As Good As Gold Australia Pty Ltd v Nguyen - [2024] SADC 28

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Appeal Against a Master)
AS GOOD AS GOLD AUSTRALIA PTY LTD v NGUYEN
[2024] SADC 28
Judgment of his Honour Judge Dart
19 March 2024
APPEAL AND NEW TRIAL - PROCEDURE - SOUTH AUSTRALIA
Appellant obtained judgment in default of a defence - respondent applied to set aside the judgment - on the hearing of the application the appellant conceded that the judgment was irregular - an irregular judgment can be set aside under UCR 142.11 - the Master set aside the judgment - the rule permits the Court to amend the judgment rather than set it aside - the appellant says that the Master should have amended the judgment to correct the irregularity - the Master's decision was an exercise of discretion - the Court should apply House v The King concepts - looked at overall there is no error by the Master in the approach adopted in coming to her decision - there is no appealable error.
Held:
1. Appeal dismissed.
2. Appellant to pay the respondent's costs on a standard costs basis.
Uniform Civil Rules 2020 (SA) r 142.11, r 142.12, referred to.
Success 618 Pty Ltd v New Zealand Natural Pty Ltd [2015] SASC 182; Gemini Property Investments Pty Ltd v Woodards Investments Pty Ltd & Ors [2000] SASC 210; Hughes v Justin [1894] 1 QB 667, considered.

AS GOOD AS GOLD AUSTRALIA PTY LTD v NGUYEN
[2024] SADC 28

This is an appeal from the decision of a Master who set aside a judgment that had been irregularly obtained. The issue in dispute relates to the form of the order made by the Master. The appeal is dismissed.
Background
Each of the applicant and respondent placed an order for gold and/or silver bullion with the Perth Mint in March 2020. The appellant ordered gold bullion in various forms. The total value of its order exceeded $1,000,000. The respondent ordered 22 kilograms of silver bullion, the value of which was about $18,000.
The practice of the Perth Mint is to engage a security firm to deliver the product to a secure delivery point. The respective orders were delivered to a delivery point at St Agnes in South Australia. On 3 April 2020 the appellant collected two sealed bags from the secure delivery point. On the same day, the respondent collected a sealed bag addressed to her.
The appellant did not open its two bags for about three days. When it did so, it discovered one of the bags contained the items ordered by the respondent and an invoice directed to her. The following day, the appellant and respondent attended at the secure delivery point and exchanged bags.
The appellant says when it received the bag intended for it, a number of items were missing. The value of the missing gold bullion was $345,842. The appellant alleges that the respondent kept that gold. The respondent denies that and says that all she retained out of the transaction was the 22 kilograms of silver ordered by her and that she returned all gold that was in the bag when she collected it.
The appellant instructed lawyers who wrote a letter of demand to the respondent about six months after the exchange of bags. A solicitor responded on behalf of the respondent saying that she did not have the missing bullion. Thereafter, there was a history of communications for a lengthy period and proceedings were eventually issued on 3 March 2022, almost two years after the exchange of the bags. No defence was filed within the time required by the Rules.
About a month later, the appellant made application to the Registrar seeking default judgment for a liquidated sum. The sum was the alleged value of the missing bullion plus costs and interest. Judgment was entered by a Deputy Registrar on 6 May 2022.
There followed a period of attempted enforcement of the judgment. For a considerable period, the respondent was overseas. An investigation summons was listed for hearing on 1 September 2022. That was adjourned to allow the respondent to obtain legal advice and for a Vietnamese interpreter to be present.
An application to set aside the judgment was filed on 6 December 2022. It was the usual application seeking to set aside a judgment in default of filing a defence.
The judgment was irregular
The default judgment was entered for a fixed sum of money. That is appropriate where there is a liquidated claim. The claim was a non-monetary claim. The principal relief sought was the delivery up of the missing bullion. In the alternative, damages were claimed.
