Glesby v. Dawe, 2013 ABQB 243

Court of Queen ’ s Bench of Alberta Citation: Glesby v. Dawe, 2013 ABQB 243 Date: 20130423 Docket: 0903 15943 Registry: Edmonton Between: Charlie Glesby Plaintiff - and - Bill Dawe Defendant _______________________________________________________ Memorandum of Decision of L. A. Smart, Master in Chambers _______________________________________________________ Background [ 1 ] The Defendant Bill Dawe (Dawe) applies to set aside a Default Judgment obtained by Charlie Glesby (Glesby) and entered on May 12, 2010.

He also seeks to have a writ of enforcement registered as against certain lands removed. [ 2 ] The action by Glesby arose out of a series of business loans made to Dawe to assist him in completion of a condominium

complex being built by his company Jed Developments Ltd. Glesby acknowledges that three loan agreements were prepared and enteredinto. He also acknowledges receiving advances of $30,000 and $20,000 under the first two agreements but denies having received anyfunds in relation to the third agreement. [3] This action was commenced on October 9, 2009. Dawe says that he did not deliberately let the judgment in the action go bydefault. Upon receiving the Statement of Claim he contacted Glesby’s counsel and spoke to him advising that he disputed the amounts asalleged in the Statement of Claim.

Further he also advised that money had been paid into court in relation to a builders’ lien action inrelation to the condominium complex which he had intended to use to pay Glesby. He had been left with the impression that steps wouldnot be taken against him. In response to a letter from Glesby’s counsel on November 23, 2009, Dawe again contacted him wherein heiterated his concern with respect to the alleged amounts and of his plans to pay the amounts remaining on the loans as soon as the lienaction was decided and funds released by the court.

Again he says he was left with the impression that steps would not be taken againsthim. Finally on December 18, 2009, Dawe contacted Glesby’s counsel again in response to a letter, wherein he reiterated his concernsabout the alleged amount and invited counsel to contact another lawyer who was representing his interests in the lien action.

Once again,he says he was left with the impression that steps would not be taken as against him. [4] In August, 2010, Dawe received the default judgment from Glesby’s counsel and thereafter he retained counsel who thenentered into negotiations regarding settlement of the matter or alternatively setting aside of the default judgment by consent. Finally inNovember, 2010 a motion was brought to set aside the judgment which subsequently was adjourned sine die by consent to permit furthersettlement discussions. Despite those efforts no settlement could be reached and it was necessary to renew the application.

Discussion [5] This matter is governed by Rule 9.15 (3) which states: The Court may set aside, vary or discharge a judgment in default of defence on any terms the Court considers just. The test established under the previous rules remains the same, the requirements which are briefly as follows: 1. The default of making defence was unintentional; 2. The application to set aside the default judgment was brought as soon as the default judgment was brought to the attention of thelitigant; 3.

There is a good defence on the merits. [6] It has been said that the three requirements above are merely a form of shorthand saying that fairness must always be doneand usually fairness requires that these three things be proved. Under the Rule, the Court has discretion to do what is just (Don ReidUpholstery Ltd. v. Patrie (1995) (AB KB), 32 Alta.L.R. (3d) 281). [7] Dealing with the first requirement, I am satisfied that the failure to file a defence was unintentional.

I accept therepresentations of counsel that he did not expressly represent that he would not proceed as against him, however, those representationsare not evidence and I am left with the “impressions” of Dawe as described in his Affidavit.

With regard to the second requirement, theuncontroverted evidence is that the matter was adjourned by consent and that there had been ongoing efforts to reach a resolution untilonly recently before the application was renewed when it became clear that it could not be resolved. [8] The final requirement and in my view the most germane to a decision in the circumstances is the merits of the defence. Theproposed Statement of Defence acknowledges the three loan agreements but denies there was any advance of the third loan of $12,000. It

also states that further payments had been made to Glesby than was acknowledged by him. In Dawe ’ s most recent Affidavit filed in support of the application he attaches a reconciliation of the loan utilizing interest rates which he says are applicable and payment amounts purported to have been made. There is nothing included that would support the payments which are alleged to have been made. Apparently all such payments had been made in cash so he has no documentation in support. In my view, such assertions are insufficient evidence to warrant the opening up of the judgment in that regard.

As for the advance under the third loan, the evidence is equally thin, however, I will allow this aspect of the matter to proceed as a defence subject to the conditions I set out below. [ 9 ] It is clear when reviewing the loan agreements that there are defences both legal and factual pertaining to the calculation of interest. Glesby acknowledges in his Affidavit that depending on the interest rate and its calculation the amount of the judgment would vary. Conclusion [ 10 ] Having regard to the foregoing, in my view it is appropriate to set aside the judgment as to the amount in a limited way.

The principal amount of $50,000 advanced pursuant to the first two loan agreements having been acknowledged and may not be put into dispute. The advance of the third loan of $12,000 may be put into dispute, however, the onus of establishing the non-advance of the loan in the face of the loan agreement will rest with Dawe.

Finally, Dawe may defend in relation to the amount of interest payable both on a legal and factual basis. [ 11 ] Dawe will have 30 days from the date of the entry of the Order arising from this decision in which to file and serve his Statement of Defence failing which the Default Judgment is affirmed in full. The Writ of Execution will remain in place and may be registered as against land in which Dawe has an interest. Execution by way of garnishee may proceed but only to the extent of $50,000. The Clerk of the Court is to make no distribution without further order and all other execution is stayed without leave.

Dawe as a condition precedent to filing of his Statement of Defence shall pay costs to Glesby of $1,500. Dated at the City of Edmonton, Alberta this 23 rd day of April, 2013. L. A. Smart M.C.C.Q.B.A. Appearances: David Schwartz for the Plaintiff/Respondent Michael Cooper Ogilvie LLP

for the Defendant/Applicant