



COURT OF APPEAL FOR ONTARIO

CITATION:
CBM
    Ready Mix Division
v. 8377278 Canada
    Inc., 2019 ONCA 886

DATE: 20191107

DOCKET: C66571

Simmons, Pardu and Nordheimer JJ.A.

BETWEEN

CBM Ready Mix Division
    a division of St. Marys Cement Inc. (Canada) and St. Marys Cement Inc. (Canada)
    doing business as Canada Building Materials Company

Plaintiffs (Appellants)

and

8377278 Canada Inc.
    operating as Concept Contracting and
Chris Mace

Defendants (
Respondent
)

Jonathan Frustaglio and Nicole Abergil,
for the appellants

Kelli Preston, for the respondent

Heard and released orally: November 5, 2019

On appeal from the order of Justice Jill M. Copeland of
    the Superior Court of Justice, dated January 7, 2019.

REASONS FOR DECISION


[1]

The appellants
appeal from the order
    granted by the motion judge that dismissed the appellants motion seeking a
    declaration that a default judgment previously entered against the respondent,
    Chris Mace, survived his bankruptcy under ss. 178(1)(d) and 178(1)(h) of the
Bankruptcy
    and Insolvency Act
, R.S.C. 1985, c. B-3 (
BIA
).

[2]

We agree with the conclusion reached by the motion judge. The appellants
    obtained a default judgment. Under r. 19.04 of the
Rules of Civil Procedure
,
    R.R.O 1990, Reg. 194, a default judgment may only be signed by the Registrar if
    the claim is for a debt or liquidated demand in money. Rather than asking the
    Registrar to sign a default judgment, a plaintiff can move for default judgment
    under r. 19.05, in which case broader relief may be granted:
Batista v.
    Mason's Masonry Supply Ltd.
, 2014 ONSC 3955, 15 C.B.R. (6th) 157, at para.
    10. However, that is not what the appellants did in this case.

[3]

The result of the process that the appellants utilized is that there is
    no finding that the default judgment involves a claim arising out of fraud,
    embezzlement, misappropriation or defalcation while acting in a fiduciary
    capacity such that it would be covered by s. 178(1)(d) as there were no
    allegations in the statement of claim that could have provided support for any
    such finding. We note that s. 178(1)(h) simply covers a claim for interest
    respecting a claim that is otherwise covered by s. 178(1) so it does not
    provide a separate basis for exemption under s. 178(1).

[4]

The appellants essentially assert that any misapplication of deemed trust
    funds, or failure to account, constitutes a defalcation under s. 178(1)(d).
    That proposition is directly contrary to the decision of this court in
Simone
    v. Daley
(1999), 43 O.R. (3d) 511 (C.A.). Further, the generic pleadings
    in the statement of claim were found by the motion judge to be insufficient to
    provide the basis to find the type of misconduct required for the exemption
    under s. 178(1)(d). We agree. It was not the job of the motion judge to go
    beyond the pleadings and the judgment obtained to make fresh findings of fact:
Lawyers
    Professional Indemnity Company v. Rodriguez
, 2018 ONCA 171.

Fresh evidence

[5]

The appellants sought to introduce fresh evidence consisting of an
    earlier order made by the Superior Court of Justice on behalf of another
    creditor of the respondents. In that case, the order exempted the default
    judgment from the bankruptcy discharge of the respondent Mace.

[6]

We would not admit the fresh evidence. It does not satisfy the
    requirements for the admission of fresh evidence set out in
R. v. Palmer
,
    [1980] 1 S.C.R. 759, especially the requirement that the fresh evidence could
    not, by due diligence, have been adduced at the original hearing. The order
    sought to be introduced was granted on September 19, 2016, well before the
    motion in this case was heard. The mere fact that counsel only became aware of
    it recently, does not satisfy the due diligence requirement.

Conclusion

[7]

We do not see any error in the conclusions reached by the motion judge. The
    appeal is dismissed. Costs are awarded to the respondent, on a partial
    indemnity scale, fixed in the amount of $4,500 inclusive of disbursements and
    HST.

Janet Simmons J.A.

G. Pardu J.A.

I.V.B. Nordheimer J.A.


