Court File and Parties
COURT FILE NO.: CV-15-3323 DATE: 2019 06 13
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: ECO-STUCCO LTD. v. CON-STRUCT DESIGNS BUILD and RUTH REBECCA OSTEN
BEFORE: Doi J.
COUNSEL: Eco-Stucco Ltd., no one appearing Adam Jarvis, for the Defendants Sharoon Gill, for the non-party, Ismet Bajcinca
HEARD: June 4, 2019, in Milton
ENDORSEMENT
Overview
[1] The moving non-party, Ismet Bajcinca, has brought this cross-motion under Rule 37.14(1) of the Rules of Civil Procedure to set aside two (2) cost orders against him. This first was made on May 17, 2018 by Justice Coats who dismissed this action and ordered $16,224.27 in costs to be paid jointly and severally by the corporate Plaintiff and Mr. Bajcinca to the Defendants. The second was made on September 13, 2018 by Master Mills who ordered Mr. Bajcinca to attend an examination in aid of execution and to pay the Defendants $7,000.00 in costs for bringing their motion for which he is said to have evaded service.
[2] Both motions by the Defendants that led to the cost orders against Mr. Bajcinca were made on notice to him. However, Mr. Bajcinca claims that he did not receive notice of the motions, and he did not appear on either of them. According to Mr. Bajcinca, he first learned of the cost orders against him when he attended an examination in aid of execution on October 1, 2018 and spoke with Defendants’ counsel. Upon learning of these orders, Mr. Bajcinca asked to adjourn the examination in order to obtain legal advice before answering questions. Several months later, he moved to set aside the cost orders against him. He claims that the cost orders were made based on inaccurate and/or incomplete information.
[3] The Defendants state that Mr. Bajcinca was served with notice of both motions and had ample opportunity to attend and respond to the motions if he had wished to do so. They claim that he sought to evade service and deliberately chose to not appear on the return of their motions.
[4] For the reasons that follow, I find that this is not a proper case to invoke Rule 37.14(1) to set aside the cost orders made against Mr. Bajcinca. Accordingly, his cross-motion is dismissed.
Background
[5] On August 4, 2015, the Plaintiff commenced the main action to enforce a construction lien registered on title to the subject property known municipally as 463 Valley Drive in Oakville. Mr. Bajcinca is registered as an officer and director of the corporate Plaintiff. In support of the Plaintiff’s claim against the Defendants, Mr. Bajcinca signed an Affidavit of Verification of Lien on June 10, 2015 which stated that $16,360.00 was owed to the Plaintiff for work performed at the property. Shortly afterwards, the claim for lien was registered on title to the property.
[6] Mr. Bajcinca claims to have not had any involvement with the corporate Plaintiff after about June 2015, which is when he claims that Blajinder (Bill) Dehal (i.e., the other registered officer and director of the corporate Plaintiff) assumed sole control of the company after both men had a falling out. Mr. Bajcinca claims that he did not authorize the commencement of this action or direct this proceeding on behalf of the Plaintiff, and that he had no further involvement with any action taken to enforce the lien after he signed the Affidavit of Verification of Lien.
[7] On August 4, 2017, the Plaintiff filed the trial record for this action. At trial scheduling court held on November 14, 2017, no one appeared for the Plaintiff and the action was struck from the trial list. Subsequently, the Defendants delivered a motion record dated March 8, 2018 for their motion to dismiss the action, and sought costs against Mr. Bajcinca personally after determining that he controlled the corporate Plaintiff. The Defendants’ motion to dismiss initially returned on April 19, 2018. Mr. Dehal appeared for the Plaintiff on the motion and asked for time to retain counsel for the company. As such, the motion was adjourned to May 17, 2018. Mr. Bajcinca did not attend either return dates for this motion, and claims that he was not served with notice of the motion. The Defendants state that they served him, as detailed further below.
