The Plaintiffs were Judgment creditors of the Defendant numbered company (“137”). The Defendants were comprised of 137 and its principal, as well as the principal’s deceased father, ex-wife, and son.

The ex-wife and son applied to vacate Default Judgments obtained by the Plaintiffs against them. The Plaintiffs applied for Summary Judgment seeking a declaration that the transfer of certain funds from 137 to the principal’s father (now his estate) be declared void. The estate sought to summarily dismiss the Plaintiff’s claim on the ground that there was no merit to it.

Justice Romaine set aside the Default Judgments against the ex-wife and son. She dismissed the Plaintiff’s Application for Summary Judgment against the estate and allowed the estate’s Application for Summary Dismissal, pursuant to Rule 7.3.

If it is fair in the circumstances, Rule 9.15(3) gives the Court discretion to set aside a Judgment. Rule 9.15(4) and the case law confirm that the Court can set aside the Judgment on any terms the Court considers just.

To determine whether it is fair to set aside a Judgment, the Court applies a three-part test looking to determine if (a) there is an arguable defence, (b) the Defendant has an excuse for why it let the Judgment go by default, and (c) the Defendant moved promptly to set aside the Noting in Default once it became aware of it.

The Defendants showed that they had an arguable defence. The ex-wife and son denied any improper receipt of money and relied on an expert report to support their position. The ex-wife provided uncontradicted evidence to explain that during the time when certain transfers of funds were alleged to have happened, she was in martial difficulties and 137’s principal handled all of their financial matters. The son provided uncontradicted evidence that at the time he received the alleged transfers, he was in his 20s, recovering from cancer and chemotherapy, unable to work, and requiring very expensive medication. He was unaware of the source of the alleged funds and had no reason to suspect anything untoward about their source.

Both Defendants were unaware that the Plaintiffs applied for Default Judgment against them, and once they found out, moved quickly to set it aside.

Turning her attention to the Plaintiff’s Summary Judgment Application, Romaine J. cited the Court of Appeal decision in Weir-Jones Technical Services Incorporated v Purolator Courier Ltd, 2019 ABCA 49 for the key considerations on the merits of a Summary Judgment Application. The Plaintiffs failed to show that there was no merit or defence to their claim against the estate. The estate had provided evidence that the father was not involved in the running of 137’s bank accounts, that he did not receive a benefit from any of the alleged funds, and that he was not privy to the transfers into his own account.

Lastly, the estate’s Summary Dismissal Application against the Plaintiffs was granted. The Court was able to conclude on the record that the Plaintiffs’ claims against the father lacked merit. The record was sufficiently clear to establish that the father did not have knowledge of the transactions conducted through his bank account.