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I Have Been Served with Court Proceedings – Can I Ignore?

By 1 April 2016Business
court proceedings

It is an all too common mistake that when Court proceedings are commenced and served on a person or company, the documents are ignored. This may be for a multitude of reasons including that a party disagrees with what is being claimed or believes the claims to be false. Whilst this may be the case, if you do not obtain appropriate legal advice and respond to the Court proceedings, you may be left in a precarious situation.

What can happen if I ignore the court proceedings?

In Queensland, the Uniform Civil Procedure Rules 1999 largely govern the civil litigation process. If you and the other party are unable to resolve the matter, the other party (the Plaintiff) may commence proceedings in a Court by way of a Claim and Statement of Claim.

When a Claim and Statement of Claim is filed at the Court and served on you, you have twenty-eight (28) days from the date of service to file a Notice of Intention to Defend and Defence. If you fail to file a Notice of Intention to Defend and Defence within the twenty-eight (28) time period, the Plaintiff may apply for Default Judgment against you. Should the Plaintiff be successful in their request for Default Judgment, this has very serious consequences for you.

Default judgment has been obtained against me – can it be removed?

A Default Judgment can only be removed if it is set aside. This involves you making an Application to the Court. It is important to understand that the Default Judgment will not automatically be set aside, but rather the power of the Court to do so is discretionary.

The Court may decide to set aside Default Judgment:

  • if the Judgment was obtained irregularly, for example, where the Claim and Statement of Claim was not served on you properly.
  • if the Judgment was obtained without any irregularity, if:
  • you give a reasonable excuse for failure to file a Notice of Intention to Defend;
  • there was no unnecessary delay in bringing the Application to set aside the Default Judgment; and
  • you have a reasonably arguable defence.

In the event that the Court does not set aside the Default Judgment, the Judgment will lie on your credit record and may affect your ability to apply for finance into the future.

Default Judgment has been obtained and I have paid the monies in full – can it now be removed?

If you satisfy the Default Judgment it does not automatically remove the Judgment from your records. It just means that the Plaintiff will not enforce the Judgment against you by actions such as applying to the Court to garnish your wages or seize your property.

It is a common misconception that when the debt is satisfied a Notice of Discontinuance can be filed to discontinue or withdraw Court proceedings, and that the Judgment would then be removed from your record. This is not the case.

A Judgment will remain on your credit record for a period of five years.

It is an internal policy of the Courts to not accept a Notice of Discontinuance in circumstances where a Judgment has been obtained. Instead what you must do is notify the Court that the claim has resolved. The only way to remove the Judgment from your record would be to apply to have it set aside or to wait 5 years for it to fall off your record.

Given the impact that a Judgment can have on not only your immediate, but also your long term, financial future, it is critically important to not allow this twenty-eight (28) day window to pass you by.

McNamara Law has over 70 years experience assisting people with Claims and please feel free to contact us on 13 58 28 if we can assist.