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The new trend in motions for default judgment
We have all been there, you bring a claim against a party who thinks that if they just ignore the litigation it will go away. The Rules of Civil Procedure dictate that if a party against whom a claim has been properly brought does not serve and file a defence within 20 days, that party may be noted in default.
So, 20 days have elapsed since service, maybe you’ve contacted the party to ask if they’re going to file a defence, maybe you haven’t, there is no legal obligation to. You proceed to note them in default, then what? The next step is to bring a motion for default judgment or set it down for an uncontested trial.
The preparations for a motion for default judgment can be quite expensive, and consequently quite costly to the client. Therefore, it is important to ensure that all requisite steps are followed to maximize the potential for a successful outcome.
The Rules dictate that once a party has been noted in default they are not entitled to notice of any further steps in the action, unless the court orders otherwise. The court has indeed begun ordering otherwise.
In Beals v. Saldanha, 2003 SCC 72, Binnie J commented that Rule 19.02 “leaves notice in the discretion of the court”, and that the requirement of notice will depend upon the circumstances of the case.
The Court of Appeal, in Greey v. Greey, 1994 O.J. No. 1344 directed that notice of any motion for judgment be provided to a defendant whose defence had been struck. The Court found that it was “in the interest of justice” to do this.
In Eleckta Ltd. v. Rodkin, 2012 ONSC 2062, Brown J, as he then was, directed that notice be provided to a defaulting defendant on the basis that this would allow the judge to be satisfied that the defendant was provided with proper notice of the claim and the motion or hearing.
In Casa Manila Inc. v. Iannuccilli, 2018 ONSC 7083, Sanfilippo J engaged in a thorough examination of the above cases as well as others and held that despite Rule 19.02 of the Rules this was a matter wherein he should “order otherwise”. This case has been cited with approval and followed in at least five reported decisions in nine months since it was heard.
Indeed, one of our own CHC counsel recently attended on a default judgment motion where the presiding judge would not grant any default judgment motions where the defaulting defendant had not been notified at least of the fact that he had been noted in default. We were granted judgment as we had notified the defendant of the default.
In summary, while the Rules do not strictly require that a defaulting defendant be notified of any steps once he has failed to deliver a defence, the courts are beginning to require it. Therefore, it is best practice to keep a defaulting defendant in the loop, to serve them with the notice of default and notice of the motion for default judgment. This may be the best way to avoid extensive preparations of a winning motion only to not have it heard or be forced to adjourn it.