CITATION: Monster Snacks Inc. v. David, 2022 ONSC 1647  
COURT FILE NO.: CV-16-548869  
DATE: 2022 03 11  
ONTARIO  
SUPERIOR COURT OF JUSTICE  
B E T W E E N:  
MONSTER SNACKS INC.  
Plaintiff/Respondent  
And  
SANDRA DAVID ALSO KNOWN AS SANDRA ALSAFFAWI-DAVID  
Defendant/Applicant  
BEFORE:  
Associate Justice Ilchenko  
COUNSEL: Robert Karrass (“Karrass”) for the Applicant Sandra David also known as  
Sandra Alsaffawi-David (“Sandra” or the “Defendant”)  
Gregory W. Bowden (“Bowden”) for Respondent Royal Bank of Canada (“RBC”)  
assignee of the Default Judgment obtained by the Plaintiff Monster Snacks Inc.  
(“Monster Snacks” or the “Plaintiff)  
HEARD:  
November 12, 2021, continued on second hearing date on December 17, 2021 and  
further written submissions filed by the Parties on December 21, 2021  
RELEASED: March 11, 2022  
E N D O R S E M E N T  
I) Nature of Relief Sought by Plaintiff and Procedural History of Motion  
[1]  
The Defendant Sandra has brought this motion to obtain an order setting aside the Noting  
in Default obtained by the Plaintiff on September 22, 2017 and the Default Judgment, in the  
Principal Amount of $301,949.58 issued January 13, 2017 (the “Default Judgment”) and an  
order setting aside any Notice of Garnishment, Writs of Seizure and Sale, and any other  
enforcement steps that may have been filed as a result of the Default Judgement.  
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[2]  
From the Ministry of the Attorney General Case History of this Action (the “Case  
History”), it appears that the Defendant Sandra initially personally appeared at a Case  
Conference before RSJ Firestone on October 29, 2019 to schedule a Motion to set aside the  
Default Judgment. RSJ Firestone transferred the matter to be scheduled to be heard before a  
Master.  
[3]  
An initial return date for the hearing of the Motion was obtained for November 22, 2019.  
The motion was adjourned to November 27, 2019 and Master Short seized himself with the  
matter and established a timetable. Unfortunately, that timetable is not available to me and could  
not be located by Counsel.  
[4]  
[5]  
On November 27, 2019 Master Short set a Long Motion date for March 10, 2020.  
The Defendant retained Karrass in or around December 2019 to proceed with the motion  
on her behalf and formally retained him on January 10, 2020  
[6] The March 10, 2020 date was adjourned to July 8, 2020. On July 2, 2020 it appears that  
a conference call occurred that suspended the Motion sine die, pending the lifting of COVID  
restrictions.  
[7]  
From all of this activity in 2019 and early 2020 in the Case History, it does not appear  
that any Motion Materials were actually filed with the Motions Court Office. The first record in  
the Case History of the filing of actual court materials was a Motion Record of the Defendant  
that was apparently served by Karrass on counsel for RBC on October 9, 2020 according to an  
affidavit of service filed on this Motion, and the Case History records that a Motion Record was  
filed with the Court by Karrass on October 20, 2020.  
[8]  
The Motion was scheduled again for December 2, 2020 before Master Short, but again  
on that date the Motion was withdrawn by the Motions Court office because it was not properly  
confirmed by counsel for the Moving Party. Master Short returned the documents he had in his  
chambers on this Motion on May 19, 2021 and retired in the summer of 2021, and as a result no  
Associate Justice remained seized with this Motion.  
[9]  
A motion date of August 26, 2021 was obtained.  
[10] On August 11, 2021 Associate Justice Abrams at a case conference vacated the hearing  
date for this motion of August 26, 2021 and booked September 21st for a Motion to Strike  
affidavits filed by Sandra by RBC for failing to answer questions at the cross-examination of  
Sandra (the “RBC Strike Motion”)  
[11] The RBC Strike Motion before Associate Justice Josefo was withdrawn by the parties on  
September 21, 2021.  
[12] Finally, this motion was set for hearing before me as an urgent Motion to be heard on  
November 12, 2021. Despite, again, counsel for the Moving Party not properly confirming the  
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motion, I heard the motion on that date and adjourned the Motion so that further materials and  
compendia could be filed. I heard further oral argument on December 17, 2021 after the filing  
of these materials. After that hearing I allowed the Parties to file further written submissions by  
December 21, 2021.  
[13]  
I will deal in greater detail with the events relating to the conduct of the Motion below.  
Materials filed and requirement by the Court for Refiling Materials with Compendia  
[14] For this motion the Applicant\Defendant Sandra has filed 696 pages of materials, while  
the Respondent RBC has filed approximately 3163 pages of materials, however some of these  
materials were refiled by counsel for RBC when it became apparent that the uploading of the  
motion materials to Caselines had stripped the RBC materials of their Adobe bookmarks.  
[15] The cross-examination transcripts alone account for 185 pages for Sandra’s two cross-  
examinations and 168 pages for the cross-examination of the RBC witness Ammar Kailani, the  
principal of the Plaintiff Monster Snacks (“Kailani”).  
[16] Originally this motion had been scheduled for a mere two hours, and was deemed  
withdrawn by the Motions Court Office and required my intervention to be heard as an urgent  
matter as a result of the failure of the Applicant’s Counsel, again, to confirm this Motion.  
[17] Given the volume of materials, this matter should have been scheduled as a Long Motion,  
as was originally set by Master Short when he was seized with this Motion.  
[18] At the end of the first day of hearings I raised certain issues with the parties that had not  
been dealt with in their materials, and adjourned the matter for further argument on December  
17th, 2021.  
[19] I also required fresh as amended hyperlinked facta to be filed, and compendia to be  
prepared, as due to the volume of materials, and the lack of ability to access them easily due to  
the materials being, in some cases, unbookmarked 333, 352 and 82 page PDF documents. This  
created a situation similar to that faced by Dunphy, J. in Basaraba v. Bridal Image Inc., 2021  
ONSC 8038, where 7 parties represented by 4 sets of counsel had uploaded (a comparatively  
modest) 2000 pages of documents on multiple summary judgment motions:  
[7] The parties have lived with this case for five years at this point and the incident in  
question occurred two years before then. A judge hearing a summary judgment motion  
comes to the task with none of that history. He or she has the benefit of facta which are  
intended to walk the judge through a summary of the relevant evidence leading to the  
desired conclusion. Absent hyperlinks, the task of checking the actual evidence against  
the summary narrative of the factum is pretty much impossible in a record of this size and  
complexity. None of the parties hyperlinked the references to the evidence contained in  
their facta. Each such reference was to a motion record or transcripts with neither  
hyperlinks nor even a reference to the relevant Caselines page number.  
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[8]  
This failing alone is more than sufficient to warrant dismissal of this motion. We  
have been working with virtual hearings for almost two years at this point. The potential  
benefits in terms of cost, efficiency and access to justice are huge and will certainly outlive  
the pandemic. However, the system will grind to a halt if the parties do not shoulder their  
part of the burden seriously. The practice directions and notices to the profession have  
been highlighting the need for serious attention to be paid to the manner in which  
documents are uploaded to Caselines for a long time. Tabs do not survive uploading.  
Hyperlinks and, in appropriate cases, separate uploading of individual tabs or  
exhibits serve to make the task of navigating large volumes of documents feasible. That  
was simply not done here. The result was to drop a task in my lap akin to asking me to  
sort through an overturned bowl of spaghetti.  
[26] I initially formed the view that there was no need to write and publish detailed reasons  
in this case. I have changed my view on the matter not from a desire to single out any of  
the counsel involved. They are in good company. The problem of parties failing to upload  
usable motion materials to Caselines is endemic. It will not improve if light is not shone  
upon it. The message needs to get out to the profession that these “motions in a box” are  
simply not going to work without more effort on the part of the parties. Properly hyper-  
linked motion records and facta are quite frankly the exception and not the rule these days.  
[27] My closing comment would be to exhort ALL counsel to check back on their case  
after they have uploaded their documents to Caselines and verify that a judge reviewing  
it will be able to navigate through the evidence, case law and written argument in the way  
they would like. Hyperlinks in facta and motion records are a MUST. Separately loaded  
and clearly identified tabs should be considered. It must be usable.”  
[20] On the December 17, 2021 return date, the Motion was deemed withdrawn, yet again, by  
the Motions Court Office, and yet again required my intervention to be heard as an urgent matter,  
as a result of, yet again, the failure of the Applicant’s Counsel to confirm this Motion.  
[21] This time, Counsel for the Applicant tried on for size with the Motions Court Office the  
tall tale that I had “waived compliance” with the requirement for filing a confirmation form with  
the Motions Court Office within the required time periods, when my endorsement clearly had  
not. I disabused counsel for the Applicant of that notion at the hearing.  
[22] As this was scheduled as an urgent motion before me, and as there was professed urgency  
by Sandra, the details of which I will deal with below, and to avoid inflicting this Motion on my  
fellow Associate Judges, I heard this motion to its conclusion, despite all of these issues. But all  
of these issues are relevant to my determination of costs on this Motion.  
II) Factual Context in which the Motion is Brought  
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[23] A summary of the positions of the parties from their affidavits, and quotations from their  
specific respective positions taken on the issues to be determined on this Motion, are necessary  
to determine the issues on this motion.  
[24] Given the bulk of the materials filed on this Motion, the parties disagree on most of the  
facts of the underlying dispute between Sandra and Kailani, and each has been extensively cross-  
examined. However, the factual background regarding the legal dispute behind the Default  
Judgment is necessary to determine many of the legal tests for the setting aside of the Default  
Judgment.  
General Overview and Parties  
[25] As a general overview, this Motion arises to set aside the Default Judgment obtained by  
the Plaintiff Monster Snacks, incorporated by Kailani, against the Defendant on January 13,  
2017, arising out of a transaction to purchase by the Plaintiff the vending machine and other  
business assets of “Suddenly Soda Refreshments” (“Suddenly Soda”), from the Defendant on  
the alleged closing date of April 13, 2015.  
[26] The Plaintiff alleges that Sandra was the sole proprietor of the Suddenly Soda business.  
Sandra vehemently denies this and states that her name was inadvertently put on the business  
records of this unincorporated business by her estranged husband Antony David (“David”), who  
she alleges ran the business, who Sandra alleges was abusive, and that David coerced her into  
signing the transaction documentation, which the Plaintiff contests.  
[27] After allegedly receiving less than he bargained for in the transaction, the Plaintiff first  
initiated a complaint on October 15, 2015 (the “LSO Complaint”) with the Law Society of  
Ontario (the “LSO”) against Sandra, who is a lawyer, but was not his lawyer. This complaint  
was rejected for insufficient evidence on July 25th, 2016, but Sandra was cautioned.  
[28] On March 16th, 2016 the Plaintiff issued a Statement of Claim (the “Statement of  
Claim”), and attempts to personally serve the claim by the process server Anthony Diaz (“Diaz”)  
on the Defendant were allegedly made on March 21, 2016, with alleged follow up phone calls  
made on April 4, 6 and 11, 2016 to arrange for service. The Plaintiff brought a Motion for  
Substituted Service in writing and Master Graham (as he then was) granted a Substituted Service  
Order on June 13, 2016 (the “Substituted Service Order”).  
[29] The Plaintiff alleges that the Order and the Statement of Claim were mailed to the Plaintiff  
in compliance with the Substituted Service Order. The Defendant vehemently disagrees, stating  
that she only received a partial copy of the Statement of Claim of the first two pages and the  
Backing Page. The Defendant alleges that she wrote twice to Murray Maltz (“Maltz”) counsel  
for the Plaintiff indicating the non-compliance with the Substituted Service Order and asking for  
the complete Statement of Claim so she could defend the claim, by mail on August 3, 2016 and  
by Fax on September 2, 2016.  
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[30] Maltz allegedly never responded to this correspondence from the Defendant and filed a  
Requisition for Noting in Default and Default Judgment on September 22, 2016 (the  
Requisition”), and the Default Judgment is ultimately issued on January 13, 2017. Maltz filed  
a requisition for Writs of Seizure and Sale against the Defendant on April 19, 2017 and registers  
a writ against Sandra in Toronto (the “Writ”). And then Maltz does absolutely nothing else to  
enforce the Default Judgment.  
[31] RBC financed Monster Snacks in this transaction, and when the RBC loan allegedly went  
into default made demand on Monster Snacks and on Kailani under his Guarantee on November  
14, 2017. The RBC commenced an Action (the “RBC Action”) against Kailani and Monster  
Snacks on January 3, 2018, by issuing a Statement of Claim (the “RBC Statement of Claim”)  
claiming against Monster Snacks and Kailani, inter alia, for forging and fraudulently presenting  
to RBC net worth information to obtain financing for the Suddenly Soda transaction. At some  
point in 2018 the RBC Action is allegedly settled and the Default Judgment is allegedly assigned  
to RBC under the alleged terms of this alleged settlement.  
[32] On May 13, 2019 Bowden contacts the Defendant to arrange a Judgment Debtor  
examination on behalf of RBC as assignee of the Default Judgment, which the Defendant testifies  
is the first time she was advised there was a judgment against her, and that the Writ had been  
registered, and indicated she would be bringing a motion to set aside a default judgment. The  
proceedings leading up to this motion as summarized above, and in the chronology below, then  
ensue.  
[33] As will be noted in the detailed chronology I have prepared below, this summary of the  
facts is not in any way complete in describing the details of this “overturned bowl of spaghetti”  
in Dunphy, J.’s words, but is not a determination of them. Given the amount of evidence, and to  
avoid repetition, I will deal with the specific evidence within the discussion of the constituent  
elements of the tests to set aside a Default Judgment.  
The Evidence filed on this Motion  
For Moving Party  
[34] The Moving Party/Defendant Sandra is a family law lawyer, and a sole practitioner,  
licensed in the Province of Ontario. She was called to the Bar in 2014.  
[35] Sandra swore an affidavit on October 8, 2020 in support of her motion (the “Motion”) to  
set aside the Default Judgement (the “Sandra Affidavit”) and also swore a Reply Affidavit on  
December 2, 2020 (the “Sandra Reply Affidavit”).  
[36] Sandra was Cross-Examined on the Sandra Affidavit and Sandra Reply Affidavit on July  
12, 2021 (the “Sandra July 12 Examination”) and the transcript of that examination was entered  
into evidence (the “Sandra July 12 Transcript”). Sandra’s cross-examination resumed on  
October 4, 2021 (the “Sandra October 4 Examination”) after the RBC Strike Motion was  
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withdrawn on September 21, 2021, and the transcript of that resumed cross-examination was  
entered into evidence (Sandra October 4 Transcript”).  
Particular Evidentiary Issues for Sandra:  
LSO Report  
[37] The Sandra Reply Affidavit attaches as Exhibit “A” the Report of the Law Society  
Complaints Resolution Counsel, Rod Thibodeau (“Thibodeau”) dated July 25, 2016 on  
completion of the review of a Law Society complaint filed by Kailani on October 15, 2015 (the  
LSO Report”).  
[38] Kailani was cross-examined on the contents of the LSO Report. As I pointed out to  
counsel at the hearing, the factual findings made by Thibodeau in the report do not bind me,  
having been obtained on evidence that has not been specified, or filed as evidence on this Motion,  
after a summary investigation, with evidence presented not apparently under oath and not in a  
tribunal or Court proceeding.  
