NWT Small Claims Default Judgment: How to Set It Aside

How Default Judgment Works in NWT

When a defendant does not file Form 2 (Statement of Defence) within the 25-day or 30-day deadline, the plaintiff can apply for default judgment. The process depends on the type of claim.

Liquidated claims (a fixed, specific dollar amount like an unpaid invoice): A registry clerk can review the file and sign Form 11 (Default Judgment) without scheduling a hearing. The plaintiff files Form 3 (Affidavit of Service) proving that Form 1 was properly served, and if everything checks out, the clerk signs off.

Unliquidated claims (damages that need to be assessed, like repair costs or breach of contract): The file goes to a Territorial Court judge, who may schedule a brief assessment hearing. The plaintiff must present brief oral or documentary evidence, and the judge determines the amount. If you learn an application is underway, contact the registry promptly about the hearing and any steps you can take.

The default judgment is enforceable. A judgment creditor may then use enforcement procedures such as a garnishee summons (Form 35) or a writ of execution (Form 22).

Setting Aside a Default Judgment

A default judgment is not permanent if you act quickly. You can apply to have it cancelled, but you cannot do it by simply calling the registry and asking. It requires a formal judicial application.

The Four Steps

1. File Form 40 (Application to Judge). State exactly what you are asking for: "An order setting aside the Default Judgment entered on [date] and granting leave to file a Statement of Defence."

2. Attach a sworn affidavit. This is where you explain what happened. The judge evaluates three things:

• A reasonable explanation for why you did not file on time (medical emergency, you were out of the territory, you did not actually receive the papers)
• Evidence that you were not deliberately ignoring the case
• A real defence on the merits — you need to show that you have a legitimate argument, not just that you dislike the outcome

3. Serve the plaintiff. The plaintiff gets a copy of your Form 40 and supporting affidavit, and a hearing date is set.

4. Request a stay of enforcement. Filing Form 40 does not automatically stop the plaintiff from enforcing the default judgment. If the plaintiff has already started garnishing your wages or bank account, you need to explicitly ask for an interim stay of enforcement within your application. Without this, collection continues while your application is pending.

What the Judge Considers

Judges have discretion here. They are more likely to set aside a default judgment when:

• You moved quickly once you became aware of the judgment
• Your reason for missing the deadline is credible and not simply that you forgot
• You can show a defence that has a real chance of succeeding
• The plaintiff would not be seriously prejudiced by reopening the case

If the judge is satisfied, they will cancel the default judgment and give you a deadline to file your Form 2. The case then proceeds normally through the mandatory judicial mediation and, if needed, trial.

Prevention Is Easier Than Cure

The set-aside process works, but it costs time and puts you at a disadvantage. Filing your defence within the original 25-day or 30-day window avoids the entire problem. The NWT small claims response guide includes a deadline calculator and step-by-step Form 2 instructions to keep you on track from the start.

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