Justice requires compliance: why missing court deadlines can cost you the case

In a recent decision of the Supreme Court of Victoria, the Court has emphasised the importance of strict compliance by parties and their legal advisors with Court orders and deadlines.

In Refuse to Lose Pty Ltd (as Trustee for the Refuse to Lose Trust) v Kostakis [2026] VSC 5, the Court refused an application by the defendants to set aside a recently entered default judgment, even though defendants established they had a prima facie defence. This marks a departure from earlier authorities that placed predominant weight on whether a defendant could show an arguable defence.

Setting aside a default judgment (and why the Court in Refuse to Lose didn't)

On 20 November 2025, the plaintiffs obtained default judgment after the defendants failed to file their defence, despite Court orders and agreed extensions for the filing of the defence. On 12 December 2025, the defendants applied to set aside the judgment and separately sought to vary a freezing order to secure funding for legal costs. Both applications were heard together on 18 December 2025.

In its consideration of the application to set aside the default judgment, the Court affirmed the following established factors relevant to setting aside a default judgment:

• whether the defendants have demonstrated a defence on the merits;

• what are the reasons for default;

• how long was the delay in filing an application; and

• prejudice and costs issues.

The Court accepted that on some issues the defendants had shown at least a possible defence. However, in refusing to set aside the default judgment the Court held:

• the defendants’ strategic choices and deliberate non-compliance with orders (and the broader litigation conduct) outweighed the presence of arguable merits, given the need to advance the overarching purpose under the Civil Procedure Act;

• the governing consideration is what justice requires in the circumstances, including efficient, timely and cost-effective resolution and parties’ overarching obligations to act promptly and minimise delay;

• the defendant's assertion that they could not fund the preparation of a defence was unpersuasive and inconsistent with their ability to undertake other funded and unfunded steps, noting that a lack of funding does not absolve solicitors or parties from complying with court orders. If compliance is not possible, the proper course is to seek a variation or extension in time.

• while the set-aside application was made approximately 21 days after default judgment, the Court would not examine that delay in isolation and instead assessed it against the defendant's pattern of prior non-compliance and delay, which the Court stated reflected "poorly on the defendants and their advisors"; and

• the prejudice to the defendants if the judgment were not set aside must be weighed against the failure by the defendants and their legal advisors to file a defence, and their acts and omissions inconsistent with the overarching purpose in the Civil Procedure Act and the overarching obligation in the Civil Procedure Act to act promptly and to minimise delay;

The Court’s remarks on the defendant's actions captures the reputational risk of failing to comply with court orders and deadlines: “It is difficult to resist the proposition that throughout the history of this and the related proceeding, the defendants and their advisers actively determined what steps they would take in the litigation and what steps they would not”.

Balancing all of the above, the Court held it was not in the interests of justice to set aside the default judgment.