Madormo v Tramonte

[2023] NSWSC 450

Supreme Court

New South Wales

Medium Neutral Citation:

Madormo v Tramonte [2023] NSWSC 450

Hearing dates:

27 April 2023

Date of orders:

28 April 2023

Decision date:

28 April 2023

Jurisdiction:

Common Law

Before:

Elkaim AJ

Decision:

(1) The summons dated 10 November 2022, is dismissed

(2) The appellant is to pay the respondents’ costs of the summons

Catchwords:

APPEAL – Appeal from Local Court to Supreme Court – Local Court Act 2007 (NSW) ss 39(1) and 40 – Local Court proceedings concerning rental arrears –whether the Covid-19 regulations were raised as a defence to the proceedings in the Local Court – whether good reason exists for the applicant failing to attend court – where deficiencies exist in appellants evidence – summons dismissed

Legislation Cited:

Local Court Act 2007 (NSW)

Retail and Commercial Leases (Covid-19) Regulations 2020 (NSW)

Uniform Civil Procedure Rules 2005 (NSW)

Category:

Procedural rulings

Parties:

Enzo Robert Madormo (Plaintiff)
Giuseppe Tramonte (Defendant)

Representation:

Counsel:
S Scevola (Plaintiff)
A Johnson (Defendant)

Solicitors:
Advalorem Law (Plaintiff)
Albert A Macri & Company (Defendant)

File Number(s):

2022/00337565

Publication restriction:

Nil

JUDGMENT

1. On 12 August 2022, the respondents obtained a judgment against the appellant in the Local Court of New South Wales (at Liverpool) in the sum of $39,538.44.

2. The judgment was also obtained against Oz Pacific Global Trading Pty Ltd (‘OPG’), but this company is not an appellant. OPG was deregistered in April 2022.

3. The judgment sum was made up of the amount of the claim ($27,384.35), interest ($2,293.05) and solicitors’ fees ($9,861.04).

4. On 10 November 2022, the appellant filed a summons seeking leave to appeal from the Local Court judgment. He said he had not been provided procedural fairness because the hearing had been conducted in his absence. Appeals to the Supreme Court of New South Wales fall under ss 39 and 40 of the Local Court Act 2007 (NSW). Under s 39 there is a right of appeal “but only on a question of law”. Under s 40 leave is required if the question is one of mixed law and fact.

5. Under Part 50.3 of the Uniform Civil Procedure Rules 2005 (NSW), a summons commencing an appeal must be filed within 28 days of the “material date”, in this case the above Local Court judgment was entered on 18 August 2022. The filing of the summons was, therefore, about twelve weeks late. Part 50.3(1)(c) makes provision for an extension of the 28 days.

6. The appellant was self-represented when the summons was filed. The only explanation provided at the hearing yesterday was that the appellant was unaware, because he was self-represented, of the rules.

7. The appellant has filed two affidavits, the first dated 10 November 2022 and the second dated 27 February 2023. The respondents have filed an affidavit of Tony Polistina dated 16 March 2023. Mr Polistina is a real estate agent who acted on behalf of the respondents in respect of a lease, which was the subject of the Local Court proceedings.

8. The salient facts and dates relating to the Local Court proceedings are as follows: the proceedings were filed to recover unpaid rent arising from a commercial lease between the respondents and OPG. The appellant and another person (Mr Vinay Kumar Ram) were the guarantors of OPG’s obligations under the lease. The appellant and Mr Ram were Directors of OPG. The lease commenced on 18 April 2019 with a term of two years and the rent was $3,465 per month.

9. OPG fell behind in the payment of rent. The premises were vacated in March 2021 with rent still owing. This led to the commencement of the Local Court proceedings. The defendants were OPG, the appellant and Mr Ram. No defence was filed and default judgment against the three defendants was obtained on 16 June 2021.

