It is very common that somebody who was served with a statement of claim does not file a defence with the court for various reasons. What happens next is usually that the defendant is served with a default judgment. The question is then if the defendant can move to set aside the default judgment.
It was held in Lenskis v. Roncaioli (1992), 11 C.P.C. (3d) 99 (S.C.J.) and confirmed by the Ontario Court of Appeal in Sinnadurai v. Laredo Construction Ltd. (2005), 20 C.P.C. (6th) 234 (Ont. C.A.) that generally the requirements that a moving party must meet in order to have a default judgment set aside are the following:
– The motion to set aside the default judgment should be made as soon as possible after the applicant becomes aware of the judgment;
– The moving party’s affidavit must set out circumstances under which the default arose that give a plausible explanation for the default; and
– The moving party must set forth facts to support the conclusion that there is at least an arguable case to prevent on its merits.
These factors are non-exhaustive (Flinthoff v. Anhalt, 2010 ONCA 786). Where a defendant is not properly served, the judgment may be set aside as of right, without the requirement that the defendant establish a defence to the claim. [Royal Trust Corp. of Canada v. Dunn, (1991), 6 O.R. (3d) 468 (Gen. Div.); Kandasamy v. 686234 Ontario Ltd. (c.o.b. Parkway Forest Apartments),  O.J. No. 3997 (S.C.J.); Miller (c.o.b. Country Lane Circulars) v. Muthulingam,  O.J. No. 4467 (Gen. Div.)]
Disclaimer: This is general information only, and is not intended as legal advice. If you think that you are in a situation similar to the above, you are encouraged to contact a lawyer for advice specific to your situation.