1 NEWNES J: This is an application by the defendant for an order setting aside a judgment in default of appearance entered on 26 November 2007 in an action for defamation brought against him by the plaintiff.

2 On 21 May 2007, the plaintiff commenced proceedings against the defendant by a generally indorsed writ of summons claiming damages for defamation. The allegedly defamatory material was published on the defendant's website.

3 The indorsement on the writ of summons was as follows:

The plaintiff's claim is for damages for defamation, aggravated damages, injunctive relief, interest, costs and further relief. The plaintiff's claim arises from written material relating to the investigation into the murder of Pamela Lawrence, which material was published on the defendant's website at the address [...] throughout at least the period from the day one year before the commencement of this proceeding to a date presently unknown to the plaintiff but about 11 October 2006. The plaintiff alleges that the website was accessible to persons in Western Australia and that the material was defamatory of him.

4 The defendant resides in Canada and notice of the writ of summons was served on him there on 28 September 2007. The defendant had 49 days from service of notice of the writ in which to enter an appearance. He failed to do so and, on 26 November 2007, the plaintiff obtained judgment in default of appearance for damages to be assessed.

5 On 11 February 2008, the plaintiff applied by chamber summons for an assessment of damages. Directions on that application were made by the court on 27 February 2007. Those directions required the plaintiff to file and serve any affidavits on which he intended to rely by 14 March 2008, for the defendant to file and serve any affidavits in response by 24 April 2008, and for the plaintiff to file and serve any affidavits in reply by 8 May 2008. An order was made that any document in relation to the assessment of damages was sufficiently served if sent by ordinary airmail post to the defendant at a specified address in Alberta, Canada.

6 On 19 March 2008, on the plaintiff's application, orders were made extending the time for the plaintiff to file and serve any affidavits in the assessment of damages to 10 May 2008 and extending the time within which the defendant was to file and serve any affidavits to 25 June 2008.

7 Between 24 April 2008 and 5 May 2008, the plaintiff filed his own affidavit and affidavits of a number of other witnesses. It was not in dispute that the chamber summons for an assessment of damages, the directions made on that application on 27 February 2007, and those affidavits were all subsequently served on the defendant in Canada.

8 On 24 July 2008, the defendant applied to have the default judgment set aside. An affidavit of the defendant was filed on 14 August 2008 in support of the application. In the affidavit, the defendant says that, following service of the notice of the writ, he was unable to locate anyone who was familiar with Australian defamation law or Australian court process, but he received advice from a lawyer in Canada that under Canadian law a publication posted on an internet website that was written, previously published and publicly available on another internet website did not constitute defamation. The defendant says he believed the legal position in Australia to be the same. He therefore believed that the plaintiff could not succeed in the action.

9 According to the defendant, he could not afford to travel to Perth to appear in person and could not afford to engage legal representation in Western Australia. Based on his understanding and experience of criminal law (the defendant was formerly a police officer in Canada), he believed that in his absence the plaintiff would still have the onus of proving the case before judgment could be given. He believed that the plaintiff would be unable to do so.

10 The defendant says that his understanding of the position influenced the view that he took of the documents he subsequently received from the plaintiff's solicitor. The first of those was the default judgment which he received by post in about February 2008. The default judgment was in a standard form and, relevantly, contained the following words:

No appearance having been entered to the notice of writ by the defendant herein and the plaintiff having abandoned his claims for injunctive relief and further relief, it is this day adjudged that defendant [sic] pay to the plaintiff damages to be assessed.

11 The defendant says in his affidavit that he understood the statement 'the plaintiff having abandoned his claims for injunctive and further relief' to mean the plaintiff had abandoned the proceedings against him and that he would only be responsible for the costs caused by his non-appearance. How the defendant reconciled that understanding with the words 'it is this day adjudged that the defendant pay to the plaintiff damages to be assessed' is not explained.

12 On 30 April 2008, the defendant received the orders made on 27 February 2008 for the assessment of damages. The defendant says he believed this document to mean he had been given an opportunity to respond to the plaintiff's allegations by way of affidavit rather than personal appearance. However, the deadline for the filing of such an affidavit by the defendant had by then expired. I should observe that it is not clear to what allegations the defendant thought he had the opportunity to respond by affidavit if he understood the substantive proceedings had been abandoned.

