Resolve Project Management Ltd. et al., 2019 ONSC 5171
COURT FILE NO.: CV-18-293-000
DATE: 2019-09-05
ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE MATTER OF the Condominium Act, 1998, SO 1998, c.19
B E T W E E N:
THUNDER BAY STANDARD
CONDOMINIUM CORPORATION #52
Warren A. Mouck, for the Applicant
(Responding Party to the Motion)
Applicant
- and -
RESOLVE PROJECT MANAGEMENT LTD. AND ALLURE CONDOMINIUMS LP by its General Partner 2352368 ONTARIO INC.
Jonathan B. Kroft / Daryl A. Chicoine, for the Respondents (Moving party on the Motion)
Roderick W. Johansen /Melanie Mayhew-Hammond Appearing for Man-Shield
Respondents
HEARD: June 5, 2019,
at Thunder Bay, Ontario
Madam Justice T. J. Nieckarz
Decision On Motion
Overview:
[1] At issue in this motion is:
a) Who are the appropriate parties to have before the court to properly determine the main application? and
b) Whether this Application should be consolidated with, or heard together with another action as between these parties and others?
[2] The main application is brought pursuant to ss. 43 and 134 of the Condominium Act, 1998, 1990, SO 1998, c. 19. The Applicant seeks a mandatory order requiring the Respondents to comply with s. 43 of the Act and provide as built structural and architectural drawings (“As-built drawings”) for the condominium project located at 2280 Sleeping Giant Parkway in Thunder Bay, Ontario (the “Condominium”). Alternatively, the Applicant requires the Respondents to pay for the creation of accurate As-built drawings. The Applicant also seeks damages totalling $16,360 as a result of the alleged violation of ss. 43(4), (5), and (9)(c).
[3] The Respondent, 2353268 Ontario Inc., as General Partner of Allure Condominiums LP (“Allure”) was the original owner of the lands, and was responsible for the construction of the Condomium.
[4] Allure contracted with Man-Shield to act as the general contractor for the construction of the Condominium.
[5] Differences arose as between Allure and Man-Shield, causing Allure to terminate the construction contract with Man-Shield and hire a new general contractor.
[6] Allure takes the position that Man-Shield is a necessary party to this Application because any necessary documentation is in the possession of Man-Shield. Allure also states that it is important for Man-Shield to have a say in this Application as to issues such as “what is an As-built drawing” and what should be ordered to be produced. Allure has stated that if it is ordered to produce additional drawings or pay damages in this proceeding, it may subsequently sue Man-Shield, and therefore it is important that Man-Shield have a voice in determining these issues.
[7] In the alternative, Allure argues that this Application should either be consolidated with the other action between the parties, or heard together. Allure takes the position that the issues are common to both proceedings and that this will avoid inconsistent findings and multiplicity of proceedings.
[8] Man-Shield opposes being added as a party, or the consolidation or hearing together of the proceedings. Man-Shield states that it has provided Allure with everything in its possession and it has no further documents or information to provide. Man-Shield further takes the position that no relief may be ordered against it under the Condominium Act, 1998 and that Allure has no cause of action against it. Even if there is, Man-Shield’s presence is not necessary to effectively adjudicate the issues in the proceeding.
[9] With respect to the consolidation or hearing together of the proceedings, Man-Shield takes the position that this would prejudice the other nine defendants in the other action, who likely have no knowledge or liability with respect to the Application. Man-Shield states that there is no risk of inconsistent findings or multiplicity of proceedings, as the issue at the heart of the Application is one as between the Applicant and the existing Respondents alone, and does not impact the other action. To consolidate the proceedings will complicate the issues in the main action and increase the legal costs to the other defendants who have no legal interest in the outcome of the Application.
[10] The Applicant, Thunder Bay Standard Condominium Corporation #52 (the “Applicant”) agrees with the position of Man-Shield. It takes the position that the issues in the Application are distinct legal issues as between it and the Respondents alone, designed solely to enforce Allure’s statutory obligation to the Applicant under the Condominium Act, 1998. The Applicant further argues that Allure’s true motive with respect to this motion is to simply delay and overly complicate the Application.
[11] I concur with the positions of the Applicant and Man-Shield.
Background:
[12] Allure was the owner of the lands on which the Condominium was built, and the developer of the project.
[13] The Respondent, Resolve Project Management Ltd. (“Resolve”) is a related corporate entity to Allure, and acted as the project manager for Allure.
[14] Man-Shield was initially retained to construct the Condominium, which was a 51-unit condominium building.
