Court File and Parties
COURT FILE NO.: CV-21-0425-00 DATE: 2023-02-21
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: 1876029 Ontario Ltd., o/a B. Gibson Mechanical v. Smart Renovation Solutions Ltd. and Walaji Estate Inc.
HEARD: November 17, 2022
BEFORE: Nieckarz J.
COUNSEL: Robin Lepere, for the Plaintiff Tarek Abuteen, for the Defendants
Endorsement on Motion
OVERVIEW:
[1] The Defendant, Smart Renovation Solutions Ltd.’s (the “Defendant”) brought a motion pursuant to Rule 15.01(2) of the Rules of Civil Procedure, for an order granting leave to Mr. Tarek Abuteen to represent the Defendant. Mr. Abuteen is not a lawyer. He is a shareholder, officer and director of the Defendant.
[2] The Plaintiff opposed the motion and argued that the interests of justice required the motion to be denied. The Plaintiff expressed various concerns, primarily that Mr. Abuteen did not have the ability to represent the Defendant without increasing the costs of this litigation and delaying it so much so that even with a costs order, the Plaintiff’s claim will effectively be defeated.
[3] For reasons outlined in an Endorsement dated July 11, 2022 (Schedule A to this decision) I dismissed the Defendant’s motion, without prejudice to the right of the Defendant to return the motion with further and better evidence. The Defendant filed further evidence and brought the motion back on for determination.
[4] In my July 11th, 2022, decision I set out a process for the Defendant to bring a further motion. My decision also provided for a process for costs submissions in the event the Defendant did not bring a further motion. The Defendant served a further Notice of Motion, but no further evidence. The Plaintiff took the position that the motion had not been brought within the timelines required by my Endorsement and sought costs. I received no submissions from the Defendant as to costs. On October 5, 2022, I released an Endorsement on Costs (Schedule B to this decision), awarding costs of the original motion to the Plaintiff in the amount of $2,710.
[5] Through emails sent by the Defendant to the court office, it came to my attention that the Defendant had filed his Notice of Motion and mistakenly assumed that because of this, no submissions on costs were required. This is despite the Plaintiff’s clear submissions that the Notice of Motion alone did not satisfy the requirements of my order, thereby triggering the necessity for costs submissions. Given that the Defendant is not represented by counsel, and in the interest of fairness, I released an Addendum to my costs decision on October 18th, 2022 (Schedule C to this decision). In that Addendum I indicated that when the motion for leave to appoint Mr. Abuteen to represent the Defendant in this proceeding returned before me on November 17th, 2022, further submissions could be made as to whether the costs order should remain in effect or be set aside and determined as part of a determination of costs of the second motion. Payment of the October 5th order was suspended pending this decision
[6] This decision pertains to both the new motion to have Mr. Abuteen appointed as the legal representative of the Defendant and the request to reconsider the costs previously awarded.
THE FACTS:
[7] The facts pertaining to this decision have been set out in my previous decisions and shall not be repeated here, even though they have been considered as part of this decision.
[8] Mr. Abuteen has filed a supplementary affidavit, sworn July 28, 2022, with the following additional material facts:
a. Two days after my decision on the initial motion was released, on July 13, 2022, Mr. Abuteen became the sole owner of all the shares of the Defendant and the only person managing it.
b. The initial share structure of the Defendant provided for 1000 Class “A” shares, divided equally among all shareholders and Officers as follows:
i. Salam Abotteen – President and CEO – 200 Class “A” shares; ii. Tarek Abuteen – Vice-President (Design) – 200 Class “A” shares; iii. Yazan Abotteen – Vice-President (Contracts & Operations) – 200 Class “A” shares; iv. Amr Abotteen – Vice-President (Marketing) – 200 Class “A” shares; and v. Hana Shibli – Vice – President (Human Resources) – 200 Class “A” shares.
c. Mr. Abuteen was one of the founding directors of the corporation and he was listed in the incorporation documents as one of two incorporators of the business.
d. Mr. Abuteen states that in February 2022 he acquired 100 shares from each shareholder, thereby owning 600 Class “A” shares and becoming a majority shareholder. The share register suggests the shares were acquired back by the corporation and then issued to Mr. Abuteen. No further details are known, such as whether there was consideration for the transfer.
e. On July 13, 2022, Mr. Abuteen was appointed President and CEO of the Defendant, and all the shares of the other shareholders were transferred to him. He states that all the other officers, directors and shareholders “would no longer be associated with the corporation”, but he does not say why this sudden shift following the release of my decision. Mr. Abuteen’s affidavit does not state whether the shares were transferred to reflect that he has always been the directing mind of the corporation, or whether, as the Plaintiff claims, this transfer occurred merely to facilitate his motion.
f. All the former shareholders, officers and directors of the corporation have the same address as their address. It is not known to me whether this is a residential address out of which the business operates, or a separate business address.
g. The following financial information was provided:
i. An informal “Business Financial Statement” showing total equity in the business of $120,107.57. The majority of the value of the business in in a “debt owed to Applicant” and accounts receivable. While it is not specifically stated, I assume based on the amount that the “debt” is the damages claim advanced by the Defendant in this case. Cash on hand is $5,400 and cash in the bank is $1,103.78. ii. Income tax “Notice” for January 1, 2021 to December 31, 2021 showing sales and other revenue of $334,513 and total GST/HST and adjustments of $43,486.69. This document includes only page 3 of 4 and certain information is struck out and illegible. iii. Business banking statements for the periods ending April 29, 2022, May 31, 2022, and June 30, 2022, showing a closing balance in the account as of June 30, 2022, of $1.23.
