Court File and Parties

COURT FILE NO.: CV-21-00671524-0000 DATE: 2023-06-05

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: TERRA PARK DEVELOPMENTS LIMITED et al, Plaintiffs AND: PENSIO PROPERTY MANAGEMENT GROUP INC., Defendant

BEFORE: ASSOCIATE JUSTICE R. FRANK

APPEARANCES: D. Levangie and D. Farace, for the moving parties / plaintiffs P. Bakos, for the defendant/plaintiff by counterclaim and the proposed added Defendants Brandon Keks, Dimitris Milankov, John Hamilton, Rentalis Insurance Company, Inc., Jeffrey Schaff, Joseph Marcantel and Jeffrey Keast R. Di Gregorio for the proposed added defendant, Tripemco Insurance Group Limited

HEARD: February 6, 2023

Reasons for Decision

[1] This is a motion by the Plaintiffs for an order pursuant to Rules 5.04(2) and 26.01 of the Rules of Civil Procedure granting leave to the Plaintiffs to add additional parties as defendants and amend the Statement of Claim in this action.

[2] For the reasons that follow, the motion is granted.

BACKGROUND

[3] The Plaintiffs are unit owners in a retirement home development. When each owner acquired their unit(s), they contracted with the defendant Pensio Property Management Group Inc. (“Pensio”) to obtain a rental income guarantee that would provide a financial backstop in the event the unit(s) were not leased immediately. The rental income guarantee was secured by a rental income contract bond brokered on behalf of Pensio by the proposed defendant Tripemco Insurance Group Limited (“Tripemco”) and issued and underwritten by the proposed defendant Rentalis Insurance Company, Inc. (“Rentalis”).

[4] The Plaintiffs allege that Pensio defaulted on its obligations, and they commenced this action seeking damages for, among other things, breach of contract. Pensio defended the action and counterclaimed, alleging that the Plaintiffs are in breach of various agreements.

[5] Following the close of pleadings and the exchange of affidavits of documents, and shortly before examinations for discovery were to commence, the Plaintiffs’ counsel communicated to Pensio’s counsel that the Plaintiffs would be bringing a motion to amend the Original Claim to add additional parties as Defendants as well as to add additional claims based on information that the Plaintiffs had recently received.

[6] Specifically, the Plaintiffs allege that Pensio and the proposed defendants (other than Tripemco) colluded and knowingly made numerous false representations concerning, among other things, their legitimacy in order to induce the Plaintiffs to enter into the various applicable agreements. The Plaintiffs also allege that Tripemco, as broker, was negligent for failing to take appropriate steps to ensure that Rentalis was a legitimate insurance provider.

[7] The Plaintiffs’ proposed amended statement of claim seeks to add new causes of action with respect to the alleged fraudulent representations and to add numerous defendants to the action, namely:

(a) certain individuals who are officers or directors of Pensio and Rentalis (collectively, the “Proposed Pensio and Rentalis Defendants”, and with Pensio, the “Pensio/Rentalis Responding Parties”); and

(b) the proposed defendant, Tripemco.

[8] None of the Pensio/Rentalis Responding Parties or Tripemco have consented to the proposed amendments. As a result, the Plaintiffs bring this motion for leave to amend the statement of claim.

PRELIMINARY ISSUES

[9] Two preliminary issues arose at the outset of the hearing of the Plaintiffs’ motion to amend the statement of claim. First, the Pensio/Rentalis Responding Parties sought leave to bring a motion to stay the action in favour of arbitration on the basis of what those parties assert is a mandatory arbitration agreement. Those responding parties served a notice of motion on February 2, 2023 (which was attached as an exhibit to the responding Affidavit of Brandon Keks sworn February 1, 2023 and served on February 2, 2023). On its face, the notice of motion (for the motion to stay) indicates that it was to be returnable on February 6, 2023, the same day as this motion by the Plaintiffs seeking leave to amend the statement of claim, but no such motion by the Pensio/Rentalis Responding Parties had been scheduled with the court for February 6, 2023. Although counsel for Pensio (now counsel for all the Pensio/Rentalis Responding Parties) had indicated in correspondence in the fall of 2022 that Pensio was considering bringing a stay motion, this was never confirmed by Pensio’s counsel, no steps were taken to schedule a stay motion through the Civil Motions Scheduling Unit as required by the Notice to Profession – Toronto, and no motion materials with respect to a stay motion were served until February 2, 2023.

