(c) in the case of proceedings for possession of land, it has been given or made in the absence of a person whom the court has ordered to be added as a defendant, whether or not the absent person had notice of the relevant hearing or of the application for the judgment or order.
…"
4 The authorities on setting aside default judgment are Evans v Bartlam [1937] 2 All ER 646; Vacuum Oil Pty Ltd v Stockdale (1942) 42 SR (NSW) 239; Cuttle v Brandt (1947) 64 WN (NSW) 96; and Adams v Kennick Trading (International) Ltd & Ors (1986) 4 NSWLR 503. Hillsan's counsel referred to Adams v Kennick Trading (International) Ltd & Ors (1986) 4 NSWLR 503, where Hope JA (with whom Glass and Mahoney JJA agreed) stated, that in determining whether "sufficient cause" has been shown to set aside a default judgment, the court must look to the whole of the relevant circumstances which include inter alia the existence of a bona fide defence on the merits, an adequate explanation for the failure to defend and any delay; and in determining whether there are bona fide grounds of defence the court must not try the issues to be determine at the trial: what is required is that the court determined that the facts sworn to as providing a defence, if established at the trial, would afford a defence and that the defence is set up bona fide.
5 One of the considerations to be taken into account when determining whether default judgment should be set aside was expressed by Priestley JA in Cohen v McWilliam (1995) 38 NSWLR 476 at 481 quoting from the Federal Court in Davies v Pagett (1986) 10 FCR 226:
"It is, however, another question whether concern about the extent of delays, either in a particular case or generally, should, in the absence of prejudice in the particular case, be taken into account in exercising a discretion to set aside a default judgment. The fundamental duty of the court is to do justice between the parties. It is, in turn, fundamental to that duty that the parties should each be allowed a proper opportunity to put their cases upon the merits of the matter. Any limitation upon that opportunity will generally be justified only by the necessity to avoid prejudice to the interests of some other party, occasioned by misconduct , in the case, of the party upon whom the limitation is sought to be imposed. The temptation to impose a limitation through motives of professional discipline or general deterrence is readily understandable; but, in our opinion it is an erroneous exercise of the relevant discretion to yield to that temptation. …"
6 This court should look to the whole of the relevant circumstances including an adequate explanation for delay and the existence of a bona fide defence on its merits. Overall the fundamental duty of this court is to do justice between the parties.
Explanation for delay
7 On 20 November 2009, default judgment was entered. On 9 December 2009, this motion seeking to set aside the default judgment was filed. In early August 2009, Ms Macaulay deposes that she received a copy of the statement of claim for the tenant of her property. Shortly after receiving the statement of claim she retained solicitor to act on her behalf. On 11 August 2009, Ms Macaulay filed a notice of appearance. On 20 August 2009, Ms Macaulay's solicitors wrote to Hillsan's solicitors advising that she wished to negotiate a settlement and outlining, in a preliminary way, the matter she would raise in her defence. She requested until 31 August 2009 to file her defence and cross claim. Between 20 August 2009 and October 2009, there was correspondence between Hillsan and Ms Macaulay's solicitors that attempted to negotiate a settlement.
8 On 2 November 2009, Hillsan's solicitors wrote to Ms Macaulay's solicitors as follows:
"It is noted that we still have not received a satisfactory response to any of our correspondence with you and particularly our letter of 28 th September 2009.
Because of this our client has now given us instructions to proceed to enter judgment and take possession of the property.
As this will increase the court fees and our costs which are to be paid by your client we shall refrain from doing so until after 12.00 noon on Wednesday, 4 November 2009."
9 On 3 November 2009, Ms Macaulay's solicitors faxed a copy of a letter. It relevantly reads:
"We request your client take no action to enter default judgment and shall assume none will be taken unless we receive notice by you to the contrary pending your providing us with the above information and allowance of reasonable time for negotiations thereafter.
If it is your client's intention not to reply to the above or to allow further time for negotiations then, as previously advised, we will require reasonable notice (i.e. 7 days notice) of such intention in order to file our client's defence. Accordingly, we note that we will be unable to file our client's defence by noon tomorrow as demanded in your letter of 2 November 2009 (being effectively less than 48 hours is insufficient) and will require such 7 days notice."
10 On 5 November 2009, by facsimile, Ms Macaulay's solicitors wrote to Hillsan's solicitors and made a further offer of settlement. On 13 November 2009, Hillsan applied for default judgment. On 26 November 2009, the tenant at the property telephoned Ms Macaulay and told her that he had received a letter informing him that Hillsan had obtained possession of the property and the rent was to be paid to Hillsan. She deposed that this was the first time she heard that Hillsan had obtained an order for possession.
11 On 26 November 2009, Ms Macaulay drove three hours to Kiama to collect the letter forwarded to the tenant. On 27 November 2009, Ms Macaulay's solicitor wrote to Hillsan's solicitor as follows:
"We advise that we consider your client has entered judgment in bad faith and irregularly given, inter alia, that:
(a) Your client has been aware for some time of our client's dispute of the claim, including but not limited to that as set out in our letter to you dated 20 August 2009;
(b) We have entered an appearance on behalf of our client in this matter;
(c) We made it clear that our client made the settlement offer in an attempt to avoid the costs of litigation (for both parties) and that, in the absence of settlement, our client proposed to defend your client's claim; and
(d) Notwithstanding the above, you have failed to:
(i) Notify us of your client's response to our client's officer of settlement set out in our without prejudice letter dated 5 November 2009;
(ii) Give notice of your client's requirement that, notwithstanding such settlement negotiations, our client file her defence failing which your client would proceed to enter default judgment; and
(iii) Serve upon us your client's application to enter default judgment and the affidavits in support or to notify us of the return date of such application. …"
12 Ms Macaulay deposed she was advised by her solicitors that they believed that Hillsan's solicitors would advise him if it proposed to take any action against her, including attempting to apply for default judgment.
13 On 20 November 2009, default judgment was entered. On 2 December 2009, a writ of possession was issued.
14 Although a letter was sent by Ms Macaulay's solicitor dated 27 November 2009, Hillsan's solicitors did not receive it until 30 November 2009 and there was difficulty transmitting it by fax. That letter requested Hillsan's consent to having the judgment set aside. Hillsan's consent has not been forthcoming.