This Decision dealt with the parties’ entitlements to Costs following the Court of Appeal’s reversal of Manderscheid J.’s Decision dismissing the Defendant’s Application to set aside Default Judgment.

The Plaintiffs had obtained Default Judgment against two Defendants on December 14, 2016, two days after the individual Defendant (the “Defendant”) had declared bankruptcy. The Defendant was discharged from bankruptcy in September 2017, and applied, initially unsuccessfully, to set aside the Default Judgment against him in October 2017. In May 2019, the Court of Appeal reversed the Decision of the lower Court and set aside the Default Judgment against the Defendant, but did not speak to Costs. Thereafter, the Defendant filed and served an Appointment for Assessment of Costs arising from the Appeal on the Plaintiffs. He sought Costs of the Appeal, netted off against the Costs he owed to the Plaintiffs in respect of their noting him in default. In response, the Plaintiffs argued that the most cost-effective and efficient way to address the Defendant’s Costs, in accordance with Rule 1.2, was to direct that they be payable in the cause as there was a good chance the Defendant would not be successful should the matter proceed to Trial.

Manderscheid J. noted that Rule 14.88 creates a presumption that the successful party is entitled to the Costs of the Appeal, pursuant to Part 10, Division 2, and Schedule C of the Rules. Consequently, His Lordship held that the Defendant was entitled to Costs of the Appeal. His Lordship also held that the Defendant’s Costs should be payable forthwith, in accordance with Rule 10.29(1). 

The Plaintiffs also sought payment of thrown away Costs to account for the steps they had taken in the period between the Default Judgment and the Defendant’s Appeal. Manderscheid J. agreed that they were appropriate in respect of the steps taken by the Plaintiffs prior to the Appeal as a result of the Defendant’s failure to file a Statement of Defence, which were now “wasted”.  His Lordship ordered that they be paid in accordance with Column 4 of Schedule C, and that they also be payable forthwith pursuant to Rule 10.29(1).