Mace v Cavanagh

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION
TRUSTS, EQUITY AND PROBATE LIST

S ECI 2022 05333

BETWEEN:

BEVERLEY JOYCE FRANCES MACE	Plaintiff
v
MARGARET CATHERINE CAVANAGH	First Defendant
- and -
MARK ALBERT MAIER (in his capacity as Administrator with the Will annexed of the Estate of the Marshall Raymond Mace, deceased)	Second Defendant

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JUDGE:	Goulden AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	27 March 2025
DATE OF RULING:	4 June 2025
CASE MAY BE CITED AS:	Mace v Cavanagh & Anor
MEDIUM NEUTRAL CITATION:	[2025] VSC 311

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PRACTICE AND PROCEDURE – Setting aside judgment obtained in default of defence – Whether default judgment irregularly entered – Whether plaintiff had proved default in service of defence as required by r 21.02(2) of the Supreme Court (General Civil Procedure) Rules 2015 – Whether error in interlocutory judgment as to how it was obtained was an irregularity warranting set aside – Whether arguable defence on the merits – Factors relevant to discretion to set aside regularly entered judgment in default – r 21.07 of the Supreme Court (General Civil Procedure) Rules 2015.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ms R G Morison of counsel	Gauld & Co
For the First Defendant	Mr G McCormick of counsel	Goldsmiths Lawyers
For the Second Defendant	Mr K Mihaly of counsel	McNab McNab & Starke

TABLE OF CONTENTS

Background

Setting aside the default judgment

Was the default judgment irregularly entered?
Would the default judgment be set aside if it had been regularly entered?
Does the first defendant have a reasonably arguable defence on the merits?
What explanation is given for the default?
Did the first defendant unreasonably delay in making the set aside application?
Is the plaintiff prejudiced in a way that cannot be compensated by an award of costs?

Summary judgment

Disposition

HER HONOUR:

By summons dated 20 December 2024, the first defendant seeks orders pursuant to r 21.07 of the Supreme Court (General Civil Procedure) Rules 2015 (‘Rules’) to set aside judgment in default of defence entered on 2 March 2023.
During the course of the hearing, the plaintiff made application orally, without filing any summons, for summary judgment.
For the reasons that follow, I will set aside the default judgment on the basis that it was irregularly entered. Even if it was regularly entered, I would set aside the default judgment in the exercise of the discretion under r 21.07 of the Rules. I will dismiss the application for summary judgment.

