Jacob v The Owners of Strata Plan 6669
[2017] WADC 70
•26 MAY 2017
JACOB -v- THE OWNERS OF STRATA PLAN 6669 [2017] WADC 70
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2017] WADC 70 | |
| Case No: | APP:103/2015 | 1 MARCH 2017 | |
| Coram: | DAVIS DCJ | 26/05/17 | |
| PERTH | |||
| 32 | Judgment Part: | 1 of 1 | |
| Result: | Appeal allowed | ||
| PDF Version |
| Parties: | ARYEH JACOB THE OWNERS OF STRATA PLAN 6669 |
Catchwords: | Appeal Magistrates Court Application to set aside default judgment dismissed by magistrate Whether the default judgment was irregularly entered Defence filed Default in lodging listing conference memorandum Whether application for default judgment required to be served on defendant Whether judgment irregularly entered as to amount Whether magistrate ought to have taken into account the defence as filed Disputed claim for strata levies arrears Whether Magistrates Court has jurisdiction to determine the pleaded defence |
Legislation: | Magistrates Court (Civil Proceedings) Act 2004 s 19(3), s 40 Magistrates Court (Civil Proceedings) Rules 2005 r 20 - r 24, r 43A, r 111 Strata Titles Act 1985 (WA) s 36 |
Case References: | ACN 076 676 438 Pty Ltd (In Liq) v A-Comms Teledata Pty Ltd [2000] WASC 214 Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172 Armstrong v Saxby [2016] WADC 87 Australian Education Union v Department of Education and Children's Services (2012) 285 ALR 27 Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47 [14]; (2000) 203 CLR 194 Hall v Hall [2007] WASC 198 House v The King (1936) 55 CLR 499 Johnstone v Housing Authority [2015] WADC 8 Nugawela v American Express Australia Limited [2016] WADC 170 Parker v Transfield Pty Ltd [2000] WASCA 382 Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 Re Attorney-General; Ex parte Skyring [1996] HCA 4; (1996) 70 ALJR 321 Shilkin v Taylor [2011] WASCA 255 Starrs v Retravision (WA) Ltd [2012] WASCA 67 The Pilbara Infrastructure Pty Ltd v BGC Contracting Pty Ltd; [2007] WASCA 257; (2007) 35 WAR 412 Tobin v Dodd [2004] WASCA 288 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Applicant
AND
THE OWNERS OF STRATA PLAN 6669
Defendant
ON APPEAL FROM:
Jurisdiction : MAGISTRATES COURT OF WESTERN AUSTRALIA
Coram : MAGISTRATE BOON
Citation : PER/GCLM/2237/2013
Catchwords:
Appeal - Magistrates Court - Application to set aside default judgment dismissed by magistrate - Whether the default judgment was irregularly entered - Defence filed - Default in lodging listing conference memorandum - Whether application for default judgment required to be served on defendant - Whether judgment irregularly entered as to amount - Whether magistrate ought to have taken into account the defence as filed - Disputed claim for strata levies arrears - Whether Magistrates Court has jurisdiction to determine the pleaded defence
Legislation:
Magistrates Court (Civil Proceedings) Act 2004 s 19(3), s 40
Magistrates Court (Civil Proceedings) Rules 2005 r 20 - r 24, r 43A, r 111
Strata Titles Act 1985 (WA) s 36
Result:
Appeal allowed
Representation:
Counsel:
Applicant : In person with Mr S J Davis
Defendant : Mr T G Darge
Solicitors:
Applicant : McKenzie Friend
Defendant : SRB Legal
Case(s) referred to in judgment(s):
ACN 076 676 438 Pty Ltd (In Liq) v A-Comms Teledata Pty Ltd [2000] WASC 214
Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172
Armstrong v Saxby [2016] WADC 87
Australian Education Union v Department of Education and Children's Services (2012) 285 ALR 27
Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47 [14]; (2000) 203 CLR 194
Hall v Hall [2007] WASC 198
House v The King (1936) 55 CLR 499
Johnstone v Housing Authority [2015] WADC 8
Nugawela v American Express Australia Limited [2016] WADC 170
Parker v Transfield Pty Ltd [2000] WASCA 382
Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355
Re Attorney-General; Ex parte Skyring [1996] HCA 4; (1996) 70 ALJR 321
Shilkin v Taylor [2011] WASCA 255
Starrs v Retravision (WA) Ltd [2012] WASCA 67
The Pilbara Infrastructure Pty Ltd v BGC Contracting Pty Ltd; [2007] WASCA 257; (2007) 35 WAR 412
Tobin v Dodd [2004] WASCA 288
1 DAVIS DCJ: The appellant, Mr Jacob, was the defendant to a Magistrates Court action brought by The Owners of Strata Plan 6669, the respondent in this appeal (the Strata Company), for the recovery of contributions levied on Mr Jacob as owner of unit 1 on Strata Plan 6669 pursuant to s 36 of the Strata Titles Act 1985 (WA).
2 Mr Jacob was defending the action and a defence had been filed on his behalf by solicitors then acting for him. After the defence had been filed, those solicitors ceased acting for him. Earlier programming orders had been made for both parties to lodge a document known as a listing conference memorandum. When Mr Jacob failed to lodge that document, the Strata Company applied for default judgment, which was eventually obtained on 26 November 2014.
3 Mr Jacob then applied to set aside the default judgment. On 4 December 2015 the magistrate hearing the application refused to set aside the default judgment and dismissed his application.
4 Mr Jacob has brought an appeal from this decision, pursuant to s 40 of the Magistrates Court (Civil Proceedings) Act2004 (MCCPA).
5 In the particular circumstances of this case, I allow the appeal. The default judgment against Mr Jacob must be set aside.
Summary of relevant facts
6 By a general procedure claim lodged in the Magistrates Court on 4 February 2013 the Strata Company claimed the sum of $13,738.54, being the arrears of strata levies said to be owing by Mr Jacob, together with interest at the rate of 15% pursuant to s 36(4) of the Strata Titles Act from 2 January 2013 until payment of judgment and costs.
7 On 10 May 2013 Mr Jacob filed a notice of intention to defend the claim, although he admitted to part of the amount claimed in the sum of $5,000.
8 On 16 July 2013 the Strata Company requested that the registrar of the Magistrates Court list the matter for a pre-trial conference. That was listed for 22 August 2013.
9 At that stage Mr Jacob was unrepresented. At the pre-trial conference on 22 August 2013 the matter did not resolve and so orders were made for the filing and service of pleadings (a statement of general procedure claim and a statement of defence) and the disclosure of documents. Another order made was:
4. Each party to lodge with the court a Listing Conference Memorandum on or by 25 October 2013 and to provide to the court unavailable dates for attendance at such conference by the same date.
