SK Developments (Aust) Pty Ltd v Vansan Construction (Aust) Pty Ltd (No 2)

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

S ECI 2025 01664

IN THE MATTER of VANSAN CONSTRUCTION (AUST) PTY LTD (ACN 104 943 732)

BETWEEN:

SK DEVELOPMENTS (AUST) PTYLTD (ACN 602 503 097) & ANOR (according to the attached Schedule)	Plaintiffs
and
VANSAN CONSTRUCTION (AUST) PTY LTD (ACN 104 943 732) & ORS (according to the attached Schedule)	Defendants

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JUDGE:	Matthews J
WHERE HELD:	Melbourne
DATE OF HEARING:	13 August 2025
DATE OF RULING:	28 August 2025
CASE MAY BE CITED AS:	SK Developments (Aust) Pty Ltd v Vansan Construction (Aust) Pty Ltd & Ors (No 2)
MEDIUM NEUTRAL CITATION:	[2025] VSC 524

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PRACTICE AND PROCEDURE — Proceeding commenced by originating motion — Judgment in default of appearance obtained without notice to defendants — Application to set aside default judgment — Default judgment set aside as it is irregular — Supreme Court (General Civil Procedure) Rules 2015 (Vic), rr 5.03(1), 45.03, 45.05, 46.08.

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APPEARANCES:	Counsel	Solicitors
For the First Plaintiff	Mr A Trichardt	HWL Ebsworth
For the Second to Fifth Defendants	Mr S Prendergast	Ryan Solicitors

Contents

A.. Introduction and background

A.1 Overview
A.2 The orders made on 27 June 2025

B.. Relevant law

C.. The Defendants’ submissions

D.. The first plaintiff’s submissions

D.1         The Set Aside Application is effectively an appeal of the Default Order
D.2         The Default Order is not irregular
D.3         If the Default Order is irregular, it should still not be set aside

E... Consideration

E.1          The Set Aside Application is competent and able to be heard by me
E.2          The Default Order was irregularly made
E.3          The Default Order should be set aside

F... Conclusion

HER HONOUR:

A Introduction and background

A.1 Overview

These reasons concern an application by the second to fifth defendants for the orders made against them on 27 June 2025 to be set aside (Set Aside Application).
The Set Aside Application is made by summons issued on 22 July 2025. At the time it was filed, it was issued on behalf of all of the defendants. By the time it came to be heard by me on 13 August 2025, the first defendant had been wound up in insolvency by the Court in unrelated proceedings,[1] hence the Set Aside Application was made by the second to fifth defendants only. They submitted, however, that if the Set Aside Application is granted, then it should also be granted in favour of the first defendant.
[1]The first defendant, Vansan Construction (Aust) Pty Ltd, was wound up in insolvency by the Court on 6 August 2025.
The second to fifth defendants (hereafter, referred to as the Defendants, for convenience) rely on the following materials in support of the Set Aside Application:
(a)the affidavit of Vincent Ryan sworn 22 July 2025 (Ryan Affidavit). Mr Ryan is the solicitor for the Defendants;
(b)the affidavit of the fourth defendant affirmed 10 July 2025 (Sutharsan Affidavit). I note that although the document is dated 10 July 2025 and refers at its commencement to it having been affirmed, the jurat states that the affidavit was sworn on 10 September 2025. I apprehend that the jurat is in error. No issue was taken with this aspect at the hearing; and
(c)a written outline of submissions from their counsel dated 11 August 2025.
The first plaintiff opposes the Set Aside Application. In so doing, it relies on the following materials:
(a)the affidavit of Matthew Bliem sworn 1 August 2025. Mr Bliem is a partner at HWL Ebsworth Lawyers, solicitors for the first plaintiff; and
(b)the affidavit of Kugan Kanagaiyan sworn 1 August 2025. Mr Kanagaiyan is the husband of Jothimathy Kugan, sole director, secretary and shareholder of the first plaintiff;
(c)its written outline of submissions dated 1 August 2025; and
(d)its further written outline of submissions dated 13 August 2025.
The second plaintiff has not played a role in seeking the orders which were made on 27 June 2025 or in the Setting Aside Application.
For the reasons which follow, the orders made on 27 June 2025 must be set aside.

