Setting Aside Default Judgements
WHAT IS A DEFAULT JUDGEMENT?
A default judgement is when judgement is given to you without going to a trial. Where the judgement is for the payment of a debted amount, the defendant (who failed to communicate with you or the court) will owe you the amount of the judgement debt.
A default judgement can be requested where:
- The defendant fails to follow the requirements presented in the Magistrates Court (Civil Proceedings) Act 2004 (WA), the rules of the court, or courts orders or directions.
- Or, where you have served a claim on the defendant and they do not enter a response, lodge a statement of defence or fail to do either of these things within the time limits required.
A default judgement will not be given if the other party has not lodged a statement of defence because they have decided to lodge a separate application which:
- Has not been dealt with; or
- Was successful; or
- Was dismissed.
If the matter is dismissed the defendant has 14 days to lodge a statement of defence.
If you believe you are entitled to a default judgement, or that you may be subject to one, you should seek legal advice.
WHO MAY SET ASIDE A DEFAULT JUDGEMENT IN THE MAGISTRATES COURT?
A court registrar should not approve a default judgement if more than a year has passed since the claim was served. If the application for default judgement occurs over a year after service the matter must be referred to a magistrate for consideration. If this is the case, the person applying for the default judgement must file an affidavit explaining why it took such a long time to make the application. It will then be at the discretion of the magistrate as to whether they approve your application or not.
If you have had a default judgment entered against you there are several steps you can take to ask the court to reconsider. Be aware that time limits apply for this application, so, if you have had a default judgment entered against you, you should seek legal advice as soon as possible.
The jurisdiction to set aside a default judgment is inherent to every court, unless displaced by statute. Due to the ease by which a plaintiff may obtain a default judgment, a defendant is offered similar rights to have it set aside. Even where the default judgment was properly obtained, the court has a discretion to set aside the judgment.
What do you need to show to set aside a default judgment?
TO HAVE A DEFAULT JUDGEMENT SET ASIDE YOU MUST SHOW:
- You had a satisfactory reason for failing to appear before the court; and
- There was no unreasonable delay in making your application to have the judgement set aside; and
- That there is a prima facie defence on the merits of the matter.
WHAT KIND OF DELAY MUST YOU SHOW?
In the matter of National Australia Bank v Singh the plaintiff issued and served a writ claiming approximately $6 million from the defendants pursuant to a guarantee for a debt of the company. A default judgement was entered as the defendant failed to act on the matter. Upon looking to have the judgement set aside the court said:
“Where there has been, in effect, no satisfactory explanation of delay, the Court should not, in my view, be overly anxious to accommodate the preference of the debtor.”
However, it is not often that a defendant who has an apparently good ground of defence would be refused the opportunity of defending, even though a lengthy interval of time elapsed. This is usually on the condition that the delay has not cause irreversible injury to the plaintiff who was awarded the default judgment.
DO YOU HAVE A DEFENCE?
The court must be satisfied that you have a prima facie defence to the default judgement.
If you cannot show the court that, if allowed to go to trial, you would have a reasonable prospect of success, it is unlikely that they will reverse the default judgement.
In order to assess whether you have a reasonable case or not, it is often advisable to seek legal assistance. Your lawyer will be able to determine whether you have a case, and provide guidance as to the best means of showing the court this is the case. This is particularly important where you have to show the court volumes of evidence or argue legal grounds of defence.
WHAT ABOUT FOREIGN JUDGEMENTS?
A foreign judgement is a decision made in a jurisdiction outside of Australia. The enforcement of a foreign judgement is the recognition that the jurisdiction of the judgement is applicable in Australia. For example: if you live in Western Australia, but a judgement is entered for a $100,000 debt in another country, that debt can be enforced in Western Australia. In this way, living outside the jurisdiction will not allow you to avoid paying a debt you owe.
Foreign judgements in Australia are dealt with under the Foreign Judgements Act 1991.
In order to set aside a foreign judgment you must show that:
- The judgement is not, or ceases to be, a judgment that can be enforced; or
- The judgement was registered for an amount of money that is greater than the amount payable under it at the date of its registration (asking for more than what is owed); or
- The judgement was not entered correctly; or
- The judgement debtor (being the defendant in the original proceedings) did not receive proper service in accordance with the law; or
- The judgement was fraudulently obtained; or
- The judgement has been reversed by appeal or set aside in the originating country; or
- The judgement has been discharged, wholly satisfied or its enforcement is against public policy.
Foreign judgements are often complex in nature as you must have an understanding of the court procedures of the originating state before making an application to the Australian Court. Further, the collection of information from foreign parties can be complex and time consuming. It is important to seek legal advice as to your rights and the best means of pursuing an application to have the judgement set aside.
If you have had a default judgement entered against you, or you believe that this is likely to happen, contact one of our experienced commercial lawyers to assist you with your matter. With over 20 years of experience, we have the tools and skills to assist you in setting aside a default judgement and defending an original claim.
About the author:
Haley Graydon is a law clerk at Lynn & Brown. Haley is currently in her final year of study at UWA. The areas of law that Haley has a keen interest in is family law and estates.