In litigation, time is critical. As is frequently the case, the failure to obtain proper legal advice after receiving a court document can result in judgment being entered against you. This often occurs without any notice.

This is why, it is important to:

1. Obtain legal advice as soon as possible after being given court documents; and

• Take appropriate steps in accordance with that requirements of that document.

Each year, many Australians are blindsided by what is known as a default judgment. This typically happens when a party fails to appropriately respond to a claim, such as by filing a defence on time

Default judgment is where the plaintiff is awarded judgment without a hearing, and usually because the defendant did not take any steps to respond to the claim, even after notice.

So, what can you do if this happens to you? Fortunately, Australian courts have the power to set aside default judgments. However, the process is not automatic, and delay can be fatal.

This article explores how default judgments operate, the grounds for setting them aside, and the steps you should take immediately. Whether you’re a business owner who missed a court notice or an individual facing unexpected legal consequences, understanding your rights is essential; especially if you have a default judgment entered against you.

What Is a Default Judgment?

A default judgment is a court order granted in favour of a plaintiff when the defendant has failed to comply with a procedural requirement; most commonly, this occurs where the defendant has failed to file a notice of appearance, or a defence, in the relevant court proceedings.

Typically:

• A defendant has 28 days from service of the Statement of Claim to file a defence (timeframes may vary slightly by jurisdiction).
• If no defence is filed within time, the plaintiff may apply for default judgment without giving further notice.

The consequences of a default judgment are that:

1. Judgment is entered against you (or your business); and
2. That judgment is recorded on your (or your business’) creditor report.

Additionally, after judgment is obtained by a plaintiff, they can usually apply to enforce that judgment, and seek orders such as:

• a garnishee order (requiring your employer or a third party to pay a portion of your income to the creditor);
• a sale and seizure, or similar order, which requires the bailiff to seize and thereafter, sell, personal property (such as a case), or real property (land); or
• bankruptcy or insolvency proceedings;
• amongst other types of orders.

A default judgment is serious. If not dealt with promptly, it can escalate into further legal or financial consequences, in addition to the effects on credit ratings, etc.

Common reasons for not responding

Missing a deadline to file a defence can occur for many reasons:

• Court documents were served at the wrong address
• You mistakenly believed the claim lacked merit
• You were overseas or hospitalised at the time
• You simply misunderstood the deadline

Even if your explanation is genuine, you must still persuade the court to set aside the judgment. Timing and detail, as to the reasons, to set aside a judgment are necessary and critical to success.  

Can a Default Judgment be set aside?

Yes. Australian courts have discretion to set aside default judgments under their procedural rules. However, you must actively apply to the court, and success is not guaranteed.

Courts will consider several key factors when deciding whether to grant your application.

Setting aside a Default Judgment

Each State and Territory court usually have their own procedural rules, but the legal test is usually the same across jurisdictions. The court will usually examine:

1. Whether there is a satisfactory explanation for the default
2. Whether the defendant has a genuine defence on the merits
3. Whether the application was made promptly
4. Where judgment was entered illegally, irregularly or against good faith

These principles are grounded in both legislation and case law, according to each State or Territory the judgment was given in.

1.        A reasonable reason for the delay in responding to the claim

You must give the court a valid and reasonable explanation for why you didn’t file a defence, or take appropriate and necessary steps as requested in the summons, in time.

Some of the following reasons may be accepted:

• You did not receive the claim documents (e.g. incorrect address)
• You were incapacitated or medically unfit
• You were unaware of the proceedings due to travel or unforeseen events

Evidence is crucial. Medical records, affidavits, or travel documents will assist in supporting your explanation.

Courts take a dim view of defendants who simply ignore proceedings or misunderstand court deadlines.

2.        A defence on the merits

It is usually preferable to give a reason as to why you say that there is a defence to the claim, whilst seeking to set aside the default judgment. This gives the court something to assist it when determining whether the reasons for setting the default judgment aside, are worthwhile.

You don’t need to provide much evidence at this stage, but you should give a basic outline of why you say there is a genuine dispute that should be heard.

