Short v Burn

Supreme Court of NSW|2012-06-13|Before: Adamson J

John Burn (Defendant) Representation: Counsel: DM Jay (Plaintiff) JA Trebeck (Defendant) Solicitors: Rockliffs Solicitors (Plaintiff) Garden & Montgomerie (Defendant) File Number(s): 2011/397503

Introduction 1The plaintiff (Mr Short) appeals, or, if leave is required, seeks leave to appeal, from a decision of Stapleton LCM (the Court below) dismissing Mr Short's application to set aside default judgment entered against him on 2 August 2011. 2In dismissing the Mr Short's application, the Court below rejected the Mr Short's affidavit in support sworn 18 October 2011, on the basis that because it did not include a residential address, the affidavit: (1)failed to comply with Form 40; and (2)was not made bona fide. 3Mr Short also seeks leave to appeal in respect of the costs orders made against him by the Court below on 5 October 2011 and 10 November 2011. In respect of the latter costs order, Mr Short submitted that it should follow the result of the order dismissing the motion.

Background to the proceedings 4The defendant (Mr Burn) commenced proceedings in the Local Court at Cowra against Mr Short by statement of claim filed on 7 February 2011, in which he claimed monies said to be owing for the storage of various items of equipment and rides used for entertainment shows, including an electric-driven space ride platform. The nature of the claim was summarised by Mr Burn in his written submissions as follows: "The defendant carries on a business of providing amusement games in country shows. In 2008, the plaintiff agreed at the defendant's request to store a large quantity of amusement games and associated equipment for two months at his property at Canowindra. Despite promises to do so, the defendant has failed to collect his goods, or pay for their storage." 5The statement of claim particularised a claim for $150 per week for 122 weeks and continuing. 6By letter dated 9 May 2011, Mr Short's solicitors (Rockliffs) wrote to Mr Burn in the following terms: "We act for Short Management Pty Limited. We are instructed by our client that you are in possession of its kids ride and have refused to hand over possession to our client. This is to advise you that unless, within 10 days, arrangements are made to yield up possession of the kids ride to our client's representative, Mr Short, proceedings will be commenced without further notice to recover same or alternatively to recover damages for the value thereof." 7On 22 April 2011, Short Management Pty Limited was deregistered, but was subsequently re-registered. It is not suggested that at the time the letter of 9 May 2011 was written, Rockliffs knew that Short Management Pty Limited had been deregistered. 8By letter dated 16 May 2011 sent by facsimile, Mr Burn's solicitor (Gardens) wrote to Rockliffs saying that they were unable to serve Mr Short and asked if Rockliffs had instructions to accept service. 9Rockliffs responded by facsimile headed "Short Management Pty Limited & John Burn", also dated 16 May 2011, in the following terms: "Please provide us with a copy of the Statement of Claim. Upon receipt of same, we shall endeavour to seek instructions from our client." 10Gardens then faxed the statement of claim to Rockliffs. By letter in response, also dated 16 May 2011, Rockliffs told Gardens of their preliminary view that Mr Burn had sued the wrong party. In the same letter they requested further and better particulars of the statement of claim. They also said: "In any event, John Short, we understand, is a resident of Queensland and we therefore anticipate, if we are instructed to accept service, to make an application for an order pursuant to s.20(3) of the Service and Execution of Process Act 1992 (Cth), that the proceedings be permanently stayed, supported by affidavit." [Emphasis added.] 11According to submissions dated 5 October 2011, on which Mr Burn relied in opposition to Mr Short's motion to set aside the default judgment, Gardens formed the view that the request for particulars contained in the letter dated 16 May 2011 was a "delaying tactic" and "mischievous" and chose neither to answer the request nor to advise Rockliffs that they did not propose to give an answer. 12On 6 June 2011, Gardens filed a notice of motion for substituted service, which was returnable on 22 June 2011. On 22 June 2011, Gardens obtained an order for substituted service which provided that service on Mr Short could be effected by serving Rockliffs. Service was effected on 29 June 2011 in accordance with the order. 13On 2 August 2011, without notice to Rockliffs, Gardens applied for and obtained default judgment for an amount of $23,150.36. On 8 August 2011, Rockliffs wrote to Gardens and noted that the default judgment had been entered notwithstanding the outstanding request for further and better particulars. They requested that the default judgment be set aside by consent. Their request was declined. 14On 17 August 2011 Rockliffs filed a notice of motion to set aside the default judgment returnable on 5 October 2011. Mr Short relied on an affidavit sworn by Stephen Rockliff on 18 August 2011. 15On 5 October 2011, the Court below dismissed the motion on the basis that the affidavit in support was sworn by Mr Short's solicitor and not by Mr Short personally. At the conclusion of the hearing the Court below asked the solicitor for Mr Burn what his costs were. He said that they amounted to $1,500. The Court below performed a calculation that the work required to be done would have taken in the order of 12 hours at a party/party rate of $250 and assessed the costs at $3,000. Mr Short seeks an extension of time to seek leave to appeal against that assessment. 16On 20 October 2011, Rockliffs filed a further notice of motion to set aside the default judgment, which was returnable on 9 November 2011. The principal affidavit in support of the second motion was sworn by Mr Short on 18 October 2011. Mr Short deposed to his occupation as "rides operator". His affidavit sought, in [3] - [7], to explain the delay in making the first application to set aside the default judgment and, in [8] - [9], deposed to what he contended to be a bona fide defence on the merits. The affidavit set out why the equipment was left on Mr Burn's property, and why it remained there. 17As part of his explanation for the delay, Mr Short deposed to speaking to his solicitor on 5 July 2011, who read the statement of claim out to him. He told his solicitor that he would send an email to him setting out the material facts. Mr Short deposed: "During the month of July I was travelling extensively in New South Wales and Queensland in my occupation as a rides operator, and I neglected to forward the e-mail referred to... to my solicitor's office." 18The defences raised were: (1)Mr Short was not the proper defendant because he did not own the relevant equipment which was owned by his company Short Management Pty Ltd (Short Management). The affidavit annexed a Certificate of Plant Item Registration which showed Short Management to be the owner of an electric-driven space ride platform; and (2)There was no agreement as to the payment of fees between Mr Burn and Mr Short either on his own behalf or on behalf of Short Management. 19At the hearing of the motion on 9 November 2011, Ms Croudace appeared for Mr Short as agent and Mr Casey appeared for Mr Burn. The Court below noted that Mr Short's affidavit did not contain a residential address and found that it was not in accordance with Form 40. The Court below rejected Mr Short's affidavit. The matter was then stood over to the following day, 10 November 2011. It appears to have been contemplated either that a further affidavit from Mr Short could be obtained in that time in which a residential address was provided or the lack thereof explained, or that the matter would be adjourned to permit such an affidavit to be obtained. 20When the matter resumed on 10 November 2011, Ms Croudace relied on written submissions in support of a further application to read the affidavit of Mr Short. The Court below rejected the affidavit. There being no evidence other than was contained in Mr Short's affidavit, the Court below dismissed the application to set aside default judgment and ordered Mr Short to pay Mr Burn's costs in the sum of $2,000. 21A request for transcript was made by Rockliffs on about 14 November 2011. The transcript was provided on about 2 March 2012. The Summons in this Court was filed on 8 December 2011.

