COURT FILE NO.: CV-19-00624361-0000 DATE: 20210111

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Canadian National Futsal Association, Plaintiff/Responding Party

AND: Canada Soccer Association Incorporated and Ontario Soccer Association Incorporated, Defendants/Moving Parties

BEFORE: Justice Vella

COUNSEL: Johnson Luyiga, non-lawyer, for the Plaintiff/Responding Party Cathleen Brennan, for the Defendant/Moving Party, Canada Soccer Association Incorporated Brigitte Morrison, for the Defendant/Moving Party, Ontario Soccer Association Incorporated

HEARD: December 4, 2020

REASONS FOR DECISION: mOTION TO SET ASIDE RULE 15.01(2) lEAVE ORDER

[1] This is a motion brought by Canada Soccer Association Incorporated, joined in by Ontario Soccer Association Incorporated, for the following relief: an order setting aside the Order of Master Josefo made on June 2, 2020 (the "Master's Order") granting leave to Johnson Luyiga to represent the Canadian National Futsal Association as a non-lawyer in this action, pursuant to Rule 15.01(2); an order requiring the Plaintiff to appoint a lawyer within 30 days, failing which the action may be stayed or dismissed; and such further and other relief as to this Honourable Court may seem just.

Background

[2] The Canadian National Futsal Association is a nonprofit corporation incorporated under the Canada Not-for-profit Corporations Act, S.C. 2009, c. 23. Its main occupation is to organize and promote an indoor sport similar to soccer called "Futsal" in Canada, and to assist coaches in developing their potential.

[3] By statement of claim issued on July 25, 2019, the Canadian National Futsal Association ("CNFA") sued the Defendants for various causes of action, many of which center around CNFA's claim that the Canada Soccer Association ("CSA") and the Ontario Soccer Association ("OSA") have breached a trademark and copyright allegedly co-owned by CNFA with the "Asociación Mundial de Futsal" in Paraguay.

[4] The statement of claim pleads foreign statutes and laws, and bases its copyright claim on a handbook authored in Paraguay in 1933, "further registered" in Paraguay in 1964 by "Federation Paraguay De Futbol De Salon", and "imported" into Canada in 1983.

[5] At the time of the issuance of the statement of claim, the CNFA was represented by a law firm. However, the law firm was removed as lawyer of record by Order of Master McGraw on January 15, 2020. One of the terms of the Order was that CNFA either appoint a new lawyer of record or bring a motion seeking leave to have it represented by a non-lawyer within 30 days of the Order.

[6] In February 2020, the CNFA brought a motion seeking leave for one of its directors, and president, Johnson Luyiga ("Mr. Luyiga"), to represent it as a non-lawyer. The motion was initially scheduled to be heard orally on March 23, 2020. However, due to the COVID-19 pandemic, the motion did not proceed on that date. The CNFA requested that the motion be heard in writing.

[7] The motion in writing was heard on June 2, 2020 resulting in the Master's Order. CSA did not oppose the motion. OSA, under disputed circumstances addressed later in these reasons, did not respond to the motion.

[8] In this action, the CNFA seeks the following relief: "special damages, including Plaintiff's loss of business and profits, Defendants' unjust enrichment, imposition of a reasonable loyalty, and any additional consequential damages for loss of profits resulting from Defendants' wrongful, unlawful, and tortious acts as alleged in the Statement of Claim in an amount sufficient to compensate the Plaintiff for Defendants' acts of defamation, malicious falsehoods, passing off, interference with economic interests, conspiracy and statutory breaches". In the original statement of claim, the CNFA sought $150,000 in "punitive, exemplary and/or aggravated damages". The CNFA also claims related relief that includes "any goods and services tax or harmonized sales tax payable on any amounts pursuant to any legislation enacted by the Government of Canada or the Government of Ontario" and costs and disbursements on a substantial indemnity basis.

[9] The claims essentially revolve around the CNFA's contention that the OSA and CSA have wrongfully interfered with its efforts to establish and successfully pursue the object of organizing and promoting the game of Futsal throughout Canada. As stated, the claims include an allegation that the OSA and CSA have infringed the CNFA's copyright and trademark which is allegedly co-owned with a foreign association called "Asociación Mundial de Futsal" ("AMF") and is located in Paraguay.

[10] The action has not yet proceeded to the point of an exchange of affidavit of documents or examinations for discovery.

