When is “The Close of Pleadings”?
In a recent Court of Appeal decision, the Court clarifies what constitutes “the close of pleadings” in an action.
The appeal in Kawaguchi v. Kawa Investments Inc.[1] arose from a motion wherein the motion judge prevented the plaintiffs/appellants from discontinuing their action against the respondents (three of a number of defendants), and granted the respondents’ motion for summary judgment.
On the motion, the judge rejected the plaintiffs’ argument that they were entitled to discontinue the action as against the respondents because the time for delivery of a reply had not expired as against all of the defendants, and so pleadings were not closed within the meaning of Rule 25.05 of the Rules of Civil Procedure.
The motion judge held that pleadings closed at different times with respect to each defendant, and as against the respondents, pleadings had been closed. Thus, the notice of discontinuance was held to be invalid.
Rule 25.05 provides as follows:
Close of Pleadings
25.05 Pleadings in an action are closed when,
(a) the plaintiff has delivered a reply to every defence in the action or the time for delivery of a reply has expired; and
(b) every defendant who is in default in delivering a defence in the action has been noted in default. R.R.O. 1990, Reg. 194, r. 25.05.
The motion judge’s interpretation focused on the singular “reply” in subrule 25.05(a), from which he inferred that pleadings close against each defendant separately. Further, the motion judge accepted the submission that, if it were otherwise, a defendant who has defended in a multi-defendant lawsuit would be precluded from moving the proceeding forward until the last defendant had defended and the time for reply had expired.
On appeal, the Court of Appeal held that the motion judge erred in law in his interpretation of Rule 25.05. The Court held that the language of the rule is unambiguous and requires that, for pleading to be closed, the plaintiff must reply to every defence or the time to reply must have expired, and every defendant who has not defended must be noted in default.
The Court held that the reference to “every” defence and “every” defendant in subrule (a) and (b) makes it clear that in a multi-defendant action, the “close of pleadings” requires that pleadings be closed as against all defendants.
Further, the Court found that, contrary to the policy reason above relied upon by the motion judge, there is no general requirement that pleadings much be closed for parties to move an action forward to the next steps in the litigation.
The clarification provided by Kawaguchi is important to note for multi-defendant actions, and particularly when taking those procedural steps where timing turns on “the close of pleadings”.
Ultimately, despite the legal error identified by the Court of Appeal, the appeal was dismissed on other grounds.
[1] 2021 ONCA 770.