Reasons for Decision

I. Status of Action

[1] This is a motion to amend an existing Statement of Defence and Counterclaim.

[2] Rule 26.01 mandates:

"On motion at any stage of an action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment."

[3] Rule 25.11 provides some additional guidance as to the court’s ability to refuse an addition that would other would be subject to being struck:

"The court may strike out or expunge all or part of a pleading or other document, with or without leave to amend, on the ground that the pleading or other document,

(a) may prejudice or delay the fair trial of the action;

(b) is scandalous, frivolous or vexatious; or

[4] In evaluating the positions of the parties on such a motion it is my view that it is appropriate to review the history of the litigation and previous findings by my members of the court when considering the words italicized by me in the above rules.

[5] The Plaintiff, Alex Furmanov is a homebuilder.

[6] Keith Juriansz is an experienced litigation lawyer who contracted with Mr. Fermanov for the construction of a home.

[7] Mr. Fermanov. asserts that he originally agreed “at a flat fee of $90,000 to assist the defendants Mr. Juriansz and Lidia Zamostean who wished to build a single family dwelling.

[8] A summary motion on behalf of Ms. Zamostean to have the action dismissed as against her was pending while this pleadings related matter was under reserve.

[9] That motion was argued before Justice Faieta on February 5^th 2015. His Honour released his initial reasons on May 21, 2015.

[10] By letter dated June 1, 2015 his Honour was asked to “re-consider” his decision and a Supplementary Judgment was released June 11, 2015. Those reasons found at 2015 ONSC 3787 concluded with this finding:

“Assuming without deciding that I have the authority to re-consider my earlier decision, I decline to do so .

[11] That earlier decision, found at 2015 ONSC 3137, outlined the learned judge’s analysis of this case:

18 The plaintiff states that he was told by the defendant Zamostean that she was a "50/50 partner" in the project with the defendant Juriansz. He was not cross-examined on his affidavit. On the other hand, the defendant Zamostean denies that she made this statement. Both defendants deny that they had any partnership, joint venture or any other type of similar arrangement in respect of the property. The defendant Juriansz's evidence is that he acquired a property, demolished the house, and built a 5,800 square foot house and then sold it after he decided he it was too big for him alone. He lived in the new house for just over a year before selling the house, which coincidentally would likely have been enough time to have any resulting capital gains exempted from income tax liability on the basis that it arose from the sale of a personal residence. On cross-examination defendant Zamostean testified, "...I thought that -- maybe a bit later, we'll build something...That was -- if his house goes well, maybe we'll build together...", which seems to imply that this transaction had been intended as a "flip."

19 In any event, whether all of the above circumstances reflect a partnership between the defendants in respect of the purchase, construction and sale of this property as alleged by the plaintiff, or merely reflect one very close friend helping another, as suggested by the defendants, remains the issue to be determined.

20 In my view, the determination of this issue turns on the assessment of the credibility of all three parties which I am unable to make based on the record. While the plaintiff requested an order requiring the parties to present oral evidence on the circumstances surrounding the question of whether the defendant Zamostean held a beneficial interest in the project, it is my view that the examination would likely cover the history of the relationship between the defendants and the relationship between the plaintiff and each of the defendants. In my view, there would be much overlap with the evidence that would be required at trial between the plaintiff and defendant Juriansz even if the defendant Zamostean was successful in her motion to have the action against her dismissed on a summary judgment. It would be an inefficient use of the parties' and the Court's resources, as well as contribute to the additional delay of the resolution of this action, to require the Court to receive oral evidence of the parties on the issue of whether the defendant Zamostean held a beneficial interest.

[12] Justice Faieta then made these observations:

21 The amount of the claim is $195,152. So far there have been two motions which have not advanced the substance of this litigation and have only resulted in additional cost for the parties.[21] In my view, judicial intervention is required to direct the parties to focus on the central issues (primarily, the merit of the defences raised in the Statement of Defence and Counterclaim).

