1. Regular default judgments

1. Regular default judgments

A regular default judgment is one that was entered in accordance with the rules of court. For example, the writ was properly served, the time for the defendant to respond had expired, and the plaintiff was procedurally entitled to enter judgment. 

Because a regular judgment is validly obtained, the defendant has no automatic entitlement to have it set aside. The court has a discretion whether to set it aside, and the defendant bears a substantial burden in persuading the court to do so. 

The main consideration: whether there is a real defence 

The most important factor is whether the defendant has a defence on the merits. It is not enough for the defendant to say that there is an “arguable” defence that would justify leave to defend in a summary judgment application. The defendant must show that the proposed defence has a real prospect of success. In other words, the defence must be realistic, credible and carry some degree of conviction. A fanciful or speculative defence will not be enough. 

Where the case depends heavily on oral evidence, the court may ask whether the defence could well be established or believed at trial. 

The court does not conduct a full trial at this stage. However, it will form a provisional view of whether the defendant’s case is sufficiently strong to justify reopening the proceedings. 

Other factors considered by the court 

Although the merits of the defence are usually the dominant consideration, the court will also look at all the circumstances of the case. 

Explanation for the default 

The defendant should explain why the default occurred. A good explanation may include illness, accident, genuine mistake or other circumstances beyond the defendant’s control. 

A poor explanation, such as simple neglect or serious incompetence, may count against the defendant. However, even a weak explanation is not always fatal if the defendant has a strong defence. 

Delay in applying 

The defendant should act promptly once he becomes aware of the default judgment. Delay may suggest that the defendant has accepted the judgment or is not serious about defending the claim. 

A long delay may also prejudice the plaintiff, for example because evidence has been lost, witnesses are no longer available, or third parties have acted on the judgment. In serious cases, delay may lead the court to refuse to set aside the judgment even where there appears to be a defence. 

Prejudice to the plaintiff or others 

The court will consider whether setting aside the judgment would unfairly prejudice the plaintiff or any third party. Ordinary delay and inconvenience may not be enough, but real prejudice may be important. 

Conduct of the defendant 

The court may also consider the defendant’s overall conduct, including whether the defendant ignored the proceedings, failed to respond responsibly, or acted only after enforcement steps were taken. 

Application procedure 

An application to set aside a regular default judgment is made by summons supported by affidavit/affirmation. 

The defendant should file an affidavit/affirmation explaining: 

1. why the default occurred; 
2. when the defendant learned of the judgment; 
3. why there was any delay in applying (if applicable); and 
4. the facts supporting the proposed defence. 

An affidavit/affirmation of merits is generally required. It is usually not sufficient merely to exhibit a draft defence. The defendant should explain the defence in clear factual terms, preferably in narrative form. 

Terms imposed by the court 

The court may set aside a regular default judgment on such terms as it thinks just. 

Common terms include:  

1. payment of the plaintiff’s costs; 
2. payment of costs “in any event”; 
3. directions for the future conduct of the action; or 
4. in some cases, payment of money into court as security. 

Requiring payment of the whole judgment sum into court is relatively unusual where the defendant has shown a real prospect of success. Such an order is more likely where the defence appears weak or “shadowy”, or where the defendant’s conduct has been seriously unsatisfactory. 

Costs where a regular judgment is set aside 

Where a regular default judgment is set aside, the defendant will usually be ordered to pay the plaintiff’s costs of the application. This is because the defendant is seeking the court’s indulgence after failing to comply with the rules. 

However, if the plaintiff unreasonably opposes the application after being shown that the defendant has a real defence, the court may make a different costs order, including ordering the plaintiff to bear some costs of the contested hearing.