Responding to an application to set aside default judgment

If the defendant applies to have the default judgment set aside (cancelled), the court will send you a copy of the notice of motion. 

The application will usually also ask for a stay of enforcement. 

A stay of enforcement (sometimes called a stay of proceedings) is a court order that stops you from enforcing the judgment debt for a period of time. This document includes an affidavit setting out the reasons for the application. You should read the affidavit carefully and think about the reasons the defendant has given for why the default judgment should be set aside.

For more information, see Stay of enforcement in Enforcement.

You should also receive a notice of listing, which tells you the date, time and place to go to court. When you go to court on that date there will be a hearing about the defendant's application. ​

You should get legal advice​ about the strength of the application so you can decide whether you should consent to (agree with) their application, or oppose it.  

If you consent to the application, the court will set aside the default judgment and list the case for a pre-trial review. 

If you decide to oppose it, you may need your own affidavit explaining why you disagree with the application.

If you disagree with the defendant's application, you can prepare your own affidavit explaining why you disagree. You should annex (attach) copies of any relevant documents. Relevant documents could include: 

• ​​the affidavit of service if the statement of claim was not served by the court​
  
• copies of any Australian Securities and Investments Commission (ASIC) or Office of Fair Trading searches about the address of a business
  
• evidence of the debt, such as contracts and invoices. 
  

You will need one form: 

• Form 40 Affidavit 

You can get a copy of the affidavit form from: 

• ​​the Local Court or
  
• the Uniform Civil Procedure Rules (UCPR) website.  

You can also complete and file this form online using the NSW Online Re​gistry​.

You need to swear or affirm the affidavit section in front of an approved witness, a lawyer or Justice of the Peace (JP).  For more information about where to find a Justice of the Peace, see Find a JP on the Department of Communities & Justice website.

You should try to serve your affidavit on the defendant before the day of the hearing. You can give a copy of your affidavit to the registrar or magistrate at the hearing.

The hearing will be before a registrar or magistrate. 

If you have prepared an affidavit, you should give a copy to the defendant or their lawyer if you have not already done so. You should also tell the registrar or magistrate that you have prepared an affidavit and give it to the court officer to hand to them, if you have not already filed it.

To have the default judgment set aside the defendant must show the court that:

• ​​​​there is a good reason why they did not file a defence within 28 days
  
• they have a bona fide (genuine) defence
  
• they applied to set aside default judgment as soon as they became aware of it. 
  

​A good reason for not filing a defence within 28 days might be that:

• ​​​the statement of claim form was served by post and the defendant never received it
  
• the statement of claim form was served at the wrong address​
  
• the defendant was sick, in hospital or overseas
  
• the defendant gave instructions to a lawyer who failed to file a defence in time. 
  

The defendant must provide facts to the court to show that they have a genuine defence that is reasonably arguable in the circumstances. For example:

• ​the debt is not owed
  
• the amount claimed is disputed
  
• the debt has already been repaid.
  

If the application to set aside the default judgment is refused 

If the court does not set aside the default judgment, your judgment stays in place and you can continue to take action to enforce the judgment.  For more information, see Enforcement.

If the application to set aside the default judgment succeeds 

If the default judgment is set aside, the court will usually order the defendant to file a defence within 14 to 28 days. If the defendant does not file a defence in this time, you can file a new application for a default judgment.  For information about applying for default judgment, see Step by step guide - Applying for default judgment.

If the court decides that it is the defendant's fault for failing to file a defence within 28 days, the court may order them to pay your 'costs thrown away'. This could be the cost of any enforcement action you may have already taken.  

Where the other party shows that they did not receive the statement of claim form or that service was faulty, you may be ordered to pay their costs. The court can also order that:

• 'each party bear their own costs' which means that each party has to pay their own legal costs
  
• 'no order as to costs' which also means that each party will have to pay their own costs
  
• 'costs reserved' or 'costs in the cause' which means that the costs of the application to set aside the default judgment will not be decided until the case is finished.