Clauson v DCH Legal Group - [2004] WADC 27

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: CLAUSON -v- DCH LEGAL GROUP [2004] WADC 27

CORAM: MULLER DCJ

HEARD: 23 FEBRUARY 2004

DELIVERED : 27 FEBRUARY 2004

FILE NO/S: CIV 1295 of 2003

BETWEEN: FRANCES ANN CLAUSON
Appellant/Defendant
AND
DCH LEGAL GROUP
Respondent/Plaintiff

Catchwords:

Appeal against Deputy Registrar's decision dismissing defendant's application to set aside judgment in default of appearance to defend - Whether defence on the merits available to defendant

Legislation:

Nil

Result:

Appeal dismissed

Representation:

Counsel:

Appellant/Defendant : In person
Respondent/Plaintiff : Mr B M C N de Lestang

Solicitors:

Appellant/Defendant : In person
Respondent/Plaintiff : Benjamin & de Lestang

Case(s) referred to in judgment(s):

Palmer v Prince [1980] WAR 61

Case(s) also cited:

Nil

MULLER DCJ: This is an appeal against a decision of the Deputy Registrar dismissing an application by the appellant/defendant to set aside a judgment entered in default of appearance to a writ of summons issued out of this Court by the respondent/plaintiff and served on the defendant on 16 June 2003. Following service the defendant failed to enter an appearance and judgment in default of such appearance was entered against her on 10 July 2003 in an amount of $43,752.94.
The appeal by the defendant is out of time and the leave of this Court is required for her to pursue the appeal.
The plaintiff is a firm of solicitors and the defendant was a client of the plaintiff. In its statement of claim the plaintiff alleges that on 31 January 2001 the defendant entered into a written agreement with the plaintiff retaining the plaintiff to represent her in proceedings in the Family Court. It was alleged that the plaintiff did legal work for the defendant and incurred expenses on her behalf in the form of disbursements to third parties. The statement of claim further alleged that the defendant was billed $62,909.52 between November 2001 and during 2002 and has paid the plaintiff $25,119.24 in reduction of her account with the plaintiff. The amount claimed by the plaintiff in its writ of summons represented the balance of the professional legal fees said to have been owed by the defendant including interest at the agreed rate and costs. Following the entry of the default judgment on 10 July 2003 the defendant applied to have the judgment set aside and filed an affidavit dated 3 September 2003 in which she acknowledged having failed to enter an appearance but claimed she did not know she was required to do so and also asserted that she had a good defence to the plaintiff's claim.
For the defendant to succeed in this appeal she must satisfy the Court that she has a defence on the merits. The position was explained by the Full Court in Palmer v Prince [1980] WAR 61 at 62 where Jackson CJ said:
"The general rule is that where a judgment has been regularly entered, it is not to be set aside unless the court is satisfied that there is a defence on the merits: Rubin v Eacott (1912) 12 WALR 162, following Farden v Richter (1889) 23 QBD 124. This rule has been approved by the House of Lords in Evans v Bartlam [1937] AC 473. At p 480 of the report Lord Atkin refers to the rule laid down by the courts to guide the normal exercise of their discretion in a case where the judgment was regularly obtained that 'there must be an affidavit of merits, meaning that the applicant must produce to the court evidence that he has a prima facie defence', although he concedes that in rare but appropriate cases the rule could be departed from. One instance where the rule was not insisted upon can be found in Collins Book Epot Pty Ltd v Bretherton [1938] VLR 40, where the failure to deliver a defence arose from a solicitor's clerk's error, and the defendant was an executor who sought and was given the opportunity to investigate, by his defence, circumstances of suspicion regarding a claim against his testator. But instances of departure from the rule are rare: see the cases referred to by Mr Neil Williams at p 390 of vol 1 of the Practice of the Supreme Court of Victoria."
The defendant has filed three affidavits in support of her application. In the first affidavit sworn on 7 October 2003 she asserted that she had a defence to the action and referred to a Deed of Charge signed by the plaintiff and herself after she engaged the plaintiff to act for her in the Family Court. The Deed of Charge, a copy of which is before the Court, conferred on the plaintiff security for fees and expenses owed and incurred by granting a charge to the plaintiff over the defendant's property in Bullsbrook. There is nothing in the terms of the charge that could possibly be said to give rise to a defence to the plaintiff's claim. The only qualification to the charge was the defendant's right to delay the sale of her property to meet any legal expenses to a date when the proposed Perth/Darwin Highway had been gazetted or within 12 months of the date of the conclusion of the Family Court proceedings whichever was the later. The defendant submitted that this provision in the Deed