How Do I Set Aside a Default Judgment? 

If you are taking court action to recover a debt, the courts may use their power to set aside a default judgment. A default judgement occurs when the defendant does not respond to the statement of claim within 28 days. That is, they did not file a defence. However, for the courts to set this judgement aside, the defendant must satisfy specific requirements. This article will explore how defendants can ask the court to set aside a default judgement.

How Do I Set Aside a Default Judgment in NSW? 

To set aside a default judgment, the defendant must convince the court that:

• there is a reasonable explanation for the failure to file a defence;
• they have a defence to the plaintiff’s claim; and
• they have not delayed making the application to set aside the default judgment, or if there has been a delay, there is a reasonable explanation for doing so.

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. Or, you may not have been served with the documents and were unaware that the claim had commenced. 

Certain circumstances make it impossible to have filed a defence in time or to have been aware of the claim in the first place. However, you must take responsibility and quick action once you become aware or can respond to the claim. If the court finds that you deliberately delayed proceedings, you will not have a reasonable explanation.

Defence to the Claim

It would help if you showed that you could defend the original claim successfully. It is not enough to deny the allegations, and you must be able to show evidence that supports your defence. You do not need to prove that you would have won the case, but you do need to have adequate evidence to justify re-opening the proceedings and setting the judgment aside. 

A typical example is where the default judgment will relate to debt. If so, it will be marked on your credit report. If you have already paid the debt, the court will often consider this evidence against you. That is to say, by paying the debt, you have admitted that the debt was owed. Therefore, removing the default judgment from your credit report will be difficult if you paid the debt.

No Delay in Making the Application

Lastly, 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 unaware of the judgment. This is especially true if many months have passed since the judgment. 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.

Further, you need to provide evidence to the court regarding the delays in making your application. The court does not take delays lightly as they impact the judicial process and can impact the other party to the proceedings. For these reasons, if you do become aware of proceedings commencing against you, it is crucial that you take action right away and do not ignore or unreasonably delay your response. 

Key Takeaways

With any court proceedings, it is essential to remember that you need to act quickly. Please do not ignore it in the hopes it will disappear. After all, the court does not look kindly at people who cause undue delays, and it could make it more difficult for you to have the default judgment set aside. If you do have a default judgment entered against you, you will need to demonstrate that you: 

• have a reasonable explanation for not filing a defence in the first instance; 
• can provide evidence as to a genuine defence to the claim; and 
• have not delayed in making your application to have the judgment set aside. 

If you need assistance setting aside a default judgment, our experienced disputes lawyers can assist as part of our LegalVision membership. You will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. Call us today on 1300 544 755 or visit our membership page.

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