2010 ONSC 5522, 2010 ONSC 5522

CITATION : Gornergrat Developments Inc. v. Lalonde et al, 2010 ONSC 5522 NEWMARKET COURT FILE NO.: 51002/99 DATE: 2010/12/17 ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: ) ) Gornergrat Developments Limited, Sean S. Aki and Soichiro Yamamoto ) ) ) Theodore Rotenberg, for the Plaintiffs ) Plaintiffs ) ) - and - ) ) ) D. Wayne Lalonde, Melvyn D. Eisen, Fraser & Beatty, Fraser & Milner, and The Corporation of the Town of Markham ) ) ) David Boghosian, for the Defendant, The Corporation of the Town of Markham ) Defendants ) ) ) HEARD: June 21, 22, 2010 REASONS FOR JUDGMENT McEWEN J.

INTRODUCTION [ 1 ] The defendant, The Corporation of the Town of Markham (“Markham”) is seeking the following relief:

a) An Order granting leave to the Defendant The Corporation of the Town of Markham to amend its Statement of Defence and Crossclaim in accordance with the draft Amended Amended Statement of Defence and Crossclaim attached at

Schedule “A” to this Notice of Motion;

b) An Order granting

summary judgment dismissing the action as against the Defendant The Corporation of the Town of Markham;

c) In the alternative, an Order dismissing the action for delay as against the Defendant The Corporation of the Town of Markham;

d) Costs of this motion and of the action. OVERVIEW [ 2 ] This action initially arose out of three agreements of purchase and sale dated February 1, 1989, (the “Agreements”) in which the plaintiff, Gornergrat Developments Limited (“Gornergrat”), agreed to purchase from Ryan Road Development Inc. (“Ryan Road”), lots 2, 3 and 4 on a proposed plan of subdivision (the “subdivision”) in Markham. Shortly thereafter, Gornergrat assigned its interest in the Agreements concerning lot 2 to the plaintiffs, Sean S. Aki (“Aki”), and Soichiro Yamamoto (“Yamamoto”). [ 3 ]

Section 3.01 of the Agreements stated that the closing and adjustment date was to be five days after Markham provided a letter to Ryan Road, which was then provided to Gornergrat, which indicated that, subject to the requirements of any public authority, a building permit would be available for the lots.

Section 3.01 reads as follows: The date for Adjustment and the possession date for the purpose of this Agreement shall be the fifth business day following delivery to the Purchaser, or the Solicitor or party acting for the Purchaser, of a letter from the Municipality indicating that subject to the requirements of any other public authority that upon an application for a building permit being made in accordance with all of the Municipality’s requirements and payment of the appropriate fees of the construction of an industrial building meeting all the requirements of the relevant zoning and building by-laws of the Municipality, PROVIDED, that should a building permit not be available by the 30 th day of August, 1989, then the Agreement arising out of the acceptance of this Offer shall be null and void, the deposit moneys shall be returned to the Purchaser without deduction or interest, and the Vendor shall not be liable for any costs or damages of the Purchaser. [ 4 ] Prior to the Agreements being signed, however, Ryan Road was made aware that the Ontario Ministry of the Environment (“MOE”) had directed a letter, dated November 3, 1988, to Markham and Ryan Road, amongst others.

In that letter, the MOE had advised that the subdivision had been used as an automobile wrecking yard in the past and that waste materials remained in the soil. As such, the MOE requested that Markham not issue building permits pursuant to

section 45 of the Environmental Protection Act , 1971 , S.O. 1971, c.86, which provided as follows: No use shall be made of land or land covered by water which has been used for the disposal of waste within a period of twenty-five years from the year in which such land ceased to be so used unless the approval of the Minister for the proposed use has been given. [ 5 ] The MOE concluded the letter by stating: Until such time as the Minister of the Environment has granted a

section 45 approval based on satisfactory plans and specifications, the denial of building permits should remain in effect. Ryan Road did not advise Gornergrat of this letter. [ 6 ] On August 21, 1989, at Ryan Road’s request, Markham wrote to Ryan Road concerning the issue of available building permits. The letter indicated, among other things, that the Markham Building Department “may” process and issue building permits for lots in the subdivision, provided a number of conditions were met.

One of the conditions involved the submission of all necessary documentation and approvals required by Markham and other regulatory bodies. [ 7 ] As a result of Ryan Road having obtained a letter from Markham as required by

section 3.01 of the Agreements, the purchase and sale transaction in respect of lots 2, 3 and 4, closed on September 15, 1989. [ 8 ] Thereafter, in July 1990 Aki and Yamamoto applied for a building permit for lot 2. The MOE objected, however, not because of the presence of materials from the wrecking yard in the soil, but rather because of its concern about the possible presence of methane gas on some of the other lots in the subdivision.

