Court of Appeal for Ontario

Date: 2018-10-24 Docket: M49487 (C59583)

Panel: Hoy A.C.J.O., Sharpe and Fairburn JJ.A.

Between

Birchland Plywood-Veneer Ltd. Responding Party (Respondent)

and

Activa Trading Co. Ltd. and MLS Machinery Incorporated Moving Parties (Appellants)

Counsel

Terry Corsianos, for the moving parties Dhiren R. Chohan, for the responding party

Heard: October 18, 2018

Reasons for Decision

[1] On April 14, 2015, the Deputy Registrar dismissed the moving parties' appeal for delay. In May 2018, the moving parties brought a motion to set aside the Deputy Registrar's order. The motion was dismissed by MacFarland J.A. The moving parties now bring a subsequent motion to review the order of MacFarland J.A.

[2] The responding party commenced an action against the moving parties in July 2010. The action pertained to the responding party's purchase of equipment from the moving parties in November 2007. Default judgment was obtained and damages were awarded in March 2011. Although the moving parties filed a notice of motion for an order to set aside the default judgment in May 2011, the motion was not heard until September 2014. The moving parties tried to explain the over three-year delay between the default judgment and the motion as having resulted from the incompetence of a series of lawyers they had retained.

[3] The motion judge gave multiple reasons for dismissing the motion to set aside the default judgment. He rejected the moving parties' position that they had not been served with the statement of claim in August 2010; found that, through their principal, the moving parties had attempted to "manipulate the litigation"; concluded that the responding party had been prejudiced by the delay; and determined that the delay had not been adequately explained.

[4] After a correct recitation of the law and careful review of the evidence, the motion judge ultimately concluded that the "equities of the situation demand that the motion be dismissed despite the prejudice that would flow to the [moving parties] from failure to set aside default Judgment and the obvious and meaningful weight that Courts often accord this final consideration."

[5] The moving parties then appealed to this court, after which more delay accrued. Although the moving parties were twice ordered to perfect their appeal by specified dates, they did not do so.

[6] Accordingly, on April 14, 2015, the Deputy Registrar dismissed the appeal for delay. The moving parties did nothing to resurrect their appeal for over three years. The only explanation offered by the moving parties for failing to act is that they had again received poor legal representation. They point to a single email exchange with a prior lawyer in April 2015 as evidence that they thought things were in hand and that the lawyer was drafting the application to place the appeal back on the "list". We agree with MacFarland J.A.'s observation that "[i]t is impossible on this record to make any conclusion except that this litigation was seemingly 'parked' until the timing served [the moving parties] better."

[7] It is against that factual backdrop – almost eleven years since the original purchase that ultimately gave rise to the dispute – that MacFarland J.A. concluded that the moving parties had lost their right to have their case determined on the merits. Although the moving parties argue that they have a strong defence to the claim on the merits, the original motion judge, whose decision would be the subject of any potential appeal, was cognizant of the fact that "arguable defences ought to be given every reasonable opportunity to be advanced in Court". Yet he concluded that, taking into account all of the circumstances, "the equities of the situation" demanded that the motion be dismissed. We see no error in that approach.

[8] Nor do we see error in MacFarland J.A.'s careful review of the factual record or her application of the legal principles to those facts. As she found, the delay has been "extraordinary", the moving parties have failed to address that delay in any meaningful way, and prejudice would result to the responding party if the matter were to be permitted to proceed at this stage.

[9] The motion is dismissed. Costs to the respondent fixed in the sum of $5,000 inclusive of disbursements and HST.

"Alexandra Hoy A.C.J.O." "Robert J. Sharpe J.A." "Fairburn J.A."