Bagher et al v. Starlite Marina Ltd. et al Date:, 2016 BCPC 9

Citation: Bagher et al v. Starlite Marina Ltd. et al Date: 20160105 2016 BCPC 0009 File No: 1424240 Registry: North Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: HAMID REZA BAGHER, NEZHAD TABASSI AND MOHAMMAD MOHEBIASHTIANI CLAIMANTS AND: STARLITE MARINA LTD. AND VINCENT VIRK DEFENDANTS AND: WILLIAM BOESTERD THIRD PARTY ORAL REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE B. DYER Counsel for the Claimants: R. Robertson Counsel for the Defendants: A. McLeod, Articled Student

(as Agent for A. Shee) Counsel for the Third Party : R. Mittal, Articled Student (as Agent for A. Stainer) Place of Hearing: North Vancouver , B.C.

Dates of Hearing: November 3 and 25, 2015 Date of Judgment: January 5, 2016 [ 1 ] THE COURT: The defendants, Starlite Marina Ltd. and Vincent Virk, apply to this court pursuant to Rules 16 and 17(2) to set aside two orders, namely a default payment order and a dismissal order of a third party claim pronounced by Judge Challenger on February 27, 2015, at a settlement conference held in this matter, which both defendants failed to attend. [ 2 ] This application was filed on June 23, 2015, and is supported by a handwritten affidavit sworn the same date by Mr.

Vincent Virk, wherein he states, in effect, that his reason for non-attendance was because he was under the impression that his lawyer, a Mr. Albas, practising in Penticton, was dealing with the matter, and said that he was travelling out of country and was unaware of the settlement conference date, in fact February 27, 2015, due to miscommunication between offices, I assume his and that of his solicitor, Mr. Albas. [ 3 ] The same affidavit asserts he has a meritorious defence to the claimants' claim.

I will return to this point below. [ 4 ] There are three further applications before me as follows: 1) An application filed by the defendants August 13, 2015, to set aside Judge Challenger's further order made February 27, 2015, setting aside the third party notice they issued against one William Boesterd on October 21, 2014, later amended December 24, 2014. 2) An application filed by the claimants to have a sum of money, $30,000, held in court pursuant to a consent order made August 27, 2015, paid out to them.

This sum of money was paid in by the defendants on August 28, 2015. 3) An application by the defendants to have the same monies repaid to them in the event that the default order made by Challenger P.C.J. is set aside. This application states in part that these funds ought not to be held as security for the claimants' claim if the default order is set aside. The claimants disagree with this position. The defendants have not stated their position as to what should occur with respect to these funds if the default order is not set aside.

The Action [ 5 ] I will briefly summarize the facts relevant to the action which has been commenced in this matter. On August 21, 2011, Mr. Tabassi and a Mr. Mohebiashtiani are said to have rented a powerboat from Starlite Marina Ltd. The vessel was a 2008 23-foot Yamaha AR230, approximately four years old on the date in issue. At the hearing before me on November 25th, I was told that Mr. Tabassi had signed what is called a "release of liability agreement" and seems as well to have initialled a document containing a safety checklist.

I understand the boat was, at all material times, operated by a third party, one Zohreh Safavieh, not named in the action before the court. [ 6 ] On the same day, at about 7:30 p.m., the vessel became involved in a collision with a second vessel operated and possibly owned by the third party, William Boesterd. The release of liability agreement stated that the undersigned, likely only Mr.

Tabassi, "assumes responsibility for the equipment rented herein until returned to the Starlite Marina" and as well states, "I, the undersigned, agree to pay Starlite Marina for any loss of use and damages caused while equipment is in my care." It does not state when this is to occur. [ 7 ] On August 22, 2011, the defendants allege Mr. Tabassi entered into a contract with Starlite Marina Ltd., which I will refer to in full as follows: August 21, 2011 Hamid Reza Bagher rented our "03" boat. An accident occurred between the boat and another boat which is being investigated by the RCMP, File Number 2011-4284.

Current estimate is the boat is most likely a write-off. Replacement costs for the boat are estimated at $53,999. Mr. Bagher agrees to pay 50 percent of the replacement cost with the view that the other party involved in the accident will be paying the remaining 50 percent. A boat on sale has been found for $49,500. Mr. Bagher agrees to pay the amount no later than 22 August 2011, 4:30 p.m., 50 percent of the new boat price will be accepted ($24,997). It is understood that if any salvage parts/monies are received from the boat, it will be adjusted at a later date.

It is also agreed that if the other party involved in the accident is found to be at greater fault and pays for their share of the damages, adjustments will be made to Mr. Bagher. Payment will be accepted via wire transfer or bank draft. [ 8 ] Then the date appears, August 22, 2011, and a signature for Starlite Marina and, as well, apparently a single signature for Hamid Reza Bagher-Nezhad-Tabassi, and then a driver's licence number 8411480. [ 9 ] The first party is Starlite Marina. This, of course, is not a legal entity. There is no such person as "Mr. Bagher" in terms of the evidence before me.

