COURT FILE NO.: CV-13-489058-00A2
MOTION HEARD: 20210527
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: 2027707 ONTARIO LTD. and JOHN KRANER, Plaintiffs
AND:
RICHARD BURNSIDE & ASSOCIATES LTD., JOHN SCHNURR, 7887035 CANADA INC., c.o.b. as CEDAR CREEK REMEDIATION and JOHN ALLEN WILFORD, Defendants
AND:
RICHARD BURNSIDE & ASSOCIATES LTD., Third Party
BEFORE: MASTER R. FRANK
COUNSEL: Matthew Urback, Counsel for the Third Party/Moving Party, Richard Burnside & Associates Ltd.
Steven D. Gadbois, Counsel for the Defendants, 7887035 Canada Inc. c.o.b. Cedar Creek Remediation and John Schnurr/Responding Parties
HEARD: 27 MAY 2021
REASONS FOR DECISION
OVERVIEW
[1] This is a motion by Richard Burnside & Associates Ltd. (“Burnside”) seeking a stay of the third party claim (the “Third Party Claim”) by the defendants 7887035 Canada Inc. c.o.b. Cedar Creek Remediation and John Schnurr (collectively, “Schnurr”) against Burnside. In the Third Party Claim, Schnurr claims: (i) contribution and indemnity from Burnside should the defendant/third party claimant be found to be liable to the plaintiffs in the main action (the “Flow-Through Claims”); and (ii) professional fees allegedly payable to Schnurr arising from the termination of Schnurr’s services (the “Fee Claim”).
[2] For the reasons that follow, the motion is granted.
FACTS
The Receivership and Receivership Order
[3] The plaintiffs, John Kraner (“Kraner”) and 2027707 Ontario Ltd. were the owners and operators of the Tobermory Lodge, a seasonal resort property in Tobermory, Ontario. In 2012, Kraner and his wife were separating, which was negatively impacting the operation of the Tobermory Lodge.
[4] On May 16, 2012, Justice Corbett made an order in Kraner’s matrimonial proceedings appointing Burnside as Receiver of the Tobermory Lodge (the “Receivership Order”) which, inter alia, defined Burnside’s role and delineated the claims that may be brought as against Burnside.
[5] The Receivership Order states, in part, that no action shall be commenced against the Receiver without leave of the court. Specifically, the Receivership Order, contains the following provisions:
NO PROCEEDINGS AGAINST THE RECEIVER
- THIS COURT ORDERS that no proceeding or enforcement process in any court or tribunal (each, a “Proceeding”), shall be commenced or continued against the Receiver except with the written consent of the Receiver or with leave of this Court.
LIMITATION ON THE RECEIVER’S LIABILITY
- THIS COURT ORDERS that the Receiver shall incur no liability or obligation as a result of its appointment or the carrying out the provisions of this Order, save and except for any gross negligence or wilful misconduct on its part, or in respect of its obligations under sections 81.4(5) or 81.6(3) of the BIA or under the Wage Earner Protection Program Act. Nothing in this Order shall derogate from the protections afforded the Receiver by section 14.06 of the BIA or by any other applicable legislation.
Completion of the Receivership
[6] On February 25, 2013, the Tobermory Lodge was sold. At about that time, the plaintiffs sued Burnside within the matrimonial proceeding for alleged misconduct. Burnside counterclaimed for alleged failure to pay accounts. In May 2013, after the sale of the Tobermory Lodge was completed, the parties reached a settlement on all outstanding issues at a judicial pre‑trial.
