Nexus Access Pty Ltd v CH Pacific Resources Pty Ltd

[2025] NSWDC 140

District Court

New South Wales

Medium Neutral Citation:

Nexus Access Pty Ltd v CH Pacific Resources Pty Ltd [2025] NSWDC 140

Hearing dates:

15 April 2025

Date of orders:

24 April 2025

Decision date:

24 April 2025

Jurisdiction:

Civil

Before:

Andronos SC DCJ

Decision:

(1)   Direct the parties to liaise as to the orders required to give effect to these reasons and costs.

(2)   List the matter for mention on Tuesday, 6 May 2025 at 10am before Andronos SC DCJ.

Catchwords:

CIVIL PROCEDURE — Default judgment — Setting aside — Bona fide defence on merits

CIVIL PROCEDURE — Default judgment — Setting aside — Irregularly entered – Against good faith

Legislation Cited:

Civil Procedure Act2005 (NSW), s 124A

Corporations Act2001 (Cth), s 109X

Uniform Civil Procedure Rules 2005, r 16.6, r 16.7, r 36.15, r 36.16

Cases Cited:

Arnold v Forsythe [2012] NSWCA 18

Dai v Zhu [2013] NSWCA 412

Goater v Commonwealth Bank of Australia (2014) 88 NSWLR 362

Pham v Gall [2020] NSWCA 116

Stephens and Anor v Glega Pty Limited trading as Robinia Homes and Anor [2022] NSWSC 120

Category:

Consequential orders

Parties:

Nexus Access Pty Ltd (plaintiff/respondent)
CH Pacific Resources Pty Ltd (defendant/applicant)

Representation:

Counsel:
Mr T Cleary (plaintiff/respondent)
Mr M McGirr (defendant/applicant)

Solicitors:
PCL Lawyers (plaintiff/respondent)
Murdock Cheng Legal Practice Pty Ltd (defendant/applicant)

File Number(s):

2023/00007891

Publication restriction:

Nil

JUDGMENT

1. On 16 August 2023 the plaintiff, Nexus Access Pty Ltd (Nexus), obtained default judgment against the defendant, CH Pacific Resources Pty Ltd (CPR), on its Amended Statement of Claim (ASoC) in the sum of $100,234.59. By notice of motion filed 21 February 2025, CPR seeks to set aside that judgment and to set aside a number of consequential orders. The orders sought to be set aside include a garnishee order and CPR seeks the return of $74,488.25 garnisheed from its bank account on 31 August 2023.

2. CPR says the default judgment ought be set aside under r 36.15 of the Uniform Civil Procedure Rules 2005 (UCPR) on the basis that it was irregularly obtained or was obtained against good faith. Alternatively, CPR says that default judgment ought be set aside under r 36.16 UCPR on the basis that it was a judgment obtained in CPR’s absence and, as a matter of discretion, CPR ought be permitted to defend the claim.

3. Nexus says that neither ground is made out and, in any event, it would be prejudiced by default judgment being set aside some two and a half years after the order was made and the garnishee order was executed, such that the balance of discretionary factors do not favour the making of the order.

4. CPR relies on the affidavit of its solicitor, Damin Murdock, affirmed 21 February 2025, and of its directors, Tianjin Hu, affirmed 20 February 2025, and Leo Wu, affirmed 21 February 2025. A large volume of material, comprising what appears to be the entire procedural history and evidence of related proceedings between the parties (the 2024 proceedings) was also tendered, but only provisionally admitted, subject to relevance. I have now determined to admit that material. Nexus read the affidavit of service of Errol Gracias, affirmed 14 June 2023.

5. For the reasons set out below, I have decided, in the exercise of my discretion, to set aside the default judgment. This is an indulgence to CPR, and accordingly, notwithstanding that it has succeeded on the motion, costs ought be in the cause.

Relevant principles

6. The general rule in litigation is that orders of the Court are final, subject to appeal. There is a public interest in the finality of litigation and the discretion to set aside a regularly obtained order is exercised sparingly.

7. The defendant relies on the powers under rr 36.15(1) and 36.16(2)(a) and (b) of the UCPR. Although both powers require the exercise of discretion, different considerations apply in the exercise of the powers under each rule.

