WAYNE CZERWONKA Plaintiff - v. -, 2022 SKKB 204

KING’S BENCH FOR SASKATCHEWAN Citation: 2022 SKKB 204 Date: 2022 09 13 Docket: QBG-RG-00455-2021 Judicial Centre: Regina ___________________________________________________________________________ BETWEEN: WAYNE CZERWONKA Plaintiff - and - DYLAN WILLIAMS Defendant Counsel: Allen T. Berriault for the plaintiff (respondent) Eric D. Miller for the defendant (applicant) ___________________________________________________________________________ JUDGMENT R.S. SMITH J.

September 13, 2022 ___________________________________________________________________________ Introduction [ 1 ] The plaintiff, Wayne Czerwonka, claims against the defendant, Dylan Williams, for monies owed to Mr. Czerwonka for cattle which he sold to Mr. Williams. The date of the sale is in dispute, as well as the purchase price for the cattle. [ 2 ] On April 6, 2021, Mr. Williams was served with a statement of claim by Mr. Czerwonka seeking $227,946.23. Mr. Williams responded inappropriately. He put the statement of claim in his glove compartment and forgot about it. Mr. Czerwonka took judgment against Mr.

Williams on January 11, 2022. Shortly thereafter, Mr. Williams was contacted by the Sheriff, which prompted him to immediately seek legal advice. [ 3 ] The application before me under Rule 10-13 of The Queen’s Bench Rules is brought by Mr. Williams to set aside the default judgment in favour of Mr. Czerwonka. Mr. Czerwonka opposes the application. Background [ 4 ] In or around 2016/2017, Mr. Czerwonka decided to pivot his focus from raising cattle to horses. He had a herd of cattle which he had to dispose of, and he and his friend, Mr. Williams, discussed the possible sale. [ 5 ] Mr.

Williams says that the sale was agreed to in 2017. Mr. Czerwonka remembers it as later than that. Although the parties agreed that Mr. Czerwonka should transfer his cattle to Mr. Williams, they also agreed that the price for same would be negotiated and settled at a later date. Nothing was in writing. [ 6 ] During the summer of 2019, Mr. Czerwonka pressed Mr. Williams that they should reach an agreement as to the price of the livestock. Several conversations were had, but the parties were at loggerheads. [ 7 ] In February 2020, the parties met to further negotiate and settle the purchase price.

Prima facie , the parties seemingly arrived at an agreed-to purchase price. The two of them, without lawyers, prepared an agreement in writing (Exhibit “1” to Mr. Czerwonka’s affidavit of August 5, 2022). [ 8 ] The agreement provided, inter alia , that it was not binding until Mr. Williams had an opportunity to seek legal advice. It would appear that he never sought legal advice or did anything else. [ 9 ] As previously noted, Mr. Williams was served with a statement of claim and responded inappropriately by filing it in his glove compartment. That mishandling has led to this application.

General Rules – Setting Aside Default Judgment [ 10 ] Justice Tochor, in Desbiens v Warken, 2020 SKQB 145 at paras 18-27 and 30 , 61 CPC (8th) 187 , outlines the

principles a court will consider in exercising its discretion to set aside a judgment under Rule 10-13. [ 11 ] These principles are shaped by the notion that a defendant, who has failed or has neglected to do what they ought to, must come before the court seeking its indulgence on the basis of equitable considerations. In that context, I must address four questions: 1. Did Mr. Williams expeditiously apply to set aside the judgment? 2. Has Mr. Williams satisfactorily explained his delay in bringing the application? 3. Has Mr. Williams raised an arguable defence? 4. Will Mr.

Czerwonka be seriously prejudiced if the judgment is set aside? [ 12 ] Browne Building Services Ltd. v North Country Homes Ltd. , 2010 SKQB 20 at paras 14-15 , 349 Sask R 72 [ Browne ] , provides that an order made under Rule 10-13 is discretionary. The discretion is available to be exercised where an action has been noted for default and/or a “default judgment” has been entered. The application to set aside the noting and/or default judgment should be done as soon as possible.

Any delay must be satisfactorily explained. [ 13 ] Browne also allows that the presence of delay will not in and of itself defeat an application unless the plaintiff will suffer irreparable harm and where no defence was filed within the time prescribed by The Queen’s Bench Rules .

For a discretionary order under Rule 10-13 to be granted, the defendant must provide a satisfactory explanation for their failure to respond to the claim and must disclose an arguable defence or a bona fide question to be decided. [ 14 ] Rimmer v Adshead , 2002 SKCA 12 , [2002] 4 WWR 119 , provides that underlying these principles is the presumption that a defendant should have their day in court. All the circumstances must be considered, and a strong reason must be present to deny a defendant their day in court.

If a defendant has an arguable defence and the delay in question has not caused the plaintiff irreparable harm, the defendant should be heard at a trial. Analysis Was the application made expeditiously? [ 15 ] On February 25, 2021, Mr. Czerwonka issued a statement of claim, which was served on Mr. Williams on July 14, 2021. It is at this point that Mr. Williams should have taken steps to address the statement of claim. Mr. Williams failed to file a statement of defence. As a result of Mr. Williams’ failure to respond to the claim, a judgment was entered against him on January 11, 2022. [ 16 ] Mr.

Williams’ explanation for failing to properly reply to the claim is set out in his affidavit. Mr. Williams states that he was unfamiliar with the process for the Court of Queen’s Bench. Mr. Williams states that he did not carefully review the claim or make note of the timelines. Mr. Williams tossed the claim in his glovebox, forgetting its very existence. [ 17 ] Sparrow v Schnurr , 2017 SKQB 358 at para 17 [ Sparrow ] , outlines that there can be no hard and fast rules to what will be fair in any given circumstance.