A.2 The orders made on 27 June 2025

By summons filed 27 June 2025 (Default Judgment Application), the first plaintiff sought orders for judgment in default of appearance against all of the defendants. The Default Judgment Application was made and determined on an ex parte basis.
After hearing the Default Judgment Application on 27 June 2025, I granted the application and made the following order (Default Order):
1.The defendants jointly and severally pay the first plaintiff the sum of $1,581,000.
2.The defendants jointly and severally pay to the first plaintiff interest on the amount in order 1, calculated from 1 January 2023 to 27 June 2025, being 908 days at $433.15 per day, in the amount of $393,300.20.
3.The defendants jointly and severally pay the first plaintiff’s costs, fixed in the amount of $11,801.40.
In the ‘other matters’ section of the Default Order, I set out my reasons for making those orders. It is necessary to set these out here, in full (Default Order Reasons):
A.By summons filed 27 June 2025[2] (Default Judgment Application), the first plaintiff (SK Developments) seeks judgment in default of appearance, pursuant to r 45.03 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘Rules’), against the defendants for the relief claimed in paragraphs 4 and 5 of the originating motion filed 31 March 2025 (Originating Motion).
[2]This date is an error: the relevant summons was filed on 25 June 2025.
B.The Originating Motion was supported by the affidavit of Jothimathy Kugan sworn 30 March 2025 (First Kugan Affidavit) and the affidavit of Bharathan Kanagaiyan sworn 30 March 2025 (Kanagaiyan Affidavit). An amended summons dated 31 March 2025 was filed on 3 April 2025 (Amended Summons).
C.In support of the Default Judgment Application, SK Developments relies on paragraph 6 of the affidavit of Ms Kugan sworn 18 June 2025 and pages 7 to 92 of exhibit JK1 to that affidavit (together, Second Kugan Affidavit), an affidavit of Ms Kugan sworn 27 June 2025 (Third Kugan Affidavit, the circumstances in which it came to be before the Court are set out at paragraph Q below), and the affidavits of Anthony Whelan sworn 25 June 2025 (First Whelan Affidavit) and 27 June 2025 (Second Whelan Affidavit).
D. Rule 45.03 of the Rules provides as follows:
(1)Where a defendant fails to file an appearance within the time limited, the Court may –
(a)on application made by the plaintiff without notice to the defendant; and
(b) on proof of service of the originating motion and of the failure –
give judgment against that defendant for the relief or remedy sought in the originating motion.
(2)For the purpose of these Rules, the hearing of the application is the trial of the proceeding.
(3)Except for the purpose of proof of service of the originating motion and of the failure of the defendant to appear, the plaintiff shall not, unless the Court otherwise orders, use in evidence on the application any affidavit made by the plaintiff or on the plaintiff’s behalf and not served on the defendant with the originating motion.
E.Pursuant to r 8.04(1)(a) of the Rules, the time for appearance by the defendants is not less than 10 days after service of the originating motion.
F.Paragraph 6 of the Second Kugan Affidavit deals with service of the Originating Motion, the First Kugan Affidavit, the Kanagaiyan Affidavit and the Amended Summons (together, the Service Documents). It is apparent from the affidavits of service at exhibit JK1 to the Second Kugan Affidavit that all defendants were served with the Service Documents. In this regard:
(i)the affidavits of Geoffrey Dunlop sworn 2 May 2025 establish that the first, second and third defendants were served on 28 April 2025; and
(ii)the affidavits of Kugan Kanagaiyan sworn 4 June 2025 establish that the fourth and fifth defendants were served on 3 June 2025.
G.Mr Whelan is a partner at HWL Ebsworth Lawyers who has the care and conduct of this proceeding on behalf of the plaintiffs. According to the First Whelan Affidavit:
(i)notices of appearance by the defendants were therefore required as follows:
(a)in the case of the first, second and third defendants, by 8 May 2025; and
(b)in the case of the fourth and fifth defendants, by 13 June 2025.
(ii)HWL Ebsworth Lawyers conducted a search on the Court file for any notices of appearance filed on behalf of any of the defendants on RedCrest, which yielded no results.
H.       I heard the Default Judgment Application on 27 June 2025.
I.SK Developments seeks orders that:
(i)        the defendants pay it the sum of $1,581,000;
(ii)the defendants pay it interest at the rate prescribed pursuant to the Penalty Interest Rates Act 1983 (Vic) from 1 January 2023 to the date of judgment; and
(iii)the defendants pay its costs in the amount of $11,801.40, comprising:
(a)       $2,534.40 for the filing fee for the Originating Motion;
(b)$2,534.40 for the filing fee for the Default Judgment Application; and
(c)$7,020 for professional costs on judgment in default of appearance for 5 defendants.
J.The defendants in this case have not been served with the Default Judgment Application, as is permitted by r 45.03(1)(a) of the Rules. Consequently, they did not appear at the hearing.
K.I am satisfied, based on the evidence referred to in paragraphs F and G above, that the Service Documents were served on the defendants and that they have failed to file notices of appearance within the time specified in r 8.04(1)(a) of the Rules. Accordingly, the requirements in r 45.03(1)(b) of the Rules have been satisfied.
L.At paragraph 4 of the Originating Motion, SK Developments seeks an order that the defendants jointly and severally pay it the sum of $1,581,000 (Settlement Deed Amount). At paragraph 5 of the Originating Motion, SK Developments seeks an order that the defendants pay interest on the Settlement Deed Amount at the statutory rate from 1 January 2023 to the date of payment.
M.According to the First Kugan Affidavit, on or about 21 May 2022, the plaintiffs and the defendants entered into a deed of settlement dated May 2022, a copy of which is at pages 24 to 38 of the exhibit to that affidavit (Settlement Deed). Pursuant to clause 7 of the Settlement Deed, if two specified properties were not transferred by the second defendant to SK Developments or its nominee by 31 December 2022, then the defendants “unconditionally and irrevocably consent to SK Developments entering judgment against each one of them jointly and severally for [$1,581,000] and payment thereof”. According to the First Kugan Affidavit, the two specified properties were not transferred to SK Developments or its nominee by 31 December 2022 or at all.
N.At the hearing, counsel for the plaintiffs submitted that SK Developments was entitled to enter judgment against the defendants in accordance with the Settlement Deed.
O.I am satisfied that the evidence establishes that the second defendant has not transferred the two specified properties to SK Developments or its nominee by 31 December 2022 or at all. It follows that the default provision in clause 7 of the Settlement Deed therefore applies.
P.After hearing submissions from the plaintiffs’ counsel, I indicated that it may be inferred from the First Kugan Affidavit and from the filing of the Originating Motion seeking the relief set out in paragraphs 4 and 5 that the defendants had not paid the Settlement Deed Amount to SK Developments. Counsel also contended that paragraph 11 of the First Whelan Affidavit alluded to this and gave rise to the same inference, as Mr Whelan described the Settlement Deed Sum as the “debt owed”. However, none of the affidavits expressly state that the Settlement Deed Sum remains outstanding.
Q.I indicated to the plaintiffs’ counsel that a short affidavit deposing to the Settlement Deed Sum being outstanding was required. I stood the matter down to enable that affidavit to be sworn and provided to the Court. The Third Kugan Affidavit was subsequently provided.
R.On the basis of the Third Kugan Affidavit, I am satisfied that the Settlement Deed Sum remains outstanding. On the basis of that affidavit and the First Kugan Affidavit, I am satisfied that SK Developments is entitled to the relief sought in paragraph 4 of the Originating Motion.
S.I am also satisfied that it is appropriate to grant that relief without requiring service of the Third Kugan Affidavit on the defendants. I am satisfied that the requirement for any affidavit relied on at the hearing for judgment in default of appearance (other than one relied on for the purpose of proving service of the Originating Motion and of the failure of the defendants to appear) to have been served on the defendants with the Originating Motion as set out in r 45.03(3) ought be dispensed with in this instance. Rule 45.03(3) specifically provides for the Court to otherwise order, and under r 2.04(1) of the Rules the Court may dispense with compliance with any of the requirements of the Rules. In this instance, I do not consider there to be any prejudice to the defendants arising from the Third Kugan Affidavit not having been served on them with the Originating Motion or from SK Developments relying on it for the Default Judgment Application without it having been served on the defendants.
T.I am also satisfied that SK Developments is entitled to the relief sought in paragraph 5 of the Originating Motion, being interest on $1,581,000 from 1 January 2023 to the date of judgment. Pursuant to s 58 of the Supreme Court Act 1986 (Vic), where a debt or sum certain is recovered, the Court may allow interest to the creditor on the debt or sum at a rate not exceeding the rate fixed under the Penalty Interest Rates Act 1983 (Vic) from the time when the debt or sum was payable, if payable by virtue of some written instrument and at a date or time certain. That is the situation which obtains here, since the sum certain of $1,581,000 was payable if the transfer of the specified properties did not occur by 31 December 2022, hence it was payable after that date.
U.In respect of costs, I am satisfied that the defendants ought to pay SK Developments’ costs fixed in the amount of $11,801.40 as set out at paragraph I above. Paragraph 6 of the Originating Motion sought orders that the defendants pay the plaintiffs’ costs of the proceeding on an indemnity basis, alternatively the standard basis. The Second Whelan Affidavit states that the professional costs have been calculated on a standard basis from the schedule of cost contained in the Court’s ‘Costs on default judgments and warrants’ which is exhibited to that affidavit. I note that the three items referred to in Paragraph I above come to $12,088.80, which is more than the total costs specified of $11,801.40 Given the modest amount claimed in total for costs, it is appropriate to fix those costs now, and in that amount, rather than put the parties to the additional expense of the costs being taxed. However, the costs will be fixed in the amount of $11,801.40, since I do not know where the error may lie, and so it is appropriate to fix it in the lower amount. Insofar as it may be the case that the Whelan Affidavits where they deal with costs fall within the type of affidavits required to be served on the defendants under r 45.03(3), which I do not consider likely, I dispense with that requirement on the basis that no prejudice is caused to the defendants by those affidavits not having been served.

