Daws v Duncan - [2001] WASC 161

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: DAWS -v- DUNCAN [2001] WASC 161

CORAM: TEMPLEMAN J

HEARD: 1 JUNE 2001

DELIVERED : 1 JUNE 2001

PUBLISHED : 21 JUNE 2001

FILE NO/S: CIV 2745 of 2000

BETWEEN: GRAHAM DAWS
Plaintiff
AND
NEVILLE DUNCAN
Defendant

Catchwords:

Practice and procedure - Application to set aside judgment obtained in default of appearance - Rules of the Supreme Court O 13 r 10 - Solicitor's obligations in response to another solicitor's withdrawal of undertaking to accept service - Solicitor's affidavit sworn in support of motion for judgment misleading - Discourteous conduct on part of solicitor - Departure from general rule that a defendant wishing to set aside a judgment must present a credible defence by filing an affidavit setting out facts - Matter referred to Legal Practice Board

Practice and procedure - Costs - Costs awarded against plaintiff on an indemnity basis - Solicitor to show cause why he should not pay costs personally - Rules of the Supreme Court O 66 r 5

Legislation:

Nil

Result:

Judgment set aside
Plaintiff to pay defendant's costs of and incidental to this application on an indemnity basis, to be taxed if not agreed and paid forthwith
Solicitor for plaintiff ordered to show cause why he should not pay costs personally

Representation:

Counsel:

Plaintiff: Mr W Naseem
Defendant: Mr D F Beere

Solicitors:

Plaintiff: Cocks Macnish
Defendant: Beere May & Meyer

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

Nil

Case(s) also cited:

