Court File and Parties
COURT FILE NO.: CV-21-00000191-0000 DATE: 2022/04/22 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: SANT REAL ESTATE INC. and EMONS GARDNER DENTISTRY PROFESSIONAL CORPORATION operating business as SANTÉ DENTAL, Plaintiffs AND: GARY WATTS WATER TECHNOLOGIES (CANADA) INC., WATTS WATER TECHNOLOGIES, INC., WATTS REGULATOR CO., ANDERSON-BARROWS METALS CORPORATION, HIL-COM INC., ROBERTS BROS. SHEET METAL CONTRACTORS LTD., DESIGN/BUILD MECHANICAL LIMITED, and SECURITY ONE ALARM SYSTERMS LTD., Defendants [1]
BEFORE: Justice I.F. Leach
COUNSEL: Adam Pennino, for the Plaintiffs Lisa Parliament, for the defendants Gary Watts Water Technologies (Canada) Inc., Watts Water Technologies, Inc. and Watts Regulator Co. The defendants Anderson-Barrows Metals Corporation and Hil-Com Inc. not having counsel of record Jesse R. Boyd, for the defendant Roberts Bros. Sheet Metal Contractors Ltd. Andrew M. Baerg, for the defendant Design/Build Mechanical Limited Morgan Martin and Christian Chini for the defendant Security One Alarm Systerms Ltd.
HEARD: In writing
Endorsement
[1] Before me is a motion brought in writing by the defendant Roberts Bros. Sheet Metal Contractors Ltd. (“RBSMC”), for an order setting aside the noting in default signed by the Registrar against RBSMC, and permitting RBSMC’s filing of a statement of defence and crossclaim within 30 days of that order.
[2] By way of further background to this motion:
a. The plaintiffs issued their statement of claim herein on February 1, 2021, and thereafter proceeded with arrangements for service of their pleading. b. RBSMC was served with the statement of claim, via personal service, on April 20, 2021. c. By July 28, 2021, (i.e., more than three months after service of the statement of claim on RBSMC), no defence pleading had been delivered by RBSMC, and the Register noted RBSMC in default at the plaintiffs’ request. d. RBSMC thereafter contacted its insurer in relation to the claim. That insurer took steps to investigate the claim, engaged in correspondence with plaintiff counsel, and retained counsel to defend RBSMC in the litigation. In that regard: i. A representative of the insurer contacted plaintiff counsel by email on December 3, 2021, noting that the insurer was in the process of investigating the claim and retaining defence counsel. The representative asked for an update on the status of the litigation and a waiver of defence in relation to RBSMC. ii. On December 6, 2021, plaintiff counsel sent a responding email advising that RBSMC had been noted in default on July 28, 2021. However, plaintiff counsel indicated that he would consent to RBSMC’s late filing of a statement of defence pursuant to Rule 19.03(2) if that was done within 30 days. Pursuant to the provisions of Rule 19.03(2), that effectively also would have set aside the noting in default of RBSMC. iii. On December 6, 2021, the insurer’s representative responded with another email to plaintiff counsel, indicating thanks for the extension, and that defence counsel being retained to defend RBSMC would be instructed to file “the documents”; i.e., RBSMC’s anticipated statement of defence. iv. On December 17, 2021, newly retained counsel for RBSMC sent a letter by email to plaintiff counsel. Amongst other things, the letter indicated confirmation of a retainer to defend RBSMC, that the file documents had just been received, and that RBSMC’s defence pleading would be “forthcoming” after the file material had been reviewed. In addition to asking for a copy of the relevant affidavit of service of the statement of claim on RBSMC, the letter sought to confirm that no steps to note RBSMC “will be taken without further written notice”. As RBSMC already had been noted in default at that point, the request obviously suggests some form of failure in communication or miscommunication between RBSMC’s insurer and the newly retained defence counsel for RBSCM. e. On January 5, 2022, counsel for RBSMC sent an email to plaintiff counsel referring to attached correspondence, and a “referenced enclosure”. The correspondence was not included in RBSMC’s motion material, but the “referenced enclosure” apparently was RBSMC’s intended statement of defence and crossclaim, which was included with RBSMC’s motion material. The pleading, dated January 5, 2022, sets forth RBSMC’s intended defence to the main action, and intended crossclaims against all the remaining defendants for contribution and indemnity. f. It seems that counsel for RBSMC, still unaware of the earlier correspondence exchanged between the insurer’s representative and plaintiff counsel, thereafter attempted to file RBSMC’s pleading with the court, without making reference to plaintiff counsel’s consent to late filing of the pleading within 30 days of December 6, 2021, such that the court refused to accept RBSMC’s pleading, as RBSMC had been noted in default. In that regard, an email sent by RBSMC to plaintiff counsel on January 19, 2022, refers to an earlier telephone conversation between counsel for