[ 10 ] The second signatory to the agreement is Mr. Tabassi. The second named claimant in the action has not signed this contract. I understand one or both of the claimants paid the sum of $24,997 to Starlite Marina Ltd. on or about August 22, 2011, pursuant to what is alleged to be a binding contract as above. [ 11 ] Following the collision, the RCMP did an investigation and completed a report on August 7, 2011, therein finding, as I read the report

summary at page 22, that the third party, Mr. Boesterd, failed to give way to the Tabassi vessel, resulting in the collision. [ 12 ] I note that Mr. Stainer, appearing for the third party, does not accept that the findings of the RCMP are a correct assessment of the liability or responsibility of the two vessel operators in question. [ 13 ] Arguably, the above contract, at least by inference, seems to have required Starlite to take steps to pursue the other party involved, Mr. Boesterd, to recover some or all of the loss in question and rebate something to the vessel lessees.

It is unclear what occurred prior to the spring of 2014 in this regard, beyond what is set out in a chronology of relevant events provided to me by the applicant defendants on November 3, 2015, wherein the following is set out: Date Description August 21, 2011 Date of the collision October 7, 2011 Date of the RCMP's marine collision reconstruction investigation report July 6, 2012 Date of letter from Crown counsel agent Pushor Mitchell confirming stay of proceedings against Ms. Safavieh, including a copy of the RCMP report January 2013 Various emails between our clients and Mr.

Virk/his associates, including Narinder Virk, in which Virk confirms he will pursue other party for our client's "proportionate share" [ 14 ] On August 22, 2014, the claimants commenced this action against the two defendants. It sounds in contract and the endorsement on their Notice of Claim reads as follows under the heading, "WHAT HAPPENED?": The Plaintiffs together rented a 23ft. Yamaha power boat from the Defendants on August 21, 2011 at Osoyoos, B.C.

While the vessel was being operated by the Defendants, a second power boat operated and owned by William Boesterd failed to keep a proper lookout and collided with the Defendants' vessel being operated by the Plaintiffs. Although the Plaintiffs denied any responsibility for the cause of the collision, the Plaintiffs demanded that they make immediate payment of $24,997 on account of damage and expected repair costs according to the Defendants.

The Plaintiffs, being new to Canada, considered that they had no option and felt under some duress, agreed, and in fact, made the payment of $24,997 to the Defendants in August 22, 2011. The Defendants agreed and promised to refund the monies paid to the Plaintiff in North Vancouver, BC on recovery of salvage, insurance payments, and any payments from the other vessel operator and/or insurer. Despite numerous requests by the Plaintiffs and promises made by the Defendants to refund the payment, no amount of money has been paid to the Plaintiffs.

The Defendants had advised the Plaintiffs that they expected an insurance claim recovery such that the funds would be reimbursed to the Plaintiffs. To date, the Defendants have refused and/or neglected and continue to refuse and/or neglect to pay the sum owing to the Plaintiffs. [ 15 ] The corporate search filed on August 22, 2014, discloses that the defendant Vincent Virk was both then a director and president of Starlite Marina Ltd. [ 16 ] On October 21, 2014, the defendants filed a Reply, later amended on December 18, 2014, which states as follows: (

a) The claimants rented a power boat from the defendant and assumed responsibility for its safe return. (

b) The claimants were involved in a collision and the defendant required them to pay for the damage to the power boat. (

c) The defendants have attempted to recover the damage and repair costs from William Boesterd, the owner and operator of the other power boat, without success. (

d) The defendants say that the plaintiffs have brought their claim after the expiration of two years after their right to do so arose. The defendants say that the defendants are barred by the effluxion of time and they plead and rely on the Limitations Act , S.B.C. 2012, c. 13 . [ 17 ] I believe the second reference to the word "defendants" may be an error and should be a reference to "the claimants". [ 18 ] The reference in paragraph (

d) is to the new Limitation Act with effective date June 1, 2013. [ 19 ] This reply does not, on its face, disclose it was prepared by a lawyer. While it does not expressly refer to the above release of

liability agreement and the August 22, 2011, contract, it seems clear that the defendants are relying on two things in their defence: 1) the agreement of the claimants in the first contract to, in essence, indemnify them for any loss or damage that occurred in the event the leased vessel was in fact damaged while in their care on August 21, 2011; and 2) the August 22nd agreement whereby the amount of the loss and damage was quantified and paid by the claimants. [ 20 ] The thrust of the claim is that at least the second contract of October 22, 2011, is not a valid contract as entered into possibly under duress and it seems clear the claimants assert, as well, in this action in breach of the agreement, if valid, the defendants did not pursue Mr.

Boesterd or their own insurer to recover any of the money they paid to the defendants as they were obliged to do. Thus, they allege, I think, the defendants breached the contract, if it is valid at all. [ 21 ] The third party notice issued by the defendants against Mr. Boesterd on October 21, 2014, and amended on December 24, 2014, states as follows: The Third Party's power boat was in a collision with a motor boat rented by the Claimant from the Defendant. The Claimant accepted responsibility and the Defendant's motor boat was a write off and the Defendant loss revenue thereon for 18 days.

