New South Wales Supreme Court CITATION : Brewer v King [2008] NSWSC 459 HEARING DATE(S) : 13 May 2008 JUDGMENT DATE : 15 May 2008 JUDGMENT OF : Malpass AsJ DECISION : Summons dismissed; plaintiff to pay the costs of the proceedings. CATCHWORDS : COMMON LAW - Local Court appeal - leave - discretionary exercise - decision refusing application to set aside default judgment CATEGORY : Principal judgment CASES CITED : House v The King (1936) 55 CLR 499 PARTIES : Yvonne Brewer (Plaintiff) John Brian King (Defendant) FILE NUMBER(S) : SC 14737/07 COUNSEL : SA Sirtes (Defendant) SOLICITORS : M Moloney, Our Lawyers Our Conveyancers (Plaintiff) Morton & Harris (Defendant) LOWER COURT JURISDICTION : Local Court LOWER COURT FILE NUMBER(S) : 55 of 2006 LOWER COURT JUDICIAL OFFICER : Dick LCM LOWER COURT DATE OF DECISION : 31 August 2007 IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION Associate Justice Malpass Thursday 15 May 2008 14737/07 Yvonne Brewer v John Brian King JUDGMENT 1 HIS HONOUR: The plaintiff is the owner of a property referred to as Hillside ("the property"). She entered into building contracts concerning the property (in early 2004). Disputes arose between the parties (late 2004). 2 Two proceedings were commenced in the Local Court. One was brought by the defendant. The other was brought by his company. A defence was filed in each proceedings. The proceedings were the subject of case management. Consent orders were made in July 2006. The plaintiff failed to comply with the directions thereof. 3 The proceedings came before a Magistrate (Dick LCM). He directed that the defences be struck out and gave leave to the defendant and his company to apply for default judgment. These parties then applied for and obtained default judgment in each of the proceedings. This happened in November 2006. 4 The parties were legally represented. Mr Gleeson (solicitor) appeared for the defendant and his company. Mr French (solicitor) appeared for the plaintiff. 5 Attempts were made to execute the judgments. This brought about an application to set aside the default judgments. Mr Button, who was employed by Mr French, appeared on behalf of the plaintiff. Dick LCM dismissed the application on 19 April 2007. 6 Mr French ceased to practise and the plaintiff employed new solicitors (Sparke Broad Goodmans). An application was made to pay the judgments by instalments. This was also unsuccessful (the applications were disposed of on 6 July 2007). 7 The plaintiff made a further change in her legal representation. She employed Our Lawyers Our Conveyancers and Ms Bartush-Peek assumed the conduct of the matter on her behalf. 8 A further application to set aside the default judgments was made. It was also held by Dick CLM. Ms Bartush-Peek appeared on behalf of the plaintiff. Again, the application was unsuccessful. 9 The application was supported by, inter alia, an affidavit from the plaintiff herself, an affidavit from Mr Greene and an affidavit sworn by Mr French. 10 By that stage, an amended defence and Scott schedule documents had been prepared. Mr Greene (whose qualifications seem to be unclear) had made an inspection of the property. He seems to have been involved in the matter since late 2004. The effect of his evidence was that the contract works were partially incomplete. In paragraph 6 of his affidavit he identified what he considered to be the incomplete matters. They are that the plaintiff had failed to: "(a) Satisfy the statutory requirements of council set out in Clause 17 of the contract (b) Notify the Defendant that the work is complete (c) Provide the Defendant with the keys to the property (d) Provide the Defendant with an occupation certificate (e) Protest against occupation of Hillside by the Defendant after being notified in my letter of 28 February 2007 which is item (c) of Annexure 'A' (f) Complete the works within the time provided for in the contract or at all before issuing a demand for final payment (g) Attend at the site after 9 March 2005." 11 The affidavit sworn by Mr French was short in content and less than satisfactory. The effect of its content is to ascribe at least part of the default to omission on his own part. 12 In her submissions to Dick LCM, Ms Bartush-Peek said, inter alia, the following: "Your Honour, paragraph 30 my friend makes there a submission that's made more than once, that we're in some way attacking the validity of the order your Honour made in 2006. Your Honour, we're not seeking to rely upon r 36.15 which is a general power to set aside a judgment or order on the basis that it was made irregularly, illegally or against good faith, that attack is not made your Honour, and that's not relevant to your Honour's consideration. The rule relied on is r 36.16." 13 Dick LCM delivered a brief ex-tempore judgment. Whilst he had regard to other matters, he placed emphasis on the default and delay of the plaintiff. His judgment concluded with the following: "Having regard to those observations it is a much wider consideration than that suggested by the applicant, each motion is refused." 