SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Ella Raitman, Plaintiff

AND

Medallion Developments (South Maple) Limited, Defendant

BEFORE: F.L. MYERS J.

COUNSEL:
Jonathan Ng, counsel for the Plaintiff for the purposes of this motion only and Ella Raitman, in person

Sepideh Nassabi, for the Defendant

HEARD: June 3, 2014

endorsement

Introduction

[1] This is a motion to dismiss a motion. The plaintiff asks me to dismiss the motion for summary judgment brought by the defendant that is scheduled to be heard on September 25, 2014. The motion for summary judgment seeks to dismiss this lawsuit because the same issues have already been tried before Boswell J. in Newmarket. As I will discuss below, Boswell J. held against the plaintiff. The defendant asks for summary judgment dismissing this action based on the related doctrines of res judicata, issue estoppel, and abuse of process and on the basis that this action was brought after the expiry of the relevant limitation period.

[2] In paragraph 1.4 of her Supplementary Factum dated May 20, 2014, the plaintiff objects to the five-month schedule for the exchange of motion materials and cross-examinations leading up to the proposed summary judgment motion hearing. She says that a “legal investigation” of the issues of issue estoppel and the limitation period that are raised by the defendant on the proposed motion does not make common sense and is proof that the defendant’s counsel is abusing the court. She argues,

1.5 Moreover, today’s motion moving party, Ella Raitman (plaintiff) is seeking from court a fair and justified decision that her case is not a candidate for Summary Judgment anyway and must go on to trial because genuine issue of material fact exists in her case regardless they were heard in Newmarket.

[3] Ms Raitman invites the court to rule, prior to hearing the motion for summary judgment next September, that she is not barred by res judicata or a limitation period from bringing this action to trial. Her factum was 25 pages long. Her supplemental factum argued the issues for another 24 pages. I agree with Ms Raitman that there is no sense in spending thousands of dollars or wasting any further time to exchange evidence and further factums. But we disagree on the outcome of the analysis. No matter what further evidence or arguments might be offered, I do not see any possibility of there being genuine issues of fact requiring a trial in this litigation. Rather, in my view, no further evidence or analysis is required to determine that this case is an abuse of process and is barred by the Limitations Act.

The Facts

[4] On November 29, 2013, Boswell J. of this court released his decision in Raitman v. Medallion Development Corporation, 2013 ONSC 7351. In that action, the plaintiff and her husband were the plaintiffs. The defendant was the parent company of the defendant in this action. The basic issue in the case was set out succinctly by Boswell J. as follows:

[1] Three years ago the plaintiffs purchased a house to be constructed. They paid over $700,000 for it. They were disappointed with the delivered product. Their disappointment led to complaints and then to this lawsuit. These are my reasons for judgment following a trial.

[2] The substantive issues for trial were whether the parties agreed that the basement of the plaintiffs’ home would have a finished ceiling clearance of 7’10” and, if so, whether the defendant breached the agreement in that respect.

[5] Boswell J. then noted that the plaintiffs had named the wrong defendant in the case before him. The plaintiffs sued the parent company Medallion Development Corporation. The defendant in this case, Medallion Developments (South Maple) Limited, is a wholly owned subsidiary of that company and was the vendor of the house to the plaintiff under an agreement of purchase and sale dated February 7, 2010. Boswell J. repeatedly offered the plaintiffs the opportunity to amend their statement of claim to name the correct defendant. The parent company and vendor/subsidiary both consented to the amendment at trial. However, the plaintiffs refused to amend their claim to name the correct party. As a result, Boswell J. found as follows:

[4] I find as a fact that the plaintiffs contracted with Medallion and not MDC. There is no basis in law or in fact, on the record before the Court, on which to find MDC liable for the plaintiffs’ claim. On this basis alone the plaintiffs’ claim must be dismissed. The Court encouraged the plaintiffs to amend their pleading, without success. The plaintiffs’ insistence on pursuing MDC is, unfortunately, fatal to their claim.

[5] Having said that, I do not intend to end the judgment at this point. It would be unsatisfactory in my view, despite the plaintiffs’ position, to render a decision solely on the basis that the plaintiffs named the wrong party when anyone looking at this claim can readily see that there was an agreement between the plaintiffs and Medallion. Justice requires, in my view, that the claim be examined as though Medallion had been appropriately named. At the end of the day, in any event, I find that Medallion has no liability, for the reasons that follow.