[39] From the evidence before me it is not clear whether Maltz did or did not assist or  
participate with the preparation of the LSO Complaint, and whether Kailani ever provided to  
Maltz the LSO Report, prior to Maltz filing the requisition for Default Judgment. Counsel for  
Sandra does not appear to have asked the question at the Kailani Examination.  
[40] It is clear however that from the Cross-Examination of Kailani, that he was aware of the  
contents of the report, and swore his affidavit with some contradictory statements, despite those  
findings.  
[41] Also, the dates of the “pleadings” being filed with LSO by Kailani and Sandra for the  
purposes of the preparation of the report are very relevant to the issues in this motion, in the  
context of what was going on with respect to the issuance and service of the Statement of Claim  
and the obtaining of the Default Judgment.  
[42] I am unable to determine with any certainty what submissions were made to Thibodeau.  
None of the submissions made by either Kailani or Sandra to Thibodeau are in evidence before  
me, for reasons I cannot fathom, given that Kailani appears to be making the same general factual  
allegations against Sandra as alleged owner of Suddenly Soda in the Statement of Claim, and  
swears to them in the Kailani Affidavit on November 25, 2020, that were made to Thibodeau,  
and seemingly rejected by Thibodeau in the LSO Report dated July 5th, 2016.  
[43] These prior submissions could have been used to impeach the testimony of Kailani and  
Sandra on any contradictions in the sworn evidence on this motion. But apparently this was not  
done.  
[44] Surprisingly, given the seriousness of the allegations apparently made by Kailani to LSO  
as detailed in the LSO Report, and the timing of the materials provided to LSO (as revealed in  
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the chronology below), the existence of the LSO Report was not revealed until the swearing of  
the Sandra Reply Affidavit.  
[45] Kailani failed to provide in his evidence the LSO Report, or any mention at all that:  
i) he had commenced disciplinary proceedings with the LSO against Sandra 6 months prior  
to the issuance of the Statement of Claim and the commencement of the process  
surrounding the issuance of the Default Judgment, and  
ii) that he and Sandra had both made responding and reply filings in response to the LSO  
Complaint CONTEMPORANOUSLY with the filing and service of the Statement of  
Claim by Maltz and the obtaining of the Substituted Service Order;  
iii) based on whatever evidence was provided to him, Thibodeau had previously  
comprehensively rejected submissions by Kailani that were similar to the evidence  
presented by Kailani in the Kailani Affidavit on this Motion;  
iii) that he proceeded to obtain the Default Judgement after Thibodeau had made these  
findings.  
[46] I note that the Bill of Sale from the Suddenly Soda transaction that Thibodeau eviscerates  
in detail in the LSO Report, raising doubts as to its enforceability, was not placed into evidence  
on this Motion.  
[47] I also note that on April 18, 2016 Maltz wrote a letter to Sandra accusing Sandra of  
evading service, and threating to make a(nother) Law Society complaint, three days before his  
client Kailani filed reply materials on April 21, 2016 to the response to Kailani’s complaint that  
Sandra had apparently filed with the LSO on March 12, 2016.  
[48] So certainly Kailani, and possibly Maltz, were aware that Sandra was participating in  
defending that the LSO Complaint commenced by Kailani, while they were obtaining Substituted  
Service and then the Default Judgment.  
David Affidavit  
[49] Sandra also attaches as Exhibit “O” to the Sandra Affidavit the Affidavit of her allegedly  
estranged husband David sworn March 10, 2016 (the “David Affidavit”), that Sandra asserts  
was provided to Kailani in March or April 2016. In general terms the David Affidavit supports  
Sandra’s evidence in her affidavits actually filed for this Motion.  
[50] It appears the David Affidavit was sworn on March 10, 2016, which is in proximity to  
March 12, 2016 the date on which Sandra filed with LSO her response to the LSO Complaint  
made by Kailani. It does not specifically appear from the text of the LSO Report that the David  
Affidavit had been provided to Thibodeau,  
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[51] Counsel for RBC objected to the use of the David Affidavit for the truth of the facts  
contained in it, I think properly, as it was his position that it had not been entered into evidence,  
and he had not been given the opportunity to cross-examine David on its contents.  
[52] Counsel for Sandra took the position that the David Affidavit was filed to impeach the  
testimony of Kailani in the Kailani Affidavit (as defined below) which contradicts the testimony  
of David as to the ownership of the Suddenly Soda business and Kailani’s knowledge of it, and  
the fact that Kailani had received it.  
[53] Ultimately after pages of discussion between counsel, the following questions were asked  
of Kailani with respect to the David Affidavit, without the objection of counsel for RBC:  
MR. KARRASS: The question that I've asked is not about the truth of the contents. The  
question that I've asked is whether or not Mr. Kailani had received this affidavit. It is a  
straightforward question. It does not require any discussion about the contents of this  
affidavit.  
MR. BOWDEN: Ask away.  
BY MR. KARRASS:  
143. Q. So, Mr. Kailani, did you at any point receive this affidavit from Mr. David?  
A. Can you define the time frame?  
144. Q. I've said ever. Have you ever?  
MR. BOWDEN: Well, Counsel, it's in your Motion Record. So the answer, of course, is  
yes. It must have been sometime before the motion was filed.  
BY MR. KARRASS:  
145. Q. Have you ever received it prior to receiving my client's Motion Record?  
A. Yes.  
146. Q. Is it true that you received it sometime between March and mid April of 2016?  
A. I don't recall.”  
[54] Given these strictures, I will consider the existence of the David Affidavit, and Kailani’s  
awareness of its contents, but will not be considering the contents of the David Affidavit for their  
truth to prove issues on this Motion.  
[55] Justin Sugar, a lawyer with the firm of Karrass Law (“Sugar”) swore an Affidavit on  
September 3, 2021 (the “Sugar Affidavit”) that was responding to the RBC Strike Motion, but  
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also referred to on this motion with respect to the chronology of the bringing of this Motion.  
Sugar was not cross-examined on the Sugar Affidavit.  
[56] RBC brought the Strike Motion returnable on September 20, 2021 to strike out the Sandra  
Affidavit and the David Affidavit. As noted above this Motion was withdrawn.  
Sandra’s evidence  
[57] Sandra’s evidence in the Sandra Affidavit on the facts underlying the claim against her  
by Monster Snacks that resulted in the Default Judgment is as follows:  
47. The Statement of Claim presents an overly simplistic and, in my view, misleading,  
recitation of the events in question.  
48. In the Statement of Claim, reference is made to a claim for payment on a purchase and  
sale agreement in the sum of $290,000, together with pre- and post-judgment interest on  
this amount, and costs.  
49. The Statement of Claim continues by describing the parties, reciting the events which  
apparently transpired and then alleging, in a somewhat conclusory fashion, that the  
business was not viable, and that judgment should be given for the entire principal amount  
plus interest.  
50. The Statement of Claim refers to a purchase and sale agreement having been entered  
into on or about April 13, 2015.  
51. I dispute all of the claims made about me in the Statement of Claim, save and except  
for the fact that Tony David was my spouse. I was not the owner of Suddenly Soda  
Refreshments, nor did I have control over its assets. Additionally, Tony David was the  
original purchaser of Suddenly Soda Refreshments.  
52. I never met, spoke to, or had any interaction with Mr. Kailani prior to his purchase of  
the business' assets. I do not dispute the advance of the sum or its receipt by the owner of  
Suddenly Soda Refreshments, Tony David.  
53. The majority of the Statement of Claim details Mr. Kailani's relationship and  
interactions with Mr. David. At no point did Mr. Kailani have any direct or indirect  
communication with me. At all material times, the Statement of Claim describes Mr.  
Kailani's interactions with Mr. David, the owner and operator of Suddenly Soda  
Refreshments.  
54. In addition to the assets of the business, the purchase and sale agreement provided for  
the purchase of the GMC van that Mr. David owned and used to operate the business. Mr.  
David alone had title of the vehicle. I could not have conveyed that asset.  
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55. The Statement of Claim purports that I refused to provide keys to the vending machines  
or to permit Mr. Kailani to attend at the machines, and that I was collecting funds from the  
vending machines. This would have been impossible for me to do as I was articling in a  
law office on a full-time basis during that time. Arguably, I physically could not have  
prevented Mr. Kailani from attending the locations, nor could I have serviced the machines  
in order to collect funds from them, while performing my work as an articling student.  
56. Mr. Kailani indicates that he was finally given the keys, however he does not indicate  
by whom. I believe this is because he obtained the keys from Mr. David, the owner of the  
business and assets, and not from me, and to admit this in the Statement of Claim would  
demonstrate that I did not have control over the keys nor the ability to convey or withhold  
them.  
57. I was initially contacted by Mr. Kailani in or about September 8, 2015, when he reached  
out to me via my former articling principal, having found one of my business cards in Mr.  
David's van, and subsequently asked me to telephone him via Facebook Messenger.  
58. When I telephoned Mr. Kailani, he explained that he was having difficulty reaching  
Mr. David, that he was aware that Mr. David and I were estranged and had been for some  
time. He stated that he knew Mr. David still loved me and believed he would do anything  
to protect me and that he believed that by exerting pressure on me, that I would reach out  
to Mr. David, and in so doing facilitate communication between them.  
59. Additionally, Mr. Kailani revealed to me that he and Mr. David had come to some kind  
of arrangement wherein Mr. David would continue to operate the business after the closing  
of the sale. He further revealed that he did not leave his employment to operate the business,  
and in fact only took it over in July 2015 because that is when he requested, and was  
approved for, a leave of absence from his employer.  
60. Mr. David bought this business in July 2005. He was the sole owner and operator, and  
it was his sole source of income. Most of his locations were in businesses and offices,  
including a law firm downtown, and so necessarily, due to their hours of operation, he had  
to service the machines during regular business hours. If Mr. Kailani's intention was to  
operate this business, he would have had to resign from his employer at the time or would  
have at least arranged to take a leave of absence at the time of the closing. In the alternative,  
he could have moved the closing date, or detailed a timeline for training and turnover.  
61. At the very least, if in fact I was preventing Mr. Kailani attending the vending machine  
locations or refused to turn over the keys to his assets, he would have had his lawyer at the  
time enforce the agreement. Mr. Kailani did not make any such complaint in for 5 months  
or attempt to enforce the agreement of purchase and sale, which defies reason. A reasonable  
person, acting reasonably, would have sought enforcement of such a large purchase at  
closing, not 5 months later.  
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62. Mr. David and I separated on or about June 26, 2014. It was a difficult separation for  
many reasons, including my religious faith, Mr. David's previous cancer diagnosis and  
treatment, and the abusive nature of our marriage.  
63. I have not seen Mr. David in person in approximately five and a half (5.5) years, and I  
have limited my interactions with him as much as possible, particularly because of his  
verbal, emotional, and psychological abuse of me. It not only impacted me personally but  
had interfered with my studies in law school. I wanted nothing to do with Mr. David at all.  
64. When Mr. David contacted me in early January 2015, he advised me that he was selling  
his business. He indicated that the buyer, who I later came to learn was Mr. Kailani, was  
insisting that I be named on the Purchase and Sale Agreement because I had been  
inadvertently listed on the Master Business Licence. I immediately refused; however, Mr.  
David became angry, verbally abusive, and threatening. He indicated that the buyer was  
insisting that I be named as the seller, and my refusal was putting the deal in jeopardy. He  
said that it was his business, he wanted to sell it and that I did not have a right to stand in  
his way. In order to put an end to the abuse, to be left alone, and because it was his business  
to do with as he pleased, I agreed to do as Mr. David directed.  
65. I had been listed through inadvertence on the Master Business Licence ("MBL") as an  
owner, when I was meant to be the administrative contact. We did not discover this error  
at first, and when I later attempted to have my name removed from the MBL, my efforts  
were not successful due to the fact that Mr. David had outstanding taxes owing to the  
provincial government for his business.  
66. On or about January 24, 2015, Mr. David forwarded me an email that originated from  
Mr. Kailani, based on the email thread, which included an attachment that was titled "Offer  
to Purchase (Business Asset Purchase)". I was directed to print it off, sign it, and return it  
to him as soon as possible.  
67. The Offer to Purchase was signed at the end of January 2015 and the closing date was  
in mid-April 2015. There were approximately 11 weeks between the written offer to  
purchase and the closing of the sale, during which I would have expected, as any reasonable  
person would, that Mr. Kailani was conducting his due diligence. Certainly, I believed Mr.  
Kailani had conducted his due diligence by the time of closing, as no reasonable person  
would make a purchase valued at $290,000.00, and advance funds without verifying what  
they were purchasing and conveying funds for.  
68. I did not benefit from the advance of $290,000.00 from the Plaintiff. I was directed by  
Mr. David to deposit the funds into a bank account that I was still listed on with Mr. David,  
and wherein he promptly removed the funds and disbursed them as he saw fit.  
69. Neither Mr. Kailani, nor Monster Snacks Inc ., have made demand of Mr. David or  
sued him for a return of the monies advanced by them. Mr. Kailani is well aware that at all  
material times he was dealing with Mr. David, purchasing the assets of Mr. David's  
- 13 -  
business, and that Mr. David was the only person in control of: 1) the keys to the vending  
machines, 2) the vehicle that was part of the asset purchase, and 3) all other assets of his  
business. He was the only person Mr. Kailani had ever seen service the machines at his  
workplace, and the only person who could train Mr. Kailani and show him the locations.  
70. Despite Mr. Kailani's assertion that he allegedly did not know Mr. David was the sole  
owner and operator of this business and its assets, despite the fact that all of his interactions  
and conversations were with Mr. David, prior to his filing his Statement of Claim, an  
affidavit sworn by Mr. David on or about March 10, 2016 advising that he was the sole  
owner of the business, and that at best I was a bare trustee due to my being listed as an  
owner on the Master Business Licence, was provided to Mr. Kailani sometime between  
March 14, 2016 and mid-April 2016.  
71. While I have been collecting these documents and looking for the Purchase of Sale  
Agreement for Suddenly Soda Refreshments wherein Tony David is the purchaser, I have  
now reached a point of urgency as I understand from Mr. Karrass that Mr. Bowden is intent  
on enforcing the erroneously obtained judgement.  
72. I am upset and dismayed that I may lose my home due to the unethical actions  
undertaken by the plaintiff, or their counsel, in proceeding with the matter in the manner  
in which they did, when they were fully aware that they had not effected service of the  
Statement of Claim.  
73. Unfortunately, given the highly acrimonious and complex civil litigation aspect of this  
matter, and the likelihood of losing my home and thereby threat to the security of my  
personal living circumstances as a result, coupled with my personal, and significant health  
concerns which have disabled me, I have been unable to move this matter forward in  
accordance with the timetable or my needs. I have thus taken steps to retain counsel in  
order to ensure that this matter is taken care of in an expeditious manner, to ensure my  
rights and interests are competently and appropriately represented.  
