DISTRICT COURT OF QUEENSLAND

Introduction

1. [1]
   The applicant in the matter (defendant in the original action) seeks to set aside the judgment by default entered against it by the respondent (plaintiff in the original action) on 25 October 2004.

2. [2]
   The application is made pursuant to r 290 of the Uniform Civil Procedure Rules 1999 (Qld) (“the Rules”).

3. [3]
   The principles to be considered on an application to set side a default judgment are set out in a number of authorities^[1] and may be conveniently summarised as follows:

1. Whether the defendant has given a satisfactory explanation of the failure to defend;

2. Whether the defendant’s delay in making the application to set aside is not such as to preclude it from obtaining relief; and

3. Whether the defendant has a prima facie defence on the merits.^[2]

4. [4]
   The court has a wide discretion in its consideration of all relevant criteria upon which it reaches its conclusion.^[3]

The Claim

5. [5]
   The respondent’s claim is straight forward and seeks the reimbursement of the sum of USD60,000 being one half (½) of the agreed purchase price for goods (diabetes test strips) which it contracted to buy from the applicant who it is alleged failed to deliver as agreed.^[4]

6. [6]
   The evidence shows that the origin of the matter was either June or August 2003 dependent upon whose version of events is to be believed^[5] subsequent to which over a period of months there were a series of emails between the parties and a Mr Arif Mohammed of Archer Enterprises Group Inc of varying content with some containing rather explicit and descriptive references inquiring as to the delivery of the goods or the return of the deposit paid, neither of which was satisfied.^[6]

7. [7]
   A formal solicitor’s letter of demand dated 10 May 2004 was then forwarded to the applicant by registered post seeking the return of the deposit sum of USD60,000 with the correspondence being collected by the respondent on his return from overseas on 11 June 2004. This required the amount to be repaid “by Friday 21 May 2004”.^[7]  There is no evidence that the applicant responded to this correspondence in any way despite the demands therein contained.

8. [8]
   Proceedings for the recovery of the funds were ultimately filed by the respondent on 10 June 2004.

Attempts to Serve Applicant

9. [9]
   Persistent attempts were made to serve the claim and statement of claim on the applicant between 12 June 2004 and 13 July 2004 either by way of personally attending at the applicant’s address at 721 Grassdale Rd, Gumdale or by leaving telephone messages at that address (in various forms).^[8]

10. [10]
    All attempts at personal service were unsuccessful and an order for substituted service was obtained by the respondent on 17 August 2004 on the basis that service of the documents be affected by ordinary prepaid post.^[9]

11. [11]
    The documents were forwarded to the respondent under cover of letter dated 24 August 2004 by registered post to the applicant’s address.^[10]

12. [12]
    There is no evidence that the documents were returned to the respondent undelivered and in accordance with the substituted service order the documents were deemed to have been served “3 business days after” they were posted.

Judgment by Default Entered

13. [13]
    The evidence is that there was no response from the applicant to this correspondence^[11] and judgment by default in accordance with the Rules was filed on 25 October 2004 by the respondent and forwarded to the applicant by the respondent’s solicitors by ordinary post under cover of letter dated 26 October 2004.  This correspondence was received by the applicant on or about 27 October 2004 as acknowledged by him at paragraph 22 of his affidavit sworn 9 December 2004.

14. [14]
    Following receipt of this correspondence the applicant instructed solicitors to act on his behalf and the current application to set aside the judgment was filed in 9 December 2004.

15. [15]
    It seems curious that notwithstanding the numerous unsuccessful attempts to serve or contact the applicant as well as messages left (some being acknowledged by family members) advising that there were documents to be served, (between 12 June 2004 and 13 July 2004), the only correspondence which the applicant says he did not receive and which was posted to his address, was the crucial correspondence of 24 August 2004 containing the claim and statement of claim in these proceedings. In this context reference should also be made to the content of exhibit “Y” to the affidavit of E Stevens sworn 4 February 2005.

Is There a Prima Facie Defence on the Merits?

16. [16]
    An important criterion which must be satisfied by an applicant to set aside a default judgment is that the applicant “has a prima facie defence on the merits”.^[12]

17. [17]
    Referring to the judgment in Watson v Anderson (1976) 13 SASR 329, Atkinson J further stated at paragraph [13]:

“…a mere statement by the defendant that he or she has a good defence is not sufficient to justify a review of the exercise of judicial discretion.  The defendant must demonstrate ‘a very compelling reason’ for the failure to appear and that it has a plausible defence either in law or in fact.  Before allowing a defendant to come in and defend, the court should have before it material which enables it to say how it came about that the defendant found itself bound by judgment regularly entered; that the defendant genuinely desires to be allowed to come in and present its case; and that issues are raised in such a form as to require serious consideration of the defence put forward.”

18. [18]
    The applicant here asserts that he was merely the agent of the respondent not the supplier which is denied by the respondent. It is therefore incumbent upon the applicant, at the least, to adduce some cogent evidence to support this fundamental allegation thereby establishing that his alleged defence is a plausible one and not just raised for the purpose of having the default judgment set aside. In my opinion the applicant in the present case has not done this.

Delay

19. [19]
    I was not addressed on this topic as it is not a relevant issue in the consideration of this matter as steps to set aside the judgment were commenced shortly after the applicant received the default judgment and instructed solicitors to act for him.^[13]

Conclusion

20. [20]
    In all the circumstances I am not persuaded that the applicant has given a satisfactory explanation of his failure to defend a claim in which judgment has been regularly entered by the respondent and in particular, on the evidence adduced, he has not satisfied me that he has a prima facie defence on the merits, to the respondent’s claim.  Consequently I am of the opinion that the application to set aside judgment should be dismissed.

21. [21]
    The court’s orders are:

1. That the application to set aside judgment of 25 October 2004 is dismissed; and

2. That the applicant pay the respondent’s costs of and incidental to the application to be assessed on the standard basis.