[13] Footnote.[21] to those reasons reads: “21 In addition to this motion, a motion by the plaintiff for an order requiring some of the proceeds of sale of the property paid into court was heard by Justice D. Corbett on June 11, 2014.”

[14] It is unclear to me whether his Honour was ever made aware of this outstanding motion to add parties and amend the Statement of Claim.

[15] Thus this particular Master’s pleadings motion is somewhat unusual in that two Judges of this court have already examined and made findings concerning the factual matrix surrounding this case.

[16] Because I was aware of the pending motion to remove a party I was of the view that the result of the summary judgment motion could have a significant impact on the ultimate form of the pleading.

[17] In July the Defendants’ counsel advised me that Justice Faieta had released his initial reasons on May 21, 2015.

[18] At that time His Honour gave these directions to the parties:

22 Rule 20.05 states that where summary judgment is refused the Court may make an order specifying what material facts are not in dispute and defining the issues to be tried, and order that the action proceed to trial expeditiously. Further, the Court may give such directions or impose or such terms as are just.

23 I hereby order that:

• this action proceed to trial expeditiously;

• each party set this action down for trial by July 24, 2015 unless another party has already done so.

24 In addition, Rule 50.13 provides that a judge may at any time, on his or her own initiative; direct that a case conference be held before a judge or case management master.

[19] He determined as well:

25 In an effort to provide more timely and affordable access to the civil justice system, I hereby direct that:

• a case conference shall be held on July 28, 2015; [subsequently advanced to July 21, 2015]

• the parties and the lawyers for the parties shall appear at the case conference; and,

• each party shall deliver submissions to my Assistant, no longer than five pages in length, at least two weeks prior to the case conference regarding the matters described in Rule 50.13(5) (specifically, identifying the issues for trial; the proposed method(s) for resolving those issues and a timetable for the events in this action) and whether, and if so how, the Court should exercise its powers under Rule.

[20] When the parties noted the pending limitation period expiry for suing the proposed third parties I delivered my Interim Decision on the point (2015 ONSC 1817) making clear that I was not permitting the addition of the proposed third parties in the circumstances of this case.

[21] Counsel saw fit to ask me to reconsider that decision. I saw no reason to do so. If any party was dissatisfied with my reasoning, they had an appeal route available.

[22] “Assuming without deciding that I have the authority to re-consider my earlier decision, I decline to do so .”

[23] There is no reason to delay discoveries on the basis of any hope of a reversal by me of my Interim Decision.

[24] As to the timing of those discoveries and any issues related to them, that would seem properly to be the subject of guidance from Case Management Judge.

[25] Now that the parties remaining in this action have been established I am now in a position to release the reasons that follow.

II. Background Facts

[26] Alex Furmanov has extensive residential building experience but is not a registered builder under Tarion new home warranty program. His first language is Russian.

[27] Clearly, Mr. Juriansz is fully knowledgeable of the English language. The contract between the two parties was in English .

[28] The codefendant Lidia Zamostean ,who is a Real Estate Broker, spoke both languages and is alleged by the plaintiff to a been the individual from whom he received numerous directions and approvals during the course of the construction.

[29] The parties entered into a written contract called Agreement between Owner and Contractor. The plaintiff’s position is that this contract was presented to Furmanov after their verbal agreement. It is unclear who drafted the contract, but it is in English and is three pages in length.

[30] The contract appears to be structured as a construction management contract.

[31] The work to be done is described as follows:

“1. MATERIAL AND LABOUR PROVIDED

The Contractor agrees to provide all of the material and labor required to perform the following work for:

Design New House

Provide Architectural Drawings

Obtain Permit

Demolish Existing House

Build New House

as shown by the drawing(s) and described In the specifications to be prepared by the Contractor, which will be identified by the signatures of the parties to this agreement and which will form a part of this agreement

The Contractor agrees to provide and pay for all materials, tools and equipment required for the prosecution and timely completion of the work. Unless otherwise specified, all materials shall be new and of good quality. The Owner will fund and reimburse the Contractor for all expenditures in a timely manner, as set out in paragraph 2 below.

