Executive Summary: Key Legal and Evidentiary Issues

• A default judgment obtained on July 31, 2024 against Surinder Kumar Ranga and Kamla Devi Ranga was the subject of competing applications to set it aside and to enforce it through the sale of the defendants' property.
• Central to the dispute was whether Mandeep Ranga, the defendants' estranged son and the plaintiff's self-described best friend, had misled the elderly defendants into believing the litigation would be halted.
• The court applied the Miracle Feeds test to determine whether the default judgment should be set aside, considering willfulness of default, timeliness of the application, and merits of the defence.
• Adverse inferences were drawn against the plaintiff for failing to produce evidence from Mandeep, who was closely aligned with the plaintiff throughout the proceedings.
• Overlapping claims filed simultaneously in both the Supreme Court and Provincial Court created procedural complications, including the eventual dismissal of the Small Claims Action.
• Both the default judgment and the damages order of $251,934 were set aside as their continuation would have amounted to a miscarriage of justice.

Facts of the case

Michael Prasad commenced this action in debt against Surinder Kumar Ranga and Kamla Devi Ranga by filing a Notice of Civil Claim on June 12, 2024. The plaintiff alleged that on April 26, 2022, the defendants purchased a property located at 3847 Parker Street in Burnaby (the "Burnaby Property") for $1,464,500, financed by two mortgages. Unable to meet their mortgage obligations, the defendants allegedly entered into an agreement with the plaintiff under which he would make the mortgage payments on their behalf. In exchange, the plaintiff was to be placed on title to the Burnaby Property and share in the rental revenue and any profits from its eventual sale. According to the plaintiff, he paid a total of $279,943 toward the two mortgages, of which only $6,200 was repaid. He alleged that the defendants breached the agreement by never transferring title, never sharing rental revenue, and never repaying the amounts owing. His causes of action included breach of contract and, in the alternative, unjust enrichment.

The defendants offered a markedly different account. Through affidavits filed by both Surinder and Kamla, they described the Burnaby Property as having been formerly owned by their son Mandeep, from whom they had become estranged. They stated that it was Mandeep, not themselves, who had entered into a verbal agreement with the plaintiff — under which the plaintiff would pay carrying costs in exchange for the right to live in or collect rent from the property, and any sale profits would be shared between Mandeep and the plaintiff. The defendants stated that they had taken title to the Burnaby Property by court order on April 8, 2022, following Mandeep's request to do so in order to avoid a foreclosure. Kamla further deposed that in November 2024, while she was hospitalised and gravely ill following heart surgery, Mandeep visited her and admitted that it was he — not the plaintiff — who was controlling and advancing this action, having used the plaintiff as an intermediary because Mandeep had been declared bankrupt and could not obtain a judgment in his own name. Mandeep also allegedly admitted to having intercepted legal papers served on the defendants and promised to halt all litigation initiated on his behalf by the plaintiff.

Contractual and procedural issues

The verbal agreement at the centre of the dispute concerned the payment of carrying costs for the Burnaby Property — including mortgage payments, property taxes, appraisal fees, and legal fees — in exchange for occupancy rights or rental income, and an eventual profit-sharing arrangement upon sale. The plaintiff claimed this agreement was made directly with the defendants. The defendants, however, maintained it was Mandeep's agreement, not theirs. The case also involved the concurrent prosecution of a Small Claims Action in the Provincial Court, filed on the same day as the Supreme Court action, against Surinder alone. That parallel proceeding ultimately complicated the procedural history, as Surinder successfully applied to have it dismissed on the basis that the plaintiff had already obtained a default judgment on the same claim in the Supreme Court.

Court's reasoning and analysis

Justice Milman applied the Miracle Feeds test to determine whether the default judgment should be set aside. The test required the court to consider whether the defendants wilfully or deliberately failed to respond, whether they applied to set aside the judgment as soon as reasonably possible, and whether they had a potentially meritorious defence. The court acknowledged that the defendants were elderly, infirm, and not proficient in English, and found they were initially confused by overlapping claims filed simultaneously in different courts. Critically, the court accepted Kamla's uncontradicted evidence that Mandeep had assured them the litigation would be halted, which explained why the defendants did not advance their set-aside application — despite having filed it on November 5, 2024 — until the spring of 2026. The court found no contradiction offered by the plaintiff to Kamla's assertions about Mandeep's admissions, and drew an adverse inference against the plaintiff for failing to adduce evidence from Mandeep, who was the plaintiff's self-described best friend of approximately 20 years. Justice Milman also noted the plaintiff's one-year delay in taking any meaningful enforcement steps after obtaining the default judgment — other than filing a certificate of pending litigation against the defendants' Vancouver Property in January 2025 — as inconsistent with the plaintiff's position that he had at all times intended to proceed expeditiously. The only coherent explanation for that delay, the court found, was Kamla's account that Mandeep had arranged for the litigation to pause while she was ill, and later resumed enforcement after the defendants refused his request to borrow against their equity in the Vancouver Property.

Ruling and outcome

Justice Milman concluded that allowing the default judgment and the $251,934 damages order to remain in place would amount to a miscarriage of justice. Accordingly, the court granted the defendants' application, setting aside both the default judgment and the damages order, and dismissed the plaintiff's application to confirm the Registrar's report recommending the sale of the defendants' property at 1062 East 39th Avenue in Vancouver. The defendants, Surinder Kumar Ranga and Kamla Devi Ranga, were the successful parties and are entitled to their costs in the cause. No specific monetary amount was ordered in their favour beyond that costs entitlement, and the exact quantum of those costs was not specified in the judgment.