ANALYSIS:
Should Mr. Abuteen Be Appointed As the Legal Representative for the Corporation?
[9] The applicable legal principles were set out in my previous decision and have been applied to this decision.
[10] The starting point is Rule 15.01(2) of the Rules of Civil Procedure, which requires a party to a proceeding that is a corporation to be represented by a lawyer, except with leave of the court.
[11] Keeping in mind the factors to be considered on motions such as this [see the Extend-A-Call Inc. v. Granovski, factors referenced in my previous decision], along with the concerns expressed in my original decision, I do not grant leave to Mr. Abuteen to represent the Defendant. The following are my reasons:
a. The information provided with respect to the corporate structure of the Defendant does not fully address the concerns raised in my previous decision. While Mr. Abuteen has clarified the structure of the corporation, the new evidence leads to more questions than answers. I am still uncertain as to who the original shareholders were in relation to Mr. Abuteen and why, two days after my decision they simply transferred all their shares to him and resigned from their officer positions. The timing, without any explanation appears to be designed to give the appearance that Mr. Abuteen is the directing mind of the corporation. This may be the case. I note that he was the majority shareholder of the corporation as of February 2022. The fact that the other shareholders were prepared, without explanation, to transfer their shares to Mr. Abuteen may in of itself suggest that Mr. Abuteen is the controlling mind and has the power within the corporation to compel other shareholders to comply with his directions, or alternatively suggests the close and trusting nature of the shareholders with each other. It does appear that the corporation is closely held, but the lack of explanation for what suddenly happened to change the share structure and officers is somewhat concerning and raises issues as to what the real interests of the other former shareholders were or are.
b. I continue to have concerns as to Mr. Abuteen’s ability to comprehend the issues in the litigation and to advocate appropriately on behalf of the corporation. No disrespect is intended with respect to this conclusion. I set out some concerns in my previous decision. I remain mindful that Mr. Abuteen is not a legal professional and that a certain amount of latitude is to be afforded to self-represented litigants. Having said this, I am concerned that Mr. Abuteen, while knowledgeable about the project in dispute, does not grasp the legal issues as framed in the pleadings.
The pleadings reveal that this case should be a relatively simple contract dispute in the context of a construction lien matter. The Defendant subcontracted with the Plaintiff and a signed contract was entered into. The Plaintiff claims that $34,291.83 plus HST remains owing on the subcontract, as amended by certain change orders. The Statement of Defence and Counterclaim was prepared while the Defendant was represented by counsel. In it, the Defendant denies having agreed to any change orders, alleges deficiencies in the work performed by the Plaintiff and alleges a breach of contract by the Plaintiff by failing to complete the contract on time. The Defendant claims damages of $68,928.88. The pleadings of both parties are clear, concise and frame the issues well.
Mr. Abuteen seeks to confuse these relatively straightforward issues with allegations of fraud and other such allegations. More evidence would have been required to fully understand and appreciate Mr. Abuteen’s arguments. He seeks to bring motions that appear to be ill-advised based on the information before me. Again, I come to these conclusions based on the limited facts I have. His allegations even in the supplementary affidavit filed in support of this motion cause me to agree with the Plaintiff’s concern that Mr. Abuteen’s failure to grasp what the true issues in the litigation are create a considerable risk that this simple case will become anything but and will generate more litigation than the case warrants. Fraud and misconduct issues raised in the context of these motions are not raised in the pleadings and are serious claims to make, attracting serious costs consequences if unsuccessful. I am not certain that Mr. Abuteen appreciates the consequences of such allegations.
I continue to be concerned about Mr. Abuteen’s insistence on accusing counsel for the Plaintiff of misconduct when there is none apparent in the examples he cites. These threats and allegations detract from the true issues raised by the pleadings and only serve to increase costs, animosity, and time necessary for the litigation.