[11] The following steps have occurred:

(a) Mr. Luyiga attempted to schedule two motions without prior notice to CSA or OSA. One was a request to schedule a case conference before a judge for default judgment against OSA and the other was a request to schedule an "urgent" motion for injunctive relief;

(b) On July 14, 2020, Mr. Luyiga requested CSA's consent to amend the title of proceedings to reflect the correct name of that defendant, which is "Canadian Soccer Association Incorporated". Notwithstanding that CSA provided consent by email to Mr. Luyiga, that step has not been brought to fruition;

(c) On July 17, 2020, Mr. Luyiga served a "Fresh as Amended Statement of Claim" in which the CNFA purported to add two new causes of action: defamation based on an article that was published on September 8, 2003, and a claim based on an alleged breach of ss. 78-79 of the Competition Act, R.S.C. 1985, c. C-34. CNFA also increased the claim for punitive, exemplary and/or aggravated damages from $150,000 to $15,000,000;

(d) On July 8, 2020, the OSA served a Demand for Particulars and Demand for Inspection of Documents on the CNFA;

(e) On July 27, 2020, the CSA served a Request to Admit on the CNFA;

(f) On August 11, 2020, the CNFA served a lengthy response to the Demand for Particulars and Demand for Inspection of Documents served by OSA and to the Request to Inspect served by CSA;

(g) On October 19, 2020, in advance of a scheduled case conference before me, CNFA delivered a document entitled "Advice to Her Honour Justice Vella and This Honourable Court Pertaining to the Case Conference on Wednesday, October 21, 2020" that referenced various matters including allegations related to violence within the context of Futsal associations in other countries, and requesting forms of relief including summary judgment and/or an injunction or mandatory order against the Defendants. In that document, Mr. Luyiga, on behalf of the CNFA, makes a number of inflammatory allegations against the OSA, CSA, and in some instances, their respective lawyers;

(h) A motion for summary judgment and injunctive relief to be brought by CNFA, and a cross motion for summary judgment to be brought by the CSA and OSA, have been scheduled to proceed on June 7, 2021. Mr. Luyiga also advised that the CNFA intends to bring an urgent motion for interlocutory injunctive relief prior to June 7, 2021; and

(i) A motion to strike certain paragraphs of the Fresh as amended Statement of Claim was also brought by the OSA but has been adjourned pending release of my decision in this motion.

Issue

[12] The issue before the court is to determine whether Mr. Luyiga's status as a non-lawyer representing CNFA should be revoked. This endeavor will entail a review of the record before Master Josefo, and an application of the test for granting leave to permit a non-lawyer to represent a corporation under Rule 15.01(2), to the particular evidentiary record and factual matrix in this matter.

Affidavits Filed on the Motion

[13] The CSA relied on the affidavit of James Aston sworn November 9, 2020;

[14] The CNFA relied on the affidavit of Mr. Luyiga sworn November 24, 2020 and the supplementary affidavit of Mr. Luyiga sworn December 3, 2020;

[15] The OSA did not file any affidavits.

Jurisdiction

[16] This motion was originally returnable before me on November 26, 2020. At the outset of the motion, I raised a preliminary issue with the parties concerning the source of my jurisdiction and the test for what was effectively a request to set aside the Master's Order, as no party had addressed these matters in their written materials. I also indicated to Mr. Luyiga that it might be of assistance to the court to have a better understanding of the financial circumstances of the CNFA and independent evidence from someone on behalf of the CNFA (other than him) by way of affidavit evidence. I invited Mr. Luyiga to file further affidavit evidence.

[17] In order to provide all of the parties with an opportunity to address my concerns, I granted a brief adjournment to December 3, 2020. I urged Mr. Luyiga to consult with Pro Bono Ontario legal services whom he advised he had been consulting with previously.

[18] In the interim, I received a further supplementary responding motion record from CNFA, a supplementary factum from the CSA, and an additional caselaw authority from the OSA. No factum was received from CNFA, however much legal argument was contained in Mr. Luyiga's affidavit. I proceeded with the hearing of this motion on December 4, 2020 via videoconference link. All parties were in attendance.

[19] The CNFA did not contest my jurisdiction.

[20] The CSA and OSA contend that I have jurisdiction to set aside the Master's Order under Rules 37.14 and 59.06(2)(a).

[21] In the alternative, CSA and OSA submit that I have inherent jurisdiction in these circumstances, to rectify a miscarriage of justice, under Rule 1.04.

OSA's Position: Rule 37.14(1) applies

[22] Rule 37.14 states in material part:

37.14 (1) A party or other person who,

(a) is affected by an order obtained on motion without notice;

(b) fails to appear on a motion through accident, mistake or insufficient notice; or

may move to set aside or vary the order, by notice of motion that is served forthwith after the order comes to the person's attention and names the first available date that is at least three days after service of the notice of motion.

(2) On a motion under subrule (1), the court may set aside or vary the order on such terms as are just.

(5) A motion under subrule (1) or any other rule to set aside, vary or amend an order of a master may be made,

(b) to any other master or to a judge, at a place determined in accordance with rule 37.03 (place of hearing of motions).

[23] The OSA states that it had no notice or, alternatively, insufficient notice of the original motion made to Master Josefo. At the time of the motion, Mr. Luyiga was advised that the OSA had retained Ms. Morrison's law firm as its lawyers for this matter.