10. On 30 September 2021, the Local Court Registrar set aside the default judgment against OPG and the appellant. The Registrar also ordered the filing of a defence within 14 days. This did not occur. The court did, however, allow the filing of a defence on 18 November 2021, and the matter was set down for a final hearing on 12 August 2022.

11. The appellant did not appear at a readiness hearing on 4 August 2022.

12. On 12 August 2022, the appellant again did not appear. According to Mr Polistina “at 9:30am the Magistrate was mindful of giving the plaintiff and or Athena the opportunity to participate in proceedings and asked the court officers to make sure the plaintiff and [or] Athena had not tried or were not trying to contact the court” (Affidavit, Tony Polistina, 16 March 2023 [24]).

13. Athena is the appellant’s wife. She had replaced Mr Ram as a Director of OPG. As already noted, OPG was deregistered in April 2022.

14. At 11.30am, there still being no appearance by the appellant, or on his behalf, the Magistrate commenced the hearing and then later in the day, delivered judgment in favour of the respondents.

15. Following the delivery of the judgment, Mr Polistina noticed that there was an error in the spelling of the appellant’s name. He told the respondents’ solicitors, who filed a notice of motion to have the spelling corrected. The court informed the appellant of the motion. The motion was heard on 6 October 2022, and the amending order was made.

16. No attempt was made by the appellant to have the judgment set aside because of his non-appearance on 12 August 2022.

17. On 25 October 2022, a bankruptcy notice was served on the appellant.

18. A transcript of the proceedings on 12 August 2022, is annexed to the affidavit of the appellant dated 27 February 2023. The transcript confirms that the Magistrate (Magistrate Daher) stood the matter down to 11.30am, stating that she would commence the matter if the respondents could establish that Mrs Madormo was aware of the hearing date. It is a little unclear why the condition was restricted to Mrs Madormo and did not include the appellant.

19. At 11:30am the Magistrate said that she had asked the court officer to enquire of the Registry whether there had been any email or missed calls about the matter. Just after the commencement of her judgment, the Magistrate said:

“I note that at 11.30 the matter was called, there was no attendance by any of the defendants. I note that at 11.30 the Courts email and telephone messages were checked and there were no messages or emails left by the defendant. The matter therefore proceeded on an ex-parte basis” (Tcpt, 12 August 2022, p 18 (34)).

20. This is contrary to the affidavit of the appellant, who said his wife was “on the phone with the Liverpool court between 9am and 10:40am” (Affidavit, Enzo Robert Madormo, 10 November 2022, p 297).

21. The appellant says his wife had been mauled by a Pit Bull dog on 9 August 2022. Judging from the photographs annexed to the affidavit and having regard to the type of animal, the injuries would appear to have been more than minor. A perusal of the photographs, without professing any particular medical knowledge, indicates that the patient has a catheter, is on oxygen and possibly has a leg in some kind of traction.

22. Mrs Madormo, perhaps surprisingly having regard to the photographs, was home by 12 August 2022, but the appellant could not attend court because he claims that he was ministering to his wife’s needs.

23. On a first impression, the appellant seems to have good reason not to have attended court. This of course depends on my acceptance of the appellant’s ‘excuse’ about why he could not attend court and that his wife did telephone the court (Affidavit, Enzo Robert Madormo, 27 February 2023, p 304 [19]). If an adjournment was sought, then the Magistrate could be seen as having denied the appellant procedural fairness in carrying on with the hearing. The same conclusion would arise even if the Magistrate was unaware of the phone call, but the phone call had been made.

24. I also note that in his second affidavit, at paragraph 19, the appellant says he told the respondents’ solicitors about his wife’s injuries but these solicitors did not inform the court. Mr Polistano denies this assertion and refers to a conversation he had with the solicitor who said that he had not heard anything from “Athena or Enzo” (Affidavit, Tony Polistina, 16 March 2023 [40]).

