Royal Bank of Canada v. Hejna, 2012 ONCA 27

Citation: Royal Bank of Canada v. Hejna, 2012 ONCA 27 Date: 2012-01-13 Docket: C53542 Court of Appeal for Ontario

Between: Royal Bank of Canada (Plaintiff/Respondent) and Roland Hejna (Defendant/Appellant)

Before: Weiler, Armstrong and Rouleau JJ.A.

Counsel: Robert Klotz, for the appellant Martin Greenglass, for the respondent

Heard and released orally: January 9, 2012

On appeal from the order of Justice Susan E. Healey of the Superior Court of Justice, dated March 10, 2011.

Endorsement

[1] We are all of the opinion that the appeal should be allowed. The motions judge failed to consider the proportionality of granting the bank’s motion to strike Mr. Hejna’s defence for failure to pay $3,000 in costs in an action for almost seven million dollars in fraud which had been allowed to proceed despite Mr. Hejna’s bankruptcy. In addition the motions judge failed to consider the possibility of an adjournment particularly in light of the fact that Mr. Hejna had been out of the country since service of the motion. There is no evidence of prejudice to the bank. The costs order of $3,000 has been paid.

[2] Accordingly the appeal is allowed and the order of the motions judge striking Mr. Hejna’s statement of defence for failure to pay $3,000 in costs is set aside. In addition, the order granting the bank default judgment on March 18, 2011 is set aside.

[3] Mr. Hejna concedes that he should pay the costs of the motion that the bank was invited to bring in the event that the $3,000 costs had not been paid by February 15, 2011. The costs of that motion were fixed in the amount of $1,500. Insofar as the costs of the appeal are concerned, we award those costs to Mr. Hejna and fix the costs of the appeal in the amount of $8,000. The costs of the motion are to be set off against the costs of appeal with the result that $6,500 in costs are awarded to Mr Hejna inclusive of all disbursements and applicable taxes.

"K.M. Weiler J.A." "R.P. Armstrong J.A." "Paul Rouleau J.A."