COURT FILE NO.: CV-19-00620388-0000 DATE: 20230926
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Alexey Kondratiev v. Michael D. Wright and Cavalluzzo Shilton McIntyre Cornish LLP
BEFORE: Associate Justice Rappos
COUNSEL: Alexey Kondratiev, self-represented Plaintiff Taylor Casement, for the Defendants
HEARD: June 19, 2023 (via videoconference)
REASONS FOR DECISION
OVERVIEW
[1] The Plaintiff, Alexey Kondratiev, commenced this action against the Defendants, his former lawyers Michael D. Wright and Cavalluzzo Shilton McIntyre Cornish LLP (“Cavalluzzo”), on May 22, 2019 under the simplified procedure rules.
[2] The Plaintiff originally sought damages in breach of contract and negligence in the amount of $100,000 with respect to the Defendants’ representation of the Plaintiff and his company in the Boyko Action (as defined below).
[3] Pursuant to the Order of Associate Justice Robinson dated September 21, 2021, the Plaintiff was granted leave to amend his claim. The amendments increased the damages sought to $100 million and included allegations of negligence with respect to the Defendants’ representation of the Plaintiff and his company in the Arcadia Action (as defined below).
[4] The Plaintiff now seeks leave of the Court to again amend his statement of claim pursuant to rules 26.01 and 26.02 of the Rules of Civil Procedure.
[5] The amendments sought by the Plaintiff relate to the dismissal of the Arcadia Action for delay pursuant to the Reasons for Decision of Associate Justice Josefo dated September 23, 2021. An appeal of this decision was dismissed by Justice Copeland on July 22, 2022. The Court of Appeal dismissed the motion for leave to appeal on December 5, 2022.
[6] The Plaintiff alleges that the Defendants bear responsibility for the dismissal of the Arcadia Action. In the proposed amendments, the Plaintiff has not requested an increase to the total amount of damages sought but wishes to specify that he has suffered $40,397,500 in damages in connection with the dismissal.
[7] The Defendants oppose the amendments on the basis that they are an abuse of process, are an attempt to re-litigate a matter that has been dismissed by three levels of court, and fails to disclose a reasonable cause of action.
[8] For the reasons set out below, the Plaintiff’s motion for leave to amend his claim is granted.
FACTS
The Parties
[9] Mr. Kondratiev is the sole officer, director and shareholder of Smart Games Canada, Inc. (“Smart Games”). Smart Games (together with the Plaintiff, the “Kondratiev Parties”) carries on business as a creator, designer, and fabricator of electronic gambling machines.
[10] In June 2014, the Plaintiff retained Cavalluzzo to represent him in the Arcadia Action. The Plaintiff signed a retainer agreement dated June 16, 2014. The retainer agreement provided that the Plaintiff was to pay outstanding accounts before Cavalluzzo would continue to act.
[11] Mr. Wright was a lawyer with Cavalluzzo and had principal carriage of the matters related to the Kondratiev Parties.
Background: Arcadia Action
[12] On May 12, 2008, Arcadia Participacoes Ltda. commenced an action against the Kondratiev Parties bearing Court File No. CV-08-354560 (the “2008 Action”). The action relates to, among other things, ownership over certain electronic bingo games. The Kondratiev Parties defended the claim and issued a counterclaim.
[13] On August 27, 2009, the Kondratiev Parties commenced an action against, amongst others, Cadillac Jack Inc. (“Cadillac Jack”), Finstar Financial Group LLC (“Finstar”) and Tilley International & Associates Inc. (“Tilley International”), bearing Court File No. CV-09-385909 (the “2009 Action”). The Kondratiev Parties sought dagames against the defendants for, among other things, misappropriation and wrongful conversion. The claim was based on the same facts pled in the 2008 Action regarding the electronic bingo games.
[14] Pursuant to the Order of Master Haberman dated February 28, 2014, the 2008 Action and the 2009 Action were consolidated (together, the “Arcadia Action”).
[15] Pursuant to an Order dated May 15, 2017 (the “Pope Order”), Master Pope approved a timetable and ordered that the Arcadia Action had to be set down for trial by December 31, 2018.
