COURT FILE NO.: CV-16-543948 Original MOTION HEARD: 2017-04-21 REASONS RELEASED: 2017-08-04

SUPERIOR COURT OF JUSTICE – ONTARIO

IN THE MATTER OF THE Ontario Business Corporations Act, R.S.O. 1990, c. B. 16, as amended

BETWEEN:

MICHAEL NOEL LUBLIN and CHRISTOPHER PAUL DAVID Plaintiffs

• and-

IGOR GOIKHBERG, MIKHAIL GOIKHBERG, KAMIAR AZHEDI, ISAAC SINGER, TRAMEZ RESTAURANT CORPORATION, TARYUG PURCHASING CORPORATION, TARYUG REAL ESTATE MANAGEMENT INC., CARINO CROSTA RESTAURANT CORP., CARINO CROSTA PURCHASING INC., CARINO CROSTA REAL ESTATE INC., 1898946 ONTARIO INC., 1898949 ONTARIO INC., 1894923 ONTARIO INC., 1903054 ONTARIO INC., 1903055ONTARIO INC., TRAMBUSTO & LEVETTO Defendants

BEFORE: MASTER D. E. SHORT

COUNSEL: Jeffrey Kroeker, Fax: 647-495-8181 for the moving parties

Howard W. Reininger Fax: 905-276-9822 for the responding entities: Shahir Massoud, 1910802 Ontario Inc, 1910804 Ontario Inc. and Levetto Franchise Corp.

Michael A. Polvere Fax: 519-660-7709 for the other responding party defendants

Jonathan Nehimetallah Fax: 416- 865.6636 for responding party, Singer

REASONS RELEASED: August 4, 2017

Reasons for Endorsement

Whac-A-Mole is a popular arcade redemption game invented in 1976. A typical Whac-A-Mole machine consists of a large, waist-level cabinet with five holes in its top and a large, soft, black mallet. Once the game starts, the moles will begin to pop up from their holes at random. The object of the game is to force the individual moles back into their holes by hitting them directly on the head with the mallet, thereby adding to the player's score. The quicker this is done the higher the final score will be.

I. Overview

[1] The above extracts are taken from the Wikipedia description of a midway game that to a degree reflects the Plaintiffs’ challenge in this action.

[2] The Plaintiffs seek leave to amend the Statement of Claim to correct and expand the title of the proceedings by adding proposed additional defendants in accordance with a draft Fresh Fresh as Amended Statement of Claim.

[3] This action arises from alleged agreements between the parties giving rise inter alia to claims of oppression and wrongful dismissal.

[4] It appears that sometime in or around July 2012, the Defendant K. Zahedi approached the Plaintiff Lublin to develop a Pasta/Quick-Fire Grill Restaurant Concept, which eventually became the Defendant Tramez Restaurant Corporation.

[5] The plaintiffs plead that sometime in or around December 2012, the Defendant Singer, was instructed to draft a Letter of Intent/Memorandum of Understanding for the parties. The pleading asserts:

“16. It was agreed upon that the Letter of Intent/Memorandum of Understanding would specify the specific share allocation for each beneficial shareholder, among other details. …. Upon the execution of a subsequent Unanimous. Shareholders Agreement, .., the Letter of Intent/Memorandum of Understanding … was to become null and void.

17. Sometime on or about January 9, 2013, the Plaintiffs met …at which time the parties reviewed the Letter of Intent/Memorandum of Understanding.”

[6] It is further asserted that as an inducement for Lublin to leave his position as the Chief Operating Officer at his previous employer, “a Letter of Intent/Memorandum of Understanding was presented that indicated that the Plaintiff Lublin would receive 47.36% (450 of 950) of the beneficial shareholdings of the group of companies that would operate under the parent company, which eventually became the Defendant Tramez Restaurant Corporation.”

[7] Thus it would appear that the two plaintiffs could have expected to have effective control of the new business that they expected to operate.

[8] The parties executed the Letter of Intent/Memorandum of Understanding during the January 9, 2013 meeting.

[9] The Plaintiffs assert that the business name was altered from Trambusto, to Levetto when the Plaintiffs “were pushed out of the business.”

