Julian Evans v Scales and Partners No. SCGRG 93/2335 Judgment No. 4384 Number of Pages 5 Practice and Procedure

[1994] SASC 4384

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA DEBELLE J

CWDS
Practice and procedure - appeal from judgment and orders dismissing the appellant's application to set aside judgment - no reasons for decision - desirability of reasons - summons not served on appellant - claim for legal costs in excess of scale - no signed agreement authorizing costs in excess of scale - appellant found to have sufficient explanation for default in filing defence, a bona fide intention of defending the action, and some possibility of doing so with success - no prejudice to respondent - appeal allowed - judgment set aside with leave to file a defence. Magistrate Court Rules R86. Watson v Anderson (1976) 13 SASR 329 and King William Law Chambers v Mobitel
(1981) 29 SASR 316, applied.

HRNG ADELAIDE, 12 January 1994 #DATE 12:1:1994
Counsel for appellant:     Mr J S Roder
Solicitors for appellant:    J S Roder
Counsel for respondent:     Mr J Neate
Solicitors for respondent: Ward and Partners

ORDER
1. That the Judgment entered in Magistrates Court Action No: 13269 of 1993 on the 11th day of August 1993 be set aside.
2. That the appellant have leave to file a Defence in respect of the three accounts the subject of the respondent's claim but limited as follows:-
    (a) As to the question of the appropriate scale of fees to be charged and the question of whether the appellant is obliged to pay costs in excess of that scale;
    (b) In respect of the claim for fees for the preparation of an indemnity whether the appellant gave the respondent instructions in that matter.
3. That the appellant pay the respondent's costs of the setting aside application fixed in the sum of $100.00.
4. That the respondent pay the appellant's costs of the appeal fixed at $350.00 plus disbursements.

