Court File and Parties
COURT FILE NO.: CV-23-91241 DATE: 2023/09/28 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN: Leanne Aubin Plaintiff – and – James Bowie Defendant
Counsel: Christine Johnson and Emilie Taman, counsel for the plaintiff Robert Mysicka, counsel for the defendant (for purposes of the motion only)
HEARD: Sept. 22, 2023
Endorsement
Justice H. J. Williams
[1] The defendant brought a motion to set aside a noting of default.
[2] The defendant also requested an order staying the action until a criminal proceeding against him has been concluded and an order sealing his evidence on the motion and prohibiting its use in any other proceedings.
[3] I ruled at the hearing that, as a party in default, the defendant had no right to request relief other than an order setting aside the noting of default. The defendant had not sought leave. I refused to consider his request for these further orders.
A brief timeline
[4] On February 15, 2023, the statement of claim was given to the defendant’s father, who resided at the same address as the defendant. The defendant’s father said he would give the document to the defendant. Also on February 15, 2023, the statement of claim was mailed to the defendant. Service in this manner would be effective on February 20, 2023.
[5] The Ottawa Citizen published a story about the lawsuit on February 21, 2023. On February 22, 2023, the defendant posted on Twitter that he had not seen the claim but that he denied it entirely. Also on February 22, 2023, the plaintiff’s counsel sent the defendant a copy of the statement of claim by email.
[6] On March 14, 2023, the plaintiff’s counsel informed the defendant that she would note him in default if she had not received a statement of defence by March 24, 2023.
[7] On March 24, 2023, the defendant sent an email to the plaintiff’s counsel, saying that he had written to LawPRO but had not received a response. The defendant wrote: “Stand by. I’ll update you when they respond to me.”
[8] The plaintiff noted the defendant in default on March 27, 2023.
[9] On March 28, 2023, the defendant emailed the plaintiff’s counsel and said that LawPRO had requested more information. The defendant asked if the plaintiff’s counsel was content to give him some grace.
[10] The plaintiff’s counsel replied the same day and informed the defendant that he had been noted in default the previous day. The plaintiff’s counsel said that she would be happy to discuss the file with LawPRO, LawPRO counsel or counsel representing the defendant.
[11] The plaintiff’s counsel did not then hear from the defendant or anyone on his behalf before April 21, 2023, when she served him with notice of a motion for default judgment. The motion was scheduled for August 10, 2023.
[12] On July 31, 2023, lawyer Robert Mysicka contacted the plaintiff’s counsel and informed her that he had been consulted by the defendant. Mr. Mysicka asked for the noting in default to be set aside.
[13] On August 1, 2023, Mr. Mysicka confirmed that he had been retained by the defendant to deal with the motion for default judgment. By this time, the plaintiff’s counsel had completed and filed the motion record and the factum for the motion.
[14] The parties agreed to adjourn the motion for default judgment so that this motion could be heard.
Analysis
[15] The following factors are relevant when considering whether a noting of default should be set aside: (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. (Franchetti v. Huggins, 2022 ONCA 111, at para. 9). These factors are not exhaustive nor are they to be applied as rigid rules.
[16] Courts will rarely require a defendant who has been noted in default to show an arguable defence on the merits unless there has been a significant delay. (Franchetti, at para. 10).
[17] While recognizing that they are not rigid rules, I have considered the seven factors identified in Franchetti:
The parties’ behaviour The plaintiff’s behaviour cannot be faulted. After serving the statement of claim, the plaintiff’s counsel did not hear from the defendant, who is a lawyer, before she warned him on March 14, 2023 that she would note him in default after March 24, 2023. On cross-examination, the defendant was critical of the plaintiff’s counsel for failing to reply to his March 24, 2023 email. In my view, the email did not request or call for a reply. It also appeared not to take seriously the plaintiff’s counsel’s threat to note the defendant in default. After noting the defendant in default, the plaintiff’s counsel invited the defendant to have a lawyer contact her to discuss the file. Crickets. (There was no response.) The plaintiff’s counsel then served the defendant with notice of the plaintiff’s motion for default judgment, which was not required by the Rules of Civil Procedure but has been recognized as a “best practice”: Casa Manila Inc. v. Iannuccilli, 2018 ONSC 7083, at paras. 11-13.
