Court File and Parties

COURT FILE NO.: CV-19-5068-00 DATE: 20201217

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

Quadform Ltd. Plaintiff

Mr. R. Y. Moubarak & Mr. J. Frustaglio, Counsel for Quadform Ltd. / Plaintiff / Responding Party

- and -

Rock Con Forming Ltd., Great Canadian Construction Ltd. and 2150778 Ontario Inc. Defendant

Mr. J. Lo Faso, Counsel for Rock Con Forming Ltd. / Defendant / Moving Party

HEARD: December 10, 2020, by Zoom videoconference

REASONS FOR DECISION

Stribopoulos J.:

Introduction

[1] The defendant, Rock Con Forming Ltd., moves to set aside its noting in default, a default judgment and a resulting notice of garnishment. It also moves for the return of funds garnished from its bank account. Finally, it seeks leave of the court to serve and file a statement of defence and crossclaim.

[2] This action, under the Construction Act, R.S.O. 1990, c. C.30, involves a claim for non-payment of monies owed for the supply of materials and services relating to a construction project.

[3] The construction project was at a property located in Mississauga owned by the defendant, 2150778 Ontario Inc. ("the Property Owner").

[4] The defendant, Great Canadian Construction Ltd., was the general contractor on the project. Rock Con was one of the subcontractors. According to its corporate profile, Rock Con’s sole director is Daniel Latartara.

[5] In early September 2019, Quadform Ltd., represented by Robert Quadrini, contracted with Rock Con, represented by Mr. Latartara, to supply materials and services to construct footings and walls at the project.

[6] After completing its work in late September 2019, Quadform delivered invoices to Rock Con totalling $32,542.92. By late November 2019, Quadform had still not received payment for its work on the project.

I. Procedural History

[7] On November 22, 2019, Quadform registered a construction lien on title to the property.

[8] Shortly after that, Quadform sent by registered mail to each of the defendants, including Rock Con, a demand letter under s. 39(1) of the Act and a copy of the construction lien. (Rock Con never responded to the demand letter, and Quadform never moved to compel a response: see Construction Act, s. 39(6)).

[9] In the case of Rock Con, its head office is a residence at 45 Presidential Street, Woodbridge, Ontario, L6P 1Y7. The registered owners of that property are Francesco Latartara and Lina Latartara.

[10] On December 13, 2019, Quadform moved to perfect its construction lien by issuing a statement of claim and a certificate of action against the three defendants, the Property Owner, Great Canadian, and Rock Con.

[11] On December 18, 2019, Karla Toma, a clerk with the law firm that represents Quadform, sent the statement of claim and certificate of action to each of the defendants by registered mail at their respective business addresses.

[12] Canada Post records detailing the tracking history for the registered mail containing the statement of claim and certificate of action sent to Rock Con form part of the evidence on this motion. From the tracking history, it appears that Rock Con never retrieved the registered mail containing the statement of claim and certificate of action.

[13] On December 19, 2019, Canada Post left a registered mail notice at 45 Presidential Street, followed by a final notice on December 27, 2019. (The latter advised that the item would be returned to the sender if not collected within ten days). Further, the Canada Post records indicate that on January 5, 2020, when the item "was unclaimed by recipient," it was "returned and is en route to the Sender."

[14] In January of 2020, the Property Owner served Quadform, Great Canadian, and Rock Con with its statement of defence and crossclaim. According to an affidavit of service, also filed on this motion, an affiant deposes that:

On Thursday January 23, 2020, at 7:00 p.m., I served the DEFENDANT ROCK CON FORMING LTD., with the Statement of Defence and Crossclaim dated Thursday January 16, 2020 by giving a copy in a sealed envelope to MIKE LATARTARA, who appeared to be in control of the business at: 45 Presidential Street, Woodbridge, Ontario, L4L 5G6.

I was able to identify the person by his admission to me that he is the said MIKE LATARTARA, manager of the Defendant, ROCK CON FORMING LTD.

