Re-Opening an Application

R.R.O. 1990, Reg. 194: RULES OF CIVIL PROCEDURE, Rule 38

38.11 (1) A party or other person who is affected by a judgment on an application made without notice or who fails to appear at the hearing of an application through accident, mistake or insufficient notice may move to set aside or vary the judgment, by a notice of motion that is served forthwith after the judgment comes to the person’s attention and names the first available hearing date that is at least three days after service of the notice of motion. R.R.O. 1990, Reg. 194, r. 38.11 (1); O. Reg. 132/04, s. 10; O. Reg. 55/12, s. 3.

(2) A motion under subrule (1) may be made,

(a) at any place, to the judge who granted the judgment;

(b) at a place determined in accordance with rule 37.03 (place of hearing of motions), to any other judge;

(c) to the Divisional Court, in the case of a judgment of that court. R.R.O. 1990, Reg. 194, r. 38.11 (2).

(3) On a motion under subrule (1), the judgment may be set aside or varied on such terms as are just. R.R.O. 1990, Reg. 194, r. 38.11 (3).

Fresh Network v. Alessandro, 2004 CanLII 30078 (ON SC)

[14] The sole question raised by the motion at hand is whether the judgment is properly to be set aside against Joe because of a “mistake” within the meaning of Rule 38.11(1).

[15] It is apparent that Joe’s “mistake” was to rely upon Domenic’s assertion that Joe was “out of the picture” and their view that the new Form #1 filed October 3, 2003 was a full and conclusive defence for Joe. This was a conclusion as to the effect of the new Form #1. However, at the least, any person acting responsibly in his own self-interest would conclude that it would be wise to attend at the hearing to give evidence as to who had actual control of Farmers at the relevant times and that the new Form #1 was truthful in its assertion as to the July 1, 2003 date in the change of directors.

[16] As I have said, Spence J. had before him the new Form #1. Spence J. seems to have implicitly made the finding that a new Form #1 does not impact to absolve a director/officer, as named by the pre-existing corporate profile in the public record of the Ministry, from liability to a third party under the relevant statutes until a new Form #1 is recorded (or at least filed) with the Ministry. Joe’s mistake was to believe he would be “out of the picture” simply because of the new Form #1.

[17] In my view, there was not a “mistake” within the meaning of Rule 38.11(1). Joe made an error of judgment in believing he was “out of the picture.” There was no mistake as to time or place of the hearing. Joe intentionally chose not to attend and, at best, relied upon his own opinion and his brother’s lay opinion, as to their legal position. They assumed the risk of non-attendance at the hearing. Joe chose not to attend the hearing because of his belief as to the legal significance and impact of the new Form #1 and that Domenic’s and his view would accord with the trial judge’s view and findings.

[18] In my view, a defendant cannot intentionally ignore a trial when he should reasonably know he is clearly at risk of being held liable and then claim a “mistake” within the meaning of Rule 38.11(1) upon being found liable to the opposing party. There is a paucity of case law in respect of Rule 38.11(1), specifically regarding the meaning of “mistake.” See generally Ewert v. Chapnick (1995), 37 C.P.C. (3d) 76 (Ont. Gen. Div.); Zsoldos v. Ontario Assn. of Architects, [2004] O.J. No. 309 (CA) (QL).

Ivandaeva Total image Salon Inc. v. Hlembizky, 2003 CanLII 43168 (ON CA)

[27] Other than Stanley Canada Inc. v. 683481 Ontario Ltd. (1990), 1990 CanLII 8098 (ON SC), 74 D.L.R. (4th) 528 (Ont. Gen. Div.), the cases that have considered the rule in its different forms do not discuss the meaning of "affected by". However, a review of the cases in which a successful motion has been brought under rule 37.14(1) and rule 38.11(1), which applies to applications, or their predecessors, to set aside or vary an order suggests that the order must be one that directly affects the rights of the moving party in respect to the proprietary or economic interests of the party. In addition, there is another broad group of cases, usually arising from the sealing of a court file, in which the media has complained that its right to freedom of expression as guaranteed by s. 2(b) of the Canadian Charter of Rights and Freedoms has been compromised and in which the principle of open and accessible court proceedings has been invoked. See, e.g., Sierra Club of Canada v. Canada (Minister of Finance), 2002 SCC 41, 211 D.L.R. (4th) 193.

2701988 Ontario Inc. v. Ok-Shim Jeong, 2020 ONSC 4455 (CanLII)

[1] This is a motion to set aside an order granted to the Applicant corporation on April 28, 2020, during the suspension of the court’s regular operations due to the COVID-19 pandemic. At a telephone case conference, the court ordered the release of $350,000 to the Applicant. The Respondents, Ms. Jeong and the 2313067 Ontario Inc. (of which she is the principal) were not in attendance for the case conference. They submit that the order should be set aside pursuant to r. 38.11 of the Rules of Civil Procedure, R.R.O. 1990 Reg. 194 on the basis that they failed to attend the hearing of the application due to accident, mistake or insufficient notice.

Test pursuant to r. 38.11

[10] Rule 38.11(1) provides that a judgment on an application may be set aside for lack of or - insufficient notice. It reads:

38.11(1) A party or other person who is affected by a judgment on an application made without notice or who fails to appear at the hearing of an application through accident, mistake or insufficient notice may move to set aside or vary the judgment, by a notice of motion that is served forthwith after the judgment comes to the person’s attention and names the first available hearing date that is at least three days after service of the notice of motion.

[11] The parties agree that the analytical framework to be applied under r. 38.11 is the same as for a motion to set aside a default judgment under r. 19.08. As set out in 1493201 Ontario Ltd. v. Giannoylis, 2016 ONSC 1210, at para. 12, the factors to consider are:

(a) Was the application made without notice or did the Respondent fail to appear at the hearing of the application through accident, mistake or insufficient notice?

(b) Was the Respondent’s motion to set aside the judgment brought forthwith after the judgment came to her attention?

(c) Did the Respondent’s motion name the first available hearing date that was at least three days after service of the notice of motion?

(d) Does the Respondent have an arguable defence on the merits?

(e) What is the potential prejudice to the Respondent should the motion be dismissed and what is the potential prejudice to the Applicant should the motion be allowed?

(f) What would be the effect of any order the Court might make on the overall integrity of the administration of justice?

[12] These factors are not to be considered as rigid rules. Instead, the court must consider the particular circumstances of each case to determine whether the judgment should be set aside: Mountain View Farms Ltd. v. McQueen, 2014 ONCA 194, at para. 50; Natural Energy Systems Inc. v. Hallett, 2019 ONSC 1372, at paras 39-40.