Rapp v Lee No. DCCIV-01-1448 - [2002] SADC 134

RAPP & ORS v LEE
[2002] SADC 134
Judge Lunn
Civil
APPEAL AGAINST A DECISION OF A MASTER TO SET ASIDE THE JUDGMENT IN DEFAULT OF APPEARANCE

In their summons the plaintiffs have claimed $377,500 plus interest which they allege is due and payable to them by the defendant under the terms of an agreement dated 19 February 1999 (“the Loan Agreement”). On 25 October 2001 the plaintiffs obtained a judgment against the defendant in default of her having filed an appearance within the requisite time after service. On 27 June 2002 the defendant applied to set aside this default judgment. This was opposed by the plaintiffs. For reasons which were published on 30 August 2002, a Master ordered that the default judgment be set aside. On 9 September 2002 the plaintiffs appealed against that order.
In the summons the plaintiffs named the defendant as “Ping Lee”. In the Loan Agreement and her affidavits her name is shown as “Ping Li”. The plaintiffs have the right under Rule 53.01(a) to amend the spelling of the defendant’s surname if they so wish.
The plaintiffs have filed affidavits setting out various conversations and communications which could constitute admissions of liability by the defendant. The defendant’s counsel objected to the admissibility of this material on the grounds of privilege. It raises issues under s67c of the Evidence Act 1929. I have ignored this material in dealing with the appeal.
The Master’s order of 30 August 2002 was an interlocutory, and not a final, order: Janair Pty Ltd v Ives, Full Court, 26/11/1993, Jud No S4288, unreported. Hence, DCR 97.01 applies to this appeal which means that it is to be by way of rehearing and that I have to exercise my own discretion afresh without regard to how the discretion was exercised by the Master.
The default judgment was regularly obtained by the plaintiffs. Under R23.04 the Court has a discretion to set it aside where the defendant has shown a bona fide intention of being able to defend the claim on the merits: Battiste v Mulvaney, Doyle CJ, 7/11/1997, Jud No S6419, unreported; Watson v Anderson (1976) 13 SASR 329. In a claim for in excess of $400,000 a defendant should not lightly be deprived of a full trial on all of the issues where there is some, albeit possibly slight, prospect of her having a good defence to the claim. I take the view that it is not desirable for the Court at this interlocutory stage to say more than is necessary to identify one proper ground on which the judgment should be set aside. A detailed canvassing of all of the issues at this stage is not in the interests of justice as they will be gone into in far more detail at the trial. The Court should avoid making any unnecessary pronouncements at this juncture which might embarrass one or other of the parties, or itself, in the light of other evidence which may be…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Rapp v Lee No. DCCIV-01-1448

Details

AGLC: Rapp v Lee No. DCCIV-01-1448 [2002] SADC 134
Case: [2002] SADC 134
Decision Date: 18 October 2002

CaseChat Overview and Summary

The case of Rapp & Ors v Lee was heard in the South Australian District Court. The plaintiffs, the appellants in this appeal, claimed $377,500 plus interest from the defendant, the respondent, under a loan agreement dated 19 February 1999. The plaintiffs obtained a default judgment against the defendant for failure to appear in court, but the defendant subsequently applied to set aside this judgment, which was subsequently ordered by a Master. The plaintiffs appealed against this decision.

The legal issues before the court were whether the default judgment should be set aside and if so, whether the defendant had a sufficient prospect of successfully defending the claim on the merits. The plaintiffs argued that the defendant had no legal basis to challenge her obligation to pay the agreed purchase price for the shares. However, the defendant argued that there was a prospect that the law on unconscionability in Equity may relieve her from the obligation to pay the plaintiffs for all of the shares, given that she may only have received a joint interest in the shares with her husband.

The court held that the default judgment was regularly obtained, but that it was within the court's discretion to set it aside where the defendant had shown a bona fide intention of being able to defend the claim on the merits. The court found that there was a sufficient prospect of the defendant successfully defending the claim on the merits, and that it was not desirable for the court at this interlocutory stage to say more than was necessary to identify one proper ground on which the judgment should be set aside. The court dismissed the appeal and endorsed the proposal of the Master that directions should be given for an early trial of the action. The defendant was also required to consider the adequacy of her pleaded Defence in the light of the requirements of R46A.05.

The orders of the court were that the appeal was dismissed, the plaintiffs were to pay the defendant's costs of the appeal in any event, and a further directions hearing was to be listed before Master Norman as soon as practicable.

Orders