10 A listing conference memorandum is required to contain the following, as set out in r 43A(3) of Magistrates Court (Civil Proceedings) Rules 2005 (the Rules):
(a) include a concise statement of the issues of fact and law that the party contends will need to be determined at the trial; and
(b) state how each allegation of fact will be proved; and
(c) state the name, address, occupation and qualification of each witness the party will call to give oral evidence at the trial; and
(d) unless the registrar or the Court orders otherwise, annex a statement in the approved form of the intended evidence of each witness who is not an expert witness.
11 A statement of claim was filed by the Strata Company on 23 August 2013, by which stage the amount claimed had increased to $17,073.42.
12 On 17 October 2013 Mr Jacob filed an affidavit which stated:
The Strata Manager have failed to answer where additional $3,000 of charges came from … They have also failed in delivering a full account of charges…
13 Mr Jacob also filed on the same day a statement of defence. This included, under the heading 'Summary of the facts relevant to the defence' a statement of 'All interest accumulated on top of levies'. (It also included issues relating to the management of the strata including a failure to carry out repairs to his unit, and a claim for car repairs, an ambulance account and pain and suffering. These claims were not continued when a defence was filed by solicitors later acting for Mr Jacob, which I will discuss below).
14 On 27 February 2014, the Strata Company complied with the orders to file a listing conference memorandum. When Mr Jacob did not do so the Strata Company brought an application seeking the following orders:
1. The time for the claimant to lodge its listing conference memorandum be extended to 28 February 2014.
2. Unless within seven days of this order the defendant lodges its listing conference memorandum, default judgment will be entered against the defendant with damages to be assessed.
3. The cost of this application be in the cause.
15 On 27 June 2014 some programming orders were made which included that Mr Jacob had to lodge and serve his response to the application within seven days of the order, and adjourning the application for hearing at a special appointment on 1 August 2014.
16 In July 2014 Mr Jacob retained solicitors who, on 7 July 2014, filed a notice of change of address for service and advised that they were now acting for Mr Jacob.
17 Shortly after their appointment Mr Jacob's solicitors and the solicitors for the Strata Company consented to orders in the following terms:
1. The claimant to lodge and serve an amended statement of claim within 5 days.
2. The defendant to lodge and serve his defence within 14 days of service of the amended statement of claim.
3. The defendant to lodge his listing conference memorandum within 14 days after service of the defendant's defence.
4. The hearing listed for an application dated 2 May 2014 be vacated.
5. There be no order as to costs.
18 Orders in these terms were made by a magistrate on 31 July 2014, and a formal order was issued on 1 August 2014.
19 On 13 August 2014 the Strata Company filed an amended statement of claim dated 10 July 2014. The sum claimed was reduced to $13,738.54. Full particulars of the arrears said to be owed by Mr Jacob were set out in this amended statement of claim. The arrears as pleaded comprised of:
(a) sinking levies between 1 April 2009 and 30 September 2012 totalling $5,618.13;
(b) reserved funds between 1 April 2009 and 30 September 2012 totalling $3,964.25;
(c) further unpaid levies from 10 September 2012, (when a strata management services company was appointed to administer and manage the common property for the Strata Company), to 1 January 2013 in the sum of $3,074.21. This sum included interest on arrears of $2,191.96; and
(d) further interest for the period between 10 September 2012 to 1 January 2013 at the rate of 15% in the sum of $475.95.
20 The amounts claimed, as I have set out in par [19] above, totalled $13,132.54. This is $606 less than the amended total sum claimed of $13,738.54.
21 The solicitors for Mr Jacob filed a statement of defence to the general procedure claim on 18 August 2014. Following the standard Form 21 used in the Magistrates Court, the statement of defence first set out a summary of the facts relevant to the defence, and then set out the legal basis of the defence.
22 In relation to the summary of the facts relevant to the defence, it was pleaded that Mr Jacob did not admit that invoices or statements for each of the levy payments particularised in the statement of claim had been issued to him, and said that if they were, they were:
1. not calculated on the basis of his levy contribution; and
2. they incorporated expenses and/or costs that were not properly chargeable.
23 It was further pleaded that if any obligation to meet payment of levy contributions arose:
1. contributions levied only bear interest at the rate of 15% if the Strata Company does not determine that an unpaid contribution shall bear no interest or shall be interest at a lesser rate: s 36(4)(b) of the Strata Titles Act; and
2. it was not admitted that the Strata Company did not determine that any unpaid contributions of the defendant shall bear no interest or interest at a lesser rate.
24 As to the legal basis of the defence, it was specifically pleaded as follows:
1. the claimant did not issue to the defendant invoices or statements for the levy contributions and sinking fund contributions; and
2. any contribution or sinking fund levies:
(a) were not calculated on the defendant's levy contribution;
(b) incorporated expenses and costs not properly chargeable by the Strata Company.
26 On 15 October 2014 an application was made by the Strata Company for default judgment. The claim was set out to be $14,585.19 plus costs of $846.65 and lawyer's costs on the application of $143. Interest was claimed at a daily rate of $2.397. It is common ground that this application for default judgment was not served on Mr Jacob.
27 On 21 October 2014 the application for default judgment was referred to a magistrate and dismissed. The reasons noted were that the application for default judgment (Form 13 application) was uncertain as to the reason for entry for the default. If it was in respect to the lodging of a statement of defence, that had occurred on 13 August 2014.
28 On 21 October 2014 a formal order dismissing the Strata Company's application for default judgment was issued by the Magistrates Court and sent to both the Strata Company's solicitors and Mr Jacob's former solicitors, notwithstanding that the court must have known (and had received a notice) that those solicitors had ceased acting for Mr Jacob on 26 September 2014.
29 On 28 October 2014 the Strata Company's solicitors filed, again without serving it on Mr Jacob, another application for default judgment similarly dated 15 October 2014 with a covering letter to the Magistrates Court which read as follows:
We act on behalf of the claimant in the above claim.
We enclose an application for default judgment signed 15 October 2014.
We note that our application was previously dismissed on the basis that a statement of defence had been lodged.
We refer to memorandum of consent orders signed by the parties on 7 and 11 July 2014 respectively where it was agreed that the Defendant was to lodge his listing conference memorandum within 14 days after service of the Defendant's defence.
