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Orders - Default Judgment - Set Aside - Liquidated Damages

Damages - Liquidated - Piercing the Corporate Veil

Ken Jackson Construction Limited v. Macklin (Ont CA, 2017)

In this case the Court of Appeal allowed a Registrar's default judgment to be set aside where the pleadings claimed damages in tort against corporate directors for the failure of the corporation to pay it's debts to the plaintiff. The issues were whether tort damages at the hands of the individual defendants could be equated with the unpaid debt (ie. were liquidated damages) or whether a judicial assessment was required. The court held that while the pleadings were inadequate to pierce the corporate veil, that even if they were adequate the default judgment could not equate any tort damages with the liquidated debt amount sought against the corporation:
[2] We agree that the motion judge erred and that his decision should be set aside, for the following reasons.

[3] Firstly, the Registrar signed judgment against the individual appellants for the amounts of the invoices billed to the corporate appellant. The claims pleaded by the respondent against the individual appellants were for breach of trust and conversion. There was no basis pleaded that would make the individual appellants liable for invoices billed to the corporation. The respondent did not seek to pierce the corporate veil: see Mitchell v. Lewis 2016 ONCA 903 (CanLII). In any event, personal liability like this would not amount to a “debt or liquidated demand in money” within the judgment signing jurisdiction of the Registrar: see Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r. 19.04(1).

[4] Secondly, the Registrar had no jurisdiction to grant judgment against the individual appellants on the claim against them for breach of trust and conversion, as this was also not for “a debt or liquidated demand in money.”

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