[8] On May 17, 2018, Coats J. heard the Defendants’ motion to dismiss. No one appeared for the corporate Plaintiff. By endorsement dated May 17, 2018, Coats J. dismissed the action and awarded costs to the Defendants of $16,244.27 to be paid by the Plaintiff and Mr. Bajcinca jointly and severally under s. 86(1) of the Construction Lien Act after finding that the lien was grossly excessive and had expired.
[9] On August 27, 2018, the Defendants delivered a motion record dated August 24, 2018 for a motion returnable on September 13, 2018 for an order to compel Mr. Bajcinca to attend an examination in aid of execution on October 1, 2018.
[10] On September 13, 2018, Master Mills heard the motion to compel. Mr. Bajcinca did not attend the motion, and claims to have not been served with notice of the motion. The Defendants state that they duly served him but that Mr. Bajcinca sought to evade service, as further explained below. Master Mills ordered Mr. Bajcinca to attend an examination in aid of execution on October 1, 2018, and awarded the Defendants their costs on a substantial indemnity scale in the amount of $7,000.00 and payable by Mr. Bajcinca after finding that he tried to evade personal service of the motion materials.
Analysis
[11] The threshold issue raised by the Defendants is whether the court should hear this motion.
[12] Rules 37.14(1) and (2) provide:
(1) A party or other person who, (a) is affected by an order obtained on motion without notice; (b) fails to appear on a motion through accident, mistake or insufficient notice; or (c) is affected by an order of a registrar, may move to set aside or vary the order, by a notice of motion that is served forthwith after the order comes to the person’s attention and names the first available hearing date that is at least three days after service of the notice of motion. [Emphasis added]
(2) On a motion under subrule (1), the court may set aside or vary the order on such terms as are just.
[13] In reviewing Rule 37.14(1)(b), Strathy J. (as he then was) described its purpose in the following terms:
The purpose of Rule 37.14(1)(b) is to prevent unfairness or, worse, a miscarriage of justice, where a party’s inadvertence or the absence of sufficient notice has resulted in an order being obtained without that party being afforded an opportunity to present his or her case. A party who does not appear in these circumstances will usually be given a chance to present evidence and to argue the motion on its merits, assuming he or she moves promptly and provided there are no countervailing considerations.
Ontario (Attorney General) v. 15 Johnswood Crescent at para. 29; adopted by Charney J. in Turino v. Shea, 2016 ONSC 6718 at para. 26.
[14] Strathy J. then proposed the following five (5) factors to be considered and weighed by the court in exercising its discretion under Rule 37.14(1):
(1) Proof of accident or mistake: The moving party must establish a failure to appear on the original motion through accident, mistake or insufficient notice. This is a precondition to relief under the rule. A party who has simply chosen not to appear on a motion cannot complain later if he or she does not like the outcome.
(2) The party must move forthwith after the order comes to his or her attention: This is also a precondition to relief under the rule, but there is room for flexibility in the interpretation of “forthwith”, depending on the circumstances. I will examine this requirement in more detail below.
(3) The length of the delay and the reasons for it: In considering whether to set aside an order, the court will consider whether there has been delay in bringing the motion and the reason for it. All other things being equal, the longer an order has been in effect, particularly where parties have acquired rights or changed their positions as a result of the order, the less likely it will be that the court will set it aside.
(4) The presence or absence of prejudice: The court should consider whether a party will be prejudiced by setting aside the order or by failing to set aside the order. There will always be prejudice if an order is made against a party without sufficient notice and there will always be some kind of prejudice to the other party if the order is set aside. Nevertheless, the exercise of the court’s discretion may require an examination of the relative prejudice to the parties.