[16] The Pope Order represented the ninth “timetable order” issued in the Arcadia Action, each of which was on consent and included a timetable and an extension of time to set the action down. [1]
Boyko Action
[17] The Plaintiff, on behalf of the Kondratiev Parties, instructed the Defendants to prepare a statement of claim against Oleg Boyko, the owner of certain corporate defendants in the Arcadia Action. A statement of claim was issued on September 29, 2015 (the “Boyko Claim”) bearing Court File No. CV-15-537434 (the “Boyko Action”).
[18] Pursuant to the Order of Madam Justice Stewart dated December 21, 2016, the Court granted the motion brought by Mr. Boyko to strike the Boyko Claim without leave to amend.
[19] The Kondratiev Parties appealed the decision to the Court of Appeal. In its decision dated May 23, 2017, the Court of Appeal allowed the appeal only with respect to one paragraph of the Boyko Claim, paragraph 39, which, if pursued, was to be remitted to another hearing for determining whether to strike it. The remaining paragraphs of the Boyko Claim remained struck.
Proposed Amendment Motion
[20] The Plaintiff’s evidence is that, in December 2017/January 2018, he learned that Cadillac Jack had been sold to AGS, Inc. (“AGS”) or PlayAGS, Inc. (“PlayAGS”). Mr. Wright’s evidence is that the Plaintiff knew about the sale years before this time.
[21] On January 18, 2018, Mr. Wright, at the direction of the Plaintiff, wrote to opposing counsel and informed them of his instructions to amend the claim to, among other things, replace Cadillac Jack with AGS/PlayAGS as a defendant, increase the damages sought, and add Mr. Boyko as a defendant, along with adding paragraph 39 of the Boyko Claim (the “Amendment Motion”). The Defendants asked the opposing parties to consent to the Amendment Motion.
[22] In the months that followed, counsel to Cadillac Jack took the position that PlayAGS was not a successor to Cadillac Jack and was a completely different entity. Counsel also raised a potential limitation defence to the proposed amendment.
[23] The Defendants’ position, which was communicated to the Plaintiff, was that the motion was not necessary. The Plaintiff instructed the Defendants to proceed with the motion, although he instructed them to remove Mr. Boyko from the Amendment Motion.
[24] On October 29, 2018, a notice of motion was served by the Defendants. On December 4, 2018, the Defendants served motion materials for the Amendment Motion, with the motion being returnable January 21, 2019.
Extension of Time to Set Down the Arcadia Action
[25] The Defendants were notified by opposing counsel that the Pope Order required the action to be set down for trial by December 31, 2018. As a result, it was necessary for the Kondratiev Parties to bring a motion to amend the timetable and set down date before the end of the month.
[26] On December 18, 2018, the parties appeared before Master Josefo (as he was then titled), who adjourned the timetable motion to January 24, 2019. The Amendment Motion was adjourned and would not proceed on January 21, 2019.
[27] By reasons released on January 25, 2019, Master Josefo granted the motion to amend the timetable and extend the set down deadline date. Master Josefo noted in his decision that “counsel for the Moving Parties has contritely recognized… [that] any extension which I may grant is the final one. In my view, it is beyond doubt that, if I grant another extension it is final.” (Arcadia Participacoes Ltda v. Alexey Kondratiev et al, 2019 ONSC 675, para. 35).
[28] Master Josefo urged the parties to collaborate on a realistic timetable, which would include a new set down deadline and be brought on consent. “[I]t is clear that this new timetable will be final. If the parties are, however, not able to agree on specific milestones, or a set-down deadline, then a short motion to set the timetable may be brought before me” (Arcadia Participacoes Ltda v. Alexey Kondratiev et al, 2019 ONSC 675, para. 39).
Breakdown of Solicitor-Client Relationship
[29] Mr. Wright sent a copy of Master Josefo’s decision to the Plaintiff and set out next steps to be discussed. One of the issues was how the Plaintiff was going to pay Cavalluzzo if he wished to proceed with the litigation. Mr. Wright alleges that the Plaintiff began having difficulties paying his legal invoices by the end of 2018.
[30] On March 13, 2019, Mr. Wright advised the Plaintiff that Cavalluzzo could not continue to represent the Kondratiev Parties without payment of outstanding accounts. The Plaintiff responded that due to an ongoing medical condition, he would not be able to meet with Mr. Wright in the next few weeks to discuss the matter.
[31] Mr. Wright’s evidence is that he had been receiving numerous requests from opposing counsel with respect to agreeing to a new timetable. The opposing parties in the Arcadia Action scheduled an appearance before Master Josefo on May 8, 2019 to address the need for a timetable.
