COURT FILE NO.: CV-21-665645-0000

DATE: 20211228

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: WATERFORD CAPITAL INCORPORATED Applicant

AND:

KEVIN COOPER and PAUL RENARD Respondents

BEFORE: Mr. Justice Chalmers

COUNSEL: T. Frankel and M. Rourke, for the Applicant

K. Cooper and P. Renard on their own behalf

HEARD: December 16, 2021, by videoconference

ENDORSEMENT

Overview

[1] The Applicant seeks an order pursuant to section 2 of the Reciprocal Enforcement of Judgments Act, R.S.O. 1990, c. R.5, (the Act) for an order registering in Ontario, two judgments issued by the Supreme Court of Newfoundland and Labrador (General Division).

[2] On June 19, 2019, Waterford Capital Incorporated (Waterford) entered into a mortgage agreement with Great North Data Ltd. (Great North), in the amount of $1,000,000. The mortgage was guaranteed by the Respondents, Paul Renard and Kevin Cooper. Great North defaulted on the mortgage. In 2020, Great North went into bankruptcy. On September 1, 2020, Waterford demanded payment of the mortgage plus interest and costs from the guarantors. Mr. Cooper and Mr. Renard did not respond to the demand.

[3] The Applicant commenced two separate actions against Mr. Cooper and Mr. Renard in the Supreme Court of Newfoundland and Labrador. The actions were commenced on September 14, 2020. Mr. Cooper was served with the Statement of Claim on October 27, 2020 by leaving a copy of the claim at his residential address at 2187 Thomson Crescent, Severn, Ontario. An additional copy of the claim was mailed to this address on October 28, 2020. Mr. Renard was served on November 30, 2020 by leaving a copy at his residential address at 99 Summerhill Avenue, Toronto, Ontario. Neither Mr. Cooper nor Mr. Renard delivered a Statement of Defence or participated in the Newfoundland actions.

[4] On December 23, 2020, the Supreme Court of Newfoundland (General Division) granted default judgment against Mr. Cooper in the amount of $1,248,351.38, plus pre-judgment interest of $25,685.25 plus post-judgment interest and costs to be taxed. The costs were taxed in the amount of $971.49. On January 5, 2021, the Judgment and Statement of Verification were delivered to Mr. Cooper.

[5] On January 5, 2021, the Supreme Court of Newfoundland (General Division) granted default judgment against Mr. Renard in the amount of $1,248,351.38, plus pre-judgment interest of $38,014.17, plus post-judgment interest and costs to be taxed. The costs were taxed in the amount of $971.49. On January 18, 2021, the Judgment and Statement of Verification were delivered to Mr. Renard.

[6] Mr. Cooper and Mr. Renard did not take any steps to vary or set aside the Judgments. They did not appeal, and the time to appeal the Judgments has expired.

[7] Waterford was successful in collecting $435,147.20, leaving an uncollected balance of $853,532.89.

[8] This Application was commenced by Notice of Application. The Notice was issued on July 8, 2021. Mr. Cooper was personally served with the Notice of Application on July 27, 2021. Mr. Renard was served with the Notice of Application on August 11, 2021. On August 9, 2021, Mr. Cooper sent an e-mail to counsel for the Applicant, in which he stated that he received the material.

[9] On September 3, 2021, counsel for the Applicant sent an e-mail to Mr. Cooper and Mr. Renard and advised that the matter would be spoken to at Civil Practice Court (CPC) on September 15, 2021. She sent the e-mail to the e-mail address used by Mr. Cooper on August 9, 2021. Mr. Cooper did not respond to the e-mail.

[10] The matter was spoken to at CPC on September 15, 2021. Mr. Renaud attended CPC to schedule the hearing of the Application. Mr. Cooper did not attend. Justice Dunphy scheduled the Application for December 16, 2021. On September 15, 2021, counsel for the Applicant emailed a copy of Justice Dunphy’s endorsement to Mr. Cooper and Mr. Renard. No material was filed by Mr. Cooper and Mr. Renard, but they were in attendance on the Application

Analysis

[11] Subsection 2(1) of the Act provides that where a judgment has been given in a court in a reciprocating jurisdiction, the plaintiff can apply to the Superior Court of Justice at any time within six years after the date of the judgment to have the judgment registered in that court. Newfoundland is a reciprocating state to Ontario.

[12] As a general rule, the courts in one province should give “full faith and credit” to the judgments by a court in another province so long as the court properly exercised jurisdiction in the action: Morguard Investments Ltd. v. De Savoye, 1990 29 (SCC) at para 41. The purpose of the proceeding to enforce a judgment is not to determine the merits of substantive legal claim, but instead is to assist in enforcing an already adjudicated obligation: Chevron Corp. v. Yaiguaje, 2015 SCC 42, at para. 44.

[13] Subsection 2(3) of the Act, provides that no judgment shall be ordered to be registered under the Act if it is shown to the registering court that the following factors are present:

(a) The original court acted without jurisdiction; or

(b) The judgment debtor, being a person who was neither carrying on business nor ordinarily resident within the jurisdiction of the original court, did not voluntarily appear or otherwise submit during the proceedings to the jurisdiction of that court; or

(c) The judgment debtor, being the defendant in the proceedings, was not duly served with the process of the original court and did not appear, despite the fact that the judgment debtor was ordinarily resident or was carrying on business within the jurisdiction of that court or agreed to submit to the jurisdiction of that court; or

(d) The judgment was obtained by fraud; or

(e) An appeal is pending, or the judgment debtor is entitled and intends to appeal against the judgment; or

(f) The judgment was in respect of a cause of action for reasons of public policy or for some other reason would not have been entertained by the registering court; or

(g) The judgment debtor would have a good defence if an action were brought on the original judgment.