[10] The Plaintiffs’ position was that only their motion for leave to amend was properly before the court. They submitted that they booked time for their motion in October 2022 (for this motion, returnable on February 6, 2023) and properly served their motion materials in November 2022. They also submitted that they followed up numerous times with Pensio’s counsel about Pensio’s position on the motion and asked whether he would also be acting for any of the other Pensio/Rentalis Responding Parties, but they received no response. They submitted that the court should not permit the “cross-motion” to proceed given the extremely late service of the notice of motion, including service of the Pensio/Rentalis Responding Parties’ factum after 5:00pm on February 2, 2023 with respect to a motion purportedly returnable on February 6, 2023. The Plaintiffs also submitted that it would not be procedurally fair to allow the stay motion to proceed as they had not had a reasonable opportunity to review the cross-motion materials and respond.

[11] It is clear from the record and the court file that a “cross-motion” for a stay of the action was not booked with the court as required under the applicable Notice to Profession – Toronto. Further, the notice of motion (seeking a stay of the action) was short-served under the Rules and the Plaintiffs had not had an opportunity to respond to it. Prior to serving the notice of motion (seeking a stay of the action), counsel for the Pensio/Rentalis Responding Parties did not call or send any written correspondence to the Plaintiffs’ counsel to advise that it would be seeking leave to bring a motion to stay the action returnable on February 6, 2023.

[12] In the result, after having heard the submissions of counsel for the parties, I ruled at the February 6, 2023 hearing that the cross-motion to stay the action was not properly before the court and I denied the Pensio/Rentalis Responding Parties’ request for leave to bring the motion on that day.

[13] In the alternative, the Pensio/Rentalis Responding Parties sought an adjournment of the Plaintiffs’ motion to amend the statement of claim. The Plaintiffs opposed the adjournment request. Counsel for the Plaintiffs reiterated that the Plaintiffs’ motion was properly booked and that the moving parties’ materials were served with ample time. The Pensio/Rentalis Responding Parties did not advise that they took the position there was insufficient time booked or that an adjournment would be requested. The responding materials were served late and even in those responding materials the Pensio/Rentalis Responding Parties did not indicate that they would be seeking an adjournment. The Plaintiffs further submitted that the Pensio/Rentalis Responding Parties should not benefit from their own non-compliance with the Rules and that the requested adjournment should be denied.

[14] Having heard the submissions of counsel for the parties, I denied the adjournment request and heard the Plaintiffs’ motion to amend the statement of claim. Following my rulings on the two preliminary issues, counsel made their respective oral arguments with respect to the Plaintiffs’ motion to amend the statement of claim. At the outset of his responding submissions, counsel for the Pensio/Rentalis Responding Parties began with certain submissions with respect to his clients’ request for a stay of the action. I reiterated to counsel that I had already ruled that there was no stay motion properly before the court. On that basis, neither counsel for the Plaintiffs nor counsel for Tripemco made any submissions with respect to the Pensio/Rentalis Responding Parties’ request for a stay of the action.

ISSUES

[15] The issues on this motion are as follows:

(a) Should leave be granted to allow the Plaintiffs to amend the statement of claim to add the Proposed Pensio and Rentalis Defendants as defendants to the action and to permit amendments related to the claims against them?

(b) Should leave be granted to amend the statement of claim to add Tripemco as a defendant to the action and to permit amendments related to the claims against it?

LAW AND ANALYSIS

(i) Should leave be granted to amend the statement of claim and add the Proposed Pensio and Rentalis Defendants as defendants to the action?

[16] Rule 26.01 of the Rules of Civil Procedure provides:

On motion at any stage of an action the court shall grant leave to amend a pleading on such terms as are just unless prejudice would result that could not be compensated for by costs or an adjournment.

[17] Rule 5.04(2) of the Rules of Civil Procedure provides:

At any stage of a proceeding the court may by order, add delete or substitute a party or correct the name of a party incorrectly named, on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.

[18] Rule 5.02(2) of the Rules of Civil Procedure provides:

(2) Two or more persons may be joined as defendants or respondents where,

(a) there are asserted against them, whether jointly, severally or in the alternative, any claims to relief arising out of the same transaction or occurrence, or series of transactions or occurrences;

(b) a common question of law or fact may arise in the proceeding;

(c) there is doubt as to the person or persons from whom the plaintiff or applicant is entitled to relief;

(d) damage or loss has been caused to the same plaintiff or applicant by more than one person, whether or not there is any factual connection between the several claims apart from the involvement of the plaintiff or applicant, and there is doubt as to the person or persons from whom the plaintiff or applicant is entitled to relief or the respective amounts for which each may be liable; or

(e) it appears that their being joined in the same proceeding may promote the convenient administration of justice.

