Gomes v. Poulos, 2015 ONSC 5355

COURT FILE NO.: CV-09-382417

DATE: 20150826

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Arnold Gomes, Plaintiff

AND:

Efthimios Poulos also known as Timo Poulos, Mehdi Akhavi and Toronto Transit Commission, Defendants

BEFORE: Penny J.

COUNSEL: Hedy Epstein for the Plaintiff

Donald Crabbe for the Defendant Mehdi Akhavi

HEARD: July 31, 2015

ENDORSEMENT

Overview

[1] This is a motion under rule 52.01(3) to set aside the September 22, 2014 judgment of Gans J. following an undefended trial (the Judgment). The essential grounds alleged for the relief sought are that the defendant, Mehdi Akhavi:

(a) filed a defence and was never noted in default;

(b) had a viable defence to the claim;

(c) failed to attend at the trial through inadvertence or confusion; and that the plaintiff

(d) would not be unduly prejudiced by the relief sought.

[2] There is long-standing authority establishing that a party seeking to set aside a judgment obtained in his or her absence must:

(1) explain his or her failure to attend the trial in a satisfactory manner;

(2) demonstrate that the underlying claim or defence has merit; and

(3) explain any delay in seeking relief.

If these criteria are met, the party who obtained judgment may still prevail if he or she is able to show prejudice which could not be compensated for through appropriate terms of any order setting aside the judgment, Nelligan v. Lindsay et al., [1945] O.W.N. 295 (Ont. H.C.) and Waite v. Gershuny, 2005 CanLII 4101 (Ont. Div. Ct.).

[3] In this case, the principal issue is whether the defendant has adequately explained his failure to attend. I accept, for the purposes of the motion, that the defendant may have had a viable defence and that he moved promptly once he became aware of the judgment through garnishment proceedings taken against him.

[4] Specifically, there are three issues:

(1) was the defendant served with notice of the trial?

(2) was the defendant’s failure to attend at trial deliberate? and

(3) is there a basis to exercise the residual discretion of the court to set aside the judgment?

Background

[5] The claim was issued in July 2009. It is a claim for malicious prosecution. It is alleged that the co-defendant, Poulos, and the defendant, Akhavi, caused false criminal charges to be made against the plaintiff which were subsequently dismissed. Poulos, who was noted in default and against whom default judgment was obtained, declared bankruptcy. As a result, all proceedings against him were stayed.

[6] The defendant was employed by the TTC. He was initially represented by a staff TTC lawyer. A defence was filed on the defendant’s behalf. His defence was that it was Poulos, not he, who laid the criminal complaint.

[7] The defendant was examined for discovery in 2011. In July 2012, the TTC counsel, on notice to the defendant, obtained an order from Master Abrams removing the TTC counsel as solicitor of record for the defendant.

[8] The July 20, 2012 Order of Master Abrams removing the TTC counsel as solicitor of record required the defendant, within 30 days after being served with this Order, to “appoint a new lawyer of record by serving a notice under sub rule 15.03(2) or serving a notice of intention to act in person under sub rule 15.03(3).”

[9] The Order went on to provide that if the defendant failed to comply with the Order, “the court may strike out his defence; and, in an appeal, a judge of the appellate court may, on motion, dismiss the appeal, or the court hearing the appeal made deny [the defendant] the right to be heard.”

[10] The Order is specifically addressed to the defendant at his home address which, he has admitted, was at all times where he lived with his brother.

[11] There is no dispute that the defendant was served with the TTC motion and with Master Abram’ Order.

[12] It is also admitted that the defendant failed to appoint new counsel and failed to serve and file a notice of intention to act in person.

[13] Notwithstanding the defendant’s failure to comply with Master Abrams’ Order, Ms. Epstein, who was counsel for the plaintiff, served all subsequent documents on the defendant by mail and, in some cases, by personal service, at his home address.

[14] This correspondence and notices of the progress of the action served on the defendant included notices of mediation (which the defendant did not attend); motion to set aside an administrative default (which the defendant did not oppose); the plaintiff’s trial record, notice of trial scheduling court (which the defendant did not attend), notice of pretrial (which the defendant did not attend) and several notices of the pending trial and the trial date. The correspondence and the enclosed documentation were all sent in envelopes clearly bearing the name of Ms. Epstein’s law firm, Hedy Epstein Professional Corporation, which the defendant knew to be the plaintiff’s counsel.

[15] Most of these mailings were returned unopened. Someone wrote “MOVED” and “RTS” (return to sender) on the envelopes.

