Court File and Parties
Court File No.: CV-09-1026-00 Date: 2018 08 27
Ontario Superior Court of Justice
Between:
SAM COSENTINO, on his own behalf and on behalf of all creditors of DIMINACO DEVELOPMENTS INC. Anna Cosentino, Caesar Cosentino and Mary Alilovic, the Estate Trustees of the ESTATE OF DOMENIC COSENTINO, Deceased, CAESAR COSENTINO, ANTHONY COSENTINO, MARIO COSENTINO, 1183082 ONTARIO INC., 1331722 ONTARIO INC., 1347482 ONTARIO INC. and PIT-ON CONSTRUCTION CO. LIMITED
S. Cosentino, Counsel for the Moving Party/Plaintiff
Plaintiffs
- and -
DOMINACO DEVELOPMENTS INC., Caesar Cosentino and Mary Alilovic, the Estate Trustees of the ESTATE OF DOMENIC COSENTINO, Deceased, ANNA COSENTINO, CAESAR COSENTINO, MARY ALILOVIC, ANTHONY COSENTINO, MARIA COSENTINO, 1183082 ONTARIO INC., 1331722 ONTARIO INC., 1347482 ONTARIO INC., PIT-ON CONSTRUCTION CO. LIMITED and JAMES ARTHUR MACCOLL
E. Evangelista, Counsel for the Defendants, Dominaco Developments Inc., Mary Alilovic, one of the Estate Trustees of the Estate of Domenic Cosentino, Decased, Mary Alilovic, Anthony Cosentino, Mario Cosentino, 1183082 Ontario Inc., 1331722 Ontario Inc., and Pit-On Construction Co. Limited. A. Antoniou, Counsel for the Defendant, James Arthur MacColl E. Griffith, Statutory Guardian of Property, Anna Cosentino J. Morton, for the non-parties
Defendants
Heard: April 11, 2018
Reasons for Decision
Lemay J
[1] Daley R.S.J. is case managing this action. It is a complicated proceeding involving various transactions relating to a family business, and other related matters. Mr. Sam Cosentino, a lawyer, is the principal Plaintiff, and a significant number of his relatives and their companies are Defendants. I will refer to Mr. Sam Cosentino as the Plaintiff throughout these reasons.
[2] The action was originally brought in 2009 by the Plaintiff. In brief, the Plaintiff views a number of transactions relating to property owned by his uncle, the late Domenic Cosentino, his estate and his corporations as having been fraudulent. As a result, the Plaintiff is seeking to set these transactions aside.
[3] As part of the proceedings, a motion for summary judgment has been brought by the Plaintiff. He subsequently brought a motion to amend his pleadings, and consolidate this action with a new action that he had commenced against a number of other Defendants.
[4] For the reasons that follow, the Plaintiff’s motion to amend his pleadings is dismissed.
The Facts
[5] The personal parties in this case are all related to each other. The corporate parties in this case are all controlled by one or more of the personal parties.
[6] The Plaintiff bringing this motion, Mr. Sam Cosentino, is a lawyer. He is also the nephew of the late Domenic Cosentino, who passed away in the early 2000’s. Since that time there have been approximately six (6) separate actions that relate to these transactions and parties, and Daley R.S.J. is case managing them all.
[7] There are some Defendants, in particular Caesar Cosentino, who oppose this matter. In addition, Anna Cosentino, Domenic’s wife, is now represented by the statutory guardian, and is not taking any position on this motion. The remaining Defendants who oppose the motion are all represented by Ms. Evangelista, and will be referred to throughout as the “Handler Defendants”.
[8] In this action, the Plaintiff is alleging that there were a number of fraudulent transactions that a number of the Defendants engaged in going back to before the passing of Domenic Cosentino. He seeks to set those transactions aside in this action.
[9] This action is related to an action that the Plaintiff has brought against the Estate of Domenic Cosentino and other related corporate parties alleging that the Plaintiff is owed legal fees as a result of legal work that the Plaintiff allegedly performed in the 1990’s and early 2000’s. This debt action (Court File No BN-03-8145) was scheduled to go to trial in 2017, but did not proceed.
