CITATION: Lettieri v. CIBC Mortgages Inc., 2015 ONSC 7265
DIVISIONAL COURT FILE NO.: 104/15
DATE: 20151123
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
MOLLOY J.
BETWEEN:
RICCARDO PATRICK LETTIERI
Appellant/Plaintiff
– and –
CIBC MORTGAGES INC. trading as FIRSTLINE MORTGAGES
Respondent/Defendant
Riccardo Lettieri, in person
James Riewald, for the Respondent
HEARD: October 5, 2015 in Toronto
MOLLOY J.
REASONS FOR JUDGMENT
Introduction
[1] This is an appeal from the decision of Deputy Judge D. Seevaratnam dated October 22, 2014, dismissing the plaintiff’s Small Claims Court action on the grounds that it was commenced outside the applicable limitations period.
[2] The appellant/plaintiff, Ricardo Lettieri was not represented by counsel either at the Small Claims Court or on this appeal, but was assisted in both courts by his brother, Joseph Lettieri. Both Lettieri brothers work together in the construction business; neither have any legal knowledge or experience. The respondent CIBC Mortgages Inc. was represented throughout by counsel from Gowlings LaFleur Henderson LLP.
Background
[3] On July 24, 2013, the plaintiff commenced an action in the Small Claims Court against CIBC Mortgages. The plaintiff’s claim is based on damage that occurred to his credit rating when a credit reporting agency, Equifax, issued credit reports showing a substantial outstanding judgment in favour of CIBC Mortgages. The judgment related to a mortgage default. Mr. Lettieri maintains that the Equifax report was incorrect as the judgment had been paid in full. Further, Mr. Lettieri alleged in his statement of claim that CIBC acted improperly in obtaining the judgment because the bank was aware that he was in the process of transferring the subject mortgage to a new lender. Further, he alleged that the poor credit report substantially injured his credit rating and his ability to conduct his business and resulted in considerable expense to him, exceeding $25,000. He waived his claim to the excess in order to keep his claim within the jurisdiction of the Small Claims Court.
[4] In its defence, CIBC Mortgages asserted that its judgments had been properly obtained in circumstances of mortgage default. It denied having reported the judgments it had obtained to the credit bureau and pointed out that the information about the judgments could have been obtained by Equifax from court files or elsewhere. CIBC Mortgages pleaded that if Equifax inaccurately reported the plaintiff’s credit history, that is the responsibility of Equifax, which is an independent third party over which CIBC Mortgages has no control.
[5] Although CIBC Mortgages asserts in its factum that it defended the action, inter alia, based on the expiry of the limitation period, there is no reference to a limitation defence in its statement of defence, nor is the Limitations Act pleaded. It appears from the transcript of costs submissions before the trial judge that CIBC Mortgages raised the limitation defence at the time of mediation, although the date of the mediation is not stated.
[6] Be that as it may, the issue does appear to have been raised before the trial judge prior to the commencement of the trial and there is a reference to counsel for CIBC Mortgages having given a copy of the statute to the Lettieri brothers that day. There also appears to have been some kind of discussion either off the record or at a time that is not part of the transcript before me, at which it was decided to proceed first with the limitations issue. The trial judge directed at the outset that she would proceed to deal with the limitations issue first, before getting into any evidence with respect to the merits of the plaintiff’s claim.
[7] Accordingly, the trial proceeded with the evidence of Joseph Lettieri, which starts at page 6 of the transcript. He was examined by the trial judge for 1 ½ pages of the transcript, and then cross-examined by counsel for CIBC Mortgages for 3 ½ pages. The court was then off the record for 25 minutes, which presumably included oral argument that was not transcribed. The trial judge then delivered oral reasons dismissing the action (pages 11-13 of the transcript).
The decision of the trial judge
[8] The trial judge stated that the limitation issue had been “raised by defendant’s counsel” as a preliminary issue. She held that the applicable limitation period was under s. 4 of the Limitations Act, 2002[^1] which provides that the claim cannot be commenced after the second anniversary of the date on which the claim was discovered. The trial judge referred to the evidence of Joseph Lettieri who testified that he and his brother were aware of the judgments affecting their credit rating on August 13, 2009. The statement of claim was not issued until July 23, 2013, a delay of almost four years, which she stated was explained by Joseph Lettieri as being caused by the plaintiff’s medical issues and the brothers’ inability to find a suitable legal representative. The trial judge then held:
The Court is sympathetic of the plaintiff’s medical condition; however, the Statute of Limitations which governs actions in the Small Claims Court clearly states that a proceeding shall not be commenced after the second anniversary of the day on which the claim was discovered.
In this particular claim, the anniversary date is August 13, 2011. The claim was instituted on July 13, 2013, almost four years after the original date of discovery and two years after the discovery date (sic). Accordingly, pursuant to the Limitation Act of this matter, this matter is statute-barred.
[9] The trial judge dismissed the plaintiff’s claim and ordered the plaintiff to pay costs of $3750.00 plus interest.
[10] There is virtually no analysis of the issues by the trial judge. She merely notes that the plaintiff knew about the judgments on the Equifax report in 2009 and that he did not commence his action until four years later, which she concludes is outside the limitation period provided for in s. 4 of the Act.
Analysis
[11] The appellant/plaintiff submits that the trial judge erred by failing to take into account the fact that this was an ongoing cause of action with recurring damage. Every time Equifax reported the incorrect information, further harm was caused to the plaintiff. This issue was not considered by the trial judge. The trial judge simply applied s. 4 of the Limitations Act, 2002, which states:
- Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.
[12] Section 4 must be read in conjunction with s. 5, which provides:
- (1) A claim is discovered on the earlier of,
(a) the day on which the person with the claim first knew,
(i) that the injury, loss or damage had occurred,
(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,
(iii) that the act or omission was that of the person against whom the claim is made, and
(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and
(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a)
[13] Counsel for CIBC Mortgages submits that the limitation period begins to run as soon as a person is aware that there is some injury from the alleged wrong, even though the extent of the damage may not be known, relying on the Court of Appeal’s 2012 decision in [Hamilton (City of) v. Metcalfe & Mansfield Capital Corp.][^2] The Court of Appeal, in turn, relied upon the Supreme Court of Canada’s decision in [Peixeiro v. Haberman][^3] in which Major J. held (at para.18):
. . .The authorities are clear that the exact extent of the loss of the plaintiff need not be known for the cause of action to accrue. Once the plaintiff knows that some damage has occurred and has identified the tortfeasor (see Cartledge v. E. Jopling & Sons Ltd., [1963] A.C. 758 (H.L.), at p. 772 per Lord Reid, and July v. Neal (1986), 57 O.R. (2d) 129 (C.A.)), the cause of action has accrued. Neither the extent of damage nor the type of damage need be known. To hold otherwise would inject too much uncertainty into cases where the full scope of the damages may not be ascertained for an extended time beyond the general limitation period.
[14] It is unfortunate that the limitations issue was decided in a truncated fashion without the benefit of a full record. There is some evidence from Joseph Lettieri that after finding out about the incorrect information being provided by Equifax, he contacted Gowlings. Equifax had advised him that only the judgment creditor could change the information on its file. Mr. Lettieri testified that a person named Karen at Gowlings undertook to rectify the situation, but failed to do so. If such an undertaking was given, and then breached, this could either extend the limitation period, or create a new limitation period.
[15] Counsel for CIBC Mortgages argued before me that it did not matter whether the cause of action was extended by an undertaking given by Gowlings. He relied on a document in the Small Claims Court file, which demonstrates that Joseph Lettieri had obtained an Equifax report in February 2011 from which he would have known that Gowlings had not rectified the problem. Counsel submitted that this could not affect the result because the action was not commenced within two years of February 2011. However, there was no evidence at trial as to this document and it was not put to Joseph Lettieri in cross-examination. In particular, there is no evidence as to when the plaintiff Riccardo Lettieri can be fixed with knowledge of the breach of undertaking. The onus is on the defendant to establish the limitation period defence. The evidentiary record is insufficient on this point.
