CRITICAL ANALYSIS ON THE PRINCIPLE AND

ISSUES RELATING TO DEFAULT JUDGMENT

PROFESSOR DR CHOONG YEOW CHOY

LXGA6325 CIVIL LITIGATION

BY: CHIEW CHOON MAN

LGA160055
1.0 Definition

Default judgment is a kind of judgment entered by one party against the other
one who failed to comply with certain procedural rules. Example of it would be
failure to enter appearance under Order 13 of the Rules of Courts 2012 ('ROC')
and failure to file the pleadings under Order 19 of the ROC.

However, a default judgment is not a judgment on the merits1 and therefore when
an application is made for setting aside a judgment in default the learned judge
would have to consider that whether there is merit in the case.

For one to raise defence on merit against the default judgment for instance in the
case of default judgment of appearance, the Defendant have to show there is an
arguable case or a triable issue2 which is similar to an application for summary
judgment under Order 14 of the ROC, in which the defendant need only raise a
triable issue in order to obtain leave to defend the claim3.

Generally, a default judgment can be categorized as regular or irregular. A

regular default judgment is the judgment that has been entered in compliance
with the procedural rules or the relevant statute; whereas an irregular judgment is
a judgment entered but has been in contrary to the ROC entered by fraudulent or
improper means.

2.0 Purpose
The fundamental purpose for this whole mechanism of default judgment is to
protect a party who has exercised his diligent and fulfil his responsibility, “lest he
be faced with interminable delay and continued uncertainty as to his rights”
whenever “the adversary process has been halted because of an essentially

1
Fira Development Sdn Bhd v Goldwin Sdn Bhd [1989] 1 MLJ 40 at p 41
2
Ibid
3
United Malayan Banking Corporation Bhd v Palm & Vegetable Oils (M) Sdn Bhd (1983) 1 MLJ 206 at page
208
unresponsive party.”4

The whose theory behind this principle is also to penalise the party who is has
failed to comply with the procedural rules and deadlines to answer and therefore
impliedly admits the cause of action is valid, without defense, and consents to
suffer judgment.5

More importantly, default judgment can enable the court to achieve a balance
between arriving justice in time and at the same time ensure the proper justice is
delivered.

3.0 Setting aside regular default judgment

Base on the case laws, the Courts have developed two approaches in
determining the threshold required in order to set aside a regular default
judgment, namely the strict approach and the liberal approach.

Strict Approach

The Court in adopting this approach set a higher threshold for party that wish to
set aside a regular default judgment. This can be seen in the case of Alpine
Bulk Transport Co Inc v Saudi Eagle Shipping Co Inc (The 'Saudi Eagle') 6
where the English Court of Appeal held that:

“must show that his defence had a real prospect of success… a defendant who is
asking the court to exercise its discretion in his favour should show that he has a

4
H. F. Livermore Corp. v. Aktiengesellschaft Gebruder Loepfe, 432 F.2d 689, 691 (D.C. Cir. 1970); see also
Adam Owen Glist, Enforcing Courtesy: Default Judgments and the Civility Movement, 69 FORDHAM L.
REV. 757, 765 (2000)
5
Keeler Bros. v. Yellowstone Valley Nat’l. Bank, 235 F. 270, 270 (D. Mont. 1916).
defence which has a real prospect of success …Indeed it would be surprising if
the standard required for obtaining leave to defend (which has only to displace
the plaintiff's assertion that there is no defence) were the same as that required
to displace a regular judgment of the court and with it the rights acquired by the
plaintiff. In our opinion, therefore, to arrive at a reasoned assessment of the
justice of the case the court must form a provisional view of the probable
outcome if the judgment were to be set aside and the defence developed. The
'arguable' defence must carry some degree of conviction…

In the circumstances, we do not think that the defendants have shown that they
have a defence which has any reasonable prospect of success.”

