Federal Treasury Enterprise (FKP) Sojuzplodoimport v Spirits International N.V. (No 2)

The matter in Federal Treasury Enterprise (FKP) Sojuzplodoimport v Spirits International N.V. (No 2) involved an appeal against a decision made by the primary judge in the Federal Court of Australia. The primary dispute was regarding an application to set aside a judgment by default. The appellants, Federal Treasury Enterprise (FKP) Sojuzplodoimport, sought to overturn a default judgment that had been entered against them in favour of the respondents, Spirits International N.V.

The legal issues before the court included whether the primary judge was correct in finding that the appellants had not established a bona fide defense to the action and whether the primary judge had erred in exercising his discretion in denying the appellants’ application to set aside the default judgment. Additionally, the court had to consider the costs implications of the appeal and the motion before the primary judge. The court's task was to determine the appropriate allocation of costs between the parties in light of the appeal and the prior motion.

The court found that the primary judge did not err in his determination that the appellants had not established a bona fide defense to the action. The court further held that the primary judge exercised his discretion correctly in denying the application to set aside the default judgment. Regarding costs, the court determined that the appellants were to pay the costs of the first respondent in relation to the ground set out in paragraph 3 of the notice of appeal, to be set off against the costs payable by the first respondent in relation to the appeal and the motion before the primary judge.

The court ordered that the first respondent pay the appellants’ costs of the first respondent’s motion before the primary judge and the appellants’ costs of the appeal, except for the costs associated with the ground set out in paragraph 3 of the notice of appeal. Conversely, the appellants were to pay the first respondent’s costs of and associated with responding to the ground set out in paragraph 3 of the notice of appeal, such costs to be set off against the costs payable by the first respondent.