74. In all the circumstances, accordingly, the following needs to be set out:  
(a) I was never served with the Statement of Claim or the Judgment;  
(b) I was never served with the Writ for Seizure and Sale;  
(c) I first learned of the existence of the matter from Mr. Bowden, counsel for the  
assignee of this judgment in May of 2019;  
(d) Thereafter, I have spent my time, in discussing the matter with Mr. Bowden, in  
obtaining documents, and in seeking a resolution of the matter;  
- 14 -  
(e) Contrary to the allegations set out in the Statement of Claim, I was never the  
owner of the business, nor did I have control over its assets, nor the ability to  
convey, or restrict access to the assets;  
(f) It was well within the knowledge of the Plaintiff that Mr. David was the owner,  
the seller and the person making representations about the business to him;  
(g) While the bank draft may have been deposited in a joint account between me  
and Mr. David, these monies were disbursed by Mr. David, the true and sole owner  
of the business and assets, at his own discretion and to his benefit;  
(h) I did not benefit from this transaction;  
(i) Mr. Kailani has neither sued, nor apparently made any claim to Mr. David about  
the business, the funds, or anything else to do with the purchase and sale;  
(j) Accordingly, I verily believe that the full nature of the events in question have  
not been properly put before the court as reflected in the Statement of Claim;  
(k) I further verily believe that the Plaintiff had an obligation to notify the Court  
that it never served me, and that Plaintiff's counsel, being in receipt of two letters  
from me advising of the incomplete and deficient service, ought to have properly  
effected service on me rather than simply proceeding to file for Default Judgment;  
(1) I further verily believe that Plaintiff's counsel was required to provide me with  
appropriate notice that he intended to file for Default Judgment, no notice was  
provided whatsoever.  
(m) Therefore, I believe that I have a genuine defence on the merits. I wish to have  
my day in Court so as to bring to light the various events in question, so as to apprise  
the Court of the totality of the circumstances and, more specifically, the fact that I  
was not the seller, nor did I have control over, or authority to convey, the assets,  
that I did not benefit, that in reality the Plaintiff was advancing money to Mr. David  
and not to me;  
(n) I further verily believe that Mr. Kailani had made arrangements with Mr. David  
with regard to the transition of the business and the conveying of its assets, that Mr.  
Kailani had done his due diligence and was satisfied with his purchase, or in the  
alternative, purposely chose not to conduct his due diligence, and that he has critical  
documents in his possession which, when shown to the Court, will shed further  
light on the matter and the totality of its events;  
75. At all material times I intended to Defend this matter.”  
Kailani Evidence on Motion  
- 15 -  
[58] In response Ammar Kailani (“Kailani”) the sole shareholder and officer of the Plaintiff  
Monster Snacks, swore an affidavit on November 25, 2020 (the “Kailani Affidavit”) and a  
Supplementary Kailani Affidavit, sworn on November 26, 2020 (the “Supplementary Kailani  
Affidavit”). Kailani was Cross-Examined on July 8, 2021 (the “Kailani Examination”) and  
the transcript of that examination was entered into evidence (the “Kailani Transcript”).  
[59] Kailani is by profession an engineer that graduated from university in 2012, and received  
his professional engineer designation in 2017.  
[60] In addition, Dawna O’Neill (“O’Neill”) a legal assistant to the Counsel for RBC swore  
an affidavit on the RBC Strike Motion on August 5th, 2021 (the “O’Neill Affidavit”). O’Neill  
was not cross examined. The exhibits to the O’Neill Affidavit consisted of the Sandra July 12  
Transcript, some emails between Bowden and Karrass, 117 pages of Sandra’s prior Tweets, and  
a link to what is alleged to be a 37 page Bank of Canada record retention policy, but as is  
discussed in detail below, is not.  
Kailani Evidence on Background to the Monster Snacks Claim against Sandra  
[61] The factual matrix for the claim by Monster Snacks against the Defendant Sandra that  
resulted in the Default Judgment is set out in the Kailani Affidavit and the Supplementary Kailani  
Affidavit.  
[62]  
Kailani alleges in the Kailani Affidavit that:  
Purchase of Suddenly Soda by Monster Snacks Inc. in 2015  
4. In 2014, I became interested in purchasing a vending machine business with a view to  
increasing my income. I spent quite some time researching the industry. On several  
occasions, I went to sites that had vending machine locations for sale, and had discussions  
with various individuals that were operating vending machine businesses and were  
interested in selling their accounts and their machines.  
5. At some point in 2013, I made contact with a person named Tony David ("Mr. David").  
He had a vending machine inside the lunch room at the Markham office of GHD, my  
employer at the time. On several occasions, I saw Mr. David restocking a vending machine,  
and on the third or fourth such occasion, I approached him. I asked him about the business,  
whether it was viable, how long he had been in the business and so on. He briefly outlined  
for me what kind of locations he had and what distinguished a good vending machine  
location from a bad one. He gave mc his name and phone number, and later I contacted  
him.  
- 16 -  
6. Mr. David came across as helpful and approachable. I told him I was interested in buying  
vending machines at various locations and he offered his expert advice any time I would  
need it.  
7. My first discussion with Mr. David about buying his vending machine business was  
sometime in late 2013. At that time, Mr. David told me he was not interested in selling his  
business. From early to mid 2014, I became busy with my work and did not wish to pursue  
a business. In late 2014 (after approximately 6 months of no communications with Mr.  
David), I gave him a call to inquire about his business. At that time, Mr. David informed  
me that he was looking to sell the business because he had to undergo cancer treatment. I  
met him after work one day to discuss details. He told me that he earned over $10,000 per  
month after taxes from the vending machine business.  
8. I engaged the services of a lawyer, Ranjeet Walia ("Mr. Walia"), to assist me with the  
asset purchase. The business Mr. David ran was called Suddenly Soda Refreshments  
("Suddenly Soda"), and was a sole proprietorship owned by his wife, Sandra David, also  
known as Sandra Alsaffawi- David ("Ms. Alsaffawi").  
9. My business, Monster Snacks Inc., ("Monster") was incorporated for the sole purpose  
of purchasing the vending machine business. I was the sole shareholder and officer of  
Monster. At the time of the transaction, I had no business experience.  
10. In her affidavit sworn on October 8, 2020 ("Alsaffawi affidavit"), at paragraph 52, Ms.  
Alsaffawi claims that she had no interactions with me prior to my purchase of the business'  
assets. This is not the case. Before closing the deal, Mr. David and I held a conference call  
with myself and Ms. Alsaffawi, as she was the owner of the business. In that discussion,  
Ms. Alsaffawi confirmed that everything that I had been told by Mr. David was accurate  
and that I would get what I was purchasing.  
11. The transaction was completed on April 13, 2015. The Offer to Purchase was signed  
back by Ms. Alsaffawi, as she was the owner of Suddenly Soda. She also initialled every  
page, including the multiple pages of Schedule A. Schedule A listed all of the vending  
machines at the various locations that I was purchasing. After the agreement was signed, I  
instructed my lawyer, Mr. Walia, to forward the funds to the vendor's solicitor, Jim  
Koumarelas ("Mr. Koumarelas""). Attached to this Affidavit and marked as Exhibit "B" is  
a copy of the email from Mr. Koumarelas regarding the closing.  
12. At paragraph 64 of the Alsaffawi affidavit, Ms. Aslaffawi [sic] claims that I insisted  
the assets be purchased from her because of a master business license that named her as  
the owner. This is untrue as I only learned that Ms. Aslaffawi [sic] was listed as the owner  
of the business when Mr. David informed me prior to setting up the conference call  
mentioned above. I verily believe that neither Suddenly Soda nor Suddenly Soda  
Refreshments are registered business names. Attached to this Affidavit and marked as  
Exhibit "C" are the applicable searches for both those business names.  
- 17 -  
13. At paragraph 66 of the Alsaffawi affidavit, Ms. Aslaffawi claims that Mr. David had  
forwarded her the Offer to Purchase and had directed her to print it off, sign it, and return  
it to him as soon as possible. I verily believe that Ms. Aslaffawi [sic] as a lawyer and as  
the owner of the business, played a role in drafting the Offer to Purchase. Nick Bouzios  
("Mr. Bouzios"), the Mortgage Broker, sent me and Mr. David a sample Offer to Purchase,  
Mr. David informed me that Ms. Aslaffawi [sic] will be editing and tailoring it for our  
purchase, since she was a lawyer and we should trust her. A true copy of the email from  
Mr. Bouzios, dated December 29, 2014, along with the sample Offer to Purchase is  
attached to this Affidavit and marked as Exhibit "D".  
14. In any event, the deal closed, and through my lawyer, I forwarded Mr. Koumarelas the  
full purchase price of approximately $350,000. After I purchased the assets from Ms.  
Aslaffawi [sic], it was not long before I learned that many of the locations set out in  
Schedule A of the Agreement of Purchase and Sale were fictitious. Of the business  
locations mentioned in Schedule A to the Purchase and Sale Agreement, I was able to get  
access to only about 20 locations, I learned that in many cases, Suddenly Soda did not own  
any vending machines at the location. Instead, their only function was to repair someone  
else's machine. Other locations simply had no machine there. In the end, there are only  
about 29 machines that were in accordance with the bill of sale, and my income from those  
machines was approximately $5,000-6000 gross and approximately $2,500-3000 net  
(before taxes and not factoring in my loan payments). This was a far cry from the $10,000  
net that I had been promised.  
15. At paragraph 55 of the Alsaffawi affidavit, Ms. Alsaffawi claims that it was not possible  
for her to collect funds from the vending machines or provide keys to me as she was  
articling on a full-time basis. Even if it was not possible for her to physically deliver the  
keys to me, as the owner of the business, Ms. Aslaffawi [sic] could have made  
arrangements for the keys to be delivered to me. However, she did not do so. Ms.  
Astaffawi/Suddenly Soda [sic] continued to collect funds from the vending machines till  
July 13, 2015.  
16. After three months, I received the keys from Mr. David. The plan was that I was  
supposed to hand in my notice to quit work as soon as the transaction closed. In April of  
2015, Mr. David did not answer any of my phone calls. I kept calling almost every single  
day and texted him until he finally answered in July of 2015. He provided a number of  
excuses as to why he had not responded to any of my attempts to contact him.  
17. At paragraph 61 of the Alsaffawi affidavit. Ms. Aslaffawi [sic] states that a reasonable  
person, acting reasonably, would have sought enforcement of such a large purchase at  
closing, not five months later. The reason it took me five months is that I kept giving Mr.  
David chances as he would seldomly respond to me and give me excuses such as "next  
week", Further, it took me two months to investigate the matter and I tried to visit most of  
the locations that Mr. David never showed me, until I finally realized I had been duped.  
- 18 -  
18. After I realized that I had not received what I paid for, I retained a lawyer, Murray  
Maltz ("Mr. Maltz"), to commence proceedings against Ms. Alsaffawi. On March 9, 2016,  
the Statement of Claim was issued and a copy of it is attached to this Affidavit and marked  
as Exhibit "E".  
Contact with Ms. Alsaffawi  
19. In her notice of motion, Ms. Alsaffawi claims that the matter first came to her attention  
in late July 2016 however at paragraphs 57-58 of the Alsaffawi affidavit, she acknowledges  
that I had contacted her and that we had a telephone conversation in September of 2015. A  
true copy of my facebook message, dated September 8, 2015 is attached to this Affidavit  
and marked as Exhibit "F"  
20. I had a telephone conversation with Ms. Alsaffawi where I informed her that I had  
discovered that I had been "duped" and "screwed over". I also told Ms. Alsaffawi that I  
know that Mr. David and Ms. Alsaffawi had some issues but I was aware that they  
communicated regularly. 1 further informed her that I will be pressing charges and was  
going to take her to court. la response, Ms. Alsaffawi started hyperventilating and pleaded  
with me to not do anything because "this was not supposed to happen this way." I did ask  
her for her help to reach out to Mr. David since he disappeared on me after giving me some  
of the keys and he was not answering any of my calls. Near the end of the phone call, Ms.  
Alsaffawi told me to contact Tony and not to contact her anymore.  
21. At paragraph 59 of the Alsaffawi affidavit, Ms. Alsaffawi states that I advised her of  
some kind of arrangement between Mr. David and I where Mr. David would continue to  
operate the business after the closing of the sale. I said nothing of the kind.  
Ms. Alsaffawi's role at Suddenly Soda  
31. I will also mention that i am rather surprised chat Ms. Aslaffawi's [sic] assertion that  
she had nothing to do with the business. From my discussions with Mr. David, I am aware  
that she serviced all of the vending machines at various locations while Mr. David was  
undergoing cancer treatment. During the time that Mr. David was training me, he  
frequently spoke about having recently been in contact with Ms. Aslaffawi, [sic] despite  
the latter's claim that they were estranged.  
32. As for Ms. Aslaffawi's [sic] claim that she was "inadvertently" listed as the owner on a  
master business license, I do not understand how Ms. Aslaffawi [sic] could "inadvertently"  
have accomplished this. Mr. David had told me that Ms. Aslaffawi [sic] had insisted that  
he transfer Suddenly Soda to her name as it was her dream to own a business.  
33. I know from my dealings with Mr. David that it was Ms. Aslaffawi [sic] who created  
invoices on behalf of the company and dealt with the accounts and books generally. Mr.  
- 19 -  
David was clear to me that he was the manager of operations. This was listed on his  
business card which 1 have not been able to locate. Mr. David did the physical labour,  
purchased all the vending products, serviced the machines, restocked thein and deposited  
the cash.  
34. Mr. David told me it was Ms. Aslaffawi who filed the taxes every year, and was, in  
effect, his business partner, although he did not use that exact term. I verily believe that  
Ms. Asiaffawi did all of the administrative work, including phone calls, invoicing,  
preparation of all invoices and submitting them, creating business balance sheets and  
income statement end had access to the bank account. She had full knowledge of the day  
to day operations of the business. Thus, it made sense to me that it was Ms. Aslaffawi, [sic]  
and not Mr. David, who signed on the bill of sale.  
35. A number of the clients at the vending machine locations knew Ms. Aslaffawi [sic].  
They knew her because she would occasionally come around to replenish the vending  
machines. At first, she attended with Mr. David, and when he was in cancer remission after  
his surgeries, she operated the business, on and off (between 2010-2015), by herself, I am  
also aware through Tony as well as other individuals that she occasionally had the  
assistance of her siblings who attended the various vending machine locations.  
36. I believe that revenue from Suddenly Soda served as a financial source of Ms.  
Aslaffawi's [sic] law school expenses, and that she worked diligently to ensure that the  
business was successful.”  
Evidence from Maltz and Diaz  
[63] I note that there is no first person evidence provided by RBC on this Motion from Maltz,  
the lawyer for Kailani and Monster Snacks with carriage of the action against Sandra. No  
affidavit was obtained from Maltz.  
[64] The Affidavit of process server Diaz sworn April 27, 2016 (the “Diaz Affidavit”) that  
allegedly attempted to serve Sandra with the Statement of Claim, was only attached as part of the  
(possibly incomplete) motion record filed by Maltz to obtain the Substituted Service Order at  
Exhibit G to the Kailani Affidavit. Diaz was not cross-examined on that affidavit for this Motion,  
or at the time of the Substituted Service Motion.  
Standing of RBC  
[65] At the beginning of this hearing I raised with counsel the preliminary issue as to whether  
counsel for Sandra contested the ability of RBC to appear on this Motion, as alleged assignee of  
the Default Judgment under the terms of an alleged settlement. The only evidence of this alleged  
settlement or assignment of the Default Judgment to RBC before me is the following two  
paragraphs of the Kailani Affidavit:  
RBC's proceeding against me  
- 20 -  
29. As part of my purchase of Suddenly Soda, Monster had entered into a loan agreement  
with Royal Bank of Canada ("RBC") dated March 23, 2015, wherein Monster had  
borrowed the sum of $226,950.00 agreeing to repay the loan in monthly installments.  