[24] The OSA also submitted that the Master did not have a sworn affidavit of service before her confirming service. Furthermore, even if notice was properly given it was inadequate.

[25] Mr. Luyiga argues that because Ms. Morrison's law firm was not yet on the record (because no notice of intent to defend or statement of defence had yet been served), Ms. Morrison's law firm was not entitled to notice. Therefore, his service of the Notice of Motion on the OSA directly and on the OSA's insurer was sufficient.

[26] As I did not have the underlying affidavit of service, I requested a copy from Mr. Luyiga. I specifically requested that Mr. Luyiga send to the court a copy of the affidavit of service that he filed before the Master. Mr. Luyiga obliged me by sending a copy of the affidavit of service (with copies to the parties) immediately following the conclusion of the oral hearing. It is apparent on its face that this affidavit of service was neither signed by Mr. Luyiga nor sworn before a commissioner of oaths.

[27] Accordingly, it appears that the Master did not have proof of service of the motion record or Notice of Motion on the OSA.

[28] Proof of service is not a mere formality. Without proof of service, the court could not know whether an affected party, in this case the OSA, had notice and if so when it received notice.

[29] The Master heard this motion in writing. At the time of the hearing of the motion by the Master, only motions that were uncontested or on consent were being heard in writing. The underlying motion record was sparse consisting of a 2-page affidavit and a document attached as an exhibit from the directors of the CNFA affirming the corporation's desire to have Mr. Luyiga represent it in this action.

[30] This was an appropriate motion to be heard in writing so long as it was on consent or unopposed. At the time the Master heard this motion, it appeared to be unopposed. However, now it appears that the OSA received inadequate notice and its lawyers received no notice. It was also inappropriate for the CNFA to have purported to serve an insurer of a party.

[31] Mr. Luyiga also submitted that it was the CSA's obligation to provide notice to its co-defendant, OSA, of CNFA's motion. However, this submission is incorrect. It was the CNFA's obligation to provide proper notice of its motion to the OSA.

[32] Under Rule 37.14, I must determine not only whether the order should have been made, but also whether, having been made, it should be rescinded or varied. The court is not restricted to determining whether the initial decision was correct but may also rescind the order if there has been a change of material facts. Once a person affected by an order made without notice to it moves to set aside, I may take into account whatever additional evidence and argument is put forward by the moving party, together with the evidence that was before the court on the initial order. I must make whatever order is appropriate in light of the ultimate purpose of Rule 37.14, which is to prevent unfairness or miscarriage of justice by affording a party opportunity to present its case, provided there are no countervailing considerations: Chambers v. Muslim, 2007 CanLII 82791 (ON SC), 87 O.R. (3d) 784 (Sup. Ct., Master); Martin Estate v. Moran, 2017 ONSC 5167.

[33] I have jurisdiction to entertain this motion to set aside the Master's Order under Rule 37.14(1), since the OSA did not have adequate notice of the motion before Master Josefo, based on the record before me. I also find, in these circumstances, that this motion is timely relying on Rules 3.02, 1.04 and 2.03 as it is necessary in the interests of justice that this motion be heard.

Alternative Position: The court's inherent jurisdiction should be exercised to set aside the Master's Order

[34] In any event, both the OSA and CSA submit that I have inherent jurisdiction to set aside the Master's Order in accordance with Rule 1.04 to rectify a miscarriage of justice. They also rely on Rule 59.06(2)(a).

[35] Rule 1.04 sets out a general interpretational principle; namely that "[t]hese rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits."

[36] Rule 59.06(2)(a) provides that a party may move to set aside or vary an order on the ground that new facts have arisen, or have been discovered, since the subject order was made.

[37] The court's jurisdiction to set aside orders from motions was affirmed by Roberts J. (as she then was) in Strugarova v. Air France 2009 CanLII 40552 (Ont. Sup. Ct.), aff'd. 2009 CanLII 58072 (Ont. Div. Ct.). At para. 4, Roberts J. articulated the test for setting aside an order made on a motion as follows:

The well known principles to be considered by the court in the exercise of its discretion to re-open a motion once an order has been made are as follows:

i) Would the evidence, if presented to the court at first instance, probably have changed the result?; and

ii) Could the evidence have been obtained before the hearing and disposition of the motion by the exercise of reasonable diligence?

(671122 Ontario Ltd. v. Sagaz Industries Canada Inc., 2001 SCC 59, [2001] 2 S.C.R. 983, at paras. 20, 59)

[38] The CSA and OSA allege that there have been new material facts that have arisen since the motion that would have altered the Master's Order, and because these facts have arisen since the hearing of the motion, the evidence could not have been adduced before the Master.

[39] Based on the evidentiary record before me, I am satisfied that I have the inherent jurisdiction to hear this motion in accordance with Rule 59.06(2). Furthermore, as I am the case management judge for this proceeding, appointed pursuant to Rule 77.06, it is appropriate that I hear this motion.

