Court File Numbers

CV-23-698079 & CV-24-724072

Date

2025-07-11

Superior Court of Justice - Ontario

Re: John Snow and Sherry Snow, Plaintiffs
- and -
10788155 Canada Inc., Nigel Neil Christian and Zain Shaikh, Defendants

Before: Todd Robinson, Associate Justice

Counsel:
J. Neal, for the plaintiffs
A. Miller, for the defendants

Heard: 2025-04-11

Reasons for Decision (Motions to Validate Service and Consolidate Proceedings)

[1] The plaintiffs bring motions in these two actions to consolidate the proceedings and fix a timetable for the consolidated action. The plaintiffs further seek an order validating service of the statement of claim and motion materials on the defendants in Court File No. CV-24-724072. The defendants oppose consolidation. They further take the position that they have not been properly served, nor has any attempt to properly serve them been made, so a validation order is not appropriate.

[2] I am granting both motions. With respect to validation, I am unconvinced that service by email should not be validated in the circumstances of this case. The defendants are clearly aware of the new claim. With respect to consolidation, the second action was evidently commenced solely to avoid expiry of a limitation period. It advances separate damages and additional claims that are not included in the first action. There is no dispute that both actions relate to a dispute over the same share purchase agreement and a related promissory note, and alleged breaches of those agreements by the defendants. Unquestionably both actions should be dealt with together. Separate proceedings do not make any procedural sense in the circumstances of this case. Consolidation is appropriate.

Analysis

Should service on the defendants by email be validated?

[3] The plaintiffs seek an order validating service of the second statement of claim by email on the defendants. I have no hesitation in finding that email service on the defendants should be validated.

[4] Rule 16.08 of the Rules of Civil Procedure, RRO 1990, Reg 194 (the “Rules”) governs validating service. It provides that the court may make an order validating a form of service other than those authorized by the Rules where the court is satisfied that either (a) the document came to the notice of the person to be served, or (b) the document was served in such a manner that it would have come to the notice of the person to be served, except for the person’s own attempts to evade service.

[5] Defendants’ counsel declined to accept service of the statement of claim in the second proceeding and advised plaintiffs’ counsel that the defendants would have to be served personally. The statement of claim was instead served by email on July 25, 2024. The evidence before me supports that the plaintiffs have no information on the current residential address of the defendants and that the first statement of claim was served by mail.

[6] The defendants have argued that they have not been properly served and that there is prejudice to validating service of the claim. They are correct that, pursuant to subrule 16.01(1) of the Rules, an originating process must be served personally or by alternative to personal service. That was not done here. However, the defendants’ position is overly technical and divorced from the reality that the second proceeding is an extension of the first proceeding and that they clearly have actual notice of the claim. Zain Shaikh’s affidavit in response to these motions discusses the new claim and appends a copy as an exhibit. He states, “At all material times, I was prepared to participate in the legal process and address the claims against me.”

[7] If nothing else, the defendants had actual notice of the claim by the time the defendants filed responding materials and opposed these motions. They did so using the same lawyer who represents them in the first proceeding. That lawyer acknowledged, on July 22, 2024, that he would be discussing the new claim with his clients and recommending that they move to dismiss it. Further, plaintiffs’ counsel has been communicating with defendants’ counsel throughout the litigation since the former was retained, including both before and after the second statement of claim was issued.

[8] In my view, the defendants’ position on service in these circumstances focusses too much on form over substance. They have actual knowledge of the plaintiffs’ overall claim against them. The second statement of claim contains further claims arising from the same share purchase agreement and guarantee. Their position in response to this motion was that the two claims are “identical” (other than relief). They have already defended the first claim. The defendants have been unable to point to any prejudice from validating service or a practical need to require that the plaintiffs go to the time and expense of personal service in these circumstances. I am accordingly validating service on the defendants by email effective July 25, 2024.

Should the two actions be consolidated?

[9] Rule 6.01 of the Rules governs consolidation and trial together of two or more proceedings. It provides that, where two or more proceedings are pending the court that have a question of law or fact in common or the relief claimed in them arises out of the same transaction or occurrence or series of transactions or occurrences, then the court may order that (i) the proceedings be consolidated, or heard at the same time or one immediately after the other, or (ii) any of the proceedings be either stayed until after the determination of any other of them or asserted by way of counterclaim in any other of them. It further provides the court with authority to give such directions as are just to avoid unnecessary costs or delay.