While I, as the directing mind of Monster, had provided a Guarantee in writing, I found it  
impossible to make payments to RBC and fell into default. A true copy of the loan  
agreement is attached to this Affidavit and marked as Exhibit "K".  
30. On January 3, 2018, RBC issued a statement of claim against inc. A true copy of the  
Statement of Claim, dated January 3, 2018, is attached to this Affidavit and marked as  
Exhibit "L". The litigation between Royal Bank of Canada and myself went on for some  
time. Eventually, I was able to settle with RBC. The settlement required that I assign to  
RBC the judgment I obtained against Ms. Alsaffawi. By the time I reached the settlement  
with RBC, the judgment against Ms. Alsaffawi was almost two years old and she had taken  
no steps to dispute it.”  
[66] No assignment documents were attached to any of the Plaintiff’s evidence proving that  
the Default Judgment had in fact been assigned to RBC, and there is no evidence that Sandra was  
ever given notice of the assignment prior to Bowden contacting Sandra in June of 2019 to arrange  
a Judgment Debtor Examination.  
[67] The Default Judgment at exhibit I to the Kailani Affidavit is still in the name of the  
Plaintiff Monster Snacks, as is the writ of seizure and sale at Exhibit J to the Kailani Affidavit.  
[68] Exhibit K to the Kailani Affidavit is the RBC loan agreement signed by Monster Snacks,  
but no security agreement granting a security interest over the assets of Monster Snacks is  
provided in evidence, nor is any guarantee signed by Kailani.  
[69] It does not appear from the Kailani Transcript that Kailani was examined on this issue.  
[70] Counsel for Sandra did not raise this dearth of evidence on the assignment issue and did  
not raise as a legal issue whether RBC had actual standing to oppose his motion, and accordingly  
I permitted RBC to appear and make submissions and I will not be determining this issue on this  
Motion.  
[71] However, the testimony of Kailani in paragraph 30 above also does not mention the nature  
of the claim that RBC brought against Monster Snacks and Kailani in the Statement of Claim  
issued January 3, 2018 (the “RBC Statement of Claim).  
[72] In the RBC Statement of Claim at Exhibit L:  
7. In or about March, 2015, Ammar Kailani submitted to the Plaintiff a loan application on  
behalf of himself and Monster Snacks Inc. Ammar Kailani, was and is the directing mind  
of Monster Snacks Inc. Ammar Kailani represented to the Plaintiff that he was starting up  
a business and needed a loan to purchase expensive equipment for his company, Monster  
Snacks Inc. Ammar Kailani proposed to purchase equipment from Tony David and Sandra  
- 21 -  
Alsaffawi-David, carrying on business as "Suddenly Soda Refreshments". Ammar Kailani  
asked for a loan pursuant to a government-sponsored program established under the  
Canada Small Business Financing Act. Under that statute, the Government of Canada will  
guarantee bank loans to small businesses, provided the loan meets certain criteria. Where  
a loan qualification for the program, a borrower is required to sign a personal guarantee for  
only a fraction of the amount of the loan, usually 25%. If the loan is not repaid, the  
Government of Canada is responsible for most of the balance of the loan. This  
program is commonly known as the "SBL program", and loans made pursuant to it  
as "SBLs".  
8. The loan application submitted by Monster Snacks Inc., and Ammar Kailani was  
successful, and the Plaintiff entered into a loan arrangement with Monster Snacks Inc., the  
particulars of which are set out above.  
SEED MONEY REQUIREMENT  
9. The Plaintiff Kailani inject of his own into his new business, known in banking parlance  
as "seed money. The Plaintiff also required that Kailani demonstrate that he possessed the  
necessary seed money before the Plaintiff would proceed further with the matter. Kailani  
gave the Plaintiff a forged bank statement showing that he was possessed of over $120,000  
in savings to inject in the new business. Kailani knew that the Plaintiff would rely on the  
forged bank statement. The Plaintiff did rely on forged bank statement to its detriment  
and as a result was defrauded by Kailani.  
10, The loan application was successful, and the Plaintiff entered into a loan arrangement  
with the Monster Snacks Inc., as described earlier in this Statement of Claim.  
11. Had the Plaintiff known that Kailani's net worth was other than he represented, or that  
he had submitted a forged document in support of his loan application it would not have  
advanced funds to Keilani[sic].  
[73] There is no evidence before me as to whether RBC as assignee has been paid:  
1) any amounts to date under the SBL program; or  
2) by Kailani and/or Monster Snacks under the terms of whatever settlement has been  
negotiated with RBC; or  
3) whether RBC has realized any amounts from the sale of the assets of Monster Snacks,  
including the sale of any vending machines, under any security interests granted to the  
RBC by Monster Snacks;  
[74] RBC has also provided no evidence as to what effect the possible setting aside of the  
Default Judgment will have on the ability of RBC to recover from the Federal Government under  
the SBL program.  
- 22 -  
[75] It does not appear that Kailani was cross-examined on these issues or whether the  
allegation of Fraud by RBC against Kailani was raised in the context of the Kailani testifying on  
behalf of RBC, given the number of times Kailani and Maltz accused Sandra of fraud, including  
with the LSO.  
[76] However, given that the amount claimed by RBC in the RBC Statement of Claim against  
Kailani and Monster Snacks is in the principal amount of $243,417.10 as at January 8, 2018, and  
the Default Judgment obtained by Maltz was in the amount of $301,949.58 and $1,114 for costs  
as at January 13, 2017, one would have thought that RBC would have provided evidence on this  
issue to meet the test of the balancing of the prejudices between the parties.  
Evidentiary issues with the Statement of Claim, Motion Record for Substituted Service and  
Requisition for Default Judgment  
[77] Given that crucial factual issues on this motion are:  
1) the circumstances of the service of the Plaintiff’s Statement of Claim;  
2) the circumstances of the obtaining of the Substituted Service Order;  
3) whether the version of the Statement of Claim served on Sandra under the terms of the  
Substituted Service Order was complete, or missing pages as alleged by Sandra;  
4) the circumstances and state of communications between Sandra and Maltz at the time of  
the Noting in Default and the obtaining of the Default Judgment; and  
5) whether there is a meritorious defence presented to the claims made in the Statement of  
Claim;  
one would have thought that the Parties would have been careful to ensure that evidence  
crucial to proving these issues, LIKE A COPY OF THE ACTUAL ISSUED STATEMENT  
OF CLAIM, would be properly put before the Court.  
[78] Astonishingly, after 3 years of litigation, and the filing nearly 4,000 pages of materials  
on this Motion, and cross-examinations spanning three days and nearly 400 pages of transcript,  
two days of hearings, and filing of Compendia in response to my request, neither the Plaintiff,  
nor the Defendant, have attached as exhibits to their numerous affidavits filed on this Motion (or  
noticed that they hadn’t) the complete Statement of Claim of the Plaintiff, as issued by the Court.  
[79] At Exhibit E of the Kailani Affidavit, what purports to be the Statement of Claim of the  
Plaintiff is obviously not:  
a) That document has no Court file number, is not issued by the Court Registrar or  
dated, and has no Court Seal;  
- 23 -  
b) The first page has FOUR paragraphs of text, but not including the “If you fail to  
defend this proceeding” statement;  
c) There are 14 paragraphs, the text is not right justified and it is dated March 9,  
2016;  
d) The Claim is for “(i) Judgment in the sum of $214,000”; and  
e) The last two pages of Exhibit E identified by Kailani as the “Statement of Claim”  
in the Kailani Affidavit appear to be a draft of the Notice of Motion for the  
Substituted Service Motion.  
[80] Exhibit A to the Sandra Affidavit is also what appears to be (part of) a copy of the  
Statement of Claim by Monster Snacks against Sandra:  
a) There is a Court file number, but this Statement of Claimalso does not bear  
the Court Seal;  
b) The first page of the Statement of Claim document has FIVE paragraphs,  
including the “If you fail to defend this proceeding” statement;  
c) There are 13 paragraphs, the text is right justified, and it is dated March 16, 2016;  
d) Sadly, only every other page of the documents included as Exhibit “A” were  
scanned, being pages 1, 3, and 5 of the Statement of Claim, despite Sandra advising  
in her affidavit that these were the complete documents she obtained from the Court  
File;  
e) The wording of paragraph 12 of this exhibit is split between page 5 and the  
missing page 4, but enough wording is present to determine that the wording is  
different from paragraph 12 of the purported Statement of Claim at paragraph 12  
of the “Statement of Claim” attached at Exhibit E to the Kailani Affidavit.  
[81] With respect to the alleged Motion Record for Substituted Service;  
1) At exhibit G to the Kailani Affidavit is what purports to be the Motion Record in writing  
for Substituted Service, when it clearly is not:  
This Motion Record states that the Statement of Claim is documentary evidence  
that will be used on the motion in writing, but the Statement of Claim is not included  
in the Motion Record at Exhibit G to the Kailani Affidavit.  
- 24 -  
2) At Exhibit A to the Sandra Affidavit is also what appears to be a copy of the Motion  
Record for Substituted service:  
Other than pages 1, 3 and 5 all other pages of this Motion Record are missing,  
because it appears to have been a two sided document where it was only scanned  
or copied on one side.  
[82] I cannot determine whether having Kailani identify the document at Exhibit E to the  
Kailani Affidavit as the Statement of Claimwhen it cannot be, and the omission of that same  
document in the Motion Record for the Substituted Service Order, is intentional, or just an  
astonishing oversight, given how crucial this issue is to the opposition of RBC to the setting aside  
of the Default Judgment.  
[83] I also note that the Kailani Affidavit attaches the Default Judgment as exhibit I, but not  
the Requisition, which is only found in the Sandra Affidavit at Exhibit A.  
[84] Perhaps:  
1) Maltz did not provide RBC with the complete Statement of Claim document, and the  
complete Motion Record filed to obtain the Substituted Service Order, or perhaps  
2) RBC provided the only Statement of Claim they got from Maltz and did not include the  
complete Motion Record as exhibits to the Kailani Affidavit through sheer inadvertence,  
but we will never know for the purposes of this Motion, because Maltz was never called as a  
witness on this Motion by counsel for Sandra.  
Quantum of Default Judgment  
[85] In addition, it appears that there may be a serious error with the quantum of Default  
Judgment itself, also arising out of which document is the actual issued Statement of Claim.  
[86] Because:  
1) the entire Statement of Claim is not present in any of the 4000 pages or so of materials  
before the Court, and  
2) in the Kailani Affidavit, Kailani never actually states how much Monster Snacks actually  
sued Sandra for,  
it appears that the evidence before me as to how much was claimed by Monster Snacks against  
Sandra in the Statement of Claim is the $214,000 amount in the document that Kailani identifies  
as the Statement of Claimat Exhibit E to the Kailani Affidavit, which as noted above, may not  
be the ACTUAL Statement of Claim issued by the Court in this Action.  
- 25 -  
[87] In the Sandra Affidavit she states the following, presumably referring to the copy of the  
Statement of Claim at Exhibit A to the Sandra Affidavit (although the actual term “Statement of  
Claimin not defined in the Sandra Affidavit) which is not complete and does not have copied  
the page that contains the Prayer for Relief about how much was claimed:  
48. In the Statement of Claim, reference is made to a claim for payment on a purchase and  
sale agreement in the sum of $290,000, together with pre- and post-judgment interest on  
this amount, and costs.”  
[88] Counsel for RBC asked the following question in the Sandra Examination regarding  
which pages of the Statement of Claim she received as a result of substituted service and it  
appears from the page references listed in the Sandra July 12 Transcript that he screen shared  
Exhibit E to the Kailani Affidavit, which may not ACTUALLY be the Statement of Claim issued  
by the Court, and which is also never actually identified as an exhibit to the Sandra July 12  
Transcript:  
231. Q. All right. Do you see this document, ma'am?  
A. I do.  
232. Q. Monster Snacks Inc. Do you see that as the plaintiff?  
A. Yes.  
233. And do you see your name there as the defendants, correct?  
A. Yes.  
234. Q. Okay. We go a bit further down. We go to page 51 of the PDF, page 48 of the  
Motion Record. Do you see this? Claim -- the plaintiff claims judgment in the amount of  
214, 000 and so on?  
A. Yes.  
251. Q. You got the next page that said you were being sued for $214,000, correct?  
A. Yes.”  
[89] It appears that “page 51 of the PDF, page 48 of the Motion Recordthat Bowden is  
referring to is the document at Exhibit E to Kailani Affidavit at those pages in the Responding  
Motion Record of RBC, which, as noted above, is likely NOT the actual Statement of Claim  
issued by the Court in this Action.  
[90] It does not appear that the version of the Statement of Claim in the Sandra Affidavit was  
ever put to her. There does not appear to be any indication that counsel for either party noticed  
- 26 -  
the discrepancy regarding the competing versions of the Statement of Claim, neither of which  
may be the issued Statement of Claim.  
[91] So counsel for the RBC appears above to be cross-examining Sandra on the WRONG  
DOCUMENT. However both counsel for RBC and Sandra agree in Sandra’s sworn testimony  
that the amount that Monster Snacks was suing Sandra for was $214,000, which is the only actual  
evidence before me as to the amount claimed by Monster Snacks against Sandra.  
[92] It also appears that Sandra identified in that cross-examination, under oath, the document  
at Exhibit E to the Kailani affidavit (that cannot be the actual Statement of Claim) as the  
document that was served on her, which has serious implications on the issues on this motion,  
and in particular, WAS THE ACTUAL ISSUED STATEMENT OF CLAIM EVER SERVED  
ON SANDRA?  
[93] Kailani in his cross-examination appears to not deny in this exchange that the amount  
claimed in the Statement of Claim is $214,000:  
418. Q. Okay. All right. So I've been having a little bit of difficulty with the numbers in  
general, when I was looking at this. Perhaps you could help me out. The Offer to Purchase,  
which we looked at, was for 290,000 and you previously confirmed that you paid 290,000.  
The affidavit, which you've now said might be an error, says 350,000. The Statement of  
Claim, which I can direct your attention to, if you require it, but I'm sure Mr. Bowden  
acknowledges and accepts that the Statement of Claim is not contentious, in terms of the  
fact that there are things written in the Statement of Claim, and I'm just referring to that,  
the Statement of Claim lists a principal amount for $214,000. Right? And I understand that  
the judgment that was obtained was for more than $300, 000. So I'm trying to understand  
what the actual amount here was. Can you please assist myself and the court in  
understanding how much was actually paid and what was transferred?  
A. From what I recall, the amount that was paid was the amount on the Offer to Purchase.  
419. Q. The 290.  
A. Yes.  
420. Q. Okay. So that means that the affidavit saying 350, the Statement of Claim for a  
principal amount of 214, the judgment for 301, none of those numbers are the number that  
you actually paid, which was 290, is that right?  
A. I can't speak of the other numbers, but 290,000 was the price that the transaction closed  
at.”  
[94] The Requisition for Noting in Default and Default Judgment is at Exhibit A to the Sandra  
Affidavit. It does not appear as an Exhibit to the Kailani Affidavit.  
- 27 -  
[95] In that requisition Maltz attests that the “Principal Sum Owing” is $290,000 not the  
$214,000 that appears in the document identified as the Statement of Claimat Exhibit E to the  
Kailani Affidavit, and agreed to by Sandra in the exchange above in the Sandra Transcript, and  
seemingly also agreed to by Kailani.  
