Sandery v Kowalski - [2017] SASC 29

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
SANDERY v KOWALSKI
[2017] SASC 29
Judgment of The Honourable Justice Vanstone
9 March 2017
MAGISTRATES - APPEAL AND REVIEW - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT
Appeal against the decision of a Magistrate to set aside judgment. Where appellant issued claim in the Magistrates Court alleging breach of contract. Where defence was not filed within 21 days and judgment was signed. Where first application to have the judgment set aside was dismissed. Where second application to have the judgment set aside was granted. Whether the Magistrate erred in hearing the second application. Whether the respondent established a reasonable case on the merits and a reasonable excuse for not having complied with the rules of Court.
Held: The appeal is dismissed.
Magistrates Court (Civil) Rules 2013 (SA) s 60, s 63(4), s 87, referred to.
Cubelic v T & D Lock Pty Ltd [2009] SASC 397, considered.

SANDERY v KOWALSKI
[2017] SASC 29
Magistrates Appeal – Civil
VANSTONE J.

The plaintiff and appellant, Mark Andrew Sandery, issued a claim in the Magistrates Court against Steven Kowalski alleging, principally, breach of contract. When a defence was not filed within 21 days he promptly signed judgment. The defendant took steps to have the judgment set aside. Ultimately a Magistrate granted the application.
Mr Sandery appeals, arguing that the Magistrate was in error in hearing a second application to set aside judgment and in finding that the defendant had adequately explained his failure to file a defence. For convenience I shall refer to the parties by their surnames. All dates referred to are in 2016.
Background
The unhappy history of this claim is best illustrated by setting out a chronology of steps taken in the Magistrates Court, interleaved with references to relevant rules.
2 MaySandery files claim against Kowalski for $51, 230
Service by post on the same day is proved to the Registrar’s satisfaction
30 MayJudgment is signed in favour of Sandery
(r 60 provides that where a party does not file a defence within 21 days of service the other party may apply to sign judgment)
1 JuneThe Registrar advises Kowalski that judgment has been signed
Kowalski applies to set aside the judgment
(r 87 provides that the Court may set aside a judgment if the applicant establishes that he has a) an arguable case on the merits; and b) a reasonable excuse for not having complied with the Rules)
22 JuneThe Magistrate grants leave to Kowalski to file an affidavit in support of the application within 21 days and adjourns the application to 27 July
27 JulyNo affidavit being received by the Court, the Magistrate dismisses the application
29 AugKowalski files a fresh application to set aside judgment
(r 63(4) provides that the Registrar must not receive an interlocutory application in respect of a matter that has been determined on a previous interlocutory application unless the applicant has leave of the Court)
20 SeptThe Magistrate adjourns the application to 19 October and notes that this is the “last opportunity” for Kowalski to file an affidavit disclosing his defence
19 OctMr Perre who now acts for Kowalski hands up affidavit of Kowalski sworn 10 October, annexing draft defence and counterclaim
The Magistrate sets aside judgment and requires Kowalski to file a defence within 14 days
26 OctKowalski files defence
Rule 87 of the Magistrates Court (Civil) Rules 2013 (SA) governs applications to set aside judgments. It provides:
87.     (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.
…
As can be seen from the chronology, Kowalski’s first application to set aside judgment came before the Magistrate on 22 June. On that occasion he was given leave to file an affidavit in support of the application within 21 days. However, when he failed to do so the Magistrate dismissed the application.
On 29 August Kowalski filed a fresh application to set aside judgment. It appears that it was received by the Registrar’s staff notwithstanding that a similar application had already been dealt with. Rule 63(4) provides that the Registrar must not receive such an application unless the applicant has leave of the court to file it. There is no suggestion that Kowalski had such leave and nor did he apply for it in that application.
On 20 September the Magistrate adjourned the application so that Kowalski could file an affidavit in support of it. That was not done. However on the adjourned date, being 19 October, Kowalski’s new legal representative, Mr Perre, handed up an affidavit of Kowalski sworn 10 October, which addressed the reasons why a defence to the action had not been filed in a timely manner and annexed a draft defence and counterclaim. The Magistrate heard argument and set aside the judgment. Kowalski was ordered to file a defence within 14 days, which was done.
