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.

Setting Aside Default Judgment

There can be a number of circumstances where a person or company find themselves in the predicament of failing to enter a defence in a proceeding, that causes 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 is 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 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 default judgment…..

And the applicant better have a good reason 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 making an application to set aside summary judgment, including whether:

  • there is a satisfactory explanation for the failure to appear;
  • there has been no unreasonable delay in bringing the application;
  • 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.

It goes without saying that if you discover that a default judgment has been entered against you or your company, as defendant you will need to get immediate legal advice from a qualified lawyer.

As the case law that we have discussed above requires, delay is a significant matter for the Court to consider when a defendant applies to have default judgment set aside.  Additionally, you will need to speak with your lawyer about the explanation you will need to provided to the Court in making the application.

You should also be aware of the costs of the other side 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.