Court File and Parties

COURT FILE NO.: CV-24-00714925-0000 DATE: 20241205 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: TFG FINANCIAL CORPORATION, Plaintiff AND: KAVEN TREMBLETT, Defendant

BEFORE: Akazaki, J.

COUNSEL: David W. Powrie, for the Plaintiff

HEARD: December 3, 2024, in writing

Endorsement

Overview

[1] In this motion for default judgment under rule 19.05 of the Rules of Civil Procedure, the plaintiff sought damages of $62,651.36, plus interest and costs. The claim arises from the defendant’s alleged breach of an equipment lease for a Freightliner haulage vehicle. The damages consist of arrears in lease payments, plus contractual obligations to defray the lessor’s vehicle recovery and repair costs. Offsetting these charges are payments on account made by the lessee.

[2] In support of the claim for damages, the plaintiff filed an affidavit sworn by a lawyer at the law firm of the lawyer who filed the motion. The deponent was not an employee of the plaintiff. The affidavit asserted:

1. … I have personal knowledge of all the facts stated in this Affidavit except where I have been informed of such facts, in which case I have stated the source of such facts and I hereby state that I believe such facts to be true.

[3] No further than in the next paragraph, the deponent asserted the following fact, without qualifying that it was information and belief:

2. On or about January 19, 2021, TFG as lessor entered into a lease agreement with the Defendant, Kaven Tremblett (“Defendant”), identified as Lease Agreement 716654. Attached hereto and marked as Exhibit “A” to this Affidavit is a copy of Lease Agreement 716654.

[4] The affidavit recited some further facts, this time gleaned from the deponent’s “review of the file.” Then the deponent reverted to personal knowledge and stated the following as proof of additional damages owed to the plaintiff:

8. As a result of the mechanical repairs, seizure and storage/towing fees, invoices in the amount of $29,719.59 were incurred. Attached hereto and marked as Exhibit “B” to this Affidavit is a copy of the Invoices, various dates.

[5] I have little doubt that all the evidence in the affidavit fell into the “information and belief” category and that none of it involved the deponent’s personal knowledge of negotiation of the lease, the management of the account, or the nature of the recovery and repair costs. There was no evidence that the lawyer was moonlighting as an employee of the client. Thus, without further explanation, I have no reason to accept the lawyer’s evidence regarding the plaintiff’s receipt of an executed lease agreement, the post-recovery assessment of the vehicle for repairs, or the authenticity of the documents marked as exhibits.

[6] The question therefore arises whether any of this information is admissible on a rule 19.05 motion and whether the court should simply ignore the question or the wording of the affidavit, in the interest of keeping the judicial assembly line running. There does not appear to be any reported decision directly on point, even though the practice of filing these lawyer affidavits is not uncommon.

[7] For the following reasons, I rule that the affidavit is inadmissible, and the motion must be dismissed. The dismissal is without prejudice to the motion being resubmitted with evidence from a representative of the plaintiff company with actual corporate knowledge of the lease account and the details of the damages incurred.

Admissibility of a Lawyer’s Affidavit on a Rule 19.05 Motion

[8] Rule 19.04 allows a plaintiff to requisition default judgment from a registrar, if the claim is for a debt or liquidated demand. Rule 19.05 sets out a procedure for obtaining default judgment by motion in other cases. Subrule 19.05(2) requires such a motion to be supported “by evidence given by affidavit if the claim is for unliquidated damages.”

[9] The interaction between rules 19.04 and 19.05 mean that the admitted pleadings alone cannot support an award of damages except on a pure debt or liquidated demand. This court set out the basic requirements of rule 19.05 motions in Ybaws! Inc. v. Ramo Canada Inc., 2024 ONSC 69, at para. 11, referring to Elekta Ltd. v. Rodkin, 2012 ONSC 2062, at paras. 12-14. In Elekta, D. M. Brown J. relied Fuda v. Conn, at para. 16, for the proposition that the moving party has the burden to prove the claim and damages on the civil standard of proof even though the proceeding is uncontested.

[10] Affidavit evidence for use in motions are governed by rule 39. Subrule 39.01(4) permits affidavits on motions to contain statements of the deponent’s information and belief, if the source of the information and the fact of the belief are specified. Subrule 39.01(5) limits the use of such statements in applications to uncontentious facts. A rule 19.05 motion is a motion, and therefore that restriction does not apply. However, I do observe that the evidence in a contested motion for judgment permits a court to draw an adverse inference from the failure of a party to produce evidence of a person with personal knowledge: subrule 20.02(1). On a motion for default judgment or any other substantive procedure, an affidavit consisting entirely of hearsay creates discomfort for a court of law.