[19] The applicable principles with respect to adding parties and the amendment of pleadings include the following:

(a) Rule 5.04(2) provides the court with discretion in considering whether to allow a new party to be added to an existing action. This discretion is to ensure procedural fairness in such things as the state of the action, with the court considering such factors as whether the trial is imminent or not, or whether examinations for discovery of all parties have already been held, whether the purpose to add a party defendant is improper such as to simply obtain a discovery of the party added, whether the proposed added party is a necessary or proper party and whether special rules were observed such as those respecting limitation periods. [1]

(b) In most cases, it is futile to refuse to add a new defendant to an existing action since it appears that it is procedurally appropriate for a plaintiff who loses such motion to issue a fresh process against such person. If a limitation period has clearly passed when the motion to add is being considered, the order to add should probably not be made. [2]

(c) Unless prejudice would result, Rule 26.01 makes it mandatory for the court to grant leave to amend, and the burden of showing prejudice lies with the party opposing the amendment. [3]

(d) On pleading amendment motions under Rules 5.04(2) and 26.01, the court is not permitted to consider the factual or evidentiary merits of the proposed new claim, as the court is restricted to look only at whether there is a prima facie meritorious case set forth in the pleading. A court is not to concern itself with the credibility of the case set forth by the party seeking the amendment. [4]

(e) The amendment sought must contain an actionable issue otherwise expressed as a reasonable cause of action. This analysis does not include a critical analysis of the factual basis for the amendment. [5]

[20] In 1588444 Ontario Ltd. v. State Farm Fire and Casualty Company, the Court of Appeal summarized the principles applicable to motions for leave to amend pleadings as follows:

(a) Rule 26.01 requires the court to grant leave to amend unless the responding party would suffer non-compensable prejudice; the amended pleadings are scandalous, frivolous, vexatious or an abuse of the court’s process; or the pleading discloses no reasonable cause of action.

(b) The amendment may be permitted at any stage of the action.

(c) There must be a causal connection between the non-compensable prejudice and the amendment. In other words, the prejudice must flow from the amendments and not from some other source.

(d) The non-compensable prejudice may be actual prejudice, i.e., evidence that the responding party has lost an opportunity in the litigation that cannot be compensated as a consequence of the amendment. Where such prejudice is alleged, specific details must be provided.

(e) Non-compensable prejudice does not include prejudice resulting from the potential success of the plea or the fact that the amended plea may increase the length or complexity of the trial.

(f) At some point, the delay in seeking an amendment will be so lengthy, and the justification so inadequate, that prejudice to the responding party will be presumed.

(g) The onus to prove the actual prejudice lies with the responding party.

(h) The onus to rebut presumed prejudice lies with the moving party. [6]

[21] In Schembri v. Way, the Court of Appeal held that “where a party wishes to amend a claim or add a new party within the limitation period, the facts pleaded are taken to be true and provable (subject to unprovable assumptive or speculative conclusions) and the court is to assess the tenability of the claim on that basis.” [7]

[22] A party is not permitted to amend a pleading to plead events that are demonstrably false as to do so would appear prima facie to be an abuse of process. [8]

[23] Applying the above principles, I find that the proposed amendments and the addition of the Proposed Pensio and Rentalis Defendants should be allowed. In the circumstances of this case, there has been no lengthy delay that would lead to presumed prejudice that would have to be rebutted by the Plaintiffs. In terms of actual prejudice, the Pensio/Rentalis Responding Parties have the onus to show actual prejudice, and where such prejudice is alleged, specific details must be provided. [9] The Pensio/Rentalis Responding Parties have not met this onus.

