ONTARIO

SUPERIOR COURT OF JUSTICE

Court File No.: CV-10-098957-00
Date: 2012-01-10

B E T W E E N:

Toronto Dominion Bank

Bernard Noik, for the Plaintiff

Plaintiff

• and -

1646861 Ontario Inc. operating as Debco Transportation & Logistics, Deborah S. Griffiths also known as Deborah Griffith, and Grifcon Construction Co. Limited.

Rocco Ruso, for the Defendants

Defendants

HEARD: December 13, 2011

REASONS FOR JUDGMENT

EDWARDS J.

[ 1 ] The defendant, Grifcon Construction Co. Limited (“Grifcon”) moves to set aside a default judgment which was obtained by the plaintiff on June 18, 2010. In support of its motion to set aside the default judgment, Grifcon filed the affidavit of its sole director and officer, Nigel Griffiths.

[ 2 ] In order to succeed in a motion to set aside a default judgment, a defendant must satisfy the court that it has an arguable defence on the merits; that the default was either unintentional or at least has been explained satisfactorily to the court; and that the defendant has moved expeditiously, or at the very least can explain away any delay.

[ 3 ] What is particularly significant from Mr. Griffiths’ affidavit is the fact that he acknowledges that he was informed of the judgment and was apparently in court on August 10, 2010, when Gilmore J. dealt with a motion by the plaintiff seeking to rectify the original default judgment. The endorsement of Gilmore J. indicates that Mr. Griffiths appeared and raised various concerns about the judgment against his company Grifcon. At that time, the endorsement of Justice Gilmore indicates that she suggested that Mr. Griffiths should obtain legal advice.

[ 4 ] The evidence before me would suggest that Mr. Griffiths did not take to heart the advice of Gilmore J., and it was not until November 22, 2010, that the import of the default judgment was brought home when Mr. Griffiths attended at his bank and was informed that there had been a withdrawal of approximately $19,000, which had been effected as a result of the plaintiff’s enforcement of the judgment against Grifcon.

[ 5 ] I am not satisfied that there is any acceptable explanation on the part of Grifcon or Mr. Griffiths for their failure to defend this matter, particularly given that the endorsement of Gilmore J. reflects the fact that as of August 10, 2010, Mr. Griffiths was aware of the court proceedings, the default judgment, and the advisability of obtaining independent legal advice.

[ 6 ] Moving to the second part of the test that the moving party must establish to set aside a default judgment, I am not satisfied on the evidence before me that there is any defence on the merits. Mr. Griffiths’ affidavit essentially takes the position that the plaintiff has no valid cause of action against Grifcon, because Grifcon was never the landlord. Counsel for Grifcon in argument took me to paragraph 4 of the statement of claim where Grifcon is described as the landlord of the property at 425 Concession 8, R.R. #5 Claremont, Ontario. Grifcon is defined for the purposes of the statement of claim as the “Landlord”.

[ 7 ] Mr. Griffiths filed in support of his motion the lease of the aforementioned premises, and in that lease the landlord is described as Her Majesty the Queen in Right of Canada and Nigel Griffiths and Deborah Griffiths are described as the tenants.

[ 8 ] The difficulty with the argument and position now taken by Grifcon is the fact that the statement of claim goes on in paragraphs 18 and 19 to plead alternative claims. These paragraphs provide:

The Plaintiff pleads that the Landlord, violated the provisions of the Act by not providing a copy of the Notice of Distress, copies of two appraisals conducted by the Landlord and an accounting of the sales proceeds.

In the alternative, the Plaintiff pleads that, if the Landlord effected a sale of the Assets, the Plaintiff is entitled to any surplus proceeds resulting from that sale.

[ 9 ] As I pointed out to counsel for Grifcon, where paragraphs 18 and 19 refer to “the Landlord”, one has to then look to paragraph 4 of the statement of claim where “Landlord” is defined to be Grifcon Construction Co. Limited. As such, paragraphs 18 and 19 plead alternative causes of action that are in no way touched upon in the affidavit of Mr. Griffiths. As I indicated to counsel for Grifcon, the failure to put before this court any defence with respect to the alternative claims in paragraphs 18 and 19 of the statement of claim was fatal to the motion now before me to set aside the default judgment. It is open to this court in the absence of any evidence filed by Mr. Griffiths with respect to the allegations in paragraphs 18 and 19, to draw the inescapable conclusion that the silence in his affidavit is indicative of the fact that there is no defence to those claims.

[ 10 ] Moving then to the third branch of the test that the moving party must satisfy, that being, to explain any delay between the time when the default judgment was brought to the attention of the defaulting defendant and the motion itself, I note in this regard that Mr. Griffiths would have known, certainly as early as August 10, 2010, and certainly no later than November 22, 2010, when he was advised of the withdrawal from his bank account, that there was a default judgment that required his attention. While Mr. Griffiths in his affidavit has supplied information that he was having health issues as of March 2011, I am not satisfied that from August 2010 when he was before Gilmore J. that he was treating this matter seriously. While he may be excused for any delay during that time period when he was ill, i.e. from March 2011 onwards, there is no indication in his affidavit that he was following the advice of Gilmore J. that he obtain legal advice.

[ 11 ] The moving defendant has not therefore satisfied me that any of the preconditions required to set aside a default judgment have been met. Grifcon and Mr. Griffiths have not established a defence on its merits; Grifcon has not explained why the default occurred; and there was an unexplained period of delay from August 2010 until March 2011. Cumulatively, all of these facts weigh in favour of the judgment remaining in place and the defendants’ motion is therefore dismissed. The parties may provide written submissions with respect to costs to be filed with the court by January 20, 2012, limited to three pages in length.

Justice M. Edwards

Released: January 10, 2012