13 In any event, the defendant says that, on 22 May 2008, he received the copy of the orders made on 19 March 2008 extending the time for the filing of affidavits. With that order, the defendant received copies of the affidavits which had been filed on behalf of the plaintiff.

14 The defendant says he believed the plaintiff's own affidavit was equivalent to a statement of claim and that he was being given an opportunity to respond to the allegations in it. He commenced preparing such a response and, soon after 22 May 2008, he contacted Mr Christian, the editor of the Post newspapers in Western Australia, requesting assistance in filing the affidavit. He forwarded a copy of the court documents he had received to Mr Christian who sought legal advice and, in early June 2008, informed him of the effect of the default judgment.

15 The defendant says that, on 18 June 2008, he contacted his current solicitors and provided them with the relevant documents, leading to the filing of the current application to set aside the default judgment.

16 In his affidavit, the defendant says that it has always been his intention to defend the allegation that he defamed the plaintiff. He goes on to say that the indorsement on the writ of summons does not sufficiently identify the publications which are the subject of the proceedings. Having since been informed of the publications which the plaintiff says constitute the defamatory material, the defendant says that the articles do not name the plaintiff or otherwise identify him as the person referred to in them. They are not, therefore, defamatory of the plaintiff.

17 The lapse of time between the defendant contacting his current solicitors and the filing of the application to set aside the default judgment is dealt with in an affidavit of a solicitor acting for the defendant. The delay appears to have occurred primarily as a result of correspondence between the parties' solicitors relating to a request by the defendant's solicitors for a copy of the statement of claim referred to in an affidavit served on the defendant. The reference in the affidavit to a statement of claim turned out to be an error, no statement of claim having been filed. There was also within that period correspondence between the solicitors concerning certain material contained in the affidavits filed on behalf of the plaintiff and the material which was said to constitute the defamatory publication.

18 The defendant seeks to have the default judgment set aside on two grounds, namely, that the judgment was not regularly entered because the indorsement on the writ did not comply with the rules of court and, alternatively, that the defendant has a good defence on the merits and has provided a reasonable explanation for his failure to enter an appearance within time.

19 On the first ground, it was submitted that the writ of summons does not contain sufficient particulars for the defendant to know what is alleged to constitute the defamatory material. Counsel argued that the reference to a website was akin to a plaintiff simply referring to the name of a publication, such as a newspaper or magazine. It was submitted that at no stage prior to the entry of judgment had the defendant been informed of the publications which were the subject of the proceedings. As the indorsement was not in accordance with the rules, the entry of judgment was irregular and should be set aside.

20 It was submitted, in the alternative, that if judgment had been regularly entered the court had an unfettered discretion to set aside a default judgment where that was necessary to do justice between the parties. Counsel argued that special rules exist in relation to the setting aside of a default judgment in a defamation action. In particular, it is only in exceptional circumstances that a default judgment will not be set aside because, except in the clearest of cases, there will always be an arguable issue of fact as to whether the plaintiff was defamed by the words complained of.

21 In the present case, it was submitted that it was at least arguable that the articles do not identify the plaintiff as the person referred to. They do not expressly name him nor do they indirectly identify him by any form of description or indicia. There is nothing in the articles on the website to connect the plaintiff with the person referred to in the articles as being the person who murdered or was suspected of murdering the late Mrs Lawrence, or of conveying any other imputation defamatory of the plaintiff.

22 Counsel also argued that there was an issue as to whether the action had been brought within the limitation period and there may be other defences available to the defendant - depending upon the way in which the plaintiff formulated his case - including common law qualified privilege. But until the plaintiff's case was pleaded in a statement of claim, it could not be said what further defences might be available.

23 The plaintiff opposed the application on three grounds. First, the default judgment was regularly entered or, alternatively, any irregularity in its entry was immaterial and should be disregarded; secondly, no adequate explanation had been offered for the defendant's default; and thirdly, the defendant had failed to identify any arguable defence on the merits.

24 It was submitted there was no substance in the contention that the indorsement of claim was inadequate. The indorsement referred to a specific section of the website and that section consisted solely of the defamatory material. Moreover, the defendant did not contend in his affidavit that he was in any doubt about the material on the website in respect of which the plaintiff complained. The website was a personal website, and the section of it which contained the defamatory material was identified with precision.

