Executive Summary: Key Legal and Evidentiary Issues

• Dispute centres on a wrongful dismissal claim by a former coach against a junior hockey club and its directors under an expedited civil procedure.
• The key procedural issue is whether long-standing notings in default against individual director defendants should be set aside to permit a merits-based defence.
• Evidence showed prior defence counsel was specifically instructed to file defences for all defendants but failed to do so, raising questions of counsel neglect rather than party misconduct.
• Affidavit evidence (mainly from a later director) described the board’s composition, steps taken after default, and the existence of arguable contractual defences to the dismissal.
• The court weighed the lengthy delay in bringing the application against explanations involving prior counsel’s conduct and dealings with the lawyers’ insurer and practice advisors.
• Prejudice to the plaintiff was found to be limited and remediable by a costs order, leading to the notings in default being set aside on terms, including $1,000 in costs payable to the plaintiff.

Background and parties

The case arises from a wrongful dismissal claim by Douglas Johnson, who was employed as a coach by the Nipawin Junior A Hawks Inc., a non-profit junior hockey organization. Johnson held a three-year coaching contract commencing in April 2019. He alleges that his contract for services was terminated on December 4, 2021, that he was not in breach of the contract, and that the termination did not comply with the terms of the agreement, rendering it wrongful. The corporate defendant is the Hawks, and the individual defendants are or were directors of the non-profit corporation. Johnson’s claim is brought under Part 8 of The King’s Bench Rules, the expedited procedure, which is intended to move cases more quickly to resolution. The individual directors are exposed to potential personal liability in connection with decisions made concerning Johnson’s employment relationship with the club.

Procedural history and notings in default

The statement of claim was issued on November 23, 2023. Service proceeded in stages during 2024. Several defendants, including the Hawks and a number of directors, were served in May 2024, while others were served in July 2024 under an extension of time order. One individual defendant had still not been served by the time of an early appearance before another judge. Counsel then acting for the defendants engaged with plaintiff’s counsel, who clearly warned that he would note the defendants in default if defences were not received by specified dates. When no statements of defence were filed, the plaintiff noted the individual defendants in default on June 13, 2024, and the Hawks in default on June 28, 2024. Instead of applying at that point to set aside the notings in default, prior defence counsel chose to attack the statement of claim directly. An application under the Rules sought to strike out the claim. Justice Dovell dismissed that strike application, holding that the defendants, having been noted in default, lacked standing to bring it and awarding costs to the plaintiff in any event of the cause. A later, separate application was then brought, but only on behalf of the corporate defendant Hawks, seeking both to open up the default and strike the claim. Justice Morrall set aside the noting in default as against the Hawks, allowing it to defend, but commented that it was “strange” the same relief was not sought for the remaining director defendants who were also noted in default. He awarded a modest costs amount to the plaintiff. Despite this pointed observation, no immediate steps were taken by prior counsel to address the individual directors’ procedural predicament. An adjourned application to strike the claim was eventually heard and dismissed on the merits by Justice Mills in March 2025, leaving the underlying wrongful dismissal lawsuit intact.

Change of counsel and explanation for delay

The present application to set aside the notings in default against the remaining individual defendants was not brought until November 2025, many months after the original defaults. By then, the defendants had changed representation. Their insurer had been notified, carriage was removed from prior counsel, and new defence counsel, Mr. Blake, entered the record in May 2025. The central evidentiary foundation for the application comes from the affidavit of Robert Nicholas, a director who joined the Hawks’ board in 2023, after Johnson’s contract had ended. Nicholas’s affidavit clarifies which directors sat on the board at relevant times and adopts earlier affidavits sworn by another board member, Pickering, from the earlier applications. More importantly, Nicholas sets out a narrative of the advice given to prior counsel and the steps taken once the defaults and procedural errors became apparent. According to Nicholas, at a board meeting on May 21, 2024, he personally told prior counsel several times that the next step needed was to file defences on behalf of all defendants. Prior counsel nonetheless failed to file or serve any statements of defence before the expiry of the time to defend. The notings in default followed, exactly as plaintiff’s counsel had warned. Prior counsel then pursued only the targeted strike and later the Hawks-only application to open up default, never applying to set aside the notings for the individual directors. Another lawyer within the same firm ultimately filed the Hawks’ statement of defence after its default had been opened, underscoring that only the corporate defendant was being procedurally “repaired” at that stage. Once new counsel assumed carriage, he obtained the prior file, recognized the problems, and began exploring whether the Law Society’s practice advisory services and the Saskatchewan Lawyers’ Insurance Association (SLIA) would assist with what appeared to be counsel neglect affecting the directors. Communications in mid-2025 show new counsel seeking guidance from a Practice Advisor, writing to SLIA to request appointment of “repair counsel,” and urging prior counsel to report himself to SLIA on the basis that his conduct had prejudiced the directors. New counsel also notified plaintiff’s lawyer in August 2025 that an application to set aside the notings would be forthcoming and formally sought consent from plaintiff’s counsel in October 2025 to open up the defaults for all directors. Plaintiff’s counsel refused to consent, forcing the defendants to proceed with the present application.