(5) The underlying merits of the moving party’s case: It may be necessary to consider the underlying merits of the moving party’s case in weighing the various factors, balancing the interests of the parties, and determining what is just in the circumstances. Lengthy delay in bringing the motion may be more readily forgiven if the moving party has a very strong case on the merits. It will be less readily forgiven if the party’s case appears frivolous. [Emphasis added]
15 Johnswood Crescent at para. 43; Turino at para. 27.
[15] Notably, where a person’s failure to appear on a motion did not result from an “accident, mistake or insufficient notice,” it is clear that Rule 37.14(1) has no application; Turino at para. 28; 15 Johnswood Crescent at para. 43. It follows that a precondition to a Rule 37.14(1) motion is for the moving party to establish a failure to appear on the original motion by accident, mistake or insufficient notice. A party who decided not to appear on a motion cannot later complain about its outcome; 15 Johnswood Crescent at para. 34(1).
[16] In submissions, Mr. Bajcinca confirmed his intention to invoke Rule 37.14(1)(b) on the sole ground of “insufficient notice,” as he claims that the Defendants did not serve him with notice of the motions which led to the cost orders against him. Mr. Bajcinca may satisfy this precondition for applying Rule 37.14(1)(b) by showing that his claim of not having been served with notice of the motions is at least plausible. A determination of whether his explanation is a plausible one must be based on the circumstances of this specific case; Turino at para. 31.
[17] As explained below, I find that the Defendants did serve Mr. Bajcinca with notices of their motions which led to the cost orders against him made by Justice Coats on May 17, 2018 and by Master Mills on September 13, 2018, respectively.
Mr. Bajcinca Received Notice of the Motion heard by Coats J.
[18] On March 22, 2018, Kevin Guminny, the Defendants’ process server, attended Mr. Bajcinca’s home to serve the Defendants’ motion record dated March 8, 2018 for their motion to dismiss the action that initially was returnable on April 19, 2018. Mr. Guminny states that Mr. Bajcinca’s wife, Lavdije Bajcinca, answered the door for him and advised that her husband was at work. She then gave her husband’s cell phone number, which Mr. Guminny called. When Mr. Bajcinca called him back, Mr. Guminny asked if he could serve the motion record by leaving a copy with his wife. Mr. Guminny states that Mr. Bajcinca agreed to accept service of the Defendants’ motion record in this way. Mr. Guminny proceeded to provide Ms. Bajcinca with a copy of the motion record for Mr. Bajcinca. After doing so, Mr. Guminny promptly sent a text message to Mr. Bajcinca to confirm that the motion record had been left with Ms. Bajcinca.
[19] Mr. Bajcinca flatly denies that he spoke with Mr. Guminny that day, and further denies that his wife received the motion record. However, Mr. Guminny provided substantial corroborating evidence to validate his account of how he delivered the motion record to Mr. Bajcinca. When Mr. Guminny spoke with Ms. Majcinca on March 22, 2018, she wrote her name at his request on his process server memo where he also had written Mr. Bajcinca’s cell phone number that she had given to him that day. Mr. Guminny also produced a record for his cell phone that documented his call on March 22, 2018 to Mr. Bajcinca’s cell phone number and the subsequent incoming call-back when Mr. Bajcinca is said to have agreed to admit service of the motion record left with his wife. During his subsequent October 1, 2018 examination, Mr. Bajcinca confirmed that the law firm representing the Defendants had his cell phone number (i.e., being the one that Ms. Bajcinca had provided to Mr. Guminny) as he had been contacted by the law firm’s process server on a prior occasion. Through an internet search, the Defendants also found that a stucco business where Mr. Bajcinca works is also using the same cell phone number that Ms. Bajcinca gave to Mr. Guminny. In addition, Mr. Guminny produced a note to file that he had dictated on March 22, 2018 immediately after speaking with Mr. and Ms. Bajcinca in order to memorialize his interactions with them. His note to file corresponds with his affidavit of service sworn April 9, 2018 to confirm that the Defendants’ record for their motion to dismiss had been delivered to Mr. Bajcinca, as explained above.
