What is a Default Judgment?
A default judgment is an order of the Court which is granted when the Defendant has failed to file a Notice of Intention to Defend and Defence (Defence) within 28 days of being served with a Claim and Statement of Claim (Claim) pursuant to the Uniform Civil Procedure Rules 1999 (Qld) (Rules).
If a person files a Defence within the stipulated timeframe or makes full payment of the amount sought on the Claim, a plaintiff cannot seek a default judgment.
Once the Plaintiff obtains default judgment, the Plaintiff has 12 years to enforce payment of the Judgment debt. This includes the following enforcement avenues (but is not limited to):
- Bankruptcy proceedings;
- Wind-up proceedings;
- Enforcement proceedings (garnishee of wages, enforcement hearing summons and selling property).
Setting Aside Default Judgments
A Defendant with sufficient cause may make an application to set aside a default judgment.
The main two grounds for a judgment order being set aside are as follows:
- If the order was obtained irregularly, the Defendant may be entitled to have this set aside without showing any merits; and
- Where the order was regularly obtained, this may be set aside at the discretion of the Court.
A judgment is considered irregular in circumstances where the Rules have not been adhered to.
Examples of irregularly obtained judgment orders include (but are not limited to):
- An order obtained on the basis of improper service of the originating process;
- An order obtained too soon (or before the statutory timeframe lapses); or
- An order obtained for the incorrect sum.
Discretion of the Court
A judgment can be set aside at the discretion of the Court pursuant to Rule 290 of the Rules.
In order to succeed with such an application, the following elements should be established by the Defendant:
- an explanation regarding the failure to file a Defence within 28 days of service of the Claim;
- an explanation regarding any delay in making the application to set aside the Default Judgment; and
- a statement demonstrating the nature of the Defence that will be relied upon if the Defendant were to defend the action as the Rules require a defendant to show a “prima facie bona fide defence on the merits”.
The Courts are often inclined to allow an opportunity for the cases to be heard on the basis that the Defendant can convince the Court that they should have a hearing on the merits rather than by default. Upon a successful application, the Court will require the Defendant to file their Notice of Intention to Defend and Defence within a stipulated timeframe.
In view of the above, if a default judgment has been awarded against you and you consider that you may have grounds to have it set aside, please contact us by email on [email protected] or by telephone on 07 3009 8444 to engage in an obligation free discussion.