ONTARIO
SUPERIOR COURT OF JUSTICE
(DIVISIONAL COURT)
CITATION: Licata Disability Management Paralegal Professional Corporation v. Triluc Enterprises Limited, 2014 ONSC 7470
DATE: 20141229
FILE NO. DC-13-00560-00
BETWEEN:
LICATA DISABILITY MANAGEMENT PARALEGAL PROFESSIONAL CORPORATION
Plaintiff (Respondent)
- and -
TRILUC ENTERPRISES LIMITED (STONE SURFACES), STONE SURFACES LIMITED and EMILIA ALLEGRETTO CARUSO (EMILY CARUSO)
Defendants (Appellant)
George Corsianos, for the appellant
Daniel Zacks, for the respondent
Heard: August 15, 2014
On appeal from the judgment of Deputy Judge Kowalishin dated May 3, 2013, Richmond Hill, SC-12-92246-00 (Small Claims Court).
Bale J:–
Introduction
[1] The appellant Emily Caruso is the principal of the defendant corporations. She retained the respondent, Licata Disability Management Paralegal Professional Corporation, to represent the defendant Triluc Enterprises Limited in relation to its account with the Workplace Safety and Insurance Board.
[2] On July 27, 2009, the respondent delivered invoice no. 239, in the amount of $2,100, to “Stone Surfaces” which, at the time, was a business name used by Triluc Enterprises Limited. That invoice was for work done between March 19, 2009 and July 31, 2009. Although it had not been in existence at the time the work was done, the defendant Stone Surfaces Limited paid the invoice on April 9, 2011.
[3] On June 2, 2010, the respondent delivered invoice no. 251, in the amount of $9,431, to “Stone Surfaces”. That invoice was for work done between August 1, 2009 and April 30, 2010, and it remains unpaid.
[4] On June 24, 2010, invoice no. 251 was sent again with a “past due” stamp and a notation that it was the second request for payment. On October 28, 2010, it was sent again with the same stamp and a notation that it was the third request for payment. On December 20, 2010, it was sent again with the notation “final notice”.
[5] In December of 2011, the respondent discounted the amount owing to $7,345; and, on March 7, 2012, the respondent issued a claim in the reduced amount naming “Stone Surfaces/Triluc Enterprises Limited as the sole defendant.
[6] On July 25, 2012, the respondent wrote to Triluc Enterprises Limited, Stone Surfaces Limited and the appellant purporting to retract all earlier discounts and demanding payment in the amount of $17,216.87.
[7] On August 7, 2012, the respondent amended its plaintiff’s claim. In the amended claim, the respondent claimed the amount of $17,216.87, and added Stone Surfaces Limited and Emily Caruso as party defendants.
[8] Following the trial of the action on May 3, 2013, the trial judge awarded judgment against the appellant in the amount of $17,216.87, and dismissed the action against the corporate defendants.
[9] The appellant argues three grounds of appeal:
• that the contract was between the respondent and Triluc Enterprises Limited, and that she was not personally liable to pay the respondent’s account;
• that even if she was personally liable to pay the respondent’s account, the limitation period had expired prior to the amendment adding her as a party defendant; and
• that the proper amount of the claim was $7,345, and not the amount awarded by the trial judge.
Analysis
Whether the appellant was a party to the contract and personally liable to the respondent
[10] The appellant argues that the contract was between the respondent and Triluc Enterprises Limited, and that she was not personally liable to pay the respondent’s account. For the following reasons, this ground of appeal fails.
[11] A person who sets up, after the fact, that she contracted upon behalf of a corporation bears the onus of establishing that the party with whom she was dealing was aware of the capacity in which she acted: Truster v. Tri-Lux Homes Ltd., at para. 21 (Ont. C.A.)
[12] In this case, the contract was signed by Emily Caruso and contained the following provision: “I, Emily Caruso of Stone Surfaces agree to pay a fee . . . to “Licata Disability Management” (LDM) to review summarize and represent the company with regards to the WSIB claims administration.” The fact that “Stone Surfaces” was a business name used by a corporation with limited liability was not disclosed on the face of the contract, and the corporate name “Triluc Enterprises Limited” nowhere appeared in the document.
