What Is a Default Judgment and How Can It Be Set Aside?

A default judgment is a judgment entered against a defendant because the defendant failed to take a required step in a civil case, usually by failing to enter appearance or file a defence within time. It can be set aside by applying to court, usually by showing that the judgment was irregular or that there is a real defence that should be heard on the merits.

A default judgment is sometimes called a judgment in default, or JID. It is common in debt recovery, contractual claims, unpaid invoice disputes, loan claims, possession claims, and other civil proceedings where a defendant does not respond after being served with court papers.

The important point is this. A default judgment is still a judgment. Unless it is set aside, it can be enforced against the defendant like other judgments. That may lead to enforcement steps, garnishee proceedings, seizure and sale, bankruptcy proceedings, winding-up proceedings, or other consequences depending on the type of judgment and debtor.

If you discover that a default judgment has been entered against you, you should contact a lawyer immediately.

How does a default judgment happen?

A default judgment usually happens because a defendant does not respond to a claim within the required time.

In a civil action started by writ, the defendant is usually required to enter appearance after being served with the writ. If the defendant fails to do so, the plaintiff may be able to enter judgment in default of appearance, depending on the type of claim and whether the procedural requirements are satisfied.

If the defendant enters appearance but later fails to serve a defence within time, the plaintiff may be able to enter judgment in default of defence. Again, the procedure depends on the nature of the claim.

The most common situation is simple. The plaintiff says the court papers were served. The defendant did not respond. The plaintiff then takes steps to enter judgment without a full trial.

This does not necessarily mean the defendant has no defence. It may simply mean the defendant missed the deadline, did not understand the court papers, changed address, failed to instruct lawyers in time, or believed the matter was still being negotiated.

However, once judgment is entered, the defendant must deal with the judgment formally.

Default judgment is not the same as losing after trial

A default judgment is different from a judgment after a full trial.

At trial, the court hears witnesses, considers documents, assesses credibility, and decides the dispute after both sides have had the opportunity to present their case. A default judgment is different because it is entered due to a procedural default by the defendant.

That distinction matters when applying to set it aside. The court is not simply being asked to overturn a decision made after a full hearing. The court is being asked whether the defendant should be allowed back into the proceedings so that the dispute can be heard properly.

This does not mean every default judgment will be set aside. The court will consider the rules, the reason for default, the delay, whether the judgment was entered properly, whether the defendant has a defence, and whether justice requires the matter to proceed.

Regular and irregular default judgments

One of the first questions in a setting aside application is whether the default judgment is regular or irregular.

An irregular default judgment is a judgment entered where the procedural requirements were not properly complied with. For example, there may be an issue with service of the writ, proof of service, the time allowed for appearance or defence, the form of judgment entered, or whether the type of claim allowed judgment to be entered in that way.

If the judgment was entered irregularly, the defendant may have a strong basis to set it aside. The reason is straightforward. A party should not be bound by a judgment obtained through a defective procedure.

A regular default judgment is different. It means the plaintiff followed the procedure properly. If the judgment was regular, the defendant usually needs to show more than a technical complaint. The defendant will generally need to show that there is a defence on the merits, or some proper basis for the court to exercise its discretion to set aside or vary the judgment.

This is why the first task is to review the court papers carefully. You need to know whether the issue is procedural irregularity, substantive defence, or both.

What is a defence on the merits?

A defence on the merits means a real defence that raises arguable or triable issues. It does not mean the defendant must prove the entire defence at the setting aside stage. It means the defendant must show that there is a genuine issue worth being heard, rather than a bare denial or excuse.

Examples may include the debt was already paid, the amount claimed is wrong, the wrong party was sued, the defendant never entered the alleged agreement, the goods or services were defective, there was a set-off or counterclaim, the claim is time-barred, the plaintiff breached the contract first, the document relied on is disputed, or the matter should be referred to arbitration under an arbitration clause.

The defence must be supported by facts and documents where possible. A statement such as "I do not owe the money" is usually weak if it is not explained. A better affidavit would explain why the money is not owed, refer to the relevant documents, and exhibit the evidence.

The court is more likely to take the application seriously if the defendant can show that the dispute deserves to be heard properly.

Act quickly once you know about the judgment

Time matters in setting aside a default judgment.

Under the Rules of Court 2012, where the rules provide for setting aside or varying an order or judgment, the application should generally be made and served within 30 days after receipt of the order or judgment, unless otherwise provided. Delay can become a serious problem.

If you are late, you may need to explain the delay. The court may consider when you first knew about the judgment, what steps you took after discovering it, why you did not respond earlier, whether the plaintiff will suffer prejudice, and whether there is a real defence.