The confusion surrounding the new Notice of Motion, the service of materials, statements from Mr. Abuteen suggesting the court office should tell him when his materials are deficient, holding on to his affidavit evidence and neither serving nor filing it even though it had been prepared in accordance with the timelines provided for by my order, failure to comply with my directions on costs after the Plaintiff filed submissions, including caselaw and argument in an affidavit, misconstruing the application of those cases to this case, and including settlement discussions in an affidavit, are somewhat understandable for a self-represented litigant and given some of the other circumstances I have raised in this decision and previous ones. If these were the only issues, I would not deny leave on this basis alone. It is recognized that Mr. Abuteen is attempting to properly comply with the Rules of Civil Procedure and practice of the court, even though there are missteps. It is understandable that there will be some missteps by self-represented litigants and that this can cause increased costs to represented parties. This alone is not sufficient to deny leave in this particular case. However, combined with the other concerns I have with respect to the approach to this litigation adopted by Mr. Abuteen, I am led to find that Mr. Abuteen does not properly grasp the issues in the litigation. I conclude that he cannot properly advocate on behalf of the corporation. I fear that the issues raised by Mr. Abuteen that he wishes to pursue, and which are not reflected in the pleadings, will take this case in a direction that is not warranted. Combined with the many procedural defects, this will unnecessarily increase costs to the Plaintiff to the point that costs exceed the amount claimed and will expose the Defendant corporation that Mr. Abuteen seeks to represent to a sizable costs award. Significant prejudice could result to both the Plaintiff and the Defendant, not to mention the expenditure of scarce judicial and court resources that would be required to effectively case manage the matter should leave be granted.
Mr. Abuteen himself has also raised concerns also as to the time he has to devote to this litigation given his responsibilities to the corporation. This is a minor consideration for me, but it highlights part of the concern and the lack of understanding of court process. While the court appreciates that Mr. Abuteen has significant responsibilities for the corporation, there is still an expectation that timelines provided for in court orders and the Rules will be complied with, and court appearances will be attended. Otherwise the Plaintiff and the court are put to the unnecessary expenditure of time to address any such issues.
c. I find that the Defendant has not demonstrated that the corporation is financially incapable of retaining counsel, and therefore denying leave will not deny the Defendant access to justice. The evidence of the financial position of the Defendant corporation is lacking for the following reasons:
i. The document titled “financial statement” is not a proper corporate financial statement. It appears to be a self-prepared document. The corporation should have proper financial statements prepared by the corporate accountants that even on an unaudited basis could better reflect the true financial picture of the corporation. This financial statement does not tell me important information such as the income of the corporation and the expenses so that I may determine the corporation’s ability to afford a lawyer. ii. The income tax notice provided is similarly deficient. I am provided only with page 3 of 4 pages of a document with much information struck out. I can glean that the 2021 income was in excess of $334,000 but I do not know the net income of the corporation or any other information that allows me to assess the ability of the corporation to hire a lawyer. iii. The banking information is also deficient. I am provided with three bank statements that give no information other than opening and closing balances. I am left to wonder if there are other bank accounts that have not been disclosed. These accounts do not have any transactions that occur throughout the months for which they purport to represent. One would think that a company operating a business such as the one described by Mr. Abuteen and being as busy as Mr. Abuteen has verbally represented it to be, would have some transactions going through its bank accounts on a monthly basis. Again, this information raises more questions than it provides answers.
d. Ultimately, the court must determine what order is in the interests of justice, keeping in mind that Rule 1.04 of the Rules of Civil Procedure directs the court to construe the rules in such a manner as to ensure a just, most expeditious and least expensive determination of every civil proceeding on its merits.
[12] For the foregoing reasons I do not find that it is in the interests of justice to grant leave. Doing so would not ensure the most just, expeditious and least expensive determination of this civil proceeding on its merits.
Should My Previous Costs Order Be Set Aside?
[13] Given some of the confusion surrounding the filing of the Defendant’s Notice of Motion (it was rejected for deficiencies on a few occasions), Mr. Abuteen’s misunderstanding that his filing of the Notice of Motion meant he did not need to respond to costs submissions of the Plaintiff, and my prior order that suggested if a new motion was brought costs would be decided after that motion, I felt it appropriate that the Defendant have the opportunity to make submissions as to costs of the first motion and suspend the payment of costs until the Defendant had done so. I have now received written submissions on costs from the Defendant and heard Mr. Abuteen’s submissions orally.
[14] I find that the costs order previously made remains appropriate in the circumstances.
[15] The Defendant’s submissions may be summarized as follows:
a. The Defendant is the party entitled to costs by virtue of the conduct of the Plaintiff and Plaintiff counsel. Total costs of the first and second motion are $10,400 on account of fees, $640 for filing fees and an additional approximately $4,000 in legal fees incurred by the Defendant to defend the action to date. b. The Plaintiff’s submissions on costs misstate facts and make vexatious claims for the sole purpose of attacking the character of the Defendant and preventing the Defendant from having access to justice. The Plaintiff’s lawyer misled the court about important facts, including acts of fraud committed by the Plaintiff. The Plaintiff’s submissions are designed inappropriately by the Plaintiff’s lawyer to confuse the issues and secure an improper strategic advantage for the Plaintiff. They constitute an abuse of process, negligence, and a violation of the rules of professional conduct of the Plaintiff’s counsel. c. The Defendant complied with the July 11th endorsement and Rules of Civil Procedure and filed its documents in a timely fashion. Any confusion in securing dates for the new motion was a failure on the part of the Plaintiff’s lawyer to respond in a timely fashion to inquiries.
[16] With respect, the Defendant’s costs submissions highlight the concerns I have expressed with respect to Mr. Abuteen’s ability to properly represent the Defendant in this proceeding. The submissions do not focus on costs principles, including Rule 57. The primary focus of those submissions appears to be an attack on Plaintiff’s counsel. Based on the evidence I have before me, that attack is unwarranted.