The Claimant is seeking the return of monies it paid the Defendant. The Defendant is entitled to contribution and indemnity pursuant to s. 4 of the Negligence Act , R.S.B.C. 1996, c. 333. To the extent of the degree in which the Third Party is found by the court to have been at fault of any liability the Defendant may be under to the Claimant, including interest pursuant to the Court Order Interest Act , R.S.B.C. 1996, c. 79, any costs the Defendant may be ordered to pay to the Claimant. [ 22 ] Mr. Stainer, acting for Mr.

Boesterd, says this third party notice is improper, bound to fail, and completely without merit. He therefore argues that Judge Challenger's order should stand and that this third party notice and claim should remain dismissed. I will return to this point below. [ 23 ] I turn now to the events leading up to the said settlement conference and those that occurred thereafter. [ 24 ] On November 28, 2014, the court issued a notice of settlement conference set for December 22, 2014. Mr. Albas was then acting for the defendants and the same was directed by mail to his office in Penticton.

All parties later agreed to adjourn this settlement conference to a new date to be set between February 17-27, 2015, at 2:45 p.m. in the afternoon. Mr. Albas signed a document to this effect on December 16, 2014, and the same forms part of the court file. [ 25 ] A new notice of settlement conference was prepared by the court dated December 23, 2014, and mailed to all parties or their solicitors including, in the defendants' case, again to Mr. Albas. Mr. Virk says that he first learned that the December 22 settlement conference had been cancelled in an email from Mr. Albas' office on December 9, 2014.

This email does not set out the new February 27, 2015, settlement conference date. Rather, it asks Mr. Virk to call and set up a meeting with him when he is in Osoyoos. [ 26 ] Mr. Virk asserts he later met with Mr. Albas, but does not say when and does not say that in this meeting Mr. Albas advised him of the new settlement conference date of February 27, 2015. This date may not then have been set. This date's selection likely occurred on December 23, 2014, the date on the new settlement conference notice referred to above. [ 27 ] Mr. Albas sent a letter to Mr.

Vincent Virk dated January 29, 2015, by email and a hard copy by mail to Starlite. These events are admitted by the defendants. Nowhere in the various affidavits filed by Mr. Vincent Virk does he say he did not receive this letter. This simple and necessary assertion is strangely missing. Rather, his father and business partner, Narinder Virk, in his affidavit sworn July 30, 2015, deposes that it was only after April 2015 that he first discovered this letter. The January 29, 2015, letter from Mr.

Albas states as follows, and I quote: The court has set the above matter for a settlement conference on February 27, 2015, at 2:45 p.m. at North Vancouver Provincial Court, 200 East 23 rd Street, North Vancouver, B.C. We will not attend because of the location, but you must attend. We enclose for your file six items: 1. Notice of claim 2. Reply 3. Third party notice 4. Amended third party notice 5. Amended reply to the third party notice 6. Amended reply to claim. If the matter is not resolved at the settlement conference, then it will be necessary to retain counsel nearer the courthouse to conduct the trial.

Enclosed please find our statement of account in this assignment. Yours truly . . . [ 28 ] The email address it was sent to was the one typically used by Mr. Albas to communicate with Mr. Virk, who said he typically used email to communicate with Mr. Albas at the time. Vincent's father, Narinder Virk, says he was not able to discuss this letter with his son immediately as he was away. He was able to meet with Mr.

Albas on May 28, 2015, and was then advised that because the defendants had not shown at the February 27, 2015, settlement conference, that a default order had been made and that an application would have to be made to set it aside, which application was filed June 23, 2015. [ 29 ] Vincent Virk asserts in his July 30, 2015, affidavit that he was advised that his father discovered the January 29 letter in early April 2015 when he was away. He does not state that he had not seen it earlier.

He says he was away travelling to India and Hong Kong from early March to the end of March 2015, and again in the U.S. and Europe from April 2 to May 7, 2015. He does not state that he was away from town anywhere on February 27, 2015, the date set for the settlement conference. [ 30 ] Absent such evidence, I am driven to conclude he was in Vancouver. I also conclude he was back in Vancouver on May 7th. He awaited the occurrence of a later meeting, which he did not attend, between his father and Mr.

Albas before deciding to file an application on June 23rd, clearly one made without any obvious assistance from a lawyer. He gives no explanation as to why he did not pick up the phone on May 8 and call Mr. Albas, or any lawyer for that matter, concerning the default orders. The Law [ 31 ] The provisions of Rule 17(1), (2), and (4) are relevant and they are as follows:

(1) A judge may change or cancel an order made in the absence of a party other than dismissal orders or default orders if (

a) that party applies (see Rule 16 (7)) within a reasonable time, and (

b) there is a good reason for changing or cancelling the order.

(2) A judge may cancel a dismissal order or default order if (

a) the order was made (

i) in the absence of a party, or (ii) for failing to file a reply, and (

b) the party applies (see Rule 16 (7)) and attaches to the application an affidavit containing (

i) the reason the party did not file a reply or attend the settlement conference, trial conference or trial, (ii) the reason for any delay if there has been delay in filing the application, and (iii) the facts that support the claim or the defence. . . .

(4) In making an order under these rules, a judge may impose any condition or give any direction that the judge thinks is fair. [ 32 ] The defendants, in their closing submissions, state that this rule is a codification of the test set out in the well-known Miracle Feeds v. D. & H. Enterprises Ltd. case, [1979] B.C.J. No. 1965 , a decision of Mr. Justice Hinds, where the test for the moving party to meet is set out in paragraph 5 as follows: 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.

