Young v Styant-Browne
[2008] WASC 188
•4 SEPTEMBER 2008
YOUNG -v- STYANT-BROWNE [2008] WASC 188
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2008] WASC 188 | |
| Case No: | CIV:1216/2007 | 6 AUGUST 2008 | |
| Coram: | MASTER SANDERSON | 4/09/08 | |
| 8 | Judgment Part: | 1 of 1 | |
| Result: | Judgment set aside | ||
| B | |||
| PDF Version |
| Parties: | WILLIAM LLOYD YOUNG GLENDA JOY YOUNG NICHOLAS JOHN STYANT-BROWNE PETER GORDON PAUL HENDERSON PAUL JULIAN MULVANY STEPHEN REX PLUNKETT ANDREW ALEXANDER GRECH |
Catchwords: | Application to set aside judgment entered in default of appearance Turns on own facts |
Legislation: | Nil |
Case References: | Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- First Plaintiff
GLENDA JOY YOUNG
Second Plaintiff
AND
NICHOLAS JOHN STYANT-BROWNE
First Defendant
PETER GORDON
Second Defendant
PAUL HENDERSON
Third Defendant
PAUL JULIAN MULVANY
Fourth Defendant
STEPHEN REX PLUNKETT
Fifth Defendant
ANDREW ALEXANDER GRECH
Sixth Defendant
(Page 2)
Catchwords:
Application to set aside judgment entered in default of appearance - Turns on own facts
Legislation:
Nil
Result:
Judgment set aside
Category: B
Representation:
Counsel:
First Plaintiff : Mr R A Zilkens
Second Plaintiff : Mr R A Zilkens
First Defendant : No appearance
Second Defendant : No appearance
Third Defendant : No appearance
Fourth Defendant : Mr G H Murphy SC
Fifth Defendant : No appearance
Sixth Defendant : No appearance
Solicitors:
First Plaintiff : Zilkens & Co
Second Plaintiff : Zilkens & Co
First Defendant : No appearance
Second Defendant : No appearance
Third Defendant : No appearance
Fourth Defendant : Pynt & Partners
Fifth Defendant : No appearance
Sixth Defendant : No appearance
Case(s) referred to in judgment(s):
Nil
(Page 3)
1 MASTER SANDERSON: This was the fourth defendant's application to set aside a default judgment entered on 6 December 2007. After hearing argument I indicated to the parties that I would set aside the judgment. I said I would publish reasons at a later date. These are those reasons.
2 The principles applicable to a matter such as this were not in dispute. The parties accepted that the applicant must:
(1) adequately explain why no appearance was entered within time;
(2) establish that he has a defence on the merits; and
(3) bring the application to set aside the judgment within a reasonable time.
3 There was no dispute between the parties as to the third of these requirements. The plaintiffs accepted that the application to set aside the judgment was brought within time. There was also no argument that the judgment was not regularly entered. Nor was it submitted on behalf of the fourth defendant that the plaintiffs had 'snapped' judgment. It was submitted on behalf of the fourth defendant that there was a reasonable explanation as to why an appearance had not been entered and that the fourth defendant had an arguable defence on the merits. The plaintiffs took precisely the opposite view on both of these questions.
4 It is convenient to deal first with the question of whether there is an adequate explanation as to why an appearance was not entered. The writ was issued on 6 March 2007. The defendants are all solicitors and each was, at the relevant time, a partner in the law firm Slater & Gordon. I will come to the terms of the indorsement on the writ later in these reasons. For the present, it is enough if I say that the claim against the defendants was for professional negligence in their handling of the affairs of the plaintiffs. At all material times, the plaintiffs were represented in the proceedings by the firm of Zilkens & Co.
5 On 18 April 2007, Zilkens & Co wrote to Slater & Gordon asking if Slater & Gordon would accept service of the writ on all defendants. As at the date of that letter, the partners comprising Slater & Gordon were materially different from the partners of the firm as at 28 June 1999, the date upon which the negligence allegedly occurred. On 9 May 2007, Slater & Gordon replied to Zilkens & Co that they had instructions to accept service for all but two of the six defendants. The two defendants on whose behalf they were not instructed to accept service were the first and fourth defendants. They further advised that they were writing to
(Page 4)
- those two defendants with a view to obtaining instructions. Slater & Gordon indicated they would advise their instructions in due course.
6 On 14 February 2007, Pynt & Co were instructed by the insurers of Slater & Gordon to act in the matter. It is important to note that at this stage Pynt & Co were instructed on behalf of the insurers. That did not necessarily mean that they would act for the defendants in the proceedings.
