SUPERIOR COURT OF JUSTICE
Stickel v. Lezzaik
Court File No. 02-CV-241314CM1
M. Harrington, counsel for the defendant, Coventry Connections Inc.
R. Robinson, counsel for the plaintiff, D. Stickel
REASONS FOR DECISION
[1] These reasons relate to a motion by the defendant, Coventry Connections Inc. (“Coventry”) for an order granting leave to withdraw an admission. Upon hearing submissions of counsel for the parties, I informed the parties that the motion was granted for reasons to follow. These are my reasons. Costs are reserved pending submissions from the parties.
[2] The motion is brought pursuant to 51.05 of the Rules of Civil Procedure. This rule provides that “an admission in a pleading may be withdrawn on consent or with leave of the court.”
[3] The plaintiff, Darryl Stickel (“Stickel”) refused consent and this motion ensued.
[4] The admission sought to be withdrawn is found at para. 5 of the original statement of defence (and subsequent pleadings). It provides as follows:
“These Defendants admit that Hassan Lezzaik was, at the time of the alleged incident, employed as a taxi cab driver by Blue Line Taxi Co. Limited.”
[5] There is a second claim filed in this case by Maureen and Thomas Stickel, Stickel’s former spouse and child (the “Family Claim”). On March 13, 2011, Coventry has delivered an amended defence to this second claim. In this pleading at para. 5, Lezzaik’s status as employee is specifically denied, in the following language:
“This Defendant denies that the Hassan Lezzaik was, at the time of the alleged motor vehicle accident, employed as a taxi cab driver by this Defendant, operating as Blue Line Taxi Cab Co. Limited at the material time.”
[6] There was no objection in the Family Claim to the pleading. Consequently, in this action in which two claims were issued, there are conflicting pleadings. In the Stickel action, there is the plea that Lezzaik is an employee. In the Family Claim, there is a denial of the employment relationship.
[7] The parties agree that the test to be applied on this motion is the three part test in Antipas v. Coroneos , 1988 10348 (ON SC) , [1988] OJ No. 137 (HC) at p. 3, as follows:
The proposed amendment raises a triable issue;
The admission was inadvertent or resulted from wrong instructions; and
The withdrawal will not result in any prejudice that cannot be compensated for in costs.
[8] The parties agree that the proposed amendment raises a triable issue and therefore, I need not address that aspect of the test. The latter two factors, inadvertence and prejudice will be considered.
Inadvertence
[9] The affidavit of Rodney Dale (“Dale”) was filed in support of the motion. His affidavit explains clearly the circumstances giving rise to the making of the admission in the first instance, which admission was carried through to subsequent pleadings. Dale’s evidence also explains clearly the circumstances giving rise to the discovery of the nature of the relationship, from the perspective of Coventry and Lezzaik.
[10] I have reviewed Dale’s affidavit carefully. Dale is the partner responsible for the matter and he instructed his associate, Mr. Polak to prepare the defence. Dale deposed that he did not pick up on the fact that Coventry had admitted that Lezzaik was an employee of Blue Line when he reviewed the original defence (see para. 24) and that he never intended to admit that Lezzaik was an employee and the admission was inadvertent (see para. 30).
[11] Additionally, Dale deposed that Lezzaik’s evidence on discovery held April 14, 2004 equivocated on the issue. Dale deposed that Lezzaik initially stated he was employed as a taxi driver by Blue Line but later seemed to clarify that he (Lezzaik) was the owner and operator of the vehicle involved in the collision with the plaintiff’s vehicle (see para. 17). It is, in fact, not disputed that Lezzaik was the owner and operator of the vehicle and that expenses were written off (see Lezzaik discovery at qq. at qq. 146/147/240). Further, at pp. 48-49 of Lezzaik’s discovery, there is a discussion between counsel as to an undertaking to produce the insurance policy declarations page and as to whether Coventry was a proper party at all. Lezzaik’s discovery at qq. owns and operates the vehicle
[12] Having considered the record and in particular the Dale affidavit and transcripts as noted above, I find that the admission was inadvertent.
[13] As well, rule 26.01 of the Rules provide that the court shall grant leave to amend on such terms as are just unless there is prejudice that cannot be compensated for by costs. In my view, this case is no different than the usual instances where amendments are sought to allow pleadings to conform to the discovery evidence. Lezzaik’s discovery evidence is clearly that he was the owner and operator.
[14] Counsel for Stickel submitted that the court ought to disregard Dale’s evidence because it is not based on information and belief. This argument, in my view, would apply only to para. 28 of the affidavit, if at all. In my view, inadvertence can be found without regard to para. 28 of the affidavit. There remains other evidence of inadvertence. I accept Dale’s evidence as supporting a reasonable explanation for the admission that was made.