[96] If that $290,000 amount submitted by Maltz in the Requisition for Default Judgment was  
erroneous, then the Registrar SHOULD NOT have signed the Default Judgment, due to that  
obvious error in the Requisition submitted in writing by Maltz, if the Statement of Claim also  
submitted along with the Requisition was indeed for a Judgment in the principal amount of  
$214,000, as appears to be agreed to in sworn testimony by Sandra and Kailani, and in Exhibit E  
to the Kailani Affidavit.  
[97] However that simple issue of “How much did the Plaintiff Claim” cannot be determined  
because the parties have failed to enter into evidence a complete copy of the actual Statement of  
Claim as issued by the Court, anywhere in the 4000 or so pages of documents they have filed on  
this Motion.  
Sandra’s Sworn Bulk Sales Act Affidavit  
[98] It is notable from the Exhibit B to the Sandra October 4 Examination that as part of this  
transaction Sandra allegedly swore an Affidavit under the (then in force) Bulk Sales Act RSO  
1990, c B.14 on April 13, 2015 (the “Bulk Sales Act Affidavit”) that stated:  
SELLER'S AFFIDAVIT  
BULK SALES ACT  
STATEMENT AS TO SELLER'S CREDITORS  
Statement showing names and addresses of all unsecured trade creditors and secured trade  
creditors of SANDRA DAVID of the City of Toronto in the Province of Ontario, c.o.b. as  
SUDDENLY SODA REFRESHMENTS and the amount of the indebtedness or liability  
due, owing, payable or accruing due, or to become due by them to each of them.  
UNSECURED TRADE CREDITORS  
- 28 -  
NAME OF CREDITOR ADDRESS  
NONE N/A  
SECURED TRADE CREDITORS  
AMOUNT  
NIL  
NAME OF CREDITOR ADDRESS AMOUNT  
NATURE OF SECURITY DUE  
NIL  
NONE N/A NIL NIL  
I, SANDRA DAVID, of the City of Toronto in the Province of Ontario, make oath and say:  
1. That the foregoing statement is a true and correct statement  
(a) of the names and addresses of all the unsecured trade creditors of the said  
SANDRA DAVID c.o.b. as SUDDENLY SODA REFRESHMENTS and of the  
amount of the indebtedness or liability due, owing, payable or accruing due or to  
become due and payable by the said SANDRA DAVID c.o.b. as SUDDENLY  
SODA REFRESHMENTS to each of the said unsecured trade creditors; and  
(b) of the names and addresses of all the secured trade creditors of the said  
SANDRA DAVID c.o.b. as SUDDENLY SODA REFRESHMENTS and of the  
amount of the indebtedness or liability due, owing, payable or accruing due or to  
become due and payable by the said SANDRA DAVID c.o.b. as SUDDENLY  
SODA REFRESHMENTS to each of the said secured trade creditors, the nature of  
their security and whether they are or in the event of sale will become due and  
payable on the date fixed for the completion of the sale.  
[99] The Jurat on the Bulk Sales Act Affidavit does not have a name of the Commissioner,  
only the signature. It appears from that exhibit that the Bulk Sales Act Affidavit was filed with  
the Court in Toronto by Monster Snackslawyer Ranjeet Walia on April 16, 2015.  
[100]  
I note that neither Sandra nor Kailani attached the Bulk Sales Act Affidavit to any  
of their Affidavits, and that it does not appear that Kailani or Sandra provided the Bulk Sales Act  
Affidavit to Thibodeau, as it is not specifically mentioned in the LSO Report.  
[101]  
As I noted at the hearing, as it appears neither Kailani not Sandra appear to have  
provided a copy of the Bulk Sales Act Affidavit to Thibodeau, that may raise other issues  
regarding her level of cooperation with the LSO investigation.  
- 29 -  
[102]  
I also raised with the parties the implications of the Bulk Sales Act Affidavit being  
false or inaccurate, namely that, had Maltz moved under the Bulk Sales Act in 2015 to declare  
the Suddenly Soda transaction void, due to the alleged non-compliance of Sandra, prior to the  
repeal of the Bulk Sales Act on March 22, 2017, the transaction could have been rendered invalid,  
and an order returning the Sales Proceeds to Monster Snacks could have been granted. But Maltz  
did not take that route.  
[103]  
The invalidity of the transaction for this reason would also have had the effect of  
invalidating any security granted by Monster Snacks to RBC, as after an order declaring the  
transaction invalid, Monster Snacks would have never had any rights in the collateral it allegedly  
purchased from Sandra, thus preventing the attachment of the RBC security to the Monster  
Snacks collateral.  
[104]  
This was also not apparently considered by the parties in three years of litigation.  
Chronology  
[105]  
Given the number of dates of events relevant to this Motion over a 17 year period,  
a chronology chart (the “Chronology”) is helpful for the analysis that follows:  
Date Event  
June 23, 2005 Agreement of Purchase and Sale signed by Lynne Pearlman and Erica  
Goodman and by “Antony David in Trust for a Company to be incorporated”  
July 4, 2005  
Bill of Sale for purchase of Suddenly Soda Refreshments assets from Lynne  
Pearlman and Erica Goodman signed by David  
July 13, 2005  
Non-Competition Agreement and Joint HST Election signed by Lynne  
Pearlman and Erica Goodman and by Tony David  
January 25,  
2015  
Offer to Purchase by Monster Snacks signed back by Sandra on behalf of  
Suddenly Soda Refreshments  
March 23,  
2015  
Kailani signs limited guarantee of Monster Snacks indebtedness to RBC in  
the amount of $56,737  
March 23,  
2015  
Monster Snacks signs a loan agreement with RBC, secured by a Chattel  
Mortgage purporting to grant a security interest in the assets listed at  
Schedule A to the RBC Statement of Claim to secure the amount of $226,950  
advanced by RBC with the full balance of the loan payable on March 23,  
2017  
April 13, 2015 Monster Snacks Inc. transaction closes regarding sale of the Suddenly Soda  
assets  
September 8,  
2015  
Facebook message from Kailani to Sandra stating that “this is the last day I  
have to make a decision about the business loan for the vending machines I  
bought from you”  
September 15, Maltz demand letter to Sandra alleging civil and criminal fraud and breach of  
2015 Rules of Professional Conduct  
- 30 -  
September 22, Sandra writes to Maltz, without prejudice advising she would be responding  
2015  
October 7,  
2015  
to the Maltz September 15, 2015 demand letter  
Sandra writes to Maltz, without prejudice, denying allegations in Maltz  
September 15, 2015 demand letter  
October 15,  
2015  
Kailani files complaint with Law Society of Ontario against Sandra  
apparently alleging fraud  
March 2016  
Sandra testifies that was involved in a motor vehicle accident  
March 9, 2016 Kailani testifies Monster Snacks issues statement of claim in action against  
Sandra on this date  
March 10,  
2016  
David swears David Affidavit  
March 11,  
2016  
March 12,  
2016  
Sandra Tweet regarding defective Bosch dishwasher  
Sandra Files response to Law Society Complaint  
March 16,  
2016  
Actual date of issuance of Statement of Claim in MAG Case History, with  
request for Judgment in the amount of $214,000 in the version of the  
Statement of Claim at Exhibit E to the Kailani Affidavit  
March 21,  
2016  
Diaz attends at virtual office for Sandra and attempts personal service  
April 11, 2016 Sandra testifies that she received phone call from process server, takes his  
number and arranges to call him the following week to arrange for service  
April 16, 2016 Sandra suffers a heart attack and is admitted to the Cardiac Intensive Care  
Unit at Sunnybrook Hospital  
April 18, 2016 Maltz, counsel for the Plaintiff, sends correspondence accusing Sandra of  
evading service, threatens Law Society complaint  
April 21, 2016 Kailani files reply comments with Law Society with respect to his complaint  
against Sandra  
April 27, 2016 Anthony Diaz swears Affidavit of Attempted Service of Claim on Sandra  
May 4, 2016  
Sandra faxes a responding letter stating that she received Maltz’s April 18,  
2016 letter, advises him that she is not evading service but has had a car  
accident and a concussions and had recently released from hospital after  
suffering a major heart attack and will contact him to arrange service when  
she is well enough to do so.  
May 10, 2016 Maltz sends correspondence questioning Sandra’s honesty and renews his  
request that she make herself available for service.  
May 17, 2016 Sandra Tweet regarding John Tory Raptors tweet  
May 19, 2016 Sandra Tweet regarding her Rogers TV Toronto interview  
May 25, 2016 Carla Reid swears Affidavit for Substituted Service Order, enclosing May 4  
Sandra and May 10 Maltz letters  
May 26, 2016 Maltz files substituted service Motion as ex parte Motion in Writing  
- 31 -  
April 12, 2016 No evidence that further attempts at service were made by Maltz  
June 13,  
2016  
June 9, 2016  
Sandra Tweets regarding work life balance and branding  
June 13, 2016 Master Graham issues Order for Substituted Service  
June 14, 2016 Sandra files final response to Law Society Complaint  
June 23, 2016 Sandra Tweet regarding artificial assistant technology  
July 7, 2016  
July 18, 2016  
July 25, 2016  
Substituted Service Order entered by the Court Office  
Sandra interviewed by LSO Complaints Resolution Counsel, Thibodeau  
LSO Complaints Resolution Counsel, Thibodeau issues letter on completion  
of review of Kailani complaint- finds insufficient evidence for Kailani  
complaint but does caution Sandra for signing Bill of Sale  
Sandra testifies that she received a partial Statement of Claim (first three  
pages and the back page), and a copy of Master Graham’s June 13, 2016  
Order.  
End of July  
2016  
August 3,  
2016  
Sandra testifies that she writes to Maltz, advising him that service of the  
Plaintiff’s Statement of Claim was incomplete and therefore deficient, and  
requesting that he properly and completely serve the Claim so that she may  
defend and suggesting he initiate a claim against Mr. David, the true owner  
of the business. Sandra testifies no response was received.  
Sandra Tweet regarding Cineplex contest  
August 7,  
2016  
August 10,  
2016  
Sandra Tweet regarding Just Eat contest  
August 17,  
2016  
Sandra Tweet regarding Ford Fusion contest  
September 2,  
2016  
Sandra sends a second letter to Maltz, by fax, reiterating her position that  
service was incomplete and deficient, and renewing her request that he  
provide service of the full Statement of Claim, along with other missing  
documents. Sandra testifies no response was received.  
September 5.  
2016  
Sandra Tweet regarding internet research and legal advice  
September 6,  
2016  
Sandra Tweets regarding Best Buy laptop warranty issues  
September 20, Maltz signs Requisition in the amount of $290,000  
2016  
September 22, Maltz files Requisition  
2016  
January 13,  
2017  
Default Judgment is issued by Registrar. Sandra testifies it was never served  
on her  
March 23,  
2017  
Full RBC loan amount due and payable by Monster Snacks  
April 19, 2017 Maltz files requisition for Writs of Seizure and Sale  
- 32 -  
November 14, RBC makes demand on Kailani and Monster Snacks  
2017  
January 3,  
2018  
RBC commences action against Monster Snacks and Kailani, inter alia, for  
fraud in the amount of $243,417.10 and to recover its loan and against  
Kailani under the limited guarantee  
Unknown date Default Judgment allegedly assigned to RBC  
May 13, 2019 Bowden contacts Sandra advising that RBC had been assigned the Monster  
Snacks judgment and to schedule Judgement debtor examination  
May 13, 2019 Sandra responds to Bowden and asks for Bowden’s available dates for a  
motion to set aside the Default Judgment to canvass with the Court, starting  
in June and requests copies of court documents, that Bowden does not agree  
to provide  
May 28, 2019 Sandra emails Bowden in response to email of May 27, 2019 and again asks  
for his availability, as she states she had been in trial  
May 29, 2019 Sandra again emails Bowden in response to Bowden’s email of May 27,  
2019 and again asks for his availability for the motion to set aside the Default  
Judgment  
May 30, 2019 Sandra testifies she attends at Court House and obtains the complete  
Statement of Claim, and Substituted Service Motion materials  
May 31, 2019 Sandra again emails Bowden and again asks for his availability for the  
motion to set aside the Default Judgment  
June 3, 2019  
October 29,  
2019  
Bowden provides September 10, 17, 24 and 27 as available dates  
Sandra appears at a Case Conference before RSJ Firestone to schedule a  
Motion to set aside the Default Judgment adjourned to Masters Court for  
scheduling  
November 22, Initial Motion date set, adjourned to November 27, 2019 and Master Short  
2019 seizes himself of the Motion  
November 27, Master Short sets a Long Motion date for March 10, 2020 and establishes a  
2019  
case timetable:  
Moving Party to deliver an Affidavit by January 3, 2020  
RBC to deliver responding materials on January 31  
Karrass approached by Sandra regarding bringing the Motion to Set Aside  
Default Judgment  
December,  
2019  
January 10,  
2020  
Karrass formally retained by Sandra  
January 22,  
2020  
Karrass advises that as a result of his retention he will need time to get up to  
speed and that the Timetable will need to be adjusted  
January 5,  
2020  
After discussion, Karrass advises Motions Court office that the March 10,  
2020 was being adjourned  
February 12,  
2020  
Due to death in Karrass family Case Conference with Master Short adjourned  
March 10,  
2020  
Motion adjourned by Master Short to be heard July 8, 2020  
- 33 -  
March 16,  
2020  
COVID Emergency Practice Directions implemented  
March 2020 to Sandra testifies that Karrass closed his office due to pre-existing risk issues  
August 2020  
July 2, 2020  
September,  
2020  
October 9,  
2020  
with COVID  
COVID conference call adjourns the motion sine die  
Sugar testimony that Karrass and Bowden discuss schedule for exchange of  
materials and cross-examinations after reopening of Karrass’ practice  
Karrass serves Motion Record to set aside Default Judgment  
November 5,  
2020  
Sugar testimony that initial Cross-Examination date adjourned at request of  
RBC  
November 5,  
2020  
Responding Motion Record of RBC and Kailani Affidavit sworn  
December 2,  
2020  
Motion scheduled before Master Short, was deemed withdrawn due to failure  
to confirm  
December 9,  
2021  
Cross-Examinations adjourned to due to Karrass illness  
April 9, 2021  
Cross-Examinations adjourned to due to Bowden scheduling issues  
April 27, 2021 Cross-Examinations adjourned as Kailani unavailable  
May 19, 2021 Cross-examinations adjourned due to disagreement amongst counsel on  
whether examinations proceeding  
May 19, 2021 Master Short returns the Motion Materials he had in his chambers on this  
Motion on May 19, 2021 and then retires  
July 8, 2021  
July 12, 2021  
August 11,  
2021  
Kailani cross-examined  
Sandra first Cross Examination  
Associate Justice Abrams vacates August 26, 2021 Motion date at a case  
conference and books September 21st for the RBC Motion to Strike  
affidavits filed by Sandra  
September 21, RBC Motion to Strike before Associate Justice Josefo withdrawn by parties  
2021  
October 4,  
2021  
Second Sandra Cross-Examination  
November 12, First hearing date of motion, 3 hours heard and adjourned for further  
2021 materials and further argument to December 12, 2021  
December 12, Second day of Hearing of Motion completed, further written submissions on  
2021  
Strathmillan v Teti to be filed by December 20, 2021  
III) Law and Analysis  
- 34 -  
[106]  
Rule 19.01 sets out rules regarding Noting a Defendant in Default. The relevant  
parts of the Rule to this Motion are:  
Where no Defence Delivered  
19.01 (1) Where a defendant fails to deliver a statement of defence within the prescribed  
time, the plaintiff may, on filing proof of service of the statement of claim, or of deemed  
service under subrule 16.01  
(2), require the registrar to note the defendant in default.  
