Edwards v Pecaz Pty Ltd No. Scciv-02-1718

EDWARDS V PECAZ PTY LTD
[2003] SASC 124
Magistrates Appeal: Civil

BESANKO J: This is an appeal by leave from a decision of a Magistrate pursuant to s 40 of the Magistrates Court Act 1991. The Magistrate made his decision on 7 November 2002, and granted leave to appeal on the same day. The decision was made in an action in the Civil Division of the Magistrates Court. The Magistrate’s decision was to refuse the fourth defendant’s application for the following orders:
“1. The judgment in this action be set aside.
2.That the warrant for sale be recalled.
3.That the plaintiff forthwith return goods seized.”
Other orders were sought relating to costs, and the need for the application to be listed urgently. The fourth defendant has appealed to this Court. I will refer to the fourth defendant as “the appellant”, and the plaintiff as “the respondent”. None of the other defendants appeared before me.
The judgment obtained against the appellant was obtained in default of defence pursuant to r 60 of the Magistrates Court Rules 1992 (“MCR”). The appellant sought an order setting aside the judgment pursuant to r 87 of the MCR. Rule 87 provides as follows:
“(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.”
Under the MCR the relevant judgment was not a final judgment.
Background Facts
There has not been a hearing of the merits of the respondent’s claim against the appellant. In those circumstances it is important that I exercise caution in stating what appear to be the facts. The following brief overview of the plaintiff’s claim is based on facts which appear not to be contested.
The respondent is Pecaz Pty Ltd which trades as “Greven & Co”. The principal of the company is Ms Cathrine Greven. Ms Greven is a tax accountant, and she practises through the respondent company. It is convenient to refer Ms Greven as if she is the respondent.
In 2000, the appellant was a member of a partnership which traded as “Sharkey’s Cue Sports Centre”. The other partners were Mr Steve Seebohm, Ms Kerry Scanlon and Mr Steven Edwards. From time to time, I will refer to the appellant and his brother, Mr Steven Edwards as the “Edwards brothers”. The partnership conducted the business of a pool hall at 6 Sims Street, Old Reynella, in the State of South Australia. There were a number of pool tables and eight ball tables at the premises. The evidence does not establish when the partnership was established. There appears to be a dispute as to whether the partnership is still in existence or was at some stage dissolved. It appears that in the latter part of 2000 the business of the partnership was managed by the appellant, and that in 2001 (or for some part thereof) the business of the partnership was managed by Mr Seebohm.
A dispute arose between the partners. I do not know precisely when the dispute arose, but by early 2001 there was a dispute between Mr Seebohm and Ms Scanlon on the one hand, and the Edwards brothers on the other. It seems that there were allegations of individual partners not accounting to the partnership for monies received by them. It also seems that the business conducted by the partnership was struggling and had substantial liabilities.
In early 2001 the Edwards brothers had solicitors acting on their behalf (Hume Taylor & Co). In addition, they had instructed an accountant, Mr Paul Wells. Although the evidence is imprecise, it seems that both the solicitors and the accountant were acting for the Edwards brothers in relation to their dispute with Mr Seebohm and Ms Scanlon. For their part Mr Seebohm and Ms Scanlon had instructed a solicitor, Mr Andrew Dudek of Andrew Rogers Solicitors.
On 14 February 2001, Ms Greven met with Mr Seebohm and Ms Scanlon and was instructed by them to perform certain work. Between February and December 2001 she carried out certain accounting tasks, and the respondent rendered accounts for those services to Sharkeys Cue Sports Centre at 6 Sims Street, Reynella. I infer that as at that time neither of the Edwards brothers were attending those premises. As at 3 July 2002 an amount of $20,902.46 remained outstanding to the respondent.
The respondent claims that it was instructed by the partnership to perform the work it carried out in 2001. It claims that Mr Seebohm and Ms Scanlon had actual or ostensible authority to engage the respondent on behalf of the partnership. By legal proceedings, the respondent sought to recover the outstanding monies from the partners.
