Court File and Parties

COURT FILE NO.: CV-16-562543 DATE: 20171123 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Royal Bank of Canada, Plaintiff AND: Sonia Hakimi and Olivier Souza, Defendants

BEFORE: Madam Justice Dietrich

COUNSEL: Brian Diamond, for the Plaintiff Sonia Hakimi, Self-represented through her agent, Olivier Souza, who did not file responding materials or represent himself at the motion

HEARD: November 15, 2017

Endorsement

A. Background

[1] The defendant, Sonia Hakimi (“Hakimi”), brings a motion to:

(i) Set aside a default judgment obtained by the plaintiff; (ii) Vacate a notice of garnishment and writ; (iii) Remove any derogatory report on her credit bureau file; and (iv) Costs in the amount of $2,500.

[2] Hakimi received from the plaintiff a banking loan for overdraft protection of $5,000 on May 18, 2013. On June 26, 2013, the defendants executed a Royal Bank Visa Business Card Agreement with the plaintiff and acknowledged joint and several liability for debt arising from the use of the business Visa account. Hakimi also received a Government Guaranteed Small Business Loan from the plaintiff of $81,000 in respect of which she signed a loan agreement on May 24, 2013. Olivier Souza (“Souza”) signed a guarantee and postponement of claim guaranteeing the sum of $20,400 under this loan.

[3] By October, 2016, Hakimi had become indebted to the plaintiff in respect of the overdraft protection account in an amount in excess of $5,000 and the defendants had become indebted to the plaintiff on the business Visa account in an amount in excess of $6,000. Hakimi defaulted on her payments on the small business loan, and by April 6, 2016, she owed $30,670.77 to the plaintiff on this loan. Despite demands by the plaintiff, no payments were made by the defendants and on October 20, 2016 a Statement of Claim was issued in the Ontario Superior Court of Justice.

[4] A default judgment was obtained, and then set aside by the defendants, following which, on July 5, 2017, the parties executed Minutes of Settlement to settle any and “all issues raised or reasonably capable of being raised in the within matter”.

[5] The defendants failed to make their first installment payment on August 1, 2017, in accordance with the Minutes of Settlement. To date, the defendants have not made any payment pursuant to the Minutes of Settlement. The only amounts received by the plaintiff from the defendants in respect of the loaned amounts have been as a consequence of: i) garnishment of Hakimi’s wages; and ii) the deduction from the amount owed by the defendants of a costs award of $1,140 awarded to the defendants against the plaintiff when the first default judgment was set aside. Following the default by the defendants under the Minutes of Settlement, and after further attempts to negotiate payment terms with the defendants, the plaintiff obtained a second default judgment against the defendants.

[6] In Hakimi’s sworn affidavit in support of the motion, and at the hearing, she acknowledged her indebtedness to the plaintiff and confirmed her willingness to pay the amount owed to the plaintiff by her in respect of each of the agreements she entered into with the plaintiff.

[7] At the hearing Hakimi argued that she had not made any payments to the plaintiff because she was seeking clarification from the plaintiff as to how it would apply amounts paid by the defendants against the indebtedness and that she had not received a satisfactory response from the plaintiff. Consequently, she did not make any payment in accordance with the Minutes of Settlement. Hakimi did not adduce any evidence to show that she is not indebted to the plaintiff for the amounts set out in the default judgment.

B. Applicable Law Re Setting Aside a Default Judgment

[8] On a motion to set aside a default judgment, the court considers:

(i) Whether the motion was brought promptly after the defendant learned of the default judgment; (ii) Whether the defendant has a plausible explanation for the default; (iii) Whether the defendant has an arguable defence on the merits; (iv) The potential prejudices to the defendant should the motion be dismissed and the potential prejudice to the plaintiff should the motion be allowed; and (v) The effect of any order the court might make on the overall integrity of the administration of justice. [ Apea Investment Group Inc. v. 917488 Ontario Inc., 2016 ONSC 4301, at para. 5 ].

[9] The moving party must adduce evidence on the motion, that she intends to lead at trial, that demonstrate an arguable case, “putting its best foot forward” [ Valente v. The Personal Insurance Co. [2010] ONSC 975 at para. 23 ] (“Valente”).

[10] Affidavits that merely assert defences without providing some detail or supporting evidence are not sufficient to create a genuine issue for trial. [ Valente, at para. 24].

[11] The test to set aside a default judgment has been held to be similar to the test to obtain summary judgment. The moving party must:

(i) Demonstrate there is a genuine issue requiring a trial; (ii) Put forward a defence that has an air of reality; and (iii) Show the court there is a real credibility issue relating to important facts [ Phen v. Jerco Insurance Co., [2006] O.J. No. 26A (Ont. S.C.J.), at para. 36 ].

C. Application of the Law

[12] I find that Hakimi was prompt in bringing her motion after the plaintiff noted the defendants in default.

[13] However, I find that Hakimi has not satisfactorily established the merits of a defence. In her affidavit in support of the motion, she baldly states that she has a meritorious defence with no support for such claim. Hakimi’s evidence at the hearing did not disclose the nature of the defence or the facts that would enable the court to determine whether there is meritorious defence to the action. Self-serving affidavits that merely assert defences without providing some detail or supporting evidence are not sufficient to create a genuine issue for trial [ Valente at para. 29].

[14] At the hearing Hakimi acknowledged her indebtedness to the plaintiff and stated that payments were withheld by her pending clarification from the plaintiff on how the payments would be applied to the debt. A good defence on the merits has not been established.

[15] The motion is dismissed without costs.

Madam Justice Dietrich Date: November 23, 2017