[24] The Pensio/Rentalis Responding Parties argue that the amendments sought as against the individual proposed defendants are intentionally designed to harm them and their business relationships with each other and the public. They also assert that the proposed amended statement of claim will cause non‑compensable prejudice to them because the action will be delayed and lengthened. I do not accept these arguments. As noted, non-compensable prejudice does not include prejudice resulting from the potential success of the plea or the fact that the amended plea may increase the length or complexity of the trial. [10] Further, I do not accept the Pensio/Rentalis Responding Parties’ argument that the proposed amendments are purely tactical and an abuse of the court’s process. As noted, the facts pleaded are taken to be true and provable and the court must assess the tenability of the proposed amendments on that basis. [11]

[25] The Pensio/Rentalis Responding Parties also argue that there is no evidence supporting the Plaintiffs’ assertion that the new claims are well within the limitation period. Although the expiry of a limitation period (if applicable) is an example of non‑compensable prejudice, the Plaintiffs’ pleading in this action alleges breaches of contract and damages beginning in May or June of 2021. Thus, the motion to amend was brought well within the limitation period. Further, with respect to the alleged misrepresentations in the proposed amendments, the evidence before the court is that the Plaintiffs learned of the misrepresentations in September 2022. The responding parties did not cross-examine on that evidence, and it is uncontradicted. I also do not accept the Pensio/Rentalis Responding Parties’ argument that the limitation period should be assessed on the basis that the agreements in issue were entered into in 2018. Limitation periods run based on knowledge of injury, loss or damage, not when the contract or representation giving rise to the loss or damage was entered into or made. [12] In the result, for the purposes of this motion to amend, and based on the current and proposed pleadings and the evidence in the record, there is no basis to conclude that the proposed amendments assert claims that are barred under the Limitations Act, 2002.

[26] The Pensio/Rentalis Responding Parties also assert that the proposed amendments should not be allowed because: (1) they do not provide sufficient specificity that the alleged representations were false; (2) they are not sufficiently particularized with respect to who made the alleged representations and how they were outside the scope of the individual proposed defendant directors’ duties; (3) with respect to the proposed added defendants, the proposed amended statement of claim does not properly plead any reasonable cause of action; and (4) with respect to proposed individual defendants, the proposed amended statement of claim does not plead sufficient facts to pierce the corporate veil. I do not accept these arguments. For purposes of pleading, the allegations of fraud are sufficient to allow the claims to proceed against the individual proposed defendants as well as against the proposed added corporate defendant, Rentalis. The pleadings in paragraphs 64-72 of the proposed amended statement of claim contain allegations of knowingly false representations by the individuals that include collusion, untrue statements with respect to the legitimacy of the intentions of the proposed added corporate defendant, and the use of a shell company that is not a legitimate going-concern. Taken together, these allegations are sufficient pleadings of causes of action against the proposed corporate defendant Rentalis and the proposed individual defendants, including based on principles of directors’ and officers’ liability for tortious conduct, through piercing the corporate veil, and by way of corporate attribution. [13] In this respect, I note that the Pensio/Rentalis Responding Parties acknowledge in their own factum that employees, directors and officers may be personally liable for their actions that involve fraud, deceit, dishonesty, or want of authority.

[27] With respect to the amendments to paragraphs 32 and 37 of the current statement of claim, I do not accept the Pensio/Rentalis Responding Parties’ objection that the amendments to those paragraphs should be disallowed because they are an improper attempt to withdraw admissions. The paragraphs have merely been reorganized and placed elsewhere in the proposed amended statement of claim at paragraphs 65 and 67. Further, I do not accept the objection that the amendments are improper because they add a qualification to an otherwise unqualified admission. Those pleadings remain unchanged in substance in terms of the payments referenced in them. In my view, the so-called qualification that the payments were made in reliance on the newly pled allegations of misrepresentation is consistent with the other allegations in the proposed amended pleading and is not a withdrawal of an admission.

[28] Finally, the Pensio/Rentalis Responding Parties assert that there is a potential conflict with respect to the Plaintiffs’ counsel’s representation of all the Plaintiffs. This issue was raised previously by the defendant Pensio at a March 14, 2022 case conference before Vermette J. At that time, Vermette J. directed that any motion with respect to the alleged conflict was to have been brought promptly following the close of pleadings. In any event, it is not clear how the alleged conflict issue, with respect to which no motion has yet been brought, would be a bar to the proposed amendments.

[29] In summary, I find that the proposed amendments properly plead a cause of action against each of the Proposed Pensio and Rentalis Defendants. In my view, the proposed amendments assert claims against those proposed defendants that are tenable at law. In particular, the proposed amendments regarding alleged fraudulent misrepresentations plead the necessary material facts with respect to the four elements of the tort of fraudulent misrepresentation, thereby asserting a reasonable cause of action. Further, there is no basis to find that the amendments alleging fraudulent misrepresentation are being asserted with malice, are based on facts that are demonstrably false, are scandalous, frivolous or vexatious, or are an abuse of the courts process. The amendments to add the Pensio/Rentalis Responding Parties and the proposed amendments relating to those parties are permitted.