B Relevant law

The Court has power, pursuant to the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (the Rules) and its inherent jurisdiction to set aside or vary an order in certain circumstances. Rule 46.08 provides as follows:
46.08 Setting aside
The Court may set aside or vary an order which affects a person where the application for the order—
(a) was made on notice to that person, but the person did not attend the hearing of the application; or
(b) was not made on notice to that person.
Here, the Default Order was made without notice to the Defendants and they did not attend the hearing of the Default Judgment Application.
Order 45 of the Rules governs proceedings commenced by originating motion, as opposed to those commenced by way of writ. Rule 45.03 deals with judgment in a proceeding commenced by originating motion where the defendant has not filed a notice of appearance within the time limited. Its provisions are set out at paragraph D of the Default Order Reasons, and I do not need to repeat them here.
Rule 45.05 is relevant here, and it relevantly provides as follows:
45.05 Special procedure
(1)In this Rule plaintiff includes a person who proposes to commence a proceeding by originating motion.
(2)       The Court may by order—
(a) dispense with the requirements of Rules 5.03(1) and 8.02; and
(b) authorise the plaintiff to commence a proceeding by originating motion in Form 5C.
(3)       Without limiting paragraph (2), an order may be made—
(a)        in an urgent case;
(b)       to save time and expense for the parties; or
(c)       where the defendant consents.
(4)An order may be made on application by the plaintiff before or after the proceeding is commenced and, except where the originating motion has been served on the defendant, application may be made without notice to the defendant.
(5) An application made before the proceeding is commenced shall not constitute a proceeding for the purpose of any requirement of these Rules with respect to originating process.
(6) Judgment shall not be given for the plaintiff, or an order made, for the relief or remedy sought in the originating motion or otherwise except on application made to an Associate Judge or, if the Associate Judge does not have authority to give the judgment or make the order sought by the plaintiff, to a Judge of the Court, on notice to the defendant in Form 45B.
….
(8) Where an application is made to a Judge of the Court under paragraph (6), the Judge may give judgment or make any order the Judge considers appropriate.

C The Defendants’ submissions

The Defendants submit that the Default Order should be set aside because it was irregularly obtained and/or obtained in breach of good faith. The nature of the irregularity is evident from the Ryan Affidavit. Specifically:
(a)the Default Order was made on the basis that the Defendants had failed to file appearances within 10 days after service of the Originating Motion (Paragraphs D and E of Default Order Reasons);
(b)however, the Originating Motion was not indorsed with any notification that the Defendants were required to file an appearance within 10 days of service (or any other time), as required by r 5.03(1);
(c)instead, the plaintiffs had filed a Form C originating motion, which did not require any appearance to be filed pursuant to Order 8. The Form C originating motion simply required the Defendants to appear at Court in response to a summons which was to be issued subsequently;
(d)the Defendants were never served with any issued summons requiring them to attend any hearing for the purpose of obtaining final relief in the proceeding.[3] The second defendant had received a summons dated 20 June 2025, however the injunctive relief sought in that summons was resolved by consent (and the summons was dismissed).[4] In any event, the default judgment was not obtained in relation to any failure to appear in response to a summons. It was obtained on an ex parte basis in relation to the failure to file notices of appearance, which are not actually required in response to a Form C originating motion; and
(e)finally, r 45.05(2) does not permit a plaintiff to proceed with an originating motion using Form C unless the Court makes an order dispensing with the requirements of rr 5.03(1) and 8.02 (regarding the need for notices of appearance and the usual indorsement on the originating motion regarding that requirement) and authorising the plaintiff to commence by originating motion in Form C. The plaintiffs were never granted such dispensation and authorisation by the Court.
[3]Ryan Affidavit, [3(b)], [4].
[4]Ryan Affidavit, [5], [6].