[10] The Plaintiffs commenced their action against the already named defendants on January 6, 2016 seeking damages for wrongful dismissal and and a number of forms of relief under the Ontario Business Corporations Act including various oppression remedies.

[11] To date not only have no Statements of Defence have been received, no Examinations for Discovery have been scheduled, nor have affidavits of documents been exchanged.

[12] In outlining the considerations made by me on this motion I first turn to an overview of the alleged conduct by some or all of the defendants, which gave rise to this action.

[13] In substance, this motion is brought for leave of the Court to add additional parties and to rectify or correct an “improperly” filed Fresh As Amended Statement of Claim (which was improperly filed with, but accepted by, the Registrar of the Court) and replace that Fresh As Amended Statement of Claim with a Fresh Fresh As Amended Statement of Claim, inclusive of the appropriate parties, “with clarified misnomers.”

[14] I determined that it is appropriate to permit some but not all of the additions sought. In particular, I am not satisfied that some of the apparently “new” franchise holders are necessary or appropriate parties to be included as defendants at this stage.

[15] As well, the Plaintiffs seek a somewhat unusual order providing that service of the within motion materials and the Fresh Fresh as Amended Statement of Claim be waived in respect of any party that has not responded to reasonable attempts to serve documents and/or is defunct and/or has otherwise discontinued its business operations.

[16] I am not prepared to make that order. Unless and until actual problems are experienced, the normal procedure of obtaining an order for substituted service can be instituted before any available Master.

II. Plaintiffs’ Claims

[17] The Statement of Claim is highly detailed. For present purposes I basically regard this as an oppression case where some of the originators of a concept for a franchised restaurant business have, for whatever reason, been excluded and, in their view have been deprived of, their legal entitlements which they now seek to recover.

[18] The following extracts give a rough overview of the essence of the plaintiffs’ claims.

“26. The parties remained in disagreement in determining the terms of the Unanimous Shareholders Agreement until November 2013. During this time, the Plaintiffs were coerced by the Defendant M. Goikhberg to execute an agreement which contained terms that the Plaintiffs opposed, including a non-competition clause for the Plaintiff Lublin and a requirement that certain vital procedures required 80% shareholder approval. It was understood by the parties prior to that time that all matters were to require majority vote of shareholders based upon issued and outstanding voting shares held.

27. After the Defendant M. Goikhberg threatened to cease any further funding on the project(s), the Plaintiffs reluctantly executed the Unanimous Shareholders Agreement sometime on or about November 11, 2013.

28. … on or about November 15, 2013, Defendant Shahir Massoud and Defendant Kam Zahedi were exchanging emails that show that groundwork amongst the several of the Defendants was being laid to eject and/or exclude the Plaintiffs from the business and that clandestine planning was or is tantamount to conspiracy. It is plead that the Defendants were conspiring to create and/or replicate new corporate structures that mirrored the existing corporate structures and that the new corporate entities would be expressly created to which assets of Tramsbusto would be transferred and, which would specifically exclude the Plaintiffs and cause them loss and/or harm . [my emphasis].

[19] The original pleading then makes a number of assertions as to an unexpected change in the Company’s operations: It is asserted that at a meeting on January 6, 2014, the Goikhberg Defendants “levelled a number of false accusations/allegations against the Plaintiffs, which were used as the basis to end their employment with the companies.”

[20] The pleading goes on to allege:

31. The Plaintiffs assert that it was at this meeting that they were advised that their employment was terminated effective immediately; and, that their shares were confiscated. One of the …said that the Plaintiffs beneficial shares, … were “worth nothing.” and one of the two Defendant Goikbergs said. “I am taking your shares”

32 At the January 6, 2014 meeting, the Defendants purported to fire the Plaintiffs; however, both Plaintiffs refused to acknowledge that the Defendants had the authority or right to do so as it is asserted that their actions were contrary to law and contravened the Unanimous Shareholder Agreement signed amongst the parties.