To date, no listing conference memorandum has been lodged or served. As this matter has been ongoing for some time and an application for default judgment had been made earlier in the year we request that judgment be entered in default against the Defendant. We enclose a copy of the memorandum of the consent orders referred to and letters to the Defendant advising that we intend to apply for default judgment.
30 This was referred to the same magistrate and on 3 November 2014 the registrar wrote to the claimant's solicitors advising that the magistrate had requested the claimant to provide an affidavit attesting to the date of service of the defence, as the lodging of the listing conference memorandum is linked to the date of service of the defence.
31 On 7 November 2014 a general form of affidavit sworn by a solicitor employed by the Strata Company's solicitors was filed. That set out a chronology and attached two annexures including a letter of service from Mr Jacob's former solicitors dated 15 August 2014 enclosing the defendant's statement of defence general procedure claim, and also requesting further and better discovery.
32 On 11 November 2014 Mr Jacob made a payment of $10,000 direct to the Strata Company in return for which the Strata Company gave him access to documents and, subsequently, a disc containing copies of bank statements (which he subsequently stated did not prove what he owed).
33 The Magistrates Court was not notified of the fact of this payment of $10,000.
34 More than two weeks after the payment of $10,000, on 26 November 2014, Magistrate Hawkins made orders as follows:
Upon the application of claimant lodged 29 October 2014 it is ordered that:
1. There be judgment for the claimant against the defendant for $13,738.54 together with interest of $3,912.66 (calculated from 2.01.2003 to 26.11.2014 at 15%) and costs of $989.65.
35 On 15 May 2015 the Strata Company applied for the following orders:
1. The costs order made 26 November 2014 be revoked.
2. The defendant do pay the claimant's costs for the claim to be assessed.
3. The requirement for service of this application be dispensed with pursuant to r 111 of the Rules.
4. This application be heard in the absence of the parties pursuant to r 113 of the Rules.
5. There be no order as to the costs of this application.
36 This application was not served on Mr Jacob and no hearing of the application was allocated by the Magistrates Court. Orders were made as asked by a magistrate on 28 May 2015.
37 Both the order for default judgment on 26 November 2014 and the order in relation to costs made on 28 May 2015 were again copied by the court to Mr Jacob's former solicitors.
38 The Strata Company then filed, on 10 July 2015, a bill of costs for assessment, based on the amount of the claim being $18,640.85. An appointment for the assessment of costs was set for 8 October 2015.
39 It was after this bill of costs had been filed that Mr Jacob found out about the default judgment which had been entered against him. He wrote a letter dated 31 August 2015 to the Magistrates Court advising he had received a letter dated 14 August indicating an amount owing for costs. He made it clear he wished 'to contest the charges being awarded without my knowledge'. The letter also stated:
It has been brought to the presiding registrar's attention at the previous pre-trial to transfer the case to a minor case claim as $10,000 was paid to the strata company and the amount in dispute is mainly interest that has been wrongly calculated.
The amount of the strata fees would have been paid if they would have provided the correct amount owed.
Numerous requests to provide bank statements in order to establish the right amount owed by my unit as extra charges were identified; the request was purposely ignored as its [sic] conveniently accumulating interest.
A disc from 28 November 2014 marked the views bank statement was finally provided to me but it lacked the information that was needed and asked for.
40 In response to this letter from Mr Jacob, the registrar of the Magistrates Court wrote by letter dated 15 September 2015 explaining that judgment had been ordered on 26 November 2014 due to Mr Jacob's failure to lodge a listing conference memorandum as ordered, and explaining the application made by the Strata Company to amend the judgment.
41 At the appointment on 8 October 2015 for the assessment of the Strata Company's bill of costs, it was ordered that the Strata Company was to file an affidavit of service in the matter and Mr Jacob had leave to file any objections within 21 days. The assessment of the bill of costs was adjourned to take place on 3 November 2015.
42 On 5 October 2014 Mr Jacob made an application to set aside the default judgment entered on 26 November 2014. He was again at this stage representing himself and prepared and swore an affidavit in support of his application. This is not a well drafted document – English is not Mr Jacob's first language – but in summary, Mr Jacob:
(a) maintained that the Strata Company had 'failed to prove the correct amount for money owed';
(b) stated his intention to defend the claim was obvious as a lawyer had been appointed to represent him, unfortunately for reasons not relating to the claim, the lawyer was no longer acting for him since 26 September 2014;
(c) deposed to the fact that he had not received any correspondence from the court or the lawyers acting for the Strata Company and he understood that all correspondence had still been sent to his previous lawyer. He deposed to the fact he was not aware of the default judgment;
(d) deposed that he was 'completely unaware of what was taking place without my knowledge', he had contacted Ms Karen Richardson, the strata manager and offered to pay $10,000 as 'a good gesture if I would be provided with evidence of payment made by the owners of the building respective to their unit entitlement'. He deposed to the fact that he provided a cheque for $10,000 to Ms Richardson at her office on 11 November 2014 and he had received three large boxes of disorganised documents in return. Subsequently on 28 November 2014 he was provided with a disc containing bank statements which again did not prove the amount that he owed. Mr Jacob pointed out that no mention had been made to the court about the $10,000 he had paid to the Strata Company.
43 Mr Jacob's application to set aside the default judgment was listed for hearing on Monday 16 November 2015 and, after some programming orders were made, adjourned to a special appointment hearing on 14 December 2015.
44 In the meantime, on 3 November 2015, the Strata Company's bill of costs was assessed and allowed at $4,777.32.
45 On 16 November 2015 Mr Trevor Darge, a lawyer from the solicitors acting for the Strata Company who also appeared as counsel in the Magistrates Court and in this appeal, swore an affidavit in opposition to Mr Jacob's application to set aside judgment. Mr Darge's affidavit deposed to the following:
(a) So far as Mr Jacob claimed that the Strata Company had failed to prove the correct amount of money owed to it and there were deficiencies with the assessment of levies for his unit, the Strata Titles Act provided an avenue under pt XI, for an owner to make an application to the State Administrative Tribunal (SAT) in respect of matters, including a failure by the Strata Company to provide requested documents, clarification of levies and outgoings and reallocation of unit entitlement. It was submitted that the Magistrates Court was not the appropriate jurisdiction to deal with these complaints and Mr Jacob ought to have the matter dealt with by SAT.
(b) As to the fact that Mr Jacob was unaware of the impending default judgment, Mr Darge produced a letter dated 10 October 2014 addressed to Mr Jacob in which the solicitors for the Strata Company advised that they were still waiting for him to lodge his listing conference memorandum, and put him on notice that if he did not lodge that listing conference memorandum by close of business on Tuesday, 14 October 2014, they would apply to the court to enter judgment against him.