The Course of Proceedings in the Magistrates Court
The respondent issued a Claim in the Magistrates Court (Civil Division) on 3 July 2002 claiming the sum of $20,902.46. The Claim was issued against “Paul Wells, Steve Seebohm, Kerry Scanlon and Paul Edwards T/A Sharkeys Cue Sports Centre”. The address of the defendants was said to be 6 Sims Street, Old Reynella.
I pause at this point in the chronology to make a number of observations about the respondent’s Claim. First, Mr Paul Wells has never been a member of the partnership, and the claim against him could not succeed. The respondent subsequently conceded that the judgment obtained against Mr Wells must be set aside. Secondly, Mr Steve Edwards was not sued, and the Court file suggests that to this point no action has been taken against him. Thirdly, the Claim is not a claim against the firm, “Sharkeys Cue Sports Centre”. It is trite that a partnership is not a legal entity, and absent a Rule of Court, an action against a partnership must name the individual partners as defendants. The Rules of Court enable a plaintiff to sue the partners by naming the partnership firm as the defendant. Rule 23 of the MCR relevantly provides as follows:
“(2)(a) Where 2 or more persons carry on business as partners in the State they may sue and be sued in the name of their firm in respect of any cause of action accruing at the time the persons were partners;
(b)The Court may order a partner to provide a statement on oath of the particulars of persons who were partners of a firm at any relevant time.
(c)A judgment against a firm may be enforced against all partners of the firm at the relevant time.”
The constitution of the Claim is confusing because, subject to the error involving the naming Mr Paul Wells, the Claim names the individual partners and the name of the firm. Although I would strive to avoid an unduly technical approach to the interpretation of the Rules, in my opinion, a plaintiff utilises the provisions of r 23(2) by naming the firm and only naming the firm. The Claim made by the respondent was a claim made against four individuals who were said (wrongly in the case of Mr Wells) to be partners in a firm.
It appears that service of the Claim was effected by the Registrar of the Court sending the Claim by post to the address of the defendants shown on the Claim, namely, 6 Sims Street, Old Reynella. In doing so, it appears that the respondent relied on the provisions of r 46(1), 47(1)(a) and r 47(1)(i) of the MCR. Rule 47(1) relevantly provides as follows:
“(1)Subject to any other Act, these Rules and any order of the Court, a document may be served on a person:
(a)by sending it by pre-paid post addressed to the address of the person (but note the cost risk in Rule 106(8).
…
(i)in the case of a firm, by service under these Rules on one partner, or at the principal place of business of the firm, but if the person serving the document knows that the partnership has been dissolved before the action is filed, by service on every person sought to be made liable;”
None of the defendants filed a defence in answer to the claim. The respondent issued a request to sign judgment in default against the defendants. The request names the defendants as follows:
“Paul Wells, Steve Seebohm, Kerry Scanlon and Paul Edwards T/A Sharkeys Cue Sports Centre”
Judgment was signed on 30 July 2002. On or about 8 August 2002 the plaintiff asked the Registrar to issue a Warrant of Sale pursuant to r 133 of the MCR. The request named the defendants in the same way as the request to the Registrar to sign judgment. A Warrant of Sale was issued by the Registrar. A number of pool tables and eight ball tables were seized by the Sheriff in mid-October 2002. The appellant made the application, which is the subject of the present appeal, on 24 October 2002. He filed an affidavit in support of his application. In essence, he asserted that he had never given instructions to the respondent. He asserted that he was involved in a dispute with his partner, Mr Seebohm. He asserted that Mr Seebohm had engaged the respondent in the context of that dispute. He referred to the fact that Mr Seebhom engaged Mr Dudek. He asserted that the respondent was aware that the partners were in dispute and that Ms Greven’s instructions were to act against him and his best interests. He asserted that none of the others were in a position to pay the respondent’s claim, and that the partnership had substantial liabilities to unsecured creditors. The appellant asserted that he had never received any communication from the respondent at his home address, and that it was known by the respondent that he was not present at the business premises of the partnership at the time she was engaged by Mr Seebohm. The appellant said that he had not received any notice of the Claim. The appellant said that not only was the respondent engaged by Mr Seebohm in a dispute against him, but also, the work done by the respondent was “wrong and inappropriate”. The appellant did not provide any details of this last allegation. The appellant said that he had no ability to provide security for the respondent. The appellant annexed to his affidavit two documents. The first is a letter dated 4 October 2001 from Mr Dudek to Mr Wells and the second is an electronic mail message dated 23 July 2001 from the respondent to Mr Dudek.