[15] On July 27, 2015, Allure caused a declaration to be registered pursuant to the Condominium Act, 1998 that was registered in the Land Registry Office, and resulted in the creation of the Applicant.
[16] On September 1, 2015, Allure terminated the construction contract with Man-Shield and hired a new general contractor to complete the project. The evidence on the motion does not specify the exact nature of the dispute, but it would appear that there are allegations of deficiencies in the work done by Man-Shield.
[17] At the time of termination, the construction contract was substantially complete and the building was being occupied by purchasers of individual units.
[18] On September 30, 2015 a “turnover meeting”, as that term is used in the Condominium Act, 1998, occurred. The net effect of this meeting was that Allure/Resolve turned-over control of the Applicant condomium corporation to the unit owners.
[19] Section 43(5) of the Condominium Act, 1998 requires Allure to provide certain information to the Board of the Applicant within 30 days of the turnover meeting. This includes As-built drawings related to the construction of the building.
[20] As-built drawings include, among other documents, the architectural, structural, engineering, mechanical, electrical and plumbing plans and specifications, and any substantial changes from the original specifications.
[21] The terms of the construction contract as between Allure and Man-Shield requires Man-Shield to submit both “record” and “as-constructed” drawings to Allure.
[22] Allure takes the position that both it, and the new general contractor, attempted to secure from Man-Shield updated drawings that reflected the actual construction of the building. Very little information was provided by Man-Shield, particularly with respect to any changes to original drawings. The new general contractor did the best it could, with limited information, to update the materials to reflect the actual constructed conditions of the building.
[23] Allure alleges that as a result of these issues with Man-Shield, and the extra work that its new general contractor had to do to update the drawings, it was unable to provide the As-built drawings within 30 days of the turnover meeting as required by the Act. It provided everything in its possession on January 15, 2016.
[24] Allure also claims that there were deficiencies in the documents provided by Man-Shield. Over a two-year period it endeavoured to secure the additional information required from Man-Shield.
[25] By way of Notice of Action issued July 26, 2017 as CV-17-0358-00, the Applicant commenced an action against the Respondents and nine other defendants for damages related to deficiencies in the construction of the Condominium (the “Action”). One of the defendants is Man-Shield. There are also a number of third parties.
[26] Originally, the Statement of Claim in the Action alleged the lack of As-built drawings as a deficiency for which damages was being claimed. Without objection from the Respondents in this proceeding, the Statement of Claim was amended to delete the reference to As-built drawings as an alleged deficiency, given that relief was being sought in this Application pertaining to that issue.
[27] This Application was commenced on June 20, 2018. The Applicant alleges that it has made repeated, unsatisfied requests from the Respondents for the required As-built drawings.
Analysis:
- Should Man-Shield be Made a Party to this Application:
[28] Rule 5.04(2) of the Rules of Civil Procedure grants the court the discretion to add a party to a proceeding on such terms as are considered appropriate, unless prejudice would result that could not be compensated for by costs or an adjournment.
[29] The test for adding a party under Rule 5.04(2) is subject to the same tests applicable to motions to amend pleadings pursuant to Rule 26.01, save and except for one important distinction. Under Rule 5.04(2), even when those tests have been met, the court retains discretion to refuse to add a party: 1353837 Ontario Inc. v. Derek Pigozzo as Chief Building Official for the City of Stratford, 2019 CarswellOnt 7174, 2019 ONSC 2868 at paras. 8 and 9.
[30] The exercise of discretion must be based on principles of fairness and judicial efficiency. For example, does the contemplated addition of a party unduly complicate or delay the proceeding, or are there any circumstances that exist that justify not adding a party: Plante v. Industrial Alliance Life Insurance Co., 2003 64295 (ON SC), [2003] O.J. No. 3034 (Ont. S.C.J.) at para. 25.
[31] In determining whether or not to add a party to a proceeding pursuant to Rule 5.04 (2), the applicable considerations and tests may be summarized as follows:
a) Is there irremediable prejudice? The onus of proving prejudice is on the party alleging it, unless a limitation period has expired, in which case the party seeking the addition must lead evidence to explain the delay and displace the presumption of prejudice.
b) The claim must be legally tenable. This does not require evidence to be led. The question, based on the pleadings, is whether they disclose a cause of action.
c) Adding a party will be particularly appropriate if it is unclear as to which defendant may be liable, or if it is necessary that the proposed party be bound by the outcome of the proceeding, or if their participation is otherwise necessary to allow the court to adjudicate effectively.
d) A party will not be appropriate if to do so will unduly delay or complicate a hearing or cause undue prejudice to the other party.
e) The addition of a party will not be permitted if it is shown to be an abuse of process. An abuse of process will be found to exist where the addition of a party is for an improper purpose, such as solely to obtain discovery from them, to put unfair pressure on the other side to settle, to harass the other party or for purely tactical reasons.