(c) In relation to the payment of $10,000, it was conceded that this was not reflected in the judgment entered against the defendant on 26 November 2014, however it was reflected in the Form 6 Property (Seizure and Sale) Order lodged in the action. Accordingly, no attempt had been made by the Strata Company to seek payment of the $10,000.
46 The hearing of Mr Jacob's application to set aside the default judgment took place before Magistrate Boon on 4 December 2015. Mr Jacob's application was dismissed with costs on that day.
47 The reasons for decision given by the magistrate were not formal and comprised of a series of exchanges with Mr Jacob, during the course of which the magistrate made a number of findings or rulings, and then finally dismissed the application. Having read the transcript, it is apparent that the magistrate was attempting to give reasons, but Mr Jacob continually (and rudely) interrupted and talked over the top of her. Relevantly for this appeal, the magistrate made the following findings.
48 In relation to Mr Jacob's complaint about the failure to give him any notice, the magistrate stated (ts 47) that if a party does not comply with an order of the court, in this case the lodging of the listing conference memorandum within the prescribed time, the other party is not required to serve an application for default judgment on Mr Jacob. Later, the magistrate stated (ts 62):
You did not comply with orders of the court about lodging the listing conference memorandum, and because you did not do that, a default judgment was entered, and that was in accordance with the Court Rules that the default judgment was entered.
49 After Mr Jacob pointed out the changes in the amount claimed, that there was '$3,000 extra charges … and there's a mistake because they did a compounded interest on it – again, they did not show the exact unit amount in relation to the other units', the magistrate stated (ts 49) that the amounts in the amended statement of claim add up to $13,738.54.
50 The magistrate then referred to the jurisdiction of the Magistrate's Court to deal with Mr Jacob's dispute over what had been levied against him (ts 63 - 64):
The reason the court entered a judgment was that you did not comply with the orders of the court, and that's under section 19 subsection (2) of the Magistrates Court Civil Proceedings Act. I accept that you're not – that you dispute what has been levied against you. This court has got the jurisdiction that Parliament gives to the court … if you dispute those levies, there are procedures under the Strata Titles Act, and if you dispute the unit entitlement, there's a procedure … under the Strata Titles Act.
51 As to the payment of the $10,000, the magistrate acknowledged that he had paid that sum and then stated (ts 67):
… the judgment was entered without the court being advised of the $10,000 payment, but I do note that there's way more than that that has been levied apparently by the strata company.
52 The magistrate then made the following finding (ts 68 - 69):
Mr Jacob, you've asked the court to … set aside the default judgment, but I'm not satisfied that what you've shown the court is – amounts to a prima facie defence on the merits. That's not something that you've put before the court. And to set this aside and then allow it to keep going, where you haven't shown a defence … is a waste of the court's time …
53 After dealing with another application made by Mr Jacob on another file (which is not relevant for the purposes of this appeal), the magistrate concluded (ts 73) that she was not satisfied that it was appropriate to set aside the default judgment.
Leave is required to bring the appeal
54 This appeal from the magistrate's dismissal of Mr Jacob's application to set aside the default judgment is brought pursuant to s 40(3) of the MCCPA. That requires an appeal to the District Court to be commenced within 21 days after the date of judgment unless the District Court gives leave to do so.
55 Mr Jacob's appeal was not commenced in this court until 30 December 2015. The date by which it should have been filed was 29 December 2015. Mr Jacob therefore requires, and has sought, the leave of this court to commence the appeal. In support of his application for leave he has sworn an affidavit dated 13 December 2016.
56 Having regard to what is set out in Mr Jacob's affidavit, the submissions made by counsel who represented Mr Jacob on this appeal, and the principles and factors summarised by Gething DCJ in Armstrong v Saxby [2016] WADC 87 [39] – [40], I am satisfied that leave to appeal out of time should be granted to Mr Jacob. The length of the delay is only one day. The reasons for the delay have been explained. Mr Jacob was unrepresented at the time, and sought and relied on information given to him by someone at the District Court registry. There appears at least some prospect of success of Mr Jacob's appeal and, finally, there is no prejudice to the Strata Company.
The nature of this appeal
57 An appeal pursuant to s 40 of the MCCPA is by way of reconsideration of the evidence that was before the Magistrates Court: s 40(3)(b) and District Court Rules 2005 (WA) r 50(1). Such an appeal is in the nature of a re-hearing.
58 An appellant court hearing an appeal by way of re-hearing can only exercise its appellant powers if satisfied that there has been some legal, factual or discretionary error on the part of the primary decision-maker: Allesch v Maunz [2000] HCA 40 [23]; (2000) 203 CLR 172; Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194, 203.
59 Whether or not to set aside the default judgment involved the exercise of the magistrate's discretion under s 19(3) MCCPA: Frigger v Forbes [2012] WADC 38 [52] – [53]; O'Dea v Shire of Coolgardie [2013] WADC 150 [44] – [46].
60 The principles relating to an appeal involving the exercise of a discretion are established in House v The King (1936) 55 CLR 499, 504 - 505. Briefly, the principles are that it must appear that some error has been made in exercising the discretion. If the judge (or in this case magistrate) acts upon a wrong principle, allows extraneous or irrelevant matters to guide or affect him or her, makes a mistake as to the facts or does not take into account some material consideration, then the magistrate's determination should be reviewed. If the appellate court has the materials for doing so, it may exercise its own discretion in substitution.
The evidence in this appeal
61 I must decide this appeal on the material and evidence that was before the Magistrates Court and any other evidence that I give leave to admit. Leave may only be given in exceptional circumstances: s 40(4) and s 40(5) of the MCCPA.
62 At the hearing of this appeal Mr Jacob applied for leave to introduce into evidence an exchange of correspondence in 2016 between his counsel and the Strata Company's solicitors. That evidence is contained in a further affidavit sworn in support of the appeal on 17 February 2017. Counsel for Mr Jacob argued it was relevant to show that Mr Jacob had a defence on the merits. This application was opposed by the Strata Company, principally on the grounds that the correspondence, although not marked as such, was without prejudice and privileged.
63 After hearing from the parties and considering the principles most recently summarised by Bowden DCJ in Nugawela v American Express Australia Limited [2016] WADC 170 [16] – [19], I ruled that I was not satisfied that the correspondence was without prejudice and it was in the interests of justice to grant leave to Mr Jacob to adduce this additional evidence in this appeal.
64 However, having now reviewed the correspondence, I consider that it is arguable that the correspondence was in relation to resolving the dispute between the parties and thus was without prejudice.