The Defendants contend that the matters referred to in sub-paragraphs 14(b) to (e) above were not brought to my attention at the hearing of the Default Judgment Application, and that they should have been. The first plaintiff did not seek orders, as part of that application, for the dispensation and authorisation required by r 45.05(2). The Defendants say that had the first plaintiff done so, the problems with their application would have been exposed.
The Defendants submit that as a consequence of the above matters, there was no default in appearance by which judgment in default could have been obtained, which was not brought to the Court’s attention, and that this is a clear case of irregularity.
The Defendants submit that it is well established that if a judgment in default is irregular or was obtained in breach of good faith, it ought to be set aside, irrespective of whether the defendant has a defence on the merits or has delayed in making the application to set aside.[5] In Cash v Rettig,[6] the Court had set aside a judgment in default on the basis that it was irregular, in circumstances where the judgment was ordered in default of pleading when the party against whom the judgment was entered was not required to serve one. Those circumstances are relevantly analogous to the present case where default judgment has been obtained in default of the Defendants filing notices of appearance, when the defendants were not actually required to file them and/or had not received notice that they were required to file them.
[5]Civil Procedure Victoria, LexisNexis, at [21.07.65].
[6][1968] VR 215.
The Defendants contend that the nature of the irregularity here has caused them prejudice, in that they are entitled to take advice and to defend the proceeding in due course.
The Defendants submit that where a judgment is irregular or obtained in breach of good faith, the plaintiff is usually ordered to pay the costs of setting it aside.[7] In the circumstances, the first plaintiff ought to pay the Defendants’ costs of and incidental to the Set Aside Application.
[7]Re Zagoridis; Ex parte Q’Plas Group Pty Ltd (1990) 27 FCR 108.
The Defendants contend that whilst they have also filed the Sutharsan Affidavit disclosing the proposed defences (including setoffs) that the Defendants would presently intend to raise in the proceedings, it is unnecessary for the Court to consider the merits of any potential defences for the purpose of this application given that the judgment was irregular.
The Defendants also submit that the first plaintiff’s contention that the Set Aside Application is effectively an appeal of my own decision is incorrect. In this regard, they rely on Savcor Pty Ltd v Cathodic Protection International APS,[8] where the Court of Appeal stated that where an application is made to the court for an order to set aside an order made without notice pursuant to the inherent power or r 46.08, the court rehears the original application, and the general practice is to refer the matter back to the judicial officer who made the order.[9]
[8](2005) 12 VR 639 (Savcor).
[9]Savcor, [21].

D The first plaintiff’s submissions

The first plaintiff submits that the Set Aside Application is misconceived, as:
(a)it is effectively an appeal of the Default Order; or
(b)the Default Order is not irregular; or
(c)if the Default Order is irregular, that does not mean that it should automatically be set aside.
Each of these submissions is set out below.

D.1 The Set Aside Application is effectively an appeal of the Default Order

The first plaintiff submits that the Default Order was obtained pursuant to an application to the Court under r 45.03 of the Rules. Although this rule is the counterpart of r 21.01 of the Rules (which provides for judgment in default of appearance in a proceeding commenced by writ), the process is different: under r 21.01 of the Rules a ‘plaintiff can simply enter judgment, and no application to the court is necessary’ and for ‘the purpose of the rules the hearing of the application is the trial of the proceeding’.[10] An application under r 45.03 of the Rules is normally heard by a judge, the reason being that for the purpose of the Rules the hearing of the application is the trial of the proceeding.[11]
[10]See Civil Procedure Victoria, LexisNexis, at [I 45.03.0]).
[11]See r 45.03(2) of the Rules; Civil Procedure Victoria, LexisNexis, at [I 45.03.10].
According to the first plaintiff, the Default Order was properly made pursuant to r 45.03 of the Rules after I had heard the application for default judgment and considered the Originating Motion and the affidavits filed in support thereof, as well as a further affidavit allowed to be filed.
The first plaintiff submits that I correctly found and held that:
(a)the time for appearance pursuant to r 8.04(1) of the Rules was not less than 10 days;[12]
(b)the Service Documents were duly served on the defendants and no appearance was filed as required by the Rules;[13]
(c)the first plaintiff was entitled to judgment in the amount claimed, all of the defendants having unconditionally and irrevocably consented to the first plaintiff entering judgment against each of them jointly and severally for the amount claimed plus interest.
[12]Paragraph E of the Default Order Reasons.
[13]Paragraphs F and G of the Default Order Reasons.
The first plaintiff submits that I made factual and legal findings, as set out in the Default Order Reasons, which underpin the Default Order. It contends that in essence, the Defendants now submit that I made errors of fact and/or law in making the Default Order.
The first plaintiff submits that if I made errors of fact and/or law (which it denies) then:
(a)I cannot be asked to revisit my own factual findings and findings of law; and
(b)I cannot sit on appeal of my own judgment - the Defendants should properly appeal, setting out the grounds for the errors so that a court on appeal can determine whether I erred.
For these reasons, the first plaintiff says that the Set Aside Application should be dismissed.

