Kasimoglu v Embleton Motor Co Pty Ltd

[2014] WASCA 182

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT :   THE COURT OF APPEAL (WA)

CITATION:   KASIMOGLU -v- EMBLETON MOTOR CO PTY LTD [2014] WASCA 182

CORAM:   NEWNES JA

MURPHY JA
EDELMAN J

HEARD:   14 MAY 2014

DELIVERED          :   14 OCTOBER 2014

FILE NO/S:   CACV 54 of 2012

BETWEEN:   HUSSEIN KASIMOGLU

ABDURAHMAN SAEDI
Appellants

AND

EMBLETON MOTOR CO PTY LTD
Respondent

ON APPEAL FROM:

Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA

Coram  :MASTER SANDERSON

Citation  :EMBLETON MOTOR CO PTY LTD -v- KASAMOGLU [2012] WASC 158

File No  :CIV 2895 of 2010

Catchwords:

Practice and procedure - Application to set aside default judgment - Whether Master erred in refusing to admit late affidavits as to appellant's defence - Application to adduce additional evidence on appeal - Turns on own facts

Legislation:

Nil

Result:

Application to adduce additional evidence dismissed
Appeal dismissed

Category:    B

Representation:

Counsel:

Appellants:     Mr K Kappadath

Respondent:     Mr B G Grubb

Solicitors:

Appellants:     Starnet Legal

Respondent:     Metaxas & Hager

Case(s) referred to in judgment(s):

Carr v Finance Corp of Australia Ltd [1981] HCA 20; (1981) 147 CLR 246

Embleton Motor Co Pty Ltd v St Kilda Beach Taxi School and Staffing Pty Ltd [2014] WASCA 183

House v The King (1936) 55 CLR 499

1. NEWNES JA:  This is an appeal from a decision of Master Sanderson dismissing an application by the appellants to set aside a default judgment entered against them by the respondent.  The appellants contend, in substance, that the master erred in declining to admit two affidavits into evidence on the application and in the exercise of his discretion to dismiss the application.  They also seek to adduce additional evidence on the appeal directed to establishing that they have an arguable defence to the respondent's claim.

2. An order refusing to set aside a default judgment is an interlocutory order:  Carr v Finance Corp of Australia Ltd [1981] HCA 20; (1981) 147 CLR 246. The appellants therefore require leave to appeal: Supreme Court Act 1935 (WA) s 60(1)(f).

3. I would refuse leave to appeal and dismiss the appeal for the following reasons.

Background

1. The respondent (Embleton) commenced proceedings against the appellants on 24 November 2010 by a writ of summons containing an indorsement of claim.  On 20 December 2010, appearances were filed on behalf of both appellants.  A statement of claim was filed on 24 January 2011.

2. In the statement of claim, Embleton pleaded that the first‑named appellant (Mr Kasimoglu) was the owner of taxi plates 181 and 597.  Embleton alleged, in substance, that at a meeting on 4 June 2008 between Mr Johnson, on behalf of Embleton, and the appellants (the second‑named appellant, Mr Saedi, acting as the agent of Mr Kasimoglu) it was agreed that Embleton would enter into what was described as a lease of plate 597 from Mr Kasimoglu for a period of five years with an option for a further five years, on certain terms (the first agreement).  Embleton further alleged that at a second meeting on 12 June 2008 it was agreed that Embleton would lease plate 181 on the same terms (the second agreement).  Both plates were subsequently delivered to Embleton. 

3. Embleton alleged that Mr Kasimoglu breached each of the agreements by demanding the return of the plates during the term of the lease.  It pleaded in the alternative that Mr Saedi and Mr Kasimoglu had engaged in misleading or deceptive conduct in relation to the lease of the plates.

4. Embleton claimed, in substance:

   •that plates 597 and 181 were leased by Mr Kasimoglu to Embleton pursuant to the first and second agreements respectively;

   •a declaration that neither of the agreements had been validly terminated; and

   •damages.