An undertaking, or a solicitor at this stage, who can prepare the defence, is helpful in persuading the court that steps will be taken to resolve the non-compliance, allowing the case proceed.

Common examples include:

• Disputing the amount claimed
• Denying liability under the contract
• Arguing the claim is out of time (statute-barred)
• Asserting defences like misrepresentation or lack of agreement

3.        Promptness of the application to set aside

Promptness is essential. Even with a valid explanation and a strong defence, an unreasonable delay may result in the application being denied; for example, a failure to file an application to set aside the default judgment is unlikely to be accepted (for example) after 2 years have elapsed since default judgment was entered.

As a rule of thumb:

• File your application as soon as possible after discovering the judgment
• Include an affidavit explaining the timeline of events

The court may still hear delayed applications in exceptional cases, but success becomes increasingly unlikely with the passage of time.

Jurisdictional Rules

Here’s a snapshot of rules across jurisdictions:

Jurisdiction	Rule
NSW	Uniform Civil Procedure Rules 2005
VIC	Supreme Court Rules (General Civil Procedure) Rules 2015
Federal	Federal Court Rules 2011
QLD	Uniform Civil Procedure Rules 1999
WA	Rules of the Supreme Court 1971
SA	Uniform Civil Rules 2020
NT	Supreme Court Rules 1987
TAS	Supreme Court Rules 2000
ACT	Court Procedure Rules 2006

The rules or statutory instruments in your particular State or Territory will outline the process of both applying for, and apply to set aside, default judgment.

The effects of setting aside default judgment

If your application succeeds:

• The judgment is will be set aside (treated as if it never existed)
• You are usually ordered to file a defence within a set time
• You may have to pay the plaintiff their costs of obtaining judgment, and responding to your application to set judgment aside

Be aware that the court may still order you to pay the plaintiff’s legal costs, particularly if your delay caused additional expenses.

What if the application fails?

If your application is unsuccessful, although it is rare for an application to set aside default judgment to fail if it has been properly prepared by a solicitor:

• The judgment stands
• The plaintiff can enforce the judgment, including:
  • Garnishee orders (freezing bank accounts or redirecting wages)
  • Seizure and sale of property
  • Bankruptcy proceedings (if over $10,000)
  • Credit reporting consequences

If you are unable to set aside the judgment, you may still explore options like settlement or payment arrangements with the plaintiff.

Case Study: A Business Owner’s Oversight

A small business owner in Melbourne receives a default judgment for $47,000 after a supplier initiates proceedings. The documents were served at his previous address, and he was unaware of the claim until a seizure and sale order was placed on the windscreen of a company vehicle.

He applies without delay to set aside the judgment. He provides an affidavit explaining the failure to update his company records, only having changed registered addresses, and a draft defence disputing the invoice amounts and alleging defective goods, along with an agreement to pay the plaintiff’s costs of obtaining judgment. The court accepts his explanation and finds the defence arguable. The judgment is set aside, and the matter proceeds in accordance with the usual progress of civil court disputes, later settling at mediation.

This example highlights how prompt legal advice and clear documentation can reverse even serious court outcomes, such as default judgment.

Setting aside default judgment becomes more problematic the more time it takes between the judgment being entered, and the set aside application being made.

Practical steps if you receive a default judgment

1. Act immediately
2. Get legal advice without delay
3. Gather evidence supporting your explanation
4. Draft a defence
5. File the application to set aside promptly

Need to set aside a default judgment, or apply for it?

At Allen Law, we regularly assist individuals and businesses in applying for, or setting aside, default judgments. We understand the urgency these matters demand, both obtaining that judgment to get the ball rolling, or setting it aside so you can negotiate. We have handled hundreds of default judgments in most States & Territories in Australia, providing strategic, effective and quick assistance, tailored to your individual needs.

Obtain that judgment, or set it aside, today.

Phone:         (03) 7020 6563
Email:          enquiries@allenlawyers.com.au
Website:      www.allenlawyers.com.au

Disclaimer: This article is general in nature and is not intended, nor does it constitute, legal advice. Any particular legal situation is unique and requires a unique analysis of the facts and circumstances, along with appropriate advice. Seek assistance from Allen Law today, we can help.