Nil

TEMPLEMAN J: I have an application pursuant to O 13 r 10 to set aside a judgment obtained in default of appearance. The matter arose out of a dispute between the plaintiff and the defendant over the purchase of a horse. A writ was issued on 20 December 2000 which contained an indorsement of claim. On the same day an amended writ was issued in which the indorsement was amended to change the name of the horse.
The indorsement disclosed that the plaintiff's claim was for specific performance of a contract said to have been made between the plaintiff and the defendant on or about 22 September 2000, for the sale by the defendant and purchase by the plaintiff of a brood mare named "No Secret" for the sum of $25,000. In the alternative there was a claim for damages for breach of the agreement by the defendant and for misrepresentation including damages pursuant to s 52 of the Trade Practices Act.
The plaintiff's solicitors are and were Cocks Macnish. The defendant's solicitors are and were Beere May and Meyer in Margaret River. Mr Cocks had the conduct of the matter on behalf of the plaintiff. Mr Beere had the conduct of the matter on behalf of the defendant.
There was some correspondence between the solicitors about the service of the writ. On 20 December 2000 Mr Beere wrote to Cocks Macnish in these terms:
"I will accept service of any proceedings subject to service being at our Margaret River office ... between the hours of 8.30 am to 5 pm today and tomorrow or between 8.30 am and 5 pm from 2 January 2001 onwards. I will not accept service at any other time."
That letter was sent by facsimile. Mr Cocks replied in the same way, shortly after the writ had been issued: he sent a copy of the writ and said it was in the process of being served on Mr Beere.
When Mr Beere received Mr Cocks' letter he took the view that it would not be appropriate for him to accept service for two reasons.
First, he considered that the writ should have been issued out of the District Court, which had a jurisdiction of up to $250,000. Secondly, because it contained an allegation, albeit disputed, that the agreement had been made in Busselton, Mr Beere believed that the writ should have been issued out of the District Court registry at Bunbury.
Mr Beere conveyed those views to Mr Cocks in a letter sent by facsimile on 21 December 2000 at 10.33 in the morning. In that letter Mr Beere said he was not prepared to accept service of the writ for the reasons to which I have just referred. He concluded his letter by saying that if Cocks Macnish persisted in proceeding with the current writ and served it personally, then a conditional appearance would be filed and an application made to have the writ struck out with an order for costs.
At about that time, the local bailiff attended at the offices of Beere May and Meyer and attempted to serve the writ. The receptionist had been instructed not to accept service and she declined to do so. It seems that the bailiff went away but returned later and simply left the writ on the reception desk.
There is an issue about the precise time at which the writ was left at Mr Beere's office. In an affidavit sworn in support of this application, Mr Beere said that the bailiff first appeared at his office at about 11.00 am on 21 December; that he left when the receptionist declined to accept service and that he returned about ten minutes later and left the writ on the desk.
In response to that affidavit, the bailiff has provided a supplementary affidavit of service in which he says that based on his contemporaneous notes, service was effected at "approximately 10.30 am on 21 December 2000".
That affidavit has been produced only very recently. I am told the delay is due to the fact that the bailiff has been away on long-service leave.
The result is that Mr Beere has not had an opportunity to respond formally to the affidavit. However, Mr Beere told me from the bar table without objection from Mr Naseem, who appears for the plaintiff, that the writ was not left at his office until after he had sent the facsimile withdrawing his undertaking to Cocks Macnish.
Although that is not a statement made on oath, Mr Beere tells me that as an officer of the Court and I accept it as true.
There was some further correspondence between Mr Beere and Mr Cocks.
On 21 December 2000 Mr Cocks responded to the letter in which Mr Beere had withdrawn his undertaking to accept service. Mr Cocks said that as the writ had been served validly, and as Mr Beere's firm had already committed to accept service, he expected to receive a memorandum of appearance, failing which, default judgment would be entered.
Mr Cocks referred to the other matters raised by Mr Beere and said he regarded them as ill conceived. The letter concluded:
"We await your memorandum of appearance within the specified time and reserve our right to show this letter to the Court in support of an application for default judgment, if necessary."
Mr Beere responded to Mr Cocks' letter saying that further to the facsimile of that date (in which he had withdrawn his undertaking) the bailiff had now served a copy of the amended writ. Mr Beere went on to say that as advised in his earlier facsimile, service of the amended writ was not accepted, for the reasons he had given previously.
Matters proceeded after the Christmas break. On 5 January 2001 Mr Cocks wrote to Mr Beere acknowledging his facsimile transmission of 21 December. That letter referred only to the jurisdictional issues and asked Mr Beere to reconsider. Mr Cocks said that even if Mr Beere was correct, the proceedings could simply be remitted to the District Court.
There was an invitation to telephone Ms Saraceni at Cocks Macnish to discuss the matter. I note there was no renewal of the threat to enter default judgment.
Mr Beere responded on 29 January in a three-page letter in which he dealt, first, with the jurisdictional issue. He then said that since last corresponding he had taken instructions from his client in relation to Mr Cocks' facsimile of 16 December which, I think, dealt with the merits of the plaintiff's claim.
Mr Beere then set out in some detail his client's instructions. It is not necessary for present purposes to go into those matters. It is sufficient to say that if the facts referred to in that letter were true then the defendant would have a complete defence to the plaintiff's claim.
I am told that Mr Beere's letter was sent by facsimile. However, Mr Naseem told me that the letter had not been received by Cocks Macnish. It is an important letter and I should have thought, as I said to Mr Naseem, that had that been so, Mr Cocks would have sworn an affidavit saying that it had never been received. Mr Naseem then resiled from that position. He said there had been no response to the letter as a result of "administrative error."
It is not clear what that administrative error was: whether the letter was received by Cocks Macnish but was never shown to Mr Cocks; or whether Mr Cocks saw the letter but then overlooked it in the subsequent conduct of the matter. Mr Naseem was unable to say. Again it seems to me, with respect, that is something which Mr Cocks should have deposed to if he was of the view that he should not have been fixed with notice of the letter.