[21] Thereafter Mr. Lublin’s then counsel, sent a facsimile asserting his client’s rights as a shareholder, director on the board and as an officer. That correspondence asserted:

“(a) Article 4.02(b) of the Shareholders Agreement dated February 2013 appointed Plaintiff Lublin as the CEO and President of the Tramez Restaurant Corporation; and, pursuant to the Article 1.07 of the Agreement, changes to the Agreement could only be made by way of unanimous agreement of all parties to the Agreement; and,

(b) Since both Plaintiffs voted against the removal of Plaintiff Lublin, unanimous agreement was not obtained, thus Plaintiff Lublin remained the President and CEO of the Corporation and shall continue his duties.”

[22] It is also alleged that the Defendants “had staff change the locks and passwords to the Corporation's various properties.” Of particular relevance to the pending motion are these assertions from the proposed pleading with respect to the various related corporate entities:

38. The Defendants proceeded to take additional steps to expurgate the Plaintiffs out of their roles and responsibilities ; and to oppressively breach their rights as shareholders; directors of the board and as officers, including but not limited to:

(a) Creating Carino Crosta Restaurant Corporation on January 29, 2014 and transferring assets, management control and structures from Tramez Restaurant Corporation;

(b) Creating Carino Crosta Purchasing Inc. on January 29, 2014 and transferring assets, management control and other structures from Taryug Purchasing Corporation;

(c) Creating Carino Crosta Real Estate Inc. on January 29, 2014 and transferring assets, management control and other structures from Taryug Real Estate Management Inc. ;

(d) Converting the leases of all of the individual restaurant locations of and under the Trambusto Brand to the new Levetto Brand and having the landlords of those properties sign new leases under the new names/numbers of newly created company(ies) with the intent of conveying those rights of leases and assets to the new companies; [my emphasis throughout]

[23] The plaintiffs make a wide range of claims in addition to claiming damages in excess of 5 million dollars. Their claims include seeking:

(a) A Declaration that the affairs of Tramez Restaurant Corporation and its subsidiaries have been conducted in a manner that is oppressive or unfairly prejudicial to the interests of the Plaintiffs;

(b) A Declaration that the Plaintiffs are collectively the owners of fifty-two point six (52.6) percent of beneficial shares in the Tramez Restaurant Corporation and its subsidiaries;

(c) A Declaration that shares; goods; monies and/or assets in the Tramez Restaurant Corporation and its subsidiaries have been improperly transferred and/or fraudulently conveyed to Carino Crosta Restaurant Corporation and its various subsidiaries/affiliates;

(d) An Order directing that an accounting and valuation be done with respect to both Tramez Restaurant Corporation and Carino Crosta Restaurant Corporation and their respective subsidiaries to determine what assets; goods and other instruments have been transferred or moved between the two; and for any and all monies owed by said corporations to the Plaintiffs;

(e) An Order directing that Corina Crosta Restaurant Corporation and its subsidiaries be wound up and their assets distributed amongst the parties entitled to the share therein pursuant to the original Unanimous Shareholder Agreement for Trambusto/Tramez Restaurant Corporation and its subsidiaries; or, in the alternative, that all assets, goods and instruments vested in Corina CrostaRestaurant Corporation and its subsidiaries/affiliates be ordered to be transferred back into Tramez Restaurant Corporation and its subsidiaries.

[24] Regardless of the veracity of any or all of the foregoing assertions, it seems clear that a number of corporations have either had their names or assets changed or have been created subsequent to the events described above. What the plaintiffs now seek to do is ensure that anyone having a obligation to them, flowing from these events, is bound by the ultimate outcome of this litigation.

III. Theory of Case

[25] This case presents elements of the application of Murphy’s Law. Although the action was started in January 2016, it appears that the plaintiffs have not managed to get the action advanced very far, up to this point in time. The original pleading named 16 defendants.

[26] I have some sympathy for the plaintiff’s difficulty in that it appears to have been somewhat of a shell game that has been going on amongst the defendants which has resulted in moving targets and ambiguities.

[27] Counsel for the plaintiff seems to have tried to address those challenges, but previously encountered problems in endeavouring to amend the statement of claim to add new parties.

[28] Following receipt of the plaintiffs’ expanded pleading, the counsel acting for some of the defendants advised plaintiffs’counsel that one of the corporate entities named as a defendant, Levetto, was a business style name that had been registered by five corporations.

