Renwick Street Pty Limited v Parker

The Default Judgment

1. The default judgment in question was made by the court on 9 November 2017 in favour of the plaintiff against the defendant in the sum of $517,729.99 inclusive of costs.

Background facts

1. The Statement of Claim was filed in the proceedings on 25 July 2017 by the plaintiff, Renwick Street Pty Ltd. Paragraphs 2-8 of the Statement of Claim provide as follows: "2. The defendant is the registered proprietor of real property known as XXXXX Road, Wedderburn being the whole of the land in Folio Identifier XXXXX (the Land). 3. On or about February 2014, the plaintiff agreed with the defendant to do all things reasonably necessary to design, supervise and temporarily fund construction of a residential dwelling on the Land for reward (the Agreement). 4. In consideration of the Agreement, the defendant agreed to reimburse the plaintiff for monies the plaintiff expended on a request for payment basis plus a supervisory fee comprising thirty per cent (30%) of construction costs incurred by the plaintiff. 5. On or about late February 2014, the plaintiff commenced supervision of the design and construction of the dwelling on the Land. 6. In accordance with the Agreement, between 27 February 2014 and 5 August 2014, the plaintiff incurred costs and expenses applied to design and part construction of the dwelling in accordance with the Agreement totalling $331,735.82. 7. Further, in accordance with the Agreement, the plaintiff became entitled to supervisory fees totalling $99,529.75 being thirty percent (30%) of the total invoice cost of design and part construction of the dwelling. 8. The defendant has failed and continues to fail to reimburse the plaintiff in the sum of $431,256.57 in accordance with the Agreement."
2. No Defence has ever been filed by the defendant in relation to the Statement of Claim. As indicated, a default judgment was entered in favour of the plaintiff based on the Statement of Claim on 9 November 2017.
3. The affidavit of Mr Scahill sets out in some further detail the background to the matter. He is a director of the plaintiff (Affidavit paragraph 1).
4. Paragraphs 5 to 11 of the Scahill affidavit are as follows: "The Agreement with the Defendant 5. In or around February 2014, on behalf of the Plaintiff, I entered into an agreement with the Defendant (Agreement) to do all things reasonably necessary to design, supervise and temporarily fund construction of a residential dwelling on the Defendant's land at XXXX Road, Wedderburn in the State of New South Wales (Works). The Agreement was oral and was not recorded in writing. 6. It was a term of the Agreement that the Defendant would deposit money into the trust account of Scahill & Co Pty Ltd: (a) to reimburse the Plaintiff for monies spent on the Works; and (b) as payment of "supervisory fees" to the Plaintiff, being 30% of the construction costs incurred by the Plaintiff in carrying out the Works. The Works and payment for the Works 7. In accordance with the Agreement, the Works were carried out under the supervision of the Plaintiff from in or around February 2014. By 24 July 2014, the residential dwelling was partly constructed. 8. Between 2 May 2014 and 5 August 2014, the Plaintiff in its own name and through related bodies corporate, incurred costs and expenses for the design and partial construction of the dwelling totalling $331,735.82 (inclusive of GST). In addition, in accordance with the Agreement, the Plaintiff became entitled to supervision fees totalling $99,520.75 (inclusive of GST), being 30% of the total invoice cost of the design and partial construction of the dwelling. Annexed to this affidavit and marked "A" is a true copy of the Plaintiff's statement of account for the Works … carried out to 24 July 2014, which includes: (a) the supervision fees (described as "Management Fees"); and (b) the costs incurred by the Plaintiff (described as "Project Costs"). 9. By 24 July 2014, a total of $473,350.75 had been paid into the Scahill & Co Trust Account on behalf of the Defendant (Funds) to be applied to reimburse the Plaintiff for the costs incurred to that date, as well as to cover payment of the supervision fees payable to the Plaintiff. Confiscation of the Funds 10. On 24 July 2014, the Australian Federal Police executed a search warrant at the premises of Scahill & Co Pty Ltd at XXXX Street, Parramatta. As a result of execution of the search warrant, the Funds were confiscated on the ground that they were proceeds of crime. 11. The Plaintiff had not drawn upon the Funds at the time of their confiscation. As a result of the confiscation of the Funds, the Plaintiff was unable to draw upon those Funds, and had not received payment of the total sum owing by the Defendant, being $431,256.57."
5. The remainder of the Scahill affidavit refers to the procedural steps taken on behalf of the plaintiff in the proceedings. Relevant in explaining the procedural steps and the role of the defendant, is that at all relevant times the defendant has been a prisoner serving a prison sentence. Paragraph 3 of Ms Awan's affidavit sworn 24 August 2020 provides as follows: "3. My firm are the solicitors on the record for the Defendant in respect of an appeal brought by him in the Court of Criminal Appeal relation to his conviction and sentence on charges of import a border controlled drug and in relation to his sentence on charges of deal with proceeds of crime. That appeal was recently heard by the Court of Criminal Appeal and was dismissed. The Defendant is now in the process of discussing prospects of lodging a High Court appeal."