[107]  
[108]  
Rule 19.03 sets out rules regarding Setting aside a Noting Default:  
Setting Aside the Noting of Default  
19.03 (1) The noting of default may be set aside by the court on such terms as are just.  
Rule 19.04 sets out rules for a Plaintiff, having properly noted a Defendant in  
default, in obtaining Default judgment:  
By Signing Default Judgment  
Where Available  
19.04 (1) Where a defendant has been noted in default, the plaintiff may require the  
registrar to sign judgment against the defendant in respect of a claim for,  
(a) a debt or liquidated demand in money, including interest if claimed in the  
statement of claim (Form 19A);  
(b) the recovery of possession of land (Form 19B);  
(c) the recovery of possession of personal property (Form 19C); or  
(d) foreclosure, sale or redemption of a mortgage (Forms 64B to 64D, 64G to 64K  
and 64M).  
Requisition for Default Judgment  
(2) Before the signing of default judgment, the plaintiff shall file with the registrar a  
requisition for default judgment (Form 19D),  
(a) stating that the claim comes within the class of cases for which default judgment  
may properly be signed;  
- 35 -  
(b) stating whether there has been any partial payment of the claim and setting out  
the date and amount of any partial payment;  
(c) where the plaintiff has claimed prejudgment interest in the statement of claim,  
setting out how the interest is calculated;  
(d) where the plaintiff has claimed post judgment interest in the statement of claim  
at a rate other than as provided in section 129 of the Courts of Justice Act, setting  
out the rate; and  
(e) stating whether the plaintiff wishes costs to be fixed by the registrar or  
assessed.  
Registrar may Decline to Sign Default Judgment  
(3) The registrar may decline to sign default judgment if uncertain,  
(a) whether the claim comes within the class of cases for which default judgment  
may properly be signed; or  
(b) of the amount or rate that is properly recoverable for prejudgment or  
postjudgment interest.  
(3.1) If the registrar declines to sign default judgment, the plaintiff may,  
(a) move before a judge for judgment under rule 19.05; or  
(b) in the case of a claim referred to in subrule (1), make a motion to the court for  
default judgment.  
Where Claim Partially Satisfied  
(4) Where the claim has been partially satisfied, the default judgment shall be  
confined to the remainder of the claim.  
Postjudgment Interest  
(5) Where the registrar signs default judgment and the plaintiff has claimed  
postjudgment interest in the statement of claim at a rate other than as provided  
in section 129 of the Courts of Justice Act, the default judgment shall provide for  
postjudgment interest at the rate claimed.  
Costs  
- 36 -  
(6) On signing a default judgment, the registrar shall fix the costs under Tariff A to  
which the plaintiff is entitled against the defendant in default and shall include the  
costs in the judgment unless,  
(a) the judgment directs a reference; or  
(b) the plaintiff states in the requisition that he or she wishes to have the  
costs assessed,  
in which case the judgment shall include costs to be determined on the reference or  
on assessment.  
[109]  
R.19.08 sets out the test for the setting aside of a Default Judgment:  
Setting Aside Default Judgment  
19.08 (1) A judgment against a defendant who has been noted in default that is  
signed by the registrar or granted by the court on motion under rule 19.04 may be  
set aside or varied by the court on such terms as are just.  
(2) A judgment against a defendant who has been noted in default that is obtained  
on a motion for judgment on the statement of claim under rule 19.05 or that is  
obtained after trial may be set aside or varied by a judge on such terms as are just.  
(3) On setting aside a judgment under subrule (1) or (2) the court or judge may also  
set aside the noting of default under rule 19.03.  
[110]  
The relevant portions of Rule 37.14 setting out the procedure for setting aside a  
Registrar Order state:  
37.14 (1) A party or other person who,  
(a) is affected by an order obtained on motion without notice;  
(b) fails to appear on a motion through accident, mistake or insufficient  
notice; or  
(c) is affected by an order of a registrar,  
may move to set aside or vary the order, by a notice of motion that is served  
forthwith after the order comes to the person’s attention and names the first  
available hearing date that is at least three days after service of the notice of  
motion.  
(2) On a motion under subrule (1), the court may set aside or vary the order on  
such terms as are just.  
- 37 -  
Order Made by Registrar  
(3) A motion under subrule (1) or any other rule to set aside, vary or amend an  
order of a registrar may be made to a judge or associate judge, at a place  
determined in accordance with rule 37.03 (where motions to be brought).  
[111]  
I am also guided by R.1.04 which states:  
Interpretation  
General Principle  
1.04 (1) These rules shall be liberally construed to secure the just, most expeditious  
and least expensive determination of every civil proceeding on its merits.  
Proportionality  
(1.1) In applying these rules, the court shall make orders and give directions that  
are proportionate to the importance and complexity of the issues, and to the amount  
involved, in the proceeding.  
Matters Not Provided For  
(2) Where matters are not provided for in these rules, the practice shall be  
determined by analogy to them.  
(3) Revoked  
“Party and Party” Costs  
(4) If a statute, regulation or other document refers to party and party costs, these  
rules apply as if the reference were to partial indemnity costs.  
“Solicitor and Client” Costs  
(5) If a statute, regulation or other document refers to solicitor and client costs,  
these rules apply as if the reference were to substantial indemnity costs.  
[112]  
Rule 2.01, 2.02 and 2.03 dealing with irregularities with pleadings reads:  
Effect of Non-Compliance  
2.01 (1) A failure to comply with these rules is an irregularity and does not render a  
proceeding or a step, document or order in a proceeding a nullity, and the court,  
- 38 -  
(a) may grant all necessary amendments or other relief, on such terms as are just,  
to secure the just determination of the real matters in dispute; or  
(b) only where and as necessary in the interest of justice, may set aside the  
proceeding or a step, document or order in the proceeding in whole or in part.  
(2) The court shall not set aside an originating process on the ground that the proceeding  
should have been commenced by an originating process other than the one employed  
Attacking Irregularity  
2.02 A motion to attack a proceeding or a step, document or order in a proceeding for  
irregularity shall not be made, except with leave of the court,  
(a) after the expiry of a reasonable time after the moving party knows or ought  
reasonably to have known of the irregularity; or  
(b) if the moving party has taken any further step in the proceeding after obtaining  
knowledge of the irregularity.  
Court May Dispense with Compliance  
2.03 The court may, only where and as necessary in the interest of justice, dispense with  
compliance with any rule at any time.  
[113]  
I am also guided by the Court of Appeal in Finlay v Passen 2010 ONCA 204  
(“Finlay”), (at Para. 14) issued in the context of a Motion to set aside a Registrar’s administrative  
order dismissing an action for delay under R.48.14:  
Rule 1.04(1) and rule 2.01 are intended to do away with overly "technical" arguments  
about the effect of the Rules and orders made under them. Instead, these provisions aim to  
ensure that the Rules and procedural orders are construed in a way that advances the  
interests of justice and ordinarily permits the parties to get to the real merits of their  
dispute.” (emphasis added)  
1) General Principles for setting aside Default Judgments  
Chitel v. Rothbart , 1987 CarswellOnt 458. [1987] O.J. No. 661, 20 C.P.C. (20) 46 1988 appeal  
allowed CarswellOnt 151, [1988] O.J. No. 1197, 29 C.P.C. (2d) (C.A.) (“Chitel v. Rothbart”)  
[114]  
In argument Counsel for RBC stated that he was relying on the three part testin  
Chitel v. Rothbart to support his opposition to the relief sought by the Moving Party.  
- 39 -  
[115]  
However in his fresh as amended Factum (the “RBC Factum”), the only actual  
reference to Chitel v. Rothbart is:  
The court took this fact into account when it applied the three-part Chitel v. Rothbart  
test.”  
[in dealing with the ruling in Luciano v. Spadafora which RBC was also citing, and which  
I will deal with separately below]  
Nowhere in the RBC Factum does counsel for RBC actually cite the three part testin Chitel v.  
Rothbart, although copies of the two Chitel v. Rothbart cases are attached to the RBC Factum.  
[116]  
In Chitel v. Rothbart, Houlden, J. writing on behalf of the Court of Appeal stated:  
In deciding whether or not to set aside the default judgments, the learned Weekly Court  
Judge set out the correct rules to be applied in such an application. Unfortunately, however,  
in exercising his discretion, he applied the rules as if they were rigid rules. This was wrong.  
Having found that the appellant had a defence on the merits and that the motion to set aside  
the judgment was brought in a reasonable time and that the judgments amounted to almost  
$900,000, we are all of the opinion that notwithstanding the fact that the appellant's  
explanation for the delay was unsatisfactory, the learned Judge should have set aside the  
judgments and permitted the appellant to defend the counterclaim. However, as the  
explanation for the delay was unsatisfactory, we believe that the appellant should be put  
on strict terms.(emphasis added)  
[117]  
In Weekly Court, Anderson J. set out these “correct rulesapproved by Houlden,  
J. at the Court of Appeal (at Para. 6):  
6  
The elements which must be shown by a moving party on a motion such as  
this are not really in dispute between the parties. They are enunciated in the moving  
party's factum and in slightly different terms in the respondent's factum. Taking  
them for the moment as they are in the respondent's factum, which I think puts them  
in slightly more accurate form, they are:  
... Mrs. Chitel must show:  
(a) that the default was unintentional and provide a valid reason for default;  
(b) that the Motion to set aside the Judgments was served forthwith after the  
Judgment came to her attention; and,  
(c) that a valid defence on the merits exists.  
- 40 -  
These were the classic tests under the old R. 526 and would appear to be still applicable  
according to the jurisprudence which has appeared since the new rules came into effect.  
Reference may be made, for example, to C.I.B.C. v. 486163 Ont. Ltd, a report of which is  
in 2 C.P.C. (2d) 101 (Ont. Master). That is a decision of Master Peppiatt, and it is sufficient  
to read one paragraph from the headnote at p. 102:  
The exercise of the Court's discretion under r. 19.01(1) is to be guided by the same  
principles as applied to motions under former R. 526. The defendants were required  
to show that the motion to set aside the judgment had been made as soon as possible,  
to explain the circumstances under which the default arose, and to disclose a  
defence to the action on the merits.”  
With respect, I agree with that conclusion of the learned Master. The moving party must  
satisfy all three of these tests in order to succeed. There is now an added consideration by  
reason of the provision that affidavits may be used upon the motion for judgment. Since  
that is a motion made in the absence of the opposite party, there is the customary obligation  
on the moving party to make full disclosure of material facts.”  
[118]  
Houlden, J.A. changed the last portion of this test by Anderson, J. namely that the  
moving party has to satisfy all three of the tests in order to succeed, adopting a more flexible  
contextual test in granting the Order setting aside the default judgment as, notwithstanding the  
fact that the appellant's explanation for the delay was unsatisfactory, the Anderson, J. should have  
set aside the judgments and permitted the appellant to defend the counterclaim.  
[119]  
For factual context in Chitel v. Rothbart from Para. 3 of Anderson, J.’s reasons:  
The action was instituted in January 1982 and gave rise to a counterclaim.  
Chitel applied for and obtained ex parte Mareva injunction.  
The motion to continue that injunction was referred to the Court of Appeal and was  
dismissed.  
By order in the spring of 1984, Chitel's claim was dismissed by Master Sandler for failure  
to make production as required by consent order.  
In June 1985 an appeal was taken to the Divisional Court from Master Sandler's order and  
that appeal was dismissed.  
In September 1985, leave to appeal to the Court of Appeal from the Divisional Court  
was refused.  
In June 1986 a notice to examine Chitel for discovery was served, the examination to take  
place in September.  
- 41 -  
At that time her solicitors were Messrs. McCarthy and McCarthy, and in August 1986  
an order was made removing them from the record.  
On October 2, 1986, Master Clark struck out the reply and defence to counterclaim of  
Chitel for failure to attend on discovery.  
On October 28 Chitel was noted in default.  
On November 7 default judgment was signed by the Registrar for a portion of the claim,  
and on December 9 a judgment was made on motion by Mr. Justice O'Driscoll.  
Chitel learned of the judgment sometime in December. The record does not clearly  
disclose the date upon which that information came to her.  
In January 1987 the solicitors now representing Chitel were retained and instructed.  
Notice of their retainer was given by telephone on January 15 to the solicitors for the  
defendants, and on January 27 that telephone conversation was followed up by a letter.  
On March 27, 1987, Chitel's affidavit in these proceedings was sworn and in April the  
motion was launched.  
[120]  
Accordingly in Chitel v. Rothbart, the Defence was struck out on October 2, 1986,  
the Noting in Default was October 28, 1986 the Default Judgement was obtained for the totality  
of the relief by motion on December 9 1986 and Chitel learned of the judgement at some point  
in December, 1986, a period of 3 months.  
[121]  
Counsel for the Judgement Creditor learned of the intention to set aside in January  
1987, and the Motion brought in April a period of approximately 4 months. The motion was  
actually heard by Anderson J. on June 17, 18 and 19, 1987. The total period from Judgment to  
hearing of approximately 7 1/2 months.  
[122]  
Both Anderson J. and Houlden J.A. found in Chitel v. Rothbart concluded that the  
Motion was brought in a reasonable time, being approximately 4 months from the date that Chitel  
learned of the default Judgment.  
[123]  
Where they differed is whether the explanation for the delay, which both levels of  
Court determined to be inadequate, which on a contextual approach rather than a rigid approach  
Houlden, J. found could be remedied by putting the defendant on a strict timetable of attending  
examinations for discovery, which non-attendance was the reason the defence was struck in this  
case. In addition, Houlden, J.A. ordered Chitel to pay within 2 months $27,000 in costs thrown  
away by the Respondent.  
Morgan v. Toronto (City) Police Services Board, [2003] O.J. No. 1106 (QL) (“Morgan”) and  
- 42 -  
Mountain View Farms Ltd. v. McQueen (2014) 119 O.R. (3d) 561, 2014 ONCA 194 (“Mountain  
View Farms”)  
[124]  
The Moving Party Sandra proceeds from a different perspective in the RBC’s  
Factum, namely that “It is respectfully submitted that the issue to be determined on this motion  
is whether it is just and appropriate for this Honourable Court to set aside the Noting in Default.”  
[125]  
However on the general principal of The factors that are to be considered in  
deciding whether to exercise the discretion to aside [sic] a noting in default and/or default  
judgement” the Defendant cites Morgan and Mountain View Farms for setting the general tests.  
[126]  
In Morgan in 2003 the Court of Appeal allowed an appeal and set aside a default  
judgment after a damages assessment that followed a noting in default, on the basis of the  
following test:  
“[19] However, I disagree with the motion judge’s failure to exercise his discretion under  
rule 19.08(2) which enables the court to set aside a judgment against a defendant who has  
been noted in default. The motion judge referred to the judgment of Nordheimer, J. in  
Karas v. Geigos, supra. The Karas case refers to the factors the court should consider in  
exercising its discretion to set aside a default judgment:  
(a) the motion must be brought without undue delay;  
(b) the circumstances which led to the default must be explained; and  
(c) the defendant must present a triable defence on the merits.”  
