New South Wales Supreme Court CITATION : Sacco v Prime Car Products Pty Ltd [2008] NSWSC 1053 This decision has been amended. Please see the end of the judgment for a list of the amendments. HEARING DATE(S) : 7 October 2008 JUDGMENT DATE : 9 October 2008 JUDGMENT OF : Malpass AsJ DECISION : Proceedings dismissed; plaintiff to pay costs of the proceedings; exhibit returned. CATCHWORDS : COMMON LAW - appeals from General Division of Local Court - leave - extension of time - discretion - setting aside default judgment CATEGORY : Principal judgment PARTIES : Amedeo Sacco (Plaintiff) Prime Car Products Pty Ltd (Defendant) FILE NUMBER(S) : SC 11464/08 COUNSEL : DS Weinberger (Plaintiff) CG Fairfield (Defendant) SOLICITORS : Hicksons (Plaintiff) Alexander & Associates (Defendant) LOWER COURT JURISDICTION : Local Court LOWER COURT FILE NUMBER(S) : 7542/07 LOWER COURT JUDICIAL OFFICER : O'Shane LCM first decision; Heilpern LCM second decision LOWER COURT DATE OF DECISION : First decision 6 September 2007; second decision 6 March 2008. IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION Associate Justice Malpass Thursday 9 October 2008 11464/08 Amedeo Sacco v Prime Car Products Pty Ltd JUDGMENT 1 HIS HONOUR: The defendant is a vendor of motor vehicle parts. It sold motor vehicle parts to the plaintiff. The plaintiff alleged that parts were defective and did not pay for them. He was asked to return the defective parts. He failed to do so. 2 The defendant brought proceedings in the General Division of the Local Court. The claim was in the order of $13,000. It proceeded on an Amended Statement of Claim which pleaded breach by way of non-payment of an oral agreement for the sale of the parts. A Defence and Cross-Claim was filed. In essence, the defence put in issue the allegation of breach and raised the issue that the parts were defective and, inter alia, had been installed in other vehicles. The Cross-Claim repeated what had been said in the Defence concerning defective parts and advanced a monetary claim for consequential loss. 3 Neither the Defence nor the Cross-Claim provided any particulars. The pleading said that these would be provided in due course. Without such further particulars, there was an absence of information as to the nature of the alleged defects and as to the loss allegedly suffered thereby. The defendant made requests for such particulars. 4 The parties were legally represented at all relevant times (however, there have been changes of solicitor). 5 The defendant brought a Notice of Motion. It sought the striking out of the Defence and Cross-Claim. The Notice of Motion informed that the defendant was relying on r 14.28 of the Uniform Civil Procedure Rules. Despite that, the thrust of the application appears to have been based on the absence of particulars. 6 Thereafter, some particulars were supplied by the plaintiff (on 28 August 2007 and on 3 September 2007). The particulars saw the plaintiff alleging a loss in excess of $20,000. What was supplied still failed to reveal the nature of the alleged defects (it identified amounts that the plaintiff had allegedly paid). 7 The Notice of Motion was heard and determined by O'Shane LCM on 6 September 2007. After a contested hearing, she ordered that the defence and Cross-Claim be struck out ("the first decision"). The Magistrate did not deliver written reasons. Her reasoning process is to be gleaned from pages 1 – 6 of the transcript. Whilst the position may not be free from doubt, it may be that she came to the view that in substance the pleadings failed to raise any grounds of defence. The time for bringing an appeal against that decision passed without any appeal being brought and until January 2008 no application was made to file any Amended Defence and Cross-Claim. 8 The defendant moved for default judgment which was obtained on 10 September 2007. Thereafter it issued a bankruptcy notice. 9 On 23 September 2007, the plaintiff instructed his solicitor to move to set aside the default judgment. On 8 October 2007 he received from his solicitor a letter from the solicitor for the defendant demanding what was owing under the default judgment. Thereafter, he had no further contact with his own solicitor. It appears that he took no action until after service of the bankruptcy notice. 10 The plaintiff's present solicitors were retained in early January 2008. On 24 January 2008, the plaintiff filed a Notice of Motion seeking the setting aside of the default judgment and leave to file an Amended Defence and Cross-Claim. 11 The proposed amended pleadings were markedly different to those that had been struck out (inter alia, there was a pleading of implied terms and an identification of alleged defects). 12 The Notice of Motion was heard and determined by Heilpern LCM on 6 March 2008. The Magistrate refused the application ("the second decision"). 13 As part of the hearing process, the defendant called upon a notice to produce and some documents were produced by the plaintiff. 14 The Magistrate did not deliver written reasons. There is no transcript for part of the hearing (by reason of an unspecified fault in the recording equipment). This Court has before it, in an affidavit, a contemporaneous handwritten note made by the solicitor for the plaintiff (Mr Price) and transcript of part of the hearing (page 2 thereof sets forth that part of the reasoning process that has been recorded therein). 