[13] The trial judge accepted the fact that “Stone Surfaces” was a business name used by Triluc Enterprises Limited, but found that the appellant had signed the contract in her personal capacity because “There is no other plausible finding where the retainer agreement was signed by Ms Caruso simply in her own name and not the name of a limited company.” Although her reasoning on this issue is somewhat conclusory, I am prepared to accept that the trial judge rejected the appellant’s testimony to the effect that the respondent was aware that she was signing upon behalf of Triluc Enterprises Limited, and I find that that she properly exercised her discretion is doing so.
[14] The appellant argues that the contract was prepared by the respondent and is ambiguous, and that it should therefore be interpreted against the respondent. I disagree. Pursuant to subsection 2(6) of the Business Names Act, a corporation carrying on business under a registered name is required to set out both the registered name and the corporation’s name in all contracts made by the corporation. It was therefore the appellant’s responsibility, and not the responsibility of the respondent’s representative, to make it clear that the respondent was contracting with a corporation and not with her personally.
If the appellant was personally liable, whether the limitation period as against her had expired
[15] The appellant argues that if even she was personally liable to pay the respondent’s account, the limitation period had expired prior to the amendment adding her as a party defendant. For the following reasons, this ground of appeal succeeds.
[16] In her reasons for judgment, the trial judge rejected the limitations defence raised by the appellant. In doing so, she found that the respondent’s invoice no. 251 “fully contemplates delay beyond 30 days of issuance which is when interest would start to run”, and held that the limitation period did not begin to run until December 20, 2010 when the respondent’s “final demand” for payment was made to “Stone Surfaces”.
[17] I do not accept the trial judge’s reasons on this issue. The invoice in question contained the following provision in relation to payment: “Please remit payment within thirty days from the date of this invoice. Delayed payment is subject to 2%.” A copy of the invoice marked “Past Due” was sent out on June 24, 2010 (even before the expiration of the thirty-day period). In her evidence, the principal of the respondent corporation admitted payment was due in thirty days and that she could have commenced an action at any time following the expiry of the thirty-day period. The trial judge’s interpretation (that the interest provision somehow delayed the due date) is, with respect, untenable, and she erred in law in holding that the limitation period only began to run following the making of the last of the series of demands for payment. If this were the case, a plaintiff could indefinitely delay the expiry of a limitation period, simply by making subsequent demands for payment.
[18] Although the respondent admits that its invoices were payable within thirty days, and that an action could have been commenced at any time following the expiry of the thirty-day period, respondent’s counsel submits that the limitation period did not begin to run until after the expiration of a reasonable time for the payment of the invoice. In support of that argument, he relies on G.J. White Construction Ltd. v. Palermo (1999), 2 C.P.C. (5th) 110 (Ont. S.C.) and Hugh Munro Construction Ltd. v. Moschuk, 2011 ONSC 3271. He says that because the earlier invoice had been paid 23 months late, the limitation period with respect to the June 2, 2010 invoice did not begin to run until 23 months after its date. I disagree.
[19] In Palermo, the invoice in question was for work up until June 30, 1989, and was dated July 27, 1989. The action was commenced on July 18, 1995. At the time, the limitation period for an action in debt was six years. Apparently, the defendants argued that the limitation period began to run upon the completion of the work for which the invoice was issued.
[20] The court addressed the issue of when the plaintiff knew, or ought to have known, the material facts giving rise to the cause of action. In doing so, the court held that it was not the time when the work was done, because it could not reasonably be expected that payment would be forthcoming until an invoice had been delivered. The court held also that a plaintiff could not indefinitely delay the start of a limitation period by unreasonably delaying delivery of an invoice.
[21] The court concluded, on the basis of the practice that had developed between the parties, “that the cause of action in this particular case arose from the time after two events took place – the expiration of a reasonable period of time for the plaintiff to deliver an invoice to the defendants, and the expiration of a reasonable period of time for the defendants to pay that invoice.”
[22] In determining how the court’s reasoning in Palermo ought to be applied in subsequent cases, two points must be noted. First, on the facts of the case, it was only necessary for the court to consider whether the cause of action arose on the day following the completion of the work for which the invoice was delivered, or on some later date. And second, it would appear that the invoice delivered by the plaintiff did not specify a due date, from which the limitation period would run.
