Cubelic v T & D Lock Pty Ltd - [2009] SASC 397

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
CUBELIC v T & D LOCK PTY LTD T/A TOP CAT LANDSCAPING
[2009] SASC 397
Judgment of The Honourable Justice Duggan
21 December 2009
PROCEDURE - JUDGMENTS AND ORDERS - AMENDING, VARYING AND SETTING ASIDE - ACTIONS TO REVIEW OR SET ASIDE JUDGMENT
Appeal against refusal of Magistrate to set aside default judgment entered against appellant – whether appellant had arguable case on merits – whether appellant had reasonable excuse for failing to comply with Rule 87 of the Magistrates Court (Civil) Rules 1992.
Appeal dismissed – appellant did not discharge onus placed on him by Rule 87 to establish he had arguable case on merits – appellant did not establish reasonable excuse for non-compliance with Rules.
Magistrates Court (Civil) Rules 1992 (SA) r 87, referred to.
Watson v Anderson (1976) 13 SASR 329; Battiste v Mulvaney [1997] SASC 6419, considered.

CUBELIC v T & D LOCK PTY LTD T/A TOP CAT LANDSCAPING
[2009] SASC 397
Magistrates Appeal: Civil.

DUGGAN J: This is an appeal against the refusal by a Magistrate to set aside a default judgment entered against the appellant.
The respondent commenced proceedings against the appellant in the Magistrates Court (Civil Division) by filing a claim for payment of the sum of $9,000. The particulars of claim were as follows:
The Plaintiff’s claim against the Defendant is for the sum of $9,000.00 which is the amount owing for services rendered, to and for the Defendant at the request of the Defendant during the month of December 2007, full particulars whereof the Defendant has already had.
According to the affidavit of proof of service the claim was served on the appellant on 14 July 2009.
There was no response to the claim and on 12 August 2009 judgment was signed against the appellant. On 17 August 2009 the respondent filed an application seeking an order that a property in which the appellant has an interest be charged with the payment of the judgment debt. This application was set down for hearing on 27 August 2009. The appellant was represented at this hearing and the matter was adjourned to 3 September 2009 after the solicitor for the appellant foreshadowed the making of an application to set aside the default judgment. At the hearing on 3 September 2009 the Court granted the appellant an extension of time to file and serve an application to set aside judgment and a supporting affidavit.
On 4 September 2009 the appellant filed an affidavit in support of the application to set aside the default judgment. He stated that on about 18 August 2009 he received an application for a charging order on his residence. He then telephoned his solicitor who asked him whether he had been served with a summons in relation to the matter. He said he advised his solicitor that he did not recall being served with a claim. However, he said he later went back through his papers and located the claim in this action. He said that when he found the claim he recalled being personally served with it at his home. He said that at the time he was served with the claim he was extremely busy with work and he was involved in a legal dispute in relation to a worker’s lien. He was also involved in another matter in the Federal Court. He said that it due to an oversight that he did not instruct solicitors to file and serve a defence and that this was in turn due to his busy workload.
The appellant outlined the nature of a proposed defence to the action in the affidavit. He said that the work was performed on land owned by Adelaide Property Development Pty Ltd (“APD”), a company in which he was a director and shareholder. He continued:
10.…I say that I initially did not understand the claim. The claim lacks any particularity and merely alleges that the plaintiff provided services in the sum of $9,000.00 at my request in December 2007 and that I have full particulars.
11.I deny that I requested the plaintiff to perform any work for me at any property that I own.
12.I now believe that the defendant is referring to work performed by it at land located at 31 Beach Road, Brighton (‘the land’). As at December 2007, APD owned that land. Annnexed hereto and marked ‘A’ is a property assist historical search confirming that APD owned the land.
13.At that time, APD had three directors and three shareholders. I was one of the directors. The other directors were Andrew Ciccarello and my brother, Ante Mate Cubelic. The shares were equally held by companies controlled by each of the individual directors. As a result of the federal court proceedings referred to above, Mr Ciccarello is no longer a director and no longer has any share or interest in APD. Annexed hereto and marked Annexure ‘B’ is a copy of the historical ASIC extract for APD.
