COURT FILE NO.: 15-51609-CP (Hamilton)

DATE: 20180529

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Ernest James Howe

Plaintiff

• and -

Solart LLL Corp, Solart International Inc., Solart Group, Blacksun Investments Inc., Gestion Marc Andre Lemieux Inc., 8378541 Canada Inc., Viviane Lea Abecassis, Elisa Marcela Barrios, Ai Chen, Julien Cyr, Natercia Dos Santos, Elaine Dubois, Martin Dupuis, Fanny Girard, Melanie Lacroix, Marc-Andre Lemieux, Francisco Lemieux, Veronique Lemieux, Mark Leyton, Lennie Moreno, Sunny Natalia, Leonor Nonnenmacher, Sophie Poirier, Nikhil Toshniwal, Nicolas Vanhove, Martin Yockell, The Toronto Dominion Bank, 2325524 Ontario Inc. o/a Sentinel Solar and Guy-Philippe Bouchard

Defendants

Winfield E. Corcoran, for the Plaintiff

Nick A. Porco, for the Defendants Solart LLL Corp, Solart International Inc., Solart Group, Blacksun Investments Inc., Gestion Marc Andre Lemieux Inc., 8378541 Canada Inc. and Marc-Andre Lemieux, and for certain proposed defendants [^1]

John P. Ormston, for the Defendant Melanie Lacroix

Andrew D. Pelletier, for the Defendant Sunny Natalia, and as agent for counsel for the Defendants Natercia Dos Santos, Martin Yockell and The Toronto Dominion Bank

James Renihan, for the Defendant Nikhil Toshniwal

Alannah Fotheringham, for the Defendant Guy-Philippe Bouchard

David Elmaleh and Aryeh D. Samuel, for the proposed Defendant The Independent Electrical System Operator

HEARD: March 28-29, 2018 in Hamilton

REASONS FOR DECISION

R. A. Lococo J.

I. Introduction

[1] Ernest James Howe is the representative plaintiff in a putative class action against Solart LLL Corp (“Solart”) and 28 other defendants. The Plaintiff has brought a motion for an order (i) granting leave to amend his claim, (ii) adding 17 additional defendants (including The Independent Electrical System Operator, referred to in these Reasons as the “IESO”), and (iii) providing document service relief.

[2] It would be useful to set out some of the background relating to the dispute between the parties and the progress of the action to date. The dispute arose from the business activities of Solart. Solart was engaged in the sale and installation of solar panels for purchasers in Ontario who applied to participate in Ontario’s Feed-in Tariff (“FIT”) program. The FIT program was established by Ontario statute to encourage the use of renewable energy sources. The FIT program allowed approved participants (including individual homeowners) to generate renewable energy and sell it to the province at a guaranteed price for a fixed contract term. The FIT program included a “MicroFIT” element that applied to small projects of ten kilowatts or less. The FIT program was administered by the Ontario Power Authority (the “OPA”). As of January 1, 2015, the OPA merged with the predecessor Independent Electrical System Operator to form the current IESO.

[3] The Plaintiff’s claim against Solart and other existing defendants is primarily based in fraud. Alternative or additional causes of action on which the Plaintiff relies are bad faith breach of contract, resulting trust and unjust enrichment. The remedies that the Plaintiff claims include damages (including punitive damages), a declaration that some or all of the defendants are resulting or constructive trustees, an accounting and a restitution order. The factual basis for the Plaintiff’s claim (as alleged in the Plaintiff’s existing pleadings) is summarized below.

[4] Solart entered into contracts with an estimated 130 putative class members for the supply and installation of solar panels for their homes. Pending final installation, the contracting parties were required to provide Solart with a series of deposits stated to represent a specified percentage of the contract amount. Solart retained the deposits but failed to install or complete the installation of the solar panels. When the contracting parties contacted Solart concerning delay in performance, the defendants gave false responses and made further misrepresentations. At times, the defendants deliberately organized the necessity to resubmit MicroFIT applications to create delay. Solart initiated bankruptcy proceedings, preventing class members from recovering their losses. The defendants knew or ought to have known that Solart was insolvent and incapable of performing the contracts.

[5] It is common ground that on June 6, 2014, Solart provided notice of its intention to file a proposal under the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3. Solart filed its bankruptcy proposal on October 6, 2014. On November 28, 2014, the creditors declined to accept the proposal. Solart was declared bankrupt.

[6] The current action was commenced by Statement of Claim dated February 6, 2015, issued against Solart and 25 other defendants alleged to be associated with Solart (collectively with Solart, the “Solart-associated defendants”). On an unopposed basis, the Statement of Claim was subsequently amended by Amended Statement of Claim served in January 2016 (referred to in these Reasons as the “2016 Amended Statement of Claim”). As set out in the 2016 Amended Statement of Claim, the Plaintiff replaced the previous representative plaintiffs, and three additional defendants were added, The Toronto Dominion Bank, Guy-Philippe Bouchard and 2325524 Ontario Inc. operating as Sentinel Solar.

[7] Sentinel Solar subsequently brought a motion to remove Plaintiff’s counsel based on an alleged conflict of interest. I heard that motion on September 30, 2016, and denied it in an oral decision on November 25, 2016. As a result of that motion, the previous timetable for bringing a certification motion (by March 31, 2016) was superseded. Other factors affecting timing included logistical challenges inherent in an action involving a large number of defendants and proposed defendants, including individuals outside Ontario who are not represented by counsel.

[8] In June 2017, the Plaintiff brought the current motion, subsequently amended as set out in the Supplementary Motion Record dated August 25, 2017. The Supplementary Motion Record (which superseded the previous motion record) contains a brief affidavit sworn by the Plaintiff, with attachments consisting of the Statement of Claim, the 2016 Amended Statement of Claim and the proposed Amended Amended Statement of Claim. The latter document is referred to in these Reasons as the “proposed amended claim”. The Plaintiff deposed in his affidavit only that the proposed amended claim was served on existing and proposed defendants on May 9, 2017, and that the additions, deletions and changes in that document do not prejudice the existing defendants. There was no other sworn statement with respect to the contents of the proposed amended claim.

[9] The Supplementary Motion Record also contains a brief affidavit sworn by Plaintiff counsel’s legal assistant. Attached to that affidavit are various email messages and other documents relating to the request for document service relief with respect to certain existing defendants, specifically Nicolas Vanhove and Lennie Moreno.

[10] In his motion, the Plaintiff seeks the following relief:

a. Leave to amend the Plaintiff’s claim (pursuant to r. 26.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194), as set out in the proposed amended claim;

b. Add 17 additional defendants (pursuant to r. 5.04(2)), consisting of (i) 15 entities that are represented by Solart’s counsel of record (collectively, the “Solart-associated proposed defendants”)[^1], (ii) the IESO, and (iii) Energia-360 Canada Inc.;

c. Extend the six month period in r. 14.08 for serving the proposed amended claim on the following existing defendants (pursuant to r. 3.02): Nikhil Tashniwal, Nicolas Vanhove, Elisa Marcela Barrios, Ai Chen and Elaine Dubois, and validate email service of the 2016 Amended Statement of Claim on Nicolas Vanhove (pursuant to r. 16.08); and

d. Require the Defendant Lennie Moreno to provide a valid email address for use in exchanging communications between the parties as contemplated by the direction of Turnbull R.S.J. at the initial case conference for this action on May 21 2015.

[11] A timetable for this motion was established at a case conference in August 2017. Among other things, the timetable provided for the exchange of motion records (commencing with a supplementary motion record from the Plaintiff), cross-examinations (although none in fact occurred) and the exchange of factums. The timetable was subsequently amended on consent.

[12] I heard this motion over a two day period on March 28 and 29, 2018. Most of the hearing time related to the Plaintiff’s request to add the IESO and the Solart-associated proposed defendants as party defendants. In both cases, the proposed defendants oppose the motion on the basis that the action as against them is statute-barred. As well, the Solart-associated defendants and Solart-associated proposed defendants say that substantial sections of the proposed amended claim are improperly pleaded and should be struck. Certain other existing defendants do not oppose the proposed amendments to the claim, but seek an order that the Plaintiff pay their costs thrown away in responding to the proposed amended claim, given (among other things) the Plaintiff’s previous insistence that they file a statement of defence prior to the hearing of a class certification motion. Other existing defendants oppose the extension of the time for service, arguing that the Plaintiff has not met his burden of justifying an extension.

[13] In the balance of these Reasons, I will address the matters in issue under the following headings:

a. Limitation issue – IESO

b. Limitation issue – Solart-associated proposed defendants

c. Alleged pleading deficiencies

d. Responding to amended claim – costs thrown away

e. Document service relief

II. Limitation issue – IESO

a. Legal principles

[14] The Plaintiff seeks to add 17 additional defendants to the action, including the IESO. The court’s authority to do so is found in r. 5.04(2), which provides that “the court may by order add … a party … on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.”

[15] Because of the use of the word “may” in r. 5.04(2), it is clear that the court’s authority to add a party is discretionary, with the onus being on the moving party to justify the proposed party’s addition. However, as indicated by the Ontario Court of Appeal in Pepper v. Zellers Inc. (c.o.b. Zellers Pharmacy) (2006), 2006 CanLII 42355 (ON CA), 83 O.R. (3d) 648 (C.A.), at para. 14, “the threshold on such a motion is low”.

[16] By way of contrast to the wording of r. 5.04(2), r. 26.01 provides that the court on motion “shall grant leave to amend a pleading” [Emphasis added], once again on just terms and with the same exclusion as in r. 5.04(2). Previous case law indicates, however, that whether the moving party seeks to add a defendant or to amend a pleading without adding a defendant, the court will not grant the motion if the proceeding against the proposed or existing defendant would be immediately subject to successful challenge by way of a motion to strike under r. 21(1)(b) or a summary judgment motion under r. 20.04(2)(a) (see Turner v. York University, 2011 ONSC 6151 at paras. 56-59; Dugal v. Manulife Financial Corp., 2011 ONSC 387, 2011 ONCS 387 at para. 5; Mancinelli v. Royal Bank of Canada, 2017 ONSC 7384 at para. 15). A proceeding would be subject to successful challenge if it is “plain and obvious that the pleading is fatally flawed” (as in Turner at para. 56) or if the claim as amended does not give rise to a “triable issue that would merit consideration on a summary judgment motion or at trial” (as in Mancinelli at para. 15).

[17] In response to the Plaintiff’s motion, the IESO has raised the limitation period as a bar to the requested order. The IESO relies on s. 21(1) of the Limitations Act, 2002, c. 24, Sched. B, which provides as follows:

21(1) If a limitation period in respect of a claim against a person has expired, the claim shall not be pursued by adding the person as a party to any existing proceedings.

[18] As indicated by the Ontario Court of Appeal in Arcari v. Dawson, 2016 ONCA 715, l34 O.R. (3d) 36, at para. 7, the effect of s. 21(1) is that “the clear expiration of a limitation period is an absolute bar to the addition of a party to an already existing action ….”