D.2 The Default Order is not irregular

The first plaintiff submits that the Default Order is not irregular or irregularly entered.
The first plaintiff contends that it was entitled to use Form 5C for the originating motion in this proceeding to save time and expense for the parties and because all of the defendants had unconditionally and irrevocably consented to judgment. The use of the Form 5C originating motion in this proceeding is not an irregularity.
The Originating Motion sought, amongst other things, orders that the requirements of r 5.03(1) of the Rules be dispensed with and for judgment against all of the defendants jointly and severally for $1,581,000 plus interest.
The first plaintiff submits that the fact that Form 5C does not contain an indorsement as to the time for appearance does not mean that the Defendants were excused from filing an appearance within the time stipulated in the Rules; more specifically, r 8.04, but merely from taking a step in the proceeding following the filing of a notice of appearance. The Defendants still had to file an appearance to:
(a)signal their submission to the jurisdiction of the court; and
(b)provide an address for service,[14]
failing which the plaintiff may apply for and obtain default judgment. If an appearance is filed, the plaintiff must apply to court by summons for relief including judgment. The application by summons only occurs after the Registry of the Court allocates a time and date for the return of the summons filed with the originating motion.
[14]Relying on CBA v Scordo [2025] VSC 256, [22].
The first plaintiff submits that the use of Form 5C for the originating motion merely entailed that the Defendants, after filing a notice of appearance, did not have to take any steps in the proceeding such as filing opposing affidavits – the steps in the proceeding would be determined by the Court on the return day of the summons, where, for example, the Court would decide whether pleadings or opposing affidavits are required. It would be inimical to the Rules, justice, and logic to require compliance with r 5.03(1), failing which there is allegedly an irregularity, when one of the orders sought is that compliance with this rule be dispensed with. If the Defendants filed a notice of appearance, the first plaintiff would have had to file and serve the summons within the date allocated by the Registry. At the hearing of the matter, the use of Form 5C and compliance with r 5.03(1) of the Rules could have been ventilated.
The first plaintiff contends that it complied with the Rules, and that the Default Order has not been irregularly entered.
Counsel for the first plaintiff stated that he did not understand the basis for the Defendants’ submission that I was unaware of the Originating Motion having been commenced by Form 5C, as that appears from the document itself. Counsel contended that there was no basis to say that I was not aware of the form of the Originating Motion as it was before me. The first plaintiff submits that it cannot be said here that there was non-disclosure of material facts, as the Originating Motion was before me.

D.3 If the Default Order is irregular, it should still not be set aside

The first plaintiff submits that although the usual position is that a judgment obtained irregularly will be set aside as of right, not every irregularity in the procedure to obtain a default judgment will entitle the defendant to have the judgment set aside as of right.[15] The very proposition that a defendant would normally be able to get a judgment irregularly entered set aside ex debito justitiae, includes ‘within it the notion that it is an invariable rule that it would be set aside’.[16]
[15]Referring to ACN 076 676 438 Pty Ltd (in liq) v A-Comms Teledata Pty Ltd [2000] WASC 214, [18]; Civil Procedure Victoria, LexisNexis, at [I 21.07.65].
[16]Gemini Property Investments Pty Ltd v Woodards Investments Pty Ltd [2000] SASC 210, [18] (Woodards).
The first plaintiff submits that usually the irregularity relates to, for example:
(a)where the judgment is entered before the defendant was entitled to file a notice of appearance;
(b)where the writ or statement of claim does not disclose a cause of action;
(c)where the plaintiff has not complied with the rules as to service;
(d)where the defendant had no notice of the proceeding; and
(e)where the judgment is entered for an amount more than is due at the time it is entered.
The first plaintiff contends that none of these scenarios apply in this proceeding. Counsel for the first plaintiff stated that he could not find, and he noted that the Defendants’ submissions do not refer to, any case dealing with a setting aside application like this one. The first plaintiff submits that this is not surprising, considering:
(a)what is set out in section D.1 above;
(b)the cases dealing with setting aside a default judgment invariably deal with a situation where the originating process was a writ and the default judgment was granted under r 21.01 of the Rules, not where default judgment was granted pursuant to an application under r 45.03 of the Rules and after the Court had heard and determined the application;
(c)that irregularly entered judgments under r 21.01 of the Rules are the product of the exercise of ‘administrative acts’, not the finding of a judge on the hearing of an application and follows unless the matters set out in r 21.01(3) apply.
I note that in reply submissions, counsel for the Defendants submitted that it was not surprising that neither he nor Mr Trichardt had been able to find a case like this one, because it is an extraordinary case.
The first plaintiff submits that in any event, the setting aside of a judgment does not, however, automatically follow but will depend on the facts and circumstances and the exercise of the Court’s discretion.
The first plaintiff submits that the Court may disregard the irregularity where the situation warrants it and the Court may, for example, vary the default judgment whether irregularly entered or not, and whether the error resulted from an accidental slip or omission.[17] The first plaintiff then refers to the following as examples of where the usual rule about the setting aside of an irregularly entered default judgment are not applicable:
[17]Referring to Cusack v De Angelis [2007] QCA 313, [30] (Cusack).
(a)It may be inappropriate to set aside an irregularly entered judgment if a subsequent application for summary judgment is bound to succeed.[18] In this case, the Defendants purport to explain their failure to file a notice of appearance and to set out their defence. However, the Defendants failed to state more than merely that they have a defence in that they failed to say something about the merits of the defence. They must show that they had a bona fide intention of defending the matter and that there was a reasonably clear and bona fide case of legal merit.[19] This is consistent with the contemporary approach of applying rules of practice and procedure, whether statutory or developed under the common law, not rigidly and with undue technicality, but regarding considerations of cost, expedition, utility, and justice.[20]
[18]Cusack, [33]; Starrs v Retravision (WA) Ltd [2012] WASCA 67, [48] (Starrs).
[19]Woodards, [8].
[20]Cusack, [33].
(b)The usual rule that a judgment irregularly entered be set aside as of right is subject also to the exercise of a power of amendment and the futility of interfering with the judgment.[21] In this matter, if the issue is that the Court did not specifically order that the requirements of r 5.03(1) need not be complied with, then the Court can amend the Default Order to include such an order.[22] The amendment can occur before or after the defendant applies to set aside the judgment,[23] and courts would do so rather than set aside the judgment.[24]
[21]Cusack, [36].
[22]Permanent Trustee Co (Canberra) Ltd v Stock & Holdings (Canberra) Pty Ltd (1976) 15 ACTR 45, 47-48; Trappando Pty Ltd v Sunshine Group Australia Pty Ltd [2024] QSC 100, [14]-[15]; Civil Procedure Victoria, LexisNexis, at [1 36.07.15].
[23]Woodards, [20].
[24]Starrs, [36]-[46].
(c)Cases where default judgments were held to be irregular are ones in which there was either some deficiency in the steps prerequisite to the entering of default judgment or an abuse of process or something akin to it resulting from the plaintiff’s obtaining a judgment to which the plaintiff knew or ought reasonably to have known that it was not entitled.[25] In this matter, the alleged irregularity, if any, does not pertain to a deficiency in the prerequisite steps or an abuse of process.
[25]Cusack, [43].
(d)The Court will not set aside a default judgment entered irregularly if the irregularity is inconsequential or causally unrelated to the making of the judgment or order.[26] That is, for example, where judgment was entered on a summons which contained errors, including as to when an appearance was to be filed, where no injustice was caused to the defendant and did not lead the defendant to change its position or caused it any prejudice.[27] In this matter, it is apparent that –
(i)the Defendants knew about the Originating Motion and the claim against them but intentionally and deliberately decided not to file an appearance;
(ii)the Defendants have no good bona fide defence, particularly considering their unconditional and irrevocable consent to judgment.
(e)The Court will not set aside a default judgment entered irregularly if the irregularity pertains to an indorsement which breaches the rules of court and the irregularity did not relevantly prejudice the defendant and the defendant did not make out a good arguable defence.[28] The justice of the situation will be considered. In this matter, the Defendants were afforded the time for appearance set out in r 8.04 of the Rules, because at the time of the Default Judgment Application, there was no order that compliance with this rule had been dispensed with.
(f)The Court should not set aside any proceeding, or step in any proceeding, or any document or judgment in any proceeding, because of a failure to comply with the Rules.[29]

