ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-11-3200-00
DATE: 2015-11-25

B E T W E E N:

GERARDA FOURNIER

R.E. Folkes, for the Plaintiff

Plaintiff

• and -

ALBANO INTERNATIONAL INC., cob as ALBANO’S GRANITE and GANZ REALTY LIMITED

Erin Craddock, for the Defendants

Defendants

HEARD: July 3, 2015,
at Brampton, Ontario

Price J.

Reasons For Order

NATURE OF MOTION

[1] After Gerarda Fournier (“Ms. Fournier”) tripped and fell over an unmarked access ramp on a sidewalk at a plaza belonging to Ganz Realty Limited (“Ganz”), fracturing her right foot, she sued Ganz and its tenant Albano International Inc., which operated a store, Albano’s Granite, that was adjacent to the sidewalk, for damages for her injuries. Although Ms. Fournier’s lawyer served the claim on Ganz’s property manager, and later notified him that Ms. Fournier was moving for default judgment, and notified him again after Ms. Fournier had obtained default judgment, Ganz ignored the claim until, a year later, Ms. Fournier took steps to garnish Ganz’s bank account.

[2] Ganz now moves to set the judgment aside and deliver a defence. For the reasons that follow, I find that Ganz forfeited its right to defend itself against the action, and that it would be unfair to Ms. Fournier for the court to set aside the default judgment she obtained.

BACKGROUND FACTS

[3] On September 17, 2009, Ms. Fournier tripped and fell on a sidewalk in front of Albano Granite, a store located at a plaza that Ganz owned at 6201 Highway 7, Unit 3, in Vaughan, Ontario (“the Vaughan property”). She suffered injuries, including a fractured foot.

[4] Ms. Fournier retained Folkes Legal Professional Corporation (“Folkes”) to sue the party or parties responsible for her injuries. Folkes sent a letter dated October 23, 2009, to Albano Granite which, it later learned, was a tenant of Ganz, notifying it of Ms. Fournier’s claim. Folkes received no response to the letter. On September 13, 2010, Folkes sent a follow-up to Albano Granite.

[5] When Mr. Folkes did not receive a response to either of its letters, it conducted a property search which disclosed that Ganz was the registered owner of the property. Folkes caused a Statement of Claim to be issued against both Ganz and Albano International Inc. (“Albano”), carrying on business as Albano’s Granite, on August 12, 2011.

[6] On August 15, 2011, Folkes caused the Statement of Claim to be left with Rita Salvatore, a receptionist for an architecture firm, Intra Architects Inc. (“Intra”), at Intra’s office at 2501 Rutherford Road, Suite 25 in Vaughan (“the Rutherford address”). Ganz had retained Intra in 2011 to perform work for Ganz, but never maintained an office or place of business at the Rutherford Road address.

[7] On August 25, 2011, Marc Bernier of the insurance company Aviva Canada, which insured Albano, telephoned Folkes and requested details of the service of the Statement of Claim on Ganz. Mr. Bernier advised Folkes that, in Aviva’s view, Albano was not responsible for Ms. Fournier’s injury, since it only leased the store where it operates Albano’s Granite, and did not design or maintain the sidewalk on which Ms. Fournier had fallen.

[8] Folkes sent a letter to Aviva on September 2, 2011, indicating that the Statement of Claim had been served on Ganz. On September 12, 2011, Folkes sent a letter to Ganz, warning it that it must respond to the Statement of Claim, which had been served on it. The letter was not returned to Mr. Folkes, and I find that it was delivered to Ganz. Folkes caused Ganz to be noted in default on October 13, 2011.

[9] On October 18, 2011, John T. Watson, the property manager for Ganz, telephoned Mr. Folkes and indicated that the Statement of Claim had come to his attention, although it had been served by leaving a copy of it with Intra’s receptionist, Ms. Salvatore, at the Rutherford Road address, which he said was never occupied by Ganz. He said that he was calling to advise that the Statement of Claim had been sent to the wrong business address, and that Ganz’s address was 5705 Steeles Avenue W., Toronto.