[19] The basic limitation period for Ontario actions is provided in ss. 4 and 5 of the Limitations Act, 2002. The effect of those provisions is summarized as follows. Under s. 4, a proceeding in respect of a claim shall not be commenced more than two years after the claim was discovered. Under s. 5(1), a claim is discovered on the earlier of (a) the day on which the person making the claim first knew of a potential claim for a loss arising from the act or omission of the person against whom the claim is made, and (b) the day a reasonable person ought to have known of the matters giving rise to the claim. Under s. 5(2), a person with a claim shall be presumed to have known of the matters referred to in s. 5(1)(a) on the day that the act or omission on which the claim is based took place unless the contrary is proved.

[20] The complete text of ss. 5(1) and 5(2) is set out below.

5 (1) A claim is discovered on the earlier of,

(a) the day on which the person with the claim first knew,

(i) that the injury, loss or damage had occurred,

(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,

(iii) that the act or omission was that of the person against whom the claim is made, and

(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and

(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).

(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1) (a) on the day the act or omission on which the claim is based took place, unless the contrary is proved.

[21] Previous court decisions have considered the issue of due diligence as it relates to the objective test in s. 5(1)(b) and the presumption in s. 5(2). When considering whether the objective test in s. 5(1)(b) is met (that is, whether the claimant “ought to have known” of the matters giving rise to the claim against the other party), it is relevant to consider what steps the claimant ought to have taken to discover those matters (see Mancinelli at paras. 9-11). For this purpose, the onus is on the claimant to provide evidence by way of affidavit to show that the claimant took reasonable steps to discover the potential claim or to explain why no steps were taken (see Pepper at paras. 16 and 20-22).

[22] By way of contrast, as noted by the Ontario Court of Appeal in Fennell v. Doel, 2016 ONCA 249 at para 26, the presumption that arises under s. 5(2) is a presumption of actual knowledge of the matters giving rise to the claim as set out in s. 5(1)(a). There is no onus on the claimant to “show due diligence to rebut the presumption in s. 5(2)”. To overcome the presumption, it is only necessary for the claimant to prove that he or she did not actually know of the matters giving rise to the claim as set out in s. 5(1)(a). Therefore, the failure to take reasonable steps is not in and of itself a reason to dismiss a claim as statute barred (see Fennell at paras. 18 and 24; Mancinelli at para. 11).

b. Position of the parties

[23] As indicated in paragraph 12(v) of the proposed amended claim, the Plaintiff’s claim against the IESO is based in negligence. The basis for that claim is set out in paragraphs 85, 86 and 88 of the proposed amended claim, summarized as follows. The IESO, as the body responsible for approval of proposed renewable energy projects under the FIT program, owed a duty of care to the putative class members, who applied to the IESO for approval of their projects. The IESO’s duty of care required it to “at minimum alert the creditors that the activity of the defendants was suspicious, in particular Solart LLL Corp, in the recycling of the microFIT applications.” The IESO breached its duty of care “when it failed to alert the creditors of the suspicious activity of the defendants, in particular Solart, in recycling so many applications.”

[24] The IESO argues that it was evident from the proposed amended claim, when read in conjunction with the original Statement of Claim dated February 6, 2015, that the Plaintiff had actual knowledge of the potential claim against the IESO by (at latest) the date of the Statement of Claim. On that basis, under s. 5(1)(a) of the Limitations Act, 2002, the Plaintiff “discovered” the claim against the IESO more than two years before bringing the current motion to add the IESO in June 2017. Therefore, by reason of s. 21(1) of that Act, the IESO could not be added as a party to the action. In that regard, the IESO referred, among other things, to paragraphs 26 and 27 of the original Statement of Claim, as follows:

26. The plaintiffs contacted Solart on various occasions to inquire concerning the progress and performance of their respective agreements. The defendants made false responses to the plaintiffs concerning the delay and made further misrepresentations concerning prompt performance…. At times, the defendants deliberately organized the necessity to resubmit the OPA and Microfit application process to create delay.

27. By reason of the stonewalling set out in the preceding paragraph, the defendants successfully concealed Solart’s true state of affairs from the plaintiffs who discovered the insolvency of Solart on or about June 6, 2014. [Emphasis added.]

[25] The IESO says that the Statement of Claim confirmed that by the date of that document (February 6, 2015), the Plaintiff was aware of: (i) the role of the OPA, the IESO’s legal predecessor, as the administrator of the FIT program (which was in any case a matter of public knowledge); and (ii) the OPA’s alleged role with respect to the defendants’ wrongful conduct whereby the defendants “deliberately organized the necessity to resubmit the OPA and Microfit application process to create delay.” According to the IESO, the record also supports the conclusion that the limitation period started to run by June 6, 2014 (the date that the Plaintiff “discovered the insolvency of Solart”), since as of that date the Plaintiff knew or ought reasonably have known about the Plaintiff’s potential claim against the IESO for the Plaintiff’s alleged loss. The IESO also suggested other dates between June 6, 2014 and February 6, 2015 on which it could be credibly argued that the limitation period started based on the Plaintiff’s knowledge by that date. Those dates include October 6, 2014 (the date Solart filed its bankruptcy proposal), November 28, 2014 (the date Solart was declared bankrupt) and December 10-12, 2014 (when representatives of the Plaintiff first had the opportunity to examine Solart financial records at the office of the bankruptcy trustee, as set out in para. 36 of both the original Statement of Claim and the proposed amended claim). In all cases, those dates were more than two years before the Plaintiff brought the motion to add the IESO as a defendant.

[26] In any case, the IESO also argued that by reason of s. 5(2) of the Limitations Act, 2002, the Plaintiff was presumed to have actual knowledge of the matters giving rise to the claim against the IESO by February 6, 2015, the date of the original Statement of Claim. In the IESO’s submission, the Plaintiff has not met the burden of proving the contrary, as required by s. 5(2).

[27] In particular, the IESO says that its alleged breach of duty in failing to warn the putative class members of the defendants’ “suspicious activity” in “recycling” micro FIT applications necessarily occurred prior to the class members’ discovery of their loss (that is, no later than June 6, 2014, the date they “discovered” Solart’s insolvency), or in any case by February 6, 2015, the date of the original Statement of Claim. Both of those dates are more than two years prior to the date that the Plaintiff brought the motion to add the IESO as a defendant. The onus is therefore on the Plaintiff to provide a reasonable explanation as to why the claim against the IESO was not “discovered” and a motion brought to name the IESO as a defendant within two years. According to the IESO, the Plaintiff’s explanation would necessarily include “proper evidence” by way of affidavit of the investigation conducted on the Plaintiff’s behalf that would have demonstrated that the steps taken were those that “a reasonable person with the abilities and in the circumstances of the person with the claim” would have taken to alert themselves to the claim against the IESO (quoting the words of s. 5(1)(b)). The IESO says that no such evidence is properly before the court.

[28] Plaintiff’s counsel took strong exception to the IESO’s position relating to the expiry of the limitation period. In his submission, it is not sufficient for the IESO to propose various possible dates for the commencement of the limitation period, and then ask the court to pick one. Plaintiff’s counsel says that it was incumbent on the IESO to provide evidence to support its position that the limitation period began to run on a particular date, on the basis that at that time the Plaintiff knew or ought to have known of the potential claim against the IESO. In his submission, the IESO has not done so. In any event, Plaintiff’s counsel says that the Plaintiff is entitled to rely on various parts of the proposed amended claim as evidence that reasonable steps were taken on behalf of the putative class members to alert them to the claim against IESO, without additional affidavit evidence. He also relied on the fact that the Plaintiff did not take steps to add the IESO as a defendant at the time that the Plaintiff served the 2016 Amended Statement of Claim in January 2016 as supporting the inference that the Plaintiff did not have sufficient information to bring a claim against the IESO by that date, which was within two years of bringing the current motion in June 2017.

[29] In Mancinelli¸ the plaintiffs/moving parties raised some of these arguments in support of their motion to add additional defendants to an existing class action against a group of financial institutions, in which a price-fixing conspiracy was alleged. The proposed defendants argued that they should not be added as parties because the claims against them were statute barred. Perell J. agreed with the proposed defendants and dismissed the plaintiffs’ motion. In that case (at paras. 43-44), the motion judge accepted that the plaintiffs did not subjectively know about their claims against the proposed defendants, but was not persuaded by the plaintiffs’ evidence that with due diligence they could not have known about the claims. The motion judge also indicated that he was not persuaded that the plaintiffs had provided a reasonable explanation why they could not have discovered the claim against the proposed defendants through the exercise of reasonable due diligence. He therefore dismissed the motion to join the respondents as defendants, finding that there was no genuine issue requiring a trial as to whether the plaintiffs had a limitation defence. In making that determination, the motion judge acknowledged that the threshold onus on the plaintiffs on a motion to add parties was low (at paras. 54, 58 and 61). However, he found that the evidence tendered did not provide a reasonable explanation as to why the proposed defendants were not identifiable and not named as parties before the expiration of the presumptive limitation period (at paras. 58 and 51).

[30] Perell J. also dismissed the plaintiffs’ argument that it was incumbent on the proposed defendants to prove that the claims against them could have been discovered within the presumptive limitation period, in the following terms (at paras. 53-54).

53 Instead of providing details of their investigations and describing what other investigative efforts they made, the Plaintiffs asserted that the onus was on BMO and TD to prove that the claims against them were known in public documents or that the onus was on BMO and TD to prove that the claims against them could have been discovered with reasonable diligence before May 2016.

54 As a proposition of law, there is no onus on BMO and TD to expose how they could have been exposed. Rather, there is a very low threshold onus on a plaintiff to provide an explanation as to why he or she did not discover the claim against the defendant before the clanging of the limitation period bell.

c. Analysis and conclusion

[31] Having considered counsel’s submissions, I have concluded that in the circumstances of this case, s. 21(1) of the Limitations Act, 2002, provides an absolute bar to the adding of the IESO as a defendant to this action. Therefore, I am dismissing the Plaintiff’s motion to add the IESO as a party.

[32] In reaching that conclusion, I agree with the IESO’s position that the Plaintiff had actual knowledge of the potential claim against the IESO by, at latest, February 6, 2015, the date of the original Statement of Claim. On that basis, under s. 5(1) of the Limitations Act, 2002, the Plaintiff “discovered” the claim against the IESO more than two years before bringing the current motion to add the IESO in June 2017. The limitation period had therefore expired by the time the Plaintiff brought its motion.

[33] As argued by IESO’s counsel, that conclusion is evident from the Plaintiff’s statement of the basis for the claim in negligence against the IESO, as set out in paragraphs 85, 85 and 88 of the proposed amended claim. In those paragraphs, the Plaintiff alleged that the IESO breached its duty of care to the putative class members by failing to alert them to the defendants’ “suspicious” activity in “recycling the microFIT applications.” When read in conjunction with section 26 of the original Statement of Claim, which refers to the OPA (the IESO’s legal predecessor) in relation to the defendants’ suspicious activities relating to the “MicroFIT application process”, the inference is clear that the Plaintiff was aware of that the putative class had a potential claim against the IESO for their losses. As indicated in paragraph 27 of the Statement of Claim, those losses had accrued by, at latest, the previous June 6, 2014, when the Plaintiff “discovered the insolvency of Solart” when Solart gave its notice of intention to make a bankruptcy proposal.