25. The solicitor appearing for the respondents, is the solicitor who the appellant asserts he spoke to. The conversation was denied from the bar table, consistent with the affidavit of Mr Polistano.

26. However, because leave to extend time is required there is another element to the discretion that I must apply. This revolves around whether or not there is any point in the appeal and in particular whether there is any defence to the proceedings in the Local Court.

27. In his first affidavit the appellant simply annexes the cover page to the defence. The only clue he gives as to what the defence may have been is stated in [10]:

“The plaintiffs in the matter in the local court were seeking payment towards rent in our commercial premises, during which the Covid-19 Small Business Code was in place. At no stage did the Landlords apply the code to any of our disputation regarding rent.”

28. In his second affidavit the appellant expands on the relevance of the pandemic. He says that the leased premises were to be used to manufacture mattresses from parts imported from China. From about December 2019, as a result of the pandemic, the supply chain was interrupted. He says that during the lockdowns trade was disrupted and it was difficult to meet the rental obligations.

29. The appellant says that OPG received Jobkeeper subsidies as a result of the pandemic and that OPG had been assessed as “an effected business” (Affidavit, Enzo Robert Madormo, 27 February 2023, p 302 [10]). The downturn in business was reported to the respondents and a mediation was listed before the Small Business Commissioner in or around January 2021.

30. The appellant continues that the respondents cancelled the mediation without notice. The appellant then refers to the Retail and Commercial Leases (Covid-19) Regulations 2020 (NSW) and says that they required the landlord to negotiate with the lessees in good faith. He says that the respondents refused to meet this obligation.

31. There is some corroboration of the appellant’s assertion in an email from Mr Bruzzese, the property manager for the leased premises, to the appellant and others, on 9 April 2020 referring to the Code of Conduct introduced by the federal government in respect of businesses unable to pay their rent. There is another email on 17 April 2020 from Mr Bruzzese noting a request for rental relief.

32. Mr Polistina, however, in his affidavit, says that no application was made for rental relief and that a scheduled mediation was cancelled “because the plaintiff said he was going to pay the arrears” (Affidavit, Tony Polistina, 16 March 2023 [10]).

33. The appellant says that the Magistrate should have examined the defence and the affidavit material that had been filed on behalf of the appellant. I disagree. A defence, like a statement of claim, is an assertion of a position. Unless that position is put forward by a defendant then it has no weight.

34. Assuming for the moment that it was incumbent upon the Magistrate to examine the defence, the Magistrate would have seen that the only reference to Covid-19 regulations is in paragraph 11 which is a claim for interest to which the defence responds:

“[d]efendants do not agree this is a breach to the covid regulation between 24 April 2020 to 31 December 2020.”

35. It is apparent that the reliance on the Covid-19 regulations is limited to the claim for interest. Nothing in paragraph 11 of the defence could have influenced the Magistrate’s decision.

36. Thus, the primary question in this matter is whether or not the Magistrate should have proceeded in the absence of the appellant.

37. A secondary question, as mentioned above, is whether or not the appellant has any defence to the Local Court proceedings. This question is relevant only to the discretion to grant leave out of time.

38. The appellant says that he informed the respondents’ solicitors about his wife’s injury and that his wife telephoned the court on the day of the hearing. However, he has produced no independent evidence of either of these actions. There is no copy of any email or other form of message to the solicitors. There is no telephone record indicating a communication with the court, especially one said to have lasted for almost two hours.

39. When I confronted the appellant’s solicitor with these problems during the hearing he told me that the appellant and his wife had separated and that Mrs Madormo would not assist with providing any evidence. Leave was then sought to call oral evidence from the appellant. I granted this leave over the objection of the respondent. I did so to prevent the necessity of an adjournment.

40. In his oral evidence the appellant said that his wife had discharged herself from the hospital in order to attend the court hearing but was unable to do so because of her injuries. He said that he was next to his wife when she telephoned the court. He said the telephone was on speaker and he could hear the court representative say that the call would be put through to the court when the matter commenced. The call, however, ended at 10:40am but the matter did not resume until 11.30am.

