Fox Tucker Lawyers v Panda - [2018] SASC 197

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
FOX TUCKER LAWYERS v PANDA
[2018] SASC 197
Judgment of The Honourable Justice Parker
21 December 2018
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - ENDING PROCEEDINGS EARLY - DEFAULT JUDGMENT - JUDGMENT IN DEFAULT OF PLEADINGS OR PARTICULARS
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
This is an appeal against an order of the Magistrates Court that set aside a default judgment awarded against the respondent on 23 December 2014. The default judgment concerned a claim for unpaid legal fees in respect of services provided by the appellant during 2012 and 2013.
The appellant was engaged to provide legal services to Amitbikram Pty Ltd (Amitbikram) and Dr Ranjit Panda (the respondent’s husband). The appellant was not, at any time, engaged by the respondent to provide services.
On 29 May 2014, the appellant filed a claim for unpaid legal costs in the Adelaide Magistrates Court against the respondent, her husband, and Amitbikram, on the basis that all three were liable to make payment. The respondent did not file a defence to the claim, and default judgment was consequently awarded against her on 23 December 2014. Although the claim was allegedly served on the respondent by post, the respondent gave affidavit evidence that she did not receive it, and only became aware of the existence of the claim upon being served with the default judgment.
On 15 February 2018, the respondent applied to have default judgment set aside. On 29 May 2018, the Magistrate set aside the default judgment by the power said to be enlivened under r 87 of the Magistrates Court (Civil) Rules 2013 (SA). That decision is the subject of this appeal.
Held, per Parker J, dismissing the appeal:
1. Delay in applying to set aside default judgment is not relevant when determining whether r 87(2)(b) has been satisfied (at [29]).
2. For the purpose of r 87(2)(b), “a reasonable excuse is one which in all circumstances the ordinary person would consider warrants forgiveness for non-compliance” (at [30]).
3. The ordinary person would not consider it reasonable that a person be expected to file a defence to a claim of which they are entirely unaware (at [30]).
4. To challenge affidavit evidence that a person had not received a claim by post, and was unaware of the existence of a claim until default judgment was served, it was necessary to seek permission from the Magistrate to cross-examine. Had such a request been made, the Magistrate would have been required to permit cross-examination as the person's credit was of central importance (at [34]).
5. Ordinarily a court cannot reject unchallenged affidavit evidence, but may do so where the facts asserted are "patently incredible" or "completely…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Keep reading for free

Create a free CaseChat account to read Fox Tucker Lawyers v Panda and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2018] SASC 197
Decision Date: 21 December 2018

CaseChat Overview and Summary

In Fox Tucker Lawyers v Panda, the Court of Appeal considered an appeal against a decision to set aside a default judgment. The primary issue was whether the Magistrate had erred in finding that the respondent had a reasonable excuse for not filing a defence within the prescribed time, thereby satisfying rule 87(2)(b). The appeal also addressed whether the Magistrate was correct in allowing the respondent’s application to set aside the default judgment.

The Court found that the Magistrate did not err in accepting the respondent's evidence that she had not received notice of the claim until after the default judgment was entered. The Court noted that the respondent's affidavit evidence, which was unchallenged in the Magistrates Court, stated that she retained legal counsel who advised her only to negotiate a payment plan. The respondent's evidence was deemed credible and plausible, and the Court held that it would be unreasonable to expect her to file a defence to a claim of which she was unaware. Furthermore, the Court upheld the principle that a reasonable excuse is one that an ordinary person would consider warranting forgiveness for non-compliance.

Ultimately, the Court dismissed the appeal on all grounds. The Court also highlighted that the delay in applying to set aside the default judgment was relevant to the exercise of discretion but did not affect the preliminary question of whether the discretion had been activated. The Court further found that the appellant's challenge to the respondent’s credibility was disingenuous, given that the appellant had not sought to cross-examine the respondent on her affidavit evidence in the Magistrates Court.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

I dismiss the appeal on ground 5.Conclusion I dismiss the appeal on all grounds. I will hear the parties as to costs.

Ratio Decidendi

Legal Principle Established

The respondent further submits that the appellant’s assertion that the respondent’s evidence in respect of her advice from PCL Lawyers is “implausible”, is also in breach of the rule in Browne v Dunn. There is nothing unlikely or implausible about her account of events. Having permitted the evidence of the respondent to go unchallenged in the Magistrates Court, it is disingenuous to challenge her credibility on appeal. Her evidence ought to be accepted.Consideration – reasonable excuse The issue is whether the Magistrate erred in finding that the respondent had a reasonable excuse for not having filed a defence within the time permitted under the Rules, i.e. was r 87(2)(b) was satisfied. I accept the correctness of the respondent’s submission that her delay in applying to set aside the default judgment is not relevant when determining whether r 87(2)(b) has been satisfied. The substantial delay is relevant to the exercise of the discretion but it is not relevant to the preliminary question whether the discretion has been enlivened. I agree with the observation of Hinton J in Marmanidis v Germein that “a reasonable excuse is one which in all circumstances the ordinary person would consider warrants forgiveness for non-compliance.”[11] I also agree with the respondent’s submission that no ordinary person could possibly consider it reasonable for her to be expected to file a defence to a claim of which she was entirely unaware. It is therefore necessary to consider the appellant’s contention that the Magistrate erred by accepting the respondent’s evidence that she had not received notice of the claim until after the default judgment was entered. [11] [2017] SASC 103 at [83] (Hinton J). The application for default judgment was an interlocutory proceeding. Thus, the appellant could only cross-examine the respondent on her affidavit evidence if permission was sought and granted. The appellant submits that the Court is ordinarily reluctant to grant permission. Thus, the usual practice in proceedings of this nature is to proceed solely on the affidavit evidence. The respondent refers to her affidavit evidence that she was unaware of the existence of the claim until she was served with the default judgment. She also deposed that she retained PCL Lawyers in October 2015 to negotiate with the appellant. PCL Lawyers had advised her that her only option was to negotiate a payment plan. That firm did not advise her that she could try to have the default judgment set aside. Her affidavit evidence about this issue was not challenged in cross-examination and there is no contrary evidence. While I accept that it is very common practice in proceedings of the present type to proceed solely on the affidavit evidence, in Southern Cross Commodities Pty Ltd (in liq) v Martin Lunn AJ held that the Court could permit cross‑examination on an affidavit sworn by a defendant who was seeking to set aside a default judgment.[12] His Honour also observed that unless the defendant was cross‑examined, he was unable to reject his affidavit evidence that he had not received notice of the claim until after the default judgment was entered.[13] On appeal the Full Court, comprising King CJ, Prior and Olsson JJ, held that there was no doubt as to the correctness of the reasons given and the orders made by Lunn AJ.[14] [12] (1985) 123 LSJS 480. [13] Ibid at 484. [14] Southern Cross Commodities Pty Ltd v Martin (1986) 126 LSJS 306.