CITATION: Philippine v. Portugal, 2010 ONSC 956

DIVISIONAL COURT FILE NO.: 93/09

DATE: 20100217

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

B E T W E E N:

PHILIPPINE/FILIPINO CENTRE TORONTO, DR. GUILLERMO DeVILLA, DR. VICTORIA SANTIAGO, ROSALINDA JAVIER, DR. MARIO ANDRES, WENDY ARENA, EVELYN BIRONDO, JULITA CORPUZ, AIDA D’ORAZIO, EFREN DE VILLA, MERCY MALIGLIG, LAURA TIAMZON, SUZETTE CRESENCIA, IRENE TURNER, LOLITA TABLANG and FELINO JAVIER

Plaintiff (Appellants, Respondents on Cross-Appeal)

– and –

FRANCISCO PORTUGAL, CAMILLA JONES, CHITO COLLANTES, ORES TING, MINDA LONGKINES, ERLINDA GALLARDO, NOBELLA TUMBOKON, DARIO MERIALES, MONCHING OLIVEROS, GLENDA GAMU IDOLOR, JOHN DOE, JANE DOE, THE PHILIPPINE COURIER PUBLISHING & ENTERTAINMENT and RAMON DATOL

Defendants (Respondents, Appellants in Cross-Appeal)

HEARD at Toronto: January 19, 2010

Douglas G. Christie, for the Appellants, Respondents in Cross-Appeal

Ronald Lachmansingh, for the Respondents, Appellants in Cross-Appeal

HEARD at Toronto: January 19, 2010

REASONS FOR JUDGMENT

FERRIER J.:

[1] This is an appeal from the order of Master Haberman dated January 21, 2009 whereby she dismissed a motion by the plaintiffs seeking to amend their statement of claim to allege conspiracy against the defendants.

[2] This action arises in the context of a number of proceedings between some or all of the plaintiffs and some or all of the defendants, primarily concerning governance and control of a community centre known as The Filipino Centre, Toronto (“the FCT”). There is considerable animosity between the “camps” represented by the plaintiffs and the defendants in this action.

[3] It is alleged that the defendants orchestrated and carried out a rally which took place in November, 2005, at which the plaintiffs were defamed by, inter alia, slogans on placards and statements made over the public address system. It is also alleged that subsequently, the defendant Ramon Datol published an article and photographs arising from the rally and a “Manifesto” concerning the plaintiffs in the defendant newspaper, The Philippine Courier (“the Paper”) in December 2005. Coincidentally with the rally, some of the defendants launched an application in which they sought sanctions against many of the plaintiffs for their alleged inappropriate conduct in the management of the FCT. The defendant Francisco Portugal (“Portugal”), also launched a defamation suit against some or all of the plaintiffs in respect of an article which had been published in a community paper.

[4] It is alleged that the plaintiffs only learned of the various acts of defamation which occurred at the rally and in the publication of articles and photographs about it in early December 2005, a month after the rally, when the Paper issued its story. The required notice was given under the Libel and Slander Act, R.S.O. 1990, c. L.12 (“the Act”) and the original claim in the action was issued on February 28, 2006, within the limitation period contained in the Act.

[5] The parties are in agreement that based on the pleading, the two-year limitation period under the Limitations Act, 2002, S.O. 2002, c. 24 began to run in January 2006 (when notice under the Act was served). The limitation period thus expired in January 2008.

[6] In October 2006, the defendants served a motion for summary judgment, in which they sought to have some of the claims dismissed, against some of the defendants.

[7] In response to this step, the plaintiffs sought leave to amend the statement of claim (“the first amendment”), to claim the defendants conspired to defame the plaintiffs.

[8] As observed by the master:

It appears that this [motion for judgment] was the catalyst for the plaintiffs’ decision to add a claim for conspiracy to the action. The plaintiffs’ thinking was as follows: even if some of the defendants were not engaged in some of the activities complained of, if a court accepts that they were nonetheless part of a conspiracy to commit these acts and to harm the plaintiffs, the action could potentially survive against all [intact].

The plaintiffs served their motion to amend, based on this proposed version, on November 15, 2006, to be heard with the defendants’ summary judgment motion. The defendants’ motion, scheduled for November 2006, was adjourned to enable the plaintiffs to proceed with their motion to amend before a master.

