SUPERIOR COURT OF JUSTICE – ONTARIO

COURT FILE NO.: CV-11-851
DATE: 2013-03-13

RE: George Maillis, Applicant

and

Mirage Resorts, Inc. and Bellagio, LLC, Respondents

APPLICATION UNDER THE EXECUTIONS ACT

COURT FILE NO: CV-12-19

AND RE: BELLAGIO, LLC and MIRAGE RESORTS, INC., Applicants

and

George Maillis, Respondent

BEFORE: The Honourable Mr. Justice D.J. Gordon

COUNSEL:
P. Quinlan, for the Applicant/Respondent, George Maillis
I. Katchin, for the Respondents/Applicants, Mirage Resorts, Inc. and
Bellagio, LLC

HEARD: October 30, 2012 and January 4, 2013

ENDORSEMENT

[1] Two applications require determination as to whether a writ of execution attaches to certain lands in the County of Brant.

Applications

[2] The first application was issued on behalf of George Maillis (“George”). He seeks the following relief:

a) the writ of execution registered against Stamatis Maillis, Georgio Stamatis Maillis and George Stamatis Maillis does not attach to the lands of George Maillis and particularly to 28 Beckett Drive, in the City of Brantford (PIN 32075-0159 (LT) being all of Lot 40, Plan 1646);

b) declaring the writ of execution obtained by Bellagio, LLC and Mirage Resorts, Inc. in court file CV-11-429902 in the Superior Court of Justice at Toronto, being file No. 11-0000588, registered with the Sheriff of the County of Brant, does not attach to the lands of George Maillis; and

c) directing the Land Registrar of the Land Registry Office at Brantford to remove from title of the lands of George Maillis, and specifically from 28 Beckett Drive, the restrictions placed by the Land Registrar due to execution 11-0000588 registered with the Sheriff of the County of Brant.

[3] In oral submissions, Mr. Quinlan requested similar relief regarding property in Dundas, apparently sold by George in 2007, but the deed not being registered. In the absence of evidence, I decline to directly address this oral claim.

[4] The second or responding application of Bellagio, LLC and Mirage Resorts, Inc. (“Mirage”) seeks a declaration that:

a. the writs of seizure and sale issued in Toronto registered as writ number 11-0009390, in Hamilton registered as writ number 12-000029 and in the County of Brant registered as writ number 11-0000588 (the “Writ”, collectively the “Writs”) encumber any and all real property of those named in the Writs and specifically that of George Maillis, born on April 24, 1974 (“George”); and

b. George, who is the sole registered owner of the property municipally known as 28 Beckett Drive, Brantford, Ontario N3T 6E5 (the “Property”) is bound by the Judgment as against Georgio Stamatis Maillis a.k.a. George Stamatis Maillis a.k.a. Stamatis Maillis d/b/a Bellagio Limousines named as a defendant in the Superior Court of Justice matter bearing Toronto Court File No. CV-11-429902 (the “Action”).

Background

[5] Mirage commenced a trademark infringement action in the State of Nevada, one of the United States of America, on November 23, 2009, against Dominic Torrino, an individual, d/b/a Bellagio Limousines, and Georgio Stamatis Maillis, an individual, d/b/a/ Bellagio Limousines. The action was initially defended. It appears, however, that default judgment was granted on April 26, 2011, including a damage award of $100,000.00 and attorney’s fees of $26,630.83.

[6] Of some interest, the Nevada attorneys were instructed by the Gowlings law firm in Ottawa. Gowlings received their instructions from Tanya Montenegro (“Tanya”) on behalf of Bellagio Limousines. Tanya is the former spouse of George.

[7] Mirage commenced an action in Toronto on June 30, 2011, to enforce the Nevada judgment. Added as a defendant or better stated as an alias were George Stamatis Maillis and Stamatis Maillis.

[8] The statement of claim was served on July 6, 2011, according to the affidavit of Nelson Paesch, sworn August 22, 2011. Service is in issue, as hereafter discussed.

[9] Default judgment was obtained on July 27, 2011, four days prematurely given the purported method of service. Further, the aforementioned affidavit of service presented on these applications was sworn on August 22, 2011, almost a month after judgment. No explanation was provided.

[10] A writ of execution was filed with the Sheriff in Brantford, and also with the Registrar of Land Titles, on August 23, 2011.

[11] George Maillis is the sole owner of 28 Beckett Drive, Brantford. He was unable to complete an agreement to sell this property due to the writ of execution.

