CITATION: Advant Leasing Limited v. Kozicki, 2021 ONSC 2032

COURT FILE NO.: CV-19-629081

DATE: 20210318

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: ADVANT LEASING LIMITED, Plaintiff

AND:

JOSEPH MARK KOZICKI AND KOZICKI PRODUCE LTD., Defendants

BEFORE: A.A. Sanfilippo J.

COUNSEL: Neil P. Gill, for the Plaintiff

No one appearing, for the Defendants

IN WRITING: March 18, 2021

ENDORSEMENT

[1] The Plaintiff, Advant Leasing Limited (“Advant Ltd.”), brought this motion in writing for default judgment against the Defendants, Joseph Mark Kozicki and Kozicki Produce Ltd., further to the Statement of Claim issued in this Simplified Procedure action initiated pursuant to Rule 76 of the Rules of Civil Procedure, R.R.O. 1990, Reg., 194.

[2] By earlier endorsement, I ordered that the Plaintiff provide the Defendants with notice of this motion, provide supplementary affidavit evidence to address an issue identified in the initial affidavit evidence, and deliver a factum: Advant Leasing Limited v. Kozicki, 2020 ONSC 4292. The Plaintiff attended to these requirements.

A. This Motion

[3] The Plaintiff brought this motion under Rule 19.05 for the following relief:

(a) Damages as against Joseph Mark Kozicki for breach of contract in the amount of $34,346.81, consisting of claim, applicable taxes and contractual interest to July 17, 2020.

(b) Damages as against Mr. Kozicki and Kozicki Produce Ltd. for breach of contract in the amount of $61,313.67, consisting of claim, applicable taxes and contractual interest to July 17, 2020.

(c) Pre-judgment and post-judgment interest at the rate of 24% per annum, pursuant to the contractual terms agreed upon by the parties.

(d) Costs on a substantial indemnity basis.

[4] Rule 19.05(1) provides as follows:

Where a defendant has been noted in default, the plaintiff may move before a judge for judgment against the defendant on the statement of claim in respect of any claims for which default judgment has not been signed.

[5] The Plaintiff issued its statement of claim on October 11, 2019. The Plaintiff filed an affidavit of service that established the Defendants were served with the statement of claim on October 17, 2019. The Defendants did not deliver a statement of defence and were noted in default by the Registrar of this Court on December 2, 2019.

[6] In accordance with my earlier endorsement, the Plaintiff has provided notice to the Defendants of this motion for default judgment, as established by the affidavit of service, filed. The Defendants have been served with a copy of the Noting in Default, through the Plaintiff’s service of its Supplementary Motion Record, and are on notice of the default judgment sought. The Defendants were provided with an opportunity to respond to this motion in accordance with a timetable, established by my earlier endorsement, for filing materials but have not done so.

[7] I am satisfied that the Plaintiff has established the requirements under Rule 19.05 to bring this motion.

B. Analysis

(a) The Evidence

[8] Advant Ltd. tendered evidence through its President, Jason Bonneville, in two affidavits. Mr. Bonneville deposed that Advant Ltd. entered into three leases with the Defendants, as follows:

(a) On October 15, 2017, Lease Agreement No. 14378, wherein Mr. Kozicki leased one used 2001 ABS RC448 4-Axle Live Bottom Trailer (the “2001 Trailer”), bearing vehicle identification number 2A942G8R711114014 (the “Lease #14378”).

(b) On October 15, 2017, Lease Agreement No. 14379, wherein Mr. Kozicki leased one used 2000 Red River 0L8439-9 4-Axle Live Bottom Trailer (the “2000 Trailer”), having vehicle identification number 4ZYLB454XY100358 (the “Lease #14379”).

(c) On April 1, 2019, Lease Agreement #14636, wherein Kozicki Produce Ltd., with Mr. Kozicki as co-Lessee, leased one used 2006 John Deere 7420 4x4 tractor (the “2006 Tractor”), bearing serial number RW7420D053654 (the “Lease #14636”).

[9] Under paragraph 12 of each of the three Leases, the 2000 Trailer, the 2001 Trailer and the 2006 Tractor (collectively the “Leased Equipment”) all remained “the sole personal and movable property of the Lessor”, Advant Ltd., during the term of the Leases.

[10] Mr. Bonneville deposed that in or about April 2019, all three Leases went into default. Mr. Bonneville stated that Advant Ltd. made demand for payment, but that no payments have since been made under the three Leases, with the result that, on September 19, 2019, Advant Ltd. delivered Notices of Default pursuant to section 63 of the Personal Property Security Act, R.S.O. 1990, c. P.10, together with a Statement of Account.

[11] At the date of issuance of Advant Ltd.’s statement of claim, October 11, 2019, Mr. Bonneville deposed that Mr. Kozicki owed the amount of $25,014.70, inclusive of HST, under Lease #14378 and Lease #14379, and that Mr. Kozicki and Kozicki Produce Ltd. owed, jointly and severally, the amount of $78,383.86, inclusive of HST, under Lease #14636. The Statement of Account shows that interest was calculated on the outstanding amounts at the rate of 24% per annum, as provided by section 21(iii)(c) of each of the three Leases: “Interest on the aforesaid amounts at 24% per annum until paid in full.”

