2017 SKPC 030, 2017 SKPC 030

PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2017 SKPC 030 Date: March 28, 2017 File: 356/15 Location: Regina Phillips Legal Professional Corporation -and - Alex P. Mercredi, Jules Lidguerre, Louis Mercredi, Dorothy Adam, Elli Adam, Derrick McDonald, Fond Du Lac First Nation, Earl Lidguerre, Leonard Adam, Rita Adam, William Adam, Marilyn Fern, Willie John Laurent and Georgie McDonald Nathan Phillips For the Plaintiff Bruce Slusar For the Defendants FIAT APPLICATION TO SET ASIDE DEFAULT JUDGMENT P.

DEMONG, J [ 1 ] This is an application by George McDonald and Fond du Lac First Nation to set aside a default judgment entered against them by this Court on December 7 th , 2015. They are two of a number of other judgment debtors who had judgment entered against them.

[ 2 ] By summons dated September 21 st , 2015, Phillips Legal Professional Corporation brought action against the several defendants seeking recovery of monies which it says are due and owing for legal services rendered to the defendants and for which they did not pay. George McDonald and Fond du Lac First Nation are not signatories to the retainer agreement prepared by the plaintiff. They have filed a dispute note maintaining that they were not the plaintiff’s clients and that they did not seek any legal services.

The plaintiff has since discontinued its action against George McDonald and the only matter for determination of the Court at this stage is to decide whether or not the default judgment obtained against Fond du Lac First Nation should be set aside. [ 3 ] Most of the named individuals and the Fond du Lac First Nation itself are situated in a tiny northern community in the very far reaches of northern Saskatchewan, approximately one thousand kilometres north of Regina, where this action was commenced. [ 4 ] Access to this remote location is difficult.

As a circuit point of the Provincial Court, air travel is the most expeditious means of attending at this location. [ 5 ] In light of the perceived difficulty and associated cost of effecting personal service on a number of the defendants - costs which might ultimately be borne by the defendants if the action were to prove successful - and upon a written request made by Nathan Phillips by correspondence to the Court on October 24 th , 2015, the Court granted an order for substitutional service of the summons and supporting documents by e-mail on each of the defendants listed below: Earl Lidguerre; Leonard Adam; George McDonald; Rita Adam; Willie John Laurent; Billy Adam; Marilyn Fern; Alex Mercredi; and Louis Mercredi. [ 6 ] In addition, facsimile service was ordered to be made on Fond du Lac First Nation at number (306) 686-2040. [ 7 ] An affidavit of service dated December 1 st , 2015, was filed with the Court evidencing that Jefferson Wourms had received e-mail delivery confirmation of the materials he had served on each of Earl Lidguerre, Rita Adam, George McDonald, Alex Mercredi and Louis Mercredi. [ 8 ] The affidavit further confirmed that he served the Fond du Lac First Nation by facsimile but that he had been unsuccessful in serving Marilyn Fern, Leonard Adam, Willie John Laurent, and Billy Adam. [ 9 ] On the return date of the summons none of the defendants appeared.

On December 15 th , 2015, default judgment was entered against those parties upon which service appeared to have been proven.

These included Fond Du Lac First Nation, Earl Lidguerre, Rita Adam, George McDonald, Louis Mercredi, and Alex Mercredi. [ 10 ] By correspondence dated February 10 th , 2016, Bruce Slusar contacted the Small Claims clerk indicating that he was legal counsel for Fond du Lac First Nation and that he understood that some of its members had been named in this legal action and that he had been made aware that a copy of the Certificate of Judgment had been delivered via facsimile to the First Nation on January 7 th , 2016. He sought a copy of the complete file for further investigation.

On March 4 th of 2016, he brought application pursuant to section 37(1) of The Small Claims Act, 1997 to set aside the default judgment that he thought had been entered against each of Fond du Lac First Nation,

William Adam, Marilyn Fern, Willie John Laurent and George McDonald and Ellie Adam. I say ‘thought’ because judgment had not been entered against Willie John Laurent, Marilyn Fern, William Adam, or Elli Adam. The action against those individuals had been discontinued because they had not been served. In the result, the application was brought to set aside the default judgment by two parties only, Fond du Lac First Nation and George McDonald.

