COURT FILE NO.: CV-19-620873 DATE: 2023 06 23
SUPERIOR COURT OF JUSTICE - ONTARIO
IN THE MATTER OF the Construction Act, RSO 1990, c C.30, as amended
RE: TENOES CONSTRUCTION, Plaintiff / Defendant by counterclaim - and - RAFAEL PINTO and ANDREIA OLIVERIA PINTO, Defendants / Plaintiffs by counterclaim
BEFORE: Associate Justice Todd Robinson
COUNSEL: C. Perera, for the defendants/plaintiffs by counterclaim
HEARD: June 19, 2023 (by videoconference)
REASONS FOR DECISION (Motion to Discharge Lien, Dismiss Action, and Amend Timetable)
[1] The defendants move for an order dismissing the plaintiff’s claim, striking the plaintiff’s defence to the defendants’ counterclaim, discharging the plaintiff’s lien, returning security for the lien, and amending the trial timetable in this action. The plaintiff (a sole proprietorship), who is currently unrepresented, has not responded to the motion and did not appear at the motion hearing.
[2] Peremptory trial dates in this action have been fixed over ten days before me in September. The plaintiff is in ongoing breach of my order to serve his trial affidavits and will-say statements. They were ordered to be served nearly three months ago. The plaintiff has not explained his ongoing failure to comply with my order.
[3] In the circumstances of this case, the defendants are entitled to some certainty over how trial will be proceeding. For the upcoming trial management conference to be meaningful, this motion cannot reasonably remain outstanding. I am satisfied that the defendants are entitled to most the requested relief, except for the relief striking the plaintiff’s defence to counterclaim. However, despite granting the motion, in part, I am staying operation of the dismissal and discharge portions of my order until at least the next hearing for trial directions before me. Since the plaintiff is currently unrepresented, I find it appropriate to afford him a final opportunity to speak to his non-attendance at this motion hearing and ongoing non-compliance before those orders take effect.
Analysis
[4] In deciding this motion, I have considered the following issues:
(a) Should service of the motion record be validated? (b) Should the motion be adjourned to permit the plaintiff an opportunity to decide if he will retain counsel or represent himself? (c) Should the deadline for the defendants’ trial affidavits be extended and trial dates vacated? (d) Do the plaintiff’s breaches of court orders and conduct warrant dismissing his claim, striking his defence to counterclaim, and discharging his lien? (e) Should operation of any order be deferred?
Issue 1: Should service be validated?
[5] The defendants served their motion record on the plaintiff by courier to his last known address. They also served the plaintiff’s former lawyer, but after being served with the order removing him as lawyer of record. Neither is valid service on the plaintiff.
[6] Service of documents in a lien action is governed by s. 87 of the Construction Act, RSO 1990, c C.30. Subsection 87(1) permits documents to be served in any manner permitted under the Rules of Civil Procedure, RRO 1990, Reg 194 (the “Rules”) or by certified or registered mail addressed to the intended recipient at the recipient’s last known mailing address. Courier is not the same as certified or registered mail and is not a valid form of service on an unrepresented party under the Rules: see subrule 16.01(4)(b).
[7] After I raised the invalid service, the defendants sought an order validating service. In support of that request, I was provided with a courier delivery receipt confirming that the package was delivered to the front door of the plaintiff’s last known address on June 8, 2023 at 12:33 p.m.
[8] The plaintiff has no email address, only a mailing address. Had the package been sent by regular mail, I would have less certainty that it had actually been delivered than I have from the courier delivery confirmation. While I do not condone invalid forms of service, lien actions are to be as far as possible of a summary character: Construction Act, s. 50(3). In the particular circumstances of this case, I am prepared to validate courier service of the motion record.
Issue 2: Should the motion be adjourned?
[9] The plaintiff’s former lawyer obtained an order removing him from the record three weeks ago. In the removal order, the plaintiff was given thirty days to appoint a new lawyer of record or serve a notice of intention to act in person, consistent with subrule 15.04(8) of the Rules. Although not in the motion materials, defendants’ counsel obtained and provided me with a copy of the affidavit of service confirming that the plaintiff was served with my removal order. The time to appoint a new lawyer or elect to self-represent has not yet expired.
[10] The defendants submit that I should still hear and dispose of the motion. They submit that non-compliance with the removal order is not a ground for any of the relief they are seeking. Given the plaintiff’s ongoing breaches of my court orders in this reference, I was convinced to at least hear their argument.
[11] I agree that this motion need not be adjourned to a later date. By failing to take appropriate steps to advance his claim in this action, despite repeated opportunities to do so, the plaintiff has demonstrated a casual attitude toward the proceeding, my court orders, and the court’s processes. The plaintiff’s failure to serve trial affidavit evidence as ordered, or at any time in the past several months, is significant. The plaintiff seems to have left the country in January 2023, failed to communicate with his now-former lawyer, and failed to make any effort to comply with the ordered deadline. He has opted for near radio silence in the past six months, taking no steps to vary the trial timetable or engage in any way in this litigation, despite pending trial dates.
[12] I am particularly mindful of the trial dates scheduled in September, which are peremptory against both sides. A hearing is pending next month for the purpose of ensuring that the trial remains on track and to provide any additional directions that may be needed for trial. That hearing has been scheduled since last December. I have no motion availability between now and the next return. Proper preparation for that hearing requires certainty over what claims and issues are proceeding to trial.
[13] The plaintiff has failed to respond to the motion at all. He has not contacted defendants’ counsel to seek an adjournment while he decides whether to retain new counsel or act for himself. He did not appear at the motion hearing, despite having appeared before me on his own behalf at other remote hearings. Those appearances include during a prior period when the plaintiff was unrepresented.
[14] Given the pattern of the plaintiff’s conduct in this action to date, and the failure to respond in any way to this motion, I find it unfair to the defendants to adjourn their motion in the absence of any request by the plaintiff to do so.
Issue 3: Should the trial timetable be varied?
[15] The defendants also breached my timetable order by failing to serve trial affidavits in support of their counterclaim by the ordered deadline of May 15, 2023. An extension was requested at a hearing before me on May 11, 2023. However, at that time, plaintiff’s counsel had no instructions and no serious discussions had occurred between counsel about varying the timetable. I found it appropriate for counsel to discuss the matter and for plaintiff’s counsel to be permitted an opportunity to seek instructions before the court became involved.
[16] An email in the record confirms that defendants’ counsel wrote immediately after the hearing asking for the plaintiff’s consent to extend the defendants’ deadline to serve trial affidavits. Following a subsequent email exchange between counsel, the plaintiff’s now-former lawyer served materials for his motion to be removed as lawyer of record. He also advised that he could not consent to the extension on his client’s behalf or commit to a timetable for this motion. The defendants thereafter completed and couriered their trial affidavits to the plaintiff’s last known address, as well as emailing copies to the plaintiff’s former lawyer.
[17] The defendants seek an order varying the directions on trial materials and the trial timetable, including reducing the number of trial dates. What was missing from the submitted draft order was an order extending the deadline for the defendants to serve their trial affidavits. A revised order was provided at the hearing seeking an extension to June 8, 2023.
[18] Most of the requested amendments to my trial directions are more appropriately addressed at the upcoming trial management conference. Releasing trial dates is tied to dismissing the plaintiff’s claim and striking his defence to counterclaim, so is discussed below.
[19] The requested extension to serve the defendants’ trial affidavits is unopposed. I am granting it. I note, though, that the two trial affidavits have been served on the plaintiff by courier. As discussed above, that is invalid service on an unrepresented party. The defendants should be ready to speak to compliance with the extended deadline at the upcoming trial management conference.
Issue 4: Do the plaintiff’s breaches of court orders and conduct warrant dismissing his claim, striking his defence to counterclaim, and discharging his lien?
[20] In seeking an order dismissing the plaintiff’s claim, striking his defence to counterclaim, and discharging the plaintiff’s lien, the defendants rely on subrules 3.04(4) and 60.12(b) of the Rules and s. 47 of the Construction Act. No case law was provided in support of the defendants’ arguments.
