What is a default judgement?

Default judgement occurs when the Court makes a judgement against the defendant without having a hearing in Court because the defendant did not file a defence to the statement of claim.

On what basis can a default judgement be set aside?

Rule 36.16(2) of the Uniform Civil Procedure Rules 2005 (NSW) provides that a Court may set aside or vary a judgment or order after it has been entered if it is a default judgment.

In Adams v Kennick Trading (International) Ltd (1986) 4 NSWLR 503, Hope JA stated that in order for a default judgment to be set aside the Court must be satisfied, by looking at the whole of the relevant circumstances, whether or not sufficient cause has been shown. The most important matters the Court will consider is whether the defendant can successfully defend the original claim and whether there is a reasonable explanation for the defendant’s default.

A reasonable explanation for not lodging a defence may be that the defendant was in the hospital at the time and unable to attend to the requirements of a defence. With regard to defending the original claim, the defendant must provide evidence that indicates that there are prospects of success.

The Court’s jurisdiction to set aside judgments also extends to circumstances where there has not been proper service or notice to a party: Taylor v Taylor (1979) 143 CLR 1. For example, through no fault of the defendant, the service of a statement of claim might be made to an incorrect address or person.

In Cameron Bankrupt v Cole Petitioning Creditor (1944) 68 CLR 571 Rich J noted that it is ‘a fundamental principle of natural justice, applicable to all courts whether superior or inferior, that a person against whom a claim or charge is made must be given a reasonable opportunity of appearing and presenting his case.’

When should an application be made to set aside or vary a default judgment?

An application to have a judgment set aside under this rule should be filed within 12 months after the date on which the judgement was given. However, an application may also be accepted after the 12 months have expired if the defendant did not acquire knowledge of the judgement and if the Court considers it reasonable in the circumstances.