[12] Mr. Bonneville deposed that Advant Ltd. retained a bailiff and recovered the Leased Equipment. Advant Ltd. was able to sell the 2006 Tractor, for $25,000, incurring $1,222 in bailiff’s fees and $750 in towing charges. This produced a net credit of $23,028 that Advant Ltd. applied against the amounts owed under the Lease #14636 which reduced the outstanding balance under that Lease to $61,313.67, inclusive of interest and HST, as of July 17, 2020, in accordance with section 21(vii) of Lease #14636:

All proceeds of a sale or lease of the Equipment shall be applied against amounts owing pursuant to the terms of the Lease net of any and all costs and expenses incurred by reason of the occurrence of any event of default or the exercise of the Lessor’s remedies in respect thereof, including without limitation, all expenses incurred in connection with the placing of such equipment in the condition required by this Lease and all legal fees on a substantial indemnity basis, inclusive of any and all applicable taxes.

[13] Mr. Bonneville stated that Advant Ltd. also recovered the 2000 Trailer and the 2001 Trailer but has not been able to sell this leased equipment because the lessee had left the equipment in poor condition. The Statement of Account tendered by Mr. Bonneville showed that the amount outstanding under Lease #14378 and Lease #14379, inclusive of interest and HST, was $34,346.81, as of July 17, 2020.

(b) Entitlement to Judgment

[14] On the basis of Mr. Bonneville’s evidence, which I have accepted, the Plaintiff has established that the Defendant Mr. Kozicki has breached Lease #14378 and Lease #14379, and that the Defendants Mr. Kozicki and Kozicki Produce Ltd. have breached Lease #14636. The Plaintiff has thereby established an entitlement to judgment against these Defendants by reason of their default in payments and their resultant breach of the Leases.

[15] I accept Mr. Bonneville’s evidence that the amount outstanding under Lease #14378 and Lease #14379 is $34,346.81, inclusive of claim, applicable taxes and interest as of July 17, 2020, and that the amount outstanding under Lease #14636 is $61,313.67, inclusive of claim, applicable taxes and interest as of July 17, 2020. These amounts are supported by the Statement of Account, filed.

[16] I am satisfied that Advant Ltd. has credited the value of the leased equipment recovered in Lease #14636, has accounted for this recovery and has provided credit against its claim on this Lease. I have noted Advant Ltd.’s undertaking, provided by Mr. Bonneville in his affidavit sworn July 27, 2020, that Advant Ltd. will credit to Mr. Kozicki any amounts recovered on sale of the 2000 Trailer and the 2001 Trailer.

[17] Advant Ltd. has established an entitlement to Judgment against Mr. Kozicki for $34,346.81, plus pre-judgment interest from July 17, 2020 at the contract rate of 24% per annum, and has established an entitlement to Judgment against Mr. Kozicki and Kozicki Produce Ltd., jointly and severally, in the amount of $61,313.67, plus pre-judgment interest from July 17, 2020 at the contract rate of 24% per year. The judgment will bear post-judgment interest at the contractual rate of 24% per year.

(c) Costs

[18] The Plaintiff sought costs of this Simplified Procedure Action and of this motion on a substantial indemnity basis by reason of section 21(v) of each of the Leases:

The Lessee shall be liable for any and all costs and expenses incurred by reason of the occurrence of any event of default or the exercise of the Lessor’s remedies in respect thereof, including without limitation, all expenses incurred in connection with the placing of such Equipment in the condition required by this Lease and all legal fees on a substantial indemnity basis, inclusive of any and all applicable taxes.

[19] On the basis of the Plaintiff’s success in this action and motion, and based on the contractual entitlement to costs on a substantial indemnity basis, I award the Plaintiff costs of this action and motion for default judgment on a substantial indemnity basis.

[20] The Plaintiff filed a Bill of Costs in the amount of $5,624.75, consisting of fees of $4,545 on a substantial indemnity basis (90% of actual fee), non-taxable disbursements of $229, taxable disbursements of $230 and disbursements of $620.75 (inclusive of HST). The amount of these substantial indemnity costs is only slightly above the partial indemnity costs quantified at $3,912.80, all inclusive, in the Plaintiff’s Bill of Costs. I find that the amount of costs requested by the Plaintiff on a substantial indemnity basis are fair, reasonable and proportionate to the amounts in issue.

[21] I award the Plaintiff costs on a substantial indemnity basis, payable by the Defendants, fixed in the amount of $5,624.75, all inclusive of legal fees, disbursements and applicable taxes.

C. Disposition

[22] On the basis of these reasons, I order as follows:

(a) The Plaintiff, Advant Leasing Limited, is granted judgment against the Defendant Joseph Mark Kozicki, in the amount of $34,346.81, and pre-judgment interest at the rate of 24% per year from July 17, 2020.

(b) The Plaintiff, Advant Leasing Limited is granted judgment against the Defendants Joseph Mark Kozicki and Kozicki Produce Ltd., jointly and severally, in the amount of $61,313.67, and pre-judgment interest at the rate of 24% per year from July 17, 2020.

(c) The Plaintiff, Advant Leasing Limited, shall account and provide credit to the Defendant Joseph Mark Kozicki for any monetary recovery in realization of the leased equipment recovered from this Defendant.

(d) The Plaintiff is awarded costs on a substantial indemnity basis, payable by the Defendants Joseph Mark Kozicki and Kozicki Produce Ltd., fixed in the amount of $5,624.75, all inclusive of fees, disbursements and applicable taxes.

(e) This Judgment shall bear post-judgment interest at the rate of 24% per year.

[23] The Plaintiff may submit a form of draft Judgment by email to my judicial assistant, in both Word and pdf, for consideration.

[24] The Plaintiff shall, forthwith, serve the Defendants with a copy of this Endorsement and the resultant Judgment.

A.A. Sanfilippo J.

Date: March 18, 2021