Toth Equity Limited v. Beach, 2015 ONSC 2067

COURT FILE NO.: 14-60719

DATE: 2015/04/10

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: TOTH EQUITY LIMITED, Plaintiff

AND

JAMES GARY BEACH, CLARIDGE HOMES CORPORATION, CLARIDGE HOMES INC. and CLARIDGE HOMES (METCALFE TOWER I) INC.

Defendants

BEFORE: Kane J.

Counsel

Jonathan P. Collings, counsel for the Plaintiff

Shawn J. O’Connor, counsel for the Defendant, James Gary Beach

HEARD: March 27, 2015 (at Ottawa)

ENDORSEMENT

[1] The defendant, James Gary Beach, seeks an order to amend his Statement of Defence and Crossclaim to:

(a) Delete paragraphs 9 and 11 of the defence; and

(b) Plead the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B

[2] The plaintiff consents to the proposed amendment to add paragraph 16(a) regarding the Limitations Act, 2002 and oppose the deletion or amendment of paragraphs 9 and 11 of Mr. Beach’s defence.

[3] In the claim, the plaintiff:

(a) Brings this action in nuisance and negligence;

(b) Alleges structural and foundation damage to its building (“Plaintiff’s Building”) at 180 Metcalfe St., as the result of dewatering of subterranean soil surrounding that building, which dewatering is:

(i) Caused by the construction of new buildings across the street by the Claridge defendants (“Claridge”) on land bordered by Metcalfe, Nepean and Lisgar streets (“Claridge Construction”); and

(ii) Caused by the presence of a tree on property owned by the defendant Beach (225 Lisgar) (the “Beach Property”).

[4] The evidence establishes that:

(a) The Beach Property with the tree is located beside the Plaintiff’s Building and across the street from the Claridge Construction; and

(b) Mr. Beach is a Director of a company, The Russell Apartments Limited, which owns an apartment building adjacent to the Claridge Construction site at 26 Nepean Street (the “Russell Apartments”).

[5] Paragraphs 9 and 11 of the Beach defence sought to be removed and paragraphs 12 and 14 thereof allege that:

(a) At the commencement of its construction, Claridge asked Mr. Beach for permission to use his property to anchor cables to secure its new foundation walls, in consideration for which Claridge would monitor Mr. Beach’s building as to possible negative effects caused by the Claridge Construction; (paras. 9)

(b) Claridge engineers recognized that Mr. Beach’s building had settled three inches and the Claridge Construction had affected the water table in the vicinity of the Plaintiff’s Building and Mr. Beach’s building. Claridge asked Mr. Beach for permission to drill into the property of Mr. Beach and inject water therein to offset the vast quantities of water draining into the Claridge excavation site across the street (para. 11) (emphasis added); and

(c) The plaintiff and the Plaintiff’s Building suffered no damage, or in the alternative, any such damage was not caused by the negligence of Mr. Beach but rather by forces and factors unrelated to Mr. Beach (paras. 12 and 14).

[6] Mr. Beach’s denial in paragraphs 12 and 14 that the plaintiff and the Plaintiff’s Building suffered damages, conflicts with his allegation in paragraph 11 as to damage to his building sinking three inches and the lowering of the water table in the vicinity of the Plaintiff’s Building and Mr. Beach’s building caused by the Claridge Construction.

[7] Counsel for Mr. Beach swore an affidavit on this motion stating he made an error in the drafting of paragraphs 9 and 11 of the defence. Without specifics, the affidavit states defence paragraphs 9 and 11 are in error as they “do not relate to the property being referred to in the Statement of Claim”. In argument, counsel for Mr. Beach was more specific and stated those defence paragraphs relate to the Russell Apartments located beside the Claridge Construction and not the Beach Property located besides the Plaintiff’s Building. To make such argument, counsel for Mr. Beach had to rely upon the plaintiff’s responding affidavit to this motion.

[8] On his motion, the defendant discloses no information as to what instructions were provided by Mr. Beach in the drafting of the defence as to the Beach Property or the Russell Apartments and whether the negative impact to the water table in “the vicinity of Mr. Beach’s Property”, refers to one or both of those properties.

[9] The plaintiff’s responding affidavit clarifies and substantiates the mistake allegedly made by the defendant Beach in the Statement of Defence. Mr. Toth in his affidavit states he was told by Mr. Beach on December 13, 2013, that both the Beach Property and the Russell Apartments had suffered significant settlement due to the Claridge Settlement and that Mr. Beach and Claridge had an agreement to water both properties.