(ii) Should leave be granted to amend the statement of claim to add Tripemco as a defendant to the action?

[30] Tripemco takes the position that the Plaintiffs’ proposed claim against it is premature. Tripemco argues that: (1) the proposed amended statement of claim indicates that the Plaintiffs are still in the process of completing the insurance claims process; and (2) in the Pensio statement of defence and counterclaim, Pensio alleges that the terms of the insurance bond have not been triggered and that neither Pensio nor the insurer are obligated to make payments pursuant to the insurance bond. Tripemco submits that, based on the pleadings between the Plaintiffs and Pensio, the claim against Tripemco is therefore contingent on the determination of the contract dispute between Pensio and the Plaintiffs, and that there is no cause of action against Tripemco at this stage because the alleged damages have not occurred.

[31] Tripemco argues that Plaintiffs’ claim as pleaded raises the same prematurity concern that was addressed in Samuel v. Klein et al. [14] In Klein, the plaintiff sought to add its lawyers as defendants with respect to a disputed real estate transaction. The court accepted that the claim against the lawyers was premature because there was “…no right of action in the ordinary sense of the term, as against the Defendant solicitors, unless and until the Plaintiff suffers a loss in respect of his transaction with the other three defendants…”. [15]

[32] Tripemco submits that the Plaintiffs in this case are asserting “an anticipated claim” and that if the Pensio defence succeeds then the anticipated claim against Tripemco will never arise. Tripemco argues that adding it to the action now will complicate the proceeding at Tripemco’s expense. It also submits that in the current circumstances there are no common underlying facts or questions of law that would suggest that the Plaintiffs’ claims against Pensio and Tripemco should be heard together. It argues that it would be a “mere spectator” in this litigation until such time as the main dispute is adjudicated by the court. In response to the specific amendments regarding fraud and negligence, Tripemco submits that the proposed amendments do not overcome the prematurity concern because, even with the addition of a fraud claim, the Plaintiffs’ claims are still contingent on the Plaintiffs proving their case against Pensio.

[33] In considering the prematurity issue, I note that the plaintiff in Klein would have had no cause of action in breach of contract or negligence against its solicitors if it succeeded against the existing defendant. In my view, there is a material difference between the potential for inefficiency due to a defence asserted by an existing defendant (which is the case in this action), as compared to the situation in Klein where the assertion of a claim against a second defendant was contingent on the failure of the plaintiff’s claim against the first defendant. Nevertheless, I recognize that Klein has been extended to situations where the prematurity argument rested on a defence asserted by the original defendant. In WCL Capital Group Inc. v. Google LLC, [16], the court declined to permit an amendment to add a second defendant to an action. In that case, Spies J. reviewed the principles outlined in Klein and found that they applied because the second claim was entirely contingent on success on the first claim such that “[u]nless [the plaintiff] can prove its claim against [the existing defendant], it has no claim for damages against [the proposed added defendant].” However, it should be noted that in declining to exercise the court’s discretion to allow joinder, Spies J.’s had concluded that the risk of inconsistent judgments “was not a concern” [17] and that if the plaintiff was successful against the existing defendant, it could then proceed against the proposed added defendant “in the unlikely event that should be necessary”. [18] In those circumstances, Spies J. held that the plaintiff’s claim was premature and it had no reasonable cause of action against the proposed added defendant at that time, and that allowing the claim to proceed against the proposed added defendant would not promote the convenient administration of justice when considering the issue from the perspective of all parties.

[34] Unlike the nature of the claims against the proposed defendants in Klein and WCL, the fraud and negligence claims against the proposed defendants in this action involve a more directly overlapping factual matrix between Tripemco and the existing defendant, Pensio, and the other proposed defendants. This is evident from the proposed amendments at paragraphs 75-77 that include allegations that Tripemco’s negligence as broker resulted in “there [being] no re-insurance policy in place”. Other proposed amendments at paragraphs 74 to 79 include allegations that: Tripemco represented to the Plaintiffs that it was a specialized insurance broker and the Plaintiffs relied on Tripemco to place them with reputable re‑insurers; Tripemco brokered the insurance; Tripemco failed to take appropriate steps to ensure that the re‑insurer was a legitimate insurance provider capable of giving the Plaintiffs their desired re-insurance solution; Tripemco owed the Plaintiffs a duty of care to place them with reputable insurance providers and breached its duty, which is the direct cause of the Plaintiffs’ damages; and Tripemco is liable for any and all damages suffered by the Plaintiffs resulting from Tripemco placing the Plaintiffs with the re‑insurer, Rentalis.

