3 The plaintiffs, Satchi & Satchi Australia Pty Limited (Satchi & Satchi) (the first plaintiff), Thambiappah Satchithanantham (Mr Satchithanantham) (the second plaintiff) and Hemalathasothy Ranjani Satchithanantham (Mrs Satchithanantham) (the third plaintiff) by summons filed on 29 March 2006 appealed against the decision of Magistrate Brown sitting in the Local Court at Parramatta, General Division, giving judgment to the first defendant, Sanjay Sharma trading as Adidev Enterprises (Adidev) (the plaintiff in the Local Court) in the sum of $20,200.00.
4 The plaintiffs' appeal against the Magistrate's judgment was brought pursuant to s 73 of the Local Courts Act 1982 and is confined to error of law.
5 In the Local Court proceedings Mr Sharma's liquidated claim was pleaded on a cause of action as follows:
For the purchase of goods by the defendants from the plaintiff and paying for the same with cheques on an account in the name of the defendants 2 and 3 after which defendant 2 (Mr Satchithanantham) admitted that no funds were available to pay the cheques.
6 The proceedings came before Magistrate Brown on 25 November 2005. Mr Satchithanantham appeared in person. Two sets of proceedings involving the same parties were before the Court. Mr Sharma had earlier commenced proceedings (3788 of 2004), which were struck out for want of prosecution. A defence and cross-claim in those proceedings had been filed. The cross-claim remained live after the original claim was struck out. The proceedings which give rise to the present appeal (1160 of 2005) were commenced in relation to the same subject matter. It appears that both proceedings involved a re-hearing following an arbitration (Mr Satchithanantham's affidavit para 8, 6 June 2007). On 25 November the Magistrate listed the cross-claim filed in the earlier proceedings for hearing on 8 December 2005, together with the hearing of Mr Sharma's statement of liquidated claim in proceedings 1160 of 2005.
7 At the hearing on 8 December each of the parties was represented by a solicitor. Mr Sharma was represented by Mr Niven and the three plaintiffs were represented by Mr Krishnar.
8 Mr Sharma gave evidence confirming the accuracy of his affidavit, which had been filed in the proceedings. In summary Mr Sharma's evidence was that he was in the business of selling women's clothing. He had sold stock to Mr Satchithanantham from time to time. In November 2004 Mr Satchithanantham owed Mr Sharma $3,500.00 and he wanted to purchase a substantial quantity of further goods from him. Mr Sharma was unwilling to sell further goods to Mr Satchithanantham until he was paid the balance that he was owed. Mr Satchithanantham offered to hand over his BMW motor vehicle to Mr Sharma as a guarantee of payment. Mr Sharma said that he was not interested in the car and that he wanted money. Mr Satchithanantham demonstrated his capacity to pay by showing Mr Sharma a cheque that had been drawn in his favour for $395,000.00 (Brunei dollars). They agreed that Mr Sharma would sell a shipment of goods worth $16,500.00 to Mr Satchithanantham, which with the outstanding balance would mean that Mr Satchithanantham owed Mr Sharma the sum of $20,000.00. Mr Sharma agreed to keep Mr Satchithanantham's BMW motor vehicle as security for the payment and Mr Satchithanantham gave Mr Sharma two personal cheques; the first for $3,500.00 and the second for $16,500.00. The cheques were post-dated. Mr Sharma said (at [20]):
I agreed that I would not deposit the cheques until the dates that were written on the cheques. We agreed that when he got back from Brunei I could then bank the cheques and when they were presented I could return the car to him.
9 The shipment was delivered to Mr Satchithanantham. Annexed to Mr Sharma's affidavit is a handwritten document, which was prepared by Mr Satchithanantham and which reads as follows:
8/11/04 Re purchase of goods
I T Satchi of 76 Houison Street Westmead received goods worth A$20,000.00. In return I give my car BMW 750 TL for the same value to Adidev Enterprise. In view of temporary arrangement, I give two cheques amounting to $3500 (dated 30/11/04) and $16,500 (dated 15/11/04) as holding payment until I return from Brunei. Settlement of the car will be done upon return from overseas. By 19/11/04.
10 Mr Sharma was unhappy with the terms of the agreement recorded by Mr Satchithanantham. The following day he had a telephone discussion with Mr Satchithanantham to the following effect (at [24]):
I said: "I am not happy with the proposed agreement. It is confusing where it mentions the car. I want you to make it clearer".
He said: "I will write a new agreement. You can sell the car and we will take that into account on the settlement. If you sell the car for more than $20,000.00 I will pay you from the sale of the car. If it is less I will make up the balance so you are paid $20,000.00.
