| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : PLAN B TRUSTEES LTD (ABN 90 054 737 156) as Executor of the Estate of MORRIS PATRICK CALLAGHAN -v- HIRSCHHUBER (JUNIOR) [2005] WADC 96 CORAM : MAZZA DCJ HEARD : 8 APRIL 2005 DELIVERED : 20 MAY 2005 FILE NO/S : CIV 234 of 2004 BETWEEN : PLAN B TRUSTEES LTD (ABN 90 054 737 156) as Executor of the Estate of MORRIS PATRICK CALLAGHAN Plaintiff (Respondent)
AND
WILHELM HIRSCHHUBER (JUNIOR)
Defendant (Appellant)
Catchwords: Practice and procedure - Application to set aside judgment in default of defence - Release and assignment of debt - Doctrine of waiver
Legislation: Property Law Act s 20
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Result:
Defendant's appeal dismissed
Plaintiff's crossappeal dismissed Representation:
Counsel:
Plaintiff (Respondent) : Mr M J Feutrill
Defendant (Appellant) : Mr I T Blatchford
Solicitors:
Plaintiff (Respondent) : Banaszak Legal
Defendant (Appellant) : Altorfer & Stow
Case(s) referred to in judgment(s):
Commonwealth of Australia v Verwayen (1990) 170 CLR 394
Freshmark Ltd v Mercantile Mutual (Australia) Ltd [1994] 2 Qd 390
Gilbert v Wetherell (1825) 2 Sim & St 254 57 ER 343
Larratt v Bankers & Traders Insurance Co (1941) 41 SR (NSW) 215
Mann v Carnell (1991) 201 CLR 1
Milroy v Lord (1862) 45 ER 1185
Palmer v Prince [1980] WAR 61
Parker v Transfield Pty Ltd & Anor [2000] WASCA 382
Sargent v ASL Developments Pty Ltd (1974) 131 CLR 634
Strong v Bird (1874) 28 LREQ 315
Whitfords Beach Pty Ltd v Gadsdon (1992) 6 WAR 537
Case(s) also cited:
Nil
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1 MAZZA DCJ: By a writ of summons with a statement of claim endorsed filed 4 February 2004 the plaintiff, who is the executor of the deceased estate of Morris Patrick Callaghan ("the deceased") sued the defendant in debt for the sum of $32,000. By his solicitors, the defendant filed and served an appearance but failed to file and serve a defence on time. Judgment in default of defence was filed in this Court on 26 March 2004 but was not sealed until 16 April 2004. The defendant then promptly applied to have the default judgment set aside. This application was heard by Deputy Registrar Hewitt on 10 November 2004. The learned Deputy Registrar dismissed the defendant's application but made no order as to costs.
2 By a notice of appeal filed 22 November 2004 the defendant appeals against the learned Deputy Registrar's order dismissing the application to set aside the default judgment. The plaintiff appeals, by way of cross-appeal and notice of contention, against the costs order. 3 Both appeals are hearings de novo Hazart Pty Ltd v Rademaker (1993) 11 WAR 26 per Malcolm CJ at 28. My task is to consider the matter afresh in light of the affidavit evidence before me. That evidence comprises the affidavit of Peter John Rock, the plaintiff's solicitor, sworn 5 April 2004, the affidavit of the defendant sworn 5 April 2004 and the affidavits of the defendant's mother, Herta Hirschhuber sworn 5 April 2004 and 12 August 2004. The second affidavit of Ms Hirschhuber merely corrects three typographical errors in her affidavit of 5 April 2004. 4 I will deal first with the defendant's appeal and then with the plaintiff's appeal.
The defendant's appeal 5 There is no issue that the default judgment was regularly entered by the plaintiff. That being so, in order for the defendant to successfully set aside the default judgment he must explain his failure to file his defence within time and must present a credible defence demonstrating that if the default judgment was set aside and the matter tried as to its merits he would have a real prospect of success: Parker v Transfield Pty Ltd & Anor [2000] WASCA 382 per Malcolm at [3] and [4] and Palmer v Prince [1980] WAR 61.
