2222028 Ontario Inc. v. Adams, 2017 ONSC 690

CITATION: 2222028 Ontario Inc. v. Adams, 2017 ONSC 690

COURT FILE NO.: CV-16-566978

DATE: 20170127

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: 2222028 ONTARIO INC., Plaintiff

AND: MICHAEL ADAMS, MARIANNE NGUYEN (AKA THUY THI NGUYEN), STEVE BUGLER, RADIANT CITY MILLWORK INC., EVAN L. TINGLEY, BALDWIN SENNECKE HALMAN LLP, CANADIAN IMPERIAL BANK OF COMMERCE (COB AS THE “CIBC”), Defendants

BEFORE: Justice W. Matheson

HEARD: In writing

ENDORSEMENT

[1] This matter was referred to me by the Registrar’s office pursuant to Rule 2.1.01(7) of the Rules of Civil Procedure following receipt of a written request from counsel for certain defendants under Rule 2.1.01(6). More specifically, the defendants Evan L. Tingley and Baldwin Sennecke Halman LLP have requested an order dismissing this action, as against them, under Rule 2.1.01.

[2] The letter requesting an order under Rule 2.1.01 was copied to the person identifying himself as the agent for the plaintiff on the statement of claim, although that person does not appear to be a licensed lawyer.

[3] In this action, the plaintiff company is described as providing labour and materials for a construction project, for which it is unpaid. It claims approximately $173,000, which are allegedly trust funds under the Construction Lien Act. The plaintiff alleges misappropriation of trust funds and breach of trust under that Act.

[4] As pleaded, the above two defendants are the solicitors for two other defendants: the owner/person with control over the construction project and related funds, and the general contractor (among other alleged roles).

[5] The statement of claim alleges that all of the defendants, including Tingley and Baldwin Sennecke Halman LLP, “have appropriated or converted” the trust funds “to their own use” among other things.

[6] There are obviously problems with the statement of claim as regards these two defendants. If their role was solely as counsel, the plaintiff must confront considerable authority against it. However, the core allegation is not negligent advice; it is misappropriation of trust funds. I am not satisfied that this statement of claim is, as pleaded, sufficiently frivolous, vexatious or an abuse of process on its face to dismiss the claim under Rule 2.1.

[7] This does not mean that the plaintiff will win its lawsuit against these two defendants, and the plaintiff is risking adverse costs consequences if these defendants are pursued unsuccessfully. In addition, these defendants may still bring motions seeking the early dismissal of the claims against them under the other rules in the Rules of Civil Procedure that are available for that relief. However, I am not satisfied that the statement of claim is so plainly an abuse of process that the limited procedure provided under subrule 2.1.01(3) is appropriate. I therefore decline to direct the Registrar to send a notice to the plaintiff in Form 2.1A.

[8] I encourage the plaintiff to seek legal advice. I also note Rule 15.01(2), which requires that the plaintiff, as a corporation, “shall be represented by a lawyer” except with leave of the Court. The plaintiff must comply with this Rule.

Justice W. Matheson

Date: January 27, 2017