[16] The defendant’s first affidavit in support of his motion to set aside the Judgment of Gans J. attributes his failure to attend at trial to the manner in which his representation by the TTC’s lawyer unfolded. When the TTC lawyer withdrew, he says, he felt betrayed, angry and disgusted. He deposed that:

With an absence of awareness as to any progress of the case against me I basically let the matter sit. I did not take pro-active steps to attempt to find out about the case. I relied on the case coming to my attention if it was ever pursued. [emphasis added]

[17] In his first affidavit, the defendant made no mention whatsoever of the fact that he returned, without opening them, all of the envelopes addressed to him from Ms. Epstein’s office. The defendant simply claimed that, although he lived at 27 Wolf Trail, he was never personally served with any notice of trial date.

[18] It was only in cross examination that the defendant admitted that he had in fact received all of Ms. Epstein’s correspondence and notices, that he chose not to open the envelops and that he was the one who wrote “MOVED” and “RTS” on the unopened envelops. He also admitted that the suggestion that he no longer lived at his home address because he had moved was not true.

[19] In addition to mailing all pertinent material to the defendant at his home address, Ms. Epstein took the additional cautionary step of serving the defendant personally at his home with the notices of pretrial and trial dates which had been given at trial scheduling court by Justice Himel.

[20] Proof of personal service was provided through the affidavit of Hamza Balata, who deposed that he served the defendant with notification of the pretrial date and the trial date “by leaving a copy of the letter with Mehdi Akhavi personally at 27 Wolf Trail Crescent, Richmond Hill, Ontario. I was able to identify this person by means of verbal admission.”

[21] Because the defendant did not attend at the pretrial conference, Chiappetta J. directed that the defendant be served again with the notice of trial date. Mr. Balata’s affidavit of service of September 22, 2014 deposes that he attempted to serve the defendant at his home on September 18, 20 and 21, 2014 but was unable to do so as there was no answer.

[22] The defendant’s evidence is that he left for the Philippines on September 14, 2014 to be married and returned on October 5, 2014. He was, therefore, out of the country on the date of the trial.

[23] Justice Gans’s Judgment found that the defendant had been “personally served” with the notice of trial date.

[24] The plaintiff’s responding affidavit to the defendant’s motion to set aside the Judgment documented the service of all the litigation papers in this case by mail at 27 Wolf Trail and the fact that they were returned un-opened.

[25] The plaintiff’s responding affidavit also attached Mr. Balata’s affidavit of personal service of the notice of trial date on the defendant at his home.

[26] In reply, the defendant tendered, for the first time, the affidavit of his brother, Bahram Akhavi. Bahram’s affidavit says that he also lived at 27 Wolf Trail. Bahram states that at 9:00 a.m. on July 5, 2014 he and the defendant were at home, sleeping in.

[27] The doorbell rang. He found Mr. Balata at the door, wanting to leave an envelope for the defendant. Bahram says he told Mr. Balata that he was not the defendant and refused to accept the envelope. He says he told Mr. Balata not to leave the envelope on the doorstep as he would just throw it into the garbage. He says that, following a somewhat heated exchange, Mr. Balata left with the envelope and that it was never given to the defendant.

[28] In a further supplementary motion record, the plaintiff tendered the reply affidavit of Mr. Balata. Among other things, Mr.Balata deposed that he keeps notes anytime there is a dispute regarding service. In this case, he made no notes of any incident or altercation on July 5, 2014 associated with service. His evidence is that if he had been advised that the person he was attempting to serve was not the defendant, but his brother, he would have noted that person’s name and sworn that he served the document on an adult person who appeared to reside at 27 Wolf Trail. He notes that in his subsequent affidavit of service of September 20, 2014, he accurately states that he attempted to serve the defendant at 27 Wolf Trail again, in September, but was unable to do so.

Analysis

Service

[29] The evidence establishes beyond a shadow of a doubt that the defendant was served with notice of the trial date. The defendant admits that he held the envelopes in his hand which contained the relevant notices. He knew they were from the plaintiff’s lawyer. He knew, or ought to have known, that these envelopes contained important documents relevant to the claim being made against him. He also knew, from the Order of Master Abrams, that serious consequences could result from his failure to attend to the procedures of court.

[30] The defendant made a conscious decision not to open the envelopes and, thus, to remain ignorant of their contents. He deceitfully wrote that he had moved, when he knew this was not true, in an effort to frustrate the legal process.

[31] Further, I find the defendant was personally served with the notices by Mr. Balata on July 5, 2014.

[32] First of all, I am unable to rely on, and do not accept, the defendant’s evidence that he was not personally served. The defendant was not forthright in his initial affidavit. He swore that he ‘relied on the case coming to my attention if it was ever pursued’ and that he was ‘never personally served’ with any notices of trial date. These statements were consciously misleading half-truths at best. The truth only came out on cross examination.

