Vukmirovic v CW Brickwork Pty Ltd
[2024] WADC 65
•9 AUGUST 2024
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: VUKMIROVIC -v- CW BRICKWORK PTY LTD [2024] WADC 65
CORAM: SEFTON DCJ
HEARD: 14 MAY 2024
DELIVERED : 9 AUGUST 2024
FILE NO/S: APP 68 of 2023
BETWEEN: PETER VUKMIROVIC
Appellant
AND
CW BRICKWORK PTY LTD
Respondent
ON APPEAL FROM:
Jurisdiction : MAGISTRATES COURT OF WESTERN AUSTRALIA
Coram: MAGISTRATE SHACKLETON
File Number : JOO/GCLM/175/2023
Catchwords:
Appeal - Denial of procedural fairness - Application to set aside default judgment - Miscarriage of justice - Turns on own facts
Legislation:
District Court Rules 2005 (WA), r 50, r 51
Magistrates Court (Civil Proceedings) Act 2004 (WA), s 19(2), s 19(3), s 40(1), s 40(4), s 40(5), s 43(3), s 43(4)(a), s 43(4)(b), s 43(7)
Result:
Default judgment set aside
Leave to defend proceedings granted
Representation:
Counsel:
| Appellant | : | Mr K S Pratt |
| Respondent | : | Mr B D Havilah |
Solicitors:
| Appellant | : | Rebus Legal |
| Respondent | : | Havilah Legal |
Case(s) referred to in decision(s):
Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172
Binningup Nominees Pty Ltd v Mirvac (WA) Pty Ltd [2021] WASCA 130
Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194
Defendi v Szigligeti [2019] WASCA 115
Duluxgroup (Australia) Pty Ltd v Chapple [2023] WASCA 83
Fabbri v Atyeo [2024] WADC 2
Fox v Percy [2003] HCA 22; (2003) 214 CLR 118
Marks v Coles Supermarkets [2021] WASCA 176
Mijatovic v Legal Practitioners Complaints Committee [2008] WASCA 115; (2008) 37 WAR 149
Nobarani v Mariconte [2018] HCA 36; (2018) 92 ALJR 806
Palmer v Prince [1980] WAR 61
Parker v Transfield Pty Ltd [2000] WASCA 382
Saunders v The Public Trustee [2015] WASCA 203
Smart v Power [2019] WASCA 106
Starrs v Retravision (WA) Ltd [2012] WASCA 67
Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141
TSW Analytical Pty Ltd v The University of Western Australia [2017] WASCA 67
Vautier Holdings Pty Ltd v Kagioulis Trading Pty Ltd [2014] WASC 209
Wildflower Electrical Refrigeration Service (WA) v Refrigid Pty Ltd [2014] WASC 382
Williams v Sadeghpour [2021] WADC 111
SEFTON DCJ:
Introduction
The appellant appeals[1] against a decision of a magistrate on 5 December 2023 by which his Honour dismissed the appellant's application[2] seeking that judgment in the matter be set aside and that he be given leave to defend the proceedings.[3]
[1] Appeal notice dated 11 December 2023.
[2] Matter Book, page 60 (MB).
[3] MB, page 78.
For the reasons that follow, I am satisfied that the appellant was denied procedural fairness and that it is appropriate that the appeal be allowed, the judgment be set aside and the appellant be given leave to defend the proceedings.
Background
Before considering the issues raised on appeal, it is convenient to set out certain aspects of the history of the Magistrates Court proceedings.
On 10 February 2023 the respondent lodged a general procedure claim in relation to invoice number 'REPAVE01' for $27,950.78, for work said to have been carried out that had not been paid. The defendant was named as 'Repave Spray on Painting (ABN: 31 900 557 273)'.[4]
[4] MB, page 11.
Service of the general procedure claim was certified as having been effected by the assistant bailiff on 7 March 2023.[5]
[5] MB, page 36. Service was said to have been effected by handing the document to someone at the person's usual or last known place of business who was believed, on reasonable grounds, to have reached 18 years of age.
On or about 26 April 2023 a response was lodged to the general procedure claim indicating that the named defendant intended to defend the claim.[6]
[6] MB, pages 38 - 39. See also MB, pages 20, 40 which record preceding communications from the Magistrates Court on 14 March 2023 and 25 May 2023 to the respondent regarding the correct identification of the name of the defendant.
On 31 May 2023 an application was lodged by the respondent seeking an order that the name of the defendant be amended to the appellant's name.[7] The respondent sought that the application be dealt with in the absence of the parties and that service be dispensed with.
[7] MB, pages 41.
The application was supported by an affidavit dated 31 May 2023 in which Mr Warner stated that 'I was lead [sic] to believe that I was carrying out the brickwork to build 29 Nautilus Crescent, Scarborough WA 6019 for [the appellant's company] Repave Spray Painting but after spending a lot of time on this case … we have discovered that [the appellant] was building the house as an Owner Builder …'. It was also stated that the documents for bricks delivered to the site specified a customer name of Peter Vukmirovic, the appellant.[8]
[8] MB, pages 42 - 43.
By letter dated 31 May 2023 the Magistrates Court advised the respondent that the application had been set down for hearing on 13 June 2023 and that attendance was not required unless the court advised otherwise.[9]
[9] MB, page 48.
On 13 June 2023 the Magistrates Court ordered that:[10]
1.Service of this application is dispensed with.
2.This application be dealt with in the absence of the parties.
3.The name of the defendant be amended from Repave Spray On Painting to Peter Vukmirovic.
[10] MB, page 49.
It appears from the file copy of that order that it was sent to the respondent.[11]
[11] MB, page 49. The file copy does not record that it was sent to the appellant.
