CITATION: Aznavehzadeh v. Babaie, 2016 ONSC 2679
DIVISIONAL COURT FILE NO.: 189/15 DATE: 20160420
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
M. LINHARES DE SOUSA J.
BETWEEN:
HOSSEIN AZNAVEHZADEH Plaintiff (Appellant)
– and –
SIYAMAK BABAIE, ROUHANGIZ NASSIRZADEH Defendants (Respondents)
Brian I. Cintosun, for the Plaintiff (Appellant)
Rouhangiz Nassirzadeh, In Person
HEARD at Toronto: April 20, 2016
M. LINHARES DE SOUSA J.
REASONS ON APPEAL
INTRODUCTION
[1] This is an appeal from the judgment of Deputy Judge Hunt of the Toronto Small Claims Court dated March 19, 2015, whereby he reinstated a default judgment dated November 5, 2014 and the garnishment proceedings resulting from that default judgment. By reinstating the default judgment of November 5, 2014, the Appellant/Defendant was ordered to pay the monetary amount of $15,000.00 plus pre-judgment and post-judgment interest plus court costs of $100.00
FACTUAL BACKGROUND
[2] Briefly, this matter arises from a claim brought in Small Claims Court by the Respondent/Plaintiff against the Appellant/Defendant for a claim involving allegations of fraud, breach of contract and negligence dating back to 2013. The amount of $4,000.00 had been paid by the Respondent/Plaintiff to the Appellant/Defendant for services she claims were never provided. In the course of those proceedings the parties reached a settlement by way of Minutes of Settlement signed by both parties on October 9, 2014. Both parties signed the Minutes of Settlement and were represented by legal counsel.
[3] The Minutes of Settlement provided that the Appellant/Defendant would pay to the Respondent/Plaintiff the sum of $4,000.00, by way of 4 post-dated cheques of $1,000.00 each for 4 months, commencing on October 25, 2014 and payable for the 25th of the month for the following three months. A default clause was included in the Minutes of Settlement which read as follows:
- Should the Defendant default, the Plaintiff may ask the Clerk of the Court to sign judgment, without notice, for $15,000.00, plus interest and costs, less any payments made.
[4] The evidence shows that the Appellant/Defendant did in fact default. By his own evidence he stopped payment on the cheques. One cheque managed to get cashed and to date the reinstated garnishment proceedings have managed to collect a further $575.00. The Respondent/Plaintiff acknowledges that in any final order the payment of $1,575.00 should be credited to the Appellant/ Defendant.
[5] Subsequent to the stop payment of the cheques effected by the Appellant/Defendant the Respondent/Plaintiff obtained, on November 5, 2014, a judgment pursuant to the signed Minutes of Settlement for the total amount of $15,100.00 against the Appellant/Defendant. The Appellant/Defendant was served with notice of this proceeding but did not attend.
[6] On March 5, 2015 the Appellant/Defendant brought a motion without notice to the Respondent/Plaintiff. He obtained a stay of the default judgment granted on November 5, 2014 and was permitted to file a Defence in the default proceedings, which he did on March 14, 2015. He also informed the Court that he could not attend on March 19, 2015 the date set for the default judgment hearing. The reason he gave for his non-attendance apparently was that he was to undergo heart surgery. The Respondent/Plaintiff has presented evidence for the first time on this appeal that he was at the Nuclear/Cardiology Imaging Clinic on March 19, 2015 for a graded exercise test. The evidence also showed that on that same day at noon the Appellant/Defendant was laying a harassment complaint with the Toronto Police Services against the Respondent/Plaintiff.
DECISION OF DEPUTY JUDGE HUNT
[7] The Default hearing before Deputy Judge Hunt proceeded on March 19, 2015 in the absence of the Appellant/Defendant. His written defence to the hearing, however, was before the Court. There is no reason to conclude that Deputy Judge Hunt did not consider the written defence filed by the Appellant/Defendant on the matter before him.
[8] Deputy Judge Hunt found that the Appellant /Defendant had not been candid with the Court at the March 5, 2015 hearing; had not informed the Court that there was a defence filed in the matter and that the default judgment had been obtained by the Respondent/Plaintiff pursuant to signed Minutes of Settlement dated, October 9, 2014. For that reason he reinstated the default judgment of November 5, 2014 and the garnishment proceeding resulting from that judgment. He also ordered that the Appellant/Defendant was prohibited from bringing any further motions without leave of the Court.
STANDARD OF REVIEW
[9] The standard of review to be applied on this appeal, while not addressed by either party, is not disputed. On questions of law, the standard is that of correctness. On questions of fact, the standard is palpable and overriding error. Matters of mixed fact and law lie along a spectrum (Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S. C. R. 235).
[10] With respect to the findings of fact, an appellate court "may substitute its own view of the evidence and draw its own inferences of fact where the trial judge is shown to have committed a palpable and overriding error or made findings of fact that are clearly wrong, unreasonable or unsupported by the evidence". Furthermore, "an appellate court will not interfere with the trial judge's findings of fact unless it can plainly identify the imputed error, and that error is shown to have affected the result." (H. L. v. Canada (Attorney General), 2005 SCC 25, [2005] 1 S. C. R. 401).
[11] With respect to a judge's exercise of discretion, in the decision of Penner v. Niagara (Regional Police Services Board), 2013 SCC 19, 2013 S. C. C. 19, stated that "a discretionary decision of a lower court will be reversible where that court misdirected itself or came to a decision that is so clearly wrong that it amounts to an injustice".
POSITION OF THE PARTIES
[12] The Appellant/Defendant submits that the Deputy Judge erred in fact and law in reinstating the default judgment and the garnishment proceedings. It was the position of the Appellant/Defendant that it was not he, but rather the Respondents/Plaintiffs who were in default of the Minutes of Settlement because they did not provide him with a receipt for the four post-dated cheques he gave them. He explained in his written defence why he required a receipt which had to do with the safety of his family.
