The defendants moved under Rule 19.08 of the Rules of Civil Procedure to set aside a default judgment and an earlier order striking their statement of defence in a property dispute involving alleged failure to disclose mould conditions in a residential basement.
The court considered the factors governing motions to set aside default judgments, including promptness of the motion, explanation for the default, and the existence of an arguable defence.
The court held that the motion had been brought without undue delay and that the defendants had an arguable defence based on sworn discovery evidence denying knowledge of mould or water problems.
Balancing prejudice to both parties and the interests of justice, the court concluded that the matter should proceed to trial on strict conditions including payment of the assessed damages and costs into court and payment of costs thrown away.
The default judgment and the order striking the defence were set aside subject to those terms.