Montes v. Al-Shiraida, 2011 ABQB 54

Court of Queen ’ s Bench of Alberta Citation: Montes v. Al-Shiraida, 2011 ABQB 54 Date: 20110202 Docket: 0003 01166, 0003 21540 Registry: Edmonton Between: Action No. 0003 01166 Manuel Montes Plaintiff - and - Humam Yarub Al-Shiraida, John Doe and The Administrator of the Motor Vehicle Accident Claims Act Defendants And Between: Action No. 0003 21540 Teresa Montes Plaintiff - and - Humam Yarub Al-Shiraida, John Doe and The Administrator of the Motor Vehicle Accident Claims Act Defendants

_______________________________________________________ Oral Reasons for Judgment of the Honourable Mr. Justice Eric F. Macklin _______________________________________________________ I. Introduction [ 1 ] These are two applications brought in two separate actions to set aside consent judgments entered in each action in June 2006. The Plaintiffs in these two actions are husband and wife and they were injured in a motor vehicle accident on December 16, 1999 at or near the intersection of 50 th Street and Whitemud Drive in Edmonton, Alberta. II.

Background Facts [ 2 ] The Statements of Claim issued on behalf of the Plaintiffs allege that the accident was caused by the operator of a motor vehicle owned by the Defendant Humam Yarub Al-Shiraida (“Al-Shiraida” or “the Defendant”). It is alleged that the vehicle was being operated by either Al-Shiraida or, alternatively, an unknown person referred to as “John Doe”.

The John Doe allegation resulted in the inclusion of the Administrator of the Motor Vehicle Accident Claims Act (“the Administrator”) as a Defendant. [ 3 ] The Plaintiff Manuel Montes filed his Statement of Claim in Action No. 0003 01166 on January 19, 2000 and noted Al- Shiraida in default on March 6, 2000. The Plaintiff Teresa Montes issued her Statement of Claim in Action No. 0003 21540 on November 14, 2000. According to Al-Shiraida, he was served with both Statements of Claim. [ 4 ] Al-Shiraida was charged with leaving the scene of an accident in relation to the accident and was acquitted following trial.

According to the Defendant, witnesses stated that it was not the Defendant who was operating the motor vehicle at the time of the accident. [ 5 ] The Defendant filed a Statement of Defence to the Teresa Montes’ Statement of Claim on June 19, 2002. He was unable to file a Statement of Defence to the Manuel Montes’ Statement of Claim on that date as he had been noted in default on March 6, 2000.

In his filed Statement of Defence, the Defendant denied that he was the operator of his vehicle at the time of the accident and alleged that it had been stolen and was being operated without his consent at the time of the accident. [ 6 ] The Defendant says that on or about June 19, 2002, the counsel for the Plaintiffs and the Administrator were provided with copies of the two Statements of Defence, though only one of them had been properly filed.

The Administrator says he never received a copy of the unfiled Statement of Defence in the Manuel Montes action. [ 7 ] There appears not to have been any other steps taken to advance either action until June 2006. On June 2, 2006, counsel for the Plaintiffs and the Administrator entered into Consent Judgments and counsel for the Plaintiffs appeared in chambers in Court of Queen’s Bench and, on an ex parte basis, obtained Consent Judgments from Justice Hillier.

The Consent Judgments were consented to by counsel for the Plaintiffs in each action and counsel for the Administrator . [ 8 ] The Consent Judgment in the Teresa Montes action provided that the Statement of Defence filed by the Defendant Al- Shiraida be set aside, service upon him of the application be dispensed with, judgment be awarded against him in favour of the Plaintiff in the sum of $50,400, and costs be paid by him to the Plaintiff in the sum of $5,046.37.

[ 9 ] The Consent Judgment in the Manuel Montes action provided judgment for the Plaintiff against the Defendant Al-Shiraida in the sum of $37,652.75 and costs payable by the Defendant to the Plaintiff in the sum of $4,439.13. [ 10 ] On or about June 5, 2006, the Plaintiffs executed assignments of the judgments obtained on June 2, 2006 in favour of the Administrator . [ 11 ] In November 2006, the Defendant Al-Shiraida was made aware of the judgments against him and he contacted legal counsel with instructions to bring an application to set aside the Consent Judgments.

On December 13, 2006, counsel for the Defendant filed Notices of Motion in each action returnable on December 20, 2006 seeking an order to set aside the judgments and directing a trial. [ 12 ] In or about September 2010, the Defendant’s drivers licence was suspended pursuant to the Motor Vehicle Accident Claims Act .

The suspension has been lifted pending the outcome of this application. [ 13 ] The Defendant says that he has been unable to locate the Plaintiffs but provided their former counsel with courtesy copies of the Notices of Motion and supporting Affidavits. [ 14 ] The Defendant says that he has taken all reasonable steps to locate the Plaintiffs but has been unable to do so. III. Issues [ 15 ] The two issues to address are as follows: 1. Should the Consent Judgment in the Manuel Montes action be set aside? 2. Should the Consent Judgment in the Teresa Montes action be set aside? IV.