6. Mr Scahill's affidavit refers to the following matters: 1. A copy of the Statement of Claim was left with authorities at Long Bay Prison for the defendant on 30 September 2017; 2. A Notice of Motion was filed on 3 November 2017 by the plaintiff applying for default judgment; 3. Default judgment was entered on 9 November 2017; 4. The plaintiff applied for the issue of a writ for levy of property in November 2017. On 28 November 2017, the District Court issued a writ authorising the Sheriff at Campbelltown to levy on the property of the defendant; 5. On 28 December 2017, the writ was left for the defendant at Long Bay Prison; 6. On 16 January 2018, the solicitor for the plaintiff, Mr Bagley, received a telephone call from a Ms MacDougall, a solicitor formerly acting for the defendant, seeking a copy of the Statement of Claim; 7. The solicitor for the plaintiff Mr Bagley sent a copy of the Statement of Claim to Ms MacDougall by email on 16 January 2018; 8. On 6 February 2018, Mr Bagley filed a judgment creditor's notice in the District Court recording the entry of the initial writ on the register kept under the Real Property Act 1900 (NSW); 9. On 28 May 2018, Mr Bagley sent an email to Ms MacDougall seeking confirmation as to whether she had instructions to accept service of the judgment creditor's notice. Mr Bagley received no response to that email; 10. The judgment creditor's notice was left for the defendant with authorities at the South Coast Correctional Centre on 26 June 2018; 11. The initial writ issued in November 2017 expired on 28 November 2018. Subsequently, a fresh writ for levy of property (Second Writ) was issued by the District Court on 29 November 2019; 12. On 13 May 2020, a further judgment creditor's notice was filed with the District Court and was signed and sealed by the court on that day; 13. The further judgment creditor's notice was left for the defendant with authorities at Macquarie Correctional Centre on 10 June 2020; 14. Mr Scahill states that the plaintiff's only prospective recovery of the judgment or any part thereof is from a sale of the plaintiff's property at Wedderburn in New South Wales by the Sheriff and he is not aware of any other assets of the defendant.
7. In the first affidavit of Ms Awan, she notes the following matters: 1. The defendant is in custody and has been in custody since about July 2014; 2. The defendant instructed Ms Awan in relation to the judgment creditor's notice filed on 13 May 2020 in June 2020; 3. Ms Awan had a conference with the defendant on 1 July 2020 at which he gave instructions. Ms Awan states in her affidavit that the defendant does not recall receiving the Statement of Claim and any legal documents that he has previously received in custody were simply passed on to his previous solicitors. The defendant has informed Ms Awan that he does not recall having a conversation with his previous solicitors regarding the Statement of Claim. He also states that he does not recall receiving the judgment creditor's notice dated May 2018 or a Notice of Motion for a writ for levy of property filed November 2018 and associated documents; 4. Ms Awan was instructed by the defendant in relation to the allegations made in the Statement of Claim "that he reimbursed the Plaintiff for the monies expended by the Plaintiff in connection with the design and construction of the dwelling referred to therein". This is inconsistent with Ms Awan's second affidavit where Ms Awan states in paragraph 5 (a) that the defendant informed her that he does not recognise the plaintiff.
8. In Ms Awan's second affidavit dated 24 August 2020, she provides further instructions from the defendant in relation to his limited recollection of his dealings with Mr Scahill. These include that the defendant only recalls dealing with Mr Scahill not the plaintiff. He further is recorded as instructing Ms Awan that the arrangements with Mr Scahill were verbal and he does not recall anything being said about commissions. He has informed Ms Awan that deposits were paid regularly into accounts nominated by Mr Scahill. He also notes that at no time prior to the Statement of Claim did Mr Scahill or anyone on behalf of the plaintiff say to him that money was owed.
9. In paragraph 6 of Ms Awan's second affidavit, she corrects paragraph 11(b) of her earlier affidavit. The defendant now instructs Ms Awan that he did receive a judgment creditor's notice whilst in custody. Having regard to paragraph 11(b) of Ms Awan's first affidavit, I accept the submission by senior counsel for the plaintiff that this must be a reference to the judgment creditor's notice dated 21 May 2018 and not the documents issued and served in 2020. As paragraph 23 of Mr Scahill's affidavit makes clear, the judgment creditor's notice dated 21 May 2018 was left for the defendant with authorities at the South Coast Correctional Centre on 26 June 2018.
10. The plaintiff opposes the application for the setting aside of the default judgment dated 9 November 2017 and the other relief sought by the defendant.

