Threshold for setting aside noting of default less onerous than setting aside default judgment

Dispute arose related to leased tow truck leading to statement of claim which expanded into counterclaim relating to unpaid and expenses incurred at cottage. Plaintiff and defendant were friends who had series of business relationships, which led to incorporation of LS Corp.. Plaintiff brought action for damages and then abandoned claim. Defendant brought counterclaim alleging that plaintiff, through LS Corp., misappropriated funds in amount of $146,633.08 and sought $100,000 in punitive damages. When plaintiff did not defend claim, he was noted in default. Defendant passed away and spouse continued default proceedings against plaintiff. Default judgment was granted, counsel sent follow up letter to plaintiff indicating judgment had not been paid and then order was made appointing defendant’s spouse as estate trustee on nunc pro tunc basis. Plaintiff brought motion to set aside default judgment. Motion granted. Order appointing spouse as trustee of defendant’s estate had effect nunc pro tunc and therefore was intended to operate retroactively to time of plaintiff’s death. Rule 11 of Rules of Civil Procedure was not bar to spouse enforcing default judgment in light of order appointing spouse as trustee. Threshold for setting aside noting of default was less onerous than setting aside default judgment under Rule 19.08 of Rules of Civil Procedure. Little would be served at this stage by requiring plaintiff to take additional step of separate motion to set aside noting of default in these circumstances. Plaintiff moved promptly once aware of default judgment and provided satisfactory explanation for overall delay.

Ozugowski v. Lake Stars Corp. et al. (2019), 2019 CarswellOnt 5439, 2019 ONSC 2032, Sossin J. (Ont. S.C.J.).

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