Court File and Parties

COURT FILE NO.: CV-23-0081601-0000 DATE: 20231115

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Zohaib Masood v. Christopher Ryan Silliker and Lindsay Smith

BEFORE: Associate Justice Rappos

COUNSEL: Michael Stanton and Brianne Powell, for the Defendants Maood Bin Tahir and Wasique Al Azad Rakib, for the Plaintiff

HEARD: August 22, 2023 (via videoconference)

REASONS FOR DECISION

OVERVIEW

[1] The Plaintiff, Zohaib Masood, is a dog breeder. The Plaintiff and the Defendants, Christopher Ryan Silliker and Lindsay Smith, entered into guardian contracts with respect to three female dogs owned by the Plaintiff. Under the contracts, the Defendants were to provide, among other things, day-to-day care for the dogs and/or their puppies.

[2] The parties had a breakdown in their relationship. As a result, the Plaintiff commenced this action against the Defendants seeking, among other things, return of the dogs and puppies, and damages for breach of the guardian contracts.

[3] The Plaintiff noted the Defendants in default for failure to serve a statement of defence and obtained default judgment signed by the registrar.

[4] The Defendants bring a motion for an order setting aside the noting in default, setting aside the default judgment, and permitting them to serve and file a statement of defence.

[5] The Plaintiff argues that the motion should be dismissed, as the Defendants failed to file a defence under the Rules of Civil Procedure (the “Rules”) and have no plausible explanation for the default, the Defendants do not have an arguable defence on the merits, that the Plaintiff will suffer irreparable loss and injury if the motion is granted, and that the Defendants have acted unreasonably and have tried to “game the system” by taking a “calculated risk” by not defending the claim in a timely manner.

[6] The Defendants argue that they always intended to defend the action, moved expeditiously to set aside the noting in default and default judgment, have a meritorious defence, and that there will be no prejudice to the Plaintiff if the default judgment is set aside.

[7] For the reasons that follow, the Defendants’ motion is granted.

FACTS

Background

[8] The Plaintiff is a dog breeder that carries on a kennel business in Napanee, Ontario under the name “Valour Kennels”.

[9] The Defendants, who reside in Hamilton, Ontario and are common-law spouses, first met the Plaintiff in the summer 2021, when they purchased a puppy from him.

Guardian Contracts

[10] On May 5, 2022, the Plaintiff and the Defendants entered into a written guardian contract with respect to a purebred American Bully dog named Nala (the “Nala Guardian Contract”). Under the terms of the Nala Guardian Contract, the Defendants assumed full responsibility and liability for Nala, including all costs of feeding and housing, while she whelped her third litter.

[11] On July 6, 2022, the Plaintiff and the Defendant Mr. Silliker entered into a written contract with respect to a purebred American Bully dog named London (the “London Guardian Contract”). Under the terms of the London Guardian Contract, Mr. Silliker agreed to take care and look after London.

[12] The Plaintiff and the Defendants agreed, either orally or through Facebook Messenger messages that have not been produced, that the Defendants were to care for seven puppies from the Plaintiff’s dog Paris’ second litter.

[13] The Defendants’ position is that there were also verbal agreements that amended the terms of the London Guardian Contract and the Nala Guardian Contract to provide that the Defendants did not have to return London and Nala to the Plaintiff.

Breakdown in Relationship

[14] The Defendants alleged that there were significant health issues with the birthing mothers and the litters, and that the Plaintiff was negligent in the care he provided to his dogs.

[15] The Plaintiff alleges that a breakdown occurred on February 23, 2023 when he was informed by the Defendants that Nala had been spayed without his written consent, in contravention of the Nala Guardian Contract. The Defendant’s position is that the Plaintiff agreed to spaying Nala in writing prior to its completion.

[16] The Plaintiff also alleges that the Defendants breached the agreement by not returning Nala’s puppies to him.

[17] The Plaintiff alleges that on April 5, 2023, the Defendants refused to give him access to puppies, which was in contravention of the guardian contracts. The Defendants’ position is that the puppies were not returned due to the Plaintiff’s neglect of his dogs.

[18] The Plaintiff further alleges that the Defendants had London spayed, in contravention of the London Guardian Contract. The Defendants deny having London spayed.

