Thain v Timber Tech Pty Ltd No. Scciv-02-1170

[2002] SASC 351

THAIN & ORS  v  TIMBER TECH PTY LTD
[2002] SASC 351

Magistrates Appeals:  Civil  (ex tempore)

1. DOYLE CJ:            I propose to give my decision now. I am going to give some very brief reasons. If the need arises I will reserve the right to deliver formal reasons and would prepare them in due course.

2. I have come to the conclusion that the interests of justice require that the appeal be allowed. I will indicate briefly why.

3. I consider that the Magistrate did err in striking out the Defence and Counterclaim and also in failing to set aside that order.

4. When the matter came before him on 31 July discovery had been made on affidavit as ordered. I am informed and I accept that the affidavit of discovery indicated that the documents were available for inspection.

5. That in one sense is all that was required of the defendants. It is not at all clear that under the Magistrates Court Rules there was any obligation on the defendants to provide copies of discovered documents. On the other hand the request by the plaintiff’s solicitors for copies was both reasonable and sensible, and an efficient way of handling things. However, the fact is the Magistrates Court Rules are silent on the point.

6. It may be that the relevant Supreme Court Rule, Rule 58.01(3), is made applicable by Rule 12(4) of the Magistrates Court Rules. I emphasise may be, because neither party was able to assure me that it was the practice of the Magistrates Court to treat that particular Supreme Court Rule as applicable. Nor, I gather, do either of the main commentaries on the Magistrates Court Rules resolve that point. Therefore there has to be real doubt as to whether the defendant was in breach of any rule as at 31 July when the matter came before the Magistrate. Certainly the Magistrate himself did not in his reasons refer to the precise basis upon which he acted when he struck out the defence and counterclaim.

7. I am confident that the Magistrate was influenced by what appears to me to be a sorry history of delay and defaults by the defendants in this case. Those delays and defaults have caused significant and very regrettable delay in the conduct of this matter. In the earliest stages of the matter some of them may have been attributable to the defendants personally. More recently they were attributable to the defendants’ solicitors.

8. While I accept that the Magistrate as at 31 July would have been understandably frustrated by what had occurred, if it is the case that there was no breach of the Rules at that stage the basis for striking out the Defence and Counterclaim becomes very shaky indeed. There was no application before him to do so on the basis that the Defence and Counterclaim was vexatious. Without such an application, properly supported, it would not have been appropriate to act.

9. Therefore the position as it seems to me is that it may well be that there was no default as at that date, and that the Magistrate erred in striking out the Defence and Counterclaim.

10. When the application came before him on 9 August to have the Defence and Counterclaim reinstated, things were no clearer. Once again, the Magistrate does not indicate the basis upon which his initial order was made, and so that uncertainty remains. Even if there had been a breach of a Supreme Court Rule, made applicable by the Magistrates Court Rules, by 9 August it was established before the Magistrate that the relevant failure to provide copies of documents was entirely due to the defendants’ solicitors.

11. In relation to this again I must say that what is revealed by the affidavit is a very sorry chapter of failure by the defendants’ solicitors to attend properly to the matter. I say no more at this stage.

12. But even assuming that the original order was based on a breach of the Rules, it seems to me in all the circumstances, and having regard to the explanation that was offered, namely that it was the solicitors’ fault, and having regard to the fact that the default had already and quite promptly been remedied, the Magistrate should have set aside his earlier order and reinstated the Defence and Counterclaim.

13. However, in saying that I must say that I sympathise with the feeling of frustration that I have no doubt the Magistrate experienced. It is very unsatisfactory for the Court to have to contemplate the sort of delays that have occurred here. I can well understand the dissatisfaction that the plaintiff would have been feeling with the process, seeing the matter delayed time and again by the defendants for one reason or another.

14. Nevertheless it is a significant thing to deny a defendant the right to have a defence heard on the merits. It is difficult for the court to balance the interests of efficiency and justice. Here the defendants strained that balancing process to the very limit. But having regard to the explanation that now was offered to the Magistrate on 9 August, and having regard to the fact that there was either no basis for the order originally made, or if there was, it can be said that the basis was not particularly clear, and there might have been some uncertainty on the part of the defendants’ solicitors as to whether they were in breach of any order, I consider that the Magistrate erred.

15. It does seem to me weighing everything up that a proper exercise of the discretion on the Magistrate’s part required that he set aside the order.

16. However, there is one other matter on which I should comment. If there was a breach of the Rules then certainly as it seems to me, that is if there was a breach of the Rules when the first order was made, then there was an obligation on the defendants to satisfy the court that the defendants had an arguable case on the merits.

17. No attempt was made by the defendants to do this before the Magistrate and no attempt was made before me other than an affidavit filed by the solicitor asserting that the defendants have an arguable defence. In my view that is not adequate. For the defendants to show an arguable case it is necessary for the defendants, or someone representing the defendants with knowledge of the facts, to swear that there is a factual basis for the defence and that it gives rise to an arguable defence. In this further respect it seems to me that the conduct of the matter before the Magistrate and here was inadequate from the defendants’ point of view.

18. However, I think in this matter the overriding interest is now to get the matter resolved and having satisfied myself that the Magistrate erred, rather than delay the matter further I propose to allow the appeal. I order:

    1.That the Magistrate’s order of 31 July 2002 be set aside.

    2.That the Magistrate’s order of 9 August 2002 be set aside.

    3.That the matter be remitted to the Magistrates Court for trial.

    I do so on the basis that I request that the Registrar of the Court in consultation with the Chief Magistrate, or such other Magistrate as may be appropriate for these purposes, do everything that can be done in conjunction with the parties to ensure that the matter is given a prompt listing for trial on a definite date so that there will be no further delays.

    4.In all the circumstances I also order that this order be conditional on the defendants paying to the plaintiff the costs ordered to be paid by the defendants as costs thrown away by orders of the Magistrates Court, prior to and not including the order of 31 July 2002.

    5.I order that those costs be paid within 21 days of today, but recognising that quantification of those costs might require clarification, I give the parties liberty to apply to the Magistrates Court in relation to that matter. I also recognise and I should make clear that I have this day set aside the Magistrate’s orders to enable the matter to progress. If the defendants fail to comply with this order then it would be necessary for an application to be made to the Magistrates Court.