Marshall v Goode

[2008] NSWSC 1025

CITATION:	Marshall v Goode [2008] NSWSC 1025
HEARING DATE(S):	26 September 2008
JUDGMENT DATE :	3 October 2008
JUDGMENT OF:	Fullerton J
DECISION:	1. The appeal is dismissed. 2. The plaintiffs to pay the defendant’s costs.
CATCHWORDS:	APPEAL FROM LOCAL COURT - error of mixed fact and law - appeal out of time - leave to set aside default judgment
LEGISLATION CITED:	Local Court Act 2007 Local Courts (Civil Claims) Act 1970
CATEGORY:	Principal judgment
PARTIES:	Garry Marshall (First plaintiff) Kerrie Marshall (Second plaintiff) Jason Anthony Goode (Defendant)
FILE NUMBER(S):	SC 2008/10631
COUNSEL:	First plaintiff in person Second plaintiff in person Defendant in person
SOLICITORS:	First plaintiff in person Second plaintiff in person Defendant in person
LOWER COURT JURISDICTION:	Local Court
LOWER COURT FILE NUMBER(S):	22/03
LOWER COURT DATE OF DECISION:	24 April 2004

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
CIVIL LIST

FULLERTON J

3 OCTOBER 2008

2008/10631 GARRY MARSHALL AND ANOR v JASON ANTHONY GOODE

JUDGMENT

1 HER HONOUR: By notice of appeal dated 7 May 2008, the plaintiffs seek leave to appeal from a decision of the Temora Local Court of 24 April 2004 dismissing a notice of motion filed with the Local Court on 2 April 2004 (“the 2004 notice of motion”). The orders sought by motion were as follow:

1. That a default judgment entered on 16 May 2003 be set aside.

2. That the defendant be allowed 14 days to file a defence.

3. That enforcement of the judgment be stayed until the Notice of Motion is determined by the Court.

4. The Notice of Motion for a stay of proceedings be dealt with on an urgent basis and service be dispensed with.

5. Costs be costs in the cause.

2 The plaintiffs were self-represented on the appeal and in the Local Court on 24 April 2004 when their notice of motion was dismissed. The defendant is a solicitor. He also appeared on his own behalf on the appeal and in the Local Court.

3 The default judgment involves a debt said to be owed to the defendant in connection with legal services said to have been supplied by him.

4 I note that both plaintiffs signed the 2004 notice of motion and swore a supporting affidavit to which they attached a copy of an affidavit filed in support of a notice of motion dated 5 June 2003 seeking orders identical to the notice of motion the subject of the appeal (“the 2003 notice of motion”). That notice of motion was dismissed on 30 July 2003. There is no appeal from that order. For all practical purposes it has been subsumed by the order dismissing the 2004 notice of motion.

5 In the affidavit filed in support of the 2003 notice of motion, the plaintiffs claimed that during the week of 21 April 2003, with the Easter public holidays falling either side of that date, the statement of liquidated claim dated 11 April 2003 was not received by them until the first week of May. They asserted a belief that the 28 day statutory period within which to file a defence commenced as of the date of receipt of the statement of liquidated claim and not the date of service and that it was for that reason that the defence they intended to advance was not filed before default judgment was entered.

6 In the grounds of defence dated 2 June 2003 Mr Marshall, the first plaintiff, denies that the amount claimed is due or owed. In addition, he denies having received the invoices setting out the amounts said to be owed by way of legal fees. So far as the second plaintiff is concerned, Mrs Marshall denies ever having retained the defendant to act as a solicitor on her behalf.

7 In the affidavit filed in support of the 2004 notice of motion the plaintiffs claim to have understood that the defendant was not seeking to enforce the judgment debt. They claim that in July 2003 he acknowledged that the monies were either not owed or not recoverable or both and, accordingly, that there was no need for them to prosecute the 2003 notice of motion seeking to set aside the default judgment. They claim that this was a position reached by agreement with the defendant on or before 30 July 2003 and that it was on this basis that they agreed that the 2003 motion be dismissed by consent in their absence.

8 The plaintiffs now seek the opportunity to agitate their defence. They assert that they have been persistently and deliberately misled by the defendant into believing that he was not intending to enforce the judgment debt. They claim that had they been aware that the debt was to be enforced they would have moved the court for orders setting aside the default judgment and would have vigorously defended the action in accordance with the filed defence. They also assert that on 24 April 2004 the Local Court magistrate was misled by the defendant into dismissing the 2004 notice of motion and, although they were in attendance on that occasion and despite the fact that the orders were made by consent, they either did not hear or did not understand what was said in the course of the proceedings on that day. They said they were not asked any questions by the magistrate to confirm the truth of the position that the defendant advanced on their joint behalf.

