What might've spurred why default judgment can be signed against a defaulted defendant by plaintiff's claim, but not by defendant's claim?

Question

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From: Small Claims Court: Procedure and Practice (4th edn., 2017), p. 48.

'Rule' refers to the Rules of the Small Claims Court, O Reg 258/98. This post involves only liquidated claims.

[p. 198:] Unliquidated Claims (Rule 11.03)

A defendant who fails to deliver a defence to a plaintiff's or defendant's claim where all or part of the claim is for an unliquidated amount may be noted in default pursuant to Rule 11.01 However, the plaintiff may obtain a default judgment in an unliquidated claim only if all defendants have been noted in default (Rule 11.03(1)).

[p. 208 Bottom] The clerk cannot sign default judgment in an unliquidated claim.

[p. 267] If a defendant by defendant's claim fails to file a defence within the prescribed time, she may be noted in default. However, the clerk cannot sign default judgment against a defendant by defendant’s claim who has been noted in default. Judgment against a defendant by defendant’s claim who has been noted in default must be obtained at trial or on motion (Rules 10.05(2) and 11.04).

Answer 1

Default judgment is the procedure for dealing with defendants who completely fail to engage with the court. The court assumes that such defendants have no meritorious defence, and therefore that the entry of judgment will end the proceedings and allow the plaintiff to begin enforcement. If the assumption turns out to be wrong, there is a good chance that the default judgment will be set aside (under rule 11.06) and everyone’s time will have been wasted.

A defendant by defendant’s claim is often the plaintiff who initiated the proceedings in the first place – not someone who has totally failed to engage with the court. Even if they have no defence, the defendant by defendant’s claim may be entitled to a set-off against their own claim, so it makes sense for all claims to go to trial together. If the defendant thinks they deserve judgment without a trial, they need to convince a judge on a motion for judgment on the defendant’s claim (and potentially, orders that any other claims be dismissed as abandoned, so that the matter can be finally resolved). The case has become too complex to be resolved administratively by the clerk.