[35] In these circumstances, I find that joinder is appropriate given the nature of the allegations and the connection between the negligence claim against Tripemco and the fraudulent misrepresentation claim against Pensio and the Proposed Pensio and Rentalis Defendants. Further, contrary to the circumstances in WCL, it is likely (rather than unlikely) that the claim against Tripemco would proceed if the fraud claim is successful, and there is a concern about inconsistent judgments if the negligence and the fraud issues are not tried together. These are additional factors weighing in favour of allowing the joinder of Trimpemco which, in the overall context and nature of the claims asserted by the Plaintiffs, would promote the convenient administration of justice when considering the issue from the perspective of all parties. [19]

[36] Although not referred to by the parties in argument, my decision to exercise my discretion to allow joinder is consistent with the principles outlined in Thames Steel Construction Ltd. v. Portman, [20] a case that is referenced in Holmested and Watson: Ontario Civil Procedure § 19:8. In Thames, Griffiths J. (as he then was) noted the conflicting views in the caselaw regarding joinder, with the court in Klein taking a more restrictive view than the more modern trend toward a liberal approach to joinder taken in other cases, which is aimed at avoiding a multiplicity of proceedings and permitting the trial of the issues against all defendants in one action. [21] Griffiths J. (as he then was) outlined the following principles that should be considered in determining whether joinder of defendants in one action is appropriate:

(1) Whether the claims of the Plaintiff arise out of the same transaction or series of transactions as required by Rule 67.

(2) Whether or not there is a common issue of law or fact of sufficient importance to render it desirable that the claims against the proposed defendant be tried together.

(3) Whether the expense and delay that would be caused by compelling the Plaintiff to bring separate actions against the proposed defendant would be greatly out of proportion to the inconvenience, expense or embarrassment to which that defendant would be put if the actions were tried together.

(4) On the basis of Klein, if the liability of the proposed defendant is contingent upon the Plaintiff first establishing that he suffered a loss in respect of the transaction with the named defendant, then the application to join the proposed defendant may be considered premature. [22]

[37] After noting that pursuant to Klein the court has the discretion to find that joinder may be considered premature if the liability of the proposed defendant is contingent, Griffiths J. (as he then was) outlined the following principles:

31 In my view, where the alternative claims arise out of the same transaction or series of transactions and involve a common question of fact or law, then the governing principle in determining whether joinder should be allowed is the third principle set out above, namely the balance of convenience. The fact that the alternative claim against the defendants may be unnecessary, if the Plaintiff succeeds against the main defendants, is only one consideration to be weighed and should not, by itself, be considered a conclusive reason for refusing the joinder. It must not be overlooked that by the concluding words of R. 67 the Court is given a discretion where defendants have been added, to order separate trials, or make such other order as is deemed expedient if the joinder then appears oppressive or unfair. [23]

[38] Applying the above principles, Griffiths J. (as he then was) held that joinder was appropriate despite the fact that the claim against the proposed added defendants in that case was contingent on the plaintiff first establishing liability against the already named defendant. As in Thames, I find that, on balance, the expense and delay that would be caused by compelling the Plaintiffs to bring a separate action against Tripemco outweighs the inconvenience, expense or embarrassment to which Tripemco would be put if the actions were tried together.

[39] In summary, having considered the relevant principles outlined above, I find that the Plaintiffs should be permitted to join their negligence claim against Tripemco with the fraudulent misrepresentation claim, and I exercise my discretion to permit the amendment of the statement of claim to add Tripemco as a defendant and to make the proposed amendments relating to Tripemco.

DISPOSITION AND COSTS

[40] For the reasons outlined above, the Plaintiffs’ motion is granted, and the Plaintiffs are granted leave to issue an amended statement of claim in the form attached as Schedule “A” to their notice of motion.

[41] With respect to costs, the Plaintiffs submit that, as the successful party, they should be entitled to costs against all the responding parties, jointly and severally. Relying on their costs outline, they submit that costs should be fixed on a partial indemnity basis in the amount of $11,057.10.

