If default judgment has been entered against you personally, or your company you should get immediate legal assistance from a lawyer who is experienced in litigation.  This article sets out the requirements that your lawyer must consider when applying to have default judgment set aside.

How to Set Aside Default Judgment

There can be several circumstances where a person finds themselves in the predicament of failing to enter a defence in a proceeding that results in the other side to succeed in their application for default judgment against them.

The most common circumstance is that the defendant is unaware of the claim and statement of claim.

Service

If the claim and statement of claim are made pursuant to 109X (1)(a) of the Corporations Act 2001 (Cth) the pleadings may be sent by mail to the company’s registered office or left at the registered office.

If the company directors fail to update their new company address on the ASIC register, they may be unaware of a proceeding due to the claim and statement of claim being served at the company’s old address.  Other times, defendants who have their home address as their registered office may become unaware of service to their registered office if they are away from their home for an extended period of time.

Whatever the reason for the defendant not filing a Notice of Intention to Defend and Defence, if default judgment is awarded against the defendant, the defendant must apply to set aside the judgment and to have time to put in a defence.  Needless to say, the applicant must have a good reason as to why the judgment should be set aside.

The Criteria to Set Aside Default Judgment

Cook v DA Manufacturing Co P/L and Anor [2004] QCA 52 (Cook v DA) sets out the criteria that the Court will consider when a defendant is applying to set aside the judgment, including whether:

  • there is a satisfactory explanation for the failure to appear;
  • there has been no unreasonable delay in bringing the application; and
  • the defendant has a prima facie defence on the merits.

In Cook v DA, when referring to National Mutual Life Association of Australia Ltd v Oasis Developments Pty Ltd [1983] Qd R 441, McPherson J indicated that the requirement for the defendant to have a prima facie defence is the most cogent to consider.

Although the Court will consider the three-point above, it is important to note that the Court has a wide discretionary power to set aside a default judgment, as per the High Court  finding in Taylor v Taylor (1979) 143 CLR 1 where the Court said:

A jurisdiction to set aside its orders is inherent in every court unless displaced by statute. In my opinion the jurisdiction extends not only to the setting aside of judgments which have been obtained without service or notice to a party (Craig v. Kanssen [24] ) but to the setting aside of a default or ex parte judgment obtained when the absence of the party is due to no fault on his part.

You should also be aware of the other side’s costs that are thrown away, in seeking default judgment due to you or your company’s failure to appear or file a defence and notice of intention to defend.