Court File and Parties

COURT FILE NO.: CV-17-569589

MOTION HEARD: 19 June 2018

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: 2403724 Ontario Limited, Plaintiff

AND:

Intact Insurance Company, Defendant

BEFORE: Master Jolley

COUNSEL: S.A. Alexanian, Counsel for the Moving Party Plaintiff Tamara Zdravkovic, Counsel for the Responding Party Defendant

HEARD: 19 June 2018

REASONS FOR DECISION

[1] The plaintiff brings this motion for an order that this action and a companion action, CV-17-568602 (the “Companion Action”), brought by the landlord of this plaintiff against it and against parties related to it, (collectively here the “plaintiff” or “tenant”) be consolidated, heard at the same time or one immediately following the other.

[2] The defendant objects to an order for consolidation or trial together. I am advised that the landlord plaintiff in the Companion Action takes no position.

The Facts

[3] On or about 16 February 2015 there was a flood in the premises leased by the plaintiff in this action from the landlord, plaintiff in the Companion Action. Allegedly due to the flood and as a result of the premises not being remediated and repaired in a timely manner, the plaintiff ceased operations and ceased paying rent and related expenses under the lease.

[4] In the Companion Action, the plaintiff landlord sues this plaintiff for rental and related arrears, repair costs and remediation costs. The landlord alleges that the tenant was responsible for the flood in the first instance. It further alleges that the tenant was not cooperative in the remediation and restoration process. The tenant defends the Companion Action alleging that it was the landlord that caused the flood and that the tenant cooperated with the remediation and repair process throughout. Because its premises were rendered unusable and had ultimately to be abandoned, the tenant could not and was not obliged to pay further rent.

[5] In this action the tenant seeks indemnity under its insurance policy for expenses relating to water damage, including a claim for business interruption. It alleges that its premises suffered extensive water damage and that it ultimately could not re-open due to the actions of the landlord in causing the flood and then in failing to carry out the necessary repairs. The defendant in this action and the landlord in the Companion Action both allege that the tenant’s damages, if any, were caused by the tenant’s lack of cooperation in the remediation and repair process.

The Law

[6] Section 138 of the Courts of Justice Act, R.S.O. 1990, ch.C.43 provides that, as far as possible, multiplicity of legal proceedings shall be avoided.

[7] Rule 6.01 of the Rules of Civil Procedure provides that:

(1) Where two or more proceedings are pending in the curt and it appears to the court that,

(a) they have a question of law or fact in common;

(b) the relief claimed in them arises out of the same transaction or occurrence or series of transactions or occurrences; or

(c) for any other reason an order ought to be made under this rule,

the court may order that,

(d) the proceedings be consolidated, or heard at the same time or one immediately after the other; or

(e) any of the proceedings be,

(i) stayed until after the determination of any other of them, or

(ii) asserted by way of counterclaim in any other of them.

[8] The purpose of the Rule is to avoid multiplicity of proceedings, to prevent inconsistent dispositions, to protect scarce judicial resources and to save expenses for the parties (Hanif v. Ontario College of Pharmacists 2014 ONSC 2598 (Div. Ct.) at paragraph 23).

Analysis

[9] I am satisfied that both actions arise out of the same occurrence. While the Companion Action is framed as a breach of lease claim, the vast majority of the alleged breaches stem from the fact of the flood. The landlord alleges that the flood was caused by the tenant. Both the landlord and the insurer further plead that the tenant’s damages were caused or increased as a result of the tenant’s failure to cooperate. The tenant pleads that it was the landlord that caused the flood by failing to keep the premises in good repair. That negligence, along with the landlord’s failure to remediate, rendered the premises unusable and relieved the tenant of its obligation to pay rent under the lease.

[10] I am also satisfied that the actions have common questions of fact in common. For instance, what damages did the tenant suffer; what was the cause of the damage sustained; did the tenant frustrate the remediation efforts taken to repair the property; did the plaintiff’s own actions cause or contribute to the damages, including mould; and whether the lack of timely remediation (if proven and caused by which party) impacts to tenant’s rental obligations under the lease. Whether the tenant was in default of its obligations to cooperate in the remediation will impact both the landlord’s claim in the Companions Action and the tenant’s claim in this action. Further, while the damages sought may not be the same in each action, they have significant overlap.

[11] Given the overlap of issues, it is likely that there will be a number of overlapping witnesses. It is also likely that experts will be called on these issues and their evidence will be relevant in both actions.

[12] While it is the case that the insurer may be involved in some pre-trial and trial steps that it would not be absent a trial together, I am satisfied that the advantage of making the order sought greatly outweighs the disadvantages which, under Rule 6.01(1)(c) is another reason for an order that the actions be tried together. The tenant will not undergo two separate trials and the parties will not risk inconsistent results either on the issue of causation or the issue of damages. The actions are both at the early stages, one having been commenced on 30 January 2017 and the other on 13 February 2017 and each having only completed the pleadings stage.

[13] For these reasons, I find an order that these actions be tried together or one immediately after the other or as the trial judge directs to be just in the circumstances, considering all the factors and the criteria set out in Rule 6.01.

[14] Each party submitted a costs outline with costs in the range of $3,000. I order the defendant to pay the plaintiff its costs of the motion in the all-inclusive amount of $3,000 within 30 days of the date of this decision.

Master Jolley

Date: 19 June 2018