Court File and Parties
COURT FILE NO.: CV-15-00520475 MOTION HEARD: 20191127 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Naim Freij and Asnad Mekhaeel, Plaintiffs AND: Jackie Rodney, Defendant
BEFORE: Master B. McAfee
COUNSEL: H. J. Ash, Counsel for the Plaintiffs, Moving Parties J. Gottlieb, Counsel for the Defendant, Responding Party
HEARD: November 27, 2019
REASONS FOR DECISION
Nature of the Motion
[1] In their notice of motion the plaintiffs Naim Freij (“Freij”) and Asnad Mekhaeel (“Mekhaeel”) (collectively “the plaintiffs”) seek an order granting leave to withdraw alleged admissions in paragraphs 2 and 4 of the statement of claim and an order granting leave to amend the statement of claim if the statements in paragraphs 2 and 4 are found to be admissions which are inconsistent with the affidavit of Mekhaeel sworn March 9, 2017.
[2] A proposed amended statement of claim was provided to the court at the return of the motion and provided to counsel for the defendant Jackie Rodney (“the defendant”) two days prior to the return of the motion.
[3] The proposed amendments are found at paragraphs 2, 4, and 10 of the proposed amended statement of claim. The defendant does not oppose the granting of leave to amend with respect to paragraph 2. The plaintiffs are no longer pursuing the proposed amendment at paragraph 10.
[4] The parties then confirmed that the only issue remaining is the proposed amendment at paragraph 4. The defendant opposes the proposed amendment at paragraph 4.
[5] The plaintiffs have now obtained a consent order from Justice Glustein dated November 14, 2019, extending the deadline for the bringing of this motion.
Background Facts
[6] The plaintiffs are current registered owners of 7 Glen Hill Drive, Whitby, Ontario (“the Property”).
[7] As pleaded at paragraph 4 of the statement of claim, on or about July 26, 2011, the plaintiffs, as vendors, entered into an agreement to sell the Property to the defendant, as purchaser, for the amount of $415,200. (“the APS”). The defendant provided the required deposit.
[8] As pleaded at paragraph 5 of the statement of claim, the APS was to be completed no later than 6:00 p.m. on July 29, 2012. However, pursuant to Schedule “A” to the APS, if for any reason the transaction did not close by the original closing date, the closing date was automatically extended to September 30, 2015.
[9] The transaction did not close on July 29, 2012, and was automatically extended to September 30, 2015. To date, the transaction has not closed.
[10] Schedule “A” to the APS provides: Upon acceptance of the deposit the sellers acknowledge and waive all their rights to and equity position within the property and further the sellers accept and acknowledge that all remaining equity belongs to the buyers.
[11] The defendant, her spouse, and three children moved into the Property in or about June 2011, and continue to reside at the Property.
[12] Schedule “A” to the APS also provides that the plaintiffs directed the solicitor for the defendant to immediately register a mortgage in the defendant’s favour in the amount of the deposit.
[13] A second mortgage in favour of the defendant for the amount of the deposit was registered on August 12, 2011, in accordance with Schedule “A” to the APS.
The Action
[14] On January 23, 2015, the statement of claim was issued. The plaintiffs seek a declaration that the APS is terminated, a declaration that the plaintiffs are beneficial owners of the Property, a declaration that the deposit is forfeited to the plaintiffs, and other relief.
[15] On or about July 29, 2015, the statement of defence and counterclaim was delivered. The defendant pleads that the plaintiffs’ claims are without merit and counterclaims for damages, specific performance of the APS, and other relief.
[16] On or about December 14, 2015, the plaintiffs delivered a reply and defence to counterclaim. At paragraph 1 of their reply and defence to counterclaim the plaintiffs admit paragraph 3 of the statement of defence which paragraph pleads that the parties entered into an APS. In addition to admitting that the parties entered into an APS, in their reply and defence to counterclaim at paragraph 5 the plaintiffs plead that Mekhaeel denies having signed the APS and believes that her signature was forged.
Position of the Parties
[17] The plaintiffs argue that the proposed amendment at paragraph 4 does not constitute the withdrawal of an admission and that, in any event, the applicable test for the withdrawal of an admission has been satisfied.
[18] The defendant opposes the proposed amendment at paragraph 4 on the basis that it constitutes the withdrawal of an admission. The defendant argues that the applicable test for leave to withdraw an admission has not been satisfied. To the extent that there are inconsistencies between the statement of claim and the reply and defence to counterclaim and within the reply and defence to counterclaim, the defendant submits that those inconsistencies ought to remain as currently pleaded.
