Overview

[1] The Defendants 2332574 Ontario Ltd. (“233 Ontario”) and Dazz Construction Inc. (“Dazz”) move for an Order dismissing the Plaintiff 1814219 Ontario Inc.’s (“181 Ontario”) action against them and discharging 181 Ontario’s claim for lien. The Defendants also move for payment of $849,851.56 out of court to 233 Ontario, a sum that was posted as security to vacate 181 Ontario’s lien registered on title to lands owned by 233 Ontario.

[2] At the centre of this action is a construction contract that is dated May 15, 2016 but was executed at some point thereafter. The precise date of execution is not established by the evidence in the record, but the parties agree that it was approximately two years before the enactment of the Construction Lien Amendment Act, 2017, S.O. 2017, c.24 on July 1, 2018. This proceeding is therefore governed by the provisions of the former Construction Lien Act, R.S.O. 1990, c.C.30 (the “Act”).

[3] The Defendants rely on ss. 44 and 47 of the Act. Subsection 44(5) provides that the Court may, “where it is appropriate to do so”, order the payment of any part of the amount paid into court to the person entitled. Section 47(1)(d) permits the court, upon motion, to dismiss an action “upon any proper ground and subject to any terms and conditions that the court considers appropriate in the circumstances.”

[4] Motions brought under to s.47 of the Act are akin to summary judgment motions under Rule 20.04 of the Rules of Civil Procedure. They are governed by the principles enunciated by the Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87: Diamond Drywall Contracting Inc. v. Ikram, 2016 ONSC 5411, at paras. 4-9. Whether a summary proceeding is appropriate under s. 47 therefore depends on whether the motion raises an issue that requires a trial or whether the motion judge is able to reach a fair and just determination of the issues on the merits: JD Strachan Construction Ltd. v. Egan Holdings Inc., 2019 ONSC 522, at para.21. As the motion judge, I must ask myself, “can the full appreciation of the evidence and issues that is required to make dispositive findings be achieved by way of summary judgement, or can this full appreciation only be achieved by way of a trial?”: Hryniak, at para.53.

[5] For the reasons that follow, I have concluded that this is not an appropriate case for summary judgment. A fair and just resolution of the issues raised by the motion requires a trial.

Background Facts

[6] Before setting out the parties’ positions in the motion, I will briefly review some relevant background facts in order to provide context for the issues in dispute.

[7] 181 Ontario was incorporated on December 23, 2009. On January 29, 2010, 181 Ontario registered the business name “UM Construction”. It has operated under that name from January 2010 to present.

[8] The registration of the UM Construction business name expired on January 28, 2015. 181 Ontario continued to conduct business under the unregistered name of UM Construction, in contravention of s. 2(1) of the Business Names Act, R.S.O. 1990, B.17, for a period of approximately three years. It was during this time period that the construction contract at issue in this case was executed.

[9] Umberto Mauti, President of 181 Ontario, swore an affidavit in support of the Plaintiff’s position in this motion. In his affidavit and during his subsequent cross-examination, Mr. Mauti stated he was unaware that the registration of UM Construction as a business name needed to be renewed after five years. He also testified that he did not know, prior to January 2018, that the registration had expired. One of 181 Ontario’s lawyers, Maria Ruberto, testified that she was also unaware that the registration had lapsed.

[10] In the spring of 2016, UM Construction entered into two successive contracts, one with each of the Defendants. Both contracts related to the performance of excavation, concrete, paving and other landscaping work at the site of a six-building commercial condominium project on Stanfield Road in Mississauga, on lands owned by 233 Ontario (the “Subject Lands”). The first contract was between Dazz and UM Construction. The second contract was between 233 Ontario and UM Construction. As explained below, the second contract replaced the first.

[11] The initial contract was a standard form CCDC2 Stipulated Price Contract. The template of the contract was completed by Manojkumar Shukla, 181 Ontario’s Project Manager for the Stanfield construction project. The parties to the contract were Dazz, identified as the Owner, and UM Construction, identified as the Contractor. The signatories to the initial contract were Mr. Mauti and Jack Da Silva, who is the President of Dazz. The template for the CCDC2 standard form contract calls for the “name and title of person signing” on behalf of each party. When Mr. Shukla prepared the contract, the words “Umberto Mauti, President” were typed directly under the signature line for the Contractor. When Mr. Da Silva signed the contract, he hand-printed the words “Jack Da Silva, President” beneath his signature, where the form calls for his name and title. The contract is dated May 15, 2016 and was executed on or about that date.

