CITATION: Caisse Populaire Rideau-Vision v. Bat-Amy and Zribi, 2016 ONSC 2155
COURT FILE NO.: 16-67315
DATE: 2016/03/30
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: Caisse Populaire Rideau-Vision D’Ottawa Inc.
Plaintiff
AND
Rachelle Bat-Amy and Robert Zribi
Defendants
BEFORE: Madam Justice S. Corthorn
COUNSEL: Alexander Gibson, for the plaintiff
No one appearing for the defendants
HEARD: March 10, 2016
ENDORSEMENT
[1] The plaintiff’s motion is for default judgment with respect to a mortgage in the principal amount of $125,000 registered on title to residential property owned by the co-defendant Rachelle Bat-Amy (“Ms. Bat-Amy”). Ms. Bat-Amy is the mortgagor and the co-defendant Robert Zribi (“Mr. Zribi”) is the guarantor of the mortgage. The property which is the subject of the mortgage is 665 Bathgate Drive, Unit 306, in Ottawa.
[2] The motion was made without notice on the basis of the defendants having been noted in default on February 25, 2016.
a) Service of the originating process
[3] The statement of claim was issued on January 27, 2016. Included as exhibits to the affidavit of Francois Landry (“the Landry affidavit”), the lawyer for the plaintiff, filed in support of the motion are copies of the affidavits of service of Kelly Gage. The affidavits of Ms. Gage set out the method by which the statement of claim was served on each of the individual defendants.
i) Ms. Bat-Amy – personally served
[4] In Ms. Gage’s affidavit of service sworn on February 4, 2016 she says that she effected service of the statement of claim on Ms. Bat-Amy on February 3, 2016 by leaving a copy of the pleading with Ms. Bat-Amy personally. The address at which service was effected is 1785 Riverside Drive, Unit 1804, Ottawa.
[5] Rule 16.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 requires that an originating process, such as a statement of claim, be served personally. Rule 16.02(1) sets out the methods of personal service permitted depending on the nature of the party to be served. Specifically, r. 16.02(1)(a) requires that personal service on an individual be effected “by leaving a copy of the document with the individual”.
[6] The method of service of the originating process on Ms. Bat-Amy complies with rr. 16.01(1) and 16.02(2) of the Rules of Civil Procedure. Ms. Bat-Amy has not delivered a notice of intent to defend or a statement of defence within the time frame required by the Rules of Civil Procedure. I find that she has been properly noted in default.
ii) Mr. Zribi – not personally (or properly) served
[7] The affidavit of service of Ms. Gage sworn on February 2, 2016 deals with service of the pleading on Mr. Zribi. In that affidavit, Ms. Gage says the following:
On Friday, the 29th day of January, 2016 at approximately 4:06 p.m. I served the defendant, ROBERT ZRIBI, with a Statement of Claim at 55 Russell Avenue, Ottawa, Ontario, K1N 7W9 by leaving a copy in a sealed envelope with [h]is son, Daniel Zribi, an adult member of the same household. A second copy of the document was mailed to the defendant ROBERT ZRIBI on January 30, 2016.
[8] Ms. Gage does not identify the address to which she mailed the pleading. It is reasonable to infer that she mailed the document to the same address at which she left a copy of the pleading with Daniel Zribi.
[9] I find that the method of service of the statement of claim on Mr. Zribi does not comply with rr. 16.01(1) and 16.02(1). I find that he has not been properly served with the originating process in this action.
iii) No relief with respect to service
[10] The relief requested on the motion does not in any way address issues related to service of the statement of claim. The plaintiff does, however, seek “[s]uch further and other [r]elief as counsel may advise and this Honourable Court may deem just”. In that context I consider to what relief, if any, the plaintiff is entitled with respect to the failure to serve Mr. Zribi personally with a copy of the statement of claim.