[7] On or about May 1, 2013, a judgment was made in the matrimonial proceedings in the form of Minutes of Settlement which contained the following release (the “Settlement Order”):
“1. The Respondent John Ivan Kraner and the Respondent, the Receiver, Richard Burnside & Associates Ltd. agree to the Settlement of the claims by the Respondent John Ivan Kraner against the Receiver, Richard Burnside & Associates and the claims by the Receiver for costs, costs orders, compensation, legal fees, expenses, all claims by other parties against the Receiver and any and all claims the Receiver has now or even can have against 2027707 Ontario Ltd., John Ivan Kraner, their representatives, agents or assigns in relation to the Receivership by the Receiver of 2027707 Ontario Ltd. and the Tobermory Lodge pursuant to the order of Justice Corbett in this court dated May 16, 2012 as follows:
d) All claims by 2027707 Ontario Ltd. and John Ivan Kraner against the Receiver shall be dismissed on a without costs basis except for any claims made by the Alta Properties Inc. and/or Tobermory Resort Inn and Suites Inc. or their assigns against 2027707 Ontario Ltd. and John Ivan Kraner in consequence of the Agreement of Purchase and Sale for the purchase of the assets of 2027707 Ontario Ltd. at 122 Bay Street South, Tobermory, Ontario and specifically the removal of certain assets of 2027707 Ontario Ltd. from the Tobermory Lodge prior to closing.” [Emphasis added.]
The Main Action
[8] In September 2013, the plaintiffs commenced the main action. In the main action, the plaintiffs alleged that, acting in concert, Schnurr and Burnside improperly converted certain property of the Tobermory Lodge.
[9] The plaintiffs did not obtain leave of the court nor the consent of Burnside before naming Burnside as a defendant in the main action.
[10] Burnside brought a motion to stay the main action and by order dated January 25, 2016, Justice Pollak ordered a stay of the main action against Burnside and refused to grant the plaintiffs leave nunc pro tunc to commence the action against Burnside (the “Stay Order”). On November 3, 2016, the Court of Appeal dismissed the plaintiffs’ appeal of the Stay Order.
The Previous Action by Schnurr against Burnside
[11] On November 22, 2013, Schnurr commenced a separate action against Burnside, bearing Court File No. CV-13-00001029-0000 (the “Previous Action”). In the Previous Action, Schnurr claimed to have been retained by Burnside to assist in the remediation and operation of the Tobermory Lodge. Schnurr also claimed that, on November 1, 2012, Burnside terminated Schnurr’s services without warning or cause and that Burnside owes Schnurr $195,542.20.
[12] On January 17, 2014, Burnside served a statement of defence in the Previous Action. On November 30, 2018, the Previous Action was dismissed for delay pursuant to Rule 48.14.
The Third Party Claim
[13] On March 16, 2018, Schnurr commenced the Third Party Claim as against Burnside. The Third Party Claim was amended on May 2, 2018 and served on Burnside on August 25, 2020.
[14] Schnurr did not obtain leave of the court nor the consent of Burnside before naming Burnside as a third party.
ISSUES
[15] The following issues arise on this motion:
i) Was Schnurr required under the Receivership Order to obtain leave of the Court before commencing the Third Party Claim against Burnside?
ii) If leave was not required to commence the Third Party Claim, are Schnurr’s claims barred by the limitation of liability provision in the Receivership Order?
iii) Should the Flow-Through Claims be stayed based on res judicata or as an abuse of process?
iv) Were the Flow-Through Claims released by the Settlement Order?
v) Should the Fee Claim be stayed based on res judicata or as an abuse of process, and is it barred by the Limitations Act?
LAW & ANALYSIS
(i) Was Schnurr required to obtain leave before commencing the Third Party Claim
[16] Schnurr commenced the Third Party Claim without obtaining leave of the court or consent from Burnside. Schnurr’s position is that the requirement in the Receivership Order for a claimant to obtain leave to commence a proceeding against the receiver is not aimed at claims such as the ones asserted in the Third Party Claim. Schnurr argues that a party hired by Burnside pursuant to powers granted under the Receiverhip Order should be protected by that order as opposed to having to obtain leave of the court or consent of the receiver in order to make a claim against the receiver.
[17] Burnside submits that the Receivership Order does not permit the commencement of “any proceeding or enforcement process in any court or tribunal” except with Burnside’s written consent or with leave of the court. Burnside also submits that, even if leave is granted or consent is provided, Burnside’s liability is limited to claims for gross negligence or wilful misconduct.
