Defamation - Judgment in default of defence - Application to set aside judgment - Turns on own facts

Supreme Court Rules, O 22 r 3, O 22 r 10, O 37 r 6(2), O 59 r 9

1 HASLUCK J: This is an application by the second defendant to set aside a default judgment obtained in default of the filing of a statement of defence. The plaintiff appeared in person. There was no appearance for the first defendant. The second defendant was represented by counsel.

2 On 6 November 2000, the plaintiff, Ross Alexander Mickelberg, issued a writ of summons bearing an indorsement of claim. On the same day, the plaintiff filed a statement of claim from which it appears that on or about 15 April 2000 in the State of Western Australia the defendants allegedly broadcast news programmes on television containing words and pictures which are said to be defamatory of the plaintiff.

3 The plaintiff says that in their ordinary and natural meaning the words as broadcast by the defendants meant and/or were understood to mean that the plaintiff had been convicted of possessing cannabis with intent to sell or supply. Paragraph 8 of the statement of claim indicates that the publications were made in circumstances where the plaintiff had been on trial, together with his father, Raymond Mickelberg, and the matter had received wide publicity. The plaintiff had been acquitted by the jury at the trial of possessing cannabis with intent to sell or supply, but he was convicted of simple possession of cannabis.

4 The solicitors for the first defendant, Clayton Utz, proceeded to enter an appearance for both defendants and, in due course, on 30 November 2000, filed a statement of defence on behalf of the first defendant.

5 Clayton Utz requested an extension of time for the filing of a statement of defence on behalf of the second defendant and it appears to be common ground that an extension of time for a period of 21 days was granted by the plaintiff who was acting in the matter on his own behalf.

6 It is apparent from the affidavits before me that the second defendant is the owner of a broadcasting licence which permits it to broadcast in regional Western Australia only. In the period following the request for an extension of time, various exchanges took place between the legal representatives of the two defendants as to whether the second defendant had broadcast the publication complained of and as to whether there was a conflict of interest which required that the second defendant be separately represented.

7 In the meantime, on 5 December 2000, a status conference had been held before a Registrar of the Supreme Court who ordered that the second defendant file and serve a statement of defence by 8 January 2001.

8 It was common ground at the hearing before me that a statement of defence was not filed and served on behalf of the second defendant within the prescribed time. On 15 January 2001, the plaintiff proceeded to enter judgment by default, pursuant to O 22 r 3 of the Supreme Court Rules upon the basis that the second defendant had failed to serve a defence on the plaintiff. A few days later, the plaintiff issued a chamber summons requiring an assessment of damages pursuant to the judgment he had obtained.

9 Subsequently, in February 2001, the plaintiff circulated a minute of proposed amended statement of claim which purports to introduce an entirely new plea in par 5A to the effect that the second defendant broadcast, or caused to be broadcast, on television to the regional areas of the State of Western Australia the words defamatory of the plaintiff. In other words, the minute takes account of the role of the second defendant as a regional broadcaster.

10 Various affidavits filed on behalf of the second defendant in support of this application to set aside the judgment contain facts and matters bearing upon the circumstances in which there was a failure to file a statement of defence and purporting to verify that the second defendant has an arguable defence to the claim in defamation being advanced against it.

11 Order 22 of the Rules of the Supreme Court deals with entry of judgment in default of pleading. Order 22 r 10 provides that the Court may, on such terms as it thinks just, set aside or vary any judgment entered in pursuance of this order.

12 It is apparent from Seaman Civil Procedure par 13.10.6 that when a judgment in default has been regularly entered, it is not to be set aside unless the Court is satisfied that there is a defence on the merits, and instances of departure from the general rule are rare. The application should be supported by affidavit evidence which discloses a defence on the merits and explains the failure to comply with the rules and any delay in bringing the application. The defendant must present a credible defence demonstrating that, if the default judgment was set aside and the matter was argued on its merits, the defendant would have a real prospect of success: Parker v Transfield Pty Ltd [2000] WASCA 382

13 Although an application to set aside a default judgment is an interlocutory application, and therefore the affidavit may contain statements of information and belief in accordance with O 37 r 6(2), as a general rule a supporting affidavit should go to the details of the defence and be sworn by somebody who is personally concerned in the defence: Carr v Finance Corp Australia Ltd (No 1) [1981] HCA 20; (1981) 147 CLR 246; Sharples v Northern Territory [1988] NTSC 20; (1988) 91 FLR 11. The usual order upon the setting aside of a regular judgment is that all the costs of and occasioned by the entry and setting aside of the judgment shall be the plaintiff's in any event.

14 In the present case, the affidavit of Ian McRae, sworn 22 February 2001, is directed both to explaining the failure to file a defence and to the merits of the defence. He says that he has been informed by his solicitors and verily believes that the second defendant has three main areas of defence. Paragraph 4 of the amended statement of claim alleges the second defendant broadcast the offending material in Perth. He draws attention to the role of the second defendant as a regional broadcaster and contends that as the statement of claim is directed to publication in Perth in the State of Western Australia, it is questionable as to whether the claim, as presently formulated, discloses a cause of action against the second defendant.

15 In the course of argument before me, counsel for the second defendant sought to reinforce this contention by reference to the minute of amended statement of claim mentioned earlier, whereby specific reference is made to publication beyond the metropolitan area of Perth.

16 Mr McRae also says that the second defendant has a prima facie defence in that it is entitled to plead truth to an alternative imputation which arises from the material broadcast.

