A judgment entered because nobody answered the claim

A default judgment is what a court enters when the time to respond to a claim runs out — not what it enters after deciding the claim is good. The window is short and it differs by state: 21 days from service in the Victorian Magistrates' Court, 28 days in New South Wales and Queensland. The courts publish a way back, an application to set the judgment aside, and the first question it usually turns on is whether the claim ever reached the company at all.

What a default judgment actually decides

Very little, and that is the part worth understanding before anything else. A judgment in default is the consequence of a calendar running out. Nobody read the claim against a defence, because there was no defence to read.

The courts describe the step in those terms. Victoria's Magistrates' Court tells a plaintiff it can apply for a default judgment where a complaint was filed and served and the defendant has not paid, returned the goods, or filed a defence — and says plainly that if a defence is filed, a default judgment cannot be applied for at all. Queensland Courts put the same sequence the other way around: after 28 days, if the defendant has not filed a defence, the plaintiff can apply. New South Wales allows the application to be dealt with without the parties present, and without being served on the defendant at all unless the court orders otherwise.

So the order is administrative in character even though its effect is not. A registrar or judicial officer considers the application, the affidavit of service and the arithmetic of the claim. Whether the money is actually owed is a question that was never put. That is the single most useful thing to know on the morning it is discovered, because it is also the reason the courts publish a way back.

You are not the first one this week

Most owners who find a judgment against their company ring their bank before they ring anybody else, usually because the judgment has already stopped something. The bank says no, and it almost never says no because it has decided the loan would not be repaid. A judgment is an exception in a credit policy, or a question the assessor is not allowed to answer, or a line in a system that was never built to take context.

That gap is where HomeSec has been since 2004. What we look at is whether there is enough unused equity in real property and whether the purpose is a genuine business one: not financials, not a credit score, not what a court file says. From a clean, complete scenario funds can be available in as little as 24 hours, and interest can be capitalised for up to six months.

Back to the substance, because the first question here is not a funding one.

The clock that ran out, and which one it was

Response times are set by each state's own rules, and they are shorter than most business owners assume. Three that were read for this page:

1. 1
   Victoria — 21 days.The Magistrates' Court tells a defendant to file a defence within 21 days of being served with a complaint, and tells a plaintiff it must wait 21 days after service before applying. The Court can also dismiss a complaint where neither a defence nor a default judgment is filed within 12 months of the complaint being made, after which a fresh complaint has to be filed.
2. 2
   New South Wales — 28 days.Rule 14.3 of the Uniform Civil Procedure Rules gives a defendant 28 days after service of the statement of claim to file a defence, unless the court directs otherwise. The Local Court deals with civil claims up to $100,000, split between a Small Claims Division up to $20,000 and a General Division above it — worth knowing, because which division a claim sits in changes how it is run.
3. 3
   Queensland — 28 days.A plaintiff can apply after 28 days if no defence has been filed, and can apply for up to one year after the documents were served. Queensland Courts also state something most people never hear: the defendant can file a defence at any time before judgment is given. A late defence is not automatically too late — it is too late only once the judgment is entered.

Those figures are the three jurisdictions whose own pages were read on the check date. Other states, the territories and the federal courts set their own, and the only safe assumption is that the window is short. If a claim is in hand and the days are still running, filing something is almost always better than filing nothing, and that is a call to a lawyer today rather than a decision to make alone.

The reason nobody saw the claim

Here is the part that explains most of these, and it has nothing to do with the merits of anything. A legal document can be served on a company by leaving it at, or posting it to, the registered office shown on ASIC's register — or by handing a copy to a director who lives in Australia.

ASIC's own words on what happens when the company has moved are the ones to sit with: the law will still deem the service effective as long as the document is properly addressed and posted as a letter. ASIC suggests a plaintiff also serve a director personally in that situation, which is sensible, but it is a suggestion rather than a requirement. A company whose registered office is a former accountant, a closed office or an address nobody checks can therefore be served, defaulted and judged without a single person in the business reading a word of it.

A company is required to tell ASIC within 28 days when its registered office or principal place of business changes. ASIC also says that where somebody who had consented to a company using their address withdraws that consent and the officers do not update the register, ASIC may change the address on the register to the director's own. Either way, the address on the register is the one that counts, not the one on the letterhead.

Two free checks follow from that, and both are worth doing before anything else. Look up the company on ASIC's register and read the registered office address as a stranger would — finding the company's own identifiers covers where to look. Then ask who has been collecting post there for the last year. If the answer is nobody, that is not a detail; in Queensland, irregularity in how a judgment was obtained is one of the two published grounds for setting one aside, and whether this amounts to it is a question for a lawyer rather than for a lender.