[19] The Plaintiff also alleges that the Defendants have made false and misleading posts about him on social media. The Defendants deny that any posts they made were defamatory. No posts were reproduced as part of either party’s motion materials.

[20] On April 17, 2023, the Plaintiff, through his lawyers, Absolute Law, sent a letter to the Defendants demanding a return of the dogs and payment of damages. A copy of this letter was not produced as part of the Plaintiff’s responding materials.

Commencement of this Proceeding

[21] On May 5, 2023, this proceeding was commenced through the issuance of a statement of claim against the Defendants (the “Statement of Claim”).

[22] In the Statement of Claim, the Plaintiff seeks: (a) a return of London (and any puppies), Nala, and Paris’ three puppies; (b) payment of $15,000 due to the breach of the London Guardian Contract, as a result of the Defendants providing negligent care and having London spayed without the Plaintiff’s prior consent; (c) payment of $20,000 due to the breach of the Nala Guardian Contract, as a result of the Defendants providing negligent care and having Nala spayed without the Plaintiff’s prior consent; (d) removal of defamatory information posted by the Defendants through social media accounts; (e) an order directing the Defendants to cease and desist the publication of any defamatory statements made by the Defendants; and (f) punitive and/or exemplary damages.

[23] The Defendant Ms. Smith was personally served with the Statement of Claim on May 11, 2023 at 9:22 pm. The Defendant Mr. Silliker was not personally served. A copy of the claim was left with Ms. Smith on May 11, 2023, and a copy was sent to him by mail on May 14, 2023.

[24] On June 5, 2023, the Defendants served a notice of intent to defend.

[25] On June 6, 2023, Absolute Law wrote to the Defendants and informed them of the Plaintiff’s position that the notice of intent to defend was filed after the expiry of the applicable time period. The Defendants were notified that the Plaintiff would note them in default if they had not sought counsel to represent them by 4:00 pm on June 9, 2023.

Involvement of Scarfone Hawkins

[26] The Defendants contacted the law firm Scarfone Hawkins LLP (“Scarfone Hawkins”) about representing them in this proceeding.

[27] On June 9, 2023 at 11:48 AM, Brianne Powell, then an articling student at Scarfone Hawkins, sent an e-mail to Absolute Law, which stated that:

We are in the process of being retained by Lindsay Smith and Christopher Silliker with respect to the matter brought by your client, Zohaib Masood.

We ask that you refrain from taking steps to note Lindsay and Christopher in default while we review the matter and respond to your claim, which we expect to have filed early next week. [emphasis added]

[28] Absolute Law did not send an e-mail in response to Ms. Powell’s e-mail.

[29] On June 12, 2023 at 6:39 PM, Ms. Powell sent the following e-mail to Absolute Law:

Maood,

As per our discussion today, we confirm that we’re in the process of being retained by Lindsay Smith and Christopher Silliker and you’ve agreed to refrain from taking steps to note them in default while we review and respond. [emphasis added]

As discussed, we will confirm once we’ve been retained.

[30] Absolute Law did not send an e-mail in response to Ms. Powell’s e-mail.

[31] Based on these e-mails, it was the Defendants’ belief that the Plaintiff would not take any steps to note them in default without first providing written warning to their lawyers.

Noting in Default and Default Judgment

[32] A requisition to note the Defendants was filed with the court on June 13, 2023. No prior notice was provided to Scarfone Hawkins.

[33] On July 6, 2023, default judgment was granted against the Defendants and was signed by the registrar (the “Default Judgment”). No prior notice was provided to Scarfone Hawkins.

[34] The Default Judgment orders the Defendants to pay $35,000 for breach of contract.

[35] The Plaintiff’s position is that he proceeded with the noting in default and obtained the Default Judgment since Scarfone Hawkins never confirmed that they had been retained.

[36] On July 11, 2023, the Defendants were notified by an officer from the Hamilton Police Department that attended at their house that the Plaintiff had obtained the Default Judgment. The officer did not have a copy of the Default Judgment.

[37] The Defendants instructed Scarfone Hawkins to move to set aside the Default Judgment.

[38] On July 12, 2023, Michael Stanton, a lawyer at Scarfone Hawkins, wrote to Absolute Law and stated that:

Further to your telephone discussion with Ms. Brianne Powell of our office, and our e-mails to you dated June 9 and 12, 2023, we advised that we were in the process of being retained and requests that you[sic] client not take any steps in default without advance warning. We confirm that we have been working on our clients’ pleadings, which are almost complete.

