SC-12-1031

SUPERIOR COURT OF JUSTICE

THUNDER BAY SMALL CLAIMS COURT

GEORGE MERRITT WARD,

Plaintiff

-and-

LANDMARK INN LIMITED PARTNERSHIP, LANDMARK INN GENERAL PARTNER
LTD. And LANDMARK INN LEASING CORPORATION,

Defendants.

REASONS ON MOTION

of Deputy Judge K. Cleghorn, delivered
April 17, 2013 at Thunder Bay, Ontario

APPEARANCES

Etienne Esquega, For Defendants (Moving Parties).

Walter Wieckowski, For Plaintiff (Responding Party).

REASONS ON MOTION

CLEGHORN (Dep. Judge-SCC)

This motion was heard on March 22, 2013 at Thunder Bay, Ontario. The decision was reserved on that day.

THE ISSUE

The Defendants have brought a motion to set aside the noting in default and seek permission to file a Defence in this matter.

There is no dispute with respect to the essential facts of the matter. The Plaintiff issued the Plaintiff’s Claim on December 6, 2012. It was served on all Defendants on December 13, 2012. The Defendants did not file a Defence within the requisite twenty days permitted by Rule 9.01 of the Rules of the Small Claims Court. As such, the Defendants were noted in default on or about January 9, 2013.

The Defendants sought to prepare and file a Defence as early as January 18, 2013. The original Motion to set aside the noting in default was made returnable on February 1, 2013 and was finally heard on March 22, 2013. Between those two dates, there was a failure on the part of the Defendants to attend for the Motion on the scheduled hearing date of February 21, 2013.

THE EVIDENCE

I find as follows in relation to the evidence:

(1) the Plaintiff has brought a Claim which alleges that he is owed $5,675.69 under a contract made with the Defendants, or, alternatively, for breach of that contract;

(2) the Defendants intended to defend the action brought by the Plaintiff, but through a series of miscommunications and inadvertence failed to do so in a timely manner;

(3) the Plaintiff noted the Defendants in default. There was no communication between counsel for the parties prior to the noting in default;

(4) the Defendants did bring this motion within a reasonable time frame and there has not been undue delay;

(5) some of the delay resulted from the scheduling of counsel for the Plaintiff as the presiding judge in this Court on the original return date of this Motion on February 1, 2013; and

(6) the Defendants have a defence to the Plaintiff’s Claim, alleging that the Plaintiff is not entitled to the compensation he claims on the basis of the specific date of termination of his services.

DISCUSSION

This is an unfortunate set of circumstances for both parties. A comedy of errors has resulted in unnecessary delay in prosecuting this case. It needs to be moved along with all deliberate speed.

Rule 11.06 of Small Claims Court Rules provides:

“11.06 The court may set aside the noting in default or default judgment against a party and any step that has been taken to enforce the judgment, on such terms as are just, if the party makes a motion to set aside and the court is satisfied that,

(a) the party has a meritorious defence and a reasonable explanation for the default; and

(b) the motion is made as soon as is reasonably possible in all the circumstances.”

I have no difficulty with the Defendants’ timing in bringing this Motion before the Court, or with the explanation for the default. I am satisfied that the Defendants’ counsel acted quickly upon discovering the inadvertent errors in their office that led to this series of events. I am also satisfied that holiday schedules and the onset of the festive season resulted in some of the delay in defending the Claim, but that there was always the intention to deliver a Defence. This Motion was, therefore, brought as soon as was reasonably possible.

The Defendants must also establish that they have a “meritorious defence” to succeed on the motion. I do not interpret that to mean that they must have a “sure fire” defence or one which is guaranteed to “win the day”. It merely means that it is reasonable and, if it is borne out by appropriate evidence, that the Defendants may indeed successfully defend the claim on the merits. I do not equate the word “meritorious” with “arguable”. As J.W. Quinn, J. noted in Coombs v. Curran, [2010] O.J. No. 815, quoting the New Shorter Oxford English Dictionary, “meritorious” is defined as “entitling a person to reward; well-deserving, meriting commendation, having merit.”(at paragraph 30). The Defendants’ defence has merit in the sense that, if supported by facts borne out by the evidence, it can succeed in whole or in part. It would have been far preferable for the Defendants to have attached their Defence to an Affidavit, but the actual Defence was not proffered in this instance. I am satisfied, however, that the Defendants have raised a meritorious defence in this case, specifically that the Plaintiff may not be entitled to compensation if he was not employed by the Defendants, or one of them, at the relevant time. Although briefly stated, it is enough to meet the threshold required by Rule 11.06, albeit barely so. The actual merits of that defence, of course, will have to be determined by the trier of fact after consideration of all the evidence, with any and all findings of credibility necessary under the circumstances. Although many documents are mentioned in the Plaintiff’s Claim, none have been provided to the Court as yet. The true merits of the Plaintiff’s Claim may be determinable only after the review and consideration of those specific documents.

Rule 1.03 (1) of the Rules of the Small Claims Court provides:

“1.03 (1) These rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every proceeding on its merits in accordance with section 25 of the Courts of Justice Act. O. Reg. 258/98, r. 1.03 (1).”

It bears repeating that this, ultimately, is a matter of judicial discretion. In each and every case, all parties should be allowed the opportunity to advance a claim and/or defend one by having their day in Court i.e. a case must be determined on its merits as required by Rule 1.03 (1). It remains a hallmark of our system of justice that matters should be decided, whenever possible, after a full and complete hearing with the active participation of everyone involved i.e. there must be a “just” determination. Those cases should consider all relevant and appropriate evidence and be decided based upon the applicable law by a neutral trier of fact. Sometimes, the just determination on the merits trumps the expeditious course and does result in some increased expense. That is certainly the situation in the case before the Court on this Motion.

DECISION

As a result, the Defendants’ Motion is granted. The noting of default is hereby set aside and the Defendants shall have permission to file their Defence. The Defence shall be served and filed within ten days of the date of this Order.

In most cases, the successful party would be awarded costs. The Plaintiff has been subject to delay and is quite correct in suggesting that the evidence being offered in support of this Motion has left much to be desired. The Plaintiff is entitled to any costs, being all disbursements, thrown away i.e. any costs (but disbursements only) incurred relating to the noting of default. The Plaintiff will not be awarded any additional costs incurred at this stage bearing in mind that some communication should have occurred between respective counsel about what would happen going forward following service of the Plaintiff’s Claim. This was a failing on the part of everyone involved and has resulted in some needless steps, and costs being incurred, that were readily avoidable. Costs of the Motion otherwise are reserved to the trial judge.

I thank all parties for their presentation of this interesting case and for their courtesy to the court and to each other.

Order accordingly.

K. CLEGHORN, Deputy Judge-SCC

Dated at Thunder Bay, Ontario this 17th day of April, 2013.