Test for Setting Aside Default Judgments

In Kaur v. Janeallam, 2019 ONSC 4249, Master Muir outlined the test to set aside a default judgment, as previously stated by the Court of Appeal in Mountain View Farms Ltd. v. McQueen, 2014 ONCA 194:

1. whether the motion was brought promptly after the defendant learned of the default judgment;
2. whether there is a plausible excuse or explanation for the defendant’s default in complying with the Rules of Civil Procedure;
3. whether the facts establish that the defendant has an arguable defence on the merits;
4. the potential prejudice to the defendant should the motion be dismissed, and the potential prejudice to the plaintiff should the motion be allowed; and
5. the effect of any order the court might make on the overall integrity of the administration of justice.

The factors are not rigid. The court’s main goal is to determine whether the interests of justice favour granting the order.

For example, the presence of an arguable defence on the merits may justify the court exercising its discretion to set aside a default judgment, even if the other factors are unsatisfied in whole or in part.

In the case at bar, Master Muir dismissed the defendant’s motion to set aside a default judgment, mainly because there was no evidence of a defence on the merits.

This case serves as a reminder to defendants to lead some evidence of a defence on the merits when bringing a motion to set aside a default judgment.

The Court of Appeal has indicated that a defendant need not show that the defence will inevitably succeed. Rather, a defendant must show that his or her defence has an air of reality.