On 12 July 2023 the respondent lodged a statement of general procedure claim.[12] In that statement it was claimed, amongst other things, that the respondent carried out work laying bricks to build a house at 29 Nautilus Crescent, Scarborough in November 2022 'and was led to believe by [the appellant] that the work was being done for he's [sic] company Repave Spray on Painting'.
[12] MB, pages 50 - 51.
In relation to the legal basis of the claim, reference was made to on invoice numbered PVUKMIROVIC01 that was said not to have been paid in full. It was stated that $15,000 was paid in cash on 9 December 2023 and there was an outstanding balance of $10,409.80.
The remedy or relief claimed was payment in full for the outstanding balance due which was stated originally to be for an amount of $27,950.78 but that $15,000 in cash had been received so the claim was for the balance of $10,409.80 to be paid in full.[13]
[13] The difference between the invoice amount and $15,000 is $12,950.78, not $10,409.80. The difference between those figures is not apparent and was not addressed in the appeal.
On 21 July 2023 an affidavit of service of Mr Warner, dated 21 July 2023, was lodged.[14] He stated that he served the statement of general procedure claim by posting it to 'the company's registered office' at the address 9/178 Elliott Road, Scarborough WA 6019 and by 'Posting it to 29 Nautilus Crescent, Scarborough 6019 - House worked on'.
Default judgment
[14] MB, page 52.
The respondent lodged an application dated 14 August 2023 with the Magistrates Court for default judgment to be given against the appellant for having not lodged, within the prescribed time, a statement of defence.[15]
[15] MB, pages 53 - 56.
On 24 August 2023 a registrar of the Magistrates Court ordered that default judgment be given to the respondent in the amount of $13,915.04 against the appellant. The amount of the default judgment was based on the originally claimed amount of $27,950.78, less monies paid, said to have been $15,000, together with costs and interest.[16]
[16] It did not reflect the balance of $10,409.80 said to be owed in the statement of general procedure claim.
On 19 October 2023 the respondent lodged an application for a property seizure and sale order. The Magistrates Court advised the respondent by letter dated 26 October 2023 that its application for an enforcement order had been placed on hold until the appellant's application to set aside judgment (see below) had been determined.[17]
Application to set aside default judgment
[17] MB, page 66. Following determination of the application a property seizure and sale order was made by the Magistrates Court on 7 December 2023; MB, pages 80 - 82.
By application dated 20 October 2023 the appellant applied for judgment in the matter to be set aside and for leave to defend the claim.[18] The application was supported by a brief affidavit of the same date.[19] In the affidavit, the appellant identified that he was the defendant. He explained that he had come in and defended the matter on 15 May and that he had come into the court about a month later. He said that he asked why he had not received a statement of claim and was told by the registrar that nothing had been lodged. He further explained that the statement of claim was lodged two months outside the required date. The appellant acknowledged he had received the original claim served by the bailiff, but said that no other documents had been served or received by him.
[18] MB, page 60.
[19] Affidavit of appellant dated 20 October 2023; MB, pages 61 - 62.
The appellant also made reference in his affidavit to the original claim stating that he owed $28,497 but that this had later been changed to $10,409.80. He also stated that the build was 'through my business name repave'.
The respondent objected to the application.[20] In his supporting affidavit he, amongst other things, indicated that he did not agree with the reasons the appellant was asking for judgment to be withdrawn and stated that the appellant had received all correspondence. The respondent said this was confirmed by court registrars.[21]
[20] Response to application lodged 30 October 2023; MB, page 67.
[21] Affidavit of respondent lodged 30 October 2023; MB, page 68.
On 7 November 2023 the application came before the Magistrates Court.[22] The respondent did not appear. It had previously requested by email that the court hearing be rescheduled for another day.[23]
[22] It appears from the transcript that the appellant appeared by telephone link, and that there was difficulty with the link.
[23] MB, pages 71 - 76.
The magistrate before whom the matter was then listed stated that it was adjourned to 5 December 'for further status conference'.[24] The formal order of the court which issued was 'Application adjourned to 5 December 2023 at 9:30am at Joondalup Magistrates Court'.[25]
The hearing
[24] MB, pages 1 - 3.
[25] MB, page 77. See also file copy letter Magistrates Court of Western Australia to parties issued 31 October 2023; MB, page 69.
On 5 December 2023 the matter was listed before a different magistrate.
It appears from the transcript that when the matter was first ready to be called, neither party was present. The appellant explains that he was late as he was stuck in unusually heavy traffic. He says that he rang the court ahead of time and advised he was running late and the person he had spoken to assured him that they had noted his message for the court.[26]
[26] Affidavit of appellant dated 3 April 2024, pars 31 - 33.
Following a short adjournment, the matter was called. After a short interchange between the magistrate and the appellant, his Honour dismissed the application.[27] Given the brevity of the hearing it is convenient to set out in full what was said prior to the application being dismissed:
[27] See also MB, pages 78 - 79.
ORDERLY: 175 of 2023, applicant, Brickwork Proprietary Limited, respondent, Peter Vukmirovic.
HIS HONOUR: Is your name Peter - stand up, please - Peter Vukmirovic.
VUKMIROVIC, MR: Yes.
HIS HONOUR: Okay. So why weren't you here at 9.30 when the matter was called this morning.
VUKMIROVIC, MR: I - I was - I rang up to say that there was a bit of traffic on the road, that I would be at 20 to.
HIS HONOUR: Roads have traffic. You ought to be here at 9.30.
VUKMIROVIC, MR: Yes.
HIS HONOUR: I had the choice whether to dismiss your claim today - - -
VUKMIROVIC, MR: Yes, so - - - - - -
HIS HONOUR: - - - or wait.
VUKMIROVIC, MR: - - - the applicant - - -
HIS HONOUR: Sorry, stop talking - - -
VUKMIROVIC, MR: - - - was late
HIS HONOUR: I'm speaking.
VUKMIROVIC, MR: The applicant was late.
