Cleary v. Carlaw, 2024 BCPC 42 (CanLII)
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2024 BCPC 42 |
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Date: |
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File No: |
7777 |
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Registry: |
Western Communities |
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IN THE PROVINCIAL COURT OF BRITISH COLUMBIA
BETWEEN:
MICHAEL CLEARY
CLAIMANT
AND:
DAVID CARLAW
DEFENDANT
REASONS FOR JUDGMENT
OF THE
HONOURABLE JUDGE T. GOUGE
Appearing on his own behalf: M. Cleary
Counsel for the Defendant: K. Jalilvand
Place of Hearing: Colwood, B.C.
Date of Hearing: March 1, 2024
Date of Judgment: March 12, 2024
The Issue
[1] Mr. Carlaw applies to set aside a default judgment granted in Mr. Cleary’s favour on April 3, 2023.
The Facts
[2] Mr. Cleary purchased a used motor vehicle from Mr. Carlaw in August, 2022. Mr. Cleary alleges breach of various express and implied warranties of the quality of the vehicle. Mr. Carlaw denies that the vehicle was defective, and alleges an express term of the contract excluding any express or implied warranties of its quality.
[3] In his affidavit filed in support of this application, Mr. Carlaw asserts that “… during the pre-contract negotiations, I advised Mr. Cleary, orally, that the Car was not complete and required significant repairs”. He appends to his affidavit a document which he asserts to be the written contract between the parties, and which includes a term excluding any express or implied warranties of quality.
[4] Mr. Cleary issued a Notice of Claim in this court on February, 22, 2023. It is on a printed form supplied by the court registry. The following text appears on the first page of the form:
TIME LIMIT FOR A DEFENDANT TO REPLY
The defendant must complete and file the attached reply and address for service within 14 days after being served in British Columbia or within 30 days after being served outside of British Columbia with this notice. If the defendant does not a court order may be made against the defendant without any further notice to the defendant. The defendant could have to pay the amount claimed plus interest and further expenses.
The passage quoted is in a prominent position on the first page of the form, is clearly legible, and is in print of a reasonable size.
[5] In his affidavit filed in support of this application, Mr. Carlaw deposes:
I was personally served with a copy of the Notice of Claim on March 3, 2023. Upon receiving the documents, I did not open the envelope immediately. I was on my way to the United States of America on a business trip and placed the envelope in the back of my car and proceeded with my day.
10 days later, when I returned to Canada, I came across the envelope containing the Notice of Claim and opened the materials. Upon reviewing the materials contained therein, I did not grasp the urgency and severity of the matter.
At this point, Mr. Cleary and I had discussed the problems he was facing with the Car on multiple occasions by way of e-mail correspondence and telephone conversations. I did not know that he had intentions of pursuing a legal claim against me, and mistakenly assumed that the Notice of Claim was yet another informal demand by Mr. Cleary for a refund.
As a primary resident of Ontario, I am also not familiar with the legal process in British Columbia or the Small Claims Rules. I did not have adequate knowledge of my obligations to file a Reply in the prescribed time period.
My failure to file a Reply was a mistake and was not intentional. I have and always had intentions to defend the claim on its merits…
[6] Mr. Carlaw did not file a Reply. On April 3, 2023, 31 days after the Notice of Claim was served upon Mr. Carlaw, Mr. Cleary filed an application for a default judgment in the amount claimed. That judgment was granted on April 13, 2023.
[7] The default judgment first came to Mr. Carlaw’s attention on July, 13 2023, when Mr. Carlaw was served with Mr. Cleary’s application to enforce the judgment in the courts of Ontario.
[8] On January 29, 2024, Mr. Carlaw filed an application in this court to set aside the default judgment. I heard the application on March 1, 2024.
Governing Principles
[9] The leading British Columbia authority on an application to set aside a default judgment is Miracle Feeds vs. D&H Enterprises Ltd. [1979] BCJ No. 1965; 10 BCLR 58. At paragraph 5 of that decision, His Honour Judge Hinds (as he then was) said:
… in order for a defendant to succeed on an application to set aside a default judgment, he must show:
1. That he did not wilfully or deliberately fail to enter an appearance or file a defence to the plaintiff's claim;
2. That he made application to set aside the default judgment as soon as reasonably possible after obtaining knowledge of the default judgment, or give an explanation for any delay in the application being brought;
3. That he has a meritorious defence or at least a defence worthy of investigation; and
4. That the foregoing requirements will be established to the satisfaction of the court through affidavit material filed by or on behalf of the defendant.
(underlining added)
[10] Miracle Feeds continues to be an authority binding on this court. However, its application in this court is complicated because litigants in this court are frequently unable to afford legal advice, many litigants in this court are not fluent or literate in the English language, and many others suffer from cognitive or psychological limitations. For those reasons, this court has tended to place primary emphasis on the question whether the applicant has demonstrated a triable issue on the merits of the claim. A very helpful review and analysis of the application of Miracle Feeds in this court is provided in the judgment of my colleague, Judge Mrozinski in Karcher Estate v Matson [2018] BCJ No. 462; 2018 BCPC 54. At paragraph 14 of her judgment, Judge Mrozinski quoted the following observation of Chief Judge Stansfield in Davis v Carlaw [1995] BCJ No. 2802:
The word “wilfully” I would assume to include the kind or degree of recklessness which is so extreme or unjustifiable as to amount to wilfulness.
Analysis
[11] Mr. Carlaw’s affidavit demonstrates that there are triable issues of liability in this case. However, Miracle Feeds also requires me to consider: (i) whether he “wilfully” failed to file his Reply within the time limit; and (ii) whether he filed and served his application to set aside the default judgment “… as soon as reasonably possible after obtaining knowledge of the default judgment …”.
[12] In so doing, it is necessary to consider Mr. Carlaw’s personal circumstances. Unlike so many litigants in this court, Mr. Carlaw is the owner of a successful business. He is obviously an intelligent man, experienced in business matters, including contracts for the sale of vehicles, and fully literate and articulate in the English language.
[13] Mr. Carlaw asserts that he “… mistakenly assumed that the Notice of Claim was yet another informal demand by Mr. Cleary for a refund ...”. The document is headed, in bold type, “Notice of Claim”, and underneath that appear the words “In the Provincial Court of British Columbia”. It bears a “Registry File Number” and a court registry date-stamp. It was obviously a document issued by the court to initiate the legal process, and would have been so understood by any literate person. If Mr. Carlaw did not understand that, he was remarkably careless, to the degree of recklessness.
[14] Mr. Carlaw says that he simply did not read the passage quoted in paragraph 4, above. That is a degree of recklessness which is so extreme or unjustifiable as to amount to wilfulness.
[15] It follows that Mr. Carlaw “wilfully” failed to file a Reply within the time allowed.
[16] I would also refuse Mr. Carlaw’s application because he did not initiate the application until January 29, 2024, more than 6 months after the default judgment was brought to his attention in the Ontario proceedings. No explanation for the delay is provided in Mr. Carlaw’s affidavit. On any view of the matter, it would have been “reasonably possible” to file and serve his application before the end of September, 2023.
Disposition
[17] Mr. Carlaw’s application is dismissed.
_____________________________
The Honourable Judge T. Gouge
Provincial Court of British Columbia