A defendant who discovers a default judgment should not wait for enforcement to begin. By then, the plaintiff may already be taking steps to garnish bank accounts, seize property, examine the judgment debtor, commence bankruptcy proceedings, or commence winding-up proceedings where applicable.

Immediate action gives you more options.

What documents should you prepare?

If you want to set aside a default judgment, you should gather the court papers and the documents supporting your defence.

Important documents may include the writ, statement of claim, affidavit of service, default judgment, correspondence from the plaintiff or lawyers, any letter of demand, proof of address, emails, WhatsApp messages, contracts, invoices, receipts, bank transfer records, delivery orders, company documents, and any documents showing payment, dispute, set-off, defective work, wrong party, or lack of service.

You should also prepare a short timeline. State when you first received the claim, whether you were served, when you found out about the judgment, what steps you took, and why appearance or defence was not filed earlier.

If there is an issue with service, evidence about your address, office, company records, travel, staff handling of documents, or how you received the papers may matter. If there is a defence on the merits, the supporting documents should be organised clearly.

The application should not only say that the judgment is unfair. It should explain why the judgment should not stand.

How is the application made?

An application to set aside a default judgment is usually made by notice of application supported by affidavit. The affidavit is important because it sets out the facts relied on by the defendant.

The affidavit should explain the background, the reason for the default, when the defendant became aware of the judgment, why the judgment is said to be irregular if applicable, and what defence exists if the matter proceeds. Relevant documents should be exhibited.

The plaintiff will usually have an opportunity to file an affidavit in reply. The defendant may then file a further affidavit if necessary. The court will hear the application and decide whether to set aside the judgment, vary it, impose conditions, or dismiss the application.

The court may impose terms. For example, the defendant may be ordered to pay costs, file the defence within a fixed time, pay money into court, or comply with other directions depending on the facts.

If the judgment is set aside, the case usually continues. Setting aside does not mean the defendant has won the dispute. It means the judgment is removed or varied so the matter can proceed according to the court's directions.

What happens if the default judgment is not set aside?

If the application is dismissed, the default judgment remains in place. The plaintiff may then continue with enforcement, subject to any stay or further application that may be available.

This can have serious consequences. A money judgment may affect bank accounts, assets, credit position, business operations, and future dealings. A company judgment may lead to statutory demand or winding-up steps if the debt remains unpaid. An individual judgment may lead to enforcement or bankruptcy-related steps if the legal requirements are met.

This is why the application must be prepared carefully. A defendant should not assume that the court will automatically give a second chance. The court will want to know why the default happened and whether there is a proper defence or procedural problem.

Can parties still settle after default judgment?

Yes. Even after a default judgment is entered, parties may still discuss settlement. This may involve payment terms, reduced sum, instalments, consent setting aside, stay of enforcement, or other agreed terms.

However, settlement after judgment should be documented carefully. If the plaintiff agrees not to enforce immediately, that should be recorded. If payment is by instalments, the agreement should state what happens if one instalment is missed. If the judgment is to be set aside by consent, the parties should ensure the proper court order is obtained.

A vague promise not to enforce can create further disputes. If judgment already exists, the settlement should be precise.

Frequently Asked Questions

What is a default judgment in Malaysia?

A default judgment is a judgment entered because a defendant failed to take a required procedural step, usually by failing to enter appearance or file a defence within the required time. It is not a judgment after full trial, but it is still enforceable unless it is set aside or varied.

Can a default judgment be set aside?

Yes. A defendant may apply to court to set aside or vary a default judgment. The court may consider whether the judgment was irregular, whether there is a defence on the merits, the reason for the default, the delay, and what is fair in the circumstances.

What should I do if I receive a default judgment?

Act quickly. Get the court papers, check whether you were properly served, identify when you received the judgment, gather documents supporting your defence, and seek legal advice immediately. Delay can make the application harder.

Final takeaway

A default judgment is serious because it can be enforced even though the dispute was not heard at a full trial. If you ignore court papers or miss deadlines, judgment may be entered against you without your side being heard.

If a default judgment has been entered, the key questions are whether it was obtained regularly, whether there is a real defence, whether the application is made promptly, and whether the evidence supports setting it aside. The sooner the issue is addressed, the better the chance of protecting your position.

Speak to JPP LAW

Justin, Poh & Partners, also known as JPP LAW, assists clients with civil and commercial disputes, debt recovery, contractual claims, company disputes, setting aside default judgments, injunctions, enforcement, and court proceedings in Malaysia. If a default judgment has been entered against you, or you need to assess whether enforcement or setting aside action is available, you may contact us to discuss the matter.

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Disclaimer: This article is for general information only and does not constitute legal advice. You should seek advice based on your specific facts and documents.