25 It was submitted that, in any event, it did not follow that if the indorsement was irregular a judgment entered in default of appearance was irregular. It was not. Further, there was no evidence that any irregularity caused any prejudice to the defendant or caused him to change his position in any way.

26 It was submitted that there was no adequate explanation by the defendant for his default. The explanations he had offered were incredible and should not be accepted. In the first place, the writ of summons contained a clear warning that if an appearance was not entered, judgment may be given in the defendant's absence. Secondly, the cost of entering an appearance was negligible and the defendant made no attempt to ascertain what was required nor did he attempt to contact the plaintiff upon being served with notice of the writ. Thirdly, if the legal advice the defendant says he obtained from a Canadian lawyer was obtained, it was plainly wrong but, more significantly, the defendant does not say what the Canadian lawyer advised him to do in relation to the writ.

27 It was submitted that the defendant's claimed understanding of the effect of the default judgment and the other documents following the entry of default judgment was irrelevant. The only matter which is relevant is his conduct in not entering an appearance within time. In any event, his explanation as to his understanding of the terms of the default judgment is simply not credible.

28 It was further submitted that the defendant has no arguable defence on the merits. It is clear that the action is not statute-barred. The plaintiff has deposed from his own knowledge that the relevant material was accessible on the defendant's website from at least May 2006 until after 11 October 2006. The plaintiff's solicitor has deposed to accessing the website and reading the relevant material in or about late September or early October 2006. Various friends and family of the plaintiff have seen the material on the website within the limitation period.

29 Counsel argued that the plaintiff is sufficiently identified by the defamatory material as the person who is said to have murdered Mrs Lawrence. It is sufficient that an ordinary reasonable person, with knowledge of some extrinsic facts, would reasonably have understood the publication to refer to the plaintiff. Evidence that persons actually understood it to refer to the plaintiff is admissible and relevant. In this case, there is evidence on affidavit that various people saw the material on the website and understood it to refer to the plaintiff. The number of people who would reasonably have understood it to refer to the plaintiff is not relevant to the cause of action but only to damages, and that is a matter which can be the subject of the assessment of damages.

30 Counsel submitted that there was no other potential defence which had been foreshadowed. A common law defence of qualified privilege would inevitably fail. It is not available in respect of publications to the world at large by way of a medium such as the internet.

31 I do not accept the defendant's contention that the indorsement of claim is defective. Under O 6 of the Supreme Court Rules 1971 (WA), a writ must be indorsed 'with a concise statement of the nature of the claim made and of the relief or remedy required in the action.' Where the action is for libel, O 6(2) stipulates that 'the indorsement must state sufficient particulars to enable the publications in respect of which the action is brought to be identified.'

32 The indorsement specifies the publications as 'written material relating to the investigation into the murder of Pamela Lawrence, which material was published on the defendant's website [address of website given].' It was not in dispute that all of the material on the specified website related to the investigation and is the subject of the plaintiff's action. I consider that the publications were sufficiently identified and that the indorsement met the requirements of O 6.

33 It is therefore unnecessary to consider whether a default judgment is irregularly entered if the indorsement of claim is defective. In the present case, I am satisfied that the judgment was regularly entered.

34 I did not understand the principles to be applied on an application to set aside a regularly entered default judgment to be in issue between the parties. The discretion to set aside a default judgment is unfettered, but in the exercise of that discretion the court will usually require that the defendant show that he or she has an arguable defence on the merits, no purpose being served by setting aside the judgment if the defendant has no defence to the claim. The court will also usually require that the defendant provide a reasonable explanation as to how judgment came to be entered in a matter where it is said there is such a defence. But the primary consideration is whether the defendant has a defence on the merits. The relevant cases are discussed in Hall v Hall [2007] WASC 198, [43] - [67].

35 It is convenient to turn at once to the question of whether the defendant has an arguable defence.

36 It is an essential element of a cause of action in defamation that the matter complained of be published of and concerning the plaintiff; that is to say, that it identify the plaintiff. In a case such as the present, where the words complained of do not refer to the plaintiff by name, the plaintiff must prove extrinsic facts from which an ordinary reasonable reader would infer that the words referred to the plaintiff.

