Isabella Carter
When a defendant fails to respond to a civil lawsuit, the plaintiff may obtain a default judgment, winning the case without the defendant's participation. However, the defendant can request the court to set aside the default judgment if they have good cause. Good cause may include a reasonable excuse for not responding, such as hospitalisation on the day of the hearing, or a substantial defect in the proceedings. The defendant must also demonstrate a meritorious defence to the plaintiff's claims, such as arguing that the debt was based on an unfair agreement. The judge will consider both the defendant's reasons for setting aside the default and the plaintiff's reasons for keeping it in place, and decide whether to grant the motion to set aside.
| Characteristics | Values |
|---|---|
| Good cause | A substantial defect or irregularity in the proceedings the default was based on |
| A reasonable excuse for not meeting the requirements that led to the default | |
| Meritorious defense | A reason your creditor should not win |
| The debt is based on an unfair agreement | |
| Excusable neglect | The act or omission of a reasonably prudent person under the circumstances |
| Mistake of fact | When a person understands the facts to be other than they are |
| Mistake of law | When a person knows the facts as they are, but has a mistaken belief as to the legal consequences of those facts |
| Lack of actual notice | The defendant lacked knowledge that the lawsuit existed |
| Default judgment improperly entered | Default judgment entered before 30 days have lapsed since the date of service shown on the Proof of Service of Summons |
| Other reasons | Mistake, inadvertence, surprise, fraud, misrepresentation, or other misconduct |
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What You'll Learn
A reasonable excuse for not responding
However, forgetfulness about the lawsuit, being too busy to respond, or being unable to afford an attorney do not count as excusable neglect. The neglect must be considered the act or omission of a reasonably prudent person under the circumstances.
In some cases, a lack of actual notice may be a reasonable excuse. For example, if a defendant can prove that they were not served a summons and were therefore unaware of the litigation, this could be grounds for setting aside a default judgment. However, this lack of knowledge cannot be due to the defendant's inexcusable neglect or avoidance of service.
It is important to note that if a defendant does not have a defence to the plaintiff's claims, they could end up in the same or a worse position if the judge sets aside the default judgment. The case would start up again, and the defendant could lose and have a judgment against them, potentially for more money.
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Meritorious defence
A meritorious defence is a critical factor in setting aside a default judgement. It is a defence that presents an argument against the plaintiff's claims, potentially absolving the defendant from liability. The defendant must demonstrate that they have a meritorious defence, which means an arguable defence that does not need to establish a likelihood of success at trial.
In the case of Morgan v. Toronto (Municipality) Police Services Board, it was established that the presence of an arguable defence may justify setting aside the default judgement, even if other factors are not met. This is because the system favours a determination on the merits, allowing both parties to present their respective cases.
To set aside a default judgement, the defendant must first file a motion with the court, demonstrating good cause for their failure to respond or appear and presenting their meritorious defence. The judge will then decide whether to grant the motion, considering the reasons provided by both the defendant and the creditor.
It is important to note that simply having a meritorious defence may not be sufficient to set aside a default judgement. The defendant's reasons for setting aside the default must outweigh the creditor's reasons for maintaining it. Additionally, the defendant must file their motion within the specified deadlines, which vary depending on the specific circumstances of the case.
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Mistake, inadvertence, surprise, or excusable neglect
Mistake can refer to a mistake of fact, where a person misunderstands the facts, or a mistake of law, where a person knows the facts but has a mistaken belief about the legal consequences. While ignorance of the law is not usually an excuse, a mistake may be more excusable if the critical fact or point of law was confusing or obscure.
Inadvertence or neglect can also be a reason to set aside a default judgment, but only if the neglect was excusable. For example, if a defendant lacked "actual notice" of the lawsuit, this could be a valid reason. However, this lack of knowledge cannot be due to the defendant's inexcusable neglect or avoidance of service.