[11] No alternative to personal service of a pleading is permitted by the Rules of Civil Procedure other than on order of the Court. Rule 16.04(1) gives the Court discretion to make an order for substitutional service or dispensing with service:
Where it appears to the court that it is impractical for any reason to effect prompt service of an originating process or any other document required to be served personally or by an alternative to personal service under these rules, the court may make an order for substituted service or, where necessary in the interest of justice, may dispense with service.
[12] The allegations in the statement of claim are that Ms. Bat-Amy is the mortgagor and Mr. Zribi is a guarantor of the mortgage. A copy of the Instrument by which the subject mortgage was registered on title to the property owned by Ms. Bat-Amy is included as an exhibit to the Landry affidavit. A copy of the Charge/Mortgage document is not in the record before me.
[13] It is alleged in the statement of claim that by executing a guarantee of the mortgage, Mr. Zribi consented to be bound by the “Standard Charge Terms” of the mortgage. A copy of the guarantee is not included in the record before me.
[14] For the reasons set out below, I am not in a position to exercise the Court’s discretion to dispense with the requirement for personal service or to otherwise validate the method of service of the statement of claim on Mr. Zribi.
[15] The address at which Mr. Zribi is said by Ms. Gates to have been personally served: a) is the address at which Ms. Bat-Amy is identified as residing when the Instrument was registered on title to the subject property; b) is not the same address as that at which Ms. Bat-Amy was served; and c) is not the address which is the subject of the mortgage. There are no allegations in the statement of claim and there is no evidence in the Landry affidavit as to the nature of the relationship, if any, between Ms. Bat-Amy and Mr. Zribi.
[16] There is no evidence before me:
• As to why the individual defendants reside at different addresses; the extent of the communication, if any, between the two defendants; and whether it is reasonable to conclude that Ms. Bat-Amy would inform Mr. Zribi of the fact that she was served with the statement of claim. The latter, in any event and in my view, would not in and of itself support an order dispensing with the requirement to serve or validating the method of service of the originating process on Mr. Zribi.
• As to how Ms. Gage established that the individual with whom she left the document was Daniel Zribi; that he is Mr. Zribi’s adult son; and that Mr. Zribi also resides at that address. There is no evidence to support a conclusion that the pleading would, on the basis of the ‘method’ of service used, be brought to the attention of Mr. Zribi.
• As to whether it is “impractical for any reason” to effect prompt service of the pleading on Mr. Zribi personally.
• To support a finding that it is “necessary in the interest of justice” to dispense with the requirement for personal service of the pleading on Mr. Zribi.
b) Noting in Default of Mr. Zribi
[17] The requisition for default judgment is dated February 25, 2016 and is included as an exhibit to the Landry affidavit. A request is therein made for the defendants (plural) to be noted in default pursuant to r. 19.01. Pursuant to r. 19.01(1) of the Rules of Civil Procedure, “Where a defendant fails to deliver a statement of defence within the prescribed time, the plaintiff may, on filing proof of service of the statement of claim, or of deemed service under subrule 16.01(2), require the registrar to note the defendant in default.”
[18] Pursuant to r. 16.01(2) of the Rules of Civil Procedure service is ‘deemed’ if a party who has not been served with an originating process delivers a notice of intent to defend, statement of defence, or notice of appearance. Mr. Zribi has not taken any of those steps. I am therefore not in a position to ‘deem’ that he has been served with the statement of claim.
[19] Based on the record before me I draw an inference that the noting in default of Mr. Zribi was based on the February 2, 2016 affidavit of service of Ms. Gage. That affidavit is not satisfactory “proof of service” within the meaning of the Rules of Civil Procedure. I find that the plaintiff was not entitled to note Mr. Zribi in default in this proceeding.
[20] The motion for default judgment against Mr. Zribi is adjourned to permit the plaintiff to decide whether to:
a) File additional evidence on the motion in support of the request for default judgment to be entered against Mr. Zribi; or
b) Arrange for Mr. Zribi to be personally served with the statement of claim and proceed thereafter as required including with default proceedings in the event Mr. Zribi does not deliver a notice of intent to defend or a statement of defence.
c) Default Judgment Against Ms. Bat-Amy
[21] The plaintiff was not successful in obtaining default judgment by way of requisition at the end of February 2016. The reasons in writing given by the registrar for not signing the default judgment include that the prayer for relief is not sufficiently specific as to the monetary sum claimed, the date on which pre-judgment interest began accruing is incorrect, and there is an arithmetic error, at a minimum, with the bill of costs included with the requisition for default judgment.
