Court File and Parties

COURT FILE NO.: CV-17-584607 MOTION HEARD: March 26, 2019 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Tarion Warranty Corporation, Plaintiff/Responding Party AND: Mohammad Aslam, Defendant/Moving Party

BEFORE: Master J. Josefo Date of Decision: March 26, 2019

COUNSEL: M. Owsiany, Counsel for the Responding Party Plaintiff on the Motion Email: Michael.owsiany@tarion.com

S. Van Duffelen, Counsel for the Moving Party Defendant on the Motion Email: vanduffelenlaw@bellnet.ca

ENDORSEMENT and ORDER

How this Motion Arises

[1] This within motion arises out of a civil action commenced by Tarion against Mr. Aslam, alleged to be an unregistered vendor of new homes in Ontario. As described at paragraphs two and three of the Statement of Claim, Tarion is the non-profit corporation designated by the Lieutenant-Governor in Council to administer the consumer protection scheme established in the Ontario New Home Warranties Plan Act (“ONHWPA”). Tarion seeks to recover monies it claims to have paid out of the “Guarantee Fund” established by the ONHWPA “in respect of warranty claims to Tarion made by homeowners who purchased a home from the Defendant”.

What the Moving Defendant Seeks

[2] Per the Motion Record and factum, the defendant Mr. Aslam initially sought to strike large portions of the Statement of Claim of Tarion. Specifically, he sought an Order striking out, with leave to amend:

• Paragraphs 6-24, inclusive, of the claim,
• Paragraphs 28-48, inclusive, of the claim, and,
• Paragraphs 49-56, inclusive, of the claim.

[3] This was on the basis, inter alia, that the impugned paragraphs fail to disclose allegations of material fact, constitute argument, contain conclusions of law, are highly prejudicial, are designed to unreasonably prejudice the case in favour of the Plaintiff, and will tend to delay and extend the trial.

[4] At the hearing of the motion, however, Mr. Van Duffelen for the defendant advised that he no longer seeks to strike paragraphs 25-48 of the claim. In the course of his submissions, he also acknowledged that paragraph 49 was, itself, not objectionable. Yet he submitted that paragraphs 6-24 of the claim still ought to be struck as these were simply a recitation of the law, with no connection to the facts, except further below in the pleading. He also objected to paragraphs 50-54, yet no longer challenged the paragraphs from 55 and onward of the Claim.

[5] The Plaintiff Tarion resists the relief sought.

What Rule Applies?

[6] In their written materials, neither party made specific reference to the applicable Rule. The moving defendant referenced Rule 25.06(1). The responding plaintiff suggested in his factum that the plaintiff ostensibly relied on Rule 21.01(b), so he focused his response on the principles applicable to a Rule 21 motion (which, however, would be a motion to a Judge).

[7] Yet, as discussed and agreed at the hearing, the most relevant Rule in this case is Rule 25.11. That Rule reads as follows:

Rule 25.11 The court may strike out or expunge all or part of a pleading or other document, with or without leave to amend, on the ground that the pleading or other document, (a) may prejudice or delay the fair trial of the action; (b) is scandalous, frivolous or vexatious; or (c) is an abuse of the process of the court.

General Observations Pertaining to Rule 25.11

[8] While a court has the authority to take a scalpel to a pleading, this should only be done where, pursuant to the above factors, it is necessary. It is trite yet still true that a claim is to be read as generously as possible, with deficiencies in drafting to be tolerated.

[9] Some of the principles to this Rule established by case-law include that:

• a motion should only be granted in “the clearest of cases”,
• all relevant facts may be pleaded, yet facts which either are irrelevant or immaterial to the matters in dispute may not,
• argumentative pleadings, or portions thereof which have prejudicial impact, or which are bald allegations, will be struck,
• a pleading of which the sole purpose is to put the other party in poor view, especially if the pleading is only for “atmosphere”, will be struck.

[10] See, in that regard, Air Canada v. West Jet Airlines Ltd., 2004 ONSC 66339, [2004] O.J. No. 5627, amongst many other cases and commentaries on pleadings.

[11] While scandalous and irrelevant allegations cannot be made, it is also trite that a pleading is not embarrassing if the facts alleged are capable of proof, and are relevant. Pleadings which are not a concise statement of material fact, but rather which are argumentative and/or devoid of fact, will be struck. Law may be pleaded, including conclusions of law, so long as the material facts supporting the conclusions are pleaded (as per Rule 25.06(2)).

[12] Generally, in my view, perfection in pleadings is not the applicable standard. A party may draft a Statement of Claim or Statement of Defence as it deems fit, so long as there is general compliance with the rules of pleading; and the pleadings, when read as a whole, are sensible, coherent, logical, and are capable of response.

