Court File and Parties

COURT FILE NO.: CV-23-0204-00 DATE: 2023-09-11

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Robert’s Plumbing & Sheet Metal Co. v. 2844683 Ontario Inc. o/a Gallucci’s Pizza

HEARD: September 7, 2023

BEFORE: Acting Regional Senior Justice T. Nieckarz

COUNSEL: C. Carr, for the Applicant Self rep, for the Respondent

E N D O R S E M E N T

[1] This motion to strike the Statement of Defence for failure to comply with Rule 15.01(2) of the Rules of Civil Procedure (the “Rules”) was heard in motions court September 7, 2023, by Zoom.

[2] No one appeared for the Defendant, although duly served.

[3] The Plaintiff commenced this action to collect payment on an invoice rendered to the Defendant for services and materials. A Statement of Defence was delivered, and submitted by Mr. Ryan Gallucci, the sole officer and director of the Defendant. Mr. Gallucci is not a lawyer.

[4] Rule 15.01(2) requires that a corporate party to a proceeding be represented by a lawyer unless the court grants leave for a non-lawyer to represent the corporation.

[5] Plaintiff’s counsel has requested that the Defendant comply with Rule 15.01(2) by either retaining a lawyer or bringing a motion to obtain leave of the court to represent the Defendant, but the Defendant has either refused or failed to do so.

[6] The Rules do not contemplate what is to happen to a party who does not comply with the requirements of Rule 15.01(2), except in circumstances in which a party has been served with an order removing a lawyer of record.

[7] The caselaw has addressed this gap and determined that if a corporate party to litigation does not comply with Rule 15.01(2), the other party may move to have their pleading struck: 19212 Ontario Ltd. v. Astrochrome Crankshaft Toronto Ltd. (Master), at para. 19.

[8] I agree that the circumstance faced by the court is analogous to the relief contemplated by Rule 15.04(7) where a party who has been served with an order to remove the lawyer of record must either appoint a new lawyer or obtain leave under Rule 15.01(2), and a failure to do so may result in a pleading being struck. Rule 1.04(2) provides that where matters are not provided for in the Rules, the practice shall be determined by analogy to them.

[9] Rule 2.01(1)(b) of the Rules provides that only where and as necessary in the interest of justice, a proceeding or step, or document in a proceeding may be set aside for non-compliance with the Rules.

[10] The Plaintiff relies on Rock Precast Erectors Ltd. v. Canadian Precast Limited, et al., 2012 ONSC 5924, at paras. 6 and 14. In that case, the court stated quite clearly that self-represented parties are not free to disregard the Rules. I accept and agree with this principle. The defendant’s pleadings in Rock Precast were struck for failure to comply with the Rules by retaining a lawyer or obtaining leave.

[11] In my view, the Rock Precast case is distinguishable from the case at hand in that there was already an interlocutory order in place compelling the defendant to obtain leave or a lawyer. That order was disregarded in Rock Precast. Not only were the Rules not complied with, a court order was disregarded without valid explanation.

[12] There is no such order in this case. The Plaintiff argues that this is immaterial as there remains a violation of the Rules. In light of Rule 2.01(1)(b), I conclude that the striking of a pleading for non-compliance with the Rules shall only occur when it is in the interests of justice to do so. The analogous Rule 15.04(7) contemplates the striking of a pleading when there is a violation of both the Rules and a court order requiring the corporate defendant to comply with Rule 15.01(2).

[13] For these reasons I conclude that the interests of justice necessitate a “last chance” order, which requires the Defendant to either retain a lawyer within thirty days further to Rule 15.01(2) or deliver a motion for leave within thirty days for Mr. Gallucci to represent the Defendant. A failure to do so shall result in the Statement of Defence being struck without further notice to the Defendant.

[14] So that the consequences of having the Statement of Defence struck are absolutely clear to the Defendant, if the defence is struck the Plaintiff will be in a position to obtain default judgment without any further notice to the Defendant or opportunity for the Defendant to put its case before the court. This is a very serious consequence.

