COURT FILE NOS.: CV-19-00000419-0000/00A1
DATE: 2020-09-23
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Philip William Crawford and Hailey Brooke Crawford, Plaintiffs
AND:
Standard Building Contractors Limited (Federal Corporation 1115109-6), Standard Paving Limited (Nova Scotia Registry ID #3223128) and Shane Ross, Defendants
AND:
Christopher Misner, Third Party
BEFORE: Mew J.
COUNSEL: David Adams, for the Plaintiffs Paul Portman, for the Defendants
HEARD: in Kingston (by telephone): 9 September 2020
ENDORSEMENT
[1] In July 2019, a residence owned by the plaintiffs in Sharbot Lake was substantially damaged by fire. The defendants were hired to demolish the remnants and build a new home at the property.
[2] Although the demolition occurred, the new home has not yet been built. The plaintiffs seek to recover $137,690.50 which they say they advanced to the defendants as well as injunctive relief to prevent the dissipation of advances made to the defendants which, they claim, are impressed with a trust in their favour. They also seek damages for mental distress, aggravated damages and punitive damages.
[3] The defendants have counterclaimed and have also instituted construction lien proceedings in a separate action.
[4] The plaintiffs’ action was commenced on 2 December 2019. The relief claimed by the plaintiffs exceeded the upper limit of $100,000 which, at the time, determined the availability of the simplified procedure under Rule 76 of the Rules of Civil Procedure.
[5] Notwithstanding that their claim exceeded the $100,000 upper limit for the mandatory application of the simplified procedure, the plaintiffs elected to bring their action under the simplified procedure.
[6] Four weeks after the commencement of this proceeding, and before the defendants had delivered their statement of defence, Rule 76 of the Rules of Civil Procedure was amended to increase the upper limit for the application of the simplified procedure to $200,000 (exclusive of taxes and costs).
[7] The defendants delivered a statement of defence and counterclaim on 9 January 2020. They pleaded an objection to the action proceeding under the simplified procedure on the basis that the plaintiffs’ claim did not comply with Rule 76.02 (1).
[8] In the meantime, on 20 December 2019, the plaintiffs had obtained an interim Mareva injunction restraining the defendants from dissipating assets.
[9] The plaintiffs now seek to amend their statement of claim to limit the total damages claimed by them to $200,000. They also seek a direction that the action, including the counterclaim, will forthwith by governed by the simplified procedure, the defendants’ pleaded objection notwithstanding.
[10] The plaintiffs have also put forward other, substantive, amendments to the statement of claim. The defendants initially took issue with a number of the proposed amendments, on the basis that they made reference to as yet unproven criminal charges which the defendant Shane Ross is said to be facing. I therefore invited the plaintiffs to resubmit their proposed amended statement of claim in a form less offensive to the defendants. Subject to the correction of a numbering error and the removal of a reference to the Victims’ Bill of Rights, 1995, the amendments are no longer opposed, and leave to amend the statement of claim is therefore granted.
[11] The defendants continue, however, to oppose the action proceeding under the simplified procedure. While they do not dispute that the amended relief now sought would have brought the action within the simplified procedure if the action had been commenced on or after 1 January 2020, they argue that it would be prejudicial to their interests to now be subject to the simplified procedure. The defendants point, in particular, to the time limits on formal examinations for discovery arguing that the plaintiffs have:
Made various allegations in both their claim and the interim motions which challenge the character of the Defendants, allege intricate fraudulent schemes or misconduct and both parties are likely to have expert witnesses present at trial. The sheer amount of claims and significant disclosure, materials and arguments warrant this matter continuing through unfettered examinations for discovery under the full complement of fact-finding and questioning powers under the ordinary procedure.
[12] The defendants rely on Olivier v. 803295 Ontario Inc., 2013 ONSC 1029. That case dealt with the exercise of the court’s discretion not to apply the costs rules in an earlier version of Rule 76.13. The plaintiff’s claim, as pleaded, exceeded the then applicable $50,000 upper limit for the application of the simplified procedure. However, the damages recovered at trial were $38,261.99. An issue then arose as to whether the plaintiff should be limited to costs that would have been recoverable had she proceeded under the simplified procedure. In holding that the court should exercise its discretion not to limit the plaintiff to the costs available under a previous version of Rule 76.13, Gareau J. observed that the action involved an elderly plaintiff with significant injuries and that it had been reasonable for the plaintiff to plead damages which exceeded the $50,000 simplified procedure limit. He added that it was not in the interests of the plaintiff to be restricted in the discovery process given the nature of the case. Nor would it have been reasonable to expect the plaintiff to adhere to the confines in evidence and timelines that the summary trial provisions of the simplified procedure would have imposed. In short, the court held that the case required an ordinary trial.
