Default judgment

Australia

Australia

Default judgment can be applied for in proceedings in any court where a defendant does not:

  • file a defense within the specified timeframe after a statement of claim has been served; or
  • fails to make an appearance at a hearing.

Once a default judgment is ordered against a defendant, a defendant can, in limited circumstances, seek to challenge the granting of judgment by default. The defendant will need to file an application or motion to set aside the default judgment within a specified period of time and show cause for why (usually lack of notice of the claim or that notice was given of intent to defend but that notice was not brought to the attention of the court which granted the default judgment) the judgment should be set aside.

Last modified 19 Jul 2019

Austria

Austria

In the event that the defendant does not appear at the first oral hearing or does not file its statement of defense on time, the claimant can request a default judgment. In such a case, the remedies sought by the claimant will be granted unless the court considers them to be clearly unfounded. The defendant can appeal within 14 days after it has been notified of the judgment.

Last modified 19 Jul 2019

Bahrain

Bahrain

Bahrain courts allow for a default judgment to be entered into where a defendant is properly summoned but fails to appear before the competent court without valid reason. The law does not provide guidance on what constitutes a valid reason in such circumstances and therefore is determined on a case by case basis. 

Despite entering a default judgment, the court will analyze the merits of the claim to reach a judgment. 

In circumstances where a party was absent when a judgment was given, and the party seeks to appeal that judgment, the timeframe for an appeal will commence on the date the party was personally notified of the judgment by the clerk of the competent court at their place of residence, or a chosen domicile by registered mail.

Last modified 19 Jul 2019

Belgium

Belgium

If the claimant does not appear in court at the introductory hearing, the judge can simply deny their claim. However, if the defendant does not appear at the introductory hearing, the judge is obliged to thoroughly analyze the merits of the claim before granting the judgment. The judge will, in these circumstances, analyze issues of liability and quantum and may, for example, reduce the quantum where the amount specified in the claim is unreasonable. The judge may not, however, analyze issues relating to the territorial jurisdiction of the court or the procedure to commence the claim. 

Furthermore, a default judgment cannot be rendered against a party that submits a written pleading, even if it does not appear in person before the court. Once a party files its written pleading, the judge is obliged to address the issues raised in the pleading in its judgment.

The defendant may object to and/or appeal a default judgment on points of fact and law. An objection (i.e. an opposition which may result in the judge that issued the default judgment reconsidering its decision) will suspend the execution of the default judgment, except when a default judgment expressly orders the claimant to execute it. Conversely, an appeal does not suspend the execution of the default judgment. Recent reforms looking to reduce the workload of Belgium’s courts have limited the instances in which a default judgment can be objected to. This is now limited to claims that do not exceed the thresholds for appeal, namely EUR1,800 for the Justice of the Peace and EUR2,500 for the Tribunal of First Instance and the Court of Commerce. Cases: (i) where the quantum in dispute exceeds these thresholds; (ii) that cannot be quantified; or (iii) that pertain to the termination of contracts, cannot be objected to and may only be appealed. The timeframe to appeal a default judgment is one month from the service of the judgment.   

Last modified 19 Jul 2019

Brazil

Brazil

Default judgments can be applied for in proceedings in any court when a respondent does not file a defense within the relevant time period (as long as the respondent has been duly served). As a result of such failure, and except in cases such as those specified below, the allegations formulated by the plaintiff will be presumed to be true. The judge will continue with the proceedings on that basis, consider the merits of the plaintiff’s claim, and ordinarily rule in the plaintiff’s favor provided that the plaintiff discharges its burden of proof. 

The presumption that the plaintiff’s allegations are true does not arise every time that the respondent has been duly served but fails to file a defense. For example, such presumption will not arise when the lawsuit deals with personal rights (such as the right to live), or when the plaintiff has not presented essential documents and information to persuade the judge on the strength of its claims. In the latter case, the judge will order the plaintiff to specify the evidence it intends to present. 

On the other hand, even when a default judgment has been granted, the respondent can object to the default judgment before the court that granted it. Such objection will be made when there are issues related to the service of process, which can cause the entire lawsuit to be nullified from its beginning. 

Also, the respondent in default is allowed to participate in the lawsuit as long as it does not seek to modify measures that have already been adopted during the proceedings. For example, the respondent will not be able to file a defense once default judgment has been granted but will be able to present evidence to challenge plaintiffs’ allegations.

Last modified 19 Jul 2019

Canada

Canada

Where a defendant does not file a defense within the specified time in which to do so, a plaintiff may obtain judgment in the defendant’s absence (default judgment). The first step in this process is for the plaintiff to note the defendant in default for having failed to file a defense. Where a defendant is noted in default, the defendant is deemed to admit to all of the facts as out in the plaintiff’s claim, and the defendant is precluded from taking any further steps in the litigation (other than asking the court to set aside the noting in default). 

