



COURT OF APPEAL FOR ONTARIO

CITATION: Ang v. Premium Staffing Ltd., 2015 ONCA 821

DATE: 20151130

DOCKET: C60455

Strathy C.J.O., LaForme and Huscroft JJ.A.

BETWEEN

Fausto Ang Jr. and Nina Buena Bigayan

Respondents (Plaintiffs)

and

Premium Staffing Ltd
.,
    SKR Immigration Services and Rose L. Noel

Appellant (Defendant)

Glenn Yoon, for the appellant Premium Staffing Ltd.

Thomas Mathews, for the respondents

Heard:  November 23, 2015

On appeal from the order of Justice Sandra Chapnik of the
    Superior Court of Justice, dated April 7, 2015.

ENDORSEMENT

[1]

The appellant, Premium Staffing Ltd, appeals from an order of the motion
    judge striking a defence of set-off from its statement of defence in an action
    brought by the respondents.

[2]

The respondents allege they paid the appellants $580,000 in advance pursuant
    to an oral contract with the appellants in exchange for a guarantee of employment
    positions for temporary foreign workers from Taiwan and the Philippines, and
    that the employment contracts turned out to be fraudulent. The vast majority of
    applicants never worked in Canada as promised.

[3]

The appellant counterclaimed for $170,000 it alleges is owing on an oral
    contract with the respondent that makes the respondent the exclusive supplier
    of candidates from Taiwan and the Philippines for temporary work permits. The appellant
    also claimed set-off of $170,000 in its defence.

[4]

The motion judge found that it is plain and obvious that the plea of
    set-off in these circumstances is inappropriate and must be struck. The motion
    judge stated that neither party admitted owing any money to the other.

[5]

On a motion to strike a pleading under Rule 21.01(b) on the ground that
    it discloses no reasonable cause of action, the court must accept the facts
    alleged  as proven unless they are patently ridiculous or incapable of proof:
Nash v. Ontario
(1995), 27 O.R. (3d) 1 (C.A.) at 6.

[6]

In this case, that means that there is an oral contract pursuant to
    which the respondents owe the appellant $170,000 and that the respondents
    submitted fraudulent information in their work permit applications, causing
    damage to themselves as well as the appellant.

[7]

Although the nature of the set-off was not pleaded, the motion judge
    properly treated the pleading as one for equitable set-off.

[8]

The motion judge set out the relevant principles governing equitable
    set-off approved in
Holt v. Telford
, [1987] 2 S.C.R. 193, at p. 212:

1.

the party
    relying on a set-off must show some equitable ground for being protected
    against his adversarys demands;

2.

the equitable ground must go to the very root of the
    plaintiff's claim before a set-off will be allowed;

3.

a cross-claim must be so clearly connected with the
    demand of the plaintiff that it would be manifestly unjust to allow the
    plaintiff to enforce payment without taking into consideration the cross-claim;

4.

the plaintiff's claim and the cross
-
claim need not arise out of the same contract; and

5.

unliquidated claims are on the same footing as
    liquidated claims.

[9]

However, her decision does not address these principles specifically. The
    motion judge simply stated that the parties disagree as to the nature of the
    contract or agreement between them and that neither admits owing any money to
    the other. She added that the conflict was more appropriately dealt with by
    means of a counterclaim.

[10]

It
    is not clear why the appellant chose to plead set-off in addition to making a
    counterclaim, or what advantage there is to the respondents to attempt to
    strike out the plea of set-off in these circumstances. Be that as it may, once
    set-off was pleaded it, was incumbent on the motion judge to address the
Telford
factors in order to make a decision on the motion and she failed to do so.

[11]

We
    are satisfied that this is a proper claim for set-off on the
Telford
test. Although there is disagreement about the nature of the parties
    contractual relationship, there is no question that the claims of the appellant
    and respondent are closely connected and arise out of one or more related contractual
    relationships between them.

[12]

The
    appellants plea of set-off is relatively thin. However, the motion judge was
    required to read the statement of claim generously with allowance for
    inadequacies due to drafting deficiencies:
Nash
. The lack of
    particularity caused no prejudice to the respondents.

[13]

Accordingly,
    the appeal is allowed.

[14]

The
    appellant is entitled to its costs from the respondent, fixed by agreement of
    the parties at $5700, inclusive of disbursements and all applicable taxes.

G.R.
    Strathy C.J.O.


H.S. LaForme J.A.


Grant
    Huscroft J.A.


