New South Wales Supreme Court CITATION : Bytewin Bros v Classic Tiles [2004] NSWSC 355 HEARING DATE(S) : 27 April 2004 JUDGMENT DATE : 30 April 2004 JURISDICTION: Common Law Division JUDGMENT OF : Master Malpass DECISION : The application for leave is refused and the Summons is dismissed. The plaintiff is to pay the costs of the Summons. The Exhibits may be returned. CATCHWORDS : Leave to appeal - setting aside Order for Judgment by the filing of an Amended Notice of Grounds of Defence after the original notice had been struck out - error of law. LEGISLATION CITED : Local Courts (Civil Claims) Rules 1988, Pt 9 r 1 (1) and r 6 (1), Pt 10 r 1, r 2, r 2 (1) (b), r 3. CASES CITED : N/A Bytewin Bros Pty Ltd (Plaintiff) PARTIES : v Classic Tiles Pty Ltd (Defendant) FILE NUMBER(S) : SC 12555 of 2003 COUNSEL : Mr A M Gruzman (Plaintiff) Mr A Ogborne (Defendant) SOLICITORS : McBride Harle & Martin (Plaintiff) Appleton & Co Lawyers (Defendant) LOWER COURT Local Court JURISDICTION : LOWER COURT 124 of 2003 Downing Centre Sydney FILE NUMBER(S) : LOWER COURT Grant LCM and McMahon LCM JUDICIAL OFFICER : IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION Master Malpass Friday 30 April 2004 12555 of 2003 Bytewin Bros Pty Ltd v Classic Tiles Pty Ltd JUDGMENT 1 MASTER: The dispute between the parties has had a long and messy history in the Local Court. Unfortunately, what has been in dispute may be described as relatively modest in quantum. The dispute has now made its way to this Court. 2 The dispute arose out of a contract whereby the plaintiff was to do certain work at Chatswood. It did work and received certain payments. A part of its claim remained unpaid. The defendant took the stance that the work had not been completed and that it was thereby put to the expense of engaging other contractors so that the work could be completed. 3 The plaintiff commenced proceedings in the Small Claims Division of the Local Court. It filed a Statement of Liquidated Claim for recovery of a sum in the order of $4,000. 4 The claim was defended. The defendant filed a Defence and a Cross-Claim. The Cross-Claim took the form of an Ordinary Statement of Claim and sought damages. It was also defended and a Notice of Grounds of Defence was filed. 5 Initially, the plaintiff did not have legal representation. Curiously, it retained the services of Mercantile Agents who carried on their business in Queensland. 6 Because the defendant's Cross-Claim was in the order of $22,000, the proceedings were transferred out of the Small Claims Division and into the General Division of the Local Court. 7 The matter came before the Local Court on a number of occasions. There was a history of default on the part of the plaintiff (inter alia a failure to provide particulars) both of its claim and Defence to the Cross-Claim. 8 On 14 April 2003, orders were made for the furnishing of particulars. Orders were also made that in default of those orders, the Statement of Liquidated Claim and the Notice of Grounds of Defence to the Cross-Claim were to be struck out and the defendant was to be at liberty to apply forthwith for an Order for Judgment. 9 The particulars were not furnished. The matter came before the court again on 28 April 2003. The plaintiff did not appear. Orders were made for the striking out of both the Statement of Liquidated Claim and the Notice of Grounds of Defence to the Cross-Claim. 10 Documentation provided by the court supplies further information as to what happened on 28 April 2003. There is a reference to "Order for judg." and a further reference to "ABOVE ORDER FOR JUDGMENT IS IN FAVOUR OF THE DEFENDANT/CROSS-CLAIMANT AGAINST THE PLAINTIFF/CROSS-DEFENDANT" (see Annexure H to affidavit sworn by Mr Dunne on 31 October 2003). On that day, the defendant took steps to obtain an Order for Judgment. On 12 June 2003, an Order for Judgment and Registrar's Notice of Order for Judgment dated 12 June 2003 came into being. (purportedly pursuant to rules 1 and 3 of Pt 10 of the Local Courts (Civil Claims) Rules 1988 (the Rules) ). 11 Thereafter, the matter was listed for trial as to assessment and came before the court initially on 10 July 2003. There were certain consent adjournments. The plaintiff was then pursuing out of court resolution. 12 On 19 August 2003, the plaintiff obtained legal representation. On 1 September 2003, an attempt was made to file a Notice of Motion seeking to have set aside orders earlier made by the court. It appears that the Registry would not accept the Notice of Motion and advised the plaintiff that the appropriate procedure was to file a Defence to the Cross-Claim. An Amended Notice of Grounds of Defence to Cross-Claim was filed 3 September 2003. 13 On 4 September 2003, the matter was again before the court for assessment. On that day, the plaintiff sought to move on a Notice of Motion dated 1 September 2003. The Notice of Motion and supporting affidavits were filed in court and a contested hearing took place before Grant LCM. 14 Prior to the commencement of the hearing, the court was told that the Amended Defence to the Cross-Claim had been filed. However, the fact of the filing of that document seems to have been put aside both by the parties and the court. The hearing that took place proceeded on the basis that the Judgment remained on foot and had not been set aside by operation of the Rules. 