[21] Subrule 3.04(4) provides that, if a party fails to comply with a timetable, a judge or associate judge may, on any other party’s motion, stay the party’s proceeding, dismiss the party’s proceeding or strike out the party’s defence, or make such other order as is just. Subrule 60.12(b) is to similar effect. It provides me with discretion to stay or dismiss a proceeding, strike a defence, or make such other order as is just where a party fails to comply with an interlocutory order.
[22] Section 47 of the Construction Act provides the court with discretion, on any proper ground, to discharge a lien or dismiss an action. Such an order may include any terms or conditions that the court considers appropriate in the circumstances. I have previously observed that s. 47 is a broadly drafted provision that is applicable in many situations, including matters that do not seek summary disposition of a lien action on its merits: GTA Restoration Group Inc. v. Baillie, 2020 ONSC 5190 (leave to appeal ref’d 2021 ONSC 1250 (Div Ct)), at para. 44.
[23] Defendants’ counsel submitted that she was unable to find any case law dealing with circumstances similar to this case. I have dealt with similar issues of non-compliance in my references in at least two prior decisions. Both of them involved relief sought under subrules 3.04(4) and 60.12(b) of the Rules and one of them also involved relief sought under s. 47 of the Construction Act.
[24] In Northstone Homes Ltd. v. Wu, 2021 ONSC 5173, the defendant had similarly failed to serve ordered trial evidence. At para. 20 of that decision, I observed that striking a pleading is a severe penalty of last resort. It is a remedy that should only be granted when a party’s failure to comply with its obligations and the rules prevents the orderly and fair hearing of the matter. That must be assessed in context of the statutory directive to ensure that the conduct of a lien action is as far as possible of a summary character having regard to the quantum and issues in dispute.
[25] I struck the defendant’s set-off defences and counterclaim. As set out in para. 21 of decision, the defendant in that case had failed to comply with disclosure obligations, refused relevant questions on discovery, and provided no indication of whether and when he would provide evidence supporting his positions on deficiencies, incomplete work, and other claims. With trial having already effectively commenced upon delivery of the plaintiff’s trial evidence, I found there could no longer be an orderly or fair adjudication of the defendant’s set-off defence or counterclaim.
[26] In Kamlu Engineering Inc. v. Cadorin Homes, 2023 ONSC 2940, I dealt with ongoing non-compliance by a plaintiff with procedural orders, but prior to any trial being scheduled. In that case, at paras. 14-15, I noted the discretion afforded to a case management judge or associate judge (such as a lien reference associate judge) when assessing whether to dismiss a claim or strike a defence. I observed that, depending on the severity of the breaches and the conduct of the impugned party in a lien action, it may well be that the just result is to discharge a lien and dismiss the action.
[27] I ultimately held, at para. 16, that the impacts of the plaintiff’s breaches and delays in that case was justly and fairly compensable in costs. Although there had been non-compliance and delay by the plaintiff, looking at the totality of the circumstances in my position as the reference associate judge, the plaintiff’s conduct was not as egregious as in other cases put before me.
[28] In this case, the plaintiff is currently unrepresented. It is not yet clear if he will represent himself or seek a new lawyer, or if he will further engage in this proceeding at all. Nevertheless, even if the plaintiff elects to self-represent, that is not an answer to non-compliance with court orders. As I observed in Northstone, supra at para. 23, self-represented parties are often extended courtesies and provided direction on keeping their case on track, when circumstances permit, but they are not free to disregard court orders or procedural rules with impunity. Tolerance and sympathy wane with ongoing defaults in procedural obligations and breaches of court orders. This is such a case.
[29] As the reference associate judge, I have direct knowledge of the history of the plaintiff’s non-compliance with court orders. He has failed to comply with several orders throughout this reference. This is also not the first dismissal and discharge motion. The defendants previously moved to dismiss this action and discharge the lien after the plaintiff failed to comply with a prior removal order. At the return of that motion, the plaintiff convinced the defendants to proceed and a new timetable was later fixed. There was compliance for a time, at least until the trial was scheduled and a trial timetable set.
[30] Most of the prior breaches are not outlined in the defendants’ motion record. Instead, the defendants have focussed their materials solely on the plaintiff’s ongoing failure to serve trial evidence as ordered. That breach, viewed in context of the overall reference, is sufficient to grant the relief sought.
