COURT OF APPEAL FOR ONTARIO

CITATION: Arora Commercial Corporation v. 975922 Ontario Inc., 2015 ONCA 146

DATE: 20150305

DOCKET: C58761

Laskin, Rouleau and Huscroft JJ.A.

BETWEEN

Arora Commercial Corporation

Plaintiff (Respondent)

and

975922 Ontario Inc. and 975922 Ontario Limited both operating as Orangeville Women’s Health Club, Susan Dyment and Karen Dyment

Defendants (Appellants)

P. Kennedy, for the appellants

George Gligoric, for the respondent

Heard and released orally: February 25, 2015

On appeal from the judgment of Justice James A. Ramsay of the Superior Court of Justice, dated April 10, 2014.

ENDORSEMENT

[1] 975922 Ontario Inc., 975922 Ontario Limited and Susan Dyment appeal the summary judgment dismissing their counter-claim, and the costs of $32,000 awarded against them.

[2] The appellants’ main ground of appeal is that they were denied procedural fairness because they were not given notice that Arora was seeking a dismissal of the counter-claim. In this court counsel for Arora candidly acknowledged that his notice of motion did not ask that the counter-claim be dismissed, and in response to a question from the motion judge, advised the court he was not seeking that relief.

[3] Nonetheless, in this court, the respondent attempts to defend the judgment dismissing the counter-claim by pointing out that the appellants’ defence and their counterclaim are mirror images of each other in the sense that they rest on the same allegation – the alleged misrepresentation made by Arora’s lawyer.

[4] Arora’s position has some merit, but we think that the absence of fair notice is fatal to upholding the dismissal of the counter-claim. Had the appellants known that their counter-claim was in issue on the motion, the evidentiary record may well have been different. For that reason, the judgment dismissing the counter-claim cannot stand.

[5] The appellants also ask that enforcement of the judgment against them be stayed pending the disposition of their counter-claim. They are not entitled to that relief because of the provisions of the lease in which the appellants waive any right to set-off.

[6] Accordingly, the appeal is allowed and para. 2 of the judgment under appeal is set aside. We decline to interfere with the $32,000 in costs ordered by the motion judge on the ground that those costs reflected the motion for summary judgment on which Arora succeeded. In this court the appellants were successful and they are entitled to their costs of the appeal, which we fix in the agreed on amount of $10,000 inclusive of disbursements and applicable taxes.

“John Laskin J.A.”

“Paul Rouleau J.A.”

“Grant Huscroft J.A.”