Eschenberg v Ellerton - [2004] SASC 327

Supreme Court of South Australia
(Magistrates Appeals: Civil)
ESCHENBERG v ELLERTON
Judgment of The Honourable Justice White (ex tempore)
6 October 2004
MAGISTRATES - JURISDICTION AND PROCEDURE GENERALLY - PROCEDURE - ORDERS AND CONVICTIONS - ORDERS GENERALLY
Plaintiff sought order that defendant deliver up personal property belonging to him, or pay damages in compensation - Defendant failed to attend Court on three occasions, and failed to file a Defence - Prior to fourth occasion before the Court, defendant's solicitor faxed a written statement of defendant's intention to file a Defence - Defendant appeared, without solicitor, on Directions Hearing - Magistrate entered judgment against defendant - Unclear whether judgment was entered in default of Defence being filed, or following a hearing. In either event, judgment irregular - In addition judgment provided for alternative remedies and was thus uncertain - Appeal allowed - Refusal of Magistrates Court to list for hearing an application to set aside the judgment held inappropriate - Defendant incurred Supreme Court appeal filing fee as a result - Order refunding Supreme Court filing fee.
Magistrates Court Act 1991, s 3, s 31, s 40; Magistrates Civil Rules Rule 2, Rule 60, Rule 62, Rule 87, Rule 104, referred to.

ESCHENBERG v ELLERTON
[2004] SASC 327
Magistrates Appeal (ex tempore)

WHITE J: This is an appeal pursuant to s 40 of the Magistrates Court Act 1991.
On 3 August 2004 a Magistrate entered judgment in favour of the respondent (who was the plaintiff in the proceedings before him and who I will continue to call the plaintiff) as follows:
“Judgment for the plaintiff and order that the goods identified in the claim herein be returned to the plaintiff 7 days after today’s date. In the alternative there is to be a financial judgment in the sum of $3073.85 together with filing fees of $140 and costs of attendance today of $40 together with costs for attendance on 6 July and 8 June each of $40 and interest of $51.25 making a total of $3385.10.
The defendant’s grounds of appeal allege errors by the Magistrate in entering the judgment. They also allege errors by the Magistrate subsequently in refusing to accept an application by the defendant to have that judgment set aside.
Background Circumstances
Until 20 August 2003 the plaintiff had been a boarder on the defendant’s property. His Particulars of Claim, filed on 5 April 2004 allege that after he left the property on 20 August 2003, he had not been able to recover certain equipment and other property which he had left there. An Annexure to the Particulars of Claim listed some 36 items, and against each item a dollar figure was shown. I understand those figures to be the value claimed by the plaintiff for each item. The total value was $3073.85.
The plaintiff sought an order that the defendant deliver up to the plaintiff the property set out in the Annexure in good order and condition. Alternatively, the plaintiff sought the sum of $3073.85 as damages for the property withheld.
The summons was served on the defendant on 6 April 2004.
The defendant has not entered any defence or counterclaim but has, from time to time since April 2004, communicated with the Magistrates Court. I record a brief chronology of relevant events in the Magistrates Court. It has to be said that this chronology reveals considerable delay by the defendant in responding to the claim.
The defendant did not appear when the matter was first called on in the Magistrates Court at Victor Harbor on 4 May 2004. She was then engaged before the Magistrates Court at Christies Beach. She caused a note to be sent to the Victor Harbor Court explaining her absence.
The defendant did not attend at the next listed hearing date, namely 8 June 2004. Her absence on that occasion is unexplained. On that occasion, on the application of the plaintiff, the Court issued an injunction restraining the defendant until final judgment or resolution of the claim from disposing of the items listed in the Annexure to the Particulars of Claim.
In issuing the injunction the Magistrate said:
“I am not expressing a finally concluded view on the merits of the plaintiff’s claim but I am satisfied on the balance that there is a legitimate concern that unless restrained the defendant may dispose of the property the subject of the plaintiff’s claim… ”
A certificate of the Court record showing the outcome of that day’s attendance was served on the defendant by post on 10 June 2004. The matter was adjourned to 6 July 2004.