[6] There were no facts in issue concerning the basement ceiling before Boswell J. The measurements were agreed upon. In introducing his legal analysis, Boswell J. expressed empathy with the plaintiff’s concerns as follows:

[8] The plaintiffs described the basement and entered photographs into evidence as exhibits. I agree with the plaintiffs that the ceiling appears low, at least by aesthetic standards. In an otherwise modern and very appealing home, the basement stands out as somewhat of an oddity. The plaintiffs have not been comfortable using it for the home office space they intended, nor have they entertained in it because they are embarrassed by it. In my view, their disappointment is justified. That said, disappointment with the finished product does not necessarily equate to breach on the part of Medallion.

[7] Boswell J. then went on to review the plaintiffs’ allegations concerning their purchase of the house, their post-contractual discussions about the height of the basement ceiling, their approval of the pre-delivery inspection, and the closing of the transaction all as contemplated by the agreement of purchase and sale. Ultimately, Boswell J. held in favour of the defendant as follows:

[23] It is the position of the plaintiffs that the reference to a standard basement ceiling height of 7’10” as set out on the Structural Upgrades Price Sheet is in fact a term of their contract with Medallion. I cannot agree with that assertion.

[24] It is, in my view, at its highest, a representation that the standard basement ceilings height was approximately 7’10” high. I accept that the plaintiffs relied on that representation in electing not to pay for an upgraded ceiling height. I have no evidence that they relied on it in terms of their decision to purchase the home in the first place. In fact, the evidence is to the contrary. The APS was signed prior to the Structural Upgrades Price Sheet being delivered to the plaintiffs.

[25] At any rate, it is clear that the contract did not contain a provision that required Medallion to construct the basement with a ceiling height of 7’10”. Paragraph 11(a) is an entire agreement clause which, in my view, completely forecloses the plaintiffs’ argument that the reference to a standard ceiling height in the Structural Upgrades Price Sheet rose to the level of a contractual term: see Mid Park Construction (1998) Ltd. v. Krofchick 1992 CarswellOnt 626, 28 R.P.R. (2d) 80. Moreover, on the plain wording of the contract, the plaintiffs’ failure to note a deficiency with respect to the basement ceiling on the PDI Form and their decision to close the purchase transaction without mention of any ceiling height deficiency, preclude them from raising the alleged deficiency now.

[8] The plaintiff’s purchase of the house closed on November 25, 2010. The plaintiff and her husband commenced their action in Newmarket on May 25, 2011. The trial was held in November, 2013. Boswell J. released his reasons on November 27, 2013 (subject to two corrections made in January 2014). This action was commenced by the plaintiff on December 20, 2013 more than two years after the events. There can be no question of discoverability given that this action was commenced more than two years after the commencement of the first action in Newmarket.[1]

[9] On January 15, 2014 Boswell J. released his costs award; Raitman v. Medallion Development Corporation, 2014 ONSC 308. He noted that the defendant in his case had served a formal offer to settle on the plaintiffs prior to the trial in which the defendant offered to pay the plaintiffs over $30,000. The plaintiffs refused to accept the defendant’s offer and exercised their right to proceed to trial. They lost. Boswell J. found as follows:

[11] This case is a glaring example of the truly unfortunate consequences that can happen when unsophisticated litigants attempt to represent themselves in Court. Eberhard J. had it exactly right when she endorsed at an interlocutory motion, “There is a history of procedural missteps”. She urged the Plaintiffs to obtain legal advice, as did McKelvey J. and Master Brott. The Plaintiffs suggest that they did obtain such advice, but their actions certainly reflect a lack of understanding combined with poor judgment.