14.I have never owned the land. Annexed hereto and marked Annexure ‘C’ is a copy of the draft defence.
Engagement of Plaintiff by APD
15.On or about December 2007, I, on behalf of, and as a Director of APD, engaged the plaintiff to undertake landscaping work on the land for the benefit of APD. The plaintiff undertook some works on the land, but failed to complete the work. The work was also not completed to a satisfactory standard.
16.On numerous occasions, my brother, Mr Ante Mate Cubelic requested that the plaintiff complete and rectify the work.
17.Given the above, I say that the plaintiff has sued the wrong person, and any claim that the plaintiff may have, which, in my capacity as director of APD, I deny, could only be against APD.
18.Further, as one of two directors of APD, I say that if the plaintiff brings an action against APD, APD will instruct its solicitors to file a counterclaim and or set-off against the plaintiff for:
18.1 failure to complete the works; and
18.2 the cost of rectifying the work done by the plaintiff.
In a further affidavit dated 16 September 2009 the appellant stated that at the time he was served with the claim he was involved in two legal disputes in addition to those referred to in his previous affidavit. He said that he had not been involved in any Court action before these matters but that, as a result of them, he had received a large amount of paperwork. He continued:
At the time I received the summons, I remember being confused as I had not had any work done by Top Cat Landscaping. I remember putting it in my office at my home with a pile of other papers. I do not remember seeing the summons again until searching for it after being advised by my solicitor that the summons was personally served. At the time I was served, I did not understand the importance of filing a defence within 21 days.
I always intended to defend the claim and it was an oversight that I did [not] file and serve a defence.
The application to set aside judgment came before a Magistrate on 17 September 2009. He gave the following reasons for refusing the appellant’s application:
I am not convinced that there is a sufficient excuse for ignoring the claim. The claim was served personally.
As for the merits, the bald allegation that ‘It was not my contract and the work was defective’ simply is that. It is an allegation. The land concerned was sold. There is no evidence before the Court by way of orders or other documentation supporting these allegations. They are just allegations. There is no evidence on the merits that convinces me and so I refuse the application to set aside the judgment.
The Magistrate then proceeded to make the charging order over the property in which the appellant has an interest.
Rule 87 of the Magistrates Court (Civil) Rules 1992 (SA) (“the Rules”) regulates applications to set aside judgments. It 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.
(3)     When setting aside a judgment the Court may order –
(a)payment to the other party of costs thrown away;
(b)payment or security under Rule 81.
The appellant claims that the Magistrate erred in applying both limbs of r 87. It is argued that the Magistrate should have found that the appellant had an arguable case on the merits and that he had a reasonable excuse for not having complying with the Rules.
It is convenient to begin with the second matter. When first asked by his solicitor whether he had been served with a summons, the appellant said he could not recall. After making enquiries his solicitor was told by the respondent’s solicitor that personal service had been effected. The appellant said he then went back to his papers and found the summons. He said at this stage he recalled being personally served with the summons at his home.
It is not in dispute that the claim was served on the appellant on 14 July 2009. It is highly unlikely that he would have forgotten that he was served with the claim when asked about it approximately a month later.
The appellant’s further assertion that he did nothing about the matter because he was busy at the time and that it was a “mere oversight” that he did not contact his solicitors is also tenuous. In his second affidavit he adds a further reason, namely, that he was confused by the summons because he had not had any work done by Top Cat Landscaping. However, the claim described the plaintiff as “T & D Lock Pty Ltd trading as Top Cat Landscaping” and referred to the period of time during which the work was done. The appellant stated in his first affidavit that he personally dealt with the plaintiff in arranging for the work to be done. If the appellant had read the claim there would be little room for confusion as to its subject matter and the connection between it and the request he had made to the plaintiff for the work to be done.