HIS HONOUR: I'm not interested in that. I'm not interested in that.
VUKMIROVIC, MR: But you've got to treat - - -
HIS HONOUR: This is your claim.
VUKMIROVIC, MR: - - - us fairly, yes.
HIS HONOUR: This is your claim.
VUKMIROVIC, MR: I understand that. But are you going to treat us fairly, or not, or do we need a new magistrate to hear this.
HIS HONOUR: Take a seat.
VUKMIROVIC, MR: Yes.
HIS HONOUR: Is there anything more you want to say in relation - - -
VUKMIROVIC, MR: Yes.
HIS HONOUR: - - - to your application?
VUKMIROVIC, MR: Yes.
HIS HONOUR: Okay. Why didn't you put it in my affidavit?
VUKMIROVIC, MR: Because, you know why? This guy here didn't serve me any document - - -
HIS HONOUR: Yes.
VUKMIROVIC, MR: - - - and not only that, I come into the court, spoke to the registrar because I hadn't received the statement of claim after I did my - - -
HIS HONOUR: So that's all in your affidavit.
VUKMIROVIC, MR: That's right.
HIS HONOUR: Right.
VUKMIROVIC, MR: Exactly.
HIS HONOUR: I asked you if you had anything further to say in relation to this matter - - -
VUKMIROVIC, MR: Well, you heard me say - - -
HIS HONOUR: - - - that's not in your affidavit.
VUKMIROVIC, MR: - - - that he didn't serve the paperwork on me.
HIS HONOUR: Is there anything else you wish to say?
VUKMIROVIC, MR: Well, is there anything else that I should say?
HIS HONOUR: Yes.
VUKMIROVIC, MR: What's that?
HIS HONOUR: Well, have you had any advice about this?
VUKMIROVIC, MR: I don't need advice.
HIS HONOUR: Okay. Your application is dismissed. Thank you. You are free to go.
…
The magistrate provided no reasons for his decision when announcing that the application was dismissed and advised the appellant that he was free to go. It was only after the appellant then enquired why the application had been dismissed that the following explanation was provided:
VUKMIROVIC, MR: Why is it dismissed?
HIS HONOUR: Because, under the Act, you need to show a reason why you didn't turn up, which you've shown, and that you have - - -
VUKMIROVIC, MR: Hang on, hang on, hang on, which - - -
HIS HONOUR: - - - and that you have an arguable defence - - -
VUKMIROVIC, MR: Which - hang on. Sorry. Sorry.
HIS HONOUR: - - - and that you have an - - -
VUKMIROVIC, MR: Which - I didn't show up when?
HIS HONOUR: - - - arguable defence.
VUKMIROVIC, MR: I have got an arguable defence.
HIS HONOUR: Well, you haven't put it in your affidavit.
VUKMIROVIC, MR: I did.
HIS HONOUR: You said there was nothing more you wanted to say about it.
VUKMIROVIC, MR: I said it's in my affidavit.
HIS HONOUR: Thank you (indistinct)
VUKMIROVIC, MR: No, it's not.
HIS HONOUR: It is. Thank you.
…
The appeal ground
The sole ground of appeal specified in the appeal notice is being denied natural justice.
The respondent raised a concern about the adequacy of the notice of appeal, contending that the appellant had not particularised any evidence that was relied upon to support the ground.[28]
[28] Respondent's supplementary appeal submissions dated 3 April 2024, par 17.
In the appellant's outline of submissions[29] the grounds of appeal were said to be as follows:
1. The magistrate erred, in law, in that the magistrate denied the appellant natural justice by not affording the appellant procedural fairness in the hearing of the appellant's application to set aside judgment.
2. Subject to leave being granted to admit the evidence comprised by:
a.the affidavit of the appellant made 3 April 2024; and/or
b.the affidavit of Paul Wilkins made 3 April 2024,
the magistrate erred, in law, in that the magistrate denied the appellant natural justice by not affording the appellant procedural fairness in the hearing of the appellant's application to set aside judgment.
[29] Appellant's outline of submissions dated 3 April 2024, par 3.
In substance, grounds 1 and 2 advanced the same ground, although the argument in support depended on whether leave was granted to admit further evidence. The reference to procedural fairness rather than natural justice, as appeared in the notice of appeal, was not a difference of substance. The appellant's counsel also clarified how it was contended there had been a denial of procedural fairness, in written and oral submissions.
In my opinion, in the circumstances of the case, the identification of the ground of appeal as a denial of natural justice/procedural fairness was in substance a specification of a reason as to why the decision was said to be wrong in law.[30] Any lack of particularity was remedied in the appellant's written and oral submissions such that the respondent was able to adequately understand and respond to the ground as advanced.
[30] See District Court Rules 2005 (WA) r 51(3).
Legal principles
Nature of Appeal
The hearing of an appeal under s 40(1) of the Magistrates Court (Civil Proceedings) Act 2004 (WA) (the Act) is required to be decided by the District Court on the material and evidence that were before the Magistrates Court and any other evidence that it gives leave to be admitted.[31] Leave may only be given under s 40(4)(b) in exceptional circumstances.[32]
[31] The Act s 40(4).
[32] The Act s 40(5).
On 4 April 2024, Curwood DCJ gave the appellant leave to rely on the affidavits of the appellant and Mr Wilkins, both sworn 3 April 2024. The respondent was, in turn, given leave to file and serve any affidavits in response to the appellant's submissions. It filed and served the affidavit of Mr Warner, dated 2 May 2024, which was also admitted in evidence in the appeal.
The nature of an appeal and principles applicable to its conduct are summarised by Gething DCJ in Fabbri v Atyeo.[33] They include that the appeal is by way of a 'reconsideration of the evidence' that was before the magistrate.[34] The court does not hear afresh all of the evidence.[35] Rather, the appeal is to be undertaken by way of a rehearing[36] and based on the record and any further evidence which it admits.[37]
[33] Fabbri v Atyeo [2024] WADC 2[54] - [56].
