Taleb v Jadco Building Group Pty Ltd

JUDGMENT

1. By notice of motion filed on 17 June 2025, Jadco Building Group Pty Ltd (‘Jadco’) applies to set aside a default judgment on liability which was entered against it on 4 March 2025 (‘the application’).

2. Mr Ahmad Taleb, the plaintiff, opposes Jadco’s application.

3. At the hearing of the notice of motion, Jadco relied upon two affidavits of Mr Rafic Chender, dated 17 June 2025 and 29 July 2025.

4. Mr Taleb relied upon five affidavits of Mr Isaac Keany, dated 14 February 2025, 30 March 2025, 21 May 2025, and two affidavits dated 2 June 2025. Mr Taleb also relied upon his own affidavit of 21 May 2025 and two affidavits of Mr Majed Kheir dated 30 March 2025 and 3 June 2025.

Facts

5. The proceedings concern a building contract entered into between the parties in 2018 (‘the contract’).

6. It was Mr Taleb’s evidence that Jadco ceased performing building work under the contract in about January 2022.

7. Mr Tarek Jad was a director of Jadco from 6 May 2014 until his death on 14 November 2024. Mr Chender has been a director of Jadco since 12 January 2023 and remains a director.

8. The statement of claim was filed on 6 December 2024.

9. Mr Keany, a paralegal at Majed Kheir, served the statement of claim, and a letter, upon the registered office of the defendant in Peakhurst by registered post on 9 December 2024. The documents were apparently received as they were not returned to sender.

10. On 27 February 2025, a notice of motion filed by the plaintiff was served on the registered office of the defendant by registered post and apparently received as it was not returned to sender.

11. Extracts from the Australian Securities and Investment Commission’s (‘ASIC’) database show that the registered address of Jadco was changed on 3 March 2025 to an address in Bankstown.

12. On 4 March 2025, default judgment was given.

13. On 2 April 2025, Mr Keany served orders of the Court dated 1 April 2025 on Jadco’s new registered address at Bankstown by registered post. Subsequently, the documents were marked “Return to sender” and returned to Kheir Lawyers.

14. On 5 March 2025, Mr Keany served a Notice of Listing Assessment of Unliquidated Damages, and a letter, upon Jadco at its registered address in Bankstown by registered post. The Notice included the information that default judgment had been entered against Jadco in Mr Taleb’s favour. On 28 March 2025, the documents were marked “Return to sender” and returned to Kheir Lawyers on 28 March 2025.

15. On 21 May 2025, Mr Keany served orders of the Court dated 6 May 2025, and a letter, upon Jadco at its registered address in Bankstown by registered post. This package was marked “Return to sender” and returned to Kheir Lawyers on 6 June 2025.

16. On 22 May 2025, Mr Keany served the affidavit of Mr Taleb of 21 May 2025, and a letter, upon Jadco at its registered address in Bankstown by registered post. The parcel was marked “Return to sender” and returned to Kheir Lawyers on 11 June 2025.

17. On 30 May 2025, Mr Keany served the affidavit of Mr Greg James dated 29 May 2025, and a letter, on Jadco at its registered address in Bankstown by registered post. Mr Chender admits receiving these documents.

18. Mr Keany says, in his affidavit of 29 July 2025, at paragraph 10:

My understanding of registered post envelopes through my dealings with Australia Post is that they cannot be left at the intended address without the signature of a person at the address to accept the envelope. When a registered post envelope is first sent, I understand that a postman attends upon the addressee of the receiver and only delivers the envelope if the receiver signs for it.

If the receiver is not present or refuses to sign, a note is left at the receiver’s address notifying them that they have an envelope to collect from the nearest Australia Post Office. I understand that the envelope is then left with the nearest Australia Post Office to await collection.

If the envelope is not collected within a few weeks, the envelope is then returned to the sender.

19. I accept Mr Keany’s description of the process for the delivery or return to sender of items sent by registered post.

20. Mr Chender says that he first became aware of the proceedings upon receipt of the affidavit of Mr James on 30 May 2025.