The similar approach is also adopted in the Singaporean Court. In the case of
Abdul Gaffer v Chua Kwang Yong, the Singapore Court of Appeal held that:

“… We now turn to consider the principles upon which the court should exercise
its discretion under O 13 r 8. They are it is not sufficient to show merely an
arguable defence that would justify leave to defend under O 14; it must both have
a real prospect of success and carry some degree of conviction; and if
proceedings are deliberately ignored, this conduct, although not amounting to an
estoppels at law, must be considered 'in justice' before exercising the court's
discretion to set aside the default judgment (see The Saudi Eagle; Alpine Bulk
Transport Co Inc v Saudi Eagle Shipping Co Inc).”

By resorting to this position, the Courts are actually setting up a different

requirement for one to aside the default judgment as compare to the requirement
to set aside summary judgment application (Order 14 of the ROC). The former
will need to establish that there is a reasonable prospect of success whereas the

6
[1986] 2 Lloyd's Rep 221
latter merely need to show that there is a triable or arguable issue 7.

Liberal Position
On the other hand, some judges in UK also adopt the more liberal approach. For
instance, in a landmark case laying down the principle to set aside a regular
default judgment, Evans v Bartlam8, the Court explained that:

“Judgment was obtained regularly … the applicant must produce to the court
evidence that he has a prima facie serious defence, which mean a bona fide
defence raising a serious issue to be tried, as opposed to a sham defence.

Unless and until the court has pronounced a judgment upon the merits or by
consent, it is to have the power to revoke the expression of its coercive power
where that has only been obtained by a failure to follow any of the rules of
procedure.”

Similarly, there are also Singapore Courts that follow this approach in deciding
the case relating to application to set aside a regular default judgment. For
example, in the case of Mercurine Pte Ltd v Canberra Development Pte Ltd9,
the court gives the rationale behind adopting this approach that:

“…the question for the court is whether the defendant can establish a prima facie
defence in the sense of showing that there are triable or arguable issues. It is, in
our view, rather illogical to hold that the test for setting aside a regular default
judgment should be any stricter than that for obtaining leave to defend in an O 14
application. In both instances, there has been no hearing on the merits. This is
not to say that the position in both instances is completely identical or

7
Federal Court case of United Malayan Banking Corporation Bhd v Palm & Vegetable Oils (M) Sdn Bhd
(1983) 1 MLJ 206
8
[1937] AC 473
9
[2008] SGCA 38
symmetrical. When a regular default judgment has been entered, there would
have been a prior default or lapse on the part of the defendant. There are,
however, other means of dealing with such procedural default or lapses,
including the imposition of adverse costs orders or the making of a setting-aside
order which is conditional on appropriate terms being met…”.

This case clearly explains that the standard in allowing the application to set
aside a regular judgment should not depart from the summary judgment
application. This is because both of the two applications have a common
important element, which is to obtain a judgment that without merits and never go
on full trial. Therefore, it is quite unreasonable to treat the standard for setting
aside judgment obtains with these two applications differently.

Malaysia’s Position
In Malaysia, the Courts have the jurisdiction to set aside or vary any default
judgment under Order 13 rule 8 and Order 19 rule 9 of the ROC. Further, in all
circumstances, Order 92 rule 4 of the ROC also gives the Courts power to
exercise their inherent jurisdiction to do justice between the parties and prevent
an abuse of the process of the Court.

The Courts in Malaysia take a more liberal approach in application to set aside
regular judgment. Therefore, in order to succeed on the issue of defence on the
merit, the applicant will only need to show arguable or triable issue fit for the case
to be tried in open court. It is not necessary for the applicant or the defendant to
establish that he has a good defence and there is a serious likelihood that he will
succeed in his case.

In the case of Chong Yik Liong J in B Dialdas & Co (Pte) Ltd v Sin Sin & Co
& Ors10, it was said “that does not mean that the defendant must show a good

10
[1984] 1 MLJ 223
defence on the merits. He need only show defence which disclose an arguable or
triable issue.”

