GO2 D4 Construction v. Hrychiw Date:, 2016 BCPC 135

Citation: GO2 D4 Construction v. Hrychiw Date: 20160518 2016 BCPC 0135 File No: 40982 Registry: Kamloops IN THE PROVINCIAL COURT OF BRITISH COLUMBIA (Small Claims Court) BETWEEN: GO2 D4 CONSTRUCTION INC. CLAIMANT AND: MELITA HRYCHIW DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE S.D. FRAME Appearing for the Claimant: Mr. Mike Spruyt Counsel for the Defendant: Mr. Dennis K. Hori, Q.C. and Mr. Tyson McNeil-Hay Place of Hearing: Kamloops , B.C. Date of Hearing: May 9, 2016 Date of Judgment: May 18, 2016

[ 1 ] This is an application by the Defendant to set aside a default order made April 1, 2016. Melita Hrychiw and Tyson McNeil- Hay filed affidavits in support of the application. The Claimant opposed the application on the premise that Ms. Hrychiw was properly served. In the Claimant’s view, she had legal counsel; it expected a lawyer to know what had to be done and in what time. [ 2 ] During the course of the proceedings, it became evident to me that the service on the Defendant was not effective. This is through no fault of the Claimant.

The Claimant prepared its Notice of Claim and attended the Provincial Court for the purposes of having it filed. At that time, through no fault of the Claimant, no Registry seal was affixed to either its copy of the Notice of Claim or the service copy. That is fatal to service. The purpose of affixing the seal is to put all parties on notice that the claim has been legitimately filed with the Provincial Court. It commences the running of time. The running of time is critical for such things as time for service and time for reply. [ 3 ] This error was compounded when the Claimant served Ms.

Hrychiw by registered mail. Ms. Hrychiw received the registered mail and took it to her counsel. [ 4 ] When Mr. McNeil-Hay reviewed the document, he believed it to be defective because it was not date stamped and because it had been served by registered mail. Mr. McNeil-Hay made the critical error of not checking the Small Claims Rules and Small Claims Act with respect to service requirements in the Provincial Court. That error may well have led to a default judgment being properly taken against Ms. Hrychiw. In the end result, Mr.

McNeil-Hay was correct that the service was defective because the copy of the Notice of Claim served upon Ms. Hrychiw did not bear this Court’s seal. For service of the Notice of Claim to be effective, it must be stamped. It does not suffice that the registry copy is stamped or that Mr. McNeil-Hay ultimately obtained a copy of the stamped Notice of Claim. [ 5 ] I am compelled to set aside the default judgment on the basis of defective service. However, I am satisfied that Ms. Hrychiw now has a proper stamped copy of the Notice of Claim.

She will have 14 days from the date of this order setting aside the default judgment. [ 6 ] Having said the foregoing, I would have set aside this default judgment in any event. The test to be met to set aside a default judgment is that the Defendant not willingly allow the judgment to be entered; that she move as quickly as possible once she learns of the default judgment to set it aside; and that she have a defence worthy of investigation. [ 7 ] Dealing first with the defence worthy of investigation, the proposed Reply is attached to the Affidavit of Mr. McNeil-Hay. The Reply contains a Counterclaim.

It is extensive and well thought out. It is not trivial or a boilerplate denial. It is a defence worthy of investigation. [ 8 ] There is no question that Mr. McNeil-Hay moved quickly to set aside the default judgment once he realized it had been taken. The application for the default order was filed on April 1, 2016. The application to set it aside was filed on April 8, 2016.

I am satisfied that, given the application materials pulled together for the purposes of this hearing and the court time allotted, that the Defendant moved quickly to set aside the default judgment. [ 9 ] This leaves whether, absent the issue of defective service, Ms. Hrychiw wilfully allowed the default judgment to be entered. There are three factors impacting this component of the test. The first is that she believed the service was defective based upon the advice received from her counsel. Some of that advice was erroneous but the other was correct. The second is that Mr.

McNeil-Hay engaged in communication with the Claimant clearly putting it on notice that counsel was involved. In the correspondence that was sent to the Claimant, Mr. McNeil-Hay set out the nature of the Counterclaim that would be made. He also put the Claimant on notice that the service was not effective because of the registered mailing. He did not point out the missing court stamp. [ 10 ] The Claimant did not put Ms. Hrychiw on notice that it would take default judgment despite this correspondence.

While it may not be expected that lay people will do so, it is a courtesy expected between counsel to forewarn that default judgment will be taken. Whenever counsel is involved and there are discussions, before a default judgment must be taken, clear notice must be given to the other counsel that no latitude will be given with respect to filing a Reply. As I said, I would not expect the Claimant to know this independently. However, the Claimant did consult legal counsel to confirm its method of service was effective.

That counsel ought to have encouraged the Claimants to extend the same courtesy that would have been expected of their lawyer. That combined with Ms. Hrychiw’s genuine belief that proper service was not effected satisfies this component of the test. [ 11 ] In the circumstances, I am satisfied that the Defendant would have met the test necessary to set aside the default judgment had that default judgment been taken properly in the first place. ___________________________ S.D. Frame Provincial Court Judge