The Appellant and Defendant by Counterclaim appealed a Master’s Order dismissing an Application to vary a Consent Order. The Appellant originally applied under Rule 9.15 to vary the terms of a Consent Order to change dates which had been specified for Questioning. The parties had initially entered the Consent Order which set specific timelines for the Appellant to provide producible records, pay Security for Costs, and appear for Questioning, failing which its Statement of Defence to Counterclaim would be struck without further Order. The Appellant produced its records and posted Security for Costs, but failed to attend for Questioning. The Appellant indicated that it was under the impression that the dates for Questioning in the Consent Order were tentative and would be re-scheduled for a later date.

The Master dismissed the Application, having determined that the Appellant was bound by the conduct of its counsel who signed the Consent Order, and that the Consent Order could not be varied unless there was common or unilateral mistake, misrepresentation, fraud, or unilateral mistake where the opposing party was aware of the mistaken understanding - none of which were established. The Master noted that the Appellant had a demonstrated history of failure to abide by Court imposed timelines which resulted in its Statement of Claim being struck, and thus the Appellant ought to have been aware of the consequences of failure to abide by Court imposed timelines.

Mahoney J. stated that Rule 9.15 provides the Court with the discretion to vary or set aside the terms of the Consent Order, and that the Rule should be interpreted and applied to give effect to the purpose of the Rules provided by Rule 1.2, which is to ensure that matters are determined on their merits in a timely, efficient, cost-effective, and fair manner. Mahoney J. held that the Master applied the correct test for variance of a Consent Order. However, Justice Mahoney found that there was conflicting Affidavit evidence regarding the understanding of the parties and their counsel as to whether the dates in the Consent Order were tentative or final. Justice Mahoney held that it would be unfair to make findings of credibility on the Affidavit evidence which had not been tested by cross-examination. Mahoney J. allowed the Appeal on this basis.

Justice Mahoney further commented that there was evidence which disclosed that the failure to attend for Questioning on the dates specified was not a deliberate or careless act, but was rather based on a misunderstanding as to the date for Questioning. Mahoney J. held that clients may be responsible for the acts or omissions of their lawyers, but that the rigid application of that principle to the facts of this case would be unfair. Given the underlying principle that cases should be resolved on their merits so far as possible, Mahoney held that the Appeal should be allowed, and the Appellant’s Statement of Defence to Counterclaim restored.