[9] The plaintiffs’ motion to amend was adjourned and effectively it stalled until September 2008 when the plaintiffs moved to further amend the statement of claim (“the second amendment”).

[10] At the same time, the motion for the first amendment was brought on for hearing. The motions were adjourned and not argued until January 8, 2009. In the interval following October 2006, the defendants’ motion for judgment stood adjourned.

[11] The appellants assert that the long delay between the launching of the motion in November 2006 and its hearing in January 2009 was due largely to the plaintiffs’ and defendants’ involvement in the related litigation. In effect, everyone was busy fighting other wars in the interim. The respondents disagree with this characterization entirely and take the position that there was no excuse for the delay. The respondents point to periods of many months when the appellants did nothing to advance the motion. Neither, however, did the respondents advance their motion for judgment.

[12] It is not necessary to resolve precisely these differences. It is apparent on the record that the appellants’ delay was inordinate and without justifiable excuse.

The decision of the master

[13] The learned master carefully reviewed the background facts. She carefully analysed the statement of claim and the first proposed amended statement of claim.

[14] The learned master correctly reviewed the relevant law concerning amendment of pleadings generally, and the law concerning pleading conspiracy:

Amending a pleading

Rule 26.01 governs amendments of pleadings and it speaks in mandatory terms – a party shall be granted leave to amend unless what they propose will result in prejudice that cannot be compensated for by way of costs or an adjournment.

The Rule is supplemented by case law, which also directs that a party should not be permitted to plead anything that is untenable at law. Thus, even if a party can ultimately prove that the proposed additional facts are true, if the claim they support cannot succeed in law, it should not go forward and the amendments sought should not be permitted.

Despite the mandatory tone of Rule 26.01, where a party seeks to amend a claim in a manner that results in the addition of a new cause of action beyond the expiry of the limitation period, he will be met by a presumption of prejudice (see Frohlick v. Pinkerton Canada Limited (2008), 2008 ONCA 3, 88 O.R. (3d) 401). As a result of the Court of Appeal’s decisions in Joseph v. Paramount Canada’s Wonderland, 2008 CarswellOnt 3495 and Meady v. Greyhound Canada Transportation Corp., 2008 CarswellOnt 3494, demonstrating the existence of special circumstances is no longer a response to that presumption. As the court stated in Frohlick, supra:

…Rule 260.01 does not contemplate the addition of unrelated statute-barred claims by way of amendment of an existing statement of claim. Conceptually, this should be treated no differently than the issuance of a new and separate statement of claim that advances a statute-barred claim.

The Frohlick case, however, must be distinguished from a situation where the essence of the claim sought to be added has already been pleaded. In Fitzgerald Estate v. Medtronic Inc., 1996 8118 (ON SC), [1996] O.J. No. 2439, Jenkins J. stated:

…when substantially all of the material facts giving rise to the ‘new cause of action’ have been pleaded [in the initial statement of claim] then there is in fact no new cause of action being added.

The principle was recently reiterated in Thompson v. Zeldin 2008 CarswellOnt 5402.

It is also important to bear in mind that the court does not exact a standard of perfection when dealing with pleadings motions. Simply because a party has not pleaded artfully is not a ground to refuse an amendment. As in the case with respect to motions to strike, the court takes a generous view when assessing a proposed pleading. The emphasis is on preventing only those claims that clearly could not succeed from going forward (see Lido Industrial Products Ltd. v. Exbar Properties Inc. (1988), 28 O.A.C. 385).

Pleading conspiracy

A claim for conspiracy must be advanced in a very precise and specific way. In 1998, our Court of Appeal, in Normart Management Ltd. v. West Hill Redevelopment Co. 1998 2447 (ON CA), 37 O.R. (3d) 97 quoted from Bullen, Leake and Jacob’s Precedents on Pleadings, 12th ed. (London: Sweet & Maxwell, 1975) when discussing what was required:

The statement of claim should describe who the several parties are and their relationship with each other. It should allege the agreement between the defendants to conspire, and state precisely what the purpose or what were the objects of the alleged conspiracy, and it must then proceed to set forth, with clarity and precision, the overt acts which are alleged to have been done by each of the alleged conspirators in pursuance and in furtherance of the conspiracy; and lastly, it must allege the injury and damage occasioned to the plaintiff thereby.

