A default judgment is a court order against a defendant who fails to respond to a civil claim or take the necessary steps to defend themselves in a lawsuit.
If you find yourself subject to a default judgment in British Columbia, you may be able to have it set aside under certain circumstances.
This article will discuss the legal test for setting aside a default judgment in BC, including when damages have been assessed.
Understanding Default Judgments and Damage Assessments
- Default Judgment: A default judgment is a ruling granted by the court in favour of the plaintiff (the party initiating the lawsuit) when the defendant fails to file a response to the notice of civil claim or appear in court. This usually happens when the defendant fails to respond to the lawsuit within the specified time frame, which is typically 21 days after being personally served with the notice of civil claim.
- Assessing Damages: After a default judgment is granted, the plaintiff must apply to the court for an assessment of damages. This is a separate hearing where the court determines the dollar amount of damages the defendant must pay to the plaintiff. The assessment can be based on evidence provided by the plaintiff, such as the terms of a contract or the value of the property in dispute.
Case Study: Ibrahim v. Hashemi
In the recent case of Ibrahim v. Hashemi, released on 31/Oct/2024, the Court of Appeal for British Columbia examined the legal test for setting aside a default judgment and an assessment of damages. The case involved a plaintiff, Ibrahim, who claimed to have entered into an agreement with the defendant, Hashemi, for the development of a property. The plaintiff alleged that Hashemi breached the agreement, resulting in financial losses for the plaintiff.
The “Miracle Feeds” Principles
The key legal principles for setting aside a default judgment in BC are outlined in the 1979 case of Miracle Feeds v. D. & H. Enterprises Ltd. These principles, also known as the “Miracle Feeds” factors, state that a defendant seeking to set aside a default judgment must demonstrate the following:
- They are not guilty of willful delay or default.
- They have brought the application for consideration as soon as reasonably possible.
- They have shown a meritorious defence or at least a defence worthy of investigation.
Why the Judge Set Aside the Default Judgment Against Hashemi
In the reasons for judgment in Ibrahim v. Hashemi, the judge at the Supreme Court of British Columbia set aside the default judgment against Hashemi because she was not properly served with the notice of civil claim.
Hashemi provided evidence that she was in Los Angeles when the notice was allegedly served on her in British Columbia.
The judge found Hashemi’s evidence credible and determined that she had not been properly notified of the lawsuit.
As such, Hashemi satisfied the Miracle Feeds factors by demonstrating that she was not guilty of willful default, brought the application as soon as possible, and she satisfied the application judge that she had a meritorious defense.
Cross-Examination on Affidavit Evidence
Cross-examination of affidavit evidence is a legal process that allows a party to question the person who swore an affidavit.
This is typically done to challenge the credibility of the evidence or to obtain additional information relevant to the case.
Factors to Consider for Cross-Examination
The court will consider several factors when deciding whether to allow cross-examination on affidavit evidence. These factors include:
- Whether the cross-examination will serve a useful purpose by eliciting evidence that would assist in determining a material issue.
- Whether the cross-examination will produce unreasonable delay or generate unreasonable expense.
The Purpose of Cross-Examination
Cross-examination on affidavit evidence aims to test the truthfulness and accuracy of the statements made in the affidavit. It can also be used to clarify any ambiguities or inconsistencies in the evidence which the judge may consider before a judgment is made.
Justification for Not Ordering Cross-Examination
In Ibrahim v. Hashemi, the judge’s decision not to order cross-examination on affidavit evidence was justified and confirmed by the Court of Appeal because the judge was concerned about the late nature of the request and the additional time and cost that cross-examination would impose on the parties. The judge also noted that there was sufficient documentary evidence to resolve the conflict without the need for cross-examination – for the judge of the first instance, there were no ambiguities in Hashemi’s evidence.
What to Do If You Face a Default Judgment
If you believe a default judgment has been made against you, and you were not served with the notice of civil claim, you should apply to the court to set aside the default judgment as soon as possible. You will need to provide evidence to support your claim that you were not served and demonstrate that you have a meritorious defence. Under certain circumstances, this challenge can even be brought after a default judgment has been obtained, like in Hashemi’s case.
Contact Roland Luo in Vancouver for Comprehensive Commercial Litigation Advice
Setting aside a default judgment in British Columbia is possible but requires prompt action and a strong legal argument. If you are facing a default judgment, it is crucial to consult with an experienced litigation lawyer immediately to discuss your options and protect your rights.
For the past two decades, our firm has developed knowledge in setting aside problematic default judgments. Should you encounter such a dispute, contact Roland Luo.
Located in downtown Vancouver, Roland Luo proudly represents clients throughout British Columbia, as well as clients across Canada and the United States. To schedule a confidential consultation, contact us online (the more efficient way) or by phone at 604-800-4628.