Defaults are Expensive, Emails are Free

In an application for setting aside a default judgment, Master Mossop, considered an expanded test including what notice the Plaintiff notify the Defendant before filing for default judgment. Stormer Building Group v Johnson [2014] ACTSC 23 considered the implications of a hastily filed default application in instances where no correspondence had been received from the Defendant.

r1128 creates a general discretion for the setting aside and the Court generally follows Evans v Bartlam [1937] AC 473 at 480 which confirms that the discretion is unfettered. The Master continued to set out the usual test:

In Ryan v Adams (1993) 112 FLR 474 at 476, Miles CJ said of the relevant principles that, “As far as this Court is concerned, the most authoritative pronouncements are those in the Federal Court in Davies v Pagett (1986) 10 FCR 226.”
11. In that case, the Court noted that the trial judge had set out a summary of the principles from Lord Wright’s speech in Evans v Bartlam, and then adopted the trial judge’s summary of the relevant considerations as follows:
1. The length of the delay between the time for delivery of defence and the date of interlocutory judgment. On this aspect, the giving of notice of intention to apply for judgment may be a relevant factor.
2. The length of delay between the entering of such judgment and the application to set it aside.
3. The reasons for such delay. The defendant’s own contribution to the delay, as contrasted with the delay caused by his legal advisers, may fall for consideration.
4. The evidence as to whether or not the defendant may have a defence? The probability of a successful defence need not be demonstrated, and the fact that a defendant’s case may appear weak, will seldom be a bar.
5. Whether the plaintiff will be prejudiced by setting the aside the judgment, the nature of the prejudice being such that it cannot adequately be compensated by an order for costs.

Refshauge J in part of the Ezekial-Hart v Law Society saga tacked on the judgment of Wallace J in Pope v Aberdeen Transport Co Pty Ltd [1965] NSWR 1550 at 1551 where his Honour said:

I think that where the party signing judgment does so without giving warning of its intention to do so, such party will generally, though perhaps not invariably, be in difficulties on a summons to set aside the judgment where a defence on the merits is disclosed.

Long story short, this additional test has the effect of adding the impetus to the party seeking the apply for default to warn the other side before applying, especially when the application is made so soon to the expiry date for filing. The filling of a defence is not the same as the disclosure required by Ezekial-Hart. In these circumstances, where knowledge of a defence can be constructed, practitioners will have a harder time of explaining why no contact was made.

From a policy point of view, default judgments are relatively simple to have overturned. Hence a hastily applied for default creates more time and expense to the parties and the court as opposed to a simple email or even just allowing a bit of time to pass.

Despite the eagerness of the Plaintiff, there was still a delay on the part of the Defendant in filing to set aside the judgment, and for this the Plaintiff was awarded costs with a pretty accelerated timetable for the Defendant to file their defence, evidence etc.

Failing to communicate intended actions is also possibly a breach of solicitors rules, but in the case of Stormer it was definitely short of this, and frankly 99% of the time it will be too. That being said, it is difficult not to froth at the mouth when the time for filing passes, but do try to resist the temptation, and send a quick email clearly setting out the intended action and possible consequences, particularly when involved with a self-rep.

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