The respondent filed an affidavit in response. In essence, she said that she was instructed to act for the partnership. She said that it was clear from what Mr Seebohm and Ms Scanlon said to her that they were giving her instructions on behalf of the partnership. She said that she was aware that there was a dispute between the partners, but nevertheless, she considered that she was acting for the partnership. The respondent said that she was told that the business had a large number of creditors that needed to be managed, and that the business needed advice as to how it could recover and continue. The respondent was aware that Mr Dudek was acting as solicitor for Mr Seebohm and Ms Scanlon. The respondent detailed the tasks that she had carried out, and which formed the subject of her accounts. The accounts were an exhibit to her affidavit. One task that she carried out was the preparation of a major audit of the business for the period from January 1998 to December 2001. She received instructions to carry out the audit from Mr Dudek. She had previously received a letter from the appellant addressed to Mr Seebohm which referred to the need for an audit of the business. The audit involved a determination of the amount of monies which were unaccounted for and the circumstances and times when those monies apparently received. The respondent said that her intention was that the audit report would be used by all of the partners of the firm as a basis for discussions between them. She said that it was not intended that the audit was to assist Mr Seebohm and Ms Scanlon in their dispute with the other partners. She said that when she prepared the audit report she provided copies of it to all of the partners or their representatives. The respondent referred to the fact that 17 pool tables had already been seized under the Warrant of Sale. She referred to the costs involved in the seizure of the property, and the ongoing costs of storing the property.
As I have said, the appellant’s application was refused on 7 November 2002. The Magistrate granted leave to appeal against his decision. It seems that on this day he also ordered that a stay of execution with respect to the Warrant of Sale remain in force for a further seven days.
On 8 November 2002, Mr Paul Wells made an application for an order that the judgment obtained in the action be set aside. The application was supported by an affidavit from Mr Wells’ solicitors stating that he had never been a member of the partnership. The application was not heard until 27 November 2002.
On 13 November 2002, the appellant made an application for an order that there be a stay of execution of the Warrant of Sale. As I understand it, by that stage the property had been seized by the Sheriff and was being held by him. That application was supported by an affidavit of the appellant’s solicitor. The application was sought on the basis that the appellant wished to appeal against the decision refusing to set aside the judgment against him. It seems that the appellant filed an affidavit in support of his application and that affidavit is dated 21 November 2002. The appellant sought to rely on that affidavit before me but only insofar as it annexed two letters which had been located by the appellant some time after 7 November 2002 when he was given access to the premises of the business by the landlord. The first is a letter from the respondent to Mr Seebohm and Ms Scanlon dated 2 March 2001, and the second is a letter from the respondent to Mr Seebohm dated 12 December 2001.
On or about 21 November 2002 the Magistrate dismissed the appellant’s application for a stay of execution of the Warrant of Sale of property. In the course of his reasons for refusing the application the Magistrate said:
“I direct that the proceeds of sale be paid into Court and that at this time the costs of the Sheriff not be paid out of the proceedings (sic.) of sale. I will await the outcome of the appeal hearing before making any further order as to release of the funds. I do, however, intimate that at the present moment I think the Sheriff, in effect, does have a prima facie entitlement to have his costs paid out of the proceedings (sic.) of sale. However, there may be arguments that either the plaintiff should pay those costs personally or the defendant, and I reserve argument upon that issue.”