The irregularity in the judgment is because judgment was obtained as if the appellant had a liquidated claim. The appellant had a non-monetary claim or a claim for damages to be assessed. It was not a liquidated claim.
At the hearing before the Master, and on the appeal, the appellant accepted that the judgment was irregular. It did not adopt that position until the hearing before the Master.
The fact that a judgment was irregular means that an application to set it aside is different to the more common application to set aside a judgment in default of the filing of a defence. A different rule is applicable. The relevant rule is as follows:
142.11—Application to set aside for irregularity
(1) A party may apply under this rule to set aside or vary a judgment in default of defence on the ground that—
(a)     the Claim documents or Cross Claim documents were not served on that party in accordance with the requirements imposed by these Rules and their existence and content did not come to that party’s attention at least 28 days before the date on which the default judgment was entered;
(b)     the Claim documents or Cross Claim documents were served by email service or post service, (except when orders for substituted service by email or post were made by the Court in the proceeding pursuant to rule 42.9) the party was no longer using the address to which they were sent or they were not received at that address and their existence and content did not come to that party’s attention at least 28 days before the date on which the default judgment was entered;
(c)     the party obtaining judgment was not entitled to default judgment;
(d)     the judgment was obtained as a result of misrepresentation or misconduct by the party obtaining it; or
(e)     the judgment was otherwise obtained or granted as a result of an irregularity.
(2) If the Court is satisfied that the default judgment was obtained as a result of an irregularity under one or more paragraphs of subrule (1)—
(a)     the Court may set aside the default judgment on such conditions as it thinks fit;
(b)     if the only irregularity was that judgment was entered for a sum in excess of that to which the party obtaining judgment was entitled—the Court may instead, in the exercise of its discretion, amend the judgment to the correct amount;
(c)     if the only irregularity was that judgment was entered for a fixed amount when it should have been entered for an amount or relief to be assessed—the Court may instead, in the exercise of its discretion, amend the judgment to a judgment for an amount or relief to be assessed.
It can be seen that the rule provides the Court an ability to set aside a judgment if it is satisfied it was obtained by reason of an irregularity. That is the sole criterion. The Court is then given a discretion in UCR 142.11(2) as to the form of the order to be made. The Master made an order pursuant to UCR 142.11(2)(a). The complaint of the appellant is that an order should have been made under UCR 142.11(2)(c).
By way of contrast, an application to set aside judgment entered in default of the filing of a defence has different criteria. The relevant rule is:
142.12—Application to set aside on other grounds
(1) A party may apply under this rule to set aside or vary a judgment in default of defence on the ground that—
(a) the Claim documents or Cross Claim documents did not come to the attention of that party or the party has another reasonable excuse for not having filed a defence; and
(b) the party has a reasonable basis for defending the claim.
(2) If the Court is satisfied that both grounds in subrule (1) are established, the Court may set aside the default judgment on such conditions as it thinks fit.
The difference between the rules is that UCR 142.12(1) provides criteria to be satisfied before a judgment can be set aside. The relevant criterion in UCR 142.11(1)(e) is simply that the judgment is irregular.
Nature of the appeal
This is an appeal from the exercise of a judicial discretion by the Master. It is not a matter of the judicial officer hearing an appeal substituting the exercise of his own discretion.
In Success 618 Pty Ltd v New Zealand Natural Pty Ltd[1] Peek J said:[2]
I remind myself that while the present appeal is in the nature of a rehearing, the subject of the appeal is the Master’s exercise of his discretion pursuant to s 1335 of the Corporations Act 2001 (Cth). The precepts in House v The King apply. Unless there is established error, I am not entitled to substitute my own discretion in lieu of that of the Master. As the order has substantive consequences, I am to consider whether the learned Master considered all relevant facts, and no immaterial facts, whether the learned Master erred in law or principle, or whether the decision is so extreme that such an error should be inferred.
