Court File and Parties
CITATION: Moore v. Elmway, 2011 ONSC 4703 Court File No: 66/11 Date: 20110810
SUPERIOR COURT OF JUSTICE - ONTARIO DIVISIONAL COURT
Re: Hugh Moore Plaintiff /Respondent
- and -
Elmway Developments Limited, Enzo Mizzi, and Robert Rothman Defendants/Appellants
Before: The Honourable Mr. Justice S.N. Lederman Counsel: John M. Clarke, for the Plaintiff/Respondent Gregory Sidlofsky, for the Defendants/ Appellants, Elmway Developments Limited and Enzo Mizzi Heard at Toronto: August 4, 2011
ENDORSEMENT
[1] The defendants appeal from the order of Master Sproat dated January 12, 2011 wherein she dismissed the defendants’ motion to set aside a default judgment in favour of the plaintiff in the amount of $361,665.07.
[2] The decision of a Master is to be interfered with only if she or he made an error in law; has exercised discretion on wrong principles; or misapprehended the evidence such that there is a palpable and overriding error. The standard of review on a question of fact is a palpable and overriding error.
[3] In the instant case, counsel agree that the Master applied the correct test that must be met to set aside a default judgment, namely:
a) the motion to set aside the default judgment must be made as soon as possible after the applicant becomes aware of the judgment;
b) the applicant must provide a plausible explanation for the default; and
c) the applicant must show at least an arguable case on the merits.
[4] Although the Master found that there was no undue delay in moving to set aside the default judgment, she found that the second and third parts of the test were not met.
[5] The Master was not satisfied that there was credible evidence that there was, in fact, internal conflict among the shareholders; or even if there was, that it would prevent the filing of a statement of defence.
[6] More importantly, the Master found that there was no arguable defence on the merits.
[7] The only defence relied upon by the defendants was the expiry of the limitation period. They argued that the option in the agreement was akin to a demand promissory note and that the relevant six year period, in existence at the time, commenced running from September 11, 2003 when the plaintiff exercised his option demanding payment of the $350,000 in lieu of taking property in the land development and, thus, the limitation period had expired when he commenced his action on October 22, 2009.
[8] The Master found that the agreement was not a demand note or a demand payment, but rather it was an agreement whereby the $350,000 was to be paid within 45 days after the exercise of the option to receive money.
[9] The defendants submit that the Master erred in law because there is an arguable case that the debt arose upon the demand for money and that the plaintiff could have started the action on the date of the demand without waiting for 45 days to elapse.
[10] The agreement in question, on its plain reading, is not a demand promissory or demand obligation. It is an agreement containing an option to receive $350,000 within 45 days of delivery of notice of exercise of the option, rather than a land exchange. No cause of action would arise until 45 days after the option was exercised.
[11] Accordingly, the Master correctly interpreted the agreement and properly found that the limitation period began to run from the date of default or breach of the contract, namely October 26, 2003, and therefore, the action was commenced within the limitation period.
[12] The Master made no error in law in concluding that the plaintiff had no arguable defence on the merits.
[13] The Master applied the correct test and made no error in principle in applying the test and holding that the default judgment should not be set aside.
[14] The appeal is, therefore, dismissed.
[15] If the parties cannot otherwise come to an agreement as to costs, they may make written submissions within 30 days.
Lederman J.
Released: August 10, 2011