Surprise can also be a reason to set aside a default judgment. This may occur if there was a substantial defect or irregularity in the proceedings, such as a serious problem or mistake in the way the case or default was handled.
Finally, excusable neglect can refer to circumstances where a reasonably prudent person may have acted or omitted to act in a certain way. For example, being in the hospital on the day of a hearing and having a doctor's note to prove it could be considered a reasonable excuse for missing the hearing. On the other hand, forgetting about a lawsuit, being too busy to respond, or being unable to afford an attorney are generally not considered excusable neglect.
In summary, mistake, inadvertence, surprise, or excusable neglect can all be valid reasons to set aside a default judgment, but the defendant must provide sufficient evidence and proof to support their claim. The judge will consider the defendant's reasons and weigh them against the plaintiff's reasons for maintaining the default judgment before making a decision.
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Fraud, misrepresentation, or other misconduct
When dealing with fraudulent misrepresentation, it is essential to seek legal advice promptly. Substantial evidence must be presented to demonstrate that a false statement was dishonestly made, relied upon, and resulted in a loss. The court will presume that the fraudulent representations induced the claimant to enter into the contract unless there is strong evidence to rebut this presumption. The statement will be considered false if it involves deception, deceit, dishonesty, fraud, or is misleading. If the claim is successful, the court may rescind the contract, award damages, or grant other appropriate remedies.
To set aside a default judgment, it is crucial to demonstrate not only good cause for failing to respond but also a meritorious defense. This means presenting a defense that is entitled to be tried and could potentially result in a different outcome. The strength of the defendant's reasons for setting aside the default will be weighed against the plaintiff's reasons for maintaining it. If the defendant's reasons are deemed valid and compelling, the judge will grant the motion, and the case will resume from that point.
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Defect or irregularity in proceedings
A defendant can ask the court to set aside a default judgment if they can demonstrate good cause for their failure to respond or appear. Good cause can be constituted by a substantial defect or irregularity in the proceedings the default was based on.
A substantial defect or irregularity in proceedings refers to a serious problem or mistake in the way the case or default was handled. This means that the defendant must show that there was a significant issue with the process that led to the default judgment. For example, if the defendant can establish that the summons was never served, or if there was mistake, inadvertence, or excusable neglect on the part of the defendant.
To be considered excusable neglect, the defendant must demonstrate that their neglect was the act or omission of a reasonably prudent person under the circumstances. For instance, forgetting about the lawsuit, being too busy to respond, or being unable to afford an attorney are typically not considered grounds for excusable neglect. Instead, excusable neglect may involve a mistake of fact, where a person understands the facts to be other than they are, or a mistake of law, where a person has a mistaken belief about the legal consequences of certain facts.
It is important to note that ignorance of the law or negligence in researching it does not usually constitute an excusable mistake. However, if the critical fact or point of law that caused the default is confusing or obscure, the court may be more likely to find it excusable. Additionally, if the defendant can show that they lacked actual notice of the litigation, meaning they were unaware of the lawsuit's existence, this could also be considered a defect or irregularity in the proceedings.
In summary, to establish good cause based on a defect or irregularity in proceedings, the defendant must demonstrate that there was a significant issue with the process, such as a mistake or excusable neglect, and that they had a valid reason for their failure to respond or appear.
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Frequently asked questions
A good cause to set aside default is having a good defence to the plaintiff's claims, which may allow you to avoid liability altogether.
A good defence is one that gives you a reason to have your day in court, i.e., a reason why your creditor should not win. For example, the debt being based on an unfair agreement that took advantage of you.
Good cause can also be a reasonable excuse for not responding to the complaint or missing the hearing, such as being in the hospital on the day of the hearing.
Forgetting about the lawsuit, being too busy to respond, or being unable to afford an attorney are not considered good causes.
You must file a motion with the court asking the judge to set aside the default judgment. This is also called a motion for relief from default or a motion to vacate judgment.