37 A witness or witnesses can be called to give evidence that in the light of their knowledge of the extrinsic facts they understood the words complained of to refer to the plaintiff, but their evidence is not conclusive. The test is an objective one, whether on the evidence an ordinary reasonable reader would draw the inference that the words referred to the plaintiff: Milmo et al, Gatley on Libel and Slander (10th ed, 2005) [32.17].

38 On this application, the plaintiff contended it is unarguable that a reasonable reader with knowledge of the extrinsic facts would draw the inference that the words referred to the plaintiff as the person who murdered Mrs Lawrence.

39 The publications in respect of which the action has been brought were put into evidence. They consist of four newspaper articles which were reproduced on the website. It is unnecessary to describe their contents in detail. It is sufficient to say that they canvass matters relating to the investigation into Mrs Lawrence's death and contain various statements attributed to the defendant in connection with the investigation. It is, of course, the case that the words must be read as a whole. But the plaintiff relied in particular on certain passages in the words complained of.

40 Counsel for the plaintiff referred to a passage in the first article where the defendant is quoted as saying:

'Based on my observations of evidence that has been provided to me, I am willing to stake my reputation on the fact that (named person) is responsible ...'

'If the police have closed the case, it is disappointing that he is going to get away with it.'

41 Counsel also referred to the following passage later in the same article:

The person [the defendant] has named was one of 136 known to be in the vicinity of Mrs Lawrence's shop, Flora Metallica, on the stormy evening she was murdered in May 1994.

[The defendant] has concluded that at least some of the 10 to 12 blows to the head suffered by Mrs Lawrence were inflicted in different locations as she lay on the floor of her shop.

'There is a high probability that blood impact splatter would have formed a distinctive and damning pattern on the offender's clothes,' [the defendant] said.

'Also, there was evidence to support the view that the suspect(s) attempted to clean themselves and that items were moved by someone who had wet blood on them,' he said.

'It is my understanding that there was no bloodstain evidence found on Mr Mallard,' he said.

His conclusions are based on blood patterns inside the shop and on other items, taken together with other evidence collected by police.

'They point away from Mr Mallard and towards the other person,' [the defendant] said.

42 And counsel referred to the following passage in the fourth article:

Mr Mallard's lawyers, working pro bono to exonerate him of the vicious 1994 killing, were preparing to allege a litany of police blunders at the re-trial scheduled for July.

They included that:

● Police did not take a detailed statement, bloodied clothing or a vehicle from a person before he left the scene, contrary to accepted practice.

● Clothing and a blood-stained vehicle were not seized for two days.

● Clothing was examined by a chemist, but not by a police blood-splatter expert.

● Mr Mallard could not have been wearing those clothes.

● Evidence suggests a member of Mrs Lawrence's family was at the scene before the ambulance arrived, but evidence was never taken from her to ascertain if she saw anything relevant to the crime.

...

● The statement of a witness at the scene was not taken for three days.

● There was an unexplained 20 minutes on the evening of the murder in one crucial recollection of events from a person of interest.

● A person handled Mrs Lawrence's handbag, pointing out that her purse was missing, after being told by a constable not to touch anything.

● Police did not search Mrs Lawrence's house in the days after the murder to see if her purse, which was the only item allegedly stolen, was there.

● A large drop of blood at the foot of a copper bath, capable of cleaning a murder weapon, in a shed at the back of the shop, was never explained.

43 None of the publications refer to the plaintiff by name as the person who murdered Mrs Lawrence (or in any other connection). The person identified as the murderer is said to be 'one of the 136 known to be in the vicinity of Mrs Lawrence's shop ... on the evening she was murdered.'

44 The plaintiff relied on the affidavit evidence of several witnesses that they had identified the plaintiff as the person referred to in the material complained of as the murderer. The witnesses are either close friends of the plaintiff or members of the plaintiff's family.

I have been shown the material from [the defendant's] website ... which is annexed to the statement of claim in this proceeding. It was immediately clear to me that the unnamed person referred to by [the defendant] as the real killer of [Mrs Lawrence] in that material had to be [the plaintiff], because of the references to the real killer having [Mrs Lawrence's] blood on his clothes.

