Oakenshield Investment Ltd. v. Berger and Vainola, 2016 ONSC 7858

CITATION: Oakenshield Investment Ltd. v. Berger and Vainola, 2016 ONSC 7858

COURT FILE NO.: 15-63704

DATE: 2016/12/14

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Oakenshield Investments Ltd.

Plaintiff

– and –

Kevin Berger a.k.a. Kevin Birger and Peter Liam Vainola

Defendants

David Cutler, for the Plaintiff

James Bowie, for the Defendants

HEARD: October 28, 2016

REASONS FOR DECISION

Kane J.

[1] This is a motion by Mr. Vainola pursuant to rule 19.08 of the Rules of Civil Procedure to set aside the February 2, 2016 default judgment granted against him. On that date, Smith J. pursuant to the plaintiff’s motion:

(a) Made an order validating service of the Statement of Claim on Mr. Vainola; and

(b) Granting judgment against him in the amount of $95,000, plus costs of $10,000.

Proceeding

[2] The plaintiff in this proceeding sought recovery of damages against the 2 defendants for nuisance, trespass, negligence and breach of contract in relation to an alleged marijuana grow operation carried on inside a rental property owned by the plaintiff.

Motion

[3] On his motion, Mr. Vainola filed a one page seven paragraph affidavit in which he states that:

(a) he is not the tenant of the subject property;

(b) he was never in possession of marijuana in the property;

(c) he never caused any damage to the property;

(d) Mr. Berger gave an undertaking that he would pay the plaintiff for the damages claimed; and that Mr. Vainola would not under any circumstances be liable to pay any judgment obtained by the plaintiff.

[4] In the above affidavit, Mr. Vainola:

(a) does not deny that the property was being used for growing marijuana;

(b) does not deny that he was present in or occupied the property while marijuana was being grown therein;

(c) does not deny that growing marijuana in the property caused damage to the premises;

(d) does not comment upon being served with the Statement of Claim in this proceeding, his dealings with Mr. Hunt as his lawyer in relation to this proceeding;

(e) does not indicate when he learned of this proceeding;

(f) does not advise when he learned of the February 2, 2016 default judgment obtained against him; and

(g) does not address or explain the 8 month delay in bringing this motion to set aside the February 2, 2016 default judgment against himself.

Chronology

[5] Mr. Vainola on February 5, 2013 was charged with the production of and possession of marijuana for the purposes of trafficking. Those charges following a trial were dismissed on January 12, 2015.

[6] The period of delay relevant to this motion is after the signing of default judgment. There was in addition significant delay by Mr. Vainola prior to the February 2, 2016 default judgment during which although aware that this proceeding had been brought against him, he took no action to defend this claim.

[7] This Statement of Claim was issued on March 20, 2015. A process server attempted to serve Mr. Vainola at a place of business on May 12, May 22 and June 6, 2015. On each occasion, the process server was advised by an employee working there that Mr. Vainola was not then in attendance. The process server left a business card and requested that Mr. Vainola call the process server, which he failed to do. The process server filed an affidavit citing the above service attempts and expressed the opinion therein that Mr. Vainola was avoiding service.

[8] Mr. Vainola had his then counsel communicate to the plaintiff on July 24, 2015, that the parties were attempting to resolve the matter directly. In response, the plaintiff requested written confirmation that Mr. Vainola had been served with the claim. Counsel for Mr. Vainola on July 28, 2015 advised that his client had accepted service of the claim in consideration for which no default proceedings would be taken without prior reasonable notice.

[9] The plaintiff on September 16, 2015 requested that Mr. Vainola’s counsel provide written acknowledgment accepting of service of the Statement of Claim, failing which Mr. Vainola would be noted in default. The plaintiff sent similar notices on September 17, 18 and 21, 2015. Mr. Vainola and his legal counsel did not respond to such notices.

[10] The plaintiff advised legal counsel for Mr. Vainola on September 23, 2015 that both defendants had been noted in default for failing to file a Statement of Defence.

[11] When asked what Mr. Vainola’s intentions were, Mr. Hunt advised he had not been retained by Mr. Vainola.

