Answer:
In New South Wales, courts have the power to set aside a default judgment. A default judgment is when the court makes a judgment against the defendant without having a hearing in court because the defendant did not respond to the statement of claim. That is, they did not file a defence. This commonly occurs when creditors take court action to recover a debt.
To then set aside this judgment, the defendant must convince the court that:
- there is a reasonable explanation to be provided for the failure to file a defence;
- they have a defence to the plaintiff’s claim; and
- they have not delayed in making the application to set aside the default judgment, or if there has been a delay, a reasonable explanation for doing so.
Criteria 1: Reasonable Explanation
To set aside a default judgment, you must first give a reasonable explanation for not filing a defence in the first place. For example, a reasonable explanation may be that you had indicated to the other party that you were in the process of filing a defence, and had requested additional time. On the other hand, if the court found that you deliberately delayed proceedings, you will not have a reasonable explanation.
Criteria 2: Defence to the Claim
Secondly, you need to be able to show that you have the ability to successfully defend the original claim. It is not enough to simply deny the allegations, you must be able to show evidence that supports your defence.
In some cases, the default judgment will relate to a debt. If so, it will be marked on your credit report. If you already paid the debt, the court will often consider this evidence against you. You paying the debt is an admission that the debt was owing. Therefore, if you paid the debt, it will be hard to remove the default judgment from your credit report.
Criteria 3: No Delay in Making the Application
Thirdly, you will need to make an application to set aside the default judgment as soon as possible. It is often not enough to say that you were not aware of the judgment. This is especially the case if many months have passed since the judgment was entered. However, if you can genuinely show that the other party did not properly notify you of the court proceedings, you may be able to explain your delay.
