Mei Zhang v Ye Cheng

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.