|
Civil Litigation Case Dicta - Applications - Pleadings. Grandfield Homes (Kenton) Ltd. v. Chen
In Grandfield Homes (Kenton) Ltd. v. Chen (Ont CA, 2024) the Ontario Court of Appeal dismissed an appeal by an appellant owner who was denied the ability to argue (or amend) their application to claim damages in an APS breach case. The appellant had already successfully claimed for declarations regarding the respondent's breach and for the right to retain deposits, but then - by pointing to passages of their application factum - further argued that they had in fact had 'pled' the damages remedy.
This case raises issues of where application 'pleadings' begin and end - ie. in which documents they are contained:[2] The appellant commenced an application to obtain declaratory relief that the respondent breached the agreement of purchase and sale and that it is entitled to retain the deposits paid by the respondent. In para. 3 of its application factum, the appellant requested, as further declaratory relief, that it was entitled to claim damages beyond the deposits. It requested that the court order a trial of the issue of those additional damages:The Applicant vendor now applies pursuant to Rule 14.05 (3)(d) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”) for a determination of its rights under the purchase agreement. It seeks to have the Court declare that the contract was breached by the purchaser; that, as a result, the purchaser is not entitled to return of her deposits, which the vendor is entitled to retain; and that the vendor is entitled to claim further damages flowing from that breach of contract, which it asks this Court to direct to trial. [Bolded emphasis in original; underlined emphasis added.] [3] The application judge found that neither of the respondent’s alleged misrepresentations gave her the right to breach the agreement and declared that she was in breach. He also ordered that the appellant shall retain the deposits. The application judge declined to grant the order that there be a trial of the issue of damages beyond the forfeited deposits, finding that 1) this relief was not in the notice of application or contained in the appellant’s evidence; and 2) a trial of this issue would bifurcate the issue of damages, result in a multiplicity of proceedings, and cause potential unfairness to the respondent.
....
[6] We start with the well-established principles that, absent amendment, lawsuits are to be “decided within the boundaries of the pleadings,” and the parties are entitled to have a resolution of their dispute based on the pleadings: Rodaro v. Royal Bank of Canada (2002), 2002 CanLII 41834 (ON CA), 59 O.R. (3d) 74, at para. 60; Mihaylov v. 1165996 Ontario Inc., 2017 ONCA 116, 134 O.R. (3d) 401, at para. 123. The rationale underlying those principles is fairness: the responding party is entitled to know the case to be met.
[7] We note that the appellant’s claims for a declaration that they are entitled to seek additional damages and an order of a trial of that issue must be specifically pleaded. Subsections (a) and (b) of r. 38.04 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, require that the notice of application “shall state” both (a) “the precise relief sought,” and (b) “the grounds to be argued”. This would include addressing why the appellant is entitled to claim relief with respect to the additional damages.
[8] This court has held that the pleadings in an application include the supporting affidavits: Voreon Inc. v. Matas Management Services Inc., 2023 ONCA 745, at para. 55; 1100997 Ontario Limited v. North Elgin Centre Inc., 2016 ONCA 848, 409 D.L.R. (4th) 382, at para. 17; see also Angeloni v. Estate of Francesco Angeloni, 2021 ONSC 3084, at paras. 27-29. However, there is no mention of any claim for additional damages in the appellant’s notice of application or supporting affidavit materials.
[9] We are not persuaded by the appellant’s submission that the claim for additional damages was implicitly included or necessarily ancillary to the existing pleading that the respondent breached the agreement of purchase and sale. On the most generous and liberal interpretation, the plain meaning of the notice of application belies this suggestion. The only express pleading in the notice of application that concerned monetary damages is the appellant’s request to retain the deposits as a consequence of the respondent’s breach. If the appellant was seeking additional damages as a consequence of the respondent’s breach, this claim should have been pleaded and particularized so that the respondent would understand the case she had to meet. To hold otherwise would render meaningless the requirement under r. 38.04 of the Rules that “the precise relief sought” be stated.
....
[12] Importantly, the appellant never sought to amend its pleadings, either before or at the hearing of the application. The appellant could not amend its notice of application by simply including the relief in its factum: Primont (Castelmont) Inc. v. Friuli Benevolent Corporation, 2023 ONCA 477, 484 D.L.R. (4th) 240, at para. 74, particularly absent any affidavit evidence in support of the claim for relief. As noted above, in its factum, the appellant framed its request as further declaratory relief that it is entitled to pursue further damages, which it asked to proceed to trial. This had to be pleaded.
[13] Moreover, it is by no means certain that the amendment would have been granted had the appellant sought to amend its notice of application. To succeed, the appellant would have been required to include affidavit evidence explaining the withdrawal of the position given at its affiant’s cross-examination and some factual basis for its claim for damages beyond the forfeited deposits. Furthermore, it would have been obliged to meet the respondent’s potential arguments of non-compensable prejudice, including the lateness of the requested amendment, the change of litigation strategy, and the potential expiry of a limitation period.
|