[34] District Court Rules 2005 r 50 which, by r 50(4), operates subject to the written law that provides for the appeal to be made to the District Court.
[35] Smart v Power [2019] WASCA 106 [100].
[36] Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194 [13] (Gleeson CJ, Gaudron & Hayne JJ) (Coal and Allied).
[37] Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 [22].
In an appeal by way of rehearing, ordinarily, and absent further evidence or a relevant change in the law, the court can exercise its appellate powers only if satisfied that there was an error on the part of the primary court. The power is to be exercised for correction of error.[38] There must be a material error of law, fact, discretion or other miscarriage of justice.[39]
Procedural fairness
[38] Coal and Allied [14]; Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172 [23] (Gaudron, McHugh, Gummow & Hayne JJ) (Allesch); Saunders v The Public Trustee [2015] WASCA 203 [84] (Mitchell J, Buss JA & Beech J agreed).
[39] Allesch [23]; Marks v Coles Supermarkets [2021] WASCA 176 [124] (judgment of the court) (Marks); Binningup Nominees Pty Ltd v Mirvac (WA) Pty Ltd [2021] WASCA 130 [460] (judgment of the court).
The applicable principles relevant to the ground of appeal are summarised by Gething DCJ in Williams v Sadeghpour[40] as follows:
[40] Williams v Sadeghpour [2021] WADC 111 [77] - [81].
77The following observations by the Court of Appeal in Defendi v Szigligeti conveniently summarise the relevant principles:91
It is axiomatic that a court is obliged to accord procedural fairness to a litigant.
However, to say that a court is obliged to afford procedural fairness is only the first step of analysis. The second step is to identify the content of the requirements of procedural fairness. The second step is what is critical in most cases.
Although sometimes expressed in terms referring to a necessity for a hearing, the fundamental requirement of procedural fairness is (relevantly for present purposes) that a party is given a reasonable opportunity to be heard, in other words, to present their case by evidence, information and submissions.
The requirements of procedural fairness are not fixed or immutable. Procedural fairness is directed to avoid practical injustice, and what is necessary to avoid practical injustice will depend upon the circumstances. The application of the requirements of procedural fairness to a court requires analysis of the procedures of the court, and the legislation and rules which govern them.
78The Court of Appeal went on to outline some relevant features of the legislation and rules governing the procedures of the Magistrates Court. This included a reference to MCCPA s 13 which relevantly provides, that in dealing with cases, the court is to ensure that cases are dealt with justly, which includes ensuring that cases are dealt with efficiently, economically and expeditiously, and that the court's judicial and administrative resources are used as efficiently as possible.
79Additional considerations apply where one of the parties is a litigant in person. These principles applied to the trial before the Magistrate, but also equally apply to the determination of the Appeal.
80As a litigant in person, Mr Williams was at first instance entitled to some leniency in relation to compliance with the court rules.92 The court was required to approach the documents in which he articulated his claim with some flexibility.93 The court needed to be astute to ensure that, in a poorly expressed or unstructured document in which he set out his case, there was no viable case which, with appropriate amendment or permissible assistance from the court, could be put into proper form.94 A 'frequent consequence of self-representation is that the court must assume the burden of endeavouring to ascertain the rights of parties which are obfuscated by their own advocacy'.95 The same principles applied at first instance once Ms Sadeghour became a litigant in person.
81At the same time, the court at first instance needed to ensure that any latitude given to either party as a litigant in person did not deprive the other of their right to procedural fairness and a fair hearing.96 The balance is ordinarily struck by limiting the assistance given to a litigant in person to that necessary to overcome, so far as is reasonably practicable, the procedural disadvantages a litigant in person faces by reason of not being legally trained.97 As the Court of Appeal recently observed:98
1.The court's obligation is to ensure a fair and just trial for all parties …
2.A self-represented litigant is subject to the practice and procedure of the court as much as any other litigant …
3.The court's obligation in the case of a self‑represented litigant is to give sufficient information about the practice and procedure of the court to mean that there is a fair trial to both parties (the application of the principle depending on the circumstances of the case) … Among other things a trial judge should usually inform a self-represented litigant of the manner in which the trial is to proceed and his or her right to examine witnesses and object to evidence. Also, it will usually be of importance to ensure that a self‑represented litigant understands the distinction between evidence and submissions ...
4.A trial judge's duty does not extend to advising a self‑represented litigant as to how his or her rights should be exercised …
5.All the more so the trial judge's role in providing information to the self-represented litigant with the object of attempting to overcome procedural disadvantages faced by not being legally trained is not a duty to formulate or conduct the case for the self‑represented litigant …
(FN91: Defendi v Szigligeti [2019] WASCA 115 [45] - [48] (judgment of the court) (references omitted))
(FN92: Glew v Frank Jasper Pty Ltd [2010] WASCA 87 [10] (reasons of the court))
(FN93: Wentworth v Rogers (No 5) (1986) 6 NSWLR 534, 536 - 537 (Kirby P), 543 (Hope JA, with whom Samuels JA agreed); Smart v Prisoner Review Board (WA) [2012] WASC 48 [10] (Pritchard J))
(FN94: Ibrahim v The Honourable Justice Carolyn Martin [2012] WASC 338 [21] (Beech J) (Ibrahim); Tobin v Dodd [2004] WASCA 288 [15] (EM Heenan J, with whom Murray & Le Miere JJ agreed) (Tobin))
(FN95: Neil v Nott [1994] HCA 23 [5]; (1994) 68 ALJR 509, 510; (1994) 121 ALR 148, 150 (Brennan, Deane, Toohey, Gaudron & McHugh JJ); Ibrahim [21]; Glew [10]; Tobin [14])
(FN96: Nobarani v Mariconte [2018] HCA 36 [47] (Kiefel CJ, Gageler, Nettle, Gordon & Edelman JJ); Woodley v Woodley [2018] WASCA 149 [76] (judgment of the court); Moleirinho v Talbot & Olivier Lawyers Pty Ltd [2014] WASCA 65 [51] (judgment of the court))
(FN97: Zerjavic v Chevron Australia Pty Ltd [2020] WASCA 40 [74] (judgment of the court) (Zerjavic))
(FN98: Zerjavic [75] (references omitted)).
