CENTRAL STATION SECURITY SERVICES INC. v. AVENUE SECURITY CENTRE INC, 2016 ONSC 6940
COURT FILE NO.: 14-61201
DATE: 2016-11-08
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
CENTRAL STATION SECURITY SERVICES INC.
Plaintiff/Respondent
– and –
AVENUE SECURITY CENTRE INC., JAMES SAIKALEY, MICHELINE SAIKALEY and AVENUE LOCK & SECURITY LTD.
Defendant/Applicant
COUNSEL:
Maxime Desforges, for the Plaintiff/Respondent
John E. MacDonell, for the Defendant/Applicant
HEARD: November 8, 2016
BEFORE: T.D. RAY, J
REASONS FOR JUDGEMENT
[1] The defendants bring this motion for summary judgement for an order dismissing the action as against the defendants James Saikaley, Micheline Saikaley and Avenue Lock & Security Ltd; and for an order for security for costs against the plaintiff.
[2] The plaintiff sought an adjournment of the defendant’s motion in order to bring a cross-motion for summary judgement, on the basis that argument for all the matters would likely take a full day. After hearing submissions I granted the adjournement to the plaintiffs for its motion for summary judgement. However I declined to adjourn the defendants’’ motion. The plaintiffs had neglected to file a factum on the assumption that the adjournment would be granted even though it was aware the adjournment was to be contested. The defendants had served their Motion record October 4. The plaintiff’s cross-motion was not served until October 31, and it was never booked properly so that the additional time could be scheduled by the court. The plaintiff also failed to file either a factum responding to the defendants’ motion or in support of their own cross-motion. I permitted the plaintiff to refer to their cross – motion record as it related to the defendants’ motion, and permitted counsel to file a factum over the bench to support his oral argument.
[3] The defendant contends that there is nothing pleaded in the Statement of Claim to support a cause of action against Avenue Lock &Security Ltd. While the party is mentioned, it is not linked to a cause of action. The plaintiff did not challenge the defendant’s argument or seek to amend. The Statement of Claim does not describe a cause of action against Avenue Lock & Security. The action is dismissed as against Avenue Lock & Security.
[4] The plaintiff’s claim against all of the defendants is to enforce an arbitral award in favour of the plaintiff and against Avenue Security Centre Inc. arising out of disputes that arose from agreements negotiated in 2006 and in 2012 between them in the amount of $61,734.50 plus costs and HST of $10,170.00. Shortly after the arbitral award it learned that Avenue Security Inc. had been dissolved since 1999, and launched its action against all of the defendants including Avenue Security Inc.
[5] The plaintiff learned recently that Avenue Security Centre Inc. had been revived. The defendants say that Avenue Security Centre Inc. was revived June 17, 2016 pursuant to s 209 of the Canada Business Corporations Act, R.S.C. 1985, c. C-44 as amended, with the legal consequence that it was thereby deemed never to have been dissolved. Since Avenue Security is deemed never to have been dissolved, then it contends the action against the individual defendants has no merit.
[6] This argument is supported by the decision of the late Panet, J in Litemor Distributors (Ottawa) Ltd. v. W.C. Somers Electric Ltd., 2004 CanLII 39026 (ON SC), [2004] O.J. No.4686, 73 O.R. (3d) 228. In that case on similar facts an action against individuals was dismissed. He held : “… upon revival, any acts undertaken in the name of the corporation by its principals during the period of dissolution would be “cured” so that such acts are deemed to have been taken by the corporation even though it was dissolved at the time.”
[7] The plaintiff’s Statement of Claim is dated October 16, 2015. The defendant delivered their Statement of Defence in November, 2015. At the time, Avenue Security Inc. had been dissolved; and therefore at the time, the defendants’ argument had no merit. It is only the recent retroactive revival of Avenue Security Inc. that gives life to the defendants’ argument. It is notable that neither the defendants nor the plaintiff sought to amend their pleadings to deal with the corporation revival issue. In fact the defendants’ motion for summary judgement is premised on grounds that were never pleaded, and never existed at the time their pleading was delivered.
[8] The plaintiff relies upon an endorsement of Corthorn J who ordered the plaintiffs original Application to proceed as an action on the ground that an application is not proper where there are facts in dispute; and that a trial is where factual differences can be dealt with. Clearly her mind was not drawn to the provisions of rule 20 when she made that endorsement. I do not consider she imagined that her endorsement would be found to defeat a summary judgement motion.
[9] The plaintiff resists this motion (as pleaded in its Statement of Claim,) that an arbitration award may be enforceable against the directing minds of a corporate entity where It Is determined that a creditor is being oppressed. (T. Films S.A. Future Films (Three) Ltd. v. Cinema Vault Releasing International Inc. (2015.) CarwellOnt 112 (ONSC)). It also relies on the principal that the Court will impose personal liability upon the principals of a corporation where a party has been flagrantly prejudiced by the actions of the said principals. (Canadian Affordable Roofing Limited v. Law (2008) CarswellOnt 9437). There is no evidence before me that the plaintiff has been prejudiced or oppressed by the conduct of the individual defendants.
[10] Even though I declined to hear the plaintiff’s cross-motion, I did consider his factum and motion record. I found no evidence in support of its claim against the individual defendants. On a motion for summary judgement the motions judge must assume, barring a request to adjourn for further evidence, that all relevant evidence is part of that party’s case.
[11] I am satisfied that there is no basis for a claim against the individual defendants. The action is dismissed as against the defendants James Saikaley, and Micheline Saikaley.
[12] The defendants also seek an order for security for costs as against the plaintiff, an admitted shell company with no assets other than its entitlement to the arbitral award. They seek an order for $25,000. No evidence was filed to support the claim. The plaintiff has a meritorious claim. Since the defendant Avenue Security Inc. was only recently revived, I can reasonably infer it has little or no assets. It would be inequitable to order security for costs in this situation, particularly in the absence of any evidence. The motion for security for costs is dismissed.
[13] If the parties cannot agree on costs they may make written submissions of two pages or less within 15 days and with a further 5 days for reply – addressed to the trial coordinator.
Honourable Justice Timothy Ray
Released: November 8, 2016
CITATION: CENTRAL STATION SECURITY SERVICES INC. v. AVENUE SECURITY CENTRE INC, 2016 ONSC 6940
COURT FILE NO.: 14-61201
DATE: 2016-11-08
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
CENTRAL STATION SECURITY SERVICES INC.
Plaintiff/Respondent
– and –
AVENUE SECURITY CENTRE INC., JAMES SAIKALEY, MICHELINE SAIKALEY and AVENUE LOCK & SECURITY LTD.
Defendant/Applicant
REASONS FOR JUDGeMENT
Honourable Justice Timothy Ray
Released: November 8, 2016