Court File and Parties

Court File No.: CV-16-566054; CV-18-00607327 Date: 20190328 Superior Court of Justice - Ontario

Re: 2252230 ONTARIO INC. and GLORIA RAJKUMAR., Plaintiffs/Moving Parties And: ARGERIS (JERRY) MAHERAS, PAULINE VAVOULIS, TRANSPORTR INC., ROGER REAMESHWAR RAJKUMAR, RITA JASOMATEE RAJKUMAR and EXPLORER MARKETING & DISTRIBUTING INC., Defendants/Responding Parties

RITA JASOMATTE RAJKUMAR, Plaintiff by Counterclaim/Responding Party And: GLORIA RAJKUMAR, SUPERIOR INDEPENDENT ASSESSMENT CENTRE LTD. and SIMAC CANADA INC., Defendants by Counterclaim/Moving Parties

15263851 ONTARIO INC. Plaintiff/Moving Party (CV-18-00607327) And: GLORIA RAJKUMAR, SUPERIOR INDEPENDENT ASSESSMENT CENTRE LTD. and SIMAC CANADA INC., Defendants/Responding Parties

Before: Justice S. Nakatsuru

Counsel: M. Gosia Bawolska, for 2252230 Ontario Inc., Gloria Rajkumar, Superior Independent Assessment Centre Ltd., and Simac Canada Inc. Michael Simaan., for Rita Rajkumar and 15263851 Ontario Inc.

Heard: March 22, 2019

Endorsement

[1] The history of this case is complicated. I will only refer to what is necessary for my decision. This case is about an action brought by 2252230 Ontario Inc. and Gloria Rajkumar (henceforth the “Plaintiffs”) in the action CV-16-566054 (henceforth the “main action”) against the Defendants regarding alleged improper dumping of soil and debris on the Plaintiffs’ lands. The Defendant, Rita Rajkumar, counterclaimed alleging that Ms. Gloria Rajkumar, Superior Independent Assessment Centre Ltd. and Simac Canada Inc. unjustly terminated her when she was working for them. She was allegedly working for the Defendants during the relevant period of time that is pertinent to the main action. There is then a separate action started by 15263851 Ontario Inc. (henceforth “152”) in CV-18-00607327 (henceforth the “second action.”) on October 19, 2018. Ms. Rita Rajkumar is a principal of 152. Prior to the commencement of the second action, 152 had brought a motion to be added to the main action as a plaintiff in the counterclaim. This motion was denied by Master Sugunasiri on October 18, 2018. It is Ms. Rita Rajkumar and 152’s position that the Defendants in the counterclaim had either hired her as an employee or as a dependent contractor. Ms. Rita Rajkumar claims that the Defendants in the counterclaim owe her damages for her wrongful termination.

[2] I have now heard two motions. In the main action, the Plaintiffs move to extend the time to set the matter down for trial; enforce a settlement between the Plaintiffs and Ms. Rita Rajkumar to have the main action dismissed against her without costs; and to strike the counterclaim of Ms. Rita Rajkumar. In the second motion brought by 152, it seeks to join the second action to the main action.

[3] Before turning to those issues, I wish to note that in the second action, Ms. Gloria Rajkumar is representing herself and the two corporate Defendants of which she is a principal. Ms. Gloria Rajkumar was present in court on the hearing of the motion. She did not choose to make representations. Ms. Bawolska made submissions though she is not formally on the record for these Defendants in the counterclaim. I wish to note further that the other Defendants in the main action were not represented in court on the motions and I was advised that they took no position on these motions.

[4] Let me deal with the first two matters. The parties have agreed and I will order: 1) the time to set the main action down for trial is extended from April 1, 2019 to July 31, 2019, and; 2) the settlement of February 23, 2018, should be enforced and the cause of action against Ms. Rita Rajkumar in the main action is hereby dismissed without costs.

[5] The third issue is whether Ms. Rita Rajkumar’s counterclaim in the main action should be struck. Two reasons are advanced: 1) It is agreed between the parties that the settlement of February 23, 2018, did not cover her counterclaim. However, the Plaintiffs submit that once the claim against Ms. Rita Rajkumar is dismissed, by operation of law, her counterclaim cannot stand. No authority is advanced for this proposition. However, the Plaintiffs point to rule 23.02 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 which states for a discontinuance of an action, the Defendant must within 30 days deliver a notice of election to proceed with the counterclaim otherwise the counterclaim is deemed to be discontinued. The Plaintiffs submit that the lack of a similar provision in the rules for dismissal of a claim thus supports their position. They also point to Master Sugunasiri’s decision of October 18, 2018, where in her brief endorsement she wrote she was advised that the action against Rita was to be dismissed and there was no basis to add 152 to the main action. This decision was never appealed. The Plaintiffs have relied upon this as supporting their argument that the counterclaim must now be struck; 2) The Plaintiffs also rely on rule 27.08(2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. They submit that Ms. Rita Rajkumar’s counterclaim would unduly complicate or delay the trial of the main action and cause prejudice and thus should be struck. The Plaintiffs submit that no prejudice would be caused to Ms. Rita Rajkumar if her counterclaim was struck since after Master Sugunasiri’s decision, 152 started the second action which essentially duplicates the same cause of action. This action will still continue as a separate action. In addition, at this hearing, the Defendants in the second action stated they will be willing to add Ms. Rita Rajkumar as a plaintiff along with 152 in the second action without raising any limitations issue.

[6] I do not accept the Plaintiffs’ arguments. The counterclaim will not be struck. With respect to the first point, I find that the dismissal of the action against Ms. Rita Rajkumar has no legal effect on the counterclaim launched by her.

[7] First of all, I do not read Master Sugunasari’s very brief endorsement as deciding this issue. The Master simply finds no basis to add 152, a non-party to the main action, as a plaintiff to the counterclaim. There is no holding that a dismissal of the claim against Ms. Rita Rajkumar forfeited her right to pursue her counterclaim.

[8] Secondly, when Ms. Rita Rajkumar issued her statement of defence and counterclaim, Ms. Rita Rajkumar chose to institute her claim in this fashion against the Defendants in the counterclaim. Put another way, she chose to sue by way of counterclaim rather than initiate a separate action. This was her choice to make.

[9] Thirdly, there is no authority supporting the Plaintiffs’ argument that by simply agreeing to have their claim against her dismissed, this would eviscerate her counterclaim and unilaterally nullify her choice of how she decided to initiate process. There is considerable authority to the contrary. They were provided to me by counsel after the hearing. I can do no better than quote and agree with the following succinct statement of law by Gibbs J. in CIBC v. Cancorp Projects Ltd, 1985 CarswellBC 941 (S.C) at para. 10:

The counterclaim is a separate cause of action, not a defence to, or dependent upon the disposition of, the plaintiff’s claim. It has its own separate life.

[10] Fourth, I do not see the lacunae in the rules specifically dealing with a situation such as this as having any consequence. It was simply not addressed since the result of such circumstances was self-evident: that being that the counterclaim would continue.

[11] Finally, to accede to this argument could result in potential unfairness to parties who sue by way of counterclaim and encourage tactical considerations by litigants.

[12] With respect to the second argument, I firstly point out that rule 27.08(2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 has been amended from the former rule where counterclaims could be struck if a fair trial might be prejudiced. The present rule only permits an order for separate trials or the counterclaim proceed as a separate action. I have considered the test under rule 27.08(2). I find that the Plaintiffs have not met the test. As I will explain under 152’s motion to consolidate the second action with the main action, not only is it my view that the counterclaim should not be struck or ordered to proceed separately, I find that the second action should be consolidated with the main action.

[13] Under rule 6.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, I have the discretion that the main action and the second action be consolidated. I have considered the factors set out in the oft-quoted decision of Master Dash in 1014864 Ontario Ltd. v. 1721789 Ontario Inc., 2010 ONSC 3306 at para. 18. These principles were adopted by more recently by Kristjanson J. in Fountain Asset Corp. v. First Global Data, 2017 ONSC 4780 at para. 16.

[14] The issues in the counterclaim and the second action are very much interwoven and related. Ms. Rita Rajkumar essentially claims that she was improperly constructively terminated from her job through a unilateral change in her duties with the Defendants on the counterclaim. The reason 152 is involved in the claim along with Ms. Rita Rajkumar is because it will be a trial issue whether she was hired as an employee or as a dependent contractor through her corporate entity 152. But the underlying occurrence is the same. The amount of damages sought is the same. The evidence is the same. The parties are essentially the same since 152 is really the alter ego of Ms. Rita Rajkumar. I expect that counsel will be the same. If Ms. Gloria Rajkumar and the corporate Defendants remain unrepresented by counsel on this claim, this will not complicate matters. If the counterclaim and the second action are not tried together, there is a serious possibility of inconsistent verdicts on the issue of whether she was an employee or a dependent contractor. On the issue of whether the counterclaim and the second action should be joined together, in my view, there is no question they should.

