Michael J Doyle & Associates (A firm) v Oronico Pty Ltd [2000] VSC 423

16. It has brought the application to set aside the deemed judgment in this court.

21. The plaintiff issued a complaint in the Broadmeadows Magistrates' Court on 2 December 1999. The firm sued the defendant for $9,623.43 being moneys due pursuant to a deed of guarantee and indemnity executed by the defendant.

24. The firm had supplied legal services to Dr Towie who was made bankrupt on 15 November 1995. On 10 March this year he was discharged from bankruptcy. A question arose as to the payment of the plaintiff's fees and Dr Towie arranged for the execution of the deed of guarantee and indemnity by the defendant for payment of the fees outstanding.

27. The defendant was obliged to give notice of defence within 21 days of service upon it of the complaint but failed to do so, and the plaintiff obtained an order that the defendant pay to it the sum of $9,623.43 together with $201.06 interest and costs fixed at $464.30.

30. Section 112 of the Magistrates' Court Act 1989 enables a judgment creditor in a Magistrates' Court proceeding to file a certificate obtained from the Registrar of the court certifying the orders made against the judgment debtor and upon filing the certificate in the Supreme Court, the orders of the Magistrates' Court become a deemed judgment of the Supreme Court which can be enforced as any other judgment entered in this court.

33. The plaintiff obtained a certificate from the Magistrates' Court at Broadmeadows on 11 April 2000 and the certificate was filed in this court on 14 April 2000.

36. As a result of filing the certificate in this court, according to s.112(2) of the Act, "judgment is deemed to have been entered in the Supreme Court for the sum mentioned in the certificate as being unpaid together with all fees paid for obtaining and filing the certificate and the prescribed amount for costs."

39. On 15 May 2000 the plaintiff caused to be issued out of this court by the Prothonotary, a warrant of seizure and sale.

42. On 17 July 2000 the defendant as applicant filed its summons in this court seeking that "the judgment and order of this court entered on 15 April 2000 be set aside and that the defendant have leave to file an appearance".

45. The date is incorrect and should read 14 April 2000.

48. No application has been made by the defendant in the Magistrates' Court to set aside the orders made in default in that court.

51. Affidavit material has been filed in this court and the defendant contends that it has a defence on the merits.

54. This raises the issue of the jurisdiction of this court to set aside a deemed judgment in this court and further, whether this court has any power to set aside the default orders made in the Magistrates' Court.

59. The complaint was served on the defendant and orders were made in default of delivery of defence. There is no suggestion that there was any irregularity in the procedures adopted in the Magistrates' Court. A certificate was given by the Deputy Registrar of the Magistrates' Court at Broadmeadows dated 11 April and there is no suggestion that the Deputy Registrar did not follow the proper and appropriate procedures.

62. The certificate was filed in this court and again there is no suggestion of any irregularity in that step being taken.

65. No attack has been made by the defendant on the regularity of the steps taken in the Magistrates' Court and in this court.

68. It follows that the deemed judgment in this court is a regular one based upon orders lawfully made in the Magistrates' Court.

73. The defendant submits that it is entitled to have set aside the orders made in default in the Magistrates' Court on the ground that it has a defence on the merits and should be permitted to defend the proceeding. There is affidavit material explaining the delay and addressing the issue of a defence on the merits.

76. There are two issues for consideration and determination -

(a) Does this court have jurisdiction to set aside the deemed judgment on the basis that the orders made in default in the Magistrates' Court should be set aside because there is a defence on the merits?

(b) Is there a defence on the merits?

82. Although the summons issued by the defendant in this court seeks that the judgment and order of this court be set aside the true nature of the application is to set aside the orders made in the Magistrates' Court which would have a consequential effect upon the judgment in this court. This must be so, because as long as the Magistrates' Court orders remain they are lawful orders which are enforceable and hence support the deemed judgment in this court.

85. This court clearly has jurisdiction to entertain any application concerning the validity of the deemed judgment in this court but there is no suggestion in the present matter that there was anything irregular concerning the certificate or the filing in this court resulting in the deemed judgment.

90. The Magistrates' Court has jurisdiction to set aside an order against a person who did not appear in the proceeding and further order that the proceeding be re-heard. See s.110 of the Act.

93. The question is whether the Magistrates' Court still has jurisdiction where a certificate of the order is filed pursuant to s.112 and judgment is deemed to be entered in the Supreme Court.

96. In the decision of Lorryn Rushton v Mr Barry Braun (a Magistrate) and Whydah Solutions Pty Ltd, (an unreported judgment delivered 18 February 1997) Cummins J held that once the certificate under s.112 was filed in the Supreme Court the Magistrates' Court no longer had any jurisdiction to hear an application to have an order of the Magistrates' Court set aside under s.110.

