Default judgments: Tips and traps for plaintiffs and defendants

When a defendant fails to file a defence on time, a plaintiff may be able to obtain a default judgment without the need for a full trial. In some cases, this can be done through a simple administrative application. However, a default judgment is not always straightforward or final.

For both sides, this raises two questions: under what circumstances can a plaintiff ensure a default judgment is effective, and how can a defendant avoid its consequences?

Two recent decisions of the Victorian Supreme Court provide useful examples (and some cautionary tales) of default judgments and attempts to set them aside.

How can a plaintiff apply for a default judgment?

A plaintiff can seek a default judgment if the defendant does not file an appearance or defence within the required timeframe. The required time frame varies depending on the circumstances, but for a claim issued and served in Victoria, an appearance is usually due within 10 days after service, and a defence within 30 days after service of a claim. This administrative process is conducted through an application to the Court registry, or by a formal application to the Court by way of summons.

To apply, the plaintiff must submit the forms required under the applicable Court rules (Rules) (which will vary between forums) and usually, a supporting affidavit setting out details of the basis of the application.

The Court expects plaintiffs to prove service and compliance with the applicable Rules . It will not allow a plaintiff rely on additional affidavit material to fix a weak or unclear pleading. Where equitable or declaratory relief is sought, the Court will be especially concerned to ensure fairness and compliance with the requirements of the Civil Procedure Act 2010 (Vic) (CPA) for a just, efficient and timely outcome.

Irregular vs regular default judgments

An irregular default judgment is one obtained in breach of the Rules or with a material defect. This may include, for example, where there is no proper proof of service, the wrong basis for judgment has been recorded, or judgment has been entered before the pre‑conditions have been met. A defendant is usually entitled to have an irregular judgment set aside ‘as of right’ and the Court does not need to look at whether the defendant has a good defence.

A regular default judgment is one entered in compliance with the Rules. A defendant does not have an automatic right to have it set aside. Instead, the Court has a broad discretion and will usually consider:

• whether there is an arguable defence
• the explanation for the default
• how quickly the defendant applied to set aside the judgment
• whether the plaintiff will suffer prejudice that costs cannot fix.

This is overlaid by the CPA, which requires the Court to promote the just, efficient, timely and cost‑effective resolution of the real issues in dispute. Conduct that wastes court time or delays proceedings can weigh heavily against a defaulting party.

Mace v Cavanagh: ‘Slap‑on’ judgment and irregularity

In Mace v Cavanagh [2025] VSC 311, the plaintiff obtained an interlocutory default judgment because the defendant did not file a defence (‘in default of defence’). Despite the first defendant filing an appearance, the judgment was incorrectly described as ‘in default of appearance’.

There were doubts as to whether the plaintiff’s affidavit in support of the default judgment application properly proved the defendant was in default. The plaintiff also obtained judgment without notifying the defendant, even though the defendant had made attempts to defend the case.

Why was the judgment set aside?

The Court found that describing the judgment as ‘in default of appearance’ when an appearance had in fact been filed, was not a technical defect that could be overlooked, particularly having regard to the justice of the situation.

On that basis, the judgment was treated as irregular and set aside as of right.

The associate judge then asked: What if it had been regular? She went on to consider the usual factors and concluded she would still have set it aside because:

• the defendant had an arguable defence on the merits
• the default was largely due to human error and confusion over filing, rather than a deliberate disregard of the proceeding
• the defendant had not been served with the default judgment and did not know it existed
• the plaintiff had ‘slapped on’ the judgment without warning and then took no steps in the proceeding for a long period.

The Court ordered the plaintiff to pay the defendant’s costs of the set‑aside application on the basis of the irregularity of the default judgment application.

Refuse to Lose v Kostakis: Strategic default, CPA and indemnity costs

In Refuse to Lose Pty Ltd v Kostakis [2026] VSC 5, the plaintiffs sued over alleged misrepresentations and other conduct in the context of a sale of business.

The defendants repeatedly failed to file a defence, despite court orders and extensions agreed by the plaintiffs. Simultaneously, they were interacting with the Court regarding other aspects of the case, including seeking access to sale proceeds that were being held under a freezing order. Eventually, the plaintiffs obtained leave to enter default judgment in default of defence, with damages and compensation to be assessed at a later hearing.

The defendants then applied to set aside the judgment and to vary the freezing order so they could fund their defence.

How did the Court deal with the set‑aside application?

Unlike Mace, there was no technical defect in how judgment was obtained. Service was proper and the Rules were complied with. The judgment was regular.

The Court therefore applied the well‑known test for setting aside a regular default judgment giving weight to the purposes of the CPA:

• merits: The defendants had at least arguable defences on some liability issues and accepted breach of duty on others, but foreshadowed expert evidence on causation and quantum
• explanation: The defendants blamed lack of funds. However, the evidence showed they chose to spend time and resources on other applications while ignoring orders to file a defence, even though much of the work had already been done. The judge saw this as a deliberate litigation strategy
• delay: The set‑aside application was made relatively promptly after judgment, but it followed a significant history of non‑compliance and delay
• prejudice: the prejudice to the defendants if the default judgment was not set aside had to be balanced against the prejudice to the plaintiffs if the judgment was set aside. The prejudice to the plaintiffs included delay and further cost, which would likely reduce the assets available to meet any judgment (which were already limited). The Court found the defendants’ conduct was both contrary to the CPA, and weighed against a finding that setting aside the judgment was in the interests of justice.

What were the costs consequences?

On costs, the Court took a firm line:

• the defendants were ordered to pay the plaintiffs’ costs of the unsuccessful set‑aside application on an indemnity basis
• the plaintiffs also obtained their costs of the freezing order variation application on the usual (standard) basis.

The indemnity costs order reflected repeated failures to comply with orders, a long history of inefficient interlocutory fighting and a weak explanation for the default.

When can you apply for a default judgment, and when can it be set aside?

The above cases provide useful guidance for both plaintiffs and defendants.

For plaintiffs seeking a default judgment

A default judgment should only be sought when:

• service is clearly proven
• the time to appear or defend has genuinely expired
• the statement of claim alone justifies the relief you want.

Avoid applying if you know the defendant is engaged (for example, requesting particulars, negotiating, clearly indicating they intend to defend), unless you have given a clear warning and a reasonable opportunity to comply. In those circumstances, it may be preferable to approach the Court for directions before seeking default judgment.

For defendants seeking to set aside a default judgment

The threshold for setting aside a default judgment depends on whether the judgment is irregular or regular:

• an irregular default judgment can be set aside as of right, without detailed consideration of the merits of the defence
• a regular default judgment can be set aside at the Court’s discretion, but will generally require an affidavit addressing the merits of the defaulting party’s defence and a reasonable explanation for the default. Promptness and prejudice are key considerations (consistent with the provisions of the CPA), and delay and poor conduct will count heavily against the defaulting party.

Overall, the contrast between the two cases is useful. In Mace, a technical but real defect and ‘slap‑on’ behaviour tipped the balance towards the defendant. In Refuse to Lose, chronic non‑compliance with orders and the CPA, and a strategic choice not to defend, meant the judgment was not set aside despite arguable defences.

If you are considering applying for a default judgment or need assistance with setting aside a default judgment, please contact us here.

Disclaimer
The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.

Published by:

Alana Giles

Stephanie Davies

Alex Lightfoot

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