COURT FILE NO.: CV-16-547619
DATE: 20220809
ONTARIO SUPERIOR COURT OF JUSTICE
RE: Duninger Corporation, c.b.a. Active Engineering, Plaintiff
-and-
Rami Mohamad Reda, a.k.a. Rami Reda, a.k.a. Mohamad Reda, Big Bee Corporation, Jerry Montour and John Doe, Defendants
BEFORE: Robert Centa J.
COUNSEL: Nathanial Read-Ellis, for the plaintiff
Antonios T. Antoniou and Ian Sinke, for the defendant Jerry Montour
HEARD: August 2, 2022
ENDORSEMENT
[1] In 2016, the plaintiff Duninger Corporation sued three defendants, including Jerry Montour, the moving party on this motion.
[2] On September 9, 2020, at a pre-trial conference, the parties advised Kimmel J. that they had not agreed on any facts or issues, there would be no agreed statement of facts, and there would be no admission of liability. They advised Kimmel J. that the case would require a 10-day trial.
[3] Five weeks later, the plaintiff delivered a lengthy request to admit pursuant to rule 51.02 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Among the 57 requests, the plaintiff sprinkled five requests that, in combination, asked Mr. Montour to admit that he was jointly and severally liable to the plaintiff for the full amount of its damages claim. Counsel for Mr. Montour responded meaningfully to the request to admit but inadvertently failed to respond to those five requests and, therefore, Mr. Montour was deemed to have admitted liability and damages pursuant to rule 51.03(1).
[4] Almost one year later, on the eve of trial, the plaintiff delivered a motion for judgment based exclusively on the deemed admissions. The trial was adjourned, and Mr. Montour brought this motion for leave to withdraw the deemed admissions pursuant to rule 51.05.
[5] The plaintiff accepts that Mr. Montour’s counsel made an inadvertent error when he failed to respond to five of the 57 requests. The plaintiff accepts that permitting Mr. Montour to withdraw the deemed admissions would cause it no prejudice that cannot be compensated for in costs. Nevertheless, the plaintiff will not consent to Mr. Montour withdrawing the deemed admissions and submits that the court should not grant leave to Mr. Montour to do so. I disagree.
[6] I readily grant leave to Mr. Montour to withdraw the deemed admissions. The Rules of Civil Procedure are to be liberally construed to secure the just, most expeditious, and least expensive determination of every civil proceeding on its merits: rule 1.04. The Rules of Civil Procedure should not reward taking advantage of, or acting upon, slips, mistakes, or inadvertence by counsel. Courts will exercise their discretion in order to avoid injustice. I can think of few results more unjust than refusing to permit Mr. Montour to withdraw these deemed admissions in these circumstances, so I grant Mr. Montour’s motion.
Facts
[7] In 2016, the plaintiff sued three defendants, Mohamed Reda, Big Bee Corporation, and Mr. Montour in respect of unpaid consulting and construction services.
[8] Mr. Montour filed his statement of defence on June 23, 2016. He denied all liability to the plaintiff. He specifically denied liability to the plaintiff for the unpaid consulting and construction invoices. He pleaded the entire claim was a post-event fabrication to shift the business losses to him. He pleaded that the amounts claimed by the plaintiff under the invoices were excessive.
[9] During his examination for discovery, Mr. Montour continued to deny all liability.
[10] On September 9, 2020, the parties appeared at a pre-trial conference before Kimmel J. At that time, discoveries were complete, undertakings had been fulfilled, there were to be no further pre-trial motions or motions at trial. Justice Kimmel’s report to the trial judge indicated that the trial was expected to last ten days as the parties had not agreed to any facts, were not willing to prepare an agreed statement of facts, had not agreed upon any of the issues in dispute, and that the defendants, including Mr. Montour, did not admit liability. Justice Kimmel’s report listed six issues for the trial judge to decide:
a. Was there a contract?
b. Who was the contract with?
c. Was the contract legal and enforceable?
d. Is there an agency or partnership relationship that creates liability?
e. Is the plaintiff entitled to recover for third party invoices it paid (over and above its own invoices)?
f. Is the plaintiff entitled to restitution?
[11] Justice Kimmel noted, “Other than what is reflected in the joint chronology, there are unlikely to be agreed facts. Credibility is a significant issue in this case. Plaintiff’s counsel will serve a request to admit by October 15, 2020.”
[12] On October 16, 2020, the plaintiff served a 57-item request to admit on Mr. Montour and the other defendants. The plaintiff also requested that the defendants admit the authenticity of 237 documents. On November 4, 2020, counsel for Mr. Montour served his response to the request to admit. It read as follows:
Admits to the truth of facts numbers: n/a.
Admits the authenticity of documents numbers: n/a.
