Court File and Parties
COURT FILE NO.: CV-14-120631-00 DATE: 20190523 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
M & M HOMES INC. Plaintiff – AND – 2088556 ONTARIO INC., JOHN REDVERS, ROYAL LEPAGE REAL ESTATE SERVICES LTD, 697350 ONTARIO LIMITED, 1375051 ONTARIO LIMITED, DOROTHY KUSHNER, SAM GOLDMAN, FRANK GOODMAN, LILLIAN GOODMAN, DINAPET HOLDINGS LIMITED, 614921 ONTARIO LIMITED, MARIA TRAINA, HOWARD BRIAN GOLDMAN, JOSEPH BURDI, DORIS MILLER, CAROLE GREENSPAN, COMMUNITY TRUST COMPANY, 2178875 ONTARIO INC., JONG SUK IM, SUNG RAN LEE, YEON HEE HUH and IN HEE WOO Defendants
E. Birnboim, Counsel for the Plaintiff R. Choi, as Agent for 2088556 Ontario Inc.
HEARD: May 23, 2019
Reasons for Decision
Healey j. :
[1] The only remaining defendant, 2088556 Ontario Inc. (“208”) attended court today to seek an adjournment of the trial. The trial was called in by the trial coordinator to be spoken to today, with tomorrow being its anticipated start date. The trial has been scheduled since September 27, 2018, to proceed during the three week long May, 2019 trial settings.
[2] 208 has not been represented by counsel ever since its original counsel of record was removed by order of Justice de Sa on May 7, 2018. That order provides, in the usual manner, that 208 had 30 days after being served with the order to appoint a new lawyer of record, or to obtain an order granting it to be represented by a person other than a lawyer. 208 has taken neither of those steps.
[3] 208 retained Mr. Choi as its agent on a limited retainer, for the sole purpose of presenting its application to the court for an adjournment. Mr. Choi’s involvement was first made known to the plaintiff’s lawyer, Mr. Birnboim, when it responded to an email chain with the trial coordinator on behalf of 208 at 4:00 p.m. yesterday. Mr. Birnboim had had no previous correspondence or communication from Mr. Choi.
[4] After hearing full argument with respect to the adjournment application, I ruled that the application was dismissed, with reasons to follow. The following are the reasons why 208’s adjournment request was denied:
(1) This action was commenced in November, 2014 by Notice of Action. The pleadings reveal that the only triable issue is the quantum of the abatement to be applied to the purchase price of real property. The plaintiff seeks specific performance; 208’s Statement of Defence concedes that relief. The trial of this action will take, at most, two days;
(2) The abatement arises out of the fact that the agreement of purchase and sale for the lands in question required 208 to deliver the lands with services installed. After the claim was commenced, a lengthy indulgence was given for the filing of the defence because 208 continue to represent that it would install the services. Finally, it defended the action on September 7, 2016.
(3) The delay in getting the action to trial rests almost exclusively with 208. Both the evidence and the submissions of Mr. Birnboim make clear that 208’s principal, Alan Lam, has been unresponsive to correspondence and has failed to abide by rules and procedures that govern this action.
(4) Specifically, 208 failed to respond to Mr. Birnboim’s requests for pretrial dates, and failed to attend at the first Central East Trial Scheduling Court on February 22, 2018, a step which was only necessary so that a pretrial date could be set. This was wholly as a result of 208’s lack of communication. 208 then failed to attend the pretrial before Justice McCarthy on August 14, 2018, or even to send an agent, failed to pay the costs ordered by Justice McCarthy on that date in the amount of $5,000, and failed to abide by the order of Justice de Sa. Mr. Choi is not counsel of record; 208 did not truly have standing to be heard by the court today but the indulgence was granted.