4.0 Irregular Default Judgment

A judgment is irregular is because it is obtained in violation of one or more of the
relevant procedural rules. Therefore, it is trite law that will be set aside as of right
(ex debito justitiae). This means that the Court has no discretion in dealing with
irregular judgment in the matter of irregular default judgment and the court must
do only one thing, which is to set aside the irregular judgment and the court is
precluded completely from considering the merits of the defence.11

There are several instances where the default judgment will become irregular
among others, entering a default judgment prematurely. For example, Order 12
rule 4 of ROC gives the defendant 14 days from the day the writ was served,
however if one enter the default judgment even before the 14 days lapse, this is
an irregular judgment. Next, failure of the claimant to give the defendant proper
notice of the proceedings will also render the default judgment becomes irregular.
This is because if a decision that will affect the right of the defendant been given
without proper notice to the defendant, it will deny the defendant’s right to be
heard and defeat the natural justice.

Setting Aside Irregular Default Judgment Ex Debito Justitiae

One of the leading case laying down principle on setting aside irregular default
judgment is the Federal Court case of Tuan Haji Ahmed Abdul Rahman v
Arab-Malaysian Finance Bhd12where the Federal Court explained that:
“There was a delay of some three years before the defendant made his

11
Anlaby And Others v. Praetorious [1888] 20 QBD 764; White v. Weston [1968] 2 QB 647, C.A; and Chu
Kam Lun v Yap Lisa Susanto [1999] 3 HKC 378, C.A.
12
[1996] 1 MLJ 30
application to set aside the default judgment entered for non-
appearance…Nevertheless, it is clear law that the court still retains a discretion
to set aside an irregular judgment despite long delay, provided that:

1) no one has suffered prejudice by reason of the defendant's delay;

2) alternatively, where such prejudice has been sustained, it can be
met by an appropriate order as to costs; or
3) to let the judgment to stand would constitute oppression

We would add that under its inherent jurisdiction to prevent an abuse of its
proceedings, the court has power to set aside a judgment in default, despite the
defendant's application being out of time, if the particular circumstances of the
case require the intervention of the court.”

By reason of this judgment, it is important to note that in Malaysia, even though

there is a long delay in sitting his rights to set aside the irregular default
judgment, the Court will still give the opportunity to the applicant to do so.
Nevertheless, the judgment of Tuan Haji Ahmed Abdul Rahman v Arab-
Malaysian Finance Bhd also lead to some misunderstanding as the Federal
Court did not give a definite standing on whether delay will defeat an application
to set aside an irregular default judgment.

The Court first start with explaining the general rule that when it is clearly
demonstrated to the satisfaction of the Court that a judgment has not been
regularly obtained, the defendant is entitled to have it set aside ex debito
justitiae, that is to say, irrespective of the merits and without terms.13

However, after that the Court had setting up the requirement for the applicant to
exercise his right to set aside the default judgment, that it shall be made with
reasonable promptitude, in other words within a reasonable time; and before the

13
Ibid at page 36
defendant has taken any fresh step after becoming aware of the irregularity14.

On the later part, the Court has again denied the requirement of making the said
application within a reasonable time by saying that “Nevertheless, it is clear law
that the court still retains discretion to set aside an irregular judgment despite
long delay.”15

5.0 To set aside or to vary the default judgment

Another issue that often arise in relation to the default judgment is the situation
where there is an error recorded in the default judgment. It is the end result that
the judgment obtained with some errors as opposed to the irregular default
judgment that the applicant himself failed to comply with certain rules and
procedures. However there are 2 opinions in relation to this issue.

In the case of Armitage v Parsons16, the Court is ready to amend the error or
mistake occur in the default judgment:
“The plaintiff had obtained judgment in default of appearance and as a result of
an error the judgment included a sum by way of costs which exceeded by a few
shillings the costs properly payable. An application by the defendant to set aside
the judgment in default on the ground of irregularity, was dismissed by the district
registrar who instead amended the judgment by reducing the amount
accordingly…”

On the other hand, in another case of Cheow Chew Khoon (t/a Cathay Hotel) v
Abdul Johari bin Abdul Rahman17, the Court of Appeal has given a different
proposition by setting aside the default judgment and said that:

14
Ibid at page 36
15
Ibid at page 42
16
Armitage v Parsons

17
[1995] 1 MLJ 457
“Now, it is an established principle that in monetary claims, the amount for which
judgment is entered must be limited to the amount actually due: Hughes v Justin
[1894] 1 QB 667; Muir v Fenks [1913] 2 KB 412. In other cases, where the claim
is non-monetary, judgment should be entered for the precise relief claimed by a
plaintiff in his statement of claim. If judgment is entered for more than is actually
due, it is liable to be set aside.”