[10] Mr. Bernier, on behalf of Aviva, sent a letter dated November 24, 2011, to Mr. Watson, with a copy to Folkes. In it, he set out Aviva’s position that Ganz, and not Albano, was responsible for Ms. Fournier’s injury, and warned Mr. Watson that Ganz should notify its insurer of the claim.

[11] Out of an abundance of caution, Folkes caused the Statement of Claim to be served on Mr. Watson at Ganz’s offices at 7000 Pine Valley Drive, Suite 103, Woodbridge, Ontario, (“the Woodbridge address”) on January 30, 2012. The process server erroneously wrote the address as 7700 Pine Valley Drive, Suite 103, but I find, for the following reasons, that the Claim was, in fact, served on Ganz at its address in Woodbridge:

(a) The address 7700 Pine Valley Drive, Suite 103, in Woodbridge does not exist.

(b) The process server states, in the affidavit of service sworn January 31, 2012, that the statement of claim was left with Mr. Watson.

(c) Mr. Watson had already informed Folkes, on October 18, 2011, that the Statement of Claim had come to his attention, and on November 24, 2011, Mr. Bernier, on behalf of Aviva, sent a letter of that date to Mr. Watson, warning him that Ganz should notify its insurer of the claim.

(d) Neither Mr. Watson, nor anyone else on behalf of Ganz, denies that Mr. Watson received the Statement of Claim on January 30, 2012.

(e) Mr. Watson states that he has no recollection of receiving the Statement of Claim. He states that in January 2012, his mother was gravely ill and that he frequently visited her in the hospital that month, and that she died on February 16, 2012. However, he does not deny that the Statement of Claim was left with him or that he brought it to the attention of Ganz.

[12] I find that the Statement of Claim, which was brought to Mr. Watson’s attention in October 2011, was, in fact, delivered to him on January 30, 2012, and was properly served on his employer, Ganz.

[13] On March 15, 2012, Folkes again caused Ganz to be noted in default.

[14] Based on Aviva’s interpretation of the exculpatory clauses in Albano’s lease, Folkes agreed with Mr. Bernier, in an exchange of e-mails in May 2012, that Ms. Fournier would not pursue Albano unless the claim against Ganz was unsuccessful. The action against Albano was not dismissed, but has been held in abeyance pending the outcome of the action against Ganz.

[15] On February 11, 2013, Mr. Rye, a lawyer then practicing with Folkes, sent a courtesy letter to Mr. Watson, enclosing a copy of Ms. Fournier’s motion for default judgment against Ganz, which was returnable February 21, 2013. I reject Mr. Watson’s evidence that he does not remember receiving the letter or motion record.

[16] Ganz states that the motion record contained a copy of a requisition to the Local Registrar to note Ganz in default but that the requisition was not stamped by the Local Registrar and does not appear in the court’s file. I find that Ganz was, in fact, noted in default. It was on the basis of the default that the court adjourned the claim on February 21, 2013, for an uncontested hearing.

[17] On October 10, 2014, Folkes sent a letter to Ganz, notifying it of the hearing of the motion for default judgment, which was to take place on October 29, 2014, and that Ms. Fournier intended to rely on certain medical records of Ms. Fournier’s treating physicians at that time. The letter was not returned and I find that it was delivered. Mr. Watson states that he does not recall receiving the October letter, which was addressed to him. I find that the letter was, in fact, delivered to him. Ganz states that if Watson received the letter, he likely filed the letter as relating to Albano, as Albano was referred to in the “Re” line of the letter.

[18] The letter notifying Ganz of the hearing scheduled for October 29, 2014, followed the following earlier notifications sent to Ganz:

(a) The notification that Mr. Watson received in October 2011, when the Statement of Claim was served on Ms. Salvatore, the receptionist for Ganz’s architect;

(b) The Statement of Claim that was served delivered to Mr. Watson on January 30, 2012;

(c) The letter that was sent to Mr. Watson on February 11, 2013, notifying him that the motion for a default judgment was to be heard on February 21, 2013.

