Court File and Parties

BARRIE COURT FILE NO.: 15-888 DATE: 20170407 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Battano Construction Limited, Plaintiff/Defendant by Counterclaim AND: Maram Building Corp., Defendant/Plaintiff by Counterclaim

BEFORE: THE HON. MR. JUSTICE G.M. MULLIGAN

COUNSEL: S. Lucenti, Counsel for the Plaintiff/Defendant by Counterclaim M. Pickard, Director and Officer representing the Company Defendant/Plaintiff by Counterclaim

HEARD: April 4, 2017

Endorsement

[1] The plaintiff, Battano Construction Limited (Battano) brings a motion for default judgment against the defendant/plaintiff by counterclaim Maram Building Corp. (Maram). Maram previously had counsel of record. That counsel subsequently got off the record. In a companion motion heard by me on April 4, 2017, the sole Director and Officer of Maram (Mary Pickard) successfully moved for leave to represent her Corporation pursuant to Rule 15.01(2) of the Rules of Civil Procedure. The plaintiff did not oppose that motion subject to certain caveats which were contained in the order granted.

[2] Ms. Pickard, now representing her Corporation, requests an opportunity to bring a motion to set aside the noting in default that occurred in this case. That requested relief was opposed by Battano.

[3] This straightforward breach of contract case has had a long and tortuous history. The following timelines will assist with respect to an analysis of the relief sought:

August 14, 2013 The plaintiff, a sub-contractor, commenced an action against Maram, its general contractor, for the balance of invoices owing from the defendant, $160,266.59.

September 27, 2013 Maram defends the action on the basis that the plaintiff’s work was defective. It also brought a counterclaim for $100,000 as the estimated cost to repair defective work. Maram was represented by counsel.

December 10, 2013 The plaintiff served a Reply and Statement of Defence to the Counterclaim.

May 12, 2014 and February 12, 2015 Examinations for discovery of the parties were completed.

October 1, 2014 Counsel for the defendant got off the record (the first removal of counsel).

October 11, 2016 Defendant’s counsel again got off the record (the second removal of counsel). No new counsel was appointed, notwithstanding the order of October 11, 2016 requiring the Corporation to appoint a new solicitor of record within 30 days or seek leave to have the Corporation represented by an individual other than a solicitor.

November 24, 2016 Counsel for the plaintiff and Ms. Pickard for her Corporation appeared before Justice McCarthy to seek an adjournment of the trial date. The adjournment was granted and the defendant was required to pay costs thrown away. The plaintiff was granted leave to bring a motion to strike the Statement of Defence if the defendant failed to comply with Rule 15.01(2) of the Rules of Civil Procedure after January 24, 2017. Costs were ordered against the defendant.

February 7, 2017 The plaintiff brought a motion to strike the Statement of Defence and Counterclaim on notice to the defendant. McCarthy J. ordered that the Statement of Defence and Counterclaim be struck, and ordered that the defendant be noted in default pursuant to Rule 19 of the Rules of Civil Procedure.

February 21, 2017 The plaintiff moved without notice for default judgment. By coincidence, Ms. Pickard was in court that day. The parties then agreed to a consent adjournment on terms. Those terms, which became the subject of the order of DiTomaso J., required that the defendant: (a) pay costs of $3,700 by March 3, 2017; (b) file motion materials concerning its request to appoint Mary Pickard as the Representative of the Corporation by March 17, 2017; (c) provide responding materials with respect to the plaintiff’s motion for default judgment by March 17, 2017.

March 7, 2017 The plaintiff brought the default judgment motion back on before Justice McCarthy for failure to pay costs. As no evidentiary record had been filed with respect to the non-payment of costs, Justice McCarthy declined to order the relief sought.

March 17, 2017 Defendant serves its Motion Record on the plaintiff’s solicitors, seeking leave to have the Corporation represented by Mary Pickard, therefore complying, in part, with the order of Justice DiTomaso.