8. Rule 36.15(1) provides:

36.15   General power to set aside judgment or order

(1) A judgment or order of the court in any proceedings may, on sufficient cause being shown, be set aside by order of the court if the judgment was given or entered, or the order was made, irregularly, illegally or against good faith.

9. Relevantly, an irregularity may be demonstrated by the inapt use of the procedure under r 16.6 to obtain default judgment on a liquidated claim when the claim is, in truth, an unliquidated claim, to which the procedure under r 16.7 properly applies. In the latter case, an assessment hearing, at which the defendant may (or may not) appear, is required.

10. In Stephens and Anor v Glega Pty Limited trading as Robinia Homes and Anor [2022] NSWSC 120, Johnson J considered whether there was an irregularity where default judgment had been obtained under r 16.6(1) of the UCPR, when the claim was not properly characterised as a liquidated claim. His Honour stated:

“[53] The focus of Rule 36.15 UCPR is on the judgment which is attacked upon the ground of irregularity: Perpetual Trustees Australia Ltd v Heperu Pty Ltd (No. 2) at [16]-[17] (see [29] above). The inappropriate use of Rule 16.6(1) UCPR, where the claim is for unliquidated damages, is a fundamental irregularity: Arnold v Forsythe at [59] (see [30] above).

[54] Where a judgment has been entered irregularly, the Court is not obliged to enquire whether or not there is a good defence on the merits, although it remains necessary for the moving party to show ’sufficient cause’ for the judgment to be set aside: Wykrota at [6] (see [28] above).

[55] There was a clear irregularity in this case so that default judgment should never have been granted for a liquidated sum. The Statement of Claim pleads several alternative causes of action against the Defendants and, in particular, the Second Defendant. The fact that the Statement of Claim asserted that it was a liquidated claim is not to the point. On the face of the claim itself, the causes of action gave rise to a claim for unliquidated damages.”

11. Relevantly, an irregularity within the meaning of r 36.15 might also be demonstrated where a statement of claim omits any material facts necessary to support the pleaded cause of action. In Arnold v Forsythe [2012] NSWCA 18, in obiter comments, Sackville AJA stated:

“[79] The appellant submitted that if a plaintiff obtains a default judgment on the basis of a statement of claim that omits any material facts necessary to support the pleaded cause of action, the judgment is given irregularly and is thus liable to be set aside under r 36.15. According to Mr Pritchard, this principle operates independently of any entitlement to set aside a default judgment arising from a failure to plead a liquidated claim. It follows, so he argued, that the respondents’ failure to plead all material facts necessary to establish its entitlement to be paid $199,500 pursuant to the Separation Agreement constituted an irregularity. Accordingly, the default judgment was also liable to be set aside on this ground.

[80] Because I have concluded that the respondents obtained the default judgment irregularly in any event, I need not decide whether this contention should be upheld. However, had it been necessary to do so, I would have concluded that the pleading defects constituted an irregularity and that the Court’s power in r 36.15(1) to set aside the default judgment was attracted.

[81] The appellant’s contention receives support from Fenato v Chief Commissioner of State Revenue [2010] NSWCA 80; 78 NSWLR 20. In that case, the Chief Commissioner obtained a default judgment on a statement of claim seeking an order for unpaid land tax and interest. The statement of claim did not plead the fact of service of the notices of assessment, nor the due date for payment specified in the notices.

[82] Gzell J, with whom Beazley and Macfarlan JJA agreed, held that:

• the service of the assessments and specification of the due date for payment were essential elements in the Chief Commissioner’s action for money due pursuant to a statute (at 26 [39]);

• by failing to plead these matters, the statement of claim omitted essential elements in the cause of action (at 28 [61]-[63]);

• the pleading deficiencies constituted an irregularity in giving the judgment and attracted the Court’s power under r 36.15(1) to set aside the judgment (at 30 [75]); and

• the defendant was entitled to have the material facts pleaded in order to know the case alleged against him and the Chief Commissioner’s failure to do so justified setting aside the default judgment (at 30-31 [84]).

Gzell J did not need to decide whether a failure to plead material facts entitles a defendant to have a default judgment based on that pleading set aside ex debito justitiae (at 29 [71]-[72]).

