Under rule 19 of the Rules of Civil Procedure, a plaintiff can note the defendant “in default” if they don’t deliver a statement of defence prior to the deadline. The consequences of being noted in default are severe; the defendant is presumed to admit everything in the statement of claim. The plaintiff is then able to move for “default judgement.” Essentially, the plaintiff can succeed in their claim without anyone defending it.

Often, defendants try to delay or draw out the proceedings. In the interest of moving the matter along quickly, plaintiff’s counsel will probably try to enforce deadlines by threatening to take steps to note the defendant in default if they do not comply with the deadline.

So what happens when it’s clear that a defendant will participate in the proceedings but will not comply with the deadlines? In Strathmillan Financial Limited v Teti, 2021 ONSC 7603, the Court made clear that default proceedings are not to be used in these circumstances for tactical purposes.

In this case, as the deadline approached to deliver the statement of defence, the plaintiff’s counsel demanded that the defence be delivered on time. The defendant’s counsel requested an additional two weeks, to which plaintiff’s counsel agreed. On the day the defence was due, the defendant’s counsel requested a further week’s extension. The plaintiff’s counsel refused, but granted him an additional four days instead. Three of those days overlapped with the September long weekend.

The defendant’s counsel was unable to file the statement of defence with the courthouse prior to the new deadline imposed by plaintiff’s counsel, although it had been completed, served on the plaintiff, and was out for filing with a process server. Consistent with his word, plaintiff’s counsel proceeded to note the defendant in default.

Ultimately, the defendant was successful in setting aside the noting in default and the plaintiff was ordered to pay the defendant $7,500 in costs for having to do so. The Court held that not only did the plaintiff’s counsel take a “patently unreasonable position in noting the defendant in default” but he also “refused to do the right thing by consenting to set aside the noting in default.”

The Court commented that using the default judgement rules for tactical advantage sets the parties down the path of unnecessary motions to set aside the default. Take this case for example; rather than having examinations for discovery completed and being ready to set the matter down for trial, the parties were tied up arguing about costs for setting aside the noting in default. Motions to extend the time for delivery of pleadings and to relieve against defaults are frequently made and typically granted on an almost routine basis. Courts want to grant judgement on the merits of the claim and not solely on technical defaults.

Significantly, the Court held that plaintiffs themselves are not entitled to refuse extension requests. The Court noted that the decision to grant or withhold an accommodation to a colleague opposite is a decision for counsel. Even if a plaintiff instructs their counsel to refuse the request for a few more days to serve the statement of defence, plaintiff’s counsel is duty-bound to refuse that instruction absent actual prejudice to their client’s case on its merits. This is significant because it may result in lawyers acting against their client’s instructions in order to abide by their duty to the courts and to each other.

The Court in Strathmillan held that when there is a disagreement about pleadings, timing, or otherwise, it is not appropriate to take default proceedings to enforce the plaintiff’s position. So, what recourse do parties and counsel have to move the matter along where the other party refuses to comply with deadlines? In these situations, a case conference is available under rule 50.13(1). At a case conference, the judge or associate judge can establish a timetable for the delivery of documents. Failure to abide by this timetable can have negative consequences for the defendant, as this is an order of the court.

In conclusion, although a strict reading of rule 19 permits plaintiff’s counsel to note the defendant in default if they do not deliver a defence within the necessary timeframe, the caselaw shows that it is improper to do so where it is clear that the defendant intends to participate in the proceedings. The proper recourse is to schedule a case conference, and then seek costs from the defendant for having to do so.

Written by Nicolas Guevara-Mann