9 In the defendant’s written submissions Part 50.12 of the UCPR was relied upon. It provides as follows:

“50.12 Leave to appeal
(1) A summons seeking leave to appeal must be filed:
(a) within 28 days after the material date, or
(b) if the appeal relates to the decision of a judicial officer, within such further time as the judicial officer may allow so long as the application for such further time is filed within 28 days after the material date, or
(c) within such further time as the higher court may allow.
(2) An application for an extension of time under subrule (1) (c) must form part of the summons seeking leave to appeal.”

10 No application for an extension of time has been made to file a summons which is more than four years out of time.

11 The defendant also submitted that the appeal should be dismissed as there was no question of law raised by the proceedings (as required under s 39 of the Local Court Act 2007) and that no application for leave to appeal on a ground that involves a question of mixed fact and law has been made (as required by s 74 of the Local Court Act).

12 Despite there being no application by the plaintiffs for an extension of time in the summons commencing the appeal, and no application for a grant of leave under s 74 on the hearing of the appeal, without opposition from the defendant, leave was granted under both provisions to permit the substantive questions raised by the appeal to be resolved.

13 In that regard, the defendant submitted that the plaintiffs acknowledged their liability for the debt in the amount claimed as early as July 2003 and that since that time they entered into an agreement to repay the debt by instalments. In these circumstances the defendant submitted they should be precluded from re-agitating any issue raised by the proposed defence irrespective of whether on its face it discloses an adequate defence. The defendant further maintained that the Local Court was informed of the various steps he has taken in enforcing the claim, inclusive of his appearance on 24 April 2004 when the court was informed that the notice of motion seeking to set aside the default judgment was without foundation because liability was admitted. He denied misleading the plaintiff or the court at any time.

The facts

14 The plaintiffs, Garry Brett Marshall and Kerrie Marshall, are husband and wife. The defendant, Jason Anthony Goode, is a solicitor who at the relevant time worked as an employed solicitor in a firm of solicitors in Temora. In 1999 Mr Marshall was engaged in litigation as a plaintiff in proceedings in the Equity Division of this Court (Proceedings No 4544/1999). It would appear that the defendant, at that time employed by a firm of solicitors in Temora, was retained by Mr Marshall to act on his behalf in those proceedings. On 20 November 2000 a notice of change of solicitor was filed with the Registry.

15 On 11 April 2003 the defendant issued a statement of liquidated claim out of the Temora Local Court naming Mr Marshall and Mrs Marshall as, respectively, first and second defendants. The claim concerns the provision of legal services which are particularised by numbered and dated invoices in various amounts which are said to be due and payable together with interest pursuant to s 39A of the Local Courts (Civil Claims) Act 1970. The total amount claimed is $20,688.46.

16 As I indicated earlier, it is this claim that was the subject of the default judgment entered in the defendant’s favour on 16 May 2003 and this claim which was the subject of the 2003 notice of motion seeking an order that the default judgment be set aside and the 2004 notice of motion seeking orders in identical terms.

17 I emphasise that it is the order dismissing the 2004 notice of motion with which the present proceedings are concerned. That said, those orders, and the circumstances in which they were made, are linked to the 2003 notice of motion and the events that followed thereafter.

18 The 2003 notice of motion was listed before the Temora Local Court for hearing on 25 June 2003. On that date both Mr Marshall, Mrs Marshall and the defendant appeared in person. The matter was adjourned for the express purpose of the court permitting the parties the opportunity to negotiate a settlement. There is a dispute as to what occurred in the course of settlement negotiations.

19 It is the plaintiffs’ case that despite the fact that the amount the defendant claimed as unpaid fees was the subject of a dispute (in the sense that the proposed defence challenged the debt in its entirety on the basis that the only work that was done by the defendant was the preparation of a defence for which monies had been paid in full), Mr Marshall gave the defendant a bankruptcy notice. He claims that when the defendant saw that there were no prospects of recovering the debt he said that he would abandon his claim and that he would advise the court accordingly. The defendant is also said to have informed Mr Marshall that there was no need for him to attend on the adjourned date and that he would inform the court not only that the judgment debt would not be enforced but that the notice of motion should be dismissed by consent there being no further purpose in seeking to have the judgment set aside given the circumstances.

