Liang v Snackhome Pty Ltd

Liang (the applicant) sought to set aside a default judgment entered against him in favour of Snackhome Pty Ltd (the respondent) in the Supreme Court of Victoria. The dispute arose from an alleged breach of a franchise agreement, with Snackhome claiming Liang had failed to pay franchise fees and royalties. Liang had failed to file a defence within the prescribed time, leading to the entry of default judgment.

The primary legal issue before Emmett J was whether Liang had established a meritorious defence to Snackhome's claim, which is a prerequisite for setting aside a default judgment. This required the court to consider the substance of Liang's defence, which centred on allegations that Snackhome had breached its obligations under the franchise agreement, thereby vitiating Liang's own obligations to pay fees and royalties.

Emmett J found that Liang had not demonstrated a meritorious defence. His Honour noted that Liang's defence was vague and lacked specific particulars. The alleged breaches by Snackhome, such as failure to provide adequate training and support, were not sufficiently detailed to establish a genuine dispute about the debt owed. Consequently, the court applied the principle that a party seeking to set aside a default judgment must show not only that they have a defence on the merits but also that they have acted with reasonable diligence in seeking to set aside the judgment.

The application to set aside the default judgment was dismissed.