[12] Mr. Da Silva and Mr. Mauti were acquainted with each other prior to signing the initial contract because Dazz and UM Construction had previously done business together in the preceding two years.

[13] UM Construction was already on the project site when the initial contract was executed. It was building a fence at the site for 233 Ontario. The construction of the fence was not part of the scope of work set out in the CCDC2 contract.

[14] Sometime after the initial contract was executed and work within the scope of the contract had begun, Mr. Da Silva advised Mr. Mauti that the contract needed to be changed to name 233 Ontario as the Owner. A second standard form CCDC2 contract was presented to Mr. Mauti for his signature. The second contract listed 233 Ontario as Owner, UM Construction as Contractor, and Dazz as a Consultant. Mr. Mauti testified that he requested and received from Mr. Da Silva an assurance that the two contracts were otherwise the same. The second contract bore the same date as the initial contract (i.e. May 15, 2016), even though it was signed at a later date. In both contracts, the price payable by the Owner to the Contractor was $4,198,558.06. The parties mutually understood that the second contract was meant to replace the first.

[15] The signatories to the replacement contract were the same as the signatories to the initial contract, namely Mr. Mauti and Mr. Da Silva. In addition to being the President of Dazz, Mr. Da Silva is also the General Manager of 233 Ontario. When the replacement contract was prepared by 233 Ontario, the words “Umberto Mauti, President” were not typewritten under the Contractor’s signature line, as they had been in the initial contract prepared by Mr. Shukla. When Mr. Mauti and Mr. Da Silva signed the replacement contract, neither wrote his title beside his name.

[16] The corporate entity 181 Ontario was not specifically mentioned in either contract. In both contracts, Mr. Mauti’s name appears only on the signature page, as signatory for the Contractor UM Construction.

[17] The construction project proceeded with Dazz acting as Project Manager (with respect to all trades) and site supervisor. Work was performed by UM Construction. Invoices were issued by UM Construction and payments were made by 233 Ontario to UM Construction for the work performed.

[18] A dispute eventually arose between the parties, who each retained counsel for advice regarding the dispute. On November 8, 2017, counsel for 233 Ontario, Robert Harason emailed Ms. Ruberto (181 Ontario’s lawyer), advising that he had been unable to locate a business name or partnership registration in the name of UM Construction. He requested a copy of the registration or confirmation that UM Construction is an unregistered business name in which Mr. Mauti personally carries on his construction business. Ms. Ruberto responded by email that same day, advising Mr. Harason that “the corporate entity is 1814219 Ontario Inc.” She did not provide him with a copy of the business name registration.

[19] On or about January 26, 2018, Ms. Ruberto discovered that registration of the UM Construction business name for 181 Ontario had lapsed. She promptly advised Mr. Mauti and the business name registration was subsequently renewed by 181 Ontario on February 2, 2018.

[20] On February 28, 2018, 181 Ontario registered the impugned construction lien against title to the Subject Lands. The lien was subsequently perfected by issuance of a Statement of Claim and registration of a Certificate of Action on April 23, 2018. Registration of the lien was later vacated upon payment into court of the sum of $849,851.56 by 233 Ontario, pursuant to an Order of Justice André dated August 27, 2018.

[21] In its Amended Statement of Claim, 181 Ontario claims for payment of the sum of $799,851.65 (plus interest) for work performed under the contract and for extras supplied to 233 Ontario, failing which the Subject Lands to which the construction lien attaches will be sold and the proceeds applied toward payment of its claim. 181 Ontario pleads that Dazz directed it to perform extra work under the contract from time to time. 181 Ontario claims it is entitled to a lien upon the Subject Lands by reason of performing the work and extras, for which payment was not made. 181 Ontario also claims an additional payment of $640,707.82 for amounts owing to its subcontractors, as well as $109,945.18 in damages for loss of profit, based on a claim that 233 Ontario wrongfully terminated the contract and thereby denied 181 Ontario the opportunity to complete the balance of the work under the contract. In the alternative, 181 Ontario claims damages for unjust enrichment in the amount of $1,711,814.17 against either or both of the Defendants, on the basis of quantum meruit.