[32] Mr. Wright corresponded with the Plaintiff and Natalia Kondratieva (“Natalia”), the person to be contacted while the Plaintiff was dealing with his medical condition, about moving matters forward. Mr. Wright’s position is that he was unable to obtain instructions regarding a timetable for the Arcadia Action, and that Cavalluzzo’s accounts were still unpaid. The Plaintiff’s position, communicated by Natalia, was that he had already provided sufficient instructions to move the litigation forward.
[33] On May 1, 2019, Mr. Wright emailed Natalia and informed her that unless instructions were provided and payment was made, the Defendants would have to take steps to remove themselves as lawyers of record.
[34] On May 7, 2019, Mr. Wright emailed the Plaintiff and Natalia and informed them of the case conference and noted that no steps had been taken to advance the litigation since Master Josefo’s decision was released on January 25, 2019. Mr. Wright indicated that he would attend the case conference to fulfill his professional obligations.
[35] On May 7, 2019, Mr. Wright, with opposing counsel’s consent, wrote directly to Master Josefo and advised that he had been unable to confirm instructions from the Kondratiev Parties.
Case Conference on May 8, 2019 and Order of Master Josefo dated January 24, 2019
[36] Following the case conference, Master Josefo issued an Order dated January 24, 2019 (the “Josefo Order”). The Josefo Order contained a timetable that required the Kondratiev Parties to serve their Amendment Motion, as well as another motion that they wished to bring to consolidate the Arcadia Action and the Boyko Action, by May 31, 2019. If they did so, the set down deadline would be March 30, 2020.
[37] If the Kondratiev Parties did not serve such motions by May 31, 2019, a different timetable was to be used, with the set down deadline being December 31, 2019.
[38] All of the deadlines were made peremptory on the Kondratiev Parties.
[39] On May 9, 2019, Mr. Wright advised the Plaintiff and Natalia of the timetables, and warned that steps had to be taken by May 31, 2019. Mr. Wright indicated that unless all issues were addressed by May 14, 2019, Cavalluzzo would be taking steps to remove themselves.
[40] On May 15, 2019, the Plaintiff emailed Mr. Wright and indicated that he expected the Defendants to bring the Amendment Motion and the motion concerning Mr. Boyko. Mr. Wright responded and asked that the Plaintiff address payment of outstanding invoices and unbilled time and disbursements.
[41] On May 22, 2019, this action was commenced by the Plaintiff against the Defendants.
[42] No materials were served by the Kondratiev Parties by the May 31, 2019 deadline. As a result, the deadline to set the matter down for trial under the Josefo Order was December 31, 2019.
Defendants Removed as Lawyers of Record
[43] On June 4, 2019, Mr. Wright advised the Plaintiff that Cavalluzzo was withdrawing as the Plaintiff’s lawyers. Mr. Wright noted that the withdrawal “does not change the Court ordered timetable, so you or your new lawyer needs to deal with the upcoming dates.”
[44] The Plaintiff responded with “[y]ou had my instructions to bring the motion to amend the pleadings and add Boyko. I did not consent to any delay in the action.”
[45] On July 17, 2019, the Defendants were removed as lawyers of record in the Arcadia Action pursuant to the Order of Master Muir.
Steps Leading up to the Dismissal Motion
[46] The applicable timetable required the Kondratiev Parties to deliver their affidavits of documents by June 30, 2019, and the remaining parties to do so by July 31, 2019. Examinations for discovery were to be held only after service of the affidavits of documents.
[47] The Kondratiev Parties brought a motion for, among other things, leave for the Plaintiff to represent Smart Games, an order compelling Tilley International to deliver its affidavit of documents, an order striking the statements of defence of Tilley International and Finstar, and an order varying the timetable established by Master Josefo.
[48] The Kondratiev Parties served an amended notice of motion dated August 30, 2019, made returnable September 12, 2019, seeking this relief.
[49] In an endorsement dated September 12, 2019, Master Brott (as she was then titled) noted that the Plaintiff wished to adjourn the leave motion to file supplementary materials. Master Brott stated that “All parties seek to, as best as possible, adhere to the Order of Master Josefo requiring examinations for discovery to be conducted by September 30/19 and for mediation by December 30/19 and for the action to be set down by December 30/19.” The endorsement also set timelines for the completion of certain examinations for discoveries.