E Consideration

[26]ACN 057 690 034 Pty Ltd v Wykrota [2020] NSWSC 1430, [7]; Collie v Merlaw Nominees Pty Ltd [2003] VSC 424, [38].

[27]CBA v Buffett (1993) 114 ALR 245, 251.

[28]ANZ Banking Group Ltd v Kostovski (unreported, VSC (Chernov J), 2 July 1997 (BC97032660) at 9.

[29]Relying on r 2.03 of the Rules.

E.1 The Set Aside Application is competent and able to be heard by me

The first plaintiff’s submission that the Set Aside Application is effectively an appeal of the Default Order, such that the proper course for the Defendants is to file an application for leave to appeal with the Court of Appeal, must be rejected. It is simply incorrect.
It is clear, both from the Rules and the case law, that an application to set aside an order made ex parte is not an appeal. In Savcor, the Court of Appeal cited with approval the following from Sir John Donaldson MR in WEA Records Ltd v Visions Channel 4 Ltd:[30]
… He [the judge] expects at a later state to be given an opportunity to review his provisional order in the light of evidence and argument adduced by the other side and, in so doing, he is not hearing an appeal from himself and in no way feels inhibited from discharging or varying his original order.
[30][1983] 1 WLR 721, 727 (WEA Records), cited in Savcor, [21].
The Default Judgment Application was made ex parte and consequently the Defendants did not appear at the hearing of that application. This entitles the Defendants to apply for the Default Order to be set aside, pursuant to r 46.08 of the Rules.
The Set Aside Application is an orthodox use of r 46.08 of the Rules. It is not to the point that the Default Order was obtained at a hearing and after a judge considered the evidence and submissions relied upon, rather than being obtained by entering a default judgment with the Registry pursuant to r 21.01 of the Rules. Indeed, r 46.08 specifically contemplates the Court setting aside or varying an order made as a consequence of an ex parte application. That is exactly what occurred here.
The Set Aside Application is not an appeal of the Default Order. The first plaintiff’s submissions that in order to succeed on the Set Aside Application the Defendants have to show error of fact or law is incorrect. Far from it being an appeal, an application to set aside an order made ex parte is usually heard by the judicial officer who heard the original application.[31]
[31]Savcor, [22].
Accordingly, the first plaintiff’s submission that I cannot hear the Set Aside Application and that the Defendants, instead of making that application, should have applied to the Court of Appeal, is incorrect and I reject it.

E.2 The Default Order was irregularly made

The Default Order was made ex parte pursuant to r 45.03(1)(a) of the Rules, which permits an application for judgment to be made without notice to the defendant where a defendant has failed to file an appearance within the time limited. Judgment was given on the basis that the Defendants were in default, the default being the failure to file appearances within the time limited by r 8.04(1)(a) of the Rules.
However, in this instance, it turns out that there was no such default. I will explain why this is the case.
Rule 5.03 of the Rules relevantly states as follows:
5.03 Appearance
(1) A writ and, unless there is no defendant, an originating motion shall be indorsed with a statement to the effect that, if the defendant does not file an appearance within the time stated in the originating process, the plaintiff may obtain judgment against the defendant without further notice.
(2) Except as provided in paragraph (3), the time for appearance to be stated in the originating process shall be as provided by Rule 8.04.

