Two kinds of judgment are entered without the losing party being heard on the merits: a default judgment, entered because no notice of intention to defend or no defence was filed, and an ex parte judgment, given at a hearing the party did not attend. Both are regular if the Rules were followed, and both can be undone, but by the court that made them.
Apply to the National Court first
The National Court may, on terms, set aside or vary a judgment entered in default, or given in the absence of a party, or an order made in the absence of a party. The application is by notice of motion with an affidavit.
The Supreme Court set out the matters that go to the discretion on an application to set aside a default judgment under Order 12 Rule 8: whether the judgment was regularly entered, the explanation for the default, whether the application was made promptly, and whether there is a defence on the merits shown by affidavit. It also distinguished an irregularity that takes the judgment outside the Rules, which entitles the defendant to have it set aside, from a mere irregularity within them: Hannet v ANZ Banking Group (PNG) Ltd (1996) SC505.
The reasons the Supreme Court sends parties back are practical. The National Court can hear the evidence explaining the absence and the proposed defence; an appeal is a rehearing on the record below, where there is no such evidence. And the appeal route asks whether the Judge erred on what was before the Judge, which, when one side was absent, is usually nothing. An appeal filed instead of a set-aside application is met with an objection to competency or dismissed as an abuse of process.
What the affidavit must show
| Matter | What is needed |
|---|---|
| Regularity | Whether the writ or notice of hearing was served; if not, the judgment is irregular and is set aside as of right |
| Explanation | A reasonable explanation for the absence or default, with dates and documents |
| Promptness | The application was made as soon as the judgment came to the party’s notice |
| Merits | A draft defence, and facts showing it is arguable, not a bare denial |
| Prejudice | What the other side loses if the judgment is set aside, and any terms offered, such as costs or payment into court |
Appealing the refusal to set aside
If the National Court refuses to set the judgment aside, the refusal is a decision made in the exercise of a discretion, and the Supreme Court reviews it on the Curtain Bros principles: it interferes only where there is an identifiable error or the result is plainly unjust. In Smith v Ruma Constructions Ltd (2002) SC695 the Court held that on an application to set aside a summary judgment the Judge applies the set-aside principles, not the principles of an appeal from the judgment, and that an appeal from the set-aside decision is an appeal from a discretionary judgment. A refusal to set aside a default judgment is interlocutory, so leave is required under section 14(3)(b) of the Supreme Court Act; a decision that finally disposes of the action may be appealed as of right. See how the Supreme Court reviews a Judge’s discretion and whether you need leave to appeal.
Ex parte interlocutory orders
The same logic applies to an interlocutory order made ex parte, such as an injunction granted without notice. Order 12 Rule 8(3) allows the National Court to set aside or vary an order made in the absence of a party, and the party affected should apply to the Judge who made it, or to the Motions Judge, at the first opportunity. An appeal against an ex parte interlocutory order needs leave under section 14(3)(b) and is rarely granted while the set-aside route remains open.
Time limits
Section 17 of the Act gives 40 days from the judgment to appeal or seek leave, and applying to set aside does not stop that clock. Where the set-aside application will not be decided within 40 days, file a protective application for leave or notice of appeal, or apply to a Judge within the 40 days for an extension under section 17. See extending time to appeal.
Enforcement meanwhile
A default judgment is enforceable immediately. Ask the National Court for a stay of execution when filing the set-aside motion; if an appeal is on foot, section 19 of the Act and section 5(1)(b) allow the Supreme Court or a Judge to stay. See what the Court considers on a stay application and appealing an interlocutory order.
Sources
Before relying on anything here, read the current text of the Supreme Court Rules 2012 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.