Background

The plaintiff commenced this proceeding by writ and statement of claim filed on 22 December 2022.
In his affidavit sworn on 28 February 2023 to prove default in service of defence, Mr Peter Gauld of Gauld & Co, solicitors for the plaintiff, deposed to the effect that the statement of claim had been served on the first defendant on 5 January 2023.[1] In giving this evidence, Mr Gauld relied upon an ‘affidavit of service of Peter Petrovich sworn 6 January 2023 filed herein’.[2] There is no affidavit of service of Peter Petrovich that has been filed in this proceeding (either recently or at the time at which it was relied upon by the plaintiff in entering judgment in default) in order to prove service of the writ and statement of claim on the first defendant on 5 January 2023. Fortunately for the plaintiff, the first defendant admits being served with the proceeding on 5 January 2023 in her affidavit sworn in support of this application on 13 March 2025.[3]
[1]Affidavit of Peter John Robertson Gauld affirmed 28 February 2023, [3] (‘Gauld Affidavit’).
[2]Gauld Affidavit [3].
[3]Affidavit of Margaret Catherine Cavanagh sworn 13 March 2025, [21] (‘Cavanagh Affidavit’).
The plaintiff filed an amended statement of claim on 27 January 2023. The amended statement of claim was served by way of filing pursuant to r 6.12(1) of the Rules as the first defendant had not, at that time, filed a notice of appearance. The first defendant filed a notice of appearance on 30 January 2023. Given her admission that she was served on 5 January 2023, this was a late notice of appearance.[4] But for the intervention of the filing of the amended statement of claim, the time for serving her defence (absent a court order otherwise) would have been within the period of 30 days calculated from the last date upon which her notice of appearance ought to have been filed in accordance with r 8.07(2).[5]
[4]The time for filing a notice of appearance, being the period of not less than 10 days after service as stated in the writ in accordance with r 8.04 of the Rules, had expired by the time the amended statement of claim was filed.
[5]Lloyd v Dixon [1952] VLR 434, 436.
The consequence of the filing (and by the filing, the service upon her under r 6.12(1)) of the amended statement of claim on 27 January 2023 was that the first defendant became entitled, by operation of r 36.06 of the Rules, to the period of 30 days from the date of service of that amended pleading to serve her defence in response. Accordingly, the time by which the first defendant’s defence became due upon the filing of the amended pleading was 26 February 2023.[6]
[6]The Court invited further submissions from the parties concerning the question whether the judgment in default had been irregularly entered in circumstances where the Gauld Affidavit in support of judgment in default of defence was affirmed on 28 February 2023 and where the first defendant submitted (First Defendant’s Outline of Submissions dated 20 March 2025, [31] (‘Submissions’)), and gave evidence (Cavanagh Affidavit [36]), to the effect that she was advised that her defence was due on 1 March 2023, being 30 days after her notice of appearance was filed. It was further submitted in the Submissions that the notice of appearance was filed ‘within time’ (Submissions [19]). However, given the first defendant’s admission that she was served on 5 January 2023, a closer examination of the facts reveals that the notice of appearance was filed late, and by operation of r 36.06, the time for service of the defence commenced to run from the date of filing and service of the amended statement of claim.
As mentioned above, on 28 February 2023, Mr Gauld swore his affidavit to prove the default in service of defence.
Also on 28 February 2023, the first defendant prepared (with the assistance of her son) a defence and attempted to file it on Redcrest. The filing was not accepted, however, the first defendant deposes in the Cavanagh Affidavit that she never received a notification of its rejection. In any case, the defence was late and the first defendant does not give any evidence that she served the defence on the plaintiff.
On 1 March 2023, the first defendant’s then solicitors filed a notice of ceasing to act.
On 2 March 2023, the plaintiff entered interlocutory judgment for damages in default of defence. Next to the words ‘How Obtained’, the plaintiff had engrossed ‘[i]n default of appearance’. The Court sealed the interlocutory judgment on 2 March 2023.
Thereafter, there were no steps taken in the proceeding until November 2024 whilst a separate proceeding in relation to the grant of probate of the estate of Marshall Raymond Mace (the originally named second defendant in this proceeding) progressed (‘Probate Proceeding’) and pending the grant of probate. The Probate Proceeding arose because, in December 2021, the first defendant applied for probate of the deceased’s will. On 31 March 2022, the deceased’s son filed grounds of objection to the grant seeking to pass over the first defendant (as well as himself) and appoint an independent administrator. The Probate Proceeding was heard on 16 November 2023, with reasons for judgment delivered on 21 November 2023.[7] The Court made orders, among others, passing over the first defendant (as plaintiff in that proceeding) and also the deceased’s son, and granting leave to Mark Albert Maier to apply for a grant of letters of administration with the will annexed.
[7]Cavanagh v Mace [2023] VSC 670 (‘Probate Proceeding Reasons’).
On 11 October 2024, Mr Maier obtained a grant of letters of administration of the estate with the will annexed and on 19 November 2024, the plaintiff issued a summons for the substitution of Mr Maier as second defendant in this proceeding in his capacity as administrator of the estate.
On 5 December 2024, the first defendant filed a notice of appointment of solicitor.
The Court made orders for the substitution of the second defendant by consent on 19 December 2024. In accordance with those orders, the plaintiff was directed to file and serve an amended writ to give effect to the substitution.
On 20 December 2024, the first defendant filed her summons seeking orders to set aside the default judgment obtained on 2 March 2023.
On 23 December 2024, the plaintiff filed an amended writ to reflect the substitution. The plaintiff also amended the party names in the statement of claim and filed and served that document on 23 December 2024.[8]
[8]The version of the statement of claim that has been amended in its title to alter the party names and which was filed and served with the amended writ pursuant to the 19 December 2024 orders, was the original statement of claim filed in the proceeding in December 2022, rather than the amended statement of claim filed on 23 January 2023.

