Mandeville v Better Lending P/L (No 3) - [2017] SADC 124

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Application)
MANDEVILLE v BETTER LENDING P/L AND ANOR (No 3)
[2017] SADC 124
Reasons for Decision of His Honour Judge Slattery
10 November 2017
PROCEDURE - COURTS AND JUDGES GENERALLY - COURTS - CONCURRENT JURISDICTION OF DIFFERENT COURTS
Application by Better Lending Pty Ltd made pursuant to s 24(2) of the District Court Act 1991 (SA) for the transfer of these proceedings to the Supreme Court.
HELD:
Application dismissed with costs.
District Court Act 1991 s 24(2), referred to.
Rana v University of Adelaide [2013] SASC 85, discussed.
Thornley v Conte (1997) 193 LSJS 484; Liddell v Southern Area Health Services [2010] SASC 11; Cooper v Maloney [2012] SASC 35, considered.

MANDEVILLE v BETTER LENDING P/L AND ANOR (No 3)
[2017] SADC 124

I refer to my first and second judgments in this action. These reasons are to be read in the background of the factual material discussed in both of those judgments. This judgment addresses a number of issues, the principal one being the application by Better Lending for the transfer of this action to the Supreme Court of South Australia under s 24(2) of the District Court Act 1991, the content and background of which is set out in my second judgment at [1]-[20] thereof.
One issue raised in Judgment No. 2 was the position contended for by Better Lending post Judgment No. 1, that my ruling that proposed paragraphs 29.1.7.1.1 and 29.1.7.1.2 not be permitted to be pleaded by Better Lending, did not form part of the ratio decidendi of Judgment No. 1 but were merely obiter comments.
As I expressed in Judgment No. 2, that submission was put following orders made by me after a consideration under 6DCR 54(4) of whether some paragraphs of the proposed Amended Defence of Better Lending, were unarguable; my reasons for decision are set out in Judgment No. 1.
At [25] of my second judgment I said:
I allowed Better Lending to continue to claim that a default judgment was not capable of giving rise to an estoppel in rem judicatum. I refused to allow Better Lending to amend to plead matters which I considered to be wrong in law or which required the District Court to exercise supervisory jurisdiction over the Magistrates Court contrary to s 8(1)(b) of the District Court Act. I also found that, contrary to 6DCR 54(4) … associated pleadings that were connected to these objectionable pleadings should also not be allowed.
I consider that this assertion of Better Lending described in [2] above cannot be sustained in light of the discussion set out in Judgment No. 1. And it would be a peculiar and inappropriate result for the court to give judgment on particular parts of a pleading that purports to offend its jurisdiction and not the associated pleadings that are directly connected to those offending pleadings and which, for the same reasons, should suffer the same fate. It would be inappropriate to have allowed that position to eventuate: to do other than what I have done would be a waste of the resources of the Court and cause the parties to incur unnecessary costs.
Since Judgment No. 1 was published, there have been a number of attendances before the Court by the parties to consider the progress of the action to the argument on the preliminary point. There are issues that require attention arising out of those attendances and that judgment; they are: costs of the application (after the State of South Australia has been awarded its costs of the application); the application under s 24(2) District Court Act (for the transfer of the action to the Supreme Court); and whether, and to what extent, Better Lending wished to be heard further on the orders that should be made by the Court following Judgment No. 1. The position accepted by the parties was that the Court had not been requested to seal, and it had not sealed, any orders consequent upon that judgment.
I deal with the third aspect first. One contention raised by Better Lending associated with the question of the hearing before the court that led to Judgment No. 1 was whether it was heard on the fate of the proposed paragraphs 29.1.7.1.1 and 29.1.7.1.2. This, it contends, is both a fundamental and natural justice issue. It is fundamental, as the argument proceeds, because the attack of the Attorney‑General upon the proposed pleading was only upon paragraphs 29.1.7.2 and 29.1.7.3, and that was all that Better Lending came to the Court to meet. The natural justice issue arises as a corollary of that argument.
I am unable to accept those submissions and the contentions of Better Lending. As earlier identified, the new pleading of Better Lending included those two further subparagraphs that raised issues that were inextricably linked to the pleading under attack. The approach of the court announced at the outset was to assess the proposed amendments under 6DCR 54(4). The amendments as a whole only came about, and the issues for determination only arose, because I identified that the written submissions of Better Lending filed in support of the argument on the preliminary point contended for a case well beyond the then pleadings of Better Lending.