[15] In January 2020, after Rock Con failed to deliver a statement of defence within the prescribed time, Quadform requisitioned the registrar to note the company in default. That required Quadform to provide proof of service: Rules of Civil Procedure, r. 19.01(1). Quaform did so by filing an affidavit of service sworn by Karla Toma on December 19, 2019. In her affidavit, Ms. Toma deposes that she served Rock Con “with the Statement of Claim and Certificate of Action by sending a copy by registered mail on December 18, 2019 to 45 Presidential Street, Woodbridge, Ontario, L4L 5G6.” As a result, the registrar noted Rock Con in default on January 21, 2020.

[16] On September 20, 2020, Quadform moved for default judgment against both Great Canadian and Rock Con. In doing so, it filed an affidavit from Robert Quadrini, sworn on September 1, 2020, which provided, in part:

10. I am advised by my solicitors, Sutherland Law, that on or about December 18, 2019, the Defendants were served with a copy of the Statement of Claim and Certificate of Action by way of registered mail pursuant to section 87 of the Construction Act …. Attached hereto and marked as Exhibit “D” is a copy of the Affidavit of Service of Karla Toma, sworn December 19, 2019.

[17] Mr. Quadrini’s affidavit did not make any mention of the tracking information from Canada Post, which showed that the statement of claim and certificate of action were never received by Rock Con.

[18] In a more recent affidavit sworn by Mr. Quadrini, filed by Quadform in response to this motion, he deposes:

41. I am advised by my solicitors and verily believe it to be true that as of the date of the swearing of this Affidavit, Sutherland Law has never received any return package from Canada Post following the delivery of its Statement of Claim and Certificate of Action to Rock Con by registered mail.

[19] On September 20, 2020, relying on Mr. Quadrini's affidavit sworn September 1, 2020, Bloom J. issued default judgment in favour of Quadform against both Rock Con and Great Canadian in the amount of $37,986.45, which was inclusive of pre-judgment interest and costs for the action and motion.

[20] Quadform wasted no time in acting on the judgment. On September 23, 2020, it requisitioned garnishment notices for the total amount of the judgment against both Rock Con and Great Canadian. With one directed to a TD Canada Trust branch in Vaughan where Rock Con does its banking, and the other to a Toronto-Dominion Bank branch in Brampton where Great Canadian does its banking.

[21] Since then, TD Canada Trust has garnished $37,992.69 from Rock Con's account with the bank and paid that sum to the sheriff at the Newmarket courthouse. Put on notice of this motion the sheriff has refrained from releasing any of the funds garnished from Rock Con’s TD Canada Trust account to Quadform.

[22] On October 2, 2020, Rock Con's counsel wrote to Quadform's counsel seeking a copy of the statement of claim, affidavit of service, and the default judgment. A flurry of e-mail correspondence followed between them before Quadform's counsel eventually provided, on October 7, 2020, a copy of the notice of garnishment and a copy of the default judgment.

[23] Counsel for Quadform resisted providing a copy of the affidavit of service to counsel for Rock Con. In a testy exchange of correspondence between counsel, Quadform’s counsel explained that he was concerned that Daniel Latartara might tailor his evidence to respond to what the affidavit of service revealed. He said he wanted to hear what Mr. Latartara had to say about service before disclosing the affidavit of service.

[24] Ultimately, on October 15, 2020, counsel for Rock Con obtained a copy of Karla Toma's affidavit of service, sworn on December 19, 2019, from the court file.

[25] The motion by Rock Con to set aside the default judgment and for associated relief was originally returnable on November 20, 2020. That day, after hearing some initial submissions, the court adjourned the motion to December 10, 2020, when the hearing proceeded.

[26] At the outset of the hearing, the court inquired of counsel for Quadform about the status of the garnishment involving Great Canadian's bank account. Mr. Moubarak advised that he did not know whether the sheriff at the Brampton courthouse had received any garnished funds under the authority of the garnishment notice relating to Great Canadian.