Rule 8.04(1)(a) of the Rules applies here, as all of the defendants are resident in Victoria: the time for appearance is not less than 10 days after service of the originating motion or writ.
Accordingly, the originating motion used by the plaintiffs in this case ought to have contained the indorsement required by r 5.03(1) of the Rules. It did not. That is because the plaintiffs sought to invoke the special procedure permitted under r 45.05 of the Rules, as their Originating Motion included, as one of the orders sought, an order pursuant to r 45.05(2)(a) that the Court dispense with the requirements of r 5.03(1) and r 8.02.[32] Further, in order to proceed with an originating motion in the form of Form 5C, the plaintiffs must obtain an order pursuant to r 45.05(2)(b) authorising them to commence the proceeding in that form. Here, the Originating Motion filed by the plaintiffs sought such an order.
[32]Rule 8.02 provides that a defendant cannot take a step in a proceeding without filing an appearance.
It is clear from r 45.05(4) of the Rules that the application for an order pursuant to r 45.05(2) can be made before or after the proceeding is commenced, so there is nothing irregular about the plaintiffs’ Originating Motion itself in this case.
However, including the request for the dispensation and authorisation required by r 45.05(2) in the originating motion is only the first step. A plaintiff still needs to obtain those orders so as to be able to proceed.
A plaintiff cannot obtain judgment using r 45.05 other than by application made to a judge or associate judge and on notice to the defendant in Form 45B.[33]
[33]See r 45.05(6) of the Rules.
Form 45B is a summons on originating motion – special procedure, as prescribed by the Rules, which summonses the defendant to attend before the Court on the hearing of an application by the plaintiff for judgment or an order in respect of the relief or remedy sought in the originating motion and it must describe the judgment or order sought. The summons must state the time, date and place of hearing.
In this case, the Originating Motion did not contain the indorsement required by r 5.03(1). Instead, as is usual with a Form 5C originating motion, it stated:
TAKE NOTICE that this proceeding by originating motion has been brought against you by the plaintiff for the relief or remedy set out below.
ALSO TAKE NOTICE that the plaintiff cannot continue with this proceeding except by order of the Court. You will be given notice by summons of an application for the order and until the summons is served you are not required to take any steps in the proceeding.
IF YOU INTEND TO DEFEND the proceeding YOU MUST ATTEND BEFORE THE COURT at the time and place named in the summons served with this originating motion.
At the time of filing the originating motion on 31 March 2025, the plaintiffs also filed a summons. At the instigation of the Registry, the plaintiffs filed an amended summons on 3 April 2025. Relevantly, the amended summons sought the same orders as set out in the originating motion, including the orders required under r 45.05(2), and it stated that the application would be heard by the judge in the Practice Court or an associate judge ‘on a date to be fixed’. The amended summons was one of the Service Documents which were served on all of the defendants.
Because the amended summons stated that the application in the summons (including the orders pursuant to r 45.05(2)) was to be heard on a date to be fixed, the Defendants were never on notice of an actual hearing at which the plaintiffs would seek the relief sought.
This means that in this case, as a consequence of the operation of r 45.05(6), judgment could not be obtained in the way that it was. I note that the first plaintiff did not address r 45.05(6), either at the hearing of the Default Judgment Application or as part of the Set Aside Application.
I do not accept the first plaintiff’s submission that despite the provisions of r 45.05, the Defendants were still required to file appearances within the time stipulated under r 8.04 of the Rules. The first plaintiff’s submissions in this regard are misconceived. In particular, I reject the submission made at paragraph 34 above.
Rule 8.04(1) simply sets out the time for appearance that must be stated in the writ or originating motion, unless the Court otherwise orders. It does not create a standalone obligation to file an appearance, although various consequences can follow from the failure to file an appearance if other provisions of the Rules apply.
This means that there was no relevant default, as the Defendants were not required to file appearances at any time prior to the Default Judgment Application being heard.
With there being no default in appearance, the foundation for both the ex parte application and the nature of the judgment given falls away. Even if it could be said that there was still a proper basis for giving judgment, it would not have been given ex parte.
None of these matters were brought to my attention by the first plaintiff upon hearing the Default Judgment Application. In particular, the following matters were not brought to my attention:
(a)the lack of an indorsement pursuant to r 5.03(1) on the Originating Motion;
(b)the actual wording of the Originating Motion, as set out at paragraph 58 above;
(c)the fact that the amended summons did not contain a hearing date and time;[34]
(d)the fact that the Originating Motion sought orders dispensing with the requirements in rr 5.03(1) and 8.02 and authorising the proceeding being commenced by originating motion in Form 5C, and that these were not sought as part of the Default Judgment Application; and
(e)the requirements of r 45.05(6).
[34]It is irrelevant for these purposes that the amended summons being listed ‘on a date to be fixed’ was stipulated by the Registry. Once the proceeding had been allocated a hearing date, that would have been communicated to the plaintiffs’ solicitor and they would have been obliged to notify the defendants of it.
The first plaintiff’s submission that there was no basis for the Defendants’ submission that I was unaware of these matters is misconceived. Firstly, that was not the Defendants’ submission. Rather, the Defendants submitted that these matters were not brought to my attention. Secondly, the first plaintiff suggests that because I refer to the Originating Motion in the Default Order Reasons, then I must have been aware of these matters. A proper reading of the Default Order Reasons does not lead to or compel that conclusion. The Originating Motion is referred to in those reasons in terms of the relief sought in paragraphs 4 to 6 of the Originating Motion, which is the content of the orders sought in the Default Judgment Application. Thirdly, what I was or was not aware of is not really the question: on an ex parte application, what matters is what is disclosed to the Court.
Regrettably, the matters referred to in paragraph 66 above were not noticed by me at the time and they were not brought to my attention. Had I been aware of these matters, either by noticing them for myself or by having them brought to my attention by the first plaintiff, then I would not have proceeded to hear the Default Judgment Application ex parte and to make the Default Order.
The Defendants’ observation that the first plaintiff did not seek orders pursuant to r 45.05(2) as part of the Default Judgment Application, and that had it done so, the problems with the application would have become apparent, is particularly apt.
In summary, therefore, the Default Order is irregular as:
(a)the default relied upon to found the judgment, being the failure to file an appearance, was not in fact a default in this case;
(b)it was obtained ex parte, when it ought not to have been; and
(c)material facts were not disclosed at the time of hearing the Default Judgment Application.