[13] The Appellant/Defendant further submits that the Deputy Judge erred in the reinstating the default judgment to the amount of $15,100.00 because it did not take account of the amount of $1,575.00 which the Respondents/Plaintiffs managed to receive from him.
[14] I have concluded that I need not consider this ground of appeal because it is acknowledged by the Respondents/Plaintiffs that the Appellant/Defendant, in any final payment on default, is to be credited with the amounts they have already received in payment on the default judgment. Furthermore, the Minutes of Settlement, dated Oct. 9, 2014 make it abundantly clear that any default amount to be paid is to be "less any payments made."
[15] Finally, the Appellant/Defendant submits that the Deputy Judge erred in law in not declaring the default clause arbitrary, excessive, unconscionable and therefore void. In support of this position, he provided the Court with the case of Loans Till Payday v. Brereton, 2010 ONSC 6610.
[16] The Respondents/Plaintiffs deny that they were in default of the Minutes of Settlement. They submit that the Minutes of Settlement do not provide the payment of the monies conditional on the Appellant/Defendant obtaining a receipt. In fact it is their position that the Appellant/Defendant did not even ask for a receipt upon the transmission of the cheques. Furthermore, they argue he would have his cancelled cheques as proof of payment. They also submit that there is no evidence to support the Appellant/Defendant's assertion that he needed the receipts for the safety of his family.
[17] With respect to the unconscionability of the default clause found in the Minutes of Settlement, the Respondent/Plaintiffs argue that the Minutes of Settlement ended a long and very conflictual dispute between the parties. The default clause was intended, as is clear from the wording of that clause, to end the dispute and ensure compliance with the payments. Both parties were legally represented at the time and were advised by their respective lawyers as to the import of the various clauses of the Minutes of Settlement. The Minutes of Settlement were overseen by the presiding Small Claims Court judge who endorsed the agreement between the parties. In this context and history the Respondents/Plaintiffs deny that the clause is unconscionable and ought to be rendered void. They argue that the Appellant/Defendant ought to be bound by his agreement.
[18] The Respondents/Plaintiffs argue that this Court ought not to find any error in law or fact made by the Deputy Judge.
DISPOSITION
[19] After examining all of the evidence before me and hearing the arguments of the parties, I come to the conclusion that the appeal ought to be dismissed. I can find no error in law or fact in the final decision of Deputy Judge Hunt.
[20] The Deputy Judge had before him the full record and the documents of both parties. He was clearly aware of the history of the proceedings and the litigation conduct of the parties. He noted accurately the lack of candour on the part of Appellant/Defendant when dealing with the Court on the previous proceedings. He had before him the clear wording of the Minutes of Settlement signed by both parties on the advice of their respective legal counsel. He had before him both the case for the Defendants/Plaintiffs and the written defence of the Appellant/Defendant.
[21] The Minutes of Settlement make no reference to the obtaining of a receipt as a condition precedent for the payment of the $4,000.00. There is the issue raised as to whether receipts were asked for at all. There was no convincing proof for the declared reasons for the need for the receipts. In my view there was sufficient and clear evidence before the Deputy Judge to permit him to come to the conclusion that any submitted written defence to the default was unconvincing and specious. I can find no palpable and overriding error.
[22] With respect to the last ground of appeal, that the default clause found in the Minutes of Settlement is unconscionable and ought to be rendered void, there is no question that the default clause is not very advantageous to the Appellant/Defendant in the event of a default. It is evident that it was intended to ensure compliance with the payment of $4,000.00 which was to terminate the whole of the long litigation.
[23] I have considering the case of Loans Till Payday v. Brereton, 2010 ONSC 6610, relied on by the Appellant/Defendant. I find the case to be quite distinguishable from the facts of this case and does not really apply to the facts of this case. On the facts of that case, what was being examined by the Court was a default interest rate contrary to the Criminal Code and a claim for liquidated damages which were unsubstantiated and amounted to a penalty when the agreement indicated that such payment would not be a penalty.
[24] Parties to an action are free to terminate their litigation according to the terms agreed between them. Both parties were represented by counsel. The Minutes of Settlement were signed under the supervision of the Small Claims Court proceedings. In all of the circumstances of this case I can find no error in law in the decision of the Deputy Judge to bind the Appellant/Defendant to his agreement, voluntarily made with the advice of counsel and to reinstate both the default order of March 19, 2015 and garnishment proceedings flowing from that order.
[25] For these reasons the Appeal is dismissed.
COSTS
[26] The parties at the end of the hearing were not able to agree on the quantum of costs nor to whom they should be paid. I received no submissions on the quantum of costs although costs are requested. The Respondents/Plaintiffs has been substantially successful on this appeal and ought to receive their costs. The Respondents/Plaintiffs had no legal counsel to make their arguments, But there were substantial documents presented for the argument and defence of the appeal. I award the Respondents/Plaintiffs their costs that I fix at $800.00.
____________________________ M. LINHARES DE SOUSA J.
Date of Reasons for Judgment: April 20, 2016
Date of Release: April 22, 2016
CITATION: Aznavehzadeh v. Babaie, 2016 ONSC 2679
DIVISIONAL COURT FILE NO.: 189/15 DATE: 20160420
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
HOSSEIN AZNAVEHZADEH Plaintiff (Appellant)
– and –
SIYAMAK BABAIE, ROUHANGIZ NASSIRZADEH Defendants (Respondents)
ORAL REASONS FOR JUDGMENT
M. LINHARES DE SOUSA J.
Date of Reasons for Judgment: April 20, 2016
Date of Release: April 22, 2016