20 Mr Goode gave a different account of the negotiations supported by a file note dated 28 July 2003 which reads as follows:

“Garry said he was not in a good financial state. He has been bankrupted, but he has appealed and it was overturned. He said he would like to come over in October and talk to me about how things are going as he will have a better idea then. He said he wouldn’t [be] at Court on Wednesday. I said I want judgment entered but I wouldn’t do anything about it until he came over in October . I also [said] I would reduce what he had to pay if it was sorted out relatively quickly. He agreed and on that and we shook hands. I did not say a reduced figure or what “quickly” meant. He said he wouldn’t be there on Wednesday and asked me to tell the judge what we agreed.” (emphasis added)

21 On 30 May 2003, court records indicate that Mr Goode appeared as defendant to the notice of motion which was dismissed by consent with no order as to costs. Importantly the record also notes the following:

“No enforcement action before October 2003 ”.

22 On 11 December 2003, Mr Goode wrote to Mr and Mrs Marshall at their residential address as follows:

“I note you were to contact me in relation to your account in October . I note I have not heard from you. Could you contact me to discuss the payment of your account as soon as possible.” (emphasis added)

23 Mr Marshall claims not to have received this letter.

24 On 19 January 2004 the defendant sent a further letter in the following terms:

“Could you contact me as a matter of urgency to discuss payment of your account.”

25 Again Mr Marshall claims not to have received the letter.

26 On 11 March 2004 the defendant filed an application with the Temora Local Court for the plaintiffs to be examined by the Registrar. The plaintiffs claim they were unaware of the filing of the Examination Summons despite the fact that an affidavit of service sworn by the defendant before Ms Reed, solicitor, was filed with the court. The plaintiffs contend, in effect, that the affidavits of service were falsely sworn.

27 In his evidence on the appeal Mr Marshall concedes that in or about the start of 2004 he was contacted by the Registrar concerning an examination apparently to see whether there was any change in his financial circumstances. He accepts that he was informed by the Registrar that it was necessary for him and his wife to attend the Local Court in response to the Examination Summons. He also concedes that the examination was set down for hearing on 28 April 2004 and, on the assumption that the statement of claim was still active, he and his wife decided to file the 2004 notice of motion reinstating the application to have the judgment set aside so as to enable them to pursue their defence. It was in those circumstances that the parties met before the Local Court on 28 April 2004.

28 The record of proceedings of the Temora Local Court of 28 April 2004 recites that the notice of motion was dismissed without any order as to costs. The record notes an appearance by both parties – the plaintiffs appearing in person and the defendant also appearing in person.

29 The circumstances in which these orders were made are said to have been vitiated by deceit on the part of the defendant who, it is said, deceived the plaintiffs into believing that the statement of liquidated claim had in fact been withdrawn by him the previous year following service of the plaintiffs’ 2003 notice of motion and that it was simply due to error on the part of the court’s administration that it had not been struck out. Accordingly, there was no need for them to seek to set aside the default judgment as there was no judgment that had either been entered or was to be enforced by the defendant. They contend that in reliance on the defendant’s representations to that effect they submitted to court orders dismissing the motion.

30 According to the defendant he next made contact with the plaintiffs by letter of 16 August 2004 where he advised as follows:

“I would like to sort out this debt shortly. The amount of the judgment is $21,017.60. I would be willing to accept less than this amount if we can sort it out shortly… If I don’t hear from you shortly I will have no other option but to continue court action.”

31 Mr Marshall claims not to have received this letter.

32 The defendant gave evidence that on 31 August 2004 (apparently in response to the letter of 16 August 2004) Mr Marshall telephoned and said words to the following effect:

“I would be able to borrow money to pay the debt but I could not pay the amount. I would be willing to pay $12,000.00 if you accept this to pay the whole of the debt.”

33 He replied with words to the effect:

“I would accept $12,000.00 provided this was paid by 30 October 2004. If I do not receive any payment by that date I will continue to force the whole of the debt.”

34 The plaintiff denies that this conversation took place.

35 On 4 November 2004 the defendant forwarded by facsimile a letter stating:

“Could you contact me to advise how things are going. I note that payment was due on 31 October.”

(Together with all previous correspondence to which I have referred, copies of which are annexed to the defendant’s affidavit, the letter of 4 November 2004 was also annexed with a faxed imprint stamped on the top right hand corner.)

