COURT FILE NO.: CV-20-4244 (Brampton)
DATE: 2021 05 18
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Eco-Power Electrical Company Limited, Plaintiff
AND
Under the Sun Home Renovations Ltd., Under the Sun Realty Inc., Luigi Simone And Miranda Simone, Defendants
BEFORE: Justice R. Chown
COUNSEL: M. Greco, for the Plaintiff
W. Kravchuk, for the Defendants Simone
HEARD: By video conference – May 18, 2021
ENDORSEMENT
[1] In this construction lien action, the plaintiff electrical subcontractor moves for default judgment against the defendant general contractors Under the Sun Home Renovations Ltd. and Under the Sun Realty Inc (collectively, “Under the Sun”). The defendants Luigi and Miranda Simone are the homeowners who had renovation work done by Under the Sun.
[2] Service of the claim was by registered mail in accordance with s. 87 of the Construction Act. All the defendants have been noted in default. All the defendants were served with the motion record for default judgment.
[3] The evidence indicates that the principal of Under the Sun is deceased. No response from Under the Sun is expected.
[4] The Simones have filed an affidavit indicating that they had been advised of the lawsuit in advance by the plaintiff but received assurances from the plaintiff that the target of the lawsuit was the general contractor, although they were necessary parties. The affidavit further indicates that they emailed counsel for the plaintiff the day after being served with the claim, disputing liability, and they did not receive a response. Based on the email dated May 5, 2021 from Mr. Moubarak, counsel for the plaintiffs (see page 48 of the responding motion record), it appears that that email was received. Despite this email, the plaintiff proceeded to note default against the Simones without any further notice or warning.
[5] Mr. Kravchuk, appearing today for the Simones, asked me to make an order setting aside the noting of default. Although no motion record was served, the affidavit in the responding motion record clearly foreshadowed that such relief would be requested.
[6] Mr. Greco on behalf of the plaintiff strongly objects to the noting of default being set aside. He points to s. 5(3) of O. Reg. 302/18, Procedures for Actions Under Part VIII, which creates a requirement that the court be satisfied that there is evidence to support a defence. He argues there is no evidence of a defence. He argues that there is no draft defence. He argues that the plaintiff has been ambushed by the lack of a motion record.
[7] The Simones do not object to judgment being granted against Under the Sun but object to it being granted in terms that would prevent them from disputing the amount owing under the contract between the plaintiff and Under the Sun. Mr. Kravchuk wants to review documentation before agreeing to the quantum.
[8] With respect to setting aside the noting of default, I will not grant that relief today in light of the way in which the relief was sought, without a motion record. I do not fault the Simones for attempting to obtain the relief they seek in this irregular way, given the timeline and the amount in issue; however, the plaintiff had no advance opportunity to provide responding material on the issue.
[9] When it suited their respective interests, both counsel emphasized the modest amount in issue and the fact that procedures under the Construction Act are intended to be summary. However, Mr. Greco did not think it appropriate for the court to act summarily in setting aside the noting of default, and Mr. Kravchuk did not think it appropriate for the court to grant judgment on the terms requested.
[10] Mr. Greco for the plaintiff argued that summary judgment in the amount sought should be granted today against Under the Sun. He acknowledged that under the terms of his draft judgment this would preclude the Simones from contesting the amount owing under the subcontract. He argued that there was no evidence to refute the amount; the Simones will not have evidence on this point because they were not privy to the subcontract; and all the necessary evidence is available.
[11] It would be unjust to grant judgment in terms which would affect the rights of the Simones without first affording the Simones an opportunity to advance their motion to set aside the noting of default and, if successful, to be heard and to contest the amount claimed under the subcontract.
[12] This motion is adjourned to July 8, 2021 to be heard by videoconference.
[13] The Simones shall deliver their motion record for an order setting aside the noting of default by June 11, 2021, which shall include a draft statement of defence. Subject to any direction otherwise given by the motions judge, the motion to set aside the noting of default shall be heard first.
[14] The Simones shall respond to the s. 39 request made by the plaintiffs within the allotted time frame under the Construction Act.
[15] Notwithstanding the noting of default, until after the motion for setting aside the noting of default is dealt with, the plaintiff shall take no steps in the action without notice to the defendants Simone.
[16] The plaintiffs may serve any documents in this matter on the Simones by serving Mr. Kravchuk, unless and until Mr. Kravchuk indicates he no longer acts for the Simones. In that event, the plaintiffs may serve the Simones directly by email at moelou123@gmail.com.
[17] The parties are encouraged to see if the matter can be resolved.
Costs
[18] It is my understanding that, until the hearing today and my questioning of Mr. Greco about the impact of the default judgment on the Simones, the Simones were not going to oppose default judgment, and the plaintiff was not going to seek costs against the Simones, but rather only as against Under the Sun.
[19] Similarly, the Simones did not intend to seek costs in their impromptu motion to set aside default judgment given that there was no formal motion record.
[20] Today was a regular motions day and this was one of the matters on the list. The hearing today was lengthened and heard in two parts because I wanted counsel to submit authorities on whether or not I could set aside the noting of default, and I gave the parties a chance to do some research and return for argument on that point after the lunch break. Counsel did not expect the hearing to take as long as it did.
[21] Because of the way the matter unfolded today, counsel wish to re-evaluate their costs positions and take instructions. The parties are directed to deliver updated bills of costs and costs, including costs of today, are reserved to the judge hearing the motion.
___________________________ Chown J.
Date: May 18, 2021