[27] However, while Mr. Moubarek was still in the midst of making submissions on the motion, his office received a cheque from the sheriff at the Brampton courthouse for the total amount of the judgment garnished from Great Canadian’s bank account.

II. Robert Quadrini's Evidence on the Motion

[28] Mr. Quadrini is a representative of Quadform. His affidavit, sworn November 16, 2020, was filed on this motion and sets out much of the procedural history summarized above. Additionally, his affidavit also addresses what he contends were the terms of the agreement between Rock Con and Quadform and details conversations between him and Mr. Latartara since the project’s completion.

[29] Mr. Quadrini contends that when he priced the work that Rock Con wanted done, there was never any discussion of a "pay when paid" arrangement. According to him, payment was due to Quadform within 30 days of it completing its work. He points out that these are the terms for payment reflected in the three invoices that Quadform submitted to Rock Con.

[30] Mr. Quadrini deposes to having numerous telephone conversations with Mr. Latartara between November 2019 and October 2020. Attached to his affidavit are telephone records corroborating that the two men spoke by telephone. On his account, during these calls, he repeatedly attempted to secure payment from Rock Con but was met with continual excuses from Mr. Latartara. According to Mr. Quadrini, he warned Mr. Latartara that he would place a lien on the property and threatened to issue a claim.

[31] During a call in January 2020, Mr. Quadrini reports that Mr. Latartara told him that: "he was speaking with '[his] lawyer, John' who advised him not to spend money liening and pursuing his own claim against Great Canadian, who apparently had not paid him yet, as Rock Con would not be recovering much, given that Rock Con subcontracted the entire job to Quaform." In their conversations between February and October 2020, Mr. Quadrini reports that Mr. Latartara continued to make excuses and refuse payment.

III. Daniel Latartara's Evidence on the Motion

[32] In support of its motion, Rock Con filed two affidavits sworn by Mr. Latartara. In the first, sworn October 27, 2020, he deposes that he only became aware of Quadform's claim on October 1, 2020. According to his evidence, he learnt of the action when he contacted Rock Con's bank after being unable to complete a transaction. The bank advised him that it was served with a notice of garnishment that morning, resulting in the freezing of Rock Con's account.

[33] According to Mr. Latartara, it was the garnishment that alerted him to the action. That led him to contact Rock Con's lawyer, Mr. Lo Faso. The very next day, Mr. Lo Faso wrote to counsel for Quadform to obtain a copy of the statement of claim, the affidavit of service and the default judgment.

[34] On Mr. Latartara's evidence, Rock Con never received the registered mail containing the statement of claim. By way of explanation, he deposes that he was away in Florida between December 31, 2019, and January 7, 2020.

[35] In a supplementary affidavit, sworn November 18, 2020, Mr. Latartara provides evidence regarding the agreement between Rock Con and Quadform. According to him, the two companies had a reciprocal verbal agreement that "our respective corporations would be paid when the other received payment whenever we worked on projects together." He maintains that the project at issue in this action was no exception.

[36] Mr. Latartara deposes that he made a concerted effort to secure payment from Great Canadian after Quadform completed its work. And that he also kept Mr. Quadrini appraised of these efforts. He acknowledges knowing that Quadform registered a lien and insists that he continued trying to collect from Great Canadian even after that.

[37] According to Mr. Latartara, after learning of the lien, he believed Quadform's interests were protected and therefore decided not to register a lien on behalf of Rock Con, given that its interest in the monies owed was only nominal.

[38] Mr. Latartara maintains that if the statement of claim had come to his attention, he would not have ignored it and would have instructed his lawyer to deliver a statement of defence on behalf of Rock Con.

