Mei Zhang v Ye Cheng - [2018] NSWDC 147

District Court

New South Wales

Medium Neutral Citation: Mei Zhang v Ye Cheng [2018] NSWDC 147
Hearing dates: 1 June 2018; 4 June 2018
Date of orders: 08 June 2018
Decision date: 08 June 2018
Jurisdiction: Civil
Before: Dicker SC DCJ
Decision:
(1) The default judgment entered in favour of the plaintiff against the defendant on 26 October 2017 is set aside on condition that within seven days the defendant pays to the plaintiff the sum of $15,994.52 towards any liability ultimately found in favour of the plaintiff against the defendant;
(2) The charging order made on 1 December 2017 by Judge Olsson SC is vacated;
(3) The garnishee orders made on 23 January 2018 by Registrar Corkhill are vacated;
(4) The defendant has leave to file a Defence in the form annexed to his 20 April 2018 affidavit within 7 days;
(5) The costs of the Notice of Motion filed 20 March 2018 are reserved. Liberty is granted to the parties to approach the Associate to Dicker DCJ to relist the matter to determine the question of the costs of the Notice of Motion.

Catchwords: Default judgment – application to set aside – principles applicable – attack on the bona fides of the defence – alleged threats by plaintiff to say “bad things” about the defendant
Legislation Cited: Contracts Review Act 1980 (NSW)
Australian Consumer Law
Uniform Civil Procedure Rules 2005, Part 36.16
Cases Cited: Adams v Kennick Trading (International) Ltd (1986) 4 NSWLR 503
Al Maha Pty Ltd v Coplin [2017] NSWCA 318
Australia and New Zealand Banking Group v Karam (2005) 64 NSWLR 149
Barton v Armstrong [1973] 2 NSWLR 598
Commonwealth Bank of Australia v Wales [2012] NSWSC 407
Dai v Zhu [2013] NSWCA 412
Dunwoodie v Teachers Mutual Bank Ltd [2014] NSWCA 24
Hussain v Haynoun Developments Pty Ltd [2015] NSWCA 420
Perpetual Trustee Co Ltd v Koshaba [2006] NSWCA 41
Sydney Development Group Pty Ltd v Perry Properties Pty Ltd [2016] NSWSC 515
West v AGC (Advances) Ltd (1986) 5 NSWLR 610
Category: Principal judgment
Parties: Mei Zhang (Plaintiff)
Ye Cheng (Defendant)
Representation:
Counsel:
S Burchett (Plaintiff)
H Mann (Defendant)
Solicitors:
Juris Cor Legal (Plaintiff)
Keypoint Law (Defendant)

File Number(s): 2017/00266631

Judgment

The defendant, Mr Ye Cheng, by Notice of Motion filed 20 March 2018 seeks an order that the default judgment entered by the court against him be set aside. Consequential relief including as to costs is also sought. In the written submissions of his counsel Ms Mann dated 10 May 2018 it is stated that the related charging and garnishee orders which have been made by the court would also need to be set aside: see paragraph 3 of the submissions and Annexure A.
The default judgment in question is that entered against the defendant in favour of the plaintiff in the sum of $715,841.46 on 26 October 2017.
In support of his application, the defendant read an affidavit of his affirmed 20 April 2018. That affidavit annexes a proposed Defence which…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] NSWDC 147
Decision Date: 08 June 2018

CaseChat Overview and Summary

Mei Zhang filed an action against Ye Cheng in the Supreme Court of Victoria, seeking payment of an amount of money owing. The defendant, Ye Cheng, failed to file a Defence within the requisite time, resulting in the plaintiff obtaining a default judgment. Ye Cheng subsequently sought to set aside the default judgment and vacate associated charging and garnishee orders. The court was required to consider the principles applicable to setting aside a default judgment and whether the defendant had a real prospect of successfully defending the proceedings. The court also had to determine whether there were any grounds to question the bona fides of the plaintiff’s case, particularly in light of the defendant’s allegation that the plaintiff had threatened to say "bad things" about him if he did not pay the debt.