We understand that your client obtained Default Judgment on July 6, 2023 without notice to our firm. We intend on moving to set aside the Default Judgment immediately…”

Please advise if your client will consent to setting aside the Default Judgment give it was only obtained 6 days ago.

[39] In response, Mr. Tahir sent a letter to Mr. Stanton and replied that:

Please be advised that on June 12th during my conversation with Ms. Powell, I was very clear that we would be proceeding with a default judgment as our client has instructed. During that conversation or until todays date you never confirmed that you are fully retained on this matter. You never requested our consent to file your client’s defence late. However, we waited as a courtesy until first week of July… [emphasis added]

[40] The Defendants’ position is that they were providing additional information to Scarfone Hawkins to properly respond to the Statement of Claim and to commence a counterclaim against the Plaintiff for breach of contract.

[41] The parties agreed to having this motion heard on August 22, 2023. The Defendants served and filed their materials on August 2, 2023.

[42] As part of their motion materials, the Defendants have produced a draft of their statement of defence and counterclaim (the “Statement of Defence”). In the draft, the Defendants, among other things:

(a) deny that Nala was spayed without the Plaintiff’s written consent, as he provided such consent on January 5, 2023 via Facebook Messenger message;

(b) deny that London has been spayed; and

(c) deny that they breached the Nala Guardian Contract and the London Guardian Contract.

ISSUE

[43] The issue before the Court is whether it should exercise its discretion to set aside the noting in default of the Defendants and the Default Judgment.

LEGAL PRINCIPLES/TESTS

[44] Subrule 19.08(1) of the Rules of Civil Procedure provides that a “judgment against a defendant who has been noted in default that is signed by the registrar or granted by the court on motion under rule 19.04 may be set aside or varied by the court on such terms as are just.”

[45] Subrule 19.08(3) provides that, “[o]n setting aside a judgment under subrule (1) or (2), the court or judge may also set aside the noting of default under rule 19.03.”

[46] As a result, granting leave to set aside a noting in default and a default judgment is a discretionary decision.

[47] As noted by the Court of Appeal in Nobosoft Corp. v No Borders Inc., 2007 ONCA 444, at para 7, it is generally not in the interests of justice to grant judgments based solely on technical defaults. The Court is to “always strive to see that issues between litigants are resolved on their merits whenever that can be done with fairness to the parties.”

[48] The Court of Appeal also explained that motions to relieve against defaults are typically granted on an almost routine basis, and opposing counsel will usually consent to such relief as a matter of professional courtesy.

[49] The underlying general principle for the Rules is that they are to be “liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding” (subrule 1.04(1)). Additionally, when making orders, the Court is to strive to reach just conclusions, as it “may impose such terms and give such directions as are just” (rule 1.05).

[50] The ultimate task on a motion to set aside a default judgment is to determine whether the interests of justice favour granting the order. In Mountain View Farms Ltd. v. McQueen, 2014 ONCA 194 (“Mountain View”), the Court of Appeal outlined the following factors to be considered by the Court when deciding whether to grant a motion to set aside default judgment:

(a) whether the motion was brought promptly after the defendant learned of the default judgment;

(b) whether there is a plausible excuse or explanation for the defendant’s default in complying with the Rules;

(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 plaintiff should the motion be allowed; and

(e) the effect of any order the motion judge may make on the overall integrity of the administration of justice.

[51] The above-mentioned factors are not rigid rules but are pertinent considerations which are to be assessed in the particular circumstances of each case to decide whether it is just to relieve the defendant from the consequences of their default.

ANALYSIS

(A) Defendants Moved Promptly

[52] With respect to factor (a) of the Mountain View test, the Defendants first learned of the Default Judgment on July 11, 2023. Scarfone Hawkins was in contact with Absolute Law the next day about setting aside the judgment. Once Absolute Law confirmed that the Plaintiff would not provide his consent, the parties agreed to the scheduling of the motion and the Defendants’ served their motion record on August 2, 2023.

[53] In Ken Jackson Construction Limited v. Macklin, 2017 ONCA 324, at para 11, the Court of Appeal held that a delay of four months between the defendants being served with the claim and retaining counsel to defend the claim and set aside the default judgment was a “relatively short delay”.