If the claim is uncomplicated and seeks payment of a specific and readily-quantifiable amount (as would be the case in a claim for non-payment of an invoice), then non-judicial court staff may grant default judgment. 

Where the claim is more complicated and/or where damages need to be assessed, the plaintiff will be required to bring a motion for default judgment. For the purpose of such a motion, and as mentioned above, the facts in the plaintiff’s claim are assumed to be true. Despite this, the plaintiff must still establish that the facts entitle the plaintiff to judgment (e.g. that the facts are sufficient to satisfy the appropriate legal test), and the plaintiff may be required to lead evidence to establish the quantum of damages. 

A defendant against whom default judgment has been ordered may seek to set aside the default judgment. To be successful on a motion to set aside default judgment, the defendant must:

  • bring the motion without delay after learning of the default judgment;
  • explain the circumstances for failing to defend the claim within the time for doing so; and
  • show an arguable defense to the claim.

Last modified 19 Jul 2019

Chile

Chile

In Chile, default judgments are uncommon and they only apply in one specific proceeding. This specific proceeding is known as “summary” and its main characteristic is the suppression of certain elements of the “ordinary” civil proceeding, as for example all the writs that must be filed in the discussion stage after the claim filing (in this case all the discussion stage is encompassed in a single audience). If the defendant does not respond the plaintiff’s claim within five days of the claim being served, the plaintiff can request a default judgment which will be granted if the plaintiff successfully argues there are grounds for it. 

Therefore, in the event that the defendant does not file a response, the general rule is that all proceedings continue under the presumption that the defendant denies some or all of the plaintiff’s claims, with the consequence that all the plaintiff’s claims must be proven.

Last modified 14 Jan 2020

China

China

Pursuant to Articles 143, 144 and 145 of the PRC Civil Procedure Law, the court may enter into a default judgment when:

  • a defendant refuses to appear in court without justifiable reasons after being summoned or leaves the courtroom during the oral hearing without permission from the court;
  • if the defendant has filed a counterclaim, the claimant refuses to appear in court without justifiable reasons after being summoned or leaves the courtroom during the oral hearing without permission from the court; and
  • the claimant requests withdrawal of the action before a judgment is made, but the court decides not to grant the withdrawal and the claimant refuses to appear in court without justifiable reasons after being summoned.

If the default judgment is issued by the first instance court, the party against which the default judgment is imposed may appeal. As the judgments issued by second instance courts are generally final, a default judgment issued during an appeal process will not usually be subject to challenge. That said, if there is any procedural defect with a default judgment (e.g. the party has not been served with a summons), the party may challenge the default judgment by applying for a retrial.

Last modified 19 Jul 2019

Finland

Finland

Where a defendant fails to deliver its written statement of defense before the deadline set by the court, the relief sought by the plaintiff will be awarded in a default judgment. In the default judgment, the court will award the relief sought by the plaintiff in the statement of claim ,unless the relief in question is evidently unfounded.

Default judgments may also be awarded at the request of either party if the opposing party does not attend the hearing. However, a default judgment: (i) against the plaintiff will not be awarded where the claim is evidently well-founded; and (ii) against the defendant will not be awarded where the claim is evidently unfounded.

The party against whom the default judgment has been rendered has the right to appeal it in the court that awarded the default judgment within 30 days of the date on which the appealing party received verifiable notice of the default judgment.

Last modified 19 Jul 2019

France

France

Where a defendant does not appear in proceedings (i.e. does not answer to the summons itself or fails to bring forward an attorney to represent it, when representation by an attorney is mandatory), the court will issue a decision on the sole basis of the evidence presented by the claimant.

A defendant facing a default judgment may file an opposition before the court which issued the default judgment within a month of the notification of the default judgment to the defendant and within three months if the defendant resides abroad. This opposition from the defendant will result in the proceedings being reopened.

Last modified 19 Jul 2019

Germany

Germany

If the defendant does not appear in court (or fails to put forward an attorney or to file a statement of defense), the claimant will be awarded judgment in default unless the claim prima facie appears to be without any legal basis (sections 331 et seqq. ZPO). A defendant confronted with a default judgment has the option to object. The objection must be filed within two weeks of the default judgment being served on the defendant, causing the case to be reopened.

Last modified 19 Jul 2019

Hong Kong, SAR

Hong Kong, SAR

Default judgments can be applied for in civil proceedings in the District Court and the Court of First Instance where a defendant does not:

  • give notice of intention to defend; or
  • serve a defense, within a prescribed time limit.