99. In the later case of O'Dea and Anor v the Magistrates' Court of Victoria at Melbourne & Anor, (an unreported judgment delivered 20 July 1998) I held contrary to the decision of Cummins J that the Magistrates' Court had jurisdiction to hear an application to set aside an order even though a certificate had been filed with this court pursuant to s.112.

102. I did not have to decide in that case whether the Supreme Court also had jurisdiction to hear an application to set aside the orders made in the Magistrates' Court.

105. In the decision of Andrew Patrick Melville v Dartmouth Projects Pty Ltd (an unreported judgment delivered 5 December 1997) Byrne J had to consider the question whether this court did have jurisdiction to set aside the orders made in the Magistrates' Court. In that case both parties submitted that His Honour should follow the decision of Cummins J. This was before I had heard and determined the O'Dea case.

"Faced with the unanimity of the parties before me and conscious of the need that certainty in a procedural matter such as this should be maintained, I will adopt this course."

112. His Honour then had to consider whether this court could set aside the default orders made in the Magistrates' Court and mindful of the fact that as the Magistrates' Court had no jurisdiction, if this court had no jurisdiction there would be no court empowered to set aside the judgment, concluded that this court did have jurisdiction to set aside the orders.

115. His Honour did not consider whether the decision of Cummins J was correct.

120. Having held in the O'Dea case that the Magistrates' Court had jurisdiction to set aside an order even after the deemed judgment in this court, I am not faced with the possible dilemma of no court having jurisdiction to entertain this application.

123. This court does have two sources of jurisdiction in respect of civil orders made in a Magistrates' Court.

126. The first is the common law supervisory jurisdiction that a superior court has in respect to the decision making processes of inferior courts. Now known as judicial review it is the creature of the common law and the procedure is now regulated by Order 56 of the Rules of this court. It is a limited jurisdiction. It is not an appeal jurisdiction. It does not permit an appeal on the merits. It is a jurisdiction that is confined to supervising the decision making process of the inferior court.

129. This jurisdiction was not invoked by the defendant and if it had been, there is no basis for any relief of a prerogative-type nature.

132. The other jurisdiction is the appellate jurisdiction of this court in respect to appeals from Magistrates' Court in respect to civil matters. This jurisdiction is a creature of statute and is found in s.109 of the Act.

135. The defendant has not invoked the appeal provisions and indeed there is no basis for any appeal which is confined to an error of law.

138. Counsel were unable to suggest any other jurisdiction in this court concerning Magistrates' Court orders in civil matters.

141. In my opinion clearly the court does have authority over the deemed judgment and if there was any irregularity with respect to its existence in this court then no doubt this court could deal with any application concerning it. However, that is not the position here. What is put here is that the defendant has a defence on the merits and accordingly the orders made in the Magistrates' Court should be set aside.

144. Section 110 of the Act provides -

"(1) If a final order is made by the court in a civil proceeding against a person who did not appear in the proceeding, that person may, subject to and in accordance with the rules, apply to the court for an order that the order be set aside and that the proceeding be re-heard."

148. "Court" means the Magistrates' Court of Victoria - see s.3.

151. The statutory provision does not empower this court to set aside the orders made.

154. Order 10, Part 1 of the Magistrates' Court Civil Procedure Rules 1989 empowers the Magistrates' Court to hear an application by a plaintiff for an order if the defendant does not give notice of defence within a specified period.

157. Order 30 is concerned with re-hearings and sets out the procedure to be adopted in an application under s.110 of the Act.

160. Clearly the Magistrates' Court Act 1989 does not empower this court to set aside orders made in the Magistrates' Court which are regularly and properly made where the defendant does not file a notice of defence.

163. In Rushton's case Cummins J accepted that he had jurisdiction to set aside the order of the Magistrates' Court and did so. Byrne J in the Melville case was content to adopt the same course and proceeded on the same assumption. His Honour did not consider the correctness of Cummins J's approach.

166. In my opinion this court does not have jurisdiction to set aside the orders made in the Magistrates' Court which are the basis of the deemed judgment in this court.

169. In Kinder v Kane (1890) 14 ALT 54 Hodges J held that the Supreme Court could in an appropriate case set aside the certificate and any execution issued in respect to it but held that the court could not set aside the Magistrates' Court order which was the basis for the certificate.

172. Both Cummins and Byrne JJ were of the opinion that since the statutory provisions which go back to the middle of the 19th century were changed when re-enacted in the Act of 1989 so that the judgment was deemed to have been entered in this court, meant that the old authorities no longer applied. They reasoned that this court should treat the judgment as a Supreme Court judgment and accordingly entitled this court to apply the jurisdiction concerning setting aside default judgments found in the Rules of this court.

