Christopoulos v BN and R Roberts Pty Ltd - [2019] SADC 97

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Minor Civil Review)
CHRISTOPOULOS & ANOR v BN AND R ROBERTS PTY LTD
[2019] SADC 97
Judgment of His Honour Judge Durrant
12 July 2019
MAGISTRATES - APPEAL AND REVIEW - SOUTH AUSTRALIA
Application for review - minor civil decision dismissing an application to set aside a default judgment - applicant has an arguable case that not the proper defendant and an excuse for failing to file a defence - appropriate to join company of which applicant is a director as admits that company the proper defendant.
Application for review allowed and summary judgment set aside.
Joinder of Ilaundromat Pty Ltd ordered.
Judgment against joined party substituted.
Magistrates Court Act s 38; Magistrates Court (Civil) Rules Rule 87; Interpretation Act s 33, referred to.
Attorney General (SA) v Marminidis [2019] SASCFC 3, considered.

CHRISTOPOULOS & ANOR v BN AND R ROBERTS PTY LTD
[2019] SADC 97
Background

Mr Christopoulos applied to review the minor civil decision of a Magistrate made 18 April 2019 dismissing his application to set aside a default judgment.
The review application comes before this Court pursuant to s 38(6) of the Magistrates Court Act 1991, whereby this Court constituted by a single Judge, may on the application of a party dissatisfied with a judgment given in a Minor Civil Action, review the decision.
In undertaking a review of a minor civil decision, this Court is entitled to inform itself as it thinks fit and, in doing so, is not bound by the rules of evidence. This Court may, if it thinks fit, re-hear evidence adduced before the Magistrates Court and having undertaken a review, this Court may:
(a)affirm the judgment; or
(b)rescind the judgment and substitute a judgment that the Court considers appropriate; or
(c)if the review arises from a default judgment or a summary judgment, rescind the judgment, and:
(d)substitute a judgment that the Court considers appropriate; or
(e)remit the matter to the Magistrates Court for hearing or further hearing.
In undertaking and determining this review, this Court must act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal forms.
A decision of this Court on a review is final and is not subject to appeal.
The Claim
By minor civil claim dated 17 January 2019, BN & R Roberts Pty Ltd trading as FJ Roberts & Son alleged:
·Mr Christopoulos was provided a written quote dated 22 March 2018 in the amount of $13,989.00 (inclusive of GST) in relation to plumbing work at 378 Sturt Road, Clovelly Park;
·Mr Christopoulos accepted the quote and paid a deposit of $2,000.00 on 3 April 2018;
·the works were commenced at 378 Sturt Road, Clovelly Park;
·prior to completion of the works, Mr Christopoulos instructed the respondent to cease work until further notice as his landlord had declined to undertake further work necessary to operate a laundromat at 378 Sturt Road, Clovelly Park;
·an amended invoice was issued for the work completed in the amount of $11,888.18 (inclusive of GST); and
·Mr Christopoulos failed to pay the sum of $11,188.18 or any sum.
Attached to the Claim was an unaddressed Quote Request from FJ Roberts & Son number 859, dated 22 March 2018 for a total price of $12,718.00 plus GST for work as follows:
·to supply and install a 50mm copper gas line from the meter which needs to be installed on the back of the shop and connect four stack dryers and hot water heater;
·the supply of a Rinnai #D200e and install and running of a 25mm copper water line;
·covers supplying and installing flues to do the four stack dryers;
·running 110mm HDPE waste line from the back of the washing machines and connecting to the outside main drain;
·covers supplying and installing a stainless steel cooling channel and an HDPE lint trap with basket plus removing and reinstalling concrete needed to be removed to connect the drain at the back of the shop; and
·water line is connected from the back of the shop only.
A tax invoice was also attached to the Claim dated 29 March 2018 from FJ Robert & Son to iLaundromat Pty Ltd providing a credit of $11,989.00 calculated by reference to the Quote Request $13,989.00 less the deposit of $2,000.00.
The Claim was posted by the Magistrates Court on 18 January 2019 to Mr Christopoulos at 121 Regency Road, Croydon Park, South Australia. Mr Christopoulos failed to defend the claim and default judgment was entered with damages to be assessed. A Notice of Assessment dated 26 March 2019 was sent to Mr Christopoulos by the Magistrates Court to 121 Regency Road, Croydon Park and also to 353 Anzac Highway, Plympton notifying an assessment of damages on 18 April 2019.
