Frankie Tomatto’s Woodbine Inc. v. De Groot, 2015 ONSC 1545
COURT FILE NO.: CV-12-467077
DATE: 20150309
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
FRANKIE TOMATTO’S WOODBINE INC.
Plaintiff
– and –
ROBIN DE GROOT, 2215208 ONTARIO INC., EVAN KARRAS and
CALVIN HTUT
Defendants
Alexander Minkin for the Plaintiff
Amandeep Sidhu for the moving party Defendant Evan Karras
HEARD: MARCH 6, 2015
ENDORSEMENT
diamond j.
[1] The Defendant, Evan Karras (“Karras”) brings a Motion seeking an order setting aside the Default Judgment dated June 5, 2013 of the Honourable Madam Justice Low (the “Judgment”) wherein Low J. ordered, inter alia, Karras to pay damages to the Plaintiff in the amount of $194,575.96 together with pre-judgment interest, and costs of the action in the amount of $9,726.00.
The Facts
[2] As with all motions brought pursuant to Rule 19.08 of the Rules of Civil Procedure, it is important to review the history of this proceeding from the time Karras was served with the Statement of Claim on November 8, 2012.
[3] The Plaintiff’s claim alleges that Karras is the business partner of the co-defendant Robin De Groot (“De Groot”), and that De Groot and Karras were retained by the Plaintiff to carry out a renovation of the Plaintiff’s restaurant. The Claim further alleges that De Groot and Karras made a written proposal to the Plaintiff to design, build and project manage the renovation of the restaurant, and ultimately as a result of alleged breaches of contract on the part of, inter alia, Karras, the renovation was not completed with the Plaintiff suffering corresponding damages.
[4] Karras never delivered a Statement of Defence within the prescribed time limit, and was noted in default on November 29, 2012.
[5] On January 17, 2013, more than six weeks after Karras was noted in default, the Plaintiff’s solicitor received an e-mail from Justin Papazian (“Papazian”), a lawyer practicing in Toronto, Ontario, which advised that Papazian had been contacted by, inter alia, Karras who was actively seeking legal representation, and that a meeting between, inter alia, Karras and Papazian would be scheduled shortly. Papazian was in turn advised on that date by the Plaintiff’s solicitor that Karras had been previously noted in default.
[6] In his brief affidavit filed in support of this Motion, Karras does not offer any evidence as to whether he spoke and/or met with Papazian in or around January 2013. His affidavit is silent on these issues, despite his legal onus to provide this Court with evidence necessary to explain the circumstances which led to his default.
[7] The Plaintiff’s solicitor never heard back from Papazian or Karras. As a result, the Plaintiff moved for Default Judgment before Low J, who as stated above granted judgment against, inter alia, Karras in the aforesaid amounts.
[8] On October 24, 2013, Papazian wrote to the Plaintiff’s solicitor on behalf of De Groot and Karras and delivered a Notice of Motion returnable on May 20, 2014, seeking an order setting aside the Default Judgment. This was the first active step in this proceeding taken by Karras or on his behalf since he was noted in default.
[9] The Plaintiff sought to examine Karras in aid of execution while his motion to set aside the Judgment was pending. Papazian refused to produce Karras for the examination, and the Plaintiff was forced to bring a motion returnable on January 9, 2014 before Master Glustein seeking an order compelling that attendance. It is important to note that in resisting that motion, Karras argued that his examination ought to be stayed pending the return of his motion to set aside the judgment. Master Glustein (as he then was) rejected that argument, noting that no cross-motion or supporting evidence was filed in support of any such request.
[10] The examination in aid of execution of Karras proceeded on January 24, 2014. I note that Papazian did not attend with Karras at that examination, even though the Notice of Motion seeking an order setting aside the judgment identified Papazian as Karras’ solicitor of record in this proceeding, and no order removing Papazian as Karras’ solicitor of record was ever obtained.