[50] Master Brott also noted that she tried to accommodate the parties by requesting a long motion date in early December “[i]n order to comply with the outstanding timetable of Master Josefo (dated Jan. 24/19)”.
[51] A case conference was held by Master Brott on October 3, 2019. In her endorsement, Master Brott stated that “[s]ince the September appearance, the parties have complied with the timetable and have conducted numerous examinations for discoveries.”
[52] The parties attended mediation on October 25, 2019.
[53] On December 13, 2019, Master Muir heard the Kondratiev Parties’ motion. As set out in his decision, the Kondratiev Parties sought leave to file a supplementary motion record with an amended notice of motion that included a request to vary the order of Master Josefo. Master Muir held that the Kondratiev Parties “can bring a motion to vary the order of Master Josefo in due course” (Arcádia Participações Ltda. v. Kondratiev, 2019 ONSC 7303, para. 6).
[54] Master Muir granted the Plaintiff’s leave motion, ordered Tilley International to serve a sworn affidavit of documents by January 15, 2020, and dismissed the Plaintiff’s motion to strike.
[55] Master Muir noted that Tilley International had circulated a draft affidavit of documents that listed no documents, and that “[t]his is not surprising either as Tilley's position has always been that it is not a proper party to this action, and it had nothing to do with the matters in issue in this proceeding. Nevertheless, even a party that has no relevant documents is required to serve a sworn affidavit of documents stating as much” (Arcádia Participações Ltda. v. Kondratiev, 2019 ONSC 7303, para. 8).
[56] On December 23, 2019, Master Muir issued supplementary reasons and ordered the registrar to not dismiss the Arcadia Action without further order of the court. Master Muir indicated that he would assign a case management master to hear the Plaintiff’s motion to extend the set down date or would convene a case conference.
[57] In a decision dated February 24, 2020, Master Muir ordered the Kondratiev Parties to pay partial indemnity costs of $9,000.
Dismissal of the Arcadia Action
[58] The motions by the Kondratiev Parties to, among other things, extend the set down deadline, and the motions of the opposing parties for an order dismissing the Arcadia Action, were eventually heard by Master Josefo on August 31, 2021.
[59] In a decision dated September 23, 2021, Arcadia Participacoes Ltda. v. Alexey Kondratiev et al, 2021 ONSC 6277 (the “Josefo Decision”), Associate Justice Josefo (as he is now titled) dismissed the motion to extend the set down deadline and granted the motion for dismissal of the action for delay.
[60] In the Josefo Decision, Associate Justice Josefo noted at paragraph 14 that, in coming to his conclusion on the motion, he considered “all the history and facts in that regard as set out in the voluminous record.” Associate Justice Josefo referred to the appearances before Masters Muir and Brott, the costs award made by Master Muir against the Kondratiev Parties, which they failed to pay in a timely manner, and the fact that the Plaintiff had commenced this action against the Defendants.
[61] Associate Justice Josefo concluded that the Plaintiff, instead of adhering to the Josefo Order, “deliberately chose to fritter away time, in fact, the better part of a year; not until December 2020 seeking to proceed with examinations for discovery of Mr. Tilley, let alone acting with the necessary alacrity called for the in the ‘last chance’ Order’” (Josefo Decision, para. 30).
[62] Associate Justice Josefo did note that the matter did not move forward and was stalled from January to May 2019, a time where the Defendants were still lawyers of record for the Kondratiev Parties (Josefo Decision, paras. 10, and 34-36).
[63] Associate Justice Josefo observed that under the Josefo Order, the Kondratiev Parties had the opportunity to choose to seek to amend their pleadings, and by failing to do so by May 31, 2019, the result was the set down deadline of December 31, 2019 (Josefo Decision, para. 13).
[64] Associate Justice Josefo concluded that the Plaintiff had many chances to move the litigation forward, that the matter was replete with ongoing delay, and that he was “unable to find any evidentiary support which demonstrates that it is in the interests of justice to vary my prior order” (Josefo Decision, paras. 31-32 and 40).
[65] The Kondratiev Parties appealed the dismissal of their action for delay. The Kondratiev Parties argued that Associate Justice Josefo erred in dismissing the Arcadia Action, as their failure in setting down the action for trial by December 31, 2019 was due to the failure of Tilley International to deliver its affidavit of documents, and the failure of a defendant to attend an examination for discovery.