RBSMC and plaintiff counsel on January 10, 2022, after which RBSMC counsel understood that RBSMC had been noted in default thereby explaining the court’s refusal to accept RBSMC’s pleading. In the same correspondence, plaintiff counsel was asked to confirm: i. that pleadings had not yet closed, as “the plaintiff” (sic) was still waiting on defence pleadings from other defendants; ii. that the “plaintiff (sic) consents to an Order setting aside the noting in default” of RBSMC; iii. that “the plaintiff” (sic) was served with RBSMC’s statement of defence and crossclaim; and iv. that the “plaintiff (sic) consents to an Order authorizing [RBSMC] to file its Statement of Defence and Crossclaim with the court”. g. Later that day, (i.e., on January 19, 2022), plaintiff counsel sent counsel for RBSMC a further email indicating that he would “consent to an order setting aside the default”, provided no costs were sought from “the Plaintiff” (sic). h. On or about March 4, 2022, RBSMC brought its motion herein, in writing, indicating reliance on Rule 37.12(1) because the motion was said to be “unopposed”. The affidavits filed with the court indicate that the motion was served on plaintiff counsel and counsel for each of the represented defendants by email, and on the still unrepresented defendants by regular post.
[3] I have not signed the requested order for the following reasons:
a. As noted above, RBSMC effectively could have addressed its noting in default by dealing unilaterally with the plaintiffs pursuant to the combined operation of Rules 19.02(1)(b) and 19.03(2) of the Rules of Civil Procedure, which read as follows:
19.02(1) A defendant who has been noted in default, … (b) shall not deliver a statement of defence or take any other step in the action, other than a motion to set aside the noting of default or any judgment obtained by reason of the default, except with leave of the court or the consent of the plaintiff. 19.03(2) Where a defendant delivers a statement of defence with the consent of the plaintiff under clause 19.02(1)(b), the noting of default against the defendant shall be deemed to have been set aside.
[Emphasis added.]
b. In particular, had RBSMC obtained a formal consent from the plaintiffs to late filing of RBSMC’s defence pleading, and presented that to the Court office along with RBSMC’s pleading, the pleading would have been accepted by the Court and the noting in default of RBSMC would have been deemed to have been set aside. c. However, rather than following that procedure, RBSMC decided to bring a formal motion served on all parties, seeking a formal order from the court setting aside the noting in default; i.e., a motion pursuant to Rule 19.03(1) of the Rules. d. Having committed to that procedure, RBSMC is required to comply with the requirements of Rule 37.12.1, if the motion is to proceed in writing. It has not done so. In particular: i. The motion material indicates that the motion is “unopposed”. If so, RBSMC is required to file, inter alia, pursuant to Rule 37.12.1(3), a notice from each responding party to the motion stating that the party does not oppose the motion. ii. In this case, all other parties to the litigation were served with RBSMC’s motion material, and I think it was appropriate for RBSMC to proceed in that fashion in the circumstances – with those circumstances including its decision to proceed by way of a Rule 19.03(1) motion. In particular:
The plaintiffs and co-defendants are parties affected by the relief sought in RBSMC’s motion. Without limiting the generality of the foregoing: a. Plaintiffs are not the only party affected by a defendant being noted in default. Co-defendants to litigation are also affected by a defendant being noted in default; e.g., insofar as the remaining co-defendants thereby receive formal confirmation that the defendant noted in default will not be defending the main action, is deemed to admit the truth of all allegations of fact made in the statement of claim, and generally is not entitled to notice of any further step in the proceeding or service of any other document in the litigation, with some limited and specified exceptions. See Rules 19.02(1)(a) and 19.02(3). b. The independent interest of co-defendants in confirmation that a defendant who has failed to file a defence pleading has been noted in default is indicated by Rule 19.01(3), which confirms the ability of a co-defendant to move for an order directing the registrar to note another co-defendant in default if the plaintiff fails to do so. c. In this case, each of RBSMC’s co-defendants is even more affected by the relief requested in the motion than it otherwise would be by a setting aside of RBSMC’s noting in default; i.e., as the relief sought on the motion would not only allow RBSMC to defend the main action, with entitlement to notice of further steps in the litigation and service of all further documents in the litigation, but also allow RBSMC to proceed with its contemplated crossclaims against each of those other co-defendants.
