Court File and Parties
COURT FILE NO.: 98-CV-155017 MOTION HEARD: 20190506 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Ganeshan, Plaintiff AND: Karunakaran and Karunakaran, Defendants
BEFORE: Master Abrams
COUNSEL: A. Honner, for the Plaintiff P. Baxi, for the Defendants
HEARD: May 6, 2019
Reasons for Decision
Overview
1The plaintiff moves under R. 37.14 to set aside the January 8/18 Order of Master McGraw which, inter alia, sets aside a default judgment obtained by the plaintiff some 20 years ago.
Background
2This action arises from a series of loans made between December 1994 and September 1996. Before the action was commenced, a demand letter was sent by the plaintiff’s lawyer at the time—this in July of 1998. The lawyer warned that, failing repayment of the loan, litigation would be commenced. The letter was sent to the address at which the defendants resided and still reside.
3The defendants failed to respond to the demand letter and a statement of claim was issued in September of 1998. An affidavit of service of someone named Terrence Gregory attests to personal service on the defendant Ganeshamoorthy Karunakaran at his home address and the mailing of the statement of claim to both Mr. Karunakaran and his wife, the second defendant.
4The defendants did not respond to the claim and default judgment was signed in December of 1998.
5A writ of seizure and sale was filed with the Sheriff of Peel and was renewed in 2005, 2011 and 2017. As well, a notice of garnishment was served on the Royal Bank of Canada where one of the two defendants maintained an account, and on Premeir [sic] Candle, where the second of the defendants was employed.
6The plaintiff succeeded in collecting some of the judgment by way of three cheques in relatively small amounts from the Ministry of the Attorney General—this in 1999.
7On August 26/17 (in circumstances described below), the defendants attended at the last address listed by the plaintiff on the renewal of her writ, 127 Flycatcher Avenue. They left a message with the plaintiff’s cousins who reside there asking that the plaintiff contact a lawyer named Archana Sharma. The plaintiff hired her own lawyer, Sutharsan Vasanthan of Nava Law, to contact Archana Sharma. On September 12/17, the plaintiff’s lawyer wrote to the defendants’ lawyer advising that the plaintiff had filed a writ of seizure and sale against the defendants and forwarded a copy of the judgment obtained by the plaintiff.
The Motion to Set Aside Default Judgment
8On January 8/18, on short notice and with the motion record having been mailed to the plaintiff’s last known address (though not her correct address), the defendants moved before Master McGraw for an Order setting aside the default judgment. Mr. Karunakaran swore an affidavit, filed on the motion, in which he said that he and his wife learned of this action, for the first time, in November of 2017 when their lawyer-- retained to assist with the refinancing of their mortgage--retrieved pleadings from the court file. The affidavit is silent in respect of the garnishments and in respect of the letter from Sutharsan Vasanthan sent two months earlier. Mr. Karunakaran denies having been personally served with the statement of claim as attested to by Mr. Gregory.
9The evidence before me is that, for the past few years, the plaintiff has resided at an address on Shuter Avenue in Toronto. There is no evidence before me that any effort to locate the plaintiff (before the motion before Master McGraw) was made, save by reference to addresses listed in the documents filed with the court. Further, no response was sent to Sutharsan Vasanthan in respect of the September 2017 letter. The defendants’ motion record was sent to addresses at which the plaintiff did not reside and no courtesy copy was sent to her lawyer. One of the addresses belonged to a former lawyer for the plaintiff whom the defendants knew was deceased; and the Flycatcher address was known by the defendants to be an address at which the plaintiff did not reside (see: qq. 204-206 of the cross-examination of Mr. Karunakaran). The defendants were specifically told that she did not live there. Then too, and in any event, the plaintiff’s cousins who do live at the Flycatcher address deny having received any mail addressed to the plaintiff.
10The plaintiff learned of the Order of Master McGraw in March of 2018. The plaintiff learned from counsel that the writ of execution registered by her had been deleted and that the defendants had remortgaged their home. A motion was booked for May/18 and the date was adjourned a few times before new counsel, counsel now on the record for the plaintiff, was engaged. In December of 2018, present counsel of record served the plaintiff’s motion materials; and any adjournments thereafter have been at the request of the defendants. I think it fair to say, as Mr. Honner has, that the plaintiff brought this motion with relative haste and diligence.
11The evidence before me is that the plaintiff did not receive actual notice of the motion before Master McGraw and that the defendants had actual notice that the addresses to which their motion materials were said to have been sent were not good addresses. There is no evidence of any independent efforts made to locate the plaintiff or to give notice through the lawyer retained by her in August of 2017 (the identity of whom was known). Further, for reasons that have not been explained, the defendants’ efforts at service (had they been successful) would have resulted in short service.
12Then too, and in any event, on the motion before Master McGraw, full and frank disclosure was not made by the defendants. It was true that Terrence Gregory had not attended to be cross-examined on his affidavit of service, as the defendants stated, but no disclosure was made that a summons to witness was not served and, in any event, that the notice of examination was sent to addresses once associated with the plaintiff and an address belonging to the plaintiff’s deceased lawyer. Mr. Gregory did not refuse to be examined and, if he failed to attend, it was because he wasn’t given proper notice. Reference to the September letter received by Archana Sharma and shared with the defendants was not made in the motion materials before Master McGraw. And the fact that loans were made to Rajini Karunakaran was denied but, on cross-examination for this motion, was admitted. The inconsistency has not been explained.
Analysis
13The plaintiff says that the question I must now answer is not simply whether the Order made by Master McGraw should have been made but whether, having been made, it should be set aside or varied in view of any change in the state of affairs or positions of the parties. In this regard, “the court may take into account whatever additional evidence and argument is put forward by the affected person and by the moving party, together with the evidence before the court that made the initial Order” (Chambers v. Muslim, [2007] O.J. No. 3855 (S.C.J.), at para. 11). Having regard to the manner in which the Order of Master McGraw was obtained and the effective lack of service of the motion record, I think that the Order of Master McGraw ought not to have issued. On the merits of the claim, I note that the evidence of the defendants is contradictory. There is conflicting evidence as to whether the loan was made to one or both of them and as to whether monies were paid back to the plaintiff in cash or mostly in cash or otherwise. No independent (supporting) evidence has been adduced as to any repayment having been made. And, while the defendants now suggest that the claim may have been statute barred when granted, I cannot agree. The claim was commenced within two years of the date of default (paras. 6 and 7 of the statement of claim).
14In all, given the (unanswered) notice letter sent July 31/98, the constancy of the defendants’ residence at the address at which Mr. Gregory says the defendants were served, the garnishment of one defendant’s wages and the other defendant’s bank account (all supporting the plaintiff’s position as to notice of the claim having been given), the fact of notice having been given to the defendants by Archana Sharma (on which they failed to act), the fact that a status letter was sent to the defendants’ lawyer in September/18 (and was not addressed), and the fact that “the only evidence the [defendants] have to support what [they] are saying…is [their] own word”, though the loan made by the plaintiff is acknowledged (qq. 337-338 of the cross-examination of Mr. Karunakaran), and given the considerations as to the merits of the plaintiff’s claim, as set out above, I am persuaded that the Order of Master McGraw ought to be set aside--with the some 11-year judgment and the writ of execution restored.
Costs
15Failing agreement as to the costs of the motion, I may be spoken to. In this regard, counsel are to confer and, if they wish me to address costs, counsel are to notify me by the 30th of June/19.
May 10/19
Master Abrams