Relevant principles

21. In its notice of motion, Jadco seeks the following order (among others):

The default judgment entered against the defendant on 4 March 2025 is set aside pursuant to r 36.16 of the Uniform Civil Procedure Rules (UCPR).

22. The UCPR provide, in r 36.16:

36.16 Further power to set aside or vary judgment or order

(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

…

23. The principles to be considered in an application to set aside a default judgment are as follows:

24. The court must look at all relevant circumstances and decide whether sufficient cause has been shown.

25. The existence of:

(a) a bona fide defence and (b) an adequate explanation for the failure to defend and (c) an adequate explanation for any delay (d) are the most relevant matters to consider.

3. The application will not necessarily fail if the defendant has failed to establish one relevant matter. Such a failure is to be considered in the light of all of the circumstances.
4. The application of these principles is subject to the provisions of the Civil Procedure Act 2006 (NSW).

Discussion

The relevant circumstances

24. In his first affidavit, Mr Chender says that he and Mr Jad were the only directors of Jadco. Mr Jad lived at the Peakhurst address which was the registered address of Jadco prior to March 2025. Mr Jad passed away on 14 November 2024.

25. Mr Chender says that Mr Jad did not bring the statement of claim to his attention. Clearly that was not possible, as it was served after Mr Jad passed away.

26. Mr Chender says that he changed the registered address of Jadco to the Bankstown address on 24 February 2025. The change was not, however, registered until 3 March 2025.

27. Mr Chender denies receiving the Notice of Listing for Assessment of Unliquidated Damages.

28. Mr Chender says that he was unaware “that a proceeding had been initiated against Jadco Building Group Pty Ltd” until 30 May 2025 when he received the affidavit of Mr James of 29 May 2025.

29. Mr Chender says, in his first affidavit:

12. I intend to file a defence to the Statement of Claim.

13. The Statement of Claim does not differentiate between what works were completed and what works are defective.

14. I will need to undertake my own inspection of the plaintiff’s property as well as engage an independent expert to provide me with a report to determine whether there is any defective works and/or incomplete works pursuant to the contract.

15. There are also issues as to whether the alleged defects are minor or major defects which may also require a determination as to whether the proceedings are brought in time in accordance with section 18E of the *Home Building Act 1989 (*NSW).

16. There may also be a cross claim concerning unpaid variations. I have not had time to undertake a thorough review of the accounts and will need to liaise with the company’s accountant given Tarek’s passing.

30. Mr Chender annexes the draft defence he proposes to have filed on behalf of Jadco in the event that the application is successful. The draft defence says:

1. The Defendant does not admit or deny paragraph 1 of the Statement of Claim.

2. The Defendant admits paragraph 2 of the Statement of Claim.

3. The Defendant admits paragraph 3 of the Statement of Claim.

4. The Defendant does not admit or deny paragraph 4 of the Statement of Claim.

5. The Defendant does not admit or deny paragraph 5 of the Statement of Claim.

6. The Defendant does not admit or deny paragraph 6 of the Statement of Claim.

7. The Defendant does not admit or deny paragraph 7 of the Statement of Claim.

8. The Defendant does not admit or deny paragraph 8 of the Statement of Claim and requires further and better particulars including:

a. Provision of the occupation certificate dated 17 June 2021;

b. Particulars to determine the validity of the occupation certificate.

9. The Defendant does not admit or deny paragraph 9 of the Statement of Claim.

10. The Defendant admits paragraph 11 of the Statement of Claim.

11. The Defendant denies paragraph 12 of the Statement of Claim and says that it requires the engagement of an independent building expert to inspect the works.

12. The Defendant denies paragraph 13 of the Statement of Claim.

13. The Defendant denies paragraph 14 of the Statement of Claim and says upon provision of its own independent building expert report, it is likely that a number of alleged defects will be minor, and accordingly out of time pursuant to section 18E of the Home Building Act 1989 (NSW).

14. The Defendant denies paragraph 15 of the Statement of Claim.

15. The Defendant denies paragraph 16 of the Statement of Claim.

16. The Defendant denies paragraph 17 of the Statement of Claim.

31. The service and attempted service upon Jadco of documents in relation to the proceedings, set out above at [9] to [17] are also relevant circumstances in relation to the application.

