DIVISIONAL COURT FILE NO.: DC-15-821-00 and DC-15-822-00
NEWMARKET COURT FILE NO.: SC-14-104251 and SC-14-104253
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
Maria DaCosta Rocha a.k.a. Sky Costa Respondent/Plaintiff
– and –
George Paul Meisner and Margaret Loo a.k.a. China Loo Appellants/Defendants
Maria DaCosta Rocha, Self-Represented
Mark Russell, for the Appellant/Defendants
AND BETWEEN:
Stephen M. Suwala Respondent/Plaintiff
– and –
George Paul Meisner and Margaret Loo a.k.a. China Loo Appellants/Defendants
Maria DaCosta Rocha, Self-Represented
Mark Russell, for the Appellant/Defendants
HEARD: July 28, 2015
RULING ON MOTIONS
gilmore J.:
Overview and Background Facts
1This is George Paul Meisner’s (Mr. Meisner’s), motion to extend the time for filing an appeal of default judgments obtained against him in Small Claims Court by Maria DaCosta Rocha (Ms. DaCosta Rocha) and Stephen Suwala (Mr. Suwala).
2In Small Claims Court file number SC-14-104251, Ms. DaCosta Rocha named Mr. Meisner and Margaret Loo (Ms. Loo) as defendants to an action seeking damages for defamatory comments posted online (the DaCosta Rocha action).
3In Small Claims Court file number SC-14-104253, Mr. Meisner and Ms. Loo were named defendants in a claim brought by Mr. Suwala, who also sought damages for defamatory comments posted online (the Suwala action).
4Ms. Loo did not participate in motion. Ms. DaCosta Rocha was present in court. She did not file materials. I infer that her position is aligned with that of Mr. Suwala but she made no submissions.
5On January 26, 2015, Ms. DaCosta Rocha and Mr. Suwala obtained default judgment in their respective actions; Ms. DaCosta Rocha for $5,000 and Mr. Suwala for $25,000.
6On March 17, 2015, a notice of garnishment was filed against Mr. Meisner with respect to both judgments. That garnishment was being executed prior to the stay order on June 30, 2015.
7Upon learning of the default judgment, Mr. Meisner filed motions to set aside the judgments in the DaCosta Rocha and Suwala actions. These motions were heard before Deputy Judge Iacono in Small Claims Court on February 27, 2015. Mr. Meisner appeared without counsel. His friend, Chris Adamson (Adamson), assisted him as his agent.
8The transcript of Deputy Judge Iacono was before the court during the hearing of this motion. Deputy Judge Iacono was concerned and apparently frustrated that neither Mr. Adamson nor Mr. Meisner presented evidence related to the test for setting aside a default judgment in Small Claims Court. In the end, his decision consisted of the following reasons; “Forget it. You know what? Motion dismissed.”1
9According to Mr. Meisner, the materials before the court on February 27, 2015 consisted of his affidavit in both motions. His affidavit set out as follows, “I did not participate or have any knowledge of the actions and doings that led to this lawsuit and subsequent judgment. Ms. Loo has recently confessed to doing the entire thing and she is willing to testify to this. Therefore I wish to have an opportunity to defend myself against the allegations outlined in this lawsuit and subsequent judgment.”
10Both motions contained an unsworn statement of Ms. Loo, dated February 10, 2015. In those statements, she admitted to creating the impugned profiles and that she did this without the knowledge or consent of Mr. Meisner.
11It should be noted, however, that there is a dispute as to whether Ms. Loo’s unsworn statements were before the court on February 27, 2015. The material served on Mr. Suwala by Mr. Meisner for this motion did not contain those statements. Further, a certified copy of the court file obtained by Mr. Suwala’s counsel did not contain those statements. Mr. Suwala submitted that there are, therefore, credibility issues arising with respect to what the court considered on the February 27, 2015 motions.
12During the course of the February 27, 2015 motions, Mr. Meisner was encouraged to obtain counsel. Therefore, he brought another Small Claims Court motion to set aside the default judgments, after having hired licensed paralegal, Domenico Mazzone. That motion was heard on April 17, 2015.
13The deputy judge dismissed the motion as being res judicata given the decision made on February 27, 2015. The material before the court on that motion included Ms. Loo’s affidavit, sworn March 18, 2015. In that affidavit, she deposes that she created the profile on the websites and that the websites were intended to insult and disrespect the plaintiffs. Mr. Meisner also filed an affidavit in support of that motion, dated March 18, 2015. That affidavit sets out that the motion was made as soon as reasonably possible, that he had a meritorious defence and that he intended to vigorously defend the plaintiffs’ claims. He also included a draft statement of defence. No draft statement of defence had been provided in the February 27, 2015 motion.
14After the dismissal of the motion on April 17, 2015, Mr. Meisner obtained counsel, Mark Russell (Mr. Russell), who prepared materials and returned the motion for an extension of time to file the appeal on June 30, 2015. On that date, Mr. Suwala requested an adjournment in order to retain counsel. The court reluctantly granted the adjournment, but was concerned about further delay and ordered that the garnishment against Mr. Meisner be stayed. The court ordered costs thrown away to be paid to Mr. Meisner by Mr. Suwala in the amount of $500. The matter was ordered to be returned on July 28, 2015.