[20] In my view, all of the evidence clearly establishes that Mr. Guminny served Mr. Bajcinca with the motion materials. I also find from this evidence that Mr. Bajcinca is an unreliable witness, as his blanket claim that he was not served is simply implausible against the strength of the Defendants’ detailed and corroborated account that clearly shows how he was served with the materials on March 22, 2018.
[21] Thereafter, and out of an abundance of caution, a law clerk at the law firm representing the Defendants further served Mr. Bajcinca with the Defendants’ motion record dated March 8, 2018 by mailing a copy to his home on March 22, 2018.
[22] On April 19, 2018, Mr. Dehal appeared for the corporate Plaintiff on the return of the Defendants’ motion. Mr. Bajcinca did not appear. At Mr. Dehal’s request, the motion was adjourned to May 17, 2018 to permit the Plaintiff to retain counsel.
[23] In her affidavit of service sworn May 16, 2018, Rachelle Hepburn, a former articling student and now a lawyer with the law firm acting for the Defendants, stated (at para. 2) the following:
On or before April 27, 2018, I caused to be sent the Motion Record dated March 8, 2018 and the Endorsement dated April 19, 2018, by regular mail to [* ********** Avenue, Hamilton, ON *** ***]. [1] [Emphasis added]
[24] In Ms. Hepburn’s further affidavit sworn December 5, 2018 in reply to this cross-motion (n.b., which also includes her May 16, 2018 affidavit as an exhibit), Ms. Hepburn stated:
I too served [Mr. Bajcinca] with the Motion Record dated March 8, 2018 returnable for May 17, 2018. I sent the motion record to [his] home address by regular mail on April 27, 2018 and I sent a copy of the confirmation form, confirming the motion which was sent by regular mail on May 2, 2018. These documents were sent to [his] home on two different dates. Attached hereto as Exhibit “8” to my affidavit is a copy of my affidavit of service [sworn May 16, 2018] and covering letter for the May 2, 2018 letter. [Emphasis added]
[25] On April 29, 2019, Ms. Hepburn was cross-examined on her affidavits. During her cross-examination, Ms. Hepburn clarified that her December 5, 2018 affidavit should more accurately state that the motion materials were mailed to Mr. Bajcinca “on or before” April 27, 2018, as she explained in her May 16, 2018 affidavit of service, rather than stating that the documents were mailed “on” April 27, 2018. She also confirmed that her May 16, 2018 affidavit of service had a minor typographical error as the stated home address for Mr. Bajcinca is missing a single digit to the number of his street address. However, she explained that she handwrote the correct home address for Mr. Bajcinca on the envelope containing the documents that were mailed to him. Due to the passage of time, she could not remember specifically when the materials were mailed to Mr. Bajcinca, although she recalled that it was done during the week ending on April 27, 2018 as she later completed the motion confirmation form on May 2, 2018 after the materials had been mailed to him during the previous week.
[26] Under cross-examination, Ms. Hepburn conceded that she no longer had a specific recollection of whether she had placed the package for Mr. Bajcinca (i.e., containing the Motion Record dated March 8, 2018 and the Endorsement dated April 19, 2018) in the mail herself or instead had arranged for someone else at her firm to do so by April 27, 2018. That said, she confirmed that she had “caused” these materials to be sent by regular mail to Mr. Bajcinca on or before April 27, 2018 as explained in her May 16, 2018 affidavit. When pressed, Ms. Hepburn stated that she was “fairly certain” that the materials were mailed to Mr. Bajcinca as described in her affidavits, while admitting that she could not say so with “one hundred percent confidence” given the time that had passed. She also produced a note to file in which she had confirmed contemporaneously that a law clerk at her firm had mailed the materials to Mr. Bajcinca in April, which corroborates her evidence that the documents had been served on him.
