Lampson (Australia) Pty Ltd v Fortescue Metals Group Ltd

Lampson (Australia) Pty Ltd brought an action against Fortescue Metals Group Ltd, seeking damages for alleged breaches of contract. The dispute was heard in the Supreme Court of New South Wales. The defendant attempted to strike out the plaintiff's statement of claim but was unsuccessful. After this, the defendant applied for conferral to obtain directions for filing a defence. However, the plaintiff, instead of conferring, proceeded to file a judgment in default of defence. The defendant subsequently sought to set aside the default judgment, arguing that the plaintiff's actions were unreasonable and that the plaintiff ought to have known the result of the conferral. The court considered whether the plaintiff's conduct was appropriate and, if not, whether it warranted setting aside the default judgment and awarding indemnity costs to the defendant.

The court held that the plaintiff's decision not to confer with the defendant, despite the defendant's application for directions to file a defence, was unreasonable. The court found that the plaintiff should have known the outcome of the conferral and that its failure to do so led to the premature entry of the default judgment. As a result, the court set aside the default judgment and awarded indemnity costs to the defendant. The court emphasised that such costs were not automatic and would only be awarded in cases of unreasonable conduct that warranted setting aside the default judgment. In this instance, the court found that the plaintiff's actions met the necessary threshold.