In the prosecution of the work the Contractor shall employ a sufficient number of workers skilled in their trades to suitably perform the work “

[32] With respect to payment to the plaintiff the document provided:

PAYMENT

The Owner hereby agrees to pay the Contractor a management fee of $90,000.00, payable as follows:

a. $35,000.00 payable upon execution of this Agreement,

b. $30,000.00 payable when excavation, concrete walls, framing and roofing have been completed.

c. $15,000.00 payable when plumbing, electrical, heating and air conditioning and drywall are installed.

d, $10,000.00 payable upon completion.

In addition, the Owner shall pay for the cost of permits, material& and labour. The cost of permits shall be paid upon signing this Agreement, in the sum of $47,000.00. Materials shall be paid upon delivery, and labour upon installation.

[33] As well the manner of record keeping was addressed:

ACCOUNTS

The Contractor agrees to keep proper accounts of all expenditures with respect to the construction of the new house on the Property, and shall provide the Owner with a monthly reconciliation of accounts, within 2 weeks of the end of each month.

[34] Mr. Fermanov says he provided invoices to the defendant Lidia Zamostean, “who was on-site most of the time and approved the work and gave direction as to changes in finishes etc. during the course of construction.”

[35] The plaintiff says he built the house in a proper and workmanlike manner, and that he is entitled to be paid in full, both for the outstanding monies paid to trades that have not yet been reimbursed and or he is $90,000 fee. Mr. Juriansz asserts that he has paid the $90,000 fee, and denies that any further monies are owed and refuses to pay the outstanding total balance of $190,000 presently claimed in the statement of claim.

[36] Moreover Mr. Juriansz claims in the statement of defence and counterclaim that because Mr. Fermanov was not registered under the new home warranty program; the entire contract was illegal, such that Mr. Juriansz is entitled to be reimbursed for the entire amount paid to Mr. Fermanov.

[37] There is no evidence before me indicating that Mr. Fermanov ever represented that he was registered under the new home plan. Under that plan, it is possible for an individual to build their own home and not be required to participate in the new home warranty plan.

[38] A home is “owner built” if:

• The owner builds the home him/herself on land that he/she owns; or

• The owner hires someone else to build the home on the owner's land but the owner exercises significant control over the construction of all or part of the home;

and, in both cases, the owner (or his/her tenant) then resides in the home.

[39] Exercising control over construction includes, for example:

• Selecting, contracting directly with or terminating contracts with subcontractors, trades or suppliers; and/or

• Reviewing, revising, approving, supervising or directing work or materials.

[40] Whether the control exercised by the owner is significant depends on the nature, value and quantity of the work or materials controlled or contributed by the owner. For example, installing interior finishes will not disqualify the home from warranty coverage but would exclude from coverage those finishes and any defects relating to those finishes. On the other hand, controlling the construction of the foundation - an essential element of the home - may be significant enough to make the home an owner built home.

[41] Owner built homes are not covered under the statutory warranties. But if the owner sells the home “without first legitimately residing in the home”, it is not an owner built home and the home is entitled to statutory warranty coverage. The owner must register with Tarion before selling the home and will be responsible for the warranty coverage on the home.

[42] The Application for a Permit to Construct or Demolish, filed with the municipality reflects in section (f) that the “No” box is ticked for each of the following two questions:

i. Is proposed construction for a new home as defined in the Ontario New Home Warranties Plan Act?

ii. is registration required under the Ontario New Home Warranties Plan Act?

[43] In his affidavit, filed in opposition to the defendant’s motion to amend, Mr. Furmanov deposes that the subject property was sold at a price of $1,955,000.00, and that Mr. Juriansz originally purchased the property for $671,000.00.

[44] Apparently Juriansz moved into the house in February 2013 and “then Juriansz wanted the basement finished and therefore construction continued until or about August 2013.”

[45] At a meeting held on August 27,2013, a dispute arose over alleged monies owing and it is asserted that the defendant demanded that Furmanov not re-attend at the premises to the inside of the house (working only on the exterior).