A defendant may apply to set aside or vary a default judgment if it was irregular in any respect or if the defendant can show that it has a meritorious defense to the claim and that there is a reasonable explanation for why the judgment was allowed to go by default in the first place. In considering whether to set aside a regular default judgment, the court will take into account all the circumstances and may only make a setting aside order with terms imposed on the defendant (for example, requiring the defendant to pay all or a part of the sum(s) being claimed by the claimant into court).

Last modified 19 Jul 2019

Hungary

Hungary

If the defendant fails to submit its written defense within 45 days after receiving the statement of claim (and it has not obtained an extension from the court allowing it to file its written defense at a later date), then the court will issue a default judgment ex officio. Note that a placeholder defense which lacks specific arguments, or a statement that generally disputes the claim but does not contain any specific substantial or procedural defense, will not qualify as a formal defense and so will not prevent default judgment being issued.

The default judgment will mirror the statement of claim i.e. the court will grant the remedies requested by the plaintiff.

When issuing a default judgment, the court will not examine the merits, it will only consider whether there are any formal or procedural reasons to reject the claim.

The court serves the default judgment on the defendant, who then has 15 days to object. During this period, the default judgment will be suspended, meaning that it will only become effective and binding if none of the parties object to it within this timeframe. If the defendant wishes to object to the default judgment, it must submit its written defense brief along with its objection, otherwise the objection will be invalid. If a valid objection is filed, the default judgment will not become effective and the case proceeds as normal.

Once a written defense has been submitted, a default judgment may no longer be issued. However, the parties remain obliged to appear in proceedings, and failure to do so is sanctioned as follows:

  • where none of the parties appear at the preparatory hearing, the court will terminate the proceedings ex officio; and
  • where only one party appears at:
    • a preparatory hearing and that party does not request that the hearing goes ahead without the other party attending, the court will again terminate the proceedings ex officio;
    • any hearing (whether it is during the preparatory or substantive stage of proceedings), then the party that failed to appear is deemed (i) not to object to any statement made at the hearing by the party who was present; and (ii) to have no wish to make any further statements or motions at that point. Note that this is one of the provisions in the new Code of Civil Procedure, which is hard to interpret in practice. An extreme interpretation of the rule would be that, in the absence of the other party, the court would have to accept any statement made by the party which is present, no matter how absurd that statement is. It is also unclear from the new code whether the party that did not attend the hearing is deemed not to contest the statements at the hearing, or not to contest them at all.

Last modified 19 Jul 2019

Italy

Italy

If the defendant does not appear before the court at the date set in the writ of summons or at the date otherwise specified by the judge, the court will verify whether the claim was properly served. If proper service can be established, the judge will declare the defendant's contumacy (i.e. the defendant's failure to appear to contest an action). Despite the defendant's contumacy and lack of participation in the proceedings, the claimant is still required to prove its case. A judge will thus assess the merits of the claimant's claim and issue a judgment if the claimant discharges its burden of proof. The judgment will then be served on the defendant, who can appeal it according to the general rules governing appeals.

Last modified 19 Jul 2019

Ireland

Ireland

Default judgment can be applied for in circumstances where a defendant has failed to:

  • enter an appearance within 8 days of the claim being served, or such other time as the court has ordered; or
  • deliver a defence, generally within 28 days following service of the statement of claim (however in practice a defendant may seek to extend the deadline, e.g. by issuing a Notice for Particulars).

A defendant who has failed to deliver a defence must be put on notice that default judgment will be sought (and the court can grant an extension of time to allow a party to file its pleading).

A defendant may also apply for an action to be dismissed if:

  • the claim brought is frivolous or vexatious; or
  • there is no reasonable cause of action.

The effect of a default judgment is the early determination of the claim. Once a default judgment is ordered against a defendant, a defendant can, in limited circumstances, seek to challenge the granting of judgment by default. Generally this will involve demonstrating some irregularity in the proceeding or arguing that it is in the interests of justice. Even if the judgment in default is set aside, there can still be costs implications.

Last modified 27 May 2021

Japan

Japan

If the defendant neither appears at the first hearing nor files a written answer at court, the claimant’s claim will be accepted by the court and a default judgment could be rendered. The defendant may appeal against a default judgment.

Last modified 19 Jul 2019

Kuwait

Kuwait

In the event that the defendant does not appear at the initial hearing or seeks more time to arrange for legal representation, the court will adjourn the hearing for a period of one to three weeks. The courts will not typically order an adjournment more than once for the same reason. Therefore, if a defendant fails to attend hearing dates on multiple occasions without good reason, the court will assess the merits of the claim and either dismiss the claim or render a judgment by default. A default judgment may be appealed causing the matter to be re-examined by the Court of Appeal. The timeframe for appealing default judgments is 30 days for civil claims and 15 days for summary and rental courts.

