A plaintiff is able to apply for default judgment when a defendant fails to file an appearance (where applicable) or a defence within the time prescribed by the relevant rules. In Victoria, judgment in default of defence is governed by Order 21 of both theSupreme Court (General Civil Procedure) Rules 2015 (Vic) and the Magistrates’ Court General Civil Procedure Rules 2010 (Vic). Equivalent provisions exist in other Australian jurisdictions.1
Ordinarily, a plaintiff is entitled to make an application to the court for default judgment, without further notice, after the expiration of the days prescribed by the rules. A plaintiff’s entitlement to apply for default judgment becomes less clear when the defendant has informed the plaintiff that they have received the originating process (usually a writ or complaint), and disputes some or all of the allegations. In these circumstances, a question arises as to whether the plaintiff is entitled to apply for judgment without further notice, or is required to respond and engage with the defendant. In some circumstances, applying for default judgment will be considered to be an application made in bad faith, and will be vulnerable to being set aside, on application of the defendant.
The issue of bad faith arises when the plaintiff or their legal advisors are aware that the defendant intends to defend the claim and there is a defence on the merits, but nevertheless applies for judgment without warning the defendant of their intention to do so. Making an application quickly is colloquially known within the legal profession as “snapping on judgment”. In Hogg v J Isherwood-Hicks2, Kearney J found that the practice of “snapping on judgment”, without notice, immediately upon the expiration of a period prescribed by the rules, should be strongly deprecated, as it served no useful purpose and increased the costs of litigation unnecessarily (given the defendant will likely set the judgment aside to continue the dispute).
However, not all judgments applied for hastily will be viewed negatively by the court, even if the defendant has contacted the plaintiff. For example in Gunns Finance Pty Ltd (R & M Appntd) (In Liq) v Storey & Anor.3 the Supreme Court of Victoria found that it was justifiable for the plaintiff to apply for judgment without further warning against a self-represented litigant. In that case, the defendant had merely made enquiries via email about the claim, without indicating his intention to defend the matter. The Court found that, had the defendant made his intention to defend the matter clear, default judgment would have likely been removed. The Court found that the plaintiff was entitled to apply for judgment without further notice in these circumstances, as the defendant failed to follow up the enquiries. In the circumstances, the plaintiff had not acted in bad faith as the actions of the defendant did not provide any indication that he intended to defend the matter.
Conversely, if both parties are represented by solicitors, it may not be appropriate to enter judgment in default of appearance without first warning the defendant’s solicitor.4 This is especially relevant when a plaintiff is aware that the defendant is represented and the defendant has made their intention to defend the matter clear, and nonetheless the plaintiff applies for default judgment, without further warning. In Mark French v Triple M Melbourne Pty Ltd5, Bongiorno J, found that an oversight by the defendant’s solicitor (their failure to lodge a defence within 21 days) did not entitle the plaintiff to apply for default judgment without further warning. The Court viewed snapping on judgment in this manner as a negative practice and considered the judgment obtained in bad faith and as a result, the Court set that judgment aside.
Overall, the court is likely to consider the individual circumstances of each matter and assess whether the plaintiff has acted in bad faith by snapping on judgment; however the overriding attitude of the court is that if a plaintiff is aware that the defendant intends to defend the matter, applying for judgment without further notice is bad practice. A plaintiff not only risks the judgment being removed, but also risks an adverse costs order associated with the costs incurred by the defendant in having judgment set aside. Further, the Civil Procedure Act 2010 (Vic) requires litigants to comply with certain overarching obligations, including a requirement to resolve disputes justly, quickly and efficiently.6