Executive Summary: Key Legal and Evidentiary Issues

• Fairness of proceeding to default judgment without emailing motion materials to a self-represented defendant amid active settlement communications
• Effect of ongoing email negotiations on the defendant’s reasonable belief about whether and when a defence had to be filed
• Application of the Mountain View factors to set aside noting in default and default judgment, focusing on promptness, explanation, merits, prejudice, and justice system integrity
• Rejection of “securitization” and “no standing” OPCA-style debt-elimination arguments as unmeritorious pseudolaw in a commercial lending dispute
• Weighing alleged prejudice from delay against the procedural unfairness created by counsel’s communication choices and lack of clear warning
• Influence of counsel’s conduct toward a self-represented litigant on the court’s discretionary relief in commercial debt enforcement

Facts of the case

Royal Bank of Canada (RBC) was the primary lender to three “Adamson Barbecue” restaurants operated by the defendant, William Adamson Skelly, through business loans, credit cards and lines of credit. During the COVID-19 pandemic, Mr. Skelly opened his Etobicoke restaurant in defiance of Ontario’s lockdown measures, drawing significant media attention and large anti-lockdown protests, and facing numerous municipal and provincial charges. He was also sued by the City of Toronto over the costs of seizing his premises and pursued a countersuit and a constitutional challenge. He claimed that lockdowns, related charges, bail conditions that barred him from accessing his restaurants, and other financial pressures caused serious losses and eventual insolvency. The restaurants closed in 2021, and he moved with his family to a rural property in Alberta, where mail could not be delivered to the physical address and he relied on a P.O. Box.
RBC later sued in Ontario to recover the outstanding business debt. The Statement of Claim was personally served on Mr. Skelly in Alberta on 17 November 2022. Over December 2022 and early 2023, RBC’s counsel granted extensions for delivery of a defence while the parties corresponded by email about a potential payment arrangement, including a request for financial disclosure that the defendant never provided. On 10 March 2023, RBC noted him in default and obtained default judgment the same day. Counsel then mailed a copy of the judgment to his Alberta civic address, which he says could not receive mail.
Despite this, RBC’s counsel resumed email contact in July and early August 2023, continuing to seek financial disclosure and discuss settlement without mentioning that default judgment had already been obtained. In an 15 August 2023 email, the defendant gave his P.O. Box as his mailing address and wrote that if RBC insisted on pressing its claim, documents could be sent there—language the court took as clear evidence he did not know a judgment already existed. RBC did not answer that email and did not disclose the judgment.
Separately, in February 2025, RBC commenced a second action in Alberta on the same debt; that proceeding was later discontinued. Through that Alberta matter, different RBC counsel sent the Ontario default judgment to the defendant on 27 May 2025. He says this was his first notice of the judgment. He then brought a motion in Ontario to set aside the noting in default and the default judgment, serving his materials in October 2025.

Procedural history and motion

The motion before the Ontario Superior Court of Justice was brought by Mr. Skelly, self-represented, to set aside both the noting in default and the default judgment of 10 March 2023. Co-defendant Alison Hunt did not attend, and no submissions were made about the case against her. RBC opposed the motion, arguing that there had been significant delay from service of the claim, that the defendant had been mailed the judgment in March 2023, that he had no arguable defence, and that his theories about securitization and lack of standing were pseudolegal.
The defendant maintained that he believed, in light of ongoing email negotiations and the absence of any clear warning, that he did not yet need to deliver a defence. He emphasized his heavy involvement in multiple other proceedings linked to his COVID-19 defiance and asserted that once he actually learned of the Ontario judgment in May 2025, he moved promptly to challenge it. He filed a draft Statement of Defence focusing on alleged securitization and transfer of the debt, an asserted inability of RBC to produce an original credit agreement, set-off, an invalid demand, and a denial of interest.

Legal issues and analysis

The court first addressed whether RBC ought to have given notice of the default judgment motion, even though Rule 19.02(3) does not automatically require notice after a defendant is noted in default. Relying on authorities emphasizing that notice is increasingly treated as best practice, especially where a defendant is engaged and not absconding, the judge found that fairness and transparency required serving the motion materials by email. Email was the parties’ established communication channel, and providing the documents that way would have been easy and ensured the self-represented defendant was fully informed. Instead, RBC relied solely on regular mail to a problematic rural address while continuing email settlement discussions that never disclosed that judgment had already been taken.
The court then applied the Mountain View test for setting aside default: whether the defendant moved promptly once aware of the judgment, whether there was a credible explanation for the default, whether there was an arguable defence on the merits, the prejudice to each side, and the impact on the administration of justice. On promptness, the judge accepted that the key period ran from late May 2025, when the defendant first received the judgment, to the fall 2025 motion, and found that timeframe reasonable. Earlier delay, in context, was mitigated by the settlement talks and absence of a clear defense deadline.
On explanation, the court accepted that “being busy” with other litigation was not a good excuse standing alone, but stressed that RBC’s handling of communications with a self-represented litigant was central. Counsel had an ethical obligation not to exploit his position. In circumstances where email was the working channel, the failure to warn him that default steps would be taken if a defence were not filed by a particular date, coupled with the choice not to email the motion record or the judgment and to continue negotiations post-judgment without disclosure, effectively “willed” him into believing default proceedings would not occur during talks.
On the merits, however, the court held that the draft defence was not arguable in its present form. The suggestion that securitization or assignment eliminated RBC’s standing, combined with demands for original “wet ink” contracts and special affidavits, was treated as belonging to organized pseudolegal debt-elimination schemes. Courts have consistently rejected such arguments as scams promoted by “gurus” selling ineffective strategies. There was no evidence the debt had been transferred away from RBC, and even if securitization had occurred, it would not negate the underlying obligation. Demands for original signed documents and special proof were also held to have no legal merit. This factor weighed against the defendant.
On prejudice, RBC invoked laches and delay but provided no specific evidence of disappearing assets or concrete prejudice beyond the ordinary effects of time passing. The defendant argued that denying the motion would deprive him of any chance to defend on the merits; the court regarded that as a routine argument in such motions. Overall, prejudice was treated as neutral.
The decisive factor was the integrity of the administration of justice. The judge underscored the strong preference for resolving disputes on their merits and noted that this case involved a self-represented litigant apparently influenced by pseudolaw while also being disadvantaged by how communications were handled. The court concluded that RBC’s conduct—failing to set a clear defence deadline and warn of default, not emailing the motion materials or judgment despite extensive email communications, and continuing to negotiate after judgment without disclosure—should not be rewarded. A purely technical application of the Rules, the court held, would produce an unfair result inconsistent with justice system values.

Outcome and implications

The court granted the motion, set aside both the noting in default and the default judgment of 10 March 2023, and ordered that Mr. Skelly deliver a Statement of Defence within 30 days of the decision. The judge emphasized that his existing draft defence, rooted in pseudolaw, is not meritorious and may need to be substantially revised if any legitimate defence exists. The decision serves as a warning that creditors and their counsel must act transparently, particularly with self-represented parties, and that default remedies may be unwound where procedural fairness is compromised, even if the current defence appears weak.
On costs, the court noted that the defendant was the successful party on the motion but characterized the relief as an indulgence in light of his unmeritorious draft defence. It therefore made no order as to costs. Accordingly, the successful party on this motion is the defendant, William Adamson Skelly, but no monetary amount, damages, or costs were awarded in his favour; the total amount ordered in favour of the successful party is zero, and the underlying debt claim remains to be adjudicated on the merits.