[13] I do not find this authority to be of much assistance to the issue at hand. The plaintiffs have amended their statement of claim to limit the monetary relief they can recover to the upper limit of $200,000 which, since 1 January 2020, has been available in simplified procedure cases.
[14] Furthermore, the Rules of Civil Procedure expressly contemplates parties doing exactly what the plaintiffs in this action now seek to do. Rule 76.02 (7) provides:
An action that was not commenced under this Rule, or that was commenced under this Rule but continued under the ordinary procedure, is continued under this Rule if,
(a) the consent of all the parties is filed;
(b) no consent is filed but,
(i) the plaintiff’s pleading is amended under Rule 26 to comply with subrule (1), and
(ii) all other claims, counterclaims, crossclaims and third party claims comply with this Rule; or
(c) a jury notice delivered in accordance with subrule 76.02.1 (2) is struck out.
[15] In the present case, the plaintiffs purported to commence the action under the simplified procedure. The defendants objected to the application of the procedure, as they were entitled to. The plaintiffs now seek to amend their statement of claim to bring the action within the now applicable upper limit of the simplified procedure. Hence the action which, by virtue of the defendants’ objection, was continued under the ordinary procedure, may now move back to the simplified procedure. This is despite the absence of consent from the defendants: Rule 76.02 (7)(b)(i) is complied with. Furthermore, the counterclaim seeks special damages of $34,493.92 and damages for breach of contract in the amount of $161,174.88, a total of $195,668.80 and, accordingly, is also within the $200,000 upper limit for the application of the simplified procedure. Rule 76.02 (7)(b)(ii) is therefore complied with.
[16] I conclude that the action, including the counterclaim, is now governed by the simplified procedure. The application of this procedure is mandatory: Rule 76.02 (1). Not only can the defendant not opt out, there exists no other basis for removing the case from the simplified procedure.
[17] Rule 76.02(a) provides that a plaintiff shall deliver a notice under Form 76A stating that the action and any related proceedings are continued under this Rule. Such a notice should be delivered to give effect to this ruling.
Costs
[18] Rule 76.13 (1) provides costs consequences for opting in:
Regardless of the outcome of the action, if this Rule applies as the result of amendment of the pleadings under subrule 76.02 (7), the party whose pleadings are amended shall pay, on a substantial indemnity basis, the costs incurred by the opposing party up to the date of the amendment that would not have been incurred had the claim originally complied with subrule 76.02 (1), (2) or (2.1), unless the court orders otherwise.
[19] The effect of Rule 76.13 (1) is that the defendants are presumptively entitled to their costs, on a substantial indemnity basis, up to the date of the amendment. However, the court does have discretion. The circumstances of this case are somewhat unusual. The plaintiffs have wanted the application of the simplified procedure from the outset. This ambition was thwarted by the defendants, who exercised their right to object to the application of the simplified procedure. It bears noting, however, that the defendants raised this objection in a pleading delivered after the simplified procedure upper limit increased from $100,000 to $200,000. It would have been entirely predictable, given the plaintiffs’ preference for the application of the simplified procedure, that they would take the necessary steps to take advantage of the increase in the upper limit. Furthermore, I cannot ignore the fact that the plaintiffs succeeded in making out a prima facie case for a Mareva injunction. Serious allegations of dishonesty and fraud are made.
[20] It is important not to lose sight of the purpose of the simplified procedure. As H.J. Williams J. recently observed in Klassen v. Klassen, 2020 ONSC 4835, at para. 46:
The goals of the Courts of Justice Act include encouraging public access to the courts and public confidence in the administration of justice, furthering the provision of high-quality services to the public and promotion of the efficient use of public resources: Courts of Justice Act, s. 71(c), (d) and (e). The general principle at the heart of the Rules of Civil Procedure is to secure “the just, most expeditious and least expensive determination of every civil proceeding on its merits”: Rules of Civil Procedure, Rule 1.04.
[21] I would add to that observation that Rule 1.04 (1.1) requires courts, in the application of the Rules of Civil Procedure, to make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved, in a proceeding. The simplified procedure is a practical manifestation of this overarching principle.
[22] Given the somewhat unique circumstances of this case, I am not prepared to apply the costs consequences of Rule 76.13. Rather, the costs of the amendment, including any costs which the defendants say have been wasted as a result of the case proceeding under the ordinary procedure to this point, shall be in the discretion of the trial judge.
Mew J.
Date: 23 September 2020