Executive Summary: Key Legal and Evidentiary Issues

• Nepean Building Supplies sought default judgment against Markelangelo's Inc. and its two personal guarantors for an unpaid building-materials debt of $185,423.97.
   
• Personal guarantees signed by Mark McSherry and Annick Lemay made them jointly and severally liable with Markelangelo's for the debt.
   
• Questions arose over the plaintiff's correct corporate name, since it appeared inconsistently across the credit agreement, demand letters, and the statement of claim.
   
• Whether Markelangelo's had been properly served became a live issue, since the process server left the claim at a residential address rather than a place of business.
   
• Determining the applicable pre-judgment interest rate required weighing the 24% contractual rate against the statutory rate under the Courts of Justice Act.
   
• Costs were contested, with the plaintiff seeking full indemnity despite no contractual entitlement to that scale.

Facts of the case

Nepean Building Supplies (NBS), formally 471021 Ontario Limited carrying on business as Nepean Building Supplies, brought a motion for default judgment against Markelangelo's Inc. and its two principals, Mark McSherry and Annick Lemay. NBS and Markelangelo's entered into a credit agreement on August 5, 2025 for the supply of building materials. McSherry and Lemay each executed a Personal Guarantee in exchange for NBS extending credit. Between May 2 and October 31, 2025, invoiced accounts went unpaid, leaving a balance NBS calculated at $185,423.97 as of October 31, 2025. On November 10 and 11, 2025, NBS's lawyers sent demand letters to Markelangelo's and to the individual defendants as guarantors, giving a deadline of November 26, 2025. None of the defendants responded. NBS commenced the action on December 1, 2025, served the individual defendants on December 10, 2025 by an alternative to personal service, and left a copy of the claim with McSherry at a King Arthur Street residential address on the same date. The defendants were noted in default on January 7, 2026, and no one appeared for them at the motion hearing on July 21, 2026.

Policy and legislative provisions at issue

The credit agreement provided that accounts were "due 'net' by the 30th day of the month following," with a carrying charge of "24% per year on all overdue accounts." The Personal Guarantee bound McSherry and Lemay as "jointly and severally liable with [Markelangelo's], as principal debtors and not as sureties," obliging them to fully guarantee Markelangelo's obligations and indemnify NBS for any failure to fulfill them. On the procedural side, Rule 16.02(1)(c) of the Rules of Civil Procedure requires personal service on a corporation to be left with an officer, director, agent, or a person in control or management at a place of business, while Rule 16.08 allows the court to validate service where the document "came to the notice of the person to be served." Sections 127 and 128 of the Courts of Justice Act set the statutory pre-judgment interest rate, and Rule 57.01(1) governs the factors relevant to fixing costs.

Reasoning and analysis

Justice Corthorn first addressed the plaintiff's name, finding the defendants were not confused or prejudiced by the inconsistent references across the agreement, guarantee, and pleadings, and granted leave to amend the title of proceeding to "471021 Ontario Limited, carrying on business as Nepean Building Services" [as worded in the judgment at paras. 11–12; the source document elsewhere consistently uses "Nepean Building Supplies"]. On service, the judge found that leaving the claim with McSherry at a residential address did not satisfy Rule 16.02(1)(c), since there was no evidence that address was a place of business of Markelangelo's. Even so, she was satisfied the document came to Markelangelo's attention through McSherry, who had consistently represented himself as a principal and signed the credit agreement on the company's behalf, and validated service under Rule 16.08. Turning to the debt, the judge reviewed the demand letters, the statement of claim, and an exhibit spreadsheet from the Operations Manager's affidavit — noting that the letters described the $185,423.97 figure as inclusive of interest while the statement of claim described it as exclusive of further accruing interest — and concluded the figure represented the principal owed. On interest, she noted NBS's own calculations used a rate lower than the 24% stipulated in the agreement, without evidence explaining the deviation or supporting its reasonableness, and declined to award interest at either the contractual or NBS's proposed effective rate. She also found the costs outline did not justify a full indemnity award, since NBS pointed to no contractual entitlement to that scale.

Ruling and overall outcome

Justice Corthorn granted judgment in favour of Nepean Building Supplies against Markelangelo's Inc., Mark McSherry, and Annick Lemay for the principal amount of $185,423.97, together with pre-judgment interest at the statutory rate prescribed by sections 127 and 128 of the Courts of Justice Act and post-judgment interest under sections 127 and 129. NBS was also permitted to rely on the Personal Guarantee to enforce the judgment against the individual defendants. On costs, the court rejected NBS's request for the full indemnity scale and instead fixed costs on the partial indemnity scale at $5,935, payable by the defendants.