[33] This list of factors is not an exhaustive one, as the defendants point out in paragraph 20 of their helpful written submission. Reference is made to the decision of Rogers J. in the McEvoy v. McEachnie decision, [2008] B.C.J. No. 1787, where he said this in partin paragraphs 13 to 15 of his reasons: [13] . . . Whether to set a default judgment aside is an exercise of discretion, and the Miracle Feeds criteria are nothing more than anon-exhaustive set of factors to be taken into account when considering whether to exercise that discretion. That this is so wasestablished by the Court of Appeal in H.M.T.Q.

In Right of the Province of British Columbia v. Ismail, 2007 BCCA 55. In that case, thechambers judge found that the applicant had wilfully allowed default to be taken against him, but nevertheless the judge set the judgmentaside. The plaintiff appealed, citing the applicant's failure to satisfy the first Miracle Feeds test. In response to that argument, Smith JA.said: [11] In my view the items enumerated in the Miracle Feeds test are not conditions that must be satisfied by an applicant.

Rather, theyare relevant factors to be taken into account by a chambers judge in exercising the discretion conferred by Rule 17(12). I find supportfor this view in the remarks of Madam Justice Saunders in Deline v. Whittle, 2002 BCCA 662 , [2002] B.C.J. No. 2796 . . . [14] It is, therefore, open to the court to set a default judgment aside if all the circumstances of the case, including but not limited tothe factors enumerated in Miracle Feeds, are such that it would be just to do so.

It follows that relative strength in one or more of therelevant factors may overcome a relative weakness in another. [15] In the present case, Ms. Forster does have a genuine defence to put forward at trial. I accept Ms. Forster's assertion that the trialwill not be unduly lengthened or complicated if she is permitted to try her defence. The other parties will not, therefore, be seriouslyprejudiced if the default judgments are set aside.

In my opinion, it would better serve the interests of justice to permit all the parties tothese actions to articulate their evidence and positions at the trial than to stifle one of them on account of default judgments taken againsther. [34] Thus, the court has a discretion to set aside or cancel the orders in question if there is a good reason to do so, and the otherrequirements of Rule 17(1) and (2) are met. There seems to be some overlap in the requirement of Rule 17(1)(

a) that the application bemade within a reasonable time. In Rule 17(2)(

b) the applicant must explain the reason for the delay. [35] I accept that the requirements of Rule 17(2) are not a complete code that I must follow, and that I am entitled to consider themany case authorities on point in making my decision. See for example Wah Loong Ltd v. Fortune Garden Restaurant (Richmond) Ltd.,2000 BCPC 163. [36] As well, there is binding authority, I think, to the effect that whether or not the applicant establishes that there is a meritoriousdefence based on facts set out in an affidavit, if believed, it is the factor entitled to paramount consideration of the three factors listed inRule 17(2)(b)(

i) to (iii) (see, for example, the decisions of Lou Guidi Construction Ltd. v. Fedick, [1994] B.C.J. No. 2409, and WaterlooPark Golf Inc. v.

Little Bear's Catering Ltd., 2011 BCPC 432). [37] Before dealing with the main application before me brought by the defendants under Rules 16 and 17(2), I will deal with twoother matters first: 1) the application to reject late affidavit evidence filed by the defendant Vincent Virk; and 2) the position of the third party as to whether or not the third party notice should be reinstated. [38] Both the claimants and the third party have objected to the court accepting two affidavits sworn by the defendant Vincent Virknumbered 4 and 5 as being filed too late.

Implicit in their submissions was the argument that their clients had not had time to deal withthem and, as well, a reliance on perhaps the obvious, that the defendants have known the case they had to meet since June 23, 2015, andhence there was no reasonable need or excuse for filing evidence in the form of affidavits as late as November 3, 2015, the fourth Virkaffidavit, and November 25, 2015, the fifth Virk affidavit.

These two dates were in fact the two hearing dates with respect to theapplications in issue. [39] These parties argue that the two affidavits were really improper attempts at reply evidence to backfill gaps in the materialsearlier filed in support of the defendants' application to set aside the orders made by Judge Challenger. [40] Mr. Stainer, counsel for the third party, relies in his submission on the case of Allcock Laight & Westwood Ltd. v. Patten,Bernard and Dynamic Displays Ltd., (ON CA), [1967] 1 O.R. 18 at page 20, quoted with approval by our Court ofAppeal in McPhee v.

B.C. (Ministry of Transportation and Highways), 2005 BCCA 139 at paragraph 47 as follows: It is well settled that where there is a single issue only to be tried, the party beginning must exhaust his evidence in the first instance andmay not split his case by first relying on prima facie proof, and when this has been shaken by his adversary, adducing confirmatoryevidence [citation omitted] . . . [41] The claimants argue that no new matters were raised in their affidavit of Palma D'Andrea, a legal assistant, sworn October 27,2015, which merely sets out copies of documents and letters earlier available to all parties.

