Aretzis Properties Pty Ltd v Creative Cooks Pty Ltd - [2020] SADC 119

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Appeal Against a Master's Decision)
ARETZIS PROPERTIES PTY LTD v CREATIVE COOKS PTY LTD & ORS
[2020] SADC 119
Judgment of Her Honour Judge Bochner
28 August 2020
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - ENDING PROCEEDINGS EARLY - DEFAULT JUDGMENT - SETTING ASIDE
Appeal from Master - whether default judgment was entered irregularly - whether appropriate warning was given prior to entry of judgment - whether the Master was required to consider whether the respondents had an arguable case when determining whether the default judgment should be set aside.
Held: appeal allowed.
Graziano v Graziano [2010] SASC 320; Gemini Property Investments Pty Ltd v Woodards Investments Pty Ltd & Ors [2000] SASC 210; Yang v Finder Earth Pty Ltd [2019] VSCA 22; Lauro v Minter Ellison [2020] SASC 137; Australia and New Zealand Banking Group Ltd v Karam [2005] NSWCA 344; Nalbandian v Commonwealth of Australia [2017] FCA 45; Thorne v Kennedy [2017] HCA 49, considered.

ARETZIS PROPERTIES PTY LTD v CREATIVE COOKS PTY LTD & ORS
[2020] SADC 119

On 15 May 2019, a default judgment was entered in this matter following the failure of the respondents to file a defence. The respondents applied to have that judgment set aside and on 25 March 2020, orders were made by a District Court Master setting aside the judgment ex debito justitiae. The applicant now appeals the Master’s decision to set aside the judgment.
Background
On 26 March 2019, the applicant issued proceedings against the respondents for breach of a lease. The parties originally entered into a lease in October 2009, for a period of seven years, with options for renewal. In October 2016, a Deed of Extension and Variation of Lease (“the lease extension”) was executed by them with the effect that the lease was extended by an additional period of six years. By early 2017, however, the respondents were suffering from financial difficulties and ceased paying their rent. In December 2017 a notice to remedy breach was served on them, and in January 2018 the applicant terminated the lease. The applicant says that up to the date of termination, the amount owed by the respondents was $94,564.85, made up of rent, outgoings and interest.
In addition to the sum of $94,564.85, the applicant seeks from the respondents further damages for loss of rental income up until the end date of the lease, in October 2022. The applicant also alleges that there were further breaches of the lease by the respondents including a failure to clean the premises and remove rubbish, and to make good. The amounts claimed in the statement of claim comprise a number of separate components. The first component is the sum of $94,564.85 as set out above, the second component is for loss and damage between the termination date and 22 March 2019, in the sum of $282,984.68, the third component is for loss of rental income to…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] SADC 119
Decision Date: 28 August 2020

CaseChat Overview and Summary

Aretzis Properties Pty Ltd appealed against a decision of a Master of the Federal Court to set aside a default judgment entered against Creative Cooks Pty Ltd. The judgment was obtained by Aretzis Properties in the Federal Circuit Court. The original dispute was a claim for unpaid lease payments, interest, and other costs. The Master set aside the default judgment on the basis that it had been entered irregularly and that Creative Cooks had an arguable case in defence of the claim. Aretzis Properties submitted that the Master had no jurisdiction to set aside the default judgment and that the Master had failed to consider whether Creative Cooks had an arguable case in defence of the claim.

The court considered whether the Master had the jurisdiction to set aside the default judgment and whether the Master was required to consider whether the respondents had an arguable case when determining whether the default judgment should be set aside. The court found that the Master had jurisdiction to set aside the default judgment and that the Master was required to consider whether the respondents had an arguable case when determining whether the default judgment should be set aside. The court found that the Master had not considered whether Creative Cooks had an arguable case in defence of the claim and that the Master had failed to give appropriate warnings prior to entering the default judgment. The court found that the default judgment was entered irregularly and that it should be set aside.

The court set aside the default judgment and remitted the matter to the Federal Circuit Court for further consideration. The court found that the Master had not considered whether Creative Cooks had an arguable case in defence of the claim and that the Master had failed to give appropriate warnings prior to entering the default judgment. The court found that the default judgment was entered irregularly and that it should be set aside. The court set aside the default judgment and remitted the matter to the Federal Circuit Court for further consideration.

Orders