[27] During submissions on this cross-motion, counsel for Mr. Bajcinca relied heavily on the discrepancies between Ms. Hepburn’s affidavits and her answers on cross-examination to cast doubt on her evidence that Mr. Bajcinca actually had been served by mail with the motion record and endorsement by April 27, 2018. Having carefully reviewed the record and submissions, I find that the evidence establishes that Mr. Bajcinca was served by April 27, 2018 with these materials. Given Ms. Hepburn’s note to file which confirmed that a law clerk at her firm mailed the materials to Mr. Bajcinca in April 2018, I am persuaded that the materials were served and delivered to him by the end of that month. I acknowledge the discrepancies in Ms. Hepburn’s affidavits, as set out above. However, when viewed collectively, I find that these discrepancies do not rise to a level that makes Mr. Bajcinca’s claim that he did not receive the materials plausible. Ms. Hepburn is “fairly certain”, albeit without “one hundred percent confidence,” that the materials indeed were served on him. Her account is corroborated by a note to file that she made at the time to confirm that a law clerk at her firm mailed these documents to him that April. While Ms. Hepburn’s affidavit of service sworn May 16, 2018 has a minor typographical error in setting out Mr. Bajcinca’s home address, I accept her evidence that she readily knew his correct address and personally handwrote it on the envelop for the package of documents that were mailed to him by April 27, 2018. I also find that her difficulty recalling the specific day in April when the materials were mailed to Mr. Bajcinca does not sufficiently detract from her evidence that he was served by mail during the week ending on April 27, 2018.
[28] The foregoing is confirmed by Ms. Hepburn’s recollection that she served Mr. Bajcinca with the motion confirmation form for the May 17, 2018 return date and a letter advising that the Defendants had not been contacted by Plaintiff’s counsel, by mailing a copy of these documents to his home on May 2, 2018. In stating this, Ms. Hepburn recalled that she did so knowing that the motion materials previously had been served on Mr. Bajcinca the prior week ending April 27, 2018, as required before confirming the motion. Her evidence confirming these matters was not seriously challenged on cross-examination, and is further supported by her note to file confirming that she personally mailed these materials to Mr. Bajcinca on May 2, 2018.
[29] From this evidence in this matter, I find that the Defendants served Mr. Bajcinca with notice of the return of their motion on May 17, 2018. I do not believe Mr. Bajcinca when he flatly denies having received any of the documents that the Defendants served him on several occasions to give notice of this motion. When considered against the Defendants’ evidence that he was served with motion materials on multiple occasions in March, April and May 2018 as described above, Mr. Bajcinca’s claim that he had no notice of the May 17, 2018 motion has caused me to seriously question his credibility and truthfulness. In the circumstances, I find that his claim strains credulity and is implausible.
Notice of the Motion heard by Master Mills
[30] On August 27, 2018, Mario Eugenio, another process server working with the law firm representing the Defendants, served Mr. Bajcinca with the Defendants’ motion record dated August 24, 2018 for their motion to compel him to attend an examination in aid of execution that returned on September 13, 2018 before Master Mills. The fact that Mr. Bajcinca was served on that day is confirmed by his own notice of cross-motion which states (at para. 15) that “[o]n or about August 27, 2018, Bajcinca was served with a Motion Record dated August 24, 2018, returnable September 13, 2018, for an order compelling him to attend an examination in aid of execution.” As well, Mr. Bajcinca’s affidavit sworn on December 5, 2018 states (at paras. 27 and 30) that on or about August 27, 2018 Mr. Eugenio gave him some court documents with the names “Eco-Stucco” and “Con-Struct” on the papers. However, on December 11, 2018 when cross-examined on his affidavit, Mr. Bajcinca denied being served with the motion record and claimed that he “returned” the motion record to the process server. Mr. Bajcinca’s own conflicting materials and evidence cause me to seriously question his credibility and truthfulness.