[15] In any event, if I am in error in accepting Dale’s evidence because it is not based on information and belief, in my view, Dale as the partner responsible for the matter, had final responsibility for the defence. Clearly, Dale has deposed that he had no intent to admit the employment relationship and there is no evidence to impair or negative that intent.
Prejudice
[16] Coventry submits that there is no prejudice occasioned by the withdrawal of the admission. Coventry points to the facts that Lezzaik’s continued examination for discovery has not yet been completed and that Coventry’s examination has not commenced. It is submitted that Stickel will have every opportunity to canvass the nature of the relationship between Lezzaik and Blue Line/Coventry. I agree. I do find that there is any prejudice to Stickel arising from the withdrawal of the admission.
[17] It was argued by counsel for Stickel that the prejudice that arises relates to the unavailability of insurance to cover damages, if Stickel is successful in his claim. This alleged prejudice arises because Coventry’s commercial general liability insurance policy limit of $23 million will potentially be unavailable to Stickel. In my view, the unavailability of the additional insurance limits is not prejudice that is properly relied upon in the context of this motion.
[18] As mentioned above, it was known to counsel for Stickel early on, in 2004 when Lezzaik was first discovered, that Coventry was unlikely a proper party to the action at all. See pp. 48-49 of the Lezzaik discovery. It would appear that some thought was given by counsel for Stickel to the possibility that only Lezzaik’s insurance policy would be available.
[19] Also, the prejudice relied upon by Stickel is not prejudice that is occasioned by the admission made and now sought to be withdrawn. There was no evidence as to what if anything Stickel did, or didn’t do, that was influenced by the making of the admission.
[20] The decision in Zellers Inc. v. Group Resources Inc. , 1995 7141 (ON SC) , [1995] OJ No. 5 (GD) at p. 7 suggests that there must be real prejudice to the plaintiff. There, the court held that in the absence of real prejudice, the court ought not hold a party to a poorly drafted pleading created in inadvertence.
[21] The onus of establishing prejudice, on a balance of probabilities, rests upon Stickel (see 370866 Ontario Ltd. v. Chizy , 1987 4122 (ON SC) , [1987] OJ No. 2244 (HC) at para. 4 ). Prejudice, or real prejudice, typically arises where a limitation period has expired (see for eg. Romita v. Shoi , [2010] OJ No. 5188 (SCJ) ). On this motion, no evidence was advanced of any prejudice to Stickel.
[22] There was a further argument advanced by counsel for Stickel. As I understand the argument, it is submitted that Dale’s evidence ought to be disregarded because he failed to declare a conflict when he spoke to Coventry about the admission following Dale’s discussion with Lezzaik. It is argued that Dale ought to have sought Lezzaik’s consent to disclose the matter or waiver of privilege before addressing the issue with Coventry. Stickel therefore argues that Lezzaik’s position is potentially prejudiced and therefore that prejudice (ie prejudice to Lezzaik) is sufficient to meet this aspect of the test. In my view, this argument cannot prevail for two reasons. First, the prejudice that is relevant must be prejudice to the Stickel. Second, Lezzaik is not opposed to the motion and therefore, this court accepts that Lezzaik does not advance any actual prejudice. It strikes me as unusual that a party to the action could rely on potential prejudice to another party where that other party does not object itself.
[23] In making this determination, I am not suggesting that there is prejudice to Lezzaik that would underpin Stickel’s submissions and I make no findings as to the same. There was simply no evidence of any prejudice to Lezzaik in the record.
[24] Given the conclusion as to lack of prejudice to Stickel, or even Lezzaik, the opposition to the motion fails.
[25] Counsel for Stickel sought an assessment of costs thrown away in the event that leave to withdraw the amendment was granted. I am not prepared to award costs thrown away to be assessed at this time for two primary reasons. First, there was no evidence as to the nature of the costs sought to be reimbursed as “thrown away”. There was no evidence that a particular step taken was wasted or may not have been taken. Second, and perhaps more importantly, the discoveries have not been completed and there is unlikely to be costs thrown away. The assessment of such costs thrown away, if there are any, is best left to the trial judge following the trial. It may be that certain steps taken might well have use at trial even if on first consideration it might have been seen to be thrown away.
[26] Lastly, Stickel on the return of Coventry’s motion brought a cross motion to amend the statement of claim to plead that Lezzaik is an employee. The cross motion was consented to by Coventry and an order was signed to this effect. In my view, it does not lie in the mouth of Stickel to seek to amend to plead vicarious liability in the face of the existing admission, now known to be inadvertent and yet refuse to consent to the proposed withdrawal of admission to address the new plea of vicarious liability. In this circumstance, I cannot see that there is any prejudice to Stickel and the issue is properly left to the trial judge.
Costs
[27] Costs are reserved pending written submissions if the issue cannot otherwise be resolved.