On November 25, I refused to acceptMr. Virk's fifth affidavit. I have considered all submissions made by the parties before me on this point and I find I am in agreementwith Mr. Stainer and Mr. Robertson, and I decline to admit or consider any facts in the fourth Virk affidavit as well.

[ 42 ] Rule 17 on point sets out the clear test to be used in an application of this sort, as does the leading Miracle Feeds case. [ 43 ] The defendants had made a decision in late May 2015 to file an application to set aside the default orders and had and took some three weeks to prepare their materials, and might have utilized counsel to assist them in the process had they cared to do so. There is no excuse available to them, in my view, that would allow me to permit them to file late materials on the date of the hearing.

This is a practice to be discouraged, in my view, as it can be highly disruptive, often giving rise to unnecessary adjournment applications. [ 44 ] There is as well, of course, the rules in this court to be considered. Rule 16(6)(

j) gives a Provincial Court judge the jurisdiction, together with Rule 17, to cancel a default order if an application is made to do so.

Rule 16(9) states as follows: At least 7 days before the date set for hearing an application under subrule (7), the applicant must serve a copy of the application, and the affidavit if required (see Rule 17 (2)), on each party that would be affected by the order requested unless the application is for a default order because no reply to a third party notice has been filed. [ 45 ] Thus, this court's own rules require that the affidavits in support of such an application are to be served with it at least seven days prior to the hearing. [ 46 ] The Virk Affidavits Number 4 and Number 5 did not comply with this requirement and the opponent parties did not otherwise consent to their being considered by me. [ 47 ] In the result, for the above reasons, I have not considered either Virk Affidavit 4 or 5 in my decision herein. [ 48 ] I will now deal with the third party notice.

I have set it out above in full. The basis upon which the defendants assert it has merit is set out very cryptically in paragraph 22 of the defendants' written submission as follows: Likewise, the accident report suggests that the accident itself was caused by the named third party, Mr. Boesterd, and as such it is submitted that the third party claim is a viable claim that the defendants ought to be given the opportunity to advance in the context of a trial. [ 49 ] This of course overlooks the fact that the claim advanced by the claimants against the defendants sounds in contract. Mr.

Stainer opposes the defendants' application under Rules 16 and 17(2) to set aside Judge Challenger's dismissal order of the third party notice, not only on the basis that the defendants have failed to state why they did not attend the settlement conference and delayed in bringing their application, but most strenuously on the basis that it is without merit. [ 50 ] He makes two main points as follows in his submissions: 1) the claim is time-barred, having been made more than two years after the date of the collision, pursuant to s. 23(1) of the Marine Liability Act , S.C. 2001, c. 6; and 2) one issue in the main action is whether the defendants breached the August 22, 2011, contract by failing to pursue the third party to recover monies before such action was time-barred.

This is a separate and distinct contract claim and has nothing to do with the liability for the collision. [ 51 ] The third party notice, as amended, does not set out any common or related issue to those in the main action. The third party claim must be related to the original claim between the claimants and defendants. [ 52 ] Mr. Shee, when called upon on November 25, 2015, at the conclusion of the hearing, really made no submission to suggest that the third party notice contained a meritorious claim and should be reinstated. [ 53 ] I find I am in complete agreement with Mr.

Stainer's very careful and helpful submissions on this point. There is no legal basis to disturb the order made on point at the settlement conference on February 27, 2015. In the result, the defendants' application to set aside the order made by Challenger P.C.J. on February 27, 2015, at the settlement conference, dismissing the third party notice, is dismissed. Her order stands and the third party notice remains dismissed. [ 54 ] I turn now to the main application. [ 55 ] I will deal with each provision in Rule 17(2) in turn.

The reason the defendants did not attend the settlement conference [ 56 ] The defendants admit, following Miracle Feeds , that they as the applicants must show that their failure to attend the February 27, 2015, settlement conference was not wilful or deliberate. They argue that a wilful and deliberate act should be something culpable, citing another judgment of Stansfield P.C.J. in Kleinfelder v. Stoy , [1994] B.C.J. No 2823 . They assert on the facts they were simply unaware of the new date and the reason was a breakdown in communications between them and their solicitor Mr. Albas and his decision:

a) not to attend the settlement conference himself; and

b) only sending a letter to the place of business of Starlite Marina Ltd. and doing (they do not stipulate what else he should have done) and as well

c) in his December 9, 2014, communication there was no new date set or suggestion that a new settlement conference would be imminent; or

d) that the consequences of failing to attend the settlement conference, as occurred, were serious. [ 57 ] The claimants invite me to find, based on certain inconsistencies in Mr. Vincent Virk's various admitted Affidavits Numbers 1 to 3 inclusive, and on what he does not state therein, that they knew about the February 27, 2015, settlement conference and simply chose not to attend, and deliberately ignored their own lawyer's letter of January 29, 2015, on point. [ 58 ] They emphasize the following facts:

a) Vincent Virk is a sophisticated businessman. I agree.

b) Email was his primary method of communication with his lawyer, Mr. Albas. He used email with the claimants in communications concerning their claim and refund they were seeking.

c) The only email address he used with them or counsel was that which Mr. Albas used in the January 29, 2015, letter.

d) He does not state why he did not attend the settlement conference on February 27, 2015. He was most probably in Vancouver on this date.

e) There is no evidence that on January 29, 2015, or at any time, his computer was malfunctioning so that he was not able to receive emails.

f) The defendants were dilatory in dealing with the majority of the claimant's inquiries concerning their claim and, as well, with respect to their judgment and in following up at all with Mr. Boesterd. [ 59 ] I find there is an important inconsistency between Mr. Virk's first affidavit sworn June 23, 2015, and his second affidavit sworn later on July 30, 2015.