[10] In 2016, the Plaintiff brought a summary judgment motion in this action, with a return date of July 21st, 2016. That motion has been adjourned a number of times, and is still pending before the Court. Significant steps, including the preparation of Affidavits and the conducting of cross-examinations, have been taken in the summary judgment motion.
[11] During the course of various appearances before Daley R.S.J., the Plaintiff came to the view that Daley R.S.J. should recuse himself from the case on the basis of a reasonable apprehension of bias. He raised this issue with Daley R.S.J., and it was argued in Court earlier this year.
[12] As a result of the issue of bias being raised, Daley R.S.J. asked me to hear this motion, as I was available for the required time period (an hour and a half) in April of this year. As of April of this year, the first available long motion date in Brampton would have been August 7th, 2018. After that, a date would not have been available until the fall of 2018.
[13] In this motion, the Plaintiff originally sought to consolidate this action with a new action in Court File No. CV-18-1011, as well as adding new Defendants to this action. Between the time the Plaintiff originally served and filed the motion, and the time that the matter was argued before me, the Plaintiff abandoned these requests for relief. As a result, it is only the amendments to the pleading that I am left to consider.
[14] This brings me to those amendments. Over the course of this action, the Plaintiff has amended his pleadings on four separate occasions. This is the fifth amendment to this Statement of Claim that the Plaintiff is seeking to make.
[15] As I understand it, the effect of the amendments is to add a series of transactions to the Plaintiff’s claim.
[16] In argument, the Plaintiff acknowledged that all of the transactions that he seeks to include in his amended Statement of Claim took place more than two years before the date on which he brought his motion to amend the pleading. Some of them took place considerably more than two years ago.
[17] In addition, the Plaintiff argued that I should not assess the costs in this case because of his allegations of bias against Daley R.S.J. Instead, I should refer the costs to an assessment officer. I will return to that issue at the end of these reasons.
Issues
[18] The Plaintiff argues that I should grant his motion to amend his pleadings because of the provisions of Rule 26.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which require that the Court “shall” grant an amendment to a party’s pleadings unless there is prejudice that cannot be compensated for by costs or an adjournment.
[19] The Defendants raise the following arguments in support of their position that I should not grant the amendments because there is prejudice in two ways:
a) The Plaintiff has brought a summary judgment motion and these amendments would prejudice the position of the Defendants on this motion.
b) The Plaintiff seeks to add incidents that are beyond the period set out in the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B for bringing these claims. As a result, some prejudice is inferred and the Plaintiff has failed to rebut this prejudice.
[20] In addition, I raised with the parties, particularly the Plaintiff, the fact that the Plaintiff had not filed an amended pleading showing the changes to his pleading. I will address that issue first.
Issue #1 - The Amended Pleading
[21] The amendments that the Plaintiff seeks to make to the Statement of Claim are extensive. The fourth amended statement of claim is 50 pages long, with 196 paragraphs. The fifth amended statement of claim is 67 pages long (including schedules), with 358 paragraphs.
[22] It is difficult to determine what the precise differences are between the fourth and fifth amended Statements of Claim. As a result, during the course of argument, I directed the Plaintiff to provide me with an underlined and struck out pleading. Our exchange on the record consumed several pages of the transcript.
[23] In the course of submissions, I directed the Plaintiff to file a blacklined pleading. He refused, stating, inter alia:
SAM COSENTINO: It’s my submission that it is improper for a court with the only evidence before it being my evidence which is uncontroverted to make a decision contrary to the rule which the rule expressly allows. I am permitted by the rule to file a fresh as amended pleading and it’s done every day.
That’s my submission.
SAM COSENTINO: [Rule] 26.01, the court shall amend the pleading unless prejudiced. [Rule] 26.03, a fresh as amended pleading is permitted where in convenient to underline and strikeout. The only evidence is my evidence and it’s uncontroverted and therefore it would be improper, in my submission, for you to make an order obliging me to underline and strikeout text. It would be an exercise in wasting time for everyone, Your Honour. They had the pleading a month ago. They could have brought it to your attention the differences in pleading. They didn’t do that, I did. They have to contest the pleading. I don’t have to show why it should be allowed. They have to show why it should not be allowed. Those are my submissions.