[10] The defendants correctly point out that rule 6.01 provides numerous options: consolidation, trial together, stay, or asserting a claim by counterclaim. Consolidation is not the only option available here. However, consolidation is the appropriate remedy in this case.

[11] Both actions clearly arise out of the same dealings between the parties, namely a share purchase agreement entered between the plaintiffs and 10788155 Canada Inc. for the purchase of the plaintiffs’ shares in Scientific Equipment Source Inc. The first action was commenced in April 2023 by the plaintiffs’ former counsel for amounts owing at that time. After new counsel was retained, the plaintiffs sought to amend the statement of claim to increase the quantum of their claim and add additional heads of relief. That included a claim for an additional $55,020.87 allegedly due and owing under para. 2.3(f) of the share purchase agreement (a provision dealing with adjustments to be made following closing) and a claim for specific performance, neither of which were included in the existing statement of claim. There was a particular concern that the limitation period for the monetary claim would expire in August 2024.

[12] When the defendants’ consent was not forthcoming, and given the plaintiffs’ concern that a limitation period may be approaching for the new claims, they sought to bring an urgent motion to amend. The plaintiffs’ urgent motion request came before a duty associate judge, who felt that the motion was not urgent. The duty associate judge provided directions on several options available to the plaintiffs, one of which was issuing a new claim within the limitation period and later moving for consolidation. The plaintiffs opted to follow that proposal and issued a second action in July 2024. It was drafted to exclude claims for the same relief already advanced in the existing action. The new statement of claim also expressly includes relief for consolidation of both proceedings at para. 1(f). This motion was subsequently brought.

[13] I am frankly at a loss for why this motion was required. There is clearly a level of acrimony between the parties, but it ought to have been tempered by counsel acting reasonably. Despite the positions taking in their responding materials, the defendants conceded during argument on the motion that they do not oppose trial together of the two actions or the timetable requested by the plaintiffs. When the overly technical arguments on both sides are stripped back, the core dispute is the appropriateness of consolidation as opposed to trial together.

[14] In their factum, the defendants suggest that the second proceeding should be dismissed, arguing that the two statements of claim are “nearly identical” and citing various statutory provisions and case law addressing the court’s jurisdiction and discretion to stay duplicate proceedings. During oral submissions, though, the defendants acknowledged that they were not advocating for dismissal of the second proceeding. Rather, they seek only dismissal of the motion to consolidate. They further acknowledged that an order for trial together is not inappropriate.

[15] I agree with the plaintiffs that I should consider rule 1.04 of the Rules, which provides that the Rules be “liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.” Continuing two parallel actions arising from the same transactions with evidently overlapping questions of fact and law is not the most expeditious or least expensive course of action. Although I could order common documentary and oral discovery, I agree with the plaintiffs’ submissions that maintaining separate proceedings will still result in duplicative work and filings, such as separate trial records.

[16] The defendants have sought to convince me that there is clearly a limitation period issue with the claims advanced in the second proceeding. They argue that the date of the share purchase agreement is relevant in considering whether the new claims are out of time. However, there is insufficient evidence before me to make any determination on discoverability of the plaintiffs’ claims. Since the limitations issue is not cut and dry on the record before me, it is not an impediment to consolidation. It will be open to the defendants to raise limitation defences in response to the new claims. There has been no suggestion by the plaintiffs that the defendants should be precluded from doing so.

[17] Since I am unconvinced by the defendants’ arguments that consolidation is inappropriate in the circumstances of this case, I am ordering consolidation of the two proceedings under Court File No. CV-23-698079.

[18] New pleadings will be required for the consolidated action. The plaintiffs have proposed a form of amended statement of claim, which was emailed to defendants’ counsel on June 10, 2024. It includes a revised quantum and some additional pleadings that are not found in either of the two existing statements of claim. The plaintiffs submit that they have sought to properly account for payments made by the defendants and the amounts they say are actually owing. The defendants dispute the accuracy of that accounting. The defendants further dispute the validity of naming the individual defendants. The plaintiffs maintain that doing so was (and is) proper based on the signed guarantee.