The existence of a bona fide defence

32. Mr Chender says, in his first affidavit, that he needs to undertake an inspection and obtain a report from an independent expert “to determine whether there is any defective works and/or incomplete works pursuant to the contract”. He does not say that there is a factual basis for challenging claims of defective or incomplete works, and no such factual basis has been put forward. The defence contains no material facts. I infer that Mr Chender presently does not know whether or not Jadco has a defence to the claim. Accordingly, he is unable to assert that there is “an arguable or triable issue” or a defence that is “fairly arguable in law or fact” (see Dunwoodie v Teachers Mutual Bank Ltd [2014] NSWCA 24 at [44] – [45]).

33. The draft defence does not set out any basis for a defence of the claim. In paragraph 13, there is an assertion that “it is likely that a number of alleged defects will be minor”. I note that the plaintiff’s case identifies minor defects and makes no claim in relation to those minor defects. The draft defence does not identify any specific defect the subject of the claim which Jadco asserts to have been wrongly categorised by the plaintiff. No basis is given for the assertion in paragraph 13.

34. There is authority that a defendant seeking to set aside a default judgment “must swear to facts which, if established at the trial, will afford a defence” (see Simpson v Alexander (1926) SR (NSW) 296 at 301). No such evidence is before me.

35. The defendant has not established that it has a bona fide defence.

An adequate explanation for the failure to defend

36. The statement of claim was served upon Jadco on 9 December 2024 at Jadco’s registered address. It was apparently received by Jadco as it was not returned to sender. Mr Jad died on 14 November 2024. Jadco’s registered address was Mr Jad’s home address. Mr Chender was, at that time, a director of Jadco and had been a director since 12 January 2023. It has not been explained how it came to pass that Mr Chender, the sole director of Jadco, apparently did not make arrangements to obtain documents being sent to Jadco’s registered address following Mr Jad’s death. It has not been explained why Mr Chender did not take steps to change the registered office of Jadco until 24 February 2025.

37. I note that Mr Keany served a notice of motion on Jadco’s then registered address at Peakhurst on 27 February 2025, and the document was apparently received as it was not returned to sender.

38. I have set out, above, the attempts made by Mr Keany to serve documents in these proceedings upon Jadco at Jadco’s registered address from 3 March 2025 in Bankstown. On four occasions from 2 April 2025 to 22 May 2025, documents sent to the Bankstown address were not accepted at that address and were not subsequently collected from the nearest post office.

39. There has been no explanation at all as to why the documents were not accepted at the registered address of Jadco, and no explanation as to why Mr Chender, as the sole director of Jadco, did not become aware that registered documents were awaiting collection by Jadco. This is particularly puzzling in circumstances where the parcel sent on 30 May 2025 to the Bankstown address did reach Mr Chender.

40. The Corporations Act 2001 (Cth) provides, in s 109X:

Service of documents

(1) For the purposes of any law, a document may be served on a company by:

(a) leaving it at, or posting it to, the company's registered office;

…

41. It was argued on behalf of Jadco that the plaintiff had an obligation to investigate why it was that the registered office of Jadco was not accepting documents sent by registered post. The plaintiff had no such obligation.

An adequate explanation for any delay

42. The delay from the service of the statement of claim on 9 December 2024 to the filing of a Notice of Appointment of Solicitor on 13 June 2025 and the filing of the notice of motion the subject of this judgment on 17 June 2025 has not been explained. Mr Chender says that he was unaware of the proceedings until 30 May 2025 when he received a document served to the Bankstown address, but he does not say whether he was aware of the many other documents sent to that address by Kheir Lawyers and not accepted and not collected from the nearest post office. He further does not explain how it was that he did not come into possession of company records held at the first registered address subsequent to Mr Jad’s death.

43. A company director has obligations under the Corporations Act 2001 (Cth), including an obligation to exercise their powers and discharge their duties with the degree of care and diligence of a reasonable company director (see s 180(1) Corporations Act 2001). It is not reasonable for a company director to allow a situation in which the company does not accept documents sent to it by registered post to persist for a period of nearly five months.