[29] Following further investigation into the identity of the corporate subsidiaries and affiliates of the defendants, the plaintiffs sought to add new detail to their pleadings. As pleadings remained open, pursuant to rule 25.05, the plaintiffs apparently intended to amend the Statement of Claim and filed a Fresh as Amended Statement of Claim with the Court.

IV. Initial Problems

[30] Given the allegations asserted in the Statement of Claim, which plead the creation of identical or similar new corporate structures, to which assets and operations were assigned/transferred, Counsel for the Plaintiff's firstly prepared a new Statement of Claim (the Fresh As Amended Statement of Claim), which was served and filed in error on September 7, 2016 and accepted by the Office of the Registrar with additional parties, notwithstanding that leave to add additional parties had not been sought or obtained. It was an administrative error acknowledged by Plaintiff's Counsel.

[31] Counsel for some of the Defendants then took immediate steps to bring a motion to have names struck from the record that were erroneously added. That counsel, who was representing some of the erroneously-added proposed defendants, 1910803 Ontario Inc., (Levetto - Dovercourt), 1910804 Ontario Inc. (Levetto - College Street), 1909800 Ontario Inc. (Levetto - Vaughan) and Levetto Franchise Corp., brought a motion to dismiss the claim as against certain proposed defendants and an order granting that relief was made by Master Muir on November 23, 2016.

[32] I am satisfied that Master Muir's acceptance of the Order on November 23, 2016 effectively included the elements of his hand-written endorsement, so as to clearly permit the addition of those or other parties in the event a proper motion was brought seeking the result.

[33] The thrust of the presently proposed amendments to the Statement of Claim, is directed primarily towards the addition of new and affiliated additional parties/corporate entities which it is asserted are necessary for the Court to properly adjudicate the Plaintiffs' claim.

[34] In particular plaintiffs’ counsel asserts:

“…one of the core issues for the Court to consider will be an alleged and ongoing pattern of some of the defendants creating new corporate structures that were identical to the original corporate structures and that the new structures had or receive d assets that were improperly conveyed . ” [my emphasis]

V. Proper Defendants?

“First Additions”

[35] Apparently the Plaintiffs did not intend to add further parties at the time the Fresh as Amended Statement of Claim was filed. Instead, counsel planned to bring a future motion for leave to add various additional parties, all of which were subsidiaries or affiliates of the corporate entities named in the original Statement of Claim. .

[36] Mr. Reininger proceeded to bring the motion to dismiss the claim as against the newly named defendants in the first Fresh amendment.. That motion was heard on November 23, 2016 and Master Muir granted the motion.

[37] Although not provided for in the formal Order, I have no doubt that my colleague did not intend to preclude a future proper application to add those defendants.

[38] Moreover, I see no present basis upon which I could determine not to allow their addition at this stage of the litigation.

[39] Seems to me the other defendants are more readily able to ascertain that the litigating finger is pointing towards them. Put simply, the plaintiffs assert that their idea for this business has been misappropriated and that parties benefiting from that appropriation ought to be held liable to them for the damages suffered.

[40] I am content that those individuals may be added at this time and they can assert a denial of any involvement in the action is presently pleaded, if so advised.

[41] To my mind, the individuals connected with directing minds of the current business owners have sufficient involvement in knowledge to justify an amendment to add them at this point.

[42] I am therefore granting leave under Rule 5.04 for the addition of some of the proposed defendants. The new defendants I am granting leave to add are:

• Shahir Massoud
• 1910803 Ontario lnc., (Levetto - Dovercourt),
• 1910804 Ontario Inc. (Levetto - College Street),
• 1910867 Ontario Inc. (Levetto -Richmond Hill);
• Levetto Restaurant (Liberty Village);
• Levetto Franchise Corp. and
• Levetto & Design ( operating as either wholly owned subsidiaries, joint ventures and/or trademarks entities of Carino Crosta Restaurant Corp.)

[43] The plaintiff has been partially successfuland I am permitting the addition of these defendants. I would have thought these defendants ought to have consented to their addition in all the circumstances. On the other hand the plaintiff is being is granted an indulgence.

[44] At the conclusion of the argument counsel for the now losing defendants sought costs, in the one in the event he was successful, of $4600. Conversely, the plaintiff sought partial indemnity overall costs of the motion in the amount of $3300.