[83] I do not read the decision in Fenato v Chief Commissioner as establishing that a failure to plead any material fact in a statement of claim will necessarily constitute an irregularity for the purposes of r 36.15. The significance of such a failure may depend on the nature of the material facts omitted and whether the pleading, despite the omission, sufficiently identifies the case pleaded against the defendant. If it were otherwise, challenges to default judgments could be made in cases where the pleading defects were of little practical importance and created no prejudice to the defendant. If a pleading defect entitles a defendant as of right to set aside a default judgment based on the pleading (a matter left open in Fenato v Chief Commissioner ), applications to set aside judgments are likely to turn on fine pleading points in a context divorced from that in which the relevant principles were developed.”

12. Finally, where there has been a material non-disclosure in obtaining an order ex parte, this may constitute a relevant lack of good faith and could establish a basis for judgment to be set aside under r 36.15. Although discretionary, the exercise of the discretion comes close to resembling the grant of relief as of right.

13. Rule 36.16(2) of the UCPR relevantly provides:

36.16   Further power to set aside or vary judgment or order

…

(2)  The court may set aside or vary a judgment or order after it has been entered if:

(a) it is a default judgment (other than a default judgment given in open court), or

(b) it has been given or made in the absence of a party, whether or not the absent party had notice of the relevant hearing or of the application for the judgment or order, …

14. Exercise of the discretion to set aside a judgment or order pursuant to r 36.16(2) requires regard to the interests of justice, and to the competing interests of the respective parties, in determining whether a defendant should be permitted to contest the plaintiff’s claim: Dai v Zhu [2013] NSWCA 412 at [83]–[92].

15. Factors relevant to the exercise of that discretion relevantly include:

1. The existence of a “defence on the merits”: Dai at [89]–[90], such that there may be a real likelihood of injustice if the defendant were precluded from arguing its defence.

2. The reasons for the default that occasioned judgment.

3. The reasons for, and the extent of, any delay in taking steps to have the judgment set aside, and the potential prejudice to other parties arising from that delay: Pham v Gall [2020] NSWCA 116 at [55]–[56] and [98].

16. Ordinarily, an applicant ought establish that there is a “real issue” to be determined (i.e., that there is a genuinely arguable basis for impugning the judgment creditor’s claim) and provide an adequate explanation for any default or delay: Pham at [95]–[111].

17. A default judgment may be set aside even if it has been substantially (but not irreversibly) executed: Goater v Commonwealth Bank of Australia (2014) 88 NSWLR 362 at [12] to [20].

18. The court must be satisfied that the apparent defence is genuinely relied upon and gives rise to a triable issue. However, enquiry about the existence of a “defence on the merits” does not involve any determinative adjudication on the ultimate substantive strength of the proposed defence. Neither does it require the court to form an opinion about the likelihood of the proposed defence being successful. On the other hand, impressions about the apparent strength of the defence may influence assessment of the sufficiency of the explanation for the default: see Pham at [112] and [158].

19. Where a defendant was unaware of the proceedings, this will be a significant discretionary factor in favour of setting aside the default judgment. This is so even where the plaintiff was not at fault.

Background

20. In about December 2021, CPR, a construction company, entered into a head contract to provide remedial works at an apartment building at 1 Kirby Walk, Zetland, New South Wales (the Property). It subsequently entered into a subcontract with Nexus to design and supply scaffolding and swing stages to the Property for the purpose of those remedial works (the Equipment).

21. In the ASoC, Nexus has pleaded that a contract was entered in December 2021 with a further quote governing the additional supply of the Equipment beyond a six-week initial period, commencing in February 2022. It now appears to be conceded by Nexus that the relationship between the parties was relevantly governed by a written agreement entered on about 24 February 2022 (the February Agreement) for the design and supply of the Equipment for a 12-week period for the fixed sum of $100,000 (+ GST). There, nevertheless, remains an issue between the parties as to the terms that would apply if the period of the supply of the Equipment exceeded the period specified in the February Agreement.

22. The parties fell into dispute. Nexus alleges non-payment by CPR as well as damages for the retention and use of the Equipment by it beyond the period of any agreement between the parties. It makes two substantive claims – a claim in debt on unpaid invoices and a claim for damages or restitution.

