COURT FILE NO.: CV-15-852
DATE: 20220411
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: MTD Products Limited, Plaintiff
AND:
1361821 Ontario Inc. and Marko Sandal, Defendants
BEFORE: Justice D.J. Gordon
COUNSEL: Sherry A. Kettle counsel for the Plaintiff
Kelsy Gill counsel for the Defendants
HEARD: April 6, 2022 via Zoom.
ENDORSEMENT
[1] The defendants present a motion on the eve of trial, seeking:
a) adjournment of the trial to the sittings commencing November 14, 2022;
b) leave to serve and file a responding expert report;
c) leave to amend the Statement of Defence to include a counterclaim; and
d) a further Pre-Trial Conference, if necessary.
[2] Submissions were presented by counsel on April 6, 2022. Given the time constraints, I delivered a brief endorsement on April 7, 2022, dismissing the motion with written reasons to follow, and directing the case remain on the trial list for the sittings commencing April 11, 2022 but not to be called prior to April 18, 2022.
NATURE OF THE CASE
[3] The corporate parties own abutting and other lands in the City of Kitchener, said to be contaminated as a result of the business activity of one or more prior owners. The plaintiff alleges such contamination flows from the defendants’ property. It seeks declaratory relief regarding the contamination, a mandatory order for remediation, damages and other relief. The defendant has denied these allegations, saying any contamination was the result of the plaintiff’s activity.
LITIGATION HISTORY
[4] Briefly stated, the principal events are as follows:
a) Statement of Claim, issued on September 11, 2015;
b) Statement of Defence delivered on December 14, 2015;
c) Order of Sloan, J. on July 16, 2016, granted leave to Mr. Sandal to represent the corporate defendant;
d) Affidavits of Documents were exchanged over a period of time;
e) Examination for Discovery of the defendants took place on January 16, 2019, and of the plaintiff on July 31, 2020;
f) Consent signed on June 23, 2022 for Pre-Trial Conference on January 11, 2022 and placing on trial list for the sittings commencing April 11, 2022;
g) Pre-trial Conference held as scheduled; and
h) This motion, dated March 21, 2022 was given a placeholder date of March 30, 2022 and heard April 6, 2022.
EVENTS PERTAINING TO DEFENDANTS
[5] Marko Sandal is the sole officer, director and shareholder of 1361821 Ontario Inc.
[6] The company purchased its lands in 1999.
[7] Mr. Sandal was aware at that time the property may have been contaminated. He has been involved in discussions with the municipality regarding same from the outset.
[8] In 2001, Mr. Sandal gave the plaintiff permission to attend on his property for the purpose of testing. At the same time, he also retained R.W. Hilker and Associates to develop a remediation plan. Mr. Sandal engaged Clear Harbours Environmental Services with respect to remediation options. No remediation has commenced to date, some twenty-three years since the lands were acquired.
[9] Mr. Sandal was also engaged in discussions with employees of the plaintiff over the years. There is an evidentiary dispute as to the nature of those discussions. Mr. Sandal says he was never informed the plaintiff was claiming the defendants were responsible for the contamination. Ed Henderson, a Vice-President of the plaintiff, reports that Mr. Sandal was made aware of the plaintiff’s position prior to this litigation being commenced.
[10] Mr. Sandal prepared the Statement of Defence for both defendants. Despite numerous requests from Ms. Kettle, Mr. Sandal did not retain a lawyer to represent his company or seek leave of the court to represent it himself, despite numerous promises to do so. In result, the plaintiff brought a motion to strike the Statement of Defence of the corporate defendant. This resulted in the Order of Sloan, J. referred to above. It is noted that Sloan, J. granted the order on his own motion, there being no such request from the defendant.