[34] The Plaintiff argued that the reference to the OPA in the original Statement of Claim would not be sufficient in itself to justify the inference that the Plaintiff knew about the potential claim against the IESO, since the Plaintiff did not know the precise nature or extent of Solart’s recycling of the FIT applications. Consistent with previous case law, it is no doubt correct that mere knowledge of the identity a potential defendant is not sufficient to start the limitation period against that person (see Zapfe v. Barnes (2003), 66 O.R. (3d) 307 (C.A.), at para. 32, relying on Aguonie v Galion Solid Waste Material Inc. (1998), 1998 CanLII 954 (ON CA), 38 O.R. (3d) 161 (C.A.), at 170). However, as indicated by Belobaba J. of this court in Beaton v. Scotia iTrade, 2012 ONSC 7063, 2012 ONCS 7063, aff’d 2013 ONCA 554, it is not necessary for this purpose for the claimant to know the details of the potential defendant’s alleged wrongdoing. According to Belobaba J. in Beaton (at para. 13), the test is as follows:

The claimant only has to know enough material facts on which to base a legal allegation. Once the plaintiff knows that some damage has occurred and has identified the alleged wrongdoer, "the cause of action has accrued". [Footnote omitted.] Neither the extent nor the type of damage need be known. The claimant also need not know the details of the wrongdoer's conduct or how the wrongdoer caused the loss. The question of "how it happened" will be revealed through the legal proceeding.

[35] In his reply factum, Plaintiff’s counsel included a long list of “facts that were not available at either the time the original Statement of Claim or the [2016] Amended Statement of Claim issued”. For some of those items, he indicated a particular paragraph of the proposed amended claim as the source of the indicated fact (for example, paragraph 90 of the proposed amended claim is cited as support that “Solart had processed 600+ applications for at most 130 successful installations”). Plaintiff’s counsel noted that the IESO is entitled to assume the truth of the facts stated in the proposed amended claim in order to support its position that the claim against the IESO is statute barred. According to Plaintiff’s counsel, the Plaintiff is also entitled to rely on other factual assertions in the proposed amended claim as evidence to support his position. As explained further below, I do not agree with that conclusion as a general proposition.

[36] As indicated in the case law referred to above, a court will not grant a motion adding a party or amending a pleading if the proceeding would be immediately subject to successful challenge by way of a motion to strike or a summary judgment motion. On a motion to strike a claim for failing to disclose a reasonable cause of action under r. 21(1)(b), the defendant (or other moving party) would be entitled to assume the truth of the facts as stated in the statement of claim for the purpose of challenging the viability of the claim (see Hunt v. Carey Canada Inc., 1990 CanLII 90 (SCC), [1990] 2 S.C.R. 959 at para. 33; Dylex Ltd. (Trustee of) v. Anderson (2003), 2003 CanLII 14551 (ON SC), 63 O.R. (3d) 659 (S.C.), at para. 8).

[37] Having raised the limitation issue on this motion, the IESO is entitled to assume the truth of the factual assertions in the Plaintiff’s proposed amended claim (together with the contents of the Plaintiff’s existing pleadings) for the limited purpose of identifying the nature of the Plaintiff’s claim against them and testing the viability of that claim based on the Plaintiff’s alleged failure to meet the limitation period. The Plaintiff would also be entitled to assume the truth of the same factual assertions as the IESO, but only for the limited purpose of responding to the IESO’s position. I do not agree, however, that the Plaintiff is automatically entitled to rely on other factual assertions in the proposed amended claim as true in the absence of supporting affidavit evidence.

[38] Like the plaintiffs in Pepper, the Plaintiff moved to add the IESO as a defendant after the expiry of the presumptive limitation period. In Pepper at para. 14, the Court of Appeal indicated as follows: “While the threshold on such a motion is low, the motion judge is entitled to consider the evidentiary record to determine whether there is a live issue of fact or credibility about the commencement date of the limitation period.” In Pepper, as with the IESO in this case, the issue was the discoverability of the claim against the proposed defendant. The Court of Appeal in Pepper (at paras. 19-21) commented on the plaintiffs’ failure to provide “a reasonable explanation” as to why the claim against the proposed defendant could not have been discovered through the exercise of reasonable due diligence. In doing so, the Court of Appeal noted in particular the lack of affidavit evidence to indicate the steps taken to determine the identity of the proposed defendant or the explain why it was not necessary to take any steps.

[39] Similarly, on the motion before me, there is no affidavit evidence with respect to (i) the Plaintiff’s knowledge of the matters giving rise to the claim against the IESO (and the other proposed defendants), (ii) the steps that the Plaintiff took to discover those matters, or (iii) an explanation as to why it was not necessary to take any steps. The factual assertions referred to in the Plaintiff’s reply factum are not supported by affidavit evidence. Accordingly, they are not properly before me on this motion.

[40] In any case, even if the facts asserted in the Plaintiff’s factum were properly before me, I do not see how they assist the Plaintiff on the fundamental issue of when those facts came to the Plaintiff’s attention, or why they should be considered anything more than further details relating to a potential claim against the IESO that the Plaintiff was aware of when the original Statement of Claim was issued.

[41] In reaching the conclusion that the Plaintiff had actual knowledge of the claim against the IESO more than two years before bringing the current motion in June 2017, I also considered the Plaintiff’s argument that I should draw the opposite inference (that is, that the Plaintiff did not have sufficient information to make a claim against the IESO at the relevant time) from the fact that the Plaintiff did not assert a claim against the IESO when he issued the 2016 Amended Statement of Claim in January 2016, a date within two years prior to bringing the current motion. I found no merit to that argument. I found it tantamount to asking me to infer that the Plaintiff asserted a claim within the limitation period from the fact that he had failed to do so when he had the opportunity at an earlier time. In my view, accepting that submission would render meaningless the already-low onus on the Plaintiff to justify the adding of a party, even after the expiry of the presumptive limitation period.

[42] The presumption in s. 5(2) of the Limitations Act, 2002, provides further support for the legal conclusion that the Plaintiff had actual knowledge of the matters giving rise to the claim as set out in s. 5(1)(a) of that Act, the onus being on the Plaintiff to prove the contrary. I agree with the IESO that on the record before me, any act or omission of the IESO upon which the Plaintiff may rely as part of its cause of action against the IESO must have occurred by June 6, 2014 (the date by which the putative class members would have “discovered” their losses, as indicated in the original Statement of Claim) or, at latest, by February 6, 2015, the date that original Statement of Claim was issued. Under s. 5(2), the onus is on the Plaintiff to “prove the contrary”. On the record before me, the Plaintiff has not done so.

[43] In addition, I agree with the IESO that even if the Plaintiff did not know about the potential claim against the IESO by the time the Statement of Claim was issued in February 2015, the Plaintiff by that date ought reasonably to have known about the matters giving rise to that claim, as provided for in s. 5(1)(b) of the Limitations Act, 2002. As indicated previously, in making that determination, it is relevant to consider what steps the Plaintiff took to discover those matters, the onus being on the Plaintiff to show that reasonable steps were taken on the Plaintiff’s behalf. However, there is no evidence before me as to what steps may have been taken to discover the claim against the IESO.

[44] Consistent with previous case law, the absence of such evidence in itself would not necessarily be fatal to the Plaintiff’s position that the limitation period had not expired when the Plaintiff brought the motion. However, as was in the case in Mancinelli, there is also no evidence before me providing an explanation (let alone a reasonable one) as to why the claim against the IESO was not discovered and a motion brought within the presumptive limitation period. As Perell J. made abundantly clear in Mancinelli at paras. 53-54, the onus was on the Plaintiff, not the proposed defendant, to provide that evidence. In these circumstances, I find that the application of s. 5(1)(b) of the Limitations Act, 2002, also justifies the conclusion that the limitation period had expired by the time the Plaintiff brought the motion to add the IESO as a defendant.

[45] In reaching that conclusion, I also considered the 2003 Ontario Court of Appeal decision in Zapfe. In that case, the appeal court permitted the plaintiff to add as party defendants two existing third parties after the apparent expiry of the limitation period, applying the discoverability principle. Plaintiff’s counsel relied on that decision to support his position that the IESO should be added as a defendant, relying on language in that decision stating that the determination of when the plaintiff acquired or ought reasonably to have acquired knowledge of the facts on which the claim was based is a question of fact that should be left to the trial judge on a full evidentiary record. However, I consider the Zapfe decision to be clearly distinguishable on a number of bases. Among other things, plaintiff’s counsel in that case provided detailed affidavits explaining why it was not possible for the plaintiff to discover with reasonable diligence the facts to form the basis for a cause of action against the proposed defendants. The deponent of the affidavits was not cross-examined, nor was any affidavit evidence provided in response. By way of contrast, as previously noted, the Plaintiff has not provided any affidavit evidence as to the steps taken to discover the cause of action against the IESO or to explain why it was not necessary to take any steps. On that basis alone, the Zapfe decision would not assist the Plaintiff in this case.

[46] Accordingly, for the forgoing reasons, I am dismissing the Plaintiff’s motion to add the IESO as a defendant. I am also dismissing the Plaintiff’s motion for leave to amend the 2016 Amended Statement of Claim to the extent that the proposed amendments relate to the requested addition of the IESO as a defendant.

III. Limitation issue – Solart-associated proposed defendants

[47] In addition to adding the IESO as a defendant, the Plaintiff seeks to add 16 additional defendants to the action. Fifteen of those proposed defendants are the Solart-associated proposed defendants, who are represented on this motion by counsel of record for the current Solart-associated defendants (referred to for convenience in these Reasons as “Solart’s counsel”). Like the IESO, the Solart-associated proposed defendants oppose the motion to add them as defendants on the basis that the action as against them is statute barred. They have adopted the IESO’s legal arguments on the limitation issue, and submit that the same considerations apply to support their position that the motion to add them as defendants should be dismissed.

[48] Solart’s counsel (with some justification) expressed some uncertainty relating to the allegations against the Solart-associated proposed defendants, as set out in the proposed amended claim. In particular, Solart’s counsel says that the proposed amended claim is unclear as to the basis upon which the Plaintiff seeks to add the Solart-related proposed defendants.

[49] As previously noted, the Plaintiff’s claim is based in fraud, as well as bad faith breach of contract, resulting trust and unjust enrichment. Having reviewed and considered the proposed amended claim, including the references to the proposed new defendants, I agree with the submission of Solart’s counsel that the bases for the claims against the proposed new defendants (with the exception of the IESO) should be read as coinciding with the bases for the claims against the existing defendants. The reason for the exception for the IESO is explained below.