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6 In this case the failure to file the defence has been explained in the affidavit of Peter John Rock, as an oversight. This explanation is not disputed by the plaintiff and I readily accept it. Once the oversight came to the attention of Mr Rock he, without delay, filed an application to set aside the default judgment.
7 The issue at the heart of the proceedings before the learned Deputy Registrar and I was whether the defendant, had a credible defence to the plaintiff's claim which had a real prospect of success.
The plaintiff's claim 8 The plaintiff's claim against the defendant has been succinctly pleaded in the statement of claim as follows: "1. The Plaintiff is the sole executor named in the Last Will of Morris Patrick Callaghan deceased ('Deceased') dated 7 March 2003 ('Will'). 2. The Deceased died on 8 March 2003. 3. Probate of the Deceased's Will was granted to the Plaintiff on 11 August 2003. 4. Paragraph 8 of the Will stated that the Deceased in his lifetime had advanced to the Defendant the sum of $32,000.00 at an interest rate of 4.5% per annum repayable at call ('Loan'). 5. Paragraph 8 of the Deceased's Will directed that the sum or the outstanding balance at the date of the Deceased's death of the Loan and the accrued interest was to form part of the Deceased's residuary estate for distribution according to the Deceased's Will. 6. The Loan was evidenced by a handwritten agreement signed by the Deceased and Defendant and dated July 1998 ('Loan Agreement'). 7. The Loan was advanced to the Defendant on or about July 1998. 8. The Loan was not repaid to the Deceased during the Deceased's lifetime.
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9. By letters dated 15 August 2003 and 9 December 2003 the Plaintiff wrote to the Defendant demanding repayment of the Loan by the Defendant ('Demands'). 10. Despite the Demands the Loan has not been repaid to the Plaintiff. 11. Given the circumstances described in paragraphs 9 and 10, the Defendant has breached the Loan Agreement."
The evidence 9 The defendant in his affidavit admitted that the deceased advanced to him by way of a loan two sums totalling $32,000. The first sum of $25,000 was advanced on 20 November 1997 and the balance, $7,000 was advanced in approximately early 1998. The defendant admitted that he and the deceased both executed a document which is in the following terms omitting formal parts: 10 Underneath the defendant's signature is the deceased's signature and to the right of both signatures are the following words: "4.5% interest from July 1998". 11 The document is undated, although according to the defendant, it was made "in approximately early 1998". In the statement of claim it is pleaded that the document was made in July 1998. 12 As to the date of repayment of the loan the defendant stated in par 5 of his affidavit: "Morrie and I agreed at the times that the loan monies were advanced that I could repay him when my financial position had improved to a state where I could afford repayments."
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13 According to the defendant the deceased never asked him to repay the loan monies in the period between the advances and his death on 8 March 2003. The defendant denies that he has not repaid any of monies loaned to him. In par 7 of his affidavit, the defendant says:
"It is my position that Morrie had forgiven repayment of the loan prior to his death during contact he had with my mother HERTA HIRSCHHUBER." 14 It is evident from the defendant's affidavit that if there was a forgiveness of the debt the deceased did not communicate that fact directly to him and that his source of information is his mother. 15 In Ms Hirschhuber's affidavit sworn 5 April 2004 she describes how she and her family had been close friends of the deceased from about 1979 to the date of his death. The deceased regularly went to Ms Hirschhuber's house for meals. Ms Hirschhuber became responsible for all the deceased's transport needs from 1999 onwards and the deceased gave her authority to operate his bank account at BankWest Geraldton. Ms Hirschhuber then deposed as follows: "7 A few weeks before his death Morrie told me that he wished to make a new will. I then telephoned Bankwest Geraldton and arranged for Morrie to see Mr Norm Jackson of the Plaintiff company who Morrie was in the habit of consulting about his investments when Mr Jackson visited Geraldton every 2 – 3 months. 8 At that stage Morrie was living at Geraldton Nursing Home and I took him to see Norm Jackson at Bankwest Geraldton on a date I recall as being Friday 28 February 2003. 9 I waited until Morrie had finished the interview with Norm Jackson and then drove him back to Geraldton Nursing Home. 10 It was on the way back to the nursing home that Morrie told me that he had forgotten to take out of his Will the need for Willi to pay him back the loan money. 11 Morrie asked him to ring Norm Jackson to arrange to change the Will so that Willi would not have to pay the money back.
