COURT FILE NO.: CV-22-00000076-0000 (Kingston)
DATE: 2023Jul14
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Kimberly Gillespie, Plaintiff
AND:
George Fraser, Diana Tilbert and Tina Capone Hall, Defendants
BEFORE: Lacelle J.
COUNSEL: Emilie Aloe, for the Plaintiff
Derek L. Chou, for the Defendant/Moving Party, Diana Tilbert
HEARD: July 10, 2023
ENDORSEMENT
[1] The Plaintiff’s mother was murdered by her father on June 3, 2015. Her father was convicted and sentenced to life imprisonment.
[2] The Plaintiff alleges that while he was incarcerated, her father (the Respondent Fraser) and two other individuals (the Respondents Tilburt and Capone-Hall) were responsible for the creation of a website that suggested that the Plaintiff was responsible for her mother’s death. Since Mr. Fraser was incarcerated and without access to the internet, the Plaintiff submits that he could not have acted alone.
[3] The Plaintiff commenced an action against the three Respondents for the torts of intentional infliction of emotional distress, publicity placing the Plaintiff in a false light, and conspiracy. The action was commenced on March 10, 2022.
[4] Ms. Tilburt is the moving party in this motion. She was noted in default on May 27, 2022, after three extensions of time to serve a Statement of Defence had been granted to her. Following a motion for default judgment heard in August of 2022, Ms. Tilburt was noted in default on January 20, 2023. Ms. Tilburt brings a motion seeking an order setting aside the noting in default and the default judgment.
The positions of the parties
[5] Ms. Tilburt alleges that her counsel was negligent in advancing her defence, and that she has been diligent in acting immediately upon knowledge of that fact. She has now taken the necessary steps to correct the errors of her former counsel, including by retaining new counsel. She says she has adequately explained her delay in defending the action, and says the evidence shows she always intended to defend the action. She asserts she has a defence that has an air of reality, and that it would be prejudicial to prevent her from defending this action.
[6] Ms. Gillespie accepts that the conduct of Ms. Tilburt’s first counsel is relevant and she should not be penalized for his negligence. However, she argues that Ms. Tilburt also had an obligation to take action upon discovering her counsel’s negligence. She failed to do that within a reasonable period of time. Ms. Gillespie further argues that there is no merit to the defence put forward by Ms. Tilburt, and an order setting aside the default judgment would be prejudicial to her (Ms. Gillespie). Ms. Gillespie argues that in all the circumstances, it is not in the interests of justice to set aside that order or the noting in default.
The issue to be decided
[7] The issue in this motion is straightforward: has Ms. Tilburt demonstrated on a balance of probabilities that the default judgment order should be set aside because it is in the interests of justice to do so. If she has done so, then an order setting aside the noting in default would necessarily follow and she would be permitted to file a statement of defence.
The legal principles
[8] Pursuant to Rule 19.08(2) of the Rules of Civil Procedure, the court may set aside a judgment obtained on a motion under Rule 19.05 on such terms as are just. It may also set aside the noting in default at the time it orders a default judgment be set aside (Rule 19.08(3)).
[9] In applying Rule 19, the court must also consider that Rule 1.04(1) directs that the Rules should be interpreted liberally in order to determine a proceeding on its merits, if possible. This is a guiding principle.
[10] The jurisprudence provides further guidance as to the factors and issues to consider. The court’s “ultimate task” is to determine whether the interests of justice favour granting the order: Mountain View Farms v. McQueen, 2014 ONCA 194 at para. 47 [Mountain]; Peterbilt of Ontario v. 1565627 Ontario Ltd., 2007 ONCA 333 at para. 2. Additionally, Mountain directs at paras. 48-49 that the court must consider:
a. Whether the motion to set aside default judgment was brought as soon as possible;
b. Whether there is a plausible explanation for the default;
c. Whether the facts establish that the defendant has an arguable defence on the merits;
d. The potential prejudice to the moving party should the motion be dismissed, and the potential prejudice to the respondent should the motion be allowed; and
e. The effect any order might have on the overall integrity of the administration of justice.
