COURT FILE NO.: CV-16-559117
DATE: 2021 07 26
SUPERIOR COURT OF JUSTICE – ONTARIO
IN THE MATTER OF the Construction Act, RSO 1990, c C.30, as amended
RE: R&V CONSTRUCTION MANAGEMENT INC., Plaintiff
- and –
MANOUCHER BARADARAN, ROYAL BANK OF CANADA and BAYBANK CAPITAL INC., Defendants
BEFORE: Master Todd Robinson
COUNSEL: J. McClelland, counsel for the plaintiff
PARTIES: M. Baradaran, in person
HEARD: April 19, 2021 (by videoconference)
REASONS FOR DECISION
Overview
[1] Manoucher Baradaran previously owned the house at 102 Church Avenue, Toronto. He contracted R&V Construction Management Inc. (“R&V Construction”) to perform interior repair and renovation work following a flood. The agreed scope of work was subsequently increased, although the required scope of work remains disputed. Ultimately, following a dispute regarding payment, R&V Construction liened.
[2] Mr. Baradaran (self-represented at the time) sued first, starting a non-lien action in Court File No. CV-16-556873 against R&V Construction, another corporation, and their principals. Mr. Baradaran claimed $500,000 in general damages and a further $500,000 in punitive, exemplary and special damages, alleging breaches of contract and conspiracy.
[3] R&V Construction subsequently started this lien action and perfected its lien. Mr. Baradaran (still self-represented) served a brief statement of defence and counterclaim, consisting of only 16 paragraphs. Mr. Baradaran subsequently retained counsel.
[4] Through his first counsel, Mr. Baradaran served motion materials to have R&V Construction’s lien discharged as invalid under s. 47 of the Construction Lien Act, RSO 1990, c C.30 (as it was then) (the “CLA”), to return security from court, and to dismiss this action. That motion was not heard for a year, during which time Mr. Baradaran’s counsel changed, cross-examinations on affidavits took place, and he ultimately returned to being self-represented. At the cross-examinations, Mr. Baradaran’s then-counsel questioned R&V Construction’s affiant on a banking transaction record that is now the subject matter of production relief in Mr. Baradaran’s motion before me.
[5] About a year after serving his defence and counterclaim in this lien action, and while his s. 47 motion was still pending, Mr. Baradaran (through his then-counsel) issued a fresh as amended statement of claim in his non-lien action. He amended the claim to more clearly plead breach of contract against R&V Construction and the second corporate defendant, as well as pleading inducing breach of contact and tortious interference against the personal defendants. The punitive damages claim was also reduced. Alleged deficiencies in R&V Construction’s work were particularized, and allegations made about R&V Construction’s principal misappropriating funds paid to fund the work.
[6] Two months after the amendment, Mr. Baradaran’s then-current counsel served a notice of discontinuance of the counterclaim in this lien action. That notice was subsequently filed with the court in January 2018.
[7] Mr. Baradaran’s s. 47 motion was heard about four months later by the former lien reference master, who granted judgment in favour of R&V Construction. Mr. Baradaran successfully moved to oppose confirmation of the reference report. On appeal from that decision to the Divisional Court, the ultimate result was upheld (albeit for different reasons than those of the motion judge). Mr. Baradaran’s motion was confirmed to be dismissed and the action was sent back to a construction lien master for disposition.
[8] Manoucher Baradaran is now self-represented again. He asks to set aside the discontinuance of his counterclaim, filed well over two years ago, and compel R&V Construction to produce further information and documents about its use of funds from the project. R&V Construction opposes and seeks leave to bring a motion for summary judgment.
[9] I have determined that Mr. Baradaran’s motion must fail, and that final disposition by way of summary judgment would expedite the resolution of the outstanding matters in dispute. Leave is accordingly granted for R&V Construction’s requested summary judgment motion, albeit on terms and a timetable that I am imposing.
