Unimac-United Management Corp. v. Cobra Power Inc., 2015 ONSC 208
COURT FILE NO.: CV-14-513288
DATE: 20150116
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Unimac-United Management Corp., Plaintiff
AND:
Cobra Power Inc., Defendant
AND BETWEEN:
Cobra Power Inc.
Plaintiff by Counterclaim
-and-
Unimac-United Management Corp., Leon Hui, Charles Daley, Ronald Chan, Keith Ly and Wing Kin Tsiu
Defendants to the Counterclaim
BEFORE: Carole J. Brown, J.
COUNSEL: Justin P. Baichoo, for the Plaintiff
Laura Brazil, for the Defendant
HEARD: January 12, 2015
ENDORSEMENT
[1] This motion is brought by the defendant, Cobra Power, pursuant to Rules 6 and 54 of the Rules of Civil Procedure to have this action referred to Master Wiebe for trial and for hearing together with, or immediately after, a number of related construction lien actions that have already been referred to Master Wiebe for case management and trial.
[2] The plaintiff opposes this motion. I am advised by counsel for the moving party that Garth Low, counsel for the defendants by counterclaim, Charles Daley, Ronald Chan, and Kenneth Ly, do not oppose the motion. Leon Hui, who is also a party in one of the related actions and was examined for discovery in that action as a representative of the plaintiff, has not been served with the statement of defence and counterclaim, commenced September 6, 2013, in this action. All individual defendants by counterclaim are identified in the counterclaim as "directors and/or officers and/or persons, including employees or agents, that had effective control of Unimac or its relevant activities and each assented to or acquiesce in conduct they knew or reasonably ought to have known constituted a breach of trust by Unimac".
[3] The defendant submits that the related actions arise from the same construction project, involving the same parties, and have questions of law and fact in common, in particular, which party or parties are responsible for the delay in the construction project and who is liable for the resulting losses. They argue that nothing in the Construction Lien Act, R S.O. 1990, c. C-30 c ("CLA")
[4] The plaintiff submits that the test for consolidation of actions pursuant to Rule 6 is not met, nor is Rule 54.02, that the actions are not at the same stage of proceedings, that there is no construction lien action with respect to the Cobra matter, but rather a breach of contract and breach of trust action, and that Cobra has failed to meet its onus under section 67(2) of the CLA for leave to bring its interlocutory motion for consolidation by failing to demonstrate that the within motion is necessary or would expedite the resolution of disputes in the Cobra action or the lien reference. I do note that that Cobra's counterclaim does raise issues under the CLA.
[5] In making my determination in this matter, I have reviewed the materials filed by both parties, the case law and, also, the decision of Master Wiebe to have the matter transferred from Newmarket to Toronto and the decision of Myers J in this matter dated December 15, 2014.
[6] I have reviewed the statement of claim and the statement of defence and counterclaim, and have also reviewed the succinct summary of those pleadings contained in the decision of Myers J at paragraphs 9 through 12, as well as the evidence before me regarding the related actions, all of which arise from the Willowbrook Rail Maintenance Facility Project ("the Willowbrook Project"). The plaintiff in this action entered into a contract in September of 2010 with Metrolinks under which the plaintiff agreed to provide general contractor services for the Willowbrook Project. Cobra, in this action, and the defendants in the numerous other actions were hired by the plaintiff as subcontractors to perform work on the Willowbrook Project.
[7] All other actions have been referred to the Master to be heard together by him. He is currently case managing all of the other actions.
[8] While this action was commenced by the plaintiff in Newmarket, by statement of claim dated March 4, 2013, it was transferred to Toronto, pursuant to a motion argued before Master Wiebe on November 24 and 27, 2013, with decision rendered December 20, 2013. Master Wiebe found that there was no rational connection between the substance of the action and Newmarket as a venue, that none of the events occurred in Newmarket and that none of the parties were in Newmarket. Further, he held that there were economies to be achieved by hearing this action together with the lien actions. He further found as follows at paragraph 41:
- Mr. Levine pointed out that not only does Toronto have court facilities to match those of Newmarket, Toronto has a specialized construction lien court already charged with litigating closely related cases concerning the project that is the main subject matter of the Cobra action. The education curve for the Toronto court that will likely hear the Cobra action will therefore probably be substantially reduced as a result. I agree with both of these points.
