Set Aside A Default Judgement

Jun 3, 2020 Ben

What does "default judgement" mean?

Typically, a plaintiff obtains default judgement when the defendant fails to file a defence within the time period allowed (often 28 days from service of the statement of claim). Essentially, in such circumstances the plaintiff obtains a judgement by default because there is no contest. 

What do you do with a default judgement?

By way of example, a judgement might say as part of its orders that there is judgement for the plaintiff in the sum of "x", interest in the sum of "y", and that the plaintiff is awarded its costs (as agreed / assessed). 

Like any other judgement, a default judgement needs to be enforced. This can be attempted initially by asking the counterparty to pay the amount due under the judgement or by taking steps to enforce it.

Enforcement is the process whereby a judgement debtor is compelled to pay the amount. There can be various options available for the enforcement of judgements including:

  • garnishee orders
  • writs for the levy of property
  • bankrupting the judgement debtor (for individuals);
  • winding up the judgement debtor (for a corporate entity). 

What are the consequences of a default judgment?

Unless a judgement debt is set aside it will be necessary for the debtor to pay it (if funds are available) otherwise it is likely that bankruptcy or insolvency may follow. As such enforcement is the likely consequence of doing nothing about a default judgement being entered against a party.

How do you set aside a default judgment?

Much depends on the circumstances, what court you are in and the time period that has elapsed since the entry of default judgement. Having said that the court rules generally permit a default judgement to be set aside in specific circumstances such as:

  • if judgment was entered irregularly, illegally or against good faith
  • where the judgement creditor consents
  • where the defendant can explain the reasons for not filing a defence, and it is shown that there are bona fide grounds for a defence. 

Contact our commercial litigation lawyers for litigation advice. 

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