Prior to agreeing to the issuance of a building permit, the MOE required that methane gas monitoring and collections systems be installed between contaminated properties and non-contaminated properties, including lot 2. Ultimately, the MOE approved Ryan Road’s proposal to satisfy MOE concerns, and Ryan Road installed the required monitoring and collections system in May 1991. [ 9 ] In the meantime, however, Gornergrat, Aki and Yamamoto (collectively the “plaintiffs”) defaulted on the payments due pursuant to the Agreements.

They allege that the defaults resulted from the lack of immediate access to building permits. [ 10 ] Thereafter, the plaintiffs brought an action against Ryan Road in 1991, (the “Ryan Road action”) claiming material misrepresentation with respect to the real property transaction and availability of the building permits, as well as the presence of soil contamination on the lots. Ryan Road counterclaimed for the outstanding monies owed to them pursuant to the Agreement. [ 11 ] Ryan Road brought a motion for

summary judgment. On May 5, 1992, Jarvis J. granted

summary judgment in favour of Ryan Road, dismissing the plaintiffs’ action and further granted judgment on the counterclaim for the outstanding funds owed: Gornergrat Developments Ltd. v. Ryan Road Developments , [1992] O.J. No. 939 (Ct. J.(Gen. Div.)). The plaintiffs’ subsequent appeal to the Ontario Court of Appeal was dismissed as was their application for leave to appeal to the Supreme Court of Canada: Gornergrat Developments Ltd. v. Ryan Road Developments , [1992] O.J. No. 2387 (C.A.) , leave to appeal dismissed: [1992] S.C.C.A. No. 549. [ 12 ] The plaintiffs commenced this action against Markham and others on January 8, 1999.

POSITIONS OF THE PARTIES [13] Markham is the only remaining defendant in this lawsuit. In its notice of motion Markham states that the plaintiffs’ claims mustbe dismissed against it for the following reasons: (

a) Abuse of process: Jarvis J. found as fact on the

summary judgment motion against the Plaintiffs in the earlier action againstRyan that the letter was not inaccurate and did not contain any misrepresentation, which findings, as a matter of law, the Plaintiffs arebound by as they were parties in the earlier proceeding. These findings of fact were upheld by the Ontario Court of Appeal and anapplication for leave to appeal to the S.C.C. was dismissed. (

b) Negligent misrepresentation: The Plaintiffs cannot make out a claim for negligent misrepresentation as all of the Plaintiffs havetestified under oath that they placed no reliance on the Letter in closing the Agreements; the Letter expressly contemplated theimposition of conditions to the issuance of building permits by third party agencies, such as the requirement that approval to develop theLots be obtained from the MOE; and the Town had no knowledge or expectation that the Letter would be provided, let alone relied upon,by purchasers of lots in the Subdivision and was unaware of the terms of the agreement of purchase and sale between the Plaintiffs andRyan which made the availability of building permits relevant for the timing of the closing of the purchase and sale transactions. (

c) Limitation Period: The within action was not commenced until January 8, 1999. The Plaintiffs were aware of the contents ofthe Letter and the lack of immediate availability of building permits by December 1990, more than 9 years earlier. The Plaintiffs wereaware that the Town was aware that the MOE had imposed a requirement that its approval to build on the lots be obtained on or aboutAugust 22, 1989, or by December 1992 at the latest. The action is therefore statute-barred by the six year limitation period for actionsalleging negligence under the former Limitations Act then in effect. (

d) Delay: The action has been outstanding for more than 11 years and relates to events which occurred 20 years ago. A. Abuse of Process: [14] Markham argues that this action should be struck as an abuse of process since Jarvis J. held in the Ryan Road action that theAugust 24, 1989, letter contained no material misrepresentation.

