What default judgment means
A default judgment is judgment against a party who did not turn up or did not respond.
Civil procedure gives a defendant a period to enter appearance and file a defence. Where that period passes with nothing filed, the claimant can apply for judgment in default, and the court can enter it without hearing the merits at all.
It is a real judgment. It can be enforced immediately through garnishee proceedings, a writ of execution or an order for possession, and a defendant who ignored the process can find their account frozen before they have engaged with the claim.
The most common cause is not defiance but service. Documents are served at a registered office nobody monitors, or at an old address, or on somebody who does not pass them on. The defendant genuinely never saw the claim, which is a reason to apply to set the judgment aside rather than a defence to it.
How it is used
The application to set aside is the remedy, and the court weighs a familiar set of factors.
The reason for the default. Was it deliberate, careless, or genuinely outside the defendant's control, such as documents served at an address they had left.
Promptness. How quickly the defendant applied once they learned of the judgment. This is the factor that decides most applications, and a defendant who waited months is in serious difficulty.
A defence on the merits. The defendant must show that they have a defence worth hearing, usually by exhibiting a draft defence. A defendant with no answer to the claim will not have the judgment set aside merely because they missed the deadline.
Prejudice to the claimant. Whether setting the judgment aside would put the claimant in a worse position than simply losing the advantage of the default.
The court can also impose conditions, including payment into court or an order for costs against the defaulting party.
Key features
- Entered where a defendant fails to respond within the time allowed
- A real judgment, enforceable immediately
- Frequently caused by service at an address the defendant no longer monitors
- Can be set aside on application to the same court
- The court weighs reason, promptness, merits and prejudice
- Conditions such as payment into court may be imposed
How this works in Nigeria
Service is where most Nigerian default judgments begin.
A company's registered office is the address at which documents can be validly served, and a great many Nigerian companies use an address they left years ago, a lawyer who has retired, or a serviced office that no longer forwards mail. Service there is effective service. The company knows nothing, and judgment follows.
That is why keeping the CAC record current is a litigation risk issue and not only a compliance one.
Undefended list and summary judgment procedures sit alongside default judgment and produce a similar effect. Where a claim is for a liquidated sum and the defendant files nothing showing a defence on the merits, judgment can be entered quickly. A defendant served with such a process should treat the deadline as real.
For a defendant who has just discovered a judgment, the sequence is: obtain the court file immediately, establish how service was effected, prepare a draft defence, and file the application to set aside without delay. Every week of inaction weakens the application.
For a claimant, a default judgment obtained where service was irregular is fragile. It is worth getting service right rather than fast, because a judgment set aside months later has cost more than doing it properly would have.
Setting aside vs appealing a default judgment
Two routes, and choosing the wrong one wastes time you do not have.
An application to set aside goes back to the court that entered the judgment. It argues that the defendant should be allowed to defend: there was a reason for the default, they acted promptly, and they have a defence on the merits. It is the normal route and it is faster.
An appeal goes to a higher court and argues that the court below erred in entering the judgment, for example because it had no jurisdiction or because the process was fundamentally defective. It is slower and narrower.
Where the defendant simply missed the deadline and has a real defence, set aside. Where the judgment was entered without jurisdiction or in fundamental breach of process, either route may be available and advice is needed quickly, because the appeal clock runs while a misconceived application is being heard.
Limits and risks
Setting aside is discretionary. A defendant with a good excuse but no defence on the merits will usually fail, because allowing a defence that cannot succeed helps nobody.
Delay is fatal more often than any other factor. Applications made months after the defendant learned of the judgment are routinely refused.
Conditions can also be onerous. A court may require payment into court of all or part of the judgment sum, which a defendant may be unable to meet.
And enforcement may already have happened. Money garnished from an account, or goods seized and sold, is not automatically restored simply because the judgment is later set aside.
Worth knowing
Keep your registered office address current at the CAC and make sure somebody actually opens the post there. Nigerian companies lose cases they never knew existed because service at the registered office is valid service, and the first they hear of it is a frozen bank account.
Questions people ask
What is a default judgment?
Judgment entered against a defendant who failed to enter appearance or file a defence within the time allowed. It is a real judgment and can be enforced immediately.
Can a default judgment be set aside?
Usually yes, on application to the same court. The court weighs the reason for the default, how promptly the defendant applied, whether there is a defence on the merits, and prejudice to the claimant.
What matters most on the application?
Promptness. A defendant who applies within days of learning of the judgment is in a far better position than one who waited months, and delay defeats more applications than anything else.
Do I need to show a defence?
Yes. A defendant with a good excuse but no answer to the claim will usually fail, because allowing a defence that cannot succeed serves no purpose. A draft defence is normally exhibited to the application.
Why do so many default judgments happen?
Service. Documents are validly served at a registered office the company no longer monitors, or at an old address, so the defendant genuinely never saw the claim. Keeping the CAC record current prevents it.
Should I set aside or appeal?
Set aside where you simply missed the deadline and have a defence. Appeal where the court lacked jurisdiction or the process was fundamentally defective. Take advice quickly, because the appeal clock runs while a misconceived application is heard.