Heritage Station Inc. v Sharifzadeh, 2012 ABQB 338

Court of Queen ’ s Bench of Alberta Citation: Heritage Station Inc. v Sharifzadeh, 2012 ABQB 338 Date: 20120522 Docket: 1003 11128 Registry: Edmonton Between: Heritage Station Inc. Respondent/Plaintiff - and - Hossein G. Sharifzadeh Appellant/Defendant _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice Don J. Manderscheid _______________________________________________________ I. Introduction [ 1 ] Hossein G. Sharifzadeh appeals Master Mason’s September 13, 2011 decision granting default judgment in an ex-parte application by Heritage Station Inc. under Rule 3.37 of the Alberta Rules of Court . II. Facts

[ 2 ] A brief

summary of the facts is as follows: 1. The Respondent as seller and the Appellant as buyer, entered into a contract for the purchase of an undeveloped condominium unit on April 27, 2007 (the “Purchase Contract”). This unit became available and the Appellant was provided with a notice of possession in early 2010. The Appellant failed to respond to the notice of possession and made no attempt to communicate with the Respondent at any time after the notice of possession was issued. The date for possession passed and the Appellant was in breach of the Purchase Contract. 2.

The Respondent filed a Statement of Claim and served it on the Appellant on July 12, 2010. The Statement of Claim expressly sought damages as follows: a. An expected reduction in the sale price of the Unit in the amount of $83,828.00, or such amount to be proven at trial; b. Utilities, condo fees and taxes on the unit for the expected period of April 22, 2010 to July 22, 2011 in the amount of $5,665.50, or such amount to be proven at trial; c. Legal fees, disbursements and other charges on the sale transaction that did not proceed in the amount of $2,500.00; d. Cleaning costs in the amount of $500.00; and e.

Commission paid on the aborted sale to the Defendant in the amount of $805.39. 3. The Appellant failed to file a Statement of Defence and the Appellant was noted in Default. The condominium unit was sold to a third party on October 1, 2010. 4. On September 13, 2011, pursuant to rule 3.37 of the Alberta Rules of Court, the Respondent brought an application, without notice, for an assessment of damages and obtained judgment from Master Mason. 5.

The Purchase Contract was before the Court, as was the evidence of damages in the form of an Affidavit sworn by Todd Werre, Vice President of Development of the Respondent. 6. The Appellant has never applied to set aside or vary the Judgment and Order granted by Master Mason on September 13, 2011. III. Issues [ 3 ] As a preliminary question, this Court addressed whether it had jurisdiction to hear this appeal. I concluded that I did have jurisdiction as s. 12 of the Court of Queen ’s Bench Act , RSA 2000, c.

C- 31, and the Alberta Rules of Court plainly provide for an appeal from the Master’s decision. [ 4 ] The Appellant sets out the issues on appeal as:

1. What is the appropriate standard of review for this decision? 2. Did Master Mason err by failing to consider the effect of the termination clause at paragraph 20 of the Purchase Contract (the “Termination Clause”), between the Appellant and the Respondent? 3. Did the Termination Clause limit the damages to any monies already paid by the Appellant to the Respondent? 4. Did Master Mason have the necessary evidence before her to render the judgment? 5.

Did Master Mason err by applying the improper test to assess the Respondent’s damages? [ 5 ] However, notwithstanding that I have concluded that I have jurisdiction to hear the appeal, the question of whether this is the appropriate procedure remains an open question. I must first determine whether an appeal is the proper procedure. IV. Analysis The issues raised by the Appellant were not raised before the Master [ 6 ] The Appellant did not defend the action and was noted in default.

The Respondent Plaintiff then, on an ex parte basis, sought default judgment under Rule 3.37, which provides: 3.37(1) The plaintiff may, without notice to any other party, on proof of the plaintiff’s claim, apply to the Court for judgment in respect of a claim for which default judgment has not been entered if (

a) one or more defendants are noted in default....

(3) The Court may do one or more of the following: (

a) pronounce judgment; (

b) make any necessary order; (

c) direct a determination of damages; (

d) adjourn the application and order additional evidence to be provided; (

e) dismiss the claim or a part of it;

(

f) direct that the claim proceed to trial and that notice be served on every other defendant; (

g) make a costs award in favour of the plaintiff. [7] Generally, a Master or Justice may revise or review its own order heard ex parte: Prue v. Sussman, 2001 ABQB 784; Noel& Blanchette Construction Company Limited v Medican Construction Limited (1982), (AB KB), 23 Alta LR (2d)215 (QB); Campbell v Arndt (1915), 8 Sask LR 320 (SC). In Campbell, the Court noted (at para 22): With regard to the appeal from the ex parte order dated February 16, 1915, I do not think I should deal with this order without giving theLocal Master an opportunity of dealing with it himself.

We cannot entertain an application to review or set aside an order made by a Judge on an ex parte statement, before an opportunity hasbeen given to the Judge, by an application to him for that purpose, to amend his own order if he thinks fit so to do, after hearing bothsides. Pollock, C.B., in Day v. Vinson, 9 L.T. 654, 723. [8] In Bancorp Financial Ltd v Excelsia Holdings Co, [1981] A.J.

No. 78 (QB) two ex parte orders granted by Master Fundukwere appealed, and the appeal judge directed that the appellants apply to Master Funduk to set aside the orders rather than appeal them. [9] This approach makes ample sense to me. In the absence of substantive argument before the Master addressing the issues nowraised on appeal, there is no basis for appellate review.

The Master, had she heard these arguments, could have exercised her discretionand determined whether to pronounce judgment, direct a determination of damages, order additional evidence, or require that the claimproceed to trial on damages. [10] Moreover, to suggest that the Masters sitting in morning chambers hearing ex parte applications are subject to appealable errorif they fail to anticipate possible legal arguments that might have been raised by the defendants, but were not, defeats one of the purposesof the default procedures in ensuring judicial economy. [11] I therefore set aside the default judgment and direct the matter be returned to the Master to do a fresh assessment of damages.

V. Conclusion [12] In essence, I have granted the appeal, but only on the basis that the arguments raised on appeal should be addressed by MasterMason. If she is unable to hear the application, another Master may do so. [13] In granting the appeal, I want to emphasize that in general the proper approach to challenging an ex parte default judgment isto apply to the Master who granted the judgment to give him or her an opportunity to amend the order if he or she thinks it would beappropriate to do so. VI. Costs

[ 14 ] Costs may be spoken to within sixty days of this Decision. Heard on the 15 th day of February, 2012. Dated at the City of Edmonton, Alberta this 22 nd day of May, 2012. Don J. Manderscheid J.C.Q.B.A. Appearances: Darcy McAllister Cleall for the Appellant/Defendant Carmen Cripps Ogilvie LLP for the Respondent/Plaintiff