Skorpos v Georgiadis - [2013] SASC 165

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
SKORPOS v GEORGIADIS
[2013] SASC 165
Judgment of The Honourable Justice David
1 November 2013
MAGISTRATES - APPEAL AND REVIEW - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT
PROCEDURE - JUDGMENTS AND ORDERS - IN GENERAL - OTHER MATTERS
Appeal against the ruling of a Magistrate refusing an application pursuant to r 87 of the Magistrates Court (Civil) Rules 1992 (SA) – the appellant was the defendant to a claim in the Magistrates Court by the respondent – the Registrar of the Magistrates Court signed judgment against the appellant – the appellant made an application for the default judgment to be set aside on the basis that he had an arguable case on the merits and a reasonable excuse for not complying with the applicable time limit for filing a defence – the Magistrate refused the application – whether the appellant had an arguable case on the merits – whether the appellant had a reasonable excuse for not filing a defence to the respondent’s claim within the applicable time limit.
Held: appeal allowed – the appellant had an arguable case on the merits – the appellant had a reasonable excuse for not having complied with the time limit in filing his defence – the default judgment is set aside.
Magistrates Court (Civil) Rules 1992 (SA) r 30, r 47, r 49, r 60, r 87, referred to.
Battiste v Mulvaney [1997] SASC 6419, discussed.