[66] In Reasons for Decision dated July 22, 2022, Kondratiev v. Arcádia Participações Ltda, 2022 ONSC 1310 (the “Copeland Decision”), the Divisional Court dismissed the appeal. Justice Copeland was not persuaded that Associate Justice Josefo had “committed legal error or committed palpable and overriding factual error” (Copeland Decision, paras. 19 and 21).
[67] Justice Copeland held that the Josefo Decision was “primarily driven by the history of delay in the action, the appellants’ role in causing that delay, and, in particular, delay caused by the appellants after the peremptory order of January 24, 2019 fixing the set-down deadline” (Copeland Decision, para. 20).
[68] Justice Copeland noted that Associate Justice Josefo had made a factual finding that “between January 24 and May 8, 2019, the action “remained stalled” due to the appellants’ refusal to agree to a timetable that included a final set-down deadline” (Copeland Decision, para. 20).
[69] The Kondratiev Parties brought a motion to the Court of Appeal for an order granting them leave to appeal the Copeland Decision. On December 5, 2022, the Court of Appeal dismissed the motion.
Plaintiff’s Claim Against the Defendants
[70] The Plaintiff commenced this action against the Defendants pursuant to a statement of claim issued on May 22, 2019. The Plaintiff claimed damages of $100,000, and alleged that the Defendants were, among other things, negligent with respect to the legal services they provided in connection with the Boyko Action. The action was commenced under simplified procedure.
[71] In June 2021, the Plaintiff brought a motion seeking leave to amend his claim and continue the action under ordinary procedure. The Plaintiff sought amendments that contained new allegations of negligence about the Defendants’ handling of the Arcadia Action and the Amendment Motion, and sought an increase of damages to $100 million.
[72] As set out in Reasons for Decision dated September 21, 2021, Associate Justice Robinson granted the Plaintiff’s motion for leave to amend his claim to include allegations regarding the Defendants’ failure to amend the Kondratiev Parties’ counterclaim in the Arcadia Action, and seek damages against the Defendants with respect thereto.
AMENDMENTS SOUGHT BY THE PLAINTIFF
[73] In his draft Second Amended Statement of Claim, the Plaintiff seeks leave to include the following allegations:
The alternative timeline, triggered by the Defendants’ failure to serve the motion record by May 31, 2019, imposed a peremptory set-down deadline by December 31, 2019. The failure of one of the Defendants to produce their Affidavit of Documents violated the Court order and prevented the Plaintiff from meeting the set-down deadline.
On September 23, 2021, Associate Justice Josefo dismissed the Arcadia Action on account of the Plaintiff’s failure to meet the December 31, 2019 set-down deadline without considering all the relevant facts. In his Reasons for Decision and Order, Associate Justice Josefo wrote that the main reason for his dismissal relies on events in the Arcadia Action from when the Plaintiff was still represented by the Defendants. The Plaintiff was ordered to pay costs to the opposing parties in the Arcadia Action in the total amount of $375,000.00.
The Plaintiff pleads that Defendant Michael Wright made false representations to the Court with respect to his client, the Plaintiff, bearing all responsibility for the failure to meet the original set down deadline of December 31, 2018, and that Mr. Wright was just trying to get it back on track by bringing a motion to extend the set-down deadline. Such representations, made during oral hearings and in writing to the Court in January – March of 2019, have influenced the decision of Associate Justice Josefo to dismiss the Action for delay.
The Plaintiff’s Appeal of Associate Justice Josefo’s Order was dismissed by Justice Copeland of the Divisional Court on July 22, 2022. The Plaintiff was ordered to pay costs in the total amount of $20,000.00.
In her Reasons for Decision, Justice Copeland stated that, “In coming to this conclusion, the associate judge considered the history of the action and evidence in the record before him, as well as the legal principles in relation to varying orders and the consequences of delay in prosecuting a claim”. Her Honor refers to the history when the Defendants, while acting for the Plaintiff, had missed the previous set down deadline of December 31, 2018, which led to an emergency motion before Associate Justice Josefo. Associate Justice Josefo ordered a new deadline of May 31, 2019 to file the motion record which the Defendants further failed to comply with.
