In Queensland, there are certain timeframes which must be adhered to when a court proceeding is served on a person or entity. These timeframes will likely be stated on the served document itself and provide the deadline for when a formal response to the proceeding is required from that served party. In the event that a response is not filed in the stated timeframe, the serving party may enter what is known as default judgment against the party served.
Default Judgment
Put simply, default judgment is a judgment that may be entered where a person or entity is served (Defendant) with legal proceedings (where it is alleged they owe money or an obligation) to the serving party (Plaintiff) and does not take steps to defend the proceedings within or by the applicable timeframe.
If you are served with a legal proceeding, it is expected you will take steps to lodge a defence or other appropriate response within the applicable timeframe.
Failure to lodge a Defence or Response
If a defence or other response is not lodged in time, there are procedures available to apply to the Court to have the judgment set aside. In making a decision, there are certain rules, known as the Uniform Civil Procedure Rules 1999 (Qld), which provide the court discretion to set aside or amend default judgments, as well as enforcing any judgments on terms it considers appropriate in the circumstances. For example, the court’s discretion may extend to enforcing terms such as who will pay the parties’ legal costs and whether a party will give security.
Grounds to Set Aside
There are two main grounds on which the court will set aside a default judgment:
- if the judgment was obtained irregularly, for example, if the defendant was not properly served with the proceedings in the first place; or
- where there is no irregularity, the Court may set aside a default judgment if:
- the defendant offers a reasonable explanation for the failure to file a defence;
- in bringing the application to set aside the default judgment, the defendant has not attempted to delay lodgement; and
- there is a defence which could be reasonably arguable to the claim.
Application to Set Aside
To lodge an application to set aside a default judgment, there are specific documents which must be prepared and filed in the court in which the judgment was made. For example, in the Queensland Magistrates Court, these documents include:
- a Form 9 – Application; and
- a Form 46 – Affidavit in support of the Application
The Form 9 – Application must clearly state that the party making the application wishes to have the judgment set aside. The Form 46 – Affidavit should identify the irregularity on which the application is based, or where no irregularity is present, provide an explanation for failing to lodge a defence, as well as demonstrating that there has been minimal delay in making the application and outlining the reasonable arguable defence that would have been put forward had a defence in fact been filed.
Ideally, we would draft a defence for you and that could be attached to your affidavit.
Risk minimisation
As a business’ reputation and credit rating may be affected by a default judgment, it is preferable not to let it happen in the first place. It is paramount that any disputes which arise are responded to promptly – whether they are received in the form of formal legal proceedings or not.
Once legal proceedings are commenced, there will likely be claims for legal costs made against you. It is also generally the case that if you are forced to make an application to set aside a default judgment, the court will make an order that you pay the other side’s legal costs for obtaining the default judgment, even before you get back to defending the main dispute!
Once a court gives judgment and the claim is resolved, a party generally cannot later argue the same issues again at a later time. Therefore, if you wish to contest the claims against you, you will need to apply to have any default judgment set aside as soon as possible.
What Next?
If you have had a default judgment entered against you, we strongly recommend you obtain legal advice from a litigation lawyer. Robinson Nielsen Legal has a wealth of experience in all disputed matters including setting aside default judgments. If you’d like our assistance, contact our office today on (07) 3036 0649 for a confidential discussion and to learn how we can help.