[12] George has a fraternal twin brother, Stamatis Maillis (“Stamatis”). Stamatis made an assignment in bankruptcy on June 23, 2009. He remains an undischarged bankrupt.

Service of Statement of Claim

[13] Service is said by Mr. Paesch to have been as an alternative to personal service. He attests to delivering a copy of the statement of claim to Diane Silvera, an adult member of the same household in which the defendant resides, namely at 551 The West Mall, Unit 22, Etobicoke.

[14] This address was the residence of Stamatis. Ms. Silvera was the spouse or former spouse of Stamatis. George resided in Brantford.

[15] In response to my inquiry, Mr. Katchin indicated it was his firm’s practice to conduct a search of Ministry of Transportion (“M.T.O.”) records and that such would have revealed the Etobicoke address as the residence of George. For some unknown reason, no evidence was presented to support this submission, nor as to how and when it was discovered that George had property in Brantford. This is of particular concern as Mr. Katchin knew that service, or lack of, was an issue raised by Mr. Quinlan in the initial application.

[16] All parties are required to put their best foot forward on an application of this nature. Failure to do so invites an adverse inference.

[17] It remains unclear as to why this particular method of service was used or when counsel knew of George’s address. In any event, counsel did become aware at some point yet continued to rely on an incorrect affidavit of service.

[18] On the evidence presented, the only available conclusion is that George was not served with the statement of claim. I so find.

[19] Compounding this dilemma is that Mr. Katchin, again in response to my inquiry, says that George and Stamatis are both bound by the judgment. That submission does not have a factual basis as only one person is sued and only one person, at best, was served. Service was only effective on Stamatis, perhaps, as the Etobicoke address was his address. But Stamatis is an undischarged bankrupt and the action against him would have been automatically stayed.

[20] Mr. Quinlan does not seek to set aside the default judgment. He submits the judgment is a nullity as, without service, George has not yet been called upon to defend the claim. Further, he argues the writ of execution, therefore, cannot attach to his client’s lands. Mr. Quinlan says that Mirage, in effect, has improperly obtained a mareva injunction.

[21] Mr. Katchin submits the default judgment is valid until set aside. He argues that George must bring such a motion in Toronto. Mr. Katchin says that Mr. Quinlan is attempting to make a collateral attack on the judgment without seeking to set it aside.

[22] Unfortunately, neither counsel presented any caselaw in support of their positions.

[23] Had Mr. Quinlan sought to set aside the default judgment, the evidentiary record would clearly support such relief.

[24] Mr. Katchin relies on a purported M.T.O. search to establish the Etobicoke address as the residence of George. However, it has already been held that an individual’s address as set out in M.T.O. records is not conclusive. See P.I.J.M. Canada Corp. v. Poetry in Motion (Canada) Inc. (2000), 1 C.P.C. (5th) 339 (Ont. S.C.J.).

[25] Further, the onus is on the serving party, Mirage, as to proof of service when relying on an alternative to personal service. See Toronto-Dominion Bank v. Marhado (1998), 28 C.P.C. (4th) 289 (Ont. Gen. Div.).

[26] When using an alternative to personal service, the plaintiff takes the risk the statement of claim will not come to the defendant’s notice, in which case any step taken as a result of the defendant’s default will in all probability be set aside due to the absence of due process. See Royal Trust v. Dunn, (1991), 1991 7227 (ON SC), 6 O.R. (3d) 468 (Ont. Gen. Div.).

[27] When judgment is irregularly obtained, such as by lack of service, it will normally be set aside as of right and the writ of execution vacated. This differs from the situation of valid service but where the defendant seeks to defend and the court has a discretion to allow such, often on terms. See Royal Trust v. Dunn, supra, and Dawson’s Marina Ltd. v. Telfer (2005), 38 C.P.C. (6th) 43 (Ont. S.C.J.).

[28] The court’s inherent jurisdiction, along with Rule 1.04, Rules of Civil Procedure, permit setting aside the default judgment, even without a motion, in the interests of justice. I choose not to do so given the specific submission of Mr. Quinlan in this regard.

[29] Without service, the judgment, as Mr. Quinlan argues, is a nullity. Mirage cannot rely on the steps it took.

Evidentiary Objection

[30] During Mr. Katchin’s presentation, Mr. Quinlan raised an objection as to the admissibility of certain evidence. Given the complexity, I requested written submissions.

[31] The evidence in dispute was obtained by Det. Holder, Toronto Police Service. Although involved in prior matters, the officer was not investigating George, or others, at the time he accumulated the documents. It is unclear as to why he did so.

[32] The documentary evidence consist of:

i) copies of M.T.O. printed records, some with handwritten comments, and correspondence from M.T.O. officials;

ii) Bearfoot Park documents pertaining to a mobile home bill of sale involving George and Tanya;

iii) Criminal investigation reports; and

iv) internet postings and newspaper articles.

[33] The officer also offered his opinion on some matters during examination. Such is not relied on and cannot be used on an application for obvious reasons.

[34] Only the printed M.T.O. records, in my view, can be considered as evidence. These are public records although such ought to have been obtained in the usual manner and not as here.

[35] The handwritten notes on these records were not properly identified and are not reliable. Nor are they necessary. Such evidence could have been obtained, if relevant, in another manner.

[36] Internet postings and newspaper articles are so obvious in their inadmissibility that I question why the attempt was made. These documents simply do not meet the test of reliability. This evidence, if relevant, could also have been obtained in another manner.

[37] The Bearfoot Park documents are not relevant. There is no evidentiary foundation for the documents in this proceeding. Mirage seeks to rely on a reference here to Bellagio Limousines. Such connection cannot be made simply by presenting a document.

[38] The criminal investigation records are also not relevant. George has admitted his criminal record. The investigative notes add nothing to the issues in dispute but, rather, is an unwarranted attack on George’s character.

[39] Other than the printed M.T.O. records, the documents presented fall well short of meeting the best evidence test. A party cannot short circuit the process in this manner.

[40] The M.T.O. records reveal:

i) George’s residential address was, for a period of time, described as 551 The West Mall, Unit 22, Etobicoke; and

ii) various vehicle transfers.

[41] Mr. Katchin relies on the Etobicoke address as revealed for service of the statement of claim. These records were later obtained. He also seeks to rely on the handwritten notes to demonstrate George’s attempt to merge his licence with Stamatis.

[42] Mr. Quinlan referred to correspondence from George’s prior counsel indicating M.T.O.’s acknowledgement of administrative error.

[43] None of these positions are supported by admissible evidence. Regardless, as previously stated, reliance cannot be made on M.T.O. records for service of the statement of claim.

[44] The vehicle transfers are addressed in the next topic.

Bellagio Limousines

[45] The focus of the Mirage application is with ownership or operating mind of Bellagio Limousines. This is not an issue requiring determination. It is raised in an attempt to demonstrate George is the true judgment debtor.

[46] The totality of the evidence does not lead to any conclusion. This is a matter that can only be determined by trial. There is some evidence to say George was involved in the business, including statements attributed to him in prior proceedings. Stamatis admits his involvement. There is also evidence showing Tanya operated the business, including her direction in the Nevada proceeding and in her criminal case.

[47] Mr. Katchin asks me to conduct a handwriting analysis as to certain vehicle transfer documents compared to George’s signature on his affidavits. He relies on R. v. Flynn, 2010 ONCA 424; R. v. Malvoisin, [2006] O.J. No. 3931 (Ont.C.A.); Thompson v. Thompson, [1902] O.J. No. 169 (Div. Ct.); and R. v. Cunsolo, 2011 ONSC 1349.

[48] As the caselaw indicates, such an analysis is discretionary and ought be undertaken with caution.

[49] I decline to entertain this request for several reasons. I have no expertise in handwriting analysis. Others do. Further, the M.T.O. documents are photocopies and, therefore, a detailed comparison of handwriting is not possible. More important, this is not the best evidence despite Mr. Katchin’s argument. Presumably, the original records remain with M.T.O. Access to such records could have been requested and a handwriting expert engaged to conduct a proper investigation and provide a report.

Stamatis

[50] On the evidentiary record, only Stamatis was served with the statement of claim. He attests to operating Bellagio Limousines. But for his status as an undischarged bankrupt, Stamatis would be bound by the judgment. I can only conclude that Stamatis is the judgment debtor.

Summary

[51] For the foregoing reasons, the relief sought in the application and motion of George, as set out at the commencement of this endorsement, is granted. The application of Mirage is dismissed.

[52] If counsel are unable to resolve the issue of costs, brief written submissions are to be delivered to my chambers in Cayuga within 30 days.

D.J. Gordon J.

Released: March 13, 2013