[45] I am awarding the moving parties costs of $2500 (all in), as against the unsuccessful parties, to be payable within 45 days of the release of these reasons.

VI. Applicable Rules

[46] The Plaintiffs submit that the “litigating finger” is directly pointed at the current and the newly proposed Defendants. They argue that in all the circumstances of the case, a reasonable person would, upon reviewing the Statement of Claim, be aware that the proposed Defendants were the intended recipients of the claim “given that broadest of broad parties were named and that specific reference was made to the corresponding and mirrored corporate structures.”

[47] The main purpose of this motion is to add and clarify the additional parties that the Plaintiff wishes to add under Rule 5.04(2), which engages a slightly different discretionary tool rather than mandatory. That said, it is subject to the same test as that applied under Rule 26.01, but the court retains a further discretion to refuse the addition of a party. (see: Plante v. Industrial Alliance Life Insurance Co., [2003] OJ. No. 3034 (Ont. S.C.J.)at para.25)

[48] In Plante, Master MacLeod advised that it would be appropriate to withhold the court's consent if joinder would unduly complicate or delay the proceeding, if any circumstances exist which would justify relief against joinder under Rules 5.03(6) or 5.05, or if the addition of a party appears to be an abuse of process.

[49] Counsel for the plaintiffs submit that given that “pleadings have not closed that there is no abuse of process and that this motion is brought to correct the style of cause to include the proper parties.” The original and properly formatted Statement of Claim, included a broad inclusion of two Corporate entities, one of "Trambusto" and one of "Levetto", which were in essence misnomer placeholders for the evolving corporate structure of the defendants.

VII. The “New” Franchisees

[50] So the remaining issue is whether to permit the addition of the second group of franchisees sought to be added which I have referred to as the “New Franchisees.” As part of this motion, the Plaintiffs seek as well an Order to add as defendants to this action, inter alia, these New Franchisees:

• 1910802 Ontario Inc. (Levetto-Baden),
• 1910801 Ontario Inc. (Levetto- Waterloo),
• 1909800 Ontario Inc. (Levetto - Vaughan),
• 2481164 Ontario Inc. (Levetto - Chinatown), and
• Levetto Aurora.

[51] The problem is, however, that the Statement of Claim does not seem to have been tailored to address which defendants are being sought to be held liable for what claims.

[52] In particular, the franchisees who only recently appointed counsel indicated they have no idea what claims are being asserted against them nor know the quantities involved, etc.

[53] Nevertheless, I am of the view that the individuals connected with directing minds of the current business owner have sufficient involvement in knowledge to justify an amendment to add them at this point..

[54] It is the position of the New Franchisees that the amendments should not be permitted on the following grounds:

(a) the proposed amendments do not disclose a cause of action against the Franchisees;

(b) the proposed amendments are barred by the Limitations Act, 2002, in any event;

(c) it is not appropriate for the Court to exercise its discretion to permit that the Franchisees be added as Defendants.

[55] I have discussed above the circumstances of the earlier attempts to add various other defendants. Counsel for the New Franchisees asserts that, there is very little difference between what was struck by Master Muir and what the Plaintiffs are now proposing in the Fresh Fresh as Amended Statement of Claim. “In fact, the Franchisees are only named and described in one paragraph of the Fresh Fresh as Amended Statement of Claim - paragraph 11.” That proposed paragraph reads:

11. The Defendants Levetto Restaurant (Liberty Village), 1910803 QNTARIO INC (Levetto - Dovercourt), 1910867 ONTARIO INC. (Levetto -Richmond Hill), 1910804 ONTARIO INC. (Levetto -College Street), 1910802 ONT ARIO INC. (Levetto - Baden), 1910801 ONTARIO INC. (Levetto -Waterloo), 1909800 ONTARIO INC. (Levetto -Vaughan), 2481164 ONTARIO INC. (Levetto -CHINA TOWN), LEVETTO in Aurora, LEVETTO FRANCHISE CORP., and LEVETTO & DESIGN are operating either franchise locations; wholly owned subsidiaries and/or are trademark or royalty entities of Carino Crosta Restaurant Corp., and are all incorporated under the laws of the Province of Ontario and, whose beneficial shareholders likely include, but are not limited to the Defendants I. Goikhberg, M. Goikhberg, K. Zahedi, and Shahj Massoud.

