Executive Summary: Key Legal and Evidentiary Issues

• Defendants failed to file a defence on time and sought to set aside their second noting in default.

• Plaintiffs argued that the Buyer Representation Agreement was binding and included the buyer’s spouse.

• The property at issue was purchased by the defendant's wife days after the agreement was signed by her husband.

• Defendants claimed delay was due to their child’s autism diagnosis, but offered insufficient evidence to support the claim.

• Court analyzed whether the defendants had an arguable defence and found their position largely meritless.

• Motion to set aside the default was dismissed due to unreasonable delay, weak defence, and prejudice to plaintiffs.

Background and facts of the case

Bhupinder Singh Dhaliwal, a real estate agent with Century 21 People’s Choice Realty Inc., entered into a Buyer Representation Agreement with Manpreet Kang on April 15, 2022. The agreement was set to expire on July 31, 2022 and included a clause stating that the brokerage would be entitled to a 2.5% commission if the buyer purchased a property fitting a specified description within the term or within 90 days after its expiry. The agreement also expressly included spouses within the definition of "buyer."

Dhaliwal introduced Kang to a property located at 26 Clockwork Drive in Brampton. Kang declined to purchase it, but three days later, on April 18, 2022, Kang’s wife, Nancy Bilkhu, purchased the same property. The plaintiffs alleged this was a deliberate move to evade the commission payable under the agreement. They sought $47,460 in unpaid commission, along with $35,000 in aggravated, exemplary, and punitive damages.

Procedural history and delay

The defendants were served with the statement of claim on May 22, 2024, and were first noted in default on June 24, 2024. They later requested and received consent from the plaintiffs to set aside the initial default. Despite multiple warnings and deadlines from the plaintiffs to serve a statement of defence, the defendants failed to do so. A second noting in default occurred on March 7, 2025. The defence was finally sent on April 8, 2025—319 days after service of the claim.

Arguments and evidence on the motion

The defendants argued that they were delayed in responding due to the stress and logistical challenges of seeking international medical treatment for their autistic child. However, they failed to submit adequate documentation or medical evidence to support this explanation. The plaintiffs maintained that the delay was intentional and timed to occur after the property was sold under power of sale, thereby undermining the plaintiffs’ ability to recover the claimed commission.

The defendants also claimed that because Nancy Bilkhu was not a signatory to the Buyer Representation Agreement, her purchase of the property did not trigger commission liability. However, the agreement explicitly included spouses within its definition of buyer, and both the Agreement and the Offer to Purchase were signed by Mr. Kang on the same day through DocuSign. The court noted there was no allegation that the plaintiffs misrepresented the nature of the agreement.

Court’s analysis and decision

Justice Wilkinson reviewed the legal test under Rule 19.03(1) of the Rules of Civil Procedure for setting aside a noting in default, referencing the Ontario Court of Appeal’s decision in Franchetti v. Huggins. The court considered several factors: the parties’ conduct, the length and reason for the delay, the complexity of the claim, and whether the defence had merit.

The court found that the plaintiffs had acted reasonably by granting multiple extensions. In contrast, the defendants had demonstrated unjustified delay, provided insufficient evidence regarding their child’s medical treatment, and offered a defence that lacked substance. The court concluded that the plaintiffs had been prejudiced by the sale of the property, which reduced their ability to enforce any potential judgment.

Justice Wilkinson dismissed the motion to set aside the noting in default. Costs were awarded to the plaintiffs in the amount of $3,220.50, payable within 30 days.