The court found that the defendant had established a real prospect of successfully defending the proceedings. The court was satisfied that the defendant’s explanation for his delay in filing a Defence was credible and that there were triable issues of fact and law in the case. The court also found that the plaintiff had not demonstrated any impropriety in relation to the defendant’s allegation of threats. The court noted that the plaintiff’s conduct in pursuing the default judgment did not indicate any lack of bona fides. The court set aside the default judgment and vacated the associated charging and garnishee orders. The court also granted leave to the defendant to file a Defence and reserved the question of costs.

The court’s decision highlights the importance of considering the principles applicable to setting aside a default judgment and the need for a credible explanation for any delay in filing a Defence. The court also emphasised the need to consider the bona fides of both parties in determining whether to set aside a default judgment. The court’s decision provides guidance for parties seeking to set aside a default judgment and for courts considering such applications. The final orders of the court set aside the default judgment, vacated the associated charging and garnishee orders, and granted leave to the defendant to file a Defence. The question of costs was reserved, and the parties were granted liberty to approach the Associate to Dicker DCJ to relist the matter to determine the question of costs.

Orders

Orders of the court

(1) The default judgment entered in favour of the plaintiff against the defendant on 26 October 2017 is set aside on condition that within seven days the defendant pays to the plaintiff the sum of $15,994.52 towards any liability ultimately found in favour of the plaintiff against the defendant;

(2) The charging order made on 1 December 2017 by Judge Olsson SC is vacated;

(3) The garnishee orders made on 23 January 2018 by Registrar Corkhill are vacated;

(4) The defendant has leave to file a Defence in the form annexed to his 20 April 2018 affidavit within 7 days;

(5) The costs of the Notice of Motion filed 20 March 2018 are reserved. Liberty is granted to the parties to approach the Associate to Dicker DCJ to relist the matter to determine the question of the costs of the Notice of Motion.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Medium Neutral Citation:	Mei Zhang v Ye Cheng [2018] NSWDC 147
Hearing dates:	1 June 2018; 4 June 2018
Date of orders:	08 June 2018
Decision date:	08 June 2018
Jurisdiction:	Civil
Before:	Dicker SC DCJ
Decision:	(1) The default judgment entered in favour of the plaintiff against the defendant on 26 October 2017 is set aside on condition that within seven days the defendant pays to the plaintiff the sum of $15,994.52 towards any liability ultimately found in favour of the plaintiff against the defendant; (2) The charging order made on 1 December 2017 by Judge Olsson SC is vacated; (3) The garnishee orders made on 23 January 2018 by Registrar Corkhill are vacated; (4) The defendant has leave to file a Defence in the form annexed to his 20 April 2018 affidavit within 7 days; (5) The costs of the Notice of Motion filed 20 March 2018 are reserved. Liberty is granted to the parties to approach the Associate to Dicker DCJ to relist the matter to determine the question of the costs of the Notice of Motion.
Catchwords:	Default judgment – application to set aside – principles applicable – attack on the bona fides of the defence – alleged threats by plaintiff to say “bad things” about the defendant
Legislation Cited:	Contracts Review Act 1980 (NSW) Australian Consumer Law Uniform Civil Procedure Rules 2005, Part 36.16
Cases Cited:	Adams v Kennick Trading (International) Ltd (1986) 4 NSWLR 503 Al Maha Pty Ltd v Coplin [2017] NSWCA 318 Australia and New Zealand Banking Group v Karam (2005) 64 NSWLR 149 Barton v Armstrong [1973] 2 NSWLR 598 Commonwealth Bank of Australia v Wales [2012] NSWSC 407 Dai v Zhu [2013] NSWCA 412 Dunwoodie v Teachers Mutual Bank Ltd [2014] NSWCA 24 Hussain v Haynoun Developments Pty Ltd [2015] NSWCA 420 Perpetual Trustee Co Ltd v Koshaba [2006] NSWCA 41 Sydney Development Group Pty Ltd v Perry Properties Pty Ltd [2016] NSWSC 515 West v AGC (Advances) Ltd (1986) 5 NSWLR 610
Category:	Principal judgment
Parties:	Mei Zhang (Plaintiff) Ye Cheng (Defendant)
Representation:	Counsel: S Burchett (Plaintiff) H Mann (Defendant) Solicitors: Juris Cor Legal (Plaintiff) Keypoint Law (Defendant)
File Number(s):	2017/00266631