The jurisdiction to determine the application 22This Court's power with respect to appeals from the Local Court is conferred by s 39, s 40 and s 41 of the Local Court Act 2007. In summary, leave is not required where the appeal is on a question of law (s 39); it is required where the question is one of mixed law and fact (s 40(1)); and it is required even for questions of law in respect of leave from interlocutory judgments or orders, consent orders or costs orders (s 40(2)).

Whether leave to appeal is required 23It is common ground that leave is required in respect of the costs orders made on 5 October 2011 and 10 November 2011. Mr Short contends that leave is not required for the order dismissing the motion on 10 November 2011. He referred to Cumming v Tradebanc International Ltd [2002] NSWSC 70 (Cumming) at [37], per Bergin J and N & G Electrical Group Pty Ltd v Terracon Industries Pty Ltd [2002] NSWSC 837 (N & G) at [5], per Bell J. Mr Burn relied on Carr v Finance Company of Australia [1981] HCA 20; 147 CLR 246 (Carr) at 248, per Gibbs CJ, where the test whether a judgment or order was final or interlocutory was held to be whether it finally determines the rights of the parties. A default judgment was held not to be in that category because it was open to a disappointed party to apply again to have the judgment set aside. 24It appears that Carr was not brought to the attention of the respective Courts which decided Cumming and N & G. There does not appear to be any thing relating to the wording of s 39 or s 40 of the Local Court Act which would permit Carr to be distinguished. Indeed Mr Short relied on the principle in Carr, as applied in Zippoz Pty Limited v National Australia Bank Limited [2011] NSWCA 164 at [31], per Basten JA, Young JA agreeing, when he filed another motion to set aside default judgment on 20 October 2011, having had an earlier motion seeking such an order dismissed. Accordingly I consider that leave is required for each of the decisions sought to be challenged by Mr Short.

