Sandery v Kowalski

[2017] SASCFC 42

SUPREME COURT OF SOUTH AUSTRALIA

(Full Court: Permission to Appeal in Private)

SANDERY v KOWALSKI

[2017] SASCFC 42

Judgment of The Full Court

(The Honourable Chief Justice Kourakis, The Honourable Justice Kelly and The Honourable Justice Stanley)

9 May 2017

APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - RIGHT OF APPEAL - WHEN APPEAL LIES - FROM INTERLOCUTORY DECISIONS - LEAVE TO APPEAL

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - JUDGMENTS AND ORDERS - AMENDING, VARYING AND SETTING ASIDE JUDGMENTS AND ORDERS - GENERAL PRINCIPLES

Application for permission to appeal against a decision of a Judge of this Court who upheld decision to set aside default judgment.

The applicant obtained default judgment in the Magistrates Court after the respondent failed to file a defence. Shortly after, the unrepresented respondent, applied twice to have default judgment set aside, but failed to file an affidavit supporting the application. At a hearing which was the respondent’s final opportunity to comply with the rules, the solicitor now representing the applicant handed up an affidavit which annexed a draft defence and counter claim. Default judgment was set aside.

The decision to set aside default judgment was appealed to a Judge of this Court on the grounds that the second application required permission and that the affidavit did not establish a reasonable excuse for not filing the defence within time. The Judge dismissed the appeal.

The applicant applies for permission to appeal that Judge’s decision on a number of grounds.

Held by the Court, refusing permission to appeal:

1. On an appeal to a Judge of this Court, when a relevant matter has not been expressly dealt with, the appropriate question is whether all the relevant circumstances support the order that was made. 

2. On the facts of this case any application for permission to file a subsequent interlocutory application to set aside default judgment was bound to succeed.

3. The costs of granting permission to appeal would be disproportionate to the subject matter of the litigation and would delay the trial.

4. Permission to appeal is refused.

Magistrates Court Rules 2013 (SA) r 63, r 87, referred to.

SANDERY v KOWALSKI
[2017] SASCFC 42

Full Court: Kourakis CJ, Kelly and Stanley JJ

1. THE COURT:  The applicant Mr Sandery instituted an action against the respondent Mr Kowalski in the Magistrates Court seeking judgment in the sum of $51,230 on a contractual claim.  Default judgment was entered on 30 May 2016, just one week after the time allowed for the filing of a defence.  Mr Kowalski promptly applied to set aside the judgment but did not file an affidavit in support of his application before the hearing of his application.  For that reason his application to set aside the default judgment was dismissed on 27 July 2016. 

2. On 29 August 2016 Mr Kowalski made a fresh application to set aside the judgment but again without a supporting affidavit.  He was given an extension of time within which to file an affidavit.  On the hearing of the fresh application on 19 October 2016, a solicitor, Mr Perre, who by that time was acting for Mr Kowalski, handed up an affidavit annexing a draft defence and counterclaim.  The Magistrate set aside the default judgment and Mr Kowalski subsequently filed his defence.

3. Mr Sandery appealed against the Magistrate’s decision to set aside the default judgment to a Judge of this Court on the grounds that:

   ·Mr Kowalski’s second application should not have been entertained without permission; and

   ·The affidavit did not establish either a reasonable excuse for not filing the defence within time or an arguable case on the merits.

4. Rule 63(4)(a) of the Magistrates Court Rules 2013 (SA) (MCR) provides that the Registrar must not receive an interlocutory application in respect of a matter that has been determined on a previous interlocutory application without the permission of the Court.  MCR87(2) provides that the Court must not set aside a default judgment unless the party seeking to have the judgment set aside establishes that he or she has an arguable case on the merits and has a reasonable excuse for not having complied with the Rules.

5. The Magistrate in her ex tempore reasons did not advert expressly to the requirement for permission and did not make an order pursuant to MCR63(4).

6. An application to set aside a default judgment is an interlocutory application.  A dismissal of the application is not a final adjudication of rights and does not result in a res judicata.  There is no impediment, save for any express enactment or rule to the contrary, to making a subsequent application.  As a matter of practice, courts accord a substantial degree of deference to the interlocutory orders first made when there has been no intervening material change of circumstances in the intervening period.  MCR63(4) recognises that practice.  At least, it may be accepted that MCR63 requires that a subsequent interlocutory application should be endorsed with an application seeking permission.  That is, if indeed the application does not require an anterior application for permission before the filing of the subsequent interlocutory application.  However, on the facts and circumstances of this case, the application for permission was bound to succeed.

7. On an appeal to a Judge of this Court, when a relevant matter has not been expressly dealt with, the question is not so much what the Magistrate might have decided if he or she had adverted to the issue, as it is whether or not all of the relevant circumstances support the order which was made.  As the Judge observed in her reasons, in this case the subsequent application was made after a summary dismissal of the first application without hearing it on its merits.  That in itself is a strong reason to give permission to bring a subsequent application.  Moreover, as the Judge again observed, Mr Kowalski’s assertions were ultimately supported on oath and were particularised both as to the reason for not filing a defence within time and as to the merits of his defence.  Furthermore, the default judgment was entered very shortly after the expiry of the time allowed by the Rules and the application to set it aside was promptly made.  Even though Mr Kowalski failed to file an affidavit when unrepresented he did so soon after he received legal advice.

8. Accordingly, accepting that the Magistrate’s reasons were elliptical, the ultimate order against which the applicant seeks permission appears, on the face of the matter, to be soundly made.

9. The applicant has insufficient prospects of demonstrating that the order was wrongly made.  Moreover, given the subject matter of the controversy and the amount of the claim and counterclaim, there is no utility in the Full Court entertaining the proposed appeal.  The litigation costs if permission to appeal were granted would be disproportionate to the subject matter of the litigation and would delay the trial.

10. Permission to appeal is refused.