[33] I also find the evidence of Bahram implausible and unreliable. Bahram’s story was not advanced until late in the day, although the defendant knew from the outset that personal service was an issue, since he addressed it (albeit in a misleading fashion) in his first affidavit. The defendant went so far as to depose that he had been advised by his brother that Bahram had never been served with anything either. There was no mention of the alleged “heated exchange” with Mr. Balata. The defendant offered no explanation why he did not tender his brother’s affidavit in the first place.

[34] In addition, Bahram’s story was full of inconsistencies which were revealed on cross-examination. Bahram himself admitted in cross examination that he had been asked by the defendant, in March 2014, if anyone had come to the door to deliver mail for the defendant and that he told the defendant, “No.”

[35] He admitted his affidavit was incorrect on certain points. He was equivocal about whether he identified himself to the process server. He admitted he “didn’t write” his affidavit. Finally, he claimed, implausibly and for the first time on cross examination, that he was trying to “harm” his brother by refusing to accept the package.

[36] Mr. Balata had no motive to lie or misrepresent what happened. His livelihood depends on his reliability as a process server. He had no vested interest in whether the package was or was not served. In the second affidavit of service dealing with his attempts at service on September 18, 20 and 21, 2014, for example, he candidly admitted he was unable to effect service. I accept the evidence that his practice is to make notes of incidents involving service and he made no notes reflecting any issues associated with his service on July 5, 2015. I accept Mr. Balata’s evidence and reject Bahram’s evidence.

[37] It may be that Bahram identified himself as the defendant or that the defendant was personally served. Either way, I find that on July 5, 2014, a copy of the notice of trial was left with the defendant or his brother with whom he lives at 27 Wolf Trail. It may be that the defendant, once again, chose not to open the envelope. Or it may be that he did open the envelope with notice of the trial date that was personally served on him. Again however, either way, I find he was served and that he knew, or ought to have known, that the envelope contained important information concerning the claim against him, which he would ignore at his peril.

Was the Failure to Attend at Trial Deliberate?

[38] Judicial authority has repeatedly focused on the question of whether the party’s failure to attend the trial was deliberate or inadvertent. Where the failure to attend is deliberate, the discretion available to the court under rule 52.01 is generally not exercised in the moving party’s favour.

[39] In Allen v. 398827 Inc. (1985), 33 A.C.W.S. (2d) 46, the defendant failed to appear at trial and judgment was obtained against it. The motion to set aside the judgment was dismissed on a number of grounds, including the fact that there was no doubt that the defendant was aware of the trial date, was aware that the case was coming up and deliberately chose not to appear.

[40] Similarly in Stabile v. Milani Estate (2002), 117 A.C.W.S. (3d) 313, Molloy J. held that the authority under rule 52.01 to order a new trial should not be exercised where the defendant deliberately did not defend the trial. She wrote:

Rule 52.01(3) gives jurisdiction to a judge of this court to set aside judgment granted against a party who failed to attend at trial. However, that rule is normally invoked in a situation where the party seeking to set aside the judgment failed to attend due to inadvertence. In my view it is not properly applied in a case where the defendant deliberately chose not to defend the trial, knowing full well that the trial would proceed in her absence and that judgment would result.

[41] The defendant claims his failure to attend at trial was not deliberate. He was out of the country at his wedding in the Philippines. He concedes, however, that he ignored the notices which were served on him. He seeks to justify this on the basis of three things:

(1) his confusion and disappointment at having been abandoned by his TTC lawyer;

(2) his self-diagnosis of post-traumatic stress; and

(3) his family doctor’s note, which he only obtained after his initial affidavit in this motion and was only produced in his reply affidavit of May 1, 2015.

[42] The first two of these alleged causes are entirely subjective and could not possibly justify or explain the defendant’s conduct in ignoring what he knew, or ought to have known, to be important legal documents. The defendant’s assertion that his conduct was not deliberate can only turn on the quality of the medical evidence he has offered.

[43] The defendant attached to his affidavit a note dated April 28, 2015 from his family physician. The note is one paragraph. The doctor states: “He discussed with me the incident that happened to him at work in 2007 that led to the legal process that ended a few months ago.” Her conclusion is as follows:

Unfortunately, it seems that he got confused by the legal system and “shot down” psychologically in dealing with the case at all. Knowing and treating Mehdi over time, I can advise that the “head in the sand” approach was his involuntary way of coping with the stressful situation and he did not intentionally had[sic] a strategy of avoidance in dealing with this matter.

[44] Experts must be independent. They must not be advocates for the party retaining them. It is not helpful to the court to have an expert simply parrot the position of the retaining client.