Last modified 19 Jul 2019

Mexico

Mexico

In the event that a defendant does not appear and hence does not take part in the proceedings, the trial will continue without the defendant’s presence (juicio en rebeldia). The party that did not appear during the proceedings has the option to object the default judgment in an appeal.

Last modified 19 Jul 2019

Netherlands

Netherlands

If a defendant does not appear in proceedings (i.e. it fails to bring forward an attorney representing it), then in principle default judgment will be awarded, unless prima facie the claim appears to be without any legal basis.

A defendant confronted with a default judgment has the option to object. The objection must be filed with the court that has delivered the default judgment.

Last modified 19 Jul 2019

New Zealand

New Zealand

Default judgment can be applied for in proceedings in any court where a defendant does not: (i) file a defence within the specified timeframe after a statement of claim has been served; or (ii) fails to make an appearance at a hearing. Once a default judgment is ordered against a defendant, a defendant can, in limited circumstances, seek to challenge the granting of judgment by default. The defendant will need to file an application or motion to set aside the default judgment within a specified period of time and show cause for why the judgment should be set aside (usually lack of notice of the claim or that notice was given of intent to defend but that notice was not brought to the attention of the court which granted the default judgment).

Last modified 20 Dec 2019

Norway

Norway

Norwegian courts may give a judgment in default if a party fails to adhere to a time limit set for a procedural step, e.g. submit a defense, or fails to attend a court hearing. A judgment in default may be challenged by way of an application for reinstatement. An application for reinstatement must be made within one calendar month from the date of the service of the default judgment.

The threshold for granting an application for reinstatement is very high.

Last modified 19 Jul 2019

Poland

Poland

According to the CPC, the court will issue a default judgment if:

  • the defendant fails to appear at a trial or if he / she appears but takes no active part in the trial; and
  • the court has no reasonable doubts about the veracity of the claimant’s allegations or described facts and they are not designed to circumvent the law.

A defendant, against whom a default judgment has been issued, may file a statement of opposition within two weeks of the judgment being served. A claimant may also appeal the default judgment if the relief sought in the statement of claim is not granted entirely by the court.

Last modified 19 Jul 2019

Qatar

Qatar

Where the statement of claim has been personally served on a defendant and that defendant does not submit any documentary pleading in response to the statement of claim or otherwise fails to appear in court after having been summoned, the court will give its judgment in the absence of the defendant. The judgment will therefore be based on the court’s review and consideration of the evidence produced by the claimant alone. It is worth noting that as a means to compelling the defendant to participate in the proceedings, the defendant will be served with the summons personally or at its residence. If the bailiff is unable to locate the defendant, the bailiff will deliver the summons to the defendant’s representative, employee, spouse, relative or in-law. If the summons is not served on a defendant who subsequently fails to participate in the proceedings, the court will adjourn the case to a subsequent session and re-notify the defendant of the proceedings. Furthermore, even if service has been perfected on the defendant, there is scope under Qatari law for a party to have such judgments reconsidered in exceptional circumstances.

Last modified 19 Jul 2019

Romania

Romania

Failure by a party to respond to a claim does not prevent the judge from awarding judgment. The absence of the defendant is not considered an admission of the claim by the defendant. The claimant still needs to prove its case. The judge is required to consider the merits of the claim before granting the judgment, regardless of the defendant’s failure to respond to the claim.

In the event that both parties fail to take steps in the proceedings but neither of them has requested default judgment, the proceedings will be suspended. Default judgments are no different from any other judgments; they are subject to the ordinary and extraordinary means of appeal.

Last modified 19 Jul 2019

Russia

Russia

All parties are responsible for adhering to the relevant procedural actions and, as such, are expected to be proactive in the proceedings.

If a respondent, who has been duly notified of the proceedings, does not appear at the court hearing on the merits, the court may adopt a judgment in the respondent’s absence. The claimant, however, would still need to satisfy its burden of proof and present the necessary evidence to the court.

The respondent is entitled to appeal the judgment in the usual way (see further details under Appeals); however, the respondent cannot submit new evidence to the court of appeal unless it proves that it was unable to do so due to circumstances beyond its control.

If the claimant fails to appear at the court hearing twice without filing a motion to try the case in its absence and the respondent does not require the court to consider the case on its merits, the court may dismiss the claim without consideration.

Last modified 19 Jul 2019

Saudi Arabia

Saudi Arabia

If (i) the defendant or their representative is notified of the date of the hearing; (ii) the defendant or their representative gives the court a memorandum of defence prior to the scheduled hearing of the case; or (iii) the defendant appears at any of the hearings and then fails to appear again, the court shall rule on the case and the judgment shall not be deemed "in absentia" with respect to the defendant.

If the defendant or their representative is not notified of the date of the first hearing and the defendant fails to appear, the first hearing shall be postponed to a subsequent hearing of which the defendant shall be notified. If the defendant fails to appear again and again they were not notified directly, the court shall rule on the case and its judgment shall be considered "in absentia" with respect to the defendant.