[19] Based on those earlier events, I find, on a balance of probability, that when Mr. Watson received notice of the return of Ms. Fournier’s motion on October 29, 2014, he was well aware of its significance, and brought the letter to the attention of his employer, Ganz, which chose to ignore it. Ganz did not respond to the letter or attend the hearing on October 29, 2014.

[20] At the hearing on October 29, 2014, Justice Tzimas granted Ms. Fournier’s motion for judgment, ordering Ganz to pay damages to her in the amount of $47,460.46, and pre-judgment interest to that date, in the amount of $11,398, and costs fixed at $11,880.61.

[21] Folkes filed a writ of execution against Ganz on November 25, 2014. The writ was amended on November 27, 2014, as Albano had mistakenly been included as a judgment debtor.

[22] Folkes sent a letter dated February 3, 2015, to Mr. Watson, enclosing a copy of Justice Tzimas’ judgment. The letter stated that if no arrangements were made to pay the judgment, steps would be taken to enforce it. Ganz did not reply to the letter. Mr. Watson says that he does not remember receiving this letter either. I reject his evidence in this regard for the same reasons stated above in connection with the service of the Claim on him and the delivery of the further correspondence that was addressed to him on February 3, 2015.

[23] Ganz acknowledges that if the letter dated February 3, 2015, came to Mr. Watson’s attention, he would have recognized it as being of a legal nature and requiring a response, particularly as it was a judgment. I find that Mr. Watson received the letter and that Ganz chose to ignore it, on the assumption that it would later be able to set the judgment aside.

[24] Folkes obtained a Corporate Profile Report dated April 16, 2015, which disclosed the names and addresses of Ganz’s directors, including Howard Ganz, Owen Rogers, and Sam Ganz. On April 17, 2015, Folkes sent a letter to Sam Ganz at the address indicated for him on the Corporate Profile Report, with a Notice of Examination requiring him to attend to be examined on behalf of Ganz on June 2, 2015, in aid of execution of Justice Tzimas’ judgment.

[25] On April 24, 2015, Mr. Watson, on behalf of Ganz, telephoned Folkes and advised it that Ganz had received their letter dated April 17th but that Sam Ganz had died. I find that Folkes was misled by the fact that Ganz’s corporate filing was inaccurate and out of date.

[26] On May 7, 2015, Folkes sent a letter to Howard Ganz at the address listed for him on the Corporate Profile Report, enclosing a Notice of Examination in Aid of Execution to take place on June 2, 2015. The letter was not returned, and Ganz acknowledges that Mr. Watson received it and brought it to the attention of Owen Rogers, Ganz’s Vice President.

[27] Although Folkes called Mr. Watson on June 1, 2015, to remind him of the examination the following day, no one attended on behalf of Ganz at the examination on June 2, 2015.

[28] I do not accept Mr. Watson’s evidence that when he received notice of the garnishment proceeding on June 16, 2015, he did not recall Folkes calling him on June 1st. I find, on a balance of probabilities, that after the Statement of Claim was served on Mr. Watson on January 30, 2012, and he received the notice of motion for default judgment in February 11, 2013, and the notice of the return of that motion in October 2014, both Mr. Watson and his employer, Ganz, were aware that the judgment would likely ensue. I further find that when Mr. Watson then received the judgment on February 3, 2015, and the notice of examination for Sam Ganz in April 2015, and notified Folkes that Sam Ganz had died, he and Ganz expected that another notice of examination would follow requiring one of the other principals to attend for examination. I find it likely that when Mr. Watson received the further notice of examination for Howard Ganz on May 7, 2015, he notified his employer.

[29] Ganz asserts that its Vice-President, Mr. Rogers, was still “investigating” the judgment when Mr. Watson received notification of the garnishment on June 16, 2015. I find, on a balance of probabilities, that Mr. Watson advised Ganz of the Notice of Examination that he had received on April 17, 2015, addressed to Sam Ganz, and of the subsequent Notice of Examination that he received on May 7, 2015, addressed to Howard Ganz, and the follow-up telephone call on June 1, 2015, and that Ganz chose to continue disregarding the Claim until the garnishment proceeding made it necessary for it to do so.