23. For its part, CPR alleges that Nexus was in breach of the February Agreement by inadequate supply, defective supply and delay. It says that it incurred liability to the principal under the head contract pursuant to a liquidated damages clause and that the principal issued a notice of intention to terminate the head contract on 6 December 2022.

24. Further, CPR alleges that, on 8 December 2022, Nexus suspended all works, removed the control boxes from the swing stages and removed the control boxes from the Property.

25. On 12 December 2022, CPR activated the dispute resolution mechanism under the February Agreement, by sending a notice of dispute, but Nexus did not respond. Nexus collected further Equipment on 14 December 2022 and 23 March 2023. On 15 November 2023, sheriffs collected the balance of the Equipment from the Property, pursuant to the enforcement processes of this Court, following default judgment having been ordered on 16 August 2023.

26. On 21 December 2022, Nexus, by its solicitor, demanded payment from CPR in the sum of $82,144.64 on the basis of allegedly unpaid invoices. On 22 December 2022, CPR responded that the parties had entered a dispute resolution process pursuant to the February Agreement and that the invoices would not be considered until the end of that process.

Relevant procedural history of these, and the 2024, proceedings

27. On 9 January 2023, Nexus commenced these proceedings by filing a statement of claim that was, it was conceded, defective. It claimed $332,998.41. There is no evidence that it was ever served. Default judgment, in the entire sum claimed, was entered on 15 February 2023, however, that judgment was set aside by the Court two days later.

28. On 25 May 2023, Nexus filed the ASoC. An affidavit of service sworn by its solicitor, Mr Errol Gracias, on 14 June 2023, was read on the present application. That affidavit established that the ASoC was despatched by registered post to CPR’s registered office at 100 Mobbs Lane, Epping, on 25 May 2023. It was despatched under cover of a letter which indicated that it had also been sent to CPR at two email addresses: [email protected] and [email protected].

29. CPR denies receiving the ASoC, either in hard copy or by email at either of the above email addresses. I return to this question below.

30. On 28 July 2023, Nexus filed a notice of motion for default judgment, relying on Mr Gracias’s affidavit and that of Michael Haslem, dated 31 July 2023. Default judgment in the sum of $100,234.59, inclusive of interest and costs, was ordered on 16 August 2023. The affidavit of Mr Haslem did not refer to the February Agreement or to the dispute resolution correspondence of December 2022. CPR did not receive notice of the default judgment application.

31. Following the 16 August 2023 default judgment, Nexus obtained a garnishee order on CPR’s bank, pursuant to which $70,488.25 was garnisheed from its account. As indicated above, on 15 November 2023, sheriffs collected the balance of the Equipment from the Property.

32. Apparently unaware of the existence of these proceedings, on 8 April 2024, CPR commenced the 2024 proceedings in which it seeks damages in respect of alleged breaches by Nexus of the agreement as set out above. CPR quantifies its loss in its statement of claim at $434,762.32. Those proceedings are ongoing.

33. On 9 May 2024, the solicitors for Nexus informed the solicitors for CPR of the existence of these proceedings and the fact of default judgment having been ordered on 16 August 2023.

34. Nexus filed a defence in the 2024 proceedings on 6 June 2024 and affidavits were served by CPR in October 2024 and by Nexus in November 2024. Those affidavits, together with their exhibits, comprise almost all of volumes 1 and 2 of the Court Book, now admitted on this application.

35. In December 2024, Nexus filed a notice of motion for default judgment on the unliquidated component of its claim in these proceedings. As a practical matter, counsel for Nexus conceded that there was little utility in pressing that application, given that these proceedings are now clearly defended by CPR.

Assessment

36. CPR relies on four grounds on which it says the Court should, in the exercise of its discretion, set aside the default judgment and the orders which proceed from it. Those grounds are:

1. The ASoC is irregular with respect to its formulation of a liquidated damages claim, which is expressed in terms more conformable with an unliquidated damages claim. Accordingly, r 16.6 was the wrong mechanism for it to seek default judgment. Further, the ASoC is defective because the actual agreement governing the parties’ relationship was not pleaded.