Syncor Technology Inc. v. Kaier, 79 O.R. (3d) 268 (S.C.J.), 2006 2763 at para. 7, citing Plante v. Industrial Alliance Life Insurance Co.
[32] With respect to the issue of prejudice, Man-Shield argues that the limitation period for any action by Allure as against it, for failure to produce As-built drawings, has expired. While the construction contract was terminated in 2015, given the ongoing dealings between the parties it is difficult on this motion for me to properly assess this argument with respect to discoverability. Absent a limitation issue, there is no evidence of irremediable prejudice to the Applicant or Man-Shield.
[33] Man-Shield’s primary objection to being added as a party is that the pleadings as they are currently constituted do not set out a cause of action against it. The Applicant agrees with this position, and takes the position that the Condominium Act, 1998 does not give it any cause of action as against Man-Shield. I agree.
[34] The Application seeks statutory relief that is not applicable to Man-Shield. The Application seeks declaratory and other relief pursuant to ss. 43 and 134 of the Condominium Act, 1998. Sections 43(4) and (5) of the Act impose an obligation on the “declarant”, who is Allure. Section 43(9) gives the court the power to make orders for compliance with these section as against the “declarant”. No other party is referenced. The Act is clear in this respect.
[35] This is not to say that Allure may not have a cause of action as against Man-Shield. If it has one, it will need to commence a separate application or action pertaining to any alleged breach of Man-Shield’s contractual obligation to provide the As-built drawings and any damages flowing to Allure as a result thereof. If Man-Shield continued to have documents in its possession that were the subject of this Application (which it says it does not), or if Allure did have a cause of action based in contract to recover damages that may be awarded against it in this proceeding (which Man-Shield disputes), it may make sense for Allure to commence its own proceeding against Man-Shield and then assess whether the two proceedings should be consolidated.
[36] On this motion, however, I must make a decision based on the pleadings and evidence before me. While Allure has stated it “may” commence a proceeding against Man-Shield, it has also stated that no amendment of the existing pleadings will be required by the addition of Man-Shield. The existing pleadings disclose no cause of action as against Man-Shield.
[37] If I am incorrect with respect to whether or not there is a cause of action disclosed by the pleadings, Man-Shield’s participation does not strike me as necessary. Man-Shield has provided sworn evidence stating that it has provided all documents and information in its possession, and that there is nothing further it can add to this proceeding. Even if it did have them, as previously indicated the relief available to the Applicant under the Act is against the declarant (Allure). Allure would still need to bring its own claim against Man-Shield to recover the information so that Allure could comply with any order made against it.
[38] Allure further argues that Man-Shield’s participation is necessary so as to provide input into questions such as “what should have been produced under the definition of As-built drawings”. Allure argues that if it is ordered to produce something additional to the Applicant, or is ordered to pay damages, it may seek recourse from Man-Shield. In other words, Man-Shield could indirectly be affected by the outcome of this proceeding and should have a voice, even if it does not want one.
[39] While there is some appeal to this argument, again, it is speculative at this time. No claim has been brought by Allure as of yet. Furthermore, the materials before me are not clear as to whether there is in fact any argument as to the definition of “As-built drawings” that Allure is required to produce, or whether the parties can agree as to what is missing and simply argue over whether Allure should be required to produce the missing items, even at a cost to have them created. Man-Shield and Allure have each stated that they have requested particulars of the Applicant as to specifically what is alleged to be missing, but have received no response. It is early stages in the proceeding. Cross-examinations have not occurred. The issues are not yet clearly defined such that I am convinced that Man-Shield needs to be a party to this proceeding.
[40] Regardless, Man-Shield’s participation, if required, does not need to be as a party. Adding another party, to whom the relief requested in the Application does not apply, risks unnecessarily adding to the cost of the proceeding for the Applicant, and also risks the likelihood of delay. If Allure feels strongly that Man-Shield has evidence that may be of benefit to the court in the determination of this proceeding as to what is or is not reasonable to produce as an As-built drawing, it may avail itself of the provisions of Rule 39.03 to have a Man-Shield official examined prior to the hearing of the Application. If any trial of an issue is ultimately directed, Man-Shield may be subpoenaed.
[41] For the foregoing reasons, the motion to have Man-Shield added as a party is dismissed.