[30] Folkes sent a letter dated June 3, 2015, to Ganz, stating that Folkes would continue its efforts to collect the outstanding debt, which could involve a finding of contempt against the principals of Ganz, and potential incarceration for failing to attend the examination in aid of execution. Folkes caused the court office in Brampton to issue a Notice of Garnishment on June 12, 2015, and on June 16, 2015, Ganz’s accounting department received an e-mail from the Toronto-Dominion Bank (“T-D”) advising Ganz that it had received a notice of garnishment that required T-D to pay $72,147.53 to the Sheriff of the Regional Municipality of York.

[31] Upon receiving the e-mail on June 16, 2015, from T-D Bank, Ganz forwarded it to its counsel. On the same day, Erin Cradock of Cassels Brock LLP telephoned Folkes to advise it that Ganz would be moving to set aside the default judgment and noting in default, and to vacate the notice of garnishment. Folkes and Ganz’s counsel agreed that the motion would be heard July 3, 2015, 17 days after Ganz had received notice of the garnishment against it.

[32] In response to Cassels Brock’s requests for documents, Folkes sent, by e-mail and regular mail, copies of the requested documents. Ganz admits receiving Ms. Fournier’s Statement of Claim on August 15, 2011.

ISSUES

[33] Ganz’s motion requires the court to determine the following issues:

(a) Was the granting of default judgment on October 29, 2014, two and a half years after the court had notified the parties on April 2, 2012, that the action would be administratively dismissed if it was not set down for trial within 45 days a procedural irregularity that invalidates the judgment?

(b) Has Ganz satisfied the onus upon it to establish the following facts:

i) The motion was brought promptly after it learned of the default judgment;

ii) Ganz has a plausible excuse or explanation for its failure to respond to the Statement of Claim;

iii) Ganz has an arguable defence on the merits.

iv) The potential prejudice to Ganz if the judgment is not set aside outweighs that prejudice to Ms. Fournier if the judgment is set aside.

v) Setting aside the default judgment would better preserve the integrity of the administration of justice than not setting it aside.

POSITIONS OF THE PARTIES

[34] Ganz argues that the default judgment should be set aside because it has an arguable defence on the merits, and because setting it aside would not result in any prejudice to Ms. Fournier, and because not setting it aside would result in prejudice to Ganz. Ganz further argues that it was a procedural irregularity for the court to grant the default judgment on October 29, 2014, after the Local Registrar had notified the parties on April 2, 2012, that the action would be dismissed if it was not set down for trial within 45 days, and when the action was not set down within that time.

[35] Ms. Fournier argues that Ganz forfeited its right to defend itself in the action by its repeated failure to respond to her Claim, and by its failure to respond to the later notices that she was applying for default judgment and, later, that the judgment had been obtained and would be enforced. She submits that there was no procedural irregularity because the Registrar, in fact, made no order dismissing the action, and that it is only if the Registrar had made such an order and served it on the parties that she would have been precluded from obtaining default judgment.

[36] Ms. Fournier argues that Ganz has not tendered a draft defence and has failed to demonstrate that it has an arguable defence on the merits. She further argues that setting aside the judgment would prejudice her because the passage of time and fading memory of the facts would cloud the evidence and give an unfair advantage to Ganz by rendering her unable, by reason of her advanced age and medical condition, to rebut the “boilerplate defences” that Ganz intends to rely on.

ANALYSIS AND LAW

i. Was there a procedural irregularity that invalidates the default judgment?

[37] Ganz relies on the fact that the Local Registrar issued a “Notice that Action will be Dismissed” on April 2, 2012, giving Ms. Fournier 45 days to comply, with the result that the action was “deemed to be” administratively dismissed on May 17, 2012.