Not every departure from the rules of procedural fairness will entitle the aggrieved party to relief, such as an order for a retrial or rehearing. Such an order will be made only if the error deprived the party of the possibility of a successful outcome.[41]
Default judgment
[41] Defendi v Szigligeti [2019] WASCA 115 [59] citing Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141, 145, 147; Nobarani v Mariconte [2018] HCA 36; (2018) 92 ALJR 806 [38]; Mijatovic v Legal Practitioners Complaints Committee [2008] WASCA 115; (2008) 37 WAR 149 [15], [73], [250].
If a party does not comply with the Act, the rules of the Magistrates Court or an order or direction made by that court, the court may give judgment against the party without a trial.[42] The Magistrates Court has a discretion however to set aside such a default judgment and may do so on conditions as to the payment of costs or to other matters.[43]
[42] The Act s 19(2).
[43] The Act s 19(3).
As a general rule, which may be departed from in rare and appropriate cases, a judgment regularly entered will not be set aside unless the court is satisfied that there is a defence on the merits[44] with a real prospect of success.[45] The defendant is required to condescend to particulars of its defences.[46] Provided that on the affidavit material the defendant's case is not inherently incredible, the question is whether, if the defendant's evidence were accepted at trial, the defendant would have a real prospect of success. That is, whether, on that basis, the defence is reasonably arguable. That is not a high threshold.[47]
[44] See Starrs v Retravision (WA) Ltd [2012] WASCA 67 [36] (Allanson J, Pullin & Murphy JJA agreeing).
[45] Parker v Transfield Pty Ltd [2000] WASCA 382 [3], [34] - [35], [58] - [59] (Malcolm CJ, Ipp & Wallwork JJ concurring).
[46] Vautier Holdings Pty Ltd v Kagioulis Trading Pty Ltd [2014] WASC 209 [10] - [11] (Sanderson M); Wildflower Electrical Refrigeration Service (WA) v Refrigid Pty Ltd [2014] WASC 382 (Wildflower) [30] (Gething AM).
[47] TSW Analytical Pty Ltd v The University of Western Australia [2017] WASCA 67 [46], [79] (Buss P, Newnes JA & Mitchell JA agreeing).
In addition to the merits of the proposed defence, relevant factors include the explanation for the non-compliance which resulted in the default judgment; the length of any delay between the judgment being entered and the application to set it aside, and the explanation for the delay; and the extent of any prejudice, particularly irreparable prejudice, that the other party would suffer if the judgment is set aside.[48]
[48] Palmer v Prince [1980] WAR 61, 62 (Jackson CJ, with whom Virtue SPJ agreed), 64 (Burt J); Wildflower [11] (Gething AM).
Strike out application
While no formal application was made by it, the respondent also invited the court to strike out the appeal and/or the ground of appeal in exercise of its powers under s 43(3) and s 43(4) of the Act. Section 43 relevantly provides:
(3)The appeal court may strike out the appeal if the likely costs of the appeal to the parties would be disproportionate to the amount of the claim in, or the nature of, the case which is the subject of the appeal.
(4)The appeal court may strike out any ground of the appeal if -
(a)there is no reasonable basis for it; or
(b)it does not have a reasonable prospect of succeeding; or
(c)although it has a reasonable prospect of succeeding, no miscarriage of justice would occur by striking it out; or
(d)it is frivolous, vexatious, scandalous or improper.
(5)The appeal court may make an order under subsection (3) or (4) on its own initiative.
(6)If the appeal court strikes out all of the grounds of the appeal the court may give judgment accordingly without a full hearing of it.
The respondent effectively advanced three bases, under s 43(3); s 43(4)(a) and s 43(4)(b); and s 43(4)(c) of the Act. The respondent contends first, that the likely costs of the appeal to the parties would be disproportionate to the amount of the claim in, or the nature of, the case which is the subject of appeal; secondly, that there is no reasonable basis for the ground of appeal and it does not have a reasonable prospect of succeeding; and, thirdly, that even if the ground has a reasonable prospect of succeeding, no miscarriage of justice would be occasioned by striking out the ground.[49]
[49] Respondent's supplementary appeal submissions dated 3 April 2024, pars 22 - 25; ts 53 - ts 54, ts 82.
The application of s 43(3) of the Act was the subject of some submissions before Curwood DCJ. His Honour did not appear persuaded that this was an appropriate case to exercise such powers at that time, in any event.[50] As it was not clear that the issue was finally determined by his Honour, I allowed the issue to be further ventilated at the hearing of the appeal.
[50] See appeal ts 37.
I am satisfied that the likely costs of the appeal to the parties would not be disproportionate to the amount of the claim in, or the nature of, the case which is the subject of the appeal. As the Court of Appeal observed in Duluxgroup (Australia) Pty Ltd v Chapple,[51] the reference in s 43(3) of the Act to 'likely costs' directs attention to costs yet to be incurred. In this case, the appeal has already been fully argued and the great proportion of the parties' costs of the appeal are already sunk. I therefore find that the discretion conferred by s 43(3) is not enlivened because the likely costs of the appeal to the parties would not be disproportionate to the amount of the claim in, or the nature of, the case which is the subject of appeal. I would have reached the same view even if considering this question prior to the appeal being heard.