The defendant has the right to appeal to the Court of Appeal within 30 days from the date of notifying the defendant of such a judgment.

Last modified 19 Jul 2019

Spain

Spain

If the defendant fails to appear before the court, it will be declared to be in default. However, the claimant cannot then automatically apply for a default judgment or a summary judgment. The proceedings will continue in the defendant’s absence and, in order for the claimant to succeed, it will need to prove the basis for its claim.

The defendant in default may only appeal the judgment rendered in its absence when there has been a breach of procedure or, in proceedings before the Provincial Court, because (i) there has been an incorrect interpretation or application of the law, or (ii) judgment was obtained in a proceeding that did not comply with the required formalities. The term to lodge such appeal is 20 working days:

  • from the notification of the judgment to the defendant in default if it had been personally notified of the judgment; or
  • from the day after the publication of the judgment in the official gazette if the defendant in default had not been personally notified of the judgment.

Last modified 19 Jul 2019

Sweden

Sweden

If a defendant fails to appear in the proceedings in person or through an attorney, the claimant may be awarded a default judgment. In the default judgment, the court will award the relief sought by the plaintiff in the statement of claim, unless the relief in question is evidently unfounded.

A defendant confronted with a default judgment has the option to object within one month to the court that has rendered the default judgment, in which case the matter will be re-opened.

Last modified 19 Jul 2019

Thailand

Thailand

A party may file for a default judgment if the defense is not filed within the prescribed deadline. The defendant has 15 days from the date of the default judgment to object and request a retrial.

Last modified 19 Jul 2019

UK - England & Wales UK - England & Wales

UK - England & Wales

Default judgment can be applied for in circumstances where a defendant has failed to file: 

  • an acknowledgement of service within 14 days of service of the claimant’s particulars of claim); or
  • a defence within 14 days of the claim being issued or, if an acknowledgment of service is filed, within 28 days of the acknowledgment of service.  

The effect of a default judgment is the early determination of the claim. A defendant may seek to resist an application for default judgment by challenging the basis of the application. However, as a default judgment application amounts to a recognition of procedural failings and that the relevant time period has expired, these are difficult to challenge.

Last modified 19 Jul 2019

UK - Scotland

UK - Scotland

Decree by default is available in Scotland where either party fails to comply with a procedural requirement such as failing to attend at a hearing. Decree in absence is available where the defender fails to indicate an intention to defend the claim in a timely manner. A decree by default may be appealed. However, an appeal will only be granted where it is “in the interests of justice” to do so. A defender can seek to have a decree in absence recalled (withdrawn) within seven days of the decree being granted in the Court of Session or prior to the decree being implemented in the Sheriff Court.

Last modified 19 Jul 2019

United Arab Emirates

United Arab Emirates

The DIFC and ADGM court rules allow a claimant to apply to obtain a default judgment where the defendant has missed the time limit to acknowledge the claim against it, or has acknowledged the claim but failed to file a defense.

Once default judgment has been granted, the defendant has no right to appeal the court’s decision. However, the defendant may apply to the court to have the judgment set aside or varied. There is no specific guidance provided by the ADGM or DIFC court rules in respect of when an application to set aside or vary a default judgment should be made. However, it is likely that the DIFC and ADGM courts would apply the principles established by the courts of England and Wales. Therefore, any such application should be made promptly. The courts of England and Wales have held promptness (in the context of the applicable provisions of the English CPR) to mean acting with “all reasonable speed in the circumstances.”

Last modified 19 Jul 2019

United States

United States

The complainant can apply for default judgment in any proceedings where a defendant does not file a defense within the specified timeframe after the complaint has been served. A defendant subject to a default judgment has the option to open and seek to vacate the judgment; though doing so usually requires the defendant to establish good cause for its earlier failure to appear.

Last modified 19 Jul 2019

Australia’s courts operate under the common law legal system. Australia has a federal system of government, with legislative power divided between the federal branch of government and six state and two territory governments (for ease, we refer collectively to the states and territories as the state or states). Australia’s courts are similarly divided into eight separate state jurisdictions and a federal jurisdiction, which each operate on a parallel but independent hierarchy of courts. State and federal courts broadly have jurisdiction over the application of legislation enacted by the state and federal parliaments respectively. The High Court of Australia is the ultimate court of appeal in Australia for all court systems. There are also tribunals created by specific legislation under state and federal jurisdictions.

In each state or territory of Australia, specific legislation imposes a time period before the end of which proceedings must be commenced for a claim or dispute. 