[17] The confusion surrounding the Defendant’s filing of the second motion for leave caused me to render a decision on costs on the first motion that I would not likely have made at that time had there not been confusion. Having said this, the order would have been made at this stage, following the argument of the second motion. The award of costs remains appropriate.
[18] The award of costs ordered by me with respect to the first motion remains appropriate for the reasons stated in my October 5th, 2022, endorsement, and namely:
a. The Plaintiff was the successful party on the motion; b. There is no conduct on the part of the Plaintiff that suggests it should be deprived of its costs. c. Keeping in mind the principles of proportionality and reasonableness, the amount of costs claimed are reasonable given the materials filed, the length of arguments made, the experience and hourly rate of counsel, the issues, and the importance of the issues to the parties.
ORDER:
[19] In light of the foregoing, it is ordered that:
a. The Defendant’s motion for leave is dismissed. b. My costs order of October 5th, 2022, ordering the Defendant to pay to the Plaintiff costs in the amount of $2,710 shall remain in effect, save and except the 30-day period for payment shall commence effective the date that this decision is sent by the court to the parties. c. The Plaintiff is prima facie the successful party on this motion. If the parties cannot agree as to costs of this second motion, the Plaintiff shall serve and file its costs submissions, limited to five pages (excluding the Bill of Costs or other attachments) double-spaced, 12-point font, no later than March 20th, 2023. d. The Defendant shall serve and file its response, limited to five pages (excluding the Bill of Costs or other attachments) double-spaced, 12-point font, no later than April 20th, 2023. e. Any reply shall be delivered by May 1st, 2023, and shall be limited to two pages, double-spaced.
“Original signed by” The Honourable Madam Justice T.J. Nieckarz Released: February 21, 2023
SCHEDULE “A”
COURT FILE NO.: CV-21-0425-00 DATE: 2022-07-11
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: 1876029 Ontario Ltd., o/a B. Gibson Mechanical v. Smart Renovation Solutions Ltd. and Walaji Estate Inc.
HEARD: April 14, 2022
BEFORE: Nieckarz J.
COUNSEL: Robin Lepere, for the Plaintiff Tarek Abuteen, for the Defendants
Endorsement on Motion
OVERVIEW:
[20] This is the Defendant, Smart Renovation Solutions Ltd.’s (the “Defendant”) motion pursuant to Rule 15.01(2) of the Rules of Civil Procedure, for an order granting leave to Mr. Tarek Abuteen to represent the Defendant. Mr. Abuteen is not a lawyer. He is a shareholder, officer and director of the Defendant.
[21] There is also other relief sought in the Notice of Motion. That other relief was not pursued by the Defendant on this date, pending the outcome of this motion.
[22] The Plaintiff opposes the motion and states that the interests of justice require the motion to be denied. The Plaintiff expresses a number of concerns but is primarily concerned that Mr. Abuteen does not have the ability to represent the Defendant without increasing the costs of this litigation and delaying it so much so that even with a costs order, the Plaintiff’s claim will effectively be defeated.
[23] For the reasons that follow, the motion is dismissed, without prejudice to the right of the Defendant to return the motion, with further and better evidence.
THE FACTS:
[24] The Plaintiff contracted with the Defendant to perform work at a property located in Thunder Bay. The Defendant was a general contractor, and the Plaintiff a subcontractor. The owner of the property is the other Defendant, Walaji Estate Inc. Walaji has not defended the action and has been noted in default.
[25] The total subcontract price was $108,859 plus HST. The Defendant alleges the subcontract had a completion date of May 30, 2021.
[26] The Plaintiff alleges that the Defendant owes it $34,391.83 plus HST for the work performed on the subcontract. This action was commenced to collect the alleged outstanding account, and a construction lien registered against the property.
[27] The Defendant denies that any amount is owing to the Plaintiff. The Defendant alleges multiple breaches of the subcontract by the Plaintiff, including the completion date. The Defendant alleges that the completion date was delayed by approximately four months, causing the Defendant to suffer its own damages.
[28] The Defendant is a small, privately-owned corporation, incorporated on March 19, 2020. Mr. Abuteen is one of five directors and officers of the corporation. He is the Vice-President of the corporation. Mr. Abuteen was also the project manager for the project in dispute.
[29] Mr. Abuteen describes himself as the “directing mind” of the corporation. The other directors, officers and shareholders are his immediate family members (exact relationship not specified). They have consented to his request for leave to represent the Defendant in this litigation. They have each attested to their confidence in his experience with construction law and ability to represent the corporation.
[30] Mr. Abuteen’s educational background is engineering. He is a certified project manager, has completed engineering law courses in university, he passed the Ontario Building Code legal requirements exam that focused on the Construction Act and the Ontario Building Code, and he attests that he has studied for the LSAT exam.
[31] Mr. Abuteen also asserts that he is familiar with the court’s “forms, procedures and protocols”, and that he has “…more than 10 years of experience in the area of engineering and construction law and I wrote and successfully argued and advised others on matters related to motions, claims, statements of defence, counterclaims, cross-examinations, conducting discovery, and had success on undertakings on complex areas of law”. He feels he is more than capable of acting for the corporation in this litigation and doing “…the work expected of a licensed lawyer”.