[50] The Plaintiff seeks to amend paragraph 12 of the existing claim by adding additional clauses to identify and described the proposed new defendants. The introduction to paragraph 12 provides as follows: “The following personal defendants have been unjustly enriched by improper knowing receipt and are liable for damages for knowing assistance with respect to the deposits.” As it currently exists, paragraph 12 identifies and describes existing defendants in clauses (a) to (u). The proposed amended claim would add clauses (v) to (ff) with respect to the proposed additional defendants, consisting of the IESO (in clause 12(v)), Energia-360 Canada Inc. (in clause 12(x)) and the Solart-associated proposed defendants (in the balance of the proposed new clauses).

[51] The clauses of paragraph 12 that deal with the Solart-associated proposed defendants are addressed briefly below.

a. In clause 12(w), Solart S.E.C. (a.k.a. Solart L.P.) is identified as a “business entity” registered in Quebec, whose registered representative is the Defendant Marc-Andre Lemieux. Solart S.E.C. is also described as being related to two other existing Solart-associated defendants. Clause 12(w) also states that its “role in the loss of the deposits is unknown.”

b. All but one of the other clauses that deal with the Solart-related proposed defendants identify them as being Quebec-registered entities, each having a registration date of January 18, 2013. A number of the clauses identify the Defendant Marc-Andre Lemieux and other entities associated with him as having a role in the particular Solart-associated proposed defendant, including as a registered representative, proxy holder, general partner, limited partner or shareholder.

c. In some cases, a particular entity is identified as having a bank account from which a cheque payable to the OPA was written (clauses 12(y) and (z)) or being the recipient of an OPA refund cheque the deposit of which is not reflected in Solart records (clause 12(ff)).

[52] The basis for my conclusion that the Plaintiff’s claim against IESO is distinguished from the claim against the other existing and proposed defendants is evident from clause 12(v), which reads as follows:

The defendant IESO is a corporation continued pursuant to … the Electricity Act, 1998 …. Any reference to “the defendants” or “the defendants herein” does not include the IESO unless specifically stated. The claim against the IESO is a claim for damages in negligence. [Emphasis added.]

[53] None of the other proposed new clauses in paragraph 12 contains equivalent language. In addition, as noted by Solart’s counsel in his submissions, the allegations in paragraph 12 relating to the Solart-associated proposed defendants do no plead any material facts that link them to the causes of action alleged against the existing defendants. As well, there are no other proposed amendments to the claim that specifically address the proposed defendants other than the IESO. In these circumstances, I consider it reasonable to conclude that the bases for the claims against the Solart-associated proposed defendants coincides with the bases for the claims against the existing defendants.

[54] Premised on that conclusion, Solart’s counsel argued that the limitation period for the claim against the Solart-associated proposed defendants started to run by December 10-12, 2014 (the date of the Plaintiff’s first opportunity to inspect Solart’s financial records, as set out in paragraph 36 of the original Statement of Claim), or at latest by February 6, 2015 (the date of the original Statement of Claim). In counsel’s submission, apart from paragraph 36 of the original Statement of Claim, there is no other evidence properly before the court that would support a later date for commencement of the limitation period. On that basis, the limitation period expired by the time the Plaintiff brought the motion to add the Solart-associated proposed defendants in June 2017. Accordingly, s. 21(1) of the Limitations Act, 2002, provides an absolute bar to adding the Solart-associated proposed defendants as parties to the action.

[55] Based on the reasoning I have already accepted relating to the claim against the IESO, I have concluded that the limitation period relating to the Plaintiff’s claim against the Solart-associated proposed defendants had expired by the time the Plaintiff brought the motion to add the Solart-associated defendants in June 2017. Each of ss. 5(2) and 5(1)(b) of the Limitations Act, 2002, provides a legal basis to support that conclusion.

[56] Pursuant to s. 5(2) of the Limitations Act, 2002, the Plaintiff is presumed to have actual knowledge of the matters giving rise to the claim against the Solart-associated proposed defendants as set out in s. 5(1)(a) of that Act, unless the contrary is proved. Consistent with my previous conclusion relating to the claim against the IESO, any act or omission upon which the Plaintiff may rely as part of its cause of action against the Solart-associated proposed defendants must have occurred by June 6, 2014 (the date by which the putative class members would have “discovered” their losses, as indicated in the original Statement of Claim) or, at latest, by February 6, 2015, the date that original Statement of Claim was issued. Under s. 5(2), the onus is on the Plaintiff to “prove the contrary”. As argued by Solart’s counsel, an arguable alternative date by which the limitation period commenced would be December 10-12, 2014, the date of the Plaintiff’s first opportunity to inspect Solart’s financial records, as set out in paragraph 36 of the original Statement of Claim. All three of these potential commencement dates are more than two years prior to the date that the Plaintiff brought the motion to add the Solart-associated proposed defendants as parties, including the “at latest” third date of February 6, 2015. Therefore, the Plaintiff has not rebutted the presumption in s. 5(2) of the Limitations Act, 2002, that the Plaintiff had actual knowledge of the claim by at latest February 6, 2015. On that basis, s. 21(1) provides an absolute bar to adding the Solart-associated proposed defendants as parties to the action.

[57] I have also concluded that s. 5(1)(b) of the Limitations Act, 2002, provides an additional basis for dismissing the Plaintiff’s motion to add the Solart-associated proposed defendants as parties. Even if the Plaintiff did not know about the potential claim against them by the time the Statement of Claim was issued in February 2015, I have concluded that the Plaintiff by that date ought reasonably to have known about the matters giving rise to that claim, as provided for in s. 5(1)(b). As indicated previously, in making that determination, it is relevant to consider what steps the Plaintiff took to discover those matters, the onus being on the Plaintiff to show that reasonable steps were taken on the Plaintiff’s behalf. However, except as noted above, there is no evidence before me as to what steps may have been taken to discover the claim against the Solart-associated proposed defendants.

[58] As previously noted, the absence of such evidence in itself would not necessarily be fatal to the Plaintiff’s position that the limitation period had not expired when the Plaintiff brought the motion. However, as was in the case in Mancinelli, there is also no evidence before me providing an explanation as to why the claim against the Solart-associated proposed defendants was not discovered and a motion brought within the presumptive limitation period, the onus being on the Plaintiff to provide that evidence. In these circumstances, I find that the application of s. 5(1)(b) of the Limitations Act, 2002, also justifies the conclusion that the limitation period had expired by the time the Plaintiff brought the motion to add the Solart-associated proposed defendants as parties.

[59] Accordingly, for the forgoing reasons, I am dismissing the Plaintiff’s motion to add the Solart-associated proposed defendants as parties to the action. I am also dismissing the Plaintiff’s motion to amend the 2016 Amended Statement of Claim to the extent that the proposed amendments relate to the requested addition of the Solart-associated proposed defendants as parties.

[60] Since I have decided not to add the IESO or the Solart-associated proposed defendants as parties, Energia-360 Canada Inc. is the only remaining proposed defendant that the Plaintiff seeks to add as a party to the action. I understand that in accordance with my directions at the August 2017 case conference relating to service of proposed defendants, Energia-360 has been properly served with the motion material without the benefit of variation of service requirements that had been provided for existing defendants who had previously been properly served. Energia-360 has not filed any responding material or otherwise taken a position on this motion. In that regard, I note that paragraph 12(x) of the proposed amended claim alleges that the Defendant Melanie Lacroix was associated with Energia-360. Ms. Lacroix’s counsel responded to the motion and appeared on her behalf, but advised that he had no instructions to appear or make submissions on behalf of Energia-360.

[61] Accordingly, on an unopposed basis, an order will issue adding Energia-360 Canada Inc. as a defendant and granting the Plaintiff leave to amend the 2016 Amended Statement of Claim accordingly.

IV. Alleged pleading deficiencies

[62] In addition to opposing the Plaintiff’s motion to add the Solart-associated proposed defendants as parties, Solart’s counsel also takes issue with certain paragraphs of the proposed amended claim. He argues that those amendments should not be allowed since they violate the rules of pleadings.

[63] By way of background, the Plaintiff’s claim against the existing defendants is set out in the 2016 Amended Statement of Claim, a 42 page document with 65 paragraphs. The proposed amended claim is a 97 page document with 245 paragraphs. Although some of the amendments relate to the Plaintiff’s motion to add additional defendants under r. 5.04(2), the proposed amended claim also, to a significant extent, expands upon the allegations relating to the existing defendants, in particular the Solart-associated defendants.

[64] When I dismissed the Plaintiff’s motion to add the Solart-associated proposed defendants as parties, I also dismissed the Plaintiff’s motion for leave to amend his claim to the extent that the proposed amendments relate to their requested addition as defendants. Therefore, it is unnecessary for me to address the objections to the proposed amended claim that relate to the motion to add the Solart-associated proposed defendants as parties. In fact, Solart’s counsel objected to only one paragraph of the proposed amended claim (paragraph 12(w)) that relates solely to one of the proposed defendants (Solart S.E.C.), limited to the last sentence of that paragraph (which states that Solart S.E.C.’s “role in the loss of the deposits is unknown”). Although I would not have been inclined to give effect to that particular objection, it is unnecessary for me to address it since the issue is now moot. However, I will address Solart counsel’s other objections since they relate to allegations against existing Solart-associated defendants.

[65] As previously noted, on a motion to amend a pleading under r. 26.01, the court is required to grant leave to amend on just terms unless prejudice would result that could not be compensated for by costs or an adjournment. In Marks v. Ottawa (City), 2011 ONCA 248 at para. 19, the Ontario Court of Appeal interpreted the court’s authority under that rule as follows: “Although the general rule is that amendments are presumptively approved, there is no absolute right to amend pleadings. The court has a residual right to deny amendments where appropriate”, including where the amendment, “if originally pleaded, would have been struck.”

[66] The rules that apply to all pleadings are set out in r. 25.06. Rule 25.06(1) requires every pleading to contain a concise statement of the material facts on which the party relies, but not the evidence to prove those material facts. Where fraud, misrepresentation or breach of trust is alleged, r. 25.06(8) provides that the pleading shall contain “full particulars, but knowledge may be alleged as a fact without pleading the circumstances from which it is to be inferred.” Under r. 25.11, the court may strike a pleading on the ground that it (a) may prejudice or delay the fair trial of the action, (b) is scandalous, frivolous or vexatious, or (c) is an abuse of process of the court.

[67] In Parker v. Pfizer Canada Inc., 2011 ONSC 5169 at paras. 24-33, Perell J. of this court usefully surveyed the considerations that apply when determining whether a pleading should be struck, as follows.

24. The balance of Pfizer Canada's attack on the Amended Statement of Claim concerns alleged violations of the rules with respect to pleading. Pfizer Canada relies principally on rule 25.11, which provides "that a court may strike out or expunge all or part of a pleading in circumstances where the impugned pleading may prejudice or delay the fair trial of the action, is scandalous, frivolous or vexatious, or is an abuse of the process of the court."