65 Accordingly, so as not to further compound what might be considered to be an error in my ruling, I do not propose to rely on the further evidence in determining this appeal, and I have not done so.
The grounds of the appeal
66 The grounds of the appeal contained in an amended appeal notice are extremely long. There are five grounds in all, and the first ground of appeal contains particulars which exceed three pages. Accordingly, the following is a summary of the appeal grounds:
1. The learned magistrate erred in her exercising her discretion not to set aside the default judgment that had been entered on 26 November 2014 in that she:
(a) Failed to take into account a number of material considerations. These included failing to take into account the merits of Mr Jacob's defence as filed, and failing to take into account multiple irregularities in the application for judgment by the Strata Company. These irregularities included that the application was made without notice to Mr Jacob, compounded by the failure of the Magistrates Court to act on the Notice By Solicitor of Ceasing to Act which had been filed by his solicitors on 26 September 2014, and the fact that pursuant to r 111 of the Rules, the application for default judgment dated 15 October 2015 was required to be served, but had not been served, on Mr Jacob and, finally, the fact of the payment of $10,000 made by Mr Jacob.
(b) Acted upon a wrong principle by failing to comply with the court's obligation to ensure she dealt with the case justly including ensuring, so far as practicable, that the parties were on equal footing, as required by MCCPA s13.
2. The learned magistrate erred in law when she stated that if a party does not comply with an order of the court, in this case lodging the listing conference memorandum within the prescribed time, the other party is not required to serve an application for default judgment on it. The learned magistrate should have held, pursuant to r 111 of the Rules,that the Strata Company was required to serve its application for default judgment on Mr Jacob.
3. The magistrate erred in fact when she stated that the amounts set out in the amended statement of claim added up to $13,738.54.
4. The learned magistrate erred in law when she stated that Mr Jacob had to show that he had a prima facie defence on the merits to the amended statement of claim, which was the wrong test for an application to set aside default judgment.
5. The magistrate erred in law in that she failed to determine that Mr Jacob was entitled to put the Strata Company to proof as to whether the contributions that it was seeking to recover had been levied in accordance with the Strata Titles Act and therefore, were able to be recovered as a debt pursuant to s 36(4)(c) of the Strata Titles Act, as Mr Jacob had done in his defence.
The issues on this appeal
67 Counsel for Mr Jacob conceded that there was some overlap between grounds 2 to 5 and ground 1.
68 After reading the written submissions filed by counsel for each of the parties and hearing oral argument, in my view the principal issues on this appeal are:
1. Was the default judgment irregularly entered because the application by the Strata Company was required to be served, but was not served on Mr Jacob? If it was required to be served on Mr Jacob, the learned magistrate erred as set out in the appeal grounds 1(a) and 2.
2. Was the default judgment irregularly entered as to amount? If it was, the learned magistrate erred as set out in the appeal grounds 1(a) and 3.
3. Did the magistrate err in failing to take into account the defence as filed on Mr Jacob's behalf, as also set out in appeal ground 1(a)?
4. Did the magistrate apply the wrong test in determining whether or not to set aside the default judgment, as set out in appeal ground 4?
5. Could Mr Jacob's dispute as to the amount he owed to the Strata Company be dealt with in the Magistrates Court or must Mr Jacob have that matter dealt with by SAT. This relates to appeal ground 5, and arises from the magistrate's discussion about jurisdiction with counsel for the Strata Company (ts 55 and 58) and her finding concerning jurisdiction as I have set out in [50] above. I will call this the jurisdiction issue.
69 It is important to consider issues 1 and 2 first, because different considerations apply depending on whether the default judgment was irregularly or regularly entered. A judgment which has been entered without proper compliance with the court's rules, or entered for more than the amount due, is irregular: ACN 076 676 438 Pty Ltd (In Liq)v A-Comms Teledata Pty Ltd [2000] WASC 214 [17]; Starrs v Retravision (WA) Ltd [2012] WASCA 67 [44]. As explained by the Court of Appeal in Starrs v Retravision (WA) Ltd [36], whether judgment was regularly or irregularly entered may be significant:
… as a general rule, a judgment regularly entered will not be set aside unless the court is satisfied that there is a defence on the merits. That rule may be departed from in 'rare but appropriate cases': Palmer v Prince [1980] WAR 61, 63; Evans v Bartlam(480). A judgment irregularly entered, however, 'ought not be on the records of the court and therefore if a judgment in defaultof appearance or pleading has been entered irregularly, it will be set aside ex debito justitiae':Collie v Merlaw Nominees Pty Ltd [2003] VSC 424 [37];RT Co Pty Ltd v Minister of State for the Interior [1957] HCA 39; (1957) 98 CLR 168, 170. Not every irregularity in the means by which a judgment in default is obtained will necessarily entitle the defendants to have the judgment set aside as of right: ACN 076 676 438 Pty Ltd (In Liq)v A-Comms Teledata Pty Ltd [2000] WASC 214 [17] - [19]. In an appropriate case, the court may amend an irregularly entered judgment rather than set it aside.
70 There is, of course, the other matter raised in appeal ground 1(b), but that can be quickly disposed of. Section 13 of the MCCPA requires the court to ensure that cases are dealt with justly. To do so, according to the section, includes ensuring that cases are dealt with efficiently, economically and expeditiously, that 'so far as is practicable' the parties are on an equal footing and that the court's judicial and administrative resources are used as efficiently as possible.
71 The main basis upon which this was argued at the hearing of the appeal was that Mr Jacob was unrepresented. However, as I pointed out to counsel, the Magistrates Court deals with unrepresented litigants all the time and, having read the transcript, I see nothing in the hearing before the magistrate which denied Mr Jacob the right to be heard or to present his case or put his arguments.The written submissions also refer to the fact that English was and is Mr Jacob's second language, however, at no stage did he suggest he was unable to understand what was going on or required the assistance of an interpreter. Mr Jacob's level of English was good enough to be able to make a number of points during his exchanges with the magistrate. There was nothing particularly out of the ordinary about the application to set aside judgment so as to put him at any special disadvantage compared to the Strata Company (this was a different situation from Johnstone v Housing Authority [2015] WADC 8 [17] referred to me by counsel).
72 I am not satisfied that there was any issue with the way in which the magistrate dealt with Mr Jacob as an unrepresented litigant or that the parties were 'not on an equal footing' as submitted.
Was the default judgment irregularly entered because the application was not served?
73 This issue turns on a construction of the Rules and whether the Strata Company's application for default judgment was required to be served on Mr Jacob.