The Plaintiff’s Position:
[32] The Plaintiff points to the following in arguing that leave should be denied. The Plaintiff argues that Mr. Abuteen’s actions in the litigation to date demonstrate that he struggles to understand the legal process such that the action will be delayed, and the Plaintiff will suffer prejudice arising out of his representation of the Defendant that will not be adequately compensated by an order of costs, particularly given that costs orders tend to indemnify a party for only a fraction of costs incurred:
a. On March 2nd, 2022, Mr. Abuteen served a Notice of Intent to Act in Person on counsel for the Plaintiff. This is not the correct procedure in these circumstances. b. On March 3rd, 2022, Mr. Abuteen served a Form 15 (c) and Affidavit of Service on counsel for the Plaintiff. The purpose of this is unknown. c. On March 4th, 2022, Mr. Abuteen copied counsel for the Plaintiff on email correspondence to the Superior Court of Justice (Thunder Bay) in which he discussed a motion for an interlocutory injunction that was scheduled for March 23, 2022, but he did not deliver any motion materials or canvass motion dates with opposing counsel. The basis for the injunction motion is unknown, and the procedure followed is incorrect. d. Counsel for the Plaintiff had to advise Mr. Abuteen of the correct procedure for him to represent the corporation, being a motion for leave under Rule 15.01(2), and advised him that he should consult her with respect to any motion dates scheduled. e. Mr. Abuteen provided additional dates for the injunction motion the Defendant sought to advance and sent email correspondence to the trial co-ordinator for the court to “formally document” his concerns that counsel for the Plaintiff was trying to delay the matter. These allegations against Plaintiff counsel were unfounded, as any delay arose out of Mr. Abuteen’s lack of knowledge of the Rules of Civil Procedure. f. On March 7, 2022, the trial co-ordinator advised Mr. Abuteen that no dates could be scheduled for the injunction motion until the motion for leave was brought. Mr. Abuteen then sought procedural advice from the court for the filing of such a motion. g. On March 11, 2022, Mr. Abuteen purported to serve motion material for the leave motion, but when counsel for the Plaintiff attempted to open the attachment to the email, she was unable to do so. Mr. Abuteen sent the document again. He had endeavoured to place the matter in motions’ court for March 17, 2022, despite not having provided the notice required pursuant to the Rules of Civil Procedure. h. Mr. Abuteen sought to proceed with the motion on March 17, 2022, in any event, and despite counsel advising of her objection. The trial co-ordinator was involved in the email exchange also, with the matter being ultimately adjourned. i. Mr. Abuteen has included in his motion materials an offer to settle, which is clearly not appropriate. j. On a prior appearance on this motion Mr. Abuteen failed to confirm the motion, such that neither the Plaintiff’s counsel nor the court knew whether the motion was proceeding or not. He did not attend court either. k. The other relief sought in the Notice of Motion is ill-advised, without legal foundation and runs the risk of unnecessarily delaying this proceeding and increasing costs for a modest claim. Mr. Abuteen has expressed a desire to proceed with the other relief once this motion is determined. It is unnecessary litigation that is contrary to the just and expeditious determination of proceedings provided for in the Rules of Civil Procedure and with respect to construction litigation generally. l. The content of his materials clearly reveals his lack of understanding of the issues, legal principles, procedures and evidence relevant. This not only runs the risk of increasing the cost to the Plaintiff, but also the Defendant. m. There is little information as to the corporate defendant and its ability to satisfy any costs order made in this proceeding. While this is generally a risk of litigation, the risk becomes significantly greater with a non-lawyer representative who advances unmeritorious claims, takes unnecessary steps, and who generally increases the costs of litigation for both parties. The concern is also heightened by Mr. Abuteen’s bald statement that the corporation cannot afford a lawyer. If this is the case, it likely cannot afford a costs award. n. He has provided only vague evidence with respect to the structure of the corporation and the financial situation of the corporation.
LEGAL PRINCIPLES:
[33] Rule 15.01(2) requires a party to a proceeding that is a corporation to be represented by a lawyer, except with leave of the court.
[34] Quinn J., in Lamond v. Smith, , 2004 CarswellOnt 3213, [2004] O.J. No. 3255 (Ont. S.C.), at paras. 8-9 speculated that the rationale for the Rule may have been to ensure that the person seeking to represent the corporation has the authority to act for and bind it or is sufficiently knowledgeable regarding its affairs.