15 The relevant passages read as follows: "HIS HONOUR: … (tape D1 begins) … would be fair to put in all the circumstances of this case whether justice could be served by allowing the judgment to be set aside and for the saga to continue. I notice that today a notice to produce has been served and even now the documents that the defendant intends, or says he intends to rely upon, some are produced and some are not, largely because according to the defendant or the applicant for the notice of motion, a medical certificate is filed of 28 February, some two weeks ago, saying that since that date after listing his medical condition his concentration and judgment had been impaired due to a infection, right lower leg, et cetera. So the plaintiff, who is seeking to recover a relatively modest amount, has spent equal to that amount, or close to, to get to this point and were the judgment to be set aside in circumstances where his original defence was struck out, and that decision has not been appealed against, there is then a delay and only when he is served with the bankruptcy notice does he move to have the judgment set aside. Then in those circumstances it seems to me that this is one of those unusual cases where despite the fact that there is a bona fide defence, it is the delay caused and indeed the whole history of the proceedings, including the amount of costs already expended by the plaintiff in the matter lead me to the conclusion that the judgment ought not be set aside. I am not going to set aside judgment and the notice of motion is dismissed." 16 The plaintiff has brought proceedings in this Court. The proceedings are brought by way of appeal to challenge both of the decisions. The appeal brought against the decision of O'Shane LCM has been made out of time and cannot be maintained without an extension of time. It also requires the granting of leave. 17 The proceedings were heard on 7 October 2008. The parties were legally represented. Written submissions have been made which have been supplemented by oral argument. 18 I shall now address questions relevant to the first decision. It is convenient to start with considerations of the extension of time and of leave. 19 The appeal is brought well out of time. The delay is not sufficiently explained. The subject of the appeal concerns an interlocutory decision. The disturbing of that decision no longer has any utility. The plaintiff has taken the course of abandoning the struck out pleadings and instead sought to file the Amended Defence and Cross-Claim which was the subject of the second decision. An aim of these proceedings is to bring about that result. Whilst what was said by the Magistrate may in some minds throw up problems of comprehension and the prospect of error, the reasoning is not manifestly erroneous and the decision itself is otherwise supportable. The documents had pleading problems. There was a failure to supply sufficient particulars and the Magistrate had power to reach her decision on such a basis. 20 The power to extend time is discretionary. It is exercised having regard to the relevant circumstances of the particular case before the Court and so that the dictates of justice are best served. The onus rests with the party seeking the extension of time. 21 In the circumstances of this case, I do not consider that the plaintiff has discharged the onus. 22 Little was said about the consideration concerning leave. The case concerns a matter of practice or procedure and involves a relatively small amount. There is no novel question of law or other matter of public interest. To the extent that there is a need to address this matter, it is my view that no case for the granting of leave has been made out. 23 I now turn to the second decision. There seemed to be common ground that this appeal involved a consideration by the Court of an alleged error in point of law. I shall proceed on that assumption. The Magistrate was exercising a discretionary power. Again, it is a discretion that is exercisable having regard to the relevant circumstances of the particular case before the Court and so that the dictates of justice are best served. Again, also, the onus is borne by the plaintiff (see, inter alia, Borowiak v Hobbs & Anor [2006] NSWSC 1089). 24 In my view, the Magistrate did not misdirect himself. It seems to me that he addressed the right question. I am not satisfied that there is any error in point of law. 25 In most cases, the relevant considerations are the existence of a bona fide defence on the merits, delay, explanation for delay and prejudice. These are matters that the Magistrate took into consideration. 26 The Magistrate saw it as an unusual case. This led him to refusing the application even though he was of the view that there had been shown a bona fide defence on the merits. It may be that if the matter had been heard by another judicial officer, a different result may have come to pass. Be that as it may, the Court was reminded during submissions that such a consideration of itself does not justify the setting aside of the decision that was made (see, inter alia, Borowiak). 27 It has been said that the Magistrate took into account irrelevant considerations. I am not satisfied that this is the case. 28 He did refer to the failure to appeal from the first decision. He did make mention of what happened in relation to a notice to produce that formed part of the hearing process before him. In so doing, it seems to me that he was having regard to what were some of the circumstances of this particular case. 29 I should add that there may be a difference of views as to whether or not such decision is only maintainable by way of leave. Neither that matter nor the need for leave was argued in this case. I have earlier mentioned certain matters that may be relevant to such consideration. Apart from making the observation that this does not seem to me to be a case in which leave (if it was required) should be granted, I take the matter no further. 30 The appeals fail. The proceedings are dismissed. The plaintiff is to pay the costs of the proceedings. The exhibit may be returned. ********** 16/10/2008 - File number added to coversheet - Paragraph(s) coversheet 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.