Court File and Parties
COURT FILE NO.: 18-75586
DATE: 2019/01/18
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: SOLUTIONS CONSTRUCTION MANAGEMENT & DESIGN INC. Plaintiff (Defendant by Counterclaim)
-and-
1971538 ONTARIO INC. O/A IN THE AIR Defendant (Plaintiff by Counterclaim)
BEFORE: Madam Justice Sylvia Corthorn
COUNSEL: Jonathan M. Richardson, for the Plaintiff Clinton Butler, for the Defendant
HEARD: January 17, 2019
ENDORSEMENT
(Oral Reasons Given on January 17, 2019)
Introduction
[1] The plaintiff corporation (“Solutions Construction”) brings a motion for summary judgment. The defendant corporation (“In the Air”) requests that the motion be adjourned.
[2] The motion record was served on the defendant corporation (“In the Air”) in August 2018. The return date for the motion was identified as January 17, 2019. In the Air was represented by counsel when the motion record was served.
[3] In the Air did not respond in any way to the motion.
[4] On January 11, 2019, the lawyer of record for In the Air obtained an order for removal as lawyer of record.
[5] The President of In the Air attended on the return of the motion for summary judgment. In the circumstances, In the Air was granted leave, for the limited purpose of the request for an adjournment, to be represented by an individual (its President, Clinton Butler). Solutions Construction did not oppose leave being granted in that regard.
[6] Evidence on the request for an adjournment was given by Mr. Butler as a witness on behalf of In the Air and by Eric Vanasse, the Vice-President of Solutions Construction.
Positions of the Parties
[7] The request for an adjournment of the motion is made by In the Air on the following grounds:
a) It requires additional time to retain new counsel—it has 30 days from January 11, 2019 within which to do so and for new counsel to deliver a notice of change of lawyer;
b) It intends to respond to the motion for summary judgment;
c) It requires time to consult with an expert with respect to the issue of construction delay, an issue said to be relevant to the substantive issues to be determined on the motion for summary judgment; and
d) It is in the process of attempting to negotiate a rent-relief agreement with its landlord (RioCan) or, in the alternative, find financing to permit it to meet its rent obligations and remain in its premises at 3094 Carling Avenue. In the Air deals with RioCan on a weekly basis in terms of deadlines to be met with respect to payment of rent and payment towards arrears of rent. Mr. Butler is confident that RioCan is interested in a solution that permits In the Air to remain at the premises and in business. In that regard, Mr. Butler’s evidence is that business has been improving recently.
[8] Solutions Construction opposes the request for an adjournment on a number of grounds, including the following:
a) The timing of motion for an order removing In the Air’s counsel of record is conspicuous in that it was made four days prior to the date of return for the motion for summary judgment. The timing is submitted to be more than conspicuous; Solutions Construction argues that the timing of that motion was deliberate and part of In the Air’s continuing efforts to delay the determination of the substantive issues;
b) The record delivered in support of the motion for summary judgment includes admissions on behalf of In the Air with respect to an obligation to pay a large portion of the amount said to be owing to Solutions Construction (approximately $60,000 or $68,000 of the $94,500 claimed). As a result, there is little, if any, prejudice to In the Air if the motion proceeds;
c) There is prejudice to Solutions Construction if the motion is adjourned because:
i) It requires a lien judgment to establish priority over the landlord and other creditors of In the Air. The lien registered on the property is of little practical significance to Solutions Construction without the benefit of a judgment; and
ii) If the landlord terminates In the Air’s lease of the premises before Solutions Construction obtains a lien judgment, the latter will lose the right to have the Sheriff enter the premises and seize In the Air’s property in satisfaction, in whole or in part, of the lien judgment.
[9] Solutions Construction submitted that if an adjournment is granted, it must be on strict terms including (a) a fixed return date, (b) deadlines for interim steps, (c) costs for the appearance on the contested adjournment thrown away, and (d) a provision for judgment to be granted in favour of Solutions Construction in the event In the Air defaults with respect to any term of the adjournment, including the payment of costs.
Removal of In the Air’s Counsel of Record
[10] The missing piece of the puzzle for the court was that there was nothing before it in terms of the documents filed in support of the request by In the Air’s former counsel for an order removing them as lawyer of record. With the consent of the parties, I retrieved from the court file copies of the documents filed in that regard.
[11] The documents available to the court at this time are limited to a consent signed by Mr. Butler in his capacity as President of and the order removing counsel of record for In the Air. The consent is identified as having been signed on January 10, 2019 and the order is dated January 11, 2019.
[12] The order removing In the Air’s counsel of record makes reference to a notice of motion, a supporting affidavit, and the consent signed by Mr. Butler. The order identifies that submissions were made on behalf of counsel and that no one attended on behalf of In the Air, although it was properly served with the motion record. Unfortunately, the court staff were unable to locate the motion record.
[13] Counsel for Solutions Construction acknowledges that he was served with a copy of the motion record in support of the request by In the Air’s former counsel to be removed as lawyer of record. Service in that regard would have been made in accordance with a recent amendment to r. 15.04 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. That amendment is effective January 1, 2019 and requires that a motion for an order for removal of a lawyer of record be served not only on the affected client but on all parties to the subject litigation.