On the appeal, I was told that the property had been sold, and an amount of about $19,000 was now held in Court.
On 27 November 2002 the Magistrate made an order setting aside the judgment against Mr Wells. As I understand it, the respondent acknowledged that Mr Wells had never been a member of the partnership. The Magistrate reserved the question of costs pending the appeal to this Court. I make the observation that if the claim was truly a claim against the firm pursuant to r 23(2) there would have been no need to set aside “the judgment” against Mr Wells. The judgment would have been a judgment against a firm which may be enforced (and only enforced) against all the partners of the firm at the relevant time (see r 23(2)(c) MCR).
On 4 December 2002, the respondent issued an application seeking an order in the following terms:
“That pursuant to r 104(2) or alternatively 104(1) of the Magistrates Court (Civil) Rules 1992, the judgment in this action be corrected or varied to record that the judgment is against Sharkeys Cue Sports Centre (‘the firm’).”
In the supporting affidavit from the respondent’s solicitor, it is said that the Claim was a claim against the firm, and that the judgment entered in default of a defence is a judgment against the firm. It is said that insofar as the judgment is recorded as a judgment against individuals, that is a clerical mistake which should be corrected pursuant to r 104(2). Alternatively, it is said that the judgment should be varied pursuant to r 104(1)(b)(ii) to correctly reflect the intention of the Court that the judgment is against the firm. The correction the respondent sought was that the judgment be recorded as a judgment against Sharkeys Cue Sports Centre. On 16 December 2002 the Magistrate refused the respondent’s application. He delivered brief reasons for doing so. He referred to the fact that in the reasons he delivered on 7 November 2002, he had stated that the judgment obtained was a judgment against the firm. He referred to the fact that he had dealt with the action upon the basis that it was an action against the firm and that the respondent had obtained a judgment against the firm. He said:
“I reiterate now that what I there set out is what I meant and nothing I have heard causes me to change my view as to that.”
The Magistrate referred to the fact that there had been no mistake in what the Court had done. There was no “slip” by the Court or a Magistrate of the Court. The Magistrate also made the observation that it was inappropriate to interfere with what had occurred in light of the fact that there was an appeal to this Court.
The Magistrate’s Reasons
The Magistrate gave detailed reasons for refusing the appellant’s application dated 24 October 2002. He summarised the nature of the respondent’s claim and he said that the respondent had sued the partnership in the firm’s name. I have already said that I disagree with that conclusion. The Magistrate noted that the appellant alleged that he had not been served with the Claim. The Magistrate noted that the appellant alleged that because of the dispute between the appellant and Mr Seebohm he was unlikely to receive the Claim and this was known to the respondent. The Magistrate referred to the fact that it seemed to be common ground that Mr Wells should not have been named in the summons because he had never been a member of the partnership. The Magistrate referred to r 23(1) (the misjoinder or non joinder of parties will not defeat an action) and said that the misjoinder of Mr Wells did not “per se defeat the action”. He said that he may need to consider the joinder of Mr Steven Edwards.
The Magistrate found that the appellant did not receive the Claim, and he held that the appellant had a reasonable excuse for failing to file a defence. Accordingly, the critical question was whether the appellant had an arguable case on the merits. The Magistrate concluded that the appellant did not have an arguable case on the merits. The important steps in the Magistrate’s reasoning are as follows:
1.The starting point is s 9 of the Partnership Act 1891 which provides as follows:
“Every partner in a firm is liable jointly with the other partners for all debts and obligations of the firm incurred while the partner is a partner; and after the partner's death the partner's estate is also severally liable in a due course of administration for such debts and obligations, so far as they remain unsatisfied, but subject to the prior payment of the partner's separate debts.”
2.The appellant would have no direct knowledge of his assertion that the respondent was instructed by Mr Seebohm in a private or personal capacity.
3.The respondent said in her affidavit that one of the tasks she performed was to telephone the appellant and answer his queries concerning administration accounting. That assertion had not been answered by the appellant.
