Lawyers for Brian Mulroney have filed a motion to set aside a court ruling ordering the former prime minister to pay $470,000 to ex-business associate Karlheinz Schreiber.

The ruling was made Thursday in a default judgment by the Ontario Superior Court of Justice.

Schreiber sued Mulroney earlier this year in an attempt to recoup $300,000 in cash he says was exchanged between the two men in hotel rooms in New York and Montreal in 1993 and 1994.

Thursday's ruling, which caught Mulroney's lawyers off guard, was not adjudicated by a judge.

Instead, Schreiber's lawyer told the court clerk that Mulroney had not filed a statement of defence, which resulted in the default ruling.

Justice Colin Campbell ordered the motion adjourned Friday, with "some reluctance," until Aug. 3. Then it will be decided if Mulroney is to pay the judgment.

Mulroney's lawyers argued in a Toronto courtroom Friday that the judgment was made despite a pending motion that challenged the jurisdiction of the Ontario court.

In the motion, Mulroney's lawyers said their client did respond to the filed lawsuit and that he can't be found in default without proper notice being sent first.

Mulroney's team has maintained that the case should be tried in Quebec, not Ontario, where Schreiber first filed his action.

"You knew right from the beginning that the jurisdiction was being challenged," Campbell told Alexander Sennecke, who represents Schreiber. "You decided unilaterally to do something knowing presumably what would happen in terms of publicity."

Sennecke said Mulroney's lawyers showed little regard for procedure and left them little choice but to file for the default motion.

Campbell said in his order that there were "serious issues of lawyer conduct" in this case.

In his lawsuit, Schreiber claims he paid Mulroney the $300,000 in exchange for his help in establishing a pasta business and a defence factory in Quebec. According to the statement of claim filed in March, Schreiber says Mulroney didn't follow through on his commitments.

Mulroney's team claims to have a letter from Schreiber showing the work was done.

Schreiber, a German-Canadian citizen, is currently conducting a court fight against extradition to Germany. He's wanted there on charges of tax evasion, fraud and bribery of government officials.

With files from The Canadian Press