The defendant did not attend the hearing on 6 July 2004. Instead, she sent a statutory declaration sworn that same day explaining that she was taking a child to a dental appointment. In the same statutory declaration the defendant set out matters which indicated that she may have a defence to a substantial portion of the plaintiff’s claim, and the basis for a counterclaim.
A Magistrate adjourned the matter to 3 August 2004 “for a Directions Hearing”. The court records that the Magistrate on that day (Mr Sprod SM) said:
“As the defendant has not filed a defence to this claim the plaintiff may consider an application to the Court to sign judgment. See documents annexed to the defendant’s statutory declaration that suggest that she may wish to pursue a counterclaim or set-off. Registrar to advise defendant that if she does not enter a defence or make an application to pursue a counterclaim within 21 days then the plaintiff is entitled to seek judgment and consequential orders for the return of the property.”
The court file shows that a copy of that record was sent to the defendant, although it may not have been sent until on or about 12 July 2004. The defendant was put clearly on notice that the time in which a defence could be filed was running out.
The 21 days to which the Magistrate referred expired on 27 July 2004. The defendant took no action before that date. On Friday, 30 July 2004 the defendant did consult a solicitor, Mr Grant of the firm Johnston Withers. On Monday, 2 August 2004, Mr Grant sent a facsimile to the Christies Beach Magistrates Court which stated:
“I advise I act for Ms Eschenberg who is the defendant in this matter and have to hand a copy of record which indicates Ms Eschenberg was to have filed a defence on or before 27 July 2004.
I note the matter is next in Court on 3 August 2004 at 10.00 am for further directions. Ms Eschenberg has sought legal advice but unfortunately does not have a copy of the Statement of Claim. I therefore am not in a position to file a Defence on her behalf. I would be most appreciative if a copy of the Statement of Claim could be facsimiled to our office so that I can attend to that forthwith.
For the avoidance of any confusion the matter is defended and indeed a counterclaim is likely which will bring it within the general jurisdiction of the Magistrates Court. I therefore ask that if judgment has not been entered by the plaintiff that it not be entered until such time as I can properly consider my client’s instructions and file a defence on her behalf.”
The defendant, but not her solicitor, attended in court on 3 August 2004. On that occasion judgment was entered for the plaintiff. The Magistrate said:
“I am in no position, in view of the order of 6 July 2004, to deny the plaintiff the opportunity to enter the judgment.”
The Magistrate then entered the judgment which I quoted earlier on in these reasons.
Given the long period of inactivity by the defendant the Magistrate’s desire to bring the matter to a conclusion is quite explicable.
On 10 August 2004, Johnston Withers, on instructions from the defendant, filed an application to have the judgment set aside. The Registrar of the Christies Beach Magistrates Court refused to list that application for hearing, taking the view that the appropriate course of action for the defendant, if she wished to challenge the judgment of 3 August 2004, was an appeal to this Court. Mr Grant has deposed to having been informed of that refusal on 16 August 2004.
Appeal to this Court
The appeal to this Court was filed on 20 August 2004, 17 days after the judgment was entered. The defendant therefore requires an extension of time. The defendant explains the delay by reference to the time taken by her solicitor in seeking to have the judgment set aside by the Magistrates Court itself, having been informed on 16 August 2004 that that application would not be listed. It then took the defendant another few days to raise the filing fee of $1007.
The period of the extension is quite short. The plaintiff has not identified any prejudice as a result of the extension of time for an appeal being granted other than the inconvenience of having to deal with the appeal and the possible delay to having his claim determined by the court in the event that the appeal is allowed.
The statutory declaration sworn by the defendant on 6 July 2004 does set out matters which, as I have already noted, do indicate that the defendant may have a good basis for defence and possibly a counterclaim.