The Magistrate gave ex tempore reasons for setting aside the judgment. The Magistrate referred to the arguments of Mr Elliott on behalf of Sandery and dealt with them. The Magistrate found that Kowalski had provided the Court with a reasonable excuse for not having filed his defence on time, and that he had demonstrated an arguable case on the merits.
In support of the appeal, reliance is placed on Rule 63(4) providing that a second interlocutory application in respect of a matter already determined must not be received without the Court’s leave. Mr Elliott put to the Magistrate that to entertain such an application without leave would amount to an abuse of process, but there is no mention of the need for leave in the Magistrate’s reasons. Before this Court Mr Elliott puts that the application “should have been considered void ab initio”.
Counsel for Sandery also argues that the Magistrate should not have set aside the judgment having regard to Kowalski’s earlier noncompliance with the rules of court and the order of 22 June requiring him to support the application with an affidavit. Further, Mr Elliott argues that the material before the Magistrate did not amount to a “reasonable excuse” for not having filed a defence. Mr Elliott referred to Cubelic v T & D Lock Pty Ltd [2009] SASC 397 for the principle that it falls to a person applying to set aside a judgment to provide compelling reasons for his failure to take the necessary step in the action and to provide more than “bald assertions” answering the requirements of Rule 87. Mr Elliott referred to Kowalski’s claim in his affidavit that he did not file a defence due to his neighbours having received his mail and not having brought it to his attention in time, and to an incident of “miscommunication” between himself and registry staff on about 30 May. Mr Elliott puts that the reasons given in Kowalski’s affidavit for the failure to file a defence in time lacked “proof” and were inconsistent with excuses given elsewhere. He argues that the affidavit contains only bald assertions, not amounting to a reasonable excuse.
Kowalski was not represented upon the appeal. Late on the eve of the hearing he forwarded written materials to my Associate, comprising a handwritten document headed “Summary of Argument and Defence” and another document headed “Private and Confidential to the Honourable Justice Vanstone”. Upon Mr Elliott informing me that he had not been served with these materials I indicated that I would have no regard to them, and I have not.
Consideration
It is not clear to me whether the Magistrate gave any separate consideration to whether the Court should entertain a second application to set aside the judgment. Certainly there was no order addressing that issue. Making an order might have been overlooked. The reason for Rule 63(4) requiring leave is plain. The Court should not be asked to entertain second or subsequent applications where there has been a previous determination of the same issue. Neither should the respondent be put to additional expense without warrant. However, I am prepared to infer that, in circumstances where the previous application failed through default rather than because of a considered decision of a Magistrate, and where the Magistrate was persuaded that Kowalski’s application had merit, she would have granted leave, or dispensed with the need for it, had she turned her mind to it.
I consider that the Magistrate was entitled to take the view that the excuse for not filing a defence in time was reasonable. Kowalski’s assertions were not “bald assertions”; they were supported on oath. True, there was a lack of detail. If the reasons given were inconsistent with other statements made by Kowalski, that would properly have been the subject of cross examination by counsel for Sandery. It appears that no such application was made.
In my view, Kowalski was fortunate indeed that the Magistrate set aside the judgment. Another Magistrate might well have refused to entertain a second application in light of Kowalski’s recalcitrance, or might have found his excuses to be flimsy. Perhaps the Magistrate was sympathetic to the fact that Kowalski, unlike his opponent, had been unrepresented, that judgment had been signed very promptly and that Kowalski took steps to remedy the situation quite quickly. In addition, the Magistrate no doubt took into account the amount of the claim and the difficulties attending proof of it where little, if any, of the arrangements were reduced to writing.
In any event, putting to one side the formal matter of granting leave for a second application, I can see no error in the approach of the Magistrate. In those circumstances I should not set aside her decision unless it is plainly wrong. I cannot say it is.
Conclusion
The appeal is dismissed.