COURT FILE NO.: CV-15-0150 DATE: 20171024 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
JOHN KITCHEN and NANCY KITCHEN Plaintiffs – and – BRIAN GARRATT, c.o.b. as “GARRATT’S GARAGE” Defendant
Scott McMahon, for the plaintiffs Michael J. Pretsell, for the defendant
HEARD at Belleville: 24 October 2017
Mew J. (Orally)
REASONS FOR DECISION
(Motion by plaintiff for default judgment; motion by defendant to set aside noting in default)
[1] There are two motions before the court.
[2] The plaintiffs, having already obtained partial default judgment, now seek the balance of their claim. The defendant seeks to have the noting in default which occurred on 11 April 2016 set aside.
[3] These reasons deal only with the motion brought by the defendant.
[4] The dispute between the parties arises from the restoration of a 1974 Corvette. The plaintiffs hired the defendant to work on their car which he did over approximately 10 years, as well - at least according to the defendant - as working on other restorations for the plaintiffs.
[5] By any yardstick, the work was moving at a snail’s pace and although the exact amount is disputed, the plaintiffs claim that they have paid a substantial amount to the defendant for his work and will incur a significant expenditure to have that work completed by someone else.
[6] In 2015, the plaintiffs’ concerns about the lack of progress rose to a level where they commenced an action which was served on Mr. Garrett on 12 July 2015. However that having occurred, it looked for a while as if a continuation of the litigation could be avoided. There were discussions between the lawyers as well as some discussions between the parties directly. On two occasions, it appeared that agreement to resolve the outstanding issues had been reached. However, deadlines for Mr. Garrett to do things which he had promised he would do came and went and there was, in fact, no deal.
[7] On 2 February 2016, a telephone conversation took place between the lawyers representing the parties at that time, the essence of which was that Mr. Garrett would complete the Corvette as a rolling chassis on or before 20 March 2016. Mr. Garrett’s lawyer (not counsel on this motion) confirmed what had been agreed to in a letter to the plaintiffs’ lawyers dated 4 February 2016, the final paragraph of which stated:
Finally, I confirm your advice that in the event the Corvette is not delivered as a rolling chassis on March 20: on April 8 without further notice to either Mr. Garrett or me, it is your clients’ intention to move for judgment on the Statement of Claim already served.
[8] That letter was copied to Mr. Garrett or, at least it is shown as having been copied to Mr. Garrett. It is not disputed for the purposes of this motion that he would have received it.
[9] On 8 February 2016, the plaintiffs’ lawyer wrote a letter to the defendant’s lawyer which repeated the warning that if the Corvette was not delivered by 20 March, the plaintiffs would move for default judgment on or after 8 April.
[10] On 4 March 2016, Mr. Garrett was involved in what has been described as – and I quote from a medical letter – “a serious accident” in which he suffered - and again I quote - “significant injuries”. He promptly informed his lawyer of this.
[11] The record before me contains a copy of a letter sent to Mr. Garrett by his former lawyer by email on the 9th of March 2016 which states:
Obviously: notwithstanding the agreement that was entered into, you are now indicating that you are unable to perform that agreement because of an injury suffered. At one point or another counsel will request to view the vehicle to determine what progress (if any) has been made and I believe it necessary to include in the correspondence I write to counsel informing him of your injury.
[12] It does not appear that Mr. Garrett’s lawyer at the time, in fact made the plaintiffs’ lawyer aware that Mr. Garrett had been injured or indeed, that any sort of indication was given to the plaintiffs that Mr. Garrett would not comply with his agreement to deliver the rolling chassis.
[13] The plaintiffs then did as they said they would do. The defendant was noted in default on 11 April 2016 and on 24 May 2016, the plaintiff obtained a partial default judgment ordering the defendant to return the 1974 Corvette, various parts applicable to the work being done on the Corvette as well as all or parts of three other vehicles.
[14] A copy of the partial default judgment was sent to Mr. Garrett under cover of the letter of 22 June 2016, but nothing further of significance happened until the 24 October 2016, when a writ of delivery that had been obtained by the plaintiffs was partially executed.
[15] Mr. Garrett subsequently retained litigation counsel and steps were then taken with reasonable dispatch to move to have the default set aside.
[16] On the present motion, the defendant does not seek to set aside the partial default judgment, but only the noting in default. The practical effect of this would be to permit the defendant to deliver a statement of defence and thereafter to actively defend the outstanding balance of the claim which would largely consist of an assessment of damages.
[17] Rule 19.03(1) of the Rules of Civil Procedure confers upon the court a discretion to set aside the noting in default of a defendant. Such motions are “frequently made and are typically granted on an almost routine basis”. McNeil Electronics vs. American Census, (1996) 5 C.P.C. (4th) 266 (Ont. Gen. Div.) at para. 2.
[18] In exercising that discretion, the court is required to consider the context and the factual circumstances pertaining to the default. In particular, the court may take into consideration the behaviour of the parties, the length of the defendant’s delay, the reasons for the delay and the complexity and value of the claim involved. Generally speaking however, the merits of the defence are not a factor.
[19] It was recently observed in another case that courts are generally cautious about visiting the sins of a solicitor upon a client in situations where an indulgence is requested to avoid a default: Schmidt v. Yacoub, 2017 ONSC 6305. A similar approach should pertain in this case.
[20] There is no indication that the plaintiffs or their legal representative were told about Mr. Garrett’s accident. Mr. Garrett, on the other hand, was told by his former lawyer that the plaintiffs would be informed of his accident and hence the reason for his non-compliance with his promise to deliver the rolling chassis by 20 March.
[21] It was those two failures - of Mr. Garrett to deliver the chassis, and by his lawyer to have informed the plaintiffs what the status was - which, in my view, led to the noting in default.
[22] While it was entirely appropriate for the plaintiffs’ lawyer to rely on the conversations he had had with his opposing number, and indeed commendable that efforts were being made at a lawyer to lawyer level to resolve the dispute between the parties without the need to further prosecute the litigation, it would be unjust in the circumstances which I have described, for the defendant to now be deprived of an opportunity to participate further in this litigation, which he has clearly demonstrated an interest in defending.
[23] Accordingly, the motion to set aside the noting in default will be granted it being understood that this, in no way, affects the validity of the partial default judgment which was obtained by the plaintiffs on 24 May 2016.
Submissions made on costs
[24] The defendant offered to settle the motion on 23 March 2017 on the basis of the outcome now achieved on this contested motion, but on a without costs basis. That offer should have been accepted.
[25] The defendant shall be paid his costs of this motion, but on a partial indemnity scale, fixed at $2,500.00 all inclusive.
Mew J.
Handed down: 24 October 2017
COURT FILE NO.: CV-15-0150 DATE: 20171024 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
JOHN KITCHEN and NANCY KITCHEN Plaintiffs – and – BRIAN GARRATT, c.o.b. as “GARRATT’S GARAGE” Defendant
REASONS FOR DECISION (Motion on Notice)
Mew J.
Handed down: 24 October 2017