6.0 Default Judgment for fail to appear proceedings at trial

Another type of default judgment that ought to be discussed is that judgment

entered against the other party who failed to appear the proceedings at trial. This
is pursuant to Order 35 of the ROC which provides that:

“Failure to appear by both parties or one of them (O. 35 r. 1)

If, when the trial of an action is called on, one party does not appear, the Judge
may proceed with the trial of the action or any counterclaim in the absence of that
party, or without trial give judgment or dismiss the action, or make any other
order as he thinks fit.”

Therefore, when a party or both parties fail to appear the proceedings at trial, the
Judge is given discretion to in choosing methods to dispose the case, and one of
it will be giving judgment without trial.

However, interestingly, the ROC clearly laid down the requirement that parties
that wish to set aside the default judgment entered against party who did not
appear in the proceedings. Clearly, the standard imposes by the law in setting
aside such judgment is much higher than the judgment in default of appearance
or pleading. This might due to the fact that even though party fail to attend the
Court to participate in the proceedings so as to tender evidence, witnesses or to
testify in Court, the Court will still have the opportunity to understand the case by
looking at the pleadings or any other cause paper that make available for the
Court before the proceedings take place.

“Judgment given in absence of party may be set aside (O. 35 r. 2)

Any judgment or order obtained where one party does not appear at the trial may
be set aside by the Court, on the application of that party, on such terms as it
thinks just.
An application under this rule shall be made within fourteen days after the date of
the judgment or order sought to be set aside without prejudice, however, to the
power of the Court to extend the period.
In considering an application made under this rule, the Court shall have regard to
the following matters:

i. the interest of justice;

ii. whether the absence of the applicant or counsel was deliberate, or due to
an accident or mistake;

iii. the prospects of success of the applicant at trial;

iv. whether there is any delay in making the application;

v. whether the conduct of the applicant has caused prejudice to the other
party which cannot be compensated by an order of costs.”

In the case of Lim Fui Hor v Welland Sdn Bhd18, the plaintiff commenced this
suit against the defendant for the payment of rental in the sum of RM51,000.00.

18
[2015] 1 LNS 991
The pleadings were closed and trial was fixed on the 16th & 17th December
2014. However on the 16th the defendant as well as his lawyer was not present
and the Deputy Registrar (DR) proceeded with the trial under O. 35 r. 1(2) of the
ROC. The plaintiff called evidence and the DR subsequently entered a judgment
for the plaintiff on the 15th January 2015. The Court in accordance to Order 35
rule 2 of the ROC said that the Court cannot find any defence in this case. The
Court also agree with the DR that there is no prospect of success of the
defendant at the trial.

Therefore, it was held that:

“In the premises it is my view that although the absence of the defendant at the
trial date on 16.12.2014 may not be deliberate and it may well be not due to
some oversight or mistake the defendant however had not shown a defence of
merits as such the Application is dismissed with costs of RM1,000.00 to the
plaintiff.”19

7.0 US (State of Missouri) position in default judgment

In the State of Missouri (“hereinafter referred as the State”), the opinion of the
Court is that judgment entered in default of appearance for trial is judgment on
the merit. This can be seen in the case of Cotleur v. Danziger20, where the
Supreme Court of Missouri hold that "when a party files a petition, then files an
answer to a cross-petition, but fails to appear for trial, the judgment is not a
default judgement but, rather, is a judgment on the merits.”

