SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-25-00734662-0000

DATE: Mar 31, 2026

RE:

RE/MAX EXCEL REALTY LTD; YING SHIU LIN, AKA Andrew LIN

Plaintiffs

AND:

SAVILLS INC., AKA SAVILLS INC., BROKERAGE; RYAN MOREIN; JORDAN KARP; TWENTY SEVEN CARLTON MANAGEMENT LIMITED

Defendants

BEFORE:

Associate Justice P.J. Barnes

COUNSEL:

EMRAAN DHARSI

for the Plaintiffs/responding parties

RE/MAX EXCEL REALTY LTD. ET AL

Email: emraan@adllp.ca

PAUL FELDMAN

For the Defendant/moving party

TWENTY-SEVEN CARLTON MAN. LTD

Email: paul@feldmanlawyers.ca

HEARD:

March 30, 2026 (by video conference)

ENDORSEMENT

[1] The motion before the Court is brought by the defendant Twenty Seven Carlton Management Limited (hereinafter "Twenty Seven Carleton") seeking an Order to set aside the noting in default against it made by the plaintiffs on or about February 18, 2025. In addition, Twenty Seven Carleton seeks an Order to extend the time for it to serve its Statement of Defence by 30 days. The plaintiffs oppose the motion on the basis that in their view, the defendant's request to set aside the noting in default does not, on balance, meet the criteria outlined by the Court of Appeal in Franchetti v. Huggins, 2022 ONCA 111 for setting aside a noting in default.

[2] For the reasons that follow, Twenty Seven Carleton's motion is granted. The plaintiffs' noting in default of the defendant Twenty Seven Carleton is set aside. Twenty Seven Carleton will otherwise have 30 days from the date of this endorsement in which to serve and file its Statement of Defence.

Background

[3] The underlying action brought by the plaintiffs stems from a contract dispute. The sum of money being sought is based on commission sums allegedly owed to the plaintiffs pursuant to a commercial leasing arrangement that reportedly existed between them and the defendants in relation to two commercial units located at 27 Carleton St. in downtown Toronto, which were both leased in January 2024.

[4] Twenty Seven Carleton is the owner of the subject property and the co-defendants Savills Inc., Ryan Morein, and Jordan Karp were a real estate brokerage and real estate agents, respectively, who purportedly acted as the real estate brokerage and agents, respectively, to Twenty Seven Carleton, for the purpose of two listing agreements (for a 700 square foot unit and a 4300 square foot unit) at the subject premises located at 27 Carleton St. The crux of the claim against the defendants is that the plaintiffs were never paid the approximate $58,000 in commission fees that were purportedly contractually owing to them, stemming from the plaintiffs' sourcing of tenants for the two commercial units that were advertised for lease.

[5] The plaintiffs claim that they served the defendant Twenty Seven Carleton with the Statement of Claim on or about January 14, 2025, by leaving a copy of the Statement of Claim with a woman named "Angela M", who apparently identified herself as a manager for Twenty Seven Carleton at its head office located at 181 Carlaw Ave., unit 202, in the City of Toronto. The plaintiffs subsequently noted Twenty Seven Carleton in default of the claim on February 18, 2025.

[6] At no time did the plaintiffs approach Twenty Seven Carleton between the date of the alleged service of the Statement of Claim, and the noting in default that was requisitioned some 35 calendar days later, seeking to follow-up on its purported service of the Statement of Claim and inquiring as to whether counsel had been retained to deal with the matter for Twenty Seven Carleton. Counsel for the plaintiffs candidly claimed during submissions that the caselaw did not require his client to "follow up" with a defendant that had purportedly been served with a Statement of Claim, prior to a noting in default being requested.

[7] On May 21, 2025, a lawyer on behalf of Twenty Seven Carleton (not the lawyer appearing on this motion for Twenty Seven Carleton) contacted counsel for the plaintiffs indicating that he had been retained to deal with the matter and that he would serve a Notice of Intent to Defend on behalf of his client. On May 26, 2025, counsel for the plaintiffs wrote back to this lawyer, indicating that his client had already been noted in default on February 18, 2025.

