Introduction:
We are approached by clients who need help setting aside a default order. There are various reasons that one of the parties cannot join the court proceedings – that party can be out of the country or in jail and does not have legal representation, ignored the service of the documents, suffering from some sickness, etc. A default order is made when there was no defence given by one of the parties.
In this article, I shall discuss a very recent appeal decided by the Court of Appeal for Ontario on this issue – Hilton v. Hilton, 2021 ONCA 29. However, before discussing this case, I would discuss the applicable law on the issue.
Applicable Law:
Section 25(19) of the Family Law Rules allows the court to set aside or change the order, the rule is read as follows:
The court may, on motion, change an order that,
(a) was obtained by fraud;
(b) contains a mistake;
(c) needs to be changed to deal with a matter that was before the court but that it did not decide;
(d) was made without notice; or
(e) was made with notice, if an affected party was not present when the order was made because the notice was inadequate or the party was unable, for a reason satisfactory to the court, to be present. O. Reg. 151/08, s. 6.
There was confusion in Ontario as to whether the court can set aside the default orders since the word “set aside” was not explicitly mentioned in section 25(19) of the Rules. However, this anomaly was settled in Gray v. Gray 2017 ONCA 100 and parties in the family law dispute were able to rely on section 25(19) of the Rules to set aside default/uncontested order. The test remains unchanged, as determined in Mountain View Farms Ltd. v. McQueen, 2014 ONCA 194 and Peterbilt of Ontario Inc. v. 1565627 Ontario Ltd. 2007 ONCA 333. As per this test, the following are the factors that the court needs to take into consideration to set aside a default order in Ontario:
(a) whether the motion was brought promptly after the defendant learned of the default judgment;
(b) whether there is a plausible excuse or explanation for the defendant’s default in complying with the Rules;
(c) whether the facts establish that the defendant has an arguable defense on the merits;
(d) the potential prejudice to the moving party should the motion be dismissed, and the potential prejudice to the respondent should the motion be allowed; and,
(e) the effect of any order the court might make on the overall integrity of the administration of justice.
Facts of the Case “Hilton v. Hilton”
The Respondent-Wife initiated divorce proceedings in 2018. The Appellant-Husband did not file an Answer until the Case Conference in March 2019 and the Respondent filed a motion for an order for an uncontested trial. The Appellant was noted in default in the Case Conference and was ordered to serve and file his Answer, disclosure, and financial statements within 30 days. The order was made that if the Appellant serve and file the material within 30 days, the noting in default will be set aside and the Respondent’s motion for uncontested trial will be dismissed. The Appellant did not file his Answer material. Accordingly, the noting in default was confirmed and the uncontested trial was scheduled for September 2019. An order for partition and sale of matrimonial home was also made.
The uncontested trial was held on November 22, 2019, and orders were made granting the exclusive possession of the matrimonial home to the Respondent, the sale of the home, the division of the sale proceeds, and granting the Respondent’s temporary spousal support.
In February 2020, the Appellant brought a 14B Motion for setting aside all orders made. The motion was dismissed, with the reason that the Appellant has not appealed the order in default.
Analysis:
The Appellant’s argument in the appeal was that the Respondent had committed fraud on the court through misrepresentation and material omissions in her evidence and the motion judge dismissed the Appellant’s motion on the basis that the Appellant has not appealed any of the orders.
The Court of Appeal finds that some of the orders were made on the Appellant’s failure to provide the disclosures and the motion judge was correct in finding that appeal was the best route. However, the Court finds that the motion judge did not decide on the Appellant’s submission regarding the Respondent’s alleged misrepresentations and material omissions at trial, which needs to be decided on merits. The Court allowed the appeal in part and directed that allegations of the Respondent’s misrepresentations and material omissions be returned to the Superior Court of Justice for determination on merits.
We can see in this case that the Court did not allow the Appellant’s appeal to set aside the orders on the basis of his own failure to serve and file his Answer material and the Court noted that “the appellant is the author of much of his misfortune”.
Conclusion:
I am of the view that if someone wants to set aside a default order, he/she must have a meritorious defence that can be produced with the help of a detailed affidavit, besides meeting the factors of the test set in Gray v. Gray.
Nasar Iqbal
Barrister & Solicitor