New Brunswick Court Warns Parties to File Pleadings Within Prescribed Timeframe
WK & NN Trucking Ltd. v. Nordic Insurance Company of Canada and G.T.I. Broker Group Inc., 2025 NBKB 24
Reading Time: 5.5 minutes (approx.)
By: Alexandre Doucet
The underlying matter stems from an incident that occurred on October 31, 2022, where WK & NN Trucking Ltd., the Plaintiff, suffered damage to a trailer it owned. The Plaintiff was covered under an automobile policy administered by the Defendant Nordic Insurance Company of Canada (Nordic), but when the Plaintiff submitted its claim for damages to the trailer, Nordic denied the claim on the grounds that the Policy did not provide collision coverage. The Plaintiff subsequently filed an action alleging breach of the insurance contact by Nordic; alternatively, the Plaintiff alleged that the co-Defendant G.T.I Broker Group Inc. (GTI) had been negligent by selling an insurance policy that didn’t include the coverage the Plaintiff had requested.
The Plaintiff served Nordic with the Action on November 23, 2023, but Nordic failed to respond with a Statement of Defence within the prescribed time; on March 18, 2024, the Plaintiff noted Nordic in default. Nordic retained counsel on May 29, 2024, to defend the action, and then filed a motion to set aside the noting in default by the Plaintiff.
Justice Doucet began by looking at the legal framework of Rules 21.03 (Setting Aside the Noting of Default) and 21.08 (Setting Aside Default Judgment) of the Rules of Court, NB Reg 82-73. He explained that the framework, or test, to allow for a default judgment to be set aside consisted of four elements:
“(1) a valid prima facie defence to the action;
(2) a continuing intention to defend;
(3) a reasonable explanation for the failure to file and serve a Statement of Defence before the noting of default; and
(4) an application for relief within a reasonable period of time.”
[para 25]
While all elements are necessary, the court explained that the importance of a valid prima facie defence dwarfed all other factors due to access to justice principles and addressed it last in its analysis.
Under the second element of the test, the Justice found that there was indeed an intention to defend the claim by Nordic. This was made obvious by its continued denial of the Plaintiff’s claim.
As for the third element of the test, Nordic presented six compelling arguments to justify its failure to file a defence. First, Nordic’s agent for service was wrong as he was no longer an employee of Intact Insurance. Second, the claim’s adjuster was on vacation when the Action was received by Nordic. Third, while the claim’s adjuster was on vacation, the back-up adjuster was never provided with the action, delaying Nordic’s capacity for a timely response. Fourth, the claim’s adjuster had inadvertently missed the Action among the numerous emails which required her attention. Fifth, due to the claim having been denied the matter was overlooked by the claims adjuster who did not expect to receive an Action. Finally, the claims adjuster only realized the Action was received by her months later after reviewing progress on her files. The court was satisfied with the Defendant’s explanation for its failure to file a defence.
As for the fourth element of the test, the court noted that Nordic became aware of its default on June 3, 2023, and filed its motion on October 1, 2023, a four-month delay. The Defendant explained that its delay was due to three factors: finding counsel, communicating with opposing counsel, and coordinating with the claims adjusters to affirm the contents of their affidavits filed with the motion. The Justice was not satisfied that the Defendant discharged its burden of proving the motion to set aside the noting in default was filed within a reasonable period of time as similar cases had done so in shorter time (see: Levionnois v. Doucet [20204] N.B.J. No. 90 (NBKB, where the Defendants in that case filed their motion to set aside the noting in default within 6 days).
The final, and most important element of the test according to Justice Doucet, involves an analysis of whether Nordic had a valid prima facie defence to the action. The Statement of Defence was provided to the court in draft form. A review of the Statement of Defence showed it was concise and succinct, and stated that the coverage claimed by the Plaintiff was not available in this particular claim by way of contractual limitations. The same conclusion was also found to be supported by the claim adjuster’s affidavit. As such, the court was satisfied that the Defendant had demonstrated a valid prima facie defense, supported by the evidence on record.
Despite the fact that the Defendant failed to file its motion to set aside their noting in default within a reasonable time, the court found that its valid prima facie defence dwarfed all other elements of the test. As such, the Defendant was ordered to file its Statement of Defence and Crossclaim within 10 days from the date of the stamped decision.
