The Defendant/Appellant, River Valley Development Corp, appealed a decision dismissing its Application to set aside a Noting in Default. The Chambers Judge determined that the Appellant had no arguable Defence, and refused to set aside the Noting in Default, awarding the Plaintiff/Respondent Summary Judgment.

On Appeal, the Court carefully set out the distinction between a Noting in Default and a Default Judgment as set out in Rules 3.36 to 3.42. If a Defendant has failed to file a Defence or Demand for Notice pursuant to Rule 3.30, the Rules of Court provide two remedies. The first remedy is to apply for Judgment pursuant to Rules 3.38 or 3.39. The second remedy is to note the Defendant in default pursuant to Rule 3.36(1)(b). Once a party has been Noted in Default, the noting party may apply for Judgment pursuant to rule 3.37(1)(a). The court can then take a variety of steps pursuant to Rule 3.37(3).

The Court held that the Chambers Judge had incorrectly conflated the tests for setting aside a Noting in Default and setting aside a Default Judgment. The Panel held that the proper procedure to be followed when there are competing Applications for setting aside a Noting in Default and for Summary Judgment is for the court to first determine whether the Noting in Default should be set aside and if so, whether a Statement of Defence should be entered and any other steps in the litigation completed before the Summary Judgment Application proceeds. The Appeal was allowed due to the prejudice arising from the error of the Chambers Judge. The matter was returned to the Court of King’s Bench to proceed in the proper order.