11 Mr Sharma attended the Roads and Traffic Authority, with Mr Satchithanantham, when the registration of the BMW motor vehicle was transferred from the company name into Mr Satchithanantham's name. On the same date Mr Satchithanantham executed a further document (annexure D to Mr Sharma's affidavit). This reads as follows:
16/11/04 Re ZHL 701
I, T Satchi hereby confirm that the market value of the car will be taken into the settlement of goods.
12 Following this Mr Satchithanantham gave Mr Sharma the BMW vehicle and the registration papers.
13 Mr Satchithanantham returned from Brunei around 23 November 2004. Shortly after this Mr Sharma requested payment and Mr Satchithanantham said, "I don't have the money, I can't pay you. I have stopped the cheques. The cheques will bounce if you bank them. You can keep the car instead". Mr Sharma protested that he did not want the car, and that their agreement had been that he would get the money. Mr Sharma transferred the registration of the BMW into his name. He had intended selling it to mitigate his losses, but he had been advised not to do so until the court proceedings were concluded. Mr Sharma was in India between December 2004 and April 2005. On his return to Australia he banked the two cheques, but they had been dishonoured on presentation.
14 An agreed statement of facts and issues was before the Magistrate on 8 December. After the morning adjournment the Magistrate raised a matter with the parties, which was not addressed by the agreed statement (08/12/05 T 11.8-24):
Gentlemen I've read these two and it seems to me that there is an issue that's not addressed here and which is quite fundamental to the present proceedings. Prima facie it would appear that the plaintiff has an absolutely unanswerable case because the two cheques were dishonoured on presentation. It may be that there's a cross-claim to run as to why there might be some damages awarded against the plaintiff but frankly I can't see how given that the two cheques were tendered in payment and dishonoured, the plaintiff simply cannot succeed by sitting on the cheques and nothing else. He doesn't need to prove anything else. It's not in the statement of facts and issues so obviously I'm obliged to raise it but it seems to me the plaintiff's case if brought from that basis is unanswerable and under Part 36 of the Rules I'd have to deal with an issue that arises whether its pleaded or not.
15 Mr Krishnar complained that he had not come prepared to meet a case based on the cheques being dishonoured on presentation. The Magistrate stood the proceedings over and invited the parties to prepare written submissions on the issue that he had raised.
16 The proceedings were next before the Court on 2 March 2006. On that occasion there was no appearance on behalf of the plaintiffs. Mr Niven informed the Court that he had spoken by telephone with Mr Krishnar who had told him that he thought the matter had been listed for the following day. Mr Niven said that he had suggested to Mr Krishnar that he should make endeavours to attend the court promptly. The Magistrate stood the matter down until 10.30AM. After a short adjournment Mr Niven informed the Court that he had not been able to make further telephone contact with Mr Krishnar. Mr Niven applied to have the defences struck out. The Magistrate so ordered. His Honour referred to Mr Sharma's affidavit and concluded that the material did not sustain the cause of action pleaded against Mrs Satchithanantham. He dismissed the proceedings against her. (It is not clear why the proceedings in this Court were commenced by Mrs Satchithanantham as third plaintiff.) His Honour gave judgment for Mr Sharma in the sum pleaded in the statement of liquidated claim against Satchi & Satchi and Mr Satchithanantham.
17 Mr Krishnar and Mr Satchithanantham attended the Court at around 11.00AM on 2 March. Later that day a notice of motion claiming orders setting aside the judgment and reinstating the defences was filed on behalf of the three plaintiffs. Mr Satchithanantham swore an affidavit in support of the motion. He said that his failure to attend court was the result of a misunderstanding and that ([15]):
We believe we have very good prospects of success in this matter, seek the Court's indulgence and orders sought.
18 The notice of motion was dealt with in chambers and refused.
19 The grounds of appeal set out in the plaintiffs' summons are:
(a) His Honour the Magistrate R. Brown (M) erred in not hearing the application of "Notice of Motion" filed by the defendants on 3/3/2006 and refused to entertains the said application and failed to hear the main hearing and made orders on 2/3/2006 without hearing the matter and application.
(b) His Honour R. Brown (M) erred in " not hearing the matter on 2/3/2006 and made orders against the defendants ," for the matter which was partly heard on 8/12/2005. The defendants were in the court at 11.00 am on 2/3/2005 for hearing, as notified to the plaintiff's solicitor by the defendant's counsel to stand the matter for the remaining part of the hearing. On 8/12/2005 and 23/12/2006, the current plaintiffs were wrongly understood that the hearing date was adjourned to 3/3/2006 instead of 2/3/2006. The court did not notify the adjournment date to the parties in writing and the plaintiff's solicitor then was notified the confusion when he called the current plaintiff's counsel at his residence at 10.00 am on 2/3/2006 prior to the orders made on 2/3/2006.