Positions of the Parties

[22] In this motion, 233 Ontario submits that 181 Ontario is not a party to the replacement CCDC2 contract and therefore has no basis to make a claim for payment, no right to register a lien, and no basis to claim for loss of profit. The Defendants take the position that they contracted with Mr. Mauti in his personal capacity when both the initial contract and the replacement contract were executed. They rely on the expired business name registration and on s.2 of the Business Names Act (“BNA”) to argue that 181 Ontario could not have contracted with them using the unregistered name UM Construction. Moreover, even if the lapse in business name registration is not dispositive of this issue, the Defendants assert that Mr. Da Silva was not aware that he was dealing with a corporation when he executed the contracts on behalf of Dazz and 233 Ontario.

[23] The Defendants submit that Mr. Mauti had a positive obligation to disclose that UM Construction is a corporation and that UM Construction was contracting on behalf of 181 Ontario. They cite several cases supporting the proposition that a person who wishes to contract on behalf of a corporation bears the onus of making it clear to the party with whom she or he is contracting that she or he is contracting on behalf of a corporate entity and not in her or his personal capacity. The Defendants claim that Mr. Mauti failed to make this clear to them. They assert that they understood Mr. Mauti was entering into the construction contracts as a sole proprietor under the name UM Construction. They argue that, in these circumstances, Mr. Mauti cannot now claim to have contracted on behalf of a corporation and 181 Ontario cannot seek damages for breach of contract.

[24] Finally, Dazz submits that 181 Ontario can have no claim against Dazz because Dazz was not a party to the replacement contract, and the initial contract is no longer in force.

[25] In response to the motion, 181 Ontario relies on s.7(1) of the BNA, which provides that a corporation carrying on business under an unregistered name, in contravention of s.2 of the BNA, may nevertheless maintain a proceeding in Court in connection with that business if the Court grants it leave to do so. Subsection 7(2) of the BNA stipulates that leave shall be granted where the Court is satisfied that the corporation’s failure to register the business name was inadvertent, there is no evidence that the public has been deceived or misled, and at the time of the application to the Court, the corporation is not in contravention of the BNA.

[26] 181 Ontario argues that the lapse in its business name registration was inadvertent, that no one was deceived or misled as a result, and that the registration was renewed in accordance with the BNA prior to the registration of the construction lien at issue and prior to the commencement of the within action. 181 Ontario submits that, in these circumstances, leave to continue the action must be granted.

[27] In response to the Defendants’ argument that Mr. Mauti had a positive obligation to disclose that he was contracting on behalf of a corporate entity, 181 Ontario submits that the cases cited by the Defendants are distinguishable. The Defendants’ cases involve individuals who attempted to hide behind a corporate veil to avoid personal liability for breach of contract, whereas in this case, 181 Ontario is a plaintiff seeking to assert a substantive right under the Construction Lien Act. 181 Ontario argues that the jurisprudence cited by the Defendants is inapplicable in the circumstances of this case. It further argues that its construction lien should not be discharged based on a mere technical defect in the registration of its business name. It relies on the curative provisions in s.6 of the Construction Lien Act to argue that its lien is valid.

[28] Furthermore, 181 Ontario disputes the Defendants’ claim that they were not aware of the existence of 181 Ontario at the time when the contracts were executed. 181 Ontario asserts that both 233 Ontario and Dazz were aware, at all material times, that Mr. Mauti was acting as a representative of 181 Ontario and that they were dealing with a corporation, not an individual. 181 Ontario argues that Dazz and 233 Ontario are related corporations and that the knowledge of one of them can be imputed to the other.

[29] Finally, with respect to Dazz’s argument that the action against it must be dismissed because it was not a party to the replacement contract, 181 Ontario submits that it did not have adequate notice of this requested relief. 181 Ontario notes that the argument was not advanced in the Defendants’ factum.