[38] Rule 48.15(1) of the Rules of Civil Procedure provides that the Registrar must make an order dismissing an action as abandoned if the conditions in clauses 1-5 of rule 48.15(1) are satisfied. Pursuant to sub-rule 48.15(2), an order under sub-rule (1) must be served on the parties. The court did not make such an order, with the result that Ms. Fournier was not precluded from moving for default judgment on her Claim.

ii. Has Ganz discharged the onus upon a defendant to have a default judgment against it set aside?

[39] Rules 19.03(1) and 19.08(1) of the Rules of Civil Procedure govern the court’s exercise of discretion as to whether to set aside a default judgment “on such terms as are just.” Section 19.08(1) provides:

19.08(1) A judgment against a defendant who has been noted in default that is signed by the registrar or granted by the court on motion under rules 19.04 may be set aside or varied by the court on such terms as are just.

[40] A judgment, including a default judgment, once granted, is entitled to all of the deference and respect of the court until it is set aside.[^1]

[41] The court follows a five-step analysis in determining whether a default judgment should be set aside. It considers the following factors:

(a) Whether the defendant brought its motion promptly after learning of the default judgment;

(b) Whether the defendant has a plausible explanation for its failure to respond to the Claim;

(c) Whether the defendant has an arguable defence of the merits;

(d) The prejudice that would result to the plaintiff from setting aside the default judgment and the prejudice that would result to the defendant from not setting it aside;

(e) The effect that the order would have on the administration of justice.[^2]

[42] These factors are not rigid rules. In each case, the court must determine whether, in the particular circumstances of the case, it is just to relieve a defendant of the consequences of default. If there is any reason the judgment ought not to stand, any and all reasons must be diligently and properly placed before the court. There is no separate category of case where orders are expected to be issued upon the bare recitation of an allegation of irregular service, no matter how scant or implausible the evidence for it.[^3]

i. Did Ganz move to set aside the default judgment promptly after learning of the default judgment?

[43] As noted above, I find that Ms. Fournier’s Statement of Claim was brought to the attention of Ganz’s property manager, Mr. Watson, in September 2011, and was served on him on January 30, 2012. Ms. Fournier’s lawyers then sent Mr. Watson a letter dated February 11, 2013, enclosing Ms. Fournier’s motion for default judgment, returnable February 21, 2013, and Ganz ignored that motion.

[44] On October 10, 2014, Ms. Fournier’s lawyers sent a further letter to Mr. Watson, notifying him that the motion would be heard on October 29, 2014, and Ganz again ignored the motion. Ms. Fournier’s lawyers sent a further letter to Mr. Watson on February 3, 2015, enclosing the judgment, and informed him that they would be moving to enforce the judgment if it was not paid. Again, Ganz took no steps.

[45] Ganz did not move to set aside the default judgment until June 16, 2015. That was:

(a) Three and two thirds years after October 11, 2011, when the Claim was first brought to its attention;

(b) Three and a half years after January 30, 2012, when the Claim was served on it;

(c) Two and a half years after February 2013, when Ganz was notified that Ms. Fournier was moving for judgment;

(d) Four months after it received the judgment.

[46] I find that Ganz did not move promptly to set aside the default judgment after learning of it.

ii. Does Ganz have a plausible explanation as to why it failed to respond to the Statement of Claim?

[47] The onus is on Ganz to prove that it had no notice of the proceedings.[^4]

[48] An originating process, including a Statement of Claim, must be served personally, as provided for by rule 16.02, or by an alternative to personal service, as provided for by rule 16.03. Where a document is to be served personally, the service must be made on any other corporation by leaving a copy of the document with an officer, director, or agent of the corporation, or with a person at any place of business of the corporation who appears to be in control or management of the place of business.[^5] I find that Ms. Fournier’s Statement of Claim was served on Ganz on January 30, 2012, when it was delivered to Mr. Watson, who appeared to be managing Ganz’s offices at 7000 Pine Valley Drive, Suite 103, Woodbridge, Ontario.

[49] Ganz has offered no plausible explanation for its failure to respond to the Claim. The explanations it has offered are not plausible for the following reasons:

(a) Ganz does not dispute that the Claim came to the attention of its property manager, John T. Watson, on October 18, 2011, when he telephoned Folkes and indicated that it had been served at the wrong address when it was left with Ms. Salvatore at the Rutherford Road address.