25. Pleadings that are irrelevant, argumentative or inserted only for colour, or that constitute bare unfounded allegations should be struck out as scandalous ….

26. Pfizer Canada also submits that various paragraphs of the Amended Statement of Claim contravene rule 25.06(1) which provides that "every pleading shall contain a concise statement of the material facts on which the party relies for the claim or defence, but not the evidence by which those facts are to be proved."

27. A material fact is a fact that is necessary for a complete cause of action …. Material facts include facts that establish the constituent elements of the claim or defence ….

28. Material facts include any facts that the party pleading is entitled to prove at trial, and at trial, anything that affects the determination of the party's rights can be proved; accordingly, a material fact is a fact that can have an [effect] on the determination of a party's rights ….

29. A fact that is not provable at the trial or that is incapable of affecting the outcome is immaterial and ought not to be pleaded. As described by Justice Riddell in Duryea v. Kaufman, (1910), 21 O.L.R. 161 (H.C.J.) at p. 168, such a plea is said to be "embarrassing;" he said: "No pleading can be said to be embarrassing if it alleges only facts which may be proved -- the opposite party may be perplexed, astonished, startled, confused, troubled, annoyed, taken aback, and worried by such a pleading -- but in a legal sense he cannot be "embarrassed." But no pleading should set out a fact which would not be allowed to be proved -- that is embarrassing."

30. A pleading that raises an issue that can have no effect upon the outcome of the action is embarrassing and may be struck out ….

31. A pleading should not describe the evidence that will prove a material fact; pleadings of evidence may be struck out ….

32. What the prohibition against pleading evidence is designed to do is to restrain the pleading of facts that are subordinate and that merely tend to prove the truth of the substantial facts in issue ….

33. The pleading of an admission, which is a type of evidence, may be struck out …. [Case names and citations omitted except in para. 29.]

[68] In Parker at para. 38, Perell J. also indicated that a pleading may be struck on the basis that it constitutes “improper argument added simply for colour and to disparage the Defendants”. As indicated in Parker at para. 25, a pleading of that nature falling would be considered “scandalous” and subject to challenge on that basis.

[69] Previous case law has also considered the circumstances in which the court may strike all or part of a pleading under r. 25.11(a) on the basis that the pleading may prejudice or delay the fair trial of the action. In Resolute Forest Products Inc. v. 2471256 Canada Inc. (c.o.b. Greenpeace Canada), 2016 ONSC 5398, 113 O.R. (3d) 167 (Div. Ct.), at para. 73, the Divisional Court indicated that even if a pleading contains material facts that have some degree of probative value, the pleading may still be struck if permitting the pleading would “greatly expand the breadth, complexity and expense of the litigation in circumstances where the corresponding probative value is minimal”, citing with approval Javitz v. BMO Nesbitt Burns Inc., 2011 ONSC 1332, 105 O.R. (3d) 279 at para. 25. In Javitz at paras. 27-29, the court invoked the principles of proportionality in r. 1.04(1.1) in exercising the court’s discretion under r. 25.11(1) to strike the pleading.

[70] Solart’s counsel argued that the impugned paragraphs of the proposed amended claim are improper on several grounds. For some paragraphs, the objection is that they bear no relationship to the elements of the causes of action that the Plaintiff is advancing, primarily fraud, as well as bad faith breach of contract, resulting trust and unjust enrichment. In that regard, Solart’ counsel referred to the constituent elements of civil fraud (citing Hyrniak v. Maudlin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 87), breach of contract (Speckling v. Communications, Energy and Paperworkers’ Union of Canada, Local 76, 2012 BCSC 1395 at paras. 12-13) and resulting trust (Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795, at para. 20). In counsel’s submission, the causes of action pleaded all relate to sale and installation of solar panels to prospective class members, and the proposed amendments should be examined in that context.

[71] For other paragraphs of the proposed amended claim, the objections of Solart’s counsel relate to the pleading of evidence, argument, conjecture or the improper use of hyperbolic language simply for colour.

[72] I agree with most of the objections the Solart’s counsel has advanced. To that end, I have addressed below the paragraphs of the proposed amended claim that Solart’s counsel objected to, indicating those amendments that I am not permitting and why.

a. Paragraphs 71 [on p. 44], 75(vi) [on p. 49] and 76 [on p. 50] are not allowed, on the basis that they plead evidence, improperly use hyperbolic language for colour and, in large measure, bear no relationship to the pleaded causes of action.

b. Paragraphs 80 and 81 (pp. 50-52) are not allowed, on the basis that they plead evidence and/or are argumentative.

c. The amendment set out in paragraph 99 is allowed. Although inelegantly constructed, it is essentially an allegation of civil fraud against the Defendant Marc Andre Lemieux specifically, particularizing the general cause of action included in the original Statement of Claim. Contrary to the argument of Solart’s counsel, I do not see any significant prejudice to that defendant in responding to the allegation that he “directly or indirectly” made false representations.

d. The amendments set out in paragraphs 101-117 and 233-245 are not allowed, with the exception of the first sentence in paragraph 241 (“The plaintiffs allege that more than one set of financial records was being used by MAL and Solart”), which Solart’s counsel reluctantly agreed was not improper on its face. The balance of those paragraphs are objectionable since they constitute evidence or argument to support material facts pleaded elsewhere. In some cases, they bear little or no relationship to the causes of action pleaded (for example, various references to alleged misconduct relating to Solart’s bankruptcy proceedings, which would have been more properly advanced in the context of those proceedings).

[73] Given that I am not permitting some of the proposed amendments to the Plaintiff’s claim, it is worth noting that the Plaintiff is not necessarily precluded from leading evidence, asking questions or making submissions relating to the same subject matter at a later stage of the proceedings. In that regard, the following passage from the Parker decision (at para. 36) is instructive:

To avoid confusion and controversy later in this action, it is necessary to point out that assuming that the evidence is relevant to the pleaded claim or defence that remains, striking out a part of a pleading that pleads evidence, does not mean that a party is precluded from leading evidence or asking questions about the subject matter of that struck pleading during the discovery phase of the action or at trial. The effect of striking a pleading depends upon why the pleading was struck and by what remains in the pleading.

[74] Accordingly, the Plaintiff is granted leave to amend the 2016 Amended Statement of Claim as set out in the proposed amended claim except as provided in paragraphs 46, 59 and 72 of these Reasons.

V. Responding to amended claim – costs thrown away

[75] In response to the Plaintiff’s motion for leave to amend his claim, the defendants Melanie Lacroix and Sunny Natalia, through their respective counsel, filed responding material. They took essentially the same position. Their counsel indicated that they did not oppose an order permitting amendments to the Plaintiff’s claim that included additional allegations against them and against all defendants generally. However, each of them submitted that as a term of the order, the Plaintiff should be ordered to pay their costs thrown away in preparing an amended defence to the claim, on the following basis. Plaintiff’s counsel had insisted that they file a defence to the claim prior to the action’s certification as class action, or face being noted in default. The Plaintiff’s motion material does not include evidence that the facts underlying the additional allegations were not known to the Plaintiff at the time the original Statement of Claim or the 2016 Amended Statement of Claim was issued. In these circumstances, the defendants are prejudiced by the fact that they need to incur the additional costs of responding to the amended claim. They should be awarded costs to compensate for that prejudice. Counsel for each of those defendants indicated that their client would be content with a modest costs award of $700, even though the actual costs incurred would be significantly higher.

[76] At the motion hearing, Sunny Natalia’s counsel also indicated that he was appearing as agent for counsel for three other defendants, Natercia Dos Santos, Martin Yockell and The Toronto Dominion Bank. None of those defendants had filed materials in response to the motion, but their respective counsel had participated by conference telephone in previous case conferences relating to the motion. Mr. Natalia’s counsel indicated that counsel for each of those three defendants was adopting his submissions, and was seeking costs thrown away in the amount of either $700 or such other amount as the court considered appropriate.

[77] Also appearing at the motion hearing was counsel for the Defendant Guy-Philippe Bouchard. Mr. Bouchard had not filed any material in response to the motion, but his counsel had participated by conference telephone in previous case conferences relating to the motion. His counsel adopted the submissions of counsel for Melanie Lacroix and Sunny Natalia, and indicated that Mr. Bouchard would also be content with a $700 costs award.

[78] In his submissions, Plaintiff’s counsel argued that justice would not be served if the Plaintiff was ordered to pay the costs thrown away in the preparation of amended statements of defence to the Plaintiff’s amended claim. In his submission, he was entitled to insist that the defendants file a full defence to the original Statement of Claim in a timely fashion as required by the rules, and that Turnbull R.S.J. had supported his position by directing at the initial case conference in May 2015 that the defendants provide full statements of defence.

[79] I do not dispute the position of Plaintiff’s counsel that he was entitled to insist on full compliance with the timing requirements of the Rules of Civil Procedure with respect to the filing of statements of defence, and that Turnbull R.S.J.’s direction at the May 2015 case conference may be seen as supporting that position. At the same time, the Plaintiff seeks the court’s leave (for the second time) to amend the Plaintiff’s claim in order to, among other things, add additional allegations against existing defendants. In these circumstances, defendants who have filed a statement of defence must consider their response to the Plaintiff’s motion, including whether they need to amend their defences to respond to the amended allegations. Two of those defendants filed responding material, indicating that they are not opposed to the court’s granting the required leave to amend, but seek the costs thrown away in preparing an amended defence. There is nothing in the material before me to indicate that the additional allegations in the amended claim were not known to the Plaintiff at the time that the 2016 Amended Statement of Claim was served in January 2016. In these circumstances, I agree with the defence submission that that the additional costs constitute prejudice that it would be appropriate to compensate for by ordering payment of their costs. I consider such a term of the leave order to be just in the circumstances, as contemplated r. 26.01. I am also satisfied that the amount sought, being $700, is modest as compared to would be expected to be incurred.

[80] Accordingly, as a term of the order granting leave to amend the Plaintiff’s claim, the Plaintiff will be required to pay $700 in costs thrown away to each of the defendants Melanie Lacroix and Sunny Natalia. The “heavy lifting” on this aspect of the motion was done by counsel for those defendants. They faced potential costs exposure on this motion had I not accepted their position. I therefore consider it appropriate that the term of the leave order relating to costs thrown away be in their favour only, and not in favour of the other defendants who supported their position. That aspect of the order is separate from the issue of the costs of this motion generally, which will be addressed by way of written submissions, as indicated further below.

VI. Document service relief

a. Introduction

[81] Incidental (to some extent) to the Plaintiff’s motion for leave to amend his claim, the Plaintiff seeks relief from document service requirements relating to the defendants Nikhil Tashniwal, Nicolas Vanhove, Elisa Marcela Barrios, Ai Chen, Elaine Dubois and Lennie Moreno.

[82] In the case of all of those defendants except Lennie Moreno, the Plaintiff seeks an order pursuant to r. 3.02 to extend the six-month period for service in r. 14.08 in order to permit service of the proposed amended claim on those defendants. The Plaintiff also seeks an order pursuant to r. 16.08 validating previous service by email of the 2016 Amended Statement of Claim on Nicolas Vanhove.