[15] The master posed three issues:

1. Does the original claim plead sufficient material facts to support a claim of conspiracy?

She answered that question in the negative.

2. If not, does the proposed pleading [the first amendment] served in October 2006 accomplish that?

She answered that question in the affirmative.

3. If the answer to either of the above is “yes”, has the limitation period expired, such that the conspiracy claim cannot now be added?

She answered that question in the affirmative.

[16] Thus she dismissed the motion to amend.

Issues in this appeal

[17] The issues on this appeal are the same as those before the master.

[18] The appellants submit that the master erred in her answers to questions one and three. By cross-appeal, the respondents submit that she erred in her answer to question two.

[19] The appellants further submit that if the first amended pleading is allowed to stand, then so should the second amended pleading, it being one which merely better sets out the particulars of the claim of conspiracy. This is opposed by the respondents.

Analysis

The original pleading

[20] I agree with the conclusion reached by the learned master. As she held, the genesis for a conspiracy claim, at least in reference to the rally, lay in the allegation that some of the defendants organized and supervised the rally.

[21] Nevertheless, as she correctly held, in the original claim “there is no suggestion that the parties conspired to injure the plaintiffs.” Acting in concert in organizing and supervising the rally does not suffice. Nowhere in the pleading is there a conspiracy alleged in reference to any of the acts of the defendants.

The first amended pleading

[22] The learned master held that the first amended pleading was, although far from perfect, sufficient, absent the limitation period issue:

For the most part, this version accomplishes what it set out to do. In it, specific acts to which various defendants allegedly conspired are set out in the body of the claim and the actors in each case are named. The parties have been described. Their relationship to one another, as members of the SCM, set out in the original claim remains and special damages of $200,000 are claimed.

Further, paragraph 39(3) contains the requisite wording regarding the predominant purpose of the conspiracy.

In my view, though this version is far from being a perfect pleading, it contains sufficient material facts on which a claim for conspiracy could stand, absent the expiry of the relevant limitation period.

[23] Notwithstanding the respondents’ submission to the contrary, I agree with the learned master’s conclusions. Taking into account the principles concerning pleadings generally, and the pleading requirements in cases of alleged conspiracies, the first amended pleading is sufficient.

[24] I also note the following passage from North York Branson Hospital v. Praxair Canada Inc., 1998 14799 (Ont. S.C.) per Cumming J.:

[22] In truth, the very nature of a claim of conspiracy is that the tort resists detailed particularization at early stages. The relevant evidence will likely be in the hands and minds of the alleged conspirators. Part of the character of a conspiracy is its secrecy and the withholding of information from alleged victims. The existence of an underlying agreement bringing the conspirators together, proof of which is a requirement borne by a plaintiff, often must be proven by indirect or circumstantial evidence. A conspiracy is more likely to be proven by evidence of overt acts and statements by the conspirators from which the prior agreement can be logically inferred. Such details would not usually be available to a plaintiff until discoveries. These considerations and the general theme of Hunt (Hunt v. Carey Canada Inc. 1999 90 (S.C.C.) [1990] 2 S.C.R. 959) instructing courts not to shy away from difficult ligation, also militate against holding pleadings in civil conspiracy cases to an extraordinary standard.

[23] Most, or all, of the greater specificity the defendants submit should be seen in the plaintiffs’ Amended Statement of Claim relates to matters that are within the knowledge of only the defendants. The defendants are not put to any real disadvantage by the present form of the plaintiffs’ Amended Statement of Claim.

[25] Similarly, in my view, the defendants here are not disadvantaged by the form of the first amended claim.

The Limitation Period

[26] The appellants launched their motion before the expiry of the limitation period. They then delayed inordinately in advancing it to a hearing, to the point where the hearing occurred after the expiry of the limitation period.

[27] The master held that the amendment was barred by the Limitations Act, because it was the assertion of a new claim after the period expired. She held that a party cannot extend a fixed two-year limitation period by simply serving a timely notice of motion to amend and then doing nothing further.

[28] However, she held that there may be, in her words, “some wiggle room” in a case where the motion was served on the eve of the expiry of the period and the motion was not argued until thereafter, but on the first court date available.

