Spliethoff Transport BV v LEISURE FREIGHT and Import Pty Limited (No.2)

Spliethoff Transport BV (the applicant) sought to set aside a default judgment obtained against it by LEISURE FREIGHT and Import Pty Limited (the respondent) in the Supreme Court of New South Wales. The dispute arose from alleged breaches of a charterparty agreement, with the respondent claiming substantial damages for demurrage and other losses. The applicant sought to have the default judgment, entered after it failed to file a defence within the prescribed time, set aside on the grounds that it had a meritorious defence and that the judgment was irregular.

The primary legal issues before the Court were whether the applicant had established a meritorious defence to the respondent's claim, and whether the default judgment had been irregularly obtained. In relation to the meritorious defence, the Court was required to consider whether the applicant had raised triable issues concerning the respondent's entitlement to demurrage, including allegations of the respondent's own breaches of the charterparty and the applicability of certain clauses. The question of irregularity focused on whether the respondent had complied with the rules of court regarding the service of documents and the entry of default judgment.

Judge Raphael found that the applicant had raised a sufficiently arguable case to suggest a meritorious defence, particularly concerning the calculation of demurrage and the impact of alleged breaches by the respondent. The Court noted that the applicant's evidence, while not conclusive, indicated that there were substantial questions to be tried regarding the respondent's claim. Furthermore, the Court determined that the default judgment had been irregularly obtained due to a failure by the respondent to properly serve certain notices on the applicant, which prejudiced the applicant's ability to respond.

Consequently, the Court ordered that the default judgment be set aside. The applicant was granted leave to file its defence, and the proceedings were to continue on the merits of the dispute, with directions for further pleadings and discovery to be made.