41. The appellant also said that he had telephoned “Tony” at the respondents’ solicitors office on the day before the hearing. The solicitor acting for the respondents, whose full name is Anthony, accepted that he is known as Tony but flatly denied ever having received a phone call from the respondent.

42. I am therefore left in the position of having heard evidence given in the witness box about the phone call to the court but there being no corroboration of the call and in fact evidence to the contrary in the Local Court transcript. I cannot discount the possibility that the telephone call might have gone astray within the court system, but one would have thought, that at the very least, a message would have been left to say that there was a call about the case. The Magistrate, conscientiously, specifically made an enquiry about whether there had been any messages.

43. The telephone call made by the appellant’s wife, as I have said, is not corroborated by any independent record. There is no affidavit evidence from Mrs Madormo stating that she did make the call and there is no call log showing the call having been made.

44. The dearth of evidence may be due to the current rift between the appellant and his wife, but there is not even any evidence of this fact. Rather, this fact emanated from the bar table during the hearing.

45. The onus is on the appellant to establish the facts that he asserts. I am not satisfied that he has done so. This conclusion is reinforced by the denial from the respondents’ solicitor that there was a telephone call made to him on the day before the hearing. Although this denial also came from the bar table, it is corroborated by the affidavit of Mr Polistina who related this conversation with the solicitor, (Affidavit, Tony Polistina, 16 March 2023 [40]):

“Me: “Has Athena or Enzo contacted you”

Tony Johnson: “Haven’t heard anything”” (Paragraph 40 of his affidavit)

46. It is also important to note, as mentioned above and as pointed out by the respondents, that the proceedings in the Local Court had been characterised by numerous failures on the part of the appellant, or his wife, to appear at various court dates or to comply with court rules. The appellant did not file a defence when the matter commenced, which led to a default judgment. Once the default judgment was set aside the appellant again failed to file a defence leading to further expense on the respondents’ part when they tried to have the default judgment re-instated. The appellant failed to appear at a pre-trial review on 9 June 2022 and then again at another review on 30 June 2022, although his wife did appear on the latter occasion. There was no appearance by either the appellant or his wife at a readiness hearing on 4 August 2022 and no reason given by the appellant.

47. I agree with the respondents’ submission that:

“The appellant’s conduct of the proceedings in the lower court was the minimum required to keep the proceedings on foot and delay the outcome.”

48. As to the defence, the question is whether or not the Covid-19 regulations would have come to the assistance of the appellant. The difficulty is that the point, other than in regard to interest, was not taken in the Local Court proceedings and there is clear evidence, from Mr Polistina, that the appellant withdrew from the mediation process in February 2021 stating that he was going to vacate the premises and pay the arrears.

49. In summary, therefore, the appellant says there has been a denial of procedural fairness because he was not able to present his case to the Local Court. This inability was derived from the court continuing a hearing notwithstanding a request made for an adjournment. I am not satisfied, however, that any attempt was made to obtain an adjournment, either through speaking to the respondents’ solicitor or communicating with the Local Court.

50. As to the defence, while relief may have been available under the Covid-19 regulations, I am not satisfied that the appellant was going to seek this relief. To the contrary the evidence suggests he positively withdrew from the relief processes.

51. Finally, the appellant has asserted that the costs orders made by the Magistrate were erroneous. I am not satisfied that this is the case. As explained by the respondents, the costs awarded fall beneath the ceiling of 25% permitted by the relevant Local Court practice note.

52. In my view the appellant has not established a sound basis for leave to be given for an extension of time, nor for the decision of the Magistrate to be quashed.

53. I make the following orders:

1. The summons dated 10 November 2022, is dismissed.

2. The appellant is to pay the respondents’ costs of the summons.

Decision last updated: 28 April 2023