Maintenance, Renovation & Development of General Property Pty Ltd v MP Landscaping Pty Ltd - [2019] SASC 185

Supreme Court of South Australia
(Magistrates Appeals: Civil)
MAINTENANCE, RENOVATION & DEVELOPMENT OF GENERAL PROPERTY PTY LTD v MP LANDSCAPING PTY LTD
[2019] SASC 185
Judgment of The Honourable Justice Bampton (ex tempore)
29 October 2019
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - ENDING PROCEEDINGS EARLY - DEFAULT JUDGMENT - SETTING ASIDE
MAGISTRATES - APPEAL AND REVIEW - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT
Appeal against refusal of Magistrates Court to set aside default judgment – whether there was a reasonable excuse for not defending the claim – whether there is an arguable defence justifying the setting aside of the default judgment – appeal dismissed.
Magistrates Court (Civil) Rules 2013 (SA) r 52, r 60, r 125, referred to.

MAINTENANCE, RENOVATION & DEVELOPMENT OF GENERAL PROPERTY PTY LTD v MP LANDSCAPING PTY LTD
[2019] SASC 185
Magistrates Appeal: Civil

BAMPTON J (ex tempore): Maintenance, Renovation & Development of General Property Pty Ltd (“the appellant”) appeals against the refusal of the Magistrates Court to set aside a default judgment entered against it pursuant to r 60 of the Magistrates Court (Civil) Rules 2013 (SA) (“the Rules”) on 9 April 2019.
MP Landscaping Pty Ltd (“the respondent”) issued proceedings in the Magistrates Court on 6 March 2019 in respect of an outstanding invoice for landscaping services. The respondent alleges that it had not been paid the sum of $18,088 for landscaping works it had carried out for the appellant in relation to a residential development at 5–7 Daws Road, Mitchell Park (“the Daws Road development”).
The Magistrates Court, at the request of the respondent, served the proceedings on the appellant by post to 58 Opey Avenue, Hyde Park, pursuant to r 52(1)(d) of the Rules.
On 9 April 2019, as no defence had been filed, the respondent filed a Form 18 requesting the Registrar of the Magistrates Court to sign judgment against the appellant and to issue an investigation summons to a company director, pursuant to r 125 of the Rules.
On 19 June 2019, as personal service of the investigation summons could not be effected, a Magistrate ordered that the investigation summons be served by mail to 58 Opey Avenue, Hyde Park. The investigation summons was posted to the appellant at 58 Opey Avenue, Hyde Park on 5 July 2019.
The appellant then made an application on 12 July 2019 to set aside the default judgment by filing an application and an affidavit in support, affirmed by the appellant’s company director, Mr Xiang Yu. Mr Yu deposed that the people living at 58 Opey Avenue, Hyde Park did not pass the documentation on to him until 10 July 2019.
On 31 July 2019, at the hearing of the application to set aside, a Magistrate correctly identified that, in order to set aside the default judgment, the Court had to be satisfied that the appellant had a reasonable excuse for not defending the claim and an arguable defence.
The Magistrate stated that he had no reason to believe that the proceedings were not delivered to the address at 58 Opey Avenue, Hyde Park in the ordinary course of post, despite Mr Yu asserting that he did not receive them. Mr Yu also asserted in the Magistrates Court that the appellant had paid the respondent all outstanding amounts. The Magistrate noted that Mr Yu produced no documentation evidencing payment and further said that if payment had been made, it was difficult to understand why Mr Yu had not communicated with the respondent earlier. The Magistrate dismissed the application saying that he was not satisfied that the appellant had a reasonable excuse for not defending the claim or that it had an arguable defence.
The appellant made a second application to set aside the default judgment, which, unusually, was accepted by the Magistrates Court on 22 August 2019. The Magistrate who heard the second application noted that it should not have been accepted without the permission of the Court and refused to set aside the default judgment. The appellant filed a notice of appeal on 22 August 2019 against the refusal to set aside the default judgment delivered on 31 July 2019.
