COURT FILE NO.: DC-09-0016-00
DATE: 20091005
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
RE: Bazar McBean LLP v. 1464294 Ontario Limited et al
BEFORE: Justice Ricchetti
COUNSEL: M.E. Girard, for the plaintiff (Appellant)
W.A. Kyle, for the Defendants (Respondents)
E N D O R S E M E N T
The Appeal
[1] This is an appeal by the plaintiff of the order of Deputy Judge Oliver dated February 4, 2009. Deputy Judge Oliver ordered the plaintiff to pay to the defendants the garnished amount received by the plaintiff.
[2] The motion before Deputy Judge Oliver was to set aside the default judgment against the personal defendants and to order the plaintiff to return the garnished funds.
[3] Deputy Judge Oliver ordered that the plaintiff return the garnished funds and ordered the plaintiff to pay $400 in costs.
The Facts
[4] The plaintiff is an accounting firm. Its claim was for accounting services provided to the corporate defendant and the personal defendants (at least one of them). The plaintiff alleged that the personal defendants were liable for the same alleged outstanding invoice.
[5] The amount of the plaintiff’s claim was $2,047.50.
[6] A defence was filed but it was only for the corporate defendant. However, it is clear from the defence that it applied to all three defendants. The position was that the plaintiff had agreed to charge only $1,000 more than the previous year.
[7] The plaintiff noted the personal defendants in default and proceeded to garnish two accounts for a total amount of $2,544.98. This was unbeknownst by the defendants.
[8] The personal defendants then moved to set aside the default judgement. The default judgment was set aside and $250 ordered in costs. The personal defendants were given until November 25, 2008 to file a defence.
[9] The parties started to have settlement discussions.
[10] The defendants state that they didn’t know that the default judgment was reinstated because of their failure to file a defence by November 25, 2008. The plaintiff sought a payout of the garnished funds in the amount of $2,544.98 which were paid and received by December 3, 2008.
[11] The parties entered into a written settlement on December 11, 2008. The settlement was for $1,000. There was no amount for interest or costs. It was signed by all the parties and states “no further action to be taken in this matter”. The settlement funds were paid to the plaintiff.
[12] The defendants swore in their affidavit that they didn’t know the garnished funds had been paid to the plaintiff.
[13] The plaintiff argues that the settlement was only between the plaintiff and the corporate defendant notwithstanding it was signed and the terms bound all parties.
[14] The plaintiff now has the following amounts: $250 for costs of the motion to set aside the default judgment, $1,000 settlement funds from the settlement and $2,544.98 garnished funds.
[15] There is no doubt this is in excess of the amount claimed by the plaintiff.
[16] The defendants requested the return of the garnished funds. The plaintiff refused. The defendants brought a motion to set aside their default and return the garnished funds to them. The defendants filled materials on the motion. The plaintiff did not.
[17] Deputy Judge Oliver heard the motion and ordered the plaintiff to return the garnished funds to the personal defendants and ordered the plaintiff to pay $400 in costs to the defendants.
[18] It is clear from Deputy Judge Oliver’s reasons that he considered the evidence and found as a fact that the settlement agreement negotiated between the parties was:
(i) Between all the parties to the claim and not just the plaintiff and corporate defendant, and
(ii) Was for a total amount of $1,000 all inclusive,
(iii) The plaintiff didn’t advise the defendants that the garnished funds had been paid out to it, resulting in “his receipt of the full amount on the judgment ….”,
[19] Let me first of all say that to permit the plaintiff to keep the garnished funds would be inequitable in the circumstances. I am very surprised at the position taken by the plaintiff in this matter. The plaintiff in essence seeks to keep the garnished funds and the settlement funds. The Deputy Judge correctly stated:
“In the case on all the circumstances I find that the plaintiff conducted himself in a manner that created confusion for the defendants and certainly strikes me as being unconscionable. Not only has the plaintiff collected more than the settlement but he has knowingly and in bad faith collected more than the initial claim and states that he is perfectly justified in that regard.”