[24] The Plaintiff was well aware of my directive that he file an underlined and struck out version of the Fifth Amended Statement of Claim. He refused to follow that direction. Having reviewed the pleading, I am of the view that this document is necessary in order to understand the precise nature of the amendments that are being sought. I have been able to obtain a general understanding of the amendments through review of the materials.
[25] The Plaintiff advances two arguments as to why he should not be required to provide this document. First, he argues that the evidence before the Court in his Affidavit is that it was too difficult to prepare this document and that I am bound to accept that argument as the other side did not put any contrary evidence into the record.
[26] I reject this argument. If this argument were accepted, it would permit every litigant to appear before the Court with an Affidavit that said it was “too difficult” to comply with this Rule, and the Court would be obligated to accept that litigant’s position. Whether a party can comply with a procedural portion of the rules in terms of the preparation of documents is generally not a question of fact.
[27] In any event, there are other ways of presenting a pleading with the amendments precisely identified. If it was too difficult to prepare this document in black and white, the Plaintiff could have prepared it in colour, using highlighting to show the changes. I also note that the Plaintiff alleges that he tried to prepare this document, but found it too difficult. However, none of his attempts to prepare the document were put into evidence before me. All I have is the Plaintiff’s bald assertion that he found preparing the blacklined pleading too difficult.
[28] Second, the Plaintiff relies on Rule 26.03(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which allows a party to not file the blacklined copy of the pleading. As a result, the Plaintiff argues that I am bound to accept his position on this issue because the Rules permit a party not to file a blacklined pleading. I also reject this submission.
[29] The Rules of Civil Procedure, R.R.O. 1990, Reg. 194 permit the Court to dispense with compliance with Rule 2 at any time (see Rule 2), and the Court’s inherent jurisdiction permits it to control its own proceedings. I required the blacklined pleading, or something else that specifically showed the amendments, and I did not receive it.
[30] I acknowledge that the Plaintiff included a table in his factum entitled “Table of Major Differences Noted by Moving Party.” There are two problems with this document. First, it does not identify all of the changes, just the “major differences”. Second, it does not contain enough detail for me to understand what the precise changes to the pleadings are. I am left trying to reconcile the differences between the two pleadings.
[31] The failure to follow my directions in terms of how the materials on the motion were to be presented to me were of concern to me. However, I will resolve this motion by considering the other two issues that have been raised by the Defendants as I have been able to obtain an understanding of the issues.
Issue #2 - The Pending Summary Judgment Motion
[32] As I have noted above, there is a summary judgment motion that is outstanding in this case. The Handler Defendants argue that there is prejudice that will accrue to them because their response to the summary judgment motion will have to keep changing to match the amended pleading.
[33] The Plaintiff opposes this position, and argues that the Handler Defendants have not shown any actual prejudice in their Affidavits. As a result, the Court should reject their argument on this point.
[34] The Handler Defendants point to two cases in support of their argument. First, there is the decision in Bruce v. John Northway & Son Ltd. ([1962] O.W.N. 150 (Master)). In that case, the Master held that the general rule was that once a motion was served, any act done by any party affected by the application which affects the rights of the parties on the motion will be ignored. In other words, the Court should not permit any further amendments until the summary judgment motion is dismissed.
[35] This principle was adopted in an earlier decision made in this case. In Cosentino v. Dominaco Developments Inc. (2010 ONSC 208), MacKenzie J. was faced with a motion by the Defendant MacColl seeking to strike out the Statement of Claim. The Plaintiff brought a cross-motion to amend his Statement of Claim. MacKenzie J. did not permit the cross-motion to proceed, and heard only the motion to strike out the pleading.
[36] MacKenzie J.’s conclusions in the previous Cosentino decision were based on the fact that one party had brought a summary judgment motion and an opposing party had brought a motion to amend the pleadings. The question is whether the principle in Bruce and Cosentino should extend to a case where the same party is bringing both motions.
[37] In my view, it should. I reach this conclusion for two reasons. First, once a summary judgment motion is brought, then it should be disposed of without a whole series of ancillary motions, if possible. The parties should not be facing an ever changing landscape of pleadings as well as an expanding number of allegations as they prepare for the hearing of a summary judgment motion. Litigation should be conducted in an orderly way wherever possible and Courts have an obligation to control their processes.