of Charge showed that the deed went beyond an instrument to secure payment of costs and constituted a variation of the original cost agreement as to the time when costs were to be paid. I am unable to agree with this submission. All par 5 does is to protect the defendant's interests by postponing the sale of her property in satisfaction of the debt to the most opportune time when the property is likely to be at its peak value. But the Deed of Charge does not in any way limit or preclude the plaintiff from taking legal action or obtaining judgment against the defendant for any outstanding legal fees or expenses raised or incurred under the agreement between the parties. Furthermore, it does not preclude the plaintiff from enforcing any judgment obtained other than by the sale of the defendant's property except in accordance with par 5 of the Deed of Charge.
In addition to the Deed of Charge the defendant also referred in her affidavit to a payment of $10,000 she had made directly to counsel acting on her behalf in the Family Court which, she claimed, had not been credited to her by her lawyers and was included in the judgment debt. Apart from this alleged over‑claim, however, there is nothing in the defendant's first affidavit that could constitute a credible defence to the plaintiff's claim for unpaid fees and legal expenses. In particular, I am unable to find any merit in the defendant's submission that because the judgment sum is said incorrectly to include an amount of $10,000 she had already paid to counsel the validity of the totality of her lawyer's claim falls into question and gives her the right to defend the claim. In fact the judgment does not include this sum of $10,000.
In response to the defendant's affidavit Rhonda Frances Griffiths, a partner in the plaintiff firm, asserted that the defendant had spoken to her personally asking for time to finalise her account after further proceedings had been instituted in the Family Court. What does emerge from the plaintiff's affidavit is that detailed accounts of the work done were sent to the defendant who had agreed to pay the plaintiff's costs within 14 days of accounts being rendered. The papers before the Court include copies of each memorandum of account sent to the defendant together with copies of a detailed breakdown of each account showing the date on which work was done, a description of the nature of the work done and the amount charged for that particular piece of work. As to the defendant's claim that the judgment sum incorrectly includes an amount of $10,000 which she had paid directly to counsel the affidavit filed by the plaintiff asserts that this amount was taken into account and deducted from the balance of the fees due. In her affidavit Rhonda Frances Griffiths also refers to correspondence she sent to the defendant asking for payment of the outstanding fees and asserted that on one occasion the defendant said she could not make any payments in reduction of her account.
The defendant filed a supplementary affidavit in support of this appeal on 17 November 2003. Once again I am unable to find anything in this supporting affidavit which might constitute a credible defence. Apart from pointing to alleged discrepancies in the plaintiff's accounts, and a failure to credit the defendant with payments that she actually made, the supplementary affidavit adds little to what the defendant claimed in her first affidavit. In her supplementary affidavit the defendant again raises the alleged failure of the plaintiff to credit her with the $10,000 she paid directly to her counsel in the Family Court proceedings and, in addition, asserts that her lawyers have failed to credit her with a payment of $5,000 that was used to meet the fees of the accountant in the Family Court proceedings. I am certainly not convinced that these discrepancies exist. Even if the accounts rendered by the plaintiff are open to question in one or more respects the proper procedure which the defendant ought to have adopted was to have the costs taxed in the Family Court. That was never done.
In par 16 of her supplementary affidavit the defendant raised the issue of negligence by her former solicitor. This was the first time this issue had surfaced. There is no evidentiary foundation for this allegation. Even if it were the basis for a valid counterclaim it still would not constitute a defence to the plaintiff's claim.
While I understand and sympathise with the predicament in which the defendant finds herself there is simply no material before the Court that points to her having any defence on the merits. The particular items that the defendant has brought into question in her affidavits are matters that ought to have been resolved at a taxation of costs. They are certainly not matters that would justify this Court in setting aside the learned Deputy Registrar's decision. Finally, the argument that the alleged discrepancies relied upon are of such significance as to cast doubt upon the accuracy and validity of the accounts as a whole is, in my view, without substance.
I would give the defendant leave to appeal but would dismiss the appeal.