It is therefore submitted that, as of a matter of law, the plaintiffs arebound by that finding as they were parties in the earlier proceeding and can not now allege that the letter in fact containedmisrepresentations. [15] The plaintiffs, however submit that that significant issues in this action were not determined by Jarvis J. in the Ryan Roadlitigation. The plaintiffs specifically state that the following issues were not dealt with:

a) Whether Markham owed a duty of care to persons such as the Plaintiffs for the contents of the letter of August 24, 1989.

b) Whether Markham made a misleading statement in the letter because it did not reference the

section 45 Order.

c) Whether Markham made a misleading statement in the letter because it knew that there was groundwater seepage andcontamination in the storm water system that would preclude it from issuing a building permit.

d) Whether it was negligent for Markham to have compartmentalized its information so that Walker was not aware of the

section 45Order. [16] The plaintiffs also contend that the Ryan Road litigation dealt with the issue of the possible migration of methane gas and not thesection 45 MOE Order. [17] The plaintiffs further argue that the

section 45 Order of the MOE constituted a development “freeze” as opposed to a condition,and if in fact this is the case, then the doctrine of abuse of process does not apply since it is not a condition to development, but rather abar to development. [18] The parties also agree that Jarvis J., through no fault of his own, was operating under the mistaken belief that at the time ofclosing, building permits were available. This was not the case: it is admitted by the parties in this action that building permits were notavailable at closing.

For some reason, counsel in the Ryan Road action believed that building permits were available at closing and thesesubmissions were made to Jarvis J., who relied upon them. B. Negligent Misrepresentation [19] The parties agree that the five elements comprising the cause of action for negligent misrepresentation are properly set out in the1993 Supreme Court of Canada decision of Queen v.

Cognos Inc., (SCC), [1993] 1 S.C.R. 87 at 110 as follows: There must be a duty of care based on a “special relationship” between the representor and the representee; the representation in question must be untrue, inaccurate, or misleading; the representor must have acted negligently in making said misrepresentation; the representee must have relied, in a reasonable manner, on said negligent misrepresentation; and the reliance must have been detrimental to the representee in the sense that damages resulted. [20] Markham makes the following submissions in its

summary judgment motion in support of its claim of negligentmisrepresentation:

a) The statements made by Mr. Walker in the August 24, 1989, letter were not untrue, inaccurate, or misleading in that subparagraphs (iii) and (iv) of the letter clearly state that compliance with all the terms and conditions of the subdivision Agreements must be adhered to and that regulatory body approval is required, all of which is true.

b) The plaintiffs did not rely on the letter, or in the alternative, any reliance was unreasonable. Specifically, Yamamoto did not receive, know about or rely on the letter. He was not aware that the letter was a condition on closing. His responses to inquiries of his knowledge was expressly stipulated as being binding on Aki. Mr. Di Paola, the president of Gornergrat, did not read the letter; however, he provided it to his solicitor. The solicitor read and misunderstood the letter and had told his client to seek a letter from Ryan Road stating that building permits would be available without condition.

This indicates that Gornergrat did not rely upon the actual terms of the letter. Alternatively, any reliance stated by Gornergrat was unreasonable, since it was a sophisticated business entity. Mr. Di Paola had been developing lands for over 35 years, and certainly knew that approvals from other regulatory bodies were required. By not familiarizing itself with appropriate regulatory requirements, Gornergrat is the author of its own misfortune. [ 21 ] The plaintiffs submit, in response to the defendants’ argument as follows:

a) That the August 24, 1989, letter was in fact misleading given the fact that it did not specifically deal with the

section 45 MOE Order.

b) The plaintiffs state that there was reliance in that the August 24, 1989, letter triggered the obligation to pay under the Agreements, and that the plaintiffs relied on the documents in determining what payments had to be made. The plaintiffs specifically relied upon the fact that Mr. Yamamoto and Mr. Di Paola, relied upon correspondence from Ryan Road’s solicitor, which enclosed the letter from Markham in closing the deal and making the payments.

The plaintiffs concede that there is some uncertainty as to whether they would have relied specifically upon the letter, but argue that a trial judge could find that the plaintiffs relied upon the letter because it triggered the payments. Furthermore, it is argued that the plaintiffs, specifically Gornergrat, relied upon its solicitor, who received a copy of the aforementioned letter and as such, there was reliance.

The plaintiffs further argue that a court could conclude that there was reliance on the letter by the plaintiffs because the letter also, in and of itself, triggered their obligation to complete the Agreements. C. Limitation Period [ 22 ] The notice of action in this matter was issued on January 8, 1999. The parties agree that the relevant limitation period is the six year limitation period set out in the previous Limitations Act , R.S.O. 1990, C.

L.15 (the “ Limitations Act ”). [ 23 ] Markham contends that the plaintiffs have commenced their action out of time. [ 24 ] Markham argues that the plaintiffs were aware that they had a claim against Markham in or around December 1990 when Mr. Di Paolo met with Mr. Walker and concluded that Mr. Walker’s August 24, 1989, letter was misleading, since the MOE had never agreed that a building permit could be obtained. (See transcript of Mr.