The applicable Rule

1. Under Part 36.16(2)(a) of the Uniform Civil Procedure Rules 2005, the court may set aside or vary a judgment or order after it has been entered if it is a default judgment. There is no indication in the Rules of the factors which the court must take into account in deciding whether to set aside a default judgment. The power of the court is a discretionary one and the court's discretion is unfettered but it is a discretion which must be exercised judicially.

The principles applicable

1. The general principles applicable to the application are set out in the written submissions prepared by counsel for the plaintiff. See in particular paragraphs 9-10 (17 September 2020 Revised Version). Counsel for the defendant did not relevantly challenge the general principles there stated.
2. I considered the principles relating to the setting aside of a default judgment in Mei Zhang v Yee Cheng [2018] NSWDC 147 at [26]-[30]. In that case, I set aside a default judgment. The plaintiff appealed. The Court of Appeal upheld my judgment: Mei Zhang v Yee Cheng [2018] NSWCA 299. There was no suggestion by or before the Court of Appeal that I had misstated the relevant principles in my reasons for decision in the case.
3. In Mei Zhang I stated the following: "27. The test to be applied is that the court needs to decide 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: Dunwoodie v Teachers Mutual Bank Ltd [2014] NSWCA 24 at [43] per McColl JA who although was dissenting, did not state a different principle to the majority; Dai v Zhu [2013] NSWCA 412 at [83] per Sackville AJA. … 28. In Dai v Zhu Sackville AJA stated as follows at [66], [83] and [89]: "[66] The primary Judge identified (at [61]) three factors relevant to the applicants' motion to set aside the default judgment in the 2011 Proceedings: • whether the applicants had an arguable defence; • whether they had provided an adequate explanation for the delay in filing a defence; and • whether the respondents would be prejudiced if the default judgment were set aside." … "[83] The applicants did not take issue with the primary Judge's identification of the three factors particularly relevant to the exercise of the discretion conferred by UCPR, r 36.16(2)(a) (see at [66] above). The applicants also did not take issue with the primary Judge's proposition, derived from Reinehr Industrial Lease & Finance Pty Ltd v Jordan (New South Wales Court of Appeal, 4 June 1974, unreported), that ultimately it is necessary to consider 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; see too, Adams v Kennick Trading (Int) Ltd (1986) 4 NSWLR 503, at 506-507, per Hope JA (with whom Glass JA agreed)." … "[89] The second observation is that the authorities consistently state that, as a general rule, a defendant who seeks to set aside a judgment by default regularly obtained must show that he or she has a bona fide defence. This ordinarily requires the defendant to file an affidavit demonstrating a prima facie defence on the merits. The rationale for this requirement 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 judgment, and (b) how it came about that the applicant found himself bound by a judgment regularly obtained. Vacuum Oil Co Pty Ltd v Stockdale (1942) 42 SR (NSW) 239, at 243, per Jordan CJ (with whom Davidson and Roper JJ concurred), citing Evans v Bartlam [1937] AC 473, at 482, per Lord Russell; Magnate Projects Pty Ltd v Youma Constructions (No 2) Pty Ltd [2005] NSWCA 331, at [48]-[51], per Hodgson JA (with whom MW Campbell AJA agreed) (holding that the principles stated in Vacuum Oil have not materially been affected by the reasoning of the High Court in Taylor v Taylor [1979] HCA 38; 143 CLR 1, and Allesch v Maunz [2000] HCA 40; 203 CLR 172)." 29. The principles to be applied as being the fundamental but not the only relevant principles are therefore: (a) Whether the applicant has a bona fide defence on the merits which is arguable; (b) Whether an adequate explanation for the failure to defend has been provided and the length of the delay. As McColl JA stated in Dunwoodie, in the final analysis, it is necessary to consider whether it is in the interests of justice to allow the party seeking to set aside the default judgment to be permitted to defend the proceedings on the merits; and (c) Whether the plaintiff would be prejudiced if the default judgment was set aside. 30. In Dai v Zhu [2013] NSWCA 412, Sackville AJA (with whom the other two judges agreed) stated that the exercise of the discretion was unfettered though judicial and the court would consider whether any useful purpose would be served by setting aside the judgment and how the judgment came about. 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. The defence must be fairly arguable in law or fact and the court will consider whether the defendant is bona fide seeking to rely upon the defence."

