Nunn v Honey[2013] QDC 58

DISTRICT COURT OF QUEENSLAND

HIS HONOUR: This is an appeal pursuant to section 45 of the Magistrates Courts Act 1921 against the decision of a Magistrate sitting at Cairns to dismiss the appellant's application to set aside a default judgment dated 27 July 2012, ordering the appellant to pay the defendant damages to be assessed together with costs to be assessed. 

The appellant is a builder and the respondents are his former friends.  The dispute, the subject of the judgment, relates to the building of a home by the appellant for the respondents near Cairns.  It is important to have regard to the chronology of events leading up to judgment.  The Claim and Statement of Claim was filed on 5 June 2012 and served on 28 June 2012.  Pursuant to rule 137 of the Uniform Civil Procedure Rules 1999 ("UCPR"), a Notice of Intention to Defend must be filed within 28 days after the Claim is served.  Accordingly, the last day for filing a Notice of Intention to Defend was 26 July 2012.  The application for default judgment was filed by the respondents' solicitors the following day, on 27 July 2012.  The application to set aside default judgment was filed on 8 August 2012.  Significantly, the appellant was not and had not been legally represented at this point in time.

The jurisdiction to set aside judgment by default is set out in rule 290 of the UCPR.  It is, in general terms.  Relevant considerations were explored by the Court of Appeal in Cook v. D A Manufacturing Co P/L & Anor [2004] QCA 52.  In delivering the leading judgment of the Court, Williams J A observed at para [19]: 

"… the three relevant considerations being whether the defendant had given the satisfactory explanation for failure to appear, any delay in making the application, and whether the defendant had a prima facie defence on the merits.  McPherson J went onto say:  ’It is not often that a defendant who has an apparently good ground of defence would be refused the opportunity of defending, even though a lengthy interval of time had elapsed, provided that no irreparable prejudice is thereby done to the plaintiff’”.

At first instance, the relevant considerations canvassed by the Magistrate were that the appellant had not given a satisfactory explanation for the failure to appear and that he had not demonstrated a prima facie defence on the merits.  It is not in dispute that the application to set aside the default judgment was brought in a timely manner.  In seeking to explain his failure to file a Notice of Intention to Defend within the requisite period, the appellant filed an affidavit before he had the benefit of legal representation.  In this affidavit, reference was made to attempts by his wife to file the Notice of Intention to Defend in the Magistrates Court at Cairns and of her inability to do so within the requisite period.  This was objected to by the respondents as the appellant had not complied with the statutory requirements of rule 430 of the UCPR, and in particular, the affidavit contained statements based on information and belief without stating the sources of the information and the grounds for the belief.

In these circumstances, the Magistrate stated: 

"That being the case, there is no material before me in support of the present application which in fact deals with the first issue I'm required to consider, that is whether or not the defendant has given a satisfactory explanation for its failure to appear." 

This is patently incorrect and the Magistrate fell into error in disregarding the affidavit in question and arriving at this conclusion.  Relevantly, the appellant deposed: 

"I had the date noted in my Diary for the Filing of Defence as the 27th July 2012.

Due to my work commitments in S.E. QLD I had to depart from Cairns and left the Documents with my wife for filing on the 27th July as per my Diary Note to her.

I since discovered that obviously in my rush to get the Documents prepared due to my Sudden work commitments, I made a genuine error of the 28 day period."

When regard is had to the chronology set out above, and in particular to the fact that the application for default judgment was filed by the respondents' solicitors on 27 July 2012, it simply cannot be said that there was no material before the Magistrate in support of the application which addressed the question of whether there was a satisfactory explanation for the failure to appear.  The Magistrate fell into error in this regard and it falls to me to re-exercise the discretion in respect of this aspect of the application. 

I am satisfied that having regard to the chronology of events, the fact that the defendant was unrepresented and absent from the Cairns area and his deposed error with respect to the calculation of the period within which to file the application to set aside the default judgment, that he has given a satisfactory explanation for the failure to file a Notice of Intention to Defend within the requisite period. 

I now turn to the other relevant issue which is whether or not the appellant disclosed a prima facie defence on the merits.  Despite filing a further affidavit which addressed each of the issues in the Statement of Claim seriatim and raised the prospect of possible equitable defences given the relationship between the parties, and exhibiting a draft defence which descended to 29 paragraphs traversing each of the allegations in the Statement of Claim, the Magistrate concluded:

"A proper consideration of Mr Nunn's affidavit notes [sic] reveals, as is detailed in a comprehensive way in the respondent's counsel's submission, that in fact there are no more effectively than bare assertions that the issues that he raises are live."

I have been taken to no authority as to what is meant by the term "bare assertions", however, in my view, the material before the Magistrate at first instance went further than raising "bare assertions."  Particularly, when regard is had to the observations of McPherson J quoted in the passage from Cook referred to above, I am of the view that the Magistrate's discretion again miscarried in denying the appellant the opportunity of defending in circumstances where a number of prospective defences were raised in the material before the Court. 

In the circumstances, I allow the appeal, set aside the default judgment and order that the appellant file and serve a Notice of Intention to Defend and a Defence within 14 days.

…

I further order that the respondents pay the costs of an incidental to the appeal on the standard basis.