“I find, as the plaintiff argues that the terms of the settlement are in fact clear. The plaintiff settled this action with all three defendants for $1,000. $250 in costs.”
[20] Let me now deal with the plaintiff’s arguments.
Rectification
[21] There was no rectification by Deputy Judge Oliver. In my view, the Deputy Judge simply interpreted the settlement between the parties and enforced it. That was well within her jurisdiction to do so. The finding of fact by the Deputy Judge that, in light of the circumstances, the settlement was the settlement of the action with all three defendants for $1,000 is reasonable on the evidence. Quite frankly, I believe it was the only reasonable conclusion the Deputy Judge could have come to. The settlement agreement was signed by all of the parties, it was one debt claimed by the plaintiff, it bound all the parties and provided that no further steps were to be taken in the action.
Set aside the Settlement and let the Matter go to Trial
[22] The plaintiff suggests that one option available is to set aside the settlement on the basis the return of the garnished funds was not what the plaintiff understood or intended when it entered into the settlement agreement.
[23] This is not viable given the amount at stake in this matter. More importantly, the plaintiff did not file any material before Deputy Judge Oliver. Lastly, I find it simply impossible to believe that the plaintiff consciously believed it was entitled to this windfall, being recovery beyond that of its claim.
Presumption Corporate Defendant meant to file one Defence
[24] Again it is clear that the claim was a claim for one debt and the defence was a defence for all the defendants notwithstanding it was formally filed only for the corporate defendant. This was a finding that was open to the Deputy Judge to find and is consistent with a review of the claim and the defence.
Parole Evidence
[25] I am not convinced that the Deputy Judge permitted parole evidence to explain the settlement agreement. The Deputy Judge simply reviewed the settlement agreement in light of the wording, the claim and the defence.
Errors of Fact
[26] The plaintiff’s counsel pointed to a number of alleged errors of fact. There are two which need to be dealt with. First, the Deputy Judge stated that the defendants “ought to have been given notice” of the intention of the plaintiff to comply strictly with the Rules. This is not a finding of fact or law. What the Deputy Judge was stating was the preferred practice to put the other side on notice of strict compliance so as to avoid motions to set aside. There is nothing wrong with this statement and does not go to the heart of the Deputy Judge’s decision. Second, the Deputy Judge stated that the plaintiff was obliged to deal with the defendants in good faith. Without having to decide whether the plaintiff is so obliged, the fact is the settlement agreement, in the circumstances, was clear and, as so found by the Deputy Judge, was a settlement between all the parties for $1,000. I find no error by the Deputy Judge in coming to this conclusion in the circumstances, where the plaintiff would receive funds more than the amount of its claim.
Set Aside Default
[27] Plaintiff’s counsel admits that the Deputy Judge had the jurisdiction to set aside the default judgment against the personal defendants. Essentially, that is what the Deputy Judge decided without having said so. It is the only basis on which the Deputy Judge could have ordered the garnished funds to be returned.
Conclusion
[28] I can find no appealable error made by Deputy Judge Oliver.
[29] The appeal is dismissed.
Costs
[30] The plaintiff’s actions in this matter have been outrageous. It seeks to use technicalities to recover more than its claim. It has taken actions in this matter despite a clear prohibition in the Settlement Agreement. Significant costs are appropriate in this case. I am not bound by the limit in s. 29 of the Courts of Justice Act as this is a Divisional Court appeal. In any event, I would have thought it appropriate to exercise my discretion to penalize the plaintiff for its behaviour in this matter.
[31] Costs of $850 payable forthwith by the plaintiff to the defendants.
Ricchetti J.
DATE: October 5, 2009
COURT FILE NO.: DC-09-0016-00
DATE: 20091005
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Bazar McBean LLP
v.
1464294 Ontario Limited et al
BEFORE: Ricchetti J.
COUNSEL: M.E. Girard, for the Plaintiff
W.A. Kyle, for the Defendants
ENDORSEMENT
Ricchetti J.
DATE: October 5, 2009