The costs order of 5 October 2011 25Mr Burn, having successfully defeated Mr Short's notice of motion, was entitled to the costs of the motion. The following exchange comprises the argument on costs. "HER HONOUR: What do you say your costs are? CASEY: Probably about $1500. HER HONOUR: All right, well that's probably not - defendant to pay the plaintiff's costs. It's a motion to - you had to read their motion, file your affidavit, draft up your affidavit? CASEY: Yes. HER HONOUR: File and appear? CASEY: And prepare written submissions and - HER HONOUR: And prepare written submissions. All right, that's 12 hours work at an hourly rate discounted on a party/party basis, say, $250 an hour. That's $3,000. CASEY: Yes. HER HONOUR: Okay. Defendant to pay the plaintiff's costs. Do you want to be heard against that, Ms Rose? It seems a very reasonable fee. ROSE: Well your Honour, your Honour I think assessed the work at 12 hours. Your Honour that - HER HONOUR: Maybe my maths is wrong. ROSE: It seems a little bit much to me, your Honour. HER HONOUR: You think 12 hours is too much? ROSE: Yes your Honour. HER HONOUR: No, I think that's fair enough. DEFENDANT TO PAY THE PLAINTIFF'S COSTS, AND THAT INCLUDES THE APPEARANCE TODAY, IN THE SUM OF $3,000." 26Mr Short contends that, in circumstances where Mr Burn's solicitor was asked what his costs were and said "about $1,500", the Court below exercised its discretion in a manifestly unreasonable way by ordering costs of $3,000 be paid. The Court below did not seek to determine what amount of work had been done but simply nominated an estimate of 12 hours. Absent any actual evidence or assistance from Mr Casey, simply nominating a figure (which doubled the amount sought) was manifestly unreasonable and an error of law. 27Mr Burn contends that the Court below was entitled to assess the costs on a reasonable basis and was not bound by what Mr Casey put. Nor was the Court bound to accept Mr Casey's figure as an upper limit for the purposes of costs. Mr Burn contended that what the Court below did was no more than an unexceptional exercise of the power conferred by s 98(4)(c) of the Civil Procedure Act 2005 to specify a gross sum of costs instead of assessed costs. 28In my view, the issues are: first, whether the Court below, in exercising its discretion to quantify Mr Burn's costs, failed to take into account a relevant consideration, namely what Mr Burn, through her legal representative, had stipulated as the costs of the motion; and secondly, whether there was a denial of natural justice in awarding double the figure sought. Either of these matters, if established, would lead to the conclusion that the discretion had miscarried and render it amenable to review under s 40 of the Local Court Act. 29The circumstance where a Court awards more than is sought arises more commonly with respect to awards of damages than with respect to assessment of costs. In the context of awards of damages it has been held to be a denial of procedural fairness to a party to disregard the submissions of the other party, and, without notice to the first party, to award substantially more than was sought by the other party. 30In Wrigley Co Pty Ltd v Holland [2002] NSWCA 109; 23 NSWCCR 463 (Wrigley), the worker submitted at trial that a weekly amount of at least $100 ought be awarded. The employer contended for $50 per week. The trial judge ordered nearly $400 per week. The trial judge had not indicated his intention to go beyond the figure sought by the plaintiff and gave no reasons for so doing. The Court of Appeal set aside the award and remitted the proceedings to the Compensation Court. 31Handley JA (with whom Hodgson JA and Ipp AJA agreed) said, at 468: "The judge, in exercising his discretion, was bound, as a matter of law, to take into account the claim advanced by the worker's counsel in argument, and if he decided to disregard that claim and award substantially more, he was bound to give adequate reasons for doing so. He either failed to take this relevant consideration into account or failed to give his reasons for disregarding this submission and on either view he erred in law: see Australian Wire Industries Pty Ltd v Nicholson (1985) 1 NSWCCR 50 at 56-57, per McHugh JA. The judge also denied procedural fairness to the employer whose counsel had no opportunity to deal in address with the judge's reasons for disregarding the submission of counsel for the worker and awarding so much more than had been sought on her behalf." 