Court of Appeal for Ontario

Citation: 1067609 Ontario Inc. (Turner's Garage) v. Schell, 2012 ONCA 310 Date: 2012-05-11 Docket: C54809

Before: MacPherson, Gillese and Blair JJ.A.

Between:

1067609 Ontario Inc., o/a Turner’s Garage Plaintiff (Respondent)

and

Lyndel Schell and BDO Canada Limited, Trustee in Bankruptcy for David Schell Defendants (Appellants)

Counsel: D. Andrew Thomson, for the appellants David A. Morin, for the respondent

Heard and released orally: May 9, 2012

On appeal from the order of Justice Edward J. Koke of the Superior Court of Justice, dated December 5, 2011.

ENDORSEMENT

[1] The appellants were served with the statement of claim on August 12, 2010. They delivered, but did not file, a statement of defence. Ultimately, they were noted in default and an undefended trial date was set for September 12, 2011.

[2] Shortly before the scheduled trial date, the appellants brought a motion in which they sought, among other things, to set aside the noting in default and extend the time for filing the statement of defence.

[3] In detailed reasons for decision, the motion judge carefully went over the factual background. He then articulated the legal principles that govern the setting aside of a noting in default. The appellant accepts that his articulation of the governing legal principles is accurate. Thereafter, the motion judge gave extensive reasons for concluding that the appellants failed to demonstrate a continuing intention to defend. In summary, these reasons show that despite being repeatedly advised of the need to file the appropriate documents or suffer the legal consequences, it was not until August 23, 2011 – some six days before the scheduled trial date and more than a year after having been served with the statement of claim – that the appellants retained a lawyer and instructed him to bring a motion to set aside the default judgment.

[4] The motion judge also found that the appellants’ explanation for their failure to file the statement of defence within a reasonable time period was both “vague and incredible”. Again, he gave thoughtful reasons for this finding.

[5] Further, the motion judge found that the appellants had failed to bring their motion to set aside expeditiously. This finding too, was fully available to the motion judge on the record.

[6] Setting aside is a discretionary order. We see no error in the motion judge’s exercise of discretion in refusing to set aside the noting in default. On the contrary, on the record before us, the motion judge was fully justified in dismissing the motion to set aside.

[7] Accordingly, the appeal is dismissed. Costs of the appeal to the respondent fixed at $8,000, inclusive of disbursements and applicable taxes.

“J.C. MacPherson J.A.”

“E.E. Gillese J.A.”

“R.A. Blair J.A.”