[18] Under the Receivership Order, the receiver, Burnside, was appointed to protect the assets under receivership, i.e. the assets of 2027707 Ontario Lts. o/a Tobermory Lodge. In my view, the Receivership Order protected the receiver by prohibiting the commencement of any action against the receiver other than with Burnside’s written consent or with leave of the court. This is ordinary protection provided to receivers under receivership orders, and I agree with Burnside that there is no ambiguity with respect to the applicable provision in the Receivership Order; see Canadian National Railway v. Holmes, 2015 ONSC 3038, at para. 18. (I will turn a second form of protection provided to the receiver, Burnside, in the section immediately below.)
[19] Burnside also submits that leave of the court was required in order for Schnurr to commence the Third Party Claim even though the receiver had already been formally discharged as receiver at the time the claim was commenced. The discharge order for the receivership is not included in the record and I do not have any information as to whether any general release language was included in that order. However, the Receivership Order that appointed Burnside had protections in favour of Burnside which suggests that a general release of the receiver is not necessary. Without any evidence that the applicable discharge order preserved any claims against Burnside and relieved claimants from the obligation to obtain leave of the Court to commence proceedings against Burnside, I accept Burnside’s submission that leave of the court was required notwithstanding the discharge. The Receivership Order required a party to obtain leave before commencing an action against Burnside, and this was part of the conditions under which Burnside accepted the appointment. As a result, it is fair and reasonable to accord this protection to Burnside; see 80 Aberdeen Street Ltd. v. Surgeson Carson Associates Inc. (2008), 2008 CanLII 2300 (ON SC), 40 CBR (5th) 109 (Sup. Ct. J.), at para. 44.
[20] For the above reasons, the Third Party Claim was not properly commenced and should be stayed.
(ii) If leave was not required to commence the Third Party Claim, are Schnurr’s claims barred by the limitation of liability provision in the Receivership Order?
[21] A second form of protection under the Receivership Order is the provision that in undertaking its duties as receiver, Burnside “shall incur no liability or obligation as a result of its appointment or the carrying out the provisions of this Order, save and except for any gross negligence or wilful misconduct on its part”. Once again, Schnurr’s position is that the Receivership Order is not aimed at claims such as the ones asserted in the Third Party Claim.
[22] Dealing first with the Fee Claim, Schnurr submits that this claim arises based on services Burnside contracted for and that Schnurr provided to the receiver. Schnurr argues that it is illogical to interpret the Receivership Order in a manner that would allow the receiver to incur debts to a supplier or service provider without any obligation to pay them.
[23] Given that Schnurr failed to obtain leave or consent prior to commencing the Third Party Claim, it is not necessary for me to decide whether Schnurr’s claims would be allowed to proceed had leave been obtained or had Burnside consented to the proceeding. However, if I am wrong about the leave/consent requirement, then I do not agree with Schnurr’s position with respect to the limitation on liability provision in the Receivership Order. Contrary to Schnur’s submissions, the Receivership Order provides prima facie protection to Burnside from liability for carrying out the provisions of a receivership order save and except for any gross negligence or wilful misconduct.
[24] With respect to the Fee Claim, Schnurr alleges that it was retained by Burnside and that Burnside breached its agreement with Schnurr. However, although Schnurr pleads that Burnside retained Schnurr, it would be unusual for a receiver to retain a supplier in its personal capacity as opposed to in its capacity as receiver. In any event, Schnurr’s pleadings with respect to the Fee Claim do not allege gross negligence or wilful misconduct with respect to the agreement or with respect to Burnside’s management of the receivership or the discharge. As a result, the Receivership Order provided prima facie protection to Burnside from liability for the Fee Claim, and I find that the allegations would not be sufficient to bring the Fee Claim within the “gross negligence or wilful misconduct” carve out of the limitation of liability clause. As such, I find that it is appropriate to stay the Fee Claim based on the limitation of liability provision in the Receivership Order.
