Cosenza v Origin Energy Ltd

Case [2017] SASC 145

SUPREME COURT OF SOUTH AUSTRALIA

(Magistrates Appeals: Civil)

COSENZA v ORIGIN ENERGY LIMITED

[2017] SASC 145

Judgment of The Honourable Justice Blue

12 October 2017

MAGISTRATES - APPEAL AND REVIEW - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT

PROCEDURE - JUDGMENTS AND ORDERS - AMENDING, VARYING AND SETTING ASIDE - ACTIONS TO REVIEW OR SET ASIDE JUDGMENT

TORTS - TRESPASS - TRESPASS TO LAND AND RIGHTS OF REAL PROPERTY - WHAT CONSTITUTES TRESPASS AND DEFENCES THERETO

Appeal against Magistrate’s order setting aside default judgment.

The Cosenzas sued Mr Palancha and Origin Energy Limited for damages of $100,000 for trespass to land. 

After Origin was served with the proceeding by post and failed to file an appearance within 21 days, the Cosenzas filed a Request to the Registrar to sign judgment in default.  The Registrar erroneously entered judgment for $100,000 instead of entering judgment on liability and listing the matter to proceed to an assessment of damages.

Origin applied to set aside the judgment supported by an affidavit by its corporate lawyer, Ms Tipping.  Ms Tipping exhibited a draft defence and said that she believed that it was arguable that Origin had a good defence because there was no revocation of the implied licence to enter the property and when revoked Mr Palancha left the property within a reasonable time.  Ms Tipping did not depose to any detail of her source of knowledge as to what occurred at the Cosenza property.

The Magistrate set aside the judgment in its entirety.  Mr Cosenza appeals against that order, contending that the Magistrate erred in finding that Origin had established an arguable defence and that the Magistrate ought instead to have confined the judgment to  judgment on liability for damages to be assessed. 

Held:

1.       The onus of proof of establishing an implied licence on an application to set aside judgment for trespass to land lies on the applicant defendant (at [49]). 

2.       Ms Tipping’s affidavit did not establish an arguable defence of implied licence (at [51] - [56]).

3.       Ms Tipping’s affidavit did not establish an arguable defence that Origin was not liable for Mr Palancha’s actions (at [67] - [71]).

4.       The Magistrate ought to have varied the judgment to confine it to a judgment on liability with damages to be assessed rather than setting it aside in its entirety (at [72]).

5.       A new affidavit by Ms Tipping filed in this Court after the hearing of the appeal establishes that Origin has an arguable defence of implied licence, justifying a setting aside of the judgment in its entirety and the matter should proceed to trial in the Magistrates Court (at [83] - [85]).

Colonial Mutual Life Assurance Society Limited v The Producers and Citizens Cooperative Assurance Company of Australia Limited (1931) 46 CLR 41; Edwards v Railway Executive (1952) AC 737; Halliday v Nevill (1984) 155 CLR 1; Plenty v Dillon (1991) 171 CLR 635; Sweeney v Boylan Nominees Pty Limited (2006) 226 CLR 161, discussed.

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Cosenza v Origin Energy Ltd [2017] SASC 145
Case
[2017] SASC 145
Decision Date

CaseChat Overview and Summary

Mr Cosenza appeals against the order made by the Magistrate in the Magistrates Court of South Australia, arguing that the Magistrate erred in finding that Origin Energy Ltd had established an arguable defence to the claim for trespass to land and in setting aside the default judgment entered against Origin. The appeal centres on whether the Magistrate was correct in setting aside the default judgment, rather than varying it to confine the judgment to a finding of liability with damages to be assessed. The alternative contention raised by Mr Cosenza was that the Magistrate erred in refusing his application for an adjournment.

The primary legal issue before the court was whether the Magistrate correctly exercised his discretion in setting aside the default judgment instead of varying it. The court had to consider whether Origin had established an arguable defence to the claim for trespass to land and whether the Magistrate had the discretion to set aside the judgment rather than vary it. The court also needed to determine whether the Magistrate erred in refusing the adjournment application.

The court found that the Magistrate did not explicitly exercise the discretion to set aside the judgment and, in the absence of reasons, it could not be inferred that the discretion was exercised. The court held that the Magistrate should have varied the judgment to substitute judgment on liability with damages to be assessed and remitted the matter to the Magistrates Court for assessment of damages. The court took into account the error made by the Registrar in entering the default judgment and the fact that Origin failed to establish an arguable defence. The court also considered new evidence filed by both parties on appeal and decided the matter based on that evidence, rather than remitting it to the Magistrates Court.