[29] It would seem that this is tantamount to saying there is a discretion to extend the limitation period. If such were the case, there would quite apparently be other circumstances which would justify an extension. However the master explicitly recognized there is no longer a discretion to extend a limitation period (see reasons para.38). Her comment concerning possible “wiggle room” must not be interpreted as allowing for some discretion in extending a limitation period.

[30] Before June 2008, when the decision in Joseph v. Paramount Canada’s Wonderland, 2008 ONCA 469 was released by the Ontario Court of Appeal, the law concerning the making of amendments to a statement of claim after the expiry of a limitation period was enunciated by that Court in Frohlich v. Pinkerton Canada Limited, 2008 ONCA 3:

[17] In my view, the proper interpretation of rule 26.01 is that the expiry of a limitation period gives rise to a presumption of prejudice. This presumption of prejudice will be determinative unless the party seeking the amendment can show the existence of special circumstances that rebut the presumption.

[20] Rule 26.01 is an enactment that allows a court to relieve against the harshness of an expired limitation period in certain circumstances. It would be wrong, however, to view rule 26.01 as allowing a party to use the existence of an outstanding claim, and nothing more, to defeat the protection of relevant limitation periods.

[21] The following excerpt from the decision of Deaville v. Boegeman (1984), 1984 1925 (ON CA), 48 O.R. (2d) 725 (C.A.) at 730, conveys the correct perspective:

In my view, the expiry of the limitation period creates a presumption, however slight in some cases, of prejudice to the defendant…. If matters are left in balance, the usual rules apply and the applicant upon whom the burden lies has not discharged that burden.

[24] In my view, rule 26.01 does not contemplate the addition of unrelated statute-barred claims by way of amendment to an existing statement of claim. Conceptually, this should be treated no differently than the issuance of a new and separate statement of claim that advances a statute-barred claim.

[31] Thus, where the limitation period had expired, and an amendment was sought under Rule 26.01 to add a new claim to one which had been made within time, a presumed prejudice could be rebutted by showing special circumstances.

[32] However, in Joseph, supra, the Court made it clear that under the newly enacted Limitations Act, there is no longer discretion to permit the new claim to be added: Joseph, supra, paras. 12, 27 and 28.

[33] Thus, the sole question embodied in the third issue is whether the rights of the parties (both the appellants’ and the respondents’) are determined as of the date of service of the motion (within the limitation period) or as of the date of hearing the motion (after the period expired).

[34] In my view, the law is clear that the parties’ rights are determined as of the date of service of the motion.

[35] In Graystone Properties Ltd. v. Smith et al. (1982), 1982 1853 (ON CA), 39 O.R. (2d) 709 (C.A.), a mortgagor applied for a partial discharge. As of the date of service of the application, the mortgagor was not in default, but later fell into default and was in default at the time of hearing of the application. The Court held that the rights of the parties crystallized as of the date of the request for the discharge and of the application being launched. Not then being in default, the mortgagor was entitled to a partial discharge.

[36] In my view, the foregoing is trite law, indeed so clear that Blair J.A. writing for the Court in Graystone, supra, cited no authority for this principle (p.712).

[37] Of like effect is Bruce v. John Northway & Son Ltd., [1962] O.W.N. 150 (Master); Cafissi v. Vana, 1973 534 (ON SC), [1973] 1 O.R. 654 (Master) and Leblanc v. York Catholic District School Board, 2002 37923 (Ont. S.C.).

[38] Southey J. in Brightman Capital Ventures Inc. v. J.P. Haynes & Associates Inc., [2001] 28379 (Ont. Div. Ct.), referred at para. 5 to the principle as “the general rule that a court hearing a motion will ignore anything done after service of the notice of motion.”

[39] As noted by the learned master, Southey J. cited Bruce, supra and Cafissi, supra, as authority. In Bruce, supra, the Senior Master referred with approval to a quote from Holmested and Langton on the Judicature Act of Ontario, 5th ed., at p. 837, which cited Preston v. Tunbridge Wells Opera House, [1903] 2 Ch. 323 as authority:

The rights of an appellant cannot be prejudiced by anything done after notice of motion has been served, but his rights are to be determined as they existed at the date of its service.