(c) His Honour R. Brown (M) erred in not hear the matters in 3 occasions on 23/12/2005, 2/3/2006 and on 3/3/2006 for the Notice of motion filed, not even heard "ex-party" and acted in favour of the current defendant in the court below.
(d) His Honour R. Brown (M) erred in " not hearing the matter fully " when all the parties were attended the hearing on 8/12/2005 after partly heard and by adjourning and by giving " concession to the plaintiff " for an issue, which the plaintiff was not pleaded in his statement of claim. The defendants were disadvantaged as to the concession and adjournment given to the plaintiff and the defendants were suffered injustice .
(e) His Honour R. Brown (M) erred in not giving weight to the defendant's defences, which were not heard in the court on 2/3/2006 for the plaintiff's statement of claim that the plaintiff altered the original claim amount from $24,000 to 20,000 and initiated a new proceeding in the same grounds after his original claim was stuck (sic) out by the court on 4/3/2005, which was not set aside in the court.
(f) Plaintiffs suffered Natural Justice, as they were not given opportunity to provide their evidence in the court in support of their defences and cross claim filed in the court on 4/3/2005, which was not set aside in the court.
(g) On 25/11/2005, His Honour R. Brown (M) erred in fixing hearing date without giving consideration for the reasons voiced out by the current plaintiff as to the previous plaintiff's defaults in the court below then and " the previous plaintiffs counsel misled the court and convinced the magistrate in his favour ".
(h) Defendant's previous counsel used his influence and acted and convinced to the court to hear the matter, when defendant was in defaults in for the orders made by the court.
(i) His Honour R. Brown (M) erred in " not hearing notice of motion listed on 23/12/2005 for hearing ". The orders sought in that Notice of motion were crucial and the Magistrate erred in his decision, when the respondent was absent on the hearing date of 23/12/2005, in which his decision was different from what the orders made by him on 2/3/2006.
20 On 18 May 2006 the summons came before Assistant Registrar Howe. Mr Satchithanantham appeared. The summons was stood over to 15 June 2006 with directions, which included that there was to be an appearance on behalf of each of the plaintiffs on the next occasion.
21 On 16 June 2006 there was no appearance on behalf of any of the plaintiffs and the summons was struck out.
22 On 4 July 2006 the plaintiffs filed a notice of motion seeking to have the order striking out the summons set aside and the proceedings "reinstated for hearing". Mr Satchithanantham swore an affidavit in support of the motion.
23 The plaintiffs' motion was referred to Assistant Registrar Howe for hearing. On 1 November 2006 he dismissed the motion. He concluded that the appeal had little, if any, prospects of success. He noted that the only evidence adduced by the plaintiffs in support of the motion was that which related to the explanation for Mr Satchithanantham's failure to attend court. The Registrar considered the fact that this was the second time the plaintiffs had failed to attend court in connection with the proceedings was a factor that was against extending letting them back in to prosecute what appeared to be a hopeless appeal.
24 By notice of motion filed on 27 November 2006 the plaintiffs moved to have the order made by Assistant Registrar on 1 November 2006 set aside and to have their summons reinstated and set down for hearing.
25 The motion came on for hearing before Malpass AsJ and is the subject of the appeal.
26 The evidence before Malpass AsJ comprised two affidavits sworn by Mr Satchithanantham. The first (sworn on 6 June 2006) annexed the transcript of the proceedings before the Magistrate on 25/11/05; 8/12/05 and 2/3/06, together with various notices by the Registrar of the Local Court, a letter by Mr Satchithanantham to the Registrar dated 24/3/06; and two tax invoices issued by the Local Court for the payment of Court fees. The second affidavit (sworn on 3 July 2006) set out the history of the proceedings including that Mr Satchithanantham had been mistaken concerning the date on which the plaintiffs' summons was next listed for call-over. He annexed a copy of an advice prepared by Mr Patel, barrister, dated 17 June 2006 with respect to the prospects of the appeal. The plaintiffs also relied on an affidavit sworn by Sivananthan Krishnar. Mr Krishnar said that Mr Satchithanantham had been in conference with him on 2 March when he received the telephone call from Mr Niven. He said that he and his clients had attended the court arriving at 11.00 am.
27 His Honour considered that the proceedings were misconceived, since the grounds of appeal (set out at [19] above) related to the dismissal of the notice of motion in the Local Court, but no relief arising out of that determination was claimed. Generally his Honour was critical of the pleading of the grounds of appeal in that they did not identify the error or errors of law that were relied upon with any specificity.