(5) Even more egregiously, after the plaintiff obtained a CPL against the subject property, 208 has transferred the property to a related company operated by Mr. Lam. Various encumbrances were then registered. One of those mortgagees has commenced power of sale proceedings and is disputing the plaintiff’s priority interest. The plaintiff obtained a temporary injunction in that application on June 29, 2019 to prevent further steps being taken. While this is a separate application to determine the plaintiff’s priority over the subsequent encumbrancers and its merits have yet to be determined, there appears to be a questionable transfer of property in the face of a CPL and subsequent “mortgaging out”, resulting in considerable prejudice to the plaintiff. The plaintiff’s costs recovery if successful at trial is thrown into doubt as a result of these encumbrances and therefore any adjournment, and the subsequent costs thrown away for preparing for trial, are not likely to be recoverable. Further, until such time as specific performance is ordered, the injunction could be terminated in the event of a sale to a third party purchaser.
(6) In the application just referred to, 208’s related company hired a lawyer to respond to the application, but that lawyer did not file a Notice of Appearance or participate in any of the hearings. I infer that the modus operandi of Mr. Lam’s companies is to do as little as possible to cooperate in ongoing litigation.
(7) When Mr. Birnboim attempted to deliver various trial documents to that lawyer, including service of an expert report, Mr. Birnboim was advised on April 12, 2019 that this lawyer acts as an agent only and could not accept service.
(8) The only time that Mr. Birnboim received a response from Mr. Lam is when Mr. Birnboim served a report regarding the required works needed to service the subject property, which addresses the sole triable issue. The report was served by email on April 15, 2019, with a reminder to Mr. Lam that the trial of this matter could be called at any time between May 13 and 31, 2019.
(9) In response to service of that expert report, Mr. Lam objected to its “belated” service, and wanted an opportunity to deliver a responding expert report. Mr. Lam stated that he was in the midst of retaining a new lawyer in this action. He also indicated that if Mr. Birnboim was not willing to agree to an adjournment, he would be retaining a “new litigation lawyer to bring a motion for an adjournment” of the trial.
(10) Mr. Birnboim advised the court that the author of the plaintiff’s expert report, Scott Passmore, had attempted to reach Mr. Lam to seek information from him regarding whether any of the servicing work had been carried out. Mr. Lam had never responded to Mr. Passmore.
(11) At the pretrial which 208 failed to attend, Justice McCarthy was required to intervene to make an order to facilitate the preparation of the foregoing expert report. He granted leave to the plaintiff to have an expert attend at the subject property within 90 days for the purpose of preparing an opinion of the cost of remedial work. One can infer that that order was required either because 208 was unresponsive or else was explicitly refusing access to the property to the plaintiff’s expert. In those circumstances, it would be impossible for the plaintiff to comply with the service requirements of Rule 53.03(1) of the Rules of Civil Procedure.
(12) Mr. Choi on behalf of 208 argued that 208 would be prejudiced if forced on to trial without a responding expert report. No evidence was filed to show the court the steps taken by 208 to retain its own expert. Given the conduct of 208 in this litigation, I infer that it has taken no serious steps to do so either before or after receiving the plaintiff’s report on April 15, 2019.
(13) Mr. Choi also asserted that the court should impose a timetable for what is essentially a complete do-over of the case. Mr. Choi indicated that 208 wished to amend its pleading. He did not indicate the nature of the proposed amendment. Mr. Choi also proposed a schedule for documentary discovery and examinations for discovery. Mr. Birnboim, on the other hand, has never sought to schedule examinations for discovery for the obvious reason that to do so would be an unreasonable expenditure for this single issue case. However, if the defendant has felt the need to examine a representative of the plaintiff, it has had years to do so. If the defendant wished to take any other steps in the action such as those suggested by Mr. Choi today - mediation, exchanging witness statements, obtaining its own expert’s report - it has had years to propose to Mr. Birnboim that these steps be taken.
(14) It makes a mockery of the court’s processes for 208 to protest the timing of the service of the plaintiff’s expert report given the role that 208 has played in delaying the timely resolution of this claim and its default of the orders of the court.
(15) It would be unjust to the plaintiff for the court to grant an adjournment in light of all of these circumstances.
Order
[5] For the foregoing reasons this court orders:
(1) 208’s application for an adjournment of the trial is dismissed;
(2) The trial of this action shall commence on Friday, May 24, 2019 at 9:30 a.m., for two days.
Justice S. E. Healey