Cosenza v Roy Morgan Interviewing Services Pty Ltd

Case [2019] SASC 95

SUPREME COURT OF SOUTH AUSTRALIA

(Magistrates Appeals: Civil)

COSENZA v ROY MORGAN INTERVIEWING SERVICES PTY LTD

[2019] SASC 95

Judgment of The Honourable Justice Parker

6 June 2019

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - ENDING PROCEEDINGS EARLY - DEFAULT JUDGMENT - SETTING ASIDE

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - JUDGMENTS AND ORDERS - AMENDING, VARYING AND SETTING ASIDE JUDGMENTS AND ORDERS - ACTIONS TO REVIEW OR SET ASIDE JUDGMENT OR ORDER

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

EMPLOYMENT LAW - RIGHTS AND LIABILITIES AS BETWEEN EMPLOYER AND THIRD PARTIES - LIABILITIES OF EMPLOYER - FOR TORTS OF EMPLOYEE

This is an appeal against an order of the Magistrates Court setting aside a default judgment.

The appellant filed a claim against the respondent in the Magistrates Court. It was alleged that two individuals, said to be an employee and agent of the respondent, entered the appellant’s residential property and thereby committed a trespass for which the respondent is vicariously liable.

As the respondent did not file a defence to the claim within time, default judgment was awarded against it. Shortly thereafter, the respondent applied to have default judgment set aside. A Magistrate granted the application and set aside default judgment. That decision is the subject of this appeal.

Held, per Parker J, dismissing the appeal:

1.  The discretionary power under r 87(1) of the Magistrates Court (Civil) Rules 2013 (SA) to set aside default judgment cannot be exercised unless the requirements of r 87(2) are satisfied (at [31]).

2.  A party applying to set aside default judgment bears the burden of satisfying the Court that the requirements in r 87(2) are satisfied, so that the discretion under r 87(1) is enlivened (at [33]).

3.  To establish an arguable defence on the merits for the purposes of r 87(2)(a), a defendant must do more than make a bare assertion of a good defence. A defendant must present evidence of sufficient particularity to satisfy the Court that the defence is one that the defendant genuinely intends to pursue and has an arguable basis for pursuing (at [36]).

4.  Hearsay evidence is generally admissible on an application to set aside default judgment (at [33], [37], [40]).

5.  The documents provided to the Court by the appellant serve to overcome what would otherwise be deficiencies in the evidentiary foundation for the respondent’s application to set aside the judgment (at [38]-[43]).

6. An inquiry as to whether there is an arguable defence on the merits is not to be turned into a trial on the affidavits (at [42]).

7.  The Magistrate’s discretion to set aside default judgment under r 87(1) was enlivened (at [44]).

8.  In determining whether a Magistrate erred in exercising the discretion under r 87(1), the test to be applied is whether the Magistrate acted on a wrong principle, allowed extraneous or irrelevant matters to guide or affect them, mistook…

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Cosenza v Roy Morgan Interviewing Services Pty Ltd [2019] SASC 95
Case
[2019] SASC 95
Decision Date

CaseChat Overview and Summary

The case of Cosenza v Roy Morgan Interviewing Services Pty Ltd involved a dispute where the appellant, Cosenza, sought to set aside a default judgment against the respondent, Roy Morgan Interviewing Services Pty Ltd. The primary issue was whether the respondent's application to set aside the default judgment met the criteria under rule 87(2) of the Magistrates Court (Civil) Rules, which requires the party to establish an arguable case on the merits and a reasonable excuse for non-compliance with procedural requirements. The respondent argued that there was confusion regarding the service of the claim, and it had a prima facie defence, including the assertion that the trespassers were not its employees and were unknown to the respondent at the relevant time. The court needed to determine if these arguments were sufficient to satisfy the requirements of rule 87(2).

The court examined the respondent's affidavits and the evidence presented, noting that the respondent had the burden of proving the conditions for setting aside the default judgment. The court found that the respondent had indeed presented an arguable case on the merits, as the respondent's affidavits indicated that the trespassers were not its employees and were unknown to the respondent. Additionally, the court accepted that there was a reasonable excuse for the respondent's non-compliance due to the confusion regarding the service of the claim. Therefore, the court concluded that the respondent had met the requirements of rule 87(2), and the Magistrate's decision to set aside the default judgment was upheld.

The appeal was dismissed on all grounds. The court invited the respondent to make submissions on costs within seven days of the publication of the reasons, and allowed the appellant a further seven days to respond. The decision confirmed that the respondent's application to set aside the default judgment was properly considered and met the necessary criteria under the relevant rules.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