Affidavits in support of the application were filed with the Court on behalf of each of George McDonald and Fond du Lac First Nation and each were dated March 4 th , 2016. [ 11 ] The application was set down for hearing on April 13 th , 2016, and the Court subsequently received correspondence from Nathan Phillips seeking the opportunity to cross-examine the applicants on their respective affidavits as the averments appeared to conflict with the averments made by Mr. Wourms in the affidavit that he had previously filed on behalf of the plaintiff.

The April 13 th date was reserved to allow the parties to argue the plaintiff’s motion to cross-examine. I granted the plaintiff the opportunity to cross-examine on the issue of service but not, as the plaintiff also sought, on the issue of the validity of the defence which had been filed by the judgment debtors. I also set the hearing date to July 11 th of 2016. [ 12 ] Shortly thereafter the plaintiff requested that the Court remit the matter back to Case Management Conference without the consent of the defendants.

As the judgment debtors had not provided their consent to this request it was denied. [ 13 ] Twelve days shy of the return date the plaintiff requested an adjournment suggesting, inter alia, that if his efforts to collect his judgment from certain of the judgment debtors proved successful, then the application would be unnecessary. Details of the machinations surrounding that request are more fully set out in my Fiat dated July 14 th , 2016. The matter was next set down to be heard on January 4 th , 2017.

The five month delay was granted by the Court, in part, to assist the plaintiff in its endeavours. [ 14 ] The Court was never advised as to what, if any, steps had been taken by the plaintiff to seek to recover against certain of the judgment debtors, or if, in fact, any of these had attempted or did satisfy their respective obligations. The application proceeded on January 4 th of 2017, and was adjourned part way through the hearing at the request of both parties in order to discuss a potential resolution of this entire matter.

The matter was adjourned sine die on a date to be determined by the Court. [ 15 ] On January 17 th , 2017, the Court received correspondence from Mr. Slusar’s office indicating that they had been unable to contact Nathan Phillips respecting a potential settlement and that they sought to have the matter set down for resumption of the application. The matter was set down for resumption of the hearing on February 16 th , 2017. That hearing ran for almost five hours. [ 16 ] At that hearing, Nathan Phillips stipulated to the Court that he would be able to prove that Darryl MacDonald, identified by Mr.

Phillips as the ‘CEO’ of the Fond du Lac First Nation, would have received the original summons and supporting claim on or about October 1 st of 2015. Mr. Phillips asserted that service on Mr. McDonald as ‘CEO’ should be deemed good service. When Mr. MacDonald was called as a witness it became apparent that Mr. MacDonald could not confirm that which Mr. Phillips said he could do. [ 17 ] At the hearing it became evident that George McDonald is not proficient in the English language. His first language is Dene.

He steadfastly maintained that those persons in control of the First Nation first became aware of the summons on or about January 6 th of 2016, after the default judgment had been entered. This was asserted notwithstanding that Mr. Wourms had filed an affidavit indicating that the summons and supporting materials had been served via facsimile on or about October 30 th of 2015. [ 18 ] This first notice has since become of interest to Mr. Phillips.

Following the hearing he ‘alerted’ the Court to the fact that he was ‘disturbed’ that the Slusar office failed to exhibit ‘the January 7 th fax apparently received from the Court’ to any of his client’s materials filed in these proceedings. He reiterated his concerns to the Court by correspondence dated March 14 th , indicating that ‘this fax raised more questions than it answers’. He requested that the Court review its files to look for any notes that might be on file in relation to the ‘fax’. The Court cannot assist Mr. Phillips in this regard. The Court record does not contain any ‘fax’ to which Mr.

Phillips speaks. The Court can advise however, that in the normal course, certified copies of judgments, once issued by this Court, are sent by regular mail to the last known address of the parties. The Court clerk in turn has advised that the certified copy of judgment would, in the normal course of the Court’s process, also have been mailed to Fond du Lac First Nation at the address that the plaintiff provided to the Court at first instance ... P.O. Box 211 Fond du Lac, Saskatchewan, SOJ 0W0.