[40] The learned master focused on the words “anything done” and noted that the appellants’ conduct was not that of “action”, but rather was that of “inaction”. They had done nothing after service of the motion. She held that since the appellants had done nothing, the above principle did not apply.

[41] In my respectful view she erred in so holding. I note that in Graystone, supra, following service of the application, the mortgagor fell into default. His inaction in failing to make the mortgage payments did not negatively affect his rights – rather, the rights of the parties were determined as of the date of service of the application. His default under the mortgage after service of the application did not affect his right to a partial discharge.

[42] Furthermore, in another passage in Brightman Capital, supra, Southey J. referred to the general rule “…that motions be decided on the basis of the facts as they existed on the date the motion was commenced…” (para.17).

[43] The mortgagor’s default in Graystone, supra, was at least as serious as the delay by these appellants, but the default of the mortgagor did not imperil his right to a partial discharge.

[44] The law is that the parties’ rights are crystallized at the date of service. Subsequent events do not affect their rights as they existed at that date.

[45] Furthermore, once served, the delay in bringing the motion on for hearing goes to prejudice under Rule 26.01. As noted above, amendment is mandatory unless there is prejudice that cannot be compensated for by costs or an adjournment. As long as the motion was served within the limitation period, any delay in having it heard would go to prejudice and does not act as an automatic bar to amendment.

[46] The respondents did not take the position that the appellants’ delay resulted in actual prejudice to them. Their position was as revealed in these reasons, focusing on the adequacy of the pleadings and the expiry of the limitation period. No position was advanced by the respondents that the motion should be dismissed solely on the basis of inordinate delay. No evidence was referred to, nor was argument presented, to show that the delay itself resulted in prejudice to the respondents.

The Second Amended Claim

[47] Finally, the Respondents argue that the second amended claim also does not meet the requirement of a pleading in conspiracy. I disagree. Against the authorities cited above and the requirements referred to in Normart, supra, it is my view that the pleading passes muster. Thus, the first amendment having been launched within the limitation period, the conspiracy claim was alive when the period expired. The second amendment, although not sought until after the expiry of the period, merely better particularized the existing valid claim.

Conclusion

[48] At the time of service of the motion, the respondents had notice of the conspiracy claim. Service occurred within the limitation period. The parties’ rights crystallized at the date of service. The first amended pleading was sufficient in law. The delay in advancing the motion was not prejudicial to the respondents; they had notice within the limitation period. The second amendment better pleaded the particulars of the valid claim (the first amended claim).

[49] The appeal is allowed and the order below including the costs order is set aside.

[50] The appellants are granted leave to amend their statement of claim in the form of the second amended pleading.

Costs

[51] At the conclusion of argument, I heard submissions on costs, including the costs below.

[52] In an alternative submission, respondents’ counsel submitted that the costs here and below should be in the cause if the appeal was allowed. Counsel for appellants accepted that suggestion.

[53] Accordingly, the costs here and below shall be in the cause, to be assessed.

Ferrier J.

Released: February 17, 2010

CITATION: Philippine v. Portugal, 2010 ONSC 956

DIVISIONAL COURT FILE NO.: 93/09

DATE: 20100217

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

B E T W E E N:

PHILIPPINE/FILIPINO CENTRE TORONTO, DR. GUILLERMO DeVILLA, DR. VICTORIA SANTIAGO, ROSALINDA JAVIER, DR. MARIO ANDRES, WENDY ARENA, EVELYN BIRONDO, JULITA CORPUZ, AIDA D’ORAZIO, EFREN DE VILLA, MERCY MALIGLIG, LAURA TIAMZON, SUZETTE CRESENCIA, IRENE TURNER, LOLITA TABLANG and FELINO JAVIER

– and –

FRANCISCO PORTUGAL, CAMILLA JONES, CHITO COLLANTES, ORES TING, MINDA LONGKINES, ERLINDA GALLARDO, NOBELLA TUMBOKON, DARIO MERIALES, MONCHING OLIVEROS, GLENDA GAMU IDOLOR, JOHN DOE, JANE DOE, THE PHILIPPINE COURIER PUBLISHING & ENTERTAINMENT and RAMON DATOL

REASONS FOR JUDGMENT

Ferrier J.

Released: February 17, 2010