[35] Ellies J., in Leisure Farm Construction Limited v. Dalew Farms Inc. et. al., 2021 ONSC 105, at para. 9, citing Extend-A-Call Inc. v. Granovski, at para. 19, set out the following factors to be considered on a motion to grant leave under Rule 15.01(2):
e. Whether the proposed representative has been duly authorized by the corporation to act as its legal representative; f. Whether the proposed representative has a connection to the corporation; g. The structure of the corporation in terms of shareholders, officers and directors and whether it is a closely held corporation; h. Whether the interests of the shareholders, officers, directors, employees, creditors and other potential stakeholders are adequately protected by the granting of leave; i. Whether the proposed representative is reasonably capable of comprehending the issues in the litigation and advocating on behalf of the corporation. The Court should not impose too high a threshold at this stage, given that the courts about with self-represented litigants of varying skills. The proposed representative should, however, be reasonably capable of comprehending the issues and articulating the case on behalf of the corporation; j. Whether the corporation is financially capable of retaining counsel. Access to justice has been a concern troubling courts at all levels in Canada for some considerable time. It is fundamental to integrity of the courts and the reputation of the administration of justice that parties have reasonable access to our courts. If the refusal to grant leave would effectively bar a corporation from access to justice, this factor should be given considerable weight; and k. Any other relevant factor specific to the circumstances of the individual case.
[36] Ultimately, the court must determine what order is in the interests of justice, keeping in mind that Rule 1.04 of the Rules of Civil Procedure directs the court to construe the rules in such a manner as to ensure a just, most expeditious and least expensive determination of every civil proceeding on its merits. See: Leisure Farm, at para. 10.
[37] Courts are more willing to grant leave when the corporation is effectively the alter ego of the individual allowed to represent it. The more closely held the corporate shares are, the more applicable this principle is. See: Leisure Farm., at para. 13.
[38] Courts have, however, expressed concern as to the implications of allowing a non-lawyer to represent a litigant. This includes the non-licensed practice of law, and lack of accountability on the part of a non-lawyer for their actions. The corporation becomes responsible for costs consequences arising out of the actions of the non-lawyer, and the non-lawyer is not bound by any rules of professional conduct. See: Braysan Properties Inc. v. Muchos et. al., 2022 ONSC 940, at paras. 37 and 38, and Leisure Farm, at paras. 13-15.
[39] Each case must be decided on its own unique facts, keeping the foregoing principles and factors in mind.
ANALYSIS:
[40] There are concerns I have with respect to the relief sought by the Defendant.
[41] Firstly, there is insufficient evidence as to the shareholdings of the corporation. Mr. Abuteen states in his affidavit that he is the “majority shareholder” of the corporation. Based on the affidavit material, there are at least three other shareholders. Mr. Abuteen states that all other shareholders are “immediate family”, but the exact nature of the family relationship is unknown (i.e. spouse, siblings, parents). While my impression is that this corporation qualifies as a closely held company, there is no information as to the interests of the other shareholders (i.e. number of shares held, common or preferred) or what relationship they bear to Mr. Abuteen and each other. While three shareholders consent to Mr. Abuteen acting on behalf of the corporation, without knowing their interest in the corporation, it is also difficult to ensure that those interests are adequately protected by the granting of the relief sought.
[42] There is also little information as to the finances of the corporation. I recognize that the failure of the moving party to provide detailed evidence that the corporation cannot afford a lawyer is not always fatal to a motion such as this. Having said this, particularly given some other concerns, the financial health of this corporation is an important consideration for this particular case. It is difficult for me to assess the assertions of either party based on the bald assertion that the corporation cannot afford to retain counsel.
[43] I have no concerns with respect to Mr. Abuteen’s ability to comprehending the factual issues. He was the project manager for this job and strikes me as having a good factual knowledge of what occurred. He is articulate and more than capable of articulating the case from this perspective. It is the legal aspect of the case that concerns me.
[44] I share the Plaintiff’s concerns that the actions of Mr. Abuteen to date demonstrate little understanding and appreciation for the Rules of Civil Procedure or the legal principles applicable to the relief he seeks to advance. He has shortcomings as a litigant. Those concerns have already been recited in paragraph 13 of this decision and will not be repeated. In addition, the affidavits filed are replete with information based on knowledge and belief without stating the basis for it, are somewhat confusing, including materials that should not be included, does not attach all materials referred to or that should be included, and overall, unnecessarily complicates the matter while leaving out evidence relevant to the motion and relief sought.
[45] I note that the motion that Mr. Abuteen seeks to advance on behalf of the Defendant if he is granted leave to represent the corporation, is unclear. He refers to it in different ways throughout his materials, including as an “interlocutory injunction”, he seeks certain relief that is properly determined at trial, and appears to be seeking a summary determination of an unknown question of law. His claim for security for costs appears to be a disguised attempt to secure any potential future judgment as opposed to securing a costs award.
[46] As Corthorn J., stated in Tash Benson Group Inc. v. Back-Bone Gear Inc. et. al., 2021 ONSC 7667, at para. 39, the court does not expect that a layperson will prepare documents with the same degree of skill as would a lawyer, or that they will have the same legal knowledge. A self-represented party or a corporation represented by a layperson must, however, still make an effort to comply with the Rules of Civil Procedure, and with the norms and practices with respect to litigation documents. They should also familiarize themselves with at a minimum, the basic legal requirements for the relief they seek so that their documents are responsive to the relevant considerations for the court.
