Court File and Parties

Court File No.: CV-14-514291 Date: 20160517 Superior Court of Justice - Ontario

Re: Joshi Group of Companies, Plaintiff And: Ashok Badhwar and Usha Badhwar, Defendants

Before: S. F. Dunphy J.

Counsel: J. Rosenstein, for the Plaintiff J. Assaf, for the Defendants

Heard: May 13, 2016

Endorsement

[1] This is one of those rare cases where it is appropriate for the court to issue a stay of proceedings of its own motion pursuant to s. 106 of the Courts of Justice Act, R.S.O. 1990, c. C.43. At the hearing of this motion to set aside default judgment I ordered instead that the entire action be stayed with brief reasons to follow. These are those reasons.

[2] On its face, the present claim is a simple mortgage enforcement action. The plaintiff claimed judgment for the mortgage debt and a writ of possession. The defendants delivered a Notice of Intent to Defend acting in person. Thirteen days later, the defendants provided the plaintiff with the name of the lawyer retained to represent them and prepare a Statement of Defence. The named lawyer followed up with a request for an indulgence to prepare a Statement of Defence four days later that was denied. That same day, the defendants were noted in default. Default judgment was signed soon thereafter.

[3] The defendant moved to set aside the default judgment but there were problems in coordinating dates for the intended motion. There is little point in reciting the list of scheduled dates and appearances that followed. It is sufficient to note that the defendants have constantly sought to obtain a hearing. There is debate between the parties as to who is responsible for which adjournment or who should wear how much of the delay. I see little point in descending so far into the weeds. Neither side appears to have viewed the actual hearing of the motion to set aside the noting in default to be a matter of pressing urgency, although the defendants at least started the process with reasonable diligence and pursued it thereafter with alternating bursts of diligence and diffidence matched measure for measure quite evenly by the plaintiff.

[4] The defendants’ motion to set aside the default judgment and noting in default came before me on May 13. The plaintiff did not seek to rely upon about the relatively leisurely pace this motion has set in making its way from conception to hearing. Rather, the plaintiff argues that the defendants – who were cross-examined – have not proposed a viable defence with a reasonable chance of success. On this basis, the plaintiff submits, the motion should be denied and the default judgment allowed to stand.

[5] However, the materials before me revealed that there is another action pending between the same parties for the very same debt brought by the plaintiff in 2011: CV-11-439398. That action is defended and very much alive. The plaintiff brought this separate mortgage enforcement action in 2014 in the face of its own claim originally advanced in 2011 apparently because it found itself getting bogged down in the earlier action. The Latin phrase “lis alibi pendens” (or “the dispute is pending elsewhere”) comes to mind.

[6] The plaintiff’s statement of claim in CV-11-4399398 claims, among other things, payment of precisely the same obligation that is claimed in the within action. The same mortgage is specifically pleaded as is the collateral nature of the mortgage debt.

[7] The existence of the principal debt secured by the mortgage has been challenged in the 2011 action. It is an abuse of process to seek to litigate the same issue in two separate proceedings. The defences in the 2011 action should be dealt with head-on. The plaintiff ought not to be seeking to wear the defendants’ will and resources down with multiple proceedings. If the defendants have as little to say in their favour as the plaintiff suggests they do, the plaintiff has remedies available to it in the 2011 action to seek default judgment or to set the matter down for an early trial. The correct route is not to start a brand new action, still less to attempt to pounce on a default in defending an improperly commenced action while the very same claim is defended in fact and has been all along.

[8] The default judgment is set aside and this motion is stayed in favour of the 2011 action. I reserved costs of this action (now stayed) to be dealt with by the court disposing of the claim in the 2011 action.

S.F. Dunphy J. Date: May 17, 2016