Ontario Civil

Civil Procedure

To move from finding arguable defence to final determination was not just result

For years plaintiff provided crop services to defendant. When defendant did not fully pay for services, plaintiff had him sign invoice to acknowledge outstanding amount of $49,862.82. Pre-printed words at bottom of invoice stated that interest would be charged on overdue accounts at annual rate of 24%. Plaintiff sued defendant for unpaid amount plus interest and obtained default judgment. Six years later defendant brought motion to have default judgment set aside. Motion judge concluded that defendant had arguable defence on merits of applicable interest rate. Motion judge varied default judgment by substituting annual interest rate of 5%. Plaintiff appealed. Appeal allowed. Motion judge considered relevant factors. There was evidence before motion judge that called into question whether defendant had agreed to pay interest at rate of 24% per annum. Having found that there was arguable defence, it was open to motion judge to find that interests of justice favoured setting aside default judgment. Motion judge did not fail to give adequate weight to unexplained delay and prejudice to plaintiff. Motion judge made no error in law or principle, no palpable or overriding error of fact and decision was not so clearly wrong as to amount to injustice. However, motion judge erred in making final determination of merits of defendant’s defence. Defendant’s motion sought to set aside default judgment. Motion did not seek determination of whether defence should succeed if there was arguable defence. To move from finding arguable defence to final determination was not just result. Appropriate remedy was to set aside default judgment in part and order that matter proceed on issue of interest.

Mountain View Farms Ltd. v. McQueen (Mar. 14, 2014, Ont. C.A., E.E. Gillese J.A., Paul Rouleau J.A., and M. Tulloch J.A., File No. CA C56832) Decision at 227 A.C.W.S. (3d) 969 was reversed.  239 A.C.W.S. (3d) 635.

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