(footnotes omitted)
[1] [2015] SASC 182.
[2] [2015] SASC 182 at [6].
The appellant must establish an appropriate error.
The grounds of appeal
The grounds of appeal are as follows:
1. The exercise of the court’s discretion under UCR rr142.11 and 142.12 miscarried in that the learned Master:
1.1erred in finding that the respondent had established that she had a reasonable excuse for not having filed a defence;
1.2erred in failing to find that the respondent did not have a reasonable explanation for her delay in applying to set aside the default judgment;
1.3erred in finding that the respondent had established that she had a reasonable basis for defending the claim;
1.4erred in having regard to the respondent’s proposed plea in her defence that the police had undertaken a full investigation and had “found no wrongdoing on her part”;
1.5erred in granting leave to the respondent to file a further affidavit to address what the respondent contended were errors in her proposed defence; and
1.6erred in having regard to the absence of an explanation for what her Honour described as a “delay” on the part of the appellant, being the period between entry of default judgment on 6 May 2022 and service of the default judgment on 29 May 2022.
On the hearing before the Master, the appellant accepted that the judgment was irregular. It did not accept that the respondent had established a reasonable basis for defending the claim. On the hearing of this appeal, the appellant concedes that the respondent has a reasonable basis for defending the claim. As a consequence of that concession, grounds of appeal 1.3, 1.4 and 1.5 fall away.
The grounds of appeal in 1.1 and 1.2 are really different sides of the same argument.
Consideration
The matter came before the Master on the respondent’s application (FDN 18) which was an application pursuant to UCR 142.12. The application sought to set aside the default judgment and to be permitted to file a defence. It only became apparent during the course of the argument before the Master that the judgment was irregular. That meant that the matter fell to be determined pursuant to UCR 142.11. The consequence is significant.
It has long been the case that a respondent is entitled to have an irregularly obtained judgment set aside ex debito justitiae.[3] That is the case regardless of whether a defence on the merits has been established.[4]
[3] Gemini Property Investments Pty Ltd v Woodards Investments Pty Ltd & Ors [2000] SASC 210.
[4] Hughes v Justin [1894] 1 QB 667.
The starting point before the Master, therefore, was that the judgment was to be set aside. The only question became what the form of the order should be. UCR 142.11(2) provides the Court with a number of alternatives. The first is the usual order that the default judgment be set aside on such conditions as the Court thinks fit. The other two provisions allow for an amendment of the order in lieu of setting it aside.
At the time the Master was dealing with the matter, the respondent had filed an affidavit exhibiting her proposed defence. She was entitled to have the irregular judgment set aside. There would then be no judgment and no reason precluding the respondent from simply filing her defence.
On an application under UCR 142.12 a respondent has an obligation to satisfy the Court that she has a reasonable excuse for not having filed a defence and that she has a reasonable basis for defending the claim. That is the respondent’s onus.
There is no onus on the respondent pursuant to UCR 142.11. If there is any onus, it would be on the appellant to satisfy the Court that an order other than simply setting aside the irregular judgment was appropriate.
To some extent the Master treated the matter as being the equivalent of UCR 142.12. She considered the reasonableness of the respondent’s excuse for not filing a defence within time. The evidence was that the respondent had spent a considerable amount of time out of the country caring for an aged relative in Vietnam. The Master accepted that the respondent had established a reasonable excuse.
What the appellant seeks in grounds 1.1 and 1.2 is for this Court to find that there was no reasonable excuse for failing to file a defence. That is, the Court should make a different finding on the same facts to the findings made by the Master.
The appellant points to several matters to suggest error by the Master. Looking at the totality of the Master’s reasoning, I am not satisfied that any appealable error has been established. In reality, the appellant simply says on the evidence before her the Master should have come to a different conclusion. On an appeal from a discretionary decision, it is not appropriate for the Court to substitute its view of how the discretion might have been exercised. The appeal is dismissed.