Peterbilt of Ontario Inc. v. 1565627 Ontario Ltd.

Peterbilt of Ontario Inc. v. 1565627 Ontario Ltd.

The motion judge erred by treating the governing principles as rigid preconditions and by discounting the served statement of defence; having found the appellants acted expeditiously, provided an adequate explanation for the default and that any prejudice to the respondent could be compensated, the Court of Appeal exercised its discretion to set aside the default judgment and allow the defendants to defend on the merits, with the respondent entitled to recover costs thrown away.

Citation
2007 ONCA 333
Parties
Respondent (plaintiff): PETERBILT OF ONTARIO INC.; Appellant (defendant): 1565627 ONTARIO LTD.; Appellant (defendant): STEPHANIE LOBSINGER; Appellant (defendant): ERIC RAYSON
Court
Court of Appeal for Ontario
Jurisdiction
Canada
Judgment Date
2 May 2007
Procedural Posture
Collection / Court of Appeal — Appeal From Superior Court Motion to Set Aside Default Judgment
Outcome
Appeal allowed; order dismissing motion to set aside default judgment quashed; default judgment set aside; matter directed to proceed; respondent awarded costs thrown away as a result of the appellants' default.
Legal Topics
Set Aside Default Judgment, Exercise of Discretion on Motions, Balancing Prejudice, Statement of Defence, Costs
Source Language
English
Civil Civil Procedure Set Aside Default Judgment Exercise of Discretion on Motions Balancing Prejudice Statement of Defence Costs

Case Brief

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Parties

PETERBILT OF ONTARIO INC.

Respondent (plaintiff)

1565627 ONTARIO LTD.

Appellant (defendant)

STEPHANIE LOBSINGER

Appellant (defendant)

ERIC RAYSON

Appellant (defendant)

Procedural Posture

Collection / Court of Appeal — Appeal From Superior Court Motion to Set Aside Default Judgment

Legal Issues

  1. 1 Whether the motion judge erred by treating principles governing motions to set aside default judgment as rigid preconditions
  2. 2 Whether the appellants’ affidavit and served statement of defence were sufficient to raise an arguable defence
  3. 3 How to balance prejudice to the parties and the interests of justice in deciding whether to set aside a default judgment

Ratio Decidendi

The motion judge erred by treating the governing principles as rigid preconditions and by discounting the served statement of defence; having found the appellants acted expeditiously, provided an adequate explanation for the default and that any prejudice to the respondent could be compensated, the Court of Appeal exercised its discretion to set aside the default judgment and allow the defendants to defend on the merits, with the respondent entitled to recover costs thrown away.

Court Disposition

Appeal allowed; order dismissing motion to set aside default judgment quashed; default judgment set aside; matter directed to proceed; respondent awarded costs thrown away as a result of the appellants' default.

Orders

  • Appeal allowed
  • Order dismissing the motion to set aside the default judgment quashed