Law and Analysis
[19] Rule 26.01 of the Rules of Civil Procedure provides:
On motion at any stage of an action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.
[20] Rule 51.05 of the Rules of Civil Procedure provides:
An admission made in response to a request to admit, a deemed admission under rule 51.03 or an admission in a pleading may be withdrawn on consent or with leave of the court.
[21] Rule 51.05, being more specific, supersedes rule 26.01 where the effect of the proposed amendment is the withdrawal of an admission (Antipas v. Coroneos, [1988] O.J. No. 137 (Ont. H.C.) at p.3).
[22] Rule 1.04(1) of the Rules of Civil Procedure provides:
These rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.
[23] The applicable test is stated by Justice Thorburn in Dharsi v. Manji, 2016 ONSC 703 (Ont. Div.Ct.) at paras. 20 – 21:
[20] There is no absolute right to amend a pleading although the general rule is that amendments are presumptively approved. (Marks v. Ottawa, 2011 ONCA 248 at para. 19).
[21] Where the proposed amendment involves withdrawal of an admission, Rule 51.05 provides that the amendment may be withdrawn on consent or with leave of the court. The onus is on the party requesting the amendment to satisfy the court that it should be permitted to withdraw admissions. (Bradhill Masonry v. Simcoe County District School Board, 2011 ONSC 6230 at paras. 18 – 19, 2011 CarswellOnt 11350).
[22] A party seeking to withdraw an admission must establish that: (i) there is a triable issue with respect to the amendment; (ii) there is a reasonable explanation for the change in position; and (iii) there is no prejudice to the other party that cannot be compensated by costs. (194388 Ont. Inc. v. The Toronto-Dominion Bank, 2014 ONSC 215 at paras. 21 – 22, 2014 CarswellOnt 659)
[24] The proposed amendment at paragraph 4 to the statement of claim is underlined as follows:
- On or about July 26, 2011, the plaintiffs (as vendors) allegedly entered into an agreement to sell the Glen Hill Property to the defendant (as purchaser) for $415,200.00. The defendant provided a deposit of $20,306.22. The plaintiff Freij did sign the agreement of purchase and sale. However, the plaintiff Mekhaeel did not sign the agreement of purchase and sale as her signature was forged by a third party, believed to have been Khaled Alazrak.
[25] The plaintiffs argue that the original pleading at paragraph 4 of the statement of claim is ambiguous. In my view the original pleading at paragraph 4 of the statement of claim is an unambiguous and deliberate statement that the plaintiffs entered into an agreement to sell the Property. The plaintiffs seek to withdraw a clear admission in the statement of claim that they both entered into an agreement to sell the Property.
Triable Issue
[26] For the limited purpose of this motion only, I am satisfied that there is a triable issue with respect to the proposed amendment. The threshold to satisfy this part of the test is low (Suncor Energy Inc. v. B. Osmond Scrap Metals Ltd., 2014 ONSC 5404 (Ont. S.C.J.) at para. 35). There is evidence from Mekhaeel at paragraph 11 of her affidavit sworn July 30, 2019, sworn for the purposes of this motion, that she was not aware that an agreement of purchase and sale had been entered into to sell the Property by herself and Freij nor was she even aware that she owned the Property in the first place. Although the defendant challenges this evidence and although credibility is very much at issue in this action, the court ought not to be in the position of trying the case at this stage (Suncor Energy at para. 35).
[27] The plaintiffs rely on the report of Wendy Carlson dated February 15, 2017, who, according to her report, is an expert document examiner. There is an issue with respect to whether the report is properly before the court. The report is appended to the affidavit of Mekhaeel sworn on March 9, 2017, for the summary judgment motions, and that affidavit is appended to the affidavit of Mekhaeel sworn on July 30, 2019, for this motion. The Carlson report is not appended to an affidavit sworn by Carlson (Dupont Heating & Air Conditioning Limited v. Bank of Montreal (Ont. S.C.J.) at paras. 47-52). In addition, the agreement of purchase and sale examined by Carlson is not the APS at issue at paragraph 4 of the proposed amended statement of claim. In making the determination that, for the purposes of this motion only, there is a triable issue, it was not necessary for me to rely on the report of Wendy Carlson.
[28] Although the plaintiffs have passed the low threshold to satisfy the first part of the test, the plaintiffs must satisfy all three parts of the test and they have not done so.
Explanation for Change in Position
[29] In her affidavit sworn July 30, 2019, Mekhaeel deposes in part:
Although I had explained the facts to my lawyer, Mr. Ash, prior to the statement of claim being issued, it appears that there was a breakdown in communications and the statement of claim may have been too vague or inaccurate. Due to language difficulties between Mr. Ash and myself as well as my misunderstanding as to the contents of the statement of claim, the statements therein which Mr. Gottlieb now alleges are admissions are not accurate or are too vague and need to be corrected, in the interests of justice.