[11] In this Statement of Defence, Mr. Sandal denies liability addressing, in great detail, the allegations contained in the Statement of Claim. Of particular interest on this motion, specifically regarding leave for an expert report, are the following allegations in the Statement of Defence:
a) Para. 23 – The Defendants believe that they have not caused any migration of any contaminants from their property on to the plaintiff’s property;
b) Para. 30 – the defendants have conducted their own investigation and trusted the Hilker Report to be accurate and true, concluding that there was no significant contamination on the property (assumed to mean the defendants’ property);
c) Para 32 – the defendants believe that such contamination was caused by the plaintiff’s own manufacturing processes and also from the solvents and all other chemicals and substances used in the day-to- day business by the previous owner of the property in close proximity to the defendants’ property;
d) Para. 36 – the defendants have not used any chemicals associated with any heat treatment or other things as they have never been in such a business not have they been associated with a business or company that uses heat treating methods in their normal operation. However, the plaintiff may use such exact methods in their natural process of conducting business on their property and must have knowledge of previous business that was conducted on their property, therefore, the plaintiff may with or without intent contaminated their own property and the defendant’s property (emphasis added).
e) Para 41 – the defendants believe that at all times the ground and underground water on the plaintiff’s property was contaminated solely by the plaintiff’s own manufacturing process; and
f) Para – 41 The groundwater is a nature phenomenon out of any control of the defendants therefore the defendants bear no liability at law or otherwise in regard to these allegations.
[12] Mr. Sandal retained a lawyer, Harry Saros, on a limited scope retainer from September 2018 to April 2019, which included attending on the Examination for Discovery of the defendants, and from June 2019 to January 2020.
[13] Mr. Sandal acknowledges receiving expert reports from plaintiff’s counsel, including in June 2021. He says that in the summer of 2021, after reviewing documents from the plaintiff and after preliminary discussions with XCG Consulting Limited, that he realized the alleged contamination could be flowing from one or more of the plaintiff’s property on to his property and that the flow of the groundwater could change in direction. No further detail was provided as to his belief.
[14] Mr. Sandal did nothing further until the Pre-Trial Conference in January 2022, on which occasion he raised his concerns. At this point, and as a result of comments from the pre-trial judge, Mr. Sandal understood he needed to retain a lawyer, seek leave to amend his Statement of Defence and to obtain an expert report.
[15] Mr. Sandal retained Ms. Gill, as agent only, to present this motion. Trial counsel are said to be retained if the trial is adjourned.
DELAY
[16] In his Affidavit on this motion, Mr. Sandal did not provide full disclosure. Such came in the responding Affidavit from the plaintiff. It is clear, Mr. Sandal has known from the outset of this case, and long before it commenced, that there were issues regarding contamination. It is also clear that he knew the plaintiff was alleging the contamination flowed from his property. Mr. Sandal alleged to the contrary in his Statement of Defence and had to know, at the very least as a result of his own Examination for Discovery and his counsel at the time, that an expert report would be needed to support his position.
[17] There has been considerable delay in this case, caused solely by Mr. Sandal and which is not satisfactorily addressed in his evidence. A self-represented litigant must educate himself. He is presumed to understand what is required in the litigation process. He cannot sit back and claim ignorance.
SHOULD LEAVE BE GRANTED
[18] The starting point is to recognize the parties consented to the trial of the action taking place at the sittings commencing April 11, 2022.
[19] There is some conflict in the caselaw as the appropriate test:
a) the need for a “substantial or unexpected change in circumstances”. See: Hill v. Ortho Pharmaceutical (Canada) Ltd., [1992] O.J. No. 1740 (Gen. Div.); and
b) a broader approach that is “necessary in the interests of justice”. See: Ginkel v. East Asia, 2010 ONSC 905; and BNL Entertainment Inc. v. Ricketts, 2015 ONSC 1737.
[20] There does not appear to be any appellate direction on this issue. The caselaw generally support the first test, the broader approach limited to unusual circumstances, such as where there is no jeopardy regarding the trial date. See, for example, Edwards v. McCarthy, 2021 ONSC 4270.