Setting it aside is a published process, not a favour

Each court sets out how to ask, and the tests are written down. None of this is work to do alone — the point of reading it is to know that the road exists and roughly what it will ask of you, so the conversation with a lawyer starts further along.

New South Wales. A notice of motion, filed at the same court where the statement of claim was filed and the judgment entered, supported by an affidavit. Legal Aid NSW states there is no time limit on applying — but the affidavit has to explain why no defence was filed within the 28 days, and separately explain any delay in bringing the application. On the defence itself, the standard it describes is facts showing the proposed defence is reasonably arguable, which is a lower bar than proving the case and a much higher one than asserting unfairness. The motion must be filed within 14 days of being signed.

Queensland. The application is made under rule 290 of the Uniform Civil Procedure Rules. Two grounds are published. The first is that the judgment was obtained irregularly — the rules were not complied with, or the judgment is defective. The second applies even where the judgment was regularly obtained, and asks the applicant to satisfy the court of three things: a reasonable explanation for the failure to file a defence, no delay in bringing the application, and a prima facie defence on the merits. The power is discretionary.

Victoria. An application for a rehearing, available where a party did not file a notice of defence or was not in court when the final order was made. The other side must be served at least 14 days before the hearing, a judicial officer decides whether to allow the rehearing, and where the application succeeds the order is set aside and the matter is heard again from the start.

One theme runs through all three, and it is the practical reason to act the same week rather than the same quarter: every version asks about delay. A month of silence is explainable. A year of it narrows the road considerably, whatever the defence.

What the judgment changes while it stands

Briefly, and mostly by pointing elsewhere, because this guide is about the judgment rather than about everything it touches.

A judgment is what a creditor needs before it can take enforcement action — Queensland Courts say so in exactly those terms, and it is why the entry of judgment is the moment a slow dispute becomes a fast one. A statutory demand and a winding-up application each have their own page and their own clocks. What a judgment does to a company's record, and why a judgment against the company and one against a director are governed differently, is set out on borrowing with a judgment against you. What can be recorded against a title, and what that does to a file, a caveat lender's checks covers. And if several creditors are in the same position at once, small business restructuring is the formal road and a registered liquidator is the person who can take it.

What a secured loan does here, and what it does not

Briefly, because the eligibility page covers the mechanics and whether financials are needed covers the paperwork.

The assessment is the equity and the purpose, so a judgment on the company's file is not an input in the way it is for a lender reading a credit report. The range is $20,000 to $5,000,000. Interest can be capitalised for up to six months, so a business that has just paid out a judgment is not also starting repayments in the same month. The term is open, so the exit can be a refinance at bank pricing once the record is clear, or a sale, rather than a date somebody else set. Secured against unsecured sets the two side by side, and consolidation covers what happens when several creditors are to be cleared at one settlement.

What a loan cannot do is answer the legal question. Money clears the judgment debt; it does not establish whether the debt was owed. Where the claim looks wrong, the order is advice first and funding second, not the other way around.

When borrowing is not the answer

Said plainly, because a judgment creates the kind of pressure that makes people borrow before they have thought.

Where the judgment is probably wrong and the facts support an application to set it aside, paying it out is the expensive version of the same morning. The money that would have gone to the creditor goes to a lawyer instead, and the lawyer is the one who can actually change the position. Advice first.

Where there is no equity in real property, a secured loan is not our answer and we will say so on the first call rather than the third. The useful calls then are to a financial counsellor — the National Debt Helpline on 1800 007 007 is free, independent and confidential — and to an insolvency practitioner if more than one creditor is pressing.

Two narrower cases where the answer is also no. Where the amount is below $20,000 we do not lend to it at all, because registering a security over a property for a figure that size is the wrong tool for the job. And where the judgment is one creditor among several and the business cannot service what it already has, clearing the loudest one leaves the position unchanged and the equity spent; checking where a company actually stands and a conversation with a registered liquidator come before a loan application.

This page explains what a default judgment is, why the response window is shorter than most business owners expect, how the registered office on ASIC's register produces judgments nobody saw, and what each court publishes about setting one aside. It is general information, not legal, credit or insolvency advice: what is right in your circumstances is a question for a lawyer, a registered liquidator or the court's own registry, and the rules differ by state. Figures and rules were checked on 19 October 2026 and can change.

Reviewed by Paul Stone, Joint Chief Executive