Factual Issues in Dispute and Summary of Evidence

[30] There are several factual issues in dispute in this case, including (but not limited to): whether the lapse in registration of the UM Construction business name was inadvertent, whether 233 Ontario and/or Dazz were misled by the use of the unregistered business name, and whether Mr. Da Silva or others in positions of responsibility at 233 Ontario and/or Dazz were aware or ought to have been aware (either based on prior dealings with UM Construction or based on information and documentation shared in connection with the Stanfield project) that UM Construction was the business name under which a corporation was carrying on business and that Mr. Mauti was contracting on behalf of that corporation (181 Ontario) when the replacement CCDC2 contract was signed.

[31] Both parties filed numerous affidavits from multiple witnesses, as well as transcripts of the witnesses’ cross-examinations. Relevant documents are attached to the affidavits, some of which were required to be procured and produced by the Contractor (UM Construction) pursuant to the terms of the CCDC2 contract, such as “evidence of compliance with Workers Compensation Legislation at the place of work” and “permits, licences, inspections and certificates which are necessary for the performance of the work”.

[32] The record establishes that the WSIB clearance certificates obtained by UM Construction bear the corporate name, “1814219 Ontario Inc. / UM Construction”. The road occupancy permits from the City of Mississauga were issued to “1814219 Ontario Inc. u/a UM Construction”. A Statutory Declaration was sworn by Mr. Shukla on behalf of “1814219 ONTARIO INC. O/U UM CONSTRUCTION” in connection with the Stanfield Project.

[33] Mr. Mauti deposed that the WSIB clearance certificates dated from February 20, 2017 to May 19, 2017 and from August 20, 2017 to February 19, 2018 were provided to Dazz. He also deposed that the Statutory Declaration sworn by Mr. Shukla on December 7, 2016 was provided to 233 Ontario. He stated that most of the correspondence sent by UM Construction to either 233 Ontario or Dazz was sent to the email address “Dazz@Dazzconstruction.com”, pursuant to the notice provisions of the CCDC2 replacement contract. That email address belongs to Paula Costa, an administrative assistant employed by Dazz. She swore an affidavit in support of the Defendants’ motion. During her cross-examination, she confirmed that she received emails on behalf of 233 Ontario for the Stanfield project, even though she was not employed by 233 Ontario. Mr. Da Silva similarly confirmed, during his cross-examination, that Ms. Costa’s email address was “the address generally for project information to be sent”.

[34] Ms. Costa deposed that she did not receive the road occupancy permits. She further deposed that she did not receive hard copies of the WSIB clearance certificates or the Statutory Declaration and did not recall receiving these documents as an attachment to an email. She stated that, if she did receive them by email, she did not open the attachment or look at them. She explained that she would have simply forwarded them to Dazz’s bookkeeper, Jacqueline Budd.

[35] Mr. Da Silva deposed that the road occupancy permits were not delivered to Dazz or to 233. He further deposed that he did not recall receiving the WSIB clearance certificates or the Statutory Declaration. He stated, as did Ms. Costa, that if these documents were forwarded to him as attachments to an email, he did not open them or look at them because Ms. Budd “was responsible for obtaining these documents and sending them to the cost consultant, the Glynn Group”.

[36] Ms. Budd swore an affidavit in support of the Defendants’ motion. During her cross-examination, she confirmed that she was responsible for collecting WSIB clearances and statutory declarations from contractors on the Stanfield project, to ensure that applications for progress payments included all the necessary information and documentation. She also confirmed that she received UM Construction’s WSIB Clearance Certificates. She testified that she would have checked the clearances to ensure the dates were correct, but she did not notice the name “1814219 Ontario Inc / UM Construction” on them. She recalled receiving the Statutory Declaration sworn by Mr. Shukla but testified that she did not review it. She said she “would have just forwarded it along to the Glynn Group”.

[37] 181 Ontario argues that the Defendants should not be permitted to rely on their own lack of diligence (i.e., failure to review important documents) to claim ignorance of UM Construction’s corporate identity. The Defendants, on the other hand, argue that these documents (i.e., the WSIB clearance certificates, road allowance permits, and Statutory Declaration) are merely “clues, after the contract was entered into, as to the existence of a corporate entity behind the scenes”. The Defendants maintain that they had no information, on the date of execution of the replacement contract, disclosing the existence of 181 Ontario as a corporation using the unregistered business name UM Construction.

