Setting Aside a Default Judgement in Queensland

Are you thinking about setting aside a default judgment?

A default judgement may be ordered in instances where the Plaintiff has filed a statement of claim, however no defence has been filed by the other party.

A default judgement may also be made if a Defendant fails or neglects to pay any amount claimed within a required timeframe.

This article will discuss how a default judgement may be set aside and the processes involved here in Queensland.

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Setting Aside a Default Judgement

A default judgement will generally state the amount owing by the Defendant which they must pay to the Plaintiff.

If the judgement is not set aside or the Defendant fails to make payment, enforcement proceedings may commence as discussed in one of our earlier articles.

This can happen in the following ways:

• Property owned by the defendant may be seized and sold through enforcement warrants.
• In cases where the Defendant owes an amount greater than $10,000, they may be declared bankrupt.
• For debts over $4,000, a statutory demand may be issued to the defendant company.

Default judgements can have numerous consequences to a defendant or a defendant company in regard to their credit rating and possibly their reputation.

How do you set aside a default judgement?

A default decision will most likely want to be set aside by the defendant due to the severity of the possible consequences.

Queensland Courts have the discretion to set aside default judgement in the following circumstances:

1. The judgement was obtained irregularly; or
2. There is a genuine defence or other reason why the default judgement should be set aside; or
3. The parties agree that the debt should be set aside.

These circumstances have been explained in more detail below.

The Default Judgement was Obtained Irregularly

Civil procedures within Queensland are set out within the Uniform Civil Procedure Rules 1999 (UCPR).

In circumstances where these rules have not been followed and the defendant is able to prove this, the default decision may be set aside.

A judgement may be deemed to have been obtained irregularly through the below examples:

• The Statement of Claim was not properly served in accordance with the UCPR.
• The date of service of a legal document is incorrect.
• The default judgement was obtained too soon.

Here the courts have discretion in deciding whether the irregularity is adequate to set aside a default judgement.

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There is a Genuine Defence

The defendant here must establish that they have a prima facie defence to the matter, a defence which has merit.

They will also need to provide a reasonable explanation for failing to respond in time to the plaintiff.

This could be due to illness, work commitments, incorrect calculation of dates or potentially a lack of legal understanding when filing a document.

However, courts have generally disregarded the following reasons as inadequate for failing to respond to the plaintiff:

• Failing to respond for an excessive length of time;
• A lack of merit;
• Failing to meet granted extensions; or
• Lack of financial stability in regard to legal fees.

The Queensland Courts will assess these relevant factors when considering an application to set aside a default judgement.

If you have a genuine defence to the case, a draft defence should also be attached.

The Parties Agree to Setting Aside the Default Judgement

If both parties consent to set aside the judgement because the debt has been paid or for another reason, a form of ‘consent orders’ signed by both parties will need to be filed. This generally attracts a filing fee.

In applying for an application to set aside a default judgement, copies of the necessary forms can be located on the relevant courts’ website.

Alternatively, you can seek legal advice and engage a solicitor to assist in making the application to ensure it is done correctly.

The application form will need to be supported by an affidavit that sets out the reason for seeking the application and any other relevant documentation.

Costs of Setting Aside a Default Judgment

In regard to costs, generally the party successful in a legal proceeding will have costs awarded in their favour.

This may differ in applications to have a default judgement set aside as the party applying to the court is considered to be applying for an “indulgence” from the court.

The Court hearing the matter will award costs as they deem fit.

A costs order will generally be awarded in favour of the applicant defendant where the reason for the default judgement was due to an irregularity.

However, if the reason was not due to an irregularity, the applicant defendant, despite being successful, will likely be required to pay costs.

If the applicant defendant is unsuccessful in setting aside the default judgment, it will most likely be required to pay the respondent plaintiff’s legal costs.

Setting Aside a Default Judgement

Due to the process of setting aside a default judgement being at the court’s discretion, the above considerations may not need to be satisfied but are assessed.

If you have been notified of a default judgement against you, you may have a case to have the judgement set aside.

It is recommended you obtain legal advice to discuss your options as soon as possible, as interest will accrue if enforcement proceedings are commenced.

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