32In Seltsam Pty Ltd v Gahleb [2005] NSWCA 208 (Seltsam), after referring to Wrigley, Ipp JA said, at [78] - [79]: "These cases illustrate the general principle that although the basis on which the parties conduct a trial does not bind the judge, if the judge contemplates determining the case on a different basis he or she must inform the parties of this prospect so that they have an opportunity to address any new or changed issues that may arise. A failure so to inform the parties will ordinarily result in a denial of procedural fairness. A new trial will be ordered if a party is not afforded a fair trial in circumstances where a properly conducted trial might possibly have produced a different result. It will not ordinarily be necessary to lead evidence to prove that the denial of procedural fairness had the potential to affect the outcome; in most cases the facts will speak for themselves." 33I consider the principles concerning awards of damages require some modification when it comes to costs, but the modification has the effect that the stipulation by the successful party is entitled to greater weight in the latter case. The purpose of an award of damages is to compensate the plaintiff for loss suffered, which may include future loss. The assessment of future loss involves judgments to be made about matters which are not certain. By contrast, a costs order is designed to compensate the successful party for legal costs incurred in the proceedings. A costs order, even an indemnity costs order, is not designed to provide any windfall to the client, or its lawyers. The Court below made no inquiry of the arrangement made between Mr Burn and his legal representative. It may be that the arrangement was that Mr Burn would pay his lawyers $1,500. It may be that the hourly rate agreed upon was $150 per hour. Had Mr Burn not stipulated a figure at all, it would have been open to the Court to assess a sum that was reasonable. But once Mr Burn stipulated a figure, in my view, there needed to be some good reason, or further inquiry, before a greater figure was awarded. 34Although the Court below invited Mr Short's representative to respond to her Honour's calculation, I do not consider that this was sufficient to put Mr Short on notice that the Court below intended to double the figure sought for costs. Rather, the exchange was consistent with her Honour conducting a rough check of the figure sought by Mr Burn by reference to number of hours and hourly rates to determine its reasonableness. I do not consider that Mr Short's representative was obliged to inform the Court below of the principles set out above in Seltsam. Therefore although the Court below sought a response from Mr Short's representative, I do not consider that this was sufficient to inform her of the prospect that the Court below would double the figure without further inquiry. 35Mr Burn contended that leave ought not be granted because Mr Short promised on 10 November 2011 to pay the $3,000 within 48 hours and did not do so. Mr Short submitted that no such promise was given. 36The question of payment of the costs of the earlier motion arose at the end of the day on 9 November 2011 when Ms Croudace had not yet confirmed that no further affidavit of Mr Short would be forthcoming. At that time there was the prospect that the motion would need to be adjourned for some period to enable such an affidavit to be prepared. The Court below expressed a preliminary view that whether the costs of the earlier motion were paid would be a relevant factor in her decision whether to grant an adjournment. It was in that context that Ms Croudace told the Court below that she had received a text message that the $3,000 "could" be paid into Mr Burn's solicitors' trust account within 48 hours. 37However, after the conclusion of the day's hearing on 9 November 2011 and before the commencement of the hearing on the following day, Ms Croudace was instructed to reiterate her submissions that Mr Short's affidavit ought be read, notwithstanding that he did not stipulate a residential address and not to apply for an adjournment. Therefore the payment of $3,000 did not arise. No order was made requiring it to be paid within any particular time. 38I do not consider that any such promise was given and accordingly whether the $3,000 was paid or not is immaterial to whether leave ought be granted. 39To proceed as the Court below did, amounted to an error of law; the discretion miscarried: House v The King (1936) 55 CLR 504 at 505, per Dixon, Evatt and McTiernan JJ. Leave is required before an order varying or setting aside the order can be made. It is notoriously difficult to obtain leave against costs orders. However, since I consider that the discretion reposed in the Court below miscarried because of a fundamental misapprehension of the requirements of a fair hearing, an extension of time to apply for leave and a grant of leave to appeal is appropriate. 40Mr Short sought an order pursuant to s 41(1)(a) of the Local Court Act varying the amount of costs from $3,000 to $1,500. In the interests of cost and time, I consider this to be a sensible proposal: Mr Burn is then awarded that which was sought on his behalf, and the matter, at least to this extent, is at an end.

