Roach v Lawler [2005] NSWSC 288 (8 April 2005)

Last Updated: 8 May 2005

NEW SOUTH WALES SUPREME COURT

CITATION: Roach v Lawler [2005] NSWSC 288



CURRENT JURISDICTION: Common Law Division

FILE NUMBER(S): 13314/2004

HEARING DATE{S): 1 April 2004

JUDGMENT DATE: 08/04/2005

PARTIES:
Una Jayneen Roach
(Plaintiff)

Linda Marjorie Lawler
(Defendant)

JUDGMENT OF: Master Harrison

LOWER COURT JURISDICTION: Local Court

LOWER COURT FILE NUMBER(S): 20/2004

LOWER COURT JUDICIAL OFFICER: Magistrate Baptie

COUNSEL:
Mr D Wetmore
(Plaintiff)

Mr K Andronos
(Defendant)

SOLICITORS:
Mr A Cohen,
(Plaintiff)

Ms L Lawler,
Cragg Braye & Thornton
(Defendant)


CATCHWORDS:
Appeal decision of Local Court Magistrate - application to set aside default judgment

ACTS CITED:
Local Courts (Civil Claims) Act 1970 (NSW) - s 69

DECISION:
(1) The appeal is dismissed
(2) The order of Magistrate Baptie dated 13 September 2004 is affirmed
(3) The summons filed 11 October 2004 is dismissed
(4) The plaintiff is to pay the defendant's costs as agreed or assessed.


JUDGMENT:




IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION


MASTER HARRISON


FRIDAY, 8 APRIL 2005


13314/2004 - UNA JAYNEEN ROACH
v LINDA MARJORIE LAWLER


JUDGMENT - (Appeal decision of Local Court
Magistrate – application to set
aside default judgment)

1 MASTER: By summons filed 11 October 2004 the plaintiff seeks an order that the decision of Magistrate Baptie at Muswellbrook Local Court on 13 September 2004 in regards to default judgment entered on 19 April 2004, be set aside.

2 The plaintiff is Una Jayneen Roach (Ms Roach). The defendant is Linda Marjorie Lawler (Ms Lawler). The plaintiff relied on the affidavit of Andrew Cohen sworn 20 October 2004. The defendant relied on the affidavits of Linda Marjorie Lawler sworn 15 October 2004 and 8 February 2005. For convenience in this judgment I shall refer to the parties by name.

3 At the outset, it may be helpful to make some brief comments concerning the remedy pursued by the plaintiff. Section 69(2) of the Local Courts (Civil Claims) Act 1970 (NSW) permits a party who is dissatisfied with a judgment as being erroneous in point of law to appeal to this Court. The onus lies on the plaintiff to demonstrate that there has been an error of law. What is a question of law (as opposed to a question of fact) was considered, inter alia, in Allen v Kerr & Anor (1995) Aust Torts Reports 81-354 and Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 155-156 and two more recent cases, namely Carr v Neill [1999] NSWSC 1263 and R L & D Investments Pty Ltd v Bisby [2002] NSWSC 1082. It cannot be said that the Tribunal member acted on evidence inconsistent with facts incontrovertibly established by the evidence - see Devries v Australian National Railways Commission [1993] HCA 78; (1993) 177 CLR 472 per Brennan, Gaudron and McHugh JJ at 479 and State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in Liq) (1999) 160 ALR 588. Section 69(4) of the Act provides that the court may determine an appeal by either (a) setting the judgment or order aside or (b) by varying the terms of the judgment or order or (c) by setting the judgment or order aside and remitting the matter for determination in accordance with the court’s directions or (d) by dismissing the appeal.

4 Recently, in Swain v Waverley Municipal Council [2005] HCA 4, the Chief Justice at [2] reiterated that in the common law system of civil justice, the issues between the parties are determined by the trial process. The system does not regard the trial as merely the first round in a contest destined to work its way through the judicial hierarchy until the litigants have exhausted either their resources or their possibilities of further appeal.

Grounds of Appeal

5 The plaintiff appeals the whole of the decision of Magistrate Baptie dated 13 September 2004. The grounds of appeal are that firstly, the Magistrate erred in law in purporting to vary, without setting aside, a default judgment. Secondly, that the Magistrate erred in law in that her discretion miscarried by reason that (i) she failed to have regard to a relevant factor, namely that there was an adequate explanation for the failure to file a defence within time, (ii) that the Magistrate failed to have regard to a relevant factor that there was an arguable defence on the merits and (iii) that the decision was manifestly unreasonable. Thirdly, that the Magistrate erred in law by denying the plaintiff natural justice by, in effect, substituting a new judgment for the default judgment entered on 19 April 2004 without affording a hearing on the merits.

6 The principles according to which this court is to decide whether the Magistrate’s discretionary decision to set aside the judgment debt constitutes and error of law, are stated definitively in a short passage in the joint judgment of Dixon, Evatt and McTiernan JJ in House v The King [1936] HCA 40; (1936) 55 CLR 499 at 504-505. It is, I think, useful to re-state them as follows:

"The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred."

Local Court Proceedings

7 Ms Roach was a former client of Ms Lawler’s law firm. On 11 July 2002 a costs agreement was sent and received by Ms Roach. On 2 September 2003 Ms Roach signed a second costs agreement. On 27 January 2004 Ms Roach terminated the services of Ms Lawler and engaged other solicitors to act on her behalf. On 24 September 2003 the solicitor rendered the first interim account in the sum of $2,787.90. On 16 October 2003 the solicitor rendered an interim account for $7,837.05. On 20 November 2003 the solicitor rendered a third interim account in the sum of $5,289.90. On 15 January 2004 the solicitor rendered a fourth interim account for $1,914.55. Finally, on 11 February 2004, the solicitor rendered a fifth interim account for $2,664.10.

