



COURT OF APPEAL FOR ONTARIO

CITATION: Misir v. Misir, 2017 ONCA 675

DATE: 20170830

DOCKET: C62436 & C63026

Pepall, van Rensburg and Trotter JJ.A.

BETWEEN

Randy Misir

Plaintiff (Respondent in Appeal)

and

Geree Misir and Rajendra Narine (a.k.a. Hardial
    Singh)

Defendants (Appellants)

AND BETWEEN

Randy Misir

Applicant (Respondent in Appeal)

and

Geree Misir and Rajendra Narine (a.k.a Hardial
    Singh)

Respondents (Appellants)

David Reiter, Selwyn Hicks and Brian Chung, for the
    appellants

Abba Chima, for the respondent

Heard: August 18, 2017

On appeal from the order of Justice Edward M. Morgan of
    the Superior Court of Justice, dated July 19, 2016 and the order of Justice
    Peter J. Cavanagh of the Superior Court of Justice, dated November 23, 2016.

REASONS FOR DECISION

OVERVIEW

[1]

An action was commenced in 2001, and not defended. The plaintiff (who is
    the respondent in this appeal) obtained a judgment after an assessment of
    damages for almost $86,000. In the following years, the judgment was set aside
    on motion by the defendants (who are the appellants) but later reinstated. The
    appellants unsuccessful attempt to set aside the reinstatement of the judgment
    is the subject of this appeal.

[2]

The issue on appeal is whether the motion judge erred in dismissing the
    appellants motion to set aside the reinstated default judgment, and in
    authorizing the respondent to sell the appellants property in satisfaction of
    the judgment. The appellants appeal the order of Morgan J. dated July 19, 2016
    (the motion judge), and the order of Cavanagh J. dated November 23, 2016
    which varied the Morgan J. order.

[3]

For the reasons that follow, the appeal is allowed.

FACTS

[4]

It is sufficient for the purpose of this appeal to set out a summary of
    the action and a chronology of steps taken in the litigation, based on the
    evidence that was before the motion judge. The record is voluminous, and
    contains affidavits from the parties with contradictory accounts of misconduct
    and subterfuge on all sides in connection with the litigation. Fortunately, the
    disposition of the appeal does not require these contradictory accounts to be
    reconciled. Except as otherwise noted, the relevant facts are undisputed, or
    based on information or documents contained in the respondents own affidavits.

[5]

The action was commenced by statement of claim issued in April 2001. The
    respondent Randy Misir claims damages against the appellants Geree Misir (who
    is his ex-wife) and Hardial Singh. The action claims that  Geree Misir made false
    allegations against the respondent to the police, leading to criminal charges
    that were tried and dismissed, and that both appellants conspired to injure him
    and to cause him emotional distress and harm, through various acts of
    harassment that are detailed in the claim.

[6]

The appellants did not respond to the claim and were noted in default.
    On October 29, 2001, Wilkins J. granted judgment against the appellants in
    favour of the respondent in the sum of $85,984, following an undefended trial
    (the Wilkins J. judgment).

[7]

In 2004, the appellants moved to set aside the Wilkins J. judgment,
    after they learned of the judgment and writs of execution that had been filed. 
    Swinton J. granted an order that set aside the judgment of Wilkins J. and the
    noting in default, and required the appellants to serve their statement of
    defence by June 30, 2004 (the Swinton J. order). The Swinton J. order was
    amended in August 2004 to lift the writs of execution.

[8]

A statement of defence on behalf of both appellants was filed with the
    court on June 28, 2004. The statement of defence, which is only nine paragraphs
    long, consists mainly of general denials of the facts pleaded in the statement
    of claim. The affidavit of service filed with the statement of defence states
    that the defence was sent by mail to 340 College Street (without showing the
    suite number indicated on the statement of claim) and by fax to the fax number
    of the solicitor who had acted for the respondent in the motion to set aside
    the default judgment, although no fax confirmation is attached to the
    affidavit. The respondent contends, and Morgan J. accepted, that he was never
    served with the statement of defence.

[9]

The respondent prepared a trial record in June 2005 that included the
    statement of claim issued April 3, 2001, the statement of defence dated June
    10, 2004 and a certificate of trial record, and served it on the appellants
    counsel of record. The respondent asserts that he located the statement of
    defence in the court file.

[10]

The respondent contends that in 2007 he wrote to the appellants and
    their former counsel, but did not receive a response. He asked the court to set
    the matter down for an assessment of damages.

[11]

On September 8, 2008, Brown J. (as he then was) issued a judgment
    restoring the default judgment of Wilkins J.
nunc pro tunc
and
    awarding costs against the appellants of $11,000, inclusive of GST. A
    transcript was filed by the appellants, indicating what transpired in the
    attendance before Brown J. (We note here that the respondent was represented by
    counsel other than Mr. Chima, who represented him before Morgan J. and on
    appeal). The following is a summary of what transpired :

·

Brown
    J. was given a trial record containing the Wilkins J. judgment (it is unclear
    whether anything else was in the trial record). The respondents counsel advised
    that he would be asking the court to reinstate the judgment. After counsel informed
    the court that the Wilkins J. judgment had been set aside, Brown J. adjourned
    the matter briefly so that counsel could provide the materials relevant to the
    setting aside of the judgment.

