Being sued by someone is no fun, especially if you know (or believe) that the claim is unjustified. The worst thing that you can do is nothing, as this could lead to a default judgment being entered against you. This will enable the person who has sued you to take enforcement action, which could include selling your property or making you bankrupt. In addition, a judgment normally affects your credit rating, making it hard for you to borrow money and do many other things such as be a company director.
What Should I Do?
You should seek urgent legal advice as soon as you are served with the court documents. Make a note of the time and date of service, as you normally only have 28 days (and only 21 in Victoria) to file a Defence. However, if you are served after 4pm or on a weekend, the time starts running on the next working day. You cannot be served on Christmas Day or Good Friday, and it is generally considered ‘un-Australian’ to serve documents before 1pm on Anzac Day!
If you are being sued as an individual, the documents need to be given to you, or to someone over 18 apparently living at your address (spouse, adult child of yours, etc). However, a company can be served by having the documents delivered to its registered office. Since this may be your accountant’s address or somewhere remote from the actual business, you need to ensure that systems are in place for any legal documents that arrive to be forwarded to you immediately. A claim that a director did not see documents until it is too late tends to get short shrift from the court.
You also need to provide your lawyer with full instructions on what is claimed in the documents. There may be either technical defences (such as the claim being brought too late) or substantive ones – eg., the incident didn’t happen, or you have paid everything due. The Defence needs to be detailed, and must respond to every allegation. Those allegations that can be admitted, should be admitted (the courts like this as it means that they do not have to worry about matters that are obviously not in dispute, such as the existence of a company). If you deny an allegation or cannot admit it, you need to say why. If you do not do so, you may be deemed to have admitted the allegation.