[14] Counsel for Solutions Construction informed the court that the record on the motion for removal as lawyer of record did not include any reference to the summary judgment motion scheduled for January 17, 2019. I accept counsel’s representation in that regard. That representation is the only information available with respect to the contents of record before the court on the motion for removal of In the Air’s counsel as lawyer of record.
[15] Solutions Construction had the opportunity to respond to and have counsel attend on the return of the motion for removal of In the Air’s lawyer of record. Solutions Construction chose not to do either.
[16] It made that choice with knowledge that the record before the court on January 11, 2019 did not disclose the January 17, 2019 return date for the summary judgment motion. By not having attended on the return of the motion on January 11, 2019, Solutions Construction did not avail itself of the right it had to ensure that the court was fully informed of the pending motion for summary judgment.
[17] The consent signed by Mr. Butler in his capacity as the President of In the Air was signed a day prior to the return of the motion. It appears, therefore, that the consent was not included in the motion record. The motion record may well have been served on Solutions Construction (through service on its counsel of record) a number of days prior to January 11, 2019. As a result, it is possible that neither Solutions Construction nor its counsel were, prior to receipt of a copy of the January 11, 2019 order, aware that In the Air consented to the relief requested by its former counsel.
[18] There is no evidence before the court (a) as to the extent to which the return date for the summary judgment motion was made known to the Master before whom the motion for removal as lawyer of record proceeded, or (b) as to representations made to the Master about the potential for the motion for summary judgment to proceed on January 17, 2019.
[19] I am not in any way second-guessing what the Master did or speculating as to what the outcome of the January 11, 2019 motion for removal might have done had Solutions Construction responded to the motion in any way, including by having counsel attend on the return of that motion.
[20] Nor am I dismissing the potential for the timing of the removal and/or In the Air’s consent to the removal of its lawyer of record to be the result of deliberate conduct on the part of In the Air. I am simply not in a position to make any findings in that regard.
[21] The 30-day period within which In the Air has to retain new counsel and have their new counsel deliver a notice of change of lawyer ends on Sunday, February 10, 2019. As a result, In the Air has until Monday, February 11, 2019 within which to have their new counsel deliver a notice of change of lawyer.
[22] Mr. Butler’s evidence is that he anticipates that by January 31, 2019, In the Air will have retained new counsel.
Adjournment of the Motion
[23] In balancing the prejudice to In the Air of refusing the adjournment with the prejudice to Solutions Construction of granting the adjournment, the balance is ever so slightly tipped in favour of granting the adjournment.
[24] This action has languished since the exchange of pleadings was carried out in the first quarter of 2018. A request for particulars with respect to allegations made in the pleading on behalf of In the Air has remained unanswered since May 2018. Solutions Construction moved in a timely manner to bring the motion for summary judgment; the motion record was served in August 2018.
[25] The next dates on which a two-hour block of time is available for the return of the summary judgment motion are March 20 and 21, 2019. In the circumstances a brief adjournment, on terms, is granted. The adjournment is on terms as follows:
a) The motion for summary judgment is adjourned to March 21, 2019 at 2:00 p.m.;
b) The adjournment is peremptory to the defendant corporation;
c) The deadlines for interim steps with respect to the motion for summary judgment are as follows:
i) The defendant corporation shall deliver responding materials no later than Monday, February 18, 2019;
ii) The plaintiff corporation shall deliver any materials in reply no later than Friday, February 22, 2019;
iii) Cross-examinations, if conducted, shall be conducted no later than Friday, March 8, 2019; and
iv) The parties’ respective facta shall be delivered in accordance with the Rules of Civil Procedure;
d) In the event the defendant corporation is in default of any one or more of the terms of the adjournment, the defendant corporation’s pleading shall be struck, the defendant shall be noted in default, and the motion for summary judgment shall be converted to a motion for default judgment without further order of the court.
[26] This matter is a cautionary tale as to the significance of the recent amendment to r. 15.04 of the Rules of Civil Procedure. It may, in some circumstances, be necessary for litigants to respond to or, at a minimum, attend on the return of a motion by an opposing party’s lawyer for an order for removal from the record. That step may be necessary to ensure that the court is (a) fully informed of the status of the litigation, and (b) given an opportunity to consider the potential prejudice to other parties if counsel for one party is removed as lawyer of record.
Costs
[27] For the following reasons, the costs of the contested adjournment are reserved to the judge hearing the motion for summary judgment:
a) I am uncertain as to the contents of record before the Master on January 11, 2019 (despite efforts to locate that record);
b) There is no evidence as to the representations made by In the Air’s former counsel to the Master on the return of that motion; and
c) Solutions Construction made the deliberate decision not to be represented on the return of that motion.
Madam Justice Sylvia Corthorn
Date: January 18, 2019
COURT FILE NO.: 18-75586
DATE: 2019/01/18
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: SOLUTIONS CONSTRUCTION MANAGEMENT & DESIGN INC. Plaintiff (Defendant by Counterclaim)
-and-
1971538 ONTARIO INC. O/A IN THE AIR Defendant (Plaintiff by Counterclaim)
BEFORE: Madam Justice Sylvia Corthorn
COUNSEL: Jonathan M. Richardson, for the Plaintiff Clinton Butler, for the Defendant
ENDORSEMENT
Madam Justice Sylvia Corthorn
Released: January 18, 2019