[46] The plaintiff asserts that Mr. Juriansz “never produced a list of deficiencies when he moved in and never produced a list of deficiencies on August 27, 2013 but did produce a list of deficiencies in his defence and counterclaim after Furmanov commenced his action.”

[47] On January 22, 2014, the property was listed for sale by Orange Square Realty Inc., the Brokerage, where Lidia Zamostean is a Broker at a price of $2,150,000.00.

[48] The description on the listing agreement for this home read:

“Extraordinary family home that meets high standards of luxury life style over 8,000 square feet including basement on 73 x 150, great layout, state of art finishes, skylight, 10ft high ceilings, oak hardwood. master with den, huge walk-in closet and spacious 7 piece spa like ensuite with steam shower, large kitchen, thermador stainless steel appliances, 2 dishwashers, built-in oven and microwave. All bedrooms with ensuite bathroom and built in closet organizers, guest/junior suit with bed & sitting area, 7 piece ensuite, 2 closets for him/for her. Finished basement with fire place, 1 bedroom, 2 washroom and gym area. 3 car garage, custom iron entrance gates.”

[49] The said property sold at a price of $1,955,000.00 and the closing date was set for June 13,2014 and did close on said date.

[50] The plaintiff asserts:”The purchaser of the property conducted a Home Inspection and firmed up the Agreement of Purchase and Sale and on abatement of purchase price of $5,000.00 for defects identified on the building inspection.”

[51] Upon learning that the property had been sold, the solicitor for Furmanov wrote to the solicitor for the defendants requesting that the amount of $195,152.00 constituting the amount of the claim and no costs or interest be paid to the trust account of Juriansz and Li to stand in place of the realty to satisfy any judgment that might be obtained by the Plaintiff.

[52] On April 11, 2014, Juriansz & Li responded to the letter indicating that Mr. Furmanov was an illegal builder and that he had repudiated the contract and that there was no basis for asserting an interest in the property and that if registration of the Notice under Section 71 of the Land Titles Act was effected, the solicitor for Furmanov would be made a Defendant in the action and damages and costs sought against him or her as well.

[53] This action was commenced by a Statement of Claim dated October 23, 2013. The Original Statement of Defence and Counterclaim bears a date of November 29, 2013.

III. This Motion

[54] This motion relates to changes sought by the defendants to their existing statement of defence. Numerous relatively minor amendments are sought in addition to a request to add four new defendants who were trades or sub trades on the project.

[55] In my earlier interim reasons I accepted that there was no privity of contract between Juriansz and Zamostean and any of the proposed new defendants .

[56] Plaintiff’s counsel has satisfied me that

“Any wrong which may have been perpetrated by the trades or substrades, such as bad workmanship or overbilling reflects onto Mr. Furmanov. Neither Juriansz nor Zamostean ever hired any of them. The purported parties did not lien the property for their outstanding accounts.

[57] These purported parties could have been examined in aid of this motion but were not.

[58] They could also be summoned to give evidence at trial. It is submitted that there is no cause of action by Juriansz and Zamostean as against these individuals and I am inclined to agree. Justice Corbett stated on the motion for security as follows:

The Court: Oh I see, you want to add additional Defendants….

The Court: If you your client does not have a contract with them, on what basis does he have a claim against them?

Mr. Lachmansingh: Well I can take you to that.

The Court: I am going to get into that in a minute because that's not really what is before me but I am concerned of the management of this case and I have - I share some the concerns that you've raised with me, sir but they don't relate to the security…

[59] And later:

…Be reasonable. It creates a negative impression and your trial judge is not going to be very happy with Mr. Juriansz if they think that he's used his expertise to bully Mr. Furmanov who, after all, is not in the legal business. He's performed a lot of construction work for him. He may be entitled to be paid and may not be, but he doesn't need to be abused in the legal system. Abuse is probably too strong a word.”

[60] It continues to be my view that the addition of the four sub-trades as party Defendants would create an unwieldy and cumbersome litigation file that would drag on for no good reason. Each sub-trade will require its own counsel, potentially for make a total of six and from a simple collection matter, the file will be disproportionately burdened with unnecessary parties.