[127]  
This test is essentially identical to the Chitel v. Rothbart test. In Morgan the  
Statement of Claim was served in March 1999, the Defendant did not defend, and was noted in  
default in March, 1999. Counsel for the Plaintiff took no steps for 14 months, then proceeded to  
a damages assessment in September 2000, with no service on the Defendant as a result of the  
Noting in Default. Garnishment proceedings were then taken 4 months later in January 2001,  
when the Defendant learned of the judgement against him and retained counsel, who first  
attempted to extend time to appeal the judgement in June of 2001, was instead sent to Superior  
Court to set aside the default judgment, which motion was heard in November 2001. In Morgan  
the Motion was brought 6 months after discovery of the Default Judgment and heard 11 months  
after discovery.  
[128]  
The Court of Appeal in Morgan in setting aside the default judgement stated:  
With all due deference to the motion judge, the record before the Court indicates that once  
Mr. Rydygier learned of the default judgment, he took steps to retain counsel and deal with  
the matter. While it may be that if Mr. Rydygier and his counsel had first contacted counsel  
for the plaintiff, rather than attempting on their own to piece together what happened, the  
motion would have been brought on more promptly. However, I see nothing in the record  
- 43 -  
which would suggest that they did not move with reasonable dispatch. There is certainly  
nothing in the record which would suggest that there was any undue or deliberate delay on  
their part.  
I am also satisfied that the circumstances of the default are reasonably explained. Although  
Mr. Rydygier was not under a disability in the sense that leave was required to note him in  
default, his medical condition at the time provides sufficient evidence to permit the court  
to exercise its discretion in his favour under rule 19.08(2). I am satisfied that a review of  
the evidence of the psychiatrist together with the evidence of Mr. Rydygier discloses a  
person who, at the relevant time, was sufficiently distracted by his medical condition that  
he failed to take the appropriate steps to defend this action brought against him.” (Emphasis  
added)  
[129]  
In Mountain View Farms, Gillese, J.A. states (at Para. 47):  
[47] The court's ultimate task on a motion to set aside a default judgment is to determine  
whether the interests of justice favour granting the order. The approach to be taken to this  
determination has been considered numerous times by this court. The following draws  
heavily on the summary of the principles in those cases by Perell J. in Watkins v. Sosnowski,  
[2012] O.J. No. 2971, 2012 ONSC 3836 (S.C.J.), at paras. 19-20 and 23-24.  
[48] The court must consider the following three factors:  
(a) whether the motion was brought promptly after the defendant learned of the  
default judgment; [page568]  
(b) whether there is a plausible excuse or explanation for the defendant's default in  
complying with the Rules; and  
(c) whether the facts establish that the defendant has an arguable defence on the  
merits.  
[49] To this list, I would add the following two factors the court should have regard to, as  
set out in Peterbilt of Ontario Inc. v. 1565627 Ontario Ltd. (2007), 87 O.R. (3d) 479, [2007]  
O.J. No. 1685, 2007 ONCA 333, at para. 2:  
(d) "the potential prejudice to the moving party should the motion be dismissed,  
and the potential prejudice to the respondent should the motion be allowed"; and  
(e) "the effect of any order the motion judge may make on the overall integrity of  
the administration of justice."  
[50] These factors are not to be treated as rigid rules; the court must consider the particular  
circumstances of each case to decide whether it is just to relieve the defendant from the  
consequences of his or her default.  
- 44 -  
[51] For instance, the presence of an arguable defence on the merits may justify the court  
exercising its discretion to set aside the default judgment, even if the other factors are  
unsatisfied in whole or in part. In showing a defence on the merits, the defendant need not  
show that the defence will inevitably succeed. The defendant must show that his or her  
defence has an air of reality.(emphasis added)  
[130]  
Despite how the RBC Factum and the Defendant’s Factum were organized, at the  
hearing in practical terms, the Parties argued this Motion on these 5 factors from Mountain View  
Farms, and did not dispute that a contextual, rather than a rigid approach was required.  
[131]  
I do not discern a conflict jurisprudentially between the approach of Houlden, J.A.  
in Chitel v. Rothbart in 1988 and Armstrong J.A. in 2003 in Morgan and Gillese, J.A. in  
Mountain View Farms in 2014, and accordingly I will deal in these reasons with this 5 part test  
as being applicable.  
[132]  
For factual context in Mountain View Farms, from the headnote:  
The plaintiff provided crop services to the defendant, an elderly farmer, for a number of  
years. When the defendant failed to fully pay for the services, the plaintiff had him sign an  
invoice to acknowledge the outstanding amount. Pre-printed words on the bottom of the  
invoice stated that interest would be charged on overdue accounts at the rate of 24 per cent  
per year. The plaintiff later sued the defendant for the unpaid amount plus interest at an  
annual rate of 24 per cent. The plaintiff obtained default judgment. Six years later, the  
defendant moved to set aside the default judgment. The motion judge found that there had  
been inexplicable delay in bringing the motion and that the plaintiff would suffer prejudice  
from that delay. He found that the defendant had an arguable defence with respect to the  
interest rate. He was not satisfied that the defendant had even impliedly agreed to pay  
interest at the rate of 24 per cent per annum. He ordered that the default judgment be varied  
only in respect of the rate of interest, with an annual rate of 5 per cent being substituted for  
24 per cent. The plaintiff appealed.”  
[133]  
In Mountain View Farms the defendant was in his late 80s and had a grade three  
education. He was served with the Statement of Claim, but did nothing to defend.  
[134] Like this case (prior to RBC having been assigned the Default Judgment), the  
Plaintiff took no enforcement steps after obtaining the Default Judgement in August 2005 other  
than registering writs of seizure and sale in November 2005 and renewing them after 6 years in  
November 2011.  
[135]  
The property was transferred to the Respondent’s son in 2010, subject to the writs,  
so at that point the Defendant was aware of the writs. Finally, in April 2012 the Defendant  
brought a motion setting aside the Default Judgment obtained by the Plaintiff, almost 7 years  
earlier, admitting the principal owing, but challenging the interest charged.  
- 45 -  
[136]  
The Court of Appeal allowed the appeal in part on the basis that the Motions Court  
Judge should not have varied the rate of interest in his judgement setting aside the default  
judgement, but permitted the order that the 24 per cent interest provision in the default judgment  
be set aside, permitted the respondent to file a defence, and allow the matter to proceed on the  
rate of interest. The Court also Ordered costs in favour of the Plaintiff.  
[137]  
In permitting the setting aside of the Default Judgment, despite the passage of 6  
years and the determination of prejudice against the Plaintiff by the Motions Judge, Gillese, J. A.  
stated:  
[53] However, the motion judge was satisfied that the respondent had raised an arguable  
defence in respect of the interest rate that applied to the principal debt. There was evidence  
before him, including evidence led by the appellant, which called into question whether the  
respondent had agreed to pay interest at the rate of 24 per cent per annum.  
[54] Having found that there was an arguable defence, it was open to the motion judge to  
find that the interests of justice favoured setting aside the default judgment. It is not, as the  
appellant would have it, that the motion judge failed to give adequate weight to the  
unexplained delay and prejudice to the appellant. Rather, in the exercise of his discretion,  
after duly considering the factors, the motion judge concluded that the [page569]  
respondent's arguable defence on the matter of the applicable interest rate weighed most  
heavily and caused the interests of justice to favour setting aside.(emphasis added)  
[138]  
On the facts before the Motions Court Judge on the test of inexplicable delay,  
Gillese, J.A. states:  
[31] He found that there had been "inexplicable delay" in the respondent's bringing of the  
motion to set aside the default judgment. The respondent must have been aware of the writ  
(and, therefore, the default judgment) no later than June 2010, when he transferred his  
properties to his son. No reasonable explanation had been given for the delay between then  
and when he brought the motion in 2012.  
[32] The motion judge noted that while it had been argued that the respondent was growing  
more forgetful over time owing to his advanced age, no evidence of medical incapacity had  
been presented on the motion. He added that the respondent was still driving in 2010 and  
had managed to transfer his properties to his son that year without requiring a power of  
attorney.  
[33] The motion judge acknowledged that the appellant would suffer prejudice from the  
respondent's delay in seeking to set aside the default judgment. The prejudice consisted of  
the following: the process server who served the statement of claim on the respondent had  
died; many of the original invoices had been destroyed; the respondent's mental  
competence was now in issue; and at least three of the respondent's properties had been  
conveyed since the default judgment was obtained. But, in the motion judge's view, the  
prejudice could be addressed in costs.(emphasis added)  
- 46 -  
[139]  
Below I have changed the Order of the tests from Mountain View Farms, as I apply  
these tests to avoid having to deal with the same evidence twice, when it is common for two tests:  
a) Was the motion by Sandra brought promptly after the defendant learned of the default  
judgment?  
[140]  
There is no evidence before me that Sandra knew of the Default Judgement prior  
to May 13, 2019 when Bowden emailed her, 28 months almost to the day that the Default  
Judgment was issued.  
[141]  
Nothing in the Sandra Cross-examinations contradicted that, and if RBC had  
evidence of an earlier date that Sandra actually knew of the Default Judgement, it has not  
provided any evidence to support that assertion.  
[142]  
From the chronology of the evidence before me it appears that Sandra’s last  
communication with Maltz was on September 2, 2016. Maltz filed the Request for Noting in  
Default and Requisition for Default Judgment on September 22, 2016 without responding to that  
correspondence, the Judgment was actually issued on January 13, 2017 and Maltz filed a  
Requisition for Writs of Seizure and Sale on April 19, 2017, and apparently took NO further  
steps, of any kind, to enforce the Default Judgment.  
[143]  
I also note that as RBC has (other than the Statement of Claim) provided no details  
of the chronology of its litigation with Monster Snacks and Kailani, or its alleged settlement or  
its terms, there is an unexplained 754 day gap in the evidence between the date that the Writ was  
issued and May 13, 2019 when Bowden contacted Sandra, that cannot be attributed to Sandra.  
RBC or Kailani could have provided evidence of what occurred but chose not to.  
[144]  
The position of RBC on this issue by RBC in it’s factum is as follows:  
34. Ms. Alsaffawi asserts that she did not know that there was a judgment against her until  
a copy was emailed to her in May of 2019. Her motion was filed in October, 2020. Thus  
the Defendant is required to explain a delay of about 17 months in bringing her motion.  
Her explanation is:  
a) She was looking for documents  
b) She had significant health issue  
35. We submit that the first excuse is less than adequate to explain a delay of almost a year-  
and-a-half. As for the second excuse, the Defendant has declined to put forth medical  
evidence to support her claim that her health problems were sufficient to excuse her from  
defending or taking steps. But given that she knew that she had been sued and had in her  
hands an order for substituted service, these excuses are not strong.”  
- 47 -  
[145]  
From the evidence submitted by Sandra and RBC, and as set out in the chronology  
I was forced to prepare to sort out the “overturned spaghetti”, these submissions misstate the  
actual facts.  
[146]  
From the email correspondence (in particular Exhibit L to the Sandra Affidavit),  
and the Case History regarding hearings in this matter, it appears on this issue that the time  
periods were:  
a) Bowden emails Sandra on May 13, 2019 at 1:59 PM stating:  
I act for Royal Bank of Canada, the assignee of the attached judgment against you.  
I would like to arrange a judgment debtor examination of you. Please send me your  
available dates. If I do not hear from you by close of business tomorrow, I will  
choose a convenient date and serve you with a notice.”  
b) Sandra responds 28 minutes later:  
Kindly forward me a copy of the court file. I have no knowledge of this matter and  
confirm that this is the first correspondence I have received from you about this  
matter. In fact, I was completely unaware of the judgment until your email today.”  
c) Bowden responds 12 Minutes later:  
My apologies, but I don't have a copy of the court file. If you intend to dispute the  
judgment, let's schedule a date for the motion. I ask that you proceed expeditiously,  
because our plan is to enforce the judgment promptly if you do not move to set it  
aside.”  
d) Sandra responds 5 minutes later:  
Kindly provide me with your available dates for a motion in June. I will canvass  
the court for dates and advise you accordingly.”  
e) Bowden responds 2 minutes later:  
I don't think June will quite do. I'm pretty well booked up, and I doubt we can get  
a date for that month in any event. Perhaps July would work. I have the following  
dates in July:  
9, 11, 12, 16  
We'd also need to get materials from you pretty early on so that we can do your  
cross-examination and get the transcript filed in time for the motion.”  
- 48 -  
f) After some exchanges on the propriety of Bowden obtaining a credit report for Sandra,  
on May 16, 2019 Bowden writes:  
We have many judgments and it is not unusual that the defendant moves to set  
aside the default judgment. Nonetheless, we are entitled to take the usual  
enforcement steps (running bureaus, filing writs and so on) unless we have  
undertaken not to do so. In this case, I am in a position to start forced sale  
proceedings of properties you own as well as serving a notice of garnishment. I do  
not plan on taking these steps so long as I am satisfied you are moving promptly to  
set aside the default judgment. If I believe you are not moving promptly enough, I  
will let you know. However, I will take other steps to protect our client, such as  
filing writs (if I find properties in other counties, for instance).”  
g) On May 27 Bowden writes:  
It's been a while since we traded emails. As I mentioned earlier, we will hold off  
enforcing the judgment for now, but only if you moving diligently to set aside the  
default judgment. Thus far you have not even consulted me about a return date for  
you motion. I will hold off until the end of the month. If by then I don't see signs of  
progress I will start enforcing the judgment.  
h) On May 28, 2019 Sandra writes:  
I emailed you on May 13, 2019 asking you for your dates, and you never  
responded to my question. I am attaching the email here for your ease of reference.  
I have been in trial last week, continuing this week, and likely into next week for  
closing arguments. I am moving diligently on this matter, but I still need more than  
four dates in July from you in order to properly canvass the court for dates, and  
allow for time for examinations.  
Kindly give me the benefit of the doubt, given that I have responded in a timely  
fashion to all of your correspondence, have advised that I was unaware of this  
judgment and had asked you for a copy of the file.  
If I was seeking to avoid you or not deal with this matter, I would not have been so  
prompt in my correspondence, nor so forthcoming.  
Kindly provide your dates, and I will canvass the court for an available date for my  
motion. If I do not hear from you by May 31, 2019, I will select a convenient date  
and advise you of same.”  
i) On May 29, 2019 Sandra writes:  
- 49 -  
Kindly acknowledge receipt of my email to you yesterday, which I include below  
for your ease of reference. Kindly respond with your availability for a motion date  
in July, August and September, keeping in mind that you will need to set aside time  
to conduct cross-examinations with me prior to the motion date.”  
j) On May 30, 2019 Sandra attends at the Court House and testifies that she obtains the  
Statement of Claim and Substituted Service Motion materials, that Bowden did not provide  
her, despite her request.  
k) On May 31, Sandra writes (the “May 31st Email”):  
I note from your out of office message that you have been out of the office. Could  
you kindly provide me with your availability for a return date of this motion? I will  
wait until next week to hear from you. However, if I have not received possible  
dates from you for August and September (as you have already given me four dates  
in July) by June 7. 2019, I will do my best to set a return date in July, however if  
they are not available and I do not have any other dates from you, I will select one  
and advise you accordingly.  
I can confirm that I have obtained a copy of the court file, and was never properly  
served by Mr. Maltz, and several of the Plaintiff's claims are untrue.  
To give you a sense of what will be in my motion materials, I have an affidavit  
from Mr. Tony David, commissioned by his lawyer, wherein he states I was never  
the owner of the business, and that it was his business.  