[21] The dilemma is one created by the defendants. Mr. Sandal knew about the issues in this litigation, raising some himself in the Statement of Defence, yet did nothing until the eve of trial. Having already consented to the trial sittings that commence next week, the defendants fail to meet the test, regardless of which interpretation of it is correct.
[22] I choose to address the remaining issues herein under the topic of leave as they are interconnected.
[23] Ms. Kettle and the plaintiff are ready for trial. Mr. Sandal is presumed to also be ready by virtue of his consent.
[24] To grant the relief sought will change the scope of the case and cause significant delay. Should the defendants deliver an expert report, it is likely the plaintiff would obtain a further reply report. Examinations for Discovery would be needed, particularly to address any new evidence and also the counterclaim. Additional motions are a concern. A further Pre-Trial Conference would be mandatory. The schedules of counsel are unknown. In all likelihood, the trial would be delayed for at least one year, perhaps longer.
[25] In this regard, a motion’s judge must balance the interests of the parties and the interests of the public in the proper administration of justice. See: Khimji v. Dhanani (2004), 2004 CanLII 12037 (ON CA), 69 O.R. (3rd) 790 (Ont. C.A.).
[26] In this case, Ms. Kettle has granted numerous indulgences to the defendants. However, to allow further delay when the trial sittings are set would “run contrary to the court’s obligation to see that all civil proceedings are processed in an orderly manner”. See: Paleshnuik v. Churchill et al, 2022 ONSC 902.
[27] There is concern for prejudice. Ms. Kettle makes reference to the memory of witnesses, some of whom have retired from employment with the plaintiff. However, there is no evidence in support. Of greater concern in this case is the contamination, long outstanding, never remediated and continuing to be of legitimate concern. Delay would be prejudicial.
[28] Expert reports must be served 90 days before the Pre-Trial Conference, as required in Rule 53.03(1). One of the reasons is to avoid trial delay. Leave may be granted unless prejudice that follows exceeds that of receiving it. See: Talluto v. Marcus, 2016 ONSC 3340. Delay in pursuing such an expert report may result in rejecting the request for leave where a defendant has effectively sat on his hands and prejudice would result in jeopardizing the existing trial date. See: Letchumanan v. Jayaseelan et al, 2021 ONSC 5253.
[29] Mr. Sandal had to know he needed expert evidence given his own pleading. Of further interest, Mr. Sandal was well aware of the need to address matters in this case by virtue of the comments made by Sloan, J. at the trial scheduling court on June 25, 2021, when he previously sought an adjournment. Similar comments were made by Smith, J. at the Pre-Trial Conference. Delaying the trial to the extent likely is not reasonable or appropriate.
[30] Leave to amend pleadings is rarely rejected given the language in Rule 26.01, save for non-compensable prejudice. See: Fortress Carlyle Peter St. Inc. v. 1774781 Ontario Ltd., 2021 ONSC 5322. However, no draft Amended Statement of Defence and Counterclaim was provided by the defendants. Such, in my view, is mandatory. See: Koohestani v. Mahmod, 2015 ONCA 56. Further, prejudice to the plaintiff, as previously discussed would be non-compensable, given the resultant delay.
SUMMARY
[31] I am not persuaded Mr. Sandal is as naive as he projects. He was well able to prepare a lengthy and detailed Statement of Defence. Mr. Sandal also understands the issue of contamination. He has dealt with experts before. Yet his failure to address remediation is consistent with his neglect in this case. There has been a pattern of delay caused by the defendants.
[32] This case has taken far too long to resolve or be tried. Mr. Sandal has failed to meet the test in every respect. In result, the defendants’ motion is dismissed.
[33] I expect counsel will be able to resolve the issue of costs; failing which, brief written submissions are to be exchanged and delivered to my attention by email, care of kitchener.scjja@ontario.ca within 30 days. If written submissions are not received within the prescribed time period, the issue of costs will be considered settled.
Gordon, J.