[61] This was not an appropriate case to add new parties as this late stage.

IV. Applicable Tests

[62] In Chesnie v. Snider, 2004 34949 (ON SC), 73 O.R. (3d) 426,Master MacLeod addressed the tests to be applied in adding a party under rule 5.04(2) including the tests for amending pleadings under rule 26.01 and additional tests having to do with the discretionary nature of the relief and whether or not joinder is appropriate:

These tests were recently summarized and restated by the court in Plante Estate v. Industrial Alliance Life Insurance Co. (2003), 2003 64295 (ON SC), 66 O.R. 3d 74, [2003] O.J. No. 3034 (S.C.J.). All counsel agree that the tests summarized in Plante are the correct tests. Read together those tests are as follows:

(a) The amendments must not result in irremediable prejudice. The onus of proving prejudice is on the party alleging it unless a limitation period has expired. In the latter case the onus shifts and the party seeking the amendment must lead evidence to explain the delay and to displace the presumption of prejudice. Mota v. Hamilton-Wentworth Police Services Board (Regional Municipality) (2003), 2003 47526 (ON CA), 63 O.R. (3d) 737, [2003] O.J. No. 1100 (C.A.), at p. 748 O.R.

(b) The amended pleading must be legally tenable. It is not necessary to tender evidence to support the claims nor is it necessary for the court to consider whether the amending party is able to prove its amended claim. The court must assume that the facts pleaded in the proposed amendment (unless patently ridiculous or incapable of proof) are true, and the only question is whether they disclose a cause of action. Amendments are to be granted unless the claim is clearly impossible of success. For this purpose amendments are to be read generously with allowance for deficiencies in drafting: Atlantic Steel Industries Inc. v. CIGNA Insurance Co. of Canada (1997), 1997 12125 (ON SC), 33 O.R. (3d) 12, [1997] O.J. No. 1278 (Gen. Div.)

(c) The proposed amendments must otherwise comply with the rules of pleading. For example, the proposed amendments must contain a concise statement of material facts relied on but not the evidence by which those facts are to be provided (rule 25.06(1)), the proposed amendments are not scandalous, frivolous or vexatious (rule 25.11(b)), the proposed amendments are not an abuse of the process of the court (rule 25.11(c)), the proposed amendments contain sufficient particulars -- for example, of fraud and misrepresentation (rule 25.06(8)).

(d) Joinder should be appropriate under rule 5.02(2) or required under rule 5.03. The addition of the parties should arise out of the same transaction or occurrence (rule 5.02(2)(a)), should have a question of law or fact in common (rule 5.02(2)(b)), or the addition of the party should promote the convenient administration of justice (rule 5.02(2)(e)). Adding a party will be particularly appropriate if it is unclear which of the original defendant or the proposed defendant may be liable (rules 5.02(2)(c) or (d)) or if it is necessary that the proposed defendant be bound by the outcome of the proceeding or his or her participation is otherwise necessary to allow the court to adjudicate effectively (rule 5.03(1)).

(e) Joinder should not be inappropriate under rules 5.03(6) or 5.05. The addition of a party should not unduly delay or complicate a hearing or cause undue prejudice to the other party. In a case managed proceeding, it may also be appropriate to withhold consent if it will cause significant disruption to the court ordered schedule. Belsat Video Marketing Inc. v. Astral Communications Inc. (1999), 1999 1092 (ON CA), 86 C.P.R. (3d) 413, 118 O.A.C. 105.

(f) Addition of a party will not be permitted if it is shown to be an abuse of process. Abuse of process will exist where the addition of a party is for an improper purpose such as solely [page431] to obtain discovery from them, to put unfair pressure on the other side to settle, to harass the other party or for purely tactical reasons. National Trust Co. v. Furbacher, [1994] O.J. No. 2385 (Gen. Div.); MacRae v. Lecompte (1983), 1983 3052 (ON SC), 143 D.L.R. (3d) 219, 32 C.P.C. 78 (Ont. H.C.J.)

[63] While some of these items do not apply directly in this case, particularly as there is no need to address special circumstances, I nevertheless find this assembling of the matters to be considered useful in addressing the matters before me.

[64] My former colleague Master Polika addressed this area as well in Ontario New Home Warranty Program v. 1236059 Ontario Inc.,[2005] O.J. No. 2714; 140 A.C.W.S. (3d) 269:

The Applicable Legal principles

The effect of Rule 26.01 is that the court at any stage of an action shall grant leave to amend a pleading on terms that are just unless prejudice not compensable by costs or an adjournment would result. Here it as well is sought to add defendants and as such Rule 5.04(2) comes into play. Unlike Rule 26.01 the court has a discretion to exercise under Rule 5.04(2) and may at any stage of a proceeding add a party on such terms as are just unless prejudice not compensable by costs or an adjournment will result. Various tests have to be met for an exercise of discretion under Rule 5.04(2). For example joinder will not be permitted if it is shown to be an abuse of process. An example of such abuse would be to put unfair pressure on a party to settle, to harass or to seek joinder for tactical purposes.

I note in Chesnie Master MacLeod goes on at paragraph 13 to find exceptions to the principle in the case of abuse of process or special circumstances. He stated:

There will be cases where the allegation that the cause of action arose on a date subsequent to the actual events is demonstrably frivolous. In such a case the court may conclude on the basis of evidence introduced by the defendant or proposed defendant that the proposed amendment is an abuse of process. [my emphasis]

V. Contested Amendments

[65] Against that background I considered the specific addition area of counterclaims the Defendants seek to assert and the basis of the plaintiffs opposition

The plea for aggravated damages for mental suffering from Furmanov and punitive damages from Furmanov.

[66] The Defendants have pleaded that Furmanov's misconduct as set out in the draft Amended Statement of Defence and Counterclaim amounted to malicious oppressive, high-handed and contumelious disregard for the rights of the Defendants so offensive to the sense of decency of the court as to warrant against him an award of punitive damages.

[67] The plaintiff’s factum in this regard reads:

“54. It is submitted that the cross-examination of Mr. Furmanov discloses not one iota of evidence that would remotely support such outrageous allegations.”

Abuse of Process

[68] The moving parties submit:

“29. In Allen-Vanguard, [Allen-Vanguard Corp. v. L'Abbe, 2013 ONSC 1098] Master MacLeod held that “it is for the party alleging abuse [of process] to demonstrate that there is an illicit purpose for the amendment constituting grounds for refusal.”38 The Master further held that “[p]ursuing an aggressive litigation strategy does not rise to the level of abuse of process unless it can clearly be shown to be directed at an improper purpose. Specifically the evidence that I would find compelling would be evidence that the amendment would give an unfair advantage to one party over another, or was designed to undermine a ruling of the court or a provision of the rules"

[69] The defendants argue that Furmanov has failed to demonstrate any illicit purpose for the proposed amendments:

“30… It is submitted that no such illicit purpose can be shown, as the proposed amendments pertain to legitimate claims that the Defendants have against Furmanov, and the subtrades that they seek to add as Defendants to the Counterclaim. The Defendants do not seek to make these amendments for any improper purpose, including but not limited to gaining an unfair advantage, or undermining a court ruling or the provisions of the Rules of Civil Procedure.

The claims for damages against Furmanov and the four subtrades are not exaggerated, but amount to Juriansz' genuine estimate of the damages arising from their fraudulent and improper conduct.” [my emphasis]

Is Juriansz entitled to claim aggravated damages for metal suffering from Furmanov?

[70] On this area the moving parties’ factum asserts:

In [Valentine v Bee-Bell Health Bakery Ltd., 1993 CarswellAlta 754; 1993 7294 (AB KB), 161 A.R. 1 (Alta. Master)] the Alberta Court of Queen's Bench declined to strike out a claim for aggravated damages for mental distress in a breach of contract case, on the basis that the Supreme Court of Canada had held in Vorvis v Insurance Corp. of British Columbia {1989 93 (SCC), [1989] 4 W.W.R. 218} that such damages could be allowed in a contract action in appropriate circumstances.