[42] Tripemco submits that notwithstanding the Plaintiffs’ success, leave to amend is a discretionary order under Rules 26.01 and 5.04(2), and that no costs should be awarded in circumstances where the court is effectively granting the Plaintiffs an indulgence. Tripemco also submits that there is no good evidence why it was not added to the action from its inception.

[43] The Pensio/Rentalis Responding Parties take a similar position to Tripemco and submit that the Plaintiffs have not provided a good explanation as to why they are seeking the amendments at this time. They submit that no costs should be payable to the Plaintiffs and, alternatively, that if any costs are ordered, such costs should only be payable in the cause.

[44] First, I do not accept the responding parties’ submission that there is no explanation from the Plaintiffs as to why they are seeking the amendments at this time. As noted, there is uncontradicted evidence that the amendments were the result of information obtained by the Plaintiffs in September 2022. Further, while an order granting leave to amend is permissive and the responding parties had a right to oppose the motion, I see no reason to depart from the ordinary rule that costs should be awarded to the successful party, and I see no reason why the timing of payment should be postponed.

[45] In assessing costs, I have considered the factors set out in Rule 57.01(1). The motion raised some complex issues and was of importance to the parties. I am also mindful that the conduct of the Pensio/Rentalis Responding Parties tended to unnecessarily lengthen the hearing of the motion. That conduct included the very late filing of responding material, which was not in compliance with the Rules or the applicable Practice Directions and Notices to the Profession. I also note that the Pensio/Rentalis Responding Parties unsuccessfully sought leave to bring a cross-motion to stay the action, and they were denied their request for an adjournment of this motion.

[46] The fixing of costs is not a mechanical exercise, and the quantum should reflect an amount the court considers to be fair and reasonable for the unsuccessful party to pay in the particular proceeding rather than an exact measure of the actual costs to the successful litigant. The overall objective is to fix an amount that is fair and reasonable; see Boucher v. Public Accountants Council (Ontario) (2004), 71 O.R. (3d) 291 (Ont. C.A.) at p. 302.

[47] In all the circumstances, and considering the factors under Rule 57.01(1), I find that that it is fair and reasonable for:

(a) Tripemco to pay to the Plaintiffs costs of this motion fixed in the amount of $2,000 (inclusive of disbursements and taxes) within 30 days; and

(b) The Pensio/Rentalis Responding Parties to pay to the Plaintiffs costs of this motion fixed in the amount of $9,000 (inclusive of disbursements and taxes) within 30 days.

R. Frank Associate J DATE: June 5, 2023

[1]: Seaway Trust Co. v. Markle (1988), 25 C.P.C. (2d) 64 (Ont. Master) (“Seaway Trust Co.”) at para 43 [2]: Seaway Trust Co. at para 69 [3]: Seaway Trust Co. at para 41 [4]: Seaway Trust Co. at paras 35 and 51 [5]: Lamb Computer Systems Inc. v. Leest at paras 11-12 [6]: 1588444 Ontario Ltd. v. State Farm Fire and Casualty Company, 2017 ONCA 42 (“State Farm”) at para 25 [7]: Schembri v. Way, 2012 ONCA 620 at para 43 [8]: Toronto (City) v. MFP Financial Services Ltd. (2005), 17 C.P.C. (6th) 338, 2205 CarswellOnt 3324, [2005] O.J. No. 3214 (Master) at para 6 [9]: State Farm at para 25 [10]: State Farm at para 25 [11]: Schembri v Way, para 43; see also Seaway Trust Co. at paras 35 and 51 [12]: Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, s. 5 [13]: See ScotiaMcLeod Inc. v. Peoples Jewellers Ltd.; Ernst & Young Inc. v. Aquino, 2022 ONCA 202, para 67 [14]: Samuel v. Klein et al, [1976], O.J. No. 2327 (“Klein”) at para 10 [15]: Klein at page 10; see also Pryshlack v. Urbancic et al, para. 12, 14 [16]: WCL Capital Group Inc. v. Google LLC. [2019] OJ No. 700, 2019 ONSC 947 (“WCL”) [17]: WCL at para 28 (emphasis added) [18]: WCL at para 27 (emphasis added) [19]: See Rule 4.02(2)(e) [20]: Thames Steel Construction Ltd. v. Portman, 1980 CarswellOnt 353 (“Thames”) [21]: Thames at paras 24 and 25 [22]: Thames at paras 27-30 [23]: Thames at para 31 (emphasis added)