Default judgment: how it happens and how to set it aside.

What is default judgment?

When a defendant is served with a statement of claim and does not file a defence within twenty-eight days, the plaintiff can ask the court to enter judgment in their favour. That is default judgment. There is no hearing and no examination of the merits. The court enters judgment because the claim was not defended, on the assumption that an undefended claim is admitted.

This is general information, not advice on your matter. Whether a default judgment can be set aside depends on the facts, and the application has its own rules and deadlines. If a default judgment has been entered against you, act quickly, because delay is one of the things the court holds against a defendant who wants it undone.

How is default judgment entered?

For a claim for a fixed sum, called a liquidated claim, the plaintiff can obtain default judgment more or less as a matter of course by filing the right forms and proving service. For an unliquidated claim, where the amount has to be assessed, the court enters judgment on liability and then assesses the amount. Either way, the trigger is the same: the defendant did not respond in time.

This is why proof of service matters so much. The plaintiff has to satisfy the court that the defendant was properly served, because default judgment rests on the defendant having had the chance to defend and not taken it. If service was defective, the whole foundation of the judgment is shaky, and that is often the strongest ground to set it aside.

What does a default judgment mean for the debtor?

A default judgment is a real judgment. It is enforceable straight away, which means the plaintiff can take enforcement action such as a garnishee order against wages or a bank account, a writ against goods, or an examination to find your assets. Our guide on enforcing a judgment debt sets out those tools. A judgment can also be recorded and affect your credit.

Many people first learn of a default judgment when enforcement starts, or when it shows up on a credit check. That is often because the statement of claim was served at an old address, or left somewhere it was never seen. If that happened to you, the fact you never actually knew about the claim is central to any application to set the judgment aside.

How do you set aside a default judgment?

You apply to the court, by a notice of motion supported by an affidavit, to set the judgment aside. The court has a broad power to do so on terms it thinks fit. In deciding, it looks at three things: whether you have a genuine defence on the merits, whether you have a reasonable explanation for not responding in time, and whether the plaintiff would be unfairly prejudiced by reopening the matter. A genuine defence is usually the most important of the three.

The explanation matters too. A defendant who was never properly served, or who was in hospital, or who was genuinely unaware of the claim, has a strong reason. A defendant who received the claim, ignored it, and only acted when enforcement started has a weaker one. Courts lean towards deciding cases on their merits rather than by default, so a real defence combined with a fair explanation usually succeeds, though often on terms such as paying the plaintiff's wasted costs.

How quickly do you have to act?

Move fast. Delay is held against you, because the longer a judgment stands, the more the plaintiff has relied on it and the more disruptive it is to unwind. There is no fixed cut-off in every case, but an application made within days or weeks of learning of the judgment is far stronger than one made months later with no explanation for the wait.

If enforcement has already started, you can ask the court to stay it while your set-aside application is heard, so that your wages or bank account are not taken in the meantime. That is another reason to act at once rather than wait. The moment you learn of a default judgment you dispute is the moment to get advice.

How do you avoid default judgment in the first place?

The simplest protection is to respond to any statement of claim within the twenty-eight days, even if only to file a holding defence or seek time to get advice. Our guide on being served with a statement of claim sets out the options. Keeping your address up to date with anyone who might sue you, and opening your mail, also prevents the common trap of a claim served at an old address.

For a plaintiff, the lesson is the opposite. A default judgment obtained on shaky service is a judgment that can be set aside later, after you have spent money enforcing it. Serving properly and proving it by affidavit protects the judgment. A judgment that cannot be undone is worth far more than a fast one that can.

Primary sources: default judgment and setting aside are governed by the Uniform Civil Procedure Rules 2005 (NSW), in particular the default judgment rules in Part 16 and the power to set aside in rule 36.16, together with the Civil Procedure Act 2005 (NSW). NSW decisions on setting aside default judgment are searchable on JADE.

Common questions

What is default judgment in NSW?

It is judgment entered against a defendant who did not file a defence to a statement of claim within twenty-eight days. There is no hearing; the court enters judgment because the claim was not defended. It is enforceable straight away, like any judgment.

How do you set aside a default judgment?

You apply to the court by notice of motion supported by an affidavit. The court looks at whether you have a genuine defence, whether you have a reasonable explanation for not responding in time, and whether the plaintiff would be unfairly prejudiced. A genuine defence is usually the most important factor, and relief often comes on terms such as paying wasted costs.

How long do you have to set aside a default judgment?

There is no single fixed deadline, but you should act as fast as possible. Delay is held against you, because the longer the judgment stands the more the plaintiff has relied on it. An application made within days or weeks of learning of the judgment is far stronger than one made months later.

What can a creditor do with a default judgment?

Enforce it. The creditor can seek a garnishee order against your wages or bank account, a writ against your goods, or an examination to find your assets. A judgment can also be recorded and affect your credit. This is why many people first learn of a default judgment when enforcement starts.

How do you avoid a default judgment?

Respond to any statement of claim within twenty-eight days, even if only to file a holding defence or ask for time. Keep your address current with anyone who might sue you, and open your mail, because many default judgments follow service at an old address that the defendant never saw.

To speak to a litigation lawyer, call Aaron Kernaghan on 0421 717 019.

This article is written by Aaron Kernaghan, Special Counsel at Good Legal Lawyers, as at 30 August 2026. It is general information and reflects the personal opinion of the author only. It is not legal advice, it is not a substitute for advice on your own matter, and it does not purport to be accurate or complete. The law changes and procedure varies from case to case. For advice on a specific matter, contact Aaron Kernaghan on 0421 717 019 or contact the firm.

More commentary by Aaron Kernaghan.

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