Carolla Investments Pty Ltd v Central Plant Hire 2000 Pty Ltd No. Scciv-01-1173

[2001] SASC 332

CAROLLA INVESTMENTS PTY LTD v CENTRAL PLANT HIRE 2000 PTY LTD
[2001] SASC 332

Magistrates Appeal:  Civil

1. Mullighan J  (Ex tempore)         This is an appeal by the plaintiff in an action in the Magistrates Court, Civil Division, against an interlocutory order made by a learned Magistrate setting aside an interlocutory judgment and granting leave to the defendant in the action to file and serve a defence and counterclaim within 7 days. That order was made on 25 July 2001.  Leave to appeal is necessary because the appeal is against an interlocutory order.  Leave had not been sought by the appellant but I permitted an application for leave to be made to me.  I proceeded to hear the application and the argument as to the merits of the appeal.

2. The action is brought by the plaintiff by a summons dated 4 June 2001 claiming the sum of $28,000 alleged to be the balance of rental and Goods and Services Tax due by the defendant for the months of November and December 2000, and January to June inclusive 2001.  The plaintiff owned premises at Wingfield and, to use a neutral expression, the defendant was in occupation at those premises. There had been some attempt by the plaintiff to have the defendant leave the premises, but the defendant claimed to be a monthly tenant, to be paying an agreed amount of rent, and to be entitled to remain in occupation.

3. The plaintiff had sought, unilaterally, to increase the rent to $6,000 per month plus Goods and Services Tax. The claim against the defendant is based upon rent at that amount and, I assume, a slightly lower amount of $5,500 for a short time which the plaintiff claimed to fix at an earlier time.

4. Both parties were represented at all material times by solicitors.

5. Prior to the institution of the proceedings by the plaintiff, there had been correspondence from the defendant’s solicitor to the plaintiff’s solicitor explaining in some detail the defendant’s position, and the basis upon which it was asserted that no money was due by the defendant to the plaintiff.

6. After the summons was served on the defendant, the defendant’s solicitor prepared a defence and a counterclaim but did not file that document. Instead, he sent it to the director of the defendant, who was familiar with the matter, for confirmation.

7. On 3 July 2001 the time within which the defendant had to file the defence and counterclaim expired. On 5 July the plaintiff’s solicitor signed judgment without the knowledge of the defendant or its solicitor. The defendant, without undue delay, made an application to set aside the judgment and for leave to file a defence and counterclaim.

8. When the matter came on for hearing before the learned Magistrate, there was extensive argument presented by the legal representatives of the respective parties. The learned Magistrate gave only very brief reasons for his decision. He referred to the submissions that had been made before him and to the affidavit of the defendant’s solicitor and to the draft of the defence which had been annexed to that affidavit. Presumably he also referred to the draft of the counterclaim but that was not a matter relevant to his consideration at that time.

9. He said that the lateness in attending to the matter, meaning no doubt the filing of the defence, had not been the specific fault of the defendant. He went on to say that he made no comment as to whether the defence disclosed ‘an absolute argument’ but that it did disclose ‘the possibility that the matter should be decided by trial’. He made no other findings or observations in the reasons which he gave.

10. The question is whether the appellant should be granted leave to appeal against that interlocutory order, and if so, whether the appeal should be allowed.

11. It is submitted, on behalf of the plaintiff, that there has not been any adequate explanation of the reason for not filing the defence within time and that the Magistrate had not considered whether the defendant had a bona fide defence which was arguable in the circumstances.

12. The learned Magistrate clearly did consider the question of delay because he decided that it was not the fault of the defendant. Plainly, he has not expressed himself in any detail, but it seems likely that he took the view that the delay was so relatively brief and was due to the defendant’s solicitor seeking confirmation from the defendant of the allegations in the defence and counterclaim, that it should not be an obstacle to the defendant defending the action.

13. Upon the material before me, I think that is an appropriate conclusion. It is true that the defendant’s solicitor might have placed more information before the Magistrate as to when certain things were done, but given the brief extent of the delay, that is a matter of no significance.

14. This court commonly, in this jurisdiction, grants an extension to a party who is out of time by a matter of only days and I think the learned Magistrate was entitled to do likewise in the proper exercise of his discretion.

15. The proposed appeal, insofar as it is based on that matter, could not succeed.

16. The next question is whether the defendant has a bona fide defence which is arguable. The statement of claim is expressed in very brief terms. It is simply a claim for money said to be the balance of rental and Goods and Services Tax due for the months therein mentioned. There is no pleading as to the nature of the relationship between the parties in the context of the occupation of the land, that is to say whether there is a lease, a tenancy or occupation on some other basis. The defendant proposed to plead that there was a monthly tenancy and the rent was $2,500 per month plus Goods and Services Tax all of which had been paid. That is, of course, all a question of fact and provides the defendant with an arguable case.

17. The defendant also proposes to plead that pursuant to the Retail and Commercial Leases Act 1995 any claim for increase in rent cannot be made. There is no need to consider the detail of that claim for present purposes. It is sufficient to say that whether there is any basis for it will depend upon the nature of the relationship between the parties in the context of the nature of the business conducted on the land and whether it can be said that the premises can be described as retail shop premises as defined in that Act. That is another substantial matter which the defendant wishes to raise and in my view, it has an arguable case about that matter.

18. I do not think it is necessary to consider some of the other matters raised in argument by the appellant which were of a more technical nature with respect to the application of rules of court, as I can see no basis for a conclusion that the learned Magistrate exercised his discretion on an incorrect basis.

19. Accordingly, I do not consider that there is merit in the appeal and leave should not be granted. However, I wish to make it clear that full argument has been presented on this appeal and that argument is what would have been presented had leave been granted.  Consequently there has been no disadvantage to the plaintiff by an application for leave to appeal having not been made at the appropriate time. I refuse the application.  I order that the plaintiff pay the defendant’s costs of this application on a party and party basis to be taxed.