So, you’ve found out that a court has made a default judgment against you. Hopefully, you’ve stopped pacing and sat down to read our article about setting aside default judgments. We now get a bit more specific and tell you how to go about setting aside a default judgment in the Magistrates Court of Queensland. It is worth nothing that the process is likely to be similar in many courts across Australia.
What is a Default Judgment?
But first, a quick recap. A court may enter a default judgment where one party (the plaintiff) has filed a claim against another party (the defendant), and the other party has failed to take steps to defend the claim within the applicable timeframe.
What’s the Process in Queensland?
In the Magistrates Court of Queensland, court procedure is primarily governed by the Uniform Civil Procedure Rules 1999 (UCPR). Where the plaintiff’s claim relates to a debt or liquidated demand, the plaintiff may seek default judgment under UCPR, rule 283.
However, under rule 290, the Magistrates Court may set aside or amend the default judgment, as well as any enforcement of the judgment. The Magistrates Court may do so on terms it considers appropriate, including terms about who will pay the parties’ legal costs and whether a party will give security.
The power of the Magistrates Court to set aside a default judgment is discretionary. This means that it may choose whether or not it should set aside a default judgment, according to the particular circumstances of the case.
There are two main grounds on which the Magistrates Court will set aside a default judgment. First, the Court may do so if the judgment was obtained irregularly. For instance, if the defendant was never properly served with the claim in accordance with the rules of service contained in the UCPR.
Secondly, even where the default judgment has been obtained without any irregularity, the Magistrates Court may set aside a default judgment if:
- the defendant gives a reasonable explanation for the failure to file a defence;
- there has been no delay by the defendant in bringing the application to set aside the default judgment; and
- the defendant has a reasonably arguable defence to the plaintiff’s claim.
What Documents do I Need?
A defendant setting aside a default judgment must apply to the Magistrates Court where the claim was initiated. This application should be made with Form 9 of the UCPR, and should be accompanied by an affidavit in support of the application (Form 46 of the UCPR). Unless the application is sought on the grounds of irregularity, the affidavit should address the three matters above and ideally, should include a proposed defence to the plaintiff’s claim as an exhibit to the affidavit.
What are the Risks?
Importantly, setting aside a default judgment may have implications for who pays legal costs. For instance, the Magistrates Court may order the defendant to pay the costs wasted by the plaintiff in obtaining the default judgment. Then, after the default judgment is set aside, further costs are likely to be incurred as the main proceedings start again.
It is, therefore, not a good idea to make an application to set aside a default judgment if you do not actually intend to defend the substantive proceedings, or there are no reasonable grounds for doing so. In those circumstances, it may be preferable to make a commercial proposal to the plaintiff to resolve the matter, rather than the parties incurring further costs.
Nonetheless, it should be noted that, once a court gives judgment and the claim is resolved, a party to that judgment generally cannot argue the same issues again at a later time. So, if a default judgment has been made against you and you intend to contest the plaintiff’s claims, you should apply to have any default judgment set aside as soon as possible.
It is critical that you act quickly because, as noted above, delay in making an application to set aside the default judgment is a relevant factor in the Magistrates Court’s discretionary decision about whether to set it aside.
If a default judgment has been entered against you, it is best to speak to a specialist lawyer about your options. Our disputes team at LegalVision has great experience helping set aside default judgments for clients across Australia, including in the Magistrates Court of Queensland.
Questions? Please get in touch on 1300 544 755.