Defending a $58,000 Default Judgment in Niagara Falls

The situation

Kenneth worked full-time as a security guard, and his friend Wilson drove for a regional transit operator. On evenings and weekends, the two of them ran a small side business supplying cleaning products and safety equipment — gloves, masks, sanitizer, floor-care chemicals — to other small businesses around Niagara Falls. It was not glamorous work, but it was steady, and it had grown enough over a few years that they had a handful of standing commercial accounts they invoiced monthly.

One of those accounts belonged to Arman, who ran a small commercial cleaning company that served offices and retail units. Arman had been buying supplies from Kenneth and Wilson for close to two years, usually paying within thirty to sixty days. Then the payments slowed, then stopped. By the time Kenneth and Wilson stopped extending him further credit, Arman owed roughly $58,000 across a string of unpaid invoices.

They tried the usual things first: phone calls, emails, a written demand letter. Arman would occasionally promise a partial payment and then not send it. After nearly a year of chasing an amount that size, Kenneth and Wilson decided they needed to sue.

The default that didn't hold

Because the amount owed was above the limit for Small Claims Court, the claim was started in the Superior Court of Justice. Kenneth and Wilson had the claim properly issued and served on Arman at the business address they had always used to reach him. Under Ontario's civil procedure rules, a defendant who is served with a claim has a set window of time to file a statement of defence. If that window closes with nothing filed, the plaintiff can have the defendant noted in default and can then ask the court to sign default judgment — a judgment granted without a trial, because the defendant never contested the claim.

That is what happened here. Arman never filed a defence. Kenneth and Wilson, acting on their own at that stage, had him noted in default and obtained default judgment for the full amount owed, plus costs and interest. For a while, it looked like the matter was over.

Nearly a year later, Arman resurfaced — this time with a lawyer of his own — bringing a motion to set aside the default judgment. His position was twofold: first, that he had never actually seen the claim before it was too late to respond, because it had gone to an old business address he had since vacated; and second, that even if he had responded, he had a genuine defence, arguing that a portion of the supplies delivered late in the relationship had been the wrong product or arrived damaged, and that he should be credited for those shipments. He asked the court to set aside the judgment entirely and let the case proceed to a full defence and possibly a trial.

Kenneth and Wilson came to Treadstone Law at that point. They had a judgment in hand, but a judgment that can be reopened is not money in the bank, and they needed someone to actually defend it.

What we did

1. Pulled together the full service and correspondence record. Courts set aside default judgments where a defendant has a reasonable explanation for missing the deadline and an arguable defence worth hearing — but they weigh that against how the defendant behaved in the meantime. We gathered the proof of service, the demand letters, and months of email and text exchanges in which Arman had acknowledged the debt and promised payment, all sent to and from the very address he now claimed was outdated.
2. Challenged the service objection directly. Several of Arman's own emails, sent well after the claim was served, still used that same business address in his signature block and referenced ongoing operations there. That undercut the claim that he had moved and never received the documents, and we put the timeline in front of the court plainly rather than arguing it in the abstract.
3. Tested the delay itself. A defendant who wants a default judgment reopened is expected to move promptly once they learn about it. Arman had waited nearly a year. We argued that the delay, combined with the weak service explanation, weighed against reopening a judgment Kenneth and Wilson had already relied on.
4. Took the quality defence seriously rather than dismissing it. Not every part of Arman's story was weak. Some of his invoices did relate to a stretch where a supplier problem upstream had caused a handful of incorrect and damaged shipments — something Kenneth and Wilson privately acknowledged. Rather than fight that point to the last dollar and risk the whole judgment being reopened for a full trial, we treated it as a genuine, containable issue.
5. Opened a settlement conversation alongside the motion. Motions to set aside a default judgment are expensive and uncertain for both sides — if Arman won the motion, Kenneth and Wilson would be back to square one with a trial still ahead; if he lost, he would likely owe costs on top of the original debt. We used that mutual risk to propose a resolution before the motion was argued to a final decision.
6. Negotiated a structured settlement in place of a contested ruling. The final agreement reduced the debt from about $58,000 to roughly $46,000 — a $12,000 credit reflecting the disputed shipments — payable by Arman in monthly instalments over about ten months, secured by a consent judgment that could be enforced immediately if a payment was missed.

The outcome

This was not a clean win, and it was not meant to be presented as one. Kenneth and Wilson did not collect the full $58,000 the original judgment had awarded them, and Arman did not escape the debt or force a trial that might have dragged on for another year or more. Both sides gave something up to get certainty.

For Kenneth and Wilson, the trade-off made sense once the real alternative was on the table. Fighting the motion to a hard finish and winning outright would have kept the original judgment intact, but Arman's business had limited assets, and a judgment is only as good as what can actually be collected from it. A structured settlement with a consent judgment behind it — one that could be enforced quickly on any missed payment — gave them a realistic path to being paid, rather than a bigger number on paper that might never turn into cash.

Arman, for his part, got the quality dispute genuinely acknowledged instead of steamrolled, and a payment schedule he said he could actually meet, rather than a single lump sum he did not have.

As of the most recent instalment, payments have been made on schedule. If that changes, the consent judgment means Kenneth and Wilson do not have to start over — they can move straight to enforcement.

What you can learn from this