[45] It is important that the expert opinion be the result of the expert’s own independent analysis and conclusions. The expert’s opinion must be supported by an underlying methodology and the analysis used to reach the conclusions and opinions advanced.

[46] Further, the court must fulfill the role of gatekeeper on the admission of opinion evidence. The court must be careful to confine opinions within the scope of the witness’s expertise.

[47] In this case, the record is utterly devoid of any evidence supporting this doctor’s expertise to express an opinion about the defendant’s mental or psychological state, or whether his conduct was voluntary or involuntary, deliberate or inadvertent. Even more problematic is that the doctor’s note contains no evidence of what methodology or inquiries she used to reach her conclusion. Finally, one is left with the overwhelming impression that this doctor’s note reflects no more than what she was told by her patient. It is, in that sense therefore, doing nothing more than parroting the retaining client’s position.

[48] Although I was prepared to receive the doctor’s note for what it is at face value, I also observe that attaching a doctor’s note to the litigant’s affidavit is not an appropriate way of putting medical opinion evidence before the court. The April 28, 2015 note is entirely hearsay and, for this reason alone, should be given little or no weight, Sanzone v. Schecter, 2015 ONSC 4829 and Suwary (Litigation Guardian of) v. Woman’s College Hospital, [2008] O.J. No. 883.

[49] The defendant also argues that his former counsel never filed the Order removing the TTC lawyer as his solicitor of record. As a result, he says, the court notified the TTC lawyer, not him, that the trial date was on September 22, 2014. I do not find this argument persuasive for at least two reasons. First, the defendant ignored all of the correspondence from Ms. Epstein. There is no reason to think notices from the court (even if anything would have been sent to him) would have been treated any differently.

[50] Second, the Order removing the TTC lawyer as the defendant’s solicitor of record required the defendant, not the TTC lawyer, to take further action. The Order specifically required the defendant to retain a new lawyer or file a notice of intention to act in person within 30 days. The Order also specifically identifies serious consequences, including default, which could result from his failure to comply. The defendant received this Order. He failed to comply with it. The defendant was in breach of Master Abrams’ Order. If the defendant did not receive notice of the trial directly from the court, he has only himself to blame.

Discretion

[51] In Toney v. Singh, 2011 ONSC 746, Lederer J. interpreted Rule 52.01(3) as giving the court discretion to compensate for the prejudice to the opposing party caused by the failure to attend by the imposition of terms. Thus, the final issue to be addressed is whether the court should exercise its discretion to set aside the Judgment by the imposition of terms.

[52] This is not a case for the exercise of the court’s discretion. The service of documents is one of the key procedures under our rules for the resolution of disputes on a fair, timely and cost-effective basis. I say this because of the fundamental importance of notice to the concept of natural justice.

[53] The corollary to the right to notice, however, is the responsibility to act on that notice and appear, responsibly, to exercise the right to be heard. Here, the failure to appear was deliberate. The defendant knew, or deliberately prevented himself from knowing, that the trial of the action against him would proceed on September 22, 2014. If he had a problem with that date, it was incumbent on the defendant to take steps to have the date changed.

[54] The defendant ignored all of the notices. Whether he read them or not is not the issue. He knew these were important legal documents which he would ignore at his peril. In litigation, as in life, choices have consequences. Our system would collapse under its own weight if a litigant were permitted deliberately to ignore all notices of proceedings, allow the court and other parties to proceed in his absence and then come back, when the process had run its course, to set aside the result claiming he was unaware of the trial because of his deliberate refusal to read the material served.

[55] The defendant argues that the only prejudice associated with setting aside the judgment is time and some limited costs thrown away to the plaintiff. I cannot agree.

[56] The plaintiff has waited since 2009 for the resolution of his claim, which involves events which took place in 2007. The plaintiff too suffered as a result of allegations he says were made against him by the defendant. As a result of the allegedly false allegations, for example, he lost his license to act as a security guard.

[57] The defendant has not paid the costs ordered against him by Gans J. nor is there any evidence of his willingness or capacity to do so. Further, valuable court resources were devoted to the conduct of the trial as scheduled. Those resources were, on the defendant’s theory, needlessly wasted. Now, if the defendant gets his way, more court resources would have to be devoted to the resolution of this case.

[58] The defendant’s conduct amounts to a form of abuse of process. I am unable to conclude that it would be fair, reasonable or just to exercise the discretion of the court, in light of the defendant’s deliberate failure to attend, to set aside the Judgment even if costs thrown away were ordered as a term of that order. For these reasons, the motion to set aside the Judgment of Gans J. is dismissed.

Costs

[59] Costs should follow the event. I fix costs payable by the defendant in the partial indemnity amount of $15,000 inclusive of all fees, disbursements and applicable taxes.

Penny J.

Date: August 26, 2015