[15] The more important question is whether the consolidated counterclaim and the second action should be joined with the main action. As I previously noted, I find that they should. The factual issues raised in the counterclaim and second action are also interwoven and related to the main action. This is the reason why the counterclaim should not be separated and joined with the second action in a separate trial. I fully appreciate that the claims against Ms. Rita Rajkumar that she knew, ought to have known, aided or participated, and benefited in the wrongs committed on the property, have now all been dismissed by way of the enforcement of the settlement. I also know that the legal issues raised in the counterclaim and second action seem on their face very different from the claims raised in the main action. However, this dismissal of the claim against Ms. Rita Rajkumar in the main action does not severe the legal and factual connection of the counterclaim and the second action to the main action. Ms. Rita Rajkumar alleges that her constructive dismissal from her job was retaliation for her involvement in the main action (the co-defendant Mr. Roger Rajkumar is Ms. Rita Rajkumar’s husband). She pleads that this termination was not done for any legitimate or proper purpose. While the Defendants in the counterclaim and second action deny this, the issue of Ms. Rita Rajkumar’s knowledge of and involvement in the alleged wrongdoings allegedly committed against the Plaintiffs on their property and Ms. Gloria Rajkumar’s belief and intent in constructively terminating her employment, will invariably be raised at trial given Ms. Rita Rajkumar’s pleadings. This will cause the factual issues in the counterclaim and second action to circle back to the factual issues raised in the main action.

[16] I do not find having the consolidated counterclaim and second action tried in the main action will unduly delay or complicate the trial or prejudice the Defendants in the counterclaim for the following reasons. The issue in the counterclaim though tied into the facts of the main action, is simple and discrete. Further, Ms. Gloria Rajkumar will be testifying in any event in the main action. Ms. Rita Rajkumar would be the additional witness if the consolidated counterclaim and second action are tried with the main action. The additional time required will be relatively speaking minor. The Plaintiffs submit that there will be delay and prejudice since the main action and second action are at different stages; the former is but for one motion, ready for trial and the latter is still at the pleadings stage. However, in the discovery of Ms. Rita Rajkumar, questions were asked of her that were relevant to her capacity as the representative of 152. Thus, the relevant areas have already been discovered in the main action. Further, the issues on the counterclaim has been on the table ever since the pleadings were exchanged. I have no reason to believe that the parties are not prepared to meet them. The issues in the second action are essentially the same. Furthermore, the addition of 152 to the counterclaim does not come as any surprise to the Plaintiffs as the history of proceedings demonstrate that this was always anticipated. I do not see given the extension of time to set this case down for trial will be extended to July 31, 2019, why the consolidation of the second action with the counterclaim will delay this trial if all the parties are diligent and take reasonable positions in preparing for trial. Finally, the Plaintiffs’ claim potential prejudice given the state of their property and the effect of any potential delay on that. While I empathize with that position, this case has been in the system for some time. The counterclaim was initiated on April 13, 2017, and it has not been until this motion that the Plaintiffs have sought to do anything about whether this counterclaim should proceed with the main action. I do not expect the consolidation will create any delay in the scheduling of this trial. Any additional costs to the Plaintiffs for the additional time required to try the issues in the consolidated counterclaim and second action are not likely to be significant and would have to be borne in any event if the issues were tried separately. Finally, consolidating the second action and the counterclaim to be heard along with the main action will avoid a multiplicity of proceedings.

[17] Thus, in conclusion, I order that the second action be consolidated as part of the counterclaim in the main action. This consolidated counterclaim is to be heard along with the main action at trial or immediately after the main action as the trial judge may direct.

[18] If the issues of costs cannot be resolved between the parties, I will entertain written submissions, each one limited to two pages regarding when the issue of costs should be resolved, and the nature of the costs award. Ms. Rita Rajkumar and 152 shall file within 20 days of this decision. The Plaintiffs/Defendants on the counterclaim shall file within 10 days thereafter. There will be no reply submissions without leave of the court.

Justice S. Nakatsuru Released: March 28, 2019