Schmitz v D-Cypha Trade Limited

Schmitz (the applicant) sought to set aside a default judgment obtained by D-Cypha Trade Limited (the respondent) in the Magistrates Court of Western Australia. The dispute arose from an alleged breach of a loan agreement, with the respondent claiming the applicant had failed to repay a sum of money. The applicant sought to have the default judgment, entered after they failed to file a defence within the prescribed time, set aside on the grounds of an irregular judgment and, in the alternative, on the basis of a meritorious defence.

The primary legal issue before the Court was whether the default judgment had been irregularly obtained. This required the Court to consider whether the respondent had complied with the procedural requirements for obtaining a default judgment, particularly concerning the service of the originating process and the subsequent steps taken to enter judgment. The applicant also contended that, even if the judgment was regular, it should be set aside on the merits, necessitating an assessment of whether a defence to the respondent's claim was likely to succeed.

Judge Nicholls found that the default judgment had been irregularly obtained. The Court determined that the respondent had failed to properly serve the originating process on the applicant, a fundamental requirement for the court to have jurisdiction. Specifically, the Court noted that the affidavit of service did not sufficiently demonstrate that the documents had come to the attention of the applicant, as required by the relevant rules of court. Consequently, the judgment entered was a nullity. As the judgment was irregular, the Court did not need to consider the alternative ground of a meritorious defence.

The Court ordered that the default judgment be set aside.