[19] In my view, these are not disputes that impact the form of amended statement of claim in the consolidated proceeding. The plaintiffs have already sued all three defendants in both actions. In the first proceeding, all three defendants have counterclaimed against the plaintiffs. In the amended statement of claim, the plaintiffs propose amended claim amounts that are lower than the aggregate monetary claim against all defendants in the two proceedings. If the defendants dispute liability of the individual defendants and the plaintiffs’ accounting, then that should be addressed in the statement of defence and subsequently explored during litigation. It is not something that should be determined prior to a new statement of claim being issued.

[20] Rule 26.01 of the Rules expressly provides that 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.

[21] The plaintiffs are entitled (and obliged) to frame their own claim, including against whom they seek relief and the specific relief that they are seeking. In my view, the scope of relief outlined in the proposed consolidated amended statement of claim is not expanding from what has been sought in the two existing statements of claim. The total quantum has been reduced. I have been directed to nothing in the proposed amended statement of claim that asserts a new cause of action, nor have I been directed to any evidence supporting that the defendants are prejudiced by the proposed amendments. I thereby find no prejudice to granting leave to the plaintiffs to amend their statement of claim in the consolidated proceeding in the form proposed.

[22] With respect to a timetable for next steps, the plaintiffs have included a discovery plan in their motion materials. The defendants conceded during oral submissions that the timetable in that discovery plan is reasonable, despite the defendants’ position that neither the timetable nor discovery plan were provided to them before the two motion records were served. I am accordingly imposing the plaintiffs’ proposed discovery plan, with modification given the length of this reserve. The parties may vary the timetable on mutual consent pursuant to rule 3.04 of the Rules or, if they cannot agree, may arrange a case conference to address a revised timetable. I am not seized of any such case conference.

Disposition

[23] For the foregoing reasons, I order as follows:

(a) Service of the statement of claim in Court File No. CV-24-724072 on the defendants is hereby validated effective July 25, 2024.

(b) The two proceedings by the plaintiffs against the defendants in Court File Nos. CV-23-698079 and CV-24-724072 are hereby consolidated and shall hereafter continue under Court File No. CV-23-698079.

(c) Leave is hereby granted to the plaintiff to amend its statement of claim in the consolidated proceeding in the form attached to the email appended as Exhibit “F” to the affidavit of John Snow sworn November 12, 2024 in Court File No. CV-24-724072.

(d) The defendants shall serve an amended statement of defence and counterclaim by July 25, 2025, failing which the existing statement of defence and counterclaim in Court File No. CV-23-698079 shall be deemed to stand as their pleading in the consolidated proceeding.

(e) The plaintiffs shall serve their reply (if any) and defence to counterclaim by August 8, 2025.

(f) The parties shall adhere to the discovery plan appended as Exhibit “F” to the affidavit of John Snow sworn November 12, 2024 in Court File No. CV-23-698079, without the need for formal execution by the parties, subject to the following timetable amendments:

(i) Affidavits of documents shall be exchanged by August 29, 2025.

(ii) Examinations for discovery shall be completed by November 28, 2025.

(g) The timetable fixed in subparagraphs (d) through (f) above may be varied on mutual consent of the parties, without the need for any further court order, or by further court order if the parties cannot agree.

(h) This order is effective without further formality.

[24] If a formal order is required, then a draft order (or orders) approved as to form and content may be submitted by email to my Assistant Trial Coordinator, Christine Meditskos, for my signature. Both pdf and Word copies should be submitted.

Costs

[25] Costs outlines have been exchanged. At least the plaintiffs intended to rely on an offer to settle, so I could not hear costs submissions at the time of the hearing. I encourage the parties to settle costs of the motion. If they cannot agree, then written costs submissions shall be exchanged. The plaintiffs shall serve any costs submissions by August 1, 2025. The defendants shall serve responding costs submissions by August 22, 2025. The plaintiff shall serve any reply submissions by August 29, 2025. Both sides shall clearly state the amount and scale of costs that they are seeking and/or should be awarded. Costs submissions shall not exceed five (5) pages, excluding any offers to settle and case law, for primary submissions and two (2) pages for the plaintiffs’ reply.

[26] Once served, all costs submissions shall be submitted by email directly to my Assistant Trial Coordinator, Christine Meditskos, with proof of service. Unless exchanged and submitted in accordance with the above, the parties shall be deemed to have agreed on costs.

Todd Robinson, Associate Justice

Date: July 11, 2025