In contrast, the defendant’s unilateral termination of the plaintiff’s counsel’s cross-examination of him weighed heavily in favour of denying the relief the defendant is seeking, even though the plaintiff’s counsel said she had only a few questions remaining. A party seeking indulgence from the court should not be obstructing the opposite party’s legitimate efforts to gather evidence.
The length of the delay The defendant was noted in default on March 27, 2023. Mr. Mysicki contacted the plaintiff’s counsel on July 31, 2023 and asked to have the noting of default set aside. This motion was heard September 22, 2023.
The reasons for the delay The facts outlined in para. 24 of the plaintiff’s factum undermine the defendant’s contention that his mental health condition would have prevented him from delivering a statement of defence. The medical evidence relied on by the defendant is both limited and vague. I am, however, satisfied by the combination of the defendant’s doctor’s letter and both the tenor and content of the defendant’s cross-examination evidence that the defendant has mental health issues and that he has been struggling.
The complexity and value of the claim The claim asserts several causes of action of some complexity. The plaintiff seeks $325,000 in damages plus interest and costs.
The balance of prejudice The plaintiff argues that the defendant’s conduct to date suggests that he will not defend her claim in good faith or comply with timelines, rules or orders and, as such, it is reasonable to expect that she will be prejudiced if the noting of default is set aside, through increased costs and delay. The plaintiff also argues that her mental anguish will be increased if the noting of default is set aside and that this is a factor that is worthy of consideration.
The defendant argues that if the noting in default is set aside, the progress of the plaintiff’s litigation will have been delayed by several months, while if it is not set aside, the defendant will lose the right to defend altogether.
An arguable defence? The defendant filed a boilerplate statement of defence with his motion materials. It simply denied the plaintiff’s allegations and did not comply with Rule 25.07. I remind myself that the Court of Appeal in Franchetti said that a defendant will not be required to show an arguable defence on the merits unless the delay has been significant.
[18] This was a close call. The plaintiff has the cleaner hands and her counsel made compelling arguments in favour of dismissing the defendant’s motion. However, the Rules of Civil Procedure and the case law emphasize that, except in exceptional circumstances, civil proceedings should be determined on their merits. Further, although the defendant has not satisfied me that his mental health issues necessarily prevented him from defending the plaintiff’s action, the evidence of a mental health condition and its consequences is sufficient to persuade me that, in the circumstances, the defendant should not be denied an opportunity to defend the plaintiff’s action if he truly intends to do so. I am also not convinced that the delay in this case is so significant that it required the defendant to show, at this stage, that he has an arguable defence on the merits.
Disposition
[19] I make the following orders:
- The noting of default shall be set aside.
- Within 30 days of the date of this order, the defendant shall deliver a statement of defence that complies with Rule 25.07 of the Rules of Civil Procedure.
- Within 30 days, the defendant shall pay the plaintiff $5,000 toward her costs thrown away. The plaintiff requested costs thrown away of approximately $18,000. The $5,000 is ordered at this time without prejudice to the plaintiff’s right to request an order for the balance of the $18,000 at a future date.
- The plaintiff’s counsel shall arrange a case conference with me after the 30-day period in paras. 2 and 3 has expired for a status check. I make this order under Rule 1.05.
- Costs of the motion shall be reserved; to be discussed at the case conference.
[20] At the hearing of the motion, the lawyer representing the defendant, Mr. Mysicka, requested directions with respect to how to remove himself from the record, as his retainer was limited to the default motion. If the defendant does not serve a notice of change of lawyer or a notice of intention to act in person within 30 days, Mr. Mysicka may attend the case conference referred to in para. 4, above, to request a removal order.
Date: September 28, 2023 Justice H. J. Williams
COURT FILE NO.: CV-23-91241 DATE: 2023/09/28 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: Leanne Aubin Applicant – and – James Bowie Respondent ENDORSEMENT Justice H. J. Williams
Released: September 28, 2023