Five Fold Test to Set Aside Default Judgment

Since at least the 1940s the test to set aside default judgment has involved three criteria. So the Court of Appeal in Roth v. Bourollias, 2011 ONCA 760 held:  

In general on a motion to set aside a default, the court will consider: (a) whether the motion to set aside the judgment was brought promptly; (b) where there is a plausible excuse or explanation for the defendant's default in complying with the Rules of Civil Procedure; and (c) whether the facts establish at least an arguable case: Nelligan v. Lindsay, [1945] O.W.N. 295 (H.C.J.); Laredo v. Sinnadurai(2005), 78 O.R. (3d) 321 (C.A.); Morgan v. Toronto (Municipality) Police Services Board, [2003] OJ. No. 1106 at para. 19 (C.A.); MacNaughton v. The Royalton, 2011 ONSC 17. 

More recently the three fold test has been restated as five fold - as a practical matter the results are likely the same. So in Ravazzolo v. Romaniuk, 2015 ONCA 542 the Court holds:

[17]       In Mountain View Farms Ltd. v. McQueen, 2014 ONCA 194, 119 O.R. (3d) 561, at paras. 48-49, this court set out five factors that a court should consider in determining whether to set aside a default judgment:

1.            Whether the motion was brought promptly after the defendant learned of the default judgment;

2.            Whether there is a plausible excuse or explanation for the defendant's default in complying with the Rules of Civil Procedure;

3.            Whether the facts establish that the defendant has an arguable defence on the merits;

4.            The potential prejudice to the moving party should the motion be dismissed and the potential prejudice to the respondent should the motion be allowed; and

5.            The effect of any order the court might make on the overall integrity of the administration of justice.

[18]       As stated in Mountain View, at paras. 50 and 51: 

These factors are not to be treated as rigid rules; the court must consider the particular circumstances of each case to decide whether it is just to relieve the defendant from the consequences of his or her default.

For instance, the presence of an arguable defence on the merits may justify the court exercising its discretion to set aside the default judgment, even if the other factors are unsatisfied in whole or in part.