You’ve been served!

There is no legal requirement in Ontario for the phrase “you’ve been served” to be uttered in the process of serving legal documents. The phrase receives notoriety as a result of popular culture. 

While the phrase is not a legal requirement, service of legal documents, in this case a statement of claim on individuals or corporations do create an important corresponding legal requirement. In other words, ignoring or not responding by serving and filing a statement of defence has serious legal consequences. Most importantly, there may be valid defence(s) to the allegations made in a claim. Nevertheless, this mistake is made far too often.

Legal issues are only made more difficult by a non-response (failing to file a statement of defence). The plaintiff (the individual or corporation bringing the matter forward) may move to obtain a judgment without any further notice. This is known as a default judgment. (Rule 19 of the Rules of Civil Procedure.) 

Once a default judgment is obtained, the plaintiff may then move to enforce the judgment as they would if they were successful at trial. At this stage, costs will continue to rise for the defendant(s) and vast options are available to the plaintiff to enforce the judgment.

Enforcement of a judgment may have consequences on your employment (if a garnishment order is obtained), for your property (if an execution against property is obtained). It is also possible that you may be required to attend an examination to respond to questions about your finances (examination in aid of execution).

These are only a small sample of the consequences to provide context to what is at stake. It is by no means a description of the full force of the remedies or a list of all remedies available. Enforcement orders have expansive reach including obtaining the right for possession of land among others. (Rule 60 of the Rules of Civil Procedure)

It is possible to set aside the default judgment.

The legal test is found in an Ontario Court of Appeal decision: Mountain View Farms Ltd. v. McQueen, 2014 ONCA 194 (CanLII).

The Court held that it must consider three factors:

(a) whether the motion was brought promptly after the defendant learned of the default judgment;

(b) whether there is a plausible excuse or explanation for the defendant’s default in complying with the Rules; and

(c) whether the facts establish that the defendant has an arguable defence on the merits.

And that the court should have regard to:

(d) 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

(e) the effect of any order the court might make on the overall integrity of the administration of justice.

There are numerous decisions interpreting what the language in this legal test means and how they should be applied. For example, what a court would consider “a plausible excuse or explanation” may not be what a defendant would believe it to be. It is important to consult a lawyer. Success at this stage is very fact dependant and this is a step of last resort - responding promptly to service within the time prescribed by the Rules of Civil Procedure will avoid altogether the need to consider this option.

NOTE: Statement of claim is only one of several documents that may be served on a party.