[11] Mountain is clear at paras. 51-52 that
[t]hese factors are not to be treated as rigid rules; the court must consider the particular circumstances of each case to decide whether it is just to relieve the defendant from the consequences of his or her default.
For instance, the presence of an arguable defence on the merits may justify the court exercising its discretion to set aside the default judgment, even if the other factors are unsatisfied in whole or in part. In showing a defence on the merits, the defendant need not show that the defence will inevitably succeed. The defendant must show that his or her defence has an air of reality.
[12] Another principle that is relevant in this context is that “the sins of the lawyer should not be visited upon the client: Aluminum Window Design Installations Inc. v. Grandview Living Inc., 2020 ONSC 1294 at paras. 51, citing Graham v. Vandersloot, 2012 ONCA 60 at para. 10. Framed another way (in the context of setting aside a dismissal order), “the court should be concerned primarily with the rights of the litigants, not with the conduct of their counsel”: Finlay v. Van Paassen, 2010 ONCA 204 at para 33; Aluminum Window at para. 53.
Analysis
[13] I have reviewed the evidence filed in support of each party’s position for this motion, including the transcript of the cross-examination of Ms. Tilburt on her Affidavit.
[14] The evidence is clear that while Ms. Tilburt had counsel when she was noted in default, his representation of Ms. Tilburt was negligent.
[15] However, I agree with Ms. Gillespie that this does not end the inquiry. The court should also consider whether Ms. Tilburt was diligent in acting to advance her defence once she became aware of her first counsel’s negligent representation. This inquiry will inform the court’s assessment of whether there is a plausible explanation for the default, and whether the motion to set aside the default judgment was brought as soon as possible.
[16] The relevant evidence on this point may be summarized as follows:
a. Ms. Tilburt was served with the statement of claim on March 13, 2022, and retained counsel on March 19th. She discussed with him the particulars for her statement of defence;
b. On April 14th, 2022, Ms. Tilburt personally received a letter from the Plaintiff’s lawyers which advised her of the deadline to file her statement of defence. It was at this point that she realized her lawyer had failed to serve and file her statement of defence, and that counsel for Ms. Gillespie was not aware he was acting on her behalf. Ms. Tilburt confirms that she understood from the letter that she would be noted in default if she did not file a statement of defence;
c. Ms. Tilburt’s counsel obtained three extensions to file the statement of defence. The final extension was granted to May 26, 2022;
d. On July 14th, 2022, she became aware that a date had been scheduled for a default judgment motion (the Respondent Fraser provided her with the motion materials). In cross-examination, Ms. Tilburt explained that this was when she “started to panic”. She was thinking “what am I supposed to do to protect myself seeing as the lawyer’s not doing anything”;
e. Ms. Tilburt said she continued with her first counsel despite her knowledge that he was not following her instructions because “I didn’t have a choice, all I know is US law, Colorado law, I knew nothing, I knew nothing about Canada law whatsoever”;
f. Ms. Tilburt met with her counsel on July 17, 2022 and he told her he had filed the statement of defence on her behalf. She asked for a copy, which he was unable to provide. She emailed him asking for a copy on August 2, 2022;
g. On August 12, 2022, Ms. Tilburt called her first counsel to fire him. She emailed him a few days later to make arrangements to pick up her file. She states it was her intention at that time to personally prepare responding documents to vacate the hearing set for August 25, 2022 so she could have more time to find a new lawyer to represent her;
h. Ms. Tilburt testified that she understood by mid-August of 2022 that her lawyer had made a “few mistakes”;
i. On August 17th, she met with her counsel to pick up her documents. During that meeting, Ms. Tilburt decided to let him continue representing her, which she now acknowledges was a “bad mistake”. She explained that she had given him all her money and she did not know anything about Canadian law;
j. Her first counsel attended the motion for default judgment, and she attended as well, virtually;
k. Her counsel was advised by the judge at that appearance (Somji J.) that the statement of defence had to be filed the next day. Ms. Tilburt understood that;
l. No statement of defence was filed, or other documents requested by Somji J. to supports counsel’s claim that he had been ill and unable to file responding documents;
m. Ms. Tilburt could not recall what steps she took to determine whether or not her statement of defence had been filed between the time of the hearing in August, 2022, and October 17th;
n. On November 14th, Ms. Tilburt attempted to file a response to the statement of claim with the court, but was not permitted to do so since she had been noted in default. She says this is the first she learned she had been noted in default. When she asked her first lawyer about this, he denied having received any documents confirming the noting in default;
o. Contrary to her statement in her affidavit, she did not discharge her first counsel on October 17th, but on November 24th, 2022;
p. While her evidence on this point was confused, in her view, Ms. Tilburt fired her counsel twice – in August and again in November of 2022;
q. On December 14, 2022, Ms. Tilburt served opposing counsel and other parties with a Notice of Motion to vacate the noting in default. The court did not accept these documents;
r. Ms. Tilburt states in her Affidavit that had her first counsel taken her initial termination at face value, she might have been able to have the noting in default set aside during the August 25, 2022 hearing, and been afforded an opportunity to defend herself. While she also claimed in her Affidavit that her first lawyer had prevented her from hiring new counsel for nearly 6 months, she could not explain what she meant by that when cross-examined. When asked, she said: “Good question, I don’t know how to answer that one”;
s. Ms. Tilburt retained new counsel (Mr. Chou, who represents her on this motion) on January 16, 2023.