Setting aside the default judgment

Relying on the power in r 21.07 of the Rules, the first defendant seeks to set aside the interlocutory judgment entered in default of defence on the alternative grounds as follows:
(a)the interlocutory judgment was irregular, having been entered on the basis of at least two procedural defects, and so should be set aside as of right; or
(b)if her first ground is not successful and the interlocutory judgment was regular, then it should be set aside in the exercise of the Court’s discretion for reasons including that the first defendant:
(i)has an arguable defence on the merits;
(ii)attempted to file a defence that was rejected by the registry;
(iii)can explain the delay in seeking to set aside; and
(iv)there is no prejudice to the plaintiff that cannot be addressed by the payment of costs.

Was the default judgment irregularly entered?

A judgment that is irregular will usually be set aside ex debito justitiae, that is, as of right. A judgment is irregular where it is not entered in accordance with the rules of court or where there is some other defect such as overstatement of the amount of the judgment sum. Instances of irregularity include a failure to serve the originating process, the failure of the originating process to disclose a cause of action, the entry of default judgment where a notice of appearance has been filed or a defence served, or where there is no proof of the default.
The first defendant submits that the default judgment was irregular for two reasons as follows.
(a)First, the judgment entered against the first defendant recited that it was obtained in default of appearance, when an appearance had been filed.
(b)Second, the Gauld Affidavit failed to prove the default in service of the defence as required by r 21.02(2) of the Rules.
In support of the first ground, the first defendant relies on the case of Jindra v Tech Rentals Pty Ltd,[9] in which Warren J (as her Honour then was) set aside as irregular a default judgment which recited that it had been obtained in ‘default of defence to counterclaim’, rather than in default of defence to amended counterclaim. In that case, this defect in the description of how the judgment was obtained was one of three irregularities upon which her Honour determined the judgment in default could be set aside, but it is apparent from her Honour’s reasons that it alone was sufficient. Her Honour stated:
The issue for me to determine is whether the error constituted an irregularity such as to warrant the setting aside of the judgment. In my view it does qualify as such. In the present matter the omission of the word “amended” before counterclaim in the recital in the judgment constitutes an irregularity and it is a matter that should lead to the plaintiff by counterclaim losing the benefit of its judgment. In my view the circumstances fall squarely within the principle expressed by Crockett J in Clayton, supra, and Blackburn CJ in Lam, supra.[10]
[9][1999] VSC 206 (‘Jindra’).
[10]Jindra [10].
In the cases of Clayton v Thomas C Denton & Co Pty Ltd[11] and Lam v Gulic[12] referred to in Jindra, Crockett J and Blackburn CJ each acknowledged the principle of law that a plaintiff entering judgment in default must comply strictly with the rules of court in every respect because of the drastic disadvantage to the defendant occasioned in the result. In each of Jindra and Lam, the error was one which could have been avoided by the plaintiffs taking proper care in preparing the form of judgment entered. The same applies in this case. The interlocutory judgment entered recites that the judgment was obtained in default of appearance. The first defendant had already appeared (albeit late). The error in the form of interlocutory judgment was made by the plaintiff in entering it without taking care to express the basis for it correctly. For the same reasons as in Jindra, the error in the recital in this proceeding as to how the judgment in default was obtained qualifies as an irregularity that warrants its setting aside.
[11][1972] VR 46 (‘Clayton’).
[12](1979) 25 ACTR 46 (‘Lam’).
The plaintiff submits that there is no useful purpose in setting aside the default judgment based upon the irregularity raised by the first defendant in the description of how the default judgment was obtained. In doing so she relies on the principles expressed in earlier authorities of this Court[13] and summarised in Boral Resources (Vic) Pty Ltd v Construction, Forestry, Mining and Energy Union,[14] including that the Court will disregard an irregularity where the justice of the situation warrants it, such as where the procedural defect is technical and where the defendant has no defence on the merits.