[25] However, I reach a different conclusion with respect to the Flow-Through Claims. For those claims, Burnside asserts that there is no factual basis to support a claim of wilful misconduct. Relying on Canadian National Railway, Burnside argues that there are no particularized allegations with respect to the Flow-Through Claims that Burnside did something “wrong knowing it to be wrong” or demonstrated “reckless indifference”, which would constitute wilful misconduct. I do not accept Burnside’s submission that the Flow-Through Claims are barred because there are no express allegations of gross negligence or wilful misconduct, nor sufficient particulars pleaded as to Burnside’s alleged malfeasance as it relates to Schnurr. Wilful misconduct has been described as including not only intentional wrongdoing but also conduct exhibiting reckless indifference in the face of a duty to know; see Canadian National Railway at para. 18. As noted in Burnside’s own factum, the allegations in the Amended Statement of Claim include allegations that:
• Schnurr removed property of the plaintiff from the Tobermory Lodge with the express approval of Burnside thereby converting that property to his own personal use without lawful authority to do so; and,
• Burnside allowed and approved the conversion by Schnurr of the property to compensate him in part for the services performed during the Receivership.
[26] In my view, the allegations that Burnside allowed and approved conversion of property may be sufficient, if proven, for a trier of fact to find wilful misconduct. As such, I would not stay the Flow-Through Claims based solely on the limitation of liability provision in the Receivership Order.
(iii) Should the Flow-Through Claims be stayed based on res judicata or as an abuse of process?
[27] Burnside argues that the Flow-Through Claims are also barred based on res judicata/issue estoppel. Burnside submits that issue estoppel arises because of events that occurred with respect to the main action. Burnside’s argument is as follows: (1) Burnside is a defendant in the main action; (2) in the main action, the plaintiffs make claims against Burnside, as well as against the defendant/third party claimant; (3) in 2016, the receiver successfully brought a motion to stay the main action against it, given that the plaintiffs failed to first seek leave to commence the claim (which was required) and Burnside obtained the Stay Order; (4) this Court also found that the plaintiffs in the main action were not entitled to leave nunc pro tunc; and (5) the plaintiffs’ appeal of the Stay Order and denial of leave was dismissed.
[28] Issue estoppel precludes the re-litigation of issues previously decided in another proceeding. For issue estoppel to be successfully invoked, three preconditions must be met: (1) the issue must be the same as the one decided in the prior decision; (2) the prior decision must have been final; and (3) the parties to both proceedings must be the same, or their privies. (See Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, at para. 23)
[29] If these pre-conditions are met, the court, in its discretion, determines whether issue estoppel ought to be applied or whether doing so would work an injustice. (See Metropolitan Toronto Condominium Corporation No. 1352 v. Newport Beach Development Inc., 2012 ONCA 850, at para. 35).
[30] Schnurr’s position is that the test for issue estoppel is not met and the Stay Order is not a bar to the Third Party Claim. Burnside submits that the Flow-Through Claims, which relate to Burnside’s conduct as receiver, have already been judicially considered in the motion to stay the main action against Burnside and the related cross-motion by the plaintiffs for leave to commence proceedings against Burnside (collectively, the “Stay Motion”). The result of the Stay Motion was the Stay Order, which was upheld on appeal. With respect to the three-part test for issue estoppel, Burnside submits that:
a) the issues in the main action are the same as the allegations pleaded in the Flow-Through Claims. In this regard, Burnside asserts that because the Flow-Through Claims are for “contribution and indemnity”, Schnurr relies exclusively on the allegations within the Amended Statement of Claim to prosecute its Third Party Claim and there is no distinction between what the plaintiffs alleged and what Schnurr now alleges;
b) there is no question that the Stay Order was final and that it was upheld on appeal; and
c) the plaintiff and Schnurr are privies and have sufficient privity of interest for the purposes of finding res judicata. In this regard, Burnside submits that: (1) Schnurr had the opportunity to participate in the Stay Motion; (2) Schnurr could have proffered the theory as set out in the affidavit it relies on in opposition to this motion; (3) Schnurr had its own self-interest to intervene during the Stay Motion; and (4) Schnurr stood aside and allowed the plaintiffs to resist the Stay Motion on their own. On this basis, Burnside argues that Schnurr must abide by the Stay Order.