34, Juriansz is therefore not precluded from claiming such damages from Furmanov, especially since the case against Furmanov sounds in tort and unjust enrichment as well as in breach of contract.

Is Juriansz entitled to claim punitive damages from Furmanov?

[71] Similarly on this issue it is asserted

In Pesowski v Vital Automotive Systems Inc., [1983 CarswellOnt 3491] Master Garfield quoted with approval from the reasons of Linden J. in Brown v. Waterloo (City) Commissioners of Police, 1982 1939 (ON SC), 37 O.R. (2d) 277, particularly Linden J's statement as follows:

"[J]ust as our courts have recognized the utility of awards for damages for mental suffering caused by breach of contract in appropriate circumstances, so too should punitive damages be allowed where the facts demand that they be awarded. It is clear that such damages would rarely be awarded, but this does not mean that it should never be done. To tie the hands of the courts by denying them the power to penalize defendants, who flout contract law in a high-handed and outrageous fashion, is unwise and unnecessary. Punitive damage awards should be part of the judicial arsenal in contract cases in the same way as they are in tort cases. I can see no sound reason to differentiate between them. Canadian courts, unlike English courts, have retained their broad power to award punitive damages in tort cases. Thus, if a high-handed breach of contract also happens to amount to tortious conduct, punitive damages would be awardable pursuant to tort theory."

[72] The Defendants have pleaded that Furmanov's misconduct as set out in the draft Amended Statement of Defence and Counterclaim "amounted to malicious, oppressive, high-handed, and contumelious disregard for the rights of the Defendants, so offensive to the sense of decency of the Court as to warrant against him an award of punitive damages.”

[73] Counsel argues that Juriansz is not precluded by from claiming such damages from Furmanov, having regard to the caselaw cited above, and also because the case against Furmanov sounds in tort and unjust enrichment as well as in breach of contract.

[74] Conversely the Plaintiff’s factum reads in part:

“48. It is submitted that the bulk of the Statement of Defence and Counterclaim and proposed amendments to the Statement of Defence and Counterclaim are outrageous and provocative and have no reasonable prospect of success. The following examples demonstrate why the Statement of Claim and the method in which it is being prosecuted is an abuse of process.

Juriansz pleads that because Furmanov was allegedly an illegal builder, the contract should collapse and all monies paid returned to Juriansz.
Justice Corbett opined on the motion for security:

The Court:

I mean his basis for repudiating the contract is that your fellow wasn't registered and that, that plus a quarter, wouldn't buy him a cup of coffee in my courtroom, but that remains for trial.

Further, Justice Corbett stated on the same issue as follows:

The Court:

Well, I would be inclined to the view - I would be inclined to the view that if, in some strange universe, the Court decides there's no contract here that your client would be entitled to a remedy for unjust enrichment but would not be entitled to a CPL against the property.”

[75] Counsel for the defendants made this submission and received this response for the defendants argued in front of Justice Corbett:

“But, again - just for the record, I want to stress that I think that Mr. Juriansz has a story to tell in his statement of defence which confirms that, if possible, he wishes to pay nothing and, in fact, if the contract collapses, he will pay nothing, and not only that, he wants all of the money refunded.

The Court: Well, that's not happening.”

[76] I have strong doubts as to the likelihood of success of the Defendants’ case.

[77] The plaintiff simply submits that he amendments sought will create prejudice. “Delay is deemed prejudice.” Is that sufficient?

[78] Notwithstanding my view that the Plaintiff ought to get his action on for trial at the earliest date, now that the Summary Judgment issue is resolved, I am not convinced that I have sufficient justication as the rules presently stand to refuse the amendments sought in these areas.

[79] The defendants in my view have a weak case but at this stage that is not for a Master to determine such issues. The Judges who have been involved to date acknowledge that the Defendants are entitled to a trial if they wish one.

[80] The action is now case managed and that should assist in moving the matter forward.

