Evans v Bartlam [1937] AC 473

Jacob v Booth's Distillery Co (1901) 8 LT 262

Palmer v Prince [1980] WAR 61

Richardson v Howell (1892) 8 TLR 445

Rolland v Bank of Western Australia, unreported; FCt SCt of WA; Library No 980498; 3 September 1998

Say v Fitzpatrick, unreported; SCt of WA; Library No 6865; 14 September 1987

White v Johnston (1886) 8 ALT 53

1 MASTER SANDERSON: This is the defendant's application to set aside default judgment entered on 19 February 2002. The application was brought on 29 May 2002, some 14 weeks after judgment was entered. However, the defendant says that he did not become aware of the entry of judgment until on or about 8 May 2002. Both counsel approached the matter on the basis that the relevant delay was 21 days - that is, the time that elapsed between the defendant learning of the default judgment and the application being brought to set the judgment aside.

2 The principles governing the setting aside of regular judgments are set out succinctly in Seaman, Civil Procedure Western Australia at par 13.10.6. In particular, the learned author refers to Parker v Transfield Pty Ltd [2000] WASCA 382 and says:

"The defendant must present a credible defence demonstrating that, if the default judgment were set aside and the matter were argued on its merits, the defendant would have a real prospect of success."

3 Both parties accepted that the success or failure of this application depended upon an assessment of whether or not the defendant had an arguable defence on the merits. To determine this question requires a brief consideration of the facts of the case.

4 In or about June 2001 the plaintiff and the defendant, who were both professional photographers, established a new business styled Stirling-Smith Photography Pty Ltd. The business failed to prosper and the relationship between the plaintiff and the defendant steadily deteriorated. The business was operated from premises in Fremantle. These premises were leased in the name of the defendant. On or about 26 October 2001 the defendant gave the plaintiff a notice requiring him to vacate the premises by 9 November 2001. On 8 November 2001 the defendant changed the locks on the premises and thereby excluded the plaintiff. On 15 November 2001 the plaintiff issued these proceedings. He claimed damages for breach of a deed of partnership and further related relief and he also sought an injunction restraining the defendant from excluding the plaintiff from the Fremantle premises.

5 On the same day the writ was issued the plaintiff obtained an ex parte interlocutory injunction restraining the defendant from excluding the plaintiff from the Fremantle premises. The injunction was extended on 20 November 2001 until further order. On 14 December 2001, the plaintiff, on a chamber summons seeking interlocutory judgment, obtained the following order:

"Insofar as leave is necessary to enter interlocutory judgment for damages to be assessed, such leave is granted subject to proof of service of the writ and the fact that no appearance has been entered."

6 Both of these requirements were satisfied and judgment was duly entered. The application for an assessment of damages was filed 4 April 2002, returnable in chambers on 15 May 2002. As I have indicated above it was service of this chamber summons which provoked the application to set aside default judgment. The court file indicates that not only was no appearance ever entered to the writ, but that the defendant never appeared either in person or by counsel prior to the return of the chamber summons for the assessment of damages.

7 There was, however, contact between the defendant and the plaintiff's solicitors. It is this correspondence which is at the heart of this application.

8 In his affidavit of 28 May 2002 filed in support of this application the defendant says that on or about 6 November 2001 he received a letter from the plaintiff's solicitors. He was then served with the writ and an application for the injunction. He says this occurred just prior to 15 November 2001. He is clearly mistaken about the date. The writ was not issued until 15 November 2001 and according to an affidavit of service of Raymond Joseph Rowles sworn 19 November 2001, the documents were served on 16 November 2001. Nothing turns on this discrepancy as to the dates. But it does illustrate that the defendant's recollection of events may not be entirely accurate.

9 The defendant says that after service of documents upon him he contacted Mr Prentice, the plaintiff's solicitor. The defendant summarises this discussion in the following way (at par 21):

"... Mr Prentice told me that the Plaintiff wanted to be reimbursed for his costs put in to the refurbishment of the premises at 7 Cantonment Street, Fremantle and to have the Plaintiff's equipment which the Plaintiff had brought onto the premises returned to him. This included a printer. Mr Prentice told me that he would fax me a copy of a list of expenses which the Plaintiff wanted to be reimbursed. I later received a list from Mossensons by facsimile just prior to 19 November 2001. I gave my copy of the list to my accountant. Mr Prentice told me that the Plaintiff wanted a bank cheque for $4,336.51 (being the amount of expenses for which the Plaintiff was seeking to be reimbursed) handed to the Plaintiff before the close of business that day, and for the Plaintiff to confirm receipt of that cheque to Mr Prentice".

10 The defendant says that after he received the list by facsimile from Mr Prentice he met the plaintiff, allowed him access to the premises and to remove the items listed. He also provided to the plaintiff a bank cheque in an amount of $4336.51. He then says that on 19 November 2001 he received a facsimile from the plaintiff's solicitor, confirming the receipt of the $4336.51. He says he did not respond to the facsimile transmission "because I thought the matter had been resolved".