[12] The plaintiff by motion as stated obtained this default judgment against Mr. Vainola on February 2, 2016.

[13] Mr. Vainola failed to bring this motion to set aside such default judgment for eight months, namely not until October 3, 2016.

Law

[14] The plaintiff and Mr. Vainola rely upon the decision in Mountain View Farms Ltd. v. McQueen, 2014 ONCA 194. That Court articulates the test for setting aside default is whether the interest of justice favour granting such order: para. 47. That Court lists 5 factors to be considered on a motion to set aside default judgment, namely:

(1) whether the motion to set aside was brought promptly after the defendant learned of the default judgment;

(2) whether there is a plausible excuse or explanation for the defendant’s default in complying with the Rules;

(3) whether the facts establish that the defendant has an arguable defence on the merits;

(4) the potential prejudice to each party should the motion to set aside default judgment be dismissed or be granted; and

(5) the effect of any order the court might make on the overall integrity of the administration of justice: paras. 47 and 48.

Factor 1

[15] Mr. Vainola did not promptly bring this motion to set aside the default judgment despite his prior knowledge of that he was being sued, and his knowledge as of September 25, 2015 that he had been noted in default in this proceeding.

Factor 2

[16] Mr. Vainola has presented no evidence to explain why he failed to defend or respond legally upon learning that a proceeding had been commenced against him and that he had been noted in default. Any arrangement or understanding he had with Mr. Berger of being indemnified did not involve or impact the plaintiff and this claim against Mr. Vainola.

Factor 3

[17] Liability for one’s damage to the plaintiff’s real property is not automatically avoided because Mr. Vainola was not the lessee of the real property or because the marijuana, pursuant to the lease, was in the possession of the lessee.

[18] Mr. Vainola does not dispute that a grow-op was being carried in the subject premises and if so, that he was unaware of and was not involved in that activity.

[19] The absence of allegations by Mr. Vainola as to the above undermines any defence as to the absence of liability against him in this proceeding.

[20] As to this third factor, namely whether the defendant had an arguable defence; the Court of Appeal in Sunlife Assurance Company of Canada v. Premier Financial Group Incorporated (Premier Financial), 2013 ONCA 151, faced with evidence that the defendant decided not to participate, held that a conscious decision not to participate in the proceeding bars consideration of a defence on the merits, even if one exists: para. 1.

[21] Any merits of an unarticulated defence based upon the decision in Sunlife Assurance is not a consideration on this motion given Mr. Vainola’s decision to not defend this claim on that basis.

Factor 4

[22] The potential prejudice to Mr. Vainola in not granting the order sought is obvious. To set aside the default now prejudices the plaintiff which is taken numerous to enforce this claim since May, 2015.

Factor 5

[23] The rules and timelines regarding civil proceedings exist for purposes which include the ability of a plaintiff to obtain a determination and resolution of claims properly presented. Mr. Vainola ignored this proceeding and continued to do so after learning that default had been signed against him in February, 2016.

[24] The integrity of the administration of the civil justice system is undermined by parties who elect to ignore proceedings until judgment is obtained and only then respond by attempting to reverse the result of action taken in order to start again, particularly where an apparent valid defence to the claim is not presented on a motion such as this.

Conclusion

[25] For the above reasons, this motion to set aside this default judgment against Mr. Vainola is dismissed.

[26] Mr. Vainola does not dispute the plaintiff’s claim for costs of this motion on a partial indemnity basis in the amount of $3,393 inclusive of tax and disbursements. The plaintiff accordingly is awarded such costs of this motion against Mr.Vainola in the amount of $3,393, payable forthwith.

Mr. Justice Paul Kane

Released: December 14, 2016

CITATION: Oakenshield Investment Ltd. v. Berger and Vainola, 2016 ONSC 7858

COURT FILE NO.: 15-63704

DATE: 2016/12/14

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

Oakenshield Investments Ltd.

Plaintiff

– and –

Kevin Berger a.k.a. Kevin Birger and Peter Liam Vainola

Defendants

REASONS FOR JUDGMENT

Kane J.

Released: December 14, 2016