I will also be presenting a copy of the first page of Mr. David's Purchase and Sale  
Agreement from when he purchased the business from the previous owners. I am  
not a party to that purchase and sale. I was never an owner of this business.  
The Plaintiff, Ammar Kailani, never had any dealings with me, never met me, never  
spoke with me, and never once was told I was the owner of the business. It is my  
understanding and belief that at all material times, Mr. Kailani was fully aware he  
was purchasing the business and assets from its owner, Tony David, including Mr.  
David's GMC van.  
I am confident that the court will set aside the judgment, and I will be seeking a  
summary dismissal given that the Plaintiff, through his own admissions, never dealt  
with me, and from his actions, appears not to have intended to take over the  
business, or at the very least operate it. He did not conduct the due diligence of the  
business and assets, he did not service the accounts, not when the sale close, and  
not in the months following. In fact, I am aware of one location that attempted to  
have him service the account, to which he repeatedly ignored their requests for  
services. He abandoned his equipment there.  
- 50 -  
I am happy to speak with you on the phone about this should you have further  
questions, but this is unfortunately a case where I have been targeted due to my  
choice in marital partner, and not through any actions or inaction on my part.”  
l) On June 3, 2019 Bowden replies:  
I have dates in September: 10, 17, 20, 24, 27”  
[147]  
Accordingly, the first 4 ½ months of alleged delay by Sandra to the end of  
September 2019 in not having “brought” the Motion to set aside the default judgment can be  
explained by Bowden’s schedule and Sandra having to obtain from the Court Office the “Court  
File” that Bowden claimed not to have.  
[148]  
On that issue, I have no evidence before me whether Bowden did or did not have  
the “Court File”. If he did have the Statement of Claim, the Substituted Service Motion and the  
Requisition for Default Judgment, he should have provided it to Sandra at her request. He did  
not, and she had to obtain it from the Court.  
[149]  
If he did not have these documents prior to seeking to enforce the Default  
Judgement, the question arises as to what due diligence RBC did prior to settling with Kailani  
and having the Default Judgment assigned to RBC, and what documentation was provided by  
Kailani or Maltz to RBC to assist in the enforcement of this Judgment, and when.  
[150]  
On October 29, 2019, it appears from the Case History, that Sandra attended at a  
Case Conference before RSJ Firestone to schedule a Motion to set aside the Default Judgment  
which was adjourned to Masters Court for scheduling. No mention of this attendance by Sandra  
is made in either party’s materials, although it is very significant given the timeline. I can only  
conclude that no dates for the Motion were available in September and October.  
[151]  
From the Case History, on the initial motion date of November 22, 2019 Master  
Short seized himself with this motion, adjourned the Motion to November 27, 2019 and on that  
date set a long Motion to hear the motion date for March 10, 2020 and established a case  
timetable.  
[152]  
No party was able to provide me with any endorsements of Master Short regarding  
timetabling, compliance with timetables, or determinations made by Master Short in the conduct  
of this Motion. I have no evidence before me that Sandra was in violation of the terms of those  
timetables, or the results of the Case Management imposed by Master Short.  
[153]  
Karrass was retained in January to argue the Motion, and the March 10th 2020 date  
was adjourned. Then COVID ensued and the parties started scheduling dates again in September  
when Karrass reopened his office and serves the Motion Record on October 9th, 2020, one month  
after he reopens his office after COVID.  
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[154]  
I have no evidence before me that contradicts Karrasss statement that he had  
comorbidities that required the closing of his office, and in any event, this Motion would not  
have been an “urgent motion” requiring hearing during COVID, given that the Default Judgment  
was dated from 2017.  
[155]  
I note that throughout the period between the end of September 2019 when the last  
dates are provided for Bowden, to the October Case Conference with RSJ Firestone, to the initial  
return dates, there is no evidence before me complaining about delay.  
[156]  
After Master Short became seized with this motion and began case managing, I can  
only conclude on the basis of the dearth of evidence before me, that he made no findings of delay  
on the part of Sandra. Had there been issues with Karras delaying the Motion during COVID by  
closing his office, I would have expected some endorsement from Master Short in that regard.  
Having been presented with none, I can only conclude it was not an issue raised with Master  
Short.  
[157]  
After the serving of the Motion by Sandra on October 9, 2020 counsel engaged in  
a prolonged dance of scheduling and canceling cross examinations, with much acrimony and  
finger pointing. Eventually, outlasting Master Short’s long and illustrious judicial career, AJ  
Abrams scheduled this motion on an urgent basis before me.  
[158]  
There is abundant evidence before me that this motion was “brought promptly. At  
Sandra’s apparent instigation this Motion was assigned to Master’s Court by RSJ Firestone,  
Master Short became seized with this motion and had established a case timetable 198 days after  
Bowden first contacted Sandra on May 13, 2019, and without the benefit of specialist counsel  
being retained by Sandra for this Motion.  
[159]  
Of those 198 days, the Motion could not have been heard within the first 137 days  
from May 13 to September 27, 2019 due to Bowden’s schedule, and likely not at all due to the  
lack of hearing dates.  
[160]  
Sandra set out in the May 31, 2019 Email to Bowden a concise summary of her  
position on this Motion that was argued before me 896 days later, without the benefit of Karrass’  
assistance. Given that counsel on this Motion have struggled to bring this Motion to a hearing  
date, and only by filing massive materials, Sandra cannot be blamed for seeking assistance from  
Karrass.  
[161]  
COVID also played a major role in the alleged delay from the date of discovery of  
the Default Judgement on May 13, 2019 to the actual hearing.  
[162]  
For this factor I find that this motion was “brought promptly”.  
- 52 -  
(b) What is the effect of any order made on this Motion on the overall integrity of the  
administration of justice.  
[163]  
Unlike most motions to set aside Default Judgment, there are serious issues raised  
by the evidence filed on this Motion on the overall integrity of the administration of justice.  
Conduct of Kailani and Maltz  
[164]  
The case of Strathmillan Financial Limited v. Teti, 2021 ONSC 7603, Myers, J.  
was drawn to my attention on the morning of the December 17, 2021 hearing and was not dealt  
with in either parties materials. I permitted the parties to make further written submissions  
relating to the case. In this case Myers, J. stated:  
[3] When counsel are involved for both sides and are having a disagreement about  
pleadings, timing, or otherwise, it is not appropriate to take default proceedings to enforce  
the plaintiff’s position. There may be a technical default as described in the Rule. But the  
Rule is inapplicable in the circumstances.  
[4] If counsel have a disagreement on process matters that they cannot sort out themselves  
despite reasonable efforts and compromise, a case conference is available under Rule 50.13  
(1). This rule promotes settlement of issues in the interests of an efficient and affordable  
resolution of the action on its merits.  
[5] Using the default judgment rules for tactical advantage just sets the parties down the  
path of unnecessary motions to set aside the default. This is the opposite of ensuring the  
efficient, affordable, and fair resolution of the civil dispute on the merits.  
[29] The plaintiff then opposed the motion to set aside the noting in default completely  
ignoring Justice Molloy’s words from McNeill Electronics:  
Motions to extend the time for delivery of pleadings and to relieve against defaults  
are frequently made and are typically granted on an almost routine basis. Usually  
opposing counsel will consent to such relief as a matter of professional courtesy.  
Where there is opposition to a motion of this kind, it is usually related to additional  
terms which are sought as a condition to the indulgence being granted or to issues of  
costs…It is not in the interests of justice to strike pleadings or grant judgments based  
solely on technical defaults. Rather, the Court will always strive to see that issues  
between litigants are resolved on their merits whenever that can be done with fairness  
to the parties.  
[30] I asked Mr. Mitchell how the plaintiff’s insistence on the filing of the pleading in a court  
file on the day it was served and noting the defendants in default for not filing it with the  
- 53 -  
court until the next day promoted the most efficient, affordable resolution of the claim on  
the merits. He responded that enforcement of a parties’ rights under the Rules does just that.  
[31] I agree that the Rules, timetables, and schedules ought to be enforced. See K.J. v The  
Regional Municipality of Halton, 2021 ONSC 7055 (CanLII). But context matters. The  
plaintiff is not enforcing the Rules. The Rules try to promote the efficient, affordable, and  
fair resolution of actions on their merits. The plaintiff misused the Rules out of some sense  
of need for counsel to display his resoluteness. The proof of the pudding is that it is now late  
2021 and this action remains mired in a pleadings motion over a $7,500 costs award. The  
cost of this motion approaches the amount in issue. An efficient, affordable process towards  
a fair resolution of the action would have seen discoveries completed and the action set down  
for trial by now.  
[32] Mr. Mitchell submitted that sometimes counsel fail to file pleadings and that can lead  
to procedural problems down the road. That is true. An action cannot be set down for trial  
before pleadings are properly closed. That risk is hardly a basis to note a represented,  
defending defendant in default however. Once again, if counsel do not cooperate on process  
matters, such as filing their pleadings, a case conference can readily solve that issue. See for  
example: Innocon Inc. v. Daro Flooring Constructions Inc., 2021 ONSC 7558, at para. 86  
(d).  
[33] Mr. Mitchell required “delivery” of pleadings as a condition of the plaintiff granting an  
extension of time. But the plaintiff had no valid basis to note the defendants in default the  
day after the defence was delivered. Had the plaintiff granted the extra week extension  
requested by Mr. Wainstock, the delivery would have been completed in time. Instead the  
plaintiff created a race to the registrar’s office for no purpose at all.  
[34] Overall, there was a three week extension of time on the delivery of the defendants’  
statement of defence. Practically speaking this is a very modest extension of time causing  
no prejudice at all to the plaintiff.  
[35] The Case Management Master’s handwritten endorsements did not include detailed  
findings of fact. Nor are little handwritten endorsements on standard matters intended to do  
so. But the Case Management Master left no doubt as to his chain of reasoning. The salient  
piece of his Endorsement dated March 18, 2020 says:  
I accept the bulk of the factum of counsel for the defendants. Rule 1.04 directs that  
the goal is generally to have matters resolved on the merits. I can see no justification  
for the approach taken by counsel for the plaintiff on this motion.  
[165]  
In Strathmillan counsel for the Plaintiff adhered strictly to a time line he had given  
opposing counsel, and instructed a process server to Note in Default the same day. The Defence  
was filed the next day. Plaintiff’s counsel refused to consent to the setting aside of the Noting in  
Default. Motions ensued.  
- 54 -  
[166]  
Counsel for Sandra cited the decision of Kristjanson, J. in 2289878 Ontario Inc. v.  
Gourmet Gringos Ltd. 2016 ONSC 6204, where again, a default judgment obtained by aggressive  
counsel notwithstanding an clear expressed intention from counsel to defend, was set aside.  
[167]  
In this case the conduct of Maltz was much, much, worse. The failure to obtain  
affidavit evidence from Maltz on this motion speaks volumes.  
[168]  
As noted previously, Sandra has been quite consistent in her general defence of the  
claim by Kailani in her correspondence with Kailani, Maltz and Bowden, as well as apparently  
the position that she took with Thibodeau based on the findings in the LSO Report.  
[169]  
In the September 15, 2015 demand letter from Maltz (the “Maltz Demand Letter”)  
at exhibit G to the Kailani Affidavit as an exhibit, sent on a without prejudice basis, states:  
Further, it is my understanding that despite receiving the proceeds from the sale on or  
about the 13th of April 2015 you chose not to release the keys to the vending machines or  
allow Mr. Kailani to attend at the locations as Mr. David was still actively working the  
business and collecting the money from the vending machines on your behalf. This is a  
clear misappropriation of third party funds und could be considered as criminal in nature.  
I would suggest that any judge this matter appears before will not be pleased with this  
conduct of a member of the Law Society of Upper Canada nor would the Law Society be  
pleased with your conduct in that it is clearly in breach of the Rules of Professional  
Conduct.  
This perfunctory letter which has been sent to you with the hope that this matter can be  
settled without the need to proceed to court. In that regard my client wishes the return of  
the sum of $230,000.00 in full and complete satisfaction of this matter. In turn Mr. Kailani  
will relinquish any interest he has in the business and machines that in fact do exist. You  
will have suffered no loss as all parties will be returned to the status quo prior to these  
heinous actions taking place. In light of the severity of your actions we require a reply  
within one week commence a legal action against you without further notice”  
[170]  
To be crystal clear, in this letter Maltz, in the context of making a demand and an  
offer to settle, on a without prejudice basis, threatens Sandra with both professional and criminal  
sanctions in the context of a civil proceeding, ironically himself possibly committing a  
professional misconduct offence by doing so, and the wording used by Maltz in this letter may  
not fit within the saving provisions of the provisions of s.346(2) of the Criminal Code RSC 1985,  
c C-46. Then Maltz reveals his own explicitly “without prejudicesettlement correspondence  
as an exhibit to the Affidavit of Carla Reid sworn in support of the Substituted Service Motion.  
[171]  
In an explicitly without prejudiceresponse on September 22, 2015 Sandra states:  
- 55 -  
“I am in receipt of your letter dated September 15, 2015. I am in the process of preparing  
a response. I expect to have it to you by September 30, 2015, if not sooner. Your patience  
is appreciated.”  
Maltz again reveals this explicitly “without prejudicecorrespondence from Sandra in the  
affidavit of Carla Reid sworn in support of the Substituted Service Motion.  
[172]  
In an explicitly without prejudiceresponse on October 7, 2015, Sandra in detail  
sets out the specific defences she has subsequently stated in 2020 in the Sandra Affidavit and the  
Supplementary Sandra Affidavit and the Draft Statement of Defence in her motion materials. In  
summary, she states that David was the operator of Suddenly Soda, that Kailani only dealt with  
David and generally denying ownership of the assets. With respect to the allegations of  
professional misconduct Sandra states in this letter:  
Finally, I take issue with you raising the Law Society and the Rules of Professional  
Conduct, My involvement in this transaction was as a mere bare trustee to assets owned by  
my estranged husband, Tony David. Mr. David at all times managed, controlled and solely  
benefited from such assets. At no time did I act as a lawyer in the sale of this transaction.  
Your client meanwhile was legally represented throughout this transaction by his own  
lawyer, Accordingly, my position is that the Rules of Professional Conduct are  
inapplicable.”  
[173]  
Maltz, yet again, revealed this explicitly “without prejudicecorrespondence from  
Sandra in the affidavit of Carla Reid sworn in support of the Substituted Service Motion.  
[174]  
From the LSO Report, it appears that Kailani filed his complaint with LSO less than  
a week after this letter from Sandra on October 15, 2015. Despite the threat of commencing  
immediate proceedings in the Maltz Demand Letter, Maltz apparently did absolutely nothing  
with respect to the threatened civil action for 6 months, and issued the Statement of Claim on  
March 9, 2016.  
[175]  
Again, based on the dates in the preamble of the LSO Report, it appears that at least  
Kailani was aware that Sandra was actively defending the allegations made by Kailani to LSO.  
It is apparent from the same source that Sandra sent a response to these allegations on March 12,  
2016.  
[176]  
Also, during this time period David swore the David Affidavit on March 10, 2016  
supporting Sandra’s version of the story. Sandra testified she sent the David Affidavit to Maltz.  
[177]  
So from October 15, 2015 on, it is undeniable from the evidence before me that  
Kailani, and perhaps Maltz as well, knew prior to approving the issuance of the Statement of  
Claim: