GD Construction & Project Management Inc. v. Kiya Sunrise Electrical Ltd., 2026 ONSC 2643

DIVISIONAL COURT FILE NO.: 454/25

DATE: 20260504

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: GD CONSTRUCTION & PROJECT MANAGEMENT INC. and CONSTANTIN DIMITROPOULOS, Appellants

AND:

KIYA SUNRISE ELECTRICAL INC. and ELI JAKUBOVIC, Respondents

BEFORE: D.L. Corbett J.

COUNSEL: Ian J. Perry, for the Appellants

Adriano Pranzitelli, for Kiya Sunrise Electrical

Eli Jakubovic, self-represented

HEARD at Toronto: March 25, 2026

ENDORSEMENT

D.L. Corbett J.

[1] This is an appeal from the Small Claims Court in respect to a judgment issued after the appellant’s pleadings were struck. This court has jurisdiction over the appeal pursuant to ss. 21(2)(b) and 31(a) of the Courts of Justice Act, RSO 1990, c. J.43. An appellate standard of review applies to the appeal: Housen v. Nikolaisen, 2002 SCC 33, para. 37.

[2] I have concluded that the appeal must be allowed, but on condition that the amount of the impugned judgment be paid into court to the credit of the Small Claims proceeding. I would order that there be no costs of the first trial or of this appeal.

[3] The appellant’s paralegal mis-diarized the trial date and so the appellant did not appear at the appointed hour for trial. At the start of the trial, counsel and the court contacted the appellant’s paralegal, and the case was stood down to 11:00 am. The appellant’s paralegal reacted promptly and went to court but did not arrive until about 11:20 am. By that point, the Small Claims Court judge had struck the appellant’s pleadings and directed that the matter proceed before the court as an assessment of damages.

[4] The appellant’s paralegal apologized and sought to explain their late attendance. The Deputy Judge found that the court had made a ruling (striking the pleadings) and was functus officio with respect to that ruling and had no jurisdiction to revisit it.

[5] Unfortunately, parties are sometimes late for court. It is in the discretion of the presiding judge as to how to proceed when this happens. In this case, the court stood the case down and directed that efforts be made to contact the appellant’s paralegal. This was a reasonable exercise of discretion in all the circumstances.

[6] As best as I can determine from the record before me, the appellant’s paralegal was reached by telephone around 10:30 am, plus or minus ten minutes. They advised that they would get to court as soon as they could. Information was provided to the Deputy Judge that the paralegal was “on their way” but no time estimate for arrival was provided to the court.

[7] By 11:00 am, the paralegal had not arrived, and the Deputy Judge decided to begin hearing the case. This was a reasonable approach in the circumstances.

[8] The respondents advised the Deputy Judge that, not only were the appellants late, but also that they were in default of a production order made by Deputy Judge McNeely in 2022 (long before the trial date). The documents ordered produced were said to be fundamental to the appellants’ substantive defence. After hearing submissions on this issue, in the absence of the appellants, the Deputy Judge struck the appellants’ defence and ordered that the matter continue as an assessment of damages.

[9] The court then dealt with a consent order respecting claims between the respondents and then invited opening statements respecting the assessment of damages.

[10] Shortly after opening statements began, the appellants’ paralegal arrived at court. As stated above, the Deputy Judge declined to revisit her ruling on the stated basis that the court was functus officio. In this, the Deputy Judge was simply wrong in law: if circumstances change while the trial is ongoing, a trial judge may revisit a trial ruling: Quadrangle v. AG Canada, 2024 ONSC 164, para. 9, per Osborne J. (as he then was); Montague v. Bank of Nova Scotia (2004) 2004 27211 (ON CA), 69 OR (3d) 87.

[11] The trial judge was required to consider the appellants’ request to set aside the striking of pleadings. Had the trial judge done so, she could have made any of several possible orders, such as:

(a) declining to set aside the order;

(b) setting aside the order and adjourning the trial;

(c) setting aside the order and standing the matter down for a further period to permit the appellant to try to get their witnesses to court for the trial;

(d) setting aside the order, but not permitting the appellants to pursue their affirmative defence of the claims (requiring the respondents to prove their claims and not just their damages);

(e) not setting aside the order, and carrying on with the trial, but permitting the appellants’ paralegal to test the evidence adduced on the assessment by way of cross-examination and final submissions.

[12] There may well have been other orders the trial judge could have made. Whatever order the trial judge might have made, the trial judge should have considered the appellants’ paralegal’s request to set aside the trial ruling and then should have exercised discretion in accordance with the applicable principles for setting aside an order striking pleadings and granting default judgment, given all the circumstances.

[13] In my view, a trial judge faced with the situation presented in this case, exercising her discretion judicially, would most likely select option (c), (d) or (e) from the list above, depending on how the issues “played out” during submissions. Given the protracted history of the case, and the appellants’ default of the order of McNeely J., it would certainly have been no error to force the appellants on to trial and to debar them from defences for which the unproduced documents were material. On the record, permitting the appellants to put the respondents to the proof of their damages claims, at least by way of cross examination and final submissions, and requiring the respondents to prove a basis for piercing the corporate veil, would likely have been minimum requirements of procedural fairness in all the circumstances.

[14] Be that as it may, the trial judge did not put her mind to the issue because of the erroneous finding that the matter had been determined finally and the court was functus officio. Where someone comes late to court, and the matter proceeds but is not concluded when the late party finally arrives, it is in the court’s discretion as to what to do, and the Deputy Judge erred in law in failing to approach the issue in this way.

[15] Unfortunately, the matter was compounded when the appellants subsequently moved to set aside the trial judgment before another Deputy Judge. That Deputy Judge declined to intervene on the basis that the issue had been before the first Deputy Judge and had been decided by that judge. The second Deputy Judge was correct in his approach to the motion: even though the first Deputy Judge had erred, and had not decided the “set aside” issue on its merits, it was not for the second Deputy Judge to overrule his colleague. The excursion before the second Deputy Judge reinforces the error made by the first Deputy Judge: if the paralegal had not arrived at the trial at all, it would have been open to the appellants to pursue the “set aside” motion before the second judge, who then would have been obliged to decide the issue on the merits – as should have happened when the issue arose before the trial judge.

[16] The impugned judgment is aside, and the case is remitted to the Small Claims Court for a new trial before a different Deputy Judge than the original trial judge. However, I would impose a condition on this disposition: I would require the appellants to pay the amount of the impugned judgment (not including costs or interest) into court to the credit of the Small Claims Court proceedings, within 60 days, as a condition of the order setting aside the impugned judgment. The underlying proceedings have been unduly prolonged and the delay, now including the continuing delay until the new trial, is primarily the fault of the appellants. The appellants failed to comply with the production order of McNeely J. and have no good excuse for that default. Without that production, it appears very likely that there would have been nothing to do at the trial beyond proving the amounts in issue and deciding the “corporate veil” issue: the respondents are deprived of the benefit of the impugned judgment, but on the condition that they will have assurance of being able to collect a judgment quickly if they succeed at the second trial.

[17] I would order that there be no costs for the first trial. The fault for the problems at the outset of the trial was entirely that of the appellant’s paralegal, but counsel for the respondents encouraged the trial judge to make the procedurally unfair decision that she made.

[18] I would order that there be no costs of the appeal in light of the amounts in issue in the underlying proceeding and the fact that the appellants remain in default of the order of Deputy Judge McNeely and were at fault for not attending the trial as scheduled ready to proceed.

“D.L. Corbett J.”

Released: May 4, 2026