To me this suggestion was completely outrageous and preposterous. Of course, [the plaintiff] had blood on his clothes, because he had found [Mrs Lawrence] dying at the scene and held her in his arms in her last moments [22] - [23].

46 Ms Wheller does not say by whom or in what circumstances she was shown the material, nor is it clear whether she actually saw it on the defendant's website. (I should mention that, as appears from an affidavit of the plaintiff's solicitor, Ms Wheller was in fact shown a draft statement of claim.) It appears that the references to the real killer having blood on his clothes caused Ms Wheller to conclude that the plaintiff was the person referred to because the plaintiff had blood on his clothes.

47 The plaintiff's daughter, Ms Amy Lawrence, also says that she was shown the material 'annexed to the statement of claim' and goes on to say that she saw it on the defendant's website in about late September or early October 2006. Ms Lawrence does not say how it came about that she saw it on the website. Nor is it entirely clear on what basis Ms Lawrence concluded that the material referred to the plaintiff. It seems, however, from statements made earlier in her affidavit that Ms Lawrence drew that conclusion from having seen press articles in about February 2006 referring to a Canadian blood splatter expert who had provided evidence to the police and DPP identifying a specific person as the murderer. Ms Lawrence says it was evident to her that that person could only be a reference to the plaintiff as he was the only person who attended the shop on the day of the murder who got blood on their clothes.

48 There was affidavit evidence from another daughter of the plaintiff, Ms Katherine Kingdon. Ms Kingdon says that early in 2006 she became aware of media reports that a blood splatter expert had named a new culprit (not being Mr Mallard) and that she knew this had to be a reference to the plaintiff, 'who was the only witness who had blood on his clothes.' Ms Kingdon says she followed the murder investigation online and, in about September or October 2006, she also read the defendant's website. Ms Kingdon does not say how it was that she came to read the defendant's website. Although Ms Kingdon does not say so, it is implicit that she concluded that the words complained of referred to the plaintiff. It appears she did so on the basis that the plaintiff 'was the only witness who had blood on his clothes.'

49 The plaintiff's wife, Mrs Robyn Lawrence, has sworn an affidavit which is in similar terms to the affidavit of Ms Kingdon. Mrs Lawrence says that in February 2006 she saw media reports that a blood splatter expert had identified a suspect (not being Mr Mallard) based on an analysis of photos of the crime scene and clothes with blood splatter. Mrs Lawrence says she knew this had to implicate the plaintiff, 'as he was the only person with blood on them from the murder scene.' Mrs Lawrence says she first saw the material on the defendant's website in late September or early October 2006, but she does not say how it was that she came to see it. Again, Mrs Lawrence does not say so, but it is implicit that she concluded that the words complained of referred to the plaintiff. It appears she did so on the basis that the plaintiff was 'the only person with blood on them from the murder scene.'

50 The plaintiff, in his affidavit sworn 5 May 2008, says (relevantly):

When I read the material posted on [the defendant's] website, I immediately understood it to be pointing the finger directly at me. I had been at the crime scene and was the only person, other than police and ambulance officers, to have had any contact with Pamela in her dying minutes. I had been covered in Pam's blood. I also knew that I was the person referred to because I knew that the defendant had been engaged by Mallard's legal team, and McCusker had previously pointed to me as a suspect in Pam's murder.

I knew that anyone reading the website who knew anything about the circumstances of Pam's death would know that I was the person the defendant had staked his reputation on as being Pam's murderer [61] - [62].

51 The plaintiff's solicitor, Mr Richards, who has been a personal friend of the plaintiff for many years, also deposed to seeing the material on the defendant's website in late September or early October 2006. While he concluded that it referred to the plaintiff, he does not explain the basis upon which he drew that conclusion.

52 The basis, therefore, upon which at least some of the deponents, namely Ms Amy Lawrence, Ms Kingdon and Mrs Robyn Lawrence, appear to have drawn the inference that the plaintiff was the person referred in the words complained of was:

• the statement in the material complained of that the defendant's conclusion as to the identity of the murderer was based on bloodstains on the murderer's clothing; and
• the plaintiff is the only person known to have been at the scene who had bloodstained clothing.