Submissions for the Parties

1. Counsel for the defendant made, in general summary, the following submissions: 1. At all relevant times, the defendant was in custody and, accordingly, his acts and omissions must be considered in the light of that restrictive factor; 2. The Statement of Claim can be criticised because it did not refer to the payment of moneys by the defendant or on his behalf into an account as referred to in Mr Scahill's affidavit or the fact that the money had been confiscated by the Australian Federal Police on the basis that they were alleged proceeds of crime; 3. On the basis of the agreement set out in Mr Scahill's affidavit, the defendant had paid money as instructed by Mr Scahill and in accordance with the contract and therefore, having complied with the contract, he has a bona fide arguable defence to the plaintiff's claim; 4. Paragraph 6 of Ms Awan's 24 August 2020 affidavit, is equivocal as to whether the defendant received the 2020 judgment creditor's notice whilst in custody or the May 2018 judgment creditor's notice; 5. If it was the 2018 judgment creditor's notice, paragraph 11(a) of Ms Awan's first affidavit establishes that any legal documents the defendant received previously whilst in custody were "simply passed on to his previous solicitors". Accordingly, the defendant has provided an explanation for a failure to take action on the basis that he left it to his solicitors. He should not be disadvantaged by the inaction or failures of his previous solicitors; 6. If paragraph 6 of Ms Awan's second affidavit refers to the 2020 judgment creditor's notice, then Ms Awan's first affidavit establishes that the plaintiff acted promptly to retain his current solicitors in relation to the matter; 7. There is sufficient in the affidavit evidence before the court: 1. To establish a bona fide arguable defence; 2. To provide an explanation as to why the plaintiff has been delayed in taking action; 1. The plaintiff is not obliged to obtain an affidavit from his previous solicitors or himself as these are interlocutory proceedings. An affidavit from his solicitor on information and belief is permissible; 2. The default judgment is for a large sum which is relevant to the exercise of the discretion; 3. There was no relevant evidence of prejudice to the plaintiff which could not be met by a costs order; 4. Taking into account all of the evidence, it is in the interests of justice that the plaintiff be provided with an opportunity to properly defend the proceedings. The default judgment and the related documents should be set aside.
2. Counsel for the plaintiff provided extensive written submissions. It is unnecessary to set out these submissions in detail. In general summary, they were to the following effect: 1. No criticism can be made of the Statement of Claim, as what was pleaded in it was sufficient to plead a simple contractual claim in debt. The other matters referred to by the defendant did not have to be pleaded; 2. There is not sufficient evidence before the court to establish a bona fide defence or an arguable defence on the merits. No affidavit as to the defendant's version of the conversations with Mr Scahill concerning the contract was before the court. The defendant should have prepared such an affidavit or, in the alternative, should have provided a precise version of what the defendant states occurred at the time the underlying transaction was entered into, to his solicitor, including relevant conversations. What is before the court is a vague assertion of a lack of recollection of the plaintiff and does not provide a proper basis for a triable defence; 3. The court must look at the whole of the circumstances to determine whether sufficient cause has been shown for setting aside the default judgment; 4. It is for the defendant, applying to set aside a default judgment, to establish that there is a real issue to be determined, being a bona fide defence