[13]Australia and New Zealand Banking Group Limited v Kostovski (Supreme Court of Victoria, Chernov J, 2 July 1997) (‘Kostovski’).
[14][2014] VSC 429.
In the case of Kostovski, and in the case of National Australia Bank Limited v Meehan[15] which it applied, the irregularities relied upon appeared in the underlying writ upon which the default judgments were each obtained, where one writ used the Supreme Court heading when it was a proceeding in the County Court, and the other omitted the proceeding number. Those technical defects caused no prejudice to the relevant defendants and neither of them had an arguable defence. In this case the irregularity is in the description of how the default judgment has been obtained, rather than an error in the Court heading in the originating process. Consistently with this Court’s finding in Jindra in similar circumstances, I do not consider this is a technical defect which could be disregarded because the justice of the situation warrants it. Rather it is an error constituting an irregularity which warrants setting aside of the default judgment. If I am wrong and it is a mere technical defect, I am not satisfied it should be disregarded for the reason urged by the plaintiff, that is, allowing the proceeding to continue would serve no useful purpose. For the reasons given later in this ruling at paragraphs 31 to 37, I am satisfied that the first defendant has an arguable defence on the merits.
[15]National Australia Bank Ltd v Meehan (Supreme Court of Victoria, Ormiston and O’Bryan JJ, 24 February 1994).
Regarding its second ground, and in response to the invitation from the Court for further submissions to be addressed to the issue,[16] the first defendant submits that the plaintiff has failed to prove the default in service of the first defendant’s defence. Specifically, the first defendant submits that the Gauld affidavit proving the default in service of a defence was affirmed on 28 February 2023, that is, in its submission, prior to the expiry of the time within which the first defendant had to file her defence. This submission rests on the premise that the first defendant had until 1 March 2023 to file her defence, being the date falling 30 days after the filing of her notice of appearance on 30 January 2023.
[16]As discussed in n 6.
I would have no hesitation in finding that an affidavit attesting to a default in service of a defence sworn or affirmed prior to the expiry of the period of time for filing and service of a defence would be an irregularity justifying the default judgment being set aside. Such an affidavit would not prove the default as required by r 21.02(2) of the Rules.[17] Although ultimately it is unnecessary to consider it, I would not accept the plaintiff’s argument that if the affidavit had been sworn by a solicitor and was not corrected or withdrawn prior to the application for default judgment being filed, then the Court could infer that no defence had been filed after it was sworn by the solicitor and prior to expiry of the time for the defence to be served.
[17]CBA v Sky Empire Pty Ltd & Ors [2006] VSC 193, [15] (‘Sky Empire’). Mr Gauld gave evidence in his affidavit in support of the default judgment that he ‘had not received’ a defence at the time of affirming his affidavit. That form of words was held not to be sufficient to prove the default in service of the defence in Sky Empire. However, given Mr Gauld was a principal of his firm, Gauld & Co, this was sufficient proof of default, see Soderstrom v Minas [2011] VSC 361, in which Sky Empire was distinguished on this point.
In the Cavanagh Affidavit, the first defendant admits that she was served with the writ and statement of claim on 5 January 2023, and so it follows that her notice of appearance, when filed on 30 January, was late. But for the postponement effected by the filing of the plaintiff’s amended statement of claim, her defence would have been due to be filed by mid-February 2023 in accordance with r 8.07(2) of the Rules. As it happened, the filing of the amended statement of claim postponed that period slightly, because by operation of r 36.06 of the Rules, the first defendant was entitled to 30 days from the service of the amended statement of claim to serve her defence. That is, 30 days from 27 January 2023 when the amended statement of claim was deemed served by its filing under r 6.12(1) of the Rules. Accordingly, her defence was due to be filed on 26 February 2023, and there is no irregularity that arises from when the affidavit deposing to the default in service was affirmed.
Nevertheless, and for the reasons given above, I am satisfied that the default judgment was irregular on the first ground raised by the first defendant. Accordingly, it should be set aside under r 21.07 of the Rules.