[39] Mr. Latartara's evidence on the motion does not address how the action escaped his attention even after January 23, 2020 when Rock Con was served with the Property Owner's statement of defence and crossclaim. Notably, he does not address whether Mike Latartara is a manager with the company, as the affidavit of service for the Property Owner's statement of defence and crossclaim asserts.

IV. Positions of the Parties

[40] The positions of the parties changed during the hearing of the motion. Initially, they argued the motion on its merits. However, after it received payment of the judgment during the hearing, Quadform took the position that the motion had become moot. I agree with Rock Con that because judgment against it remains outstanding, the motion is not moot. Turning then to the positions of the parties concerning the merits of the motion.

[41] On behalf of Rock Con, Mr. Lo Faso notes that his client was never served with the statement of claim. He submits that the court should accept Daniel Latartara’s evidence that he only became aware of the action on October 1, 2020 when he discovered Rock Con’s account at TD Canada Trust was frozen due to the notice of garnishment. After that, submits Mr. Lo Faso, his client moved quickly to set aside the default judgment. He argues that Rock Con has a meritorious defence, that Rock Con and Quadform had a “pay when paid” arrangement, such that the monies owed only became due when Rock Con received payment from Great Canadian. In the circumstances, he submits that the prejudice to Rock Con of not granting the motion would far outweigh any potential prejudice to Quadform in granting it.

[42] On behalf of Quadform, Mr. Moubarak and Mr. Frustaglio submit that the court should dismiss the motion. They argue that Rock Con was served with the statement of claim and certificate of action under the Construction Act, which deems service effective five days after a document is sent by registered mail to the recipient's last known mailing address: Construction Act, s. 87. They submit that it is of no consequence that the registered mail containing the statement of defence and certificate of action was never actually retrieved by Rock Con and rerouted for return to the sender by Canada Post. After all, submit Mr. Moubarak and Mr. Frustaglio, Rock Con must have known of the action by January 23, 2020, when the Property Owner personally served its statement of defence and crossclaim on one of Rock Con's managers. The style of cause noted Rock Con as a defendant, which should have alerted it to the action. Finally, they argue that Rock Con has no valid defence to the claim. They emphasize that nothing memorializes the purported "pay when paid" arrangement. In all of the circumstances, Quadform submits that the court should dismiss the motion.

V. Law and Analysis

[43] The law concerning a motion to set aside a default judgment is well established. The Court of Appeal for Ontario’s decision in Mountain View Farms Ltd. v. McQueen, 2014 ONCA 194, summarizes the relevant considerations at paragraphs 47-51:

[47] The court’s ultimate task on a motion to set aside a default judgment is to determine whether the interests of justice favour granting the order. The approach to be taken to this determination has been considered numerous times by this court. ...

[48] The court must consider the following three factors:

(a) whether the motion was brought promptly after the defendant learned of the default judgment;

(b) whether there is a plausible excuse or explanation for the defendant’s default in complying with the Rules; and

(c) whether the facts establish that the defendant has an arguable defence on the merits.

[49] To this list, I would add the following two factors the court should have regard to, as set out in Peterbilt of Ontario Inc. v. 1565627 Ontario Ltd. 2007 ONCA 333, 87 O.R. (3d) 479 (C.A.), at para. 2:

(d) the potential prejudice to the moving party should the motion be dismissed, and the potential prejudice to the respondent should the motion be allowed; and

(e) the effect of any order the court might make on the overall integrity of the administration of justice.

[50] These factors are not to be treated as rigid rules; the court must consider the particular circumstances of each case to decide whether it is just to relieve the defendant from the consequences of his or her default.

[51] For instance, the presence of an arguable defence on the merits may justify the court exercising its discretion to set aside the default judgment, even if the other factors are unsatisfied in whole or in part. In showing a defence on the merits, the defendant need not show that the defence will inevitably succeed. The defendant must show that his or her defence has an air of reality.