(b) It is not plausible that Mr. Watson would not have notified his employer when the Claim came to his attention on October 11, 2011, or on January 30, 2012, when the Claim was served on him.

(c) It is not plausible that Mr. Watson, who admittedly received notice of the Claim on October 11, 2011, failed to make his employer aware of it on January 30, 2012, when he received the Claim, on February 3, 2013, when he received notification that Ms. Fournier was moving for judgment on the Claim, in October 2014, when the motion was returned, or on February 2015, when the judgment was sent to him.

(d) Ganz’s only explanation for its failure to respond to the Claim is that:

(i) The Claim was served on the wrong person, at the wrong address, in October 2011;

(ii) Mr. Watson was pre-occupied with his mother’s illness in January 2012, when the Claim was served on him;

(iii) Mr. Watson simply doesn’t remember receiving the letters on February 2013, notifying him of Ms. Fournier’s motion for judgment, or on October 2014, notifying him of the return of that motion, and

(iv) Ganz was still investigating the judgment that was sent to Mr. Watson in February 2015, when, three months later, it was notified of the garnishment proceeding.

[50] The court applies a three-part test when exercising its discretion as to whether to set aside a default judgment:

(a) Whether the motion was brought without delay after the defendant learned of the default judgment;

(b) Whether the circumstances giving rise to the default were adequately explained; and

(c) Whether the defendant has an arguable defence on the merits.[^6]

[51] I find that the motion was not brought without delay after February 2015, when the judgment was sent to Mr. Watson. There is no reason why Ganz required three months to investigate the judgment before it was served with the notice of garnishment. I further find, for the reasons stated above, that the circumstances giving rise to the default were not adequately explained.

[52] There is no evidence on the basis of which the court can find that Ganz has an arguable defence on the merits. Ganz has not tendered a draft Statement of Defence. Mr. Watson offers only the following in response to the judgment:

Ganz denies that it was negligent in the construction and/or maintenance of the sidewalks at the Property, including that portion of the sidewalks outside the entrance to the unit leased by Albano. The wheelchair ramp over which the Plaintiff allegedly tripped was constructed in accordance with the Ontario Building Code, and was clearly visible to the Plaintiff and all other patrons of the Property.

[53] The plaintiff’s claim is based not on defective construction, but on lack of adequate warning. Ganz does not offer any evidence regarding that allegation, other than to assert that the ramp was clearly visible to the plaintiff, as her fall occurred in mid-day in the middle of September. Ganz’ further defence, based on the fact that the plaintiff wore a leg cast from a previous injury longer than was recommended by her treating physician, or that she was taking Tylenol 3, which can cause drowsiness, even if proved, do not amount to a meritorious defence. Ms. Fournier’s prior injury, which Ganz relies on in support of its assertion that the amount of the judgment should be reduced, was taken into account by the judge at Ms. Fournier’s motion for judgment.

[54] Even if the facts relied on by Ganz amounted to a meritorious defence, the delay that Ganz caused in the proceeding would substantially prejudice Ms. Fournier’s ability to respond to them, as her response would depend largely on her memory of events long past, which almost certainly has faded.

[55] A motion judge must ultimately determine whether the interests of justice favour granting the order. This over-arching analysis requires a motion judge to “consider the potential prejudice to the moving party if the motion were dismissed, the potential prejudice to the respondent if the motion were allowed, and the effect of any order on the overall integrity of the administration of justice.”[^7]

[56] In the present case, the potential prejudice to Ganz if its motion is dismissed is greater than the potential prejudice to Ms. Fournier if it is allowed, because if the motion is dismissed, Ganz will certainly remain liable for the judgment, whereas if the motion is allowed, Ms. Fournier may or may not be prevented by the delay from successfully proving her claim. However, that it not the end of the matter.

[57] Justice Corbett, in Canadian Imperial Bank of Commerce v. Petten, in 2010, stated:

The analysis of relative “prejudice”, then, is seen in the context of the overall goal of orderly and efficient processing of cases, and not just the immediate impact on the parties to the dispute. An atomistic analysis of the “prejudice” to the moving party and to the responding party will almost always favour the moving party: if the motion is dismissed, the moving party will have lost the case and be liable for the claim. If the motion is allowed, the responding party will be delayed but may yet obtain and enforce its judgment, if it succeeds on the merits. Where it can be shown that a responding party’s position may deteriorate if the motion is allowed, this may be addressed by terms, for example: expediting the trial, securing a potential judgment, or preserving evidence. Thus, if the over-arching principle under Rule 19.08 is “relative prejudice”, the “principles established by the authorities”, the three-part test, would be rendered largely nugatory….

Civil litigation is slow. The Rules of Civil Procedure are the framework within which a plaintiff may bring its action and move that action forward to eventual judgment. This process is an essential feature of an ordered society under the Rule of Law. Those fundamental principles are compromised if the process for obtaining judgment is too slow and too costly. And those fundamental principles are compromised if defendants may defy the process for months or years, thereby delaying a just resolution, on the merits.

Thus it is that a default judgment resulting from a defendant “gaming the system” or taking a “calculated risk” in not defending will not be set aside:

While debtors have rights, so too do creditors. It is not open to an alleged debtor to turn his back deliberately on a claim initiated against him and then, when it suits his purposes (and his pocket book) seek to do that which he should have done a good year before. Such conduct, in my view, is simply an attempt by a debtor to game the system and no interest of justice is served by rewarding such conduct. [Harnratty v. Woods, 2009 ONSC 43649, per D.M. Brown J., at para. 18]

Certainly where the court can conclude that there is an oblique motive by a defendant in failing to defend a claim, then a motion to set aside a default is unlikely to succeed. But there does not have to be an oblique motive. Indeed, the court may pile insult on top of misery in making such a finding where, as is often the case, debtors fail to defend because of stress and anxiety. There is an objective standard of reasonableness to be applied to the totality of circumstances giving rise to the default, and any delay in moving to set the default aside. Where a defendant has not acted reasonably, the court should not set aside the default, even if the court cannot determine why the defendant has proceeded as he did.[^8] [Emphasis added]

CONCLUSION AND ORDER

[58] I agree with Justice Corbett’s analysis, and find it to be apt in the present case. I find that Ganz deliberately ignored the proceeding for several years, until, by reason of the garnishment proceeding, it suited its pocket book to address it. I find that Ganz was, indeed, “gaming the system”, taking a calculated risk that the court would set aside the judgment when he challenged it. It would be contrary to the interests of justice to reward such conduct. Ganz’s motion to set aside the default judgment of Justice Tzimas dated October 29, 2014, is therefore dismissed.

[59] If the parties are unable to agree on costs, they may submit written argument, not to exceed four pages, and a Costs Outline, by September 30, 2015.

Price J.

Released: November 25, 2015

[^1]: Marina Bay Sands Pte. Ltd. v. Jian Tu aka Tu Jian, 2015 ONSC 5011, para. 1
[^2]: HSBC Securities (Canada) Inc. v. Firestar Capital Management Corporation, 2008 ONCA 894, at para. 17; see also Canadian Imperial Bank of Commerce v. Petten, 2010 ONSC 6726; and Boufford v. Globe Span Capital Inc. et al., 2010 ONSC 1211
[^3]: Intact Insurance Company v. Kisel, 2015 ONCA 205
[^4]: Marina Bay Sands Pte. Ltd. v. Jian Tu aka Tu Jian, 2015 ONSC 5011
[^5]: Rules of Civil Procedure, rule 16.02(1)(c)
[^6]: HSBC Securities (Canada) Inc. v. Firestar Capital Management Corporation, 2008 ONCA 894
[^7]: HSBC Securities, supra, at para. 30
[^8]: Canadian Imperial Bank of Commerce v. Petten, 2010 ONSC 6726