[47] All of the foregoing leaves me concerned that the appointment of Mr. Abuteen as the representative for the Defendant in this action could result in unnecessary litigation that increases the cost and exposure for both the Plaintiff and the Defendant to the point that this lien claim will not be resolved in an expeditious and cost-effective manner. These concerns could extend to either the unnecessary delay of trial and/or lengthening of trial and cause considerable unfairness to the Plaintiff. It could also cause the Defendant to have exposure for costs awards that could render Mr. Abuteen’s representation of the corporation more, as opposed to less expensive for the corporation than retaining counsel. While I appreciate that certain of these concerns are often present when there are self-represented litigants and that terms (such as requiring leave to be granted before bringing a motion) could overcome some of them in situations in which denying leave denies the corporate defendant access to justice, again, there is insufficient evidence before me today for me to draw this conclusion. Absent sufficient evidence as to the structure of the corporation and the financial necessity for the relief sought, the concerns are simply too great to grant the relief sought at this time.
[48] Based on the evidence before me, I find that the just outcome of this motion is to dismiss it, with leave to Mr. Abuteen to bring a further motion for leave to represent the Defendant if he so chooses, but on a further and better record. That further and better record shall include an affidavit in which an individual in a position to do so, provides the requisite evidence. That evidence must include information as to the financial situation of the Defendant and specifics as to the corporate structure and shareholdings of the Defendant. If that motion is to be brought, it shall be served and filed no later than August 5, 2022. This matter should take less than one-half an hour for argument and shall be scheduled on a mutually agreeable date before me. If it assists in the scheduling of this matter, it may be scheduled either before the commencement of the regular court day or after the conclusion (i.e. it may be scheduled for either 9:30 or 4:30 if need be).
[49] For clarity, this does not mean that that the relief will be granted once further evidence is filed. I am simply giving the Defendant a further opportunity to provide the necessary evidence to allow me to properly weigh all the relevant factors so that I may properly assess whether the nature of the corporation and financial necessity outweigh the concerns I have addressed.
[50] Paragraphs 17 and Exhibit “H” in the Affidavit of Yazan Abotteen, sworn March 18, 2022, is an Offer to Settle from the Plaintiff that should not be included in motion materials. It shall be struck from the court record.
[51] Both parties should give consideration to expediting this case to minimize the risk of the costs of litigation exceeding the value of the claim. It may be that a case management conference could be of assistance once the Defendant’s legal representation is sorted out.
[52] If the Defendant brings another motion to have Mr. Abuteen appointed as legal representative in this case, I shall address costs of this motion at the same time as I address costs of the second appearance.
[53] If the Defendant does not bring another motion, then the parties shall make written costs submissions as follows, failing which costs shall be deemed to have been resolved:
a. The Plaintiff is prima facie the successful party on this motion. The Plaintiff shall serve and file its costs submissions, limited to five pages (excluding the Bill of Costs or other attachments) double-spaced, 12-point font, no later than August 19, 2022. b. The Defendant shall serve and file its response, limited to five pages (excluding the Bill of Costs or other attachments) double-spaced, 12-point font, no later than September 16, 2022. c. Any reply shall be delivered by September 30, 2022, and shall be limited to two pages, double-spaced.
“Original signed by” The Honourable Madam Justice T.J. Nieckarz Released: July 11, 2022
SCHEDULE “B”
COURT FILE NO.: CV-21-0425-00 DATE: 2022-10-05
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: 1876029 Ontario Ltd. o/a B. Gibson Mechanical v. Smart Renovation Solutions Ltd. And Walaji Estate Inc.
HEARD: Written Submissions
BEFORE: Nieckarz J.
COUNSEL: Robin Lepere, for the Plaintiffs Tarek Abuteen, for the Defendants
ENDORSEMENT ON COSTS
[1] On July 11, 2022, I released my decision dismissing the Defendant, Smart Renovations’ motion for leave for Mr. Tarek Abuteen to represent the Defendant in this action. The motion was dismissed, subject to a right to file a further motion with better evidence by August 5th, 2022.
[2] The Defendant has not filed a further motion with better evidence despite advising the Plaintiff of its intention to do so.
[3] The Plaintiff seeks costs of the original unsuccessful motion of the Defendant in the amount of $2,709.74, inclusive of fees, disbursements and HST.
[4] In my decision, I provided timelines for written submissions with respect to costs. The Plaintiff complied with the timeline and filed submissions. The Defendant has not responded.
[5] By virtue of s. 131(1) of the Courts of Justice Act, an award of costs is in the discretion of the judge. It is a wide discretion, to be exercised taking into consideration the factors outlined in Rule 57.01 of the Rules of Civil Procedure.
[6] The Ontario Court of Appeal has made it clear that in assessing costs, the overriding principle is one of reasonableness, and that the failure to follow that principle can produce a result that is contrary to the fundamental objective of access to justice (Boucher v. Public Accountants Council for the Province of Ontario, (2004), , 71 OR (3d) 291 (Ont CA) at para. 37).
[7] The Plaintiff is the successful party on the motion. It is entitled to its costs. I agree that there are no facts or circumstances before me that suggests there is reason to order otherwise.
