The appellants, a lawyer and his professional corporation, appealed a default judgment obtained against them for knowingly assisting in a client's fraud.
The Court of Appeal for Ontario confirmed its jurisdiction to hear the appeal, treating the motion judge's decision as equivalent to a refusal to set aside a default judgment.
The Court upheld the motion judge's refusal to set aside the noting in default, citing the appellants' bad faith and deliberate delay tactics.
While agreeing that the negligence claim was not properly pleaded, the Court affirmed the finding of liability for knowing assistance in fraud, based on the lawyer's issuance of a misleading "comfort letter" and the disbursement of funds from his trust account despite knowledge of the property's prior sale.
The appeal was dismissed.