[22] On the return of the motion counsel for the plaintiff filed with the Court a copy of the decision of Hockin J. in Citifinancial Canada Inc. v. Moniz and Pereira, 2006 CanLII 31908 (Ont. S.C.). In that decision Hockin J. provides a detailed review of the jurisdiction and role of the registrar when considering a request for default judgment. Based on that review, it is clear that it was entirely appropriate for the registrar in Ottawa not to sign default judgment in this matter. Counsel for the plaintiff was not, and I am not, in any way critical of the registrar in Ottawa.
[23] A copy of the statement of claim is included in the record. For the following reasons I am satisfied that the pleading is one for which default judgment may be granted:
• Paragraph 1(b) of the statement of claim identifies that the subject property is to be sold and the proceeds of sale are to be applied towards the balance owing on the mortgage.
• The amount due under the mortgage, although not identified in the prayer for relief, is broken down specifically in paragraph 12 of the statement of claim. The “Total Now Due” is alleged to be $132,689.95 for principal, interest, property tax arrears, condominium expenses, and costs.
i) Damages
[24] The amount included for costs in the “Total Now Due” is $2,250 (including HST). It is alleged in the statement of claim that, “[t]he Mortgage provides that legal fees as between solicitor and client incurred by the Plaintiff in enforcing the security shall be payable by the Defendants and be a charge on the Property.” There is no explanation provided in either the statement of claim or the Landry affidavit in support of the figure of $2,250 for costs. Even though Ms. Bat-Amy is, by reason of her default, deemed to admit the entitlement of the plaintiff to that amount, the plaintiff is not entitled to relief in the absence of a legal basis for same. Without the benefit of a copy of the Charge/Mortgage upon which the plaintiff’s claim is based, I am unable to find that the plaintiff is entitled to costs in the amount of $2,250 as claimed.
[25] The plaintiff seeks costs on the motion and those costs are addressed below. The amended bill of costs submitted on behalf of the plaintiff is comprehensive. It encompasses the plaintiff’s costs of enforcement of the mortgage as against Ms. Bat-Amy. I find that to include as damages the costs in the amount of $2,250 claimed in the statement of claim in addition to the costs sought on the motion for default judgment would amount to double recovery.
[26] In summary, the damages to which the plaintiff is entitled total $130,439.95 ($132,689.95 - $2,250).
ii) Pre-Judgment and Post-Judgment Interest
[27] The registrar did not accept the plaintiff’s claim for pre-judgment interest from August 27, 2015. This date, the date of the Notice of Sale, is relied on by the plaintiff for the calculation of pre-judgment interest in paragraph 12 of the statement of claim. The pleading does not explicitly identify: a) the date on which the plaintiff alleges pre-judgment interest began to accrue; or b) the method of calculation of pre-judgment interest.
[28] The registrar’s response to the pleading was that, because the date on which pre-judgment interest began to accrue is not set out in the statement of claim, the plaintiff would be entitled to pre-judgment interest from January 27, 2016 – the date on which the statement of claim was issued.
[29] Where interest is payable by a right other than under s. 128 of the Courts of Justice Act, R.S.O. 1990, c. C.43, pre-judgment interest shall not be awarded under that section (s. 128(4)(g)). Section 130 of the Courts of Justice Act gives this Court the discretion to vary the interest rate or the period of time for which pre-judgment interest is to be awarded. Similarly, pursuant to s. 129(5) of the Courts of Justice Act, post-judgment interest may be awarded at a rate other than as prescribed by the Act.
