In bringing an application for default judgment, it is critical first to determine whether or not the claim is one for a ‘debt or liquidated demand’ or ‘unliquidated damages’, or seeks another form of relief.
A plaintiff may apply for default judgment under rule 281 of the Uniform Civil Procedure Rules (UCPR) where a defendant has failed to file a notice of intention to defend in the required time (generally within 28 days of being served with the claim: see UCPR, r137).
There are different procedures and outcomes, however, depending on whether the plaintiff’s claim is for:
- a debt or liquidated demand
- unliquidated damages
- the detention of goods
- recovery of possession of land, or
- other things such as mixed claims, ‘other’ claims and costs only.
Where a claim is for a debt or liquidated demand, a registrar can give judgment on the amount sought with interest and costs (r283). But for unliquidated damages, judgment by default will be conditional on the assessment of damages by the court (r284); in other words, there will still be a hearing though limited to the question of damages.
It is important for practitioners to appreciate when a claim is properly one for ‘unliquidated damages’. Failure to do so will likely result in a refusal to grant default judgment or make it susceptible to being set aside by the defendant.
In this article, the difference between liquidated demands and unliquidated damages is considered.
Debt or liquidated demand
The phrase ‘debt or liquidated demand’ has been described as covering any claim in which the action of debt would lie.1 It is an amount which can be ascertained by calculation or fixed by any scale of charges, or other positive data; for example, the payment of unpaid invoices.2
Where parties to a contract have determined a genuine pre-estimate of damage in the event of breach, whether as a pre-determined lump sum, or by means of a specified calculation, those are liquidated damages.3
A claim for the recovery of unpaid body corporate levies would be a claim for a liquidated demand but “recovery costs” under reg.156 of the Body Corporate and Community Management (Accommodation Module) Regulation 2020 are unliquidated amounts because they must be assessed as reasonable before judgment is entered.4
Unliquidated damages
It has been said that a claim for ‘unliquidated damages’ is one “in which the amount to be recovered depends on all the circumstances of the case, and no-one can say positively beforehand whether the plaintiff will recover a farthing, or forty shillings or a hundred pounds”.5
A claim for breach of contract will often be one for unliquidated damages.6
Further, claims for breaches of the Australian Consumer Law are likely to be claims for unliquidated damages because it is only upon the court’s consideration of damages that the actual amount can be fixed.7
Where there are multiple defendants and default judgment is only granted in respect of one, the assessment of damages will usually be determined at the trial of the other defendants.8
Conclusion
Practitioners considering an application for default judgment need to be conscious of the different routes which apply depending upon the type of relief sought. There are often subtle differences between claims for liquidated and unliquidated damages.
Naturally, cases may involve a mix of relief which again will require close attention to the proper rule and procedure applicable when default judgment is sought.
Alexander McKinnon is a Brisbane barrister and member of 16 Quay Central Chambers.
Footnotes
1 Alexander v Ajax Insurance Co Ltd [1956] VLR 436 at 445 (Sholl J); Edwards v Bray [2011] 2 Qd R 310 at [40]-[41].
2 Spain v Union Steamship Co. of New Zealand Ltd (1923) 32 CLR 138 at 142 (Knox CJ and Starke J); Living Australia Pty Ltd v Rans Consulting Group Pty Ltd [2019] SASC 86 at [53]-[54] (Hinton J).
3 Environmental Systems Pty Ltd v Peerless Holdings Pty Ltd (2008) 19 VR 358 at [79] (Nettle JA, Ashley and Dodds-Streeton JJA agreeing).
4 For example, Body Corporate for Pinehaven 1 CTS 31755 v MacKenzie [2021] QMC 8.
5 Dalgety Futures v Poretsky [1980] 2 NSWLR 646 at 649 (Rodgers J).
6 For example, Allen v Dungey [2015] QDC 167.
7 Day & Anor v Bell [2000] QDC 014 at [42] (Newton DCJ).
8 Vasta v Dynwest Pty Ltd [1988] 1 Qd R 79.
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