Chief Executive Officer of Customs v Abdul Wahid Afiouny & Anor [2006] NSWSC 430

New South Wales Supreme Court

CITATION : Chief Executive Officer of Customs v Abdul Wahid Afiouny & Anor [2006] NSWSC 430

HEARING DATE(S) : 13/03/06, 14/03/06, 15/03/06, 16/06/06

JUDGMENT DATE : 14 July 2006

JUDGMENT OF : Buddin J

DECISION : Judgment entered on 21 April 2005 be set aside. Costs of the Motion be costs in the cause.

CATCHWORDS : Customs Act prosecutions - defendants did not appear at hearing - judgment entered - application to set judgment aside - whether the defendants have an arguable case - whether the defendants have a reasonable explanation for not attending hearing

Customs Act 1901 LEGISLATION CITED : Supreme Court Rules Uniform Civil Procedure Rules

CASES CITED : Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2003) 216 CLR 161 Magnate Projects Pty Ltd v Youma Constructions (No2) Pty Ltd [2005] NSWCA 331

Chief Executive Officer of Customs (Plaintiff/Respondent) PARTIES : Abdul Wahid Afiouny (First Defendant/Applicant) Bilal Afiouny (Second Defendant/Applicant)

FILE NUMBER(S) : SC 20077/2002

COUNSEL : P Roberts SC/I Bourke (Plaintiff/Respondent) G Thomas (Defendants/Applicants)

SOLICITORS : Australian Government Solicitor (Plaintiff/Respondent) Vosnakis & Associates (Defendants/Applicants)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

BUDDIN J

FRIDAY 14 JULY 2006

20077/02 – CHIEF EXECUTIVE OFFICER OF CUSTOMS v ABDUL WAHID AFIOUNY & ANOR

JUDGMENT

Introduction

1 HIS HONOUR: By Notice of Motion dated 26 July 2005 Abdul Walid Afiouny and Bilal Afiouny (whom I shall refer to as the first and second defendants, respectively) seek orders pursuant to Part 40 Rule 9 of the Supreme Court Rules that judgment obtained by the Chief Executive Officer of Customs (the plaintiff), which was entered against them on 21 April 2005, be set aside. By reason of those orders the defendants were required to pay in excess of $4.5 million to the plaintiffs. 2 It is common ground however that the Uniform Civil Procedure Rules apply to the proceedings initiated by the Notice of Motion and that the provision which ought to have been invoked is Part 36 Rule 16(2)(b) of those Rules. That provision empowers the court to set aside or vary a judgment or order after it has been entered if it was "given or made in the absence of a party". 3 It is also common ground that the relevant test to be applied was enunciated by Hodgson JA (with whom Campbell AJA agreed) in Magnate Projects Pty Ltd v Youma Constructions (No 2) Pty Ltd [2005] NSWCA 331. His Honour said: In my opinion, the following passage from the judgment of Jordan CJ in Vacuum Oil Pty. Co. Limited v. Stockdale (1942) 42 SR(NSW) 239 at 243 sets out the principles applicable to this case: The present is not a case in which judgment was signed by default through some procedural omission on the part of the defendant or his legal advisers. The action followed the ordinary course, except that its coming on for trial was delayed through dilatoriness on the part of the defendant. It is one in which, the action coming on for trial in its ordinary place in the list, no one was present in Court to conduct it for the defendant, and it therefore proceeded in his absence. In such a case, when the plaintiff is in no respect in default, a new trial will not be granted save in very special circumstances: Chitty's Archbold, 10th ed., 1457; 12th ed., 1526. In every such case the Court has an inherent and unfettered, though judicial, discretion, in the exercise of which it will, however, necessarily 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: Evans v. Bartlam [1937]AC 473 at 482 . As a general rule (although not necessarily in every case, if some reason exists for departing from it: Collins' Book Depot Pty Ltd. v. Bretherton [1938] VLR 49; Austn. Digest (1934-1939) 1859, the Court requires an affidavit showing prima facie that the defendant has a good defence on the merits: Evans v. Bartlam [1937] AC 473 at 480, 488-9, and also an explanation of his absence which shows that justice requires that in the circumstances it should be excused. And if there has been gross negligence on the defendant's part, the Court will be the more disposed to require at least a reasonably clear case of merits to be shown, to incline it to interfere: Nash v. Swinburne 3 M&G 630 at 632; Weitzel v. Friedenreich 14 WN 7; Austn. Digest 376 . I do not read the cases of Taylor v. Taylor (1979) 143 CLR 1 and Allesch v. Maunz (2000) 203 CLR 172 as materially affecting the principles stated by Jordan CJ in Vacuum Oil .