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CIVIL PROCEDURE - Default judgments - Setting aside

Wednesday, January 13, 2021 @ 6:03 AM  


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Appeal by the plaintiff from a decision setting aside the appellant’s default judgment against the respondent. The appellant sued the respondent insurer for breach of contract after the respondent denied the appellant’s claim under an insurance policy. After receiving the claim, the respondent asked for various particulars to the appellant’s claim and for confirmation that the appellant would not take default judgment without reasonable notice. Thereafter the parties’ counsel engaged in an extended exchange of communications. The chambers judge found that default judgment should not have been sought or taken. Communications between the parties had made it perfectly clear that there was an active, ongoing dispute between the parties with a substantial defence forthcoming. At the time of taking default, a defence application for further particulars had already been filed and scheduled on a mutually agreeable date. The application for particulars was ultimately dismissed.

HELD: Appeal dismissed. The chambers judge rightly concluded that default judgment should not have been sought or taken. Counsel for the appellant was aware that the respondent intended to defend the appellant’s claim. There was, in such circumstances, little prospect of concluding that the respondent’s failure to file a response had been wilful or deliberate. Conduct of counsel for the respondent was, however, unreasonable and obdurate. The chambers judge did not err in concluding that communications between the parties had made it perfectly clear that there was an active, ongoing dispute between the parties with a substantial defence forthcoming that was not merely worthy of investigation, but which had been communicated clearly and precisely.

Forgotten Treasures International Inc. v. Lloyds Underwriters, [2020] B.C.J. No. 1943, British Columbia Court of Appeal, B. Fisher, S.A. Griffin and P.G. Voith JJ.A., November 30, 2020. Digest No. TLD-January112021005