Chengluo Jiang and Woomee Australia Pty Ltd v Coral Storm Pty Ltd

Chengluo Jiang and Woomee Australia Pty Ltd (the applicants) sought to set aside a default judgment entered against them in favour of Coral Storm Pty Ltd (the respondent). The dispute arose from an alleged breach of a loan agreement. The application to set aside the default judgment was heard by the Supreme Court of New South Wales.

The primary legal issue before the Court was whether the applicants had established a meritorious defence to the respondent's claim, which is a prerequisite for setting aside a default judgment. The Court also considered whether there was a sufficient explanation for the delay in filing the defence and whether the applicants had acted promptly once they became aware of the default judgment.

The Court noted that the applicants had not provided a sufficiently detailed or compelling explanation for their failure to file a defence within the time stipulated by the court rules. While the applicants asserted a defence based on alleged misrepresentations and unconscionable conduct, the Court found that these assertions were not sufficiently particularised or supported by evidence to demonstrate a real prospect of success. The Court applied the principles established in cases such as *Colonial Bank of Australasia Ltd v Berrill* and *Australian Coal and Shale Employees' Federation v Commonwealth*, which require a party seeking to set aside a default judgment to show both a good defence on the merits and a reasonable explanation for the default.

The Court concluded that the applicants had failed to satisfy the necessary criteria for setting aside the default judgment. Accordingly, the application was dismissed.