[56] The New Franchisees’ counsel further asserts :

“Nowhere else in the Fresh Fresh as Amended Statement of Claim do the Franchisees appear. They are not properly identified and there is no cause of action plead against them.”

[57] In addressing this issue, I look to Rule 5.04(2) which provides :

“ At any state of a proceeding the court may by order add, delete or substitute a party or correct the name of a party incorrectly named, on such terms are just, unless prejudice would result that would not be compensated for by costs or an adjournment. ”

[58] A motion to add a new party to an existing action under Rule 5.04(2) is distinct from a motion to add new claims against an existing party under Rule 26.01. While Rule 26.01 provides that the Court shall grant leave to amend a pleading provided certain conditions are met, conversely Rule 5.04(2) provides that the Court may by order add, delete or substitute a party. Thus I have a discretion under Rule 5.04(2) to refuse an amendment, even in the absence of non-compensable prejudice. ( see Mazzuca v. Silvercreek Pharmacy Ltd. (2001), 56 O.R. (3d) 768 (C.A.) at paras 25-26, & 30)

[59] In either case, leave to amend a pleading will not be permitted where the proposed amendment is not tenable in law. As with all pleadings, the Court must consider whether a proposed amendment is frivolous, vexatious, or an abuse of process, and whether it discloses a reasonable cause of action.

[60] In considering whether the claim discloses a cause of action, the Court applies the same test as under Rule 21.0l(l)(b) on a motion to strike a claim. The test to be applied is whether, on the facts as pleaded and assuming those facts as pleaded to be true, it is "plain and obvious" that the Statement of Claim discloses no cause of action. Put another way, the question is whether the pleading has no reasonable prospect of success.

[61] The Supreme Court of Canada considered issues in this area in Knight v. Imperial Tobacco Ltd., 2011 SCC 42, particularly at paras. 17 &.22-24

[62] In Chief Justice McLachlin’s reasons, she observed that placing the onus on the plaintiff to plead its claim sufficiently is “not unfair to the claimant” since the plaintiff is the party who selects the facts for the pleadings “with a view to the cause of action it is asserting.” Where the plaintiff fails to provide sufficient facts to support its claim, the pleading must be struck.

[63] It is incumbent on a plaintiff to clearly plead the facts upon which it relies in making a claim. A plaintiff is not entitled to rely on the possibility that new facts may tum up as the case progresses.

[64] As well the onus is on the party seeking to make the amendment to show that the claim sought to be added is tenable at law. A Statement of Claim must, at a minimum, plead the necessary elements of a cause of action. (See Aristocrat Restaurants Ltd. (c.o.b. as Tony's East) v. Ontario, 2003 CarswellOnt 5574 (Sup. Ct.) at para. 18 )

[65] One of my predecessors, Master Clark, addressed this issue in 876761 Ontario Inc. v Maplewood Ravines Ltd. 2002 CarswellOnt 1877 ; 114 A.C.W.S. (3d) 772 :

10. In my view, the material supporting supporting this type of motion must state clearly and specifically why the Plaintiff seeks to add the defendants, and why they were not added until after the claim was issued. The value of such evidence is the bona fides it brings to the motion by dispelling suspicions of ulterior motives, such as adding parties mainly for the purpose of obtaining discovery, or adding individuals in order to simply put pressure on Defendant corporations or vice versa , and thereby gain an unjust advantage.

[66] However I note the cases have suggested an appropriate test is to ask whether

in all the circumstances of the case, a reasonable person, upon receiving the document and looking at it as a whole would say: “of course it must mean me, but they have got my name wrong,” then there is a case of mere misnomer.

(see: Spirito Estate v. Trillium Health Centre, 2008 ONCA 762, at para.12, and Essar Algoma Steel Inc. v. Liebherr (Canada) Company, 2011 ONSC 1688, at para.16, )

[67] I am not satisfied that such an obvious understanding would be the case with the New Franchisees based upon the evidence before me.

