STEINKEY v FIRST CAPITAL HOLDINGS (ALB) CORPORATION

This was an Appeal of an Applications Judge’s decision declining to set aside a Noting in Default.

The Plaintiff brought an occupiers’ liability claim arising from injuries allegedly cause by a
wind-blown patio umbrella. Although the Statement of Claim was served in 2020, the Defendants failed to file a Statement of Defence despite repeated demands and were Noted in Default in December 2022. More than a year later, the Defendants applied to set aside the Noting in Default, arguing that communications were missed due to accidental email deletions by a third-party adjuster and asserting an arguable defence based on internal safety policies.

Justice Lema confirmed that Rule 9.15(3) confers a broad, discretionary power to permit a defence to be filed after a party has been noted in default where it is fair and just to do so. The Court reviewed competing appellate authorities concerning the applicable test to set aside a Noting in Default. It reviewed the traditional three‑part test of an arguable defence, a reasonable excuse, and a prompt application. Justice Lema also considered the more flexible “fair and just” analysis articulated in Liberty Mortgage Services Ltd v River Valley Development Corp, 2025 ABCA 346. Lema J. emphasized that the stricter test applicable to setting aside a Default Judgment, reflecting the finality of judgments, must not be conflated with the more discretionary approach for setting aside a Noting in Default, although similar factors may remain relevant.

The Court held that, under either framework, the Defendants failed to meet the requisite standard. In particular, the Defendants failed to establish an arguable defence, as the evidence demonstrated only the existence of umbrella safety policies, not that they were implemented or followed on the day of the incident. Further, Lema J. found that the alleged email deletions were inadequately explained and did not constitute a reasonable excuse, and that the Defendants failed to act promptly after learning of the Default, given the significant delay in bringing their Application.

Accordingly, Justice Lema found that it was neither fair nor just to set aside the Noting in Default and dismissed the Appeal.