·

When
    counsel returned to the court room without materials, Brown J. adjourned the
    matter to the afternoon, indicating that he wanted a pretty clear picture of
    whats happened since, communications between the parties, why defendants who
    moved to set aside an order are not showing up today. He stated, Im going to
    insist on having a very clear picture of whats gone on and why the defendant
    isnt here today before proceeding.

·

In
    the afternoon, counsel attended with the order and endorsement of Swinton J.,
    requiring a defence to be served by June 30, 2004. Brown J. asked whether a
    defence was filed and counsel responded, No. No defence was filed. Nothing has
    been filed ever. Brown J. then asked when the defendants were noted in default
    and counsel advised, September of 04. Brown J. observed that it was a long
    time for something that had been noted in default to get onto the trial list
    and asked what happened. Counsel advised that the respondents former counsel
    was trying to find the appellants and that they moved, and left the country.
    Counsel then stated that the respondent filed a trial record and got the matter
    on the list, and then retained him to assess the damage. Counsel asked that
    Brown J. restore the default judgment
nunc pro tunc
.

·

Brown J., after marking the documents provided by counsel as
    exhibits, asked the respondent to provide evidence under oath that no defence
    was filed and that he did not know where the appellants were. The respondent
    testified that a statement of defence was never served on him by or after June
    30, 2004, and that he noted the defendants in default in September, or
    sometime of that year, of 2004. He also testified that the appellants had
    commenced an action against him which had been administratively dismissed.
    Finally, he testified that he did not know where the defendants live, that they
    disappeared, and that Immigration was looking for them.

[12]

In his brief endorsement Brown J. referred to the fact that the
    respondent testified that the appellants failed to serve statements of defence
    by June 30, 2004 and that the respondent noted the appellants in default around
    September 2004. He noted that another action commenced by the appellants
    against the respondent had been administratively dismissed earlier that year
    and that the respondent did not know where the appellants currently lived.
    Brown J. concluded:

The defendants were given the
    opportunity to present a defence to this court, which they have failed to do.
    It appears their objective was solely to lift the execution filed against the
    property. When the judgment was set aside, without any financial condition,
    they lost interest in the litigation and appear to have left the jurisdiction.

[13]

In May 2010, the respondent filed writs of execution in respect of the
    reinstated judgment.

[14]

In early 2015, the appellants moved to set aside the judgment of Brown
    J. after Hardial Singh, in 2014, discovered the writs of execution registered
    against his name. The motion was before Master Short on three occasions before
    it was adjourned to a judge. In the interim, the respondent brought an
    application to enforce the judgment by a court-supervised sale of the
    appellants property.

ISSUES AND ANALYSIS

[15]

The appellants assert that the motion judge made palpable and overriding
    errors of fact in refusing to set aside the Brown J. judgment and ordering that
    certain property be sold. They also contend that the Brown J. judgment ought to
    have been set aside on the basis that the respondent did not make full and fair
    disclosure when he and his counsel attended before the court without notice to
    the appellants.

[16]

We agree with the latter submission. As a result, it is unnecessary to
    address the motion judges findings of fact or the appellants submissions about
    them.

[17]

A party who seeks relief from the court in proceedings without notice is
    obliged to make full and fair disclosure of all material facts. This is a
    common law rule that is enshrined in rule 39.01(6). See also
Sangster v.
    Sangster
, [2003] O.J. No. 69 (C.A.), at para. 7. It is unnecessary to find
    that the court was deliberately misled before a court will set aside such an
    order. The basis of the rule is fairness. As the rule confirms, the failure to
    make such disclosure is a reason, in itself, to set aside the order made:
Mariani
    v. Mariani
, [2010] O.J. No. 1464 (S.C.);
Balanyk v. Greater Niagara
    General Hospital
, [1997] O.J. No. 4867 (C.A.).

[18]

Here, the respondents counsel, who had only been retained for an
    assessment of damages, provided information to the court that was inaccurate 
    that no statement of defence had been filed, and that there had been no
    communication between the parties in the interim. The respondent did not
    correct this information, and he testified that the appellants had been noted
    in default in 2004. As a result, Brown J. proceeded on the assumption that the
    action was not defended when he granted a judgment restoring the Wilkins J.
    judgment. There is nothing on this record to support the respondents
    submission on appeal that Brown J. must have known that a defence had been
    filed and that he granted judgment based on lack of service of the defence on
    the respondent. Brown J. was clearly proceeding on the basis that there was no
    defence  the respondents counsel said none had been filed, and the respondent
    testified that the appellants had been noted in default. What was material to
    Brown J. was whether the action was being defended, and why the matter was
    proceeding
ex parte.


[19]

The respondent did not make full and fair disclosure of material facts.
    The Brown J. judgment ought to have been set aside on this basis.

DISPOSITION

[20]

The appeal is therefore allowed. The orders of Morgan J. and Cavanagh J.
    are set aside. If the parties are unable to agree on costs, we will receive
    written submissions from the appellants within 15 days and from the respondent
    ten days thereafter, limited to five pages each, including any costs outline.

S.E. Pepall J.A.

K. van Rensburg J.A.

G.T.
    Trotter J.A.