On December 5, 2022, the Court of Appeal denied the Plaintiff’s motion for leave to Appeal the Order of the Divisional Court and the Plaintiff was ordered to pay $2,500.00 in costs.
The Plaintiff pleads that the Defendants are directly responsible for the dismissal of the Arcadia Action by repeatedly missing deadlines imposed by the Court and acting in unprofessional manner.
[74] The Plaintiff also wishes to include the following itemization of damages and losses he has suffered:
g. the damages in the amount of $40,000,000.00 for failures to advance the Arcadia Action resulting in the action’s dismissal; and h. the fees paid to other counsel representing the Plaintiff in Arcadia Action before the Plaintiffs became the lawyers of record; and i. the costs awards payable to the opposing parties in the Arcadia Action: i. the costs ordered by the Superior Court in the amount of $375,000.00, ii. the costs ordered by the Divisional Court in the amount of $20,000.00 iii. the costs ordered by the Court of Appeal in the amount of $2,500.00;
POSITIONS OF THE PARTIES
[75] The Plaintiff argues that the Defendants are at fault for the dismissal of the Arcadia Action, and that he suffered damages as a result of its dismissal. The Plaintiff relies on rule 26.01, and argues that the proposed amendments will not result in prejudice to the Defendants that cannot be compensated for by costs or an adjournment.
[76] The Defendants argue that the proposed amendments are an abuse of process, an attempt to re-litigate a matter that has been dismissed by three levels of court, and fail to disclose a reasonable cause of action.
ANALYSIS
[77] Rule 26.01 of the Rules of Civil Procedure states that “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.” [emphasis added]
[78] In Klassen v. Beausoleil, 2019 ONCA 407, the Court of Appeal noted at paragraph 25 of its decision that “[t]he rule is framed in mandatory terms: the court must allow the amendment, unless the responding party would suffer non-compensable prejudice, the proposed pleading is scandalous, frivolous, or vexatious, or the proposed pleading fails to disclose a reasonable cause of action”.
[79] In Klassen, the Court of Appeal also discussed whether proposed amendments to a claim constitute a new cause of action. The Court of Appeal stated that “[a]n amendment does not assert a new cause of action – and therefore is not impermissibly statute barred – if the ‘original pleading… contains all the facts necessary to support the amendments … [such that] the amendments simply claim additional forms of relief, or clarify the relief sought, based on the same fact as originally pleaded’ [citations omitted]” (para. 28).
[80] In my view, based on my review of the Second Amended Statement of Claim, the amendments constitute a new cause of action. The existing Amended Statement of Claim does not address any claim for negligence in connection with the dismissal of the Arcadia Action as a whole. The proposed amendments are a separate factual situation that the Plaintiff relies on in support of his claim against the Defendants.
[81] The Defendants do not argue that any limitation period has expired with respect to the proposed amendments. The Defendants also do not argue that they would suffer non-compensable prejudice if the Plaintiff’s motion is granted.
[82] The Defendants have two main arguments. The first argument is that the proposed pleading does not disclose a reasonable cause of action. They argue that the proposed amendments contain no particulars to support a cause of action in negligence, and that the court must consider the “tenability” of the proposed claim.
[83] It is a general rule that pleadings must be read generously in favour of the proposed amendment, with allowance for drafting deficiencies (Klassen, para. 30).
[84] In Polla v. Croatian (Toronto) Credit Union Limited, 2020 ONCA 818, the Court of Appeal cited Klassen and noted the following with respect to amendment motions at paragraph 38 of its decision:
The existing pleadings, together with the proposed amendment, must be considered in a functional way – that is, keeping in mind that the role of pleadings is to give notice of the lis between the parties. As such, the question in this case is whether the respondents would reasonably have understood, from the Amended Statement of Claim and the particulars provided on discovery, that the appellant was pursuing a claim in respect of the matter addressed by the proposed amendment. [emphasis added]
[85] While the court retains the discretion not to allow an amendment, the denial of leave to amend should only be made in the clearest of cases, when it is plain and obvious that no tenable cause of action is possible on the facts as alleged (Mitchell v. Lewis, 2016 ONCA 903, para. 21).
[86] As set out above, the Josefo Decision noted that the Arcadia Action was stalled from January 24 to May 9, 2019. The Defendants’ motion materials show that the Plaintiff had instructed the Defendants to serve the Amendment Motion during this time period, which would have extended the deadline date to March 31, 2020. The Defendants refused to do so as they were not being paid and were of the view that they were not getting proper instructions.