[12] Litigating is, at its heart, an exercise in risk management. It is imperative that litigants properly assess the strengths and weaknesses of their case – in other words, their litigation risks. Proceeding to trial means that the litigants’ rights and interests are being referred to a third person (the trial judge) for determination. There is always inherent risk in such a process. The obvious risk is that the adjudicator will not see the world in the same manner that any given litigant does. Assessing litigation risks is much easier to do with the benefit of experienced legal advice. But electing to proceed without counsel does not absolve a litigant from the exercise of risk management. Here, the Plaintiffs ought to have recognized that their claim had real difficulties, given the wording of the agreement of purchase and sale. They ought to have been able to “do the math” and recognize that a loss at trial would occasion significant costs. Their submission that costs will be “a very hard burden on us” is something they must have considered prior to making the decision to reject the reasonable offer of the Defendant and elect instead to proceed to trial.

[13] The Court is naturally sympathetic to the Plaintiffs. They did not get what they had hoped in terms of the construction of their home. I recognized in my reasons for judgment that they were right to be unhappy about the aesthetic appeal (or lack thereof) of their basement. The home builder let them down, albeit not in a manner that attracts any liability. But the rulings of the Court cannot be based on sympathy. They must follow the rule of law.

[10] Boswell J. ordered the plaintiffs to pay the successful defendant costs of $50,000. They have not paid these costs as yet.

The Plaintiff’s Position

[11] Ms Raitman understands that Boswell J. found that her basement was disappointing, an “oddity” and, as she puts it, “very bad”. She cannot understand, therefore, how it is that the court dismissed her claim. She argues that “His Honour cannot contradict himself”. Since Boswell J. found there was no breach of contract, the plaintiff now says that she is no longer suing for breach of contract. Rather, she writes:

In Toronto action plaintiffs in not suing for the breach. Plaintiff is suing for the damages explicitly confirmed by Justice Boswell in his Reasons for Judgment (when he is talking about disappointment closed-in basement).

[12] Ms Raitman says that because she is now suing the correct party who was not sued in Newmarket and because she is not suing for breach of contract, the decision of Boswell J. cannot be res judicata.

[13] Ms Raitman also argues that she has not missed a limitation period. She complains that her first action in Newmarket took too long. She raises a number of allegations that the defendant’s counsel deliberately delayed or confused issues. While her reasons are not clear, she seems to be saying that the two year limitation period does not apply to this action because her Newmarket case was started on a timely basis. In oral argument, she referred as well to subsection 21(2) of the Limitations Act, S.O. 2002, c.24, Schedule B. The section provides:

Adding party

21. (1) If a limitation period in respect of a claim against a person has expired, the claim shall not be pursued by adding the person as a party to any existing proceeding. 2002, c. 24, Sched. B, s. 21 (1).

Misdescription

(2) Subsection (1) does not prevent the correction of a misnaming or misdescription of a party. 2002, c. 24, Sched. B, s. 21 (2).

[14] It is plain and obvious that subsection 21(2) does not assist the plaintiff. She is not seeking to correct a misdescription of a party in this proceeding. In fact, she was offered an opportunity to do just that by Boswell J. in the prior litigation. Nothing in this section of the statute allows a new claim to be brought against a different party after the relevant limitation period has expired.

Analysis

[15] It is apparent that the plaintiff seeks to litigate the same issues of fact and law as were decided against her by Boswell J. This action is both an abuse of process and has been brought after the expiry of the limitation period. While the parties may technically be different, Boswell J. decided the issue as if the present defendant was before him. Even if the defendants were different, it would be an abuse of process for the plaintiff to re-litigate the legal and factual issues that have already been decided against her. (See: Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63) Moreover, while the plaintiff now says she is not suing for breach of contract, she has only contract and tort causes of action by which to claim the damages that she says were confirmed by Boswell J. There are no factual issues as to the dates or discoverability. In all, it is plain and obvious that this action was commenced after the expiry of the two year limitation period applicable in either contract or tort.