March 28, 2017 Lavine J. adjourned the return of the motion, on consent, to April 4, 2017.

April 4, 2017 Leave was granted to allow the defendant Corporation to be represented by a person other than a solicitor, namely, Mary Pickard, its Officer and Director, therefore further complying in part, with the order of Justice DiTomaso.

[4] It is clear that the defendant has not complied promptly with a number of orders made against it. It has been ordered to pay costs on two occasions. Most recently, it was required to pay $3,700 by March 3, 2017. It attempted to pay these costs to the plaintiff’s law firm by PayPal. This led to much confusion because the law firm had not established a PayPal account and the defendant made no effort to ascertain if this method of payment would be acceptable. I am satisfied that the matter has now been sorted out and these costs are paid, and I do not consider that the order of Justice DiTomaso has been breached with respect to that issue.

[5] The second issue, as a term of the DiTomaso J. order, was the defendant’s obligation to bring a motion for leave to have Ms. Pickard act for the Corporation. I am satisfied that Ms. Pickard did take appropriate steps, having prepared the motion and served it on the plaintiff’s counsel on March 17, 2017, within the time period prescribed by Justice DiTomaso.

[6] The final term of the DiTomaso J. order was the requirement that the defendant provide “responding materials with respect to the plaintiff’s motion for default judgment”.

Analysis

[7] The defendant was noted in default by Justice McCarthy on February 7, 2017, after he struck the Defence and Counterclaim. The subsequent order of Justice DiTomaso gave the defendant an opportunity to file responding materials to the default judgment motion by March 17, 2017.

[8] The setting aside of a noting in default requires a consideration of Rule 19.03(1) of the Rules of Civil Procedure, which provides “A noting in default may be set aside by the court on such terms as are just”.

[9] In response to this motion, Mary Pickard filed an affidavit confirming that she is the Director and Officer of the Corporation, and setting out the details of her payment of the costs order. I am satisfied that those costs have been paid. With respect to the default judgment issue, paragraph 14 of her Affidavit states:

I did not serve by affidavit for the default judgment as of March 17, 2017, as I still did not have confirmation that I would be able to represent the company in my personal capacity. However, I did serve the Motion Record to represent the defendant in my personal capacity [on March 17, 2017] and costs were also paid by March 3, 2017.

Can a Corporation File a Motion to Set Aside a Noting in Default Without Counsel?

[10] Rule 15.01(2) of the Rules of Civil Procedure states, “A party to a proceeding that is a corporation shall be represented by a lawyer, except with leave of the court.”

[11] In my view, this defendant Corporation was not in a position to file a motion to set aside the noting in default until there was a judicial determination that it could be represented by its Director and Officer, Mary Pickard. That motion for leave was brought, and the defendant was successful. Leave of the court was granted. This defendant, represented by an individual, is now in a position to serve and file a motion to set aside the noting in default or to take other appropriate steps that may be necessary to oppose the plaintiff’s default judgment motion.

[12] As noted, the defendant previously served and filed a Statement of Defence. Examinations for discovery have been conducted. The matter is on the May trial sittings list marked peremptory.

[13] I am satisfied that the defendant substantially complied with the order of Justice DiTomaso. Costs were paid and a motion was brought seeking leave to have the Corporation represented by an individual. The Corporation, represented by Ms. Pickard, is now in a position to serve and file a motion to set aside the noting in default. I am satisfied that under these unique circumstances, the defendant shall be granted 15 days to serve and file a motion seeking to set aside the noting in default, together with such materials as the defendant deems appropriate. If that motion is successful, unless the parties agree otherwise, the matter can remain on the May trial sittings list. If the motion is unsuccessful, the plaintiff shall be at liberty to proceed with its default judgment motion that was adjourned on April 4, 2017 pending the outcome of this motion.

Costs

[14] The issue of costs for the day is reserved to the motions judge, or the trial judge, as the case may be.

MULLIGAN J. Date: April 7, 2017