Executive Summary: Key Legal and Evidentiary Issues

• The Court assessed whether Mr. McCarthy demonstrated a prima facie defence sufficient to justify setting aside a default judgment.

• Mr. McCarthy relied on pseudo-legal commercial arguments unsupported by any admissible evidence or recognized legal principles.

• The Court found Mr. McCarthy failed to file a valid Statement of Defence or Notice of Intent to Defend within the required timeframe.

• No credible explanation for the default or evidence of a real defence to the debt claim was provided.

• Applying Royal Bank of Canada v. Ruddock, the Court ruled that the absence of a prima facie defence was determinative.

• The motion to set aside was dismissed, but the Court exercised discretion not to award costs against Mr. McCarthy.

Background of the debt and commencement of proceedings
Toronto-Dominion Bank commenced an action against Mark Terence McCarthy to recover unpaid debts related to two credit card accounts and an overdraft protection loan. The Bank sent a demand letter in November 2023, but when no payment was received, it filed a Notice of Action with Statement of Claim in January 2024. Mr. McCarthy was personally served in February 2024. Rather than filing a valid defence, Mr. McCarthy submitted a document titled "Private Trust Deposit," containing pseudo-legal language asserting rights over an "estate" and challenging the court's authority. No proper pleadings were filed, leading to default judgment being entered on April 16, 2024, for $48,598.72.

Mr. McCarthy's motion to set aside the default judgment
In August 2024, Mr. McCarthy filed a motion to set aside the default judgment. He alleged that TD Bank had committed fraud, breached accounting standards, and violated the Criminal Code and American statutes like the Truth in Lending Act. His theory was that his application for credit cards constituted a "financial asset" that discharged his debt obligations. However, he produced no admissible evidence, no credible legal argument, and acknowledged he relied on poor advice when he filed the initial documents.

Court’s analysis of the motion
Justice Robert M. Dysart explained that under Royal Bank of Canada v. Ruddock, the key requirement for setting aside a default judgment is demonstrating a prima facie defence. Even if other factors are considered, the existence of a triable defence is mandatory. Mr. McCarthy’s arguments were characterized as pseudo-legal commercial gibberish with no foundation in Canadian law. He failed to contest the underlying debt and provided no evidence that could raise a legitimate issue for trial. His theories about promissory notes, financial assets, and trust accounts were found to have no legal merit.

Justice Dysart denied Mr. McCarthy's request for an adjournment because there was no indication that any credible defence could be raised. The Court ruled that there was no genuine triable issue and dismissed the motion to set aside the judgment.

Conclusion and result
The Court dismissed Mr. McCarthy’s motion to set aside the default judgment. Although the usual practice would be to award costs against the unsuccessful party, Justice Dysart exercised discretion not to impose costs against Mr. McCarthy in this case. The decision upholds the principles of procedural compliance and reinforces that unsupported, speculative defences cannot undo final judgments properly obtained in civil debt recovery actions.