[8] In follow-up email correspondence on June 6, 2025, the lawyer advised that he would deliver a Statement of Defence for Twenty Seven Carleton the following week. Counsel for the plaintiffs followed up with the lawyer on June 18, 2025, asking him to serve Twenty Seven Carleton's Statement of Defence by June 27, 2025, failing which, his client would move for default judgment. The next day, the lawyer responded to counsel for the plaintiffs, indicating that he had been in hospital for a significant health matter and had not been able to finalize his instructions.

[9] Counsel for the plaintiffs wrote back to the lawyer in early July 2025, indicating that he had not received a Statement of Defence for Twenty Seven Carleton, and as such, that his client would move for default judgment. The lawyer wrote back to plaintiffs' counsel the next day, asking that the plaintiffs refrain from commencing default judgment proceedings and that he would have a Defence filed, but that he had remained out of office due to a "major (health) set back" the previous week.

[10] Plaintiffs' counsel delivered the lawyer and Mr. Tangredi with a motion record seeking default judgment (in writing) on August 4, 2025, and the lawyer confirmed that he had received the materials the next day. After the motion materials were rejected by the Court, another motion record seeking default judgment was served on August 28, 2025, on the lawyer and Mr. Tangredi, returnable on October 1, 2025. The motion return date was ultimately rejected by the Court on the basis of an incorrect motion confirmation form being used.

[11] On September 11, 2025, current counsel for Twenty Seven Carleton identified himself to plaintiffs' counsel, indicating that the plaintiffs' motion had just come to his client's attention. The same day, counsel for the plaintiffs asked that Twenty Seven Carleton serve its Defence and Affidavit in support of a motion to set aside the noting in default. On September 26, 2026, counsel for Twenty Seven Carleton served its motion materials seeking to set aside the noting in default, as well as its proposed Statement of Defence.

[12] An initial affidavit of Vincent Tangredi, an officer and director of Twenty Seven Carleton, dated September 26, 2025, was presented to the Court in support of its motion to set aside the noting in default of his company. Mr. Tangredi sets out in this first affidavit that there was nobody in his office who went by the name "Angela M" in his office in January 2025, and further, that there was nobody else other than himself that would identify themselves as a manager of Twenty Seven Carleton. In short, Mr. Tangredi indicates that the Statement of Claim was not served on his company in January 2025 like the plaintiffs allege.

[13] A second affidavit from Mr. Tangredi was submitted to the Court dated March 25, 2026, after his review of the responding affidavit of the plaintiff Andrew Lin sworn on March 24, 2026 (where all the email correspondence regarding the initial lawyer’s handling of the file for Twenty Seven Carleton and outlining this person's health problems was disclosed to the current counsel for Twenty Seven Carleton for the first time). Mr. Tangredi corrects himself in this second affidavit and indicates that his company was served with the Statement of Claim, and that either himself or someone in his office retained the firm Teplitsky Colson to deal with the matter. Mr. Tangredi explains in his March 25, 2026 affidavit that he had either forgotten about retaining Teplitsky Colson on this matter, or believed it could have been for another matter. After reading Mr. Lin's affidavit, Mr. Tangredi indicated that he learned about why his previous lawyer had not responded to him about this matter, and that this lawyer had allowed another claim to go to default against his company. In short, Mr. Tangredi indicates that his previous lawyer "dropped the ball" and did not report to him about the status of the subject litigation.

[14] After being personally served with the plaintiffs' motion record for default judgment on August 28, 2025, Mr. Tangredi explains in his second affidavit that he immediately reached out to retain current counsel to represent Twenty Seven Carleton's interests and set aside the noting in default.

[15] Despite having a proposed Statement of Defence from Twenty Seven Carleton since late September 2025, the plaintiffs have refused to set aside the noting in default of that company, and consent to the Defence being filed with the Court.

The Law:

[16] Rule 19.03(1) states:

19.03 (1) The noting of default may be set aside by the court on such terms as are just. R.R.O. 1990, Reg. 194, r. 19.03 (1).