Analysis [ 16 ] The application by the Defendant is to set aside the two Consent Judgments granted by Justice Hillier on June 2, 2006. The new Alberta Rules of Court (“New Rules”) came into force on November 1, 2010. Rule 15.2(1) of the New Rules provides that they apply to every existing proceeding. Rule 9.16 of the New Rules provides that an application under Rule 9.15 to set aside a judgment “must be decided by the judge...who granted the original judgment...unless the Court otherwise orders”.

As these judgments were granted in morning chambers when numerous applications are often heard and given that these were heard about four and one-half years ago, it would not be unusual for the presiding judge not to retain any independent recollection of them. Accordingly, and in order to avoid any further delays in this matter, I have determined that it is unnecessary for the parties to appear before Justice Hillier for the hearing of this application and I will consider it. a. The Manuel Montes Action [ 17 ] Manuel Montes issued his Statement of Claim on January 19, 2000.

He noted the Defendant in default on March 6, 2000. When the Defendant attempted to file a Statement of Defence to the action on June 19, 2002, he was advised that it could not be filed as he had been noted in default in March 2000. [ 18 ] The Defendant says that the Plaintiff and the Administrator acted unfairly in consenting to a judgment against him in June

2006. He says that no prejudice will be suffered by the Administrator in setting aside the Consent Judgment as the Administrator would have been obligated to pay the claim of the Plaintiff in any event as the vehicle had been stolen and the operator at the time of the accident was unknown. [ 19 ] This application is governed by Rule 9.15(1) of the New Rules which provides: 9.15(1) On application, the Court may set aside, vary or discharge a judgment or an order, whether final or interlocutory, that was made (

a) without notice to one or more parties ... [ 20 ] While the New Rules govern this application, I must also consider the Rules as they existed at the time the Consent Judgments were obtained in order to determine whether they were obtained properly.

In this case, I must consider whether the parties were required to provide notice of their application for Consent Judgments to the Defendant prior to their appearance before Justice Hillier. [ 21 ] The old Rules provided: 384(1) An application in an action or proceeding shall be made by motion and, unless the Court otherwise orders, notice of the motion shall be given to all parties affected. [ 22 ] However, the right of a party who has been noted in default is the not same as one who has filed a Statement of Defence.

The old Rules provided: 144 Except where otherwise provided by these Rules or where otherwise ordered by the Court, a defendant who fails to defend or demand notice is not entitled to notice of any subsequent proceedings in the action. [ 23 ] Once the Defendant became aware that he had been noted in default, he was entitled to bring an application under Rule 158 for an order setting aside the noting in default and allowing him to file a Statement of Defence.

According to his evidence, the Defendant or his counsel became aware that he was noted in default by Manuel Montes on or about June 19, 2002 when his counsel attempted to file his Statement of Defence in the Manuel Montes action. He argues that the Plaintiff did not take any further steps to advance the action until July 2006.

More importantly, however, he took no steps to set aside the noting in default at any time and only now brings an application to set aside the Consent Judgment obtained on June 2, 2006. [ 24 ] As indicated and despite being aware that he had been noted in default, the Defendant took no steps whatsoever to set aside the noting in default and enter a Statement of Defence. Had he done so within a reasonable period of time after being advised that he had been noted in default, he may well have been successful in his application.

However, he did not do so and he was therefore not entitled to notice of the application for the Consent Judgment in June 2006, four years after he had been noted in default. [ 25 ] The Defendant argues that he clearly intended to defend, as evidenced by his attempt to file the Statement of Defence and his actual filing of the one in the Teresa Montes action and it is only fair that the Court exercise its inherent jurisdiction to set the Consent Judgment aside. While the Court may have broad discretion in matters such as this, it must be careful to exercise that discretion judiciously.

In this case, while there may be some evidence of an intention to defend and an allegation that, if proven, would have provided a defence, the Defendant still took no steps for four years to set aside the Noting in Default. In fact, he has taken no steps to set it aside for eight and one-half years. Even this application to set aside the Consent Judgment is finally being made four and one-half years after it was granted and four years after the Notice of Motion was filed.

There has been no explanation, satisfactory or otherwise, as to why it has taken so long to get here. [ 26 ] In short, after being noted in default and with no order setting aside the noting in default, the Defendant was not entitled to notice of any subsequent proceedings in the action (Rule 144).

There was nothing at all improper about the procedure followed by the Plaintiff and the Administrator in obtaining a judgment in the Manuel Montes action. The Defendant’s application to now set aside the Consent Judgment is four and one-half years after the Consent Judgment was obtained and eight and one-half years after he was noted in default. There is no basis upon which to set it aside. [ 27 ]

Section 4 of the Motor Vehicle Accident Claims Act , R.S.A. 2000, c. M-22 gives the Administrator discretion in taking steps on behalf of a defendant, including consenting to a judgment, where the defendant has been noted in default of filing a Statement of Defence. Here, the Defendant was noted in default and the Administrator negotiated a resolution of the claim with the Plaintiff and consented to a judgment confirming that resolution. [ 28 ] The application to set aside the Consent Judgment in the Manuel Montes action is therefore dismissed. b.