17 As to this aspect of the matter, reference was made to an extract of the decision of the Full Court in Mickelberg v The Queen [2000] WASCA 319.

18 The Full Court decision deals with the applicant's application for leave to appeal against sentence and ancillary appeal. The Full Court noted that the applicant was acquitted of offences of possession of cannabis with intent to sell or supply it to another, but was convicted of one offence of simple possession of cannabis. The Full Court held eventually that leave to appeal should be granted and the appeal allowed to the extent necessary to vary the fine imposed from one of $900 to one of $300.

19 Counsel for the second defendant in the present case drew attention to a passage of the Full Court's judgment at par 3 in which the Full Court said that the quantity of cannabis involved in the offence was not trivial. The Full Court said further that "the possession of 100 grams of cannabis may give rise to a presumption of intention to sell or supply the drug to another, but it is clear that the jury accepted that the applicant had no such intention with respect to this drug and found that it was for his own use."

20 Counsel submitted that this passage suggested that it would be open to the second defendant to plead by way of answer to the defamation claim an alternative imputation to be drawn out of the publication complained of and then to seek to justify the alternative imputation.

21 Counsel for the second defendant went on to say that there was a clear explanation for the delay in filing the defence set out in the affidavits supporting the application. The relevant passages of the various affidavits suggested that, in the course of addressing the question of whether the second defendant should be separately represented, a misunderstanding arose as to which firm of solicitors was to attend to the filing of a statement of defence and it was this misunderstanding and the need to resolve the conflict of interest issue which explained the second defendant's failure to file and serve a statement of defence within the prescribed time. The second defendant, by its legal advisers, seems to have thought that as a request for an extension of time had previously been granted, the plaintiff would not enter judgment by default without prior warning.

22 The plaintiff filed an affidavit sworn 9 March 2001 in answer to these evidentiary materials. He confirmed that he had given no indication to the second defendant that he would not enter default judgment. He also sought to rebut the suggestion that the statement of claim did not disclose a cause of action against the second defendant. He referred to a conversation between his uncle and a person in charge of the second defendant's technical department to the effect that the second defendant does broadcast to a number of households in the Perth metropolitan area. He referred also to the evidence of a Mr McParland who claims to have seen the second defendant's news broadcast the day after the plaintiff had been acquitted of serious cannabis charges. Mr McParland said that the broadcast in question contained vision of the plaintiff and the news item in question said that the plaintiff had been convicted along with his father of having sold cannabis.

23 It is apparent from the decided cases that the Court has an unfettered discretion to set aside a regularly entered default judgment. Although it is usual for the second defendant, in applying for the setting aside of a regularly entered judgment, to explain the delay in appearing or pleading, and show a prima facie defence on the merits, there is no hard and fast rule to that effect. This was established in Evans v Bartlam [1937] AC 473, where it was pointed out that since the power to set aside a default judgment as it is expressed in the rules is not surrounded with qualifications, the Court should not qualify a discretion that is left unfettered in the rules: Cairns, "Australian Civil Procedure" (2nd ed) page 328.

24 In Kostokanellis v Allen [1974] VicRp 71; [1974] VR 596, the Full Court in that case considered it proper to have regard to the length of, and reason for, the delay. But it refused to conclude that if the explanation is unsatisfactory, the judgment cannot be set aside. It is simply one factor to be weighed against the other. Of greater importance is whether the defendant has a prima facie defence. A defence on the merits may be either a defence on the defendant's version of the facts, or a technical defence.

25 In the circumstances of the present case, I am persuaded that the second defendant has provided a sufficient explanation for the delay in formulating its statement of defence. The delay involved was not excessive. An attempt was made to obtain an appropriate extension of time. It seems to me, having regard to the affidavits filed in support of the application, that the defendants were genuinely conscious of a need to resolve the conflict of issue before proceeding further and the steps taken in that regard were designed to avoid complications and confusion at a later date.

26 With the benefit of hindsight, it emerges that Clayton Utz, as the solicitors who entered the initial appearance, could have exercised greater diligence in ensuring that the appropriate steps had been taken to comply with prescribed time limits. However, I do not consider that it is appropriate in the circumstances of the present case for the second defendant to be penalised by the misunderstanding that arose between the legal advisers attending to the conflict of interest issue.

27 When I turn to the question of whether the second defendant has a prima facie defence, I am conscious that the claim in respect of which the judgment by default has been entered concerns a publication for a broadcast in Perth. There is, however, evidence before me that the second defendant is a regional broadcaster. The plaintiff's wish to amend the statement of claim by introducing a new par 5A complaining of a broadcast on television to the regional areas of the State of Western Australia is a significant indication that the plaintiff itself is conscious that the claim as originally formulated may not be sufficient to attach liability to the second defendant. I also give weight to the second defendant's submission that it may be open in the circumstances of the present case to the second defendant to seek to justify an alternative imputation.

28 Accordingly, in my view, having regard to the claim as it stood immediately prior to the judgment of default being entered, I consider that the second defendant should not be deprived of the opportunity to advance an arguable line of defence and that the judgment by default previously entered should be set aside.

29 Accordingly, I will order that the default judgment herein be set aside. The time limited for the second defendant to file and serve a defence will be extended to 21 days after the date of this order. The second defendant is to pay the plaintiff's costs of this application thrown away. The Court will waive the operation of par 1 of O 59 r 9.