The respondent says, in response to the appellant’s submission as to the inadequacy of its affidavit material, that because Mr Thumar is no longer its employee it is difficult to get evidence voluntarily from either Mr or Mrs Thumar to support its application. Because direct evidence of the conduct which gives rise to this claim is confined to Mr Thumar, Mrs Thumar, the appellant and his mother, it should not be counted against the respondent that its supporting affidavits include hearsay evidence. The respondent’s supporting affidavits were sworn by in-house counsel (as opposed to an external firm of solicitors). It is open for the Court to be satisfied that the evidence of in-house counsel, who has made detailed inquiries, indicates the thinking of the respondent company.Evidence before the Magistrate As previously noted, the evidentiary material before the Magistrate comprised affidavits sworn by the appellant and by Mr Yeatman. Mr Yeatman’s first affidavit, dated 24 September 2018, largely includes matters which are only to relevant to the issue of the service of the claim. In his second affidavit, dated 10 October 2018, Mr Yeatman deposed to various matters relevant to the merit of the respondent’s defence, including the following:3. The essence of the Plaintiffs’ claim is that the Defendant is liable at law for the conduct of a person who allegedly trespassed on private property at which the Plaintiffs reside. The Defendant swears to the fact that the person who allegedly trespassed on the property at which the Plaintiffs reside, was not known to the Defendant at the time, and had no legal relationship whatsoever with the Defendant.…6. The person who allegedly trespassed on the property, Mrs Thumar, was not an employee of the Defendant and was not even known to the Defendant at the relevant time.This affidavit also enclosed the defence which the respondent proposed to file if given permission. While Mr Yeatman has deposed to Mrs Thumar being unknown to the respondent at the relevant time, he has not deposed to Mr and Mrs Thumar’s conduct. As the appellant observes, neither of Mr Yeatman’s affidavits include an assertion that Mr Thumar did not enter the appellant’s property. The appellant’s affidavit sworn on 23 October 2018 annexed correspondence between the appellant and respondent, and between employers of the respondent. Details of this correspondence is set out in the following paragraphs [22] to [29]. The appellant stated in his affidavit that on 9 October 2017 the Chief Executive of the respondent, Michele Levine, had forwarded to him and his mother a letter apologising “for the conduct of the Thumars”. He also asserted that the Chief Executive had admitted in the letter that both Mr and Mrs Thumar had entered his property. Ms Levine’s letter of 9 October 2017 is annexed to the appellant’s affidavit. Her letter does not contain the admission contended for by the appellant. Ms Levine stated “in February 2017, a person purporting to be one of our interviewers entered your property”. Ms Levine then stated that she was sorry that this incident had occurred. At no point in the letter did Ms Levine admit that both Mr and Mrs Thumar had entered the property. Given the content of Mr Yeatman’s affidavit, it can be inferred that the reference by Ms Levine to “a person purporting to be one of our interviewers” was clearly intended to refer only to Mrs Thumar.

Decision

Reasons for decision

I therefore dismiss the appeal on grounds 1 and 2.Conclusion I dismiss the appeal on all grounds. As I intimated at the conclusion of the appeal hearing, because counsel and solicitor for the respondent had travelled from Melbourne and so as to avoid exposing the respondent to unnecessary expense, I am publishing my reasons administratively rather than in open court. I invite the respondent to make submissions as to costs within seven days of publication of these reasons and I allow the appellant a further seven days to respond.

Ratio Decidendi

Legal Principle Established

On 19 February 2017, Ms Sandra Teagle sent an email message to Mr Trifkovic in which she reported the results of enquiries made with persons that lived in the same street as the appellant, including his next-door neighbour, and other persons in nearby streets who had been contacted for the purposes of the respondent’s survey. These persons each reported that they had been approached by a female interviewer. Based on that information, on 20 February 2017, Mr Trifkovic sent an email to Mr Yeatman in which he stated “Jay was caught taking his wife to do interviews for him while he was sitting in the car.” As a result, the employment of Mr Thumar was to be terminated. Consideration The appellant contends, in effect, that the Magistrate’s discretion under r 87(1) to set aside the default judgment was not enlivened because the requirements of r 87(2) of the Magistrates Court (Civil) Rules were not satisfied. The discretionary power under r 87(1) to set aside default judgment cannot be exercised unless the requirements of r 87(2) are satisfied.[3] Rule 87(2) sets out the following conditions precedent to the exercise of the discretion to set aside a default 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.[3] Marmanidis v Germein [2017] SASC 103 at [80] (Hinton J). Although the reasons of the Magistrate, set out at [9] above, were brief and included no express reference to r 87, it is nevertheless clear that his Honour did turn his mind to the requirements of r 87(2). His Honour remarked on the “difficulty or confusion in respect of service” (which is relevant to r 87(2)(b)), and found that “a prima facie defence” was raised (which is relevant to r 87(2)(a)). It is plainly the case that his Honour was satisfied that the requirements for the exercise of the power were met. The appellant is correct in submitting that the respondent bore the onus of proving that the requirements in r 87(2) were satisfied. Plainly, a party applying to set aside default judgment bears the burden of satisfying the Court that the requirements in r 87(2) are satisfied, so that the discretion under r 87(1) is enlivened. In this respect, I respectfully agree with the following remarks of Blue J in Cosenza v Origin Energy Ltd:[4]There are three relevant differences between an application to set aside judgment pursuant to rule 87 and a trial of the action.First at trial the plaintiff bears the ultimate onus of proof of each element of the cause of action; whereas the defendant bears the ultimate onus of proof of a defence strictly so called. On an application to set aside judgment, the defendant bears the onus of proof of negating an element of the cause of action or establishing a defence strictly so called.Secondly at trial the plaintiff bears the onus of persuading the judge or magistrate that the plaintiff has established each element of the cause of action and the defendant bears the onus of persuading the judge or magistrate that the defendant has established a defence strictly so called. On an application to set aside judgment, the defendant’s onus is merely to establish that it has an arguable defence (by negating an element of the cause of action or establishing a defence strictly so called) rather than establishing that it will ultimately succeed on that issue.Thirdly at trial hearsay evidence is generally inadmissible. On an interlocutory application, hearsay evidence is generally admissible.(Footnotes omitted)[4] [2017] SASC 145 at [31]-[34] (Blue J).