The Teresa Montes Action [ 29 ] Teresa Montes filed her Statement of Claim against the Defendant on November 14, 2000. The Defendant filed a Statement of Defence to the action on June 19, 2002. Counsel for the Defendant ceased to act on his behalf as of June 22, 2005. The Notice of Ceasing to Act filed by his counsel provided that the Defendant’s forwarding address was “unknown”.

The Consent Judgment presented to Justice Hillier on June 2, 2006 provided, among other things, that the Statement of Defence filed on June 19, 2002 be set aside. [ 30 ] There is no evidence of any steps taken by the Administrator or the Plaintiff to determine the actual whereabouts of the Defendant at any time.

There is also no explanation as to why the Defendant did not keep in touch with his lawyer or why the lawyer filed a Notice of Ceasing to Act when he did. [ 31 ] Unlike the situation in the Manuel Montes action, the Defendant had filed a valid Statement of Defence to the Teresa Montes action and was entitled to notice of any actions or proceedings being taken in that action.

The fact that his lawyer indicated that his address was “unknown” to him, did not alleviate the responsibility of the Plaintiff or the Administrator to determine the whereabouts of the Defendant so as to serve him with proper notice of their intended actions or, in the alternative, seek an order to substitutionally serve notice or dispense with service on the Defendant. They did neither and in the circumstances it was unfair to present a Consent Judgment, consented to by the Plaintiff and the Administrator, but affecting the Defendant’s rights. [ 32 ] The Administrator says that under s. 4(6) (

a) of the Motor Vehicle Accident Claims Act he is entitled to consent to a judgment after conducting an investigation under s. 4(4) following receipt of a notice that the defendant’s lawyer has ceased to act under s. 4(2) . He is right. He is entitled to consent to a judgment. However, he is not entitled to also consent to a setting aside of that defendant’s Statement of Defence. [ 33 ] Rule 9.15 of the New Rules allows the Court to set aside a judgment made without notice to one of the parties or following a hearing at which a party did not appear because of a mistake.

In this case, the Defendant did not receive notice of the application and it was a mistake by the Plaintiffs and the Administrator not to either serve him or bring an application to substitutionally serve him or dispense with service. Two parties cannot simply consent to a judgment striking out another party’s Statement of Defence. Accordingly, the Consent Judgment in the Teresa Montes action is hereby set aside. [ 34 ] While it may be unnecessary, I feel it important to comment on the allegation of the Defendant that he has a defence on the merits and the Consent Judgments should be set aside on that basis.

The Defendant was acquitted on a charge of leaving the scene of an accident as one of the witnesses who attended the trial could not identify him as the individual who ran from his vehicle and the second witness did not attend at trial.

The fact that he was acquitted does not equate to a judicial finding that he was not driving or that his vehicle had been stolen and was being operated by an unknown driver. [ 35 ] The facts put forward by the Administrator in this application are that the vehicle involved in the accident had recently been purchased by the Defendant and a bill of sale in his name was found in the vehicle. The driver of the vehicle had run away from the scene of the accident and was seen by two people. The driver was seen to run in the direction of the home of the Defendant where the Defendant was later arrested.

[ 36 ] In short, the Provincial Court Judge simply acquitted on the basis that the Crown had not proven its case beyond a reasonable doubt. I do not believe that this necessarily supports the Defendant’s purported allegation that the vehicle had been stolen from him and was being operated by the thief at the time of the accident. The burden of proof in a civil action is different from that in a criminal trial. V.

Conclusion [ 37 ] The Defendant took no steps whatsoever to open up the noting in default in the Manuel Montes action between June 19, 2002 when he discovered that he had been noted in default, and November 2006 when he found out that a judgment had been obtained against him in June 2006. He was not entitled to notice of the application for judgment against him.

His application to set aside that Consent Judgment is dismissed. [ 38 ] In the Teresa Montes action, the Administrator and Plaintiff failed to take any steps whatsoever to determine the whereabouts of the Defendant after being served with a Notice of Ceasing to Act listing his address as “unknown”. A defence had been filed and some effort should have been made to serve him with notice of their intended proceedings. If he could not be located or service was impossible, an appropriate order could have been obtained from the Court for substitutional service or dispensing with service. Neither was done.

The application to set aside the Consent Judgment in the Teresa Montes action is granted. Heard on the 12 th day of January 2011. Dated at the City of Edmonton, Alberta this 2 nd day of February 2011. Eric F. Macklin J.C.Q.B.A. Appearances: Arman Chak for the Defendant Humam Yarub Al-Shiraida David Rode, Q.C. for the Administrator