[83] In the case of the Defendant Lennie Moreno, the Plaintiff seeks an order requiring Mr. Moreno to provide a valid email address for use in exchanging communications between the parties as contemplated by Turnbull R.S.J.’s direction dated May 21, 2015.

[84] In order to address the Plaintiff’s request for relief from document service requirements, I will first set out the legal principles that apply on a motion to extend the time for service of the statement of claim. I will then address the application of those and other principles with respect to service on the affected parties, depending on their circumstances.

b. Extending time for service – legal principles

[85] The Plaintiff was required to serve the original Statement of Claim on the defendants within six months of its issuance (r. 14.08(1)). The court has the discretion to extend the time for service on such terms as are just (r. 3.02(1)). A motion to extend the time for service may be made before or after expiry of the time for service (r. 3.02(2)).

[86] In previous decisions of this court that defence counsel relied on, the Ontario Court of Appeal decision in Chiarelli v. Wiens (2000), 2000 CanLII 3904 (ON CA), 46 O.R. (3d) 780 (C.A.) has been cited as the leading case on the extension of time for service of a statement of claim (see Tarsitano v. Drutz, 2013 ONSC 5605 at para. 20; Malatesta v. 2088675 Ontario Inc., 2014 ONSC 1793 at para. 10).

[87] In Chiarelli, the Plaintiff brought a motion to extend the time for service of the Statement of Claim more than six years after the expiry of the six month period for service. The motion judge granted the extension, but on appeal the Divisional Court overturned that decision. On further appeal, the Court of Appeal restored the motion judge’s decision. At para. 12, the Court of Appeal confirmed that on a motion to extend the time for service of a statement of claim, the basic consideration is whether the extension “will advance the just resolution of the dispute, without prejudice or unfairness to the parties.” At para. 10, the Court of Appeal stated that prejudice was the “key issue on the motion”, and further indicated that “the court should not extend the time for service if to do so would prejudice the defendant, and that the plaintiffs bore the onus to show that the defendant would not be prejudiced by an extension.”

[88] In each of Tarsitano and Malatesta, the motion judge, while relying on Chiarelli as the leading case, arguably went further in their characterization of the plaintiff’s burden when seeking an extension of time for service. Both decisions state that “the expiry of the [six month] limitation period for service gives rise to a presumption of prejudice” (Tarsitano at para. 28, Malatesta at para. 17). In each case, the motion judge cited in support the Ontario Court of Appeal decision in Frohlick v. Pinkerton Canada Ltd., 2008 ONCA 3, 88 O.R. (3d) 401. However, I do not agree that the decision in Frohlick stands for that proposition. Frohlick was an appeal from a motion judge’s refusal to allow amendments to a statement of claim on the basis that the amendments advanced a new and unrelated claim that was statute barred. The issue before the court in Frohlick was whether there was a presumption of defence prejudice arising from the expiry of the limitation period for the action. The Court of Appeal held that a presumption of prejudice arose in those circumstances. However, the Court of Appeal did not address the issue of whether on a motion to extend the six month period to serve a statement of claim, the expiry of the six month period for service, in itself, gave rise to a presumption of defence prejudice.

[89] In any case, the Court of Appeal in Chiarelli gave further guidance with respect to any presumed prejudice that may arise on a motion to extend the time for service. At para. 14, the Court of Appeal commented on the “very general statement” in the defence affidavit relating to the deponent adjuster’s belief that the defence had been seriously prejudiced by the passage of time. In that regard, the court indicated that even though the onus was on the plaintiffs to show that the defendants will not be prejudiced, “if the defence is seriously claiming that it will be prejudiced by an extension it has at least an evidentiary obligation to provide some details” (see also Noori v. Grewal, 2011 ONSC 5213 at paras. 24 and 46; Smith v. Galbraith (2004), 2004 CanLII 13164 (ON SC), 9 C.C.L.I. (4th) 126 (S.C.), at para. 15).

[90] As well, the Court of Appeal in Chiarelli indicated (at para. 17) that the motion judge did not err in principle by extending the expiry date by over six years, even though the limitation period for the action was two years. In that doing so, the court focused on defence prejudice as the key consideration, as follows:

The court should not fix in advance rules or guidelines when an extension should be refused. Each case should be decided on its facts, focusing as the motions judge did in this case, on whether the defence is prejudiced by the delay.

[91] In Tasitano, after referring to Chiarelli as the leading case, DiTomaso J. also provides additional guidance as to the relevant considerations when considering a motion to extend the time for service, as follows:

22. In considering whether to grant the plaintiffs an extension of time, the jurisprudence provides that the court may consider the following factors:

(a) Whether the defendant had notice before the expiry of the limitation period that the plaintiff was asserting a claim against him;

(b) whether or not the plaintiff moved promptly for an extension of time after the period expired;

(c) whether or not it was reasonable for a defendant to infer from all the circumstances that the plaintiff had abandoned his claim;

(d) whether or not the delay in serving the claim resulted from the direction, participation or involvement of the plaintiff personally in the service of the claim; and,

(e) prejudice to the defendant.

[92] Consistent with previous case law relating to delay in other contexts (see Scaini v. Prochnicki (2007), 2007 ONCA 63, 85 O.R. (3d) 179 (C.A.), at paras. 21-25), I would not consider the list of factors cited in Tasitano to be exhaustive, nor would it be necessary to satisfy each of the criteria for an extension to be granted (taking into account the Court of Appeal’s indication in Chiarelli that defence prejudice is the key consideration). In Scaini, the Court of Appeal favoured a “contextual approach” whereby the motion judge will ultimately exercise the court’s discretion upon consideration of all the relevant factors and will attempt to balance the interests of the parties in order to arrive at a fair and just result.

c. Service on Nikhil Toshniwal

[93] With that background, I will first address the Plaintiff’s request for an extension of the time for service on the Defendant Nikhil Toshniwal. He is one of the defendants named in the original Statement of Claim, where he was identified as a Vice-President of Solart. In the Plaintiff’s supporting affidavit for this motion, the only sworn statements relating to Mr. Toshniwal are (a) he is a Solart vice president and an employee of certain other Solart-associated defendants, (ii) he has not been served with the original Statement of Claim, (iii) the proposed amended claim was served on “existing and proposed defendants” (including Mr. Toshniwal) on May 9, 2017, and (iv) the additions, deletions and changes set out in the proposed amended claim “do not prejudice the existing defendants”, including Mr. Toshniwal.

[94] In the original Statement of Claim, the Plaintiff claimed relief against Mr. Toshniwal together with other individual defendants for their involvement with Solart in allegedly fraudulent activities, but there were no allegations particular to Mr. Toshniwal with respect to his involvement. Additional allegations relating to Mr. Toshniwal are, however, included in the proposed amended claim, specifically in paragraph 149 and paragraphs 151-155. Paragraphs 149-150 also include statements relating to the efforts of Plaintiff’s counsel to locate and serve Mr. Toshniwal. The relevant parts of paragraphs 149-150 are set out below.

149. Nikhil Toshniwal is a vice president of Solart…. The solicitor for the plaintiff hired an investigator to speak with Toshniwal on the telephone posing as a person interested in renting his apartment in Montreal. By the time the original statement of claim had issued, Toshinwal had fled Montreal.

150. Toshniwal was located through his family in British Columbia and served with the Amended Statement of Claim by email and within days he hired a lawyer in Toronto to contact the solicitor for the plaintiffs. The lawyer would not accept service on behalf of Toshniwal. This same lawyer advised on May 25, 2017, that he is now representing Toshinwal but has to date declined to go on the record.

[95] The statements in paragraphs 149-150 relating to communications between Plaintiff counsel’s and Mr. Toshniwal’s counsel were not dealt with in the body of the Plaintiff’s affidavit, but certain aspects of those communications were addressed in the responding affidavit sworn by a law clerk with responding counsel’s law firm. That affidavit together with correspondence attached to it address contact between counsel that occurred in July 2016 and again in May 2017, as outlined below.

[96] The responding material confirms that Mr. Toshniwal’s counsel contacted Plaintiff’s counsel in July 2016, and that Plaintiff’s counsel declined to deal with him unless he served a notice of appointment as Mr. Toshniwal’s counsel. In a letter sent to Plaintiff’s counsel by email, Mr. Toshniwal’s counsel contested that his client had been properly served with the 2016 Amended Statement of Claim (as alleged in the original Statement of Claim), given the long passage of time since issuance of the original Statement of Claim. In that letter, Mr. Toshniwal’s counsel also agreed to serve a notice of appointment if Plaintiff’s counsel agreed that his doing so would be without prejudice to Mr. Toshniwal’s position relating to service and the validity of the Plaintiff’s claim. In his responding email, Plaintiff’s counsel declined to deal with Mr. Toshniwal’s counsel by email unless he was counsel of record for Mr. Toshnwal, but indicated he would deal with him by fax. Mr. Toshniwal’s counsel responded by email, declining to resend his letter by fax, and also indicated that if Plaintiff’s counsel chose not to respond, it was at the Plaintiff’s risk. In his responding email, Plaintiff’s counsel again declined to deal with him by email without proof of his retainer, and also indicated that he had deleted without reading all correspondence sent to him by email and would block his email until Plaintiff’s counsel had proof of his retainer.

[97] As set out in Mr. Toshniwal’s responding material, the next contact between counsel was in May 2017, when Mr. Toshniwal’s counsel contacted Plaintiff’s counsel by email after receiving the proposed amended claim. Mr. Toshniwal’s counsel indicated his position that it was too late for the Plaintiff to serve his client with any claim, and that he would require a court order extending the time for service. He also stated that his client would object to the proposed amended claim, and that the additional allegations against his client were statute barred. By return email, Plaintiff’s counsel again declined to respond unless Mr. Toshniwal’s counsel served a notice of appointment as counsel. Mr. Toshniwal’s counsel then provided Plaintiff’s counsel with a notice of appointment as counsel for Mr. Toshniwall, stating that he was doing so without prejudice to his client’s position that he had not been served and that the time for service had expired. In a hostile responding email, Plaintiff’s counsel (among other things) acknowledged receiving notice of counsel’s retainer by Mr. Toshniwal.

[98] Mr. Toshniwal’s counsel argued that the Plaintiff had not satisfied his onus of demonstrating that extending the time for service will advance the just resolution of the dispute without prejudice or unfairness to the parties, specifically prejudice to Mr. Toshniwal. Consistent with Chiarelli, the Plaintiff bore the onus to show that Mr. Toshniwal would not be prejudiced by the extension. The Plaintiff has not led any evidence to demonstrate that there was no prejudice to Mr. Toshniwal, other than the bald unsupported statement in the Plaintiff’s supporting affidavit to the effect that the amendments in the proposed amended claim “do not prejudice the existing defendants.”