Application to set aside default judgment
A Notice of Acting for Mr Christopoulos was filed by solicitors on 10 April 2019 together with an Interlocutory Application, returnable on 18 April 2019. By that interlocutory application, Mr Christopoulos applied for the judgment to be set aside and for leave to file and serve a defence. In support of that application, Mr Christopoulos filed an affidavit dated 10 April 2019 which deposed that:
1he was a director of iLaundromat Pty Ltd;
2to date he had not been served with a copy of the Claim which was served at his old address and despite a mail redirection in place;
3he had received by post the Notice of Assessment dated 26 March 2019 on 1 April 2019 addressed to 121 Regency Road, Croydon Park (as redirected to 2 Aroona Road, West Croydon);
4he thought that the Notice of Assessment was a claim and took steps to file a defence which was rejected by the Court as judgment had been entered;
5he had a proper defence to the Claim as:
a.      the plaintiff had issued against the incorrect defendant as iLaundromat Pty Ltd was party to the contract and not him personally;
b.      iLaundromat Pty Ltd operated a laundry business and sought to lease the property the subject of the Claim to open a laundromat;
c.      the laundromat required specific electrical and plumbing infrastructure in order to operate the number of machines required to run the business and fitout works were required;
d.       iLaundromat Pty Ltd engaged FR Roberts & Son to perform the necessary plumbing works;
e.      from time to time the plaintiff issued invoices for part performance of the plumbing works and on 27 September 2018 Mr Christopoulos directed FR Roberts to immediately cease all works, informing them that the reason for doing so was because the owner of the property had delayed in having the electrical power infrastructure upgraded and was considering whether they would proceed with the fitout works at all;
f.      ultimately the owner of the property was neither willing nor able to upgrade its electrical power infrastructure and accordingly the laundromat could not be opened at the property;
g.     by invoice dated 7 December 2018 the plaintiff issued Mr Christopoulos with an invoice for work allegedly performed;
h.     iLaundromat Pty Ltd disputes that the works the subject of the invoice were performed as follows:
i.he supply and installation of copper line was already paid for in an earlier invoice;
ii.the installation of hot and cold water was not completed as there was no water supply to the property at that time;
iii.the gas and hot water service was installed on a date after he had directed that the plumbing work cease;
iv.the waste drain was not started as the original pipework was connected to the original clay pipes;
v.the stainless steel link water tank was delivered on a date after he had directed that the plumbing work cease;
vi.the flue was not installed;
vii.the washing machine and dryers were not installed; and
viii.the total percentage of the plumbing work completed was only 30 to 40% of the total plumbing works.
i.      he would suffer significant prejudice if the judgment was not set aside as it would likely affect his credit rating.
Mr Christopoulos exhibited a draft defence to his affidavit which denied the whole of the Claim, asserted that he was not the correct party and otherwise indicated that he was unable to provide any further information to assist the Court. I note that he can provide information to assist the Court in respect of this dispute as a director of iLaundromat Pty Ltd and has demonstrated the knowledge set out in his affidavit. He also exhibited correspondence from the respondent referring to invoice No. 2590 from FJ Roberts & Son to iLaundromat Pty Ltd, and some photographs of what he alleged was unfinished work.
On 18 April 2019, the learned Magistrate delivered ex tempore reasons in respect of the application to set aside judgment. I have set out in full those reasons:
In my view, based upon what I have heard, even if the plaintiff has erroneously sued the wrong party, which I do not accept, the plaintiff performed work up until the time he was requested to stop at which time he did stop. His claim is for monies still owing in relation to that work. He has received [sic] part payment, without complaint.
I am not satisfied the defendant has a reasonable defence. Further, nothing has been provided in the affidavit in support of the application to indicate that the plaintiff knew or should reasonably have known that he was dealing with a company.
I find that it was reasonable for him to believe that he was dealing with the currently named defendant in his personal capacity. No contract in writing or any other documentation has been produced which would support the defendant’s application.
The application to set aside judgment is therefore refused.
Application to review
The applicant has filed, by his solicitor, an affidavit sworn 8 July 2019 to support the application to review the decision of the Magistrate. It exhibits an undated invoice from FJ Roberts & Son to iLaundromat Pty Ltd in the amount of $11,888.18 (inclusive of GST) to replace quoted invoice 2205. Invoice 2205 has not been provided to the Court.
The applicant has also filed written submissions and read both his affidavit sworn 10 April 2019 and the affidavit of his solicitor.
The invoice in the amount of $11,888.18 from FJ Roberts & Son to iLaundromat Pty Ltd, the subject of the judgment, related to the following work:
·supply and install copper line;
·actual work completed;
·hot and cold water connected and gas finished; and
·waste drain finished and parts of stainless steel lint cooling tank, hot water heater and flue and total labour in the amount of $5,200.00.
The payment advice attached to the invoice shows the customer as iLaundromat Pty Ltd.
Mr Christopoulos submits that:
·he was never served with the Claim;
·the Claim named the wrong defendant and iLaundromat Pty Ltd was the proper party;
·the applicant has reasonable grounds to defend the proceedings;
·the proper party, iLaundromat Pty Ltd, has reasonable grounds to defend the Claim; and
·the applicant would suffer personal prejudice if default judgment was not set aside.