[11] Numerous undertakings and questions refused and/or under advisement resulted from Karras’ examination. In or around early July 2014, Karras retained Brian Jenkins (“Jenkins”) as his new solicitor of record. Counsel for Karras indicated in his submissions before this Court that Karras had previously approached Jenkins in March 2014 with a view to retaining Jenkins as his new solicitor, but a pre-condition of that retainer was that all outstanding Costs orders owing by Karras at that point first needed to be paid.
[12] On July 18, 2014, the Plaintiff obtained a Consent Order from Master McAfee requiring Karras to provide answers to his undertakings from the examination within 30 days. Jenkins delivered Karras’ consent to this order.
[13] The Notice of Motion previously served by Papazian never proceeded, as Papazian never served or filed a formal Motion Record. That motion seemingly “evaporated”.
[14] On July 23, 2014, Jenkins served a new Notice of Motion on Karras’ behalf, returnable on October 6, 2014, again seeking an order setting aside the Judgment.
[15] The deadline for compliance with the Consent Order of Master McAfee passed without Karras complying with same. The Plaintiff then moved before Master Graham on September 8, 2014, for an order compelling Karras to answer questions refused and/or taken under advisement at this examination. No one appeared on behalf of Karras before Master Graham, who ordered the relief sought. However, on the same date, Jenkins advised the Plaintiff’s solicitor that Karras’ motion returnable October 6, 2014 (being Karras’ second motion to set aside the Judgment) “may not go forward” as Jenkins had been unable to obtain instructions from Karras. Counsel for Karras advised in his submissions to this Court that Karras was unable to provide instructions due to his father’s death. While that is obviously understandable, it does not excuse the failure to serve and file a Motion Record for nearly two months up to that point.
[16] Other than Jenkins’ e-mail, there is no evidence offered by Karras in his supporting affidavit as to why the Motion Record was not served, or why the Motion did not proceed on October 6, 2014.
[17] Karras’ Motion Record was finally served on December 2, 2014, being the last possible date for service pursuant to Rule 37.07(6) of the Rules of Civil Procedure. The Plaintiff delivered its Responding Motion Record on December 8, 2014. Karras then requested a second adjournment of his own Motion. While there is nothing in Karras’ supporting affidavit explaining why this Motion was adjourned a second time, counsel for Karras advised in his submissions that this was due to the Plaintiff’s responding materials being served “at the last minute”. This is an ironic position to take, as Karras’ own materials were served “at the last minute” despite the fact that the Notice of Motion was served some five months earlier.
[18] After being abandoned once, and adjourned twice, Karras’ Motion proceeded before this Court on March 6, 2015, approximately 28 months after Karras was noted in default.
[19] I further note that Karras remained in breach of some or all of the provisions of the Orders of Master McAfee, Master Graham and the Order dated December 12, 2014 of the Honourable Madam Justice Chiappetta. It was not until the day before this Motion was argued before me that Karras finally complied with the majority of the terms of those Orders.
[20] However, the Order of Master Graham required Karras to produce Papazian’s bills, accounts and trust statements as they related to the time he was retained by Karras. Presumably, those documents would, or could, have shed light upon, inter alia, when Papazian was retained by and acted for Karras, and what steps (if any) Papazian took on Karras’ behalf to set aside the noting in default and/or default judgment. Karras only made the request of Papazian to produce those documents the day before this Motion was argued, and not surprisingly no such documents were made available to this Court, despite Karras’ obligation to provide evidence necessary to explain the circumstances which led to his default.
The Law
[21] When bringing a motion to set aside a default judgment, a moving party defendant must satisfy the following three requirements:
(a) the moving party defendant must bring the Motion promptly and without undue delay;
(b) the moving party defendant must explain the circumstances which led to his/her default; and,
(c) the moving party defendant must present a triable defence on the merits.
