In a defamation action arising from a broader franchise dispute, the defendants moved to set aside a substantial default judgment.
Applying the five-factor framework governing relief from default, the court found the motion was brought promptly, the defendants had a plausible explanation for their default, there was at least an arguable defence, and the plaintiffs would suffer no substantive prejudice from a merits determination.
The court also found the confusion created by parallel related litigation and different counsel of record materially contributed to the default.
The default judgment was set aside on condition that counsel be retained and a statement of defence and counterclaim be delivered within 60 days.