In Watson v Anderson[1] the Full Court dealt with an appeal against a refusal by a Local Court Judge to set aside a default judgment. Bray CJ said:[2]
I say at once that the present appellant, in my view, has shown no reasonable explanation for his default at all. He received the summons. If he read it he would have seen plainly enough the following words:
“If you dispute the claim you must file in duplicate the necessary affidavit together with a notice of appearance with the Clerk of this Court within six (6) days … If you do not file the necessary affidavit and notice of appearance … within the times stated judgment may be signed and execution issued against you immediately and without any further summons.”
If he did not read it he was the author of his own misfortune. But all he says is that he arranged for a friend to make an appointment to see solicitors but no appointment was made until after the issue of the unsatisfied judgment summons, which would be a considerable time after the expiry of the six days. He is a salesman, presumably not unaccustomed to business procedure. He does not say that he did not understand the summons and he could hardly have expected to have been believed if he did.
[1] (1976) 13 SASR 329.
[2] (1976) 13 SASR 329 at 333.
In the present case the claim served on the appellant had printed on it in bold type the requirement to file a defence and/or counterclaim within 21 days and the consequence of failing to do so. As I have pointed out, the nature of the claim must have been evident to the appellant. If it was not, there was every reason to make further enquiries.
The Rules require a person in the position of the appellant to establish a reasonable excuse for not complying with the Rules in the manner identified in the claim which was served on the appellant. It is clear that the appellant chose to ignore the claim and the Magistrate was justified in finding that there was no reasonable excuse for not filing a defence or a defence and counterclaim.
The next question is whether the appellant has established that he has an arguable case on the merits.
It is common ground that the judgment was regularly obtained.
In Watson v Anderson Walters J said:[3]
… a mere statement by a defendant that he has a good defence is not sufficient to justify a review of the exercise of a judicial discretion. He must go further and demonstrate “a very compelling reason” for his failure to appear in the action, and, further, that he has a plausible defence either in law or in fact. True it is that on an application to set aside a judgment by default, the court does not pronounce on the law or the facts, but it seems to me that before allowing a defendant to come in and defend, the court should have before it materials which enable it to say how it came about that the defendant found himself bound by a judgment regularly obtained; that the defendant genuinely desires to be allowed to come in and present his case; and that issues are raised in such form as to require serious consideration of the defence which he would put forward. In the words of Jenkins L.J. in Grimshaw v. Dunbar “the judge is entitled to satisfy himself that the party applying has a bona fide intention of defending the action, and that there is some possibility of his doing so with success”.
(Footnote omitted)
[3] (1976) 13 SASR 329 at 341.
In Battiste v Mulvaney,[4] Doyle CJ referred to the observation of Bray CJ in Watson v Anderson that it is for the Court to determine whether there is any “reasonably clear and bona fide case of merits”. Doyle CJ refused to accept that there was an arguable defence “in the light of the bare and unsupported claim by the defendant”.
[4] [1997] SASC 6419.
The information which is to be put before the Court in an affidavit of merits must be of sufficient particularity to at least enable the Court to make an assessment of the genuineness of the defence and whether it is arguable on the merits.
The first issue which the appellant raises in his main affidavit is that he engaged the respondent to undertake landscaping work for the benefit of APD. However, although he may have been acting as a director of APD in this respect, it is of critical importance to determine whether he disclosed to the respondent that he was acting in this capacity. If he did not do so, then he would be liable, in addition to APD, to pay for the work. No details are given in the appellant’s affidavits as to the circumstances relevant to this issue.
Further, the appellant states that if the respondent brings an action against APD, he will instruct APD’s solicitors to plead a counterclaim and/or a set off for failure to complete the work and failure to do it properly. However, no details of such a claim are provided.
Again, I am of the view that the Magistrate was correct in concluding that these responses by the appellant were no more than bold assertions which fell short of establishing that the appellant had an arguable case on the merits.
It follows that the appellant did not discharge the onus placed on him by r 87(2) of the Rules to establish the matters set out in paras (a) and (b).
The appeal will be dismissed.