8 By statement of claim filed 19 February 2004, the solicitor sought recovery of $20,493.50 from Ms Roach for work performed; the basis being the accounts referred to above. On 10 March 2004 the statement of claim was served on Ms Roach. On 19 April 2004, default judgment was obtained. The application before the Magistrate was in relation to a judgment debt. Ms Roach sought a stay of proceedings or that the judgment debt be set aside. The notice of motion was contested.

The law in relation to default judgment

9 The authorities on setting aside default judgment are Evans v Bartlam (1937) AC 473 at 489; Vacuum Oil Pty Limited v Stockdale [1942] NSWStRp 31; (1942) 42 SR (NSW) 239; Cuttle v Brandt (1947) 64 WN (NSW) 96 at 97; and Adams v Kennick Trading (International) Ltd & Ors (1986) 4 NSWLR 503.

10 A consideration to be taken into account when determining whether default judgment should be set aside was expressed by Priestley JA in Cohen v McWilliam (1995) 38 NSWLR 476 at 481:

"It is, however, another question whether concern about the extent of delays, either in a particular case or generally, should, in the absence of prejudice in the particular case, be taken into account in exercising a discretion to set aside default judgment. The fundamental duty of the court is to do justice between the parties. It is, in turn, fundamental to that duty that the parties should each be allowed a proper opportunity to put their cases upon the merits of the matter. Any limitation upon that opportunity will generally be justified only by the necessity to avoid prejudice to the interests of some other party, occasioned by misconduct."

11 For the defendant to succeed in her application to set aside default judgment, she must give an adequate explanation for the delay in filing her defence and show that it has a defence on its merits, or as often expressed, a bona fide defence. However, as Priestley JA said in Cohen doing justice between the parties is a fundamental duty of the court.

12 The Magistrate stated that in relation to these interim accounts it is submitted that they do not, on the face of them, bear sufficient detail for them to be a bill of costs. She did not receive an answer in relation to the amounts paid that are referred to as interim accounts.

13 The Magistrate continued [J 21.45-58; J 22.18-40]:

“... the judgment creditor has argued that whether on the face of the material before me that the applicant judgment debtor has shown sufficient cause as to why the judgment should be set aside or stayed, ..., the failure to defend the matter, and suggest that there has been no adequate explanation I’ve heard Mr Cohen in relation to his explanations for that position, but mainly the judgment creditor relies on the lack of bona fides on behalf of the applicant and has taken me through sections 37 and 38. They submit that the basis of the Notice of Motion is largely in relation to delay and avoidance, and that there has been no real excuse as to why, for example disbursement costs in relation to experts have not been resolved.

...

...It is certainly my view that account number five must fail, given that it was within the 28 days.

In relation to the real issue as to sufficient cause, it would seem that there may well be grievances on behalf of Miss Roach as to the way that she feels she has been treated and dealt with by her former solicitors, and barrister and possibly the experts, but that is not a matter which of necessity goes to the issue as to whether there is sufficient cause to set aside the judgment debt. That may be a matter which she wishes to take up somewhere else. The mere issue of for example an assertion of negligence, in my view, does not on the fact of it go to an issue as to setting aside the judgment debt on the material before me.

I AM NOT PREPARED IN THE CIRCUMSTANCES TO ACCEDE TO THE APPLICATION AND SET ASIDE THE JUDGMENT DEBT, HOWEVER I AM OF THE VIEW THAT THAT JUDGMENT DEBT IS WRONG AND SHOULD BE AMENDED BY DELETING THE FIFTH ACCOUNT OF THE 11 FEBRUARY 2004 IN THE SUM OF $2,644.10. AND THAT IS WHAT I PROPOSE TO DO. I MAKE A TOTAL OF $19,925.26.”

14 After further argument, the amount of the judgment debt was $18,925.26.

15 Ms Roach submitted that the Magistrate failed to consider the relevant principles; namely, whether there was an arguable defence and the explanation for delay and further, that because the Magistrate did not pay enough attention to Ms Roach’s solicitor’s submissions, there was a denial of natural justice. In submissions during this appeal, the court was taken through much correspondence between the solicitor, Ms Roach and then Mr Cohen - Ms Roach’s solicitor. From the costs agreements together with schedules and the accounts rendered, it was at all times possible for Ms Roach’s solicitor to draft a defence. Ms Roach had been advised by her solicitor that she was entitled to dispute the bill within 28 days after its receipt.

16 Ms Roach had been provided with more than enough information in order to file a defence. But she did not do so. She was warned that default judgment would be entered on 19 April 2004. There was still no defence filed. On 20 April 2004, the judgment was entered. The draft defence prepared later does not raise an arguable issue. But this is not to the point.

17 It is my view that the Magistrate addressed the correct principles. The Magistrate did pay attention to the submissions made. It was open to the Magistrate to exercise her discretion in the manner she did. There was no denial of natural justice or procedural fairness. There is no error of law. The appeal is dismissed. The order of Magistrate Baptie dated 13 September 2004 is affirmed. The summons filed 11 October 2004 is dismissed.

18 Costs are discretionary. Costs normally follow the event. The plaintiff is to pay the defendant’s costs as agreed or assessed.

The court orders

(1) The appeal is dismissed.

(2) The order of Magistrate Baptie dated 13 September 2004 is affirmed.

(3) The summons filed 11 October 2004 is dismissed.

(4) The plaintiff is to pay the defendant’s costs as agreed or assessed.
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LAST UPDATED: 03/05/2005