- Should the Action and the Application be Consolidated or Heard Together:
[42] Allure argues that either the consolidation of the Application and the Action, or having them heard one after the other is necessary to avoid multiplicity of proceedings, minimize the risk of inconsistent findings, and to promote the most expeditious and inexpensive determination of the disputes.
[43] In support of this position, Allure submits that the Application and the Action involve questions of fact arising out of the same transaction, being the building and construction of the Condominium. The evidence in both proceedings will be overlapping, and the same or similar witnesses will be called. The common issues of fact render it desirable that the proceedings be consolidated. In addition to being more efficient and avoiding duplication of effort and cost, this will minimize the otherwise significant risk of inconsistent findings of fact.
[44] Rule 6.01(1) of the Rules of Civil Procedure provides that the court may either consolidate two proceedings, or order them to be heard together if:
a) they have a question of law or fact in common;
b) the relief claimed arises out of the same transaction or occurrence, or the same series of transactions or occurrences; or
c) for any other reason an order ought to be made.
[45] Underlying the Rule are the general policies of avoiding multiplicity of proceedings and promoting the expeditious and inexpensive determination of proceedings. These policies are reflected in s. 138 of the Courts of Justice Act and Rule 1.04(1) respectively: Watson and McGowan, Ontario Civil Practice, 2015, (Thomson Canada Limited, Toronto) at pg. 399.
[46] On a motion such as this, I must first ascertain whether Allure has satisfied one or more of the three “gateway” criteria as set out in Rule 6.01(1). If so, I must then consider all relevant factors as well as s. 138 of the Courts of Justice Act in order to exercise my discretion: 1014864 Ontario Ltd. v. 1721789 Ontario Inc., 2010 ONSC 3306 at para. 17.
[47] With respect to the Application, the main issues arising out of the Notice of Application are:
a) Has Allure complied with its obligation under the Condominium Act, 1998 to provide As-built drawings?
b) If not, does it have a reasonable excuse for not doing so? And
c) If not, what damages or other orders should be made?
I acknowledge that there may be sub-issues that arise such as “what is included in
the definition of As-built drawings?”.
[48] With respect to the Action, I was only provided with the Amended Statement of Claim and none of the other pleadings. The primary issue in that litigation is whether the Defendants (there being 11 in total, including the Respondents and Man-Shield) are liable to the Plaintiff (Applicant in the Application) for damages as a result of deficiencies in the construction of the project.
[49] While I acknowledge that both proceedings arise out of the construction of the Condominium, and that there is the potential for the overlap of some evidence, based on the limited information I have before me, it strikes me that the issues are not interwoven but rather are very different, and that the findings of facts that will need to be made are likely to be quite different.
[50] I also note the concern expressed by the Applicant with respect to the other Defendants involved in the Action. The issue in the Application is one that does not affect the other Defendants named in the Action. It would be unfair to all other parties to the Action to consolidate the Action and the Application, or having both proceedings heard together. Doing so would add issues to what appears to be an already complex action, and could unnecessarily add to the cost of that proceeding.
[51] Similarly, the issues in the Application are relatively straightforward and should be capable of being determined much quicker and less expensively than those in the Action, even if a trial of an issue must be directed (which remains to be seen at this point). These issues should not be complicated by the issues in an Action involving a $2.5 million claim for damages that involves multiple other parties. I expect it will take significantly longer to ready the Action for trial than it will to ready the Application for hearing.
[52] In my view, the minimal risk of duplication of effort and inconsistent findings of fact if the proceedings are not consolidated or heard together, does not militate in favour of the relief sought. I am not satisfied that the balance of convenience favours granting the relief sought.
[53] The motion to consolidate, or alternatively have the proceedings heard together is dismissed.
[54] If costs are sought, written submissions shall be served and filed within 21 days of the release of this decision, failing which costs will be deemed to have been resolved. The responding party shall have 14 days thereafter to serve and file a response. Any reply shall be delivered within 7 days thereafter. Submissions shall be no more than five pages in length, double spaced, together with a Bill of Costs or Summary of Costs.
“Original signed by” The Honourable Madam Justice T.J. Nieckarz
Released: September 5, 2019
Resolve Project Management Ltd. et al., 2019 ONSC 5171
COURT FILE NO.: CV-18-293-000
DATE: 2019-09-05
ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE MATTER OF the Condominium Act,
1998, SO 1998, c.19
THUNDER BAY STANDARD
CONDOMINIUM CORPORATION #52
Applicant
- and -
RESOLVE PROJECT MANAGEMENT LTD. AND ALLURE CONDOMINIUMS LP by its General Partner 2352368 ONTARIO INC.
Respondents
DECISION ON MOTION
Nieckarz J.
Released: September 5, 2019