[17] As for the nature of the defence asserted by Ms. Tilburt, it includes the following set of facts:
a. Ms. Tilburt and the Respondent Fraser were friends. On the date of the murder, he asked to use her vehicle to go visit his ex-wife because he needed to talk to her about his cabin (which he had lost the right to visit), and he knew that if he arrived at her apartment in his vehicle she would not speak with him;
b. Ms. Tilburt allowed Mr. Fraser to use her vehicle because she felt bad for him. She denies knowledge he intended to kill his ex-wife;
c. Ms. Tilburt states that that she “had no role in the creation, publication or dissemination of the website in question”, and she does not know who did. She denies any responsibility for the Plaintiff’s mental suffering or for publicity placing her in a false light;
d. Ms. Tilburt confirms that since 2014, she has been designated Mr. Fraser’s power of attorney at his request. Recently, he changed that designation and appointed the Respondent Capone-Hall;
e. Ms. Tilburt says she originally extended a hand to Mr. Fraser because he had nobody else and other family members would not speak to him. In connection with this statement, she refers to a history of working for public defenders in Colorado.
[18] In assessing the merits of Ms. Tilburt’s defence, Ms. Gillespie’s counsel suggests that the court should also consider that Mr. Fraser’s statement of defence states that he hired both Ms. Tilburt and Ms. Capone-Hall to “carry out the tortious conduct at issue” and that the Respondents’ conduct was defensible given they were “employees” who were paid for their services. Counsel notes that this is not specifically refuted in Ms. Tilburt’s draft statement of defence. In any event, counsel submits her statement of defence confirms the close relationship she had with Mr. Fraser. On the other hand, Ms. Tilburt’s counsel reminds the court that the motion record contains a draft statement of defence, and is intended solely to show that there is something to argue. I consider both positions.
[19] In considering the totality of the circumstances, I am not persuaded that it would be in the interests of justice to grant an order setting aside the default judgment.
[20] I accept that Ms. Tilburt has a plausible explanation for the default, since she was relying upon counsel to follow her instructions in the spring of 2022 and had no reason to believe he would not file her statement of defence. Things changed by July, however, by which point she might have started taking steps to set aside the default finding.
[21] This is because by mid-July of 2022, Ms. Tilburt’s had come to the conclusion that her lawyer was “not doing anything”. She determined to fire him and file her own documents. Her affidavit confirms she understood that she could represent herself during the August hearing and request more time to find a new lawyer. It is also clear that from April of 2022 onward, she understood the consequences of failing to file a statement of defence. Yet, inexplicably, Ms. Tilburt continued with her first counsel and permitted him to represent her at the hearing for default judgment. She was present when the judge directed that the statement of defence had to be filed the following day. However, despite her knowledge that her counsel had not acted on her instructions in the past, and had to that point failed to file a statement of defence, she did nothing else to follow up about whether this had been done until October of 2022. It was months later still, in January 2023, that she retained new counsel.
