Brian A. Diamond

The appellant, David Aiello, appealed the dismissal of his motion to set aside a default judgment and noting in default.

The Court of Appeal found that the motion judge erred in principle and made palpable and overriding errors of fact in applying the factors for setting aside default judgment from Mountain View Farms Ltd. v. McQueen.

Specifically, the motion judge misapplied the first and second factors by considering the entire litigation history, ignored relevant facts regarding the appellant's default, and applied too high a standard for an arguable defence, failing to consider the quantum of damages as a viable defence.

The Court concluded that it would be unjust to prevent the appellant from having his day in court, given the significant prejudice of a multi-million dollar judgment and the overarching principle of determining proceedings on their merits.

The appellants appealed the dismissal of their claim for adverse possession of a strip of land between two residences in Toronto.

The application judge found that the appellants failed to meet their onus to establish adverse possession.

The Court of Appeal upheld the decision, finding that the application judge's factual findings were supported by the evidence, particularly that the predecessor in title recognized the respondents' ownership and did not intend to exclude them from the disputed land.

The defendant, David Aiello, brought a motion to set aside a default judgment and the striking of his statement of defence.

The default judgment arose from his failure to close on a property purchase and subsequent repeated non-compliance with court orders, including deadlines for undertakings and retaining counsel.

The court applied the five-factor test from *Mountain View Farms Ltd. v. McQueen* to determine if setting aside the default judgment was in the interests of justice.

The motion was dismissed, as Aiello failed to provide a plausible excuse for his numerous breaches of court orders and did not establish an arguable defence on the merits.

The defendant, Sonia Hakimi, brought a motion to set aside a default judgment, vacate a notice of garnishment and writ, remove derogatory credit bureau reports, and for costs.

Hakimi acknowledged her indebtedness to the plaintiff, Royal Bank of Canada, but argued she withheld payments pending clarification on how they would be applied.

The court applied the five-factor test for setting aside default judgments, finding that while the motion was brought promptly, Hakimi failed to establish a plausible explanation for default or an arguable defence on the merits.

Her affidavit merely asserted a defence without supporting evidence.

Consequently, the motion was dismissed without costs.

The Royal Bank of Canada brought a motion for judgment against Mohammed Elsioufi for outstanding loan debts, after Elsioufi was noted in default.

The bank also sought a declaration that the judgment debt would survive any future bankruptcy discharge of the defendant, pursuant to section 178(1)(e) of the Bankruptcy and Insolvency Act, alleging fraudulent misrepresentation.

The court granted judgment for the liquidated debt amounts but refused to issue the pre-emptive declaration regarding bankruptcy discharge, holding that it lacked jurisdiction to make such a hypothetical determination before a bankruptcy proceeding was initiated and without notice to a potential Trustee in Bankruptcy.

A contractor commenced a construction lien action seeking payment of $20,000 under a fixed‑price kitchen renovation contract that provided for payment upon completion.

The homeowners denied the claim and advanced a counterclaim for repair costs and return of a deposit.

The court held that the contractor had not completed or substantially completed the work and that several deficiencies—including an uneven floor, improperly cut countertop, damaged hardwood floor, and backsplash design issue—were significant.

The court found that the contractor abandoned and repudiated the contract by refusing to undertake necessary corrective work and by demanding payment when none was due, disentitling it from recovery including quantum meruit.

The homeowners’ counterclaim also failed because the alleged repair costs had not yet been incurred and the deposit claim was withdrawn.