The appellants appealed a motion judge's decision that partially set aside a default judgment against them and imposed substantial indemnity costs, including a personal costs order against their counsel.
The default judgment stemmed from their inability to close on a home purchase agreement, leading to the respondent retaining their down payment and selling the property at a significant loss.
The Court of Appeal allowed the appeal in full, finding that the motion judge erred in her assessment of the appellants' arguable defence, misapplied principles regarding promptness and prejudice, and made palpable and overriding factual errors.
The personal costs order against counsel was set aside due to a breach of procedural fairness and factual errors.
The Court ordered the default judgment and noting in default to be set aside entirely, allowing the appellants to file a full statement of defence and counterclaim, and awarded substantial indemnity costs of the appeal to the appellants.