SKORPOS v GEORGIADIS
[2013] SASC 165
Magistrates Appeal: Civil

DAVID J: The appellant was the defendant to a claim in the Magistrates Court by the respondent, a practising solicitor. The respondent brought an action in the Magistrates Court against the appellant for outstanding legal fees. On 5 March 2013, the Registrar of the Magistrates Court signed judgment against the appellant. On 1 August 2013, a Magistrate refused an application by the appellant pursuant to r 87 of the Magistrates Court (Civil) Rules 1992 (SA) (“the Rules”) for that default judgment to be set aside.
The appellant now appeals against that ruling.
The facts
I have been provided with two affidavits from the appellant, Emanuel Skorpos,[1] and I received by consent an affidavit of the appellant’s wife, Laura Maria Skorpos.[2] I have also been provided with an affidavit of Jonathon Craig McKay,[3] the solicitor for the appellant in the Magistrates Court, in his attempt to defend the claim by the respondent and, attached to that affidavit, a draft defence to the claim of the respondent.
[1]    Affirmed 8 May 2013 and 26 July 2013.
[2]    Sworn 15 October 2013.
[3]    Affirmed 11 June 2013.
Laura Skorpos, in her affidavit, swore that the respondent’s solicitors acted for her husband in a District Court dispute that he had involving his company, Southern Flinders Ranges Estate Pty Ltd, and Rocklands Estates. The claim was listed for trial commencing in January 2013. During that period of time, Mrs Skorpos lived at the family home some distance from Port Pirie and the appellant had moved to his parents’ home in Adelaide in preparation for the trial. Mrs Skorpos eventually joined her husband at his parents’ home in the lead up to a mediation which took place on 5 and 6 February 2013, such mediation successfully settling the claim. Mrs Skorpos further says in her affidavit that, about three weeks after the mediation when the paperwork was finalised, both she and the appellant were able to return to their home in Baroota in the southern Flinders Ranges during the week of 25 February 2013. Baroota is approximately 32 kms outside of Port Pirie and they have a post office box in Port Pirie due to the fact that Baroota does not have a regular postal delivery route.
On Monday 4 March 2013, Mrs Skorpos travelled into Port Pirie and stopped at the Post Office. Among the mail on that occasion was an action in the appellant’s name which is the subject of this matter. Mrs Skorpos said she immediately telephoned the appellant and went to the Port Pirie Magistrates Court in order to lodge a defence. Mrs Skorpos attended at the Court on the afternoon of 4 March 2013 and spoke with a clerk at the front counter. That clerk told Mrs Skorpos that it was too late to file a defence as judgment had already been entered. She was advised by the clerk that the only avenue available to her was to apply to set aside the judgment. In fact, an application was made to do so on 9 May 2013.
The appellant, Mr Skorpos, in his affidavit affirmed on 8 May 2013, deposed that he was told by his wife about the events of 4 March 2013 referred to above. He also swore that from 1 November 2012 until February 2013 he and his wife were permanently resident in Adelaide, staying with his parents. He said he went back to Baroota for a short time on 25 February 2013 and returned to Adelaide a few days later but did not check the post office box during that period.
In his reasons for judgment, the Magistrate did not dispute what Mrs Skorpos said in her affidavit concerning her attendance at the Port Pirie Magistrates Court on 4 March 2013 and, in particular, did not dispute that she was told that a judgment had already been signed. The Magistrate did, however, cast doubt upon the appellant’s version that he did not regularly check his post office box for correspondence even though he happened to be living in Adelaide for a period of time. He made that finding without recourse to any contrary evidence or any cross-examination of the appellant.
As it transpired there is no dispute on the Court records that judgment was signed not on 4 March 2013 when Mrs Skorpos was advised by the Court clerk that it had been signed, but on the next day 5 March 2013. In other words, it was signed on the day after the appellant’s wife’s attempt to lodge a defence. There was also no dispute from the Court records that the respondent’s claim was sent by post to the appellant’s post office box in Port Pirie on 7 February 2013. In order to appreciate fully the appellant’s argument to set aside the default judgment, it is important to examine the relevant legislation.
Magistrates Court (Civil) Rules 1992 (SA)
I set out the relevant sections of the Rules:
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.
(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.
There is no dispute that the judgment which the Magistrate refused to set aside was not a final judgment. The appellant in this case argues that the Magistrate erred in finding that the appellant did not have an arguable case and there was a reasonable excuse for not having complied with the Rules in relation to a time limit.
Rule 60 provides:
60.(1) Subject to sub-rule (4), where a party has been served with an action (other than an action under Rules 26A and 37) and does not file a defence within 21 days of service, or any other period fixed by the Court, the other party, on proof to the Registrar of such service, may sign judgment against the party in default, by filing a Form 18.
(2)[Not applicable].
(3)(a) The 21 days referred to in Sub-rule (1) will be taken not to include the day on which the party was served.
(b)Where the 21 days referred to in Sub-rule (1) expires on a Saturday, Sunday or public holiday, the period within which a defence may be filed will be extended to expire on the next working day.
(4)[Not applicable].
Rule 30 provides:
30.(1) To defend an action (other than an action under Rules 26A and 37) a person must file a defence in Form 4, which may be filed at any Registry of the Court.
(2)A party intending to object to the jurisdiction of the Court may only do so on an application filed at the same time as the defence.
In the light of the factual situation in this case, it is important to point out r 49(1) which provides:
49.(1) Subject to any Act, a person will be taken to be served -
(a)at the time he or she is personally served;
(b)where service is by fax during normal business hours on a business day, when the fax is transmitted;
(c)where service is by e-mail on the next business day after an acknowledgement of receipt of a transfer by e-mail is received from the computer to which it was addressed; and
(d)in any other case, 2 business days after the document is served in accordance with these Rules.
It is to be noted that r 47(1)(a) provides:
47.(1) Subject to any other Act, these Rules and any order of the Court, a document may be served on a person:
(a)by sending it by pre-paid post addressed to the address of the person (but note the cost risk in Rule 106(8)); …
Appeal
The appellant now argues that r 87(2)(b) is satisfied and the appellant has a reasonable excuse for not having complied with the Rules, namely filing a defence within 21 days of service. Mr Tokley SC, counsel for the appellant, argues that service occurred two business days after the agreed date of 7 February 2013[4] and the 21 days referred to in r 60 commences to run from 12 February 2013 and would have expired on 5 March 2013, the date that judgment was signed. In other words, on 4 March 2013, when Mrs Skorpos was told judgment had been signed, the appellant was still within time to file a defence.
[4] Magistrates Court (Civil) Rules 1992 (SA) r 49(1)(d).
Mr Thomas, counsel for the respondent, argues about the actual day that the respondent was entitled to sign judgment. He argues that, when looking at the appropriate rules mentioned above, the time for filing a defence would have in fact expired on 4 March 2013 and not 5 March 2013.
In relation to this aspect of the argument, I find that the dispute makes no difference to my decision. I disagree with the Magistrate when he said that, in relation to the timing aspect, on the facts stated above, there was not a reasonable excuse for not having complied with the Rules. Accepting the version given by Mrs Skorpos is honest and truthful, about which there appears to be no dispute, the innocent misinformation provided to Mrs Skorpos, in my view, clearly makes out a reasonable excuse such as to satisfy r 87(2)(b). I make that finding even allowing for the fact that the application to set aside the default judgment was not lodged until 9 May 2013 and also in the light of the Magistrate’s finding that he had difficulty in believing the appellant himself did not check his post office box for correspondence. There is still no dispute, either before the Magistrate or this Court, that the appellant’s wife did in fact receive the claim for the first time when she attended the Post Office on 4 March 2013.
I turn to a consideration of whether r 87(2)(a) has been made out and whether there is an arguable case on the merits.
I have been provided with an affidavit of the solicitor for the appellant in the Magistrates Court, Jonathon Craig McKay of Camatta Lempens Pty Ltd Lawyers.[5] A draft defence to the claim by the respondents is attached to that affidavit.
[5] Affirmed 11 June 2013.
Mr Thomas argues that I should not receive the affidavit of Mr McKay because the basis of the defence as outlined in the draft document is in fact based upon the instructions given to him by his clients. Mr Thomas argues that those matters should be the subject of an affidavit sworn by the appellant and as such constitute hearsay. I disagree with the argument. In matters such as this, solicitors often depose to instructions given to them by their clients for the purposes of arguments on appeal.
Mr Thomas also argues that the defence itself does not disclose an arguable case and therefore r 87(2)(a) has not been satisfied.
The case for the appellant as disclosed in the draft defence document and also the affidavit of the appellant[6] raises issues of the interpretation of a retainer advanced by the respondent and the issue will rely upon the terms of an agreement between the parties. Such considerations will necessarily involve factual findings after hearing evidence. As Doyle CJ said in Battiste v Mulvaney,[7] such an enquiry as to whether there is an arguable defence on the merits cannot be turned into a trial of affidavits. I cannot decide disputes of fact at this stage. But if as pleaded there is a genuine dispute about the contents and nature of the retainer depending on findings of credibility, that is enough to satisfy r 87(2)(a).
[6] Affirmed 26 July 2013.
[7] [1997] SASC 6419.
Conclusion
Looking at the matter afresh, I find that there is an arguable case on the merits and the appellant had a reasonable excuse for not having complied with the time limit fixed by the Rules in filing his defence.
I would allow the appeal and set aside the default judgment.
I will hear the parties as to costs.