[87] The Plaintiff has argued that the inaction of the Defendants in moving the Arcadia Action forward in 2019 was a factor that Associate Justice Josefo took into account in dismissing the Arcadia Action, and was also referred to in the Copeland Decision.
[88] In my view, with an allowance for inadequacies due to drafting deficiencies, it is not plain and obvious that no tenable cause of action is possible on the facts as alleged.
[89] The Defendants’ second argument is that the proposed amendments are an abuse of court process. Rule 25.11(c) provides that the court may strike out all or part of a pleading on the ground that the pleading is an abuse of process of the court.
[90] The Defendants rely on Toronto (City) v C.U.P.E., Local 79, 2003 SCC 63 in support of the principle that the re-litigation of issues that have been before the courts in a previous proceeding will create an abuse of process. In The Catalyst Capital Group Inc. v VimpelCom Ltd., 2019 ONCA 354, the Court of Appeal noted that abuse of process “applies to prevent re-litigation of previously decided facts” (para. 62).
[91] I agree with the Defendants that the statements in proposed paragraphs 16, 17, and 18, which I have crossed out below, are an abuse of process, as they either challenge decisions of the Court that were subject to appeal and are final, or have no basis when the Josefo Decision and Copeland Decision are considered:
The alternative timeline, triggered by the Defendants’ failure to serve the motion record by May 31, 2019, imposed a peremptory set-down deadline by December 31, 2019. The failure of one of the Defendants to produce their Affidavit of Documents violated the Court order and prevented the Plaintiff from meeting the set-down deadline.
On September 23, 2021, Associate Justice Josefo dismissed the Arcadia Action on account of the Plaintiff’s failure to meet the December 31, 2019 set-down deadline without considering all the relevant facts. In his Reasons for Decision and Order, Associate Justice Josefo wrote that the main reason for his dismissal relies on events in the Arcadia Action from when the Plaintiff was still represented by the Defendants. The Plaintiff was ordered to pay costs to the opposing parties in the Arcadia Action in the total amount of $375,000.00.
The Plaintiff pleads that Defendant Michael Wright made false representations to the Court with respect to his client, the Plaintiff, bearing all responsibility for the failure to meet the original set down deadline of December 31, 2018, and that Mr. Wright was just trying to get it back on track by bringing a motion to extend the set-down deadline. Such representations, made during oral hearings and in writing to the Court in January – March of 2019, have influenced the decision of Associate Justice Josefo to dismiss the Action for delay.
[92] During oral submissions, the Plaintiff confirmed that he was prepared to remove the crossed-out statement from paragraph 16.
[93] With respect to paragraphs 18 and 22, the Defendants argue that the Plaintiff has failed to provide particulars in connection with his allegations, contrary to rule 25.06(8), and that they are bald allegations and are frivolous and vexatious.
[94] The Defendants have not referred to any decision of the court where a proposed amendment was denied due to a lack of particularity. They have also not cited any decision where a court concluded that the failure to particularize an amendment renders the amendment frivolous and/or vexatious.
[95] In my view, the lack of particularity in those paragraphs likely stems from the Plaintiff’s status as a self-represented litigant. An allowance must be made for drafting deficiencies in the proposed amendments to the Amended Statement of Claim. When considering the proposed amendments in a “functional way”, the Defendants should reasonably understand what the basis of the Plaintiff’s claim is. Additionally, the issue of particularity may be addressed by the Defendants through a demand for particulars under rule 25.10 and through discovery.
DISPOSITION
[96] As a result of the foregoing, and taking into account the revisions to the proposed amendments contained in paragraph 91 above, the Plaintiff’s motion for leave to amend the Amended Statement of Claim is hereby granted.
[97] The Plaintiff sought costs of $1,000. In my view, this amount is reasonable for a self-represented litigant. I hereby order the Defendants to pay $1,000 (all inclusive) to the Plaintiff within 30 days of the date hereof.
[98] The parties shall agree on a form of draft order and send it to Assistant Trial Coordinator Kimi Sharma (kimi.sharma@ontario.ca) for my review.
Associate Justice Rappos
DATE: September 26, 2023
[1] See Arcadia Participacoes Ltda v. Alexey Kondratiev et al, 2019 ONSC 675, paras. 6-7.