[44] In the context of claims under the Construction Act, the third factor identified in Mountain View, whether the facts establish that the defendant has an arguable defence on the merits, must be read together with the regulations under the Act. The regulations provide that once noted in default; a defendant may file a statement of defence with leave, which the court may only grant if “satisfied that there is evidence to support a defence.”: Procedures for Actions Under Part VIII of the Act, O. Reg. 302/18, s. 5(3). Although Mountain View and s. 5(3) of the regulations use different wording, they essentially require the same thing. A party seeking to set aside a default judgment must demonstrate facts (through evidence) that provide it with an arguable defence to the claim. In other words, that its defence has an air of reality.

[45] I turn to consider each of the relevant factors, in light of the evidence on the motion.

a) Was the motion brought promptly after discovery of the default judgment?

[46] Based on the record, I accept that Rock Con only became aware of the default judgment after its bank account was frozen, and it obtained a copy of the default judgment on October 15, 2020 from Quadform’s counsel. The motion to set aside the default judgment was initially returnable on November 20, 2020. In my view, Rock Con moved with relative dispatch between learning of the default judgment and bringing the motion to set it aside.

b) Is there a plausible excuse for the defendant’s default in complying with the Rules?

[47] Given the evidence, especially the Canada Post tracking history concerning the registered mail containing the statement of claim and certificate of action, I accept that Rock Con never received these documents.

[48] Section 87(1) of the Construction Act permits service by registered mail. That provision must be read along with s. 87(2), which provides:

In the absence of evidence to the contrary, a document or notice sent to a person by certified or registered mail shall be deemed to have been received by the person on the fifth day following the date on which it was mailed, exclusive of Saturdays and holidays.

[Emphasis added]

[49] In this case, the Canada Post tracking history provides evidence to the contrary. Rock Con never received the statement of claim and certificate of action because it never retrieved the registered mail despite at least two delivery notices having been left at its business address.

[50] In that regard, I reject Quadform's argument that once delivery notices are left at a party’s address, any documents contained in the registered mail, which remain under the control of Canada Post, are "received" by that party. Such an interpretation would strain the plain meaning of these provisions past their breaking point. "Receipt" when it comes to a document, means actual physical receipt of it: Hans Mann Tiles Inc. v. Palmer (1995), 24 O.R. (3d) 93 (Ont. Gen. Div.), at para. 16.

[51] That said, I find it difficult to credit Mr. Latartara's evidence that he only learnt of the action on October 1, 2020. His evidence does not address how that is possible even after Mike Latartara was personally served with the Property Owner’s statement of defence and crossclaim at Rock Con's business address on January 23, 2020. Rock Con did not file any evidence on the motion to refute that Mike Latartara is a manager with Rock Con, as reported in the affidavit of service. As a result, I do not find Daniel Latartara's evidence, that Rock Con only became aware of the action in October 2020, credible.

[52] In my view, the far more likely explanation for why Mr. Latartara decided not to respond to the claim is because he believed that until Rock Con was served with the statement of claim, the action against the company could not proceed.

[53] Litigation is not a game. Parties should not be encouraged to evade the court's process by hiding from their opponent until they are successfully tagged.

[54] A finding that a defendant, although not formally served, effectively had notice of the claim and nevertheless chose not to respond will ordinarily weigh heavily against granting a motion to set aside a default judgment: see e.g. Select Acoustic Supply Inc. v. College of Physicians & Surgeons (Ontario) (2008), 70 C.L.R. (3d) 118 (Ont. Div. Ct.), at para. 5. However, in all of the circumstances of this case, that is far from the decisive consideration on this motion.

c) Is there an arguable defence on the merits?

[55] Quadform and Rock Con never reduced their agreement to writing. Instead, it was an oral contract between Mr. Quadrini and Mr. Latartara entered into on behalf of their respective companies.

[56] Mr. Quadrini insists that the contract between Quadform and Rock Con was not a "pay when paid" arrangement. As a result, Quadform contends that Rock Con became indebted to it as soon as Quadform finished its work on the project. In contrast, Mr. Latartara maintains that it was a "pay when paid" arrangement.