5. (I should mention that neither party contended that the Taxi Act 1994 (WA) or the references in that Act to a 'lease' of taxi plates had any relevance to the issues on the appeal and these reasons proceed on that assumption.)

6. At a status conference on 4 February 2011, the appellants were ordered to file and serve their defence and any counterclaim by 18 February 2011.  They failed to do so.  At a further status conference on 17 June 2011, the appellants were ordered to file and serve their defence and any counterclaim forthwith.  Again, they failed to do so.  Finally, at a status conference on 1 July 2011, the court ordered that unless the appellants filed and served a defence by 8 July 2011, the respondent would have leave to apply for default judgment. 

7. No defence was filed and, on 11 July 2011, the respondent applied for default judgment. 

8. On 19 July 2011, the court sent an email to the appellants' solicitors informing them that the status conference had been relisted for further hearing on 22 July 2011 to deal with the respondent's application for default judgment.  There was no appearance on behalf of the appellants on 22 July 2011 and the registrar entered judgment for the respondent. 

9. Two months later, on 22 September 2011, the respondent filed and served a bill of costs.  On 3 November 2011, the appellants brought an application to set aside the default judgment, supported by an affidavit of the appellant's solicitor, Mr Boden, of the same date.

10. The first return date of that application was 10 November 2011.  On that date it was adjourned to 17 November 2011.  When it came back before the court on 17 November 2011, consent orders were made for the filing by the respondent of any affidavit in opposition to the application.  An affidavit was filed on behalf of the respondent on 25 November 2011.

11. On 15 February 2012, the parties were notified that the application had been set down for hearing on 6 March 2012.  As it turned out, on that date it was further adjourned by consent.  The application ultimately came on for hearing on 3 April 2012, some four months after it was lodged and some eight months after judgment was entered.

12. At the commencement of the hearing, counsel for the appellants sought leave to rely on two further affidavits, one an affidavit of Mr Boden, sworn on 29 March 2012, and the other an affidavit of Mr Saedi, sworn on 1 April 2012.  Both affidavits were concerned with the appellants' defence to the claim.  Mr Boden's affidavit had, as an attachment, an unsigned copy of a witness statement of Mr Saedi in another action which, Mr Boden said, set out Mr Saedi's position in relation to this action.  In his affidavit, Mr Saedi set out briefly his version of his dealings with the respondent in relation to the two taxi licences, reproducing in the course of doing so the relevant contents of the unsigned witness statement attached to Mr Boden's affidavit.  It is unnecessary to describe the content of Mr Saedi's affidavit beyond observing that much of it was not in admissible form.

13. The respondent's counsel objected to the affidavits on the grounds first, that there was no explanation as to why they were late and secondly, that the contents were largely inadmissible. The master refused to admit the affidavits as they contained no explanation for the delay in filing them nor any explanation of the circumstances in which default judgment came to be entered. He also considered that the affidavits contained nothing of any probative value in respect of the appellants' defence to the claim [10].

14. That left the appellants' application supported by the affidavit of Mr Boden of 3 November 2011, which said nothing about any possible defence to the claim.  In the affidavit Mr Boden did, however, seek to explain how default judgment came to be entered.  He said that a defence and counterclaim had been posted to the court on or about 17 February 2011 but the required filing fee had not been enclosed because he was not aware that a fee was payable.  Mr Boden noted that at the status conference on 17 June 2011 the appellants were ordered to file and serve their defence and any counterclaim forthwith.  He also noted that at the further status conference on 1 July 2011, a self‑executing order was made by which the defence and any counterclaim were required to be filed and served by 8 July 2011.  Mr Boden said that, on 20 July 2011, a defence and counterclaim, together with the filing fee, was posted to the court.  Because of problems he had been experiencing with his email, he was not aware that the status conference had been listed on 22 July 2011 to consider the respondent's application for judgment. 