In any event, there was no response from Cocks Macnish to the letter of 29 January.
On 22 February 2001 Cocks Macnish filed a notice of motion in which the plaintiff sought orders in default of appearance, for delivery by the defendant of the brood mare "No Secret", pursuant to the alleged agreement. The application was supported by an affidavit of Mr Cocks. On the same day Cocks Macnish filed a statement of claim.
Quite extraordinarily the statement of claim was never served on Mr Beere. He learned of it only this morning. Equally extraordinarily the notice of motion, which is said to be addressed to the defendant and his solicitors at Margaret River was not served: nor was the supporting affidavit. Mr Beere had no notice of the application.
In his affidavit, Mr Cocks referred to the alleged agreement, which, he said the plaintiff was ready, willing and able to perform. He referred to the service of the writ and to the affidavit of service of the bailiff. He annexed to his affidavit a copy of Mr Beere's letter dated 20 December 2000 in which he had said he would accept service.
Mr Cocks also deposed to the fact that he verily believed the plaintiff had a good case and that he was unaware of any bona fide defence by the defendant based on his instructions.
There is no doubt that when Mr Cocks swore his affidavit and exhibited the letter of 20 December 2000, he knew that Mr Beere had withdrawn his undertaking. It may well be, and this is an interesting question, that Mr Beere was not entitled to withdraw the undertaking. I will digress for a moment to deal with that. There is clear authority that if a solicitor undertakes to accept service of a writ and is then served, he cannot then withdraw his undertaking without the leave of the Court. Leave will be granted only in special or unusual circumstances.
There is apparently no authority (and none is referred to in Seaman, P Civil Procedure Western Australia Butterworths, Australia, 1990 where one would expect to find it) dealing with the present question: may a solicitor who gives an undertaking to accept service withdraw his undertaking before service has been effected? I think he may: but it is not a question which I need to deal with today for reasons which will appear.
The important point, I think, is this: given Mr Cocks knew that Mr Beere had withdrawn his undertaking (even if he believed that Mr Beere was unjustified in so doing) he should have informed the Court of Mr Beere's position on the application made without notice to Mr Beere. Had that been done, then I have no doubt that the Court would have required the papers to be served on Mr Beere so as to hear what he had to say. Not only did Mr Cocks fail to inform the Court of these matters, he exhibited to his affidavit the letter in which Mr Beere had said he would accept service. In the circumstances, that was grossly misleading.
Further, Mr Cocks referred in his affidavit, as I have said, to his being unaware of any bona fide defence, based on his instructions. If Mr Cocks had received the letter of 29 January from Mr Beere setting out his client's defence, then he could not properly have made that assertion. Whether or not the defence was bona fide, would, of course, depend on whether or not the facts set out by Mr Beere on his instructions from the defendant were true.
It was not something about which Mr Cocks could have made a judgment. It was not appropriate to say that he was unaware of a bona fide defence based on his instructions simply because his instructions were different from Mr Beere's instructions.
The plaintiff's application for judgment in default of appearance came on before McKechnie J in Judge's Chambers. There is no transcript, such proceedings not usually being transcribed.
I am told by Mr Naseem, who appeared then for the plaintiff, that McKechnie J had apparently read the papers and made the orders without question. Indeed, there is no reason whatever why McKechnie J would not have made those orders, having read Mr Cocks' affidavit. It gave the misleading impression that the defendant had simply decided not to enter an appearance nor to raise any defence. Had McKechnie J known of the true position, then I have no doubt he would have required service and given Mr Beere an opportunity to be heard.
This application to set aside the judgment is made pursuant to O 13 r 10 which provides that the Court may, on such terms as it thinks just, set aside or vary any judgment entered in pursuance of this Order.
The question whether or not the judgment was entered regularly does, of course, depend on whether or not Mr Beere was entitled to withdraw his undertaking to accept service. As I have said, I do not think it is necessary for me to decide that question today because, in my view, it would be quite unjust, even if service was effected regularly, to allow the judgment to stand.
That is because, as I have said, even if Mr Beere was wrong to withdraw his undertaking, there was clearly a bona fide dispute about whether or not service could be effected in the circumstances. And even if Mr Cocks did not know that a defence was being raised to his client's claim, he should have known. On any view, Mr Cocks should have ensured that the motion for judgment was served on Mr Beere.
However, there is one obstacle, to setting the judgment aside. It is that the affidavit in support of the application, which has been sworn by Mr Beere, does not go any further than his letter of 29 January in setting out the defendant's position.
The almost invariable practice is that a defendant who wishes to set aside a judgment must present a credible defence by himself filing an affidavit setting out the facts, with the penalty of perjury if the affidavit is false in some material respect.
That authority is well established and is referred to in Seaman at par 13.10.6. It is, however, only a general rule. It is not a matter which is expressly required by O 13 r 10: and it is open to the Court to depart from it in appropriate albeit unusual circumstances.
The circumstances here are extremely unusual. In addition, of course, Mr Beere has had only an indorsed writ on which to take instructions. I repeat that he saw the statement of claim only when it was passed to him across the bar table this morning. In all the circumstances, I shall not require any further affidavit evidence before setting the judgment aside.
What I shall do is refer this matter to the Legal Practice Board with a request to investigate, because, with all respect to Mr Cocks, the affidavit he swore in support of motion for judgment was misleading. Further, even though his failure to give notice of the application to Mr Beere may not have been a breach of any professional conduct rule it was, in the circumstances, extremely discourteous. I think it is a matter which the Legal Practice Board should consider. The judgment will be set aside and I will hear from counsel as to the question of costs.