[13] Pleadings are the skeleton of the case—in this within matter perhaps the better analogy is that they are the underpinning framework of the new home construction. Pleadings should define the issues, so that the parties know what respective case each have to meet. Good pleadings also clearly explain the position of the parties as it is then known at the outset of an action. Discovery, both documentary and oral examinations, put the meat on the bones. Indeed, if new evidence or information arises out of discovery, amendments to pleadings are a possibility, and such is indeed addressed in the Rules.

Applying these Observations to the Impugned Portions of the Statement of Claim

[14] Despite the cogent submissions of counsel for the defendant, I disagree that paragraphs 6-24 are improper in the context of this action. The Plaintiff is therein pleading nothing which, in my view, is contrary to the rules of pleading, either Rule 25.06(2) or Rule 25.11. There is nothing in this portion of the claim that I find scandalous, prejudicial, or abusive.

[15] Rather, the plaintiff is pleading the law, pertaining to how the ONHWP operates. This portion of the claim also purports to describe, factually, the role of Tarion pursuant to the applicable legislation (paragraphs 6-13). In my view, explaining the facts surrounding the statutory warranty process (paragraphs 14-19) is appropriate. It is likely helpful factually to ensure that the relevant context of the (later pled) alleged breaches by the defendant are contextually understood. Finally, describing the applicable regulations (paragraphs 20-24), to further explain how the warranty plan is administered by the plaintiff, is again I find relevant and helpful to understand the later described purported breach(s) of the defendant.

[16] Pleading law, as this portion of the claim in large part does, is not improper. In that regard, I find the pleading both descriptive and relevant. It is not prejudicial to set out for the trier of fact the relevant legislation and how it (purportedly) applies. If the defendant disagrees with the descriptions of what plaintiff asserts is the applicable law, or with the facts as pleaded, then it may join issue when it delivers its Defence. Yet to have the opportunity to deny what is claimed, and to tell its side of the story, does not mean that the defendant is prejudiced by what the plaintiff has therein pleaded.

[17] It was appropriate that Mr. Van Duffelen did not pursue an attempt to strike paragraphs 28-48 of the claim. This is simply a factual narrative of what Tarion alleges transpired in this matter. Is this section of the pleading very detailed? Yes. Would some lawyers plead differently, perhaps without all or some of this detail? Perhaps. Yet such goes to “style”, not substance. Again, counsel are entitled to have pleadings read generously, so long as the pleading is generally compliant with the Rules. In this case, moreover, by setting out the allegations with much peculiarity, the plaintiff has clearly identified the case which the defendant must meet. There can be no doubt to what the defendant must respond. Certainly, there would be no need for additional particulars of this section of the claim.

[18] Turning to paragraphs 50-54 of the Claim, in my view there is contained near the end of this section some degree of argument and conclusory statements which go beyond reasonable drafting. The second sentence of paragraph 51 reads as follows:

The Defendant should not be allowed to benefit from his unlawful actions and should therefore be treated as if he were a registrant with attendant statutory obligations.

[19] This is in my view argumentative and conclusory.

[20] The second sentence of paragraph 52 also offers conclusory argument:

To permit the Defendant to evade financial responsibility as a result of his failure to register and enroll under the ONHWP Act, would allow him to profit through his illegal building activities.

[21] Yet, whether defendant evaded financial responsibility, or that the building activities are legal or not, all remains very much in issue.

[22] Finally, paragraph 53 also contains, in the main, argument and a conclusion, yet not one of law. It is, rather, a conclusion based on the expected validation of the plaintiff’s case. That validation, however, must await trial or some other disposition of the case. The paragraph is also repetitive of what has already been pleaded. Paragraph 53 reads as follows:

Although the Defendant was not registered with Tarion at the time the Home was sold, he should nevertheless be subject to the provisions of the ONHWP Act. As set out above, to not impose liability on unregistered vendors and builders would permit them to evade their responsibilities by their unlawful acts, which would be contrary to the purpose of the ONHWP Act.

[23] In the result, I strike existing paragraph 53 and strike the second sentences each of paragraphs 51 and 52. In my view, to avoid conclusions, repetitions, and argument, the first sentences of paragraphs 51 and 52 can be combined, with that new paragraph in place of existing paragraphs 51, 52, and 53. The remainder of the statement of claim is undisturbed.

Costs

[24] The plaintiff responding on this motion was mainly successful in resisting what the defendant initially sought. While Mr. Van Duffelen made appropriate concessions at the hearing, this was after the plaintiff was compelled to prepare for the motion. Out of the paragraphs which the defendant sought to be struck, I only struck one in its entirety, plus two sentences from two other paragraphs for reasons stated.

[25] On that basis, if the parties wish to argue costs I will consider what the parties submit ought to be awarded, and to whom, for costs. Such argument can be made today or subsequently, by tele-conference call. Alternatively, the parties may wish to come to an agreement on costs.