JAMES v HWANG

[2014] SADC 85

District Court of South Australia

(Civil: Appeal Against a Master's Decision)

JAMES v HWANG

[2014] SADC 85

Judgment of His Honour Judge David Smith (ex tempore)

14 May 2014

PROCEDURE

PRACTICE AND RULES OF COURT - DEFAULT OF PLEADINGS

Appeal against order of Master requiring payment into Court of the judgment sum as a condition of setting aside a default judgment – discussion of ambit of Court’s discretion to impose such a condition – discussion of whether dilatory behaviour in the litigation is a relevant consideration in the exercise of such a discretion.

Held: that dilatory behaviour in the conduct of the litigation is a relevant consideration in the exercise of discretion to set aside a default judgment – in this case, as found by the Master, there was continued unjustifiable dilatory behaviour by the defendant (appellant), such that it was within the discretion of the Court to require a payment in as a pre-condition to setting aside the default judgment – there being no error demonstrated in the exercise of the Master’s discretion appeal dismissed.

District Court Act 1991 s 43; District Court Rules 2006 R 292, referred to.
Rahmani v Heng [2010] 270 LSJS 234; Grimwade v Beresford (1974) 9 SASR 157; Saunders v Esanda Finance (Unreported Supreme Court 31 May 1996); House v The King (1936) 55 CLR 499, considered.

JAMES v HWANG
[2014] SADC 85

1. The issue in this appeal is whether the Master ought to have required the defendant to pay into Court the judgment sum, namely $33,362.82, as a condition of setting aside the judgment in default obtained by the plaintiff (respondent).

2. It is within the Master’s discretion to require a payment into Court as a pre-condition to setting aside a judgment entered by default. I refer here to the authorities on the topic of setting aside judgments entered by default, usefully gathered by Beazley DCJ in Rahmani v Heng [2010] 270 LSJS 234. I note, in particular, that Beazley DCJ in that case referred to Saunders v Esanda Finance Corporation (Unreported Supreme Court 31 May 1996). In that case Lander J said that in some cases there could be ‘special circumstances’ justifying an order for payment in as a pre-condition to setting aside a default judgment.

3. The Master in his reasons has chronicled the patient way in which the Court dealt with the defendant’s delays and non attendances. I will not repeat all the detail. A brief summary will suffice. The defendant failed to attend three hearings before the Master on, respectively, 5 June 2013, 30 July 2013 and 7 August 2013.  Following each of the first two non-appearances the defendant was warned, that such failures could result in a default judgment being entered. The last failure to appear was on 7 August 2013 when the Master was considering the plaintiff’s application for entry of a default judgment. On that day the default judgment was entered.  Further, the defendant admitted that he became aware of the default judgment having been entered on 28 August 2013, and yet he made no application to set it aside until February 2014 – a delay of some six months. Accordingly on the facts found and marshalled by the Master, including those I have just set out above, I wholeheartedly agree with his following conclusion in [49] of his reasons for decision.

   … having regard to the lack of cogency of the defendant’s explanation for failing to attend hearings, his significant delay in applying to set aside the judgment, and the time and effort wasted by the plaintiff in obtaining and executing the judgment entered in his favour, I have determined that while that judgment should be set aside, the interests of justice require this be on terms that the defendant must first pay the judgment monies into court …

4. In all the circumstances, I consider that the defendant was fortunate to convince the Court to set the judgment aside at all.

5. I do not agree that the discretion conferred on the Court in respect of these applications should be so confined that, in all cases where there is a reasonably arguable defence, as was the case here, the Court is constrained to set aside a default judgment unconditionally. 

6. Unexplained continuing dilatory behaviour in the litigation, of the character chronicled in this case, can amount to ‘special circumstances’ as mentioned by Lander J in the case of Saunders, and can justify a requirement that the dilatory defendant pay a sum into Court as a pre-condition to setting aside the default judgment.

7. This is an appeal pursuant to s 43 of the District Court Act 1991 and 6 DCR 292. This Court should not interfere with the exercise of a discretion of a Master in the absence of demonstrable error. In this respect I have close regard to the principles relating to appeals against exercises of discretion set out by the High Court Justices in House v The King (1936) 55 CLR 499 at 505:

   The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the Judges comprising the appellate court consider that, if they had been in the position of the primary Judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the Judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary Judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case although the nature of the error may not be discoverable, the exercise of the discretion is to be reviewed on the ground that a substantial wrong has in fact occurred.

8. There being no error demonstrated in the exercise of the Master’s discretion I dismiss this appeal. I will hear the parties as to costs.