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12 On Sunday 2 March 2003 when Morrie was at our home for his regular meal he again asked me to ring Norm Jackson to arrange for his Will to be amended so that Willi would have (sic) to pay the loan money back. (In Ms Hirschhuber's affidavit sworn 12 August 2004 she deposed that the word 'not' should have been inserted between the words 'would' and 'have' so that the last line should read: 'to be amended so that Willi would not have to pay the loan money back'.) 13 I rang Norm Jackson on Monday 3 March 2003 and told him of Morrie's wish to amend the Will so that Willi would not have to pay the money back and that Morrie had forgotten to instruct him to that effect when talking to him in Geraldton about the Will a few days before. 14 Norm Jackson stated that this could be arranged with Morrie the next time Norm Jackson came to Geraldton. 15 I advised Morrie of my conversation with Norm Jackson and he was happy with that. 16 A few days later Bankwest rang me and I took Morrie to its premises at 3pm on Friday 7 March 2003 for the purpose of signing his new Will. 17 After Morrie and I left Bankwest on that occasion he asked me to take him to his home at 44 Crawford Street Geraldton to get some papers. 18 At his residence he unlocked a tin storage box and took from it a document which he handed to me saying:-
'This is my loan agreement with Willi. I want you to keep it in case something happens to me'. 'I don't want Willi to have to repay the loan money'.
Annexed hereto and marked with the letter 'A' is a copy of the document. Attached to the document was a Bankwest withdrawal slip for $25,000.00 dated 20 November 1997 with Willi's signature and Morrie's writing. Annexed and marked with the letter 'B' is a copy of the Withdrawal slip.
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19. At the same time as giving me the loan agreement and withdrawal slip Morrie also gave me an unsigned copy of his 2001 Will. Annexed and marked with the letter 'C' is a copy of that document. 20 After he gave me the papers referred to in paragraphs 18 and 19 above I took Morrie back to the Geraldton Nursing Home and he died the next day. 21. I am a beneficiary under Morrie's most recent Will in respect of which the Plaintiff obtained a Grant of Probate on 11 August 2003. Annexed and marked with the letter 'D' is a copy of the Grant of Probate including a copy of Morrie's Will which I believe was signed by him on Friday 7 March 2003. 22. I note that the 2001 Will and the last Will are exactly the same apart from changes made to clause 4. 23 Morrie made it clear to me prior to his death that he had forgiven the loan he had made to Willi which is the subject of these proceedings." 16 It is not necessary for me to refer to the complete text of the annexures to the affidavit. However, annexure C, the 2001 unsigned Will, includes a clause in the following terms: "8. I DECLARE that during my lifetime I have advanced to WILHELM H HIRSCHHUBER (junior) the sum of Thirty two thousand dollars ($32,000.00) at an interest rate of 4.5% per annum repayable at call and I DIRECT that the said sum on the balance outstanding at the date of my death together with any accrued interest thereon shall fall into and form part of my residuary estate for distribution in accordance with the provisions thereof." 17 That clause appears as cl 8 in the Will executed by the deceased on 7 March 2003, the day before his death. 18 Probate of that Will was granted on 11 August 2003 to the plaintiff. 19 I pause at this point to observe that the deceased's behaviour in relation to the debt was plainly inconsistent. On the one hand he told Ms Hirschhuber that he wished to amend his Will so that the defendant
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would not have to pay the loan back and yet when he made a new Will the day before his death he included in it the clause which I have already referred to with respect to the debt. 20 The deceased then on the same day as he signed his new Will, told Ms Hirschhuber that he did not want the defendant to repay the debt. There is no evidence before me as to the deceased's mental state at the time of the signing of the Will on 7 March 2003 and nowhere on the evidence is there any concern expressed as to his mental health. There is nothing which would enable me to conclude that the deceased was other than in possession of his faculties and had testamentary capacity. 