It then became necessary for Better Lending to seek and to be given an opportunity to amend its Defence to reflect the contentions contained within its written submissions and for the Attorney‑General to be given an opportunity to be heard on the proposed amended pleading. There has never been a suggestion that proposed paragraphs 29.1.7.1.1 and 29.1.7.1.2 were other than inextricably linked to those issues. That proposition is easily tested. There had been no other application to amend the Defence of Better Lending in the terms of any of those paragraphs prior to the hearing of the argument on the preliminary point which Better Lending and Mandeville both sought to be heard and determined.
I would not accept any suggestion that these two further subparagraphs were not inextricably linked to that question; such a proposition is without any merit.
Despite all of that and as I indicated in Judgment No. 2, I made arrangements to give Better Lending an opportunity to be heard in full on these two further subparagraphs before orders of the court were sealed. At a hearing before the court on 18 August 2017, Better Lending indicated that it did not wish to be heard further on the topic. The transcript of the exchanges between bench and bar is instructive. It reads:[1]
[1]    T 3-4.
HIS HONOUR:   Following the hearing before the court on 21 March this year I published my reasons on the more limited topic of the issues that were raised, as I described them, more narrow issues that are raised by virtue of the submissions that I received. I invited the parties to inform me whether or not they wished to bring any further application in light of those reasons. The position is this: I have in my reasons published, which is a second set of reasons - I'm struggling gentlemen because there's no date on this. Whatever date I published them, I expressed views in relation to one aspects of the matter raised by Mr Douglas. There is a second aspects raised by Mr Douglas that is a question of whether or not as a matter of natural justice Mr Douglas's client had been properly heard in relation to 29.1.7.1.1 and 1.2.
My view is based upon the fact that I'm satisfied that no sealed orders have been made yet in relation to my earlier judgment and that if it is the case that a natural justice point is put by Mr Douglas then that ought to be resolved. The way I would propose doing that is to give Mr Douglas whatever opportunity he wants to address me on the content of those two sub-sub-paragraphs. I don't think it will take more than an hour to do that, Mr Douglas, on my estimation of things. I would like to set some time to hear you on that topic.
MR DOUGLAS:   Yes, thank you for that opportunity your Honour. We've carefully regarded the reasons that you've published and I've given advice about that topic. My instructions are to ask that your Honour make whatever orders your Honour's disposed to make with respect to the application without putting further submissions. In saying that, I'm instructed not to abandon the point, but given that your Honour has published a judgment on those matters, the submission that I'm asked to make is that the matter is now not curable by further submissions to your Honour, that is, having articulated the reasons that your Honour has - and I put this without any criticism - it's now not a matter that can be perfected by further submissions that I might make to you in the wake of those reasons.
HIS HONOUR:      Well I'm inviting your client to put whatever it wishes to put to me in support of the retention of those two sub-paragraphs in the pleading, that is, that they are arguable.
MR DOUGLAS:    I understand that and I've given advice on the basis of having understood that to be your Honour's invitation and I can do no more than say that I've put my instructions.
HIS HONOUR:      So that the record clearly records the position that is that the first defendant Better Lending in the District Court proceedings does not wish to be heard further in support of those two sub-paragraphs as to whether they are arguable or not.
MR DOUGLAS:      I agree, make the record clear, Better Lending is declining your Honour's invitation but is doing so on the basis that, in my submission, having in the absence heard my client on those matters, announced reasons on those topics, my client's submission is that that's not curable by a further submission to your Honour in the wake of the reasons that you've published.
HIS HONOUR:    Well I don't accept that.
MR DOUGLAS:    I understand that. But your Honour understands the position that I'm bound to put.
HIS HONOUR:    I'm saying what I'm saying for the benefit of your client.
MR DOUGLAS:    If your Honour pleases.
HIS HONOUR:    Yes, I would say first of all, that I would be greatly assisted by any further submission that you would wish to put in relation to that, I understand fully your position that your instructions are that you do not wish to put any further submissions on the basis that the court has published some reasons in relation to those matters.
MR DOUGLAS:     Thank you. Those are my instructions.
Following that exchange, I made the following orders:
Gentlemen, the position becomes then that in light of the fact that no further submissions are sought to be put in support of the retention in the pleading, the proposed pleading at paras.29.1.7.1.1 and 29.1.7.1.2, that my judgment of 6 December 2016 stands and that I would refuse permission to Better Lending to include those sub-paragraphs in the pleading on the basis that they are not arguable. That leaves para.29.1.7.1.3 as the extant pleading under that sub-paragraph.