I asked Mr Christopoulos, in his capacity as a director of iLaundromat Pty Ltd, whether he would consent to that company being joined to this action on the basis that he have the opportunity to cross-examine Mr Brett Roberts, who supervised the work undertaken. He consented.
Mr Roberts gave evidence for the respondent that the invoice dated 7 December 2018 was prepared on his instruction and as requested by Mr Christopoulos to replace the quote and charge for all works done and goods provided. That was agreed by Mr Christopoulos. Mr Christopoulos cross-examined Mr Roberts concerning the work and the invoice. I am satisfied and find that the invoice properly recorded the work done and goods supplied.
Consideration
The power to set aside judgment is vested by r 87 of the Magistrates Court (Civil) Rules and provides:
87.(1)     The Court may set aside or vary a judgment (not being a final judgment).
(2)     The Court must not set aside such a judgment unless the party seeking to set it aside establishes that he or she –
(a)    has an arguable case on the merits; and
(b) has a reasonable excuse for not having complied with these Rules, or an order of the Court, or any time limit fixed by these Rules or order of the Court, in respect of the action or proceeding.
As noted in Attorney-General (SA) v Marminidis,[1] ‘both r 87(2)(a) and (b) must be satisfied before the power to set aside arises.’
[1] [2019] SASCFC 3, [186].
The applicant contends that he has an arguable case on the merits. He says that he is not the contracting party and has been wrongly sued. The invoices and correspondence between the parties support the submission that the dealing was between the respondent and iLaundromat Pty Ltd. I am satisfied that Mr Christopoulos has an arguable defence.
The position in relation to whether Mr Christopoulos has a reasonable excuse for not having complied with the Court Rules and defended the Claim, premised on his evidence that he never received the Claim, is less clear. He accepts the Claim was sent to his former business address. He says that the redirect between his business premises was ineffective. He says that he received the Notice of Assessment from the Court sent to a different, also redirected, address and reacted promptly to that.
The Court should be cautious in assessing evidence that mail has not been received when it has been properly sent. Under Magistrates Court Rules 45 and 47 the Registrar may serve a Claim by prepaid post. The Register did send the Claim to an address which Mr Christopoulos accepts was a previous address and from which he had instructed Australia Post to redirect post. Under s33 of the Acts Interpretation Act service by post is taken to have been effected when the letter would have been delivered in the ordinary course of post. Where the party served by post has not received the document any resulting default judgment will be treated as regular for the purposes of Magistrates Court Rule 87 where the other party did not know that the document had not been properly served.[2]
[2] Battiste v Mulvaney (SASC, Doyle CJ, No. S6419, 7 November 1997, unreported, BC9801033).
Having noted the effect of the Rules and the decision in Battiste v Mulvaney, in my view, the evidence of Mr Christopoulos that he did not receive the Claim should be accepted in this case.
The application to set aside summary judgment must therefore be granted.
Mr Christopoulos, who is a director of iLaundromat Pty Ltd, accepts that the respondent is entitled to some payment by iLaundromat Pty Ltd for work done. He quantifies that as at least 30-40% of the quoted sum of $12,718.00 plus GST. Mr Christopoulos, in his capacity as a director of iLaundromat Pty Ltd consented to iLaundromat Pty Ltd being joined.
I joined iLaundromat Pty Ltd as a party to this action, as a second applicant, pursuant to District Court Rule 74. iLaundromat Pty Ltd is a person interested in the dispute, and is a person that should be joined as a party to ensure that all matters in dispute in the action[3] are determined and in order to enable determination of a related dispute and thus avoid a multiplicity of proceedings. The power of this Court on review includes the rescinding of a judgment and the substitution of a judgment that the Court considers appropriate. It would be in the interests of justice for this dispute to be dealt with in its entirety before this Court.
[3] See DCR 6 and 28.
In respect of this review, I find that the invoice in the amount of $11,888.18 from FJ Roberts & Son to iLaundromat Pty Ltd, the subject of the judgment, was payable in respect of the following work:
·supply and install copper line;
·actual work completed;
·hot and cold water connected and gas finished; and
·waste drain finished and parts of stainless steel lint cooling tank, hot water heater and flue and total labour in the amount of $5,200.00.
Having set aside the summary judgment against Mr Christopoulos, I will substitute a judgment in the amount of $11,888.18 plus interest against iLaundromat Pty Ltd. I will fix interest from the date payment was due, 14 December 2018, until the date of judgment in the amount of $200.00.
Orders
I make orders as follows:
1.Summary judgment against the applicant be set aside.
2.iLaundromat Pty Ltd be joined as a party to this action as an applicant.
3.Judgment for the respondent in the amount of $11,999.18 against iLaundromat Pty Ltd.
4.Interest on $11,888.18 from 14 December 2018 up until the date of judgment in a fixed amount of $200.00.
5.No order as to costs.