BROOKFIELD PLACE (CALGARY) LP v CRU JUICE INC (JUSU BARS)

The Defendants applied to vary a Consent Order after their former counsel, without instructions, consented to Procedural Orders setting an Undertaking response deadline and stipulating that non-compliance would strike their defence and permit default. The Defendants were never told of the Orders or the deadline; once they learned of them, they promptly retained new counsel and sought to extend the deadline and to pay the Plaintiff’s thrown-away Costs.

The Court treated the March 12, 2025, Consent Order as an Interlocutory Procedural Order, not a final one resolving the merits. Justice Jugnauth held that Interlocutory Consent Orders are governed by the Court’s discretionary power under the Rules and may be varied on what is just in the circumstances, rather than only on contractual grounds. Applying Rule 9.15(4)(a) and (c), and informed by Rule 13.5, the Court found that the Defendants’ late discovery of the Orders (caused by counsel’s misconduct) was information discovered after the Order was made and that varying the deadline was just.

Jugnauth J. emphasized that enforcing the Consent Order to strike the Defence would be unequitable, as it would indirectly grant a contempt-style remedy that could not have been obtained directly because contempt requires proof the alleged contemnor had actual knowledge of the Order. Given the purely procedural nature of the Consent Order, the promptness of the Defendants’ Application, and the Rules’ objective of resolving disputes on their merits, the Court varied the deadline from March 21, 2025 to October 3, 2025.

To address prejudice and uphold the proportionality objectives of the Rules, the Court ordered the Defendants to pay the Plaintiff’s reasonable thrown-away Costs on a full indemnity, solicitor-and-client basis tied to the earlier Applications and Orders, and otherwise left each party to bear its own Costs on this variation Application.