The specific legislation is: 

  • Limitation Act 1985 (ACT)
  • Limitation Act 1981 (NT)
  • Limitation Act 1969 (NSW)
  • Limitation of Actions Act 1974 (QLD)
  • Limitation of Actions Act 1936 (SA)
  • Limitation Act 1974 (TAS)
  • Limitation of Actions Act 1958 (VIC)
  • Limitation Act 2005 (WA) 

These time periods vary from state to state and depend upon the type of claim. A failure to issue proceedings before the relevant time period expires is likely to result in that claim becoming time barred. 

In most Australian states, actions in simple contract or tort must be brought within six years of either the date of breach (contract) or the date on which loss was incurred (tort). 

The limitation period may be extended in some circumstances, for example where someone with legal incapacity (such as a minor or a person of unsound mind) has entered into a contract. Some jurisdictions also permit for the limitation period to be extended at the court’s discretion.

The process of litigation is broadly similar across Australian courts. Proceedings are initiated by a claim or application, which must be filed in the relevant court and served on all parties to the proceeding. Parties will then exchange pleadings (such as statements of claim, defenses, counterclaims, and replies) which define the parameters of the dispute between the parties and the specific issues which are to be proved by each party. Timeframes for the progression of litigation are found in the civil procedure rules applicable in each jurisdiction. Generally, a defense must be filed within 28 days of service of a statement of claim. 

For proceedings in the Federal Court, parties are required to file a genuine steps statement, which outlines the steps taken to make a sincere and genuine attempt to resolve the dispute prior to commencing litigation. Superior courts in the states may also require a party to litigation to provide details of attempts made to resolve a dispute before proceedings were commenced.  

Once the exchange of pleadings is complete, parties will generally undertake the discovery (also known as the disclosure) process, and then go on to prepare their evidence for a final hearing of the dispute. It is common, particularly in complex litigation, for the parties to be obliged to attend court at regular intervals for directions hearings, in which orders are given to manage the conduct and timeframes of the case up until its final hearing. 

Timeframes for each stage of proceedings vary greatly with the complexity and case management style of an individual matter and the specific jurisdiction in which the case is commenced. Each superior court in the states has in place specific practice notes or directions for the conduct of commercial disputes with the aim of ensuring that those commercial disputes are resolved in the most cost-effective and time-efficient manner possible. Generally, across all jurisdictions, parties will have 28 days from receipt of a claim to put on a defense. As noted above, the timetable from that point of time will depend on the nature of the dispute.  

A straightforward commercial contract dispute will normally, court resources permitting, be resolved within 12 months. 

Most state and federal courts require a corporate entity to be represented by a lawyer (which could include a lawyer employed by a company). Some jurisdictions dealing with small claims / employment issues may allow a company to appear by its director. Individuals may appear on their own behalf in most jurisdictions without a lawyer.

In Australia, the discovery process is designed to allow parties to civil litigation to obtain from an opponent all documents relevant to the issues in dispute. Australian courts strictly prohibit “fishing expeditions” through discovery. Discovery is usually undertaken after the close of pleadings (although in some courts in some states this may not be permitted until after evidence is complete) when the points of dispute between the parties have crystallized. Discovery may however be ordered, in limited circumstances, prior to the commencement of proceedings where an applicant is able to satisfy the court that he or she needs to obtain discovery in order to find out whether or not a cause of action exists against a potential defendant.  

The practice of disclosure varies between those jurisdictions which mandate a general right of discovery and those in which the right is more limited. In the Northern Territory and the states of South Australia and Queensland, parties have a mandatory duty of disclosure which is discharged by the exchange of lists or copies of discoverable documents. In Tasmania, Victoria and Western Australia, a party may, by written notice to another party, require that party to make general discovery. In the Federal Court of Australia and New South Wales, the right to discovery is limited and requires an order of the court and will usually be limited to specific categories.  

There have been recent attempts by some of the states’ superior courts to more tightly control the disclosure process. For example, the preparation of disclosure plans (which identify the categories of documents to be disclosed and how they will be disclosed), and the courts ordering that discovery being provided after the exchange of written evidence with a view to limiting the number of documents to be exchanged. 

In the Federal Court and most state courts, discovery can be ordered to be made by non-parties to the dispute where the court is satisfied as to the likelihood of the non-party having relevant documents. Courts in Australia will also generally permit the issuing of subpoenas to produce documents to non-parties to litigation and this process will be more straightforward than seeking non-party disclosure orders. 

Default judgment can be applied for in proceedings in any court where a defendant does not:

  • file a defense within the specified timeframe after a statement of claim has been served; or
  • fails to make an appearance at a hearing.

Once a default judgment is ordered against a defendant, a defendant can, in limited circumstances, seek to challenge the granting of judgment by default. The defendant will need to file an application or motion to set aside the default judgment within a specified period of time and show cause for why (usually lack of notice of the claim or that notice was given of intent to defend but that notice was not brought to the attention of the court which granted the default judgment) the judgment should be set aside.

