COURT FILE NO.: CV-20-00009241-0000
DATE: 2021-08-10
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
THE CORPORATION OF THE CITY OF ELLIOT LAKE
Plaintiff/Responding Party
– and –
UNITED BUNKERS INVESTORS CORPORATION
Defendant/Moving Party
Shelbi Dippold, for the Plaintiff/Respondent Party
HEARD: August 6, 2021
GAREAU J.
ENDORSEMENT
[1] Before the court are two competing motions. The defendant seeks to be exempt from the requirement under Rule 15.01 of the Rules of Civil Procedure that the corporation be represented by a lawyer in this proceeding. The plaintiff requests that the defendant’s statement of defence and counterclaim be struck because the defendant does not have a lawyer representing it in this proceeding and therefore is in non-compliance with the Rules of Civil Procedure.
[2] The claim by the plaintiff is for unpaid municipal taxes alleged to be owed by the defendant related to property located at 22 Mary Walk, Elliot Lake, Ontario. The defendant corporation is the owner of the said property. Mr. Osama Eissa is a director and fifty percent shareholder of the defendant corporation and he made representations on the motions before the court on behalf of the defendant corporation. The other fifty percent shareholder of the corporation is deceased and it is unclear to the court whether the estate of the deceased shareholder has an interest in these proceedings or whether Mr. Eissa is duly authorized by the corporation to represent all the interests in this matter. it was Mr. Eissa’s position that he is the one with all the knowledge pertaining to the corporation and to this matter and that the corporation cannot afford to retain counsel, which he feels is unnecessary given his intimate knowledge of the matter.
[3] The subject property at 22 Mary Walk in Elliot Lake has been listed for sale since February 2021 and Mr. Eissa advises that the listing price has been reduced to $549,000. It appears from Mr. Eissa’s submission to the court that the corporation intends on paying all outstanding taxes from the sale proceeds but the defendant disputes the amount of municipal taxes actually owing to the plaintiff, which the plaintiff alleges to be $95,217.19 as of May 21, 2021.
[4] The position of the plaintiff is that Mr. Eissa, without legal representation for the defendant corporation, has protracted this matter and has been unresponsive to requests for information and has not complied with agreed upon timetables to move this matter forward, such as the delivery of an affidavit of documents or conducting examinations for discovery.
[5] As is indicated in the endorsement of Cullin J., made almost one year ago (August 21, 2020), Mr. Eissa was unaware that the defendant corporation was administratively dissolved on October 25, 2019 as a result of non-filings. As noted in Justice Cullin’s endorsement of August 21, 2020, Mr. Eissa advised the court that he was attempting to sort out the affairs of the corporation and other business interests and was working with a law firm in order to do so. It appeared that these matters involving the deceased shareholder of the defendant corporation were not recent and that these matters had not been resolved, at least at the time this matter was before Justice Cullin. As noted in paragraph 10 of Justice Cullin’s endorsement dated August 21, 2020,
It was clear from Mr. Eissa’s submissions that he had been dealing with a lawyer to address business interest other than United Bunkers. Initially, he attempted to suggest that it was difficult to retain and instruct counsel due to the pandemic, but he later indicated that he had been dealing with a law firm regarding another matter since May 2020 and had paid tens of thousands of dollars to address the other matter. It was clear to me that the pandemic was not acting as a barrier to his ability to address this proceeding. It was my impression that he was attempting to defer this matter because he had other more pressing legal matters that were requiring his attention and his money.
[6] Rule 15.01(2) of the Rules of Civil Procedure requires that a party to a proceeding that is a corporation be represented by a lawyer, except with leave of the court. In Extend-a-Call Inc. v. Granovski 2009 CanLII 33047 (ON SC), [2009] Carswell Ont. 3754 (Ont. S.C.J.), Boswell J. reviewed the jurisprudence and set out a list of factors to be considered in applying Rule 15.01(2). Those factors are as follows:
(1) Whether the proposed representative has been duly authorized by the corporation to act as its legal representative;
(2) Whether the proposed representative has a connection to the corporation;
(3) The structure of the corporation in terms of shareholders, officers and directors and whether it is a closely held corporation;
(4) Whether the interests of shareholders, officers, directors, employees, creditors and other potential stakeholders are adequately protected by the granting of leave;
(5) Whether the proposed representative is reasonably capable of comprehending the issues in the litigation and advocating on behalf of the corporation. The Court should not impose too high a threshold at this stage, given that the courts abound with self-represented litigants of varying skills. The proposed representative should, however, be reasonably capable of comprehending the issues and articulating the case on behalf of the corporation;
(6) Whether the corporation is financially capable of retaining counsel. Access to justice has been a concern troubling courts at all levels in Canada for some considerable time. It is fundamental to integrity of the courts and the reputation of the administration of justice that parties have reasonable access to our courts. If the refusal to grant leave would effectively bar a corporation from access to justice, this factor should be given considerable weight; and,
(7) Any other relevant factors specific to the circumstances of the individual case.
[7] In applying these factors in De La Rocha v. Markham Endoscopy Diagnostics Inc. (2010) ONSC 5100, Justice Boswell noted at paragraph 3 that,
Ultimately the court must give effect to whether the order is in the interests of justice and must pay heed to Rule 1.04, which directs the court to construct the rules so as to ensure the just, most expeditious and least expensive determination of every civil proceeding on its merits.
[8] In applying the jurisprudence to the facts in this case, I am satisfied that Rule 15.01(2) should be applied to require that the defendant corporation have legal representation in this matter and that it is not appropriate to dispense with that requirement. The defendant corporation has already engaged a lawyer with respect to other corporate matters, and given the value of the property in question, I am satisfied that it can afford to retain legal counsel with respect to this matter. I am of the view that in the end it may be less costly to the corporation to have legal representation than to have Mr. Eissa represent the corporation and have timelines not met, further motions to the court as a result of his non-responsiveness and the delay in the resolution of this matter or having the matter adjudicated on its merits. Given the uncertainty about the deceased’s shareholders estate I am not satisfied that Mr. Eissa has been duly authorized by the corporation to act as its legal representative in this matter or that the interest of the estate of the deceased shareholder is adequately protected by an order allowing this matter to proceed without the defendant corporation having legal representation. Furthermore, I am not satisfied that Osama Eissa is capable of advancing the interests of the defendant corporation given his reluctance to follow the agreed upon timetable to move this litigation forward, including the delivery of an affidavit of documents or the attendance at an examination for discovery.
[9] Accordingly, the defendant’s request for leave of the court to dispense with legal representation for the corporate defendant is denied. It is ordered that the defendant corporation be represented by a lawyer in these proceedings in accordance with Rule 15.01(2) of the Rules of Civil Procedure. The defendant shall retain a lawyer and have that lawyer get on the record in this proceeding by September 30, 2021, failing which the defendant’s statement of defence and counterclaim dated September 15, 2020 shall be struck from the record. With respect to the request in the plaintiff’s motion for judgment in accordance with the statement of claim, that portion of the motion dated July 16, 2021 is adjourned sine die to be brought back on seven days written notice.
[10] Costs of the motions heard by the court on August 6, 2021 are reserved to the judge ultimately disposing of the action.
Gareau J.
Released: August 10, 2021
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
THE CORPORATION OF THE CITY OF ELLIOT LAKE
- AND –
UNITED BUNKERS INVESTORS CORPORATION
endorsement
Gareau J.
Released: August 10, 2021