Executive Summary: Key Legal and Evidentiary Issues

• Defendant applied to set aside a default judgment and damages award issued in her absence.

• Plaintiffs claimed contract breach after the defendant failed to complete a $1.58 million real estate transaction.

• Substitutional service was used multiple times, but the defendant alleged she never received the documents due to being abroad.

• The court considered whether the defendant was guilty of willful default and if she had a defence worth investigating.

• Defendant presented evidence of medical and family emergencies abroad, internet and communication barriers, and language difficulties.

• Justice ruled the defendant met criteria under Rules 22-1(3) and 3-8(1), setting aside the default judgment and damages award.

Facts and outcome of the case

In this case, the plaintiffs brought a claim against Li Min Wang for failing to complete the purchase of a 3.4-acre property in Anmore, British Columbia. The sale price was $1.58 million, but the deal fell through. The plaintiffs subsequently sold the property for $1.15 million and sought to recover the $430,000 difference, plus interest and costs. Ms. Wang had paid an initial $55,000 deposit.

The plaintiffs obtained default judgment on October 16, 2023, and registered it against the defendant’s property. The court assessed damages in her absence on November 8, 2024. Despite multiple methods of substitutional service, including email, mail, text message, and physical posting, the defendant did not appear or respond. She later claimed she was unaware of the proceedings due to being in China for nearly two years to care for her ill parents and dealing with her own health issues. Her affidavit detailed that she did not use her Canadian phone number, did not access Canadian emails due to internet restrictions, and did not receive physical mail or notice postings at her rented apartment.

Ms. Wang applied to have the judgment and damages assessment set aside under Rule 22-1(3), arguing she was not guilty of willful default, brought the application promptly upon learning of the proceedings, and had a meritorious defence. She also intended to file a third-party claim against her realtor, alleging misrepresentations about the property’s power lines and that she was not personally intended to be the buyer. She raised financing and zoning issues as further defences.

Justice Hamilton accepted that Ms. Wang had not been aware of the proceedings, had acted quickly upon discovery, and had a defence worthy of investigation. The court found that justice required setting aside both the damages assessment and the default judgment. As a result, the court granted Ms. Wang leave to file a response, counterclaim, and third-party notice within 21 days. While the earlier damages ($430,000), interest ($27,961.74), and costs ($8,127.48) had been awarded to the plaintiffs, all were set aside. The costs of this application were left to be determined with the final outcome of the case.