Analysis
[10] Manoucher Baradaran’s requested relief requires that I apply fairly technical legal tests. Procedural motions in litigation can be daunting to some self-represented litigants. I have accordingly approached Mr. Baradaran’s motion in a manner that takes into account the required legal framework while making allowance for the fact that Mr. Baradaran is not a lawyer.
[11] Similarly, although Mr. Baradaran confirmed during oral submissions that he did not oppose deciding the case by summary judgment, I have still considered if summary judgment is necessary or would expedite resolution of the remaining issues.
Should the notice of discontinuance be set aside?
[12] Manoucher Baradaran’s statement of defence and counterclaim is brief. The only portion in the nature of a counterclaim is paragraph 16, which states, “Because of the matters pleaded above, The Defendant, ("Baradaran"), accordingly [sic] to the report of professional independent inspector seeks the damages set out in his Statement of Claim No: CV-16-556873” (emphasis in original). I am satisfied that the discontinuance had the effect of discontinuing Mr. Baradaran’s counterclaim in this lien action for the same damages being pursued in the non-lien action.
[13] I have discretion to set aside a notice of discontinuance, but only where there has been some inadvertence, mistake or misapprehension of a client’s instructions, or other exceptional circumstances: Daniele v. Johnson, 1999 CanLII 19921 (ON SCDC), [1999] OJ No 2562 (Div Ct) at para. 21. In exercising my discretion, it is also proper to consider whether Mr. Baradaran has acted within a reasonable time to set aside the discontinuance and whether any prejudice would be suffered if it is set aside: Roland v. Florence, 2018 ONSC 2754 (Master), at paras. 31 and 45.
[14] Because this is a lien action, Mr. Baradaran must show that setting aside the notice of discontinuance is necessary or would expedite the resolution of the issues in dispute: CLA, s. 67(2) (the CLA still applies by operation of s. 87.3 of the Construction Act).
[15] Setting aside the discontinuance will not expedite resolution of any issues. It will increase the number of issues for determination and likely add further procedural delay. Nevertheless, in my view, Mr. Baradaran will demonstrate necessity of the motion if he demonstrates inadvertence, mistake, misapprehension, or other exceptional circumstances supporting a set aside.
[16] Mr. Baradaran has not, though, demonstrated inadvertence, mistake, misapprehension, or other exceptional circumstances. By his own acknowledgments, Mr. Baradaran knew and understood that his claims against R&V Construction for deficiencies and incomplete work were only proceeding in the non-lien action. In my view, that fact makes it immaterial whether Mr. Baradaran actually knew about delivery of the notice of discontinuance.
[17] Mr. Baradaran argues that there was a conspiracy or collusion between his former counsel and R&V Construction’s counsel. However, alleged pressure by R&V Construction’s counsel and coordination between counsel is unsupported by any evidence, other than Mr Baradaran’s own views as expressed in his late-served reply affidavit sworn March 30, 2021.
[18] At the hearing, R&V Construction submitted that Mr. Baradaran’s reply affidavit should be struck in its entirety as scandalous and vexatious. As a matter of practicality, I did not immediately decide if it should be struck because Mr. Baradaran was unsure if he would rely on the affidavit in argument. Since Mr. Baradaran did argue “conspiracy” and influence on his former counsel, I have considered R&V Construction’s submissions that the reply affidavit should be struck.
[19] I need not consider the entire affidavit. Much of its content is irrelevant to disposition of these motions or is not scandalous, vexatious, or prejudicial. It is sufficient for me to review the paragraphs challenged by R&V Construction regarding “conspiracy” between counsel, which are what R&V Construction argues to be spurious and vexatious.
[20] I agree that the impugned paragraphs of the reply affidavit (paras. 12-14) should be struck. They collectively allege a purported conspiracy or collusion between Mr. Baradaran’s former counsel and R&V Construction’s counsel and various breaches of the lawyers’ ethical duties. No evidentiary support or foundation for the allegations is provided. The statements constitute, at their highest, opinion and argument. It is well-established that non-expert opinion and argument are improper in an affidavit, so that alone is a sufficient basis to strike the paragraphs.
