1917196 Ontario Ltd. v. Kazmi, 2022 ONSC 2289

Court File and Parties

Court File No.: CV-18-594953 Date: April 12, 2022 Superior Court of Justice - Ontario

Re: 1917196 Ontario Ltd. o/a Save On Contracting v. Sadaf Kazmi, Shazia Tareen, Tasneem Zahir and Adnan Bashir;

Before: Master C. Wiebe

Counsel: Stephen R. Dyment for 1917196 Ontario Ltd. o/a Save On Contracting (“Save On”); Robert J. Kennaley for Sadaf Kazmi, Shazia Tareen, Tasneem Zahir and Adnan Bashir;

Heard: April 11, 2022

Reasons for Decision

1In the week prior to the trial management conference on April 4, 2022, Mr. Dyment tried to email me a document of close to 1000 pages in size. My computer did not allow the document to be opened. At the trial management conference on April 4, 2022, Mr. Dyment said that Save On was trying to move for leave to be represented by a non-lawyer, namely its principal, Noorulah Kamil. I scheduled the motion to be argued on April 11, 2022 and directed that the motion material (which included a factum) be uploaded to Caselines. It eventually was so uploaded, and Mr. Kennaley delivered and uploaded a responding motion record and factum on April 8, 2022.

2On April 11, 2022, Mr. Dyment appeared, as did Mr. Kamil himself. With my leave, Mr. Kamil addressed the court at length. Mr. Kennaley addressed the court as well. It was conceded that at this time Mr. Dyment is the lawyer of record for Save On; but Mr. Kamil made it clear that he did not have confidence in Mr. Dyment going forward.

3Having read the motion material and heard submissions, I have decided to grant the requested leave on condition, pursuant to Rule 56.09 of the Rules of Civil Procedure, that $56,000 be posted by Save On on or before April 27, 2022. If that happens, Save On has leave to be represented by Mr. Kamil. If it does not happen, Save On must be represented by a lawyer of record, failing which its claim and defence to counterclaim are stayed and subject to a motion for dismissal.

4The following are my reasons for this decision. The onus rests on Save On to satisfy the court that leave should be granted; see Simpson v. Bell Mobility Inc., 2017 CarswellOnt 6464 at paragraph 7.

5The factors to be considered in granting a corporation leave to be represented by a non-lawyer under Rule 15.01(2) are aptly summarized in Canadian Entertainment Properties v. 2428399 Ontario Inc., 2020 ONSC 875 at paragraph 9. The first four factors concern the operation of the corporation: the proposed representative has been authorized by the corporation to act as its legal representative; the representative has a connection to the corporation; the corporation is closely held; and the interests of the shareholders, officers, directors, employees, creditors and other potential stakeholders are adequately protected by granting leave. The defendants accept that these factors weigh in favour of the motion.

6The defendants ask the court to consider the last three factors: whether the proposed representative is reasonably capable of comprehending the issues and advocating for the corporation; whether the corporation is financially unable to retain a lawyer; and whether there are any other factors specific to this case.

7The defendants want me to grant leave on condition that Save On post security for costs in the amount of $130,000 being close to the equivalent of what they have posted for the four Save On claims for lien, $56,426, plus the $80,000 the defendants originally paid to Tarion that was later paid into court on consent. Save On had little evidence on these three factors.

8There is no doubt that Save On has the wherewithal to pay for legal services. There is no evidence to the contrary in the motion material, and Mr. Kamil admitted as much in oral argument. He said he made $500 per hour and had more than adequate means to pay for a lawyer. Mr. Kamil just does not want Save On’s present lawyer.

9A major issue is whether Mr. Kamil can comprehend the issues and properly advocate for the corporation. Mr. Kamil argued that the Tarion related issues in the case were not within Mr. Dyment’s knowledge and experience. Yet, Mr. Kamil could not explain to me the alleged complexity of the Tarion issues he was concerned about. I appreciate that the issue of whether Mr. Bashir was a “builder” under the Tarion legislation will be a significant issue in the case. Mr. Kennaley explained that this definition may not coincide entirely with the definitions of “contractor” and “subcontractor” in the Construction Act, although he conceded that the two may overlap considerably. Mr. Kamil could not articulate his concern about Tarion to my satisfaction.

10The filed trial affidavit of Mr. Kamil also caused me concern. I agree with Mr. Kennaley that this affidavit refers to documents not in evidence, is full of hearsay evidence, refers to without prejudice communications, includes argument, is full of evidence that does not appear to be relevant, and inappropriately refers to his own discovery evidence. There is no evidence before the court as to Mr. Kamil’s previous experience with and management of construction lien litigation and virtual trials like the one scheduled in this case, although Mr. Kamil insisted in argument that he has such experience.

11What also troubled me was the penchant in the Save On motion and trial material for making serious accusations without careful substantiation, namely accusations against Tarion, against the defendants’ first lawyer, Ms. Sheikh, against Mr. Bashir, against Mr. Winter, Mr. Kennaley’s former associate, against Mr. Dyment and against Mr. Kamil’s former lawyers, Chand & Co. I also note that many of these allegations are not relevant.

