Business Debt Recovery: Application to Set Aside Default Judgment

If, as a defendant, you consider that default judgment has been entered wrongly against you, or you have failed to respond to the claim and now wish to defend the claim, you must act promptly and apply to the court to set aside the default judgment.

The steps you will need to take as a matter of urgency are:

• Identify what has happened – did you not receive the claim form or particulars of the claim, or did you receive them and not take any action? If the latter, you will need to be able to provide reasons to support why the judgment should be set aside. 
• Collect evidence – did you respond to the claim form within the allotted time stated? Was there a delay in your response, and if so, why?
• Your position regarding the claim – do you accept or dispute the claim? Do you admit any part of the claim? If you dispute the claim, what are your reasons for this?
• Take legal advice from a solicitor – a solicitor will be able to assist you with making an application to set aside a judgment if this is appropriate and will be able to advise you on the prospects of successfully doing so. A solicitor will also be able to advise you on the prospects of your defence being successful.  

To set aside the default judgment, the defendant or its legal representatives must make an application to the court and pay the appropriate court fee unless exempt from paying the court fee.

The application should be made to the same court that entered the default judgment.

The application must provide the court with all of the evidence that the defendant relies upon in support of the application to set aside the default judgment.

The evidence required will depend on the reason(s) why the defendant is asking for judgment to be set aside.

If appropriate, the evidence must explain why an acknowledgement of service or defence was not filed with the court in time.

The evidence must also provide information on the steps the defendant has taken since discovering default judgment has been entered.

Before making any application to the court, it is best to try and agree with the claimant and its legal representatives that the default judgment should be set aside.

However, if the claimant will not agree to the same, the application to set aside the default judgment should be made immediately.

Once the court has issued the application, the court will send the parties a notice of hearing. At this hearing, the court will decide whether or not the default judgment should be set aside.

If the default judgment is not set aside at the hearing, then the claimant can proceed with the enforcement of the judgment.

You may also have to pay the claimant’s costs relating to the application to set aside the default judgment.

You should obtain legal advice if this situation arises regarding your options in the future.