MIAO v Michell

In the matter of *MIAO v Michell*, the applicant, Ms. Miao, sought to set aside a default judgment entered against her in favour of the respondent, Mr. Michell. The dispute arose from an alleged breach of a loan agreement. The application to set aside the default judgment was heard by Judge Riethmuller in the County Court of Victoria.

The primary legal issue before the Court was whether the default judgment should be set aside. This required the Court to consider the principles governing applications to set aside default judgments, specifically whether there was a "real prospect of success" on the merits of the defence and whether it was in the interests of justice to set aside the judgment. The Court also had to determine if the applicant had provided a sufficient explanation for her failure to file a defence within the prescribed time.

Judge Riethmuller applied the well-established principles for setting aside default judgments. Her Honour noted that a party seeking to set aside a default judgment must demonstrate both a defence with a real prospect of success and that it is just and equitable to set aside the judgment. The applicant's explanation for the delay in filing her defence was found to be unsatisfactory, as it relied on a misunderstanding of court procedures and a failure to seek timely legal advice. Despite this, her Honour found that the applicant had raised a defence with a real prospect of success, particularly concerning the terms of the loan agreement and the alleged breach. Balancing these factors, and considering the overarching interests of justice, the Court determined that it was appropriate to set aside the default judgment.

Consequently, Judge Riethmuller ordered that the default judgment be set aside. The applicant was granted leave to file her defence, and the respondent was awarded costs thrown away by the application.