The dismissal of the notice of motion on 10 November 2011 41The basis on which the Court below dismissed Mr Short's notice of motion is not entirely clear. Two bases appear: first, because it rejected the affidavit of Mr Short, which was the principal evidence relied upon in support of the motion; and secondly, because Mr Short had not established a bona fide defence on the merits to Mr Burn's claim.

The rejection of the affidavit of Mr Short 42The Court below rejected the affidavit because it did not contain a residential address for Mr Short. Instead, Mr Short gave the address of his solicitors. Her Honour's objection on that basis was adopted by Mr Burn. 43The affidavit met the principal requirements in that it was in writing, made on oath, signed by the deponent and witnessed by the person administering the oath: Fastlink Calling Pty Ltd v Macquarie Telecom Pty Ltd [2008] NSWSC 299 at [16] - [29] per Barrett J. Form 40 is the approved form of an affidavit. Strict adherence to the prescribed form of an affidavit is not required: Interpretation Act 1987 s 80. An address, though not a residential one, was provided. There is no express requirement in the UCPR to provide a residential address. In these circumstances it cannot be said that lack of a residential address amounts to an irregularity as to form. Accordingly I do not consider that the occasion arose for leave to be granted to use an affidavit despite irregularity in form under UCPR 35.1. 44The affidavit was admissible. It contained relevant evidence and ought to have been admitted. The Court below did not reject it for a legitimate reason. The erroneous rejection of admissible evidence gives rise either to a question of law or a mixed question of law and fact, which ought of itself result in an order to set aside the dismissal of the motion if leave to appeal is granted. 45However, because the Court below appears to have decided to dismiss the motion also on the second basis identified above, it is desirable that I address further arguments put as to the course that the determination of the motion took.

