Executive Summary: Key Legal and Evidentiary Issues

• The motion sought to set aside a default judgment and noting in default arising from a corporate loan default and a related personal guarantee.
   
• Justice Antoniani applied the five-factor test from Mountain View Farms Ltd. v. McQueen, focusing on promptness, an explanation for the default, and an arguable defence on the merits.
   
• Ms. Egesi's 17-month delay in bringing the motion, marked by repeated procedural filing errors, weighed against setting the default aside.
   
• Allegations that court staff and opposing counsel acted with bias or in bad faith were raised but found unsupported by the record.
   
• None of the defendants' arguments regarding the interest rate, the overdraft charge, the dual guarantees, or the property enforcement measures amounted to an arguable defence.
   
• Ultimately, every relevant factor favoured dismissal, and the court left the issue of costs to be resolved through a structured submissions process.
   

Facts of the case

This motion arose from a corporate loan default. Black Startups Inc., also known as Startups Noires Inc., and its director and controlling mind, Karen Egesi, moved to set aside a noting in default and a default judgment obtained by Canadian Imperial Bank of Commerce (CIBC) on October 3, 2024. The parties had entered into a Credit Agreement dated December 7, 2022 [elsewhere in the decision, at paragraph 39, the same agreement is described as having been "first executed" on October 4, 2022; the document does not reconcile these two dates]. Under the agreement, the corporate defendant received access to $150,000 in credit at 7.950% interest, along with a Visa credit card with a $10,000 limit, and interest-only payments were permitted for the first 12 months. Ms. Egesi personally guaranteed the debt, signing both a limited guarantee capped at $160,000 and a second, unlimited guarantee. The defendants drew the full $150,000. Payments were scheduled to increase to $12,500 per month starting November 1, 2023, but the defendants never began making the higher payments, although CIBC continued accepting automatic interest-only withdrawals for several months. During this period, the corporate account went into overdraft; an overdraft balance of $4,809.38 as of May 31, 2023, was converted into an overdraft loan on June 24, 2024, and became part of the total indebtedness. The final interest-only payment was made in March 2024, after which the account had insufficient funds and no further payments were made. CIBC issued a demand for payment; the reasons state this occurred in July 2025, though the more detailed chronology set out later in the decision indicates the statement of claim was issued on August 30, 2024, served on September 7, 2024, and followed by default judgment on October 3, 2024 [the decision's earlier narrative refers to the claim being issued in October 2025, and a later passage refers to August 2025, both of which are inconsistent with the detailed chronology and with the October 2024 default judgment date]. Following judgment, CIBC registered writs of execution against two real properties owned by Ms. Egesi but took no further steps to realize on the judgment while this motion was pending. Ms. Egesi, self-represented, then made numerous unsuccessful attempts over roughly 17 months to bring a motion to set aside the default, including multiple rejected filings, a period retaining and losing counsel, and an unsuccessful attempt to transfer the matter to Newmarket.

Policy and legislative provisions at issue

Rule 19.08 of the Rules of Civil Procedure permits a default judgment to be set aside or varied "on such terms as are just," and the decision notes that a noting in default may be set aside at the same time as the judgment itself. The governing test comes from Mountain View Farms Ltd. v. McQueen, 2014 ONCA 194, which directs courts to weigh whether the motion was brought promptly, whether there is a plausible excuse for the default, whether the defendant has an arguable defence on the merits, the potential prejudice to each side, and the effect on the overall integrity of the administration of justice. On the contractual side, the Credit Agreement incorporated CIBC's Small Business Credit Terms and Conditions booklet and its Business Account Operating Terms and Agreements, which set the 7.950% interest rate on the principal, established a 21% per annum rate on amounts drawn in excess of the agreed principal (the overdraft), and set out the terms of Ms. Egesi's limited guarantee, capped at $160,000 in principal plus costs and interest, and her separate unlimited guarantee.

Reasoning and analysis

Applying the Mountain View Farms factors, the court first found the defendants had not acted promptly. Although Ms. Egesi notified CIBC of her intention to move to set aside the judgment within days, the subsequent 17 months were marked by more than a dozen motions rejected on filing, unexplained multi-month gaps in retaining counsel, an unsuccessful attempt to change venue, and repeated procedural missteps. The court rejected Ms. Egesi's submissions that courthouse staff and opposing counsel acted with bias or in bad faith, finding no support for these allegations in the record and attributing the filing errors instead to inexperience or inattentiveness. On the second factor, the court found no reasonable explanation had been offered for the delay at any stage. On the third and most significant factor, the court found no arguable defence on the merits. It rejected the argument that CIBC had charged 30% interest, confirming the actual rate was 7.950%, calculated from March 2024, the last month interest was paid. It rejected the claim that "internal correction" entries revealed a triable issue, finding these simply reflected returned payments due to insufficient funds. It rejected the argument that the defendants never agreed to the overdraft or its 21% rate, since the loan documents, which the defendants did not dispute, expressly provided for that rate. It rejected the argument that the two guarantees created a triable issue, since Ms. Egesi did not dispute signing either one. It rejected the claim that CIBC had improperly registered a mortgage, clarifying that CIBC had only registered writs of execution against two properties after judgment, which are not mortgages. It rejected the argument that the accounting was too complex to be understood, describing it as a straightforward calculation of principal, one interest rate, and costs. Finally, it rejected the claim that funds were advanced before the loan documents were executed, finding no factual or legal support for that assertion, along with an unsupported allegation that CIBC chose to litigate in Hamilton due to an improper relationship with court staff there. The court also noted that even if the delay attributable to the venue motion were viewed neutrally, no explanation accounted for the remaining months of delay.

Ruling and overall outcome

Weighing all of the Mountain View Farms factors together, Justice Antoniani found that every factor favoured dismissal and that granting the motion would improperly encourage parties to expend resources on meritless applications. The motion to set aside the default judgment and noting in default was dismissed, leaving CIBC as the successful party and the underlying default judgment intact. The decision notes that CIBC had already secured judgment for a total amount owing of less than $160,000 in principal, plus costs and interest, but does not state an exact consolidated figure for the judgment amount, so no precise total can be confirmed from this decision. As the motion concerned setting aside the default judgment rather than assessing new damages, no further monetary award was made in these reasons. On costs, the court did not fix an amount; instead, it directed the parties to attempt to agree, failing which each side was to serve costs submissions and a bill of costs within set deadlines, with costs deemed unresolved and left undetermined if neither party made submissions.