Youssef v Shepherd [2021] NSWSC 1355

Youssef v Shepherd [2021] NSWSC 1355

Although the default judgment was not irregularly obtained and was not entered against good faith, Mr Shepherd raised bona fide triable issues that the 2020 Deed may not have been validly executed by Rx Ops under s 127 of the Corporations Act 2001 (Cth) and that, if not a valid deed, the guarantee and indemnity may be unenforceable for want of consideration. Some delay was explained by his lack of knowledge of the default judgment application and the technical nature of the defences. In the interests of justice, he should not be shut out from defending the claim.

Jurisdiction
Australia
Judgment Date
19 October 2021
Procedural Posture
Civil Procedure Application to Set Aside Default Judgment / Notice of Motion by the First Defendant to Set Aside Default Judgment
Outcome
Default judgment against the First Defendant set aside.
Legal Topics
['default Judgment' 'setting Aside Judgment' 'bona Fide Defence on the Merits' 'execution of Deeds by Companies' 'electronic Signatures' 'consideration for Guarantee and Indemnity']
['civil Procedure' 'equity' 'corporations Law' 'contract Law'] ['default Judgment' 'setting Aside Judgment' 'bona Fide Defence on the Merits' 'execution of Deeds by Companies' 'electronic Signatures' 'consideration for Guarantee and Indemnity']

Case Brief

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Procedural Posture

Civil Procedure Application to Set Aside Default Judgment / Notice of Motion by the First Defendant to Set Aside Default Judgment

Legal Issues

  1. 1 ['Whether the default judgment was entered irregularly or against good faith under Uniform Civil Procedure Rules 2005 (NSW), r 36.15(1).' 'Whether the Court should set aside the default judgment under Uniform Civil Procedure Rules 2005 (NSW), r 36.16(2).' 'Whether the First Defendant had a bona fide defence on the merits based on invalid execution of the 2020 Deed by Rx Ops under s 127 of the Corporations Act 2001 (Cth).' 'Whether the First Defendant had an arguable defence that the 2020 Deed was not an enforceable agreement because the guarantee and indemnity were based on past consideration.' 'Whether delay, explanation for failure to defend, and prejudice justified refusing to set aside the default judgment.']

Ratio Decidendi

Although the default judgment was not irregularly obtained and was not entered against good faith, Mr Shepherd raised bona fide triable issues that the 2020 Deed may not have been validly executed by Rx Ops under s 127 of the Corporations Act 2001 (Cth) and that, if not a valid deed, the guarantee and indemnity may be unenforceable for want of consideration. Some delay was explained by his lack of knowledge of the default judgment application and the technical nature of the defences. In the interests of justice, he should not be shut out from defending the claim.

Court Disposition

Default judgment against the First Defendant set aside.

Orders

  • ['The default judgment entered against the First Defendant on 2 February 2021 be set aside.' 'The First Defendant to file and serve his defence and any cross-claim on or before 16 November 2021.' "The First Defendant to pay the Plaintiff's costs of his application for default judgment." 'The costs in respect of the...