JUDGE1 DEBELLE J This is an appeal from a judgment and orders made by a magistrate dismissing the appellant's application to set aside judgment, and ordering the appellant to pay the sum of $200 costs to the respondent. 2. The appeal is from an interlocutory judgment: Hall v Nominal Defendant
(1966) 117 CLR 423 at 440; Carr v Finance Corporation of Australia Limited
(1981) 147 CLR 247; and SA Repairs and Painting Pty Ltd v Trenka Pty Ltd
(1993) 171 LSJS 300. Leave to appeal is therefore required. Leave had not been expressly sought but when the appeal was called on for hearing, Mr Roder, who appeared for the appellant, applied for leave. Both parties were ready to present argument on the question of leave and on the merits of the appeal. Mr Neate, who appeared for the respondent, did not oppose the granting of leave. I therefore heard argument on both the application for leave and on the appeal and determined the appeal accordingly. 3. Power exists under Rule 86 of the Magistrates Court Rules 1992 to set aside an interlocutory judgment of this kind: SA Repairs and Painting Pty Ltd v Trenka Pty Ltd (supra). 4. The respondent is a firm of solicitors. It claims that the sum of $6,737.28 is due and owing to it, being the costs of professional services rendered to it by the appellant. The sum of $6,737.28 is said to be due in respect of three separate matters. They are:
    1. Professional charges in an action in the Local Court of
    Adelaide, number 1901 of 1990, in which the appellant was
    plaintiff, and the defendants were a Mr John Anderson and
    Mr John Arnold. $2,026.28
    2. Professional fees in an action in the Local Court of
    Adelaide, number 536 of 1990, in which the appellant was
    plaintiff, and the defendant was Mr Barry Wheaton.
    $4,371.00
    3. Professional charges in relation to advice concerning
    certain indemnities. $ 340.00
(Total) $6,737.28. 5. On 7 July 1993, a summons was issued out of the Adelaide Magistrates Court claiming the total sum of $6,737.28. The appellant failed to file a defence and, on 11 August 1993, the solicitors acting for the respondent signed the judgment in default of defence. On 15 October 1993 the appellant lodged an application to have the judgment set aside and for leave to file a defence. The application was heard on 29 October 1993 and was adjourned until 12 November 1993. On 12 November 1993 the magistrate hearing the application refused it and ordered the appellant to pay $200 costs to the respondent. 6. The first ground of appeal is that the learned magistrate failed to give any reasons for his decision. There is some dispute whether reasons were given or not. If reasons were given, they were brief and were given ex tempore. Given the dispute on this issue, and given that there are more substantial grounds of appeal, it is unnecessary to examine this issue in any greater detail than to restate the well settled proposition that it is desirable to give reasons for a decision, even if by dint of a busy list, they must be brief: Watson v Anderson (1976) 13 SASR 329; Pettitt v Dunkley (1971) 1 NSWLR 376; and T v Medical Board of South Australia (unreported, Full Court of the Supreme Court of South Australia, 5 May 1992, Judgment No 3353). While the ideal is that reasons should be given for every decision given by a judicial officer, that has never been a uniform practice, and the court will recognise that it may not be possible to give reasons for every interlocutory decision for to do so may impede the proper dispatch of chamber business: Watson v Anderson (supra) at 332. The failure to give reasons does not necessarily mean that there has been an error of law. 7. I turn to the more substantial issues on this appeal. The circumstances in which a judgment in default of defence would be set aside were considered in Watson v Anderson (supra). The matters to be considered include whether there is any explanation for the default and whether the appellant has a bona fide intention of defending the action and there is some possibility of doing so with success: Watson v Anderson at 333 to 335, and at 341. 8. The appellant's explanation for the default judgment is that he did not receive a copy of the summons. The summons was not served personally but by post and at premises which the defendant had left. The appellant admits that he returned to the premises from time to time but says that he did not receive a copy of the summons. That is, I think, sufficient explanation for the failure to enter an appearance and file a defence. 9. I turn to the question whether the appellant has a bona fide intention of defending the action and there is some possibility of doing so with success. The attitude of the appellant in respect of this claim appears to be ambivalent or at least confusing. On some occasions the appellant appears to have acknowledged the liability to pay the costs, while on others he has disputed that liability. 10. The costs sought in the two actions in the Local Court are in excess of the scale of fees fixed by the Rules of that court. In an affidavit sworn in support of his application, the appellant states that he had not signed an agreement authorising the respondent to charge more than the fees authorised by the Rules of Court: see s.296 of the Local and District Criminal Courts Act 1926. He says that he was not aware of the terms of s.296 until he was advised by his current solicitor. While he admits a liability to pay costs in respect of these two Local Court actions, he disputes a liability to pay costs in excess of the scale authorised by the Rules. The respondent does not suggest that at any time the appellant has signed an agreement authorising fees in excess of the amount authorised by the Rules. 11. In relation to the claim for $2,026.28, the appellant also says that he has never received an account for those fees. This is disputed by the respondent, which says that an account dated 19 December 1991 was sent by post to the appellant. Furthermore, it says, accounts rendered had been sent to the appellant. Whatever might be the position as to whether the respondent did render an account for the sum of $2,026.28, the appellant would appear to have a good defence in respect of the claim for that sum for an amount in excess of the amount authorised by the rules of court. 