Would the default judgment be set aside if it had been regularly entered?

In the event that I am wrong in holding there was an irregularity, I have also considered whether the default judgment should be set aside if it was regularly entered.
The matters relevant to the exercise of the discretion to set aside a judgment regularly entered against a party in default are well settled, and are well described in the case of Kostokanellis v Allen.[18] They include:
(a)whether the defendant has a prima facie or arguable defence on the merits;
(b)the reasons given by the defendant for the default;
(c)whether the application to set aside the default judgment has been unreasonably delayed by the defendant; and
(d)whether the plaintiff would be prejudiced in any respect which could not be adequately compensated by an award of costs.
[18][1974] VR 596.

Does the first defendant have a reasonably arguable defence on the merits?

The Court will usually only set aside a regularly entered default judgment where the defendant demonstrates that they have an arguable defence on the merits. A defendant is not bound to show that their defence will succeed, or even that they have a strong case, a prima facie defence suffices.[19] This has also been described as ‘an arguable defence’,[20] or ‘a good defence’ or one that carries ‘some degree of conviction’.[21]
[19]Evans v Bartlam [1937] AC 473, 480.
[20]Lau v Citic Australia Commodity Trading Pty Ltd [1999] VSCA 34.
[21]Day v RAC Motoring Services Ltd [1999] 1 All ER 1007, 1010.
In the amended statement of claim filed on 27 January 2023, the plaintiff alleges that:
(a)she owned a farm in Bairnsdale, which she agreed to sell to her son (the deceased) and the first defendant and they became the registered proprietors on 9 May 2018 ([7], [8]);
(b)on 14 May 2018, she, the deceased and the first defendant entered the ‘Granny Flat Agreement’ ([9]);
(c)the deceased and the first defendant breached the Granny Flat Agreement in various ways by reason of which she has suffered loss and damage in the amount of approximately $265,000 ([17]-[34]);
(d)the first defendant has converted various goods and chattels belonging to the plaintiff (having been inherited from her late husband) by reason of which she seeks damages for the converted goods and chattels in the amount of approximately $165,000, or damages for detinue ([35]–[39]).
The first defendant outlines her defence to the statement of claim at [94] of the Cavanagh Affidavit. She does not seek to rely on the defence she prepared and attempted to file in 2023 without any legal assistance, which filing was rejected. I have only had regard to the matters identified in the outlined defence in [94] of the Cavanagh Affidavit as the basis of her defence in the proceeding, as the outlined defence has been prepared with assistance and advice from her legal advisors.
In the outlined defence, the first defendant admits the existence of the ‘Granny Flat Agreement’, but, with limited other admissions, puts in issue the allegations that she breached that agreement, identifying the areas of disputed fact, as well as denying the basis of the claim in conversion and detinue. While ordinarily those areas of factual dispute would be determined at trial, the plaintiff submits that key issues in the proceeding that the first defendant purports to deny have already been determined by the Court in the Probate Proceeding. Accordingly, the plaintiff submits, an issue estoppel applies and so the first defendant has no arguable defence on the merits.
The plaintiff submits that an issue estoppel arises because:
(a)the same questions of fact as those raised by the outlined defence were decided in the Probate Proceeding, which factual questions were fundamental to the ultimate determination made to pass over the first defendant as executor;
(b)the Probate Proceeding Reasons constitute a final decision binding on the parties; and
(c)the parties to the Probate Proceeding were effectively the same parties or their privies, and both matters involve the estate of the deceased.
In her submissions, the plaintiff identifies paragraphs of the outlined defence in respect of which she submits a binding determination has been made in the Probate Proceeding Reasons.
In my view, the plaintiff’s reliance on issue estoppel invites an examination of the prospects of success of the first defendant’s defence, and seeks the determination of issues of fact and law, beyond that which is appropriate in considering the issue raised on this application, namely, whether there is an arguable defence on the merits. Without determining conclusively whether an issue estoppel arises, I observe that I am not convinced that:
(a)there is an identity of parties to the Probate Proceeding and this proceeding, or that the defendant in the Probate Proceeding, being the plaintiff’s son, was her privy in interest in that proceeding;
(b)there is an identity of issues between the two proceedings, given this one involves claims for breach of contract and detinue and conversion, and the Probate Proceeding involved consideration of whether the first defendant should be passed over; and
(c)the issues relied upon by the plaintiff as having been determined in the Probate Proceeding were logically essential to the decision in the Probate Proceeding, that is, they were the ultimate issues.
As noted, to form a concluded view requires an extensive examination of the Probate Proceeding Reasons and the evidence given in the Probate Proceeding, compared against the issues in dispute in this proceeding, where the defence exists only in outline.
I am satisfied that the first defendant’s defence is arguable; whether or not it succeeds will be for determination at trial.

What explanation is given for the default?