However, the jurisprudence provides some guidance to the Court as to how its judicial discretion should be exercised. One factor in determining what is fair is whether the application was made expeditiously after the default comes to the attention of the applicant. [ 18 ] On March 4, 2022, Mr. Williams was made aware of the default judgment against him after receiving an email from the Sheriff’s office. After receiving the Sheriff’s email, Mr. Williams sought legal counsel expeditiously. In short, finally, an appropriate response from Mr. Williams.

Explanations for delay in making the application [ 19 ] As found in Sparrow , in exercising its discretion to set aside a default judgment, the court should search for a satisfactory explanation for Mr. Williams’ failure to respond to the claim.

In Browne at para 17 , Justice Popescul (as he then was) outlines that where no defence was filed within the time prescribed by The Queen’s Bench Rules , the defendant must provide satisfactory explanation for his or her failure to respond to the claim. [ 20 ] Upon appeal, Justice Schwann in Jones v Jones (6 July 2022) Regina, CACV3972 (Sask CA) [ Jones ] , found that the chambers judge understood there was a four-year delay between the noting for default and the defendant’s application to set aside, and that the length was significant.

Despite the four-year delay, Justice Schwann upheld the decision to set aside the default judgment stating, “While the delay in this case was lengthy, delay alone is not fatal.” Mr. Williams’ delay is substantially less than that in Jones . Mr.

Williams sought counsel promptly after the Sheriff advised him of the existence of the judgment. [ 21 ] Justice Caldwell in Ballentyne v Benard , 2012 SKCA 23 at paras 13-14 , 385 Sask R 280 [ Ballentyne ] , provides that: [13] While one might imagine circumstances in which a “wilful” failure to defend an action might constitute sufficient reason to deny an application to set aside a default judgment, as noted, the fundamental principle relevant to the exercise of judicial discretion in these cases is that it is necessary to ensure that the application of the Court’s rules and principles does not violate the principles of fundamental justice and equity .

As Cameron J.A. pointed out in Rimmer v. Adshead , the applicable principle requires consideration of all the circumstances and a strong reason to deny a defendant his or her day in court when he or she can demonstrate an arguable defence to the claim and the delay has not caused the plaintiff irreparable harm.

[14] This point is particularly apt with respect to defendants who, like the appellants, do not appreciate the risk of not responding to a statement of claim. Despite the cautionary wording on the face of a statement of claim, it is not uncommon that an individual will fail to appreciate that not responding in a legal way to a statement of claim will result in a legally enforceable judgment against him or her by default. There may be many reasons for this.

For example, an individual may fail to read the document out of fear, or he or she may read it but not understand it or what it requires, or may fail to read it carefully enough , or may simply ignore it as yet another tactic in an on-going dispute with the party opposite.

Such conduct may well be negligent; but, if it falls short of a deliberate decision to allow a default judgment to issue, such conduct, in and of itself, does not justify denial of an application to set aside a default judgment brought in a timely way where the applicant has shown an arguable defence and no irreparable prejudice to the plaintiff if the default judgment is set aside.

In short, in my opinion, a “wilful” default (i.e., one which could in and of itself justify dismissal of an application to set aside the default judgment) occurs where the defendant understands the import of a statement of claim and deliberately decides to let the matter go to default judgment, whether to vex the plaintiff with the cost, delay and inconvenience of defending an application to set it aside or otherwise. ... [Emphasis added] [ 22 ] There is no question that Mr. Williams’ conduct, after being served with a statement of claim is negligent, even dimwitted.

However, I am unable to go so far as to say Mr. Williams’ conduct reaches the bar of “wilful” default as described in Ballentyne . In short, Mr. Williams narrowly clears the curve of providing a “satisfactory explanation” in making an application to open up the default. Does the proposed defence raise arguable issues? [ 23 ] There are clearly issues in debate: (

a) the date the agreement was reached is in question, which can affect an argument under The Limitations Act , SS 2004, c L-16.1 ; (

b) the contract was oral; (

c) there was no initial agreement as to price; (

d) there was no agreement as to terms of payment; (

e) although there is a written agreement reached between the parties as a result of their negotiation meeting in February 2020, it was subject to Mr. Williams obtaining legal advice – what does that mean? [ 24 ] There is no doubt there are live issues to be appropriately argued at trial. Is there serious prejudice to the plaintiff? [ 25 ] Browne , at para 14 , demonstrates that the defendant must satisfy the Court that an order setting aside the noting and/or the default judgment will not seriously prejudice the plaintiff.

Browne also shows that “mere delay will not, in and of itself, defeat an application unless the plaintiff will suffer irreparable harm.” Absent evidence of serious prejudice, or irreparable harm, Mr. Williams should be entitled to his day in court. [ 26 ] Ballentyne , at para 14 , provides some context for making the assessment of serious prejudice.

Consideration must be taken of all the circumstances, and a strong reason to deny a defendant his or her day in court must be presented when the applicant has an arguable defence to the claim and the delay has not caused the plaintiff irreparable harm. [ 27 ] From the facts provided, several arguable issues are present in the current case. These arguable issues warrant that absent any compelling prejudice, the presumption should be that Mr. Williams should have his day in court. No such prejudice is present. Conclusion [ 28 ] I make the following orders: 1.

The default judgment granted January 11, 2022, in favour of Mr. Czerwonka is set aside. 2. Mr. Williams shall have 15 days from the date of this order to serve and file his statement of defence. 3. Mr. Czerwonka shall have his costs thrown away under Column 1. If the parties cannot agree on those costs, I shall remain seized of the debate, and they should contact the Local Registrar to make arrangements to have it argued before me by telephone. “R.S. Smith” J. R.S. SMITH