[17] The onus of satisfying the Court that the noting in default should be set aside rests with the defendant who has been noted in default. See Garten v. Kruk, 2009 58071 (ON SCDC) at paragraph 16.

[18] The evidentiary bar to set aside a noting in default is low and guided primarily by the fact that it is the Court's preference to resolve civil disputes on their merits. See Westcott v. Khan, 2021 ONSC 1396 at paragraph 21, and Bridgepoint Financial Services Limited Partnership I et al v. Grillone et al, 2022 ONSC 4802 at paragraph 23.

[19] Further, I find the decision of Molloy J. in McNeil Electronics Ltd. v. American Sensors Electronics Inc. (1996), 5 CPC (4th) 266 (Ont. Gen. Div), reversed on other grounds in 1998 17963, to be instructive in how the Court views generally views motions of this nature:

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. Where there is opposition to a motion of this kind, it is usually related to additional terms which are sought as a condition to the indulgence being granted or to issues of costs...It is not in the interests of justice to strike pleadings or grant judgments based solely on technical defaults. Rather, the Court will always strive to see that issues between litigants are resolved on their merits whenever that can be done with fairness to the parties.

[20] The Court of Appeal, in its decision in Intact Insurance Company v. Kisel, 2015 ONCA 205, outlined the following principles that a court should consider when deciding whether to set aside a noting in default:

[13] When exercising its discretion to set aside a noting of default, a court should assess "the context and factual situation" of the case: Bardmore, at p. 284 O.R. It should particularly consider such factors as the behaviour of the plaintiff and the defendant; the length of the defendant's delay; the reasons for the delay; and the complexity and value of the claim. These factors are not exhaustive. See Nobosoft Corp. v. No Borders Inc., 2007 ONCA 444, 225 O.A.C. 36, at para. 3; Flintoff v. von Anhalt, 2010 ONCA 786, at para. 7. Some decisions have also considered whether setting aside the noting of default would prejudice a party relying on it: see, e.g., Enbridge Gas Distribution Inc. v. 135 Marlee Holdings Inc., [2005] O.J. No. 4327, [2005] O.T.C. 891 (S.C.J.), at para. 8. Only in extreme circumstances, however, should the court require a defendant who has been noted in default to demonstrate an arguable defence on the merits: Bardmore, at p. 285 O.R.

[21] These principles were re-affirmed by the Court of Appeal in Franchetti v. Huggins, 2022 ONCA 111 at paragraphs 9 and 10:

[9] There are many cases discussing the criteria for setting aside a noting of default. See particularly Laskin J.A.’s detailed exposition in Kisel, at para. 13. To summarize the jurisprudence, the following factors have been found to be relevant in 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.

[10] These factors are not exhaustive nor are they to be applied as rigid rules. An arguable defence on the merits may justify the court in exercising its discretion to set aside a default judgment, and for that purpose it is sufficient for the defence to have an “air of reality”: Mountain View Farms Ltd. v. McQueen, 2014 ONCA 194, 119 O.R. (3d) 561, at para. 51. However, perhaps because requests to set aside noting in default usually occur early in the litigation process, unlike this case, courts will rarely require a defendant who has been noted in default to show an arguable defence on the merits. In a case such as this one involving a significant delay, the moving party is required to show an arguable case on the merits.

Analysis

[22] The evidence of Mr. Tangredi, which I accept, is that he moved quickly to rectify the noting in default of Twenty Seven Carleton after he was personally served with the plaintiffs' motion materials seeking default judgment in late August 2025, by retaining the new counsel appearing on this motion for his company.

[23] In addition, despite the prima facie contradiction in Mr. Tangredi's affidavits about whether/when Twenty Seven Carleton was served with the Statement of Claim, it seems clear that the counsel that had originally been retained to deal with the matter for Twenty Seven Carleton had ongoing parallel health issues that affected his ability to properly report to his client.