The finding that Mr Short had not established a bona fide defence 46The reasons of the Court below should be given such latitude as is appropriate to reasons given ex tempore. It is not necessary to set them out in full. The following extracts are sufficient to expose her Honour's thinking which resulted in the dismissal of the motion on the second basis, identified above: "...although the address is not material to the facts asserted, to my knowledge it was material to the credit of the defendant which, of course, goes to whether the defence asserted, the facts asserted in the affidavit are asserted bona fide. By that I mean in good faith. ... I am satisfied that the issue about the address is about the credit of the defendant. That is, he wants to set aside judgment based on a defence which he asserts... but he is not prepared to put on... the affidavit his residential address and this is now explained the way [sic, away]... that he has no fixed residential address. ...the court must be satisfied that the defence is asserted bona fide and by that I understand to mean it in good faith and there is an arguable or triable issue. It seems to me that the absence of the address is not remedied by the assertion on instructions that he had no fixed place of abode that is the issue is about the credit of the deponent of the affidavit in terms of the bona fides of the defence asserted. It is not about the truth of the defence asserted but whether it is a defence which is asserted in good faith in respect of the whole of the court process... It seems to me that it does go to the bona fides of the defendant. It looks like this defendant does not want to have his residential address known in these proceedings... Of course, the matter can be remedied by the defendant himself attending court, swearing as to the truth of the evidence in the witness box, exposing himself to cross-examination on the particulars of the assertion that he is a person of no fixed abode, production of his drivers' licence and the like and that would then, no doubt, put a court in a position to judge whether his defence is asserted bona fides." 47The truthfulness of a witness may be assessed by a judge to determine the bona fides of a defence: Adams v Kennick Trading (Int) Ltd (1986) 4 NSWLR 503 at 507, per Hope JA. For example, if the judge hearing the application concludes that the applicant deliberately lied about the alleged defence and is thus dishonest in raising it, the applicant would fail to establish that he had a bona fide defence on the merits. However, in circumstances where Mr Short was not required for cross-examination and there was no basis for asserting that his affidavit was dishonest, it would not be open to the judge to find that Mr Short deliberately lied about the alleged defence. 48The Court below appears to have concluded that Mr Short's failure to give a residential address was evidence of a lack of bona fides (as distinct from an assessment of credit) personally in making the affidavit. This appears to have been premised on the unproved and untested assumption that he did have a residential address that he was not prepared to disclose. 49There was little evidence on the matter but such evidence as there was, which is referred to above, tended to indicate that Mr Short was itinerant. Mr Burn tendered, on 10 November 2011, an ASIC search for Short Management Pty Limited which had been obtained that morning which recorded that Mr Short had given an address at 3 Second Avenue, Scarborough, Queensland as his address as a director and as the principal place of business of the company. Mr Short's legal representative informed the Court below that this house formed part of the estate of Mr Short's late mother and required renovation before it would be habitable. In these circumstances, in my view, there was insufficient evidence to permit the Court below to exclude the possibility that Mr Short did not have a residential address. There was, in my view, no evidence that was capable of establishing the assumption made by the Court below; that Mr Short had a residential address which he was concealing from the Court. Nor was there any articulation of any basis to link the assumption made by the Court below to the question whether Mr Short had a bona fide defence to Mr Burn's claim. 50In my view, the lack of a residential address cannot conceivably affect the bona fides of the defence in the instant case. Whereas the "requirement of having an address for service that complies with UCPR 4.5 is one of the conditions upon which a person is permitted to litigate" (Kelly v Mosman Municipal Council [2010] NSWCA 370 at [66]), having a residence, and therefore a residential address is not. Lack of an address for service might indicate evasiveness, but lack of a residence does not. 51I do not consider there to be any proper basis for the assessment of the Court below that Mr Short was being evasive. There was no issue about service. Once an order for substituted service had been made, documents were served on Rockliffs. Mr Short twice appeared in Court by solicitors (through town agents) to set aside default judgment. No notice of appearance was filed but this was explained on the basis that none was permitted to be filed after default judgment had been entered. 52Mr Short submitted further that her Honour's discretion miscarried because she did not take into account mandatory relevant considerations in s 56 of the Civil Procedure Act. The failure to take into account a mandatory relevant consideration is an error of law: Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; 162 CLR 24. In Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230 (Hans Pet), Allsop ACJ said: "What is vital to appreciate is that the regard to both ss 56 and 57 is statutorily compulsory: s 58(2)(a)." 53Section 56 of the Civil Procedure Act relevantly provides: "56 Overriding purpose (1) The overriding purpose of this Act and of rules of court, in their application to a civil dispute or civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the dispute or proceedings. (2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule." 54Section 57 of the Civil Procedure Act relevantly provides: "57 Objects of case management (1) For the purpose of furthering the overriding purpose referred to in section 56(1), proceedings in any court are to be managed having regard to the following objects: (a) the just determination of the proceedings, (b) the efficient disposal of the business of the court, (c) the efficient use of available judicial and administrative resources, (d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties. (2) This Act and any rules of court are to be so construed and applied, and the practice and procedure of the courts are to be so regulated, as best to ensure the attainment of the objects referred to in subsection (1)." 55The Court below did not refer to these mandatory relevant considerations. Nor is there any indication that they were taken into account. Her Honour appears not to have given any consideration to any of the following matters: (1)The degree of injustice to which the respective parties were subjected by the rejection of Mr Short's affidavit; (2)The likelihood or consequence of her decision to reject the affidavit that Mr Short would be deprived of the opportunity to raise a defence to the proceeding, or be required to file a further motion to set aside the default judgment; (3)The nature, circumstances and context in which the alleged irregularity (the failure to put a residential address on the affidavit in circumstances where he did not have one at the time it was sworn) occurred; or (4)The bona fides of the defences raised in Mr Short's affidavit. 56For the reasons given above, the rejection by the Court below of Mr Short's affidavit was erroneous either as a matter of law, or mixed law and fact. It did not promote the just determination of the proceedings. It is a fundamental principle that if there are merits to a defence the Court should not let a judgment pass upon which there has been no proper adjudication: Evans v Bartlam [1937] AC 473 at 489. 57I do not consider that the miscarriage of discretion was rectified by her Honour's proposal that Mr Short file a fresh affidavit and present himself for cross-examination particularly (in circumstances where Mr Burn had not indicated that he would be required to attend for that purpose). 58There was, in substance, by reason of her Honour's erroneous rejection of his affidavit, a denial of natural justice in that the Court below failed to consider the merits of Mr Short's application. 59Mr Jay, who appeared on behalf of Mr Short, made oral submissions which could be taken to amount to an allegation of bias or apprehended bias against the Court below. Mr Jay confirmed that he did not make any such allegation and accepted that, in any event, no notice had been given of any such allegations.