While co-defendants are similarly affected when a defendant noted in default is permitted to file its pleading late with the formal consent of the plaintiff(s), thereby simultaneously setting aside the noting in default pursuant to Rules 19.02(1)(b) and 19.03(2), the provisions of those rules allow the defendant noted in default to proceed relying solely on plaintiff consent; i.e., without the formal consent or formally confirmed non-opposition of co-defendants. There are no such provisions available to a defendant noted in default when it brings a motion pursuant to Rule 19.03(1) for a court order setting aside the noting in default. iii. The plaintiffs and each of the co-defendants accordingly was and is a respondent to RBSMC’s motion, and if the motion is truly “unopposed” as indicated in the motion material, a notice from each of those responding parties stating that the party does not oppose the motion needs to be filed, pursuant to Rule 37.12.1(3), for the motion to proceed in writing on an “unopposed” basis. Rule 37.12.1(3) does not prescribe a precise form that such a notice must take, (as opposed to its required substantive content), which is why the filing of even informal email correspondence from such a respondent, stating its non-opposition to a motion, frequently will and does suffice. iv. In this case, however, RBSMC’s motion material contains no communications whatsoever sent on behalf of any responding party to the motion other than the plaintiffs. There are only references to the plaintiffs having given their consent to a setting aside of the noting in default, without any indication whatsoever of the position or positions that may have been taken by the remaining co-defendants in that regard. Moreover, I note that the correspondence from plaintiff counsel indicates willingness to consent to an order setting aside RBSMC’s noting in default and only that; i.e., as opposed to consenting to the relief requested in RBSMC’s notice of motion on an unopposed basis, or allowing RBSMC’s motion to go forward on an unopposed basis.
[4] If RBSMC desires its motion to proceed in writing on an unopposed basis, it accordingly should request and file the required Rule 37.12.1(3) notice from each of the responding parties.
[5] Alternatively, if each of the responding parties supplies a formal written consent to the motion, or authorizes counsel for RBSMC to sign such a consent on the responding party’s behalf, the motion may then proceed in writing on consent, pursuant to Rule 37.12.1(2).
[6] If neither of those alternative routes is open to RBSMC, the motion may not proceed in writing. For the motion to move forward, RBSMC then should serve, on each responding party already served with the motion material, a notice of return of its motion in regular motions court, on a specified date, so the matter can be spoken to there.
[7] In the meantime, the judicial secretaries will be asked to provide a copy of this endorsement to each counsel of record. Counsel for RBSMC is hereby directed to send a copy of the endorsement to each of the two unrepresented parties by regular post.
“Justice I.F. Leach” Justice I.F. Leach Date: April 22, 2022.
[1] I have replicated the style of cause as it appears in the plaintiffs’ statement of claim, which was filed as an exhibit attached to the moving defendant’s supporting affidavit. The stated name of the last defendant almost certainly contains an inadvertent typographical error; i.e., spelling “Systems” incorrectly as “Systerms” (sic). My inference in that regard is buttressed by the fact that the last named defendant is described as “Security One Alarm Systems Ltd.” in the body of the plaintiffs’ statement of claim. However, the formal style of cause put in place by the original statement of claim must be employed throughout this proceeding unless and until it is formally amended.