In all these circumstances, but particularly bearing in mind the shortness of the time, the explanation for the delay and the absence of relevant prejudice to the plaintiff, I grant the extension of time which is sought by the defendant the institution of the appeal. That extension is granted to 20 August 2004.
The Judgment
The way in which the Magistrate proceeded on 3 August 2004 is not altogether clear. By reason of the defendant’s failure to file a defence, the plaintiff could have signed judgment against her pursuant to Rule 60 of the Magistrates Court Civil Rules, which I shall call simply “the Rules”. It seems that this is what Mr Sprod SM may have contemplated when the matter was before him on 6 July 2004. However, if the plaintiff wished to proceed in that way, he had, by virtue of Rule 60(1), to sign judgment by filing a Form 18. The plaintiff has not filed a Form 18 and there does not seem to be any other indication that the plaintiff has signed judgment.
If the plaintiff had signed judgment, in the circumstances of this claim, Rule 62 would have governed the situation. The Magistrates Court Registrar would then have been required to fix a date, time and place for the hearing by the court, of the claims made by the plaintiff, and in particular to hear evidence as to the value of the items, so as to be able to make an assessment of damages. It would have been necessary I think to hear evidence establishing that the items were still in the possession of the defendant, before making an order that the defendant return those items. Rule 62(2) requires that: “A party who has signed judgment must serve on all other parties, at least 21 days before the date of the hearing, a notice in Form 19, and a copy of any affidavit evidence to be relied upon together with some other information.” None of that appears to have occurred in this case.
The alternative is that on 3 August 2004, the Magistrate entered judgment for the plaintiff against the defendant after a hearing. It does not seem that this is a realistic explanation for what occurred on 3 August 2004. It does not seem that the Magistrate was provided with any evidence on 3 August 2004, which would have warranted the entry of a judgment by the court.
Absent the consent of the parties, it would, in any event, have been inappropriate to proceed with the hearing on 3 August 2004, because the matter had been adjourned to that day for a Directions Hearing only. Neither party had been put on notice of the need to be present at that time with evidence which he or she wished to adduce, or to be ready to make submissions which would be appropriate if there was to be a final hearing.
There are other indications that the Magistrate did not proceed with in effect a trial of 3 August 2004. They include the statement in the reasons that he did not consider himself to be in a position
“to deny the plaintiff the opportunity to enter judgment; and the absence of any detailed reasons referring to evidence, or on which findings of fact were made.”
In my opinion, whether the judgment was a judgment entered by default, that is to say in default of the defence having been filed, or following a hearing, it was entered inappropriately. If it was a default judgment it was inappropriately entered because the procedure contemplated by Rules 60 and 62 was not invoked. If it was a judgment after a hearing, it was inappropriate because the matter had not been listed for hearing on 3 August 2004, the Magistrate did not have the consent of both parties to proceed to a hearing on that day, and the Magistrate entered the judgment without hearing evidence from either party.
For that reason, my conclusion is that the appeal should be allowed. There is a further reason why I regard the judgment as irregular. That is the manner in which it is expressed.
The judgment orders the return of the specified equipment and other items, and then in the alternative, orders the defendant to pay the plaintiff the specified sum, together with costs and interest. The plaintiff’s claims are in the alternative. He sought an order for the return of the goods, or damages in respect of their loss. He was not however, entitled both to an order for the return of the goods and to damages in respect of the same items. The plaintiff had to make an election as to which form of relief he wished the judgment to provide, and in relation to each item. Section 31 of the Magistrates Court Act which provides for alternative forms of relief does not authorise an order for the return of an item, and at the same time, damages for the loss of the item.
Furthermore, the judgment of the court should be both precise and certain. Those responsible for its enforcement should know what it is that the court order requires. In this case, as the judgment is expressed in the alternative, that certainty is not possible.
That uncertainty can be easily demonstrated. Suppose some of the items listed in the Annexure were returned to the plaintiff pursuant to the court order. Would the plaintiff then be entitled to damages in the sum of $3073.85 or in some other lesser sum in respect of the remainder of the items? If this judgment was a judgment which was entered by a default, the manner of its expression by itself would in my opinion constitute the judgment as so irregular as to entitle the defendant to have it set aside as of right.