[40] The onus is on the moving parties to show that the Master's Order should be set aside.

Test for setting aside a Master's Order Appointing a Non-lawyer to Represent a Corporation (Rule 15.01(2))

[41] To set aside the Master's Order, I must be satisfied that facts have arisen since the granting of that Order that justify setting it aside to prevent a miscarriage of justice and/or because it is just to do so. These facts must either be new or could not have reasonably been discovered at the time of the original hearing.

[42] A review of the motion record before the Master demonstrates that the Master had the following evidence submitted through Mr. Luyiga's affidavit and the two exhibits attached to it:

(a) Mr. Luyiga's bald allegation that CNFA could not afford to hire a new lawyer;

(b) Mr. Luyiga's bald assertion that he could "responsibly represent the plaintiff" and would continue to consult Pro Bono Ontario legal services in relation to the prosecution of this claim;

(c) Mr. Luyiga deposed that he has "business administration" and "a simple concept of business law education background" to show his competence;

(d) Mr. Luyiga deposed that he has a good knowledge of the facts and issues of the proceeding having instructed and dealt with CNFA's former lawyer;

(e) Mr. Luyiga attached, as an exhibit to his affidavit, a direction from the directors of the CNFA authorizing him to represent it in this proceeding; and

(f) Mr. Luyiga also attached the order removing the CNFA's former lawyer of record as an exhibit to his affidavit.

[43] All parties agree that the general (non-exhaustive) factors for determining whether leave should be granted to allow a non-lawyer to represent a corporation are:

(i) whether the proposed representative has been duly authorized by the corporation to act as legal representative;

(ii) whether the proposed representative has a connection to the corporation;

(iii) the structure of the corporation in terms of shareholders, officers, and directors and whether it is a closely held corporation;

(iv) whether the interests of shareholders, officers, directors, employees, creditors, and other potential stakeholders are adequately protected by the granting of leave;

(v) whether the proposed representative is reasonably capable of comprehending the issues in the litigation and advocating on behalf of the corporation;

(vi) whether the corporation is financially capable of retaining counsel; and

(vii) Any other relevant factor specific to the circumstances of the case.

(Extend-A-Call Inc. v. Dimitri Granovski et. al., 2009 CanLII 33047 (Ont. Sup. Ct.) ("Extend-A-Call Inc."), at para. 19)

[44] Some courts have observed that the threshold applied at the granting of leave stage should not be high, given that the courts are abound with self-represented litigants of varying skills. However, this threshold does require that the proposed representative be reasonably capable of comprehending the issues and articulating the case on behalf of the corporation. Furthermore, some courts have also placed a significant amount of weight on whether it would be "seriously unfair" to the opposing party to have the matter in issue advanced by a non-lawyer representative: Janamian v. Riocan, 2010 ONSC 2022 (Sup. Ct., Master).

[45] Courts have observed that access to justice is an important concern, and that it is fundamental to the integrity of the courts and the reputation of the administration of justice that parties have reasonable access to our courts. Therefore, some courts have observed that if the refusal to grant leave would effectively bar the corporation from access to justice, this factor should be given considerable weight: J.C. Nature Source v. ISO Renovation Design, 2013 ONSC 4966 at para. 13, citing Extend-A-Call Inc., and De La Rocha v. Markham Endoscopy Diagnostics Inc., 2010 ONSC 5100.

[46] There is evidence in the record that supports Mr. Luyiga's submission that he has been authorized by the CNFA to act as its legal representative and that he has a strong connection to the CNFA, as a director and its president.

[47] There is also some evidence in the record from which the structure of the CNFA can be inferred. It is a nonprofit corporation and has at least five directors. The CNFA has broad objectives which are national in scope. In his affidavit, Mr. Luyiga states that the CNFA is a closely held corporation. However, I reject that submission. It is clear that the CNFA is neither a family run or sole/closely held proprietorship style business.

[48] The evidence offered by the CNFA in relation to factors (iii) – (vi) is weak at best, notwithstanding Mr. Luyiga also relied on these same factors in the course of his legal argument.

[49] With respect to the fourth factor, there is no evidence that addresses how it is that a non-lawyer can adequately represent the interests of the stakeholders, such as the officials and players, to advance the claims in this action. Furthermore, there is some suggestion in the evidence proffered by the CNFA that the Paraguayan organization, AMF, may have an interest in the subject copyright/trademark issue, but there is no direct evidence from AMF regarding its position concerning the CNFA's decision to have Mr. Luyiga advance this action.

