Griffin Atlas Limited v Nursyarina Binti Zulkifli Wijitha PIHAK KETIGA 1. ) ASX International Sdn Bhd 2. ) Nor Sazly Bin Supingi

Case Significance

An appeal from the refusal to set aside a default judgment entered against a second third party, applying the regular/irregular distinction and the requirement to show a meritorious defence.

This High Court decision concerns an appeal against the refusal to set aside a judgment in default that had been entered against the second third party in a multi-party commercial action. In the underlying proceedings the plaintiff had sued the defendant, who in turn had brought in third parties, and a judgment in default dated 8 January 2024 had been entered against the second third party. That party applied to set the default judgment aside; the Court, on the balance of probabilities, dismissed the application with costs, and the second third party appealed.

An application to set aside a judgment in default is governed by well-settled principles that turn on whether the judgment was regularly or irregularly obtained. A judgment entered in accordance with the rules — where the party was duly served and failed to enter an appearance or defence within time — is a regular judgment, and the applicant must show a defence on the merits that carries some prospect of success before the court will exercise its discretion to set it aside; a mere desire to contest liability is not enough. Where, by contrast, a judgment has been entered irregularly, it may be set aside as of right. The applicant's delay and conduct, and the adequacy of the explanation for the default, also bear on the exercise of the discretion.

Weighing these considerations, the Court was not satisfied on the balance of probabilities that a sufficient basis had been shown to set the default judgment aside, and dismissed the application with costs; the second third party's dissatisfaction with that outcome led to the present appeal. The judgment is a useful illustration of how the courts apply the regular/irregular distinction and the merits-of-the-defence requirement when a party against whom a default judgment has been entered — including a third party brought into the action — seeks to have it set aside.