Sky Optical LLC v Golden Cala Trading Est

Sky Optical LLC (the applicant) sought to set aside a default judgment obtained by Golden Cala Trading Est (the respondent) in the Supreme Court of Victoria. The dispute concerned an alleged breach of contract, with the respondent claiming the applicant failed to pay for goods supplied. The applicant argued that it had a meritorious defence to the claim and that the default judgment should be set aside due to irregularity and a failure to properly serve the originating process.

The primary legal issue before the Court was whether the applicant had demonstrated sufficient grounds to set aside the default judgment. This involved determining whether the applicant had a real prospect of success in defending the underlying claim and whether there had been a material irregularity in the proceedings, specifically concerning the service of the originating process. The Court also considered the principles governing the setting aside of default judgments, including the need for the applicant to show a defence on the merits and to explain any delay in seeking to set aside the judgment.

In its reasoning, the Court noted that the applicant had provided an affidavit detailing its defence, which appeared to raise triable issues regarding the quality of the goods supplied and the existence of a valid set-off. The Court found that the applicant had acted with reasonable promptness once it became aware of the default judgment. Crucially, the Court also found that the service of the originating process had not been effected in accordance with the rules, constituting a material irregularity that prejudiced the applicant by preventing it from responding to the claim. The Court applied the well-established principles that a default judgment should be set aside where there is a meritorious defence and a material irregularity in the proceedings.

The Court ordered that the default judgment be set aside, with the applicant granted leave to file and serve its defence within a specified period. The costs of the application were reserved.