Judgments of civil courts in Australia can be appealed to a superior court. Civil procedure legislation in each jurisdiction sets out the rules and procedure for appeals. Ordinarily, it will be necessary to seek leave from the superior court to appeal. The Court of Appeal in each state, and the Full Federal Court, are the ultimate courts of appeal for each of those jurisdictions. Cases that emanate from the Federal Circuit Court are appealable to the Federal Court and then the Full Federal Court, whereas matters emanating from a State Magistrates Court are appealable to the Supreme Court and the Court of Appeal. Decisions made by the District Court (County Court in certain states) are appealable to the Supreme Court and decisions of the Supreme Court can be appealed to the state’s Court of Appeal. The High Court of Australia hears appeals from courts of appeal (sometimes referred to as the full court) in all jurisdictions, and has limited original jurisdiction (which predominantly relates to constitutional matters). 

Parties generally, depending on the jurisdiction, have 28 days from the date of judgment or final order, to lodge an appeal in a civil matter to the relevant appeal court. Appeals will generally, because of the limitation of introducing new evidence in most civil appeals, be resolved more quickly than matters at first instance. Most appeals of civil matters will be heard and judgment given within six to eight months from commencement of the appeal. 

All superior Australian courts have a wide power and discretion to grant both interlocutory orders and interlocutory injunctions. An interlocutory application, generally speaking, is an application which seeks any order other than a final judgment. 

As in other jurisdictions, interlocutory injunctions are a species of interlocutory orders. Where those orders are sought on an urgent and temporary basis until a more extended form of relief is sought, they are often referred to as interim orders. 

Interlocutory orders (including interlocutory injunctions) can require a party to undertake or refrain from a particular act, and can be granted before proceedings have commenced, once they are on foot and after judgment has been entered. Applications for these types of orders may be made by self-represented litigants or through legal representation. 

The categories of non-urgent interlocutory orders that an applicant may seek are many and varied and include, by way of example, applications for security for costs, discovery (including preliminary discovery before proceedings have been commenced), the filing of expert evidence or orders for particulars, The evidence required to obtain non-urgent interlocutory orders will turn on the type of orders sought, although at the very least substantive interlocutory applications usually require a sworn affidavit to be filed. 

The kinds of relief that can be sought by way of an urgent interlocutory injunction are equally varied. This is because the orders have the purpose of preserving the status quo until the rights of the parties can be determined finally, and the types of matters that can be heard by the court are vast. Common urgent interlocutory injunctions include applications for the preservation of property, the freezing of assets and applications to search premises to preserve evidence.

An applicant for an interlocutory injunction (either urgent or not) must prove that: 

  • there is a serious question of law to be tried;
  • the balance of convenience favors the granting of the injunction; and
  • an award of damages (at the conclusion of the proceeding) would not be an adequate remedy. 

It is possible for urgent interlocutory injunction applications to be heard by the court ex parte, without the opposing party’s involvement. Any orders given ex parte will generally operate only for a limited period of time until the matter can be brought to a hearing. The duration of any ex parte order will ordinarily be limited to a period terminating on the return date of the summons, which should be as early as practicable (usually not more than a day or two) after the order was made, when the respondent will have the opportunity to be heard. For this reason appeals of ex parte interlocutory injunctions are not usually made to a superior court. The applicant will then bear the onus of satisfying the court that the order should be continued or renewed. A party seeking an interlocutory injunction will ordinarily be obliged to give an undertaking to pay any damages by the defendant suffered as a result of the injunction in the event that the claim for final relief at trial fails. 

The decision to grant an interlocutory injunction can be appealed on an urgent basis to a relevant appeal court. The appeal court will usually list the matter before a single judge to assess the urgency (often the same or the day following the day on which the appeal is lodged) and set a timetable based on the information provided at that first listing. 

Australian state and federal courts can grant interim freezing orders, which restrain a defendant from disposing of property prior to judgment. These orders are a species of interlocutory orders. Such applications may be filed at the Supreme Court or Federal Court. A freezing order is normally obtained ex parte without notice to the respondent, before service of the originating process, because notice or service may prompt the feared dissipation or dealing with assets. A freezing order or an ancillary order may be limited to assets in Australia or in a defined part of Australia, or may extend to assets anywhere in the world, and may cover all assets without limitation, assets of a particular class, or specific assets. It would therefore be possible for a freezing order to encompass bank accounts as well as assets such as real property, art, securities or motor vehicles. Such orders would, however, normally allow for access to funds for reasonable expenses, living costs and payments in the ordinary course of a defendant or third party’s business. A court may also order a freezing order against a third party, where it can be established that there is a risk that a judgment or prospective judgment may be unsatisfied as a result of a third party’s power, possession or influence over the assets in question. The power to issue a freezing order is a function of courts’ authority to prevent an abuse of the court process by the frustration of court-ordered remedies. A freezing order will be made only to preserve the status quo for the purpose of resolving a substantive cause of action brought by the plaintiff, and not as a stand-alone remedy.