Simply put, the Court did not send the apparent fax. [ 19 ] At the hearing, it became apparent to the Court that while the affidavit of Mr. Wourms avers to the fact that he served the summons and supporting materials via facsimile on October 30 th , 2015, he also averred to the fact that the documents that he had served were set forth in the attached ‘exhibit S’ to his affidavit. These would ostensibly be the summons, the claim, the order for substitutional service

and a package of materials described as a ‘Preparing for Trial Package’. The latter are materials prepared by the Court to assist adefendant in understanding the Court process. This matter is complicated because although the averment was made, the affidavit of Mr.Wourms did not, in fact, include an ‘exhibit S’. That exhibit was not included on the Court’s copy of Mr. Wourms affidavit, nor was itincluded in Mr. Slusar’s copy of the affidavit. Describing this oversight as his secretary’s mistake, Mr Phillips provided an undertakingto the Court to file this missing exhibit. This undertaking has not been satisfied.

The Court still does not have a copy of that exhibit. [20] In his efforts to locate the missing ‘exhibit S’ Mr. Phillips sent an e-mail to Mr. Slusar on or about March 11th, 2017, requestingthat Mr. Slusar send him a copy of his copy of Mr. Wourms’ affidavit, suggesting that perhaps the court clerk had inadvertentlymisplaced the exhibit when she was making copies of that affidavit for Mr. Slusar. I accept Mr. Slusar’s representations made at thehearing, that his copy does not have an attached ‘exhibit S’. I have again reviewed the file and while I would have thought that myoriginal comment made to Mr.

Phillips at the hearing would have sufficed, (that it was not in the Court file), I can confirm that there isno ‘exhibit S’ on the court file. Mr. Phillips was free to search the Court file but he has apparently not taken any steps to do so. Onewould have thought that Mr. Phillips would have kept a copy of Mr. Wourm’s affidavit, and thereby be in a position to provide thisinformation. He has not done so and I am not prepared to yet again delve into this issue by accepting an amended affidavit from Mr.Wourm this late in the day. [21] On an application to set aside a default judgment under

section 37 of the Act the onus rests with the applicant judgment debtor to show that it has a valid defence and that it is has a reasonable excuse for not attending court. I have, in my earlier Fiat, dated April 20th,2016, indicated that the test for the validity of a defence is not whether or not the defendant will be successful, but rather, whether or notthe defence is worthy of investigation - whether or not there is a bona fide question to try. The Fond du Lac First Nation’s defence israther straightforward.

It maintains that it did not, at any time, contract for the provision of legal services from the plaintiff. Since it wasnot one of the signatories to the written retainer filed by the plaintiff it would appear that there is certainly a defence which is worthy ofinvestigation. In my view the defence filed by Fond du Lac First Nation is worthy of investigation and therefore the defendant has metthe first requirement set out under

section 37 of the Act. [22] Has Fond du Lac First Nation offered a reasonable excuse for not attending at first instance? Our Court has indicated on several occasions that what might be considered to be a ‘reasonable excuse’ is often difficult to assess and isto be considered on a case by case basis having regard to the context in which the litigation has progressed. [See generally: Honch vArcand, 2009 SKPC 43 and Judy v Olympic Motors Corporation (SK) 1, 2014 SKPC 201, ]. [23] Facsimile service is not ideal.

It presumes that when an entity other than an individual is served, then those in a position ofauthority and who have authority to bind that entity will receive timely notice of its receipt. It is unlike personal service whereby theactual party who is being sued has been handed the document, or service by registered mail, in which the person receiving the documentwill usually sign for it.

While I am not entirely satisfied that all of the documentation which was alleged to have been served was in factserved, it is clear that 18 pages of documents were sent via facsimile and that number corresponds to the approximate number of pagesthat the materials would comprise. I am also concerned that Fond du Lac First Nation may lack the business acumen to ensure thatmaterials which are faxed to them are given to those persons in authority in a timely and orderly fashion. While Mr.

Phillips has takenumbrage in final argument to my suggestion that Fond du Lac First Nation may not be deemed to have the same degree of sophisticationin its business affairs as say, a crown corporation, or an international business corporation, Mr. Slusar, who says that he has representedFond du Lac for years, is a little more pragmatic. He has fairly conceded that his client does in fact lack that degree of sophistication, andspeculates that the reason the facsimile, if received, did not come into the hands of a person in authority is for precisely this reason.

Simply put, Fond du Lac First Nation cannot explain why they did not become aware of the facsimile when it was initially received. Itinvites the Court to conclude that it was because of a lack of oversight, or because the responsible persons overseeing the First Nationwere not in regular attendance at the band office, or because the office was in transition and closed from time to time following atransition of councillors. All of these things must also be considered in the context that the persons in authority do not use English as afirst language.

