Sandery v Kowalski

In the case of Sandery v Kowalski, the plaintiff, Sandery, filed a claim against the first and second defendants, Kowalski, alleging breach of oral agreements concerning the sale of a massage business and a partnership in a second massage business. Sandery sought a total of $38,409 in damages and legal fees. The defendants did not file a defence within the prescribed period, leading to a default judgment in favour of Sandery. The first defendant subsequently applied to set aside the default judgment, which the Magistrate allowed, leading to Sandery's appeal to the Supreme Court of South Australia.

The central legal issue in this case was whether the Magistrate correctly exercised her discretion under rule 87(2) of the Magistrates Court (Civil) Rules 2013 (SA) to set aside the default judgment. The first limb of r 87(2) requires the court to be satisfied that the defendant has a bona fide defence to the plaintiff's claim. The second limb requires the court to be satisfied that there is a satisfactory explanation for the defendant's failure to file a defence. Sandery contended that the Magistrate erred in concluding that both limbs of r 87(2) were satisfied, and that the appeal should therefore be allowed.

The Court of Appeal held that the Magistrate erred in setting aside the default judgment. The Court found that the first defendant did not provide a satisfactory explanation for the failure to file a defence within the prescribed period, nor did she offer a proposed defence. The Court further found that the second defendant's assertion that he had attempted to file a defence but was informed by the Registry that the time to do so had expired was not sufficient. Consequently, the second limb of r 87(2) was not satisfied. The Court concluded that the Magistrate erred in setting aside the default judgment, and allowed the appeal, dismissing the defendants' application to set aside the default judgment.