[38] Second, the parties have already served and filed significant amounts of material for the summary judgment motion. They will have taken positions on that motion, and provided answers on cross-examination. Changing the pleadings creates a prejudice in terms of the positions that the party responding to the motion has taken in documents filed on the record.
[39] In the result, I am of the view that any otherwise allowable amendments should not be permitted until after the summary judgment motion is heard.
Issue #3 - The Limitations Act Issue
[40] The Handler Defendants argue that the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B applies to these new allegations. Specifically, section 4 provides that no proceeding may be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered. It is clear from both the evidence, and the submissions of the parties, that the new claims all relate to events that took place more than two years before the amendments were sought.
[41] The Plaintiff argued that the limitations period did not apply for two reasons. First, the Handler Defendants had failed to show any prejudice that they had suffered. Second, not all of the new claims amounted to new causes of action. I will address each of the Plaintiff’s arguments in turn.
[42] First, there is the issue of prejudice. I am of the view that it is not necessary for the Defendants to show any specific prejudice. As the Ontario Court of Appeal notes in Frohlick v. Pinkerton Canada Ltd. (2008 ONCA 3 at paragraph 22):
Where a limitation period has passed, there will be a presumption of prejudice that cannot be compensated for by costs or an adjournment. The moving party must demonstrate why, on the facts of the case, the court should not apply the normal rule that the presumption of prejudice flowing from the loss of the limitation period is determinative. This involves a consideration of special circumstances that would lead the court to conclude that the presumption of prejudice should not apply.
[43] Once the Handler Defendants raise the limitations period, the Plaintiff has an obligation to dispel the prejudice that arises, however slight it may be. On this point, see Noori v. Grewal (2011 ONSC 5213 at paragraph 58) and Howell v. Jatheeskumar (2016 ONSC 1381 at paragraphs 40-42).
[44] The Plaintiff relies on the decision in Morris v. Blu-Skye (2010 ONSC 684). In that decision, Lauwers J. (as he then was) stated the proposition that, on a motion to amend a Statement of Claim, the Defendants are required to show prejudice in order for the amendment to be refused. In other words, the onus on a pleadings motion is on the party that is resisting the amendment.
[45] This case does not assist the Plaintiff, as the Defendants have shown a presumption of prejudice by showing that the limitations period has expired. Given that the Plaintiff conceded that none of the transactions took place within the two years prior to his motion to amend the pleadings, no further evidence is needed to establish that the claims are outside of the limitations period.
[46] It is then up to the Defendant to show that there are “special circumstances” that would allow the Court to conclude that the presumption of prejudice. He has failed to do so, as he has only stated that these claims were missed through “inadvertence”. This bald statement, without more, is not sufficient for me to accept that there is any tenable explanation that would cause me to not apply the presumed prejudice.
[47] The Plaintiff also argues that, for the most part, he is not seeking to bring forward new causes of action. He does concede that some of pleadings do trigger new causes of action in that they relate to completely different transactions. It is difficult to tell precisely what these transactions are from the pleading that was filed.
[48] However, one fact is clear. Each and every amendment relates to a new transaction involving at least some different facts. In addition, each and every amendment relates to a transaction that took place more than two years ago.
[49] If the facts remain the same, new remedies can be sought, and added to a claim through amendment, even where the limitations period has expired. However, where a fundamentally different claim is advanced, on different facts, then the Plaintiff will be barred from amending the pleading unless there are special circumstances (see Dee Ferrarro Ltd. v. Pellizzari 2012 ONCA 55).
[50] In this case, the claims are clearly based on different facts. They are transactions that took place years ago, and that were not challenged by the Plaintiff until he sought to make these amendments. In the circumstances, the Defendants were not expecting to have to defend these transactions. I am of the view that these transactions fall within the holding in Frohlick, supra, and should not be added to the claim.
[51] The Plaintiff’s motion to amend his claim is dismissed.
Conclusion and Costs
[52] For the foregoing reasons, based on the materials before me I am dismissing the Plaintiff’s motion to amend the Statement of Claim.