on the merits of the case and to provide an adequate explanation for any default or delay; 5. The court does not embark on a hearing of the full merits of the case but instead considers whether the defence properly asserted in evidence is bona fide and whether there is an arguable or triable issue; 6. Ultimately it is necessary to consider 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; 7. The defendant has failed to provide the form of defence that would be relied upon and this weighs heavily against the exercise of the discretion in the defendant's favour; 8. There is no clear and persuasive evidence of a defence. There is no clear admissible evidence either directly from the defendant or on information and belief as to his version of the contract between the parties. All that is provided is bare assertions from his solicitor on information and belief; 9. There is no documentary evidence to support any payment to the plaintiff as alleged by the defendant including where it was paid and into what account it was paid; 10. There has been no explanation by credible evidence for the delay in the present case. The defendant has failed to discharge the onus to establish an adequate explanation; 11. The two Awan affidavits make clear that the defendant received the May 2018 judgment creditor's notice; 12. More than two years have passed since the defendant was on notice of the existence of the judgment against him. There is no evidence of following up with his former solicitors as to the matter. There is no affidavit from the former solicitors as to what they did. The absence of any proper explanation as to why no steps were taken in 2018 to set the judgment aside, speaks against the exercise of discretion in the defendant's favour; 13. There is prejudice to the plaintiff as the plaintiff has obtained for nearly three years a regularly obtained judgment and substantial legal costs have already been incurred in attempting to enforce the judgment. There has been extensive delay. There is no evidence that the defendant would be capable of satisfying an order for indemnity costs; 14. Accordingly, the regularly obtained judgment should not be set aside in the court's discretion.
3. Counsel for the defendant submitted in reply: 1. The evidence of prejudice was not persuasive. There is no evidence that the property in question was not sufficient to satisfy any costs order; 2. An order for costs may be the appropriate remedy; 3. Even on the plaintiff's case, there is an arguable defence in the light of Mr Scahill's affidavit.

Consideration

1. In my view, the following matters are relevant to the application: 1. A large sum is involved in the default judgment. This fact assists the application; 2. There was no evidence of a letter providing a warning from the plaintiff to the defendant before default judgment was entered; 3. The defendant has at all relevant times been in custody. There would accordingly have been difficulties for the defendant in dealing with legal matters and with his solicitors. This is established in the affidavit evidence of Ms Awan; 4. No draft Defence has been provided on which the defendant would seek to rely if default judgment was set aside. This fact assists the plaintiff. The court therefore does not have a draft Defence to properly assess the way the defendant puts his defence to the claim; 5. The defendant has not purported to put his version of the discussions between him and Mr Scahill relating to the agreement in an affidavit. He has also not put before the court documentary evidence as to the payment of the moneys and into which account they were placed; 6. The default judgment has been on foot for over two and a half years. This is a lengthy period. This factor assists the plaintiff; 7. I read paragraph 6 of Ms Awan's second affidavit as establishing that the defendant did receive the May 2018 judgment creditor's notice whilst in custody in mid-2018.