[57] If the court accepts that it was a "pay when paid" arrangement, then the contract would only become enforceable by Quadform against Rock Con once the latter received payment from Great Canadian: see Timbro Developments Ltd. v. Grimsby Diesel Motors Inc. (1988), 32 C.L.R. 32 (Ont. C.A.).

[58] Ultimately, the outcome of this action will turn on a question of credibility as between Mr. Quadrini and Mr. Latartara. Should Mr. Latartara's evidence be preferred, Rock Con would succeed in its defence. In other words, there is a potential defence in law that is supported by evidence.

[59] In so concluding, I reject Quadform's argument that Rock Con’s potential defence is devoid of merit because there was nothing between the parties memorializing a "pay when paid" arrangement. This submission ignores that the parties did not reduce any aspect of their agreement to writing.

[60] In short, there would appear to be an arguable defence on the merits.

d) Who faces the greater prejudice from granting or denying the motion?

[61] The answer to this question changed significantly during the hearing of the motion, when counsel for Quadform received payment in satisfaction of the judgment from funds garnished from Great Canadian’s bank account. Given that development, I struggle to identify any potential prejudice to Quadform that would follow from granting Rock Con’s motion. After all, Quadform has now received payment of the monies it was owed.

[62] In contrast, there is a judgment against Rock Con and funds equal to it have already been garnished from its bank account. As an officer of the court, I readily accept Mr. Moubarak’s undertaking to repay the garnished amount once he becomes satisfied that Great Canadian will not be moving to set aside the judgment against it (although it is less than clear how long that might take). That said, Quadform is not an officer of the court. There would be nothing to stop it from discharging Mr. Moubarak and insisting on enforcing its judgment against Rock Con.

[63] Further, even if the funds are eventually returned to Rock Con, the potential negative consequences for it of the judgment remaining in place are obvious. For example, it could impact on Rock Con’s ability to secure credit in future.

[64] There will be real prejudice to Rock Con if the court denies its motion to set aside default judgment. In contrast, there is only a remote possibility of prejudice against Quadform should the court grant the motion.

[65] In the circumstances, this prong of the analysis strongly favours granting the motion.

e) What would be the effect of any order on the overall integrity of the administration of justice?

[66] In my view, this factor, standing on its own, justifies granting the motion in the circumstances of this case. I will briefly explain why I have come to that conclusion.

[67] It is trite that when a party brings an ex parte motion, it must make full and fair disclosure of all material facts. In Misir v. Misir, 2017 ONCA 675, the Court of Appeal concisely explained this obligation, writing, at paragraph 17:

A party who seeks relief from the court in proceedings without notice is obliged to make full and fair disclosure of all material facts. This is a common law rule that is enshrined in rule 39.01(6) of the Rules of Civil Procedure. See also Sangster v. Sangster, [2003] O.J. No. 69 (Ont. C.A.), at para. 7. It is unnecessary to find that the court was deliberately misled before a court will set aside such an order. The basis of the rule is fairness. As the rule confirms, the failure to make such disclosure is a reason, in itself, to set aside the order made: Mariani v. Mariani, 2010 ONSC 1464 (Ont. S.C.J.); Balanyk v. Greater Niagara General Hospital, [1997] O.J. No. 4867 (Ont. C.A.).

[68] I accept the representations made by counsel for Quadform that when they moved for default judgment before Bloom J., they were unaware of the fact that Rock Con had not received the registered mail containing the statement of claim and certificate of action. More specifically, that they never checked the registered mail's tracking history and therefore did not know that Rock Con had not received the statement of claim and certificate of action before bringing the motion for default judgment. Further, that the registered mail did not get returned to their office, or, if it did, it never came to their attention. It follows that I am not prepared to conclude that Quadform deliberately misled the court.