[31] I fixed the ten-day trial in this action at a hearing in November 2022. At a hearing in December 2022, a timetable for preparing and exchanging trial-related materials was fixed. That timetable had been agreed by the parties and was ordered on consent. It contemplated the plaintiff serving its sworn/affirmed affidavits of evidence in chief or will-say statements in support of its claim by March 31, 2023. The plaintiff failed to comply with that deadline.
[32] From mid-March through May, the plaintiff’s former lawyer made efforts to protect the plaintiff’s interests in this litigation, albeit without instructions. The plaintiff was confirmed to be in Portugal. I was advised that his travel to Portugal related to a death in his family. Regardless of the reason, the correspondence in the motion record supports that, over the past six months, the plaintiff does not appear to have been providing instructions to his lawyer and, accordingly, has not been taking any steps to prepare his trial evidence or advance this litigation.
[33] Subrule 52.01(2) of the Rules provides that, where an action is called for trial and a party fails to attend, the trial judge may (a) proceed with the trial in the absence of the party; (b) where the plaintiff attends and the defendant fails to attend, dismiss the counterclaim, if any, and allow the plaintiff to prove the claim; (c) where the defendant attends and the plaintiff fails to attend, dismiss the action and allow the defendant to prove the counterclaim; or (d) make such other order as is just. I have previously agreed with my colleague and expressed my own view that failing to tender ordered trial evidence for a summary trial in a lien proceeding may amount to failing to appear at trial for the purpose of subrule 52.01(2): Northstone, supra at paras. 18-19.
[34] The circumstances of this case are different than in Northstone. In that case, the plaintiff had already served its trial evidence. That fact, in my view, supported that trial as contemplated in rule 52.01 of the Rules had effectively commenced. The defendant failed to serve his trial affidavits and remained in ongoing breach of that order for several months. Essentially, the defendant failed to “attend” by not leading any evidence as required.
[35] In this case, neither side tendered trial evidence in compliance with my order, but the defendants’ trial affidavits were always intended to follow and respond to the plaintiff’s affidavits. They would have addressed the defence evidence as well as the counterclaim evidence. Unlike the plaintiff, the defendants did ultimately serve affidavits in support of their counterclaim, albeit three weeks late. However, I acknowledge that there was no reason to believe that the plaintiff was abandoning its claim and, thereby, uncertainty about whether the defendants’ trial affidavits should be prepared and served.
[36] The consent trial timetable has some leeway for adjustment, but not three months. The trial dates were ordered peremptory against both parties. The plaintiff has failed to serve his trial evidence. Moreover, in the three months since the deadline for his evidence, the plaintiff has failed to take any steps to explain the default and comply with the order. The plaintiff has not even expressed an intention to comply, let alone proposed a date for compliance.
[37] This is a lien action. They are to be summary in nature. I am convinced by the defendants’ arguments that, given plaintiff’s failure to serve trial evidence, his failure to explain that breach, and his failure to take any steps to remedy it, the plaintiff’s action should be dismissed and the defendants allowed to proceed with their counterclaim. The same grounds that support dismissing the action are also, in my view, proper grounds on which to discharge the lien, which cannot survive independent of the proceeding commenced to enforce it. It follows from a discharge of the plaintiff’s lien that the security posted by the defendants to vacate that lien should be returned to them.
[38] However, I am not convinced by the defendants’ arguments that the plaintiff should be denied the opportunity to defend the counterclaim. Regardless of the reasons, the defendants also failed to comply with my order to serve their trial evidence in support of the counterclaim. In addition, they only sent their affidavits to the plaintiff after the plaintiff’s lawyer had been removed from the record. Since those affidavits were sent by courier, whether or not the defendants have validly served that trial evidence remains an open question.
[39] I will accordingly address at the next hearing the status of service of the defendants’ evidence, whether the plaintiff should be entitled to serve any responding affidavit evidence in defence of the counterclaim, or whether the plaintiff’s defence will be limited to only cross-examining witnesses and making submissions.