[30] The Supreme Court in Bank of America Canada v. Mutual Trust Co., 2002 SCC 43, [2002] 2 S.C.R. 601, at para. 49, noted that:
A loan agreement with a specified interest rate is an agreement between parties on the cost of borrowing money over a period of time. Absent exceptional circumstances, the interest rate which had governed the loan prior to breach would be the appropriate rate to govern the post-loan breach. The application of a lower interest rate would be unjust to the lender. (See also 1468025 Ontario Ltd. v. 998614 Ontario Inc., 2015 ONSC 7216, at para. 200.)
[31] Based on Ms. Bat-Amy having been noted in default, she is deemed to admit the allegations in the statement of claim with respect to the claim for pre-judgment interest. Those allegations include: a) at paragraph 12(b), that the pre-judgment interest which had accrued on the principal amount of $124,038.56 owing was, as of January 19, 2016, in the amount of $32.65; and b) at paragraph 13, that compound interest is to be paid following default.
[32] In summary, I find that the plaintiff is entitled to pre-judgment interest and post-judgment interest at the rate prescribed by the mortgage.
iii) Costs of the Proceeding
[33] The registrar correctly identified an arithmetic error in the bill of costs submitted by the plaintiff when the requisition for default judgment was filed. In that bill of costs, HST was charged twice on the disbursement for service of the statement of claim. With that error now corrected, as appears from the amended bill of costs filed on the return of the motion, the plaintiff’s claim for costs is as follows.
[34] The fees claimed are based on 4.2 hours of work at $300 per hour for counsel and 0.4 hours at $90 per hour for a student. The actual fees total $1,296 and the plaintiff requests an award of fees in the amount of $750. I find that amount to be reasonable.
[35] The disbursement items claimed are as follows:
Service of statement of claim $ 104.64 *
Paid to issue statement of claim $ 181.00
Paid to issue default judgment $ 127.00
Sub-total $ 412.64
- HST re service of statement of claim $ 13.60
Total $ 426.24
[36] Given that Mr. Zribi has not been properly served with the statement of claim, it is not appropriate to include in costs awarded at this time a disbursement in that regard. I therefore reduce the disbursement amount for service by 50 per cent to $52.32 and add HST in the amount of $6.80. As a result, the total for disbursements and HST is reduced from $426.24 by $59.12 to $367.12.
[37] In summary, the plaintiff is awarded costs with respect to obtaining default judgment against Ms. Bat-Amy as follows:
Fees $ 750.00
HST on fees $ 97.50
Disbursements (including HST) $ 367.12
Total $ 1,214.62
Summary
[38] For the reasons set out above, I order as follows:
- The defendant, Rachelle Bat Amy shall pay to the plaintiff the sum of $130,439.95 for:
a) Principal owing on the Mortgage as of January 19, 2016;
b) Pre-judgment interest to January 19, 2016;
c) Realty tax arrears as of August 27, 2015; and
d) Condominium expenses as of August 27, 2015.
The defendant, Rachelle Bat Amy shall pay to the plaintiff pre-judgment interest on the sum of $130,439.95 at the rate of 2.45 per cent per year, compounded, and from January 27, 2016 to the date of this endorsement.
The defendant, Rachelle Bat-Amy shall pay to the plaintiff costs in the amount of $1,214.62.
The amounts payable pursuant to this order, including costs, shall bear post-judgment interest at the rate of 2.45 per cent per year, compounded.
The motion for default judgment against the defendant Robert Zribi is adjourned sine die.
Madam Justice S. Corthorn
Date: March 30, 2016
CITATION: Caisse Populaire Rideau-Vision v. Bat-Amy and Zribi, 2016 ONSC 2155
COURT FILE NO.: 16-67315
DATE: 2016/03/30
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: Caisse Populaire Rideau-Vision D’Ottawa Inc.
Plaintiff
AND
Rachelle Bat-Amy and Robert Zribi
Defendants
BEFORE: Madam Justice S. Corthorn
COUNSEL: Alexander Gibson, for the plaintiff
No one appearing for the defendants
ENDORSEMENT
Madam Justice S. Corthorn
Released: March 30, 2016