ZAHRA v Pharmacy Management Avoca Beach Pty Ltd (No.2)

The applicant, Mr. Zahra, sought to set aside a default judgment entered against him in favour of the respondent, Pharmacy Management Avoca Beach Pty Ltd. The dispute arose from an alleged breach of a commercial lease agreement. The application was heard in the District Court of New South Wales.

The primary legal issue before the Court was whether the default judgment should be set aside. This required the Court to consider the principles governing the setting aside of default judgments, specifically whether there was a meritorious defence and whether the applicant had provided a sufficient explanation for the delay in filing a defence.

Judge Street applied the well-established principles for setting aside default judgments. The Court noted that a party seeking to set aside a default judgment must demonstrate that they have a defence on the merits and that they have acted with reasonable diligence. In this instance, the Court found that Mr. Zahra had failed to provide a satisfactory explanation for his failure to file a defence within the prescribed time. While some defence was arguably raised, the lack of a compelling reason for the delay weighed heavily against the applicant. The Court also considered the prejudice to the respondent if the judgment were set aside.

Consequently, the Court dismissed the application to set aside the default judgment.