At [22]–[39] of the Cavanagh Affidavit, the first defendant explains her default in serving her defence within the time limited. The circumstances are unusual. Her evidence is as follows.
(a)The first defendant engaged solicitors on or about 13 January 2023 and placed monies into their trust account.
(b)On 30 January 2023, the solicitors filed an appearance.
(c)On 6 February 2023, the solicitors sought to arrange a conference between the first defendant and a barrister. However, the first defendant was uncomfortable with the proposed engagement and sought to have a discussion with her solicitor, who was not available that day or the next. After an exchange of emails on 8 February 2023, the matter did not progress.
(d)On 16 February 2023, the solicitors’ law clerk emailed the first defendant to inform her (incorrectly) that her defence was due on 1 March 2023, and they needed instructions as to how she wished to proceed.
(e)On 17 February 2023, the solicitors’ law clerk emailed to inform her that they had not been successful in locating a female barrister, and to urge the first defendant to engage the barrister initially proposed.[22]
[22]The first defendant denies instructing her solicitors to try to engage only a female barrister.
(f)The first defendant and her son attended at her solicitors’ offices several times between 16 February 2023 and 23 February 2023 to speak to her solicitor. On some of those occasions they were informed the solicitor was either unavailable or not in the office. On others they were able to speak with her about information for inclusion in the defence.
(g)The solicitors sent the first defendant an invoice on 23 February 2023, which included fees for preparing a brief to counsel.
(h)The first defendant received an email on 24 February 2023 from her solicitors which stated:
We have tried to contact you on several occasions in relation to progressing your matter. Your defence is due to be filed on Monday 27 February 2023 and the plaintiffs have already advised that they will not consent to an extension to file. Leave of the Court would have to be sought to file out of time. It would be necessary to make submissions in relation to the delay.
I note that you wanted to speak with me regarding…counsel and I have endeavoured to make contact with you to do so.
Unfortunately, as you have not provided any further instructions, regardless of our efforts, we shall notify the Court that we are withdrawing from this matter.
We shall finalise the account and forward the remaining funds in trust to you once you have provided your banking details by telephone.
(i)Having lost confidence in her solicitors, the first defendant, with the assistance of her son, prepared and sought to file a defence on 28 February 2023. The Supreme Court registry rejected the defence, unbeknownst to the first defendant. A copy of the defence as lodged is exhibited to the Cavanagh Affidavit, together with the payment record for the filing.
(j)On 1 March 2023, the first defendant received an email from her solicitors which stated that because she had arranged to file a defence without them they would cease to act. The first defendant deposes that she does not know how the solicitors knew about the defence. However, she did use their contact details on the front of the document she attempted to file, and I infer that they were most likely informed by the registry of the rejection. Thereafter, her solicitors filed a notice of ceasing to act.
(k)On 10 August 2023, the first defendant’s former solicitors sent her an invoice for disbursements for barrister’s fees incurred on 8 February 2023 and 1 March 2023, including fees for drawing a defence. The first defendant deposes that she has never seen a copy of the defence produced by any barrister.
The plaintiff has not adduced any evidence which contradicts the first defendant’s account as to the reasons for her default. I accept the first defendant’s evidence. I am satisfied that the first defendant, unassisted by her solicitors, attempted to file her own defence by the time she had initially, but incorrectly, been told it was due. She did not know it had been rejected by the registry.
The first defendant’s solicitors’ conduct throughout the period played a very significant part in the events that transpired, including by reason of their provision of incorrect advice about the date upon which the defence was due. At the time she attempted to file her own draft of the defence, her solicitors remained on the record and invoiced her for work done in briefing counsel to draw a defence and for attendances. They had a professional responsibility to assist her to file and serve a defence or to negotiate an extension. They later charged her for a disbursement in respect of barrister’s fees for the preparation of a defence that does not exist. The first defendant ought not suffer the penalty of being shut out from defending the claim where her solicitors were responsible for the default.[23]
[23]Kostokanellis 607; White v Dortenzio [2004] VSC 381, [9].

Did the first defendant unreasonably delay in making the set aside application?