15 Following the hearing of the Notice of Motion, the learned Magistrate refused to grant the relief sought by the plaintiff. 16 The matter was then stood over to the following day, to enable the assessment to take place. 17 On 5 September 2003, a contested assessment took place before another Magistrate (McMahon LCM). 18 Again, the matter of the filing of the Amended Defence was mentioned. The learned Magistrate took the view that if the plaintiff wanted to challenge what had happened on the previous day, it was open to it to appeal. The assessment then proceeded and was concluded (inter alia the learned Magistrate assessed the damages at $22,705.32). 19 By Summons filed on 30 September 2003, the plaintiff seeks leave to appeal against the decisions made respectively on 28 April 2003, 12 June 2003, 4 September and 5 September 2003. 20 Broadly speaking, two matters were argued. One concerns the application of r 2 (1) (b) of Pt 10 (the rule). The other alleges error on the part of Grant LCM in the exercise of her discretion to refuse the relief sought in the Notice of Motion. 21 Part 10 is headed "Order for judgment". It is in the following terms:- " 1 Order for judgment (1) Where, in an action commenced by the lodging of an ordinary statement of claim: (a) a defendant has not filed a notice of grounds of defence under Part 9 rule 1 (1) or 6 (1), or has filed such a notice which the court has ordered to be struck out, (b) judgment has not been given against that defendant, and (c) a period of 28 days after service of the statement of claim on that defendant has elapsed, the plaintiff may, within 12 months after the expiration of that period, or at such later time as the court may, on sufficient cause being shown, allow, and on filing a form of order for judgment and an affidavit of service of the statement of claim on that defendant, have an order for judgment made by the court or registrar against that defendant. (1A) Where: (a) a defendant seeks an order for judgment under subrule (1) in respect of a cross-claim, and (b) a notation has been made, by an officer in the registry, on the filed notice of the cross-claim: (i) to the effect that a copy of the notice has been given or sent by post to the plaintiff or the plaintiff's solicitor, and (ii) stating the date of that giving or sending, that giving or sending shall be deemed to be service of the notice on the plaintiff and that notation shall be taken to satisfy the requirement in subrule (1) for the filing of an affidavit of service. (1B) Where a notation has been made, by an officer in the registry, on the court record of an action: (a) to the effect that the statement of claim in the action has been served by posting under Part 7 rule 20 (1), and (b) stating the date of that posting, that notation shall be taken to satisfy the requirement in subrule (1) for the filing of an affidavit of service of the statement of claim. (1C) The plaintiff is not entitled to an order for judgment under subrule (1) if the statement of claim has been struck out under Part 5 rule 5 (1A). (2) Subject to rule 2 (2), where an order for judgment is made in an action against a defendant: (a) that defendant shall be taken to have admitted liability, and (b) the action shall go to trial, in accordance with rule 3 and Part 22 rule 1, only as to the assessment of the amount to be recovered by the plaintiff against that defendant. 2 Setting aside order (1) An order for judgment against a defendant: (a) may be set aside, on terms, by order of the court at any time before judgment, and (b) shall, without order, be set aside on the filing of a notice of grounds of defence by that defendant under Part 9 rule 1 (1) or 6 (1). (2) Rule 1 (2) shall, on the setting aside of an order for judgment against a defendant in an action, cease to have any operation on or in respect of the action as against that defendant. (3) Where an order for judgment is set aside, the court may, at the same time or subsequently, make such orders as it thinks fit as to the continuance of the action and as to the costs incurred by any party by the making or setting aside of the order for judgment or by any adjournment of the hearing of the action. 3 Trial (1) Where an order for judgment is made by the registrar in an action, the registrar shall: (a) fix a date for the trial of the action as to the assessment of the amount to be recovered by the plaintiff, and advise the plaintiff of that date, and (b) at least 14 days before the date so fixed give to the defendant, or send to the defendant by post addressed to the defendant at the last address known to the registrar, notice of the order for judgment and the date so fixed. (2) The trial of the action as to assessment shall, unless the order for judgment is set aside or the trial is adjourned, proceed on the date fixed and notified as mentioned in subrule (1), but it shall not be necessary to prove compliance by the registrar with the requirements of that subrule. (3) Without limiting the generality of Part 3 rule 7 and Part 22 rule 1, and unless the court or registrar otherwise orders, the trial of the action as to assessment shall be held in chambers, and any evidence in the action shall be given by affidavit." 