Court File and Parties

COURT FILE NO.: 260/07

DATE: 20071130

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

B E T W E E N:

RIVETTE HERZIG Plaintiff

• and -

THE CORPORATION OF THE TOWN OF MARKHAM Defendant/Respondent

• and -

WHITEHORN INVESTMENTS LIMITED and STEPHEN GOLDHAR Defendants/Appellants

Counsel: Vito S. Scalisi, for the Respondent, The Corporation of the Town of Markham Jonathan Kulathungam, for the Defendants/Appellants, Whitehorn Investments Limited and Stephen Goldhar

HEARD at Toronto: November 30, 2007

Oral Reasons for Judgment

GREER J.: (Orally)

1The appeal of the Defendants, Whitehorn and Goldhar is allowed for the following reasons.

2Master Haberman’s decision of May 11, 2007 is clearly wrong. She firstly erred in failing to grant the amendment to the Statement of Defence of the Appellants, which they had set down by way of Notice of Motion on April 12, 2007. The Town’s cross-motion served May 3, 2007 and set down to be heard on the same date, was second in time. The Appellant’s Motion was interlocutory. The Town’s motion was final, in that it was asking for a Judgment on Minutes of Settlement entered into earlier with the Plaintiff, which would bring the action to an end. I adopt the reasoning in Magnish v. Steves, (2002) Carswell Ont. 3074 (C.A.). In that case, the Court held that the Motion to amend the Statement of Defence should have been heard first before any other Motion. This is analogous to the appeal before me since a Summary Judgment Motion, if granted, would be a final Order and a dismissal of the action itself (unless it was a partial Summary Judgment). See also Russell v. Toronto International Dragon Boat Race Festival (Ontario Corp. No. 1016514) (2002) Carswell Ont. 3164 (SCJ).

3The Master erred at law by applying the incorrect test on a Rule 26 Motion seeking to amend a pleading. The Rule is mandatory unless there is prejudice, which cannot be compensated for by way of costs or an adjournment.

4The Master erred in her last sentence of her Endorsement when she said:

“There is no evidence of potential prejudice that cannot be compensated for by way of costs if this order is made and their motion to amend is dismissed.”

5In making this statement, the Master erred by reversing the onus on a Rule 26 Motion. On such a Motion, it is the opposing party who has the onus of proving prejudice, which cannot be compensated for, not the moving party. Since no prejudice was shown by the Respondent, the amendment is mandatory and the Motion should have been granted. The Master could then have dealt with the Respondent’s cross-motion. The action would then have remained alive.

6The Master erred in saying that there was no explanation from Whitehorn as to why they wanted to add a cross-claim or why they wanted to do it “now”. The Appellants did not have to explain why they wanted to add it to their pleadings. Further, delay is not part of the Rule, given that such amendment can be made at any time, even during a trial.

7The Respondent says that there is an inference that the Master saw the pleading as being untenable and therefore dealt with its cross-motion first. In my view, the Master has no jurisdiction to determine whether a pleading is tenable at law or not. That is in the jurisdiction of a Judge of the Court to determine. See Coriale (Litigation Guardian of) v. Sisters of St. Joseph of Sault Ste. Marie, 27 C.P.C. (4th) 328 at para. 17 to 19, which was followed in Atlantic Steel Industries Inc. v. Cigna Insurance Company of Canada, 33 O.R. (3d) 12. In my view, the finding in Vaiman v. Yates, 20 C.P.C. (2d) 33, 60 O.R. (2d) 696, 41 D.L.R. (4th) 186, is no longer good law.

8The appeal is allowed. The costs awarded to the Respondent by the Master and hereby set aside. Costs in that Motion are now to the Appellants and are fixed at $700 plus GST. The costs of today to the Appellants are fixed at $1,750 plus GST, payable forthwith.

GREER J.

Date of Reasons for Judgment: November 30, 2007

Date of Release: December 10, 2007

COURT FILE NO.: 260/07

DATE: 20071130

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT