Defendants on occasion are tardy in filing a response to a Notice of Civil Claim and default judgment is taken out against the defendant.
The decision of De Thomas Family Holdings Ltd v Glen Valley Cannabis Ltd discusses the issue of what is required by the court to consider setting aside a default judgment.
Setting Aside a Default Judgment
[62] Rule 3-8(11) of the Rules provides that the Court may set aside or vary a judgment entered against a defendant who has failed to file a response to a civil claim. The Rules’ discretion must be exercised in accordance with the interests of justice: 1163499 B.C. Ltd. v Holm, 2026 BCCA 270 at paras 8, 19 [Holm].
[63] The considerations traditionally relevant to that determination were identified in Miracle Feeds v D. & H. Enterprises Ltd. (1979), 10 BCLR 58 at p 61 (BC Co. Ct.) [Miracle Feeds] and are summarized in Holm at para 8. They are:
- a) whether the defendant wilfully or deliberately failed to file a response;
- b) whether the defendant applied to set aside the judgment as soon as reasonably possible after learning of it, or has provided an explanation for any delay; and
- c) whether the defendant has a meritorious defence or, at least, a defence worthy of investigation.
[64] The applicant bears the burden of demonstrating that the interests of justice favour setting aside the judgment. The Miracle Feeds considerations are neither mandatory nor exhaustive and are not discrete preconditions, each of which must be satisfied. Their weight depends upon the circumstances: Holm at paras 8, 19, 23-29; Forgotten Treasures International Inc. v Lloyd’s Underwriters, 2020 BCCA 341 at para 17 [Forgotten Treasures]. I do not accept Ceridwen’s submission insofar as it would require an applicant who deliberately defaulted and delayed seeking relief to establish fraud or a shocking and unconscionable result as a separate prerequisite. Those adverse circumstances carry substantial weight, but the governing inquiry remains whether the interests of justice favour relief.
[65] The threshold for establishing a defence worthy of investigation is low. The applicant must point to some evidence showing that the proposed defence could succeed; the applicant need not establish that it will succeed. At this stage, the Court does not decide the merits through a searching, extended, or detailed weighing of the evidence: Holm at paras 26-28; Forgotten Treasures at paras 26-30.
[66] A proposed defence may satisfy this threshold even if it would defeat only part of the plaintiff’s claim, including by reducing the damages recoverable. The applicant must provide some evidence that the defence could succeed; its ultimate merits are not determined on this application: Holm at paras 27-28.
[67] The Court may consider any other circumstance relevant to the interests of justice, including practical problems that maintaining the judgment may create for the assessment of damages: Holm at paras 14, 19. Alleged prejudice from reopening must be supported by evidence: Holm at paras 29-30.
[68] The ultimate inquiry is therefore contextual. The Court must weigh the defendant’s explanation and conduct, the timing of the application, the evidentiary foundation for and potential validity of the proposed defence, any demonstrated prejudice, and all other circumstances relevant to whether justice is better served by maintaining the judgment or permitting the dispute to be determined on its merits
If a default judgment remains in place, the plaintiff must nevertheless prove the damages recoverable under that judgment through admissible evidence: McIsaac v Healthy Body Services Inc., 2009 BCSC 1716 at para 44; Besic v Kerenyi, 2011 BCSC 1277 at para 53.
[77] Rules 3-8(12) and (13) provide for assessment at trial and permit the Court to give directions respecting the conduct of the assessment. Under Rule 3-8(12)(b), an assessment set for trial is ordinarily heard together with the action or issues involving the remaining defendants unless the Court otherwise orders.
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