[40] Given my decision to dismiss the plaintiff’s action and discharge the lien, a ten-day trial will no longer be required. However, I am not yet certain that the two days proposed by the defendants will be enough. That will turn on whether the plaintiff engages in the process, which presumably will not be known until the upcoming trial management conference. I am vacating the last four days of trial and will revisit the remaining six days at the next return.
Issue 5: Should operation of the order be deferred?
[41] The plaintiff’s lawyer has only recently been removed from the record. The deadline to appoint new counsel or serve a notice of intention to act in person has not yet passed. Despite that, I have disposed of the motion for reasons already discussed given the upcoming trial management conference and peremptory trial dates.
[42] Nevertheless, although the plaintiff did not appear at this hearing or respond to the motion in any way, in my view, he should still be afforded a final opportunity to speak to his non-attendance, his breach of my order, and his claims before they are extinguished. I am accordingly staying operation of my orders dismissing the action, discharging the plaintiff’s lien, and returning security until at least the next hearing for trial directions.
Costs
[43] The defendants seek their partial indemnity costs of this motion in the amount of $3,592.27, including HST and disbursements. They point out that this is the second time a motion of this nature has been brought. They submit that the plaintiff has been given repeated chances to comply with the trial order, but has chosen not to participate in the litigation. The defendants also submit that the amount they seek in costs of this motion is reasonable in the circumstances and considering the importance of the issues on the motion.
[44] Costs are discretionary. I have broad discretion under s. 86 of the Construction Act and rule 57.01 of the Rules to fashion a costs award that I deem fit and just in the circumstances of this case. Costs awards should reflect what the court views as a fair and reasonable amount that should be paid by the unsuccessful party rather than any exact measure of the actual costs to the successful litigant: Davies v. Clarington (Municipality), 2009 ONCA 722 at para. 52. The overall objective is fixing an amount that is fair and reasonable in the particular proceeding, having regard to the expectations of the parties concerning the quantum of costs: Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 OR (3d) 291 (CA) at paras. 26 and 38.
[45] The partial indemnity fees claimed by the defendants are unopposed. In my view, they are reasonable and proportionate. I have no concerns with the hours spent or the rates claimed. Since a paper copy of the motion record was required to serve the plaintiff, the disbursements claimed are also reasonable. I take issue only with the claim for a motion filing fee. That is not properly claimed as a disbursement in this proceeding. This is a lien action under the Construction Act. There are no fees for filing a notice of motion in a lien action: see s. 3 of O Reg 293/92 under the Administrations of Justice Act, RSO 1990, c A.6. If a motion fee was paid, the defendants may wish to discuss the matter with civil intake staff.
[46] I accordingly fix costs of the motion in the amount of $3,250.00, including HST and disbursements, payable by the plaintiff to the defendants within thirty (30) days.
Disposition
[47] For the above reasons, I am granting the motion, in part. I order as follows:
(a) Service of the motion record on the plaintiff by courier is hereby validated, with service effective on June 8, 2023. (b) The deadline for the defendants to serve the plaintiff with their sworn/affirmed affidavits of evidence in chief or will-say statements is hereby extended nunc pro tunc to June 8, 2023. (c) The plaintiff’s action against the defendants is hereby dismissed. (d) For greater certainty, notwithstanding dismissal of the plaintiff’s action, the defendants shall be allowed to proceed with their counterclaim without any further formality. (e) The plaintiff’s lien is hereby discharged. (f) The security posted into court by the defendants to vacate the plaintiff’s lien shall be paid out to the defendants or as they may otherwise direct. (g) Operation of the orders in subparagraphs (c), (e), and (f) above is hereby stayed until August 1, 2023, subject to further court order. (h) Trial in this action is hereby reduced to six days and the trial dates of September 19-22, 2023 are hereby vacated. (i) The plaintiff shall pay to the defendants their costs of this motion, fixed in the amount of $3,250.00, including HST and disbursements, payable within thirty (30) days. (j) This order is effective without further formality.
[48] As noted above, a revised draft order was submitted at the hearing. It requires further revision to give effect to the above. I am also adding a requirement to serve these reasons and the order on the plaintiff. Order to go in an amended form of the draft order submitted, as amended electronically prior to signing.
ASSOCIATE JUSTICE TODD ROBINSON DATE: June 23, 2023