Court File and Parties

Court File No.: CV-22-00678190 Date: 2023-09-28 Superior Court of Justice - Ontario

Re: Metropolitan Toronto Condominium Corporation No. 1049, Plaintiff And: 1127937 Ontario Inc., Defendant

Before: C. J. Brown J.

Counsel: Stephen R. Jackson and Jana Smith, for the Plaintiff Roderick Byrnes, for the Defendant Denise Dimitroff, for the Third Party, Brian Chan

Heard: September 15, 2023

Endorsement

[1] The plaintiff brings this motion for an order striking the defendant’s statement of defence for their failure to retain counsel pursuant to Rule 15.01(2) of the Rules of Civil Procedure or, in the alternative, an order compelling the defendant to retain counsel within 14 days.

[2] The plaintiff commenced this action on March 10, 2022. The notice of intent to defend was sent by facsimile from “Parkdale Internet Lounge”. There was no indication that the defendant, a corporation, 1127937 Ontario Inc., was represented by counsel.

[3] The statement of defence was received by the plaintiff on April 6, 2022 via regular mail, again with no indication that the Corporate defendant was represented by counsel.

[4] On April 27, 2022, the plaintiff’s counsel sent a letter to the defendant advising that, pursuant to Rule 15.01(2) of the Rules of Civil Procedure, the Corporation must be represented by counsel. The defendant failed to comply with said Rules and, accordingly, the plaintiff served a notice of motion on July 19, 2022.

The Law

[5] Pursuant to Rule 15.01(2) “a party to a proceeding that is a corporation shall be represented by a lawyer, except with leave of the court”.

[6] In determining whether to grant leave to a corporation to act without a solicitor, the following factors have been considered by the courts:

1. The internal situation of the corporation and whether the person seeking to represent the Corporation in court is a senior representative of the corporation who has been duly authorized by the Board of Directors, who themselves are properly elected;
2. The nature of the action and the issues, and whether it would be seriously unfair to the opposite party to have the case presented or defended by a non-solicitor;
3. Whether the proposed corporate representative will be able to properly carry out the duties of a litigant under the Rules;
4. Whether the interests of the shareholders, officers, directors, employees, creditors and other potential stakeholders are adequately protected by the granting of leave;
5. Whether the proposed representative is reasonably capable of comprehending the issues in the litigation and advocating on behalf of the Corporation. The court shall not impose too high a threshold at this stage, given that the courts abound with self-represented litigants of varying skills. The proposed representative should, however, be capable of comprehending the issues and articulating the case on behalf of the Corporation;
6. Whether the corporation is financially capable of retaining counsel. Access to justice has been a concern troubling the courts at all levels in Canada for some considerable time. It is fundamental to the integrity of the courts and the reputation of the administration of justice that parties have reasonable access to our courts. If the refusal to grant leave would effectively bar a corporation from access to justice, this factor should be given considerable weight. See: De La Rocha v Markham Endoscopy Diagnostics Inc., 2010 ONSC 5100. See also: 92417 Canada Ltd. v Canada Film Development Corp, [1984] O.J. No. 3257, 46 O.R. (2d) 769.; 419212 Ontario Limited v Astrochrome Crankshaft Toronto Ltd, [1991] O. O. J. No. 918, 3 O.R. (3d) 116, 48 C.P.C. (2d) 268.

[7] It is the position of the plaintiff that the defendant has not satisfied the above-enumerated factors and conditions.

[8] It is the position of the defendant that he is the sole officer and director of the Corporation and knows the affairs of the Corporation better than anyone. It is further his position that the Corporation cannot afford a lawyer.

[9] The plaintiff argues that the defendant has not provided sufficient or any evidence of a Resolution to establish that Mr. Byrnes has been duly authorized by the Corporation to act as its agent. While the defendant argues that he has provided evidence of the structure of the corporation and is the sole officer, director, and shareholder of the Corporation, the Corporate Profile provided dates from prior to the commencement of this action. There is no current information about the Corporation. Further, there is no evidence of a formal Resolution by the Board, authorizing Mr. Byrnes to represent the Corporation. While Mr. Byrnes has included a Resolution signed by himself personally, there is no formal Resolution signed by an officer of the Corporation. The Resolution included in the materials does not include a signing line for a representative of the Corporation and has not been signed by an officer of the Corporation.

[10] While I appreciate Mr. Byrnes’ submission that he is the only officer and director of the Corporation, he has not provided sufficient evidence of such for purposes of this motion, nor sufficient evidence of a formal Resolution of the Board and has not complied with the Rules of Civil Procedure.

[11] There is concern that Mr. Byrnes will not properly protect the interests of the Corporation, its shareholders officers, directors, employees, creditors and other potential stakeholders. Mr. Byrnes was disbarred by the Law Society of Ontario as a result of professional misconduct: Law Society of Upper Canada v Roderick John Byrnes, 2013 ONLSHP 125. The Law Society Hearing Panel specifically cited Mr. Byrnes’ failure to serve his clients as a reason for the revocation of his license to practice law and stated in its decision, “Mr. Byrnes has now demonstrated for a third time that he could not be trusted to deal fairly or honestly with clients” and that “[Byrnes] was very much prepared to sacrifice his clients’ interest to meet his needs”. Thus, the Law Society of Ontario held that Mr. Byrnes was incapable of advocating on behalf of clients, which led to the revocation of his license to practice law. The Law Society Hearing Panel specifically cited the fact that the fundamental reason Mr. Byrnes’ license was revoked was that he was likely to sacrifice his clients’ interest to meet his needs again. In this case, the Corporation is his client.

[12] While this Corporation appears to be the sole interest of Mr. Byrnes, I do not know whether there are employees, creditors or other stakeholders whose interests may not be adequately protected if Mr. Byrnes is permitted to act on behalf of the Corporation. And see Canada Trust v Public Guardian and Trustee, 2019 ONSC 1768 where the court refused to permit a non-lawyer CEO to represent his organization due to his misconduct in previous proceedings.

[13] Based on the history of this case and what I have seen from Mr. Byrnes, I am concerned that he does not properly understand the court process or the issues involved or has improperly adhered to said Rules and procedures which will unnecessarily encumber the proceedings, and potentially adversely affect stakeholders and others.

[14] Further, there is no substantive evidence that the defendant does not have sufficient funds or assets to retain counsel. Mr. Byrnes has provided no evidence of the financial status of the Corporation, no financial statements or records, and merely indicates in a bald statement in his affidavit that the Corporation is unable to afford counsel to represent it: see Sykes v All Tech Mechanical Ltd, 2019 ONSC 2297.

[15] I note further that the defendant Corporation has third-partied Brian Chan, Mr. Byrnes’ former law partner, with whom he retained the condominium units in question. Mr. Chan, through his counsel, Ms. Dimitroff, also opposes Mr. Byrnes’ request to represent the Corporation.

[16] I have read the jurisprudence cited, including the three cases cited by Mr. Byrnes. I have further reviewed all of the evidence provided.

[17] I am satisfied that, in this case, Mr. Byrnes has not provided sufficient evidence in order for me to exercise my discretion to permit him to represent the defendant Corporation in these proceedings.

[18] Accordingly, I order that the Corporation retain counsel to represent it in this action within 30 days. If it does not do so within the 30 days ordered, I order that the statement of defence of the Corporation be struck.

[19] I order costs payable by the defendant within 30 days, as follows:

1. Costs of the plaintiff in the amount of $12,000; and
2. Cost of the third party, Mr. Chan in the amount of $3,000.

C.J. Brown J. Date: September 28, 2023