Background
Langway Pty Ltd owned land at Badgerys Creek and leased two parts of it, LA3 and LA4, to Bulk Resources Management Pty Ltd from August 2018. Allen Romel and Michael Menon were alleged to have guaranteed Bulk Resources’ obligations under both leases, including rent, compliance with the permitted use, and making good the premises.
Langway alleged that Bulk Resources failed to pay rent, breached permitted-use obligations, and left remediation and other losses after it was required to vacate in about June 2020. It sued Mr Romel as guarantor and, after he did not file a defence, sought default judgment for $5.33 million in claimed liquidated amounts plus unliquidated damages to be assessed.
The Court’s Holding
Williams J dismissed the motion. The solicitor’s affidavits did not comply with r 16.6(2) of the Uniform Civil Procedure Rules 2005 (NSW) because they did not properly state the amount due: they relied on a spreadsheet with an unclear source and inconsistent description.
The claimed rent also covered the full lease terms despite Langway’s own pleading indicating that the leases had been terminated when Bulk Resources vacated in June 2020. Default could not amount to an admission of liability for rent after that point, and entering judgment on an amount not pleaded and calculated on that basis would be unjust. The unliquidated claim was also deficient because Langway had not pleaded that it notified Mr Romel of the relevant breaches, loss, and compensation claimed; overlap with the post-June 2020 rent-loss claim created further confusion.
Key Takeaways
- A defendant’s default does not compel judgment where the pleaded case and evidence do not establish the relief sought.
- An affidavit supporting default judgment for a liquidated sum must properly state and substantiate the amount due.
- A guarantor claim for compensation requires adequate pleading of the basis on which the guarantor became obliged to pay.
Why It Matters
The decision underscores that default-judgment procedure does not cure defective pleadings or unsupported calculations. Courts retain a discretion to refuse judgment where the claimed amount is inconsistent with the claimant’s own case or would unfairly prejudice the defendant in default.