Default Judgment Set Aside Despite Litigant's Choice Not To Attend Trial

In Ontario there is a fundamental belief that litigation should be decided on its merits and not on procedural advantage. A recent Ontario Superior Court decision demonstrates that, sometimes, even when a litigant decides not to show up for trial, they can still prevail in getting the judgement set aside.

The litigants were sisters who allegedly entered into a transaction regarding the sale of their parents home. According to the plaintiff, Nicole, she owed the house outright. Her sister Stacy disagreed and claimed that Nicole had engaged in some nefarious activity and actually held the property in trust for her. Not surprisingly, there was little if any documentation concerning the transaction.

The action proceeded in the normal course with documents being exchanged and examinations for discovery occurring. Nicole commenced a motion for summary judgment but after Stacy delivered her affidavits, the motion was vacated with Stacy obtaining a few thousand dollars in costs. Nicole then set the action down for trial.

At this point, and approximately six weeks prior to the commencement of trial, Stacy's lawyer brought a motion to be removed as lawyer. Because she believed the motion would succeed Stacy delivered a Notice of Intention to Act In Person. She claimed she tried to find new counsel but was unsuccessful in doing so.

At the pre-trial, literally on the eve of trial, Stacy advised the court that she had not succeeded in obtaining new counsel. She requested an adjournment. The pre-trial judge declined the request and advised Stacy that she could make the request to the judge who was conducting the trial. The pre-trial judge further advised that the request would not likely succeed or if it would succeed it was likely to result in a significant cost award against her.

The trial started but Stacy did not attend. An uncontested judgement was obtained. Immediately after Nicole attempted to collect on the judgment, Stacy hired new counsel and moved to set aside the judgement. She succeeded.

Stacy produced evidence that she suffered from a generalized anxiety disorder that had prevented her from attending the trial. According to Stacy, she was completely overwhelmed by not having counsel and by being told, by the pre-trial judge, that the trial was likely to succeed.

The motion judge, who set aside the uncontested judgement found that Stacy did suffer from anxiety disorder and that she had a meritous defence (as demonstrated by the abandoned summary judgement motion). Additionally, since Nicole would suffer no prejudice that could not be compensated with costs, the judgement was set aside.

The Lesson: This case demonstrates that in certain circumstances uncontested judgements can be set aside. However, it is not prudent to take calculated risks that you can later move to vacate the judgement. If a court believes the decision not to attend was deliberate or a calculated risk, or if the court determines that there is little merit to the defence, the judgment will not be set aside. Allowing a trial to proceed as a tactical move with a view to later setting it aside is very risky and not advised.

Geldart v Geldart, 2016 ONSC 7150 https://www.canlii.org/en/on/onsc/doc/2016/2016onsc7150/2016onsc7150.pdf

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