11 As I understand the defendant's position, it is said that there has been a settlement of the plaintiff's claim and that the defendant has a defence of accord and satisfaction. It is the defendant's position that on payment of the sum demanded by the plaintiff's solicitors, and upon allowing the plaintiff to remove his property from the Fremantle premises, the action was compromised and brought to an end. If leave to defend is given, this is the defence which will be raised by the defendant to the plaintiff's claim.

12 In opposition to the application the plaintiff relies upon his affidavit sworn 20 June 2002 and an affidavit of Anthony John Prentice sworn 12 June 2002. It is the affidavit of Mr Prentice which is relevant in assessing the veracity of the defendant's defence. Mr Prentice says that he had a telephone conversation with the defendant on 16 November 2001. During that discussion Mr Prentice says that the defendant advised him that he (the defendant) would consent to the injunction being extended until further order. The defendant said he would confirm that by facsimile. Mr Prentice denies that there was any discussion as to settlement of the action due to the fact that Mr Prentice had no instructions as to the basis upon which the plaintiff would be prepared to settle. Mr Prentice also says that he has no record of telling Mr Smith that he would fax him a copy of a list of expenses for which the plaintiff wanted to be reimbursed. Mr Prentice puts his evidence in this way (par 13):

"I have no recollection or record of faxing a list to Mr Smith just prior to 19 November 2001. There is no such list on our file. We wrote to Telstra requesting confirmation of all facsimile transmissions from our office to Mr Smith in November 2001. ... These facsimile transmissions were not the alleged list and I will explain below what they were. Further, I sent a letter to Corsers on 31 May 2002 requesting a copy of the alleged list. ... At the date of swearing this affidavit, I have not received a copy of the alleged facsimile transmission from them."

13 Mr Prentice goes on to deny any conversation with Mr Smith where he said that a bank cheque for $4336.51 was demanded. Mr Prentice notes that the figure quoted by the defendant is to be found in par 18 of the plaintiff's affidavit in support of his application for interlocutory injunction. Mr Prentice says that on 16 November 2001 he received a telephone call from the plaintiff. He was told by the plaintiff that the defendant had tendered a cheque for some equipment the plaintiff was leaving on the Fremantle premises. The plaintiff asked Mr Prentice whether by accepting this cheque he (the plaintiff) would prejudice his claim. Mr Prentice advised that it would prejudice his claim if the payment was made in full and final settlement of all matters. The plaintiff advised him that it wasn't - the defendant was simply purchasing some of the plaintiff's equipment. Mr Prentice says that he advised the plaintiff that the cheque could be accepted on that basis.

14 Mr Prentice says that on 19 November 2001 he telephoned the defendant and advised he had not received a fax confirming the defendant's agreement to the extension of the injunction. On the same day he sent a reminder fax confirming the discussion. During the course of the telephone conversation Mr Prentice says the defendant asked him whether the matter was going to be settled. Mr Prentice says he advised the defendant that he had been instructed by the plaintiff to send a fax setting out the terms upon which the plaintiff was prepared to compromise. The defendant asked Mr Prentice what the terms would be. Mr Prentice did not set out those terms because, he says, he needed to clarify the position with his client. Later that day Mr Prentice says he sent a draft of the fax containing settlement proposals to the plaintiff. The plaintiff approved the draft. The fax, which was dated 19 November 2001, was then sent to the defendant on 22 November 2001. Thus there were only two faxes sent by the plaintiff's solicitor to the defendant and neither could in any way be regarded as confirmation of settlement of the dispute between the parties.

15 It is not possible to reconcile the case put by the defendant with what is said by Mr Prentice on behalf of the plaintiff. Moreover, it is difficult to resist the conclusion that the defendant's evidence is anything other than intentionally misleading. Paragraph 25 of the defendant's affidavit of 28 May 2002, referring as it does to the facsimile from the plaintiff's solicitors dated 19 November, seeks to establish that the dispute has been settled. But the document annexed to the defendant's affidavit is only the first page of the facsimile. The whole of that facsimile is found as annexure "F" to the affidavit of Mr Prentice. Reading the whole of that letter makes it plain that in no way can it be suggested that the facsimile confirms a resolution of the dispute. To suggest as much is at best misleading and perhaps wilfully deceptive. In my view, there is no basis whatever for suggesting that the facsimile of 19 November confirmed an agreement between Mr Prentice and the defendant.

16 In circumstances where there is a conflict of evidence on affidavits, great care must be taken to ensure that findings of fact adverse to one party are not made on contested evidence. But there are cases, and in my view this is one of them, where a party's evidence is inherently unreliable. There is no basis at all upon which it could be said that there has been accord and satisfaction, or some resolution of the dispute by a settlement between the parties. There being no other basis upon which the defendant suggests that this action by the plaintiff could be resisted, I can see no grounds at all for concluding the defendant has an arguable case. That being so, I am not satisfied that the judgment ought be set aside. Accordingly I would dismiss the defendant's chamber summons.

17 As I have indicated above, I have grave concerns about the way in which the defendant's evidence was presented in this case. In the light of my comments I am of the tentative view that the defendant should pay the plaintiff's costs of this application on a full indemnity basis. However, I will give the defendant the opportunity to make submissions before making any order to that effect.