I should mention some other matters. This was not a case in which the Magistrate was entitled to proceed pursuant to Rule 101 which entitled the Magistrate to enter judgment without hearing any evidence where a party fails to attend within 15 minutes of the time fixed for a hearing. In this case the defendant was in attendance.
I also accept the submission of the parties that this matter was not a Minor Civil Claim. Given that the plaintiff was seeking the return of specified equipment and goods, this claim did not come within the definition of a Minor Civil Claim in s 3(2) of the Magistrates Court Act 1991.
Because I will uphold the appeal it is strictly speaking unnecessary for me to deal with the complaint of the defendant about the refusal of the Magistrates Court to list the application to have the judgment set aside, but I do propose to say a little about this ground of appeal.
In my opinion it is unfortunate that the court refused to list that application. In saying that, I do not intend to imply that on such an application the court would necessarily have acceded to the application. I emphasise that my remark is directed to the failure of the court to list the application for hearing. In my opinion two Rules of the Magistrates Court may have empowered the Magistrates Court to set aside this judgment. The first is Rule 104 which empowers the Court to vary or set aside a judgment, whether final or interlocutory, in specified circumstances. In particular it empowers the court to set aside a judgment obtained “consequent upon any irregularity”.
At the very least it is arguable that the absence of compliance with the procedures contained in Rules 60 and 61 constituted an irregularity for the purposes of Rule 104.
Alternatively, I consider that it is at least reasonably arguable that Rule 87 could have been invoked. Rule 87 empowers the Court to set aside or vary a judgment not being a final judgment in specified circumstances. The expression “final judgment” is defined in Rule 2 in a way which would not include this judgment unless the judgment had been entered after a formal hearing at which the parties had been given an opportunity to present whatever evidence or submissions they wished. As already noted, it does not seem that this was such a hearing.
In my opinion the application of the defendant should have been listed for hearing so that a Magistrate could hear the parties on the issues which would arise in the event that the defendant relied on either Rule 87 or Rule 104. There may be cases in which an application to the Magistrates Court will be so misconceived that there is no point in listing it for hearing, but in my opinion such cases are likely to be extremely rare. It is better practice for the court to list applications properly filed and to give the parties an opportunity to be heard on such applications.
For the reasons which I have already given, the appeal is allowed.
The defendant paid the fee of $1,007 specified by the Regulations on the institution of this appeal. The defendant seeks an order from this Court remitting that fee. She invokes the power in s 131(2) of the Supreme Court Act which empowers the Court “to remit or reduce a fee on account of the poverty of a party by whom the fee is payable or for any other proper reason”. The appellant accepts that she does not come within the first limb of sub-s (2), namely poverty, but does submit that there is proper reason for the fee to be remitted. I consider that in the circumstances of this case there is proper reason. That proper reason arises because of the failure of the Magistrates Court to list the defendant’s application to have the judgment set aside for hearing which, as I have found above, was in my view in error. Had that error not occurred, this appeal may have been unnecessary. The defendant was not responsible for that error. Secondly, I take into account, although in a secondary way, the size of the filing fee ($1,007) in comparison to the amount in dispute between the parties which is of the order of $3,000.
The orders of the Court are:
1.       I grant an extension of time to the defendant to 20 August 2004 for the institution of this appeal.
2.     The appeal is allowed.
3.     The judgment and orders of the Magistrate entered on 3 August 2004 are set aside.
4.     The time in which the defendant may file a defence and/or a counterclaim is extended to 14 days from today.
5.     The matter is remitted to the Magistrates Court for hearing before another Magistrate. The nature and extent of the hearing required will depend upon whether the defendant does file a defence and/or counterclaim.
6.     I make no order as to the costs of the hearing of the appeal.
7.     I order that the court remit to the defendant the fee of $1,007 paid by her on the institution of the appeal to this Court.