4.The work that the respondent performed appeared to relate to the firm rather than the particular interests of Mr Seebohm or any other person.
5.There was some force in the submission that the exhibits to the affidavit of the appellant sworn on 24 October 2002 suggested that the respondent carried out her work in a manner favourable to Mr Seebohm and Ms Scanlon and adverse to the appellant’s interests. In one of the letters the respondent had suggested that the Edwards brothers be advised that if they wished to obtain a copy of her report, a bank cheque for half the value of the account should be sent before any documentation was released. On the one hand, this might be taken to suggest that the respondent was isolating the Edwards brothers leaving Mr Seebohm and Ms Scanlon as the other parties. On the other hand, the statement could be construed as an indication by the respondent that she was looking to Mr Seebohm and Ms Scanlon to pay the other half of the account. In other words, the respondent was not showing bias in favour of the two partners as against the other two. The Magistrate said that he had nothing to rebut the respondent’s assertion that she was acting in good faith. The respondent acknowledged that she was aware of the dispute between the parties. There was nothing to rebut the assertion that the respondent was instructed by a partner to do work on behalf of the partnership. If the partner did not in fact have authority, nevertheless, the partner would have appeared to the respondent to have such authority. The request was not “abnormal” and it related to the affairs of the partnership rather than to the private affairs of any member of the partnership.
6.It followed from the provisions of s 9 of the Partnership Act that even if the appellant was not aware of and did not authorise the engagement of the respondent, nevertheless, as a partner of Mr Seebohm, he was jointly liable with that partner for the debt which that partner incurred to the respondent on behalf of the firm. The assertion made by the appellant may give rise to a cause of action as between himself and the other partners, but that does not establish a defence to the respondent’s claim.
7.The appellant asserted that the work done by the respondent was “wrong and inappropriate”. The appellant provided no details in support of this assertion.
8.The judgment obtained by the respondent is a judgment against the firm, and in those circumstances, it was appropriate that execution be levied against the property of the firm.
9.The appellant has not established an arguable defence to the respondent’s claim. The Magistrate said:
“There is nothing that can rebut, or does in fact rebut, the plaintiff’s assertion in her affidavit that she was instructed by a partner who had actual or apparent authority to bind the firm. The nature of the work done by the plaintiff related to the financial situation of the firm. There is nothing to support the assertion that the plaintiff was acting in a private capacity to Seebohm or Scanlon. Her evidence is to the contrary and the applicant is not in a position to know. His assertion that the plaintiff was acting for Scanlon and Seebohm and not for the firm is speculation by the applicant and nothing more.”
10.If the respondent’s right to be paid would not be jeopardised, it might be appropriate to set aside the judgment on the ground that the appellant had not been served with the Claim. However, the appellant was not in a position to provide security for costs and there was nothing to indicate that Mr Seebohm and Ms Scanlon were not served. Service on two of the partners in the business was effective service against the firm itself.
Arguments on Appeal

In essence, the appellant submitted that the Magistrate erred in deciding that he did not have an arguable case on the merits. The appellant argued that the Magistrate fell into error by in effect deciding the issues between the parties. That was not his function on the application brought by the appellant. He should not have decided factual issues on the affidavits and without affording to the appellant the opportunity to cross-examine the respondent and her witnesses and to call evidence on his own behalf.
In addition to these arguments, at the hearing of the appeal, the appellant sought leave to amend his Notice of Appeal to add the following grounds of appeal:
“1.Rule 47 of the Magistrates Court Rules provides for service to the address of the person (Rule 47 (1) (a)) and in the case of a firm if the person serving the document knows that the partnership has been dissolved before the action is filed, by service on every person sought to be made liable.
2.A person must not rely on apparently ineffective service (Rule 47 (2)).
