Court File and Parties

COURT OF APPEAL FOR ONTARIO DATE: 20211118 DOCKET: C69281

Feldman, van Rensburg and Coroza JJ.A.

BETWEEN

Michael Lee Plaintiff/Defendant by Counterclaim (Respondent)

and

Shirmati Singh Defendant/Plaintiff by Counterclaim (Appellant)

Counsel: Mark Singh, speaking for the appellant Ash Mazinani on November 2 and Elena E. Mazinani on November 5, for the respondent

Heard: November 2, 2021 and November 5, 2021 by video conference

On appeal from the order of Justice Hugh K. O’Connell of the Superior Court of Justice, dated March 11, 2021, with reasons at 2021 ONSC 1870.

Reasons for Decision

[1] The appellant entered into an arrangement with the respondent relating to the purchase of a home in Oshawa, Ontario. The appellant lives in the home with her spouse Mark Singh and their family. A dispute has arisen between the parties as to the ownership of the home. The respondent issued a claim in the Superior Court for possession of the property, arrears of rent, repayment of a loan, and damages. The respondent’s position is that he is the lawful owner of the property and has paid all carrying costs towards the home. The appellant filed a statement of defence and counterclaim claiming that the respondent holds the property in trust for her.

[2] On March 11, 2021, a motion judge struck the appellant’s pleadings because she had not complied with previous orders of the Superior Court of Justice to pay occupation rent of $3,000/month. Once the appellant’s pleadings were struck, the respondent obtained default judgment for possession of the home on June 10, 2021.

[3] On this appeal, the appellant claims that the motion judge committed several errors in striking her defence and counterclaim and asks that the court set aside the orders. At the conclusion of the hearing, the court allowed the appeal with reasons to follow. We now provide our reasons.

[4] The appellant did not appear at the hearing of this appeal. Mr. Singh advised the court that the appellant was not able to argue the appeal because she had just given birth. On consent, we allowed Mr. Singh to appear on behalf of the appellant because we were satisfied that he has extensive knowledge of the history of this matter, he has appeared for the appellant on other occasions, and he was fully prepared to argue the appeal on behalf of the appellant.

[5] Pursuant to a consent order dated March 8, 2019, the appellant was required to pay the respondent $3,000/month in occupation rent commencing March 1, 2019 until further order of the court or the consent of the parties. It is not disputed that the appellant has stopped complying with this order.

[6] On February 4, 2021, the respondent brought a motion to strike the appellant’s pleadings because the appellant had stopped paying occupation rent pursuant to the March 2019 order. Based on the appellant’s submissions that she was prepared to pay the arrears owing under the March 2019 order, Corkery J. ordered on consent that the appellant pay the respondent the sum of $27,000 plus costs of $4,000 on or before February 18, 2021, that the failure to pay that amount would result in the striking of the statement of defence and counterclaim of the appellant, and that if there were any further breaches of the March 2019 order, the respondent would have leave to proceed with a motion to strike the statement of defence and counterclaim without notice to the appellant.

[7] The appellant did not comply with Corkery J.’s order. The respondent brought a motion, without notice, to strike the appellant’s pleadings for failure to comply. On March 11, 2021, O’Connell J. granted the relief and struck the appellant’s pleadings. The respondent then obtained default judgment on June 10, 2021.

[8] The appellant raises several arguments about the decision of the motion judge to strike her pleadings. Her primary submission is that a law clerk employed by counsel for the respondent advised Mr. Singh over the telephone that a delay in complying with Corkery J.’s order was acceptable. We do not accept the appellant’s arguments. We are satisfied that O’Connell J. was entitled to strike the appellant’s pleadings based on the record before him and that he committed no error in doing so.

[9] However, during oral argument, Mr. Singh advised the court that because he had recently found work, the appellant could satisfy the outstanding arrears shortly and that the litigation was ready to proceed in the Superior Court of Justice. Counsel for the respondent also acknowledged that the litigation was ready for trial and if the orders were set aside, the next step would be for the parties to schedule a judicial pre-trial in the Superior Court. According to the parties, the appellant has filed an affidavit of documents and examinations for discovery are complete.

[10] The panel directed that if Mr. Singh provided funds to counsel for the respondent in the amount of $49,500 by noon on November 5, 2021, the appeal would be allowed, and the order striking pleadings would be set aside along with the default judgment that followed it. If Mr. Singh failed to make payment, the appeal would be dismissed. Counsel for the respondent had confirmed that this amount would cover the rent arrears to date as well as the outstanding costs awards. The appeal was adjourned until November 5, 2021.

[11] On November 5, counsel for the respondent confirmed that Mr. Singh had provided the payment of $49,500.

[12] In light of the information received from the parties and the fact that the appellant paid the full amount claimed in arrears, the orders striking the appellant’s pleadings should be set aside. Having now received the arrears, we see no identifiable prejudice to the respondent in proceeding with this litigation. In the circumstances of this case, the striking of the appellant’s pleadings is not a proportionate response.

[13] For these reasons, the appeal is allowed and the March 11, 2021 order of O’Connell J. striking the appellant’s pleadings and the June 10, 2021 order of Smith J. (as amended by Verner J. on June 28, 2021) granting the respondent default judgment are set aside.

[14] While these reasons were on reserve, the court was advised in writing by counsel for the respondent that an incorrect figure had been provided by counsel for the respondent during the hearing. The respondent requests that the reasons for decision reflect that the appellant actually owed $58,000 instead of $49,500, resulting in an outstanding balance of $8,500. The appellant objects to this request.

[15] We would simply observe that the payment by the appellant of the amount the court was told was the full amount in arrears, $49,500, was key to our decision to set aside the order striking the appellant’s pleadings. The appellant complied with the requirement to pay $49,500. Counsel for the respondent confirmed the amount in arrears twice during the November 2, 2021 hearing and, furthermore, raised no issue to the panel on November 5, 2021, when payment was confirmed. If a mistake was made, that will have to be proved in the ongoing proceedings between the parties. However, except at trial, the respondent may only try to claim the now-alleged past arrears in the event of a further breach of the Corkery J. order.

[16] The appellant submitted that because he was successful, he should be awarded costs for the appeal in the amount of $2,200. We reject this request. The appellant has been granted an indulgence by this court and it would not be appropriate to award costs for the appeal. There will be no order for costs.

“K. Feldman J.A.”

“K. van Rensburg J.A.”

“S. Coroza J.A.”