Setting Aside a Noting in Default

Being sued is inherently stressful. If someone is making a claim against you, or a business you own, the importance of addressing the problem promptly cannot be overstated. If you fail to meet the court-imposed timelines, it could result in you being “noted in default” – which simply means that the suit can proceed without you being involved at all.

If you have been noted in default, it is sometimes possible to have this set aside. The Alberta Court of Appeal recently affirmed the legal test for setting aside a “noting in default” and serves as a reminder to litigants why this is something you want to avoid.

In Kraushar v Kraushar, 2019 ABCA 186, the Alberta Court of Appeal affirmed that there are two instances in which the court has jurisdiction to set aside a noting in default.

The first is where there is a “non-trivial” flaw in the process leading up to the default judgment (para 5) and the defendant acts promptly to set aside the judgment once apprised.

The second is where the procedure leading up to the noting in default is “regular”, but the defendant/applicant is able to establish the following three criteria:

  1. the existence of an arguable defence
  2. that the defendant/applicant did not intend to allow the judgment to go by default and offers some reasonable excuse for the default, such as illness or solicitors inadvertence; and
  3. that once the noting in default came to the defendants/applicants attention, they  promptly applied to set it aside. (para 5)

This test was applied in the case of Fort McKay Métis Community Association v Morin, 2020 ABCA 311, where the defendant was noted in default after having been served with a Statement of Claim for defamation. The Plaintiff’s lawyer had the Defendant personally served and was in contact with the Defendant post-service to remind them of their timeline to file a response. The Plaintiff informed the Defendant they would hold off on noting them in default for 7 days (beyond the 20-day timeline) in order to allow for a response. When no response was received after 27 days, the Plaintiff noted the Defendant in default, 33 days after the Statement of Claim had been served. A month later, the Defendant applied to have the noting in default set aside. Their application was dismissed at trial, and they appealed this ruling up to the Alberta Court of Appeal. Ultimately, the Court of Appeal found that the Defendant was unable to provide satisfactory evidence to explain why they allowed themselves to be noted in default. The trial judge’s decision was upheld and the noting in default was not set aside.

This case illustrates why it is always best to proactively address your legal disputes and have them dealt with by a professional who knows the law. Contact one of the civil litigation lawyers at Schnell Hardy Jones LLP today if you need helping to address a civil dispute.

Alex Peters