Executive Summary: Key Legal and Evidentiary Issues

• Dispute centers on whether plaintiffs can file a supplemental engineering expert report after cross-examinations in support of resisting the defendants’ summary judgment motion.
• Court applies Rule 39.02(2) and the four-part First Capital test, focusing on relevance, responsiveness to cross-examination, prejudice, and explanation for late delivery.
• Structural deficiencies and alleged Ontario Building Code non-compliance in the sunroom addition are pivotal to the plaintiffs’ negligence and misrepresentation claims.
• Timing and conduct of plaintiffs’ counsel are scrutinized, but the court favours a flexible, contextual approach over a rigid procedural bar to the new evidence.
• Defendants’ prejudice arguments about case-splitting and expanded expert evidence are rejected, given no hearing date, defendants’ own expert inspection, and willingness for limited further steps.
• Plaintiffs obtain leave to file the Supplemental Expert Report, defendants obtain leave to file a responding report and keep the Laco Statement on the record, resulting in divided success and no fixed costs award at this stage.

Background and parties

This case arises from a residential construction and real estate dispute over a property located at 18 Green Ridge Road in Kenora, Ontario. The plaintiffs, Brett Robert Perry and Andrea Diane Perry, purchased the property from the defendant Black Fox Construction Inc., which had bought, renovated, and then sold the home. They also sued individual defendants, including contractor representative Marke Elke and former owners Glenda and William Scurfield. The underlying action alleges fraudulent misrepresentation, negligent misrepresentation, and negligent construction relating primarily to defects in the work done on the home, including a sunroom addition. The defendants brought a summary judgment motion seeking to dismiss the plaintiffs’ claim. In preparation for that motion, the court imposed a timetable requiring the plaintiffs’ responding motion record by mid-May 2025, any reply evidence by the end of May, and completion of cross-examinations on affidavits by late June 2025.

Discovery of new alleged defects and early notice

Shortly after serving their Responding Motion Record on May 15, 2025, the plaintiffs undertook work to upgrade the insulation in the sunroom, a new addition constructed by Black Fox. On May 19 and 20, 2025, during this work, they discovered what they say are significant structural deficiencies in the sunroom’s construction. They claim these defects include non-compliance with the Ontario Building Code and structural issues that should have been disclosed and properly built. On May 20 and 21, 2025, plaintiffs’ counsel promptly notified defence counsel in writing that the sunroom defects had been discovered, that the roof structure would have to be inspected by an expert, and that the plaintiffs intended to rely on supplemental expert evidence on the summary judgment motion. The plaintiffs also provided a point-form outline of the anticipated expert evidence.

Initial supplemental lay evidence and cross-examinations

On May 29, 2025, before cross-examinations, the plaintiffs served a Supplemental Affidavit from plaintiff Brett Perry. That affidavit described, from a lay perspective, how and when the newly discovered defects in the sunroom were found and gave some detail of what was observed. This additional lay evidence was therefore on the record about a month before the cross-examinations took place. Cross-examinations on the affidavits for the summary judgment motion proceeded on June 24 and 25, 2025. At that time, although the plaintiffs had alerted the defendants to forthcoming expert evidence about the sunroom, no supplemental expert report had yet been delivered.

Development and timing of the plaintiffs’ supplemental expert report

The plaintiffs retained their engineering experts, 30 Forensic Engineering, to investigate the sunroom addition. Due to scheduling issues and the summer season, the expert was only able to inspect the sunroom on August 18, 2025, and even then only by video to speed up the process. An initial draft of the supplemental expert report was served on defence counsel on August 22, 2025, with a signed version following shortly thereafter. On September 3, 2025, the plaintiffs served the Supplemental Affidavit of Tom Pepper, a representative of 30 Forensic Engineering, together with the final Supplemental Expert Report dated August 27, 2025. This report purportedly details structural and code-related defects in the sunroom, identifies alleged breaches of the Ontario Building Code, and, according to the plaintiffs, supports their claims of negligent construction and misrepresentation by the defendants.

Defendants’ responding expert steps and the Laco Statement

The defendants, for their part, had their own expert inspect the sunroom addition on September 13, 2025, after receiving the plaintiffs’ supplemental expert materials. Although they had not yet delivered a responding expert report by the time of the motion, the inspection signaled their intention to contest the new engineering evidence. Separately, on September 19, 2025, the defendants delivered answers to undertakings arising from cross-examinations. Those answers included a statement from former owner George Laco, dated September 2, 2025. The plaintiffs argued that this “Laco Statement” was an improper use of the undertaking process because it was not truly “pre-existing documentation” and was effectively a late, unsworn narrative statement placed into the record after cross-examinations. They sought to have this statement struck from the record.