E.3 The Default Order should be set aside

I turn now to address the question of whether the Default Order should be set aside, given that it is irregular. In my view, the Default Order should be set aside.
In Savcor, Gillard AJA, with whom Ormiston JA and Buchanan JA agreed, distinguished the situation referred to in the citation from WEA Records as set out at paragraph 44 above from one where the order made ex parte is set aside because there was a material non-disclosure of a material matter by the party who obtained the order. Where the issue is material non-disclosure:
The order is set aside because of some irregularity and not on the merits. When this jurisdiction is enlivened, the court’s function is to determine on the material that was placed before the judicial officer at first instance, whether a party has failed to discharge the obligation which rests upon any party seeking an order ex parte, namely, making a full and fair disclosure of all matters within its knowledge and which are material, to the court. The court is not concerned whether the order should have been made on the material before the court. Whether or not the court will set aside the order upon proof of the failure to discharge the obligation depends upon the particular circumstances.[35]
[35]Savcor, [22].
As the first plaintiff acknowledged, the usual position where a judgment is obtained irregularly is that it can be set aside as of right. The above extract from Savcor makes this plain.
It is up to the person resisting the application to set aside an irregularly obtained judgment to persuade the court that it should not set the judgment aside, notwithstanding the irregularity.
I am not at all persuaded by any of the first plaintiff’s submissions in this regard. In particular, and addressing each of the matters raised in paragraph 42 above in turn:
(a)Even if the first plaintiff’s submission at paragraph 42(a) above as to the propositions in Cusack and Starrs is correct, I would not refuse to set aside the Default Order on that basis. Taking the view that the Default Order was irregular and therefore the Court would set it aside as of right, rather than consider whether they had a bona fide defence, the Defendants did not focus on that as part of the Set Aside Application. Indeed, when commencing oral submissions, counsel for the Defendants stated that the Court did not need to have regard to the Sutharsan Affidavit because of that. The first plaintiff criticised this, saying that the Defendants had filed this affidavit and if they wished to rely on other matters by way of defence, they should have included them in that affidavit or filed additional material. In other words, the first plaintiff submitted that as the Sutharsan Affidavit had been filed and arguably did not disclose a bona fide defence, then the Defendants could not now contend that the Court was not in a position to assess their defence due to a lack of material. In my view, the appropriate and fair course is to set aside the irregularly obtained Default Order. The first plaintiff’s submission that it should not be set aside because a subsequent application for summary judgment is bound to succeed cannot be accepted here. The first plaintiff’s written submission dated 1 August 2025 goes into great detail as to why it says that the Defendants do not have a bona fide defence on the merits. That may well, or may well not, be the case. However, I do not consider that to be the pertinent question here. Rather, when making the Set Aside Application on the basis that it did, the Defendants could not have known that they may need to put on affidavits capable of resisting a summary judgment application.
(b)This is not a simple application of the slip rule in r 36.07, where the Court can amend an order where there is an error arising in a judgment from any accidental slip or omission. It is not simply a matter of amending the Default Order to include orders pursuant to r 45.05(2), for example. The problem is not that those orders were not made at the time of granting the default judgment: the problem is that in the absence of such orders and in light of the requirements of r 45.05(6), the Default Order should not have been made.
(c)The first plaintiff’s submission at paragraph 42(c) above does not take this any further.
(d)I do not accept that this is an instance where the irregularity is inconsequential or causally unrelated to the making of the Default Order. Here, the irregularity is inextricably bound up in the making of the Default Order. That judgment was given in default of appearance, when there was in fact no such default as there was no requirement for appearance.
(e)I do not accept the first plaintiff’s submission as set out in paragraph 42(e) above. The final sentence of that paragraph displays circular reasoning which I reject. To say that the Defendants were afforded the time for appearance set out in r 8.04 because at the time of the Default Judgment Application there had been no order made dispensing with compliance with this rule is not only circular, but it is based on a misconception as to r 8.04 in the first place. The dispensation is not from r 8.04, it is from the requirement in r 5.03(1) to indorse the originating motion with a statement that if the defendant does not file an appearance within the time stated in the originating motion, the plaintiff may obtain judgment without further notice.
(f)The first plaintiff’s reliance on r 2.03 as a reason why the Court should not set aside the Default Order is misplaced. That rule provides that the Court shall not set aside any proceeding or step in a proceeding or a judgment in a proceeding on the basis of non-compliance with the Rules, ‘unless the application is made within a reasonable time and before the applicant has taken any fresh step after becoming aware of the irregularity.’ That is an important qualification to r 2.03, and the first plaintiff’s submission as set out at paragraph 42(f) above does not refer to it. Here, the Defendants made the Set Aside Application within a reasonable time of becoming aware of the existence of the Default Order and before they had taken any fresh step after becoming aware of it.
The Default Order was obtained irregularly and it should be set aside.

F Conclusion

For all of the above reasons, the Default Order will be set aside.
I will hear from the parties as to the form of order (including as to whether the Default Order should also be set aside as against the first defendant) and as to costs.

SCHEDULE OF PARTIES

S ECI 2025 01664
BETWEEN:
SK DEVELOPMENTS (AUST) PTY LTD (ACN 602 503 097)	First Plaintiff
BHARATHAN KANGAIYAN	Second Plaintiff
- v -
VANSAN CONSTRUCTION (AUST) PTY LTD (ACN 104 943 732)	First Defendant
DHRUVA DEVELOPMENT PTY LTD (ACN 636 875 628)	Second Defendant
FORTUNATE STAR DEVELOPMENT PTY LTD (ACN 618 921 976)	Third Defendant
SUTHARSAN SHANMUGLINGAM	Fourth Defendant
KOGULAVANI SUTHARSAN	Fifth Defendant

[2025] VSC 524

28 August 2025