2. CPR has a bona fide defence to that part of the plaintiff’s claim for which it obtained default judgment.

3. The ASoC was not properly served, or alternatively, the existence of these proceedings had not been brought to CPR’s attention prior to default judgment being obtained.

4. CPR can explain the delay in bringing the present application and there is, in any event, no prejudice to Nexus if the judgment were set aside and the liquidated damages component of its claim was determined together with the unliquidated damages component and the 2024 proceedings.

Pleading a liquidated claim

37. Counsel for CPR submitted that, properly construed, the paragraphs in the ASoC relied upon to establish the alleged liquidated damages component of the claim do not properly articulate a liquidated claim but, rather, only an unliquidated claim. Accordingly, in accordance with Stephens & Anor, an irregularity is established.

38. I do not accept this submission. Relevantly, the ASoC pleads:

“AGREEMENT

3. On or around 22 December 2021, the Defendant engaged the Plaintiff for the hire and use of the Plaintiff’s Equipment (“the Agreement”).

…

4. The material terms of the Agreement were:

…

d. Any period of hire additional to the first 6 weeks would attract further hire fees.

…

6. The Quote stipulated the ‘per week there after [sic]’ hire cost if the Defendant required the Equipment for longer than 6 weeks.

…

EXTENSION OF HIRE PERIOD

8. The Defendant failed to complete the ‘re-cladding’ works on the Sites within 6 weeks of the Commencement Date and required additional use of the Equipment.

9. The Defendant retained the Equipment past the 6-week fixed quoted period with the consent of the Plaintiff.”

39. The ASoC then pleads the issue of $176,438.96 in invoices between 31 March 2022 and 21 December 2022, only the last four of which are alleged to remain outstanding. The total of the allegedly outstanding invoices was $93,656.14.

40. CPR says that this pleading does not disclose a liquidated claim because it does not draw a sufficient connection between the conduct of CPR and the invoiced amount to demonstrate that the invoiced amount was an entitlement that accrued to Nexus as a result of work performed by it under the contract. In the absence of such a pleading, the ASoC is properly characterised as no more than a claim in quantum meruit, which is an unliquidated claim requiring assessment.

41. I do not accept this submission. In my view, the relevant paragraphs of the ASoC do draw such a connection. A liquidated sum is articulated with reference to the invoices, which plainly relate to the retention of the Equipment for which alleged ongoing hire charges were invoiced.

42. I am satisfied that the claim articulated a liquidated sum and the mechanism under r 16.6 was appropriate for any default judgment application in respect of that component of the ASoC.

Service

43. CPR says that it had not been served with the ASoC and was unaware of these proceedings at the time of default judgment. Nexus’s affidavit of service demonstrates that the ASoC had been sent by registered post to CPR’s registered office at 100 Mobbs Street, Epping. CPR says that it no longer occupied that office and that the ASoC had not been forwarded to it. Further, CPR says that Nexus was aware that CPR did not occupy that office because, under the February Agreement, a notice provision specified a different address for service of notices under that Agreement. It concedes, however, that at the relevant time, 100 Mobbs Street, Epping was still its registered office.

44. There was no evidence that the ASoC had been sent to the email addresses specified on the covering letter. Mr Hu and Mr Wu, deny ever having received those emails.

45. There is no reason to disbelieve any of the witnesses. For the purpose of this application, CPR’s solicitors have made enquiries of Australia Post, which disclosed that the envelope had been delivered on 3 June 2023, having been processed through a regional processing centre, north-west of Newcastle. Further, a search of the tracking number used for the delivery shows that delivery remains “pending”. The submission was that this at least raises questions about whether service was effected at all.

46. In my view, neither of these matters derogates from a finding that the ASoC had been sent to CPR’s registered office.

47. Service of a company, as is well known, is permitted under s 109X of the Corporations Act2001 (Cth) by registered post to its registered office. I am satisfied that this occurred with respect to the ASoC. It follows that CPR was served.

48. I, nevertheless, accept that the relevant officers of CPR, Mr Hu and Mr Wu, were not aware of the existence of the ASoC until May 2024, at the earliest. To the extent that this may be a result of their own failure to keep the company’s records with ASIC up to date will be relevant to whether, as a matter of discretion, their absence of knowledge of the ASoC is a factor in favour of the setting aside of the default judgment.

