NEWMARKET
COURT FILE NO.: CV-05-74680
DATE: 20140527
SUPERIOR COURT OF JUSTICE – ONTARIO
IN THE MATTER OF The Construction Lien Act, R.S.O. 1990, Chapter C.30
RE: 539243 ONTARIO LTD. o/a RCG SITE SERVICING & CONTRUCTION, Plaintiff
AND:
THE REGIONAL MUNICIPALITY OF YORK, THE CORPORATION OF THE TOWN OF MARKHAM, and CANNING CONTRACTING LIMITED, Defendants
BEFORE: THE HON. MADAM JUSTICE S.E. HEALEY
COUNSEL:
N. Punyarthi, for the Matthew Montanaro
L. Wise, for the Defendant Canning Contracting Limited
HEARD: April 24, 2014
ENDORSEMENT
[1] The moving party, Canning Contracting Limited (“Canning”) seeks the following orders:
Varying the Order of this Court made April 18, 2011, or in the alternative, for a further Order awarding costs of these proceedings from August 18, 2009 to Canning Contracting Limited as against Matthew Montanaro personally;
That any monies recovered from Matthew Montanaro be credited against the costs order to Canning Contracting Limited;
For leave for Wise & Associates to bring a motion for a Charging Order in favour of Wise & Associates for its fees, charges and disbursements against the costs award to be paid by Matthew Montanaro to Canning Contracting Limited;
Discharging the Claim for Lien of the plaintiff, registered on January 12, 2005 as Instrument No. YR587130 in the Land Titled Office for the Land Registry Office of York (Aurora) No. 65, against the lands and premises set out in Schedule “A” hereto;
Discharging the Certificate of Action of the plaintiff, registered on February 16, 2005 as Instrument No. YR601048 in the Land Titles Office for the Land Registry Office of York (Aurora) No. 65, against the lands and premises set out in Schedule “A” hereto;
Discharging the Claim for Lien of the plaintiff, registered on January 12, 2005 as Instrument No. YR587131 in the Land Titles Office for the Land Registry Office of York (Aurora) No. 65, against the lands and premises set out in Schedule “A” hereto;
Discharging the Certificate of Action of the plaintiff, registered on February 16, 2005 as Instrument No. YR601049 in the Land Titles Office for the Land Registry Office of York (Aurora) No. 65, against the lands and premises set out in Schedule “A” hereto; and
Delivering up the Lien Bond of Zurich Insurance Company No. 6320335 dated March 1, 2005, posted on March 1, 2005 by Canning Contracting Limited with the Accountant of the Superior Court of Justice as Bond No. 494472 to vacate the Claims for Lien and the Certificates of Action of the Plaintiff, pursuant to Sections 44 and 47 of the Construction Lien Act, R.S.O. 1990, c.C.30 as amended.
[2] All remaining lien claimants have either consented to or are not opposed to discharges of the Claim for Lien and Certificates of Action, and delivering up of the Lien Bond. Accordingly, an order shall issue in accordance with paragraphs (f) to (j), inclusive, of the Motion Record.
[3] In terms of the request for leave to bring a motion for a Charging Order in favour of Wise & Associates, counsel has advised that not all known creditors of RCG Site Servicing & Construction (“RCG”) were served with the Motion Record, and submitted that an adjournment would be appropriate for this request. This court agrees. An order shall issue that paragraph (d) of the motion is adjourned to a date to be scheduled through the trial co-ordinators’ office.
[4] The bulk of time was spent on argument of the motion to vary the costs order of O’Connell, J. dated April 18, 2009, such that costs be made payable by Matthew Montanaro personally. Justice O’Connell ordered that RCG pay Canning costs on a partial indemnity basis fixed at $75,237.72.
[5] The authority of the court to vary an order as requested is found in Rule 59.06(2) which provides:
(2) A party who seeks to,
(a) have an order set aside or varied on the ground of fraud or of facts arising or discovered after it was made;
(b) suspend the operation of an order;
(c) carry an order into operation; or
(d) obtain other relief than that originally awarded,
may make a motion in the proceeding for the relief claimed.
[6] The basis for this request is the allegation that Mr. Montanaro provided a misleading affidavit used in opposing a motion for security for costs, and that the evidence contained therein was later contradicted at the judgment debtor examination of RCG, after judgment was obtained in the action. It is the position of Canning, as set out in the affidavit of Roy Wise, that:
Had RCG been candid in its responses to letters delivered by Canning’s counsel prior to the motion for security for costs and had RCG been truthful in its Affidavit in response to Canning’s motion for security for costs, then either a discontinuance of RCG’s claim could have been negotiated or in the alternative an order for security for costs would have gone on consent.