21 As to the facts, the plaintiff filed the affidavit of Alan Norman Jackson sworn 28 April 2004. Mr Jackson is a certified financial planner employed by the plaintiff and provided the deceased with financial planning advice from 1993 until the date of his death. According to Mr Jackson, the deceased consulted him with respect to some changes which the deceased wished to make to his Will. Mr Jackson deposed as follows: 4. On 28 February 2003, the Deceased and Mrs Herta Hirschhuber came to meet me at Bankwest, Geraldton. this was the first time I met Mrs Hirschhuber. The Deceased mentioned that he wished to make some changes to his Will and I arranged to have a copy of his Will faxed to me in Geraldton. 5. Whilst we were waiting for the faxed copy of the Will we began to discuss some matters relating to the Deceased's current situation. The Deceased appeared uncomfortable. I felt it was important that the Deceased discuss matters with respect to his Will confidentially with me. Therefore, I asked Mrs Hirschhuber to wait outside my office while we were having these discussions and she was happy to do so. 6. Consequently, Mrs Hirschhuber was not present at the meeting between myself and the Deceased at the time when we discussed the changes that he wished to make to his Will. 7. The Deceased discussed with me the matter of the loan he had advanced to the Defendant. The Deceased was adamant that he wanted the debt to be recovered in the
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event of his death and expressed to me his disappointment that the Defendant had not repaid the loan. 8. I discussed with the Deceased the changes he wished to make to his Will and wrote them on the faxed copy of the Will. I also ticked the paragraphs of the Will that the Deceased was happy with. Annexed and marked 'ANJ 1' is a copy of the Will with the handwritten changes and also showing the ticked paragraphs. 9. The changes the Deceased instructed me to make were made on the faxed copy of the Will and were then re-read to the Deceased in the presence of Mrs Vicki Bentley, an employee of Bankwest. Mrs Hirschhuber was not present at the re-reading of the amended Will. 10. The Deceased agreed that the notes made on the copy of the Will reflected the changes he wished to make to his Will and the Deceased signed the changes. Ms Bentley and I witnessed the Deceased signing the changes. 11. I then asked Mrs Hirschhuber to re-join us and concluded the meeting shortly thereafter without any further discussion with Mrs Hirschhuber regarding the Will. 12. On or about 3 March 2003, Mrs Hirschhuber rang me and raised the issue of changing the Deceased's Will with respect to the loan between the Defendant and the Deceased. I told Mrs Hirschhuber that the Deceased's instructions regarding the changes to the Will were between the Deceased and myself as his adviser, and that it would be up to the Deceased to instruct us as to any further changes. I advised Mrs Hirschhuber that I was not in a position to discuss the Deceased's Will with her. 13. After that time I was not contacted by the Deceased or Mrs Hirschhuber regarding any further changes to the Deceased's Will. 14. Annexed and marked 'ANJ 2' is a copy of the Deceased's Will signed on 7 March 2003. The Will accurately reflects the changes the Deceased discussed with me at
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our meeting on 28 February 2003. I verily believe that the Will reflects the true intentions of the Deceased." 22 Annexure "ANJ 1" is a copy of the deceased's 2001 Will which included at par 8 the clause that I have already referred to concerning the loan. I note that next to that paragraph is the tick written by Mr Jackson being an indication of one of the paragraphs which the deceased wished to include in his new Will. 23 Although it is not clear from Mr Jackson's affidavit, it would appear that either he or someone within his employ drafted the Will which the deceased ultimately signed in accordance with the instructions given to him on 28 February 2003. That Will was then sent to BankWest Geraldton where it was signed by the deceased on 7 March 2003 in the presence of two bank officers but not in the presence of Mr Jackson. 24 Before me, neither counsel disputed the facts contained in the affidavits. I will determine the case on the basis that the contents of all the affidavits will be accepted at trial.