In gathering the facts, information, and documents for this summary judgment motion I was better able to explain the facts to Mr. Ash which led him to obtain a handwriting expert’s report from Wendy Carlson to confirm that I had not signed the agreement of purchase and sale. A copy of this handwriting expert’s report was provided to Mr. Gottlieb in or about March 2017 and as far as I am aware he has done nothing to refute the findings therein, save and expect to attempt to exclude the report due to the alleged admissions in the statement of claim.
[30] Mekhaeel’s explanation that she was better able to explain the facts to her lawyer when preparing material for the summary judgment motion which was originally scheduled for January 27, 2017, and adjourned to May 29, 2017, is inconsistent with her pleading at paragraph 5 of the reply and defence to counterclaim wherein it is pleaded that Mekhaeel denies having signed the APS and that she believes that her signature was forged. The reply and defence to counterclaim is dated December 14, 2015.
[31] The explanation that this change came about when preparing material for the summary judgment motion in 2017 is also inconsistent with an email sent by her lawyer in response to an email from defendant’s counsel attempting to close the transaction on September 30, 2015, wherein Mekhaeel’s counsel advises that the transaction has been terminated for two reasons: (a) due to the failure of the defendant to comply with her obligations in the APS; and (b) due to Mekhaeel’s signature having been forged on the waiver.
[32] I am not satisfied that the plaintiffs have provided a reasonable explanation for the change in position.
Prejudice to the Defendant
[33] The plaintiffs have not satisfied me that the withdrawal will not result in significant prejudice to the defendant that cannot be compensated for by costs.
[34] Some of the events in this case are now over eight years old and the claim was issued by the plaintiffs almost five years ago. The defendant and her family have now lived in the Property as the family home for more than eight years. The defendant made improvements and significantly renovated the Property. Granting the plaintiffs’ motion will effectively return this matter back to the beginning of the pleadings stage and effectively change the fundamental facts of this case pleaded in the statement of claim that the two plaintiffs entered into the APS.
[35] The plaintiffs have already obtained interim relief in this action relying on the terms of the APS. Although the reply and defence to counterclaim dated December 14, 2015 pleads that Mekhaeel believes that her signature was forged, the plaintiffs subsequently brought a motion before Master Short on May 2, 2016, relying solely on the APS, to obtain an order that the defendant pay amounts owing for the period between 2011 and 2015 in the amount of $53,624.44 in accordance with the APS. The defendant paid the amount owing in full. The evidence from the defendant is that nothing in the plaintiffs’ materials submitted to Master Short referenced their position that Mekhaeel’s signatures or initials on the APS were forged. On the motion before me the plaintiffs did not refute the defendant’s evidence with respect to the material that was before Master Short.
[36] The defendant asserts prejudice with respect to potential claims against the alleged forger who is named in the proposed amendment at paragraph 4 of the statement of claim and potential claims against lawyers involved in the underlying transactions involving the plaintiffs’ purchase of the Property on September 30, 2010, and the lawyer who the plaintiffs met with to sign the closing documents for the sale of the Property, and the lawyers who acted for the plaintiffs with respect to mortgages on the Property. It is the defendant’s position that the defendant is prejudiced because the limitation period for making these claims has passed.
[37] The plaintiffs argue that any limitation period issue ought to be addressed at trial. In this regard the plaintiffs rely on Suncor at para. 41. Suncor did not consider the issue of potential claims against persons who are not existing parties. The plaintiffs have not satisfied me that the applicable limitation periods have not expired with respect to potential claims against persons who are not existing parties.
[38] For these reasons, the plaintiffs have not satisfied the second and third part of the three part test. Leave to amend the statement of claim to withdraw the admission at paragraph 4 is denied and the motion in this regard is dismissed.
Costs
[39] The parties agreed that the successful party on this motion is entitled to costs of the motion in the all-inclusive sum of $6,000.00. The defendant was successful on the motion. Costs of the motion are fixed in the all-inclusive sum of $6,000.00 payable by the plaintiffs to the defendant within 30 days.
Summary of Order
[40] Order to go as follows:
- On an unopposed basis, leave is granted to amend paragraph 2 of the statement of claim by adding the word “registered” in front of the word “owners.”
- The balance of the motion is dismissed.
- Costs of the motion are fixed in the all-inclusive sum of $6,000.00 payable by the plaintiffs to the defendant within 30 days.