The appeal
On the hearing of the appeal, Mr Yu represented the appellant and Mr Mike Philip, director of the respondent, represented the respondent. Mr Yu asserted that he had not received any documentation from the Magistrates Court until he received the investigation summons. He also maintained that he had paid all amounts owed and had bank transfer evidence to prove payment.
Background
The appellant and the respondent entered into two contracts. The first related to the Daws Road development and the second to a development at Semaphore Park (“the Semaphore Park development”). The respondent alleged that on 31 August 2018, it provided the appellant with a written quote for landscaping works at the Daws Road development in the approximate sum of $40,000 and a written quote to perform landscaping works at the Semaphore Park development in the sum of $42,908.
The Daws Road development
The respondent alleged that the appellant changed the scope of works in relation to the Daws Road development, the result of which was the respondent provided the appellant with a revised quote (QU‑0066) on 2 October 2018 in the sum of $32,813. The respondent said that it commenced landscaping works for the Daws Road development in early October 2018. Invoice number 0044 dated 22 October 2018 was rendered to the appellant seeking $18,000 as a progress claim in respect of the Daws Road development. It is to be noted that the invoice is endorsed “This payment claim is made under the Building and Construction Industry Payment Act 2009”. On 29 October 2018, the appellant paid $18,000 in payment of that invoice. The respondent asserted that shortly thereafter the appellant verbally requested that it perform additional landscaping works at the Daws Road development. The additional landscaping works were performed and the respondent rendered invoice number 0062 dated 2 December 2018 in the sum of $18,088, being the balance owed pursuant to the quote (QU-0066) plus the costs of the additional landscaping works. This invoice was also endorsed “This payment claim is made under the Building and Construction Industry Payment Act 2009”. It is this invoice in the sum of $18,088 that underlies the Magistrates Court claim in respect of which the default judgment was entered.
The Semaphore Park development
The respondent submitted that, in early to mid-January 2019, the appellant asked it to commence the landscaping works for the Semaphore Park development. As the appellant still owed the respondent the sum of $18,088 in respect of the Daws Road development, the respondent requested that the appellant pay a deposit for the Semaphore Park development landscaping works in the sum of $13,500 before it commenced the work. Accordingly, the respondent invoiced the appellant on 19 January 2019 by invoice number 0078 for a deposit in the sum of $13,500. The appellant paid the sum of $13,500 on 19 January 2019.
Mr Philip handed up a copy of an email exchange with Mr Yu dated 19 January 2019, which was headed “Subject: Re INV-0078 from MP Landscaping Pty Ltd for Xaing” and attached “as requested heres (sic) a deposit invoice for the landscaping to commence onsite. Here’s INV-0078 for AUD 13,500.” An email dated 19 January 2019 headed “Subject: Re INV-0078 from MP Landscaping Pty Ltd for Xaing” records that Mr Yu using the appellant’s email address appears to acknowledge the invoice, saying “just paid mate, please check your bank and start the site”.
I pause to mention that the appellant produced a copy of its bank statement which evidences that the sum of $13,500 was paid to the respondent, the bank entry recording; “ANZ internet banking payment 1733452 to MP Landscaping new effective date 19 January 2019”.
The respondent said that, after payment of the deposit, it commenced the Semaphore Park development landscaping works. The landscaping works continued until the respondent received a notice to subcontractors confirming that on 19 February 2019 the owner of the Semaphore Park development gave notice to the appellant terminating the contract and all subcontracts for works at the site.
The unpaid invoice of $18,088
The respondent alleged that during the period December 2018 to March 2019, it continued to demand payment from the appellant for the $18,088 owing in respect of the Daws Road development. The respondent referred to a number of text messages and emails between Mr Phillip and Mr Yu appearing to evidence Mr Yu’s acknowledgment that the monies were owed by the appellant to the respondent for the Daws Road development.