ADDENDUM

Having delivered my judgment in this matter, I reserved the question of costs. I did so in order to give Mr Cocks an opportunity to file an affidavit explaining his, or his firm's conduct in this matter.
Mr Cocks has now filed such an affidavit, in which he says:
1.he believed the writ had been served before Mr Beere withdrew his undertaking;
2.he assumed that the firm's articled clerk, who had been instructed to take all necessary steps to apply for the judgment in default of appearance, had served the notice of motion;
and
3.although it is "strict office policy that all incoming facsimile transmissions and mail are brought to the attention of a partner of the firm" he does not recall seeing Mr Beere's letter date 29 January 2001 until late May or early June 2001: he cannot explain why the letter was not brought to his attention and does not recall seeing it before swearing his affidavit on 22 February 2001.
Mr Cocks' belief that the writ was served before the undertaking to accept service was withdrawn is based on the fact that Mr Beere's letter appears to have been received at the offices of Cocks Macnish by facsimile at 10.44 on 21 December 2000. It will be recalled that the bailiff said he served the writ at "approximately" 10.30, based on his contemporaneous notes.
However, I have accepted Mr Beere's evidence (albeit from the bar table) that the writ was not served until after Mr Beere had written to Mr Cocks withdrawing his undertaking and informed his receptionist not to accept service. Mr Beere was there: Mr Cocks was not. The bailiff's affidavit is imprecise.
In any event, Mr Cocks does not explain why he annexed Mr Beere's letter of 20 December 2000 as evidence of an undertaking to accept service, which he knew had been withdrawn. Whether or not Mr Beere was justified in withdrawing his undertaking was irrelevant: it was a matter which should have been drawn to the attention of the Court in any event.
Further, Mr Cocks does not say what steps he took in instructing his firm's articled clerk to apply for the default judgment or in his supervision of the articled clerk to the extent necessary to ensure that the documents were served properly.
Finally, Mr Cocks does not say what became of Mr Beere's letter of 29 January 2001, on arrival at the Cocks Macnish facsimile machine. He gives no indication of any investigation into the apparent failure of his firm's system in relation to incoming facsimile transmissions.
These are all matters which the Legal Practice Board will no doubt wish to investigate further.
I cannot emphasise too strongly that the Court relies for the efficient conduct of its business on the professional competence of legal practitioners. It is essential that articled clerks who are entrusted with litigious business should be supervised in a proper manner. The Judges and Masters of this Court should not be expected to enquire into matters which appear to have been conducted regularly to ensure that is in fact the case. The Court is entitled to assume also that legal practitioners will observe the proper courtesies in their dealings with each other.
It seems to me, in all the circumstances, that the plaintiff should pay the defendant's costs of and incidental to this application on an indemnity basis, such costs to be taxed if not agreed and paid forthwith.
That is the order I propose to make, unless I am informed by Cocks Macnish within seven days that they wish to contend that some other order should be made.
However, I do not think it right that the plaintiff himself should be required to pay the costs. Order 66 r 5 provides that:
"Where in any proceedings costs are incurred by a party -
(a)as a result of any improper, unreasonable, or negligent act or omission …
The Court may order any practitioner whom it considers to be responsible (whether personally or through a servant or agent) -
(c)to pay those costs personally or to indemnify any party who has been ordered to pay those costs."
The rule goes on to provide that no such order shall be made against a practitioner unless he has been given a reasonable opportunity to appear before the Court and show cause why the order should not be made.

In my view, O 66 r 5 is applicable here. I therefore invite Mr Cocks to appear before the Court on a date to be fixed to show cause why a personal costs order should not be made. The listing arrangements may be made through the listing coordinator.