In the first, he seems to assert he was travelling and out of the country at the time of the February 27, 2015, settlement conference, really offering this as an excuse for not being there and stating he was under the impression his lawyer was somehow dealing with it. He has not said in his affidavit why he had this impression. There is no basis, in my view, on the evidence that would reasonably support his having such a belief or impression. For example, there is no communication from Mr.

Albas to the effect, "When the new date is set, I will email you and I will attend on your behalf or engage counsel in North Vancouver on your behalf to do so." [ 60 ] In the second affidavit, Mr. Virk makes no mention of being away travelling on February 27, 2015. It is silent on this critical point. He has not said where he was on this date. I reject his counsel's characterization of Mr. Albas's efforts relating to the February 27 settlement conference being half-hearted. This seems unfair. [ 61 ] Mr.

Albas did what I think any competent lawyer would do: he sent his client a letter at his place of business, using these days the fastest and most secure mode of communication, namely email, and at the email address the defendant Vincent Virk regularly used. In doing so, he communicated in the usual way with his client. In it, he said he would not be attending the settlement conference. Perhaps the gold standard for such a letter would be to warn that failure to attend the settlement conference might result in a default order being made, but I do not find this omission resulted in the defendants not attending. Mr.

Albas told them they must attend. [ 62 ] Based on all the evidence placed before me in Mr. Virk's Affidavits Numbers 1 to 3 only, I conclude that he received the January 29 letter from Mr. Albas and elected not to attend the settlement conference on February 27, 2015, for some unexplained reason, not including travel, nor to follow up with Mr. Albas for an explanation of the consequences of not attending. He has not clearly denied receiving it. I find paragraph 10 of his second affidavit evasive on this important point.

I find that his decision not to attend in the absence of any reasonable explanation was wilful and deliberate. Was there delay in filing the application to set aside the order made by Judge Challenger, February 27, 2015? [ 63 ] I find that on March 2 and 9, 2015, the claimants' counsel, Mr. Robertson and/or Mr. Hawkins, made the defendants aware of the orders made by Challenger P.C.J. These letters were received by Colin Vincent, the operations manager of the Pallas Group, and he responded to Mr. Hawkins by email on March 23, 2015, that Mr.

Virk was away on vacation until possibly early April, stating that once he returned, he, Virk, would be contacting Hawkins, in essence, concerning his correspondence. [ 64 ] Mr. Virk has said he returned to Vancouver in late March 2015. I do assume that in the ordinary course of business, Mr. Vincent would have drawn these two important letters to Mr. Virk's attention in a timely way. That is what even an incompetent manager would have done in the circumstances, let alone one acting reasonably and holding a reasonably senior-level position, which I assume Mr.

Vincent did at the material time. [ 65 ] I find that by April 1, 2015, at the latest, Mr. Virk knew about the default judgment. He did not leave for the U.S. or Europe until April 12. For no very good reasons, he waited until his father met with Mr. Albas in late May and then again until June 23rd to file his application to set aside the default order. It was thus filed about two months later than it might have been had he dealt with it as he should have in early April 2015. Thus I find there was delay in filing his application to set aside the default orders.

The facts that support his defence: Is his defence meritorious or worthy of investigation? [ 66 ] The defendants argue they have a meritorious defence. In paragraph 22 of their written submission, they assert in part as follows with respect to their reply to the notice of claim: In the circumstances of this case, Mr. Virk's affidavit exhibits an agreement signed by one of the claimants. Mr. Bagher Nezhad Tabassi

signed an agreement to indemnify Starlite Marina Ltd. for damages caused to the boat that he rented during the course of the rental period. Likewise, following the crash, Mr. Bagher Nezhad Tabassi signed an indemnity agreement to repay one-half of the cost of damages to the boat immediately. It is submitted that these two factors, irrespective of any claims that the claimants may wish to make as to the circumstances surrounding the execution of those documents, demonstrate a meritorious defence that ought to be given consideration at trial. [ 67 ] Likewise, the claimants assert they have a meritorious claim.

They assert they were not at fault for the collision, a view, as I have said, not shared by counsel for the third party, Mr. Boesterd, and say that they were really forced to pay to the defendant Vincent Virk $24,997 before leaving Osoyoos, but on his agreement to pursue the matter and, if they were not at fault, to reimburse them. [ 68 ] Mr. Robertson asserts the only defence really advanced is a limitation defence and that it has no merit, as the claimants' claim is in contract and that the old limitation period in contract of six years applies. [ 69 ] I disagree with this submission.

Clearly the defendants rely on the documents referred to at the outset of these reasons for their defence against certainly Mr. Tabassi, whom they say is the only claimant who signed same and paid any money. [ 70 ] As to the second claimant, they say this in paragraph 23 of their written submission: Finally with respect to the default judgment entered in favour of Mr.