[9] As observed by Myers J in his decision of December 15, 2014 at paragraph 17:
[17]… The Master is a construction lien specialist. I would not lightly second-guess his view as to the common facts and issues between this case and the other lien cases that he is managing or the efficiencies to be gained by hearing them all together. He is in the best position to know, given his knowledge of the substance and procedural status of the lien cases and having reviewed the evidence and arguments before him concerning this case.
[10] While Master Wiebe transferred the action to Toronto, he observed that referral of this case to the Master must be determined by a judge of the Ontario Superior Court. Hence, this motion before me.
[11] The plaintiff maintains that the motion cannot succeed as the defendant has failed to satisfy the requirements for such reference under the Rules and the CLA. The plaintiff argues that the factors to be considered by this Court in exercising its discretion have not been met and that the defendant is precluded by the provisions of the CLA from seeking a reference. It maintains that the actions are different, as this action does not involve any construction lien or bond issues, that there will be a delay in proceeding with the other actions, as this matter adds four additional parties, not named in any of the other related actions, as well as two additional projects for which the plaintiff allegedly owes the defendant monies, that there will be no efficiencies realized by joining the actions, but rather those other actions will be prevented from moving forward expeditiously and that there is non-compliance with the CLA. These issues are dealt with below.
[12] Rule 6.01 of the Rules of Civil Procedure provides the court with broad powers and a broad discretion in making any order under Rule 6.01. The policy behind the rule is to save expense and avoid a multiplicity of pleadings and proceedings. On a motion for consolidation, the court must ultimately balance the competing interests of expediency with convenience and possible prejudice to the parties.
[13] The parties are not ad idem as regards the factors to be considered by the court in balancing the various interests. While the defendant relies on 1623242 Ontario Inc. v Great Lakes Copper Inc., 2013 ONSC 2548 and the numerous non-exhaustive factors set forth therein, the plaintiff relies on the case of Shah v Bakken (1996), 1996 CanLII 2522 (BC SC), [1996] B.C.J. No. 2836, 46 C.P.C.(3d) 205(BCCA). It is clear that the factors to be considered by the court are non-exhaustive. In my view, the lists of factors in the two cases relied upon by the parties essentially overlap, with the case cited by the defendant going into the factors cited in Shaw in a much more detailed way. I do not see any inconsistency in the factors relied upon by each of the parties and have, indeed, taken them all into account in arriving at my decision.
[14] As regards consolidation of this matter pursuant to Rule 6, based on all of the voluminous documentation before me and on the submissions of counsel, I am satisfied that there are questions of law or fact in common. The issue of who is responsible for the delays in the progress of the project and who is liable for the resulting losses will be central to the cases. I note in Master Wiebe's decision of November 18, 2013, his observation at paragraph 35 that "the parties in the Toronto Proceedings have at previous trial management conferences identified delay of the Unimac contract work as the major issue that pertains to all of those actions. It does not surprise me, therefore, that the issue of Unimac's delay and the liability for it would also form a major part of the Cobra Action". The cases, all concerned with the Willowbrook Project, should not be determined by separate courts which may come to inconsistent or conflicting decisions on central issues. They should all be heard by one judicial officer. I am also satisfied that the relief claimed arises out of the same transaction or occurrence or series of transactions or occurrences and that this branch of the test has been met.
