Supreme Court New South Wales

• Medium Neutral Citation: Geotech v Northwest Civil Construction Group [2014] NSWSC 8
• Hearing dates: 20/01/2014
• Decision date: 20 January 2014
• Jurisdiction: Equity Division
• Before: McDougall J

Decision

Stay execution of default judgment on conditions. Transfer proceedings to District Court.

• Catchwords: PRACTICE & PROCEDURE - application to stay execution of judgment - whether serious question to be tried - balance of convenience
• Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW); Evidence Act 1995 (NSW); Service and Execution of Process Act, 1992 (Cth)
• Category: Procedural and other rulings
• Parties: Geotech Pty Ltd (Plaintiff); North West Civil Construction Group Pty Ltd (First Defendant); ANZ Limited (Second Defendant)
• Representation: Counsel: LA Tyndall (Plaintiff); D S Weinberger (Defendants); Solicitors: Champions Lawyers (Plaintiff); Thomsons Lawyers (Defendants)
• File Number(s): 2014/15144

Judgment (ex tempore - revised 20 january 2014)

1 HIS HONOUR: This is an application to restrain the first defendant (Northwest), which is the plaintiff in certain District Court proceedings against the plaintiff (Geotech) as defendant, from enforcing a default judgment obtained by Northwest against Geotech in those District Court proceedings.

2 Specifically, Northwest has obtained a garnishee order and has served it on Geotech's bank, the second defendant (ANZ). ANZ is in a position to pay the sum demanded, which is in excess of $206,000.00. It has drawn a bank cheque in favour of Northwest in that amount. It will pay it unless restrained, but otherwise it will abide by the order of the Court.

3 The underlying dispute appears to be whether the default judgment in the District Court was regularly obtained. The affidavit evidence is in a state that could best be described as unsatisfactory. That would appear to reflect the urgency with which this application was brought before the Court.

4 Northwest's case is that it served the statement of claim, and the requisite notice under the Service and Execution of Process Act, 1992 (Cth) by posting it to Geotech on 21 October 2013.

5 Accordingly, Northwest says, the effect of s 160 of the Evidence Act 1995 (NSW) is that the letter and its attachments should be taken to have been received four working days after 21 October 2013. If that be the case then there can be no doubt that it was open to Northwest to recover default

judgment when it did, on 2 December 2013.

6 Geotech's case is that the letter and its attachments were not actually received until 15 January 2014. Thus, Geotech says, the presumption flowing from s 160(1) of the Evidence Act has been rebutted.

7 As I understand it, Northwest claims either pursuant to a payment claim made under the Building and Construction Industry Security of Payment Act 1999, (NSW) (Security of Payment Act) or pursuant to what it says were the terms of the subcontract made between it and Geotech. As to the latter: Geotech says there was no such subcontract. As to the former: Geotech suggests, as I understand it, that it did in fact provide a payment schedule to Northwest in the requisite time. There is some doubt as to this, because the payment schedule itself has not been proved, and the only document tendered appears to be an accompanying or explanatory letter, or perhaps a statement of reasons, rather than a payment schedule itself.

8 In those circumstances, Northwest says, even if there were some irregularity attending the way in which default judgment has been recovered (and it does not accept that there has been any irregularity), Geotech has failed to show a defence on the merits. Thus, Northwest says, the application to set aside default judgment must fail.

9 There is yet another complication, because the affidavit in support of the application for default judgment asserted that nothing had been paid on account of the claim. However, Geotech's evidence is that some $91,198.84 has in fact been paid in reduction of the claim.

10 It seems to me that the appropriate court for resolution of all those fascinating issues is the court in which the judgment was recovered. The only way this Court could deal with them would be to remove the District Court proceedings into this Court and then to deal with the matter as though the default judgment had been recovered in this Court. That does not seem to me to be an appropriate course to take during the vacation.

11 I am satisfied that there is a serious question to be tried as to whether the default judgment was regularly recovered. I say that because I am satisfied, on the evidence as it stands, first, that there was a real question as to whether the document was "posted" on the day alleged, and, secondly, because the evidence suggests that regardless of the date of postage, it was not received until 15 January 2014.

12 The dispute as to whether the document was "posted" is somewhat esoteric. Northwest's case is that the documents were posted by its lawyers. However, the affidavit says that the envelope containing the documents was posted "in the ordinary post at" those lawyers' premises. There is no post box or post office at that address on that level. I assume that what is intended to be said is that the documents were put out for postage and that there is some course of business from which I could infer that they were taken to a nearby post office or post box and "posted" accordingly. The evidence of that course of business is lacking, but I do not think it requires a huge stretch of the imagination for the Court to conclude that this is likely to have been what occurred.

13 However, regardless, there is evidence which, if accepted, would rebut the presumption raised by s 160(1) of the Evidence Act.

14 As to balance of convenience, such evidence as there is is all one way. There is reason to think that Northwest is in a somewhat precarious financial position. Thus, if the money is paid to it and if ultimately Geotech has the default judgment set aside, there is some likelihood that Geotech might not enjoy the pecuniary fruits of that forensic triumph.

15 On the other hand, such evidence as there is of Geotech's financial position suggests that it is more than able to pay the default judgment, and interest and costs, if it does not succeed.

16 In any event, to a substantial extent, that can be dealt with by ordering, as I propose to do, that any relief granted be on terms that the amount in question is paid either into court or into a controlled moneys account.

17 In all the circumstances, and balancing as best I can the competing contentions, I think that the appropriate course is to continue the injunctive relief that has been granted on the condition that I have mentioned, so that the District Court, as the court whose processes are said to have been misused, can consider the application brought in relation to the judgment recovered in it.

18 I should add that although Northwest urged upon me the underlying policy of the Security of Payment Act, that does not seem to go very far. If, as the evidence suggests, a payment schedule has been provided and if, as is clear, there was thereafter no reference to adjudication, the Security of Payment Act claim is spent and there is no question of policy outstanding.

19 On condition that the plaintiff forthwith pay either into the District Court of New South Wales or into a controlled moneys account maintained by its lawyers the sum of $206,192.93, such sum to be held to abide the outcome of District Court proceedings 2013/314752, I make orders in accordance with paragraphs 1, 2 and 3 of the notice of motion filed in court on 16 January 2014.

20 I order that the costs of the application be costs in the District Court proceedings. I order that the exhibits both today and before the Court on 16 January 2014 be handed out. I order that these proceedings be transferred to the District Court to be heard together with proceedings 2013/314752.

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Decision last updated: 22 January 2014