[50] In terms of the fifth factor, whether Mr. Luyiga can reasonably comprehend the issues and advocate on behalf of the CNFA, there is again little evidence offered by the CNFA. The lengthy affidavit sworn by Mr. Luyiga generally addresses the theories and claims of the CNFA and is largely argumentative. The fact that he may have a grasp of the facts underlying the claims does not equate into having the knowledge to apply the complex areas of law that are engaged by the Fresh as Amended Statement of Claim, which includes copyright and trademark law (engaging what appears to be a copyright registered in Paraguay), defamation, conspiracy, breach of foreign and domestic laws, and statutory causes of action. In fact, the evidence supports the opposite conclusion. I will return to this factor in more detail.

[51] Concerning the sixth factor, Mr. Luyiga states that the CNFA is unable to afford a lawyer at this time. However, in support of his submission, he relied primarily on a document the CNFA filed with the Canada Revenue Agency called "Nonprofit Organization Information Return" for the fiscal year from June 22, 2018 to June 21, 2019. This exhibit was attached to Mr. Luyiga's supplementary affidavit. A review of this document shows that the CNFA has some revenue sources, investments, and assets, albeit of a modest nature, totalling about $70,000 as of June 2019. It also lists amounts owing to Team Canada and officials in the sum of $123,000. However, attached to this document is a letter dated March 30, 2019, from CNFA advising of Canada's withdrawal from the 2019 World Cup, calling into question whether the stated liability materialized. If the liability materialized, then the CNFA may be insolvent based on the Nonprofit Organization Information Return.

[52] As well Mr. Luyiga stated that the CNFA continues to seek a lawyer. The inference is that the CNFA would prefer to have a lawyer represent it in this action. It is also noteworthy that the CNFA was initially represented by a lawyer who prepared and issued the original statement of claim.

[53] On the other hand, there is no evidence regarding the status of Mr. Luyiga's consultations with Pro Bono Ontario legal services (or any other lawyer or legal aid organization) since its appearance before Master Josefo. It will be recalled that in the affidavit of Mr. Luyiga submitted to the Master, he stated that he would have ongoing consultations with Pro Bono Ontario legal services to assist him throughout this proceeding.

[54] The CNFA did not advance any other relevant factors for the court to consider.

[55] The affidavits filed by Mr. Luyiga in response to this motion are very lengthy. However, there is little in that material that addresses the six factors mentioned above. Furthermore, the content of the affidavits raises a serious concern about Mr. Luyiga's ability to comprehend the complex legal issues in this action and steps in this action, even at a "minimally adequate" level, including the response to this motion: Murphy v. Stefaniak, 2014 ONSC 4396, at para. 11.

[56] The real contest in this motion is between the fifth and sixth factors concerning Mr. Luyiga's ability to reasonably comprehend the issues in this action (and related to that whether the interests of the CNFA and its stakeholders are ultimately adequately represented) versus the possibility that the CNFA will not be able to hire a lawyer, if leave is revoked, thereby calling into question its ability to access justice. The corollary to the fifth factor is whether it would be seriously prejudicial to the Defendants to have this action prosecuted by a non-lawyer and is also at issue. The CSA and OSA urge the court to favour the fourth factor in this situation, whereas Mr. Luyiga urges the court to be persuaded by the important principle of access to justice for the CNFA.

[57] A review of the history of the development of the presumptive requirement that, in the normal course, corporations must be represented by lawyers, and the underlying rationale, is instructive in this exercise. It is instructive because it informs the access to justice principle as applied to corporations versus individuals.

[58] At common law, corporations were required to be represented by a lawyer in litigation proceedings. In the early 20th century, the common law established that companies could only sue or defend through a solicitor. (Re London County Council and London Tramways Co. (1897), 13 Times L.R. 254; Scriven v. Jescott (Leeds) Ltd. (1908), 53 Sol. Jo. 101 (K.B.).

[59] Later, the possibility of a non-lawyer representing a corporation in a proceeding with leave from the court is recognized: Charles P. Kinnell & Co. v. Harding, Wace & Co., [1918] 1 K.B. 405 (C.A.). The following statement of Swinfen Eady L.J. demonstrates the shift from requiring corporations to always be represented by lawyers, to recognizing the circumstances under which judges may exercise discretion in permitting corporations to be represented by non-lawyers in certain circumstances:

There remains, however, the question of how such a body may appear in Court, either as plaintiff or defendant. This is provided for by the County Courts Act, 1888, s. 72. As from its nature a company cannot appear in person, not having as a legal entity any visible person, it must appear by counsel or solicitor, or by leave of the judge some other person may be allowed to appear instead of the company to address the Court, which includes the examination of the witnesses and generally conducting the case. There is no limit or restriction imposed on the judge as to the persons whom he may allow, or as to the nature of the cases in which he may allow some other person to address him instead of counsel or solicitor for the company. It is left to his discretion, but except under special circumstances he would doubtless only sanction some director or officer or regular employee of the company so appearing instead of the company, and would limit his permission to cases which he thought could properly be disposed of before him, without the assistance of either counsel or solicitor. (pp. 413 to 414)

[60] Rule 15.01(2) states that "[a] party to a proceeding that is a corporation shall be represented by a lawyer, except with leave of the court". This rule codifies the common law rule that requires corporations to be, presumptively, represented by a lawyer, while acknowledging the discretion of the court to grant leave for corporations to be represented by non-lawyers in appropriate situations.