[99] In support of his position that the extension should not be granted, Mr. Toshniwal’s counsel also relied on additional factors cited in Tarsitano, including as noted below.

a. Mr. Toshniwal may not have had notice of the Plaintiff’s claim against him within the limitation period. The evidence indicated that Mr. Toshniwal was aware of the Plaintiff’s claim by July 2016, 17 months after the Plaintiff issued the original Statement of Claim. Arguably, the limitation period had expired by June 2016, two years after Solart provided notice of its bankruptcy proposal.

b. The Plaintiff did not move promptly to obtain an extension after the six-month period for service expired. Without reasonable explanation for the delay, the Plaintiff did not bring his motion to extend until over 22 months after the time for service expired in August 2015, and nearly a year after first email contact with Mr. Toshniwal’s counsel in July 2016.

c. It was reasonable for Mr. Toshniwal to infer that the Plaintiff had abandoned his claim. In the email exchange in July 2016, Plaintiff’s counsel was advised of Mr. Toshniwal’s position that he was contesting the validity of service unless the Plaintiff obtained on order extending the time for service. However, the Plaintiff took no steps to do so until June 2017, shortly after Mr. Toshniwal’s counsel contacted Plaintiff’s counsel upon receiving the proposed amended claim in May 2017. In these circumstances, it was reasonable to conclude that the Plaintiff had no interest in continuing the claim against Mr. Toshniwal.

d. The delay is attributable to the Plaintiff. There is no evidence from the Plaintiff of any effort to move the claim against Mr. Toshnwal forward in a timely way. Therefore, it was reasonable to infer that the Plaintiff was complicit in the delay (see Tarsitano at paras. 35-36). As well, there is no suggestion that the delay was attributable to the inadvertence of Plaintiff’s counsel, but rather “a continuous if not studied neglect of the Rules of Practice respecting … service” (see Noori at para. 26, quoting Nugent v. Crook (1969), 1969 CanLII 389 (ON CA), 40 O.R. (2d) 110 (C.A.)).

e. Mr. Toshniwal was prejudiced. As previously indicated, to support the conclusion that Mr. Toshniwal was prejudiced, his counsel relied on the Plaintiff’s failure to lead evidence to discharge his onus of demonstrating that Mr. Toshniwal would not be prejudiced. Mr. Toshniwal did not provide evidence of actual prejudice.

[100] In response to the submissions of Mr. Toshniwal’s counsel, Plaintiff’s counsel argued that it was correct and appropriate for him to refuse to deal with Mr. Toshniwal’s counsel unless a notice of appointment was served. Plaintiff’s counsel also argued, among other things, that there was no evidence to support Mr. Toshniwal’s position that he would be prejudiced by an extension in the time for service. In that regard, Plaintiff’s counsel noted that he had made a demand for particulars from Mr. Toshniwal with respect to his objections to the motion, but had not received a reply. Plaintiff’s counsel also indicated that the Plaintiff would be seeking a costs order against Mr. Toshniwal for not responding to the demand for particulars and not particularizing his objection to the facts pleaded against him in the proposed amended claim.

[101] On the issue of prejudice, I found Plaintiff counsel’s response to be problematic, since it again reflected an apparent failure to appreciate that the Plaintiff was the one that brought the motion and bore the onus of establishing that the relief he requested should be granted. I can understand to some extent Plaintiff counsel’s frustration, given that the Plaintiff has only limited access to information about the defendants at the pre-certification stage. However, it is of no assistance to the Plaintiff to complain that the responding parties have not provided the information that he believes he needs to make his case on this motion.

[102] I also found Plaintiff counsel’s refusal to deal with Mr. Toshniwal’s counsel prior to his going on record (as well as Plaintiff counsel’s hostility once he had done so) to be ill-advised and potentially self-defeating. The court has the right to expect counsel to cooperate in order to resolve procedural issues, or at least narrow the scope of the matters in dispute should it be necessary to resort to court processes. Except in unusual circumstances, the same considerations apply whether or not counsel is formally on the record.

[103] That being said, I have decided to grant the Plaintiff’s motion to extend the period for service in r. 14.08(1) in order to permit service of the proposed amended claim on Nikhil Toshniwal. In that regard, I am satisfied that the extension will advance the just resolution of the dispute, without prejudice or unfairness to the parties. As indicated in Chiarilli at para. 10, prejudice is the “key issue” on a motion to extend the time for service of a statement of claim. The only affidavit evidence I have on the issue of defence prejudice is in the Plaintiff’s supporting affidavit, in which he deposes that the amendments in the proposed amended claim do not prejudice the existing defendants. I realize that even that generalized statement does not directly address the question of lack of defence prejudice arising from the delay in bringing the motion to extend the time for service. Nevertheless, it may be taken as providing some recognition that the extent of any defence prejudice is a key consideration relating to the relief that the Plaintiff seeks. A previously noted, the Plaintiff (like other affiants on this motion) was not cross-examined on his affidavit.

[104] While the Plaintiff relies on a generalized statement of this nature without particulars at his peril, it is in fact more evidence relating to the presence or absence of actual defence prejudice than Mr. Toshniwal has provided. To support his position that the defence has suffered prejudice, his counsel relies solely on presumed prejudice, arising from the Plaintiff’s alleged failure to satisfy his onus of establishing that Mr. Toshniwal would not be prejudiced by the extension. It is also fair to say that Mr. Toshniwal relies on presumed prejudice at his peril, given in particular the Court of Appeal’s observation in Chiarelli (at para. 14) that “if the defence is seriously claiming that it will be prejudiced by an extension it has at least an evidentiary obligation to provide some details”. Mr. Toshniwal has not done so in this case.

[105] In reaching the conclusion that the extension should be granted in this case, I also took into account the other factors referred to Tasitano, but concluded that considering them as a whole together with the issue of defence prejudice, the requested extension should be granted. The factors I considered included those noted below.

a. Limitation period. As already indicated, the evidence indicated that Mr. Toshniwal was aware of the Plaintiff’s claim against him by July 2016, 17 months after the Plaintiff issued the Statement of Claim. While it is possible that the limitation period had expired by that time, I am not in a position to determine whether that is the case, as Mr. Toshniwal’s counsel conceded in factum.

b. Delay in bringing motion. The motion material indicates that the Plaintiff’s claim came to Mr. Toshniwal’s attention by July 2016, 17 months after the original Statement of Claim was issued and 11 months after the time for service expired, after receiving the 2016 Amended Statement of Claim. At that time, Mr. Toshniwal’s counsel provided Plaintiff’s counsel by email with Mr. Toshniwal’s position that the time for service had expired and an order extending service would be required. However, the evidence indicates that Plaintiff’s counsel was not aware of that position (albeit through his own intransigence in refusing to read emailed documents). The Plaintiff brought his motion to extend the time for service 11 months later in June 2017. It would have been helpful to have affidavit evidence relating to the Plaintiff’s attempts to locate Mr. Nishniwal and providing an explanation for the delay in bringing the motion. However, even in the absence of such evidence, I do not consider the delays in this case to be sufficient as to justify refusal of the extension in the absence of any evidence of actual prejudice (for example, see Chiarelli by way of comparison).

c. Plaintiff’s responsibility for the delay. I also considered the defence submissions relating to attributing delay to the Plaintiff, based on the conduct (rather than the inadvertence) of Plaintiff’s counsel. However, I did not find those considerations to be of particular assistance to the defence. In that regard, I took into account the Court of Appeal’s comments in Chiarelli (at para. 9), in which the court cited with approval the motion judge’s statement in his reasons that “on a motion to extend the time for service, the court should be concerned mainly with the rights of litigants, not with the conduct of counsel.” That being said, issues relating to delay (including responsibility for delay) may also be relevant factors when considering the matter of costs.

[106] Accordingly, the six-month period for service in r. 14.08(1) is extended by six months, in order to permit the Plaintiff to serve Mr. Toshniwal with the proposed amended claim. For greater certainty, service of the proposed amended claim on Mr. Toshniwal may be made by way of email to Mr. Toshniwal’s counsel or as otherwise agreed between the Plaintiff and Mr. Toshniwal.

d. Service on Nicolas Vanhove

[107] As with Mr. Toshniwal, the Plaintiff seeks an order pursuant to r. 3.02 extending the six-month period for service in r. 14.08 in order to permit the service of the proposed amended claim on the Defendant Nicolas Vanhove. The Plaintiff also seeks an order pursuant to r. 16.08 validating previous service by email of the 2016 Amended Statement of Claim on Mr. Vanhove.

[108] Mr. Vanhove is one of the defendants named in the original Statement of Claim, where he was identified as a Vice-President of Solart and a former resident of Montreal who was “believed to be living in China c/o [website indicated] Hong Kong and Singapore.” In the Plaintiff’s supporting affidavit for this motion, the only sworn statements relating to Mr. Vanhove are that (i) he is a French national, a Solart vice president and an employee of one of the other Solart-associated defendants, (ii) he is believed to be in China and/or Singapore, (iii) he has not been served with the original Statement of Claim, (iv) the proposed amended claim was served on existing and proposed defendants on May 9, 2017, and (iv) the additions, deletions and changes set out in the proposed amended claim do not prejudice the existing defendants.

[109] The Plaintiff’s Supplementary Motion Record also contains a brief affidavit sworn by Plaintiff counsel’s legal assistant, attaching various email messages between Mr. Vanhove and Plaintiff’s counsel that are described further below. The legal assistant’s affidavit also includes that following statements relating to Mr. Vanhove: (i) none of the email messages sent to Mr. Vanhove at the indicated email address “have ever been rejected”; (ii) a copy of the motion record containing the deponent’s affidavit will be served upon Mr. Vanhove at the same email address; and (iii) from documents that Solart provided to the bankruptcy trustee, certain identifying information relating to Mr. Vanhove is known to the Plaintiff. Attached to the legal assistant’s affidavit are the email messages described below.

a. The first two email messages are from Mr. Vanhove to Plaintiff’s counsel dated August 26, 2014 (several months before the issuance of the original Statement of Claim) and July 8, 2015 (five months after the claim’s issuance). Mr. Vanhove asks Plaintiff’s counsel to stop trying to contact Mr. Vanhove by, among other things, bothering people he used to work with and posting flyers in Hong Kong. In the latter email message, Mr. Vanhove acknowledged the following: (i) he was formerly Solart’s Communications Director in Montreal; (ii) he left Solart before it went bankrupt, and has no further association with Solart, and (iii) he left Canada to work elsewhere since he was not a Canadian and did not have a visa to support a longer stay. He also asked Plaintiff’s counsel to direct any questions to him rather than disturbing others.

b. In response to the latter email message, Plaintiff’s counsel sent two email messages dated July 10, 2015, in which he (i) asked for various documents and other information to confirm Mr. Vanhove’s identity, (ii) indicated he could make arrangements to serve Mr. Vanhove if he was in Hong Kong or Singapore, and (iii) asked for further information relating to Mr. Vanhove’s activities with Solart. Mr. Vanhove did not respond to those email messages.

c. On July 2, 2016, Plaintiff’s counsel sent two email messages to Mr. Vanhove, stating that he was thereby serving him with the 2016 Amended Statement of Claim. There was no response to those email messages.

d. On May 20, 2017, Plaintiff’s counsel sent two email messages to Mr. Vanhove. The first message indicated that Plaintiff’s counsel was “serving [Mr. Vanhove] with the Amended Amended Statement of Claim,” and that he was also sending a copy to the home of Mr. Vanhove’s parents in Paris, France. The second email, marked WITHOUT PREJUDICE, was directed to the defendants and proposed defendants generally, and dealt with (among other things) procedural matters relating to the Plaintiff’s proposed Rule 26 motion. There was no response to those email messages.