[54] In this case, there was only two months between service of the Statement of Claim and the Defendants notifying the Plaintiff that they intended to set aside the Default Judgment.

[55] In my view, the Defendants moved promptly to set aside the Default Judgment.

(B) Plausible Explanation

[56] With respect to factor (b) of the Mountain View Test, in my view, there is a plausible explanation for the Defendants default in complying with the Rules.

[57] The Defendants admit to being served with the Statement of Claim on May 11, 2023. Under subrule 18.01(a), the Defendants were to serve a statement of defence within 20 days of being served with the claim. This time period could be extended by 10 days if the Defendants served a notice of intent to defend before the expiry of the 20-day period under subrule 18.02(1).

[58] By my calculation, the 20-day period for service of a statement of defence expired on May 31, 2023. The Defendants served a notice of intent to defend five days later on June 5, 2023, which counsel to the Plaintiff rejected. As a result, the Defendants missed the deadline for service of a statement of defence.

[59] In an e-mail dated June 9, 2023, Scarfone Hawkins asked Absolute Law to not take steps to note the Defendants in default without first providing them with notice. Absolute Law did not respond to this e-mail.

[60] On June 12, 2023, representatives of Scarfone Hawkins and Absolute Law had a conference call. Ms. Powell’s e-mail on that day set out her memorialization of the call, which is that Absolute Law agreed not to note the Defendants in default without providing prior written notice to Scarfone Hawkins.

[61] During oral submissions, Mr. Bin Tahir challenged the description of the call as set out in Ms. Powell’s e-mail. I informed Mr. Bin Tahir that he had the ability to swear an affidavit in connection with this motion in the event that he wished to proffer evidence. As he chose not to do so, and given that Absolute Law never responded to Ms. Powell’s e-mail, I accepted Ms. Powell’s e-mail as an accurate description of what was discussed during the call.

[62] It was clear from the two e-mails that it was Scarfone Hawkins’ understanding that no steps would be taken by the Plaintiff without prior written warning being provided to them.

[63] Notwithstanding the call that occurred on June 12, 2023, the Plaintiff filed a requisition for the noting in default on the very next day, June 12, 2023.

[64] This Court has repeatedly confirmed that it is better practice to place the defaulting party on notice rather than move ahead with noting a defendant in default and proceeding with a motion for default judgment. See Robert Attersley Family Properties Limited v. Richard H. Gay Holdings Ltd., 2020 ONSC 82, at para 32 and Casa Manila Inc. v. Iannuccilli, 2018 ONSC 7083, at paras. 11 and 16.

[65] I believe that the same principle applies even in a case such as this, where default judgment is requested from the registrar and a law firm has not explicitly confirmed that they have been retained by a defendant. As stated by Justice Sanfilippo in Casa Manila Inc. v. Iannuccilli, 2018 ONSC 7083, at para. 17, “to a plaintiff seeking a judgment on default, notice is not a nuisance: it is key to the viability of the default judgment.”

[66] Mr. Bin Tahir argued that as Scarfone Hawkins failed to confirm in writing that they had been retained by the Defendants, it was not necessary to provide them with notice.

[67] I do not accept this submission. Section 19 of The Principles of Civility for Advocates published by The Advocates Society states: “Subject to the Rules of Practice, advocates should not cause any default or dismissal to be entered without first notifying opposing counsel, assuming the identity of opposing counsel is known.”

[68] Additionally, Rule 7.2-2 of the Rules of Professional Conduct of the Law Society of Ontario provides that “A lawyer shall avoid sharp practice and shall not take advantage of or act without fair warning upon slips, irregularities, or mistakes on the part of other legal practitioners not going to the merits or involving the sacrifice of a client’s rights.”

[69] While Scarfone Hawkins had not formally informed Absolute Law of it being retained by the Defendants, in my view, given their repeated statements of working with the Defendants to finalize their defence, it was incumbent on the Plaintiff’s lawyers to act with courtesy and civility and the rules of practice and inform Scarfone Hawkins before they took steps to note the Defendants in default and obtain the Default Judgment, as Scarfone Hawkins had asked them to do on two occasions.

[70] The better practice would have been for Absolute Law to follow up with Scarfone Hawkins to demand a statement of defence by a certain date, otherwise they would proceed to note the Defendants in default.