[10] In summary, the evidence on this motion indicates that:

(a) The “use of part of Mr. Beach’s property to anchor its cables” to “secure its foundation walls” as per paragraph 9 of the defence suggests reference to the Russell Apartments and not across Metcalfe street to the Beach Property; however

(b) The Russell Apartments are owned by a corporation and not by Mr. Beach;

(c) The Beach Property and the Russell Apartments are, as per paragraph 11, each in the vicinity of the Claridge Construction; and

(d) The Beach Property, as per paragraph 11 of the defence, is across the street from the Claridge Construction, while the Russell Apartments is not across the street to the Claridge Construction.

[11] The court is left with the position of this defendant that:

(a) His defence contains a mistaken reference to the Beach Property which should refer to the Russell Apartments, but

(b) His admission that Claridge Construction drained the vicinity water table negatively impacted the neighbouring properties, including the Plaintiff’s Building.

[12] Deletion of paragraphs 9 and 11 removes admissions of fact as to the dewatering effects to the Plaintiff’s Building and to properties in the vicinity. That would result in prejudice to the plaintiff on a material issue in his proceeding that cannot be compensated by costs or an adjournment under R. 26.01 or R. 51.05 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[13] The defendant is not entitled to deletion of these paragraphs as they contain material admissions of fact helpful to the plaintiff on a material issue in this proceeding: Amello v. Blueware Energy Limited Partnership, 2014 ONSC 4040, para. 29 and Kostruba and Sons Inc. v. Pervez, 2011 ONSC 4894, para. 51, (S.C.J.).

[14] These are clear admissions of facts on a central issue in the proceeding which are unrelated to the error as between the Beach Property and the Russell Apartments: 1194388 Ont. Inc. v. The Toronto-Dominion Bank, 2014 ONSC 215, para. 17.

[15] The defendant therefore adopted an alternative position during this motion that paragraphs 9 and 11 not be struck but instead simply be amended in referencing the property therein to the Russell Apartments rather than “Mr. Beach’s Building”.

[16] The plaintiff is suing Mr. Beach in relation to the Beach Property thereby subjecting that property and Mr. Beach to full examination for discovery as to impact of dewatering and Mr. Beach’s conversations with Mr. Toth and Claridge.

[17] The alternative more limited amendments to paragraphs 9 and 11 of the Beach defence retains the negative impact of dewatering on properties in the vicinity of the Plaintiff’s Property and the Russell Apartments as statements of fact.

[18] The amendments to the defence and counterclaim of Mr. Beach are attached hereto as Schedule “A” and are hereby approved. They preserve the above important admissions of fact helpful to the plaintiff and correct an obvious error as to the Russell Apartments in paragraph 9.

[19] Paragraphs 1 and 2 of Mr. Beach’s Request to Admit are too broadly worded to attract the cost consequences of R. 51.05 on this motion because paragraphs 9 and 11 refer to more properties than just the Russell Apartments. The properties referred to include the Plaintiff’s Building and properties in the vicinity, which includes the Beach Building. Paragraphs 5 and 6 of the Request to Admit are appropriately admitted by the plaintiff.

[20] This decision is without prejudice as to the anticipated refusal by Mr. Beach on discovery to answer questions as to the Russell Apartments, the resulting motion by the plaintiff to compel answers thereto and for production of third party records. It is preferable to wait as to how such matters develop rather than ruling in anticipation as a “direction” under R. 1.05.

[21] Success on this motion is divided. There shall be no order of costs.

Kane J.

Released: April 10, 2015

CITATION: Toth Equity Limited v. Beach, 2015 ONSC 2067

ONTARIO

SUPERIOR COURT OF JUSTICE

RE: TOTH EQUITY LIMITED, Plaintiff

AND

JAMES GARY BEACH, CLARIDGE HOMES CORPORATION, CLARIDGE HOMES INC. and CLARIDGE HOMES (METCALFE TOWER I) INC.

Defendants

BEFORE: Kane J.

COUNSEL

Jonathan P. Collings, counsel for the Plaintiff

Shawn J. O’Connor, counsel for the defendant, James Gary Beach

ENDORSEMENT

Kane J.

Released: April 10, 2015