Di Gregorio v Jersey Developments 27 Pty Ltd [2018] NSWSC 966

Di Gregorio v Jersey Developments 27 Pty Ltd [2018] NSWSC 966

Paragraph 5 of the settlement terms bore the hallmarks of a stipulation designed to compel performance of the defendants' payment obligations and was not a genuine pre-estimate of loss from breach of those obligations. The settlement contained no express acknowledgment of an existing debt, and, construed in the context of the contract for sale and the pleadings, did not contain an implied acknowledgment that the plaintiffs' claimed amount was an existing debt. Because paragraph 5 was an unenforceable penalty, the second defendant established grounds to set aside the judgment entered in the defendants' absence under UCPR r 36.16(2)(b).

Jurisdiction
Australia
Judgment Date
19 June 2018
Procedural Posture
Amended Notice of Motion to Set Aside Judgment Entered Pursuant to Consent Orders / Post Judgment Application Heard on 19 June 2018
Outcome
Judgment set aside under UCPR r 36.16(2)(b).
Legal Topics
['setting Aside Judgment Given in Absence of Party' 'consent Orders' 'settlement Agreements' 'penalty Clauses' 'acknowledgment of Existing Debt']
['civil Procedure' 'equity' 'contract Law'] ['setting Aside Judgment Given in Absence of Party' 'consent Orders' 'settlement Agreements' 'penalty Clauses' 'acknowledgment of Existing Debt']

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Procedural Posture

Amended Notice of Motion to Set Aside Judgment Entered Pursuant to Consent Orders / Post Judgment Application Heard on 19 June 2018

Legal Issues

  1. 1 ['Whether order 1 made on 14 March 2018, entering judgment against the defendants in the sum of $754,700.61, should be set aside under UCPR r 36.16(2)(b).' "Whether paragraph 5 of the settlement terms, permitting judgment for the plaintiffs' claim plus interest and costs less payments received upon default in payment of the settlement sum, was unenforceable as a penalty." 'Whether the settlement agreement contained an express or implied acknowledgment by the defendants of an existing debt owed to the plaintiffs.']

Ratio Decidendi

Paragraph 5 of the settlement terms bore the hallmarks of a stipulation designed to compel performance of the defendants' payment obligations and was not a genuine pre-estimate of loss from breach of those obligations. The settlement contained no express acknowledgment of an existing debt, and, construed in the context of the contract for sale and the pleadings, did not contain an implied acknowledgment that the plaintiffs' claimed amount was an existing debt. Because paragraph 5 was an unenforceable penalty, the second defendant established grounds to set aside the judgment entered in the defendants' absence under UCPR r 36.16(2)(b).

Court Disposition

Judgment set aside under UCPR r 36.16(2)(b).

Orders

  • ['Order 1 made by the Court on 14 March 2018, being judgment entered against the defendants in the sum of $754,700.61, is set aside.' "The plaintiffs are to pay the second defendant's costs of the Notice of Motion and Amended Notice of Motion."]