74 As it stood at the relevant time, and still applies, r 20 of the Rules provides that pt 5 of the Rules 'applies if an application for default judgment is made against a defendant' in the following circumstances:
(a) where the defendant had not lodged a response in accordance with r 9(1) – in other words, where no response to the claim has been filed within 14 days after the claim is served on the defendant: r 20(a); and
(b) where the defendant had failed to lodge and serve a statement of defence: r 20(b).
75 The Rules also provide that a magistrate may enter default judgment against a party who was required but failed to attend a listing conference: r 46(4).
76 In relation to the failure to lodge a listing conference memorandum, r 43A provides as follows:
43A. Listing conference memoranda, orders to lodge etc.
(1) This rule does not apply in the case of a claim to recover possession of real property.
(2) If the registrar at a pre-trial conference is of the opinion that it is unlikely that the case will be settled, the registrar must order each party to lodge a listing conference memorandum in accordance with subrule (3) by the day specified in the order.
(3) The listing conference memorandum must be in the approved form and must —
(a) include a concise statement of the issues of fact and law that the party contends will need to be determined at the trial; and
(b) state how each allegation of fact will be proved; and
(c) state the name, address, occupation and qualification of each witness the party will call to give oral evidence at the trial; and
(d) unless the registrar or the Court orders otherwise, annex a statement in the approved form of the intended evidence of each witness who is not an expert witness.
(4) When all the parties have complied with the order the registrar must —
(a) give a copy of each party’s listing conference memorandum to the other parties; and
(b) list the case for a listing conference.
(5) If a party does not comply with the order, the registrar may, after giving 10 days notice to the party, give default judgment against the party, and in that case Part 5, except rule 24, with any necessary modifications, applies in relation to the default judgment. (italics my emphasis)
77 Thus r 43A(5) specifically provides for notice to be given by the registrar to the party who has not complied with an order made at a pre-trial conference to lodge a listing conference memorandum, before the registrar may give default judgment against that party. In other words, default judgment could not be entered by the registrar for the failure to lodge a listing conference memorandum without notice to the party in default.
78 Rule 111 sets out that a party making an application must serve a copy of the application and any affidavit in support on every other party, with some exceptions:
111. Application must be served
(1) Except as provided in subrule (2), a party making a written application must serve a copy of the application and any supporting affidavit on every other party after it has been lodged and at least 10 days before the hearing of the application.
(2) Subrule (1) does not apply —
(a) in relation to an application for default judgment —
(i) for a failure to lodge a response in accordance with rule 9(1); or
(ii) for a failure to lodge a statement of defence in accordance with rule 41B; or
(iii) if these rules state that the default judgment may be given in the absence of the parties;
(b) in relation to any other application, if —
(i) these rules provide otherwise; or
(ii) the Court dealing with the application orders otherwise.
80 Applying this principle of construction, I interpret r 111 to mean that where a party is making an application for default judgment, service on the other party is not required if the application is for default judgment for the defendant's failure to defend a claim (i.e., failure to file a response, or failure to file a defence), or 'if these rules state that the default judgment may be given in the absence of the parties'. Otherwise, service on the other party is required.
81 The rules which state that default judgment may be given in the absence of the parties are all in pt 5 of the Rules and are as follows:
(a) Rule 21, which allows for default judgment for a specified amount (i.e., liquidated claims):
Except as provided in rule 24, a registrar may, in the absence of the parties, give default judgment against the defendant for a specified amount …
(b) Rule 22, which sets out when default judgment may be entered for unspecified amount (namely unliquidated damages). Rule 22(1) provides:
Except as provided in rule 24, a registrar may, in the absence of the parties, give default judgment against the defendant for an unspecified amount if the claim is for an unliquidated amount to which rule 21 does not apply.
(c) Rule 22, which deals with default judgment on a claim to recover possession of personal property, and provides:
Except as provided in rule 24, a registrar may, in the absence of the parties, give default judgment for a claim to recover possession of personal property.
24. Default judgment not to be given in certain cases
(1) A registrar must not give default judgment under this Part against a party for a failure to lodge and serve a statement of defence if —
(a) the party has lodged an application under the Act section 17 to strike out the relevant statement of claim; and
(b) the application —
(i) has not been dealt with; or
(ii) has been granted; or
(iii) has been dismissed, and the party has lodged a statement of defence within 14 days after the dismissal.
84 In my view, the application brought by the Strata Company for default judgment against Mr Jacob for his failure to lodge the listing conference memorandum was an application which had to be served on Mr Jacob. A construction otherwise, as urged by counsel for the Strata Company, would be contrary to the ordinary meaning of r 111 and also inconsistent with the specific requirement of r 43A(5) for notice to be given before the registrar can enter default judgment for failure to comply with an order to lodge the listing conference memorandum, (and before pt 5 of the Rules applies).
85 As the Strata Company did not serve its re-lodged application for default judgment dated 15 October 2014 on Mr Jacob, there was no proper compliance with r 111. For this reason I find that the default judgment obtained on 26 November 2014 was irregularly entered.
86 Accordingly, I am satisfied that the learned magistrate erred in law when she stated that if a party does not comply with an order of the court, in this case lodging the listing conference memorandum within the prescribed time, the other party is not required to serve an application for default judgment.
Was the default judgment irregularly entered as to the amount?
87 There are three aspects to the submission in this appeal that the default judgment was irregularly entered as to the amount. These are that the magistrate erred:
(a) in failing to take into account the $10,000 paid by Mr Jacob;
(b) in finding that the amounts set out in the amended statement of claim added up to $13,738.54; and
(c) in failing to take into account that there was an amount totalling $2,667.91 in interest, on which further interest was claimed (in other words, that there was a claim for 'interest on interest' by the Strata Company).
88 Dealing first with the $10,000 payment, on the evidence before the magistrate this was paid on 11 November 2014. This was after the affidavit sworn by the solicitor on 7 November 2014, but well before the date when default judgment was entered on 26 November 2014.
89 The magistrate was aware of the payment; it had been addressed in the affidavit of Mr Jacob and the affidavit of Mr Darge. In fact, the magistrate specifically noted that it was not disputed that the $10,000 was paid before the default judgment was entered, and then asked Mr Darge about this. His response at (ts 57 – 58) was as follows:
… of course, it's a difficult question when money is owing for strata levies, the first question is, where should it come off if there's – should it come off the end, or should it be allocated towards the first ones? Now, in any event, what happened is that the money was received after the application was lodged and also after the further affidavit was lodged to explain the application …
So I appreciate the fact that the registrar or magistrate who made the order on – made the judgment did not have information about whether that $10,000 was to be reduced off that debt …
So as it happens, when it came to execute, that amount has been reduced off the – and no attempt has been made to suggest to Mr Jacob that he has never paid $10,000. It's a question of where it comes from when it's – you know, what it's allocated to …
90 I do not consider it was enough for the Strata Company to say that it had taken into account the $10,000 at the time of execution of the default judgment. There was a fundamental and significant difference in the amount owed by Mr Jacob as at 26 November 2014 and the amount for which default judgment was entered. In the circumstances, the magistrate should have been alert to the fact that there had been an irregularly entered default judgment.
91 It is the case that not every irregularity in amount will necessarily entitle the defendant to have the judgment set aside as of right: Starrs [36]. In an appropriate case, the court may amend an irregularly entered judgment rather than set it aside, and that is a power which can be exercised after the defendant has applied to set it aside: Starrs [46] - [47]. In this case, however, the magistrate appeared not to have turned her mind to the principles in Starrs to consider:
(a) first, whether the default judgment had been irregularly entered; and
(b) secondly, whether or not there should be an amendment of the judgment amount to at least reflect the $10,000 which had been paid.
92 It is true that these were not legal issues raised by Mr Jacob, who of course did not have any legal representation. However, he drew to the magistrate's attention that the Strata Company had received the $10,000 and default judgment should not have been entered (ts 69). In these circumstances, the magistrate had the burden of examining what had been put by Mr Jacob to ensure that he had not, because of the lack of legal skill, failed to claim rights or to put forward arguments which otherwise he might have done: Tobin v Dodd [2004] WASCA 288 [13] - [18]; Re Attorney-General; Ex parte Skyring [1996] HCA 4; (1996) 70 ALJR 321.
93 In the circumstances I am satisfied that the magistrate, accordingly, erred in law in failing to take into account the $10,000 paid by Mr Jacob.
94 Turning now to the second aspect of this issue, it is clear there is a discrepancy of $606 in the total amount pleaded, compared to the amount of the judgment of $13,738.54, for the reasons as I have set out in [20].
95 The error is understandable, but the magistrate erred in fact when she stated that the amounts set out in the amended statement of claim added up to $13,738.54.
96 The third aspect of this issue is that the Strata Company had claimed interest on interest. By reason of the matters set out in [19] (c) and (d) above, the amount of $3,912.66 included $2,667.91, on which interest at the rate of 15% had been claimed and calculated. Further, the judgment as entered included a sum of interest of $3,912.66 'calculated from 2.01.2003 to 26.11.2014', at the rate of 15%. The judgment therefore comprised an amount representing compound interest, or interest on interest. Pursuant to s 36(4)(b) of the Strata Titles Act (which I set out in [113] below), the Strata Company was only entitled to simple interest on outstanding amounts.
97 That is a matter which Mr Jacob also brought to the magistrate's attention during the hearing of his application to set aside the default judgment (ts 49; ts 60 - 61).
98 In my view, the magistrate erred in failing to take into account that this also led to an overstatement of the judgment sum, which was another reason why this judgment was irregularly entered.
99 I need to observe here that the receipt of the $10,000 by the Strata Company also affected the interest to which it was entitled pursuant to the default judgment. In other words, it was not entitled to interest on $10,000 between 11 November and 26 November 2014, so to that extent there was another overstatement of the amount of interest to which the Strata Company was entitled.
Did the magistrate err in failing to take into account the defence as filed
100 Normally, on an application to set aside default judgment, the judgment has been entered after the failure to defend the claim – a failure to file a response (a memorandum of appearance in the District Court and the Supreme Court), or the failure to file a defence.
101 For a regularly entered default judgment in that situation, the authorities have stated that in order for it to be appropriate to set aside the default judgment, it must appear from the affidavit material before the court that the defendant's case is not inherently incredible and that if his evidence were accepted at trial the defendant would have a real prospect of success: The Pilbara Infrastructure Pty Ltd v BGC Contracting Pty Ltd; [2007] WASCA 257; (2007) 35 WAR 412 [55]; Parker v Transfield Pty Ltd [2000] WASCA 382 [3]; Hall v Hall [2007] WASC 198 [67].
102 We have a different situation here (apart from the fact that this was an irregularly entered default judgment). A defence had been filed and it was a defence filed by solicitors then acting on Mr Jacob's behalf. Mr Jacob had also filed his affidavit of 9 October 2015 which arguably did not condescend to particulars. However, in that affidavit Mr Jacob specifically deposed to the fact that it was always his intention to defend the claim and 'my intention to defend the claim is obvious as a lawyer was appointed to represent me'.
103 As pleaded in the defence, Mr Jacob put the Strata Company to proof that it had properly levied the contributions it claimed and that it had served demands for those contributions. It was pleaded in the defence that:
(a) the Strata Company did not issue to Mr Jacob invoices or statements for the levy contributions and sinking fund contributions; and
(b) any contribution or sinking fund levies, were not calculated on the defendant's levy contribution and incorporated expenses and costs not properly chargeable by the Strata Company.
104 Having reviewed the transcript of the hearing before the magistrate and her reasons, I am not satisfied that the magistrate did, in fact, take into account this defence. While she mentioned, as I have set out in [50], that she did appreciate that Mr Jacob disputed what had been levied against him, there is no mention of the specific matters pleaded in the defence.
105 In the unusual circumstances of this matter, given that the nature of the default was the failure to lodge a listing conference memorandum after the defence had been filed, I consider the magistrate erred in law in failing to take into account that defence.
Did the magistrate take into account the wrong test for determining whether the default judgment should be set aside?
106 As I have set out in [101] above, the test on an application to set aside a default judgment when looking at the merits of the defence is whether the defendant would have a 'real prospect of success'.
107 The test for the prospect of success has been more recently stated by the Court of Appeal as a 'reasonable' prospect of success: Shilkin v Taylor [2011] WASCA 255 [25].
108 To the extent that the magistrate stated that Mr Jacob had to show that he had a 'prima facie defence on the merits' is arguably an incorrect statement of the test. However, I do note that in Starrs [36], the Court of Appeal stated that a judgment regularly entered will not be set aside 'unless the court is satisfied that there is a defence on the merits'.
109 While the magistrate's statement of the test may be said to be an error, I do not consider that to be one of decisive weight in the overall context of this appeal.
The jurisdiction issue
110 Counsel for the Strata Company argued in this appeal, as he did before the magistrate, that whether the amounts are owing by Mr Jacob is not an issue for the Magistrates Court. He submitted that SAT is the sole body to resolve disputes about accounts, levies, calculation of levies, and calculation of interest. If there is a dispute as to the calculation of those amounts, that is a dispute that the defendant ought to have resolved with SAT in order to determine the appropriate amount.