[23] In Moschuk, the work in question had been completed in March of 2007, but was not invoiced until June 22, 2009. The action was commenced on November 24, 2009. The applicable limitation period was two years.
[24] Based upon the plaintiff’s evidence as to its “usual practices”, the court found that it would have been reasonable to expect an invoice to have been delivered within two months of the completion of the work (by the end of May 2007), and that payment would be made within 30 days of the date of the invoice (by the end of June 2007). The court therefore concluded that: “Under any reasonable view of the plaintiff’s established practices, the two-year limitation period expired before the statement of claim was issued on November 24, 2009.” This case is therefore an illustration of the point made in Palermo to the effect that a plaintiff should not be allowed to indefinitely delay the start of a limitation period by unreasonably delaying the delivery of an invoice.
[25] The effect of the reasoning in Palermo and Moschuk is to allow a defendant to argue that the limitation period has expired, prior to the expiry of the applicable number of years from the date of the invoice, where the plaintiff has unreasonably delayed delivery of the invoice. The reasoning in those cases does not support the argument made by the respondent in this case that commencement of the limitation period should be delayed based upon the prior delinquency of the defendant, particularly when the invoice in question was delivered within a reasonable period of time, and provided that payment was due within thirty days from its date.
[26] I note also that the respondent’s reasonable expectation as to when payment of invoice no. 251 would be made could hardly have been based upon the length of the delay in payment of the earlier invoice when, at the time invoice no. 251 was delivered, payment of the earlier invoice had not been made.
[27] The respondent’s invoice no. 251 was dated June 2, 2010; and, by its terms, was due on July 2, 2010. The limitation period therefore began to run on July 3, 2010, and expired on July 2, 2012.
[28] The plaintiff added the appellant as a defendant to the action on August 7, 2012. Section 21 of the Limitation Act, 2002 provides that where “a limitation period in respect of a claim against a person has expired, the claim shall not be pursued by adding the person as a party to any existing proceeding.” The amendment should therefore not have been made and the appellant is entitled to a dismissal of the action as against her.
The proper amount of the claim
[29] The trial judge awarded judgment against the appellant in the amount of $17,216.87, based upon the respondent’s time sheets. The appellant argues that the proper amount of the claim was $7,345.00, the amount invoiced, and not the amount awarded by the trial judge. For the following reasons, this ground of appeal succeeds.
[30] The amount invoiced by the respondent on June 2, 2010 was $9,431.00. There was no indication, at that time, that the actual value of the services was any more than the amount invoiced. The respondent later discounted the amount owing to $7,345.00. In the plaintiff’s claim, issued on March 7, 2012, the amount claimed was $7,345.00. No previously unknown facts subsequently came to light. No satisfactory explanation for the increased amount of the claim was given. In the event that payment was delayed, the invoice provided that interest would be payable – not that the amount owed would more than double.
[31] In the result, had I not found that the limitation period had expired, I would have found the amount owing to be $7,345.00, with interest in accordance with the terms of the invoice.
Disposition
[32] For the reasons given, the appeal is allowed, and the respondent’s claim against the appellant is dismissed, with costs in this court and in the court below.
[33] If the parties are unable to reach an agreement with respect to costs, I will consider brief written argument provided that it is delivered to Judges’ Reception, at the Durham Region Courthouse, no later than February 13, 2015.
“Bale J.”
Released: December 29, 2014
ONTARIO
SUPERIOR COURT OF JUSTICE
(DIVISIONAL COURT)
CITATION: Licata Disability Management Paralegal and Professional Corporation v. Triluc Enterprises Limited, 2014 ONSC 7470
FILE NO. DC-13-00560-00
BETWEEN:
LICATA DISABILITY MANAGEMENT PARALEGAL AND PROFESSIONAL CORPORATION
– and –
TRILUC ENTERPRISES LIMITED (STONE SURFACES), STONE SURFACES LIMITED and EMILIA ALLEGRETTO CARUSO (EMILY CARUSO)
REASONS FOR JUDGMENT
Bale J.
Released: December 29, 2014.