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So you have discovered that there is a default judgement against you and it is listed as a black mark on your credit rating. What does that mean, and is there any way to remove it? A default judgement is a court order that you or your company owe another party money. In Queensland, it is possible to have a default judgement removed, but only in certain circumstances. This article will explain:

  • what a default judgement is;
  • when you can apply to set it aside; and
  • the steps you will need to take to do so. 

What Is a Default Judgement?

A court will enter a default judgement against a person or company when someone has issued a claim against them and they have failed to either: 

  • file a defence; or 
  • pay the amount claimed within the given timeframe. 

In the Queensland Magistrates’ Court, you have 28 days to respond to a claim filed against you. If you do not respond, the person or company that issued the claim can apply to the court for a default judgement. The default judgement is an order that you owe the sum claimed, plus legal costs and interest. 

When Can a Default Judgement Be Set Aside?

In Queensland, a court has the discretion to set aside a default judgement in the following circumstances: 

  1. The judgement was obtained irregularly. For example, if the statement of claim was not properly delivered to you in accordance with the rules. 
  2. There is a genuine defence. This is when you believe the amount claimed is not correct or not owed at all. If this is the case, you can apply to have the default judgement set aside. However, you must show the court that: 
    • there has been no delay in applying to set aside the judgement;
    • you have a reasonably arguable defence to the claim; and
    • if you filed the defence late, that you had a reasonable explanation for failing to file a defence in time.
  3. The parties agree to set the debt aside. If the debt has already been paid, you can ask that the other party consent to set the judgement aside and apply to the court on that basis. 

Steps to Set Aside the Judgement

To set aside a default judgement in Queensland, you will need to apply to the court where the claim first brought. For example, in the Magistrates’ Court or Supreme Court. You can find copies of the necessary forms on the relevant courts’ website. Alternatively, you can seek legal advice to assist you in making the application. The application form will need to be supported by an affidavit that sets out the reason for seeking the application. 

For example, if there was a reason for not filing the defence in time, then this should be stated. 

If the other party consents to set aside the judgement because the debt has been paid, then you should attach a form of ‘consent orders’ signed by both parties. If you wish to file a defence, you should include a copy of a draft defence to the application. There will also be a filing fee to make the application. The court may also order that the other party pay your costs of making the application. If the other party objects to setting aside the judgement, the court may list the matter for a hearing. 

What if the Judgement Is Being Enforced?

The party that brought the original claim in court can force the other party to pay the money owed under the judgement. In Queensland, this might be by:

  • garnishee order on wages or bank accounts;
  • an order for the sheriff to seize personal property to pay the debt; or
  • taking steps to bankrupt you or wind up the company.

If your company is facing enforcement of some sort, you can make an urgent application to the court requesting that the judgement is ‘stayed’ or frozen. This gives you time to apply to set aside the default judgement. 

Key Takeaways

Default judgements can be damaging to you or your business as they get listed as a default on your credit rating. Courts in Queensland have the discretion to set a default judgement aside in certain circumstances, particularly where you have paid the debt owing, or you have a genuine defence to the claim but did not file it in time for some reason. If you discover a default judgement against you or your company, it is important to act quickly and make an application to set a default judgement as soon as possible. 

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