Mohebiashtiani, the documentation surrounding the rental of the boat and the payment made to the defendants that is the subject of this action suggests that he was not involved in either the payment to the defendants or in the rental of the boat in any way that would give rise to a cause of action on his behalf, and accordingly any default judgment in his favour ought to be vacated on that basis alone. [ 71 ] That said, I do agree with Mr.

Robertson's submission that the limitation defence would seem very weak indeed, as under the old Act , the limitation period for a contractual claim was six years, and even if the new Act applied and it was two years, the notice of claim was filed within two years of the new Act 's effective date. [ 72 ] As to the contract the defendants rely on, I confess it seems an unusual instrument requiring a lessee to pay a large sum of money the day after a boating accident he has been involved in and where there has been no assessment of fault or, I think, too, of the proper amount of the loss of: (

a) the four-year-old boat; and/or (

b) loss of use. [ 73 ] The release of liability agreement does not require the vessel lessees to make an immediate payment to the lessor Starlite. The claimant lessees could not have been given any reasonable opportunity to consult a lawyer before signing the contract in issue.

It is not entirely clear to me what consideration flowed to the claimants as part of the bargain set out in the August 22, 2011, contract. [ 74 ] Nonetheless, the claimants have not yet pleaded that it was, for example, an unconscionable bargain or made any reference in their pleading to the Trade Practices Act . [ 75 ] It does appear, based on all submissions made before me, and I think, too, on the lack of evidence submitted by the defendants, that they did very little to uphold their part of the bargain, if there was one, in pursuing Mr. Boesterd or an insurer to recover any part of their loss.

I also note there is a certain vagueness in those portions of the contract that relate to the defendants' obligations thereunder and how any funds recovered should be applied. [ 76 ] I find myself asking of this contract, exactly what does it mean? For example, how should a court construe the clause, "If any salvage/parts, monies are recovered from the boat, it will be adjusted at a later date." What will be adjusted? When will the adjustment occur? What will the amount of the adjustment be?

I have the same concerns about the penultimate clause in this arrangement. [ 77 ] In the result, the contract relied on seems terribly one-sided in favour of the defendants. They get their $24,997. It is far from clear to me what the claimants got in exchange. [ 78 ] I cannot therefore conclude that the defendants obviously have a meritorious defence. It seems to me to be weak. The contract they rely on is clearly subject to attack on a number of fronts. [ 79 ] Nonetheless, I am not able to find that the contractual provisions relied on by the defendants are certain to fail.

I really have been given no evidence to show that Mr. Tabassi was under either physical or economic duress when he signed the contract in issue. He did not swear an affidavit, nor did the second claimant. If the defendants are correct, he played no

part in this matter beyond possibly "going along for the ride", so to speak. [ 80 ] The claimants' counsel, Mr. Robertson, did not argue that the August 22, 2015, indemnity agreement was somehow void on its face or clearly made without consideration. [ 81 ] I conclude, notwithstanding its rather amateurish drafting, the defendants' reply does very narrowly raise defences "worthy of consideration or investigation". I nonetheless assess them, for purposes of the application before me, to be weak. Decision [ 82 ] It is not necessary for me to find that all the criteria in the Miracle Feeds test are met or that all the three sub-items in Rule 17(2)(

b) are satisfactorily met by the defendant applicants in order for me to exercise my discretion and set aside the default order made by Challenger P.C.J. against the two defendants. [ 83 ] I find that while there was some delay in the defendants making their application, they did ultimately apply within a reasonable time, some four months from the date the order was made. I also find that very narrowly there is a good reason to set aside the order made by Judge Challenger, only because the defendants elected not to attend the settlement conference and not based, I think, on any assessment at all of the merits of the claims and defences advanced.

[ 84 ] Rule 17(4) permits me to impose terms which I consider to be fair when making an order under Rule 17. The claimants' first position on this application is that I should refuse to set aside the default order made by Challenger P.C.J., and make an order that the money paid into court by the defendants on August 27, 2015, be paid out to the claimants. Their second or fall-back position is set out in paragraph 78 of their written submission as follows: 78 In the alternative if the application is granted, the claimant relies on the decision of the Court of Appeal in Marport Properties Ltd. v. S.

Maierovitz Ltd ., [1986] B.C.J. No. 988 , which affirmed the decision of a chambers judge who had ordered the posting of security for the judgment and payment of costs thrown away as conditions of setting aside a default judgment in circumstances where the defendant's case, though triable, was weak.

In the case at bar, the defendants' case is weak and the funds paid into court ought to remain in court as security, and the defendants should be ordered to pay the claimants' costs thrown away for this application, as well as all matters, including its enforcement proceedings from the date of the settlement conference to present. [ 85 ] Thus, if I am not prepared to dismiss the defendants' application, the claimants, pursuant to Rule 17(4), invite me to make the requested order.

I am permitted to do so only if I consider it to be fair to do so based, I think, on the facts placed before me (or arguably not placed before me when they should have been) on the application. [ 86 ] I conclude, pursuant to Rule 17(2), that I should set aside the default payment order made by Challenger P.C.J. against the two defendants. They should have their day in court. [ 87 ] What terms should I impose?