The Application for Transfer of the Proceedings
I turn then to the operation of s 24(2) of the District Court Act. This court has jurisdiction to determine the scope and the effect of a default judgment obtained in another jurisdiction. It is not a question whether the common law rules applicable to such default judgments are settled, the question is whether or not this court has jurisdiction to determine that question. Secondly, any finding made by this court about whether an estoppel in rem judicatum arises by virtue of a default judgment entered in the Magistrates Court, does not require this court to grant some form of relief or order of a supervisory nature.
The approach of this court will be to assume the regularity of that default judgment and to decide whether or not an estoppel in rem judicatum does or does not arise by virtue of that judgment. I conceive of no doubt about the jurisdiction of this court to make that decision. And properly considered, there is no specific challenge to the fact that the default judgment has been obtained. The challenge is made at a completely different level.
In considering the application under s 24(2) of the District Court Act, the question for my consideration is what is in the interests of justice, particularly bearing in mind the width of that test.[2] A number of factors weigh heavily in my considerations. It was not until Better Lending filed its third submissions preparatory to the trial on the preliminary point and after filing its Second Defence in the District Court proceedings, did it raise (in its submissions) the issues which are the subject of my first decision. It is apparent that they were only raised surreptitiously because they appeared within written submissions which I recognised to raise substantive issues that required further pleadings and the involvement of the Attorney-General.
[2] Thornley v Conte (1997) 193 LSJS 484; Liddell v Southern Area Health Services [2010] SASC 11 at [12]-[18]; Cooper v Maloney [2012] SASC 35 at [9]-[13].
I would not accept any submission that those matters were in some sense an epiphany that were only recently revealed to Better Lending. I consider that a clear inference arises on the whole of the material before the Court that those matters had been given consideration well prior to that time. It is then also very difficult to understand why Better Lending agreed to the Magistrates Court action being removed from that Court to this Court and not seek to challenge that issue in the Magistrates Court. An appeal lies directly to the Supreme Court from a decision of the Magistrates Court on this topic.
I also do not consider that this action necessarily is an appropriate one to be heard in the Supreme Court. I am conscious of the views expressed by White J in Rana v University of Adelaide[3] (which admittedly arose in a quite different context) that the appropriate question for Better Lending is whether it now wishes to commence a proceeding on this issue in the Supreme Court. One consideration that I have set out above is that Better Lending could have brought an appeal from a decision in the Magistrates Court action directly to the Supreme Court if it had chosen to do so. For those reasons, I am unable to see that there is good reason to transfer the action and I am unable to identify whether any prejudice is suffered by Better Lending in so deciding.
[3] [2013] SASC 85.
Most importantly, despite the submissions of Better Lending, this Court is in as good a position as any other Court to decide what remains the fundamental issue in this matter: whether the default judgment obtained by Better Lending against Mandeville raises an estoppel in rem judicatum against Better Lending purporting to proceed against Mandeville to recover the balance of any debt allegedly owing by her. That issue is within a narrow compass and is properly to be determined in the manner envisaged by the order of the learned Master. I consider this, amongst a host of other issues, as carrying the most significant weight in the exercise of my discretion. In the end, I consider that, properly weighed and considered, all the discretionary features point in only one direction, namely, the refusal of the transfer application.
I am also conscious that Mandeville is largely impecunious and has been brought to these proceedings because of the fact that she appeared to agree to be a joint lender with her husband on his property development project. From my understanding of the facts, she stands in a quite different position than an active participant in a property development joint venture. Also, she has lost the benefit of the properties which she owned which have already been sold to generate the money paid to Better Lending, the details of which I have set out in my first judgment.
I am not aware of any other considerations put to me which would justify the transfer of this proceeding.
For all of those reasons, I would refuse the transfer application.
I turn to the question of costs. I am unable to accept the application by Mandeville that she should have the costs of the proceedings to date. Mandeville must have all of her costs thrown away as a result of attending any hearing before the court on 22 July 2016 and 7 October 2016. Mandeville will have the costs of opposing the interlocutory application for transfer of the proceedings which, for the purposes of consideration by the taxing Master, will include all of the attendances before the Court during 2017. In respect of each of those attendances, I certify for counsel.