Hartnett Legal Services Pty Ltd v Ballantyne

Hartnett Legal Services Pty Ltd and another (appellants) sought leave to appeal against a default judgment entered in favour of Mr Ballantyne, asserting that the Federal Circuit Court had erred in granting the judgment. The dispute revolved around unpaid leave entitlements, penalties under the Fair Work Act, and the enforceability of restraint clauses in an employment agreement. The primary judge found that the appellants were in default for not filing a response, and granted Mr Ballantyne's application for default judgment, awarding him various sums and penalties, and ordering the appellants to pay his costs on an indemnity basis. The appellants contested the decision, arguing the primary judge erred in several respects, including by treating the application for default judgment as akin to an application to set aside a default judgment, and by not adequately considering the lack of seriousness of any defaults.

The court examined whether the appellants were indeed in default for not filing a response, as required by the Federal Circuit Court Rules. The appellants argued they were not in default because they had filed a defence, and Rule 4.03(1) of the Rules gave them discretion to decide whether to file a response. The court noted that while the appellants had filed a defence, they were still required to file a response to the application, as mandated by Rule 4.03(2). The court concluded that the appellants were in default for not filing a response within the prescribed time. The court also found that the primary judge's application of the principles relevant to setting aside a default judgment to an application for default judgment was incorrect, as established in Wiedenhofer v Commonwealth. Additionally, the court held that the primary judge should have considered the lack of seriousness of any defaults and provided adequate reasons for the judgment.

The appeal was allowed, and the orders of the Federal Circuit Court were set aside. The appellants were granted leave to appeal and ordered to file and serve a response within 7 days. The matter was remitted to the Federal Circuit Court for further consideration in light of the findings.