[15] I am satisfied that the various actions are interwoven and that they are substantially related, that the damages sought in the actions are for breach of the construction contracts governing the Willowbrook Project and breach of trust related to construction holdbacks for the Willowbrook Project, that damages overlap in the cases and that a global assessment of damages will be required, which is best dealt with by Master Wiebe, that there will be an overlap of evidence and witnesses in the various cases, which is most expeditiously considered by one judicial officer, that the parties are substantially the same and that the lawyers are the same. I note that it is not required that the parties be identical in order to have actions heard together: Segal & Partners Inc. v Infolink Technologies Limited, 179A. C. W. S. (3d) 1071. Further, the court is not precluded from ordering that actions brought under the CLA with those not brought under the CLA are not precluded where the Rule 6 requirements are met: 450477 Ontario Limited v Feldman, 2010 ONSC 1, 2010 ONSC1 122; Taylor v Georgina (Town), [1992] O J. No. 1240. It is the jurisdiction of this court to control its process.
[16] Further, I am mindful that having a Master hear all of the cases together, or seriatum, will help to expedite the hearing of these issues and will ensure efficiency, as one judicial officer will have the benefit of reviewing and determining all of the evidence relevant to these actions and to the Willowbrook project.
[17] As regards the plaintiff's position that the actions are different, as this action does not involve any construction lien or bond issues, and involves additional projects, I note that Master Wiebe also considered this matter at paragraph 39 of his decision of November 18, 2013, transferring this action from Newmarket to Toronto. He observed that while the counterclaim raised two additional projects in which the defendant was involved with the plaintiff, the amounts claimed as regards those projects with only 17% of the entire amount claimed by the defendant as set off in counterclaim, while 83% of the counterclaim involves the Willowbrook Project.
[18] While the plaintiff argues that there will be prejudice and delay, as the actions are in different stages of proceeding, I am not persuaded, based on the evidence and submissions of counsel, that there will be likely prejudice or delay. While plaintiff's counsel maintains that the lien actions are at an advanced stage and nearly ready for trial, the defendant states that there are numerous examinations for discovery in the related actions which have not been completed. The supplementary affidavit of Glenn Grenier, sworn November 20, 2013 in support of the motion, states that "as of the date of this affidavit, discovery in the related actions have not been completed".
[19] I note that in the affidavit of Lindsay Lorimer, a partner in the same law firm which also represents the defendant, contained in the Reply Motion Record of Cobra Power, Ms. Lorimer states that examinations of four parties in the other actions have not been completed and that two of the parties have not been examined. In one of the actions, no examinations for discovery have been undertaken. That affidavit is contested, as it was served seven days after the stipulated date for service in the timeline propounded by Myers J in his decision of December 15, 2014. While no cross-examinations on affidavits were conducted by either party with respect to this motion, plaintiff's counsel argues that such may have been conducted on this affidavit had it been served within the timeline. While he maintained that there was no time to do so between January 7 and January 12, there is no evidence to support this statement.
[20] I note that the only statements made in the contested affidavit relate to the status of the examinations for discovery in the related actions. The plaintiff adduced no evidence on this motion to refute the statements therein. Based on the Grenier affidavit alone, it appears that examinations for discovery in the related actions have not been completed. The contested Lorimer affidavit merely provides a more detailed account of the statement contained in the Grenier affidavit. I am satisfied, based on the Grenier affidavit, that the examinations for discovery are not completed in the related action and that it cannot be said that the actions are "at an advanced stage or nearly ready for trial".
[21] I am not persuaded by the plaintiffs delay argument, nor by the argument that the action should not be transferred to the construction lien court due to delays being experienced in that court. I am of the view that the consolidation will be more expedient and efficient and will avoid a multiplicity of proceedings with potentially inconsistent findings of fact and law.
[22] The plaintiff further argues that the defendant has not met its onus of satisfying Rule 54 of the Rules. Counsel for the plaintiff argues that as affidavits of documents have not been exchanged in this case, it cannot be determined whether a prolonged examination of documents and a taking of accounts is required. Based on the pleadings in this case, the allegations contained therein and the evidence before me, I am of the view that it will be necessary to review the project documentation in conjunction with these claims and that there will be required a careful, and likely prolonged, examination of documents and an investigation, through the evidence of the various cases, as to who is liable for what expenses and a likely accounting of monies owing, which is most expeditiously done in conjunction with the other actions and the documentation arising from the actions related to the Willowbrook Project.