Put another way, the band hierarchy cannot explain why, if the documents were received, they did not get timely notice ofthem. [24] The steps taken by Fond du Lac First Nation to set aside the noting in default, while not as timely as they could have been, arenevertheless indicative of its intention to vigorously defend this action. They have incurred substantial costs in retaining counsel inSaskatoon to attend in Regina to advance their cause. There is nothing before me to suggest that Fond du Lac First Nation was aware ofthe claim but indifferent to the action brought against it.

There is nothing to suggest that they had actual notice but chose to delay thismatter, or ignore it, or had, as is often argued in this Court, ‘more pressing things to do rather than attend Court’. [25] I can come to no other conclusion but that the applicant more likely than not received some or all of the summons and attached

materials, but when received these were not brought to the attention of persons in authority in a timely fashion. This alone should not, in my view, preclude the applicant from being afforded an opportunity to defend itself. There is no evidence before me to conclude that Fond du Lac wilfully defaulted, or took deliberate steps to vex the plaintiff.

That said, I do want to impress upon the applicant the need to ensure that its business affairs, particularly as it relates to this Court’s process, should be conducted in a timely and orderly fashion. [ 26 ] Section 37(4) of the Act allows a judge of this Court to set aside a judgment on any terms as to costs that the judge considers appropriate and give any directions that the judge considers necessary respecting the rehearing of a matter.

This Court has in the past directed that money be paid into Court to stand to the credit of the successful party, as a pre-condition to setting aside a default judgment, and that kind of order has been recognized by our Queen’s Bench as a sensible and prudent direction to ensure that a dangerous precedent not be set by holding the bar for setting aside a default judgment unreasonably low [See: Horosko v Huber [1993] SJ No 183 (QB) ]. [ 27 ] If I were to make that kind of order, the plaintiff invites this Court to order that the entirety of its potential claim be paid into court, that is to say, both the principal and interest component be paid.

Its argument is predicated primarily on the basis that if the full amount is not paid into Court, then, even if it is successful at trial, it may be difficult to collect on the judgment against a First Nation. I am not prepared to make an order of this magnitude. I note that the claim against Fond du Lac First Nation would, if successful, be joint and several to those other judgment debtors that already exist. There are four of them.

I am satisfied that payment into court of the sum of $1,780.00, or approximately one fifth of the existing judgment will be sufficient to impress upon the applicant the need to conduct its affairs in a manner necessary to maintain its attention in this matter. [ 28 ] As I have already noted, the judgment against George McDonald is hereby vacated and the claim against him is dismissed in its entirety on a without costs basis. [ 29 ] The default judgment entered against Fond du Lac First Nation shall continue to be stayed until 4:00 p.m.

May 26th, 2017. [ 30 ] Fond du Lac First Nation is directed to pay the sum of $1,780.00 into Court by way of certified cheque payable to ‘The Provincial Court of Saskatchewan’ on or before 4:00 p.m. on the 26 th day of May, 2017. These monies shall stand to the credit of the successful party following a trial of the action.

If these monies are not received by the Court clerk by this time, the stay shall be lifted and the plaintiff shall be free to take such further steps as it deems necessary to collect on its judgment. [ 31 ] If the monies are paid into Court, then the Court shall advise the parties and subsequently order that the default judgment entered against Fond du Lac First Nation be vacated in its entirety. [ 32 ] If the default judgment is vacated, then the plaintiff shall, on or before 4:00 p.m.

June 15 th , 2017, serve opposing counsel, and file with the Court with proof of service, its list of documents with enumerated copies of those documents; its witness list including the names, addresses and phone numbers of each witness; its brief of law if any; and the number of days that it feels will be required to present its case. [ 33 ] The defendant shall thereafter serve and file, in like manner, its materials as set forth above, on or before 4:00 p.m., July 7, 2017. [ 34 ] The Court will thereafter advise the parties of the dates which will be set down for the trial in this matter. [ 35 ] The only remaining matter is the issue of costs.

The plaintiff has suggested in its brief that each of the parties should bear their own costs associated with this application. Fond du Lac First Nation seeks its costs. As the result has been mixed, I have concluded that costs shall be costs in the cause to be argued at the conclusion of the trial. Dated at Regina, Saskatchewan the 28 th day of March, 2017.

P. Demong, J