The legal test for setting aside default and its application

The court reviewed the well-established test for setting aside a noting in default or default judgment. The criteria, drawn from prior Saskatchewan authorities, require the applicant to: move as soon as possible after learning of the judgment or explain any delay; provide a satisfactory explanation for the failure to respond to the claim; disclose an arguable defence; and satisfy the court that reopening the default will not seriously prejudice the plaintiff. These considerations are applied in a discretionary, equitable manner. Modern appellate guidance in Saskatchewan emphasizes flexibility and fairness, stressing that rigid application of procedural rules must yield to fundamental justice where appropriate and that a defendant should not lightly be denied a hearing on the merits where an arguable defence exists and where any prejudice can be addressed, often through costs. The court noted that a default judgment differs from a judgment after trial because it reflects a failure to follow process rather than an adjudication on the substantive merits. The Rules expressly contemplate applications to set aside or vary such judgments, and the case law warns against treating procedural defaults as permanently fatal where doing so would be inequitable. In particular, the authorities distinguish between “wilful” default, where a defendant understands the consequences and deliberately allows default to occur, and other forms of neglect, misunderstanding, or counsel error. Only in cases of truly wilful default, or where there is irreparable prejudice to the plaintiff or no arguable defence, will courts generally refuse to reopen a default. Applying these principles, the court first found a satisfactory explanation for the failure to defend. There was uncontroverted evidence that the defendants fully expected and expressly instructed their prior counsel to file a defence on behalf of all defendants. The failure was that of counsel, not the parties themselves. Depriving the defendants of a merits-based adjudication because of their lawyer’s inaction would not be just and equitable, particularly where the defendants had done what litigants are expected to do—retain counsel and give clear instructions. Second, the court accepted that the affidavits collectively disclosed arguable defences to Johnson’s wrongful dismissal claim. While the plaintiff has advanced a contract interpretation that favours his own position, the alleged deficiencies in how the contract was terminated were, in the court’s view, at least debatable and cannot be resolved without a full hearing. Third, the court held that setting aside the notings in default would not seriously prejudice the plaintiff. Although some individual defendants had died since the claim was filed, there was no evidence that they were crucial witnesses whose absence would irreparably damage Johnson’s ability to prove his case, especially with another director (Nicholas) able to outline the relevant history. Similar reasoning had earlier led Justice Morrall to conclude that opening up the default against the Hawks caused “very little prejudice” to Johnson. The judge in the present decision saw no greater prejudice in allowing the individual directors to participate in the litigation than in allowing the corporate defendant to do so.

Assessment of delay and equitable considerations

The most contentious element was the length of the delay between the original notings in default and the bringing of the present application. Plaintiff’s counsel argued that the delay was inordinate and entirely out of time, contending that the court should no longer exercise its discretion in favour of the defendants. The judge acknowledged that the delay was unusually long and that few reported cases would exhibit a comparable passage of time. However, he emphasized that the law does not impose a fixed upper time limit on such applications. Instead, courts must examine each case in its context and decide whether the delay has been reasonably explained. Here, the defendants were found to be “blame-free” up to the point of prior counsel’s failures; they had given clear instructions that defences be filed. The subsequent lapse, while serious, was largely attributable to counsel’s missteps and to the time it took new counsel to investigate possible insurance coverage, seek guidance from regulatory bodies, and attempt a consensual solution before resorting to a formal application. The judge accepted that new counsel might have proceeded more quickly, but perfection is not the standard. The steps taken—reviewing the file, consulting a Practice Advisor, approaching SLIA, pressing prior counsel to self-report, and notifying plaintiff’s counsel of the plan to seek relief—all formed an adequate explanation for the elapsed time before the application was filed. In line with recent appellate authority, the judge underscored that Saskatchewan courts now adopt a flexible, equity-focused approach to procedural defaults. While it is a given that defaulting defendants have failed to comply with their legal obligations, applications to set aside default are inherently appeals to the court’s equitable jurisdiction, asking for an indulgence. Where there is no wilful default by the parties, where they have arguable defences, and where the plaintiff has not suffered irreparable or serious prejudice, fairness and fundamental justice favour allowing the litigation to proceed on the merits.

Costs, conditions, and overall outcome

Having concluded that all elements of the test were met, the court exercised its discretion to set aside the notings in default against the director defendants who brought the application. However, the relief was granted subject to terms, primarily in the form of costs. The judge considered submissions on what amount of “costs thrown away” should be imposed to fairly compensate the plaintiff for wasted effort and delay without drifting into punitive or solicitor-client-type awards. Plaintiff’s counsel asserted that $8,300 in fees plus disbursements and taxes had been incurred, but the court found this figure unsupported and inconsistent with the legal principles governing elevated costs. It was not broken down, and there was concern that items such as drafting the original statement of claim—work that would have been necessary regardless of the defaults—were being swept into the request. The court viewed the request as akin to an impermissible solicitor-and-own-client costs order and reminded counsel of appellate guidance warning against routine pursuit of such enhanced costs. Defence counsel, by contrast, suggested that his clients were prepared to pay up to $5,000 as costs thrown away, which the court considered generous but not reflective of the Tariff or a strict “thrown away” analysis. The judge also noted that Justices Dovell and Morrall had each already awarded $450 in costs to the plaintiff in earlier related applications, meaning some of the plaintiff’s work had already been compensated. Balancing these factors, the court ordered that the defendants collectively pay a single, all-inclusive amount of $1,000 as costs thrown away, payable within 30 days and in any event of the cause. Crucially, payment of this $1,000 is a condition precedent to the defendants serving and filing their statements of defence. The final order thus grants the director defendants leave to defend, on the condition that they collectively pay $1,000 in costs to the plaintiff within 30 days and then file their defences within 30 days of the fiat. In this application, the successful parties are the director defendants who sought to set aside the notings in default. The monetary component of the ruling is confined to the $1,000 in costs payable to the plaintiff as a condition of that relief; no damages or final compensation for the wrongful dismissal claim have yet been determined, and the total amount of any future damages award cannot be stated at this stage.