36 The plaintiffs deny receiving this correspondence.

37 On 9 February 2005 the defendant forwarded a letter to the plaintiffs in the following terms:

“I note I have not heard from you since August last year. Unless some arrangement is made or I hear from you within 14 days I will have no option but to proceed to enforce the whole judgment against you…”

38 The defendant gave evidence that on or about 16 March 2005 Mr Marshall contacted him and said words to the effect:

“Would you accept $13,000.00 in full satisfaction of the debt provided I pay $500.00 each month?”

39 The defendant said words to the effect:

“Garry, I will accept $13,000.00 in full satisfaction of the debt provided you pay $500.00 each month until the debt is paid. If you do not make a payment in any month then I will enforce the whole debt against you. I will also require you to file with the Court an Application for Leave to pay the Judgment Debt by Instalments.”

40 On 16 March 2005 the defendant sent a letter confirming that arrangement.

41 On 17 March 2005 the defendant spoke to an officer of the Sheriff’s Office at Wagga Wagga who enquired as to whether it was the correct position that Mr Marshall had agreed to pay the debt by instalments. The defendant replied:

“Yes Garry has made an offer to pay by instalments and so there is no need for you to do anything at this stage”.

42 Mr Marshall denies having any conversation with anyone from the Sheriff’s Office in March 2005. Indeed he claims that he had no contact in respect of the outstanding debt at all from April 2004, when the 2004 motion was dismissed, to April 2007 when a sheriff attended at his residence with a writ of execution.

43 On 4 April 2005 the defendant received a pro forma document under Part 27 Rule 2(1)(b) of the Local Courts (Civil Claims) Act 1970 which is signed by the plaintiffs as judgment debtors and which confirms the following:

“The judgment creditor and the judgment debtor agree that the amount due in respect of the judgment Debt is $13,000 and that this amount may be paid by instalments of $500.00 per month commencing on 4 April 2005.”

44 The document has printed upon it the fax number from which it was sent inclusive of the name “Honeyflow”, the imprinted date 4 April 2005 and the time 8.59am. In cross-examination the plaintiff conceded that the fax number was a fax number associated with his premises. He could not explain (otherwise than by alleging the defendant fabricated it) how the document came to be sent from his fax number in association with the business name Honeyflow with which he had relevant connection. Quite apart from my being satisfied that the defendant has given truthful evidence, I regard the suggestion of fabrication as fanciful.

45 The defendant contends that on or about 17 April 2005 payment in the amount of $500 was received but that no further payments have been made from that date. The plaintiff denies paying the sum of $500 by way of an instalment but agrees that cash in that amount was given to the defendant to compensate him for the time spent in issuing the statement of liquidated claim and appearing from time to time in response to notices of motion filed by the plaintiffs.

46 There is no clear evidence as to when the amount of $500 was paid. However, irrespective of uncertainty as to the date, I regard it as more likely than not that it was a payment by way of an instalment pursuant to what I regard as irrefutable evidence tendered by the defendant of the agreement to pay by instalments in the documents faxed to him on 4 April 2005.

47 On 3 November 2005 the defendant forwarded an examination notice to the plaintiffs stating as follows:

“I note that you have not made any further payment towards the debt owing. I am therefore enclosing Examination Notice.”

48 On 5 February 2008 the defendant forwarded a letter to the plaintiffs advising in terms:

“It has now been almost five years since judgment was first entered and since judgment you have only made one payment of $500.00.
You have left me with no alternative but to file a Creditors Bankruptcy Notice against both of you.
This will be done within 7 days from the date of this letter…”

49 The letter goes on to offer a form of settlement whereby the debt is reduced on the basis of it being paid in full within seven days.

50 Following receipt of that correspondence the plaintiffs brought proceedings in this Court. Both Mr Marshall and the defendant gave evidence in the proceedings and were cross-examined. I am not satisfied on the evidence that the orders by the Temora Local Court on 24 April 2004 were entered as a result of the plaintiffs having been misled by the defendant as to the status of default judgment or that the Court was misled by the defendant at that time or at any other time as to the question of the plaintiffs’ attitude to the 2003 or 2004 notices of motion.

51 Whilst I have no doubt that the plaintiffs genuinely believe they have a defence to the action, and perhaps fervently hoped that the defendant would not pursue them to recover the debt either because of Mr Marshall’s impecuniosity and/or because of the effluxion of time, I am not persuaded that any proper basis has been shown to set aside the order dismissing the notice of motion.

Orders

52 Accordingly the orders I make are as follows:

1. The appeal is dismissed.

2. The plaintiffs to pay the defendant’s costs.

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