SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: CV-09-387286
DATE: November 18, 2013
RELEASED: November 22, 2013
RE: 2101641 ONTARIO CORPORATION v DEVDAS SUVARNA, GEETA SUVARNA and AATISH SUVARNA
BEFORE: MASTER C. ALBERT
COUNSEL:
P. Rausch, for the plaintiff, tel: 416-661-9229; fax: 416-663-5887
and Remzi Cene, a principal of the plaintiff corporation, also appearing
S. Carter for defendant, tel: 416-567-4278; fax: 519-942-0300
ENDORSEMENT
This construction lien action arises from the renovation of a property. The defendant moves for judgment on the basis of a consent to judgment dated November 19, 2012 executed by the parties. A seven day trial is scheduled to begin on January 28, 2014. I granted judgment for the reasons that follow.
The plaintiff registered a construction lien for $456,930.00 on August 6, 2009 and issued its action on September 17, 2009. The defendant counterclaimed for $100,000.00 for deficiencies and incomplete contract items plus $50,000.00 for damages for an exaggerated lien claim[^1] plus $20,000.00 for other damages. On December 8, 2011 the defendant posted security of $506,930.00[^2] to vacate the lien from title.
Justice Brown referred the action to the master for trial on December 2, 2011. Master Polika signed an order for trial on February 9, 2012. The reference was before me for the first hearing for directions on March 12, 2012. On that date the plaintiff, represented by counsel, reduced the claim to $350,000.00 and the parties agreed that $106,000.00 of the security posted by the defendant to vacate the lien claim would be returned to the defendant, leaving the sum of $350,930.00 for the lien claim plus $50,000.00 for costs (total $400,930.00) as security posted to vacate the lien. I included the return of $106,000.00 to the defendant in my March 12, 2012 order.
On March 12, 2012 I ordered a timetable for production and discoveries. I also fixed April 13, 2012 as the deadline for the plaintiff to answer all outstanding undertakings arising from the cross-examination on the affidavit of verification of the lien.
At the next hearing for directions, on July 23, 2012, the parties advised the court that discovery of the plaintiff did not proceed for several reasons, including that the plaintiff’s undertakings given at the cross-examination on the affidavit of verification (conducted two years earlier) had not yet been provided and the accounting particulars that the plaintiff was to provide had not been delivered. I made a “last chance” order on July 23, 2012 as follows:
By August 15, 2012 the plaintiff shall (i) comply with undertakings given at the cross-examination on the affidavit of verification, (ii) provide particulars of its claim as demanded by the defendants and (iii) deliver a supplementary affidavit of documents that includes documents not yet produced, listed on either schedule “A” or “C” as applicable.
If the plaintiff fails to comply with all outstanding undertakings given at the cross-examination on the affidavit of verification, ordered by the court to be answered by April 13, 2012 and the deadline extended by this order to August 15, 2012, then at the next pretrial hearing for directions or on motion prior to that date, upon satisfactory evidence of non-compliance, the plaintiff’s pleadings will be struck.
At the July 23, 2012 hearing for directions the plaintiff, represented by counsel, advised the court that most of its documents had been lost. However the plaintiff had not listed any documents that had been in its possession and were claimed as having been lost on Schedule “C” of its affidavit of documents. Nor had the plaintiff provided an explanation in its affidavit of documents as to why most of its documents are no longer available. I ordered a litigation timetable that extended deadlines previously ordered, allowing the plaintiff another chance to comply.
The defendant brought a motion for security for costs, returnable 2:30 p.m. on November 19, 2012. The third hearing for directions was scheduled for noon the same day. At the hearing for directions, in which the plaintiff was represented by counsel, the parties advised the court that they had resolved the security for costs motion on consent. I included the following order in my endorsement of that date:
Security for costs: On consent, the plaintiff shall pay into court security for costs in the fixed amount of $50,000.00 by December 17, 2012 or such later date as may be ordered or agreed to by the parties.
The plaintiff did not pay security for costs of $50,000.00[^3] into court by December 17, 2012 as ordered. Nor did the plaintiff post security for costs prior to the next hearing for directions on February 11, 2013. In my February 11, 2013 endorsement I directed that the defendant may move for security for costs.
As part of the February 11, 2013 endorsement I ordered a litigation timetable for the parties to exchange affidavit evidence in chief of the witnesses who would be testifying in chief at trial by affidavit, having established a hybrid summary and ordinary procedure for trial[^4]. I also fixed the trial for seven days of hearing beginning January 28, 2014.
The plaintiff’s list of trial witnesses included eleven (11) witnesses who were to give evidence in chief by affidavit plus three witnesses who would testify orally in chief at trial. Witnesses who were to testify orally in chief orally at trial were required to file witness statements outlining their anticipated evidence. The deadline for the plaintiff to serve its affidavit evidence in chief and witness statements was ordered to be May 31, 2013, allowing over two months for the plaintiff to prepare the affidavit evidence and witness statements. The plaintiff failed to comply.
The defendant brought its motion for security for costs returnable August 26, 2013. On that date the defendant reported that the parties had settled the motion and I endorsed the record “Motion reported settled. Motion dismissed”.
The basis of the settlement on August 26, 2013 was that the plaintiff had agreed to post security for costs of $50,000.00 by a new deadline and as an assurance that it would do so the plaintiff executed a consent to judgment dismissing its lien claim and its action in the event that the plaintiff failed to comply with the agreement to post security for costs.
