Costs of an application to set aside a default judgment

From memory, Williams is a bit light on when it comes to authority for the general rules guiding the exercise of discretion in relation to costs following an application to set aside a default judgment, so here’s some from the Supreme Court of the ACT, in a case between a lawyer and a legal regulator, just for double relevance to this humble newspaper. In Ezekial-Hart v Law Society of the ACT [2012] SCACT 135, a default judgment had been irregularly entered and was set aside ex debito justitiae, that is, as of right.  Ordinarily, an applicant to set aside such a judgment will get costs.  Not here, though, in part because the Law Society overlooked the irregularity and fought the judgment as if regularly entered until the judge pointed out their better point.  At [53], the meaning of ‘costs in the cause’ is spelt out, and at [54] various other kinds of costs orders’ effects are summarised.  There is also a review of cases relating to the costs consequences of not engaging in mediation, or not engaging in a bona fide manner.  Back to the costs of what is called in the Magistrates’ Court though:

  1. Ordinarily, however, a party who seeks an indulgence of the Court will be ordered to pay the costs of the indulgence, whether or not that party is ultimately successful in the proceedings, as Beaumont J, with whom Kelly J agreed on this point, said in Golski v Kirk (1987) 14 FCR 143 at 157.  Thus, for example, a party seeking an amendment to pleadings will ordinarily be ordered to pay the costs of the application to amend and of the costs thrown away, even though the application for leave to amend is successful:  Northern Territory Fuels Pty Ltd v Hart (1985) 73 FLR 405 at 412; AON Risk Services (Australia) Ltd v Australian National University (2008) 227 FLR 388 at 391; [14], 395–6; [56], 423; [238].
  2. Similarly, an applicant for an order setting aside a default judgment will ordinarily be required to pay the costs of the application, even if successful:  Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 at 353;  Re Zagoridis;  Ex parte Q’Plas Group Pty Ltd (1990) 27 FCR 108 at 114.
  3. That rule, however, is not inflexible and will depend on the circumstances of the case:  Johnsen v Duks [1963] NSWR 730 at 733.  As the Court said in Anlaby v Praetorius (1888) 20 QBD 764 at 769 per Fry LJ, “although the Court is bound to set aside an irregular judgment ex debito justitiae, it has always exercised a discretion as to costs” (see also at 770 per Lopes LJ).
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