3.In these circumstances the proper course was to set aside the judgment ex debito justitiae White v. Weston (1968) 2 QB 647 at 658, Watson v. Anderson (1976) 13 SASR 329, Kowalski & Killa v. Lochlee Pty Ltd (2002) SASC 252 [paragraph 20].”
The appellant’s application was opposed by the plaintiff. I heard the arguments and reserved the question of whether I would grant leave to amend the Notice of Appeal.
The appellant also sought to introduce fresh evidence on the hearing of the appeal, namely, the letter from the respondent to Mr Seebohm and Ms Scanlon dated 2 March 2001 and the letter from the respondent to Mr Seebohm dated 12 December 2001. The appellant did not have these letters when his application was heard and determined. He found the letters when the landlord gave him access to the premises at 6 Sims Street, Old Reynella after 7 November 2002. I admit the letters on the hearing of the appeal. I am satisfied that the letters constitute evidence not reasonably available to the appellant at the time his application was heard and determined. I turn now to consider in detail the arguments raised on the appeal. It is convenient to start with the arguments the appellant sought to raise in his amended grounds of appeal.
Service of the Claim
The Magistrate found that the claim had been properly served. However, he found that the Claim did not come to the notice of the appellant and that therefore he had a reasonable excuse for failing to file a Defence. The appellant seeks to challenge the Magistrate’s conclusion that the Claim had been properly served. He seeks to argue that the Claim was not properly served and the irregularity in service meant that he was entitled as of right to have the judgment set aside (Watson v Anderson (1976) 13 SASR 329). The appellant submitted that the Magistrate should have found that service had not been properly effected under r 47(i) because the respondent knew the partnership had been dissolved. Alternatively, the Magistrate should have conducted an inquiry into the issue and made an appropriate finding of fact. Although the appellant argued before the Magistrate that the respondent had directed service of the Claim to the business premises of the firm knowing that it would not come to the attention of the appellant, the particular argument he now wishes to raise was not put to the Magistrate. I do not think the appellant should be permitted to raise the argument for the first time on appeal. The evidence on the point is contained in two letters, one of which was before the Magistrate and the other is one of the letters I have admitted as fresh evidence on the hearing of the appeal. The first is the letter from Mr Dudek to Mr Wells dated 4 October 2002 wherein Mr Dudek states that the contention of Mr Seebohm and Ms Scanlon is that the partnership had already been dissolved. The second is the letter from the plaintiff to Mr Seebohm dated 12 December 2001 wherein the respondent states that the position as presented to her was that the partnership is “nul and void”. To my mind, the letters without more do not establish that the partnership was dissolved prior to 3 July 2002 or that the respondent knew that it had been dissolved. A great deal more would be needed to establish those two propositions. In fact, it might be necessary to conduct a fairly lengthy hearing to determine if the two propositions can be made out. It is not appropriate for me to conduct such a hearing even recognising my powers on appeal to receive fresh evidence. Furthermore, it is unnecessary for me to do so in view of my conclusion that the appellant has established an arguable case on the merits, and that therefore the judgment against him should be set aside.
It is important that I record the fact that the appellant did not argue on the question of whether the Claim had been properly served, that the Claim was a claim against the partners and not the firm, and that therefore it was not open to the respondent to utilise the provisions of r 47(i). Accordingly I have not addressed that issue.
An Arguable Case on the Merits
In my opinion, the appellant does have an arguable case on the merits. The issue was perhaps a borderline one on the evidence before the Magistrate. However, having regard to all the evidence before me including the evidence I have admitted on the hearing of the appeal, I think an arguable case on the merits has been made out. Section 9 of the Partnership Act 1891 is relevant but only after it is determined that the debt or obligation is a debt or obligation of the firm. The prior question is whether the act of the partner which results in the debt or obligation binds the firm (see s 5 of the Partnership Act). There is evidence to support a conclusion that the respondent was retained by Mr Seebohm and Ms Scanlon and not by the partnership. There is evidence to support a conclusion that even if retained by the partnership the respondent performed tasks which, in all the circumstances, could not be seen as having been carried out for the partnership. Acceptance of the latter proposition might lead to arguments along the lines that there has been a failure of consideration or that there should be a reduction in the quantum of the respondent’s accounts or that the appellant has a right of set off against the respondent. I am far from saying that these arguments are likely to succeed. It may be that after a hearing the Court will find in favour of the respondent. However, I do not think that it can be said at this stage that these matters are unarguable.