Consideration of the lack of an adequate explanation for the failure to defend and the lack of an adequate explanation for the delay in the light of all of the circumstances

Civil Procedure Act 2006 (NSW)

44. The Civil Procedure Act 2006 (NSW) provides, in ss 56 – 59:

Part 6 Case management and interlocutory matters

Division 1 Guiding principles

56 Overriding purpose

(1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.

(2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule.

(3) 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.

(3A) (Repealed)

(4) Each of the following persons must not, by their conduct, cause a party to civil proceedings to be put in breach of a duty identified in subsection (3)—

(a) any solicitor or barrister representing the party in the proceedings,

(b) any person with a relevant interest in the proceedings commenced by the party.

(5) The court may take into account any failure to comply with subsection (3) or (4) in exercising a discretion with respect to costs.

(6) For the purposes of this section, a person has a relevant interest in civil proceedings if the person—

(a) provides financial assistance or other assistance to any party to the proceedings, and

(b) exercises any direct or indirect control, or any influence, over the conduct of the proceedings or the conduct of a party in respect of the proceedings.

Note.

Examples of persons who may have a relevant interest are insurers and persons who fund litigation.

(7) (Repealed)

57 Objects of case management

(1) For the purpose of furthering the overriding purpose referred to in section 56 (1), proceedings in any court are to be managed having regard to the following objects—

(a) the just determination of the proceedings,

(b) the efficient disposal of the business of the court,

(c) the efficient use of available judicial and administrative resources,

(d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties.

(2) This Act and any rules of court are to be so construed and applied, and the practice and procedure of the courts are to be so regulated, as best to ensure the attainment of the objects referred to in subsection (1).

58 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.

59 Elimination of delay

In any proceedings, the practice and procedure of the court should be implemented with the object of eliminating any lapse of time between the commencement of the proceedings and their final determination beyond that reasonably required for the interlocutory activities necessary for the fair and just determination of the issues in dispute between the parties and the preparation of the case for trial.

45. Jadco’s submissions rely on Mr Chender’s failure to make arrangements for documents served at the first registered address in Peakhurst to come to his attention and Mr Chender’s failure, having belatedly changed the company’s registered address to Bankstown, to ensure that registered mail sent to the registered address was accepted or collected and brought to his attention. Mr Chender was the sole director of the company. I do not consider that his failure to address a situation which had the obvious consequence that documents sent to Jadco, including legal proceedings, would not come to his attention, weighs in favour of the application.

46. This application was filed subsequent to the hearing of the assessment of damages in the proceedings, but prior to the delivery of judgment in relation to the assessment of damages.

47. Jadco submits that it will suffer prejudice if the default judgment is not set aside, in that it will have lost the opportunity to contest liability in circumstances where substantial damages are sought.

48. I take into account the submissions with respect to prejudice to Jadco. I also take into account the expenditure by the plaintiff on the interlocutory steps and hearings which have taken place in the proceedings to date. The defendant submitted that, in the event that the default judgment is to be set aside, there should be an order for costs in the cause. The defendant makes no offer to pay the plaintiff’s costs to date or to pay money into court.

49. I have regard to the provisions of the Civil Procedure Act 2001 (NSW) set out above at [44]. Clearly, the efficient disposal of the business of the court and the minimisation of delay would best be served by the refusal of the application. In all of the circumstances of this matter, having regard to the fact that the failure by Jadco to respond to the statement of claim and subsequent documents in the proceedings is entirely the fault of its sole director, and that no bona fide defence has been advanced and no adequate explanation for the delay has been given, I decline to set aside the default judgment.

50. The defendant will, however, be given an opportunity to be heard with respect to the quantum of damages.

Orders

51. The following orders will issue:

52. The application in the Notice of Motion filed on 17 June 2025 by the defendant is refused and the Notice of Motion is dismissed.

53. The defendant is to pay the costs of the plaintiff in relation to the Notice of Motion.

**********

Amendments

05 September 2025

Amendment to catchwords