The defendant's submissions 25 Mr Blatchford, counsel for the defendant submitted that the conduct of the deceased being: (a) He advanced $25,000 to the defendant on 20 November 1997 and an additional $7,000 in early 1998. (b) At no stage during the following six years until his death did the deceased ever require repayment. (c) He specifically indicated to Ms Hirschhuber that he wished to change his Will to delete any reference indicating a requirement that the defendant pay the money back. (d) He told Ms Hirschhuber on 7 March 2003 that he did not want the defendant to repay the money. (e) He gave Ms Hirschhuber on 7 March 2003 the loan agreement and the withdrawal slip, amounted to a waiver by the deceased of the requirement that the defendant repay the $32,000. In his written submissions, Mr Blatchford expressed it this way:
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"20. In this case, the defendant says that the deceased waived (meaning elected) by his words and conduct not to enforce the right he had to enforce (sic) the repayment of the $32,000." 26 Mr Blatchford submitted that if the evidence of the defendant and Ms Hirschhuber is accepted at trial "it is clearly arguable" that the deceased's conduct amounted to a waiver of the right to enforce repayment of the $32,000. In the alternative, Mr Blatchford has submitted that the conduct of the deceased amounts to an equitable release in respect of the debt of $32,000. In support of this proposition he cites Gilbert v Wetherell (1825) 2 Sim & St 254; 57 ER 343. Mr Blatchford submitted that conduct of a creditor can amount to a waiver and that this case is an example of that. He relied on Strong v Bird (1874) 28 LREQ 315 to sustain this submission. Finally, Mr Blatchford submitted that the defendant's various defences are credible and have a real prospect of success.
The plaintiff's submissions 27 Mr Feutrill, counsel for the plaintiff submitted that the defendant does not have a credible defence with any real prospect of success. Mr Feutrill submitted that the deceased's actions do not amount to, either at law or in equity, a release or assignment of the debt. Further, Mr Feutrill submits that there has been no waiver by the deceased of the right to enforce the debt whether by election or estoppel. Finally, the cases of Gilbert v Wetherell and Strong v Bird are not, according to Mr Feutrill, of any assistance to the defendant because their facts were decidedly different to the facts in the present case.
Release and assignment of the debt 28 It has long been held that the mere saying by a creditor to a debtor of words to the effect, "I forgive you the debt" will not operate as a release at law. This is because it is a promise made without consideration nor, plainly, is it made under seal: Strong v Bird per Jessel MR at 317 and 318. In the present case the statement made by the deceased to Ms Hirschhuber on 7 March 2003 "I don't want Willi to have to repay the loan money" if they are interpreted as a release of the debt were made without consideration passing between the deceased and the defendant and so would not effect a release of the debt at law.
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29 It was not argued by Mr Blatchford that the debt had been assigned by the deceased to either the defendant or his mother. Such an argument would have been futile. For a debt to be assigned the requirements of s 20 of the Property Law Act 1969 must be met. Those requirements are that the assignment must be in writing and that express notice in writing must be given to the debtor.
30 Nothing done by the deceased would in equity constitute a voluntary settlement of the debt upon the defendant or his mother. This is because the deceased had not done everything which, according to the property comprised in the settlement was necessary to be done to effect the assignment to either person: Milroy v Lord (1862) 45 ER 1185 per Turner LJ at 1189 – 1190.
