Default Proceedings: What Will Change and Why It Matters for Ontario Litigators

Ontario’s civil justice reform proposes a more stringent and expeditious process for obtaining default judgment. This section explains what is changing in default proceedings, why the Working Group says the change is needed, what stakeholders said in consultation, and the final recommendations. The focus is on faster outcomes, clearer notice, and real consequences for non‑compliance—while preserving fairness where a defendant has a legitimate excuse and an arguable defence.  

The Need for Change 

Under the current Rules, there is uncertainty about whether a motion for default judgment must be served on a defendant in default. It is not required by the Rules but is widely required by the courts. There is also a perception that motions to set aside default judgments are brought too often and granted too easily. The existing Court of Appeal jurisprudence essentially allows for a noting in default to be set aside where the defendant establishes an arguable defence, which is a low bar. There are currently insufficient incentives to comply with timelines. The result is delay, added cost, and weaker respect for deadlines.  

Proposed Reforms 

The Working Group proposes a structured, two‑notice model and a tighter test for setting aside defaults and default judgments on the Summary Track and Trial Track. 

• Service of the Notice of Claim: If the timelines regarding service of a Notice of Intent (20 day) or statement of defence (45 days) are not followed, the claimant can serve a Notice of Default (personally or by an accepted alternative, with recognition of service by email). 

• Curing the Default Quickly: A defendant may set aside the noting in default within 20 days of proper service of the Notice of Default by paying $500 in costs and filing a statement of defence. Alternatively, they may obtain consent of the claimant to file a statement of defence or seek a Directions Conference to show a compelling reason for failing to defend (for example, illness or non‑receipt of materials). If compelling reasons are shown, the Court will set a new, peremptory defence deadline and no costs will be payable.  

• No Further Notice of Default Judgment: Once a defendant has been served with the Notice of Claim and a Notice of Default and the defendant has not cured the default, the claimant may seek default judgment.  

• Stricter Set‑aside of Default Judgments: The test is made more stringent: the defendant must show a compelling explanation for the default and an arguable defence on the merits. Mere delay or inadvertence will carry less weight.  

• Timeline to Pursue Default Judgment: Claimants must take the steps to obtain default judgment within six months of issuing the Notice of Claim (unless the matter is on the Trial Track and placed on the Inactive List). This supports timely progress and client accountability.  

• Scope Exclusions: Where statutes prescribe a different default regime (for example, the Crown Liability and Proceedings Act, 2019), those schemes prevail. 

Consultation Feedback

Stakeholders supported clearer notice but raised cost and fairness concerns: 

• Some feared that personal service of the Notice of Default would add cost and reward evasion. The proposal addresses this by recognizing service by email and by trading modest up‑front cost for fewer set‑asides later.  

• Clinics and access‑to‑justice voices warned that low‑income defendants often default due to lack of legal advice, not disinterest. The final model balances this with the $500 cure route, a 20‑day window, and the ability to seek a Directions Conference where compelling reasons exist (including reasonable, timely but unsuccessful efforts to obtain advice). 

• Insurers and LAWPRO cautioned against automatic high costs presumptions in default proceedings, especially where default judgments are improperly obtained or misused. The final recommendation removes any across‑the‑board costs presumption. 

Overall, consultees agreed that a clearer, firmer structure could improve compliance and reduce waste, provided there is flexibility to prevent unfairness.  

Recommendations 

Amend Rule 19 to: 

• Require service of a Notice of Default (personal or accepted alternative) before seeking default judgment.  

• Allow a defendant to set aside the noting in default within 20 days by paying $500 and filing a Statement of Defence, or by obtaining relief at a Directions Conference on compelling reasons without costs. 

• Permit claimants to obtain default judgment without further notice if the defendant does not take the limited steps to cure the default. 

• Impose a six‑month outer limit to initiate default judgment steps from issuance of the Notice of Claim, aligned with the broader delay‑reduction framework. 

Why it matters: This model sets out a clear, fair pathway—two notices, a short cure window with a modest fixed cost, and a stricter yet balanced test to set aside the default. It also reciprocates compliance with certainty: faster default judgments where defendants ignore two notices, and measured mercy where compelling reasons exist and a defence is arguable.