7 On 25 May 2007, Mr Pynt telephoned Mr Zilkens. Mr Pynt advised that he acted for the insurers of Slater & Gordon. He also advised that he was not at that time authorised to act for Slater & Gordon. Mr Pynt said that he would revert to Mr Zilkens when he had instructions about whether he was to act for Slater & Gordon or not. Mr Zilkens advised that he had not been authorised to serve the writ on the defendants at that time, but he anticipated getting instructions shortly. Mr Zilkens also indicated that he was keen to progress the action. It would appear that Mr Pynt and Mr Zilkens were acquainted and discussions also took place about social matters unrelated to the action. There is no dispute about the nature of this discussion. In his affidavit of 21 May 2008 (pars 4, 5 and 6), Mr Pynt details the discussions. Mr Zilkens effectively confirms those discussions in his affidavit of 20 June 2008 (par 8(2)). The matter is further discussed in Mr Pynt's affidavit of 29 July 2008 (par 2).
8 As a consequence of this discussion on 25 May, Mr Pynt believed Mr Zilkens would not do anything precipitous against the defendants without fair warning to Mr Pynt. This emerges from par 7 of Mr Pynt's affidavit of 21 May 2008. For his part, Mr Zilkens believed Mr Pynt would contact him if he (Mr Pynt) got instructions to accept service for all defendants. This emerges from par 8(3) of Mr Zilkens's affidavit of 20 June 2008.
9 On 10 May 2007, Slater & Gordon wrote to Zilkens & Co and said they had instructions to accept service on the first defendant. They did not say that they had been instructed to accept service on the fourth defendant. On 20 September 2007, Zilkens & Co sent the writ to Slater & Gordon 'by way of service' on all defendants except the fourth defendant. That letter said that personal service would be effected on all five defendants unless Slater & Gordon acknowledged that service by post was satisfactory. Mr Pynt received a copy of the letter from Zilkens & Co to Slater & Gordon dated 20 September 2007 on 27 September 2007.
(Page 5)
10 On 27 September 2007, Slater & Gordon acknowledged receipt of Zilkens & Co's letter of 20 September 2007. They said a copy had been forwarded to Mr Pynt. The letter does not acknowledge that the five defendants from whom they had instructions accepted service by way of letter.
11 On 2 October 2007, Mr Pynt phoned Mr Zilkens. Mr Zilkens told Mr Pynt that the writ had not been served on any of the defendants. In other words, Mr Zilkens acknowledged, quite properly, that in the absence of consent on the part of the five defendants represented by Slater & Gordon that service by mail was sufficient, there was no proper service. Mr Pynt told Mr Zilkens he had been provided with documents sent to Slater & Gordon and he was taking instructions on accepting service. There was further discussion between Mr Zilkens and Mr Pynt about matters related to the claim, but which are not presently relevant.
12 On 4 October 2007, the writ was personally served on the fourth defendant. During the course of the month of October, Mr Pynt was told by the insurer of the service on the fourth defendant personally and was instructed to enter an appearance for all defendants once the writ had been served. On 3 December 2007, a staff member of Zilkens & Co telephoned Mr Pynt and enquired if he intended entering an appearance for the defendants. Mr Pynt indicated that he hoped to do so in the next few days. On 6 December 2007, default judgment was entered against the fourth defendant. There was no specific warning that judgment would be entered, save for that which might be implied by the discussion between the staff member from Zilkens & Co and Mr Pynt.
13 On 10 December 2007, Mr Zilkens phoned Mr Pynt. Mr Zilkens enquired if Mr Pynt intended entering an appearance for the defendants. Mr Pynt said he hoped to do so on 10 or 11 December. Mr Zilkens said he might be instructed to enter default judgment if appearances were not entered immediately. Mr Pynt said that he felt he needed to re-check his instructions before entering an appearance. It was at that stage Mr Zilkens advised that default judgment had already been entered against the fourth defendant.
14 During the course of his submissions, senior counsel for the fourth defendant likened the interaction between Mr Pynt and Mr Zilkens over the entry of an appearance as 'two ships passing in the night - coming close but never quite intersecting'. In my view, that is a good analogy for what actually occurred. At all times Mr Zilkens knew that Mr Pynt was instructed by the insurers and was aware that there was every likelihood
(Page 6)
- that Mr Pynt would be instructed to enter an appearance for all of the defendants. It is understandable that during the two-month period between his telephone conversation with Mr Pynt on 2 October and the telephone conversation between the staff member of Zilkens & Co and Mr Pynt on 3 December Mr Zilkens would have become concerned about the delay. But at any time he could have contacted Mr Pynt and set a deadline. Or he could have taken the step of serving personally the other five defendants. Mr Zilkens was aware that Mr Pynt was instructed by the insurers of Slater & Gordon. It was understandable that Mr Pynt would have to make some enquiries and provide his client with some advice before he could enter an appearance on behalf of the defendants.
15 It is undeniable that Mr Pynt could have, and probably should have, acted with more dispatch in entering appearances for all of the defendants. But it is also understandable that he was under the impression that default judgment would not be entered without warning and limited to the one defendant who had been personally served.