Denies the truth of facts numbers: 9, 10, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 27, 36, 37, 42, 44, 45, and 46.
Denies the authenticity of documents numbers: n/a.
Refuses to admit the truth of facts numbers 1, 2, 3, 4, 5, 6, 7, 8(a), 8(b), 26, 28, 29, 30, 31, 32, 33, 34, 35, 38, 39, 40, 41, 43, 47, 48, 49, 51, 52, 54 for the reason that Mr. Montour has no knowledge as to these alleged facts, and fact number 11 on the grounds that counsel has been unable to very whether Mr. Montour was convicted and if so, what sentence may have been ordered.
Refuses to admit the authenticity of documents 1-235 for the following reasons: Mr. Montour was not involved in the creation of these documents and has no first-hand knowledge as to their creation or circulation and as particularly regards documents 223-225, in addition insufficient knowledge or information so as to attest to their authenticity.
[13] The response provided by Mr. Montour’s counsel was not a blanket denial or an otherwise cursory response. It complied with rule 51.03. Mr. Montour, however, did not respond to five requests: #50, 53, 55, 56, and 57. Those questions read as follows:
Pursuant to the Outstanding Active Engineering Invoices, Active Engineering is owed $274,103 USD, plus contractual interest of 1.5% per month, for work performed and services provided in relation to the Project.
Mr. Reda agreed to repay Active Engineering for the Platt and Fowler Payments.
Active Engineering has also been charged the following in respect of amounts owed by Mr. Reda in relation to the Project, which Active Engineering must remit to GB Systems, Inc. when it receives payment…$63,299.
The total debt owing to Active Engineering is $437,211 USD, plus interest of 1.5% per month on the Outstanding Active Engineering Invoices (the "Total Debt").
Mr. Reda, Mr. Montour, and Big Bee are jointly and severally liable to Active Engineering for the Total Debt.
[14] On July 22, 2021, shortly after the plaintiff settled with the other two defendants, the parties appeared at a further pre-trial conference before Sharma J., who scheduled an urgent motion to address issues surrounding the proposed Pierringer agreement. The endorsement indicates that the trial was scheduled to begin on September 20, 2021. No mention was made of the deemed admissions before Sharma J.
[15] On September 15, 2021, counsel for the plaintiff wrote to counsel for Mr. Montour to list the witnesses it intended to call and to provide a chart of admitted facts that contained the deemed admissions. Counsel for Mr. Montour responded by asking for a will-say from one of the witnesses but did not mention the chart of admitted facts.
[16] On September 17, 2021, three days before the start of trial, and about 11 months after Mr. Montour responded to the request to admit, the plaintiff served a notice of motion seeking judgment against Mr. Montour. The plaintiff sought the equivalent of $437,211 USD, plus interest since 2015. The plaintiff listed the following grounds for its motion for judgment against Mr. Montour:
(d) On October 16, 2020, the Plaintiff, Duninger Corporation, c.b.a. Active Engineering ("Active Engineering"), served a Request to Admit on the Defendants, including Jerry Montour, dated the same (the "Request to Admit").
(e) The Request to Admit is attached as Schedule "A" to this Notice of Motion.
(f) On November 4, 2020, Mr. Montour provided his response to the Plaintiff's Request to Admit, dated the same (the "Response to Admit").
(g) The Response to Admit is attached as Schedule "B" to this Notice of Motion.
(h) The Response to Admit lists several paragraph numbers from the Request to Admit for which Mr. Montour (i) denied the truth, and (ii) refused to admit the truth.
(i) Mr. Montour's Response to Admit makes no reference to the following facts listed in the Request to Admit (collectively, the "Deemed Admissions").[^1]
(j) The Deemed Admissions admit that Mr. Montour is severally liable to Active Engineering for the full amount of the "Total Debt", being $437,211 USD, plus interest of 1.5% per month on $274,103 USD.
(k) The Deemed Admissions are sufficient to establish Mr. Montour's liability to Active Engineering in the requested amount and to grant judgment accordingly.
[17] The plaintiff indicated that the request to admit and Mr. Montour’s response were the only pieces of evidence necessary for the motion.
[18] On September 20, 2021, Sanfilippo J. adjourned the trial. Mr. Montour then brought this motion.
Position of the plaintiff
[19] The plaintiff submits that by failing to respond to requests #50, 53, 55, 56, and 57, Mr. Montour was deemed to admit the truth of those statements pursuant to rule 51.03(3). I agree.