[71] As well, in considering this factor, I again refer to the Court of Appeal’s comments in Nobosoft Corp. v No Borders Inc., 2007 ONCA 444 that “Motions to extend the time for delivery of pleadings and to relieve against defaults are frequently made and are typically granted on an almost routine basis. Usually opposing counsel will consent to such relief as a matter of professional courtesy.”

[72] In these circumstances, I believe there is a plausible explanation for the Defendants’ default in delivering a statement of defence in accordance with the Rules.

(C) The Defendants have an Arguable Defence on the Merits

[73] With respect to factor (c) of the Mountain View Test, the Court is to consider whether the proposed defence has an “air of reality”. The Defendants do not need to show that their defence will succeed, only a plausibility of a defence. See Mountain View, at para. 51.

[74] As noted above, I have reviewed the Defendants’ draft Statement of Defence. Based on my review, I am satisfied that the defence has an air of reality for the following reasons:

(a) the Defendants allege that the Plaintiff consented in writing to having Nala spayed. This directly challenges the Plaintiff’s allegation that he did not consent to the spaying, which was the basis for receiving $20,000 of the $35,000 in damages in the Default Judgment;

(b) the Defendants allege that London has not been spayed while in their care. This directly challenges the Plaintiff’s allegation that London has been spayed without his consent, which was the basis for receiving the remaining $15,000 of the $35,000 in damages in the Default Judgment;

(c) the Defendants challenge the Plaintiff’s position that they were negligent or required to return Nala or London to him based on the terms of the agreements of the parties; and

(d) the Defendants allege they did not post any defamatory statements on social media about the Plaintiff. The Plaintiff’s Statement of Claim did not provide particulars about which statements made by the Defendants were defamatory, and the Default Judgment requires the Defendants to cease and desist from the publication of any defamatory statements.

(D) and (E) No Prejudice from Setting Aside the Default Judgment and an Order Dismissing the Motion Will Have an Effect on the Integrity of the Administration of Justice

[75] With respect to factor (d) of the Mountain View test, the Court of Appeal noted in Intact Insurance Company v. Kisel, 2015 ONCA 205, at para. 26 that the shortness of the period between the delivery of a claim and the noting of default is relevant to the question of prejudice. In that case, the noting in default was 45 days after delivery of the claim.

[76] In this case, the Plaintiff issued the Statement of Claim on May 6, 2023, served it on May 11, 2023, noted the Defendants in default on June 13, 2023, obtained Default Judgment on July 6, 2023 and informed the Defendants of its existence on July 11, 2023. On the very next day the Plaintiff’s lawyers were informed that the Defendants would be taking steps to set aside the Default Judgment.

[77] As noted above, the Plaintiff has alleged that the Defendants have “gamed the system” by not defending his claim in a timely manner. There is nothing in the evidence to support this argument.

[78] In my view, the period of time was brief and there is no prejudice to the Plaintiff in setting aside the Default Judgment. Conversely, permitting the Default Judgment to continue would negatively prejudice the Defendants, as it would require them to return two dogs they insist are legally theirs and require them to pay $35,000 in damages to the Plaintiff for breaches of the guardian contracts they say never occurred.

[79] Additionally, while the Plaintiff will be prejudiced if the motion is granted because it will result in costs and delay, he still may prevail once the action has been adjudicated.

[80] With respect to factor (e) of the Mountain View test, again, the preference in the civil justice system is for disputes to be determined on their merits. See Zeifman Partners Inc. v. Aiello, 2020 ONCA 33, at para 47. The Defendants have established an arguable defence, and as a result, the interests of justice support the setting aside of the Default Judgment and permitting the Defendants to have their day in court. See Natural Energy Systems Inc. v. Hallett, 2019 ONSC 1372, at para 88.

DISPOSITION AND COSTS

[81] In my view, the Defendants have satisfied the factors set out in Mountain View and as a result, it is in the interest of justice to set aside the noting in default and the Default Judgment and permit the Defendants to serve their Statement of Defence. As a result, I hereby grant the Defendants’ motion.

[82] With respect to costs, the parties have agreed that the successful party is entitled to $3,500 in costs, inclusive of disbursements and tax. As a result, I hereby fix costs in the amount of $3,500, to be paid by the Plaintiff to the Defendants within 30 days.

Associate Justice Rappos DATE: November 15, 2023