In other words, the relevant extrinsic fact is that the plaintiff is the only person known to have been at the scene who had bloodstained clothing.

53 The statements in the affidavits that the plaintiff is the only person known to have been at the scene who had bloodstained clothing are, in my view, in each case properly to be read as a statement of the belief or understanding of the deponent as to that rather than proof of it as a fact. But a matter does not constitute an extrinsic fact simply because a person believes it to be the fact.

54 Thus, an erroneous belief of a reader as to the existence of a fact cannot found an innuendo. An innuendo must be based on an existing fact. A defendant is not liable for an imputation which is not the product of the words complained of read in the light of existing facts known to the reader, but which is merely the product of those words understood in the light of the reader's erroneous belief: Mirror Newspapers Ltd v World Hosts Pty Ltd [1979] HCA 3; (1979) 141 CLR 632, 642.

55 It may be that where a defendant has published the relevant 'fact' (in the present case, that the plaintiff is the only person known to have been at the scene who had bloodstained clothing) in a prior publication, the plaintiff can rely upon that prior publication as the extrinsic fact without having to establish the truth of the fact itself: see Rivkin v John Fairfax Publications Pty Ltd (Unreported, NSWSC, 17 July 1998); John Fairfax Publications Pty Ltd v Rivkin [1999] NSWCA 164. But there is no evidence of that in this case. None of the deponents identify the source of their belief.

56 In my view, the material before me does not establish that the understanding of the relevant deponents that the plaintiff is the only person known to have been at the scene who had bloodstained clothing is the fact. There is no evidence on this application that the plaintiff is the only person known to have been at the scene who had bloodstained clothing. Nor is there anything in the words complained of to that effect. The evidence only establishes that the deponents believe that to be the case. The plaintiff says only that he had bloodstained clothing.

57 Nor, in my view, is it clear that if that fact were proved it would be sufficient to establish that an ordinary reasonable reader would conclude from the words complained of that the plaintiff was the person referred to. That would depend upon whether such a reader would infer that because the plaintiff is the only person known to have been at the scene who had bloodstained clothing, the words complained of must be referring to him. That, in my view, involves an issue of fact.

58 In the case of Ms Wheller, the relevant extrinsic fact appears to be that the plaintiff had bloodstains on his clothes. Ms Wheller does not refer to the plaintiff being the only person who had bloodstains on his clothes. Whether, when the words complained of are read as a whole, the fact that the plaintiff had bloodstained clothing would cause an ordinary reasonable reader to identify the plaintiff as the person referred to seems to me to raise a question of fact.

59 In the case of Mr Richards, it is quite unclear specifically what it is that led him to identify the plaintiff as the person referred to in the words complained of.

60 It is also the case, as I have said, that the deponents are either close friends or members of the plaintiff's immediate family and in each case the circumstances in which they came to read the defendant's website have not been explained. Those circumstances add weight to the contention that whether the inference they drew as to the identification of the plaintiff would necessarily be drawn by the postulated ordinary reasonable reader is a matter which could only properly be tested at a trial.

61 As the evidence currently stands, I consider there is an arguable issue of fact as to whether an ordinary reasonable reader would have concluded that the plaintiff was the person referred to in the words complained of. It follows, in my opinion, that the defendant has an arguable defence to the claim.

62 That leaves the question of the defendant's explanation for his failure to file an appearance within time and the delay in bringing this application.

63 The best that can be said about the defendant's conduct is that it reflects a serious failure on his part to give proper attention to the various court documents served on him, leading to a failure to take steps to obtain proper, timely advice as to what was required of him in order to defend the action. Such a lackadaisical approach is not lightly to be excused. I am conscious, too, that for the plaintiff the effect of setting aside the judgment would be that the issue of the defendant's liability, which he had thought was behind him, would now, many months later, be raised again.

64 On the other hand, there must be weighed in the balance the consequences to the defendant of refusing the application, thereby denying him the opportunity to defend the action, and allowing the judgment against him to stand.

65 Having concluded that the defendant has an arguable defence to the claim, in the circumstances it seems to me that it is in the interests of justice that the default judgment be set aside.

66 I would set aside the judgment. I would hear the parties on the directions that are required for the further progress of the action and on the costs of and associated with this application.