[51] Duluxgroup (Australia) Pty Ltd v Chapple [2023] WASCA 83 [5].
As to the application of s 43(4)(a) and s 43(4)(b), in my view, there is a reasonable basis for the ground of appeal and it has a reasonable prospect of success.
Finally, I am not satisfied that the discretion under s 43(4)(c) has been enlivened. In support of this ground the appellant contends that there would be no miscarriage of justice by striking out the ground of appeal. Given the substantial overlap between the respondent's submissions, I have addressed the question of miscarriage of justice or 'prejudice' in my reasons below. In summary, in my opinion, a miscarriage of justice would occur in striking out the ground of appeal. That is because the appellant was denied procedural fairness and thereby deprived of a real possibility of a successful outcome of his application.
Issues
Two primary issues arise for determination: (1) whether the appellant was denied procedural fairness; and (2) if so, whether that deprived the appellant of the possibility of a successful outcome on his application. That in turn requires consideration of the merit of any potential defence of the appellant to the general procedure claim and related arguments by the respondent as to whether there has been no miscarriage of justice, in any event.
If those issues are determined in favour of the appellant, a further issue arises as to the nature of the relief that ought be granted in the circumstances of the case.
The parties' contentions
The appellant contends that the hearing conducted bore no semblance to a proper hearing. In particular, counsel contends that the magistrate failed to take any of the necessary measures summarised by Gething DCJ in Williams v Sadeghpour,[52] to ensure that the appellant had 'no viable case' in respect of his application to set aside default judgment, particularly as to whether the appellant could establish:[53]
(i)whether there was a reasonable explanation for his failure to file a defence to the respondent's statement of claim;
(ii)he had an arguable defence to [the] respondent's claim insofar as the defence proffered had a reasonable prospect of succeeding; and
(iii)any delay in making the application was explained and was reasonable in the circumstances.
[52] Williams v Sadeghpour [80] - [81].
[53] Appellant's outline of submissions dated 3 April 2024, par 8.
The appellant contends that the magistrate should have identified the issues at large in an application to set aside a default judgment, being the reasons for the delay and whether or not there is an arguable defence.[54] The appellant contends that his Honour should have allowed a greater opportunity to the appellant to articulate what he wanted to say in support of his application[55] and reasonable steps to flesh out any defence which might have become apparent. That included attempting to have the appellant develop argument that the wrong party was sued.[56]
[54] ts 57.
[55] ts 58.
[56] ts 71.
The appellant contends that he was thereby denied a real chance of a successful outcome. The potential defences identified were a defence relating to the identity of the party sued,[57] and a defence in relation to a suggested failure to account for an additional cash payment of $8,500 said to have been paid to the respondent in satisfaction of the claim.[58]
[57] ts 59, ts 65 - ts 66, ts 100 - ts 101.
[58] ts 67 - ts 68, ts 102.
In response, the respondent contends that the magistrate made it clear to the appellant that his affidavit had been considered by the court and invited the appellant to make any submissions in support of his application. It contends that on more than one occasion the magistrate asked the appellant if there was anything more he would like to say, and the appellant said he did not need any advice when asked by the magistrate if he had sought any advice about the application.[59]
[59] ts 87 - ts 88.
The respondent points to the only evidence before the magistrate being that contained in the appellant's affidavit sworn 20 October 2023. It contends that the evidence does not condescend to details that substantiate a defence. It says that the only part of the affidavit that makes reference to the matters that might have been the subject of the defence, was the sentence 'The build is through my business name repaved'.[60] It further submits that the magistrate made clear that he dismissed the application on the basis that the evidence before him was insufficient to meet the legal requirements for setting aside default judgment.[61]
[60] Respondent's supplementary appeal submissions dated 3 April 2024, par 32.
[61] Respondent's supplementary appeal submissions dated 3 April 2024, par 33.
Counsel for the respondent also points to the fact that prior to the appellant's affidavit in the appeal, the appellant made no reference in his affidavit before the Magistrates Court to the legal entity said to have entered into the contract.[62] He offers no real resistance however to the proposition that there was sufficient to put the learned magistrate on notice that the appellant was seeking to raise a potential defence relating to the identity of the contracting party, which should have been allowed to be better articulated.[63] The respondent contends, in effect, that if the issue had been ventilated it would not necessarily have made a difference. It contends that the defendant would not necessarily have been prejudiced where it was not being said the company was 'owned by someone else' but rather was a company that was a corporate trustee of a family discretionary trust.
[62] ts 83.
[63] ts 84.
The respondent also advances certain interwoven arguments in relation to whether, even if there was a denial of procedural fairness, the appeal ought not be allowed, or the appeal ground ought be struck out.
Central to the respondent's arguments is the contention to the effect that any reasonably arguable defence has not been adequately identified through sufficiently convincing evidence to justify its ventilation at a full hearing of the facts and that there would be no miscarriage of justice in striking out the appeal ground or dismissing the appeal in any event.[64]
[64] ts 82, ts 86 - ts 87, ts 97.
The respondent refers to the absence of any corroborating records of payment having come from Repave accounts or from the corporate trustee of the family trust accounting for and setting out transactions with the respondent. It also points to a lack of an ASIC search.[65]
[65] ts 90 - ts 91.
While the appellant gave evidence that a further cash payment of $8,500 was made, which was not accounted for in the claim,[66] the respondent contends that there was no corroborating bank statement or other document to give the court any confidence that there was a triable issue about the $8,500.[67]
[66] Affidavit of appellant dated 3 April 2024, par 16.
[67] ts 95.
In contrast, corroboration is pointed to for various assertions by Mr Warner in his affidavit.[68]
[68] ts 92.