14 The plaintiff has brought an appeal in this Court. She now proceeds on an Amended Summons. It seeks leave to appeal from the decision of 31 August 2007 and, inter alia, an order that his decision be set aside. This relief was restricted to the proceedings brought by the defendant himself in the Local Court. The grounds of appeal are lengthy. However, the substance of what is complained of is failure to have regard to other relevant matters (such as the question of there being a good defence on the merits and explanation for default). 15 The appeal was heard on 13 May 2008. By that time, Ms Bartush-Peek had ceased to have the conduct of the matter and Mr Moloney took that over at short notice. He did not seek an adjournment. However, it was clear that he had had little opportunity to prepare for the hearing. Ms Sirtes appeared for the defendant. 16 As earlier mentioned, the plaintiff has proceeded on the basis that leave is required to maintain this appeal. Questions of leave were not argued before me. I shall return to this matter in due course. I shall first look at the merits of the appeal. 17 In this case, the only appeal as of right available to the plaintiff is where there has been error in point of law. The complaint that is made relates to error in the exercise of a discretion (see, inter alia, House v The King 1936) 55 CLR 499 at 504-505). The discretionary exercise in this case required the Magistrate to have regard to the dictates of justice in the context of the relevant circumstances. What is sought to be set aside is a decision refusing to set aside a default judgment. The appeal is brought against that decision. It is not brought against the entry of the default judgment. It may be added that there is authority for the view that a default judgment is an interlocutory one. 18 The plaintiff bears the onus. Not only must she demonstrate requisite error, she must also demonstrate that the error was material to the decision sought to be disturbed. 19 The dispute goes back to late 2004. The proceedings were commenced in the Local Court in early March 2006. There followed the default in compliance with the consent orders and what was done in October 2006 to bring about the default judgment. The default judgment was entered in November 2006. The first attempt to set it aside was not brought to hearing until 19 April 2007. The second attempt was not dealt with until 31 August 2007. This appeal was not brought to hearing until 13 May 2008. 20 The delay has been enormous and what has been put before the Court to explain it falls well short of being satisfactory. 21 Dick LCM did have express regard to the explanation offered for default and delay (inter alia, the conduct of Mr French and the plaintiff's state of disarray). He did have express regard to matters of liability. He observed that liability was even admitted in the course of the application to pay by instalments. He observed that she "had more than a reasonable opportunity to present a case". He also observed that she "now seeks further indulgence". 22 Further, I consider that what was expressly said has to be considered in the light of his concluding remarks. It seems to me, that what was expressly said has to be read in the context of the submissions made on behalf of the parties. 23 A court usually requires evidence of a bona fide defence on the merits. What was offered by the plaintiff was at best partial failure to complete the works. In essence, it provided a defence to part of the claim only (and it may not be a significant part). What was not in dispute has not been paid and it has not been suggested that any offer has been made to pay the undisputed amount. 24 Whilst the plaintiff had the opportunity to file a cross-claim, no such claim was filed in the Local Court proceedings. If she wishes to pursue an action for breach of contract that option would seem to remain open to her and the matters of non-completion can be litigated in proceedings brought by her. 25 She may also have a further alternative. She may have a good cause of action against Mr French. 26 In the circumstances, I am not satisfied that she has demonstrated entitlement to relief in this Court. I am not persuaded that the decision made on 31 August 2007 should be set aside. It may be added that a setting aside of that decision would not necessarily solve the plaintiff's problem. She would also need the leave of the Local Court to disturb what was achieved by reason of the orders made on 13 October 2006. Putting aside those matters, there remains the consideration of leave. If leave be required in this case, I am not persuaded that it should be granted. 27 Apart from merit deficiencies, there is no question of public interest and the amount involved would not seem to be large. Further, she would appear to have other available remedies. 28 The Summons is dismissed. The plaintiff is to pay the costs of the proceedings. ********** 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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