See: Karas v. Gegios, [2001] O.J. No. 732 (S.C.J.) and Morgan v. Toronto (City) Police Services Board, 2003 CanLII 14993 (ON CA), [2003] O.J. No. 1106 (S.C.J.)
[22] The Court has an overall discretion to be exercised in order to consider what effect, if any, an order may have upon the overall integrity of the administration of justice. While the above principles are not to be viewed as rigid pre-conditions to the exercise of the Court’s discretion, they will nevertheless guide the Court in determining whether the interest of justice favour an order setting aside a default judgment. See: Mountview Farms Ltd. v. McQueen 2014 ONCA 194 and Peterbuilt of Ontario Inc. v. 15656267 Ontario Ltd. (2007), 2007 ONCA 333, 87 O.R. (3d) 479 (C.A.).
[23] Although Karras’ evidence is lacking in terms of particulars and supporting documentation, I am nonetheless satisfied that he has explained the circumstances which led to his default. While I would have expected additional evidence from De Groot and/or Papazian, I accept Karras’ evidence that at the time he was served with the Statement of Claim, he was under the impression that De Groot would be instructing Papazian on Karras’ behalf with respect to delivering a response to the Plaintiff’s claim.
[24] I am also satisfied that Karras has presented a triable defence on the merits. While I would have preferred a draft Statement of Defence responding to the allegations set forth in the claim, the nature of those allegations against Karras are rooted in breach of contract, and in his affidavit Karras claims that he never entered into any contract with the Plaintiff, and was only hired as a subcontractor by De Groot. Indeed, the documentation produced by the Plaintiff in response to Karras’ Motion appears to confirm that Karras’ role was that of Project Manager.
[25] However, I am not satisfied that Karras either moved expeditiously to bring this Motion or satisfactorily explained his undue delay in doing so. The onus to satisfy this branch of the test lies squarely upon Karras. Papazian was advised in mid-January 2013 that Karras had been noted in default. The Judgment was obtained on June 5, 2013, yet Karras took no steps whatsoever until late October 2013 when he served the original Notice of Motion to set aside the Judgment. This nine month delay is unaccounted for in Karras’ affidavit.
[26] As stated above, Karras’ original Motion to set aside the Judgment evaporated despite Karras’ court ordered attendance on January 20, 2014 at his examination in aid of execution. No further steps were taken by Karras until his current counsel was retained in July 2014, notwithstanding Karras apparently meeting with his current counsel in March 2014.
[27] Even when Karras served his second Notice of Motion on July 23, 2014, that Motion was adjourned on two further occasions at the request of Karras and through no fault of the Plaintiff. Again, there is nothing in Karras’ affidavit explaining why the motion, booked with the scheduling office in July 2014, did not proceed until approximately eight months later.
[28] To the extent that Karras has attempted to explain his undue delay over the last two years, those explanations do not satisfy the onus placed upon him by the jurisprudence. He also remained in breach of several Court orders during that period of undue delay. In the circumstances of this case, I am therefore of the view that an Order setting aside the Judgment is not in the interests of the administration of justice, and Karras’ Motion is therefore dismissed.
Costs
[29] Costs typically follow the event and there is no reason to depart from that principle. Counsel for the parties agreed at the conclusion of the Motion that in the event Karras’ Motion was dismissed, the Plaintiff would be entitled to its costs fixed on a partial indemnity basis in the amount of $2,378.42 and payable forthwith.
[30] Karras’ motion is therefore dismissed with costs payable by Karras to the Plaintiff in the amount of $2,378.42 forthwith.
Diamond J.
Released: March 9, 2015
COURT FILE NO.: CV-12-467077
DATE: 20150309
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
FRANKIE TOMATTO’S WOODBINE INC.
Plaintiff
– and –
ROBIN DE GROOT, 2215208 ONTARIO INC., EVAN KARRAS and CALVIN HTUT
Defendants
ENDORSEMENT
Diamond J.
Released: March 9, 2015