Court File and Parties
COURT FILE NO.: DC-05-004843-00
DATE: 20060413
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
RE: 620369 ONTARIO INC. t/a HERMAN’S BUILDING CENTRES
Plaintiff
(Respondent)
v.
JOHN EDWARD KREUZER, aka JOHN EDWARDS KREUZERS, cob as ALL SORTS OF CONSTRUCTION and JVCN BUILDING CORPORATION
Defendants
(Appellants)
BEFORE: Sproat J.
COUNSEL: Shana Dale, for the Plaintiff (Respondent)
Ethan Rogers, for the Defendants (Appellants)
E N D O R S E M E N T
[1] This is an appeal from the judgment of Deputy Judge H.C. Adams on April 18, 2005 dismissing a motion to set aside a default judgment granted April 4, 2005.
[2] In support of the motion Mr. Kreuzer filed an affidavit sworn April 11, 2005 indicating he did not receive the claim until March 22, 2005 and understood he had 20 days to defend.
[3] In all but very clear cases the best strategy for a plaintiff is to agree to set aside a default judgment on terms and to have the matter decided on the merits. The risk for the plaintiff in not following this course of action is that much time and money is wasted if on appeal the court determines that the defendant should have had an opportunity to defend on the merits. In this case I note that both counsel on the appeal were not counsel in the court below. There the plaintiff was represented by an agent and the defendants were self-represented by Mr. Kreuzer.
[4] For the reasons that follow, my conclusion is that the appeal should be allowed.
[5] The affidavit of service of the claim indicates that service was effected on March 1, 2005. The service is certainly defective in relation to Mr. Kreuzer in that it purports to serve the claim on him by serving “Manny Grewbalt – person in charge”. The best the plaintiff can say is that it thinks this was brought to Mr. Kreuzer’s attention because Ms. DeMarco, the process server, in a further affidavit dated April 14, 2005 indicates that Mr. Kreuzer called her on March 3, indicating he had been given some “court papers”. Mr. Rogers, however, suggests Mr. Kreuzer may have been referring to a demand letter and not a claim. Mr. Kreuzer denies knowing or employing Grewbalt. There is evidence to the contrary and Grewbalt’s status remains unclear.
[6] The Statement of Claim alleges that Mr. Kreuzer is personally liable because he personally guaranteed the obligations of Tops All Roofing Inc. which purchased the goods in question. (There is also suggestion that there is liability under the Construction Lien Act, however, the basis of this liability is difficult to see and, as to the defendant corporation, it would be inconsistent with paragraph 3 of the Statement of Claim which indicates that the corporation is not active.)
[7] There then appears to be some further confusion at the actual hearing on April 18, 2005. Mr. Rogers’ submission is that while the agent for the plaintiff and the deputy judge had before them a copy of Ms. DeMarco’s affidavit of April 14, 2005 Mr. Kreuzer did not have a copy of the affidavit. There is some support for this in the transcript. At page 8 line 27 Mr. Kreuzer states:
“Your Honour, I must ask the question, the affidavit you refer to from, when did you serve me with that? Or did I get a copy of that?
[8] The agent for the plaintiff, at page 9, lines 15-20 indicates he does not know if there is an affidavit of service in the file relating to Ms. DeMarco’s responding affidavit. No affidavit of service was put before me on this appeal. In any event, regardless of whether there was an affidavit of service, it appears from the record that Mr. Kreuzer did not have before him the affidavit which the judge and the agent for the plaintiff were referring to. This created the opportunity for confusion as to what document is being referred to by the judge and plaintiff’s agent.
[9] At page 7 the judge then asked Mr. Kreuzer “How do you explain your signature under the credit application of TopSal Roofing?” Mr. Kreuzer responds, when asked if it was his signature, “Yes. But as you can see, Your Honour, it isn’t fully completed, there’s only initials at the bottom”.
[10] Neither counsel on this appeal were able to clearly identify the document that Mr. Kreuzer was referring to. It is apparent, however, that he may not be referring to the guarantee document which the plaintiff relied upon to found its claim against Mr. Kreuzer as it appears to bear a complete signature.
[11] The fact that Mr. Kreuzer was never properly served is itself reason to set aside the default judgment against him. The fact that there is confusion as to what document Mr. Kreuzer was referring to in court and, therefore, what he was or was not admitting is reason to set aside the default against corporate defendant.
[12] I, therefore, allow the appeal and order that the default judgment be set aside, the defendants be permitted 20 days from this date to file a Statement of Defence; that any writs of execution be vacated; and any garnishee requests be stayed.
[13] If the parties cannot agree on costs then the appellant shall make written costs submissions within 10 days; respondent further 10 days; reply, if any, further 5 days.
Sproat J.
DATE: April 13, 2006
COURT FILE NO.: DC-05-004843-00
DATE: 20060413
ONTARIO
SUPERIOR COURT OF JUSTICE DIVISONAL COURT
RE: 620369 ONTARIO INC. t/a HERMAN’S BUILDING CENTRES
Plaintiff
(Respondent)
v.
JOHN EDWARD KREUZER, aka JOHN EDWARDS KREUZERS, cob as ALL SORTS OF CONSTRUCTION and JVCN BUILDING CORPORATION
Defendants
(Appellants)
BEFORE: Sproat J.
COUNSEL: Shana Dale, for the Plaintiff (Respondent)
Ethan Rogers, for the Defendants (Appellants)
ENDORSEMENT
Sproat J.
DATE: April 13, 2006