The Bank of Montreal initiated a foreclosure Action against the Appellant who defaulted on mortgage payments. The Appellant was Noted in Default. The Appellant then applied to set aside the Noting in Default and foreclosure Orders. That Application was dismissed, and the Appellant appealed to the Court of Appeal.

The Appellant argued that the Noting in Default should be set aside due to improper service and that the interest charged on the mortgage was not permitted. The Respondent argued that service was proper, the foreclosure Action was valid, and that the Appellant had no arguable defense against the foreclosure Action.

Pentelechuk J.A. and Gosse J.A. formed the majority, while Wakeling J.A. concurred in the result. The Majority noted that Rule 9.15 grants the Court the discretion to set aside a Noting in Default and permit the filing of a Defence. The Majority determined that there was no procedural flaw leading up to the default, and the Appellant was therefore not entitled to have the Noting in Default set aside as of right. The Majority stated that, per Rule 9.15(3), the Court may grant an Order setting aside Default Judgment on terms it considers just, and retains discretion to grant relief when fairness requires.

To succeed in an Application to set aside the Noting in Default, the Court held that the Appellant was required to demonstrate that: (1) he had an arguable defence; (2) he did not intend to allow the judgment to go by default and has a reasonable excuse for the default, and (3) once he became aware of the Noting in Default, he promptly applied to set it aside. The Chambers judge found that the Appellant did not deliberately let the Judgment go by default and acted promptly in applying to have it set aside. However, the Appellant did not present an arguable defence to the Bank of Montreal’s mortgage foreclosure Action.

The Court of Appeal, satisfied that the Chambers Judge considered all the evidence and circumstances, determined that the Chambers Judge exercised reasonable discretion and that there was no basis for appellate intervention. The Appeal was dismissed.

Wakeling J.A., concurring in the result, noted that Rule 9.15 bestows an unfettered discretion on the Court and that the Court must be mindful of the objectives set out in Part 1 of the Rules, especially Rule 1.2(1). Justice Wakeling was also satisfied the Chambers Judge reasonably exercised the discretion bestowed on the Court pursuant to Rule 9.15 and concurred in dismissing the Appeal.