[21] Mr. Baradaran’s only other evidence on the issue is his denial that he knew about or had seen the notice of discontinuance until I raised it at a hearing in early January 2021. Mr. Baradaran denies having knowledge that his lawyer served the notice of discontinuance, and further denies consenting to it. That evidence appears contradicted by an email exchange filed by Mr. Baradaran between Mr. Baradaran and both his former lawyer and a paralegal working with her.
[22] After the hearing before me in January 2021, Mr. Baradaran was provided with a copy of the notice of discontinuance by R&V Construction’s counsel. The email exchange follows that. Mr. Baradaran wrote to his former counsel a few hours after the hearing seeking information on the discontinuance. The full exchange (initially between Mr. Baradaran and his former counsel and then between Mr. Baradaran and the paralegal) is several pages long. By way of an email dated January 21, 2021, Mr. Baradaran appears to have been provided with a marked-up copy of a reporting letter dated December 27, 2017, described to have addressed the notice of discontinuance as follows:
Please see the attached reporting letter that was sent to you on December 27, 2017.
I have side-barred the important paragraphs which speak to the dismissal of your counterclaim for ease of reference.
[23] Mr. Baradaran has not tendered the marked-up reporting letter, nor does his affidavit deny receiving it. In fact, his subsequent email in the exchange seems to acknowledge that the letter does report on the discontinuance, but that he remained unsatisfied there was no proof of his written consent. In his email dated January 25, 2021, Mr. Baradaran states as follows:
The email you delivered(Forward the email) to me prove [sic] that I knew your steps regarding stopping my counterclaim, more than that, you must have a written consent with a witness that I gave you this direction, that is all you shall protect yourself, to date I have not to receive this documents, everybody can rolling hundreds of the letter you mail it to your clients, that is prove nothing.
[24] I infer from the email exchange and Mr. Baradaran’s failure to tender a copy of the pertinent reporting letter that the letter does, in fact, report on the discontinuance. It follows that Mr. Baradaran ought to have known from his counsel’s near-contemporaneous reporting letter that his counterclaim had been discontinued.
[25] Since Mr. Baradaran reasonably ought to have been aware of the discontinuance in December 2017, he has not acted within a reasonable time in bringing this motion, which is a relevant consideration. Nevertheless, if Mr. Baradaran’s first notice of the discontinuance was after-the-fact, then he may still be able to demonstrate inadvertence, mistake or misapprehension of instructions.
[26] Regardless of whether Mr. Baradaran was aware of the formal discontinuance, I am satisfied that he knew his damages claim was only being pursued in the non-lien action. During oral submissions before me, Mr. Baradaran acknowledged that he knew his deficiency, incomplete work, and other claims were not being pursued in the lien action, and were only being advanced in the non-lien action.
[27] In the course of arguing Mr. Baradaran’s prior s. 47 motion, he twice made a similar acknowledgement that he was not pursuing set-off claims for deficiencies or incomplete work in the lien action. I think it helpful to set out the relevant exchanges with the lien reference master, which are as follows:
THE COURT: On the lien claim you're not claiming any set-off for deficiencies, is that correct?
MR. BARADARAN: That's correct. [The inspection report of Rob Amani dated September 3, 2016] is nothing to do with the lien. This is for the purpose of my claim which is going to be civil. So we discuss for nothing, and that's why, that's why I'm asking my friend it says one of the reason that he requests for the trial is Mr. Amani an inspector coming, nothing to do with the lien.
THE COURT: Again, looking at the question whether there's a genuine issue for trial you’re not claiming any set off for deficiencies or incomplete work?
MR. BARADARAN: Exactly, we’re not …
THE COURT: So I could make a finding today that R&V completed its scope of work?
MR. BARADARAN: Maybe he did the work but is faulty job. Is no …
THE COURT: But you're not claiming deficiencies in this motion …
MR. BARADARAN: No.
THE COURT: … in this action?
MR. BARADARAN: No. This is regarding my money that is hostages, that's all. With the next one we go to the civil action and I'm claiming. We can bring the money, we can bring that whoever is related. But this is about the money that they take and hold it for two years. I paid, you know, I have to feed my kids, family.
[28] Rob Amani’s property inspection report dated September 3, 2016 appears to be the source of Mr. Baradaran’s allegations of deficiencies and incomplete work, and is also the “report of professional independent inspector” referenced in para. 16 of Mr. Baradaran’s statement of defence and counterclaim in this lien action. It is expressly incorporated by reference in Mr. Baradaran’s fresh as amended statement of claim in the non-lien action and identified as the source of the “numerous deficiencies” particularized in that pleading.
[29] Mr. Baradaran submits that he did not know the notice of discontinuance had been served or filed. I accept that he is being genuine in making that submission. Even so, Mr. Baradaran knew and understood that his claims for deficiencies and incomplete work were only being pursued in the non-lien action. The procedural mechanism by which that was accomplished is a matter of form, not substance.
[30] On the record before me, the evidence does not support a finding that Mr. Baradaran’s former counsel delivered the notice of discontinuance by inadvertence, mistake, or misapprehension of instructions.
[31] I also find no exceptional circumstances to set aside the discontinuance. Mr. Baradaran argues that there are efficiencies and cost savings to both parties from having the matters addressed together. Efficiencies in having related claims tried together are not the kind of “exceptional circumstances” that warrant setting aside a notice of discontinuance. It is an argument that may potentially support a motion for the non-lien action to be referred to be tried by me, either together or one after another with the lien action, but that issue is not before me (nor is it within my jurisdiction to refer an action to myself for determination).
[32] My mandate under the CLA is to ensure that this lien action be as far as possible of a summary character having regard to the quantum and issues in dispute: CLA, s. 67(1). This action has already been far from summary in nature.
[33] Although the CLA does permit a defendant to counterclaim against the lien claimant plaintiff for any matter, whether or not related to the improvement, Mr. Baradaran’s counterclaim was discontinued over two years ago. The notice of discontinuance was intentionally delivered by Mr. Baradaran’s former counsel, who had ostensible authority to deliver it on Mr. Baradaran’s behalf. It appears that Mr. Baradaran reasonably ought to have known about the discontinuance at the time, but his subsequently retained counsel assuredly ought to have known about it. Nevertheless, no steps were taken to set it aside until this motion.
[34] Notably, the discontinued counterclaim does not appear to have been raised as an issue in either Mr. Baradaran’s motion to oppose confirmation of the prior report (2019 ONSC 1551) or in the subsequent appeal to the Divisional Court (2020 ONSC 3111). Although the Divisional Court does briefly note that the counterclaim was dismissed on consent (at footnote 4), it is not otherwise mentioned in either decision.
[35] I find no basis to set aside the discontinuance. Mr. Baradaran’s claims for deficiencies and incomplete work are no longer being pursued in this lien action. That does not preclude him from pursuing his other defences pleaded in this lien action, such as the challenges to R&V Construction’s positions on price, scope, and extras.
[36] R&V Construction has tendered evidence of an unpaid costs award against Mr. Baradaran in the non-lien action, arguing that Mr. Baradaran wants to pursue his claims in this action to avoid paying that costs award. Since I am not setting aside the notice of discontinuance, I need not address that submission. Mr. Baradaran remains entitled to pursue damages for deficiencies and incomplete work in his non-lien action. Whether or not the outstanding costs award is a procedural bar to advancing that action is not before me.
Should R&V Construction be compelled to make further production?
[37] Mr. Baradaran also seeks further disclosure from R&V Construction regarding a bank account transaction record. That transaction record was marked as an exhibit during cross-examinations for the s. 47 motion. Specifically, Mr. Baradaran seeks copies of referenced cheques and particulars of listed transfers and deposits.