[38] On this point, it is noteworthy that the motion record contains an Ontario Ministry of Labour Form 1000: Registration of Constructors and Employers Engaged in Construction. This form is required by Ontario Health and Safety Act Regulations to be completed by every employer engaged in construction on a construction site. The form is dated May 26, 2016, which may be prior to the execution of the replacement contract. As noted earlier, the date of execution of the replacement contract is unclear based on the evidence in the motion record.

[39] The Form 1000 was signed by Mr. Mauti, who identified the “Nature of Business” by checking off the box marked “Corporation”. He wrote, “1814219 Ontario Inc. o/u UM Construction” as the name of the business on the form.

[40] There is evidence in the record that the Form 1000 was sent to Ms. Costa by email from Mr. Shukla. A request was made for a copy of the completed and signed form by Ms. Costa on November 8, 2016 and Mr. Shukla provided the copy that same day. Ms. Costa confirmed that she received the email message with the Form 1000 attached but she deposed that she did not see or notice the name “181 Ontario Inc.” on it.

[41] It is unclear whether this email in November 2016 was the first time that the Form 1000 was sent to 233 Ontario or Dazz. There is no evidence that it was sent earlier, but Mr. Mauti deposed that UM Construction was required to provide Dazz with a completed and signed Form 1000 “before starting work on the project”. Mr. Da Silva confirmed, during his cross-examination, that UM Construction was required to supply the Form 1000 to 233 Ontario before it could perform the work under the CCDC2 contract.

[42] A number of credibility issues arise from evidence filed. Both Mr. Da Silva’s credibility and Mr. Mauti’s credibility are contested.

[43] For example, Mr. Da Silva deposed that he did not see or notice the typed words “Umberto Mauti, President” beneath Mr. Mauti’s signature when he signed the initial contract on behalf of Dazz. During his cross-examination, he testified that he only saw the handwritten words “Umberto Mauti” beneath Mr. Mauti’s signature. However, he later testified that he could not recall whether he signed the contract first or whether Mr. Mauti signed first, which is inconsistent with his earlier statement that he saw the handwritten “Umberto Mauti” below Mr. Mauti’s signature.

[44] Another example of a material internal contradiction in Mr. Da Silva’s testimony relates to his evidence about his subjective understanding of the nature of the UM Construction business. Mr. Da Silva confirmed, during his cross-examination, that Dazz had done business with UM Construction for a couple of years prior to the Stanfield project. He initially testified that, “all that time” (i.e., throughout the two years during which Dazz and UM Construction had business dealings), he believed “a hundred percent” that UM Construction was a sole proprietorship. Later during his cross-examination, he was asked about Mr. Harason’s email to Ms. Ruberto in November 2017, in which Mr. Harason indicated that he had been unable to locate a business name or partnership registration in the name of UM Construction. At that point in his testimony, Mr. Da Silva confirmed that he “only considered Umberto Mauti was operating a sole proprietorship when the issue of the business name registration came up”.

[45] Mr. Mauti’s credibility is also at issue in this action. Notably, the Defendants make the serious allegation that he manufactured evidence to bolster 181 Ontario’s claims.

[46] Mr. Mauti attached copies of two invoices to his affidavit. They invoices are addressed to “Dazz Construction Inc.” and bear the name “1814219 Ontario Inc. o/u UM Construction”. They both relate to the Stanfield project. They are numbered 1850 (dated June 1, 2016) and DC_SCC_10 (dated July 4, 2017). Mr. Mauti also attached copies of cheques from 233 Ontario, made out to UM Construction, in the amounts payable pursuant to these invoices. The cheques are dated June 2, 2016 (referencing invoice 1850 dated June 2, 2016) and July 21, 2017 (referencing invoice DC_SCC_10 dated June 15, 2017).

[47] The Defendants take the position that the two invoices bearing the name “181429 Ontario Inc.” were never delivered to 233 Ontario. Ms. Budd denied receiving them. She attached to her affidavit two different invoices bearing the same numbers (1850 and DC_SCC_10) and showing the same amounts owing, but made out in the name of UM Construction without reference to 181 Ontario. She deposed that the copies of the invoices attached to her affidavit were delivered to 233 Ontario and the amounts owing were paid to UM Construction. It is notable that the dates on Ms. Budd’s copies of the invoices coincide with the invoice dates referenced on 233 Ontario’s cheques. This lends some support to the Defendant’s allegation that the invoices attached to Mr. Mauti’s affidavit are inauthentic.