Bona fide defence and failure to plead the governing contract

49. Nexus has conceded that CPR has raised a bona fide defence in its evidence and on the basis of its submissions in the present application. This concession, properly and appropriately made, is a significant factor in favour of the granting of relief to CPR. It might be noted that the facts on which CPR relies are set out in affidavits, even though no draft defence has been served. While it is ordinarily preferable that a draft defence be made available when the Court is considering an application to set aside a default judgment, it is not mandatory.

50. Even though the existence of a bona fide defence is no longer in issue, the following matters flow from the alleged facts on which CPR relies in defence of its claim.

51. First, it was conceded by counsel for Nexus that the agreement governing the parties’ relationship was likely the February Agreement rather than an agreement entered on 22 December 2021 together with the 10 February 2022 Quotation. The concession was properly made, given that the February Agreement, executed by both parties, was in evidence. The significance of that agreement was manifold. It was not pleaded in the ASoC. The sources of right on which the plaintiff relied were not what had been agreed by the parties. Of itself, I consider this is a factor which supports the setting aside of the default judgment.

52. Secondly, the February Agreement also contains a mandatory dispute resolution clause, which had been enlivened by CPR on 12 December 2022. There was some dispute as to whether Nexus’s claim on the unpaid invoices was embraced by the process initiated by CPR. In its terms, the notice of dispute relates to alleged defaults of Nexus which are the subject of the 2024 proceedings.

53. In the weeks following the notice of dispute, Nexus served invoice 1223 ($11,511.50) and a letter of demand in the sum of $82,144.64. Those sums, which add up to $93,656.14, comprise the whole of Nexus’s liquidated claim in these proceedings and the principal for which it obtained default judgment.

54. On 22 December 2022, Mr Hu sent an email to the solicitors for Nexus, in which he stated:

“Please replying of your email dated 20 December and 21 December 2022, I have enclosed the letter to Nexus at 12 December 2022 for your reference.

We are in dispute resolution process at this stage, your demond [sic] on your client will not be reviewed prior to dispute resolution.”

55. There was no evidence of any response to this email. The course of correspondence was not disclosed in the ASoC, nor in the affidavits of Mr Gracias or Mr Haslem in support of the default judgment application.

56. To my mind, this was a significant omission. It may be that invocation of the dispute resolution process would not have established a defence to the liquidated claim in the ASoC and would only have formed the basis for a stay. It may even be that the payment of the invoices was not properly a subject matter of the dispute resolution process. However, the solicitors for Nexus had been made aware that CPR believed them to be, and I was not taken to any evidence that they ever told CPR that they did not accept this to be the case.

57. Even if the efficacy of the mandatory dispute resolution provision were disputed, I consider that it would have been a factor relevant to the default judgment application. In any event, it goes some way to explaining why CPR, not being aware of the service of the ASoC, would not have been astute to the possibility that Nexus had commenced proceedings against it. I consider this a significant discretionary factor in favour of setting aside the default judgment.

58. Finally, CPR contends it has a defence of set-off. This defence would exist, however, whether or not the default judgment were permitted to stand, provided that no further enforcement steps were permitted.

Delay and prejudice

59. Counsel for CPR accepted that he faced some difficulty in meeting the charge by Nexus that CPR’s delay, in bringing the present application, is not properly explained and has been for far too long. CPR ought to have been on notice when some $74,488.25 was garnisheed from its bank account in August 2023 and when the balance of the Equipment was removed from the Property in November 2023. Once it commenced the 2024 proceedings, it was informed by the solicitors for Nexus, on 9 May 2024, of the fact of the default judgment.

60. Notwithstanding each of those matters, CPR did not bring the present application until 21 February 2025.

61. CPR’s explanation was not wholly satisfactory. It points to confusion on the part of its legal advisors, particularly due to the simultaneous existence of these proceedings and the 2024 proceedings, which it commenced unaware of the existence of these proceedings. Indeed, only when Nexus indicated, in November 2024, that it would re-enliven the balance of its claim in these proceedings and later filed a notice of motion seeking default judgment on the unliquidated balance of its claim, does it appear that CPR properly understood what had occurred and took steps to set aside the default judgment.