[31] I do not accept Burnside’s submission that Schnurr was aligned in interest with the plaintiffs in the main action with respect to the Stay Motion. At the time of the Stay Motion, it would not have been in Schnurr’s interest to advocate for or support the plaintiffs’ position that asserted liability against Burnside. Taking such a position could have increased Schnurr’s risk as a defendant in the main action given the allegations that: (1) Burnside and Schnurr acted in concert; and (2) the alleged liability arose from Schnurr’s conduct, which was allowed and approved by Burnside. If anything, at that time, Schnurr’s interests were more closely aligned with Burnside than with Schnurr. The claim for contribution and indemnity is something that Schnurr would only assert in the alternative, rather than as a primary position.
[32] As a result, I do not accept Burnside’s argument that the Flow-Through Claims are barred by res judicata/issue estoppel.
[33] Burnside also argues that the Flow-Through Claims should be stayed as an abuse of process. Burnside submits that the doctrine of abuse of process is not limited by any set number of categories and is broader than issue estoppel. However, the general principles of abuse of process dictate that a party should not be required to defend a cause of action previously litigated which relies on the same evidence put before or that could have been put before the previous court. (See Canam Enterprises Inc. v. Coles (2000), 2000 CanLII 8514 (ON CA), 51 O.R. (3d) 481 (C.A.), at paras. 31-32, appealed allowed on other grounds, 2002 SCC 63).
[34] In this regard, Burnside argues that the Stay Order was made on the basis that the allegations in the Amended Statement of Claim were deficient. Burnside asserts that Schnurr is requiring Burnside to defend the same cause of action with respect to the Flow-Through Claims twice, which is, in effect, another test to the Stay Order in a different forum, and that is an abuse of process.
[35] I do not agree. As noted above, I find that Schnurr was not aligned in interest with the plaintiffs in the main action for the purposes of the Stay Motion. In any event, it is not obvious that Schnurr would rely on precisely the same evidence that was put before or that could have been put before the Court on the Stay Motion. Therefore, I would not stay the Flow‑Through Claims based on abuse of process.
(iv) Were the Flow-Through Claims Released?
[36] Burnside also submits that the plaintiffs have already released any claims they may have had against Burnside. In this regard, Burnside relies on the Order of Thomson J. made in the matrimonial proceedings between the plaintiff Kraner and his wife, which incorporated executed Minutes of Settlement, containing the following release language (the “Release”):
- The Respondent John Ivan Kraner and the Respondent, the Receiver, Richard Burnside & Associates Ltd. agree to the Settlement of the claims by the Respondent John Ivan Kraner against the Receiver, Richard Burnside & Associates and the claims by the Receiver for costs, costs orders, compensation, legal fees, expenses, all claims by other parties against the Receiver and any and all claims the Receiver has now or even can have against 2027707 Ontario Ltd., John Ivan Kraner, their representatives, agents or assigns in relation to the Receivership by the Receiver of 2027707 Ontario Ltd. and the Tobermory Lodge pursuant to the order of Justice Corbett in this court dated May 16, 2012 as follows:
d) All claims by 2027707 Ontario Ltd. and John Ivan Kraner against the Receiver shall be dismissed on a without costs basis except for any claims made by the Alta Properties Inc. and/or Tobermory Resort Inn and Suites Inc. or their assigns against 2027707 Ontario Ltd. and John Ivan Kraner in consequence of the Agreement of Purchase and Sale for the purchase of the assets of 2027707 Ontario Ltd. at 122 Bay Street South, Tobermory, Ontario and specifically the removal of certain assets of 2027707 Ontario Ltd. from the Tobermory Lodge prior to closing.
[37] Burnside asserts that: (1) the claims made in the main action are not claims covered by the “carve out” in the release, i.e. they are not claims “by the Alta Properties Inc. and/or Tobermory Resort Inn and Suites Inc. or their assigns” against the plaintiffs; (2) the “carve out” addresses the scenario that a purchaser of the Tobermory Lodge received less than what it bargained for; and (3) therefore, the claims were released by the plaintiffs and are no longer actionable and thus cannot “flow through” to Schnurr. Schnurr takes the contrary position and asserts that the Flow-Through Claims include claims that derive from specific claims against the plaintiffs by Alta Properties Inc., which was the basis for the “carve out” language in the Release.
