Setting aside judgment; fresh evidence

Wednesday’s decision in HSBC Securities ( Canada ) Inc. v. Firestar Capital Management Corporation, 2008 ONCA 894 provides a useful review of two areas of civil law – the setting aside of default judgments and the admission of fresh evidence.

The Court’s analysis is clear and reads almost like a text:

[21] The motion judge’s discretionary decision whether to set aside a default judgment pursuant to rule 19.08 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, was governed by the following three-part test:

(a) Whether the motion was brought without delay after the defendant learned of the default judgment;

(b) Whether the circumstances giving rise to the default were adequately explained; and

(c) Whether the defendant has an arguable defence on the merits.

See Morgan v. Toronto (City) Police Services Board (2003), 34 C.P.C. (5th) 46 (Ont. C.A. ), at para. 19.

…

[30] In Peterbilt of Ontario Inc. v. 1565627 Ontario Ltd. (2007), 87 O.R. (3d) 479, at para. 2, this court indicated that on a motion to set aside a default judgment, the motion judge will be guided by the principles established by the authorities but must ultimately determine whether the interests of justice favour granting the order. The motion judge should consider the potential prejudice to the moving party if the motion were dismissed, the potential prejudice to the respondent if the motion were allowed, and the effect of any order on the overall integrity of the administration of justice.

…

[38] The respondent opposes the admission of the new evidence arguing that it does not meet any aspect of the four-part test set out by the Supreme Court of Canada in R. v. Palmer at p. 775, for the receipt of fresh evidence:

(a) the evidence should generally not be admitted if, by due diligence, it could have been adduced at trial;

(b) the evidence must be relevant in the sense that it bears upon a decisive or potentially decisive issue in the trial;

(c) the evidence must be credible in the sense that it is reasonably capable of belief; and

(d) it must be such that if believed it could reasonably, when taken with the other evidence adduced at trial, be expected to have affected the result.