[38] Although framed as motion to compel answers to undertakings, the requested documents and particulars were not the subject matter of any undertaking (or refusal). From review of the transcript, Vahab (Rob) Kamranpoor was examined only on whether the transaction record was R&V Construction’s bank account, whether R&V Construction had any other bank accounts, and where R&V Construction deposited funds paid by Mr. Baradaran. Questions about the transactions themselves were not put to Mr. Kamranpoor.
[39] No rule or authority has been cited for production of the cheques or compelling further particulars of the transactions. I have authority under the Rules of Civil Procedure, RRO 1990, Reg 194 to order that R&V Construction produce any relevant document that has been omitted from its affidavit of documents and to compel answers to questions. However, neither the cheques nor the requested transaction particulars are necessary or relevant. I thereby need not address the impact of Mr. Baradaran’s counsel not having asked for them during the cross-examination.
[40] Mr. Baradaran argues that R&V Construction misused funds that should have been used to pay for subcontractors, equipment, and materials for the job. R&V Construction’s use of money paid by Mr. Baradaran is not an issue in dispute in this lien action. It is an issue in Mr. Baradaran’s non-lien action, where Mr. Baradaran expressly pleads misappropriation of those funds by R&V Construction’s principal.
[41] In my view, neither the cheques nor particulars of the transactions listed in the bank record are necessary to a proper adjudication of this lien action. They will not assist my determination of any outstanding issue. I thereby deny leave for Mr. Baradaran to move for the relief pursuant to s. 67(2) of the CLA. I would, in any event, decline to grant the relief on the basis that the cheques and particulars are not relevant.
Is summary judgment necessary or will it expedite resolution?
[42] R&V Construction argues that a summary judgment motion is both necessary and will expedite resolution of the issues in dispute. It submits that the evidentiary record from the s. 47 motion, which includes lengthy affidavit evidence from both sides on which cross-examination had already occurred, is sufficiently complete for the court to decide the case. R&V Construction submits that the parties’ evidence has already been tested and is ready to be considered by the court.
[43] I do not accept R&V Construction’s submission that a summary judgment motion is necessary. Procedural delay from Mr. Baradaran changing counsel and prior removal motions are an insufficient basis to find that summary judgment is now necessary. Notably, the greatest procedural delay arose from the opposed confirmation motion and subsequent appeal, in which Mr. Baradaran was successful. At this point, a summary trial could just as readily proceed, with or without directions allowing for use of both the existing affidavit evidence and cross-examination transcripts.
[44] I am, however, satisfied that a summary judgment motion will expedite resolution of the remaining issues in dispute. The existing record from Mr. Baradaran’s prior s. 47 motion appears to contain substantial evidence from both parties on R&V Construction’s claim. Cross-examination on the affidavits has already occurred. Since I have not set aside the discontinuance of Mr. Baradaran’s counterclaim, any necessary supplementary evidence on the claim or defences should be narrow. Out-of-court cross-examination on any such supplementary evidence is appropriate, and would permit a hearing of no more than one day. I will also have discretion under Rule 20.04(2.2) to order oral evidence, if necessary.
[45] R&V Construction has already confirmed that, for its summary judgment motion, it will rely on the evidence previously filed in response to Mr. Baradaran’s motion. It argues that Mr. Baradaran’s prior evidence should stand as his responding evidence, such that there is no need for further evidence from either party at all. I disagree.
[46] The Divisional Court expressly held that a s. 47 motion is not a motion for summary judgment and does not provide a means for a plaintiff to move for judgment (para. 46). It held that Mr. Baradaran’s motion had been mischaracterized and that he had no notice the court could grant judgment against him (paras. 44, 47 and 60).
