Papagiorgos v Complete Credit Acquisitions Pty Ltd

[2019] SASCFC 90

Supreme Court of South Australia

(Full Court)

PAPAGIORGOS v COMPLETE CREDIT ACQUISITIONS PTY LTD

[2019] SASCFC 90

Judgment of The Full Court

(The Honourable Chief Justice Kourakis, The Honourable Justice Nicholson and The Honourable Auxiliary Justice David)

25 July 2019

PROCEDURE - JUDGMENTS AND ORDERS - AMENDING, VARYING AND SETTING ASIDE

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - ENDING PROCEEDINGS EARLY - DEFAULT JUDGMENT - JUDGMENT IN DEFAULT OF PLEADINGS OR PARTICULARS

Application for permission to appeal against an order of a Judge of this Court dismissing an appeal against an order of the Magistrates Court refusing to set aside a default judgment entered in favour of the respondent, Complete Credit Acquisitions Pty Ltd.

On 8 March 2017, the respondent filed a claim alleging that the applicant, Mr Papagiorgos, was liable to pay to it a sum of $23,761. On 18 March 2017, the respondent served that claim on the applicant. The applicant failed to file a defence or counterclaim within 21 days, and default judgment was entered in favour of the respondent on 31 May 2017.

On 26 February 2018, the applicant filed an application to set the default judgment aside. That application was dismissed by a Magistrate. The appellant appealed that decision to a single Judge of this Court. That application was also dismissed. The applicant now appeals to this Court.

Held per Kourakis CJ (Nicholson J and David AJ agreeing) refusing permission to appeal:

1.  No error of principle which would vitiate the exercise of the discretion is alleged.

2.  No question of general importance is advanced.

Magistrates Court (Civil) Rules 2013 (SA) r 87; National Consumer Credit Protection Act 2009 (Cth); Consumer Credit (South Australia) Act 1995 (SA), referred to.
Papagiorgos v Complete Credit Acquisitions Pty Ltd [2019] SASC 44, discussed.

PAPAGIORGOS v COMPLETE CREDIT ACQUISITIONS PTY LTD
[2019] SASCFC 90

Full Court:                Kourakis CJ, Nicholson J and David AJ

1. KOURAKIS CJ:             This is an application for permission to appeal against an order of a Judge of this Court dismissing an appeal against an order of the Magistrates Court. 

2. The order of the Magistrates Court dismissed an application by Mr Papagiorgos pursuant to r 87 of the Magistrates Court (Civil) Rules 2013 (SA) (MCR) to set aside a default judgment entered for failure to file a defence.  MCR 87 provides:

   (1)The Court may set aside or vary a judgment (not being a final judgment).

   (2)The Court must not set aside such a judgment unless the party seeking to set it aside establishes that he or she – 

   (a)     has an arguable case on the merits; and

   (b)     has a reasonable excuse for not having complied with these Rules, or an order of the Court, or any time limit fixed by these Rules or order of the Court, in respect of the action or proceeding.

   (3)When setting aside a judgment the Court may order –

   (a)     payment to the other party of costs thrown away;

   (b)     payment or security under Rule 81.

3. The respondent, Complete Credit Acquisitions Pty Ltd (CCA), brought an action in the Magistrates Court on 8 March 2017 claiming a debt which had been assigned to it by the Commonwealth Bank of Australia Limited in the sum of $23,761.  The summons was served on the defendant on 18 March 2017.  On 31 May 2017, CCA caused judgment by default to be entered.  Nine months later, on 26 February 2018, Mr Papagiorgos filed his application to set it aside.   On the application, Mr Papagiorgos contended that he had defences under the National Consumer Credit Protection Act 2009 (Cth) and its predecessor, the Uniform Credit Code (SA), in force pursuant to the Consumer Credit (South Australia) Act 1995 (SA) (collectively the Codes).

4. The Magistrate found that even though Mr Papagiorgos had called in aid various provisions of the Codes, those provisions ‘when properly characterised … cannot give rise to a cause of action’.

5. The Magistrate dismissed another ground which relied on misleading and deceptive conduct by CCA because that claim relied on communications about CCA not pursuing further court action until the defendant’s hardship application was finalised, and not about the merits of the claim.

6. The Magistrate also found that there was no arguable defence that CCA had acted unconscionably, rejecting as not arguable Mr Papagiorgos’ submissions that he was labouring under a special disability, and that CCA had acted with a predatory state of mind. 

7. Finally, the Magistrate was not satisfied that Mr Papagiorgos had a reasonable excuse for not filing a defence within 21 days as required by the MCR.  The Magistrate emphasised that Mr Papagiorgos was informed of the default judgment by at least 15 June 2017 but did not file the application until 26 February 2018.

8. The Judge, Doyle J, dismissed Mr Papagiorgos’ appeal against the Magistrate’s refusal.[1]  Doyle J held that the civil penalty provisions of the Codes did not give a personal cause of action sounding in damages.  His Honour affirmed the Magistrate’s finding that no factual basis had been established which would attract the provisions of the Codes.

   [1]    Papagiorgos v Complete Credit Acquisitions Pty Ltd [2019] SASC 44.

9. Doyle J also held that the claim based on an alleged misrepresentation by CCA about whether a default judgment would be entered, could not be set-off against Mr Papagiorgos’ indebtedness under the credit contract.  His Honour held that the unconscionability claim could not succeed both because it was founded on CCA’s conduct in causing the default judgment to be entered and because it was not supported by evidence.

10. Doyle J rejected certain defences, raised only on the appeal before him, relating to the giving of notice to Mr Papagiorgos of the assignment of the debt from the Commonwealth to CCA.  The contentions were only raised the day before the Judge heard the appeal, and were not supported by adequate evidentiary material.  His Honour described those submissions as ‘a classic case of too little too late’.

11. Finally, Doyle J rejected Mr Papagiorgos’ ground of appeal that the Magistrate had erred in finding that he had not shown a reasonable excuse.  Doyle J found that CCA’s representation that it would not take any steps until after it had considered Mr Papagiorgos’ hardship application had no continuing effect after CCA informed him on 11 May 2017 that the hardship application had been declined.

12. Doyle J observed that Mr Papagiorgos did not file a defence within 21 days after 18 March 2017, when CCA’s claim was served on him.  His Honour did not accept that it was reasonable not to take any steps to advance the filing of the defence whilst Mr Papagiorgos negotiated with CCA.  Doyle J accepted that in a conversation on 26 April 2017 CCA engendered a reasonable expectation that between that date and the determination of the hardship application a default judgment would not be entered.  However, his Honour found that that expectation could not have reasonably have extended past 11 May 2017 when Mr Papagiorgos was informed that the application had been dismissed.  Doyle J also emphasised that the period of about nine months between the entry of the default judgment and the making of the MCR 87 application was essentially unexplained.

13. On his application for permission to appeal to this Court, Mr Papagiorgos has simply repeated the arguments which were put before the Judge.  No error of principle which would vitiate the exercise of the discretion is alleged.   No question of general importance is advanced.  The determination of the application depends entirely on its peculiar facts on which there are adverse concurrent findings of both the Magistrate and the Judge that Mr Papagiorgos failed on both limbs of MCR 87.

14. I would refuse permission to appeal.

15. NICHOLSON J:          I agree with the reasons of the Chief Justice.

16. DAVID AJ:            I would refuse permission to appeal.  I agree with the reasons of the Chief Justice.