175. In my opinion this court does not have jurisdiction to hear and decide an application to set aside the orders regularly made in the Magistrates' Court.

178. In my opinion the decision of Cummins J in Lorryn Rushton v Mr Barry Braun & Anor is wrong and I decline to follow the decision of Byrne J as it proceeds on an assumption that the decision of Cummins J is correct.

181. My conclusion is supported by a consideration of the history of the legislation both in England and here and the cases which applied the legislation.

184. Legislation whereby an order or judgment of an inferior court is registered or removed into a superior court for execution has been in the statute books in England from as early as 1779 and in this State since 1865. There is power in the County Court to have a judgment of that court entered in this court.

187. Although the verbiage used in the various legislation differs the object of the legislation is clear.

190. I considered the history of the legislation and the authorities in the O'Dea case and at p.13 said -

"At the outset it is necessary to emphasise the object of the legislation under consideration. Its object was to enable orders in an inferior court to be enforced by a means which was not available in the inferior court. The one procedure notably absent from the inferior court's armoury was the right to execute an order by the sale of real estate owned by the judgment debtor. By filing a certificate of judgment in the Supreme Court the judgment creditor had available to him all the forms of enforcement available to a judgment creditor in the Supreme Court including the issue of a writ of fi fa to sell up the real estate of the judgment debtor. The prime concern of the Supreme Court was the execution of the order or judgment once the certificate had been filed."

194. The authorities both in England and here established that the superior court did not have jurisdiction to set aside the order or judgment made in the inferior court.

197. In Williams v Bolland (1876) 1 CPD 227 judgment was entered in the Passage court at Liverpool in default of appearance and the judgment was removed into the Common Pleas Division for execution pursuant to a statute of 1839.

200. The Act provided that once the record of judgment was filed "such judgment shall be of the same forth, charge and effect as the judgment recovered in such superior court, and all proceedings shall and may be immediately had and taken thereupon, or by reason and in consequence thereof as if such judgment so recovered had been originally recovered in the said superior court."

203. A judge of the Common Pleas Division set aside the judgment for alleged irregularity and because of an arguable defence on the merits. However, on appeal the court held that the judge had no power to do so.

"When a judgment is removed from an inferior to a superior court under this statute, it is only for the purpose of enabling the superior court to execute the judgment. No jurisdiction is given to the superior court to enquire into the merits or into the regularity of the proceedings in the court below."

210. In the earliest reported case on similar legislation in the Colony of Victoria of Wrixon v Deehan (1865) 2 WW and a'B (L) 16 a judgment recovered in the County Court was registered in the Supreme Court. An application was then made to the County Court judge to set aside the judgment on the ground of improper service but His Honour held that while the judgment remained undisturbed in the Supreme Court he could not set aside the judgment. A summons was issued to set aside the Supreme Court judgment and the application was referred to the Full Court.

213. Stawell CJ speaking for the court said at p.17 -

"The question here is whether the sixty second section of the County Court Act prevents the judge from hearing an application to set aside a summons (sic - order) where the judgment has been registered in this court. If he can hear it, he certainly ought to do so, because he can exercise an equitable jurisdiction whereas we could only set it aside for irregularity. Does then the latter clause of that section prevent him? I think it does not. I think 'proceeding' means 'proceeding with a view to advance' and that an attempt to set aside proceedings is not a proceeding. The judge of the County Court must therefore entertain the question." (Emphasis added).

217. The cases establish that the superior court does not have jurisdiction to set aside a order made by the inferior court unless there is some statutory provision to that effect, and the only power that the superior court does have is to deal with the certificate of judgment in its court if there is some irregularity or for some reason the basis for the judgment is altered, for example, by way of appeal or the judgment being set aside in the lower court.

220. The change in verbiage in the Act passed in 1989 did not alter the law established by the earlier cases.

225. In my opinion the court does not have jurisdiction to set aside the orders made in the Magistrates' Court at Broadmeadows in default of delivery of notice of defence and as the orders have been made the subject of a certificate which is filed with this court and in the absence of any irregularity in the procedures taken in this court there is no ground for setting aside the deemed judgment in this court.

228. Counsel on behalf of the parties made submissions concerning the merits and since the most likely next step is for the defendant to make application in the Magistrates' Court to set aside the orders made, it is inappropriate for me to express any view on the submissions made.

231. Subject to any submissions from counsel I propose to make the following orders -

(a) That the defendant's summons filed 17 July 2000 be dismissed;

(b) that the defendant pay the plaintiff's costs including any reserved costs.

---