In conclusion, the court varied the Magistrate's order by substituting judgment on liability with damages to be assessed and remitted the matter to the Magistrates Court to proceed to an assessment of damages. The court did not find it necessary to address Mr Cosenza's alternative contention regarding the adjournment application.

Orders

Orders of the court

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Background

Background to the litigation

Mr Cosenza appeals against the order, contending that the Magistrate erred in finding that Origin had established that it had an arguable defence and he ought to have confined the judgment to a judgment on liability for damages to be assessed rather than setting it aside in its entirety. Mr Cosenza contends in the alternative that the Magistrate erred in refusing his application for an adjournment.Background On 30 June 2012 the Cosenzas were the occupiers of a house property at Woodville South. Mr Palancha entered the property, walked to the front door and rang the doorbell. When Mr Cosenza answered the door, Mr Palancha said that he was selling electricity supply contracts for Origin and produced an Origin identification card bearing the number 25262. Mr Cosenza escorted Mr Palancha from the property. On 9 July 2012 Mr Cosenza wrote a letter to Origin’s legal department alleging that Mr Palancha had committed trespass to land and foreshadowing an intention to bring an action in the District Court.[1][1] Although the letter was marked without prejudice and was expressed to be a notice before action for the purpose of rule 33 of the District Court Civil Rules 2006, both parties by their conduct have waived any settlement privilege that would otherwise apply to the communications between them. On 4 September 2012 Ms Tipping wrote a letter in response to Mr Cosenza. She said:We have investigated this matter internally and, based on our findings strongly deny the allegations you have made against Origin. We believe your claim has no merit or prospect of success … We will defend any action you bring against us and will seek costs. On 19 March 2015 the Cosenzas issued the claim against Mr Palancha and Origin. They claimed damages for trespass to land, including for anguish, distress and aggravation to pre-existing psychiatric conditions suffered by Mr Cosenza, aggravated and exemplary damages. On 23 November 2016 Mr Cosenza posted the claim to Origin’s registered office in Sydney and filed an affidavit of proof of service. On 28 December 2016 Mr Cosenza filed an application to the Registrar to sign judgment against Origin in default of defence. On 28 December 2016 the Registrar entered judgment in favour of the Cosenzas against Origin for $100,000. On 17 January 2017 Mr Cosenza wrote a letter to Origin’s legal department informing them of the judgment. He enclosed a Creditors Statutory Demand for $100,000. On 7 February 2017 Ms Tipping swore an affidavit in support of an application to set aside the default judgment. Ms Tipping exhibited her correspondence with Mr Cosenza and a draft defence. On 8 February 2017 Origin’s solicitors filed an application to set aside the default judgment together with an affidavit of Roxanne Smith exhibiting Ms Tipping’s supporting affidavit. On 14 February 2017 the Magistrate heard Origin’s application. Mr Cosenza applied for an adjournment to enable him to file an answering affidavit. The Magistrate refused the application. After hearing argument, the Magistrate gave ex tempore reasons for granting the application to set aside judgment and ordering that a defence be filed within 21 days.The Magistrate’s reasons