[14] I am satisfied that none of the factors set out above apply in this case.

[15] The original Judgments were with respect to Waterford’s mortgage to Great North and the guarantees given by Mr. Cooper and Mr. Renard. The mortgage and the guarantees were entered into in Newfoundland. The Newfoundland Court therefore had jurisdiction to grant the Judgments.

[16] In argument, Mr. Cooper takes the position that he did not carry on business and was not ordinarily resident in Newfoundland and did not voluntarily appear or submit to the proceedings in Newfoundland. At the relevant time, Mr. Cooper was the Chief Technology Officer of Great North. He was a director and shareholder of the company. I am satisfied that as a director of a Newfoundland company, Mr. Cooper was carrying on business in Newfoundland.

[17] Mr. Renard did not argue that the Judgment should not be registered in Ontario because he was not carrying on business in Newfoundland. He is a director of 83275 Newfoundland & Labrador Ltd. As a director of a Newfoundland company, I am satisfied that Mr. Renard was carrying on business in Newfoundland.

[18] Both Mr. Cooper and Mr. Renard, were served with the Statement of Claim in Ontario. On October 27, 2020, Mr. Cooper was served with the Statement of Claim by leaving a copy of the Claim taped to the front door of his home at 2187 Thomson Crescent, Severn, Ontario, and mailing a copy of the Claim to the same address on October 28, 2020. With respect to Mr. Renard, Waterford obtained an order for substituted service dated November 19, 2020. The Claim and Order were served on Mr. Renard by leaving copies at his home at 99 Summerhill Avenue, Toronto, Ontario.

[19] Mr. Renard and Mr. Cooper did not appear in Newfoundland to respond to the actions. Mr. Cooper argues that he did not participate in the Newfoundland action because he believed he had to file his defence with the Court in person. He could not travel to Newfoundland because of the Covid restrictions. The Newfoundland Court Practice Direction dated September 23, 2020 provides that documents could be filed with the court by e-mail. Mr. Cooper was served with the Statement of Claim on October 27, 2020. At the time he was served with the Claim, the court could accept Statements of Defence by e-mail. Mr. Cooper conceded that he did not contact counsel after being served with the claim. He did not indicate that he wanted to defend the action. I find that Mr. Cooper and Mr. Renard chose not to appear in the Newfoundland court notwithstanding the fact they were properly served and were carrying on business in Newfoundland.

[20] Mr. Cooper argues that the Judgments were obtained by fraud. Mr. Renard does not take this position. Mr. Cooper did not file any evidence on the motion and therefore there is no evidence to support his allegations. In argument, Mr. Cooper states that Waterford did not advise the Court in Newfoundland, that it was taking steps to possess the real property owned by Great North. This is denied by counsel for Waterford. However, it is my view that even if this fact was not disclosed by the Applicant, this does not support a finding of fraud. The guarantees specifically provide that the mortgagees are not required to exercise their recourse against the mortgagee or any other person before exercising their rights against the guarantors. The Applicant could not recover more than the amount of the mortgage loan plus interest and costs. Mr. Cooper and Mr. Renard are entitled to a credit for all amounts recovered in the proceedings against Great North. I am satisfied that the Judgments were not obtained by fraud.

[21] Judgment against Mr. Cooper was granted December 23, 2020. The Judgment was registered with the Judgment Enforcement Registry on January 4, 2021. Mr. Cooper received a copy of the Judgment by letter dated January 5, 2021. Judgment against Mr. Renard was granted on January 8, 2021. The Judgment was registered with the Judgment Enforcement Registry on January 13, 2021. By letter dated January 18, 2021, Mr. Renard was provided with a copy of the Judgment. Neither Mr. Cooper nor Mr. Renard, moved to vary or set aside the Judgments. No appeal was commenced. The time for pursuing an appeal has expired.

[22] The cause of action against Mr. Renard and Mr. Cooper is to enforce a guarantee with respect to a mortgage made to Great North. This type of action would be entertained in Ontario and there are no public policy grounds for not registering the judgment in Ontario.

[23] I am not satisfied that Mr. Renard and Mr. Cooper have a good defence to the action. As noted above, the Respondents did not file any materials. There is no evidence before me, to allow me to find that the Respondents have a good defence on the merits. Mr. Renard and Mr. Cooper executed guarantees for the mortgage to Great North. The loan was not repaid, and the lender brought an action and obtained Judgment against the guarantors.

Disposition

[24] I grant the relief sought and permit the registration of the Judgments in Ontario.

[25] The Applicant is successful in this Application and is entitled to its costs. The Applicant filed a Bill of Costs in the amount of $16,886.38 on a partial indemnity basis, inclusive of counsel fee, disbursements and HST. In awarding costs, I considered the factors set out in R. 57.01 of the Rules of Civil Procedure, and the general principle that costs are fair and reasonable and within the expectations of the parties: Boucher v. Public Accountants Council for the Province of Ontario, 2004 14579 (ON CA), [2004] O.J. No. 2634 (ON CA). The guarantees provide that Mr. Cooper and Mr. Renard are responsible for the payment of the mortgage and other applicable fees. I am of the view that the cost of this Application to register the Judgments in Ontario is within the reasonable expectations of the Respondents. I award costs to the Applicant fixed in the amount of $15,000 inclusive of counsel fee, disbursements and H.S.T.

[26] Order to go in accordance with the draft judgment filed and signed by me.

DATE: December 28, 2021