Leave to appeal 60Mr Short submitted that the matters that caused the discretion to miscarry were sufficiently serious to warrant a grant of leave. Mr Burn submitted that leave should be refused because Mr Short was entitled to bring a fresh application in the Local Court to set aside the default judgment and there was, accordingly, no need to commence proceedings for relief in this Court. 61An application for leave to appeal against the dismissal of an application to set aside default judgment faces significant obstacles. In Hession v Century 21 South Pacific (1992) 28 NSWLR 120, Meagher JA said of such applications (in that case, an application for security for costs): "An order made by a trial judge in these circumstances is usually immune from appeal and any attempt to appeal is hopeless. This is because the trial judge is exercising a discretionary judgment, which will be set aside only in the most extraordinary circumstances: House v The King (1936) 55 CLR 499. Not only that; he is exercising his discretion not on a matter which determines substantive rights, but on a point of practice and procedure (on which subject the High Court pronounced in Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177). Moreover he is doing so at an interlocutory level. Not only that; it is a decision from a busy judge dealing with a heavy load of matters all requiring quick and ex tempore solution, who can therefore hardly be expected to deal with every case on the subject or to give judgment couched in deathless prose." 62As is apparent from the reasons given above, I consider that the discretion of the Court below miscarried since her Honour's rejection of Mr Short's affidavit was erroneous in law and dismissal of the application failed to take into account mandatory considerations. Although Mr Burn's submission is correct in that a fresh application could have been made, the right to have the Court determine a fresh application is not unfettered. The relevant principle is summarised in Spencer, Bower & Handley, Res Judicata (4th ed, 2009) at pages 85 - 86: "The dismissal of an interlocutory application on procedural grounds or on the merits is not final and does not bar a further application, although that is not likely to succeed unless supported by additional evidence or a different argument. Courts have sometimes enforced a requirement for the additional evidence to be 'fresh', but in other cases a second application has been granted on evidence that should have been before the court on the first." 63The "additional evidence" that the Court below required Mr Short to adduce was not relevant to the application. Its absence ought not have led to the rejection of the affidavit. Nor was it appropriate for her Honour to impose a requirement that Mr Short attend for cross-examination, when Mr Burn had not required him to be there. A fresh application without the further evidence may well have been met with the argument that it was an abuse of process to make the same application on the basis of the same evidence. In those circumstances, I consider that it is appropriate to grant leave to appeal and to allow the appeal against the dismissal of the application.

Orders 64I make the following orders: (1)Extend the time for the plaintiff's application for leave to appeal to 20 March 2012. (2)Grant leave to the plaintiff to appeal the order made by the Court below on 5 October 2011 that the plaintiff pay the defendant's costs of the motion filed on 17 August 2011 in the sum of $3,000. (3)Vary the order made by the Court below on 5 October 2011 that the plaintiff pay the defendant's costs of the motion filed on 17 August 2011 in the sum of $3,000 by substituting for the sum of $3,000, the sum of $1,500. (4)Grant leave to the plaintiff to appeal the order made by the Court below on 10 November 2011 dismissing the plaintiff's notice of motion filed on 20 October 2011 to set aside default judgment and the consequential order that the plaintiff pay the defendants costs of the motion. (5)Set aside the order made by the Court below on 10 November 2011 dismissing the plaintiff's notice of motion filed on 20 October 2011 to set aside default judgment. (6)Vary the order made by the Court below on 10 November 2011 that the plaintiff pay the defendant's costs of the notice of motion filed on 20 October 2011 to set aside default judgment by substituting an order that the costs of the motion be reserved. (7)Remit the matter to the Cowra Local Court to be determined according to law by a magistrate other than Stapleton LCM. (8)Unless a different application for costs is made by written application within seven days, order the defendant to pay the plaintiff's costs of the proceedings in this Court.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 27 June 2012

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (12 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (16)

Cited By (3)