Evidence

Evidence Before The Court

Taking into account the fact that the error was one made by an officer of the Court, coupled with the fact that Origin clearly failed to establish that it had an arguable defence, it is appropriate to exercise the discretion to vary the judgment to substitute judgment on liability with damages to be assessed and remit the matter to the Magistrates Court to proceed to an assessment of damages rather than setting aside the judgment in its entirety.New evidence on appeal As noted above, both parties filed new evidence on appeal relevant to the question whether Origin has an arguable defence to the claim. Mr Cosenza filed affidavits sworn on 2 and 14 June 2017. Origin filed an affidavit by Ms Tipping sworn on 13 June 2017. The parties agree that, rather than remitting the matter to the Magistrates Court to hear and determine a fresh application to set aside the judgment based on the new material, I should decide that question.Implied licence to enter Ms Tipping exhibits a statement taken from Mr Palancha and signed by him on 9 August 2012. Mr Palancha says that he entered the property through a small [pedestrian] entrance gate on its left hand side (the small entrance), made his way to the front door and knocked on the door. He said that the occupant [obviously Mr Cosenza] told him that he had trespassed on his property and Mr Palancha replied “What is the problem?” The occupant led him to a large [driveway] entrance on the right hand side of the property (the large entrance) and pointed at a no trespassing sign on the right hand gate. Mr Palancha said that he told the occupant that he did not see the sign. The occupant said “You have now seen the sign, leave”. Mr Palancha apologised and left the property by the large entrance. In Mr Cosenza’s responding affidavit sworn on 14 June 2017, Mr Cosenza says that the gate at the small entrance was kept locked. He also says that there was a trespass sign clearly delineated at that gate. Mr Palancha’s statement is hearsay and would be inadmissible at trial. However, as observed above hearsay evidence is generally admissible on an application to set aside judgment. The evidence of Mr Palancha’s statement is sufficient to establish an arguable defence to trespass by Mr Palancha’s entry onto the property. While there is a conflict between Mr Cosenza’s evidence that the gate at the small entrance was kept locked and Mr Palancha’s statement that he entered through that gate, this is the type of conflict that is to be resolved at trial rather than on a set aside application. While Mr Palancha did not say that he checked the gate at the small entrance for a sign after being escorted off the property and his statement suggests that he did not, he did say that he told the occupant that he did not see a sign when entering through the property and for the purposes of a set aside application (as opposed to trial) it may be inferred that Mr Palancha did not in fact see a sign when entering. Mr Cosenza’s responding affidavit submits that Mr Palancha did not refute the existence of a sign at the small gate. If Mr Palancha gives evidence at trial, no doubt his examination and cross-examination will explore whether he did see a sign at the small gate and if not whether and if so how he looked for a sign. However, on a set aside application, it is sufficient to give rise to an arguable defence that Mr Palancha said that he did not see a sign when entering through the small gate.Failing to leave when requested

Decision

Reasons for decision

Given this conclusion, it is not necessary to consider Mr Cosenza’s alternative contention that the Magistrate erred in refusing his application for an adjournment. Set aside versus variation of judgment As noted above, Origin accepts that, if it did not establish that it had an arguable defence on the merits, the Magistrate had power to vary the judgment by confining the judgment to liability with damages to be assessed. However, Origin contends that in that event the Magistrate nevertheless had a discretion to set aside the judgment instead of varying it and it has not been demonstrated that the Magistrate erred in so doing. The Magistrate did not need to decide whether the discretion would have been exercised to vary rather than set aside the judgment if Origin had not established that it had an arguable defence because the Magistrate found that it had established an arguable defence. The Magistrate did not explicitly refer to the discretion. Origin contends that it should be inferred that the Magistrate exercised the discretion against varying the judgment. I reject that contention because, if the Magistrate had done so, the Magistrate would have been bound to give reasons for the exercise of the discretion. In the absence of the Magistrate saying that he exercised the discretion and in the absence of any reasons for the exercise of the discretion, the only conclusion open is that the Magistrate did not exercise the discretion. In any event, the absence of any reasons would have vitiated any exercise of the discretion by the Magistrate. In the circumstances, it is appropriate that I exercise the discretion rather than remitting the question to the Magistrates Court because the issues were fully argued before me and this will save the parties further time and cost. As the Magistrate observed, it was the Registrar who was responsible for entering judgment erroneously for a money sum when the Registrar ought only to have entered judgment on liability with damages to be assessed. Taking into account that Mr Cosenza was not a lawyer, the Request to Registrar signed by him left it to the Registrar to determine the appropriate form of judgment. Taking into account the fact that the error was one made by an officer of the Court, coupled with the fact that Origin clearly failed to establish that it had an arguable defence, it is appropriate to exercise the discretion to vary the judgment to substitute judgment on liability with damages to be assessed and remit the matter to the Magistrates Court to proceed to an assessment of damages rather than setting aside the judgment in its entirety.New evidence on appeal As noted above, both parties filed new evidence on appeal relevant to the question whether Origin has an arguable defence to the claim. Mr Cosenza filed affidavits sworn on 2 and 14 June 2017. Origin filed an affidavit by Ms Tipping sworn on 13 June 2017. The parties agree that, rather than remitting the matter to the Magistrates Court to hear and determine a fresh application to set aside the judgment based on the new material, I should decide that question.Implied licence to enter

Ratio Decidendi

Legal Principle Established

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