Relief

[16] While the motion for summary judgment is not before me and has not even been briefed, the plaintiff has moved for relief as part of the summary judgment process that required me to consider how the doctrine of res judicata and the Limitation Act apply to this action. In considering a summary judgment motion, Hryniak v. Mauldin, 2014 SCC 7 directs the court to consider an appropriate process that is proportionate, timely and affordable. Here the plaintiff already has an unpaid $50,000 costs award against her. I could order that this matter be stayed pending the posting of security for costs based on this outstanding cost award. I could just dismiss this ill-found motion and let the matter proceed to summary judgment in September. But both of those outcomes perpetuate this inappropriate litigation and require both sides to bear yet further costs. The plaintiff submits that she wants to examine the defendant in order to better understand its corporate structure and its relationship to the other Medallion entities described by Boswell J. None of that evidence is relevant to the resolution of either issue presented for summary judgment. Nothing is needed to resolve those issues other than the decisions of Boswell J. and the description of the claims in this action. In my view, the culture shift dictated by Hryniak can assist here. The plaintiff has had her day in court. She wants to have a second trial on the same issues which is the very thing that the doctrines of res judicata, issue estoppel and abuse of process are designed to prevent. In bringing this second proceeding in a different city, (unsuccessfully) reporting the defendant’s counsel to the Law Society, and proceeding on an unrepresented basis until this hearing (at which her counsel asked permission for Ms Raitman to speak and I agreed to hear from her) Ms Raitman is exhibiting behaviour that is associated with a vexatious litigant. The right thing to do is to end this case as soon as possible to focus the plaintiff on the finality of Justice Boswell’s decision pending appeal (if any). Bringing a further lawsuit for the same issues is not a proportionate response. Neither will it encourage timely justice. Nor is it affordable for anyone. Increasing the plaintiff`s costs burden is no answer for her. Nor do unpaid costs awards help the defendant or its counsel who will have to endure the losses and harm of abusive proceedings.

[17] In my view, the just thing to do is to dismiss this lawsuit now. The delivery of further evidence and legal submissions will not make any difference to the issues of res judicata, issue estoppel, abuse of process or the limitation period. The plaintiff put the issues before me. She does not get to ask me to say that doctrines do not apply but then get yet another kick at the can after I find that they do apply. Moreover, in my view, judges should feel buoyed by Hryniak to dismiss a case where they are “confident that they can fairly resolve the dispute” as that phrase is used in Hryniak at paragraphs 57 et seq. I do not think that Hryniak changes the basic substantive law. (See: The Castlefield Event Theatre Inc. v. Capital Place Inc., 2014 ONSC 3108 at paragraph 4) However, to breathe life into a “culture shift” means that we are not going to just keep doing the same old familiar things that have led to a bogged down, slow and expensive system in too many cases. Whether I am acting under Rules 1.04, 20.04, 21.01(3)(d), 37.13(2)(a) or the inherent jurisdiction of the Court to control its own process, in my view nipping potentially vexatious cases in the bud where the relevant facts and law are already before the Court is in the interests of all concerned and promotes the proportionate, timely and affordable resolution of litigation on the merits.

[18] Like Boswell J., I have sympathy for the plaintiff’s predicament. She has a basement that is not up to the aesthetic standards of a $700,000 home. I reiterate the sentiment of Boswell J. that the law does not remedy every disappointment. Trying to litigate a second time or lashing out at lawyers and others is abusive and will not help. That type of behaviour will just lead to more costs awards being made against her that will consume whatever equity the Raitmans have in their house. Ms Raitman will just have to come to accept that the law does not fix every wrong. That does not diminish the wrong that she suffered. But it does end these proceedings.

[19] Accordingly, this action is dismissed. The September 25, 2014 appointment is released. I encourage the parties to agree upon a modest costs award. If there is no agreement by June 13, 2014, the defendant may deliver a Costs Outline and no more than two pages of submissions to counsel for the plaintiff and then to the Court by June 18, 2014. The plaintiff may then respond with her own Costs Outline in the proper form supported by submissions of no more than two pages to be served on counsel for the defendant, and then delivered to the Court by June 25, 2014. The defendant may deliver a reply submission of no more than two pages by June 27, 2014 if necessary. If Mr. Ng is discharged, he should forward any submissions that he receives to Ms Raitman. I do not require the defendant to inquire further as to Mr. Ng’s retainer or to deal with Ms Raitman personally. Submissions to the Court should be delivered to Judges’ Administration at 361 University Avenue, Toronto.

F.L. Myers J.

Date: June 4, 2014

[^1]: The plaintiff adds a claim in this action regarding a concern for the laundry tub. That claim too was discovered during the pre-closing inspection and presents the same issues under the Limitations Act. There is probably also an issue of cause of action estoppel concerning the plaintiff’s entitlement to raise these facts in a subsequent action. But I do not need to determine that issue given my proposed outcome.