Sampson (Trustee) v Taboada

In the matter of Sampson (Trustee) v Taboada, the Federal Court was tasked with determining whether the respondents had provided a satisfactory explanation for their absence from a hearing and if there was a reasonably arguable defence against the default judgment. The respondents, Monica and Julio Taboada, sought to set aside a default judgment entered against them in proceedings related to a claim for the recovery of a debt under the Bankruptcy Act 1996 (Cth). The primary issue before the court was whether the respondents had supplied a satisfactory explanation for their absence at the hearing and whether they had disclosed a defence with sufficient merit to warrant setting aside the order.

The court found that Monica Taboada’s evidence did not constitute a satisfactory explanation for her absence. Despite her claims of being unable to instruct her legal representatives due to a major depressive disorder, the medical records did not support her assertion that she was completely incapacitated. Moreover, there was no evidence to suggest that the respondents’ former solicitors had failed to inform them of the proceedings or the consequences of non-participation. Consequently, the court was not satisfied that the respondents had provided a satisfactory explanation for their absence.

Additionally, the court considered whether the respondents had disclosed a reasonably arguable defence. The respondents argued that the decision of the Delegate of the Official Receiver to issue a notice under section 139ZQ of the Bankruptcy Act was flawed, but they failed to provide any draft cross-claim or written submissions identifying the basis for such an application under the Administrative Decisions (Judicial Review) Act 1977 (Cth). The respondents only vaguely referenced "errors" in the schedule without specifying the grounds on which the decision could be deemed vitiated.

The court ultimately dismissed the respondents’ application to set aside the default judgment. It held that the respondents had not provided a satisfactory explanation for their absence and had not disclosed a reasonably arguable defence. Consequently, the respondents were ordered to pay the applicant’s costs.