The appellant argued that, as I understand it, the address of 58 Opey Avenue, Hyde Park was not the appellant’s address and became Mr Yu’s parents’ residential home after September 2017. However, a letter from the City of Charles Sturt dated 6 December 2018 was sent to Mr Yu care of the appellant at 58 Opey Avenue, Hyde Park. Further, the appellant’s address on documents filed by the appellant in this appeal and the Magistrates Court is 58 Opey Avenue, Hyde Park. I also note that the notice of termination dated 19 February 2019, forwarded by the solicitors for the owners of the land at the Semaphore Park development, was addressed to the appellant at 58 Opey Avenue, Hyde Park.
Mr Yu argued that the text messages referred to by the respondent do not match text messages he produced. Mr Yu asserted that between 2017 and 2019 he and Tony Zhao, an employee of the appellant, shared the same phone. Mr Yu also said that he did not ever request any variations and suggested Mr Zhao was authorising works without his knowledge. Mr Yu confirmed that Mr Zhao no longer worked with the appellant.
Mr Yu argued that the $13,500 paid by the appellant on 19 January 2019 was paid in respect of the Daws Road development not the Semaphore Park development. Mr Yu relied on the fact that in early 2019 the owners of the land at Semaphore Park terminated the building contract with the appellant and that the only works the appellant undertook after 6 December 2018 were to fix defects on the Semaphore Park development as demanded by the City of Charles Sturt. Mr Yu also asserted that no deposit can exceed $1,000 by law and that he would not pay $13,500 in relation to a site where work had been stopped by the council.
Mr Yu maintained that he had not received any invoices from the respondent. When I asked him how it was he paid the $18,000 in payment of invoice 0044 he denied paying it and suggested Tony Zhao must have paid it. Likewise, he was unable to explain how he paid, on his version of events, the $13,500 in respect of the Daws Road development without an invoice.
Conclusion
The appellant and the respondent entered into two landscaping contracts, one in respect of the Daws Road development and the other in respect of Semaphore Park development. It is evident by reference to the copy of the appellant’s bank record that the appellant paid the sum of $13,500 on 19 January 2019, which sum corresponds with the deposit sought by the respondent’s invoice number 0078 in relation to the Semaphore Park development. The appellant’s contract with the Semaphore Park development land owners was not terminated until 19 February 2019, after the deposit of $13,500 was paid. Mr Yu asserted that the respondent was thereafter engaged by the land owner directly. Having regard to the emails between Mr Philip and Mr Yu dated 19 January 2019, the respondent’s invoice 0078 and the appellant’s bank record, the very clear inferences to be drawn are that the sum of $13,500 was paid by the appellant as a deposit in respect of the Semaphore Park development and that the appellant has not paid invoice 0062 in the sum of $18,088.
I am satisfied that the claim issued by the respondent in the Magistrates Court was served on the appellant in accordance with the Rules. All other notices from the Court, correspondence from the City of Charles Sturt and from solicitors acting for the owners of the Semaphore Park development land were addressed to the appellant at 58 Opey Avenue, Hyde Park. Documents filed in court by the appellant have also been endorsed with the same address. No reasonable excuse has been advanced by the appellant for not having defended the claim within the time stipulated by the rules.
The appellant has not advanced an arguable defence and has not adduced any evidence demonstrating that invoice 0062 in the sum of $18,088 has been paid.
Finally, I note that each of the invoices rendered by the respondent were endorsed as a payment claim made under the “Building and Construction Industry Payment Act 2009”. The correct name for this Act is the Building and Construction Industry Security of Payment Act 2009 (SA) (“the Act”). Whilst the claim brought by the respondent was not brought pursuant to the Act, if the invoice 0062 is a payment claim in accordance with s 13 of the Act, upon receipt of it, the appellant had the option to reply by providing a payment schedule. If no payment schedule was provided, the appellant would have been liable to pay the amount of the invoice and the respondent would have been entitled to recover the amount claimed as a debt due to it in the Magistrates Court. Had the respondent issued proceedings in the Magistrates Court pursuant to the Act, s 15(4) of the Act provides that the appellant would not have been entitled to raise a defence in relation to matters arising under the contract to perform the landscaping works.
Finally, it has not been necessary to the consider the text messages exchanged between the parties in determining this matter.
I dismiss the appeal.