Gilbert v Wetherell and Strong v Bird 31 In my opinion this case does not assist the defendant. The facts of that case are completely different to the facts of the present case. Gilbert v Wetherell concerned monies advanced by a father to his son which were evidenced by a promissory note. Just prior to the father's death he burnt the note at which time the son owed the father a sum in excess of £9,000. Although the report of Leach VC's decision is very brief it is apparent that the court regarded the outstanding sum as being an advancement from the deceased father to his son and so the son was not required to pay the money to his father's estate. In the present case the situation is not one where a presumption of advancement arises. Nor do I think that Strong v Bird assists the defendant. The facts of that case were also very different to this case.
Waiver 32 The term "waiver" is not a term of art and is not capable of precise meaning. The meaning of the word has been described as vague, Mann v Carnell (1991) 201 CLR 1 at 13 as "imprecise" Commonwealth of Australia v Verwayen (1990) 170 CLR 394 at 451. Owen J put it this way in Whitfords Beach Pty Ltd v Gadsdon (1992) 6 WAR 537 at 544: "The doctrine of waiver has been a contributing factor to the demise of many a jarrah forest as the courts, academics, paper writers and authors of text books have sought to encapsulate in a definition the concept of waiver. The search has been in vain."
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33 What can be said is that waiver is a term " … used to describe what is done in a variety of circumstances rather than to assert any particular legal process". Commonwealth of Australia v Verwayen (supra) per Dawson J at 451.
34 The word is primarily used to encompass the concepts of election and estoppel: Commonwealth of Australia v Verwayen per Mason CJ at 406. Although there have been attempts to establish a doctrine of waiver independent of election and estoppel the preponderance of authority in Australia is that there is no such doctrine independent of those two concepts: Freshmark Ltd v Mercantile Mutual (Australia) Ltd [1994] 2 Qd 390 at 403 – 404.
Election 35 In the Commonwealth of Australia v Verwayen at 421, Brennan J described election as consisting of a "… choice between rights which the person making the election knows he possesses and which are alternative and inconsistent rights." A simple example of such a situation is where a party to a contract which is the subject of breach may have available to him or her alternative and inconsistent rights which would allow that person either terminate the contract for breach or insist on its continuation and performance. In such a case once an election is made it cannot be retracted. In effect there is an abandonment of one inconsistent right and pursuit of another. 36 A binding and legally enforceable election is not made by a person in whom a right is vested either expressly or impliedly, intimating that he or she does not intend to enforce it: Larratt v Bankers & Traders Insurance Co (1941) 41 SR (NSW) 215 per Jordan CJ at 226 and 227. In my opinion in the present case the evidence goes no further than an intimation that the deceased did not intend to enforce his right to require payment of the debt. He was not making an election between mutually inconsistent rights which could not be retracted.. 37 Moreover, the words or conduct required to constitute an election must be unequivocal in the sense that it is consistent only with the exercise of one of the two sets of rights and inconsistent with the exercise of the other: Sargent v ASL Developments Pty Ltd (1974) 131 CLR 634 per Stephen J at 646. I do not think that it can be said that the deceased's behaviour in this case was unequivocal. On the evidence before me during the period between 28 February and 7 March 2003 the deceased was expressing different things to different people as to the debt.
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38 Finally, the words used by the deceased when he spoke to Ms Hirschhuber on 7 March 2003, namely, "I don't want Willi to have to repay the loan money" are ambiguous. The words may mean that the defendant does not have to repay the money at that time, or indeed during the deceased's lifetime but do not necessarily preclude the deceased's estate enforcing repayment of the loan.
39 On the evidence before me, I am of the opinion that the defendant does not have a real prospect of success in a defence which relies upon election.