[20] I note that there is no evidence that the plaintiff had any reason to believe that Mr. Montour would admit his liability and the plaintiff’s preferred damages calculation. Mr. Montour had continuously disputed the very facts the plaintiff requested him to admit. The primary purpose of the request to admit procedure is not to achieve deemed admissions of matters that are very much disputed: Furgiuele v. Don Casselman Global Enterprises, 2013 ONSC 7302, at para. 40; Jones v. Union Gas Co. of Canada (1978), 1978 CanLII 1574 (ON SC), 20 O.R. (2d) 229 (Sup.Ct.), at para 13.
[21] Nevertheless, the plaintiff submits that the court should not grant leave to Mr. Montour to withdraw the deemed admissions pursuant to rule 51.05 unless he can prove three things:
a. there is a triable issue in respect to the truth of the admission;
b. there is a reasonable explanation for the withdrawal, such as inadvertence or wrong instructions; and
c. the withdrawal will not result in any prejudice that cannot be compensated in costs.
[22] For this proposition, the plaintiff cites Champoux v. Jefremova, 2021 ONCA 92, para. 28, which was a medical malpractice case. In that case, the plaintiff asked the defendant doctor to admit that, on the date of treatment, the plaintiff had a perianal abscess. The defendant refused to admit that fact and stated in the response to request to admit that on the date in question, the plaintiff had a “buttock abscess/swollen nodule in the general perianal area.” During cross-examination, counsel for the plaintiff put the defendant’s admission to the defence expert witness. The defence expert testified that, given that admission, the defendant fell below the standard of care. The next day, counsel for the defendant attempted to withdraw that admission. The facts of Champoux are, obviously, far removed from the facts of this case, but I will accept that its test applies here.
[23] The plaintiff concedes that Mr. Montour has satisfied the second and third branches of the Champoux test. The plaintiff “does not dispute the evidence of Mr. Montour’s lawyer that the failure to respond to the Request to Admit in respect of [questions #50, 53, 55, 56, and 57] was inadvertent.” The plaintiff also concedes that the withdrawal of the deemed admissions will not result in any prejudice that cannot be compensated in costs.
[24] The only question, therefore, is whether or not there is a triable issue in respect to the truth of the admission. The plaintiff submits that to establish a triable issue, Mr. Montour must demonstrate that there is an arguable case on the merits: Phillips v. Disney, 2018 ONSC 1021, at paras. 19 to 25. The plaintiff concedes this is a low bar but says that Mr. Montour has not met it. I disagree.
[25] It is only necessary to look at the plaintiff’s notice of motion for judgment to understand that withdrawing the admissions establishes triable issues. As the plaintiff argued in the notice of motion, “The Deemed Admissions are sufficient to establish Mr. Montour's liability to Active Engineering in the requested amount and to grant judgment accordingly.” With the deemed admissions, the plaintiff gets judgment. Without the deemed admissions, the plaintiff faces a ten-day trial to prove that it is entitled to judgment.
[26] The question is not whether Mr. Montour will succeed at trial, it is only whether or not the defence is triable: BNP Paribas (Canada) v. Bartlett, 2012 ONSC 5604 at para. 12 (Div. Ct.); Farlinger v. Hood, 2006 CanLII 32321 (ONSC), at para. 33.
[27] I have no doubt that Mr. Montour’s position would be irretrievably prejudiced unless he is given leave to withdraw the deemed admissions. Absent the deemed admissions, the plaintiff is required to prove that it is owed money for work performed in relation to the project, that Mr. Reda agreed to repay certain amounts to the plaintiff, that it must remit amounts owed by Mr. Reda to a third party, that its debts at issue exist and do so in the amounts claimed, and (significantly) that Mr. Montour is liable for these amounts. The plaintiff may well succeed at trial, but these are all quintessentially triable issues on which it bears the burden of proof.
[28] I find that Mr. Montour has met the Champoux test. I grant Mr. Montour’s motion and leave for him to withdraw the deemed admissions to requests #50, 53, 55, 56, and 57 in the request to admit.
[29] I close by echoing the words of Morgan J., “to reiterate the crucial point, a Request to Admit is a means to foster the timely and efficient adjudication on its merits. It is not a means by which to avoid addressing the merits.”: Furgiuele, at para. 44; see also National Utility Service (Canada) Ltd. v. Kenroc Tools Inc. (1995), 34 C.P.C. (3d) 362.
[30] At the hearing of this motion, the parties indicated that they had exchanged costs outlines but were not in a position to settle the costs of this motion. If the parties are not able to resolve the issue of costs between them, Mr. Montour may deliver submissions of no more than three pages (exclusive of the costs outline) to my judicial assistant on or before August 16, 2022. The plaintiff may then deliver submissions of no more than three pages (exclusive of the costs outline) on or before August 23, 2022. There will be no reply submissions without leave.
Robert Centa J.
Date: August 9, 2022
[^1]: The plaintiff then included a screenshot of questions 50, 53, 55, 56, and 57, from the request to admit.