[11] The rules for affidavits on motions therefore tolerate hearsay, even on contested facts. However, these rules do not necessarily sanction a lawyer’s affidavit, let alone one that mixes improbable personal knowledge with information from an inanimate source such as “the file.” An affidavit from a lawyer practising with the lawyer of record is presumptively problematic for several reasons.

[12] There has always existed varying degrees of conflict of interest when an officer of the court is required to remove the robes to step into the witness box: TSCC No. 2519 v. Emerald PG Holdings Ltd., 2022 ONSC 3916, at para. 16. There are exceptions to the rule that counsel should avoid putting themselves in the dual role of advocate and witness. It is commonplace for lawyers or law firm employees to provide affidavits on purely procedural motions because of their knowledge of interactions with the other law firm. For example, a motion to dismiss a case or to strike out a defence based on procedural non-compliance must necessarily be proven by a member of the party’s legal team – no one else would be better placed to give the evidence of a discovery non-attendance or other default. By convention, courts have allowed counsel to appear on their own affidavits on rule 15.04 motions for removal of a lawyer of record. Subrule 7.08(4) requires the plaintiff’s lawyer to file an affidavit to obtain approval of a settlement on behalf of a person under disability.

[13] However, the evidence on substantive motions must be different from the evidence on procedural motions, because the judicial act of judgment extends to facts emanating outside of the court and its process. A statement under oath of the facts of the case and the authenticity of documentary evidence too closely resembles an opinion of the merits, something a lawyer cannot provide a court or tribunal: Rules of Professional Conduct, s. 5.1-1, commentary 5.

[14] The best practices for rule 19.05 motions, as described in Casa Manila Inc. v. Iannuccilli, 2018 ONSC 7083, and as adopted by the Toronto civil list, contemplates that a motion for default judgment can, in fact, unravel and lead to a regular trial of liability and/or damages. In such an instance, a lawyer’s affidavit leads to the undesirable prospect of the lawyer being compelled to testify and being examined as an adverse witness on a substantive issue.

[15] The current streamlined procedure facilitates but does not replace or mechanize the judicial function of a default judgment. In 1986, the current iteration of rule 19.05 replaced a procedure requiring the plaintiff to set the action down for a trial of unliquidated damages: Oko v. Kwinch (1987), 60 O.R. (2d) 220 (Ont. D.C.), at 221-22. As reproduced by Borins D.C.J. (as he then was), rule 19.05 originally read (emphasis added):

19.05 Where a defendant has been noted in default, the plaintiff shall proceed to trial in respect of a claim for,

(a) unliquidated damages, unless the amount of damages has been agreed upon; or (b) a divorce or declaration of the invalidity of a marriage.

[16] Prior to the 1986 rule change, the procedure was a damages trial, with the client or other witness providing live evidence in the ordinary manner, albeit with no one on the other side to cross-examine. The streamlining of the procedure did not negate the fact that a default judgment on an unliquidated claim for damages is a judicial act. Unlike a contractual debt claim, the amount owed is not fixed by agreement of the parties. In the pre-1986 default judgment trial, the only difference between the trial and the regular trial was that the defendant lost the right to participate. The change from live evidence to affidavits does not change the nature of the required evidentiary record. Although uncommon, subrule 19.05(3) preserves the pre-1986 default judgment trial in appropriate instances.

[17] Under the pre-1986 procedure, a court would not have allowed a lawyer representing the plaintiff, or another member of the lawyer’s firm, to remove his or her gown and testify at a trial for assessment of damages. The conversion of the procedure to a motion based on affidavits does not alter the requirement that the evidence of the defendant’s liability and of the damages suffered by the plaintiff must all be admissible. Hearsay from a lawyer from the same firm as the advocate for the plaintiff, upon review of documents in a client file, cannot be the foundation of a judgment setting the defendant’s liability for damages. While some information that is likely incapable of dispute might go in, the affiant must be the party, an employee of a corporate party, or some other witness with sufficient proximity to the transaction to satisfy the court that the liability and damages have a proper factual foundation.

[18] The issue of the lawyer’s affidavit must therefore be resolved by excluding it from the record. Because of this ruling, I need not enter a further dissection of the affidavit to query the lawyer’s claim of possessing personal knowledge of certain facts.

Conclusion

[19] Since there is no admissible affidavit evidence supporting the defendant’s liability or the claim for unliquidated damages under subrule 19.05(2), the motion is hereby dismissed. This disposition is without prejudice to the plaintiff’s resubmission of the motion based on information from a deponent who has actual corporate knowledge of the transactions in issue.

Akazaki J. Date: December 05, 2024