The court in Gillespie v. Fraser, 2023 ONSC 4183, dismissed a defendant’s motion to set aside default judgment in circumstances where defence counsel was negligent.
The facts of the case are unusual. The plaintiff’s mother was murdered by her father and he was convicted and sentenced to life imprisonment. The plaintiff alleges in her action that her father, while he was incarcerated, conspired with two other individuals, Tilburt and Capone-Hall, to create a website that suggested that the plaintiff was responsible for her mother’s death. The plaintiff commenced an action as against her father, Tilburt and Capone-Hall for intentional infliction of emotional distress.
Ms. Tilburt was noted in default on May 27, 2022, after three extensions on the timeline to file a statement of defence, and default judgment was obtained against her on January 20 2023.
Ms. Tilburt brought a motion to set aside the noting in default and default judgment.
The Applicable Test
Under Rule 19.08(2) of the Rules of Civil Procedure, the court may set aside a judgment obtained on a motion under Rule 19.05 on such terms as are just. It may also set aside the noting in default at the time it orders a default judgment be set aside (Rule 19.08(3)).
The Judge on the motion noted that the ultimate question to be determined is whether the interests of justice favour setting aside the default judgment and the following factors are to be considered:
- Whether the motion to set aside default judgment was brought as soon as possible;
- Whether there is a plausible explanation for the default;
- Whether the facts establish that the defendant has an arguable defence on the merits;
- The potential prejudice to the moving party should the motion be dismissed, and the potential prejudice to the respondent should the motion be allowed; and
- The effect any order might have on the overall integrity of the administration of justice.
The Judge noted that the factors are not ridged rules and the Court must consider the particular circumstances of each case. One relevant circumstance is whether there is a defence on the merits of the case. If there is a defence on the merits, and the defence has an air of reality, the Court may be justified in exercising its discretion to set aside the default judgment.
Finally the Court noted that:
“the sins of the lawyer should not be visited upon the client” [citations omitted]. Framed another way (in the context of setting aside a dismissal order), “the court should be concerned primarily with the rights of the litigants, not with the conduct of their counsel” [citations omitted].
The Positions of the Parties
Ms. Tilburt’s primary argument on the motion was that her counsel was negligent and that she responded as quickly as she could to address the matter once it became clear that her counsel was not defending the claim properly.
The plaintiff argued that Ms. Tilburt failed to act within a reasonable period of time after discovering the negligence of her counsel. The plaintiff further argued that there is no merit to Ms. Tilburt’s defence and that there would be prejudice to plaintiff if the default judgment were set aside.
The Court considered the following relevant facts, among others:
- Ms. Tilburt became aware of the fact that her lawyer had not served her statement of defence on April 14, 2022
- The plaintiff granted three extensions to file the statement of defence, the last of which expired on May 26, 2022
- Ms. Tilburt met with her counsel on July 17, 2022 and he told her he had filed the statement of defence on her behalf. She asked for a copy, which he was unable to provide. She emailed him asking for a copy on August 2, 2022
- On August 12, 2022, Ms. Tilburt called her first counsel to fire him.
- She met with her lawyer on August 17, 2022, and decided to keep him on as counsel
- Both Ms. Tilburt and her counsel attended the motion for default judgment at which they were advised by the Judge that the defence had to be filed the next day
- Ms. Tilburt could not recall what steps she took to determine whether or not her statement of defence had been filed after the hearing
- On November 14, 2022, Ms. Tilburt attempted to file a response to the statement of claim with the court, but was not permitted to do so since she had been noted in default
- Ms. Tilburt retained new counsel (who represented her on the motion) on January 16, 2023
The Judge held that it was not in the interests of justice to set aside the default judgment. The Judge found that, by mid July 2022, Ms. Tilburt had concluded that her lawyer was not properly defending her and yet she did not take reasonable steps to ensure that her defence was properly managed thereafter despite numerous indications that her lawyer continued to fail to properly defend the claim.
The Judge also considered whether there was an air of reality to Ms. Tilburt’s defence and concluded that the draft statement of defence contained only a bald denial on the central issue. The Judge held that if there was more to her anticipated defence, it should have been articulated in Ms. Tilburt’s motion record.
The Judge further noted that the plaintiff would suffer the greater prejudice, if the default judgment was set aside, as she gone to the expense of proceeding with a hearing for default judgment. To permit the filing of a statement of defence particularly given the nature of the claim would unnecessarily prolong proceedings and presumably increase the plaintiff’s mental anguish and increase costs.
The motion to set aside the default judgment was dismissed.
The takeaway from this decision is that parties must act reasonably in terms of ensuring the appropriate steps are being taken on their behalf by their lawyers. In the context of a motion to set aside a default judgment, defendants may not be able to rely on missteps by their counsel.
Further, on a motion to set aside default judgment, a defendant should present the most robust and detailed defence possible on the merits.