[48] The record contains copies of numerous other invoices bearing only the name “UM Construction” (without reference to 181 Ontario) for work performed on the Stanfield project.

Analysis

[49] Despite the voluminous materials filed by the parties, including transcripts of cross-examinations, I am not confident that I am able to gain a full appreciation of the evidence in order to make dispositive findings of fact based on the motion record. Resolution of the credibility issues, in particular, requires a trial. The record contains contradictory evidence and provides support for both parties’ positions on the issues in dispute. It is sufficient to familiarize myself with the evidence of the parties, but that is not the same as fully appreciating the evidence in a way that permits a fair and just adjudication of the issues in dispute: Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764, at para.35; Gunraj v. Cyr, 2012 ONSC 1609, at para.38.

[50] Although I may weigh the evidence in the written record and make credibility findings without the benefit of viva voce evidence, this is not a case in which I am comfortable doing so. As Lauwers, J.A. stated in Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, at para.44:

Evidence by affidavit, prepared by a party’s legal counsel, which may include voluminous exhibits, can obscure the affiant’s authentic voice. This makes the motion judge’s takes of assessing credibility and reliability especially difficult in a summary judgment and min-trial context. Great care must be taken by the motion judge to ensure that decontextualized affidavit and transcript evidence does not become the means by which substantive unfairness enters, in a way that would not likely occur in a full trial where the trial judge sees and hears it all.

[51] There are extensive similarities in the wording of the Defendants’ affidavits (i.e., those sworn by Mr. Da Silva, Ms. Louzado, Ms. Costa and Ms. Budd). It is apparent they were drafted by counsel, not by the affiants themselves. I suspect the same is true of Mr. Mauti’s affidavit. The cross-examinations of witnesses on both sides of the case were interrupted incessantly by interjections made by counsel, which further obscured the witnesses’ evidence. For these reasons, I am not confident that the paper record faithfully captures and conveys the witnesses’ own evidence in their own voice. I feel hamstrung by my inability to see and hear the witnesses testify in their own words and by the lack of opportunity to ask the witnesses my own questions to help clarify their answers to questions posed by counsel: Trade Capital Finance Corp. v. Cook, 2019 ONSC 4950, at paras. 50-58.

[52] The available record does not give me confidence that I can fully appreciate the evidence, make the necessary findings of fact and resolve the dispute fairly and justly. The motion is, on that basis, dismissed.

[53] Even if the motion record were sufficient to enable me to arrive at a fair and just determination of the issues, the resulting ruling would constitute only a partial judgment because it would not deal with 181 Ontario’s unjust enrichment claim against the Defendants. Dismissal of 181 Ontario’s contractual claims would not dispose of its alternative claim for damages based on quantum meruit. The Ontario Court of Appeal, in the context of Rule 20.04 summary judgment motions, has repeatedly cautioned against granting partial summary judgment where there is a risk of inconsistent or duplicative findings at trial: CIBC v. Deloitte & Touche, 2016 ONCA 922; Butera v. Chown, Cairns LLP, 2017 ONCA 783. Such a risk is present in this case.

[54] Deciding the issues raised by the Defendants’ motion on a summary basis is therefore inadvisable. For that reason, I decline to make a determination regarding Dazz’s motion to dismiss 181 Ontario’s claim based on the fact that Dazz was not a party to the replacement contract. Such a determination would only deal with the contractual claims pleaded in the Amended Statement of Claim and would leave 181 Ontario’s unjust enrichment claims against Dazz and 233 Ontario to be determined at trial.

[55] For all of the above reasons, the Defendants’ motion is dismissed.

Costs

[56] At the hearing of the motion, both parties submitted Bills of Costs and made requests for an order of costs on a substantial indemnity basis. Mr. Harason, on behalf of the Defendants, sought costs of the motion in the amount of $78,083.91 and reserved the right to seek costs of the action if the action was dismissed. Ms. Hatsios, on behalf of 181 Ontario, sought costs in the amount of $48,017.46.