[31] In the course of serving Mr. Bajcinca with the Defendants’ motion record on August 27, 2018, Mr. Eugenio claims to have been threatened by Mr. Bajcinca with serious bodily injury. Worried about his personal safety, Mr. Eugenio reported the threat of violence to police and to his work colleague Mr. Guminny. Police responded to the occurrence, took Mr. Eugenio’s statement of the incident, and provided him with a police incident report number. When Mr. Guminny learned of the threat from Mr. Eugenio, he called Mr. Bajcinca in an unsuccessful effort to diffuse the situation. Unfortunately, his attempt to de-escalate matters backfired, as Mr. Bajcinca threatened to find and kill Mr. Guminny.
[32] Previously, on July 23, 2018, Mr. Eugenio served Mr. Bajcinca personally with a notice of examination dated July 18, 2018. Although Mr. Bajcinca denies that he was served with the notice of examination that day, Mr. Eugenio produced a photograph showing Mr. Bajcinca in front of his home holding a copy of the notice of examination that Mr. Eugenio had handed to him just moments earlier, together with electronic confirmation that the photograph had been taken at 6:49 pm on July 23, 2018. This evidence strongly corroborates Mr. Eugenio’s statement that Mr. Bajcinca indeed was served that day. Against this evidence, Mr. Bajcinca’s denial is troubling and causes me to seriously question his credibility.
[33] In my view, the record and evidence clearly establish beyond doubt that the Defendants personally served Mr. Bajcinca on August 27, 2018 with notice of the motion to compel which returned on September 13, 2018 before Master Mills. Mr. Bajcinca’s claim that he did not have notice of this motion is simply not credible. I do not accept his argument that he was not served on August 27, 2018, as it is clear from even his own material that the Defendants served him with notice of the motion on that date, as explained above. His claim that he was not served is simply implausible.
Conclusion
[34] Based on the foregoing, I find that Mr. Bajcinca did not fail to appear on the May 17, 2018 motion before Coats J. or the September 13, 2018 motion before Master Mills through accident, mistake or insufficient notice. It follows that Mr. Bajcinca does not meet the necessary precondition for invoking Rule 37.14(1). In the circumstances, it is unnecessary to address the other factors in 15 Johnswood Crescent and Turino.
Costs
[35] The Defendants were wholly successful on this motion. They are entitled to their costs, which they seek on a full indemnity scale in the amount of $27,383.37.
[36] In determining costs, I am guided by s. 131 of the Courts of Justice Act and the factors under Rule 57.01(1). That being said, an award of costs on an elevated scale is warranted in only very limited situations, including where the losing party has engaged in behaviour worthy of sanction: Davies v. Clarington (Municipality) 2009 ONCA 722 at para. 28. Substantial indemnity is the higher scale of costs normally applied by the court to express disapproval of a party’s conduct, with especially egregious conduct required to justify the highest scale of full indemnity costs that is awarded only in rare and exceptional cases; Net Connect Installation v. Mobile Zone Inc., 2017 ONCA 766 at para. 8.
[37] I find that Mr. Bajcinca’s conduct was reprehensible, and warrants an award of costs on an elevated scale. He ignored and/or sought to evade service on multiple occasions, and did not attend the motions for which notice was delivered. After cost orders against him were made on the motions, he brought this cross-motion to set aside the orders by claiming that he had been prejudiced by a lack of notice of the motion. His conduct constituted a fairly serious abuse of process that, in my view, warrants a costs order against him on a substantial indemnity scale to reflect the court’s disapproval of his conduct; Net Connect at para. 8.
[38] Having regard to the Defendants’ cost outline, I am fixing their costs of this cross-motion on a substantial indemnity scale in the amount of $24,645.00, inclusive of taxes and disbursements, which I find is reasonable in the circumstances of this case.
Order
[39] This cross-motion is dismissed. Mr. Bajcinca shall pay the Defendants their costs in the fixed amount of $24,645.00, inclusive of taxes and disbursements, which is payable forthwith.
Doi J. DATE: June 13, 2019