[24] In cases where the Court is asked to exercise its discretion to cure a technical defect that has arisen in the conduct of litigation, the Court of Appeal has confirmed that the Court should be concerned mainly with the rights of litigants, not with the conduct of counsel. See Chiarelli v. Wiens, 2000 3904 (ON CA), [2000] O.J. No. 296, at paragraph 9.

[25] While the Chiarelli decision dealt with the principles that a Court must consider when deciding whether or not to extend the time for service of a Statement of Claim, its reasoning on this point is nevertheless equally applicable, in my view, to a situation where the Court is considering whether to set aside a noting in default.

[26] Twenty Seven Carleton should not be punished or prejudiced due to an oversight or lack of capacity from its previous counsel. In this sense, I am satisfied that it has provided a reasonable explanation (pursuant to criteria “3” in Franchetti) for why the Statement of Defence was not delivered in the Spring/Summer of 2025, while its previous counsel appears to have been incapacitated and was not properly reporting to his principal.

[27] Mr. Tangredi made efforts to quickly retain new counsel for Twenty Seven Carleton after it became apparent that his initial lawyer "dropped the ball", and had his new counsel deal with getting the noting in default set aside, and serving a proposed Statement of Defence, within several weeks of his personal receipt of the plaintiffs' default judgment motion materials on August 28, 2025. As the current counsel for Twenty Seven Carleton was not immediately available when Mr. Tangredi received the plaintiffs' motion record by email on August 28, 2025 (per Mr. Tangredi's original affidavit of September 26, 2025), this is an understandable explanation that adequately explains the short delay that occurred between Twenty Seven Carleton being served with the plaintiffs’ default judgment motion materials, and Twenty Seven Carleton’s counsel delivering the proposed Statement of Defence to the plaintiffs' counsel on or about September 25, 2025. It is an overall short delay in the overall context of civil litigation, which would also tend to work in Twenty Seven Carleton's favour when criteria “2” of Franchetti is applied to the facts at hand.

[28] If anything, the behaviour of the plaintiffs in having a draft Statement of Defence from Twenty Seven Carleton as of late September 2025, but refusing to accept it, in light of the Court's well-established preference to have matters between litigants dealt with on their merits, also does not work in their favour when assessed against criteria “1” of Franchetti.

[29] The litigation itself does not otherwise appear to be complex. It is a contractual dispute at its core. It is a straightforward case that needs to be dealt with on the merits. This would be the only part of the Franchetti criteria (4) that would appear to fall in the plaintiffs’ favour.

[30] Considering that the litigation is still at a relatively early stage, and the overall nature of the claim, setting aside the noting in default would also not prejudice the plaintiffs (pursuant to criteria “5” of Franchetti), particularly since they have accepted the Statement of Defence of the co-defendants Savills et al in the meantime, and would be forced to deal with the litigation on its merits vis-a-vis those defendants in any event.

[31] Seeing as the plaintiffs were willing to accept a Statement of Defence from the initial counsel for Twenty Seven Carleton as of late June 2025, I also do not accept that there has been any prejudice to the plaintiffs during the approximate three month period that ran between that time and the time when they eventually received a proposed Statement of Defence from Twenty Seven Carleton's new counsel, which would hamper the plaintiffs pursuant to criteria “5” of Franchetti. There is otherwise no suggestion that any records have been lost, or witnesses not locatable, that are germane to the litigation at hand.

[32] The balance of prejudice under the circumstances (criteria “6” of Franchitti) also falls in Twenty Seven Carleton's favour, as it will clearly be prejudiced if the noting in default is not set aside. Its failure to serve a Statement of Defence was ultimately a technical default that was induced by what appears to be substandard conduct of its initial counsel.

[33] Otherwise, given the request to set aside the noting in default was made early on in the litigation process, it is unnecessary for Twenty Seven Carleton to demonstrate at this point that it has an arguable defence on the merits, per criteria “7” of Franchetti. Nevertheless, Twenty Seven Carleton alleges that it does not have contractual privity with the plaintiffs, which in my view would be enough to satisfy the Court that it has an arguable defence under the circumstances.