[57] As the successful party in the motion, 181 Ontario is entitled to its costs. I am of the view that costs should be awarded on a substantial indemnity basis for the following reasons.

[58] First, the issues were extremely important to 181 Ontario because the motion sought to dismiss their claims for payment of very large sums of money. 181 Ontario was therefore required to prepare a full response to the motion, even though it had no merit and ought not to have been brought. The serious credibility issues raised and the fact that only partial judgment could be obtained in any event militated against the wisdom of bringing such a motion, which required the parties to expend substantial resources for naught. It ought to have been clear to the Defendants that a trial would be required to arrive at a fair and just determination of the issues in dispute.

[59] Second, the conduct of the Defendants tended to lengthen the motion proceeding unnecessarily. The cross-examinations of Mr. Mauti and Ms. Ruberto were replete with inappropriate questions to which Ms. Hatsios was compelled to object. Multiple refusals resulted. Refusals were made on the basis that the questions were irrelevant, sought to elicit solicitor-client privileged information, or called for speculation from the witnesses. In my view, a significant number of the questions were properly refused. The examinations took longer than necessary because of the manner in which they were conducted by the Defendants.

[60] Third, the Defendants’ conduct was unreasonable in the following respects:

a. They improperly attempted to introduce new documentary evidence during Ms. Budd’s examination under the guise of re-examining their witness. The document and the questions posed to Ms. Budd were not within the permitted scope of re-examination. Ms. Hatsios objected to the questioning strenuously at the time, but Mr. Harason persisted, noting that “the judge will rule on it”.

b. During the cross-examination of Mr. Da Silva, Mr. Harason, on a few occasions, phrased his objections to Ms. Hatsios’s questions in a manner that was effectively tantamount to giving evidence. For example, when Ms. Hatsios asked Mr. Da Silva whether he agreed that, as of November 2017, Mr. Harason “couldn’t find the registration” of the UM Construction business name, Mr. Harason interjected before Mr. Da Silva could answer, stating, “Well, it’s not that he couldn’t find. It didn’t exist.” Ms. Hatsios had not misstated the evidence in the framing of her question and the interjection was therefore not warranted, but it signaled information to Mr. Da Silva. At one point during the cross-examination, Ms. Hatsios remarked out of obvious frustration, after Mr. Harason made a similar objection, “Your client has already given his evidence. I don’t really need yours.” Had such objections been made before a judge, Mr. Harason would have been cautioned not to lead the witness.

c. The Defendants filed an affidavit sworn by Karen Louzado, a legal assistant employed in Mr. Harason’s law firm. An exhibit attached to the affidavit consisted of email correspondence from Ms. Ruberto (181 Ontario’s lawyer) that was explicitly marked “without prejudice”. Such evidence should not have been produced to the court.

[61] The quantum of costs sought by 181 Ontario ($48,017.46) is not disproportionate given the nature, importance and complexity of the issues. It does not exceed the amount that an unsuccessful party could reasonably expect to pay for this motion, particularly in light of the Defendants’ own claim for $78,083.91 in costs.

[62] For the above reasons, and taking into consideration all of the factors listed in Rule 57, I order the Defendants to pay 181 Ontario’s costs in the amount of $48,017.46, all inclusive, within 30 days of today’s date.

Petersen J.

Released: December 20, 2019

COURT FILE NO.: CV-18-1688

DATE: 2019 12 20

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

1814219 ONTARIO INC., carrying on business as UM CONSTRUCTION, Plaintiff

AND

2332574 ONTARIO LTD. and DAZZ CONSTRUCTION INC., Defendants

RULING ON MOTION TO DISMISS

Petersen J.

Released: December 20, 2019

1814219 Ont. Inc. v. 2332574 Ont. Ltd., 2019 ONSC 7468

Case Summary

Overview

Background Facts

Positions of the Parties

Factual Issues in Dispute and Summary of Evidence

Analysis

Costs

Judge

Counsel

Parties

Areas of Law

Fact Patterns

Financial Outcomes

Issues

Statutory Provisions 3

Legal Tests 1

Legislation 2