Di Paolo’s evidence dated November 25, 2002, page 140, question 461.) Markham further takes the position that at the very latest, by December 1992 the plaintiffs had to have known of the material facts giving rise to the cause of action by virtue of the contents of the letter written by Ms. Di Paolo, Mr. Di Paolo’s spouse, to Markham in which she states the following: In reviewing the Town of Markham’s files, we have ascertained that building permits are not yet available for the above property, nor were they ever available for these lands. Would you kindly confirm this to us in writing.

Your prompt reply to this matter will be greatly appreciated. [ 25 ] Markham claims that Ms.

Di Paolo could only have come to this conclusion if her review of the documentation demonstrated that Gornergrat did in fact have knowledge that MOE approval was required before building permits would be issued. [ 26 ] Markham further argues that by the date of Jarvis J.’s judgment in June 1992 that the plaintiffs had knowledge of the material facts required to demonstrate that they had the possibility of bringing a successful action. [ 27 ] The plaintiffs argue that the circumstances surrounding the issue of when the plaintiffs obtained the material facts is complicated and cannot be dealt with on a motion for

summary judgment. They submit there is simply not enough evidence produced at the

summary judgment motion to infer what each plaintiff knew at the material times. The plaintiffs argue that reasonable diligence does not require 20/20 hindsight. In support of their submissions, the plaintiffs submit that it is clear that, at the very least, Aki and Yamamoto did not know of the relevant facts until 1993, as set out in Mr. Yamamoto’s affidavit. [ 28 ] With respect to Gornergrat, the plaintiffs contend that Ms. Di Paolo’s letter does not refer to the

section 45 MOE Order. Furthermore, the plaintiffs argue that the examination for discovery of Mr. Di Paolo clearly illustrates that Gornergrat was not aware of environmental issues in August 1989. (See page 80, questions 266 and 267). [ 29 ] Both sides referred me to numerous documents from the Affidavit of Documents in support of their positions with respect to the commencement of the running of the limitation period. D. Dismissal for Delay [ 30 ] Markham moves to have the action dismissed by virtue of the provisions of rule 24.01(1) (

e) of the Rules of Civil Procedure , R.R.O. 1990, Reg. 194, which provides that a defendant may move to have an action dismissed for delay, where the plaintiff has failed to set down the action for trial within six months of the close of pleadings. In this case, the plaintiffs only very recently set down the

matter for trial; more than 10 years after the action commenced. [31] Markham alleges that it has been prejudiced by this delay since its’ key witness, William Walker, passed away in 2006. Markham contends that Mr. Walker was a key witness to this action since he authored the critical, August 24, 1989, letter to Ryan Road,which the plaintiffs claim contained negligent misrepresentations. The letter is specifically referred to in the Statement of Claim. [32] Markham also alleges that the plaintiffs did not file any materials with respect to the presumption of prejudice, despite the factthat Mr.

Walker’s evidence has been preserved and subject to the agreement above, there is an issue as to how much weight Mr.Walker’s evidence will ultimately be given. [33] The plaintiffs submit that Markham has sustained no prejudice as a result of the death of Mr. Walker, since the plaintiffs andMarkham have agreed to accept Mr. Walker’s examination for discovery as truthful and admissible evidence. THE TEST FOR

SUMMARY JUDGMENT [34] It is clear that a court is to grant

summary judgment if it is satisfied that there is no genuine issue requiring a trial. Rule20.04(2.1) stipulates that a judge on a

summary judgment motion may weigh evidence, assess the credibility of a deponent and draw anyreasonable inference from the evidence, unless it is found to be in the interest of justice that such powers only be exercised only at a trial. It is also clear that changes were made to Rule 20 to broaden the scope of cases in which

summary judgment could be granted. [35] The moving party, however, bears the onus of establishing that a trial is unnecessary to truly, fairly, and justly resolve the issues. Part of that analysis necessarily involves a consideration of whether the issues between the parties cannot be properly and justly resolvedwithout a trial: RPG Receivables Purchase Group Inc. v. Krones Machinery Co., 2010 ONSC 2372, [2010] O.J. No. 2198. ANALYSIS A.