Given what was said to be the overall lack of evidence, it is contended that the court should not be satisfied that on the balance of probabilities that any trial is likely to be decided in favour of the appellant.[69] It is therefore contended that there was no miscarriage.[70]
[69] ts 96.
[70] ts 97.
Analysis and determination
Denial of procedural fairness
In my respectful opinion the learned magistrate erred and the hearing, such as there was, involved a denial of procedural fairness to the appellant.
In applying the above principles to the circumstances of the case, in my view, the respondent ought to have been, but was not, afforded a reasonable opportunity to present and explain his case. Further, I consider that it was necessary in all the circumstances for some further inquiry to have been made of the appellant as to his position in relation to the central issue based on which the magistrate ultimately dismissed the application; whether there was a reasonably arguable defence.
The content of the affidavit of the appellant in support of his application is set out above.[71]
[71] See [19] - [20] above.
At the hearing, when the appellant asked if there was anything more he wanted to say in support of his application, he indicated that he did. Rather than inquire as to the nature of what the appellant wanted to say in support of his application the magistrate immediately asked him why he did not put it in his affidavit.
In response, the appellant proceeded to briefly refer to matters which were adverted to in his affidavit regarding having not been served and previously having enquired about whether any statement of claim had been filed. When asked if he had anything further to say, the appellant referred again to not having been served with paperwork.
The magistrate then asked if there was anything else that the appellant wished to say, after which the following exchange occurred:
VUKMIROVIC, MR: Well, is there anything else that I should say?
HIS HONOUR: Yes.
VUKMIROVIC, MR: What's that?
HIS HONOUR: Well, have you had any advice about this?
VUKMIROVIC, MR: I don't need advice.
HIS HONOUR: Okay. Your application is dismissed. Thank you. You are free to go.
Once the appellant indicated that he did not need advice, the magistrate, without any further inquiry, peremptorily dismissed the matter without affording the appellant an effective opportunity to conclude making submissions in support of his application.
I accept that the magistrate was not required to explain to the appellant how to conduct his case. I also take into account that the Magistrates Court is required to deal with matters justly, which includes ensuring that cases are dealt with efficiently, economically and expeditiously, and that the court's judicial and administrative resources are used as efficiently as possible.
Further, some steps were taken by the magistrate to ascertain the appellant's position, including asking whether the appellant had any advice about the application, to which the appellant responded that he did not need advice. I also take into account the less-than-ideal manner of engagement by the appellant at the commencement of, and at times during, the hearing before the magistrate.
I am satisfied however that the opportunity afforded to the appellant fell short of that which at law was required to be afforded to the appellant. Regrettably, it would seem that both the appellant and the court were somewhat caught up in the heat of the moment.
In my view, it was reasonably apparent that:
(a)the appellant may be acting under a misunderstanding as to what issues he may be required to address in his application and affidavit;[72]
(b)the supporting affidavit, limited as it was, contained a kernel of a possible defence in relation to the claim, whether by reference to the proper party to any agreement or by reference to the amount claimed; and
(c)the applicant was seeking to be heard.
[72] The appellant confirms at [35] - [37] of his subsequent affidavit adduced in the appeal that he was acting under a misapprehension that he only needed to establish issues in relation to service and not that he had an arguable defence.
In my view, the primary court needed to be astute to ensure that there was no viable basis for the application which, with appropriate amendment or permissible assistance from the court, could be put into proper form. Further, it needed to ensure the appellant had an adequate opportunity to explain his case, which in my view, he was not afforded. In my view, this case was an example of a court being required to assume the burden of endeavouring to ascertain the rights of the appellant, which were obfuscated by his own advocacy.
Deprival of opportunity of a successful outcome
I am satisfied that the appellant was thereby deprived of the possibility of a successful outcome. Had the appellant been afforded the opportunity outlined, and not been denied procedural fairness, I am satisfied that there was a real prospect that the appellant:
(a)would have been afforded an opportunity to adduce additional evidence in support of his application relating to the nature of any defence;
(b)would have been able to establish that he had a reasonably arguable defence; and
(c)in turn would have succeeded on his application to set aside the default judgment.
Much of the hearing of the appeal was taken up with submissions addressed to the merit of any potential defence.
It is essentially common ground that the respondent was engaged to provide bricklaying services in relation to a building being constructed at 29 Nautilus Crescent, Scarborough; at some point it was agreed that payment would be rendered, at least in part, in cash; and in December 2022 a cash payment of $15,000 was made by the appellant to Mr Warner.[73]
[73] Affidavit of appellant dated 3 April 2024, par 14; affidavit of Clifford Warner dated 2 May 2024, par 28. The appellant suggests the payment was made around early December 2022. Mr Warner suggests it was made on 15 December 2022.
In my view, based on the totality of the evidence, there is a real factual dispute between the parties, and a reasonably arguable defence established, first, in relation to the parties to any agreement reached; and, secondly, in relation to whether a further cash payment was made of $8,500 and whether any other amount was due to be paid to the respondent as claimed in the Magistrates Court proceedings.
As to the question of the parties to the agreement, the appellant attests that he is the sole director and secretary of Realgold Corporation Pty Ltd (ACN 117 580 560) which is the trustee for the Discretionary Trading Trust which trades as 'Repave Spray on Painting' (ABN 31 900 557 273). He says that in around 2022 he purchased a piece of land on behalf of Repave Spray on Painting and decided to construct a dwelling at that address. The appellant says that he reached an agreement with Mr Warner on a price per brick for providing bricklaying for the dwelling and that during the meeting he told Mr Warner that he was discussing matters on behalf of Repave Spray on Painting. He says that he made it clear that he was engaging the services of CW Brickwork Pty Ltd on behalf of Repave Spray on Painting. Mr Warner denies the assertions in relation to Repave Spray on Painting and says he did not hear of its existence until later when his business came to issue an invoice.[74]
[74] Affidavit of Clifford Warner dated 2 May 2024, pars 2 and 8.
