COURT FILE NO.: CV-21-0194-00
DATE: 2022-10-28
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
2801100 Ontario Inc.
No one appearing
Plaintiff
- and -
River Green (Thunder Bay) Inc.
M. Singh for Defendant moving party
Defendant
HEARD: in writing at Thunder Bay, Ontario
Mr. Justice F. Bruce Fitzpatrick
Decision On Motion Made Without Notice in Writing
[1] The defendant moves without notice for default judgment on its counterclaim against the plaintiff. It does so as the plaintiff did not defend the counterclaim. Further the plaintiff’s claim was struck out in its entirety on April 11, 2022. The defendant noted the plaintiff in default on April 23, 2022.
[2] The background of this matter is factually complex. I have been case managing several actions involving this defendant. Presently a bankruptcy proceeding has been brought against it by one of its creditors.
[3] The defendant has provided a draft default judgment in its motion materials. The terms of the judgment requested are as follows:
THIS COURT ADJUDGES that the Plaintiff has wrongfully taken possession, power or control of the Defendant’s property and/or assets.
THIS COURT DECLARES that any of the Defendant’s property and/or assets that came into the possession, power or control of the Plaintiff at any time is hereby restored to the power and control of the Defendant.
THIS COURT FUTHER DECLARES the Defendant’s legal rights to full and unencumbered ownership or any of its property and/or assets that came into the possession, power and control of the Plaintiff at any time are hereby affirmed.
[4] The default judgment also seeks costs.
[5] The terms of this proposed judgment are interestingly contrasted with the actual prayer for relief in the counterclaim. The counterclaim makes no claim for declaratory relief of any type over any assets. The counterclaim makes no claim for an order adjudging the plaintiff was wrongfully in possession of any assets of the defendant. The counterclaim is for general damages, special damages and punitive damages. The body of the counterclaim makes no claim for return of assets or property of the defendant.
[6] The affidavit in support of the motion is provided by a legal assistant in the office of counsel for the defendant. The three page affidavit contains no particulars about the counterclaim other than to attach the pleadings and advise of the history of the matter. In other words, there is no evidence before the Court that would entitle the defendant to judgment as requested.
[7] Rule 19.09 makes all of Rules 19.01 to 19.08 apply in respect of counterclaims.
[8] In my view the provisions of Rule 19.05 and 19.06 are of particular application to this motion.
[9] Further to Rule 19.06, in my view, the facts alleged in the counterclaim do not entitle the defendant to judgment as requested despite the general “repeat, rely and adopt” pleading attempting to connect “the facts” in the statement of defence to the counterclaim. The property and/or assets are not specified in a sufficiently particular way in the pleadings nor the affidavit in support of the motion that would give me any basis to grant the draft default judgment as requested. I am aware of many other competing claims against the property and assets of the defendant by other parties, including the creditor who seeks to put the defendant into bankruptcy. Those actions are all before me as the result of the order that any matter relating to River Green are to be subject to case management.
[10] Given the history of this proceeding, putting forward a motion of this type on a completely bald record was not a just, expeditious and least expensive route to determine the issues concerning the multi-faceted contest over the defendant’s assets on the merits.
[11] Rule 19.05 (3) provides the relief that is available on a motion for a default judgment. I am not prepared to grant judgment. There is no basis to do so. I am not prepared to order that the counterclaim proceed to trial at this point. I say this because practically speaking the pleadings from both parties on this particular are unhelpful in their current state. The plaintiff’s statement of claim was devoid of particulars. It has now been struck. The initial defence was that the claim did not disclose a cause of action and the claim was vexatious and an abuse of process. The defence alleges the plaintiff was created in furtherance of an illegal scheme to distrain the defendant’s assets and interfere with the defendant’s business. The claim has now been dismissed. It seems to me that if the counterclaim was allowed to proceed to trial on the pleadings as presently constituted the Court would be unduly burdened and precious time wasted. I am not aware of any trial time being available for civil matters in the Northwest Region until at least January 2023 at the earliest.
[12] If the defendant is serious about proceeding against what appears now to be a shell company, the defendant is granted leave to amend its counterclaim against 2801100 Ontario Inc.. 2801100 Ontario Inc. was incorporated December 17, 2020. The basic two-year limitation period has not yet expired. The defendant will suffer no prejudice by repairing its pleading so the claims it does actually want to make against 2801100 Ontario Inc. can be plainly put before the Court. This amended pleading shall be filed on or before November 30, 2022. There is no need to serve the amendment on 2801100 Ontario Inc.. 2801100 Ontario Inc. shall not file a pleading or be allowed to participate in the defence of the amended counterclaim as it did not defend the counterclaim at first instance and its pleading has been struck out.
[13] However, no further steps of any kind shall be taken in this action without further court order. This is because I anticipate if the counterclaim is to proceed to trial it will be potentially consolidated with all the other claims currently being made in respect of the property and assets of River Green in the interests of trial efficiency. Those claims are subject of ongoing case management.
[14] I see this route as the least expensive, just and most expeditious way for the defendant to proceed in light of all the other claims it is currently facing from other parties to the litigation I am currently case managing.
[15] Leave is granted to amend the counterclaim. The balance of any relief claimed in this motion is dismissed without costs. I also direct that counsel for the defendant provide a copy of this endorsement to all other counsel of parties who are currently pressing claims against the property and assets of the defendant. This is to be done within 5 business days of receipt of these reasons and may be done by email. I do this in the interest of keeping all parties to this case managed process updated on this aspect of the matter.
“original signed by” The Hon. Mr. Justice F.B. Fitzpatrick
Released: October 28, 2022
COURT FILE NO.: CV-21-0194-00
DATE: 2022-10-28
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
2801100 Ontario Inc.
Plaintiff
- and -
River Green (Thunder Bay) Inc.
Defendant
DECISION ON MOTION
MADE WITHOUT NOTICE IN WRITING
Fitzpatrick J.
Released: October 28, 2022