Default Judgment: What Does It Mean?

Author: Zeinab Farhat, Progressive Legal

If you have recently been served with a statement of claim or are a plaintiff who has served a statement of claim, it is important to understand what a default judgment is.

This article will cover what a default judgment is, when a plaintiff can apply, and setting a judgment aside.

What is a default judgment?

In New South Wales, a defendant has 28 days from the date of being served with a statement of claim to file a defence. Where the defendant fails to do this, the plaintiff can apply to the Court for a default judgment.  

A default judgment is a court order which finds a matter is in the favour of a plaintiff without a formal hearing, i.e. in the absence of the parties. It is important to note, that a plaintiff can apply for it without the knowledge of the defendant. Thus, if you have received a statement of claim it is imperative that you either: 

1. obtain immediate legal advice to draft a defence;  
2. communicate with the plaintiff to resolve the dispute; or 
3. seek an extension of time to file a defence. 

What are the consequences of a default judgment?

Once a default judgment has been entered, the plaintiff can begin enforcing the disputed claim against you. This may include, amongst other things: the seizure of property, garnishee orders (i.e. for wages and salary) etc.

When can a plaintiff apply for a default judgment?

As mentioned above, a plaintiff can apply for a default judgment where a defendant has failed to file a defence in time. If you are a plaintiff and wish to apply, the process is usually: 

1. identify where the defendant was served; 
2. obtain the relevant forms, such as a notice of motion and affidavit of service; 
3. file the forms in accordance with any applicable time frames and filing requirements; and 
4. obtain your default judgment. 

Generally speaking, a court will grant a default judgment if it can be demonstrated that: 

1. the defendant was served with the statement of claim; 
2. 28 days has lapsed from the date of service; 
3. the defendant has not paid the money claimed; and  
4. the defendant has not filed a defence.

Setting aside a default judgment 

Conversely, if you are a defendant who wishes to set aside a default judgment, you must take immediate action. It is important to note that if a judgment has been made against you, interest will accrue on the judgment debt until you make the repayment. 

If you want to defend the disputed claim, rule 36.16(2)(a) of the Uniform Civil Procedure Rules 2005 (NSW) provides that a Court can set aside or vary a judgment or order after it has been entered if it is a default judgment. 

To set aside a default judgment, you are generally required to show: 

Adequate explanation for delay

The defendant must be able to demonstrate that there is an adequate explanation for delay in relation to the failure to file a defence. Examples of reasonable explanations can include that the defendant was not served properly, or, was in hospital at the time of service and thus unable to dedicate time to the defence. 

If the defendant is unable to provide an adequate explanation for the failure to file a defence, “the interests of justice require that [the Defendant] demonstrate a defence that has reasonably strong prospects of success” (Violi v Commonwealth Bank of Australia (“Violi”) [2015] NSWCA 152, at [82]). The question is then whether the merits of the proposed defence outweigh the absence of an adequate explanation (Violi, [82]).  

Evidence of a defence against the original claim

As noted, the defendant has to show that there is a prima facie defence. It is not necessary that the defendant be able to show the Court that it would be able to succeed against the plaintiff.  

There was no delay in bringing an application to set aside the default judgment

It must be demonstrated to the Court that the defendant acted promptly upon being notified of the default judgment. A Court will not look favourably upon a defendant who took months to bring an application to set aside, if there is no reasonable excuse.  

Key Takeaways

Default judgements are often an aspect of the civil litigation process that both plaintiffs and defendants are not aware of. If you are involved in a dispute and are served, or are intending to serve a statement of claim, it is vital that you have a basic understanding of the default judgment process. This includes, without limitation: 

1. that a defendant has 28 days from the date of service to file a defence;  
2. a plaintiff can apply for a default judgment if the defendant fails to file the defence within that period; and 
3. a defendant can apply to set aside a default judgment subject to showing the court that there is an adequate reason for the delay, there is a defence on the merits, and there was no delay in bringing the application to set aside the judgment.  

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