Setting aside default judgment

In regards to the procedure to set aside a default judgment, the position of the
State is quite similar to our Order 42 rule 13 of the ROC. The Missouri Supreme
Court Rule 75.01 provides that," Before an entry of a default judgment became
final, a party could file a motion to set aside the judgment pursuant to which

19
Ibid
20
Cotleur v. Danziger, 870 S.W.2d 234, 236 (Mo. banc 1994)
allows the trial court to control a judgment for thirty days following its entry." In
other words both default judgment in Malaysia and the State will only become
final after thirty days of service of the judgment in Malaysia and thirty days of
entry in the State.

There seems to be a flaw in comparison as it might be unjust to the party of the

State who is not served with the default judgment after it was entered. Even when
the party did become aware of a default judgment within the thirty day period and
was able to make a motion pursuant to Rule 75.01, the party still had to provide
the court with a meritorious defense and "good cause." This would mean that
there shall be a good excuse for his failure to flie a timely answer, a meritorious
defense, and no undue prejudice to the plaintiff if the judgment is set aside.21

In Cotleur v. Danziger22, the Supreme Court of Missouri began its analysis by

comparing Supreme Court Rules 74.05, 74.06, and 75.01, all of which provide
procedural means to set aside judgments.

The court had noted that the lowest standard in order to set aside judgment is in
Rule 75.01 which allows the trial court to set aside a judgment for "good cause”
before the judgment becomes final. Rule 75.01 provides that:

“The trial court retains control over judgments during the thirty-day period after
entry of judgment and may, after giving the parties an opportunity to be heard
and for good cause, vacate, reopen, correct, amend, or modify its judgment
within that time. Not later than thirty days after entry of judgment the court of its
own initiative may order a new trial for any reason for which it might have granted
a new trial on motion of a party, and every order granting a new trial shall specify
the grounds therefor. After the filing of notice of appeal and before the filing of the
record on appeal in the appellate court, the trial court, after the expiration of such

21
Courtin v. McGraw Constr. Co., 639 S.W.2d 286 (Mo. Ct. App. 1982)
22
Ibid, fn 19
thirty-day period, may still vacate, amend or modify its judgment upon stipulation
of the parties accompanied by a withdrawal of the appeal.

The thirty-day period after entry of judgment for granting a new trial of the court's
own initiative is not shortened by the filing of a notice of appeal but is terminated
when the record on appeal is filed in the appellate court.”

This follows by Rule 74.05(c) that allows a default judgment to be set aside for
'good cause' if the party can show 'facts constituting a meritorious defense. Rule
74.05 (c) provides as the following:

“a) Entry of Default Judgment. When a party against whom a judgment for
affirmative relief is sought has failed to plead or otherwise defend as
provided by these rules, upon proof of damages or entitlement to other
relief, a judgment may be entered against the defaulting party. The entry of
an interlocutory order of default is not a condition precedent to the entry of
a default judgment.

c) Default Judgment May Include. A default judgment may include an award of

damages, other relief, or both.

d) When Set Aside. Upon motion stating facts constituting a meritorious

defense and for good cause shown, an interlocutory order of default or a
default judgment may be set aside.

The motion shall be made within a reasonable time not to exceed one year
after the entry of the default judgment.

“Good cause” includes a mistake or conduct that is not intentionally or

recklessly designed to impede the judicial process.
 An order setting aside an interlocutory order of default or a default judgment
may be conditioned on such terms as are just, including a requirement that
the party in default pay reasonable attorney's fees and expenses incurred
as a result of the default by the party who requested the default.

A motion filed under this Rule 74.05(d), even if filed within 30 days after
judgment, is an independent action and not an authorized after-trial motion
subject to Rule 78.04 or Rule 78.06.”

Lastly, the highest standard will be Rule 74.06(b) which allows for a judgment on
the merits to be set aside if the party shows "excusable neglect." Rule 74.06 (b)
provides the following:

“(b) Excusable Neglect--Fraud--Irregular, Void, or Satisfied Judgment. On

motion and upon such terms as are just, the court may relieve a party or
his legal representative from a final judgment or order for the following
reasons: (1) mistake, inadvertence, surprise, or excusable neglect; (2)
fraud (whether heretofore denominated intrinsic or extrinsic),
misrepresentation, or other misconduct of an adverse party; (3) the
judgment is irregular; (4) the judgment is void; or (5) the judgment has
been satisfied, released, or discharged, or a prior judgment upon which it
is based has been reversed or otherwise vacated, or it is no longer
equitable that the judgment remain in force.