[81] The allegations now permitted to be advanced by the defendants expose at least one of them to potential Substantial Indemnity costs awards if they fail to establish fraud at trial. So these amendments may ultimately accrue to the plaintiff’s benefit.

VI. Disposition

[82] I am content that my previous order, which was released some months ago should stand. I see no reason to alter the decision with respect to the addition of further defendants by counterclaim in the present action. If in fact the matter needs to proceed with separate with the involvement of the four sub trades those actions can be consolidated or tried together based on proof following examinations for discovery, etc. as to the appropriateness of the matters being tried together.

[83] The defendants sought to amend a large number of paragraphs in their previous statement of defense. Many of these paragraphs are being altered to provide a degree of clarification and I see no reason not to permit those amendments. I doubt that the plaintiff would have opposed those amendments had they been the only ones sought.

[84] I am therefore granting an order permitting the following specific paragraphs to be amended in the manner indicated on exhibit AA to Mr Jurianz’ affidavit sworn September 23, 2014.

[85] In several cases the amendments now sought change the description of the Defendants to “Defendants/Plaintiffs by Counterclaim” or the Plaintiff’s description to simply “Furmanov”. Similarly Tarion Warranty Corp. becomes “Tarion”. Such amendments are allowed in paragraphs 1, 2, 3,4a, 6 (but not 6a), 17, 19, and 44.

[86] More substantial amendments in the form requested are permitted in the following paragraphs and sub paragraphs:

paragraphs 9(c), 10, 14, 16, , 18, , 27, 32a, 32b, 32c, 33, 36a ( re Furmanov only), 37a, 37b, 39ha, 39la, all subparagraphs of 39(n) and 39(v), 39(hh)a, 41, 42, 43, 47 (e),47(f) but only with respect to Mr. Furmanov, only the first sentence paragraph of 47 (g) and subparagraphs 48 (a) and 48 (b), but not paragraph 48.

[87] As well, I am authorizing the requested deletion of paragraphs 39qq and 40.

[88] With respect to paragraph 46, which had alleged variety of causes of action against the proposed added defendants.I am only permitting the amendments sought up to subparagraph 46(l) but not beyond that point.

[89] If I have missed any contested paragraphs I invite the parties to bring the omissions to my attention.

VII. Costs

[90] While success has been somewhat divided. I am satisfied that the major issue was the proposed adding a 4 defendants. The plaintiff has been wholly successful it in re Existing that motion. The fact that many remaining “housekeeping” amendments were permitted does not in my view, raison entitlement to costs, particular light of the previous guidance contained in justice Corbett’s earlier comments to the parties during the earlier security motion.

[91] The the parties submitted cost outlines of the end of the motion. The plaintiff’s counsel had 37 years of experience and sought total fees of an disbursements of $4808.15 on a substantial indemnity basis for matters up to the argument of the motion. His partial indemnity calculation of the same basis yielded $4062.35.

[92] The amount sought by the defendant’s counsel (based upon 16 years experience”) were copied by a certification indicating that 58.9 hours had been spent by him, and that the rates shown for his hours, and those of others at the firm were correct.

[93] The amounts claimed on a substantial indemnity basis were calculated at $35,774.32, including an allowance for the time spent arguing the motion. The partial indemnity amount was calculated at $24,614.67. I observed these are amounts being claimed for services rendered to the senior partner of the law firm.

[94] Based on these calculations I see no reason not to award a total of $4500 on account of costs to the plaintiff for his success on this motion, payable within 30 days.

_(original signed) __

Master D. E. Short

Released: November 3, 2015

DS/ R.92

Alex Furmanov v. Howard Keith Juriansz and Lidia Zamostean, 2015 ONSC 3787

Case Summary

Reasons for Decision

I. Status of Action

II. Background Facts

III. This Motion

IV. Applicable Tests

V. Contested Amendments

VI. Disposition

VII. Costs

Judge

Counsel

Parties

Areas of Law

Fact Patterns

Financial Outcomes

Issues

Statutory Provisions 3

Legal Tests 1