[61] The oft-cited case in Canada for the rationale underlying the requirement that, presumptively, a corporation must be represented by a lawyer, is 2272539 Manitoba Ltd. v. Manitoba (Liquor Control Commission) (1996), 1996 CanLII 12428 (MB CA), 139 D.L.R. (4th) 9 (MB CA). In this case, the issue was whether a corporate officer could appear on behalf of the corporation in appellate court. Manitoba Queen's Bench Rule 15.01(2) provides that "[a] corporation which is a party to a proceeding may be represented by a duly authorized officer of that corporation resident in Manitoba or by a lawyer."

[62] With respect to the policy objectives underlying the rationale of Manitoba's Rule 15.01(2), Twaddle J.A. held at paras. 16, 18-20:

[16] The rule excluding corporate officers as advocates has its roots in public policy. Courts function best in our adversarial system when both sides are represented by a qualified advocate. So widely is this recognized that legal aid is available in appropriate [cases] for those individuals who lack the means to retain counsel independently. This does not mean that an individual is not permitted to appear in person if legal aid is not available or if the individual litigant chooses not to seek it, but the policy is to encourage qualified representation whenever possible.

[18] It is in keeping with this policy that corporate officers are generally not permitted to appear on behalf of their corporations in this Court. Unlike individuals, corporations cannot appear "in person". Nor is there a need for special privileges. A corporation exists only as an economic unit. If it lacks the means to retain legal counsel, its very existence is put in doubt. Natural people may be in jeopardy of going to jail, of suffering personal indignities or of being bothered by noise or smell or unwanted attention, but a corporation can only be affected by a change of figures on its balance sheet.

[19] The incorporation of a company carries with it advantages and disadvantages. Those who incorporate it limit their liability for the obligations of the company and separate the company income from their own for tax purposes. On the other hand, shareholders of the company engaged in litigation must usually arrange for legal counsel to be retained.

[20] But for this disadvantage, corporate officers could cause impecunious corporations to litigate hopeless causes without fear of personal liability for even the other side's costs. In this Court, meritless appeals by impoverished corporations would be encouraged. This would not serve the public interest.

[63] While the above quote does not address the specific facts before me and was written in an era when access to justice (from an economic perspective) was perhaps not as heightened a concern as it is today, the rationale is instructive in assessing the importance of having corporations generally represented by a lawyer, particularly where the corporation is pursuing complex claims but may not be able to afford a lawyer.

[64] Ontario courts have developed two distinct lines of authority for the issue of whether corporations should be treated more like individuals in terms of weighing the importance of a corporation's inability to afford to hire a lawyer and the challenges that poses to its ability to access justice.

[65] One line of cases emphasizes the heightened importance of the corporation's inability to afford a lawyer over the remaining factors. These cases hold that where the corporation is a closely held company, such as a family business or a sole officer, director and shareholder business, and/or the individual litigant's or proposed representative's interests are closely aligned with the corporation's interest, the court is more likely to grant leave where the company cannot afford a lawyer. These cases include Lamond v. Smith, 2004 CanLII 6218 (Ont. Sup. Ct.); Mirashrafi v. Circuit Center, 2007 CanLII 21978 (Ont. Sup. Ct.); Extend-A-Call Inc.; and 1700285 Ontario Inc. v. Vass, 2016 ONSC 1322 ("Vass"). The common thread underlying these authorities is that a closely held company is more analogous to an individual where the non-lawyer representative is the sole owner of the company and/or is directly affected by the outcome of the proceeding.

[66] For example, in Murphy, leave was granted where the position of the corporate plaintiff was "largely indistinguishable" with the proposed non-lawyer representative and the corporation held the proposed non-lawyer's representative's house as an asset.

[67] In the oft cited decision rendered in Lamond, the court was persuaded to grant leave to a closely held corporate defendant where the proposed non-lawyer representative was, himself, a co-defendant to the action; meaning that he would bear the cost consequences of any unsuccessful position or unnecessary step in the litigation.

[68] The motions in these cases were generally brought at the outset of the proceeding and therefore the courts did not have the benefit of assessing the proposed non-party representative's ability to advance the action, including an appreciation of the legal issues, evidentiary requirements, and the procedural steps involved.