Is the proposed defence fairly arguable?

1. A factor in assessing the defendant's proposed defence is that the court has not been provided with a proposed draft Defence or with the defendant's version of the conversations with Mr Scahill either in an affidavit from the defendant or on information and belief from the defendant's solicitor.
2. This provides some difficulty to the court in understanding the precise defence put forward by the defendant. As the court understands it, the proposed defence is that the defendant has paid the plaintiff (or Mr Scahill) what it is owed because money was paid as directed by Mr Scahill into an account and the fact that the money was later seized as the proceeds of crime is irrelevant as payment was made in accordance with the contract.
3. First, under paragraph 4 of the Statement of Claim it is pleaded that the defendant "agreed to reimburse the plaintiff for moneys the defendant expended on a request for payment basis plus a supervisory fee …" In paragraph 8 it is pleaded that the defendant has failed and continues to fail to "reimburse" the plaintiff the sum owed.
4. Secondly, the version of the contract put forward in Mr Scahill's 2 August 2020 affidavit is, in substance, in similar terms: see paragraph 6. Paragraph 9 refers to a figure of $473,350.75 by 24 July 2014 having "been paid into the Scahill & Co Trust Account on behalf of the Defendant … to be applied to reimburse the Plaintiff for the costs incurred to that date, as well as to cover payment of the supervision fees payable to the Plaintiff". Although paragraph 11 of the affidavit notes that the plaintiff had not drawn upon those funds at the time of their confiscation by the Australian Federal Police, the affidavit seems to state that the moneys were placed by the defendant into a trust account. In the absence of other evidence, the inference to be drawn is that it was in a trust account in the name of the defendant or for the defendant. How the placement of moneys in the trust account in the name of the defendant or for the defendant can amount to reimbursement of the plaintiff is unclear. I can only assume that the trust account operates in the usual manner of requiring the beneficial owner's authority before money is disbursed.
5. Thirdly, paragraph 12 of Ms Awan's first affidavit merely involves a bold assertion on information and belief that the defendant had reimbursed the plaintiff "for the moneys expended by the plaintiff in connection with the design and construction of the dwelling referred to therein". There is no supporting evidence of how that reimbursement occurred and through what means.
6. In my view, paragraph 5 of Ms Awan's second affidavit does not take the matter further. In particular, paragraph 5(d) of Ms Awan's second affidavit does not deal with the question of the account or accounts into which the money was paid and whether, as appears to be the case, they were trust accounts. It is also unclear how the payments referred to constituted reimbursement of the plaintiff.
7. In the light of these matters, in my view the defence is vague and unclear. In relation to the issue as to the identity of the proper plaintiff, paragraph 12 of the Awan first affidavit asserts reimbursement to the plaintiff not Mr Scahill. The alteration in the second affidavit raises issues as to the reliability and consistency of the defendant as to the defence. Accordingly, I find that the proposed defence, to the extent I have understood it, is not on the evidence fairly arguable. I accept the plaintiff's submissions on this issue.

Is the proposed defence bona fide?

1. As to the question of the bona fide nature of the proposed defence, there is nothing compelling in the evidence which in my view suggests it is not put forward bona fide. Contrary to the plaintiff's submissions, the inconsistencies between Ms Awan's affidavits in relation to her instructions from the defendant do not suggest to me that the defence, to the extent I understand it, is not bona fide.