[23] The plaintiff argues that the defendant is precluded from seeking a reference to the master pursuant to s.58(1) of the CLA, in conjunction with s.67(3), as pleadings are not closed. Section 58(1) states as follows:
On motion made after the delivery of all statements of defence, or the statement of defence to all crossclaims, counterclaims or third party claims, if any, or after the time for their delivery has expired, a judge may refer the whole action or any part of it for trial,
(a) to a master assigned to the area in which the premises or part of the premises are situated;
(a.1) to a case management master; or
(b) to a person agreed on by the parties.
[24] The plaintiff argues that Mr. Hui, a defendant by cross-claim in this action, has not been served. Counsel for the plaintiff submits that the provision must be given its plain and ordinary meaning pursuant to the rules and principles of statutory interpretation and that, in this case, the meaning is clear and clearly precludes this motion. The defendant states that it has attempted to effect service on Mr. Hui but has been unsuccessful and that a motion for substituted service may be required. I note that Mr. Hui is a party in a related action and is, or was at the material time, an officer, director or person in effective control of the plaintiff. I further note that he was cross-examined in the related action as a representative of the plaintiff.
[25] The defendant submits that the statement of defence and counterclaim was issued September 6, 2013. Counsel for defendant submits that Mr. Hui is evading service. Pursuant to the Rules of Civil Procedure, the time for service of the defendant by counterclaim, Mr. Hui, has passed. There is no evidence before me that the defendant has taken steps to seek an extension of time for serving Mr. Hui. Nor is there any evidence that the defendant has sought an alternative to personal service. I note, however, that the affidavit of Glenn Grenier sworn in support of this motion indicates that it is their intention to seek substituted service. Based on the amount of time that has already passed, namely 10 months, it is not clear whether or not such a motion would be successful. In any event, at this juncture and in all of the circumstances, there was no requirement on Mr. Hui to serve the statement of defence to the counterclaim. Accordingly, at this time, and with the time for service of the statement of defence and counterclaim on Mr. Hui having expired, there are no pleadings which remain open. I am not satisfied in the circumstances of this case that the motion for referral is precluded by s.58(1) of the CLA. I am satisfied, as regards Mr. Hui that the Master will be able to case manage this action, as well as this aspect of the action, and will handle any such potential circumstances should they arise, which is only speculative at this juncture.
[26] I find that transfer of this action to the construction lien list to be heard before Master Wiebe together with the other cases which he is case managing, all arising from the Willowbrook Project, or to be heard seriatim, is the most efficient and expeditious means of proceeding with this case and will also ensure that there will not be inconsistent findings of fact or law relating to the cause of the delay in the Willowbrook Project and who is liable as a result of that delay. I do not find there to be any persuasive reasons why my discretion to order consolidation should not be exercised.
[27] Accordingly, I order that this action, Court file number CV-14-00513288, be transferred to the construction lien court, to be case managed and heard by Master Wiebe, along with all of the other related actions which he is currently case managing, arising from the Willowbrook Project.
[28] I am also mindful of Rule 6.02. In the circumstances of this case, a master to whom a reference is directed for the trial of construction lien actions has discretion to control the court process. I will not give specific directions as to the specific means of proceeding, as I do not wish to tie the hands of the judicial officer hearing the actions. I am confident that Master Wiebe, who has case managed the other proceedings and has familiarity with this proceeding, will make the necessary orders and issue the necessary directions to expedite these proceedings.
[29] While the responding party maintained that due to the counterclaim, which joins four new parties, not previously parties to the other actions, delay could be occasioned, again I am satisfied that the Master can and will make any orders necessary as regards the hearing of the counterclaim to expedite these matters.
[30] I leave the issue of the costs of this motion to the Master hearing the trial of this action.
Carole J. Brown, J.
Date: January 16, 2015