COURT FILE NO.: CV-22-00088287-0000
DATE: 2022-07-14
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Carman Feng v. Keenman Feng and Vivien Wai Man Feng
BEFORE: Associate Justice Kaufman
COUNSEL: Carman Feng, Self-Represented Plaintiff
Jameel Madhany, for the Defendants/Moving Parties
HEARD: July 14, 2022
E N D O R S E M E N T
[1] The defendants bring this motion for an order setting aside their noting in default, which was requisitioned on March 7, 2022.
[2] The parties are siblings and shareholders of Hopsons, Inc., a corporation registered in the state of Washington. The plaintiff commenced this action on January 7, 2022. He seeks damages for breaches of fiduciary duties and documentary disclosure relating to the corporation.
[3] The defendants were served with the statement of claim on January 10 and 13, 2022, and they retained counsel on January 17, 2022. Counsel for the defendants were of the view that the claim was defective because it failed to name the corporation as a defendant. They advised the plaintiff that they would seek instructions to bring a motion to strike the claim on January 31, 2022.
[4] The plaintiff responded on February 11, 2022, and raised the possibility of settlement through disclosure of documents. On February 22, 2022, the plaintiff gave the defendants a deadline of March 4, 2022, to deliver their defences. Counsel for the defendants advised that they would endeavour to respond by that deadline. The next business day after March 4, 2022, was March 7, 2022. On that date, the defendants made an offer to settle the action. On that same day, the plaintiff noted the defendants in default.
[5] The plaintiff refused to set-aside the noting in default unless the defendants paid him his costs of $2,000. It remains his position today that he should be entitled to costs.
[6] The Court of Appeal has recently reviewed the principles applying to motions to set-aside a noting in default. The following considerations are relevant:
(1) The parties’ behaviour;
(2) The length of the defendant’s delay;
(3) The reasons for the delay;
(4) The complexity and value of the claim;
(5) Whether setting aside the noting of default would prejudice a party relying on it;
(6) The balance of prejudice as between the parties; and
(7) Whether the defendant has an arguable defence on the merits.[^1]
[7] Here, I consider that it was unreasonable for the plaintiff to note the defendants in default when they had: retained counsel, conveyed to the plaintiff that they were considering a motion to strike, and were considering the plaintiff’s settlement proposal.
[8] Moreover, the defendants had only missed the deadline to deliver their defence by 14 days when they were noted in default, because the defendant Keenman resides in British Columbia and was entitled to deliver a Statement of Defence within 40 days of service. Additionally, the defendants moved expeditiously to schedule this motion after they were noted in default.
[9] I see no basis to grant the plaintiff costs. The plaintiff advises that he is concerned with delay, but if he had agreed to set-aside the noting in default back in March, and agreed to the timetable the defendants had proposed, this proceeding would have advanced and this motion would have been avoided.
[10] When counsel are in disagreement about the timing of pleadings, a more appropriate and efficient procedure would have been to request a case conference under Rule 50.13 of the Rules of Civil Procedure.[^2] Proceeding as he did, the plaintiff created unnecessary delays, and costs.
[11] I have reviewed the defendants’ costs outline. The defendants appropriately delegated the majority of the work to junior counsel, and the rates claimed are appropriate. I would slightly reduce the hours claimed because this motion was not overly complex, but I award the defendants their costs, on a substantial indemnity basis, fixed at $7,500.
[12] The Court orders that:
The defendants’ noting in default is set-aside.
The defendants shall, within the next 20 days, either deliver their defences or bring a motion to strike the plaintiff’s claim.
The defendants shall have their costs of this motion, fixed in the amount of $7,500 all inclusive, and payable forthwith.
Alexandre Kaufman
Associate Justice A. Kaufman
DATE: July 14, 2022
COURT FILE NO.: CV-22-00088287-0000
DATE: 2022-07-14
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: FENG v. FENG et al
BEFORE: Associate Justice A. Kaufman
COUNSEL: Carman Feng, for the Plaintiff (Self-Represented)
Jameel Madhany, for the Defendants/Moving Parties
ENDORSEMENT
Associate Justice A. Kaufman
DATE: July 14, 2022
[^1]: Franchetti v. Huggins, 2022 ONCA 111, at para 9.
[^2]: Rules of Civil Procedure, R.R.O. 1990, Reg. 194.