Understanding Default Judgments in NSW: A Comprehensive Guide

Q: What Is Default Judgment?

Default judgment is when the court enters a judgment in favour of a party (typically, a plaintiff) as a result of the other party’s (typically, a defendant) failure to respond to legal proceedings or meet court deadlines. If default judgment is entered against a defendant for a sum of money, the plaintiff becomes the ‘judgment creditor’ and the defendant becomes the ‘judgment debtor’. Having a default judgment against you can have negative consequences. However, there are circumstances in which default judgments can be set aside. In this article, we will provide you with a guide on setting aside default judgments in NSW.

Q: What Are the Consequences of Default Judgment?

If default judgment is into entered against you, the judgment creditor might take enforcement action to recover the amount that the Court has ordered that you are liable to pay. This may result in (without limitation) your assets being seized and sold or your wages being garnished and paid to the judgment creditor. The judgment can also negatively impact your credit rating, affecting your ability to obtain loans. Further, you may become liable to pay additional costs if a judgment debtor has to take enforcement action against you.

Q: How Do You Apply to Set Aside Default Judgment?

Courts are often readily willing to set aside default judgments. This is because default judgment is an administrative form of judgment as opposed to a judgment based on the merits of a legal argument. However, to set aside judgment an applicant will have to satisfy the Court that the following elements are present:

Q: What Must You Show to Have Default Judgment Set Aside?

There was a reasonable explanation for not responding to the legal proceedings (or otherwise meeting the relevant Court deadline). There was no unreasonable delay in applying to set aside the default judgment. That, on the face of it, there is an arguable defence to the plaintiff’s claim. This does not require a full explanation of the defence, or even that there is a strong defence. There simply needs to be a potential to defend the matter. It is a low threshold to meet. It is not uncommon for parties to ignore default judgment in the hope that the matter will go away. As above, this can have negative consequences that can be avoided by making an application to set aside default judgment.

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How to Deal with Default Judgments in WA: A Practical Overview

What Is Default Judgment?

In Western Australia, default judgment may be entered under the Rules of the Supreme Court 1971 (WA), District Court Rules 2005 (WA), or Magistrates Court (Civil Proceedings) Rules 2005 (WA), depending on the court. Default judgment arises when a defendant fails to file a defence or otherwise respond within time.

Once entered, the plaintiff becomes the judgment creditor, and the defendant becomes the judgment debtor. The consequences can be significant and immediate.

What Are the Consequences of Default Judgment?

Upon default judgment being entered, a judgment creditor may pursue enforcement through:

property seizure and sale;
earnings appropriation orders (garnishee);
statutory demands (for corporate defendants); or
charges over land.

A default judgment may also negatively affect your credit record and ability to obtain loans. Additional legal costs may accrue if enforcement action is taken.

How Do You Apply to Set Aside Default Judgment?

The rules governing setting aside default judgment vary slightly depending on the court, but all WA courts have broad powers to set aside default judgment.

Key rules include:

Order 13 rule 14 RSC (Supreme Court)
Rule 42 Magistrates Court (Civil Proceedings) Rules 2005 (WA)
District Court Rules 2005 (WA) provisions relating to default judgments

These rules give courts wide discretion to set aside default judgment where the circumstances justify it.

What Must You Show to Have Default Judgment Set Aside?

Western Australia applies similar principles to other states. An applicant generally must show:

A Reasonable Explanation for the Default

This must be more than speculation. In Chapman v Garrigan [2017] WASC 336, the Court emphasised that evidence must be cogent, and mere assumptions or suspicions are insufficient.

No Undue Delay in Bringing the Application

Failure to act promptly can cause the application to fail.

A Prima Facie Defence on the Merits

You must show that your defence is arguable, not that it will succeed. The threshold is low. WA courts have repeatedly confirmed that matters should, where possible, be resolved on their merits rather than through technical default.

Courts also consider whether setting aside the judgment would cause unfair prejudice to the judgment creditor.

Ignoring a default judgment rarely makes the problem go away. Instead, it usually makes the situation worse. If a default judgment has been entered against you, acting quickly to set it aside is essential to protecting your rights and avoiding unnecessary financial harm.

Please contact Sebastian Brodowski of our Insurance & Dispute Resolution team if you are a plaintiff or defendant who requires assistance with default judgment on 02 9264 9111

Understanding and Setting Aside Default Judgments in WA: A Broad Guide

How to Deal with Default Judgments in WA: A Practical Overview

What Is Default Judgment?

What Are the Consequences of Default Judgment?

How Do You Apply to Set Aside Default Judgment?

What Must You Show to Have Default Judgment Set Aside?

A Reasonable Explanation for the Default

No Undue Delay in Bringing the Application

A Prima Facie Defence on the Merits