There is a considerable delay between the date of the default judgment and the date on which the first defendant applied to set it aside. The first defendant explains the reasons for the delay at paragraphs [41] to [52] of the Cavanagh Affidavit.
First, she explains that she was not served with the interlocutory judgment. This evidence is uncontradicted. In circumstances where she had attempted to file her defence, and without knowing it had been rejected, the first defendant had no reason to suspect that default judgment had been entered. It is also relevant that the plaintiff entered judgment without notice to the first defendant, despite the appearance having been filed. The default judgment was ‘slapped on’, a practice strongly deprecated by the courts and one that is inconsistent with the obligations imposed on civil litigants by the Civil Procedure Act 2010 (‘CPA’). Had the plaintiff made any attempt to contact the first defendant, or her former solicitors, the first defendant may have been alerted to the rejection of her defence for filing, and sought and obtained a short extension for compliance. Put another way, if the default judgment had not been slapped on, this whole situation, including the costs of this application, may have been avoided.
The first defendant deposes that she was first alerted to the existence of the default judgment in late 2023 because of its inclusion in the court book in the Probate Proceeding. She deposes that her son saw a copy of it projected onto the screen during the hearing on 16 November 2023. The first defendant then explains that she did not act on the default judgment until 2 December 2024 for various reasons including:
(a)she did not have solicitors representing her in this proceeding;
(b)she was distracted by the Probate Proceeding which she found very stressful, and by the administration of the estate;
(c)she was assisting her son with his diabetes which required numerous hospital admissions in the period including for a toe and partial foot amputation;
(d)she contracted COVID-19 and was herself unwell within this period; and
(e)she was in shock from the death of the deceased and had been diagnosed with PTSD.
In my view it is relevant also that the plaintiff ceased prosecuting this proceeding whilst the Probate Proceeding was resolved, only taking steps after the grant of letters of administration to Mr Maier to substitute him as second defendant.
The plaintiff has not filed any evidence to contradict or otherwise undermine the first defendant’s explanations. I am satisfied that the first defendant’s explanation is sufficient.

Is the plaintiff prejudiced in a way that cannot be compensated by an award of costs?

The plaintiff does not point to any specific prejudice other than that she is aged 87 and will be delayed in proceeding to trial on issues of liability and quantification of damages if the default judgment is set aside. The first defendant submits, correctly, that the plaintiff must still proceed to trial against the second defendant on the question of liability and quantum. In answer to that submission, and having foreshadowed her right to elect not to proceed against the second defendant in her written submissions, the plaintiff then chose to abandon her claim for damages against the second defendant during the hearing of the summons. She submits, accordingly, that she will be prejudiced by the delay occasioned by having to prove the liability of the first defendant if the default judgment is set aside.
I am not persuaded that the plaintiff will be prejudiced in a way that cannot be compensated by a costs order. The plaintiff ‘slapped on’ the default judgment in 2023, without notice to the first defendant and then did not take any step in the proceeding until November 2024. The abandonment of her claim against the second defendant (who incurred the cost of appearing at the hearing of the first defendant’s summons) comes too late to persuade me that the plaintiff will be prejudiced. The fact that the plaintiff is of advanced years is not a justification for denying the first defendant the opportunity to defend the proceeding.

Summary judgment

At the hearing of the first defendant’s summons, the plaintiff’s counsel made an oral application for summary judgment in favour of the plaintiff pursuant to s 63 of the CPA. No summons has been filed, and although there was a discussion between counsel prior to the hearing, the plaintiff effectively made the application without notice.
In support of the application, the plaintiff relied on its argument that the first defendant’s defence enjoyed no real prospect of success because an issue estoppel applies in respect of the factual matters raised by her outlined defence. Although the first defendant objected to the application, I would nevertheless dismiss it for the same reasons that I found the first defendant has an arguable defence on the merits. Given the matters to be examined in determining whether an issue estoppel arises, the argument ought be determined after a full hearing, and not summarily. Further, given the weaknesses in that argument that I have identified above, I am not satisfied that the first defendant’s defence enjoys no real prospect of success.

Disposition

For the reasons given above, I will set aside the interlocutory judgment in default entered on 2 March 2023. In view of my finding that the default judgment was irregularly obtained, I will order that the plaintiff pay the first defendant’s costs of and incidental to the application.
Should the second defendant seek its costs of the hearing, which it attended, but in which it did not participate, I will consider such application on the papers.

[2025] VSC 311

4 June 2025