111 Counsel for the Strata Company submitted that s 89 of the Strata Titles Act allows SAT to look into the amount of interest which has been charged to a party and, if necessary, vary that interest, and s 90 allows a person seeking documentation from a strata company to apply to SAT for orders for those documents.
112 If counsel for the Strata Company is correct, it means that if there is any dispute as to the amount owed when a strata company brings action in the Magistrates Court, the strata company is entitled to judgment unless the defendant goes to SAT to resolve the dispute. That cannot be the case, in my view, and after considering the relevant provisions of the Strata Titles Act.
113 Section 36 of the Strata Titles Act provides, relevantly:
36. Levy of contributions on proprietors
(1) A strata company shall —
(a) establish a fund for administrative expenses that is sufficient in the opinion of the company for the control and management of the common property, for the payment of any premiums of insurance and the discharge of any other obligation of the strata company; and
(b) determine from time to time the amounts to be raised for the purposes described in paragraph (a); and
(c) raise amounts so determined by levying contributions on proprietors —
(i) in proportion to the unit entitlements of their respective lots; or
(ii) where a by-law referred to in section 42B or an order under section 99A is in force, in accordance with that by-law or order;
and
(d) recover from any proprietor, by action in a court of competent jurisdiction if necessary, any sum of money expended by the company for repairs or work done by it or at its direction in complying with any notice or order of a competent public authority or local government in respect of that portion of the building comprising the lot of that proprietor.
(1a) ….
(2) A strata company may —
(a) establish a reserve fund for the purpose of accumulating funds to meet contingent expenses, other than those of a routine nature, and other major expenses of the strata company likely to arise in the future; and
(b) determine from time to time the amounts to be raised for the purpose described in paragraph (a); and
(c) raise amounts so determined by levying contributions on the proprietors in proportion to the unit entitlements of their respective lots.
(3) Except in so far as and to the extent that the by-laws of a strata company may empower the council of that company to exercise the functions in subsections (1)(a), (b) and (c) and (2), those functions shall be performed by and in accordance with resolutions of proprietors passed at a general meeting of the strata company.
(4) Any contribution levied under this section —
(a) becomes due and payable to the strata company in accordance with the terms of the decision to make the levy; and
(b) if not paid when it becomes due and payable, bears interest on the amount unpaid at the rate of simple interest prescribed, unless the company determines (either generally or in a particular case) that an unpaid contribution shall bear no interest or interest at a lesser rate; and
(c) including interest accrued under paragraph (b), may be recovered as a debt by the strata company in a court of competent jurisdiction and the strata company may agree to a compromise of such a debt.
(a) that the contribution was levied, including the terms of the decision to make the levy (s36(4)(a));
(b) that interest on the amount unpaid has been applied at the prescribed rate of simple interest (s 36(4)(b)).
115 These are the matters which have been disputed in this case by Mr Jacob. The Strata Company is required to prove the amounts of unpaid levies as claimed and that it has applied simple interest on the amounts unpaid. It may be that this could have been proved to the satisfaction of a magistrate on a summary judgment application, but no such application was brought in this case.
116 Parliament has, in fact given jurisdiction to the Magistrates Court, pursuant to s 34(4)(c), to deal with the Strata Company's claim and Mr Jacob's dispute over what had been levied against him. These are not matters which need to be resolved, in my view, in a separate action in SAT.
117 Section 89 of the Strata Titles Act relates to where there is a dispute as to the rate of interest charged. There is no dispute about the rate of interest in this case. What has been raised is the issue of calculation of interest and whether the Strata Company can charge interest on interest.
118 While s90 of the Strata Titles Act deals with orders for a strata company to provide information or documents, that cannot replace or usurp the process of discovery in the Magistrates Court. Discovery of documents relevant to a pleading and the issues in the action is an adjunct to the court process. A unit holder defending a claim in the Magistrates Court brought by a strata company pursuant to s 36 of the Strata Titles Act is entitled to discovery in the course of the Magistrate Court proceedings.
119 I am satisfied in the circumstances that the magistrate erred in her findings about the jurisdiction issue.120 It follows that appeal ground 5 has been made out.
A reconsideration of the application to set aside judgment
121 Having regard to my findings in relation to the issues on this appeal, I am satisfied that the magistrate made a number of errors which, having regard to the principles in House v The King, means that I should review the magistrate's decision to refuse to set aside the default judgment and exercise my own discretion in substitution.
122 I am satisfied that the default judgment has been entered irregularly but as the authorities make it clear, not every irregularity in the means by which a default judgment is obtained will necessarily lead to it being set aside.
123 I may amend the judgment rather than set it aside. That was what occurred in Starrs where it was conceded that the judgment overstated the amount due. However, in that case, the defence as to the balance of the claim was found to be without merit: Starrs [75]. It was in those circumstances that the Court of Appeal considered that the proper course was to vary the judgment to reflect the amount that was due at the time it was entered.
124 In this case the reason why the judgment was irregularly entered is not just because there was an overstatement of the amount due.
125 As I have found, there has been irregularity in the application of the Rules. The default judgment application by the Strata Company, based on the failure to a listing conference lodge memorandum, should have been served on Mr Jacob. It could not be said that this is a minor or technical irregularity or that there has been no prejudice to Mr Jacob, or no injustice caused: see ACN 076 676 438 Pty Ltd (In Liq)v A-Comms Teledata Pty Ltd [18] – [19]. This is particularly so in this case where Mr Jacob had filed a defence and it was apparent he intended to defend the claim, and subsequently the Strata Company (again without service on or notice to Mr Jacob) applied to vary and increase the costs component of the default judgment.
126 In addition, on the Strata Company's own pleading and the judgment itself it is apparent that there has been interest charged on interest. I am really not able to determine the amount by which I should vary the judgment. It is not clear what amount is actually owed by Mr Jacob, and there are arguments about the dates from which interest would run.
127 For these reasons, this is not a situation where Mr Jacob's defence as to the balance of the amount of the Strata Company's claim is entirely without merit (as in Starrs).
128 Accordingly, the default judgment being one which has been irregularly entered, I consider that it must be set aside and that should be done without terms: The Pilbara Infrastructure Pty Ltd v BGC Contracting Pty Ltd [56].
129 I will therefore allow the appeal, and make orders setting aside the orders of the Magistrates Court. I will hear from the parties as to the exact orders I should make, including costs orders.
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