COURT OF APPEAL FOR ONTARIO

CITATION: Frankie Tomatto's Woodbine Inc. v. De Groot, 2015 ONCA 739

DATE: 20151102

DOCKET: C60214

Blair, Hourigan and Brown JJ.A.

BETWEEN

Frankie Tomatto's Woodbine Inc.

Plaintiff (Respondent)

and

Robin De Groot, 2215208 Ontario Inc., Evan Karras and Calvin Htut

Defendants (Appellant)

Amandeep Sidhu, for the appellant

Alex Minkin, for the respondent

Heard and released orally: October 28, 2015

On appeal from the order of Justice James F. Diamond of the Superior Court of Justice, dated March 9, 2015, with reasons reported at 2015 ONSC 1545.

ENDORSEMENT

[1] The appellant, Evan Karras, appeals from the order of Diamond J. dated March 9, 2015, dismissing his motion to set aside the noting of default made against him on November 29, 2012 and the default judgment by Low J. dated June 5, 2013 made against him.

[2] The appellant advances two grounds of appeal. First, he submits that the motion judge erred in finding that the appellant did not bring his motion to set aside the default judgment without undue delay. Second, he argues that the motion judge failed to consider the potential prejudice to the appellant or the respondent in the event the motion to set aside was dismissed or granted.

[3] A motion judge’s decision to set aside a default judgment is a discretionary one that will attract deference on appeal. It should not be interfered with absent an error in law or principle, a palpable and overriding error of fact, or unless the decision is so clearly wrong as to amount to an injustice: Mountain View Farms Ltd. v. McQueen, 2014 ONCA 194, 119 O.R. (3d) 561, at para. 55.

[4] The motion judge correctly identified the principles governing the motion to set aside as those set out by this court in Peterbilt of Ontario Inc. v. 1565627 Ontario Ltd., 2007 ONCA 333, 87 O.R. (3d) 479, and Mountain View Farms Ltd..

First Ground of Appeal: Failure to Move Expeditiously to Set Aside the Default Judgment

[5] The motion judge found that the appellant had explained the circumstances which led to his default and had presented a triable defence on the merits.

[6] However, the motion judge found that the appellant had not moved expeditiously to bring his motion to set aside, nor had he satisfactorily explained his undue delay. The appellant submits that the motion judge erred in so finding. We disagree. That finding has ample support in the evidence.

[7] The appellant was noted in default on November 29, 2012. Six weeks later, the respondent was contacted by a lawyer who advised that the appellant had approached him for advice. Nothing more was heard from the appellant, and the respondent obtained default judgment on June 5, 2013.

[8] On October 24, 2013, the same lawyer served a notice of motion to set aside the noting in default on behalf of the appellant and his co-defendant, Robin De Groot, returnable in May 2014. The motion judge held that the appellant had failed to account for the nine-month delay between learning of the noting in default and serving that notice of motion to set aside.

[9] The motion to set aside returnable in May 2014 did not proceed. The motion judge stated it “seemingly ‘evaporated’.”

[10] On July 23, 2014, the appellant’s present counsel served a new notice of motion to set aside the default judgment against the appellant, returnable on October 6, 2014. On September 8, 2014, appellant’s counsel advised that the October motion “may not go forward” because of the inability to obtain instructions from the appellant. The motion judge found that “there is no evidence offered by Karras in his supporting affidavit as to why the Motion Record was not served, or why the Motion did not proceed on October 6, 2014.”

[11] The appellant finally served his motion record in early December 2014. The appellant then requested a further adjournment of his own motion. The motion to set aside finally went ahead 28 months after the noting in default.

[12] In light of that chronology of events, it certainly was open to the motion judge to find that the appellant had not moved expeditiously to set aside the noting in default and default judgment.

Second Ground of Appeal: Failure to Consider the Prejudice to the Parties

[13] In Mountain View Farms, this court stated, at para. 49, that on a motion to set aside a default judgment, in addition to considering the standard three factors, a court should take into account the potential prejudice to the moving party should the motion be dismissed and the potential prejudice to the responding plaintiff should the motion be allowed, as well as the effect of any order the court might make on the overall integrity of the administration of justice.

[14] The appellant submits that the motion judge failed to consider the respective potential prejudice to the parties of any order he made. More specifically, the appellant argues that the motion judge, having found the appellant had presented a triable defence on the merits, erred in failing to consider the prejudice the appellant would suffer if not allowed to put forward such a defence at trial.

[15] We are not persuaded by this argument. The reasons of the motion judge must be read as a whole. The motion judge clearly understood that by dismissing the appellant’s motion to set aside the default judgment, the appellant would not be able to defend the claim on its merits. The motion judge took that factor into account as part of his overall analysis.

[16] The appellant submits that any prejudice suffered by the respondent by setting aside the default judgment could be compensated by costs. The motion judge effectively addressed that issue when he considered whether setting aside the default judgment would be in the interests of justice. He concluded it would not. In reaching that conclusion, the motion judge took into account the appellant’s litigation conduct, specifically the appellant’s continuing breach of several court orders relating to the respondent’s efforts to enforce the default judgment in the period before the appellant finally brought his motion to set aside before the court. Accordingly, we see no error by the motion judge in his application of this part of the test governing motions to set aside default judgments.

[17] For these reasons, we dismiss the appeal.

[18] Costs to the respondent fixed in the amount of $1,925.90, all inclusive.

“R.A. Blair J.A.”

“C.W. Hourigan J.A.”

“David Brown J.A.”