[38] The difficulty with Burnside’s position with respect to the Release is that the Court is not in a position on this motion to determine whether the plaintiffs’ claims against Burnside fall within the scope of the Release. As a such, it is not possible to conclude that the plaintiffs’ claims are no longer actionable and thus cannot “flow through” to Schnurr.
(v) Should the Fee Claim be stayed based on res judicata or as an abuse of process, and is it barred by the Limitations Act?
[39] Burnside submits that the Fee Claim is barred by the operation of the Limitations Act, 2002 and that it is barred by virtue of res judicata. Burnside also relies on Rules 2.1.01(1) and Rule 25.11 and submits that the Fee Claim is an abuse of process. Burnside argues that because the Fee Claim is a re-litigation of the Previous Action, and a collateral attack upon same, and in any event is barred by the operation of the Limitations Act, it is frivolous (in that it is devoid of merit and has little prospect of success), vexatious (in that this step was taken to annoy or embarrass the other party) and an abuse of process.
[40] With respect to the Limitations Act, Burnside submits that there can be no dispute that Schnurr discovered its claim prior to March 16, 2016 (two years prior to the issuance of the Third Party Claim) given that the Previous Action was commenced on November 22, 2013.
[41] In support of its position that the Fee Claim should be stayed based on the doctrine of res judicata, Burnside submits as follows:
a) the Fee Claim alleged in the Third Party Claim is the same as in the Previous Action. In this regard, Burnside prepared a chart that compares the claims and facts as pleaded, which is attached as Schedule “A” to these Reasons and which Burnside asserts shows that the claims are essentially identical;
b) there was an order dismissing the Previous Action, which was final and has not been appealed nor set aside; and
c) the parties to the Previous Action are the same as the parties to this proceeding.
[42] Burnside submits that prosecuting a claim that is clearly out of time is vexatious, is an abuse of process, and warrants the application of Rule 2.1.01; see Van Sluytman v. Department of Justice (Canada), 2017 ONSC 481 at paras. 14-15. Burnside also argues that Rule 25.11 should be applied to strike out the Fee Claim as an improper attempt to relitigate issues that have been decided in earlier proceedings; see 1520658 Ontario Inc. v. Ontario (Transportation), 2012 ONSC 539 at para. 30.
[43] Schnurr disputes that the Fee should be stayed based on res judicata or as an abuse of process and submits that it is not barred by the Limitations Act. Schnurr argues that the Fee Claim was commenced before the Previous Claim was dismissed and that it is a “continuation” of the Previous Claim. I do not accept Schnurr’s position on this issue.
[44] With respect to issue of whether res judicata applies in the circumstances, I am mindful that Rule 24.05 provides that the dismissal of an action for delay is not a defence to a subsequent action unless the order dismissing the action provides otherwise. However, commencing a second action, identical to one that had already been dismissed for delay, is an abuse of process; see, for example, Mintz v. Wallwin, 2009 ONCA 199. This can be the case if a subsequent action is commenced after the dismissal of the first, as well as when an identical claim is made in a second action that was commenced prior to the dismissal of the first action. In both situations, the second action can be stayed as an abuse of process.
[45] In Davies v. Hodgins, 2013 ONSC 6444, the plaintiffs commenced a Small Claims Court action that was dismissed as abandoned. The plaintiffs later brought an action in the Superior Court seeking substantially the same relief as in the Small Claims Court proceeding. The Court noted that the plaintiffs’ Small Claims Court action was dismissed as abandoned, and that the plaintiffs had been at liberty to move to set that dismissal aside. The Court held that “To permit the plaintiffs to proceed with a second, virtually identical, action would bring the administration of justice into disrepute. It would allow a collateral attack on a previous court order which had dismissed the earlier action for delay…”; see Davies at para. 7.
[46] In Bricks and More Bricks v. Conran, 2011 ONSC 983, the plaintiff commenced an action that was ultimately dismissed for delay under Rule 48.14 on October 16, 2008. On December 7, 2007, the plaintiff commenced a second action while the first action was still active. The defendant took the position that the second action was identical to the earlier action which had been dismissed in 2008 after the second action was commenced, and that the second action should be struck as an abuse of process. The Court held that it would be an abuse of process to permit the second action to stand and stayed the second action.
