr Buchanan's lawyers explained in an email to the liquidator's lawyers that Mr Buchanan is still going through the various paperwork for the relevant period and is still seeking to recover invoices for other liabilities which he personally adopted. Our client further instructs that the company's documents contain some of this information. Our client will seek leave to rely upon the further evidence as it is uncovered, however provides this evidence in discharge of the Orders made 15 July 2015. 10 It is not clear that Mr Buchanan has necessarily breached the terms of order 1, although his absence today, and the absence of any substantive communication from him to the Court does not make this easy to determine. For instance, it may simply be that Mr Buchanan is only able to produce invoices and receipts totalling $6,205.18 (inclusive of GST). Of course, since this is in the context of unreasonable director/related transactions totalling $140,000, this this could mean that judgment could ultimately be entered against him for up to $134,000 plus costs even if (and this is disputed) the $6,205 represents genuine consideration for the payments received. This is in circumstances in which Mr Buchanan admits in his defence that some of the payments alleged to have been made were made to him. 11 The amount of fixed costs claimable by the liquidators is already said, in affidavit evidence, to be $7,715. A mediation is listed in this matter in approximately 2 weeks, on 17 August 2015. This matter should go to mediation before any further expense is incurred. Further directions will be held on 18 August 2015. 12 My preliminary view is that the costs of the hearing today should be paid by Mr Buchanan. First, this hearing has been necessitated by Mr Buchanan's failure to communicate to the Court his position in relation to his alleged lack of production of all invoices and receipts. Further, the Court was only informed that there would be no appearance for him very shortly before the hearing. I will reserve costs of today so that Mr Buchanan will have the opportunity to make any submissions about costs of today's hearing on 18 August 2015. But, as I have said, my preliminary view is that he should pay today's costs. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edelman.