The explanation for the delay

1. In paragraph 53 of Mei Zhang I stated as follows: "53. The authorities appear to accept that if 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 then that should be permitted, even if an adequate explanation for the delay is not established: Dai v Zhu at [83] and Adams v Kennick Trading at page 506. In the latter case, Hope JA noted that the absence of an adequate explanation, particularly if it is coupled with prejudice, may justify the denial of relief but only when considered with the other relevant circumstances of the case including whether a defence on the merits is established."
2. In the present case, the explanation provided is that the plaintiff gave any legal documents to his former solicitors and, impliedly, left it to them to deal with them. It is submitted that that is the defendant's explanation and it is not incumbent on him to provide any further detail. It is submitted that that is both a proper explanation and a reasonable one as it is reasonable for someone in custody to provide legal documents to their solicitors and to assume that they have dealt with them.
3. In my view, that is not a reasonable explanation from the defendant. I accept the submissions on behalf of the plaintiff on this issue.
4. First, no affidavit was provided by the defendant's former solicitors as to what actions they took when provided with the legal documents. On the evidence, I find: 1. That the defendant did receive the May 2018 judgment creditor's notice in mid-2018 whilst in custody; 2. That his previous solicitors were provided with a copy of the Statement of Claim, following the request by Ms MacDougall, by email on 16 January 2018 and the May 2018 judgment creditor's notice in May 2018.
5. As submitted by the plaintiff, I draw a Jones v Dunkel inference against the defendant due to the absence of any affidavit from his previous solicitors as to what steps were taken following the receipt of those documents from the defendant or the provision of some other adequate explanation. I infer that the evidence of the previous solicitors would not have assisted the defendant on the "adequate explanation" issue: Newell v De Costi [2018] NSWCA 49 at [78]; Jones v Dunkel (1959) 101 CLR 298 at 321. I reject the submission by counsel for the defendant that such an inference should not be drawn. The criteria for the application of the principle in Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 as stated by the Court of Appeal in Payne v Parker [1976] 1 NSWLR 191 at 201-202 apply. It would be expected or natural that the plaintiff would call the solicitor involved. The solicitor would be in the plaintiff's camp. It is assumed that a solicitor would be willing to provide an affidavit.
6. Even if I am wrong in relation to drawing the inference, I would still not have found the explanation provided to be an adequate one. The defendant has provided no evidence as to what he did after he provided relevant legal documents to his former solicitors. He does not provide any evidence as to following up in relation to the legal documents, seeking a conference with his former solicitors, or asking what steps should be taken in relation to the documents. In my view, even if Ms Awan's affidavit does provide an explanation, it is not an adequate explanation. The defendant has been aware of these legal proceedings on any view of the evidence for more than two years.

Prejudice to the plaintiff

1. In relation to the issue of prejudice to the plaintiff if the default judgment is set aside, I am not persuaded that the prejudice relied on in the plaintiff's submissions is of such a nature that if I was satisfied of the other relevant matters that the issue of prejudice would be decisive.

The Discretion

1. Having regard to the extensive delay involved in the present case and the defendant's failure to provide a clear account of the conversations relied on relating to the contract, I would exercise the discretion against the defendant, in the circumstances.

Summary

1. Accordingly, in my view: 1. The defendant has not established a defence on the merits which is arguable; 2. The explanation which has been provided by the defendant for his delay in seeking to set aside the judgment is not an adequate explanation in the whole of the circumstances.
2. I have carefully taken into account the evidence before me particularly in the light of the fact that the defendant has always been in custody and would have had difficulties in managing legal proceedings brought against him. However, in my view no proper basis has been established to set aside the default judgment.
3. Overall, I am not satisfied that it is in the interests of justice to allow the defendant to set aside the default judgment and to be permitted to defend the proceedings on the merits having regard to the material which has been placed before me.

Determination

1. For the above reasons, I make the following order: 1. The Notice of Motion filed 8 July 2020 is dismissed.
2. I will hear from the parties in relation to the appropriate costs order to be made. My preliminary view is that as the defendant has failed in his application, the plaintiff should be awarded its costs of the Notice of Motion.

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: 23 September 2020