[69] In the other line of cases, the courts were not dealing with closely held corporations. In these cases, the court was more concerned about the degree of complexity involved in the subject proceedings and the fairness of the process. Fairness was assessed from the perspective of the parties who are represented by lawyers who must, in turn, navigate processes that will become more expensive and less efficient because of the inexperience of the non-lawyer representing the corporation. This line of cases includes De La Rocha; J.C. Nature Source; DM Urban-Scape Property Developments Ltd. v. Body Blitz Spa East Inc. et. al., 2014 ONSC 1616 (Master); Dickinson v. Toronto & Region Conservation Authority, 2003 CarswellOnt 6019 (Ont. Sup. Ct.); and Canada Trust v. Public Guardian and Trustee, 2019 ONSC 1768.

[70] The tension that sometimes arises amongst these factors is outlined in paras. 3-5 of De La Rocha:

[3] Ultimately the court must give effect to what order is in the interests of justice and must pay heed to Rule 1.04, which directs the court to construe the rules so as to ensure the just, most expeditious and least expensive determination of every civil proceeding on its merits.

[4] When considering the interests of justice, and access to justice generally, it is readily observable that individuals have the right to represent themselves in court and corporations do not. Courts have commented on this apparent inequality and the difficulty in rationally supporting such different treatment, at least when dealing with a closely held corporation. As Quinn J. observed in Lamond [citation omitted], where a corporation is closely held and there is a sole director, officer and shareholder, it is hard to justify not allowing that individual to represent a company in view not only of the right of individuals to represent themselves, but the prevalence of individuals representing themselves in our courts.

[5] There are, of course, differences between individuals and corporations. With corporations, there may be other stakeholders involved: officers, directors, shareholders, employees, creditors and others.

Analysis

[71] In this proceeding, I now have the benefit of having seen Mr. Luyiga in action, so to speak, as the CNFA's non-lawyer representative. This factor, alone, distinguishes the current matter from many of the decisions in which leave was granted at the outset of a proceeding.

[72] Indeed, in Janamian, the court granted leave to a non-lawyer to represent the corporate defendant but, recognizing the early stage of the proceeding and the complexities of pursuing construction lien litigation at issue, expressly reserved the right to revoke the leave if the ongoing representation became unfair or prejudicial to the plaintiff.

[73] The action launched by CNFA is complex. Already it has engaged in some missteps in this proceeding (which have already been alluded to) which have prolonged this proceeding and has inevitably increased the legal costs. Certain causes of action added by Mr. Luyiga are also questionable, such as breach of the Competition Act and the defamation allegation based on a 2003 publication. As well, the CNFA has now increased its damages claim one hundred-fold from $150,000 to $15,000,000. All of these developments have occurred since Mr. Luyiga has been appointed as non-lawyer representative of the CNFA.

[74] In addition, the CSA notes that on August 11, 2020, again after the Master's Order was made, the CNFA served a response to the demand for particulars and demand for inspection of documents that included:

(a) a 1988 decision of the Federal Court of Australia;

(b) a 2012 Bulletin from the Court of Arbitration for Sport; and

(c) a 1992 decision written in Spanish.

The reliance on authorities from foreign and international jurisdictions points to the complexities with which this action is fraught, including the issue of the applicability of foreign law to the within action.

[75] By way of further example, on October 19, 2020, in advance of a scheduled case conference, the CNFA delivered a letter to the court in which it essentially raised allegations that instances of violence had been perpetrated against other foreign Futsal associations. This letter included a YouTube video link portraying a violent incident, suggesting that there is a link between the violence in foreign jurisdictions and the OSA and CSA. In that letter, the CNFA requested that I issue an injunction or mandatory order at the case conference that,

[T]he defendants and their co-conspirators are restrained from any contact and/or conduct to the plaintiff's associations in Canada and abroad or any attempt to victimization of vulnerable witnesses that may violate their personality right, or, so that they may not be victims of aberrant violence and retribution that may be interpreted as a measure or conduct intended to destroy evidence to deny the plaintiff justice in these proceedings.

[76] Allegations of conspiracy, if they fail, can attract elevated costs awards, and thus exposes the CNFA to a higher degree of financial vulnerability. These types of allegations must not be made lightly. Also, the letter was claiming relief that had to be advanced by a properly constituted motion.

[77] Furthermore, the Fresh as Amended Statement of Claim makes no such allegation linking violence in foreign countries to conduct alleged against the OSA and CSA. The letter may thus be seen as misleading and a mischaracterization of the relevant facts within the context of this litigation.

[78] These examples suggest Mr. Luyiga is not reasonably able to comprehend the legal issues that are being asserted by the CNFA or pursue those issues in a reasonably competent manner, even when measured as against a relatively low standard of minimal adequacy.

[79] In Vass, at para. 3, the court, citing 419212 Ontario Ltd. v. Astrochrome Crankshaft Toronto Ltd. (1991), 1991 CanLII 7163 (ON SC), 3 O.R. (3d) 116 (Sup. Ct., Master), placed an emphasis on "whether it would be seriously unfair to the opposing party to have the case presented or defended by a non-lawyer in light of the nature of the action".