Costs:

[15] The Plaintiff seeks costs of this motion on a substantial indemnity basis in the amount of $3,390.00 inclusive of fees, disbursements, and HST. While I appreciate that the Defendant’s conduct and non-compliance with the Rules necessitated the motion, this is not the type of egregious circumstances that substantial indemnity costs are generally reserved for.

[16] The Defendant’s conduct does warrant an order for partial indemnity costs payable to the Plaintiff. The Plaintiff was put to unnecessary costs as a result of the Defendant’s non-compliance with the Rules. The Defendant’s representative did not even attend court to address the motion. Regardless of this fact, the Plaintiff was successful in obtaining relief. The Plaintiff is entitled to costs. The Plaintiff’s partial indemnity bill is $2,712 inclusive.

[17] An award of costs is in the discretion of the court by virtue of s. 131(1) of the Courts of Justice Act.

[18] The discretion of the court is to be exercised in light of the facts and circumstances of the case in relation to the factors provided for in Rule 57.01(1).

[19] In addition to the outcome and any offers to settle that were made, Rule 57.01(1) provides for consideration of the following factors:

57.01 (1) In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,

(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;

(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;

(a) the amount claimed and the amount recovered in the proceeding;

(b) the apportionment of liability;

(c) the complexity of the proceeding;

(d) the importance of the issues;

(e) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;

(f) whether any step in the proceeding was,

(i) improper, vexatious or unnecessary, or

(ii) taken through negligence, mistake or excessive caution;

(g) a party’s denial of or refusal to admit anything that should have been admitted;

(h) whether it is appropriate to award any costs or more than one set of costs where a party,

(i) commenced separate proceedings for claims that should have been made in one proceeding, or

(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and

(i) any other matter relevant to the question of costs.

[20] A costs award must be fair and reasonable. It should not merely be a calculation of the hours spent. An award of costs should seek to balance the indemnity principle with the fundamental objective of access to justice: Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.) at paras. 37-38; Andersen v. St. Jude Medical Inc. at para. 22.

[21] In Serra v. Serra (2009), 2009 ONCA 395, 66 R.F.L. (6th) 40 (Ont. C.A.), at p. 42, the Court of Appeal reiterated the fundamental purposes which costs rules are designed to foster:

a. To partially indemnify a successful litigant for the costs of litigation;

b. To encourage settlement; and

c. To discourage and sanction inappropriate behaviour.

[22] With these principles in mind, I find that a fair and reasonable award of costs in the circumstances is $1,500 for fees (inclusive of HST), in addition to disbursements of $339, for a combined award of $1,839.00. I have taken into account the following:

a. While the motion was important to the Plaintiff, as the Defendant’s non-compliance prevented the litigation from moving forward, it was not a complex motion.

b. The Plaintiff’s materials were done well and assisted the court in dealing with this matter efficiently. Regardless, neither the evidence nor the law is complex with respect to this matter.

Order:

[23] For the foregoing reasons it is ordered that:

a. Within 30 days of the date of this order, the Defendant shall either:

i. Appoint a lawyer of record by serving a notice under Rule 15.03(2); or

ii. Bring a motion for leave under Rule 15.01(2) of the Rules of Civil Procedure that is returnable within the 30-day period.

b. If the Defendant fails to comply with the requirement to either appoint a lawyer or bring a motion for leave as set out in this order, the Statement of Defence shall be struck.

c. The Defendant shall pay to the Plaintiff, within 30 days of the date of this order, costs of this motion in the total amount of $1,839.00.

d. A copy of this Endorsement and Order issued pursuant to this Endorsement shall be served on the Defendant forthwith by regular mail and email.

e. The Defendant’s approval of any Order made pursuant to this Endorsement is dispensed with.

“Original signed by” The Honourable Justice T.J. Nieckarz, Acting R.S.J.

Released: September 11, 2023