12. The appellant could and proposes to admit liability for the amount of costs as taxed and then apply for an order that the respondent tax its costs. In doing so, he seeks to utilise the procedures suggested by this court in King William Law Chambers v Mobitel (1981) 29 SASR 316, 319 to 320 and see also s.42(5), of the Legal Practitioners Act, 1981. As I have said, the appellant's conduct on some occasions suggests he does not dispute his liability to pay the costs but has instead sought to secure terms as to the manner in which the costs should be paid. On 15 February 1993, the appellant signed an authority authorising payment of the amounts of $4,371, and $2,026.28 out of the proceeds of a sale of property at Morphett Vale. That attempt failed because the purchaser did not complete the contract. On 13 April 1993, the appellant signed an authority authorising payment of all amounts due by him to the respondent out of the sale of premises at Blackwood. That attempt also failed for reasons which have not been explained. On a further and unidentified occasion, the appellant signed an authority authorising payment of the amounts of $4,371 and $2,026.28 out of a sale of property at Hindmarsh. That attempt failed because the whole of the proceeds were required to discharge a mortgage over the said property. It must be noted that in the case each of those three authorities, the authority was signed by the appellant on behalf of a company called Aardvark Enterprises Pty Ltd and questions may exist as to whether the appellant signed the authority in his personal capacity or on behalf of the company. 13. The respondent also relies on an assertion made by the appellant that he has made an arrangement with it whereby he would assign to the respondent his right to recover the monies due to him from the judgments in the two Local Court actions, in order to discharge the debt due to the respondent. The respondent had obtained judgment in both actions, and the consideration for the assignment, says the appellant, was that the respondent should enforce the judgments. The respondent denies that such an arrangement has been made, and there appears to be a real dispute as to whether the arrangement was in fact made. However, whether the arrangement was or was not made, the respondent points to it as an indication of an acknowledgment by the appellant of his liability to it. 14. Notwithstanding the appellant's apparent willingness on some occasions to pay the fees claimed, I think he should be entitled to have the judgment set aside and to enter a defence. It was not until he had received advice that he was aware that, in the absence of an agreement in writing, the respondent's costs could be limited to fees authorised by the Local Court Rules. Until he received that advice, he was willing to pay the fees. Now that he has received that advice and is aware that he has a defence, his attitude has understandably altered. I do not think that there is any ground which should preclude him from limiting his liability to the amount authorised by the Local Court Rules in respect of each of the two Local Court actions. 15. As to the claim for $340 for advice in respect of indemnities, the appellant denies giving instructions in respect of that matter. The respondent has so far failed to dispute that assertion. There appears to be a real issue in relation to that question also. I think the defendant should have leave to defend that claim also. 16. I have given consideration to whether there is any prejudice to the respondent if judgment is set aside. Mr Neate has not pointed to any prejudice nor do I think it would have been possible for him to do so other than some prejudice which can be cured by an order as to costs. 17. In the affidavit of the appellant, there is some suggestion that he seeks to prosecute a counterclaim alleging negligence on the part of the respondent firm of solicitors and requiring taxations of costs in respect of other matters to which the respondent has acted in on his behalf. Mr Roder expressly disavows any intention to seek to plead in this action, any such counterclaim. The appellant can, if so advised, issue separate proceedings in respect of those claims. 18. For these reasons I will allow the appeal. I think, however, that given the nature of the submissions made on behalf of the appellant and the matters contained in his affidavit, the grounds upon which the appellant should be permitted to defend the action should be limited. Mr Roder does not object to such a course. I would therefore order that the judgment and orders made by the learned magistrate in the action no.13269 of 1993 on 11 August 1993 be set aside and that the appellant have leave to file a defence limited in the way that I have mentioned. Nothing I have said in these reasons precludes the respondent firm from pleading an acknowledgment by the appellant of his liability to costs. 19. There will be orders as follows:
    1. That the Judgment entered in Magistrates Court Action
    No: 13269 of 1993 on the 11th day of August 1993 be set
    aside.
    2. That the appellant have leave to file a Defence in
    respect of the three accounts the subject of the
    respondent's claim but limited as follows:-
    (a) As to the question of the appropriate scale of fees to
    be charged and the question of whether the appellant is
    obliged to pay costs in excess of that scale;
    (b) In respect of the claim for fees for the preparation of
    an indemnity whether the appellant gave the respondent
    instructions in that matter.
    3. That the appellant pay the respondent's costs of the
    setting aside application fixed in the sum of $100.00.
    4. That the respondent pay the appellant's costs of the
    appeal fixed at $350.00 plus disbursements.