[34] The plaintiffs otherwise rely on the decision of Wilkinson J. in Century 21 People’s Choice Realty et al v. Bilkhu et al, 2025 ONSC 4920, in support of their position that Twenty Seven Carleton has not satisfied the Franchetti criteria, on balance.

[35] While the facts of the Century 21 decision at first glance appear to be similar/analogous to the facts before the Court in the motion at bar, I do not think that this case is particularly persuasive given the substantially different factual matrix that was before my learned colleague in that case.

[36] In Century 21, the Court was dealing with a claim involving a real estate commission allegedly owing arising out of the purchase of a residential property by the spouse of the defendant who initially contracted with the real estate agency. The Statement of Claim was issued in March 2024. The defendants were noted in default for the first time on June 24, 2024, served a Notice of Intent to Defend on August 2, 2024, and then requested to set aside the noting in default 10 days later. The plaintiffs consented to setting aside the noting in default on August 26, 2024. A demand for particulars was subsequently sent by the defendants to the plaintiffs and then responded to by the plaintiffs. The plaintiffs then requested a Statement of Defence before December 12, 2024, which was not responded to by the defendants’ counsel.

[37] Another follow-up email was sent to counsel for the defendants on February 3, 2025, indicating that they had 10 days in which to deliver a Defence. A 10-day extension was then requested by the defendants’ counsel after the initial 10 days had expired (as that lawyer was reportedly in trial), which was granted by plaintiffs’ counsel. Counsel for the defendants did not respond to this subsequent email, and it was discovered by the plaintiffs that the property was being sold under power of sale by the mortgagee bank. The defendants were noted in default for a second time on March 7, 2025, approximately a full year after the Statement of Claim was first issued. Counsel for the plaintiffs informed counsel for the defendants on April 7, 2025, that the noting in default had occurred one month earlier. Counsel for the defendants then delivered a Statement of Defence on April 8, 2025, and asked that the second noting in default be set aside.

[38] In other words, the delay in delivering a Statement of Defence in Century 21 came a full calendar year after the claim had been issued in the first place, and after the plaintiffs had agreed to set aside the first noting in default upon the timely delivery of a Statement of Defence in the summer of 2024 (which never came). There was also no issue in the Century 21 case of the defendants having inadequate legal counsel, as there appears to be in the case at bar.

[39] Moreover, in Century 21, the Court found that the defendants’ action in delaying the delivery of their Statement of Defence was tactical and had resulted in prejudice to the plaintiffs’ ability to recover a judgment against the defendants due to the power of sale that had taken place.

[40] In the case at bar, the delay in adhering to the plaintiffs’ request for a Defence was only several months at most, once the initial counsel advised of their presence on the file for Twenty Seven Carleton. Once responsive counsel took over carriage of the file for Twenty Seven Carleton in September 2025, he delivered a proposed Statement of Defence on behalf of his client almost immediately.

[41] There is otherwise no evidence before the Court on the present motion that Twenty Seven Carleton is impecunious or that it delayed the delivery of its proposed Defence in order to gain a financial or tactical advantage in the action. As such, the factual matrix of the Century 21 case is materially different than the facts that are before this Court and that case does not assist the plaintiffs in resisting the relief that Twenty Seven Carleton seeks.

[42] In light of my comments above, the totality of the Franchetti criteria for setting aside the noting in default falls significantly in Twenty Seven Carleton's favour.

Disposition

[43] Accordingly, I grant the relief being sought by the Twenty Seven Carleton defendant. The noting in default against Twenty Seven Carleton is set aside, and the company is granted an extension of 30 days from the date of the accompanying Order in which to serve and file its Statement of Defence.

[44] The parties are encouraged to resolve the issue of costs between themselves. If they are not able to settle costs by end of business on April 2, 2026, counsel for Twenty Seven Carleton may email his cost submission of no more than three double-spaced pages to my assistant trial coordinator by end of business on April 7, 2026, followed by the responding costs submission of no more than three double-spaced pages from counsel for the plaintiffs by end of business on April 10, 2026.

Associate Justice P.J. Barnes

Date: Mar 31, 2026