[7] Accordingly, Canning attributes all costs of preparing the motion for security for costs and all subsequent fees incurred, including the judgment debtor examination, to arise from the “false and deliberately misleading affidavits sworn and filed by Mr. Montanaro in response to Canning’s motion for security for costs”.
[8] It is the position of RCG that the judgment debtor examination did not establish that Mr. Montanaro’s affidavit was false. Further, counsel points to portions of the affidavit of Oscar D’Silva sworn August 6, 2009 filed in support of the motion for security for costs to show the extent of Canning’s knowledge prior to bringing that motion. Mr. D’Silva deposed that he is Canning’s general manager, and stated:
Mr. Montanaro deposed on his examination for discovery that RCG is carrying on business and that it did not have any active projects;
That he learned on or about May 14, 2009 that RCG’s former business location and phone number were no longer in use;
Canning had suspicions as to RCG’s lack of assets;
A corporate profile report dated May 15, 2009 disclosed no current registered business name for RCG, and no reference to Mr. Montanaro as a director or officer of RCG;
Canning’s position is that RCG is pursuing its claim under tenuous circumstances and in the face of a very significant counterclaim because RCG is a shell corporation without assets and its principal believed that he had nothing to lose; and
At paragraph 30:
Although RCG deposed on its examination for discovery held March 30, 2009 that it was still carrying on business, its telephone has been disconnected, a different occupant has been resident at RCG’s business address as shown on its letterhead for a number of years, the business name registration has expired and counsel for RCG has refused to confirm that it carries on business notwithstanding recent inquiries all of which give rise to Canning’s theory as to why RCG is able to persist in its meritless approach.
[9] Despite this information, Canning proceeded with its motion for security for costs, and did not seek to have any individual personally post security.
[10] The test for setting aside, or varying an order is found in Becker Milk Co. Ltd. v. Consumers’ Gas Co. (1974), 1974 545 (ON CA), 2 O.R. (2d) 554, 43 D.L.R. (3d) 498 (C.A.) at p. 557 O.R. as follows:
That the evidence “might” probably have altered the judgment and,
That the evidence “could not with reasonable diligence have been discovered sooner”.
[11] The Court of Appeal for Ontario in DeGroote et al v. Canadian Imperial Bank of Commerce et al. (1999), 1999 4115 (ON CA), 121 O.A.C. 327 wrote:
The decision whether or not to reopen the motion was discretionary. While the test has been expressed in a number of different ways, it essentially comes to this. The court must consider whether the evidence would probably have changed the result and whether that evidence could have been discovered by the exercise of reasonable diligence. The reasonable diligence requirement will, however, be relaxed in exceptional circumstances where necessary to avoid a miscarriage of justice.
[12] The case law put forward by Canning includes cases in which orders were set aside on the basis of false misrepresentations or fraud: JV Mechanical Ltd. v. Steelcase Construction Inc., 2010 ONSC 1443 (Master); Computerized Security Systems Inc. v. Eco Tech Cleaning Systems Inc., 2005 CarswellOnt 9008 (S.C.J.).
[13] This motion fails for two reasons. First, I am not persuaded that the evidence given on the judgment debtor examination stands in contradiction to that contained in the affidavit of Mr. Montanaro, with one exception. At paragraph 15 of his affidavit, Mr. Montanaro stated that RCG’s assets were more than sufficient to satisfy Canning’s estimated costs of the action. He then gave evidence at the judgment debtor examination that the rationale for making such a statement was that he thought “that was in regards to what Canning owed us”. Such an answer stretches the bounds of reality. Mr. Vona, also questioned on behalf of RCG at the judgment debtor examination, confirmed that the company had no assets.
[14] However, that is insufficient to vary the order, for the second reason that causes this motion to fail. The concern that RCG had no assets was clearly addressed in the affidavit of Mr. D’Silva. Despite that knowledge or suspicion, there was no cross-examination of Mr. Montanaro on his affidavit, and therefore it cannot be said either that the evidence was newly discovered or that it could not have been discovered even with reasonable diligence. Reasonable diligence would have included cross-examination on the affidavit in the circumstances, particularly given Canning’s suspicions. Accordingly, the test for fresh evidence necessary to vary the order has not been met.
[15] For the foregoing reasons, the motion is dismissed.
[16] As the successful party, RCG is presumptively entitled to costs. Counsel advised that if successful in defending the motion, RCG would seek $1,250 for fees and $300 for disbursements. Accordingly this court orders that costs of this motion are payable by Canning to RCG fixed in the sum of $1,500 plus HST and payable in 30 days.
HEALEY J.
Date: May 27, 2014