16 In all the circumstances, I was satisfied that there was an adequate explanation for the failure to enter an appearance and that the fourth defendant has discharged the onus upon him.
17 That then leads to the question of whether or not the fourth defendant has an arguable defence to this claim. Both parties proceeded on the basis that it was necessary for the fourth defendant to establish that there was a serious question to be tried. That test necessarily implies that where there were disputes of fact, those disputes were not to be resolved on this application. Rather, the version of events most favourable to the fourth defendant - provided the evidence was not inherently unlikely - was to be accepted.
18 The starting point in considering this question is the indorsement of claim to be found on the writ. In that indorsement, the plaintiffs claim:
… damages as a result of loss and damage suffered due to the defendants' breach of contract, alternatively negligence in failing within the limitation period to issue a writ, alternatively commence third party proceedings … against Fiocco Hopkins Rattigan, the solicitors who in breach of their contract with the plaintiffs did not fully or adequately advise, or alternatively negligently advised the plaintiffs in respect of a guarantee executed on 3 March 1995 in favour of the National Australia Bank to secure the indebtedness of Computerised Holdings Pty Ltd and related instruments.
(Page 7)
19 As submitted by counsel for the fourth defendant, it is necessary to look carefully at what allegation is being made against the fourth defendant. Put simply, it is an allegation of failing to commence proceedings within the limitation period. It is not a claim for negligent advice. The indorsement alleges that negligent advice was given by Fiocco Hopkins Rattigan in relation to the guarantee executed by the plaintiffs in favour of the National Australia Bank. But the quite specific allegation put against the defendants by the plaintiffs in the indorsement is a failure to commence proceedings. That is quite a separate and distinct claim from an allegation that the defendants provided negligent advice.
20 Once that point is reached, it is not difficult to conclude that the fourth defendant has an arguable case in this matter. There is no evidence at all that the firm of Slater & Gordon were instructed to commence proceedings. In fact, both the solicitor at Slater & Gordon who was handling the matter, Mr Robert Alexander Lees, and counsel, Mr Marcus Clarke, advised the first plaintiff not to commence proceedings. In his affidavit of 2 June 2008, Mr Clarke puts the position this way:
4. In 2000, I received a brief from Slater & Gordon to provide advice to Lloyd and Glenda Young concerning their defence of proceedings brought against them by National Australia Bank ('NAB') in the Supreme Court of Western Australia.
5. I recall meeting with Mr Young and my instructing solicitor Mr Lees on 3 and 4 June 2000 (on a Sunday and a Monday) and advising and explaining to Mr Young that:
5.1 Mrs Young may have a defence based on undue influence or unconscionable conduct;
5.2 I could not prepare a defence and counterclaim on behalf of Mrs Young as her interests may conflict with Mr Young's interests; and
5.3 Mrs Young should obtain her own advice about her defence to the NAB claim and whether she had a claim:
5.3.1 against Fiocco Hopkins Rattigan ('FHR'), who had been the lawyers involved at the time that Mr and Mrs Young signed their guarantees to NAB; and
5.3.2 against Mr Young himself.
- Mr Young and Mrs Young, and that Mrs Young must obtain independent legal advice.
- 7. I recall that Mr Young instructed me and Mr Lees that he understood the nature of the guarantee (and I satisfied myself that he did understand the guarantee) and that he had given specific instructions to FHR to delete the export licence precondition, being one matter that I had been asked to consider. Accordingly, I did not believe that it was appropriate to issue proceedings on his behalf against FHR.
- (Mr Clarke filed a later affidavit correcting the date of the conference, but in no way changing any material aspect of his evidence - see the affidavit of Mr Clarke sworn July 2008.)
21 The submission put on behalf of the plaintiffs seems to amount to this. If proceedings had been issued against the plaintiffs' former solicitors, the plaintiffs may have been in a position to bargain with the solicitors' insurers, thus providing some return to the plaintiffs. In other words, the argument is that Slater & Gordon should have acted unethically to advance the plaintiffs' position. That is not a submission which could ever find favour.
22 In my view, the defendants' position in this case is more than arguable. For those reasons, I set aside the default judgment.
23 During the course of his submissions, counsel for the fourth defendant sought leave to tender a bundle of documents that comprised the brief which was delivered to Mr Clarke. As I understand counsel's submissions, it was not intended to rely upon the documents themselves. Rather, the tendering of the documents was to show that Mr Clarke was in possession of all relevant material when he gave his opinion. I refused leave to tender these documents. The tendering of them had not been foreshadowed to counsel for the plaintiffs and prior to the hearing counsel had not had the opportunity to consider their contents. For that reason alone, it would have been unfair to the plaintiffs to have allowed the documents into evidence. Moreover, even on the basis put by counsel for the fourth defendant, it did not seem to me that the documents were relevant to matters in issue. They could not add materially to any point raised by either party. Accordingly, leave was refused.
24 I will hear the parties as to the precise form of orders.
0
0
1