[53] It is open, of course, for the Plaintiff to seek to amend his Statement of Claim to address matters that are within the time limits or otherwise are permissible under the relevant law. However, as I indicated in the previous section, those amendments cannot be pursued until after the summary judgment motion is addressed.
[54] It is also possible that some of the amendments that the Plaintiff has sought in this motion are within the limitations period. I do not believe so, but because there was no blacklined proposed pleading, I do not want to preclude the Plaintiff from pursuing those amendments if they are timely. However, if he pursues those amendments, he is required to file a blacklined pleading unless he is given leave by the judge presiding at the motion not to.
[55] There are two issues that arise with respect to costs.
[56] First, I note that the motion for consolidation was not pursued before me. As a result, I have not made any decision on it. However, after discussion with the parties, they advised me that they could not agree on whether the costs for the consolidation motion were before me or Justice Daley.
[57] As a result, in reading paragraph 17 of Daley R.S.J.’s endorsement of March 28th, 2018, it appears that he intended to reserve the costs for the attendance on March 28th to himself, with those costs to be addressed after Daley R.S.J. released his decision on the recusal motions. Given that Daley R.S.J. is case managing this matter, I am of the view that it is not appropriate for me to consider the costs of the March 28th 2018 appearance.
[58] Second, there is the question of whether I should fix the costs of the appearance before me. The Plaintiff argues that, in light of his claim of bias against Daley R.S.J., that I should not fix costs in this case. Instead, I should refer the costs of this motion to an assessment officer.
[59] This is a motion. As a result, Rule 57.03(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 states that I am required to fix the costs of the motion and order them payable within thirty (30) days. Alternatively, under the rule, I may refer the issue of costs to an assessment officer in exceptional circumstances. In the Plaintiff’s view, these exceptional circumstances exist as a result of the fact that he has made an accusation of bias against Daley R.S.J., and given that Daley R.S.J. scheduled me to hear this motion.
[60] I start with the issue of scheduling this motion. The Plaintiff suggested that it would have been more proper for this motion to have been left to be heard on a regular motions day instead of having it scheduled by Daley R.S.J., particularly given the fact that the Plaintiff alleged bias against Daley R.S.J. I disagree for three reasons:
a) This was clearly not a regular motion. Regular motions are an hour long. The argument before me consumed an hour and a half. Further, given the issues raised by the Plaintiff, had this appeared before me on a regular motion, I would have adjourned it to a long motion date. As a result, a special appointment was required.
b) Long motion dates are difficult to come by in the Central-West Region. As a result, when this matter was heard, the first available long motion date was approximately four months away. It was important to complete this matter so that the summary judgment motion could proceed.
c) Daley R.S.J. is the case management judge. It is within his scope to both direct that another judge hear the matter, and canvass the availability of other judges in Brampton to determine which judge can hear the matter. There is nothing untoward about how this motion arrived on my docket.
[61] Second, there is the issue of exceptional circumstances. An allegation of bias made against the Regional Senior Judge, regardless of the nature of the allegations, is not an exceptional circumstance that would justify referring the issue of costs to an assessment officer. I reach that conclusion for three reasons.
[62] First, no issue was taken with me actually deciding the motion itself. If I can decide the motion, there is no reason why I cannot fix the costs as well.
[63] Second, I am independent of Daley R.S.J., and my decisions are made independently of his. There is no basis for assuming that my costs decision is going to be tainted by the fact that he is the R.S.J. for the Region in which I am a judge.
[64] Finally, the direction to the Courts under the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 is that we are to fix costs in an efficient and expeditious manner. The Plaintiff’s proposal runs contrary to this principle.
[65] In the circumstances, I will fix the costs for the appearance before me, including any claim by any of the non-parties for costs for the attendance before me.
[66] The submissions of the Defendants are due within fourteen (14) days of the release of these reasons. They are to be no more than two (2) single-spaced pages, exclusive of case-law, offers to settle and bills of cost.
[67] The submissions of the Plaintiff are due within fourteen (14) days thereafter. Again, these submissions are to be no more than two (2) single-spaced pages, exclusive of case-law, offers to settle and bills of cost.
[68] There are to be no reply submissions without my leave.
Released: August 27, 2018 Lemay J