22 The plaintiff contends that the filing of the Amended Grounds of Defence set aside the Judgment or Order for Judgment that had been earlier made. It said that this follows from the provisions of 10.2 (1) (b). It is said in effect that the failure of the Magistrates to properly address this matter saw them fall into legal error. 23 There is much that is unclear in what happened in this case. It may be that Judgment was entered by court order on 28 April 2003 rather than by the filing of the prescribed form of Order for Judgment. It may be that the Order for Judgment should be seen as coming into being pursuant to the liberty to apply granted on 14 April 2003. 24 Be that as it may, in my view it was not intended by the Rules that the Order for Judgment entered in the circumstances of this case would be set aside by operation of the Rules (inter alia upon the filing of an Amended Defence). 25 Part 10 applies where the action is commenced by Ordinary Statement of Claim. It is comprised by three rules. Rule 1 contains the provisions which enable the filing of an Order for Judgment. Rule 2 contains provisions which enable such an Order for Judgment to be set aside. Rule 3 provides for the trial of the action as to assessment. 26 Rule 1 has application inter alia where either the defendant has not filed a Notice of Grounds of Defence under Pt 9 r 1 (1) or 6 (1) or such a notice has been struck out. 27 Part 9 r 1 (1) enables the filing of such a notice at any time before Judgment. Rule 6 (1) has no present relevance. 28 In this case, the Notice of Grounds of Defence had been struck out because of default in complying with an order of the court. It was not a case where an Order for Judgment had been obtained because of default in filing a Notice of Grounds of Defence. If the construction propounded by the plaintiff was correct, r 2 could become a source of abuse (inter alia as in the present case it could be used to avoid the consequences of default and frustrate or overcome orders earlier made by the court). The purpose in striking out the Notice of Grounds of Defence would be defeated. 29 As previously mentioned, there is doubt as to what has been done. A liberty to apply had been granted on 14 April 2003. The defendant sought the Order for Judgment following the granting of that liberty. On one view, the Order for Judgment may be seen as being pursuant to the liberty to apply rather than r 1. Further, the Order for Judgment would have been otiose if judgment had already been given. In any event, I do not consider that the Amended Notice of Grounds of Defence can be regarded as a Notice of Grounds of Defence filed pursuant to Pt 9 r 1 (1). 30 In my view, the failure by either Magistrate to consider and treat the rule as having had the effect propounded by the plaintiff did not constitute any error of law. 31 For completeness, I should add that the application before Grant LCM was conducted inter alia as an application to set aside the Order for Judgment. The plaintiff did little more than draw attention to the fact that the Amended Notice of Grounds of Defence had been filed. The argument was not pressed before McMahon LCM. Its first real ventilation came in this Court. 32 It is also said that Grant LCM erred in exercising her discretionary power. I am not satisfied that that is the case. 33 In my view, her exercise of the discretion reached a result that was open on the material before her. 34 There were relevant circumstances to which she was entitled to give weight and which could lead her to the view that relief should be refused. I shall mention only some of them. She was confronted with a history of delay and default which had not been satisfactorily explained. Further, there had been no attempt to remedy the default. The application did not see the plaintiff placing before the court the outstanding particulars. 35 Leaving aside any question of error of law, the present appeal can only be entertained if leave is granted. Apart from addressing what was said to be the errors of law, the plaintiff did not otherwise address the need for leave. 36 In my view, no case for the granting of leave has been made out. It suffices to merely mention some of the features that are lacking. This is not a case where any novel point of law is involved. It concerns claims in a modest quantum. It may be still open to the plaintiff to seek relief in the Local Court. There is no question of public importance. 37 Accordingly, the application for leave is refused and the Summons is dismissed. The plaintiff is to pay the costs of the Summons. The Exhibits may be returned. ********** Last Modified: 05/11/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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