(c) Motion Under Subdivision (b)--Affect on Judgment--Time for Filing--

Notice of Hearing--Service. A motion under subdivision (b) does not
affect the finality of a judgment or suspend its operation. The motion shall
be made within a reasonable time and for reasons (1) and (2) and (3) of
subdivision (b) not more than one year after the judgment or order was
entered. The motion and a notice of a time and place for hearing on the
motion shall be served upon the parties to the judgment pursuant to Rule
 54.

(d) Power of Court to Entertain Independent Action--Certain Writs

Abolished. This Rule 74.06 does not limit the power of the court to
entertain an independent action to relieve a party from a judgment or order
or to set aside a judgment for fraud upon the court…”

8.0 Default judgment rule in US

Federal Rule of Civil Procedure 55(b) gives the power to the Court to order a
default judgment following the entry of default by the clerk of the Court under
Rule 55(a). The Court has the discretion to determine whether default judgment
should be entered. In exercising its discretion, the Court in the US has developed
seven discretionary factors, which were known as the "Eitel factors" following the
decision of the Court in the case of Eitel v. McCool23.

The first Eitel factor considers whether Plaintiff would suffer prejudice if default is
not entered. The second and third factors will be the merits of the substantive
claims pleaded in the Complaint as well as the general sufficiency of the
Complaint. In weighing these factors, Courts evaluate whether the Complaint is
sufficient to state a claim that supports the relief sought.24

The next factor will be on the sum of money involved in the dispute. The Court is
more reluctant to grant the default judgment if the sum of money at stake is too
large or unreasonable in relation to the defendant's conduct25. Therefore, in
general, the fact that a large sum of money is at stake is a factor disfavoring
default judgment.

23
Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986)
24
Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978)
25
Vogel v. Rite Aid Corp., 992 F. Supp. 2d 998, 1012 (CD. Cal. 2014) (citing Truong Giang Corp. v. Twinstar
Tea Corp., No. C 06-03594 JSW, 2007 U.S. Dist. LEXIS 100237, 2007 WL 1545173, at 12 (N.D. Cal. May 29,
2007))
The fifth Eitel factor examines the likelihood of dispute between the parties
regarding the material facts surrounding the case26. The sixth Eitel factors will
consider whether the default caused by the defendant is resulted from excusable
neglect; whereas the seventh factor would be the consideration of the strong
policy favouring decisions on the merits or in other words the Court should
decide the cases on merit whenever reasonably possible.27

Further, in applying the Eitel factors in determining the granting of a default

judgment, the Court also ought to consider the proof of the damages and the
terms of the judgment sought by plaintiff whereby the plaintiff must be able to
prove all damages sought in the complaint.28

9.0 Factors to be Considered In the US Court to set aside default judgment

Rule 55(c) of the Federal Rules of Civil Procedure spells out that the Court may
"set aside an entry of default for good cause." When hearing an application to set
aside a default judgment and to determine whether there is a good cause, the
court will consider a number of factors:
(1) whether the default was willful;
(2) whether setting it aside would prejudice the adversary;
(3) whether a meritorious defense is presented;
(4) the nature of the defendant's explanation for the default;
(5) the good faith of the parties;
(6) the amount of money involved; and
(7) the timing of the motion [to set aside entry of default]29
Some of these factors will become part of the consideration for a judge in
determining whether or not an applicant can succeed in setting aside the default

26
United States v. Sterling Centrecorp, Inc., No. 2:08-cv-02556 MCE JFM, 2011 U.S. Dist. LEXIS 60064,
2011 WL 2198346, at 6 (E.D. Cal. June 6, 2011)
27
Drew v. Lexington Consumer Advocacy, LLC, Case No. 16-cv-00200-LB, 2016 U.S. Dist. LEXIS 52385, 2016
WL 1559717, at *10 (N.D. Cal. Apr. 18, 2016)
28
Warne, 2012 U.S. Dist. LEXIS 49138, 2012 WL 1156402, at *4
judgment. For example, in the case of Unity School District, Plaintiff v.
Vaughn Associates, Inc., and Scott Vaughn, Defendants v. School
Administrative Unit 6, Excel Mechanical, Inc., Superior Walls of Hudson
Valley, Inc., and Ton of Unity, Third-Party Defendants30, the Court in deciding
in favour of the Third-Party Defendant, the Excel in setting aside the default
judgment, has applied the factors in this case and taken it into considerations:

1) First, the default in enter appearance is not wilful or intentionally.

