Background
1163499 B.C. Ltd. (“116”), a corporate investor, owned a residential property in the Chilliwack area adjacent to the home of Timothy Holm. Near the shared boundary sat several structures — a fence, workshop, storage sheds, a retaining wall, and an apple tree — that pre-dated 116’s acquisition of the land. In 2021 and/or 2022, those structures were removed or destroyed. Holm admitted removing a shed and the apple tree, claiming they sat on his property; he attributed the removal of the remaining structures to persons on 116’s side of the boundary.
In May 2022, 116 filed a civil claim against Holm for negligence, nuisance, and trespass, alleging the structures were on its land. Holm was personally served but failed to file a timely response, and 116 obtained default judgment in August 2022, with damages to be assessed. When 116 later moved for summary assessment of damages, that application was adjourned for inadequate evidence. In May 2025, Holm applied to set aside the default judgment, which the Supreme Court of British Columbia granted by order dated August 22, 2025 (2025 BCSC 1925). 116 appealed.
The chambers judge, Justice Coval, applied the three-factor framework from Miracle Feeds v. D. & H. Enterprises Ltd. (1979), 10 B.C.L.R. 58 — examining whether the default was wilful, whether the defendant moved promptly to set it aside, and whether there was a meritorious or investigation-worthy defence — and concluded it was “very much in the interests of justice” to set aside the default judgment.
The Court’s Holding
The Court of Appeal, in oral reasons delivered by Iyer J.A. (Willcock and Francis JJ.A. concurring), dismissed the appeal. The court confirmed that a decision to set aside a default judgment is discretionary and attracts a deferential standard of review; appellate intervention is warranted only where the court below misdirected itself or reached a conclusion so clearly wrong it amounts to an injustice, per Penner v. Niagara (Regional Police Services Board), 2013 SCC 19 at para. 27.
On the sole question of law raised — whether Justice Coval erred by considering the need to assess damages as a factor — the court found no error, reaffirming that the Miracle Feeds factors are not exhaustive and that courts may weigh any consideration relevant to the interests of justice, citing Forgotten Treasures International Inc. v. Lloyds Underwriters, 2020 BCCA 341. The court also rejected 116’s oral argument that Holm’s admitted removal of the shed constituted antisocial self-help requiring dismissal of the set-aside application, noting the issue had not been raised as a distinct question below and that the evidence did not clearly support such a characterization.
On the evidentiary grounds, the court found that Justice Coval committed no palpable and overriding error in his weighing of the three Miracle Feeds factors. In particular, two 2025 surveys supported Holm’s position that the structures were on his land, and 116 had offered no contrary survey evidence. The court further noted that 116 had tendered no evidence at the hearing to establish that its sale of the property had actually compromised its ability to prove the claim, leaving its prejudice argument unsupported.
Key Takeaways
- The Miracle Feeds factors for setting aside a default judgment are non-exhaustive guidelines, not mandatory requirements; courts may consider any circumstance relevant to the interests of justice, including the practical difficulty of assessing damages without first determining the merits.
- The bar for establishing a “defence worthy of investigation” on a set-aside application is deliberately low — a defendant need only show the defence could succeed, not that it will; chambers judges are not to engage in detailed merits assessment at this stage.
- Appellants challenging a set-aside order on grounds of prejudice must adduce evidence of that prejudice in the court below; unsupported assertions on appeal will not suffice.
- A legal argument not raised as a distinct issue before the chambers judge will generally not be entertained as a question of law on appeal.
Why It Matters
This decision reinforces the well-established principle that default judgments are procedural outcomes, not merits determinations, and that courts will readily exercise their discretion to permit a case to be heard on its substance where a potentially valid defence exists. For litigants in British Columbia, the case is a practical reminder that obtaining default judgment does not end the dispute — particularly where the defaulting party can marshal objective evidence (here, professional surveys) suggesting the claim may not succeed at trial.
The decision also highlights the importance of evidentiary preparation at interlocutory applications. 116’s failure to file survey evidence rebutting Holm’s boundary evidence, and its failure to document the prejudice allegedly caused by its property sale, proved fatal to its appeal. Courts will not fill evidentiary gaps with inference when the burdened party had the opportunity to adduce proof.