[110] Based on the foregoing affidavit evidence, I am satisfied that an order should issue extending the period for service in r. 14.08(1) by an additional six months, in order to permit the Plaintiff to serve Nicolas Vanhove with the proposed amended claim. As previously indicated, on motion to extend the time for service of a claim, the basic consideration is whether the extension will advance the just resolution of the dispute, without prejudice or unfairness to the parties, with the key issue being defence prejudice. The only evidence before me relating to defence prejudice is the Plaintiff’s affidavit. I have no evidence of actual defence prejudice. Notice of the motion, including the Plaintiff’s supporting material, was provided to Mr. Vanhove by email to an email address through which effective contact with Mr. Vanhove has previously occurred. Although the last time Plaintiff’s counsel received an email from Mr. Vanhove through that address was in July 2015, the evidence indicated that subsequent email messages sent to that address have not be “rejected”, which I take to mean that the messages were not returned as undeliverable. In the absence of evidence to the contrary, I am proceeding on the basis that Mr. Vanhove had notice of the motion to extend the time to service, and chose not to respond to it.

[111] In reaching the conclusion that I should grant the requested extension, I also found it helpful to have affidavit evidence that provided insight with respect to the Plaintiff’s attempts to locate Mr. Vanhove and his dealings with him. I found that information to be of assistance in coming to the conclusion that it would be fair to the parties to grant the extension.

[112] Accordingly, the six-month period for service in r. 14.08(1) is extended by six months, in order to permit the Plaintiff to serve Mr. Vanhove with the proposed amended claim. For greater certainty, service of the proposed amended claim on Mr. Vanhove may be made by way of email to the email address indicated in the Plaintiff’s motion material.

[113] Since the proposed amended claim will effectively supersede the 2016 Amended Statement of Claim, I see no need to also grant the Plaintiff’s request for an order validating the previous service by email of the 2016 Amended Statement of Claim on Mr. Vanhove.

e. Service on Elisa Marcela Barrios, Ai Chen and Elaine Dubois

[114] The Plaintiff also seeks an order extending the time for service of the proposed amended claim on three additional defendants, Elisa Marcela Barrios, Ai Chen and Elaine Dubois. Each of these persons were among the defendants named in the original Statement of Claim. In the Plaintiff’s affidavit in the Supplementary Motion Record, he identifies each of those defendants as a Solart vice-president or manager who cannot be located and, in the case of Elisa Marcela Barrios, is believed to be living abroad. The affidavit also states that their addresses and particulars are believed to be in the possession of one of the Solart-associated defendants and, “although requested, have not been provided to the plaintiff.”

[115] As with service on Mr. Toshniwal and Mr. Vanhove, I have decided to grant the Plaintiff’s request for an order extending the time for service of the proposed amended claim on Elisa Marcela Barrios, Ai Chen and Elaine Dubois. In that regard, I have the Plaintiff’s affidavit evidence that there is no defence prejudice and no evidence to the contrary.

[116] That being said, if the Plaintiff should seek a further extension of the time for service for those and other defendants in the future, it would be helpful to have from the Plaintiff, among other things, more compelling evidence by way of affidavit relating to the absence of defence prejudice, as well as a more fulsome explanation of the Plaintiff’s attempts to locate the defendants.

f. Lennie Mareno’s email address

[117] The Plaintiff seeks an order requiring the Defendant Lennie Moreno to provide a valid email address for use in exchanging communications between the parties as contemplated by Turnbull R.S.J.’s direction dated May 21, 2015.

[118] By way of background, at an initial case conference for this action before Turnbull R.S.J., he directed, among other things, that “communication from all parties is to be copied to all the parties and email correspondence is to be used. Counsel and parties are to exchange email addresses in a timely manner to allow this order to be put into effect as quickly as possible.”

[119] At a subsequent case conference before me on July 24, 2015 (which included counsel for represented parties and unrepresented defendants who wished to participate, some of whom did so by conference telephone), I was asked to clarify that direction, given some uncertainty as to its intended scope. After some discussion and with the concurrence of those who addressed the issue at the case conference, I clarified the scope of that direction, which included a direction that the Plaintiff and any defendants who defended the action may be served by other such parties by email. I understand that except for Mr. Moreno, all defendants who have defended the action have provided an email address, and that for those defendants, communications relating to the action, including service of court documents, are generally being effected by email.

[120] Unlike the other defendants with respect to whom the Plaintiff has requested relief from service requirements, Mr. Moreno was previously served with the original Statement of Claim and the Amended Statement of Claim, and has defended the action on his own behalf (without counsel). I understand that he has had notice of case conferences for the action, but has not participated in them. As indicated in the affidavit of service provided by Plaintiff counsel, he was served with the Plaintiff’s Notice of Motion and supporting material for this motion by courier. Mr. Moreno did not file responding material or appear on the motion.

[121] I understand from Plaintiff’s counsel that he would like to have Mr. Moreno’s email address as a matter of convenience so that he would be able to communicate with him in a cost-effective manner with respect to matters relating to the action, including service of court documents where appropriate. While I am sympathetic to his position, I have decided not to compel Mr. Moreno to provide an email address.

[122] The Rules of Civil Procedure provides for service by email where the parties consent or by order of the court (see rr. 16.01(4)(b)(iv), 16.05(1)(f) and 16.06.1). However, there is no express authority permitting the court to order a party to provide an email address to allow the party to be served by email. Mr. Moreno was previously served with originating process in this action and has filed a defence. The Plaintiff (and other parties) generally have access to other forms of service (in addition to personal service) relating to Mr. Moreno. There is no evidence that Mr. Moreno is resisting or evading being served by other permitted means. I see no undue hardship for the Plaintiff to resort to those forms of service where appropriate in relation to Mr. Moreno.

[123] As well, the service protocol for this action has generally been arrived at by consensus. In these circumstances, I am hesitant to enforce use of email by compelling a party to provide an email address, at least without a compelling rationale for doing so.

VII. Conclusion

[124] Accordingly, an order will issue in the following terms:

1. The Plaintiff is granted leave to amend the 2016 Amended Statement of Claim as set out in the proposed Amended Amended Statement of Claim except as provided in paragraph 2 of this order and paragraph 72 of these Reasons for Decision, provided that within 30 days the Plaintiff shall pay $700 in costs thrown away to the Defendants Melanie Lacroix and Sunny Natalia.

2. I am dismissing the Plaintiff’s motion (i) to add as defendants the IESO and the Solart-associated proposed defendants, and (ii) for leave to amend the 2016 Amended Statement of Claim to the extent that the proposed amendments relate to the proposed addition as defendants of those proposed defendants.

3. Energia-360 Canada Inc. is added as a defendant, and the Plaintiff is granted leave to amend the 2016 Amended Statement of Claim accordingly.

4. The six-month period for service in r. 14.08(1) of the Rules of Civil Procedure is extended by six months, in order to permit the Plaintiff to serve Defendants Nikhil Tashniwal, Nicolas Vanhove, Elisa Marcela Barrios, Ai Chen and Elaine Dubois with the proposed Amended Amended Statement of Claim. For greater certainty,

a. Service of the proposed Amended Amended Statement of Claim on the Defendant Nikhil Toshniwal (together with a copy of this order) may be made by way of email to his counsel or as otherwise agreed between the Plaintiff and that Defendant.

b. Service of the proposed Amended Amended Statement of Claim on the Defendant Nicolas Vanhove (together with a copy of this order) may be made by way of email to the email address indicated in the Plaintiff’s Supplementary Motion Record.

5. The Plaintiff’s motion to validate the previous service by email of the 2016 Amended Statement of Claim on the Defendant Nicolas Vanhove is dismissed.

6. The Plaintiff’s motion to require the Defendant Lennie Moreno to provide a valid email address for use in exchanging communications between the parties is dismissed.

[125] If the parties cannot agree on costs, the defendants who responded to or appeared on this motion may serve and file brief written submissions (not to exceed three pages) together with a bill of costs and any pertinent offers within 21 days. The Plaintiff will have 21 days after receipt of the defendants’ submissions to respond by brief written submissions (not to exceed five pages). The defendants may reply by brief written submissions within seven days. All such submissions are to be forwarded to the Trial Coordinator in Hamilton and to me at 59 Church Street, 4th Floor, St. Catharines ON L2R 7N8. If no submissions are received within the specified timeframe, the parties will be deemed to have settled costs.

The Honourable Mr. Justice R.A. Lococo

Released: May 29, 2018

COURT FILE NO.: 15-51609-CP (Hamilton)

DATE: 20180529

SUPERIOR COURT OF JUSTICE - ONTARIO

BETWEEN:

Ernest James Howe

Plaintiff

• and -

Solart LLL Corp, Solart International Inc., Solart Group, Blacksun Investments Inc., Gestion Marc Andre Lemieux Inc., 8378541 Canada Inc., Viviane Lea Abecassis, Elisa Marcela Barrios, Ai Chen, Julien Cyr, Natercia Dos Santos, Elaine Dubois, Martin Dupuis, Fanny Girard, Melanie Lacroix, Marc-Andre Lemieux, Francisco Lemieux, Veronique Lemieux, Mark Leyton, Lennie Moreno, Sunny Natalia, Leonor Nonnenmacher, Sophie Poirier, Nikhil Toshniwal, Nicolas Vanhove, Martin Yockell, The Toronto Dominion Bank, 2325524 Ontario Inc. o/a Sentinel Solar and Guy-Philippe Bouchard

Defendants

REASONS FOR DECISION

R. A. Lococo J.

Released: May 29, 2018

[^1]: Solart S.E.C., SSM FNC L.P. (aka SSM PPN S.E.C. Partnership), Investissement SSM PPN S.E.C., CLS Investissement 2, SSM FNC LP, Halton Solar L.P. (aka Halton Solaire S.E.C. Partnership), CLS Investment 7 Limited Partnership, Hammer Solar L.P. (aka Hammer Solaire S.E.C Partnership), Societe en Comandite Investissement HS, Crow Lake Solar L.P. (aka Lac Crow Solaire S.E.C. Partnership), London Solar L.P. (aka Londre Solaire), Yarmouth Solar FNC, CLS Investment 5 Limited Partnership, Chesswood Solar L.P. (aka Chesswood Solaire S.E.C. Partnership) and Uniek Ojibway Solar Power Limited Partnership.