Default Judgment,Danger Danger Danger!
Time flies when you are having fun and it flies even faster if you have been served.
Depending on the method of service, Defendants usually have 14 days to file a Reply in Provincial Court. When calculating the days of service you do not count the day you were served and you do count all of the last day.
14 days is not a lot of time to collect all of your evidence and prepare a proper response to a claim served upon you. What if you are late? If you fail to file your Reply in time, the Claimant can apply for default judgment. Default judgment is far from a minor inconvenience or legal hurdle. While there is case law that supports overturing a default judgment if certain circumstances are met, that outcome is never assured.
Default judgment essentially allows a Claimant to leapfrog all of the stages of small claims litigation and obtain judgment immediately. It’s an instant win. If the damages are not quantified in the claim then its a win with the amount to be determined (imagine handing the Claimant a blank cheque from your bank account or giving them your bank card and PIN). If damages have been specified in the Notice of Claim then interest and fees will be tacked on and the Claimant can proceed with collections proceedings. Your opportunity to defend yourself is gone.
Scary stuff.
Andrews v. Clay, 2018 BCCA 50 (CanLII) Looked closely at what is required to set aside a default judgment obtained in Small Claims court. In this case default judgment was obtained for failure to apply a mediation. The parties wrote each other, in part, as follows:
[11] …. Mr. Andrews sent an email to counsel for Ms. Clay advising that he did not think mediation was an appropriate process for the claim and stating that:
I won’t attend a mediation – not just because the other Defendants are not going to be there, but because the action cannot be resolved through mediation.
[12] The same day, Mr. Andrews received a response from counsel for Ms. Clay advising that:
Under the Small Claims Rules you are obligated to attend the mediation whether or not another party is in attendance. Thus, we will proceed to attend the mediation as scheduled.
…
[14] Before doing so, Ms. Clay’s solicitor sent an email to Mr. Andrews stating that:
Please be advised that due to your failure to attend the mediation that was scheduled yesterday on April 30th and pursuant to rule 33 (sic) of the Small Claims rules, we will be seeking default judgment against both you and Jesse Andrews [Mr. Andrews’ daughter, who was a co-defendant].
[15] Mr. Andrews responded in part:
… So file for the default judgment against me if you wish – I will just appeal it. … As I mentioned to you in previous correspondence – even if I had shown up, I would not have participated in a mediation …
[16] The default judgment was entered on May 1, 2014.
This matter was subject to appeals all the way up to the British Columbia Court of Appeal.
All cases in BC that examine whether to set aside a default judgment go straight here: Miracle Feeds v. D. & H. Enterprises Ltd. (1979), 10 B.C.L.R. 58 (Co. Ct.) wherein Judge Hinds set out the following test:
… in order for a defendant to succeed on an application to set aside a default judgment, he must show:
1. That he did not wilfully or deliberately fail to enter an appearance or file a defence to the plaintiff’s claim;
2. That he made application to set aside the default judgment as soon as reasonably possible after obtaining knowledge of the default judgment, or give an explanation for any delay in the application being brought;
3. That he has a meritorious defence or at least a defence worthy of investigation; and
4. That the foregoing requirements will be established to the satisfaction of the court through affidavit material filed by or on behalf of the defendant.
There are other noteworthy cases in this area depending upon the circumstances, but Miracle Feeds remains the backbone of the test in most cases. In Andrews v. Clay , the appellant was a law school graduate and not a lawyer. It was found that Mr. Andrews willfully failed to attend the mediation. The appeal was dismissed.