2) Second, setting aside the default would not prejudice to the other parties.
3) Third, the fact that Excel has articulated viable defenses to the various
claims advances against it.
4) The amount of money at issue is substantial: in excess of USD 1.3 million.
5) Finally, Excel appears to have acted promptly in retaining new counsel and
seeking to vacate the entry of default.

The Excusable Neglect Standard

Under Rule 60(b)(1) Federal Rules of Civil Procedure, a default judgment may be
set aside for “excusable neglect.” As to what amounts to an excusable neglect,
the Court has both liberal and strict approach on determining this matter.

Liberal Approach

Under this approach, the Court is more preferable to hold a trial on the merits of
the case and a wider stance in interpreting Rule 60 in order to achieve justice.
The Court will set aside the default judgment unless it is proven on the element
of intention or bad faith.

Under this liberal standard, excusable neglect can include the illness or death of
a party or counsel, confusion resulting from the withdrawal of counsel, difficulties
for out-of-state defendants, misunderstandings between multiple defendants,

29
Coon v. Grenier, 867 F.2d 73, 76 (1st Cir. 1989)
30
2018 DNH 037
clerical error, miscalculation of time, or honest mistakes31.

Strict Approach
In the strict approach, the Court will refuse to set aside default judgments that
result from mere carelessness or negligence.

Under the strict standard, the following conduct did not constitute excusable
neglect: miscommunication with a party’s insurance company32, failing to open
mail containing service of process before taking a vacation33, and missing
deadlines due to counsel’s heavy caseload and scheduling conflicts34.

10.0 Conclusion
Problems With The Current System
When a default judgment is set aside, the defaulting party generally did not face
any negative impact or consequence arising from his failure to comply with the
Rules and his negligent and mistake.

As one commentator has noted: “The drafters did not intend the Rules to be, nor
should it be, a license for parties and their counsel to disregard process or
procedural rules with impunity, to fail to exercise due diligence in regard to
litigation, or to impede the efforts of other litigants vigorously pursuing their
cases. To condone such behavior makes a mockery of ROC.”35

Especially when the default judgment is regular, when it was set aside by the
Court, the non-default party is not compensated with cost for time and expense

31
10a Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice And Procedure § 2681 (3d
Ed. 1998).
32
Davis v. Safeway Stores, Inc., 532 F.2d 489, 490 (5th Cir. 1976).
33
CJC Holdings, Inc. v. Wright & Lato, 979 F.2d 60, 64 (5th Cir. 1992).
34
Pryor v. U.S. Postal Serv., 769 F.2d 281, 287 (5th Cir. 1985).
35
Brett Warren Weathersbee, Note, No More Excuses: Refusing to Condone Mere Carelessness or
Negligence Under the “Excusable Neglect” Standard in Federal Rule of Civil Procedure 60(b)(1), 50 VAND.
L. REV. 1619 (1997) at page 1646.
spend on the default judgment and he has to have his matter to be restarted
again.

Solution
Therefore, in order to remedy the efforts and loss suffered by the non-defaulting
party as a result of the negligence or carelessness of the default party, the
Legislature ought to include the payment cost in the rules for setting aside the
judgment, particularly for the default judgment that obtained regularly.

Further, we can also impose higher threshold for setting aside the default
judgment even if it is irregular default judgment if there is an undue delay and the
Defendant has sit on their rights to set aside. Reference can be made to Order
35 (3) of the ROC where the requirements for setting aside is set forthwith and
with a higher threshold.