The Motion for Judgment
The consent to judgment executed by the plaintiff forms the basis of the defendant’s motion for judgment today. The defendant advises the court that if the court is prepared to strike the plaintiff’s claim, order the lien discharged and direct that the funds posted as security by the defendant be returned to the defendant, then the defendant would be prepared to discontinue its counterclaim.
In a construction lien reference the reference master has all the powers of the court: section 58 of the Construction Lien Act. These powers include a motion for judgment in the circumstances that are before me in this reference.
On a motion for judgment the court has discretion to grant or refuse to grant the motion, even in the face of a consent to judgment. The factor that causes me to pause is that the plaintiff appears today with counsel who is different from counsel who appeared at the hearings for directions, such counsel having become counsel of record at some point prior to today, and counsel appearing today asks the court for leave to get off the record on the basis that he is unable to get instructions from his client, the plaintiff corporation. The instructing individual behind the corporation is Mr. Remzi Cene, also appearing in court today.
The plaintiff’s counsel did not book, serve or file a motion to be removed as counsel of record for the plaintiff. However, he obtained written consent from his client to be removed from the record.
The issue is whether, in the absence of the plaintiff having instructed counsel on this motion for judgment, in the absence of a motion properly before the court for plaintiff’s counsel to be removed from the record, in the presence of counsel for the plaintiff and Mr Cene also appearing on behalf of the plaintiff corporation, and in the face of the plaintiff having executed a consent to judgment to address the exact circumstances the plaintiff faces today, should the plaintiff be allowed yet another chance to show its good faith in prosecuting this construction lien claim by extending the deadline to post security for costs a fourth time.
The consent to judgment is prima facie sufficient to warrant judgment dismissing the plaintiff’s claim. However, in exercising discretion I have taken into account the plaintiff’s conduct of the litigation. The plaintiff has repeatedly breached court orders. Such breaches cause the court to question the plaintiff’s bona fide intention to prosecute its action and its ability to proceed to trial on the fixed trial date of January 28, 2014. Had the plaintiff genuinely intended to prosecute its claim, in the face of a trial date looming just over two months away, it would have instructed its counsel in respect of today’s motion and also in respect of the witness affidavits and witness statements that were to have been served almost six months ago. The plaintiff has not sought any relief regarding its breaches of court orders. These are factors that I have considered in exercising my discretion to grant the defendant’s motion for judgment based on enforcing the parties’ executed consent to judgment.
The fact that Mr. Rausch appears today without instructions is a matter between him and his client. It is within his client’s control to properly instruct him. By failing to do so the plaintiff is accepting the consequences of appearing today on this motion without having instructed counsel.
In the absence of a motion to be removed from the record and an order of the court served on his client, Mr. Rausch remains on the record of purposes of this motion. As stated at the hearing of the motion, his request to be removed from the record will be granted provided he files a draft order in the proper form. The order will not come into effect until five days after he serves the order on his client and files proof of service with the court.
Conclusion
Taking into account (i) the plaintiff’s conduct throughout this reference; (ii) the consent to judgment executed by the plaintiff authorizing dismissal of its claim if it failed to post security for costs; (iii) the plaintiff’s failure to post the security for costs of $50,000.00, and (iv) the defendant’s willingness to discontinue the counterclaim if the plaintiff’s claim is dismissed, I find that it is appropriate to grant judgment and dismiss the plaintiff’s claim. This exercise of discretion takes into account the plaintiff’s repeated breaches of court orders including its failure to serve its trial evidence by May 31, 2013 as ordered, or at all.
For these reasons the plaintiff’s claim is dismissed and its action is struck. The lien is ordered discharged. The counterclaim is discontinued.
While my endorsement on the back of the motion record indicates that the security posted by the defendant to vacate the lien of “$506,930.00” plus accrued interest be returned to the defendant, I note from the order of March 12, 2012 that security was reduced to $400,930.00. The amount of security to be returned to the defendant is the quantum posted by the defendant that remains in account 520755.
The parties may file a draft order with my assistant, ATC Backes, 6th floor, 393 University Avenue, to give effect to this endorsement.
After the formal order is issued on this motion, or incorporated into the same order, the defendant may bring a motion in any 9:30 a.m. construction lien “ex parte” court over which I am presiding to effect the discharge of the construction lien and the return of the security posted by the defendant to vacate the lien. A motion record and two copies of the draft order are required.
The defendant may bring a motion for costs of the action on notice to the plaintiff, provided the motion is brought in a timely manner and returnable no later than January 28, 2014. If an earlier date for the motion for costs is not available then the motion should be made returnable January 28, 2014 at 10:00am being the date and time set aside for the first day of trial.
Master C. Albert .
DATE: November 22, 2013
2013 ONSC 7247
COURT FILE NO.: CV-09-387286
DATE: November 18, 2013
RELEASED: November 22, 2013
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: 2101641 ONTARIO CORPORATION v DEVDAS SUVARNA, GEETA SUVARNA and AATISH SUVARNA
BEFORE: Master C. Albert
COUNSEL:
P. Rausch, for the plaintiff
tel: 416-661-9229; fax: 416-663-5887
Remzi Cene, principal of the plaintiff corporation, also appearing, for the plaintiff
S. Carter for defendant
tel: 416-567-4278; fax: 519-942-0300
ENDORSEMENT
Master C. Albert
[^1]: Section 35 of the Construction Lien Act
[^2]: Accountant’s account number 520755
[^3]: or any amount of security
[^4]: Rule 55.01 requires the reference master to devise and adopt “the simplest, least expensive and most expeditious manner of conducting the reference” as is suitable for the case.