15. Mr Boden said he was informed by the court, by letter dated 25 July 2011, that judgment had been entered for the respondent on 22 July 2011.  He then wrote to the court on 26 July 2011, asking for the matter to be relisted so that the appellants could be heard on an application to set aside the judgment.  He said he was informed in a subsequent telephone conversation that it would be necessary to make an application to set aside the judgment.

16. The master found the appellants' explanation to be unsatisfactory.  He noted that Mr Boden did not explain why he had not made any enquiry as to whether a fee was payable before sending the defence and counterclaim in February 2011.  The master also noted that by 17 June 2011, at the latest, Mr Boden must have been aware that the pleading had not been accepted for filing but he did not explain why nothing was done about it until 20 July 2011.  There was also no explanation for the delay in filing the application to set aside the judgment or any evidence on affidavit identifying any arguable defence to the claim. 

17. The master concluded that in the absence of an adequate explanation as to the circumstances in which default judgment came to be entered and some evidence that the appellants had an arguable defence to the claim, the application should be dismissed.

The grounds of appeal

1. The appellants' case contained nine grounds of appeal.  On the hearing of the appeal, counsel for the appellants abandoned all but four of those grounds.  The four that remained were as follows:

   1.The learned Master Sanderson erred in law and in the exercise of his discretion in refusing to admit into evidence the affidavit of Kimani Adil Boden sworn on 29 March 2012 and the affidavit sworn by Adburahman Saedi on 1 April 2012;

   2.The learned Master Sanderson failed to consider whether there was a defence/arguable case on the merits;

   3.The learned Master Sanderson failed to consider whether there was a reason for the default; and

   4.The learned Master Sanderson failed to consider whether there was any prejudice suffered by the [respondent], which could not be compensated by an order for costs.

2. Counsel for the appellant also sought leave to add a further ground in the following terms:

   5.In light of the decision of Bowden DCJ dated 23 July 2012 in (2012) WADC 114, the default judgment entered by Registrar Boyle on 22 July 2011 in CIV 2895 of 2010 be set aside.

3. The court reserved its decision on the application to add that ground.

The disposition of the appeal

Ground 1

1. Counsel for the appellants conceded (correctly in my view) that grounds 2, 3 and 4 did not arise unless the appellants succeeded on ground 1 (ts 21).  That was because there was otherwise no evidence before the master that the appellants had an arguable defence to the respondent's claim.  The only affidavits directed to that were the affidavits of Mr Boden of 29 March 2012 and Mr Saedi of 1 April 2012.  The appellants' counsel accepted that in the absence of any evidence that the appellants had an arguable defence to the respondent's claim, it could not be said that the master was in error in refusing to set aside the default judgment.

2. The decision of the master to refuse to admit the affidavits into evidence involved the exercise of a discretion.  It is therefore necessary for the appellants to establish error of the kind identified in House v The King (1936) 55 CLR 499, 505. The appellants contended that the master had erred in failing to take into account a relevant factor, namely, the probative value of the evidence in the two affidavits as to the appellants' defence to the claim (ts 21 ‑ 22).

3. That contention, however, is plainly untenable.  I understood the appellants' counsel to concede that the master had expressly taken into account the contents of the two affidavits and concluded that they had no probative value (ts 3).  In any event, that is plainly the case.  The finding that they had no probative value was not challenged on the appeal.  It was therefore clearly open to the master, if not incumbent upon him, to decline to admit the affidavits.

4. This ground of appeal must be dismissed.  It follows that grounds 2, 3 and 4 must also fail.

Proposed ground 5

1. This ground lay at the heart of the appeal.  The appellants sought to support it by an application, dated 21 September 2012, to adduce additional evidence on the hearing of the appeal.  The additional evidence consisted of an affidavit of Mr Boden, sworn on 20 September 2012, to which were annexed the papers for the judge, the transcript of the trial, and the reasons for judgment of the trial judge, Bowden DCJ, in action 624 of 2011 in the District Court (the District Court action).  That was an action between St Kilda Beach Taxi School and Staffing Pty Ltd (St Kilda) as plaintiff, Central Taxi Management Pty Ltd (CTM), Embleton and Kim Johnson as defendants, and Mr Saedi as a third party. 

