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Beware taking "no position" on orders: Ontario Court of Appeal.

D’Onofrio v Advantage Car & Truck Rentals Limited et al [2017] FICR 5

Estoppel by taking "no position".

A party taking no position on a summary judgment application is bound by the judgment and estopped from raising issues it determines. So held the Ontario Court of Appeal in D’Onofrio v Advantage Car & Truck Rentals Limited et al [2017] FICR 5.

Defendants had taken no position on another defendant's application for summary judgment that it be released from proceedings. The basis of the application was fundamental to one of the defences raised by the defendants. After summary judgment was given, the remaining defendants said they wished to rely on that defence, and the plaintiff sought an order that they were estopped.

The judge agreed, saying the defendants did not “actively participate” in the summary judgment application, they had “no right or interest” in keeping the otherdefendant in the action, and were “disinterested in the outcome”. As a result, they could not be parties for the purposes of estoppel.

On appeal by the plaintiff, the Court of Appeal held that the defendants were bound by the summary judgment and were estopped from raising the defence. They were parties to the action and were bound regardless of the position they took. Further, their defence was directly affected by the judgment and their ability to maintain it depended on the application being dismissed.

Gillese JA giving the judgment of the court, said all parties had notice of the summary judgment application and a chance to participate fully. If they wished to retain the right to maintain the defence they were obliged to contest the application and show that there was a genuine issue requiring a trial on those matters. In so doing, they were required to “put their best foot forward”.

The released defendant was ordered to pay the majority of the plaintiff’s costs on a substantial indemnity basis because it was the author of the saga in mistakenly informing the court that the summary judgment was on consent, and then in opposing the plaintiff’s efforts to clarify.