15On July 28, 2015, Mr. Suwala asked for another adjournment. At this point, he had counsel who had filed materials. However, his counsel had discovered the issue with respect to Ms. Loo’s unsworn statements and the possibility that the court record alleged to have been before the court by Mr. Meisner did not, in fact, include Ms. Loo’s unsworn statements. Mr. Suwala’s counsel therefore asked for time to file additional material and cross-examine. I dismissed Mr. Suwala’s request for an adjournment. It was this court’s view that the motion should proceed and that if additional material and cross-examinations were to take place, that could happen before the appeal was filed and perfected without much additional delay.
Theh Position of the Appellant
16The appellant relies on the four part test set out in Bratti v. Wabco Standard Trane Inc. (c.o.b. as Trane Canada), 1994 ONCA 1261, [1994] OJ No. 855 (ONCA). In that case, the court reiterated the broad principle that an extension for time to file an appeal should be granted if the justice of the case requires it. The four factors for consideration, subject to that broader principle, are:
(a) Has the appellant maintained a firm intention to appeal within the statutory period?
(b) Has the appellant provided a reasonable explanation for the delay?
(c) Is there prejudice to the respondent in granting the extension?
(d) Is there so little merit in the proposed appeal that the court should reasonably deny the appellant the opportunity to appeal?
17The appellant submits that Mr. Meisner has demonstrated a firm intention to appeal since discovering the default judgments. It is clear that Mr. Meisner had a lack of understanding of the legal system and proper court procedures, as well as the test required on a motion to set aside the default judgment. However, he continued to take steps on both February 27, 2105 and April 17, 2015.
18Mr. Meisner’s delay was not intentional, but demonstrated a lack of familiarity with the court procedures and two failed attempts to set aside the default judgment, all the while attempting to address the outstanding issues. The fact that he failed in attempting to set aside the default judgment did not mean that he was attempting to delay matters.
19There would be no prejudice suffered by the respondent if an extension to file the appeal is granted. The actions involve substantial damages and there is no prejudice arising from Mr. Meisner being given the opportunity to have the matters decided on their merits and presenting a defence.
20Mr. Meisner submits that the appeal clearly has merit. His affidavit evidence both with respect to the February and April motions demonstrate that Ms. Loo has accepted responsibility for the defamatory actions and that he acted quickly to retain counsel after the April 17 dismissal, in fact, retaining counsel on April 29, 2015.
21With respect to the stay of the execution pending appeal, Mr. Meisner’s wages had been garnished for both actions in the amount of $3,436.06 prior to June 30, 2015. The appellant argues, based on RJR-Macdonald v. Canada (Attorney General), 1994 SCC 117, [1994] 1 SCR 311, that with respect to irreparable harm, the garnishment orders are based on untested allegations and that if Mr. Meisner succeeds on the merit, it is unlikely he would be able to recover the wages that have been garnished. As well, the balance of convenience weighs towards granting a stay of execution and the respondent will not be harmed if the garnishment is stayed.
The Position of the Respondent
22The respondent spent some time in his arguments dealing with issues that are more related to the appeal proper, including the standard of review with respect to the deputy judge’s decision and the test for setting aside a default judgment.
23The respondent submits that Mr. Meisner has failed to provide any reliable evidence worthy of weight and that specifically with respect to the fourth part of the Bratti test that there is so little merit in his appeal that the court should reasonably deny him the opportunity to appeal. The respondent bases this argument on two main factors. First, that the appellant relies on bald allegations and fails to provide adequate details of why he did not take steps to defend the actions. The appellant received a demand letter in March of 2014 but was told by Ms. Loo not to worry because the litigation was frivolous. According to the respondent, the appellant should have been aware that the matter was serious based on the demand letter. Simply relying on Ms. Loo’s statements about the litigation was unreasonable given the sophistication of the appellant.
24The second reason why there are concerns about the merits of the appeal relate to the unsworn statements of Ms. Loo, dated February 10, 2015. Upon retaining counsel and having counsel review the entire record, it came to the attention of Mr. Suwala’s counsel, that the material served on his client did not contain Ms. Loo’s unsworn statements. He obtained a certified copy of the court record, which also did not contain those unsworn statements. Counsel for the Respondent is concerned, therefore, that on February 27, 2015, the record before the court did not contain Ms. Loo’s unsworn statements. This would have left only the bald allegations in the short affidavit of Mr. Meisner. The respondent submits that is insufficient evidence upon which to ground an appeal and that the dismissal on February 27, 2015 was entirely proper.
25Finally, the respondent submits that the material filed in support of the April 17, 2015 motion should not be considered by the court on this motion. That is because the matter was considered to be res judicata by the deputy judge on April 17, 2015 and is not the record that would be considered by the Court of Appeal, in any event. According to the respondent, the Court of Appeal can only consider the record from February 2015.