Legal framework on late affidavit and expert evidence

The motion before the court was governed by Rule 39.02(2) of the Ontario Rules of Civil Procedure. That rule generally prohibits a party who has cross-examined on an opposing party’s affidavit from later delivering additional affidavits for use at the motion hearing without leave of the court or consent. The court must grant leave where satisfied that the party ought to be allowed to respond to matters raised on cross-examination, on such terms as are just. Rule 1.04 requires that the Rules be interpreted liberally to secure the just, most expeditious, and least expensive determination of every proceeding on its merits. Building on this, the court applied the four well-known criteria from First Capital Realty Inc. v. Centrecorp Management Services Ltd.: whether the evidence is relevant; whether it responds to a matter raised on cross-examination (not necessarily for the first time); whether there is non-compensable prejudice to the opposing party that cannot be addressed by costs, terms, or an adjournment; and whether the moving party provided a reasonable or adequate explanation for not including the evidence before cross-examinations. The court also noted that leave under Rule 39.02(2) is to be granted sparingly, that the moving party faces a high threshold, and that the rule is not to be used to correct deficiencies in motion materials or to permit strategic case-splitting.

Positions of the plaintiffs and defendants on the motion

The plaintiffs argued that the Supplemental Expert Report is highly relevant to their allegations of negligent construction and fraudulent or negligent misrepresentation because it details Ontario Building Code breaches and structural deficiencies in the sunroom that should have been disclosed by the defendants. They said the report directly responds to cross-examination testimony from defendant Marke Elke, who asserted that the sunroom was constructed in a good and workmanlike manner and in compliance with the Code. They emphasized that defendants had prompt notice of the defects, had long known supplemental expert evidence was coming, and that the hearing date for the summary judgment motion was not even set. They offered to allow limited further cross-examinations and a responding expert report, arguing any prejudice could be cured. The defendants countered that the plaintiffs had known about the sunroom deficiencies more than a month before cross-examinations and should have either produced the expert evidence earlier or sought an adjournment of cross-examinations. They argued that notice of an intention to serve a report does not extend deadlines under the Rules and that the late delivery amounted to an attempt to split their case after testing the defendants’ evidence. They also suggested that the alleged code breaches did not reveal serious safety or structural issues and thus lacked materiality. On the explanation prong, they argued that “everyone being busy” and summer timing did not amount to a satisfactory justification.

The court’s analysis of the four Rule 39.02 criteria

The court accepted that the Supplemental Expert Report was clearly relevant, as it identified alleged breaches of the Ontario Building Code and was probative of the plaintiffs’ negligence and misrepresentation claims. It also found that the report responded to matters raised on cross-examination, particularly the sworn evidence by defendant Marke Elke that the sunroom was attached and built in accordance with the Ontario Building Code and that he was personally responsible for “code compliant” construction; the report allegedly contradicts those assertions. On the question of prejudice, the court emphasized that the summary judgment motion had not yet been scheduled for hearing and that the defendants’ own expert had already inspected the sunroom. The plaintiffs were willing to permit further cross-examination of their expert and did not oppose the filing of a responding expert report by the defendants. In those circumstances, the judge concluded that any prejudice was curable and did not rise to the level of non-compensable prejudice that would justify excluding probative evidence. Regarding the explanation for delay, the court drew a distinction between asking whether the explanation is “satisfactory” and whether it is “reasonable or adequate,” the latter being the correct standard from the case law. The judge found that the plaintiffs’ explanation—that the defects were discovered in May, that a qualified expert was not available to inspect until mid-August, and that it was impossible to obtain and finalize a report before late-June cross-examinations—was at least adequate, if not entirely reasonable. The court acknowledged that, in hindsight, plaintiffs’ counsel should have sought an adjournment of the cross-examinations but, citing authority, stressed that an overly rigid reading of Rule 39.02 could unjustly punish litigants for counsel’s oversight.

Decision on the supplemental expert report and the Laco Statement

After weighing all four criteria in a flexible, contextual manner, the court concluded that the plaintiffs should be allowed to introduce the Supplemental Expert Report for use on the summary judgment motion. At the same time, the court granted the defendants leave to serve a responding expert report addressing the new engineering evidence. On the plaintiffs’ attempt to strike the Laco Statement, the court characterized the document as a response provided to fulfill an undertaking from cross-examination and emphasized that an undertaking is a promise to provide further information or documentation. The Laco Statement was not an affidavit, was not sworn, and therefore did not fall within the ambit of Rule 39.02, which governs subsequent affidavits. On that basis, the court refused to strike it, holding that the rule simply did not apply and dismissing the plaintiffs’ request to have the statement removed from the record.

Outcome, successful party, and monetary result

In the result, the motion produced mixed success. The plaintiffs prevailed on the central issue of obtaining leave to deliver their Supplemental Affidavit of Tom Pepper and the Supplemental Expert Report of 30 Forensic Engineering for use on the defendants’ summary judgment motion. The defendants, however, were successful in preserving the Laco Statement on the record and in securing leave to file a responding expert report of their own. Because each side succeeded in part, the judge described success on the motion as divided and strongly urged the parties to agree on costs, setting a schedule for written costs submissions only if they could not resolve the issue. No damages or substantive monetary relief were adjudicated in this procedural decision, and no specific amount of costs was fixed or ordered at this stage. Accordingly, while both parties achieved partial success, there is no determinable total amount of costs or damages awarded in favour of any party based on this decision alone.