2016 QCCQ 1457, 2016 QCCQ 1457

4127854 Canada inc. (Higrowth Engineering Group) c. Adaptall Manufacturing Inc. 2016 QCCQ 1457 COURT OF QUÉBEC Practice Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-22-224720-154 DATE: March 10, 2016 ______________________________________________________________________ PRESIDED BY JUDGE HENRI RICHARD, J.C.Q. ______________________________________________________________________ 4127854 CANADA INC. (Higrowth Engineering Group) Plaintiff v. ADAPTALL MANUFACTURING INC.

Defendant ______________________________________________________________________ JUDGMENT on the application for revocation of judgment ______________________________________________________________________ [ 1 ] Plaintiff is claiming from Defendant $68,255.56 for unpaid research and development services rendered. [ 2 ] On October 30, 2015, an appearance is filed by Phillips Friedman Kotler acting as attorneys for Defendant. [ 3 ] On November 5, 2015, date of presentation of the Motion to institute proceedings, nobody was present on behalf of Defendant.

Hence, this file was referred to the court office for judgment, resulting from the absence of Defendant’s grounds of defence. [ 4 ] On December 22, 2015, a judgment by default is rendered against Defendant for the whole amount claimed by Plaintiff. [ 5 ] The Defendant files an application for revocation of judgment alleging, in particular, “THAT, at the very least, in view of our Appearance, the Defendant was entitled to an ex parte notice of the Motion for a judgment by default so that the Defendant could have presented a Defence” (par. 9 of the application for revocation).

Question in dispute [ 6 ] Was Defendant prevented to defend itself owing to fraud, surprise or any other cause considered sufficient? Context and analysis [ 7 ] Defendant’s application for revocation is based on

article 346 of the new Code of Civil Procedure , CQLR, c. C-25.01 ( NCCP ): 346. A party against which a default judgment has been rendered following failure to answer the summons, attend the case management conference or defend on the merits but that was prevented from doing so owing to fraud, surprise or any other cause considered sufficient may apply to the court that rendered the judgment for the revocation of the judgment and the dismissal of the original application.

The application for revocation must contain the reasons justifying the revocation as well as the grounds of defence raised against the original application. [ 8 ] Plaintiff’s Motion to institute proceedings is served by mail to Defendant on September 28, 2015 at its head office located in Mississauga, Ontario, following a “Motion for special mode of service” granted on September 22, 2015. [ 9 ] Attached to the Motion to institute proceedings is a bilingual “Notice to Defendant”.

The English version reads as follows: TAKE NOTICE that plaintiff has filed this application in the office of the superior Court of Quebec [sic] for the judicial district of Montreal.

To file an answer to this application, you must first file a written appearance, personally or by advocate, at the office of the court in the Montreal Courthouse located at 1 Notre-Dame Street East, in the City of Montreal, province of Quebec, within 10 days from service of the present application . Should you fail to file an appearance within the time limit indicated, a judgment by default may be rendered against you without further notice upon the expiry of the 10 days period.

If you file an appearance , the application will be presented before the court on November 5 th , 2015 at 9:00 a.m., in room 2.06 of the Courthouse. On that date, the court may exercise such powers as are necessary to ensure the orderly progress of the proceeding or the court may hear the case, unless you have made a written agreement with Plaintiff or Plaintiff’s advocate on a timetable for the orderly progress of the proceeding. The timetable must be filed in the office of the court.

In support of the Motion to institute proceedings, Plaintiff discloses the following exhibits (see attached list). [ 10 ] On October 29, 2015, Plaintiff’s lawyer, Me James Reza Nazem, wrote to a lawyer representing the Defendant in Ontario: Dear confrere, I am writing to you as I have not received any appearance in the above-mentioned matter. The delays for the Defendant to file a written appearance expired in ten (10) days after service.

Please be advised that, unless I receive a written appearance from a Quebec attorney in the above matter by tomorrow, I will inscribe this case for a judgment by default on Monday.

DO GOVERN YOURSELVES ACCORDINGLY. [ 11 ] Following the said message, Mtre Nazem received an appearance dated and filed on October 30, 2015 from Phillips Friedman Kotler, attorneys for Defendant. [ 12 ] Despite the filing of said appearance, nobody appeared on November 5, 2015 in the Montreal Courthouse, date of presentation of Plaintiff’s Motion to institute proceedings. [ 13 ] From what appears in this file, Me Nazem did not receive any communication from Defendant’s attorneys from October 30, 2015 to February 16, 2016, date of reception of Defendant’s application for revocation of judgment. [ 14 ] As provided for in

article 346 NCCP , the Defendant has the burden to establish that it was preventing to defend on the merits “owing to fraud, surprise or any other cause considered sufficient”.

Also, the application for revocation must contain the reasons justifying the revocation and the Court must find the said reasons to be sufficient [1] . [ 15 ] As indicated, in its application for revocation, Defendant alleges that it “was entitled to an ex parte notice of the Motion for a judgment by default so that the Defendant could have presented a defence” (par. 9). [ 16 ] Plaintiff’s Motion to institute proceedings was governed by the Code of Civil Procedure, CQLR, c. C-25 , then applicable (C.C.P.). [ 17 ] Articles 192 and 193 C.C.P. provide: 192.

If the defendant fails to appear within 10 days of service of the motion to institute proceedings, the plaintiff may inscribe the case for judgment by default or for proof and hearing before the court or the special clerk. If the defendant fails to file a defence within the time limit agreed between the parties or determined by the court, the plaintiff may inscribe the case for judgment by the clerk or for proof and hearing before the court or the special clerk. The court or the clerk may, of their own motion or on an application, order the cancellation of an inscription made prematurely or irregularly. 193.

At least two clear juridical days' notice of the date on which the inscription will be presented must be given to the defendant foreclosed from pleading. No notice is necessary if the defendant has made default to appear. [ 18 ] The Court notes that the judgment rendered by default in the present instance on December 22, 2015 results from an error of the clerk who took for granted that Defendant was in default to appear: [2] La

partie défenderesse ayant fait défaut de comparaître, un affidavit et des pièces ont établi la preuve. [ 19 ] Even though nobody appeared on the date of presentation of Plaintiff’s Motion to institute proceedings, on November 5, 2015, a judgment by default to appear could not have been rendered, considering the appearance of Defendant’s attorney on October 30, 2015, with the consent of Plaintiff’s attorney. [ 20 ] In application of articles 192 and 193 C.C.P., a notice of the date on which the inscription resulting from Defendant’s failure to file a defence must have been given to the Defendant. [ 21 ] Consequently, the Court concludes that the reasons given by Defendant for its application for revocation are sufficient considering, in particular, that the due process of law was not rigorously observed.

THEREFORE, the Court: GRANTS Defendant’s application for revocation of judgment; ANNULS , for all legal purposes, the judgment rendered by default on December 22, 2015 in the present file; ORDERS the parties, within 30 days of the present judgment, to file with the court office a case protocol in application of

article 148 NCCP ; THE WHOLE , the legal costs to follow. __________________________________ Henri Richard, J.C.Q. M tre James Reza Nazem, for Plaintiff M tre Stacey Douglas, (PHILLIPS FRIEDMAN KOTLER) for Defendant Date of hearing: March 1, 2016 [1]

Article 348 C.C.P. : If, when the application for revocation is presented, the reasons given are found to be sufficient, the parties are restored to their former state and the court stays execution of the judgment; it continues the original proceeding after agreeing with the parties on a new case protocol. If circumstances permit, the court may decide the application for revocation and the original application at the same time.