[47] While I need not decide the question of whether the Fee Claim is statute barred under the Limitation Act, I note that the situation is factually similar to the circumstances in Hawthorne v. Markham Stouffville Hospital, 2015 ONSC 2294. In that case, the plaintiff had commenced three separate medical malpractice claims. The third action was substantially similar to the second action, with one main difference being when the plaintiff claimed to have discovered her cause of action. The third action was commenced 5 days before the second action was dismissed as abandoned. The first action was distinct from the other two actions. At paragraph 15, the court held that “As a result of the plaintiff’s decision to proceed with the [third action] rather than continue [the second action], the limitation issue must be considered with reference to the commencement of the current proceeding, rather than the commencement of either of the previous actions.”
[48] In light of the pleadings in the Previous Action and the Third Party Claim, it is clear that Schnurr discovered the Fee Claim more than two years prior to the issuance of the Third Party Claim. For purposes of the Limitations Act, I do not accept Schnurr’s argument that the Fee Claim is a continuation of the Previous Claim. Rather, as in Hawthorne, the limitation issue must be considered with reference to the commencement of the Third Party Claim rather than the commencement of the Previous Action. Further, consistent with the principles regarding abuse of process outlined in Mintz, Davies and Bricks and More Bricks, the Court in Hawthorne commented as follows at paragraph 14: “It is worth noting that the manner in which the plaintiff has chosen to proceed was frowned upon by the Court of Appeal in Mintz v. Wallwin, 2009 ONCA 199, 79 C.P.C. (6th) 6. In Mintz, the court concluded that commencing a second action, identical to one that had already been dismissed for delay, was an abuse of process. The court remarked at para. 3 that ‘in the circumstances before us, it would bring the administration of justice into disrepute to now permit the respondent to proceed with a second identical action.’”
[49] Given that the Fee Claim is essentially identical to the claim in the Previous Action which was dismissed for delay, I find that the Fee Claim should be stayed as an abuse of process.
CONCLUSION
[50] For the reasons set out above, Burnside’s motion is granted and the Third Party Claim is hereby stayed.
[51] If the parties cannot agree on costs, they may provide the court with submissions of no more than 3 pages in length by September 15, 2021.
Master Robert Frank
DATE: 25 August 2021
SCHEDULE “A”
Previous Action Statement of Claim (2016)
Fee Claim Amended Third Party Claim
Seeks $195,542.40
Seeks $196,542.40
“Cedar Creek’s work was performed under the supervision of Burnside and it duly provided Burnside with ongoing reports of work done, monies expended on behalf of the Tobermory Lodge and monies owed to Cedar Creek.” (para. 8)
“Cedar Creek’s work was performed under the supervision of Burnside and it duly provided Burnside with ongoing reports of work done, monies expended on behalf of the Tobermory Lodge and monies owed to Cedar Creek.” (para. 9)
“As of November 1, 2012, Cedar Creek’s services were terminated without warning or cause. At that time it was owned [sic] the sum of $211,611.25 by Burnside.” (para. 9)
“As of November 1, 2012, Cedar Creek’s services were terminated without warning or cause. At that time it was owned [sic] the sum of $211,611.25 by Burnside.” (para. 10)
“Since November 1, 2012, Cedar Creek has retried equipment for which it had billed Burnside $26,330.50 from the Tobermory Lodge, reducing its entitlement by
$26,330.50 and received an invoice in the sum of $10,261.65 plumbing work done at Tobermory Lodge, increasing its entitlement by $10,261.65, for a total of
$195,542.40.” (para. 10)
“Since November 1, 2012, Cedar Creek has retried equipment for which it had billed Burnside $26,330.50 from the Tobermory Lodge, reducing its entitlement by
$26,330.50 and received an invoice in the sum of $10,261.65 plumbing work done at Tobermory Lodge, increasing its entitlement by $10,261.65, for a total of
$196,542.40.” (para. 10)