Estoppel 40 In Commonwealth of Australia v Verwayen at 413, Mason CJ said: "… it should be accepted that there is but one doctrine of estoppel, which provides that a court of common law or equity may do what is required, but not more, to prevent a person who has relied upon an assumption as to a present, past or future state of affairs (including a legal state of affairs), which assumption the party estopped has induced him to hold, from suffering detriment in reliance upon the assumption as a result of the denial of its correctness." 41 In order for an estoppel to exist three elements must be present: 1. A party engages in behaviour whether by act, statement or omission which induces another party to make an assumption as to a state of affairs. 2. The other party relies on the assumption to his or her detriment. 3. The party against whom the estoppel is alleged behaves contrary to the assumption and to allow such behaviour would be unfair and unjust. Cheshire & Fifoot, "Law of Contract" 8th Aust ed LexisNexis Butterworths at 62. 42 The difficulty which the defendant faces in this case is that assuming it can be said that the deceased induced in the defendant an assumption that he would not have to pay the debt, there is no evidence that the defendant relied on that assumption to his detriment. In my view, that precludes the defendant from having any prospect of successfully availing himself of the defence of estoppel. I note in both Mr Blatchford's written submissions and oral submissions he did not argue to the contrary. I say this not in criticism of Mr Blatchford but simply to emphasise the complete lack of evidence on the point.
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Conclusion as to the defendant's appeal
43 In my opinion the defendant has not made out any ground of defence which has a real prospect of success. Accordingly, I will not set aside the default judgment. I dismiss the defendant's appeal.
The plaintiff's appeal as to costs 44 The general rule is that costs follow the event so that a successful party will recover his or her costs. Having said this, I recognise that I have wide discretion on the issue including, in appropriate cases, the discretion not to award costs to a successful party. The plaintiff's position on this appeal is that having succeeded before the learned Deputy Registrar it should have been awarded a costs order in its favour. The defendant's position is that the appropriate order before the Deputy Registrar was that there be no order as to costs. 45 The submissions of counsel on the issue of costs have been succinct. Mr Feutrill submitted that the plaintiff as a successful party was entitled to an award of costs in its favour. Mr Blatchford on behalf of defendant whilst acknowledging the general rule, submitted that although the default judgment was regularly entered it was entered in circumstances where the plaintiff's solicitors knew that the defendant was represented and had, in prior correspondence, indicated the defence which has been raised in the proceedings before me. From those facts, it is submitted that the plaintiff's solicitors would have been aware that when a defence was not filed in time that was as a result of oversight and professional courtesy dictated that the plaintiff's solicitors warn the defendant's solicitors of their instructions to proceed to default judgment. 46 The Law Society of Western Australia Professional Conduct Rules require practitioners to treat each other with the utmost courtesy. Rule 18.2 is in the following terms: "If a practitioner observes that another practitioner is making or is likely to make a mistake or oversight which may involve the other practitioner's client in unnecessary expense or delay, he shall not do or say anything to induce or foster that mistake or oversight and shall, except where so doing might prejudice his own client, draw the attention of the other practitioner to that mistake or oversight."
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47 I do not think that the plaintiff's solicitors did anything to induce or foster Mr Rock's admitted oversight but I do think that the solicitors should have drawn Mr Rock's attention to his oversight. I cannot see that there would have been any prejudice to the plaintiff if that had been done.
48 There was no sworn evidence before me from the plaintiff as to the circumstances leading to the entry of the default judgment. All I can say is that it is accepted that Mr Rock failed to file the defence due to an oversight. 49 Having taken into account all of the circumstances I am of the view that I should exercise my discretion to make no order as to costs with respect to the proceedings before the learned Deputy Registrar. I do so primarily because I think it is incumbent upon practitioners to observe professional courtesies and to explain to their clients the necessity for such courtesies to be observed. I dismiss the plaintiff's appeal as to the issue of costs.
Orders 50 I propose to make the following orders: 51 I will hear counsel as to the precise term of the orders and the costs of these appeals.
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