26The respondent argued that there is significant prejudice to Mr. Suwala in granting leave because of the significant time and costs expended by him to date and that Mr. Meisner has not maintained a firm intention to appeal within the statutory period. When his motions were dismissed in February 2015, Mr. Meisner retained a licensed paralegal. If the paralegal did not recommend an appeal as he should have, that is an issue as between Mr. Meisner and Mr. Mazzone, the paralegal, and not between Mr. Meisner and the respondents.
27With respect to the stay of execution, the respondent argues that Mr. Meisner has failed to meet the required tests under RJR Macdonald. This is because there is not a serious issue for consideration on the potential appeal and Mr. Meisner has not established that he will suffer irreparable harm based on proper and satisfactory evidence. The court has discretion as to whether or not to grant a stay where a party has obtained default judgment and that discretion should not be exercised in that case.
Analysis and Ruling
28Based on the submissions of counsel and the tests set out Bratti, I find that Mr. Meisner should be granted leave for an extension of the time to file his appeal. I do so for the following reasons.
Intention to Appeal
(a) Mr. Meisner has maintained a firm intention to appeal within the statutory period. It is clear that he took steps quickly after finding out that default judgment had been obtained against him in both Small Claims Court actions. He filed material and attended court with a friend whom he hoped would be able to represent him as an agent. Unfortunately, neither Mr. Meisner nor his friend were familiar with the evidence required to satisfy the test for setting aside a default judgment. The deputy judge was intolerant of both Mr. Meisner and his agent. He simply dismissed the motion without articulating any cogent reasons, other than the three-pronged test had not been met.
(b) On February 27, 2015, the deputy judge also suggested that Mr. Meisner obtain counsel. No mention was made of any appeal. It is therefore understandable why Mr. Meisner, given his lack of familiarity with court procedures, would return to attempt to obtain the same relief, notwithstanding the dismissal order. While perhaps his paralegal should have advised him of the option of an appeal, that does not mean that the April 17, 2015 motion should not be considered “a step” with respect to the considerations in the Bratti test. Mr. Meisner did not ignore the matter. He took the steps that he thought were appropriate, based on the recommendations of the court. It is my view that he should not be punished for the fact that the step was the wrong one. Once the April 17, 2015 decision was made, Mr. Meisner retained counsel to bring this motion. I find that he had a firm intention to appeal as of February 27, 2015, but was thwarted in his efforts to do so, for reasons which have already been explained.
Reasonable Explanation for the Delay
(c) The reasons for the delay are comingled with the intention to appeal as set out above. I find that the delay has therefore been adequately explained.
Prejudice to the Respondents
(d) I do not find there is any prejudice to the respondent in granting the extension. These are significant claims. Mr. Meisner has now filed a draft statement of defence. Mr. Meisner should be afforded the opportunity to have the claim heard on its merits.
Does the Appeal Lack Merit?
(e) I find that there is merit in the proposed appeal. While the affidavit of Mr. Meisner filed with his original motion in February 2015 did contain rather bald allegations, his further affidavit, and that of Ms. Loo from March 18, 2015, provide a reasonable basis for a defence. I do not see why these affidavits cannot be relied on at this stage of the proceeding. This is not the appeal. The threshold in relation to the Bratti test is far lower than that on the actual appeal. The court should not be precluded from considering all of the circumstances with respect to whether granting an extension of time is reasonable.
29With respect to the stay of execution, I find that Mr. Meisner has met the test in RJR Macdonald. It is irrefutable that there would be irreparable harm in his wages continuing to be garnished and the possibility he would not be able to recover those garnished amounts in the event that the respondent’s claim is determined to be without merit.
Costs of the Adjournment Motion of July 28, 2015
30Mr. Meisner sought $1,000 for these costs. Mr. Suwala did not agree that costs should be payable as he was prepared to proceed so long as the affidavit of Mr. Mazzone was not considered. I did not consider the affidavit of Mr. Mazzone and therefore no costs should be ordered on the adjournment motion.
Costs on the Motion for Leave
31Mr. Russell sought partial indemnity costs of $3,127 on the motion. Mr. Panzer for Mr. Suwala sought partial indemnity costs of $9,734. Mr. Panzer conceded that these were costs for everything, including the time spent for him to get up to speed and to prepare material in a relatively short time frame. He conceded that in the event that the appellant was successful on this motion, that some of his time would relate to the appeal proper.
32The appellant has had clear success. It is my view that none of the arguments raised by the respondent were significant enough to defeat this motion. The appellant should have his costs, which I fix at $2,500 and are payable by Mr. Suwala. Those costs are payable in the cause. No costs are ordered against Ms. DaCosta Rocha at this stage.
33Finally, I accept that the respondents have raised a new issue with respect to the unsworn statements of Ms. Loo. Both parties are therefore permitted to file further affidavits and cross-examine on them, if they wish, in order for that evidence to form part of the appeal record. The parties are given forty-five days to file further material and cross-examine, after which, the appellant will be required to file his notice of appeal and perfect it in accordance with the Rules of Civil Procedure.
Released: August 4, 2015 Madam Justice C.A. Gilmore