While I accept that the appellant did not adduce primary evidence of the name of the corporate entity, its trustee status and the name under which it carried on business, in my view the evidence received, which was not objected to, was sufficient to establish a reasonably arguable defence as to the proper party to the agreement.
Further, and in any event, the appellant also says that a dispute arose in relation to the amount that was owed towards Christmas 2022. He says that he then paid to Mr Warner $8,500, which in his estimate was reasonable and fair given the number of bricks which he says he found in the waste bin at the time. He also foreshadowed bringing a counterclaim or further proceedings against the respondent related to alleged faulty workmanship. This latter issue was not a matter of defence, nor was it contended to be.
As to the suggested further payment of $8,500, the director of the respondent, Mr Warner, denied the payment was made. Also, no corroborative evidence of the payment was adduced by the appellant. I take into account however that the payment was said to have been made in cash and it is common ground that at least part of the work had been paid for, by agreement, by a $15,000 cash payment.
I am satisfied that the potential defences by the appellant, and supporting evidence, are not inherently incredible.
Further, if the defendant's evidence were accepted at trial, in my opinion the defendant would have a real prospect of success and a reasonably arguable defence as to whether the alleged $8,500 payment was made and whether any amount is owing.
It is otherwise unnecessary to comment as to the likely outcome of any substantive hearing. Much will depend on the cases as finally advanced and evidence ultimately adduced. That will no doubt need to be scrutinised carefully in circumstances in which there is a direct factual contest between the appellant and Mr Warner, only one of whom can be telling the truth, as to the alleged additional payment of $8,500.
In my view, a miscarriage of justice has been established by reason of the denial of procedural fairness which deprived the appellant of a real prospect of success in his application. The appeal ground should accordingly be upheld and not struck out as contended by the respondent.
Re-determination of application
Under s 43(7) of the Act the appeal court may make various orders including -
(a)confirm, vary or set aside all or a part of the lower court's judgment;
(b)give any judgment and make any order that the Magistrates Court could have given or made;
(c)order a new hearing in, or trial of, the case to be held in the Magistrates Court;
…
(e)make an order as to the costs of the appeal and as to the costs in the Magistrates Court … ;
(f)make any orders that are necessary as a result of other orders it has made.
Ordinarily, where a denial of procedural fairness of the nature established in this appeal occurred at first instance, the appropriate disposition would be to remit the matter to the primary court, differently constituted, for re-determination. However, in certain circumstances it may be appropriate to substitute a decision in relation to the original application. In my view this is such a case.
First, the appellant, in his outline of submissions, seeks an order setting aside the order of the magistrate and granting the appellant unconditional leave to defend the respondent's claim.[75] That position is maintained.[76]
[75] Appellant's outline of submissions dated 3 April 2024, par 4.
[76] ts 68, ts 72 - ts 73, ts 99.
Secondly, it is not disputed by the parties that if the appeal is upheld this court may set aside the decision of the magistrate and substitute its own decision on the application to set aside default judgment.[77]
[77] ts 71 - ts 73, ts 98, ts 99.
Thirdly, on appeal this court received detailed evidence and submissions from both parties relevant to the application, particularly as to the crucial issue; whether a reasonably arguable defence has been established.
Fourthly, in my opinion the avoidance of the time and cost of a further hearing of the application before the Magistrates Court, the substantial overlap with the issues already determined on appeal, and efficient administration of justice strongly favour this court substituting a decision on the application based on the whole of the evidence received on appeal, rather than remitting the application for re‑determination.
In my view, it is therefore in the interests of justice for this court to make a decision in relation to the application to set aside the default judgment and obtain leave to defend.
Turning then to the application, I am satisfied, for the reasons already given, that the appellant has established that he has reasonably arguable defences in relation to the proper party and amount, if any, owing.
Further, I am satisfied that the appellant has provided a reasonable explanation for not having filed a defence and as to the short delay before he then made the application to set aside the default judgment.[78]
[78] ts 68, affidavit of appellant dated 3 April 2024, pars 20 - 29.
While Mr Warner in his affidavit of service of 21 July 2023 swore that he served the statement of general procedure claim by post,[79] the appellant swore he did not receive it. I am satisfied that the appellant had previously indicated an intention to defend the claim; actively followed up with the Magistrates Court when no statement of general procedure claim had been filed by the respondent; and promptly followed up and made the application upon becoming aware of the default judgment. I accept that Mr Warner did not receive the statement of general procedure claim, despite it apparently being served by post. Even if he had received the statement of general procedure claim, given my conclusion about his potential defences to the claim, I would have allowed the application in any event.
[79] MB, page 52. Mr Warner's evidence about service at pars 50 - 54 of his affidavit in the appeal dated 2 May 2024 is mistaken insofar as it in fact references the earlier attempts at service and actual service of the initiating general procedure claim, not the service of the later statement of general procedure claim lodged on 12 July 2023: see MB, pages 50 - 51.
I do not consider that there is any prejudice, certainly material prejudice, to the respondent, were the default judgment to be set aside. None was contended for by the respondent.
Accordingly, I am satisfied that in substitution for the order of the magistrate dismissing the application, orders ought to be made that the application be allowed and allowing the appellant leave to defend the proceedings.
Outcome and orders
I would allow the appeal and make orders to the effect that:
1.The appeal is allowed.
2.The order of the Magistrates Court dated 5 December 2023 in proceeding GCLM/175/2023 is set aside.
3.In lieu thereof the following orders are substituted:
(a)The application is allowed.
(b)Default judgment given on 24 August 2023 is set aside.
(c)The claimant is granted leave to defend the proceedings.
I would hear the parties in relation to the final form of orders, any consequential orders and the question of costs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
CJ
Associate to his Honour Judge Sefton
8 AUGUST 2024
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