2. Notwithstanding that the whole of the transcript of the trial in the District Court action was annexed to the affidavit, we were informed by the appellants' counsel that the appellants relied upon the findings of the trial judge rather than the evidence given in the District Court (ts 8), as indeed the ground of appeal indicates. 

3. The findings of Bowden DCJ in the District Court action are described in the reasons for judgment of this court in Embleton Motor Co Pty Ltd v St Kilda Beach Taxi School and Staffing Pty Ltd [2014] WASCA 183. For present purposes, the effect of his Honour's reasons can be sufficiently summarised as follows. St Kilda was the owner of a taxi plate, plate 529, which it had leased to CTM. Mr Saedi, the sole director of CTM, had subsequently provided the plate to Embleton. Upon the expiry of the lease to CTM, St Kilda commenced action against CTM and Embleton to recover the plate. Embleton contended that it was entitled to possession of the plate pursuant to a five year lease it had entered into with St Kilda, through St Kilda's agent, CTM or alternatively Mr Saedi.

4. Bowden DCJ held that neither CTM nor Mr Saedi was the agent of St Kilda for the purpose of letting the plate.  His Honour further found that CTM had sub‑leased the plate to Embleton for an indefinite term, not for a five year term.  That sub‑lease, his Honour found, was made in April 2008 and plate 529 delivered to Embleton pursuant to the agreement in December 2008.  CTM had since lawfully terminated the sub‑lease and St Kilda was entitled to possession of the plate.  In Embleton Motor Co Pty Ltd v St Kilda Beach Taxi School and Staffing Pty Ltd, this court dismissed an appeal by Embleton against his Honour's decision.

5. In his affidavit, Mr Boden says that the finding in the District Court action that there was no agreement for a five year lease of plate 529 established that there was no agreement for a five year lease of plates 181 and 597, the subject of this action.  According to Mr  Boden, that is because it was Embleton's case in the District Court action that the agreement for a five year lease involved five taxi plates:  plates 181, 597, 529 and two others.  As the court had found there was no five year lease in respect of plate 529, Mr Boden contended that it followed there was no five year lease in respect of any of the plates.

6. It was submitted by counsel for the appellants that based on the decision in the District Court action, the appellants' defence in this action has been made out and if the default judgment is not set aside there will be inconsistent or contradictory decisions in respect of the same agreement. 

7. I do not accept that submission.  I do not consider that of itself the decision in the District Court action advances the appellants' position.  Counsel for the appellants conceded (correctly in my view) that if the present action were to proceed to trial no issue estoppel would arise by reason of the decision in the District Court action (ts 12).  The District Court action was a separate and quite different proceeding involving other parties and a different subject matter, plate 529, owned by a third party.  No finding was made in that case in relation to plates 181 and 597.

8. It follows that there would be no reason why a court in the present case could not reach a different decision as to what was agreed between the parties in relation to plates 181 and 597.  The court would have to decide the case on the evidence before it, evidence which may of course be different to the evidence in the District Court action.  There would not be, in any relevant sense, a risk of inconsistent or contradictory decisions. 

9. In my opinion, Mr Boden's affidavit does not assist the appellants' case and it is not in the interests of justice to receive it in evidence.  The application to adduce additional evidence must be dismissed.

10. The proposed ground of appeal is without merit and I would refuse leave to amend the grounds of appeal to add it.

Conclusion

1. I would:

   1.dismiss the application to adduce additional evidence on the appeal;

   2.refuse leave to amend the grounds of appeal to add the proposed ground 5;

3.refuse leave to appeal; and

4.dismiss the appeal.

1. MURPHY JA:  I agree with Newnes JA.

2. EDELMAN J:  I agree with Newnes JA.