[69] Nevertheless, Quadform did not fulfill the obligations a party owes when bringing an ex parte motion. In moving for default judgment in September 2020, Quadform relied on an affidavit of service sworn on December 19, 2019, the day after the statement of claim and certificate of action were mailed. By not taking a moment to check the Canada Post tracking history and disclosing the results, Quadform failed to provide the court with full and fair disclosure of all the material facts.

[70] In defending their failure to check the tracking history and disclose the results in their motion materials for default judgment, counsel for Quadform point to s. 87(1) of the Construction Act. They say they complied with the Act by sending the statement of claim and certificate of action by registered mail to Rock Con's business address. In their submission because of s. 87(2) service was effective five days after that. They contend that that was all that they were required to do. They contest having any obligation to check the registered mail's tracking history before moving for default judgment.

[71] Quadform’s counsel emphasize that the Construction Act's overarching purpose is to facilitate the timely and efficient resolution of construction disputes. They contend that it would frustrate that purpose to impose a burden on plaintiffs bringing claims under the Act to be required to check and confirm receipt of a statement of claim sent by registered mail to a defendant before moving for default judgment. Further, they submit that such a requirement would only encourage defendants to behave as Rock Con did in this case and evade service by failing to retrieve registered mail. They argue that imposing such a burdensome requirement would fundamentally alter existing construction law practice.

[72] With respect, I do not find these arguments persuasive. Checking the tracking history of an item sent by registered mail through Canada Post can be done online and takes only a few seconds. As a result, it would not be unduly burdensome to expect a plaintiff advancing a claim under the Construction Act to check the tracking history for a statement of claim sent by registered mail and disclose the results to the court when moving for default judgment.

[73] In so concluding, I do not accept that ex parte proceedings under the Construction Act are somehow different than other types of ex parte proceedings. Although s. 87(1) of the Act allows for a statement of claim to be served by registered mail, service is only effective five days after mailing: "In the absence of evidence to the contrary": Construction Act, s. 87(2). A plaintiff is required to place any "evidence to the contrary" readily available to it before the court on a motion for default judgment. That obligation flows from the burden on any party when moving ex parte to make full and fair disclosure of all material facts.

[74] It is not for a plaintiff, a partisan participant in the process, to decide that a defendant is evading service. Instead, a plaintiff, in moving for default judgment on an ex parte basis, as part of its duty to make full and fair disclosure, must collect all of the relevant information readily available to it concerning service and place it before the court. It is then for the court to decide how to deal with the issue of service.

[75] For example, should the court conclude that a defendant is evading service and already has notice of the action, it may make an order deeming service effective or make an order for substituted service: see Rules of Civil Procedure, r. 16.04. Ultimately, these are decisions for the court to make after a moving party has made full and fair disclosure of all material facts.

[76] Therefore, I am of the view that Quadform should have checked the tracking history to see whether Rock Con received delivery of the registered mail containing the statement of claim and certificate of action. Further, it should have disclosed what the tracking history revealed when moving for default judgment before Bloom J.

[77] This factor, standing on its own, would justify granting Rock Con's motion.

Conclusion

[78] In my view, in all of the circumstances of this case, the interests of justice favour granting Rock Con the relief it seeks on this motion. Accordingly, an order shall issue setting aside the noting in default and default judgment, granting leave to Rock Con to file a statement of defence and crossclaim, setting aside the notice of garnishment against Rock Con, and directing the sheriff at the Newmarket Courthouse to return the garnished funds to Rock Con.

[79] Ordinarily, as the successful party on the motion, Rock Con would be entitled to costs. However, as noted above, I am satisfied that Rock Con evaded service of the statement of claim and certificate of action. In doing so, it played a significant role in creating the events precipitating the need for this motion. In these circumstances, given the conduct of both parties, I do not think it would be appropriate to make an order for costs.

Signed: Stribopoulos J.

Released: December 17, 2020