DATE: 2001-01-31

DOCKET: C34542

COURT OF APPEAL FOR ONTARIO

RE: SCHILL & BENINGER PLUMBING & HEATING LTD. (Plaintiff (Respondent)) and AMANDA KELLY ROZON as Executrix of the Estate of Rosalind Gallagher and of the Estate of George Gallagher, Canadian Imperial Bank of Commerce and The Toronto-Dominion Bank (Defendants (Appellant))

BEFORE: CARTHY, DOHERTY AND ROSENBERG JJ.A.

COUNSEL: John E. Callaghan and John P. Ormston For the appellant

John K. Lefurgey For the respondent

HEARD: January 12, 2001

On appeal from the order of Justice G.W. Dandie dated May 19, 2000.

E N D O R S E M E N T

[1] This appeal is from an order of Dandie J. permitting the plaintiff to amend a judgment to set forth the proper name of the corporation named as judgment creditor and dismissing an application by the defendants to set aside a default judgment and permit them to defend.

[2] The action was for damages for conversion and fraud alleging that Rosalind Gallagher had stolen money over an extended period of time from the plaintiff, her employer, with the connivance of her husband, George Gallagher. The Gallaghers died in a motor vehicle accident and a litigation administrator was appointed, Clive Ramage, a Manitoba lawyer. On the morning of this appeal hearing Mr. Ramage was replaced by order of this court by Amanda a daughter of the original defendants.

[3] Clive Ramage did not defend the Ontario action and this was an intentional decision based, presumably, upon his belief that a trial on the merits would be required in Saskatchewan to reach the assets of the Gallagher estate.

[4] Pleadings were noted closed and the plaintiff then obtained a default judgment, signed by the Registrar on January 9, 1998, pursuant to r.19.04(1)(a) as “a debt or liquidated demand in money”. The judgment was in the amount of $557,013.22 being the $450,000 claimed in the statement of claim plus interest.

[5] That judgment has been the basis of proceedings in Manitoba and Saskatchewan.

[6] It was only when the plaintiff brought a motion to correct its name in the Ontario proceeding that the administrator decided to seek to set aside the default judgment. On the material before Dandie J. he quite properly allowed the amendment to the name, characterizing the misnomer as a technicality, and refused to set aside the judgment because the administrator had intentionally defaulted and presented no defence to the action.

[7] Dandie J. also ordered the administrator to personally pay the costs of the motion on the ground that the administrator was responsible for failing to adequately protect the estate he was administering. The essence of this concern was that Mr. Ramage was playing tactical games between jurisdictions rather than coming to grips with the interests of the estate and its creditors. This order was appealed and we would not interfere with that exercise of discretion.

[8] On this appeal, for the first time, the appellant raised the issue of the jurisdiction of the Registrar to sign judgment under r.19.04, arguing that the proper procedure was under r.19.05 to a judge on affidavit material supporting the claim. The appellant takes the position that this is a jurisdictional issue in that the Registrar is not a s.96 judge [s. 96 of the Constitution Act, 1867] and cannot make judicial decisions. The Registrar acted solely on the basis of the statement of claim, presumably treating this as an administrative act. However, the statement of claim suggests that it is not clear how much money was allegedly stolen and used the expression “approximately $450,000.”

[9] In other circumstances we would not tolerate the conduct of the administrators in raising this issue at this stage of a long tactical chess game, and even now presenting no defence to the claim. However, we cannot turn away from a jurisdictional issue. Upon analysis, and even without the word “approximately” the claim was one that required examination by a judge to assure that the amount could be justified. It was not a liquidated claim within the meaning of the authorities decided under rule 19.04 and former Rule 33, which dealt with specially endorsed writs. Adjudication was required to determine that the allegation had substance in respect of the amount claimed.

[10] Having so concluded we have no choice but to set aside the default judgment signed by the Registrar with leave to the plaintiff to now proceed before a judge under r.19.05.

[11] We would not accede to the appellant’s request to set aside the noting of pleadings closed. Nothing has been presented to suggest a basis for defending the action at this time. Even if a viable defence was presented the intentional refusal to defend as recorded in the correspondence stands as a permanent bar to intervention.

[12] We regret the dislocation this may occasion to the proceedings in Manitoba and Saskatchewan, but there is no avoidance of a jurisdictional defect.

[13] An order shall issue in accordance with these reasons. The appellant has had some success but we would order no costs of the appeal since the issue upon which she succeeded was raised for the first time on appeal and she was unsuccessful on the substance of the appeal.

[14] There was mention that the plaintiff’s name is still not accurately spelled. That was not an appeal issue and we leave that in the plaintiff’s hands to seek correction if that is necessary.

“J.J. Carthy J.A.”

“Doherty J.A.”

“M. Rosenberg J.A.”