Should I order that the defendants post security as the claimants seek in their fall-back position? [ 88 ] In Marport , an action between a landlord and tenant, where the landlord had obtained a default judgment and the defendant tenant sought to set it aside, the chambers judge did so, but on terms requiring the defendant to post virtually the whole amount of the plaintiff's claim. This order was upheld on appeal.

The facts on which the order was made included a lack of delay in filing the application to set aside the default judgment, and some evidence on an earlier assignment of the lease in issue that the tenant owed money to the landlord.

As well, the chambers judge was of the view that the plaintiff had a strong case, notwithstanding that the defendant tenant raised a triable issue, but in some respects not a strong one. [ 89 ] This decision and the authorities referred to in it suggest that it is only in exceptional circumstances that the court would order that the defendant applicant post security for all of the claim or part of it advanced by the plaintiff. One such circumstance is where the court has some doubt as to the reasonableness or possible merit of the defence advanced.

Another example of such circumstances is evasiveness, for example, evidence a defendant has or is removing assets from the jurisdiction of the court to avoid being able to pay a prospective judgment: see paragraphs 27 and 29 of the Marport decision. [ 90 ] In my view of the facts placed before me, I should make an order that the defendants post security. In coming to this decision, I take into account the following: 1) The failure on the part of the defendants to attend the settlement conference was not, in my view, an innocent act, but rather an intentional and wilful act.

It regrettably shows a certain contempt for court proceedings. If the defendants did not know the consequence of attending such an important meeting, they apparently did not take the time or make the effort to find out what they might be. Their attempt to blame their solicitor, Mr. Albas, for half-hearted efforts on their behalf is, in my view, lame and simply an unacceptable excuse and an inappropriate attempt to lay the blame for their own inaction on someone else. 2) All the evidence points to the defendants being sophisticated in business affairs.

Starlite Marina Ltd. was but one corporate entity in the Pallas Group. 3) I have expressed concern that the defendant Vincent Virk has been evasive in the manner in which he has put his evidence before the court on this application, some of which is inconsistent. Crucially, there is no clear, straightforward statement in the admissible affidavits in this case that he never saw the important letter of January 29, 2015, from his lawyer putting the defendants on notice of the adjourned settlement conference date and the requirement that they must attend and that he, Albas, would not be doing so.

Perhaps the high watermark of Mr. Virk's evasiveness in his second affidavit, sworn July 30, 2015, which, as counsel for the claimant argues, leaves much unsaid which should be said in paragraph 10 as follows: 10. I am aware of only one letter received from Mr. Albas regarding the second settlement conference. Attached hereto and marked as Exhibit E is a true copy of the letter from Mr. Albas dated January 29, 2015.

I am advised and verily believe that Exhibit E was discovered by Narinder at approximately the same time he discovered the default order in or about early April 2015. 4) The evidence shows that after the claimants obtained their default judgment, there was some delay in their filing the application to set aside the same and, as well, certainly strong, uncontroverted submissions made by counsel for the claimants that after the August 22, 2011, contract was entered into, the defendants did very little to resolve the liability of others for the collision and seek a monetary contribution from someone for the benefit of the claimants as, in my view, they were obliged to do under the terms of the contract, such as it is.

I had a very strong sense, when hearing this application over the two days in court, that the initial mindset of the defendants was that, "We have the claimants' money and our priorities now lay elsewhere." 5) I have above expressed some concern about the strength of the defendants' defence. [ 91 ] In the result, I make the following orders: a) $30,000 posted by the defendants in court on August 28, 2015, will remain in court as security against the claimants' claims and costs, and subject to the following further orders, which I also make.

b) The defendants' application to set aside the order made by Challenger P.C.J., February 27, 2015, with respect to the third party notice is dismissed.

c) The defendants will pay to the third party, care of his solicitors, Bull Housser & Tupper, costs in the amount of $500 with respect to his defence of the third party claim and successful defence of the defendants' application to set aside the order made by Challenger P.C.J. with respect to the third party notice.

d) This sum of $500 of costs is to be paid forthwith to Bull Housser & Tupper from the above funds now held in court.

e) The default payment order made by Challenger P.C.J. on February 27, 2015, against the two defendants is set aside.

f) The defendants will forthwith pay the sum of $500 costs to Bernard LLP as costs incurred by the claimants with respect to the hearing to set aside the default order.

g) There will be a settlement conference in this action to be set by the claimants on an early date acceptable to all parties and on a date convenient to all parties, and notice of the same and all future court documents for the defendants shall be given to the defendants care of Hawthorne, Piggott & Company, to the attention of Adam Shee, Suite 208 - 1899 Willingdon Avenue, Burnaby, British Columbia, Canada, V5C 5T1.

h) The Honourable Judge Dyer is not to preside at any future settlement conference or trial in this matter. [ 92 ] I invite counsel for the parties to make this last order very clear to the judicial case manager when a future trial date or settlement conference date is set. [ 93 ] Those are my reasons in this matter. By way of clarification, the court will prepare the order and, when it is signed by me, it will be mailed to the appropriate parties. Thank you. (REASONS CONCLUDED)