[47] In the prior motion, Mr. Baradaran was the moving party. He had a different evidentiary onus than he will have as the responding party to a summary judgment motion. Had he known there was a risk that judgment might be granted against him, he may have tendered different or further evidence. As a matter of procedural fairness, Mr. Baradaran, as a responding party, must be afforded an opportunity to consider if he needs to supplement his prior evidence in response to R&V Construction’s request for judgment, particularly having regard to the “best foot forward” evidentiary obligation on both parties in a summary judgment motion. If Mr. Baradaran determines that that further evidence as a responding party is required, he should be entitled to tender it.
[48] I have accordingly set a timetable for the exchange of materials, including any reply evidence from R&V Construction, and fixed a hearing date for the summary judgment motion, as ordered below. With respect to facta, since a motion under Rule 20 is different than a motion under s. 47 of the CLA, each party should prepare a fresh factum rather than re-file a prior one.
[49] If the hearing date fixed for the motion cannot be accommodated by both parties, a new date may be booked on consent through my Assistant Trial Coordinator without further order or, if the parties cannot agree, a case teleconference may be arranged.
Costs
[50] R&V Construction has been successful in both motions. Typically, costs follow the event. As the lien reference master, I will be determining costs of the action following final disposition. Rather than address costs now, I have determined that in the particular circumstances of this reference it is appropriate to reserve costs of these motions to final disposition of the action, unless otherwise ordered.
[51] R&V Construction shall be entitled to its costs of Mr. Baradaran’s motion in any event of the cause and costs of its leave motion in the cause.
Disposition
[52] I accordingly order as follows:
(a) Manoucher Baradaran’s motion is dismissed.
(b) R&V Construction is granted leave to bring a motion for summary judgment, which shall proceed in accordance with the following timetable:
(i) R&V Construction shall serve its notice of motion and motion record containing the materials outlined in subparagraph (ii) by August 20, 2021.
(ii) R&V Construction’s motion record shall include a compilation of copies of all previously-sworn/affirmed affidavit evidence tendered by both R&V Construction and Manoucher Baradaran on the prior s. 47 motion and all transcripts from cross-examinations on such affidavits, with copies of any exhibits marked at such cross-examinations as separate tabs.
(iii) Manoucher Baradaran shall serve his responding motion record by September 17, 2021. The responding motion record shall include only new, supplementary evidence in support of Mr. Baradaran’s defences. It should not repeat evidence already included in his previously-sworn/affirmed affidavit evidence included in the motion record.
(iv) R&V Construction shall serve its reply motion record, if any, containing reply evidence to any supplementary evidence from Mr. Baradaran by October 6, 2021.
(v) Cross-examinations on Mr. Baradaran’s supplementary affidavits and R&V Construction’s reply affidavits, if any, shall be completed on a date or dates agreed by the parties acting reasonably by no later than October 29, 2021.
(vi) If either party intends to rely on transcripts from cross-examination(s) provided in subparagraph (v) above, then such transcripts shall be filed in an examination brief that includes, as separate tabs, any exhibits from examinations for which a transcript is filed. A single examination brief for all examination transcripts (with any exhibits) is preferred.
(vii) R&V Construction’s factum and book of authorities shall be served by November 19, 2021.
(viii) Mr. Baradaran’s responding factum and book of authorities shall be served by December 8, 2021.
(ix) Compendiums for the motion hearing are encouraged, but not required. If prepared, they shall contain only the brief portions of the cases and the brief portions of evidence to which each party intends to refer during the hearing.
(x) The motion for summary judgment shall proceed before me on Thursday, December 17, 2021 for up to a full day, commencing at 10:00 a.m., to proceed by videoconference or by personal attendance, as the parties may agree or the court will direct prior to the hearing.
(xi) The motion shall be confirmed in the ordinary course.
(c) Costs of these motions are reserved to final disposition of this action, subject to further order of the court, with R&V Construction entitled to its costs of Mr. Baradaran’s motion in any event of the cause and its costs of its leave motion in the cause.
(d) This order is effective without further formality.
MASTER TODD ROBINSON
DATE: July 26, 2021