Court of Appeal for Ontario

Citation: Cardinal Investments Inc. v. Ultra Depot (Ontario) Inc., 2022 ONCA 827 Date: 2022-11-25 Docket: C70479

Before: van Rensburg, Sossin and Copeland JJ.A.

Between:

Cardinal Investments Inc. Plaintiff (Appellant)

and

Ultra Depot (Ontario) Inc., Serge Lafleur and Murray Rappel Defendants (Respondents)

Counsel: James R. Smith, for the appellant Alan S. Cofman, for the respondents

Heard: November 22, 2022

On appeal from the order of Justice Renu J. Mandhane of the Superior Court of Justice, dated February 24, 2022.

Reasons for Decision

[1] After hearing submissions, we dismissed the appeal without costs, and without prejudice to the appellant’s right to bring a motion in the Superior Court seeking leave to amend the statement of claim under r. 26.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. These are our reasons.

[2] The appeal is from the order of the motion judge under rr. 21 and 25.06(8) striking out the claims against the individual defendants as disclosing no reasonable cause of action, and striking out the portions of the claim against all of the defendants alleging fraud, malice, and bad faith. The individual defendants are directors of the corporate defendant. As the claim relates to them, it sought to hold them liable in their personal capacity.

[3] The reasons of the motion judge and her order are silent on the issue of leave to amend.

[4] The appellant raised two grounds of appeal in its factum. First, the appellant argued that the motion judge erred in striking out the claims against the individual defendants and the allegations of fraud, malice, and bad faith against the corporate defendant. Second, the appellant argued that the motion judge erred in not articulating any reasons for denying the appellant leave to amend the statement of claim, and ought to have granted leave to amend.

[5] In oral submissions, counsel for the appellant did not press the first argument. Rather he focused on the issue of leave to amend the statement of claim.

[6] During the course of submissions, counsel for the respondents made clear for the first time that the respondents did not take the position that the motion judge denied leave to amend. The respondents accept that it is open to the appellant to bring a motion in the Superior Court under r. 26.01 seeking leave to amend the statement of claim in relation to the claims that were struck. The respondents may oppose such a motion depending on the substance of a proposed amended pleading. But they do not take the position that the motion judge’s order bars the appellant from bringing a motion to seek leave to amend the claim in relation to the claims that were struck.

[7] After the respondents made clear their position that a motion seeking leave to amend the claim is not barred, the parties reached an agreement that it was appropriate that the appellant take the opportunity to bring a motion to amend the claim in the Superior Court, rather than proceed with argument of the appeal. Counsel for the respondent proposed that the appeal be dismissed with costs, without prejudice to the appellants’ right to bring a motion to amend, while counsel for the appellants proposed that the appeal, and any determination of costs, be stayed pending the determination of such a motion.

[8] Typically, the issue of leave to amend would be considered by a motion judge at the same time as a motion to strike a pleading or portions of a pleading. However, in the unusual circumstances of this case, in particular the silence of the motion judge’s reasons and order on the issue of leave to amend, and the position of the parties, we considered it appropriate to dismiss the appeal on the basis that the order of the motion judge does not bar the appellant from bringing a motion in the Superior Court seeking an amendment under r. 26.01.

[9] In the circumstances, we made no order for costs of the appeal.

“K. van Rensburg J.A.”

“Sossin J.A.”

“J. Copeland J.A.”