Abuse of Process [36] A party to a prior judicial proceeding can be bound by findings of fact and mixed fact and law made in a prior proceeding,notwithstanding the fact that the opposite party in the later proceeding was not a party in the first proceeding: Toronto (City) v.C.U.P.E. Local 79, 2003 SCC 63 , [2003] 3 S.C.R. 77. The obvious purpose of the rule is to prevent the relitigating ofpreviously decided issues, as noted above. Markham contends that Jarvis J. held in the Ryan Road action that there was no materialmisrepresentation in the August 24, 1989, letter.

The plaintiffs therefore cannot relitigate this issue. [37] The difficulty with Markham’s submission is that it is agreed that Jarvis J. was operating under the mistaken belief that at thetime of closing, that building permits were available; this is not the case. It is now admitted by the parties that building permits were notavailable. Given this inaccuracy in the true state of affairs, I cannot conclude that Jarvis J. answered the “same question” that must bedecided in this case.

It simply cannot be said that Jarvis J.’s finding of fact and law in the earlier proceeding determines the issue in thisproceeding, given the misunderstanding that he and counsel were operating under, at that time, concerning a critical issue, i.e. theavailability of a building permit. [38] Markham further submits, however, that this mistake of fact is not fatal to its position given the following passage from thejudgment of Jarvis J. in Gornergrat Developments Ltd. v.

Ryan Road Developments, supra: Furthermore even if this latter time period were relevant to the issue before me even at this point building permits were available subjectto conditions of the sort contemplated by

Article 3.01. [39] The difficulty, once more, is that Jarvis J. in crafting the entire decision, was operating under the mistaken belief that buildingpermits were available at the time of closing. Accordingly, when he made the above statement, he was obviously influenced by thisfact.

Therefore, I cannot conclude that had he been aware of the fact that building permits were not available at the time of closing, hewould have necessarily concluded that building permits “were available” subject to the conditions of the sort contemplated by Article3.01. [40] Additionally, I find that Jarvis J.’s comments above constitute obiter dicta and therefore cannot support the contention that it isan abuse of process to litigate the issue herein. [41] Moreover, the decision of Jarvis J. deals primarily with the issue of the migration of methane gas, not the issue of the effect ofsection 45 MOE Order. [42] Lastly, with respect to the plaintiffs’ argument that the

section 45 Order was in fact a development “freeze” as opposed to acondition or approval, I find that there is a triable issue in this regard, which may require expert evidence or evidence from arepresentative from the MOE. [43] For abuse of process to be properly applied, the same issue has to have been decided: Toronto (City) v. C.U.P.E. Local 79,supra; Glenko Enterprises Ltd. v. Keller, 2008 MBCA 24. I cannot find that if a judge was misinformed as to critical information, thatthe issue was previously decided.

Moreover, even if the issue was previously decided, I have discretion to apply the abuse of processdoctrine to prevent relitigation: Toronto (City) v. C.U.P.E. Local 79, supra, Glenko Enterprises Ltd. v. Keller, 2008 MBCA 24. Usingmy discretion, I find that the plaintiffs are not prevented by abuse of process from bringing their case. [44] Based on the foregoing, I find that there are genuine issues that require a trial. The

summary judgment motion raised byMarkham with respect to the issue of abuse of process must fail. B. Negligence Misrepresentation

[45] Firstly, I find that Markham owed the plaintiffs a duty of care in the circumstances of this case. A municipality, in itsrepresentations, owes a duty of care to third parties who are potential purchasers: Black v. Lakefield Village (1998), (ON CA), 41 O.R. (3d) 741, [1998] O.J. No. 4660 (C.A.). With respect to Markham’s argument that the August 24, 1989, letter was notin any way untrue, inaccurate or misleading, I have concluded that there is a genuine issue for trial. While it is true that the August 24,1989, letter set out in simple terms that approvals of other regulatory bodies were required, no specific reference was made to theoutstanding

section 45 MOE Order that, at that time, made it impossible to obtain building permits. At that time it was unknown as towhether building permits would ever be obtained. As noted previously in dealing with the issue of abuse of process, the plaintiffs arguethat the bar to development amounted to “a freeze”. In determining this issue, I would think that, once again, expert evidence may be ofassistance and/or evidence from the MOE with respect to the significance and potential longevity of the

section 45 Order. Therefore,summary judgment would be inappropriate. [46] Secondly, with respect to the issue of the plaintiffs’ reliance on the letter, I cannot conclude on a

summary judgment basis thatthere is not a genuine issue for trial, in that, the plaintiffs specifically state that they relied upon the letter, either generally or throughcounsel. Accordingly, viva voce evidence would be appropriate to properly determine this issue. C. Limitation Period [47] I have carefully reviewed the correspondence and the transcripts and I am forced to conclude that without hearing viva voceevidence from the parties, it is premature to determine that this is not a genuine issue requiring trial.