VIII. “New Franchisees”: Not Now

[68] The problem is, however, that the Statement of Claim does not seem to have been tailored to address which defendants are being sought to be held liable for what claims.

[69] In particular, the franchisees who only recently appointed counsel indicated they have no idea what claims are being asserted against them know the quantities involved, etc.

[70] My view is that the liberal interpretation, ought generally to be given to claim such as this with the court generally giving the plaintiff the benefit of the doubt, so that the issues it seeks to raise may be dealt with on the merits rather than being blocked by some technicality.

[71] Nevertheless, based on the pleading as it presently stands, I cannot see how the independent franchise location holders should be exposed to what appears to be a claim for in excess of $5 million. Particularly as the bulk of the claims are in regard to events that largely happened before those corporate entities were even in existence.

[72] Defendants who are the new franchise holders are not being added at this point, but without prejudice to the plaintiffs seeking to either sue them in a separate action or by way of a further amendment to the existing claim and heads of damage demarcated in that pleading.

[73] In coming to this conclusion I have considered the case law and arguments placed before by the parties.

[74] It may well be that at a later stage evidence will become available to justify the addition of some or all of these New Franchisees, however, at present I am simply not satisfied that is, it is necessary or appropriate to add these proposed defendants. Applying proportionality it seems to me that there are more than enough available targets for the plaintiffs.

[75] Counsel for the new franchisees sought to rely upon Section 4 of the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, as precluding claims for these types of actions from being commenced more than two years after the claim was discovered. I disagree. The issue is discoverability. Any actions of a Corporation can hardly be expected to have been “discovered” prior to that corporation coming into existence.

[76] In any event, I would not refuse to add these defendants, if there was simply a discoverability issue. Instead, I would have allowed the amendment, leaving limitation issues to be addressed by the trial judge in a case such as this.

[77] I acknowledge that another principle to be considered directs that a defendant may be added after the expiry of the limitation period where discoverability is a live issue and it is not clear that prejudice would result that could not be compensated for and it is respectfully submitted that the various creations and incarnations of new corporate entities and the evolution of the corporate structures of the corporate parties at bar, that discoverability was and remains a live and ongoing issue. ( see Ibrahim v. Alexis Nihon Developments Ltd., [2001] O.J. No. 4595 (Ont. S.C.J.) at para.21)

[78] However, I am not prepared to permit a “shotgun approach” which by adding a multitude of tangential players may lead to what I regard the participation of unnecessary additional parties which will only contribute to expense and delay.

[79] Inasmuch as I am ruling that there is no claim asserted against these defendants in the present form of the pleading, it would seem that the entitlement to add the same parties on different evidence and better enunciating claims ought not simply to be blocked by a res judicata argument.

[80] In the result, I am satisfied that the New Franchisees ought not to be added at this stage of the Plaintiffs’ action. I reach this conclusion based upon a failure to plead the necessary elements of any tenable claim against them.

[81] That portion of the Plaintiffs’ motion is therefore dismissed.

[82] In the circumstances, I see no reason not to award them costs of the motion on a partial indemnity basis. I regard the amount sought of $3300 as fair and appropriate in the circumstances payable by the plaintiffs within 45 days of the release of these reasons.

IX. Disposition

[83] In the result the Plaintiffs’ motion is allowed in part to permit the addition of :

• Shahir Massoud
• 1910803 Ontario lnc., (Levetto - Dovercourt),
• 1910804 Ontario Inc. (Levetto - College Street),
• 1910867 Ontario Inc. (Levetto -Richmond Hill);
• Levetto Restaurant (Liberty Village);
• Levetto Franchise Corp. and
• Levetto & Design (operating as either wholly owned subsidiaries, joint ventures and/or trademarks entities of Carino Crosta Restaurant Corp.)

[84] Costs flowing from that success, payable to the moving parties in the sum of $2500, all in costs, as against the unsuccessful parties, payable within 45 days of the release of these reasons.

[85] The balance of the Plaintiffs’ motion is dismissed.

[86] Costs flowing from that success shall be payable by the Plaintiffs to the successful resisting parties in the sum of $3300, all in, to be payable within 45 days of the release of these reasons.

Released: August 4, 2017

Master D. E. Short

DS/ R179