62. CPR’s explanation for its delay is not satisfactory. It is a factor against setting aside the judgment. It is not, however, dispositive.

63. Nexus submitted that it would suffer prejudice, including presumptive prejudice, arising from CPR’s delay, if the judgment were set aside. Leaving to one side the question of whether the garnishee order could be set aside and what prejudice would flow from such an order, I do not accept that there would be either any procedural or presumptive prejudice to Nexus if the judgment were set aside. The events took place in 2021 and 2022, much evidence has already been prepared and the parties are in litigation concerning the same circumstances, in any event.

64. Of course, Nexus would lose the benefit of the default judgment, but this does not appear to me to be a decisive factor, to the extent that it can properly be treated as prejudice at all.

Conclusion

65. In my view, the key considerations in determining the present application are to give appropriate weight to the principle of finality in litigation, establishing where the interests of justice lie and balancing the various discretionary factors which are properly to be taken into account in determining an application to set aside default judgment.

66. In the present circumstance, the proceedings between the parties are not final on any view. Nexus still wishes to prosecute the unliquidated component of its claim in these proceedings and CPR has commenced the 2024 proceedings arising out of the same transaction. The two proceedings are almost certainly going to be heard together, with evidence in one being evidence in the other, although no order has yet been made to that effect.

67. Accordingly, the general rule concerning the finality of litigation may have less practical force in the present case than in cases where the whole of the dispute between the parties has been determined by a default judgment.

68. In my view, on balance, the interests of justice are best served if the default judgment were set aside. That is because there are factors relating to the default judgment, itself, which I consider favour the grant of relief.

69. First, CPR has an arguable defence. To the extent that the defence relies on the invocation of the mandatory dispute resolution clause, the proceedings were arguably brought in breach of a contractual obligation, which may have been a complete defence to the proceedings, or at least a proper basis for a stay that would have precluded the default judgment.

70. Secondly, while the ASoC was served, it did not come to the attention of CPR. As service was at CPR’s registered office, this does not excuse its default, but it does go some way to explaining CPR’s failure to appear.

71. Against these factors are CPR’s lengthy delay, which was not adequately explained. However, I do not consider Nexus to have suffered any irremediable prejudice, subject to a separate determination of the question of whether the garnishee order ought be set aside.

72. The effect of an order setting aside the default judgment or the garnishee order, and the other consequential enforcement orders, was not addressed by the parties as an independent issue requiring the exercise of a separate power under s 124A of the Civil Procedure Act2005 (NSW).

73. Counsel for Nexus submitted that it would be an unreasonable outcome if the garnishee order, having been executed some two and a half years ago, were set aside and Nexus were ordered to return the moneys to CPR after such a lengthy delay. Although Nexus did not tender any evidence of prejudice in this regard, the submission, on its face, appears to have force.

74. In the course of argument, there was a suggestion that the parties might agree on a mechanism by which the garnisheed moneys could be treated as the subject of a restitutionary claim that would abide determination of Nexus’s liquidated claim. I will give the parties an opportunity to consider and, if possible, agree on orders in this regard.

75. I will ask the parties to bring in short minutes giving effect to these reasons. If they cannot agree on orders with respect to the garnishee order, I will give them a further opportunity to address me in that respect.

Costs

76. I invited the parties to address on costs. Having heard them both, I consider the appropriate costs order is that costs be costs in the cause. Nexus had erred in its formulation of the ASoC and CPR has an arguable defence. However, CPR is the beneficiary of an indulgence which, given its delay and my findings as to the adequacy of service, was reasonably opposed by Nexus. I will not make any order for costs at this stage, pending agreement by the parties (or determination by me) of the question of the garnishee, and other consequential, orders. If those orders cannot be agreed, I will also take those matters into account in determining costs.

Orders

77. The orders of the Court, therefore, are:

1. Direct the parties to liaise as to the orders required to give effect to these reasons and costs.

2. List the matter for mention on Tuesday, 6 May 2025 at 10am before Andronos SC DCJ.

**********

Decision last updated: 24 April 2025