Specifically, credibility issuessurrounding what letters were received and when, what was said at certain meetings, and the general understanding of the plaintiffsconcerning material facts. These considerations ought to be left with the trial judge who will have the opportunity to observe thewitnesses and consider their evidence.

I cannot help but conclude that the interests of justice would be better served by having a trialjudge evaluate the credibility of the opponents and weigh the evidence in this regard. [48] Specifically, with respect to the plaintiffs Aki and Yamamoto, there is definitely a genuine issue for trial in that it is specificallyalleged that they did not know of the relevant facts until 1993. This is supported by Yamamoto’s affidavit evidence. Insofar asGornergrat is concerned, there is certainly evidence that they may well have been aware of the fact that they had a claim againstMarkham in or about 1990.

However, after thoroughly reviewing the aforementioned correspondence and discovery evidence, I find thatthere is a genuine issue requiring a trial and that a trial judge would be in a much better position than I to determine the matter, havinghad an opportunity to review all of the documentation with the assistance of viva voce evidence. [49] I therefore dismiss Markham’s motion to have the plaintiffs’ action dismissed on the basis that the plaintiffs instituted this actionoutside the six year limitation period. D.

Dismissal for Delay [50] The law is clear that in the face of an inordinate delay, a rebuttable presumption arises that the defendants are prejudiced,because a substantial risk arises “that a fair trial might not be possible”. There are several bases for the presumption. One recognizesthat memories fade over time and another recognizes that justice delayed is justice denied. Expeditious justice is the objective. Thepresumption strengthens with the length of the delay: Tanguay v. Brouse, 2010 ONCA 73 , [2010] O.J.

No. 343 (C.A.). [51] In this case there is no question that there has been an inordinate delay and therefore, there is a rebuttable presumption thatMarkham has suffered prejudice, because a substantial risk arises and a fair trial may not be possible. [52] Markham argues that Mr. Walker was “its key witness” and as a result of his death, there has been substantial prejudice. Asnoted above, however, the parties have agreed to accept Mr.

Walker’s examination for discovery evidence as truthful and admissible. [53] In addition to the aforementioned agreement in which his evidence will be deemed to be truthful and admissible, Markhamconcedes that this case is a “document driven case”, and that viva voce evidence will largely be self-serving. Furthermore, Mr. Walker’srole in the entire transaction that gave rise to this action was very limited. In essence, he signed a standard form letter that he himself didnot prepare. [54] Markham concedes that Mr.

Walker’s evidence will be before the court, but contends that Markham is prejudiced by not havingevidence from Mr. Walker before the court as to whether he was aware of the

section 45 EPA Designation of the subject lands by theMOE, and thus signed the letter in error. Markham contends that Mr. Walker was never questioned on this issue. Markham furthercontends that the plaintiffs are attempting to insinuate that Mr. Walker was ignorant of MOE’s concerns about the previous use of thesubdivision lands, when he signed the letter, and thus issued the letter in error. I do not agree.

There may be some merit to Markham’sargument at trial if the plaintiffs make such “insinuations”, but if this becomes a critical feature at trial, it would appear to prejudice theplaintiffs more as they did not ask this question of Mr. Walker at his examination for discovery.

At this stage it would certainly bespeculatory to suggest that Markham is prejudiced. [55] Based on the above, I believe it will be in order to reserve this issue to the trial judge who will be in a much better position todetermine whether the plaintiffs do in fact make the insinuations feared by Markham and whether such insinuations are in factprejudicial. [56] Finally, I did not find the plaintiffs’ failure to file materials fatal to its argument.

In light of the aforementioned agreement, Icannot conceive of what materials the plaintiffs might have filed that would not have been entirely self-serving and of limited or no valueto the court. DISPOSITION [57] Based on the foregoing, I therefore make the following orders:

a) On consent Markham is allowed to amend its statement of defence in accordance with the Draft Amended Amended Statement of

Defence and Crossclaim attached to

Schedule A to its Notice of Motion.

b) Markham’s motion seeking

summary judgment dismissing the action against it is dismissed with costs.

c) Markham’s motion for an order dismissing the action for delay is referred to the trial judge for hearing. [ 58 ] If the parties cannot agree with respect to the issue of costs, they are to provide the court with written submissions not exceeding three pages in length, and filed with the court within 30 days. ___________________________ Justice T. McEwen Released: December 17, 2010