De Castro v Burtenshaw Super Pty Ltd

The case of De Castro v Burtenshaw Super Pty Ltd was heard in the Supreme Court of Queensland. The dispute arose from a default judgment obtained by the lender against the guarantor in the amount of $479,483.85, together with costs. The guarantor, who had failed to defend within the requisite time, sought to set aside the default judgment, contending that the lender had acted unconscionably by taking advantage of his known vulnerability and disadvantage when offering the loan and having him provide the personal guarantee.

The primary legal issue before the court was whether the primary judge miscarried in finding that the guarantor had not demonstrated a prima facie defence on the merits. The guarantor needed to provide evidence that he had a plausible defence to avoid the operation of the deed of guarantee and indemnity. This requirement was firmly established in the case of Embrey v Smart, which emphasized that the applicant must produce to the Court evidence that they have a prima facie defence. The applicant must make more than a bare allegation; the allegation must be supported by some reference to evidence to suggest that the defence is plausible and not just raised for the purpose of having default judgment set aside.

The court found that the primary judge did not miscarry in their exercise of discretion. The evidence presented by the guarantor was insufficient to demonstrate a prima facie defence on the merits. The guarantor's allegations of unconscionability were not supported by any reference to evidence, and the application was not made in good faith. The appeal was dismissed with costs.

In summary, the court held that the primary judge correctly found that the guarantor had not demonstrated a prima facie defence on the merits and properly exercised their discretion to deny the application to set aside the default judgment. The appeal was dismissed, and the guarantor was ordered to pay costs.