9.15: Setting aside, varying and discharging judgments and orders

Case Summary

The Defendants applied to set aside a Default Judgment issued in favour of the Plaintiff on June 28, 2010.  The Default Judgment was for $59,810 related to costs incurred for a course in laser hair removal and the purchase of three laser machines and related equipment and furniture.

At the time the Application was filed, the “old” Rules applied and when the Application was heard the new Rules, specifically Rule 9.15 (re: setting aside, varying and discharging Judgments and Orders), had come into force.

The Plaintiff relied in part upon Rule 9.15(2) which specifies a requirement that the Application be made within 20 days of when a Judgment came to an Applicant’s attention.

Poelman J. determined that 9.15 (2) does not apply to an Application to set aside a Default Judgment. First, because a Default Judgment is not made “without notice” and Second, because:

…the structure of rule 9.15 indicates that sub-rule (1) deals with judgments and orders where a party did not appear because of lack of or insufficient notice or an accident or mistake, and sub-rule (2) then requires prompt application when the party becomes aware of the judgment or order. Sub-rules (3) and (4) deal with different circumstances: (3), the specific case of default judgment, and (4), the case of new information or agreement of all parties. Neither of those situations is contemplated by rule 9.15(1).

This Decision indicates that Default Judgements differ from other Judgments. The Decision also appears to remove a potential argument that the party knew about the Default Judgment for more than 20 days. Poelman J. stated:

In my view, the application referred to in rules 9.15(1) and (2) does not include an application to set aside a default judgment under rule 9.15(3).

In terms of the test to set aside a Default Judgment, Poelman J. found that the Defendants must show that:

(a)        They have an arguable defence; and

(b)        They did not deliberately let judgment go by default and have some excuse for the default, such as illness or a solicitor’s inadvertence; and

(c)        After learning of the default judgment, they moved promptly to open it up.

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