[8] As to the quantum of costs, the Plaintiff claims on a partial indemnity basis. I agree with the Plaintiff that the scale of costs and amount claimed is reasonable in the circumstances, based on:
a. The nature of the motion and the materials filed; b. The hourly rates charged by the Plaintiff’s counsel, which are reasonable given the experience of counsel; c. The time spent on the motion does not strike me as unreasonable, or beyond the reasonable expectation of what a losing party would expect to pay with respect to a contested motion of this nature; d. The attendances required on the motion, including a date that the Defendant’s representative failed to attend; and e. The importance of the motion, and the outcome to the parties.
[9] The Defendant, Smart Renovation Solutions Ltd., shall pay to the Plaintiff, within 30 days, costs in the amount of $2,710.
“Original signed by” The Honourable Madam Justice T.J. Nieckarz DATE: October 5, 2022
SCHEDULE “C”
COURT FILE NO.: CV-21-0425-00 DATE: 2022-10-18
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: 1876029 Ontario Ltd. o/a B. Gibson Mechanical v. Smart Renovation Solutions Ltd. And Walaji Estate Inc.
HEARD: Written Submissions
BEFORE: Nieckarz J.
COUNSEL: Robin Lepere, for the Plaintiffs Tarek Abuteen, for the Defendants
ADDENDUM TO ENDORSEMENT ON COSTS
[10] On October 5, 2022, I released an Endorsement on Costs. Written submissions had been provided on costs by the Plaintiff further to my Endorsement dated July 11, 2022. The Defendant, Smart Renovations, did not respond.
[11] The relevant portions of my July 11, 2022, Endorsement are as follows:
a. In paragraph 29, I dismissed the Defendant’s motion for leave for Mr. Abuteen to represent the Defendant but did so without prejudice to the Defendant’s right to bring a further motion with better evidence. b. The Defendant’s motion was to be brought no later than August 5, 2022. c. Paragraph 33 states that if the Defendant brings another motion to have Mr. Abuteen appointed as legal representative in this case, I shall address costs of this motion at the same time as I address costs of the second appearance. d. If the Defendant does not bring another motion, then the parties shall make written costs submissions in accordance with the schedule provided for in paragraph 34 of the Endorsement. The Plaintiff submissions were due August 19, 2022 and the Defendant submissions due September 16, 2022.
[12] When making my decision on costs I was under the impression that the Defendant had taken no steps to properly bring its fresh motion before the court as required by my July 11, 2022, Endorsement. No fault is attributed to the Plaintiff for this. The Plaintiff advised in their submissions that a Notice of Motion had been served on them, but as of the date of filing of their submissions no steps had been taken by the Defendant to further the motion, including filing affidavit evidence. The Defendant did not file their costs submissions as required by my Endorsement saying otherwise. In these electronic days, I do not receive the entire court file in making a decision and had no information to suggest that the Defendant had since filed a proper motion record.
[13] After releasing my decision on costs, Mr. Abuteen contacted the court for clarification of the order on costs. He was under the impression that the filing of a notice of motion alone would have prevented costs from being determined, even though the Plaintiff made costs submissions in writing.
[14] Ms. Lepere was not copied on Mr. Abuteen’s correspondence. The email was to the judicial assistant seeking clarification of the nature of the costs endorsement in face of the motion filed August 8th. Once it was brought to my attention, I caused a review to be undertaken of the court file.
[15] A review of the court file reveals:
a. The Notice of Motion was served on August 5th but filed with the court on August 8th. While this is past the date specified in my Endorsement, a further review indicates that attempts were made to file the Notice of Motion on August 5th and 6th but the filings were rejected for deficiencies, including the lack of affidavit in support of the motion. b. A motion record, which includes an affidavit, was filed September 20, 2022. c. The motion was made returnable September 29th, 2022, which was a date that I was originally scheduled to preside over motions court. I was absent on that date for medical reasons and another judge had the parties notified that the matter would need to be adjourned. It was adjourned by way of confirmation form to November 17th, 2022.
[16] There was not strict compliance with the terms of my Endorsement. However, in these circumstances, I am assuming that Mr. Abuteen and the Defendant incorrectly concluded that no response to the costs submissions of the Plaintiff were required.
[17] In the circumstances, and in the interests of fairness, both parties shall be entitled to speak to the question of costs of the original motion when this matter returns before me on November 17th, and whether the costs order should remain in effect or set aside and determined as part of a determination of costs of the second motion.
[18] The costs order shall remain in effect pending the hearing of those submissions, but payment shall be suspended pending further order by me.
“Original signed by” The Honourable Madam Justice T.J. Nieckarz DATE: October 18, 2022
COURT FILE NO.: CV-21-0425-00 DATE: 2023-02-21
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: 1876029 Ontario Ltd., o/a B. Gibson Mechanical v. Smart Renovation Solutions Ltd. and Walaji Estate Inc.
HEARD: November 17, 2022
BEFORE: Nieckarz J.
COUNSEL: Robin Lepere, for the Plaintiff Tarek Abuteen, for the Defendants
ENDORSEMENT ON MOTION
Nieckarz J.
DATE: February 21, 2023