The criteria for the issue of a freezing order is similar to the ordinary principles for the grant of interim relief, as discussed above, although the potentially serious impact on a defendant’s property rights raises the threshold for the granting of a freezing order. This may be overcome by an undertaking as to damages given by the applicant of the freezing order, where the applicant undertakes to submit to such order (if any) as the court may consider to be just for the payment of compensation (to be assessed by the court or as it may direct) to any person affected by the operation of the order. The High Court of Australia described freezing orders as 'a drastic remedy which should not be granted lightly.' Broadly and generally, an applicant must show that: 

  • the applicant has a good arguable case (in the substantive cause of action);
  • the refusal of a freezing order will give rise to a real risk that any judgment pronounced in the action will remain unsatisfied, or that the recovery of any judgment will be prejudiced by reason of the removal by the defendant of assets from the jurisdiction, or their dissipation within it; and
  • the balance of convenience favors the making of the order.

Australian courts have wide discretion to award costs orders against either party to cover the opposing party’s costs of litigation. The general rule is that costs follow the event. This means that the unsuccessful party will be liable to pay the litigation costs of the successful party. The aim of this rule is to achieve a just outcome by shifting the costs burden on to the party which is found to have either unjustifiably brought another party before the court or given another party cause to have recourse to the court to obtain their rights. 

Where each litigant has enjoyed some success in the proceedings, courts may modify the general rule to make costs orders that reflect the litigants’ relative success and failure. Courts may depart from the general rule by requiring a successful party to bear their own costs where there is good cause to do so. Such an outcome may be justified where, for example, a successful plaintiff is awarded only nominal damages, or a party succeeds only due to late and substantial amendments to their case. 

Of particular strategic importance is the rule that generally a court will not award costs to a successful party which has obtained relief no more favorable than had already been offered by his or her opponent in settlement discussions. This rule is designed to encourage the early resolution of litigated disputes. 

Costs orders are subject to a costs assessment process administered by the courts. It is unusual that a party will be able to recover all of its actual legal costs through this process. On a standard assessment, parties may recover approximately 60% to 75% of their actual costs. A higher rate of assessment, on an indemnity basis, may be employed where a party has engaged in unreasonable conduct in the proceeding. 

All courts in Australia will charge fees for commencing civil proceedings (often referred to as a filing fee). Some jurisdictions, particularly superior courts, will also charge additional fees including but not limited to daily hearing fees (calculated by reference to the length of the trial), filing fees for notices of motions/applications and the issuing of subpoenas to third parties. These fees are set by the courts and are published on their websites. They are usually reviewed on a yearly basis. By way of example, the current (2019) rate for commencing proceedings in the Federal Court of Australia is AUD4,045 for corporations and the hearing fee for a five-day trial is AUD19,730 for corporations.

In all Australian jurisdictions, a representative proceeding, or class action (as it is more commonly known in Australia) may be commenced by or against any one person as a representative of numerous persons (the minimum number required is generally seven people) who have the same interest in the proceeding and the claims brought give rise to a substantial common issue of law or fact. It is possible to commence a class action against multiple defendants and there is no requirement for every group member to have a claim against every defendant.  

An overarching consideration of the courts in hearing a representative proceeding is whether it involves less delay, expense, and prejudice to the parties than alternative forms of trial. If not, the court may discontinue the proceedings. 

The Federal, New South Wales, Victorian and, most recently, Queensland jurisdictions contain further statutory provisions in relation to representative proceedings, which are arguably more liberal and plaintiff-friendly than other jurisdictions. These jurisdictions allow representative proceedings to be brought where seven or more people have claims which arise out of the same or related circumstances and give rise to a substantial common issue of fact or law. Over 90% of all class actions filed in Australia from 1992-2009 were filed in the Federal Court of Australia. 

When a representative proceeding is commenced, all potential plaintiffs who fall within a class become members of the class, whether they are aware of the claim or not. Members can then opt out of the proceedings before a date set by the court. All class members who do not opt out will be bound by the judgment of the court or by any approved settlement. 

It is important to note that, although some states have yet to formally abolish the law of champerty and maintenance, outside of the US, Australia has one of the most developed class action industries, with a variety of large, class action plaintiff law firms and with many litigation funders having been active in the jurisdiction for over 20 years. This active funding industry has seen a continued increase in the number of class actions being commenced in Australia. 

Cameron Maclean

Cameron Maclean

Partner
DLA Piper Australia
[email protected]
T +61 8 6467 6013
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