[80] In Dickinson, Himel J. observed that the area of law being asserted by the corporate plaintiff in that proceeding was complex, involving injunctive relief and slander of title. The court ruled that it would be an injustice to the defendants to have the case presented by a non-lawyer. However, in that case, the court was not concerned that the plaintiff corporation was without means to have a lawyer (as it was a property owner). Still, the case is instructive regarding the importance of the fifth factor: whether the proposed representative is reasonably capable of comprehending the issues in the litigation.

[81] In this action, the CNFA not only advances procedurally and substantively complex causes of action; it is seeking interlocutory injunctive relief as well.

[82] Added to the complexity of this proceeding, is the pending motion for summary judgment by the CSA and OSA against the CNFA that, if successful, could terminate the action. As well, there is a pending motion by the OSA to strike certain paragraphs of the Fresh as Amended Statement of Claim, which was adjourned pending release of this decision.

[83] It does not seem to me that the interests of the corporation will be adequately served by the ongoing representation by Mr. Luyiga, or that the claims of the CNFA can be adequately and fairly advanced by a non-lawyer. The corporation is exposed, by its own pleading, to the potential of elevated costs awards. This exposure would likely be mitigated with the services of a lawyer to critically assess the viability of the causes of action and advance the most efficient case.

[84] Further, I am of the view that it would be very unfair to the defendants to have to defend this action against a corporation represented by a non-lawyer. This proceeding has already bogged down due to procedural missteps by the CNFA and the lack of coherence of its claims reflected in the Fresh as Amended Statement of Claim.

[85] In the present case, I have the benefit of seeing the complex route that the CNFA is advancing and a better opportunity, than did the Master, to assess Mr. Luyiga's capability given the steps that have now been taken, or attempted, in this proceeding.

[86] Should I permit Mr. Luyiga to continue acting on behalf of the CNFA, it is likely that the CNFA will not be able to mount effective legal arguments or have its claims effectively advocated. In light of my finding that Mr. Luyiga is not reasonably capable of comprehending the legal issues (notwithstanding the low threshold), the CNFA could be deprived of having its claims meaningfully presented and therefore heard.

[87] I am cognizant of Rule 1.04 and in particular that rule's emphasis on a matter being heard on its merits. However, in this case, I find that the CNFA will be deprived of having its matter truly determined on the merits without having a lawyer to represent it. The interests of the stakeholders of this non-profit sports organization will thus be sacrificed if I do not revoke the leave granted by the Master in the first instance. I am also cognizant that the interests of the Defendants are also to be reflected by the application of Rule 1.04.

[88] Furthermore, and in any event, I am not convinced on the record before me that the CNFA will not be able to hire a lawyer to represent its interests. I am encouraged in this view by Mr. Luyiga's representations that the CNFA is intent on hiring a lawyer, and that he will be meeting with what I understood to be the parent Futsal association with a view to securing the means to hire a lawyer.

[89] In summary, given the complexity of this action, the steps taken to date by CNFA under Mr. Luyiga's representation, and the other factors I have reviewed, I find, with the greatest of respect, that Mr. Luyiga is not reasonably capable of comprehending the issues in the litigation and advocating on behalf of the corporation, notwithstanding the relatively low threshold that this requirement presents. My finding in no way impugns the dedication and sincerity with which Mr. Luyiga has advanced this action, to the best of his ability, on behalf of the CNFA.

[90] For the reasons stated, I also find that it would be seriously unfair to the Defendants to have to defend against this action if the plaintiff is not represented by a lawyer.

Conclusion and Order

[91] In the end, I have concluded that Master Josefo's order should be set aside for the reasons stated and am revoking leave for the CNFA to be represented by Mr. Luyiga as a non-lawyer.

[92] The Defendants have requested that I provide the CNFA with 30 days to appoint a lawyer, however, I will provide CNFA until March 5, 2021, to appoint a lawyer, bearing in mind the current June 7, 2021 motions date already scheduled. I will also consider modifying the existing timetable for the hearing of these motions, if requested, once CNFA has appointed a lawyer.

[93] The CSA and CNFA are not seeking costs. OSA had not determined whether it would seek costs, if successful. I asked the OSA to circulate its costs outlines to the other parties following the motion in the event it is seeking costs. If the OSA is seeking costs, then it is to deliver its costs outline to my judicial assistant by no later than January 15, 2021. The CNFA shall deliver its written response, no longer than three typed pages, to my judicial assistant by no later than January 22, 2021.

Justice S. Vella

Date: January 11, 2021

COURT FILE NO.: CV-19-00624361-0000 DATE: 20210111

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

CANADIAN NATIONAL FUTSAL ASSOCIATION Plaintiff/Responding Party

AND:

CANADA SOCCER ASSOCIATION INCORPORATED AND ONTARIO SOCCER ASSOCIATION INCORPORATED Defendants/Moving Parties

REASONS FOR JUDGMENT

Justice S. Vella

Released: January 11, 2021