12I recalled the Save On motion I heard in this action some nineteen months ago concerning the adequacy of the defendants’ Scott Schedule, a motion wherein I advised the parties strongly to resolve the motion when Mr. Kennaley became involved. It came out later that, against Mr. Dyment’s advice, Mr. Kamil refused to follow my advice and did not resolve the motion despite a reasonable offer from the defendants. This all indicates to me that Mr. Kamil will find great difficulty staying within the bounds of relevance and following my directions.

13Nevertheless, I heed the ruling of Associate Justice McAfee in Simpson, op. cit., paragraph 13 that the question of advocacy ability is “not too high [a] threshold.” I will not allow these concerns to stand in the way of leave.

14The final consideration is whether there are factors specific to this case that bear on the issue of leave. In my view, there is. This is a construction lien action, and the defendants have been forced to post security for costs in the amount of 25% of the value of the Save On four liens to clear title and sell the lands. As stated earlier, this amount is $56,426. To exercise some discipline on Mr. Kamil and to give some balance and fairness to the defendants, I believe a similar amount should be posted by Save On.

15Mr. Kennaley referred me to the decision of Master Sandler in Biotechnik Inc. v. O’Shanter Development Co., 2003 CarswellOnt 1895. In this decision, Master Sandler introduced the concept of “leveling the playing field” concerning security for costs motions in construction lien proceedings. He stated in paragraph 29 that it is a matter of procedural fairness to give defendants leave to bring security for costs motions. In paragraph 52 he stated that there is an imbalance unique to lien actions where plaintiff has the security of the land to support its lien (and costs) or the security posted by the defendant to clear title, which posted security has the required added security for costs, and where, on the other hand, the defendant facing a plaintiff with minimal assets has no security for its claim and costs should it succeed.

16I believe the same concept can apply to this motion where the defendants have been forced to post security, including security for costs, to sell the lands and now face the prospect of an unruly corporate representative without the discipline of legal costs who may make this litigation much costlier. I also note that in addition to the lien security and the security for costs already posted by the defendants, Save On has the added benefit of the Tarion $80,000 posted as security for this action. There is a need to provide some balance to the posted security for costs.

17Mr. Kennaley argued that I should also require that Save On post the equivalent of the Tarion $80,000. I am not prepared to do so. This money was posted into court on consent of both parties. The money was originally posted with Tarion due to the apparent mutual mistake of the parties as to the ability of the owners to assume the Tarion charges and responsibilities. This is, therefore, not a matter of unfairness. Also, it is not clear whether the plaintiff is “over-secured.” Should the plaintiff be found to be subcontractor, the lien security may be a fraction of what it is now.

18I note as well that I will not be giving Save On much time to post the ordered security. This short a time period is intended to preserve the present trial schedule, a result the defendants want. But it puts a sudden burden on the plaintiff that must be considered.

19A comment about the jurisdiction of Rule 56.09. Rule 56.09 allows the court to impose security for costs as a term of an order in the interests of justice, particularly where the plaintiff is obtaining an indulgence. In Whitty v. Wells, 2016 ONSC 2266, Justice Myers imposed security for costs under this rule in extending deadlines for the delivery of documents where the plaintiff had consistently contravened orders in failing to deliver the documents. In paragraph 29 His Honour stated that this rule can be used to “provide for a just outcome.” In Smith v. Aqua Timber Inc., Court File No. 621/11 Justice Sloan used this rule to impose security for costs as a term of giving the defendant corporation leave in the middle of a trial to be represented by a non-lawyer given the judge’s deep concerns about the trial having “gone off the rails.”

20In the case before me we are close to the trial hearing which starts on May 10, 2022. Trial affidavits are already being served. At this late hour, the plaintiff wants a non-lawyer to take over the running of its case despite being able to afford a lawyer, despite having a lawyer of record and despite my deep concerns about Mr. Kamil’s ability to advocate properly. The need to bring discipline to the proceeding combined with the imbalance of security for costs presently in court as mentioned above convinces me that an order for security for costs under Rule 56.09 is appropriate in this case.

21I, therefore, grant the requested leave on condition that $56,000 be posted by Save On or before April 27, 2022. If that happens, Save On has leave to be represented by Mr. Kamil. If it does not happen, Save On must be represented by a lawyer of record, failing which its claim and defence to counterclaim are stayed and subject to a motion for dismissal. The leave to be represented by Mr. Kamil if brought into being will be on a “short leash.” The court will entertain a motion on short notice if necessary to revoke the leave should circumstances require it.

22As to costs of the motion, the defendants have filed a costs outline showing actual costs of $6,847.80 and partial indemnity costs of $4,451.07. The plaintiff has filed a costs outline showing substantial indemnity costs of $3,200 and partial indemnity costs of $2,531.20. Those seeking costs can serve and file by email written submissions as to costs of no more than two pages on or before April 18, 2022. Responding written submissions as to costs of no more than two pages must be served and filed by email on or before April 22, 2022.