I identify the following matters which emerge from the correspondence:
1.The letter from Mr Dudek to Mr Wells dated 4 October 2001 suggests that the Edwards brothers were not prepared to pay half the costs of the audit performed by the respondent. It suggests there was clearly a dispute as to the operation of the partnership between the Edwards brothers on the one hand and Mr Seebohm and Ms Scanlon on the other. It suggests that Mr Seebohm and Ms Scanlon then took the view that the partnership had already been dissolved.
2.The electronic mail message from the respondent to Mr Dudek dated 23 July 2001 suggests that the respondent was providing advice to Mr Dudek as to how he should respond to Mr Wells who was acting on behalf of the Edwards brothers. The respondent was advising Mr Dudek that he should advise Mr Wells that they were taking advice from the Police Department about certain alleged discrepancies involving the Edwards brothers. In fact, the respondent charged for this advice and it appears in the accounts which form the basis of her claim as follows: “Drafted a letter to Paul Wells and emailed to Andrew Dudek.”
3.The letter from the respondent to Mr Seebohm and Ms Scanlon dated 2 March 2001 suggests that the respondent was providing advice to them about the strategy they might adopt in attempting to resolve their dispute with the Edwards brothers. Again, the respondent charged for this advice as shown in the accounts which form the basis of her claim as follows: “Constructed a strategy letter to S Seebohm and R Scanlon.”
4.The letter from the respondent to Mr Seebohm dated 12 December 2001 suggests that the respondent was aware of Mr Dudek’s advice that the partnership is “nul and void”. The respondent provides detailed advice to Mr Seebohm about aspects of the business.
Security and Costs
I have the power in setting aside the judgment to require the appellant to pay the respondent’s costs thrown away and/or to give security under r 81. The Magistrate found that the appellant did not receive notice of the Claim. The respondent knew that there was a significant dispute between the partners. I have found that the appellant has an arguable case on the merits. The appellant is not in a position to provide security to the respondent.
The pool tables and eight ball tables seized under the Warrant of Sale have been sold and approximately $19,000 has been paid into Court. Those monies are now under the control of the Court. At present, those monies provide some security to the respondent, although just who may have a claim to those monies now or in the future is uncertain. I have given the question of security anxious consideration, particularly as there may be a number of arguments as to who is entitled to the monies held in Court. In all the circumstances, I do not think I should refuse to set aside the judgment against the appellant because the appellant is unable to provide security in addition to such security the respondent may have by reason of the fact that the monies are held in Court.
Other Orders
The appellant sought other orders in his application. Leaving aside orders in relation to costs, the appellant sought orders that the Warrant of Sale be recalled and that the plaintiff forthwith return the goods seized. I would not make such orders. The operation of the Warrant of Sale is spent and the goods seized have been converted into the monies now held in Court. In those circumstances there would be no utility in making the orders sought. Furthermore, as I have said, at this stage the monies held in Court provide some security to the respondent and the appellant is not otherwise able to provide security. It is not appropriate for me at this stage to determine if the appellant has any ground to complain about the execution process by reason of the fact that his brother had (or appears to have had) an interest in the property seized under the Warrant of Sale and yet he was not named as a defendant in the Claim or in the judgment which was subsequently signed.
Conclusions
The orders I make are as follows:
1.The appeal is allowed.
2.The judgment against Mr Paul Edwards is set aside.
3.The action between the plaintiff and Mr Paul Edwards is remitted to the Magistrates Court for hearing.
I will hear the parties as to costs and any other appropriate orders.

[2003] SASC 124

30 April 2003