[22] I do not find Ms. Tilburt’s explanations for her failure to act earlier persuasive. She says she knew nothing of the laws in Canada, but this is not responsive to the issue. She clearly had come to the conclusion that her interests were not being competently represented by her first counsel. It is also hard to reconcile this explanation of knowing nothing of the law with the assertion in her draft statement of defence that she had worked for public defenders in the United States. As for the financial issues involved in retaining new counsel, as Ms. Tilburt acknowledges in her affidavit, she might have acted to represent herself, and she could have asked the judge at the default judgment hearing for more time to retain new counsel. She chose to do neither. The result is that no steps were taken to meaningfully advance her defence for months before and after the hearing of the default judgment motion.
[23] I consider that Ms. Tilburt may not have been able to file this motion while the default judgment ruling was reserved, and there is evidence she tried to file a statement of defence in December of 2022 after firing her first counsel at the end of November. Nevertheless, the evidence supports the conclusions that Ms. Tilburt did not take steps to ensure her statement of defence had been filed (once she was aware that her first counsel was not following her instructions), she failed to terminate the services of her first counsel after becoming aware of his errors, and she failed to retain alternative counsel until several months after the hearing for default judgment. Given those conclusions, I am not persuaded that there is a plausible or reasonable explanation for the delay that has occurred in this case.
[24] As for the merit of her defence, I consider that the defence involves a baldly stated denial of the central issue. The proffered defence is not so strong that to prevent Ms. Tilburt from advancing it would likely lead to an injustice. Ms. Tilburt bears the onus on this application and if there was more to her anticipated defence, it should have been articulated in this motion record.
[25] While there is prejudice to both parties in a ruling that favours the other, on balance, given the modest merits of the defence and the reasons offered for the delay in properly advancing a defence, the greater prejudice would be to Ms. Gillespie should the order be granted. Ms. Gillespie commenced this action in March of 2022. She has acted reasonably throughout. She has gone to the expense of proceeding with a hearing for default judgment. In my view, to permit the filing of a statement of defence at this juncture, particularly given the nature of the claim and the position of the Respondent Fraser in defending it, would unnecessarily prolong proceedings (presumably increasing the Plaintiff’s mental anguish) and increase costs.
[26] Having considered all the circumstances, and the ultimate issue of what order is in the interests of justice, I conclude that Ms. Tilburt’s motion must fail. I find that setting aside the default judgment is not in the interests of justice.
[27] In arriving at this conclusion, I have considered the authorities relied upon by Ms. Tilburt, Aluminum Window, and Ontario (Attorney General) v. Johnswood Crescent, 2008 CanLII 50751 (ON SC). Both those cases involve the application of a different Rule - Rule 37.14 – which addresses setting aside orders made following a failure by a party to appear by reason of accident or mistake. While some of the factors considered in such a motion are the same, the predicate scenario – the failure to appear – attracts different considerations. In any event, the facts in each of those cases bear no similarity to this case.
[28] While I consider that the principle that a client should not suffer as a result of counsel’s mistakes or negligence (discussed in Aluminum Window) has application here, this is not a case like Aluminum Window, where it can be said that the faith that the defendant continued to place in counsel “was not unreasonable” (see paras. 63-64). In this case, Ms. Tilburt had determined by as early as July and definitely by mid-August of 2022 that her interests were not being advanced by her counsel. Nevertheless, she did not fire him until November of 2022, months after the hearing for default judgment had occurred. Her continued faith in counsel was not reasonable. This case is also different than Aluminum Window because while Ms. Tilburt has expressed an ongoing intention to defend the action, the failure to advance the case was not solely because of the conduct of her first counsel. The delay that occurred here was not reasonable in the circumstances.
Conclusion
[29] In the result, Ms. Tilburt’s motion is denied.
[30] The parties may submit costs submissions of no longer than 3 pages (plus attachments) in writing. Ms. Tilbert shall have until August 14th, 2023 to file her submissions. Ms. Gillespie shall reply within 14 days. In the event counsel wish to set another timeline to accommodate summer schedules, they should so advise my judicial assistant, Ms. Sandra Pacheco, who may be contacted at sandra.pacheco@ontario.ca.
Lacelle J.
Date: July 14, 2023