DIVISIONAL COURT FILE NO.: 200/06
SUPERIOR COURT FILE NO.: 05-CV-285372PD1
DATE: 20060515
SUPERIOR COURT OF JUSTICE - ONTARIO
DIVISIONAL COURT
RE: TARION WARRANTY CORPORATION
Plaintiff
- and -
BROOKEGREENE ESTATES INC., BARRY FLODDER
and RICHARD J. ROONEY also known as JOHN ROONEY
Defendants
BEFORE: Mr. Justice Carnwath
COUNSEL: Peter Balasubramanian & Gena Argitis, for the Plaintiff, Moving Party
Ranjan Das, for the Defendants, Barry Flodder & Richard J. Rooney,
also known as John Rooney
HEARD: May 11, 2006
E N D O R S E M E N T
CARNWATH J.:
DISPOSITION
[1] The motion is denied. Unless contrary submissions are received within fourteen days, costs to the responding parties fixed at $2,000, plus disbursements, plus applicable GST, payable within thirty days.
REASONS
[2] Tarion moves for leave to appeal, pursuant to Rule 62.02(4)(b), and submits there is good reason to doubt the correctness of Cameron J.’s decision. Cameron J. denied Tarion’s motion to strike under Rule 21.01(1)(b) of the Rules of Civil Procedure.
[3] It must be remembered that it is the correctness of the result of Cameron J.’s exercise of discretion, not necessarily the underlying reasons for that exercise, that is the subject of the leave application. In other words, Cameron J. may have reached the right result for the wrong reasons. Whether he did or did not in this case, I find to be irrelevant.
[4] There is a particular feature in this matter that is not present in the following cases cited by the moving party:
Cooper v. Hobart, 2001 SCC 79, [2001] 3 S.C.R. 537; [2001] S.C.J. No. 76; (2001) S.C.C. 79
Edwards v. Law Society of Upper Canada, 2001 SCC 80, [2001] 3 S.C.R. 562; [2001] S.C.J. No. 77; (2001) S.C.C. 80;
Morgis et al. v. Thomson Kernaghan & Co. Limited et al. 2003 5999 (ON CA), 65 O.R. (3d) 321; [2003] O.J. No. 2504
Edwards et al. v. Law Society of Upper Canada et al. 48 O.R. (3d) 329; [2000] O.J. No. 2085
That feature is the contractual relationship into which Tarion chose to enter with the guarantors.
[5] Tarion’s obligation under the ONHWP Act, s. 6(a) is to register a proposed vendor/builder except where having regard to the applicant’s financial position, the applicant cannot reasonably be expected to be financially responsible in the conduct of the applicant’s undertakings. Section 6(c)(i) is similarly worded where the applicant is a corporation.
[6] Tarion is under no obligation to contract with guarantors. It can refuse registration if it finds an applicant “cannot reasonably be expected to be financially responsible….” Having chosen to require third party guarantees, Tarion exposes itself to whatever remedies, if any, that flow from the contractual relationship.
[7] It is trite law that the burden on the defendant seeking to strike a claim disclosing no reasonable cause of action is very high. Folland v. Ontario, 2003 52139 (ON CA), [2003] O.J. No. 1048 (C.A.) Leave to appeal dismissed, [2003] S.S.C.A. No. 249 (S.C.C.) at [10].
[8] Cameron J. had regard to the following Rule 21.01(1)(b) principles:
(a) Such a motion can only succeed if it is ‘plain and obvious’ that the pleadings disclose no reasonable cause of action;
(b) The novelty of a claim does not prevent a plaintiff from proceeding with its case;
(c) The court should not strike out a pleading where the matters of law are not fully settled in the jurisprudence;
(d) Evidence is not admissible on the motion pursuant to Rule 21.01(2)(b);
(e) The Court must accept the facts alleged in the pleading as proven unless they are patently ridiculous or incapable of proof;
(f) The pleading is to be read generously with allowances for inadequacies due to drafting deficiencies;
(g) A court may strike out less than the entire pleading although this should be done only when the portion being struck is a distinct purported cause of action; and,
(h) A motion under 21.01 should be made promptly.
Janssen-Ortho Inc. v. Amgen Canada Inc., 2004 8595 (ON SC), [2004] O.J. No. 2523 (S.C.J.), at para. 12, varied on other grounds 2005 19660 (ON CA), [2005] O.J. No. 2265 (C.A.)
[9] A court should be reluctant to dismiss a claim as disclosing no reasonable cause of action based on policy reasons at the motion stage before there is a record on which a court can analyze the strengths and weaknesses of the policy arguments. Haskett v. Equifax Canada Inc. (2003), 2003 32896 (ON CA), 63 O.R. (3d) 577 (C.A.)
[10] Cameron J. was reluctant to strike the pleading at this stage. I find no good reason to doubt the correctness of his decision.
CARNWATH J.
DATE: 20060515