[16] It is by no means clear to me that the principles established in Peixeiro apply to a case in which there is an ongoing act or acts, each of which creates separate injury. In Peixeiro and also in Hamilton (City) v. Metcalfe, there was a single wrong, which caused injury. It was the discovery of the injury arising from the wrong that started the limitation clock to run, even though the full extent of the plaintiffs’ damages had not yet been quantified. In the case now before the court, however, I am not clear as to the precise nature of the plaintiff’s claim. It could be regarded as a number of separate wrongs, each time Equifax provides incorrect information to a creditor creating a separate injury to the plaintiff. Alternatively, it could be regarded as a failure by the CIBC Mortgage’s solicitors to take steps to rectify the situation, in breach of its undertaking to do so. Every time incorrect information is given to a new prospective creditor or business associate of the plaintiff, new injuries flow from that ongoing breach. The absence of a full evidentiary record makes it difficult to determine this issue, particularly since the plaintiff is not represented by counsel.
[17] If the cause of action is determined to be a continuous omission by CIBC Mortgages, consideration should be given to whether s. 15 (6) of the Limitations Act is the applicable provision, rather than s. 4. Section 15(6)(a) and (b) stipulate:
15 (6) For the purposes of this section, the day an act or omission on which a claim is based takes place is,
(a) in the case of a continuous act or omission, the day on which the act or omission ceases;
(b) in the case of a series of acts or omissions in respect of the same obligation, the day on which the last act or omission in the series occurs;
[18] In [Hare v. Hare],[^4] the Court of Appeal wrote, at para. 98: “Sections 15(6)(a) and (b) create the possibility for indefinite limitation periods where there is a continuous act or omission and a series of acts or omissions, as the ultimate limitation period in such situations will never begin to run as long as the act or series of acts continues.” In Germain v. Clement,[^5] 166 A.C.W.S. (3d) 978, the Ontario Superior Court dealt with a continuous omission, namely the failure on the part of one party to continue making profit-sharing payments to the other as per a contractual obligation. The Court held that when each annual payment became due, a fresh cause of action arose and a fresh limitation period began to run.
[19] I am not suggesting that s. 15(6) necessarily applies, nor should I be taken as having determined the nature of the cause of action. My point is simply that there are alternatives that ought to have been considered and could only have been properly considered on a proper evidentiary basis. These issues were not raised at trial, nor in the material filed on this appeal.
[20] Alternatively, if s. 4 applies, it may nevertheless be possible to characterize the plaintiff’s injuries as separate injuries arising from the same cause of action. I am not aware of any case law from Ontario that speaks directly to this issue. However, Alberta’s courts have dealt with this under virtually identical legislative provisions. In [Sun Gro Horticulture Canada Ltd. v. Abe’s Door Service Ltd.],[^6] the Alberta Court of Appeal draws the distinction between a “claim,” i.e. a matter giving rise to a civil proceeding in which a claimant seeks a remedial order, and an “injury,” i.e. a personal injury, property damage, economic loss, non-performance of an obligation, or the breach of a duty, holding, at para. 11:
It is true that a factual nexus gives rise to only one cause of action, and a judgment merges all claims for damages arising from that cause of action. Section 3(1)(a), however, links immunity with the discoverability of the injury, not the discoverability of a cause of action for any injury. This accords with a plain and purposive reading of the enactment reflecting as it does the legislative choice for discoverability of the injury. In so concluding, I am not unmindful that statutory interpretation cannot be founded on the wording of the legislation alone. As made clear in Rizzo & Rizzo Shoes Ltd., Re, [1998] 1 S.C.R. 27 (S.C.C.), the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of the legislature. See also Bell ExpressVu Ltd. Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559 (S.C.C.).
Sun Gro was followed by the Alberta Court of Appeal in [Aram Systems Ltd. v. NovAtel Inc.][^7]
[21] Again, this is not an issue that was argued before me, and I should not be taken as having ruled on it. I simply raise it as another issue that should be taken into account before simply dismissing Mr. Lettieri’s claim, particularly as he is not represented by counsel.
[22] I also note the difficulty and potential unfairness that arises from a rigid application of s. 4 and the principles in Peixeiro to a case of this nature. Where there is an ongoing omission and distinct, separate damages are arising at different points over time, it can be problematic to start the limitations period at the very instant the plaintiff is aware of any injury arising from the omission. The first injury might be trivial or inconsequential. However, an injury two years and one day later might be devastating. Is a plaintiff’s $1,000,000 claim to be barred by the Limitations Act because he did not bring an action on a $100 injury three years earlier? Such a construction does not appear to me to be reasonable.
[23] The Supreme Court has held that when there is ambiguity in limitation statutes, they are to be strictly construed such that any ambiguity should be resolved in favour of the person whose rights are being circumscribed, unless there is a valid policy reason to justify otherwise.[^8] In Peixeiro, the Supreme Court held, at para. 34, that “whatever interest a defendant may have in the universal application of a limitation period must be balanced against the concerns of fairness to the plaintiff who was unaware that his injuries met the conditions precedent to commencing an action.”
[24] Finally, regardless of which section of the Limitations Act applies, consideration ought to have been given to the plaintiff’s physical condition at the time the limitation period is otherwise determined to have started running. The trial judge raised the issue of Riccardo Lettieri’s serious health issues at the outset of the trial. However, there was no evidence as to the nature and extent of those issues and how they may have had an impact on his ability to commence a proceeding. Joseph Lettieri referred to his brother’s illness as the main reason for the delay. The trial judge noted this, but no further inquiries were made. Further, the trial judge did not consider s. 7(1)(a) of the Limitations Act which provides that the limitation period set out in s. 4 “does not run during any time in which the person with the claim is incapable of commencing a proceeding in respect of the claim because of his or her physical, mental or psychological condition.” It is unclear whether Riccardo Lettieri’s illness would meet this criterion, but the inquiry ought to have been made, particularly where the plaintiff raised the issue and was not represented by counsel.
Conclusion
[25] I realize I have raised more questions in this appeal, than I have provided answers. However, the absence of a full record makes it difficult to decide these issues. I am also hampered by the fact that the plaintiff was unrepresented by counsel and did not know to raise any of these issues.
[26] I recognize the time pressures on a judge in the Small Claims Court and the advantages of deciding cases on a narrow point where possible. However, the application of the limitation period in this case is not straightforward. I do not fault the trial judge for taking the route that she did. However, with the benefit of hindsight and time for reflection, I find that it was unfair to the plaintiff to dismiss his action without the benefit of a full examination of the factual underpinnings. I am also troubled by the manner in which the limitation defence was first raised. It should have been pleaded, rather than simply raised informally in a mediation session with an unrepresented plaintiff.
[27] In all of these circumstances, in my view, a new trial is required. Therefore, the decision of the Small Claims Court is set aside. If CIBC Mortgages intends to rely on a limitation defence in any further trial, it must seek to amend its statement of defence accordingly.
[28] The plaintiff was self-represented and did not raise some of the issues that have resulted in a new trial. In these circumstances, it is appropriate that there be no order as to costs.
MOLLOY J.
Released: November 23, 2015
CITATION: Lettieri v. CIBC Mortgages Inc., 2015 ONSC 7265
DIVISIONAL COURT FILE NO.: 104/15
DATE: 20151123
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
MOLLOY, J.
BETWEEN:
RICCARDO PATRICK LETTIERI
Appellant/Plaintiff
– and –
CIBC MORTGAGES INC. trading as FIRSTLINE MORTGAGES
Respondent/Defendant
REASONS FOR JUDGMENT
Molloy, J.
Released: November 23, 2015
[^1]: Limitations Act, 2002, SO 2002, c. 24
[^2]: Hamilton (City of) v. Metcalfe & Mansfield Capital Corp. 2012 ONCA 156
[^3]: Peixeiro v. Haberman, [1997] 3 S.C.R. 549
[^4]: Hare v. Hare (2006), 83 O.R. (3d) 766 (C.A.)
[^5]: Germain v. Clement, [2008] O.J. No. 1441 (S.C.J.)
[^6]: Sun Gro Horticulture Canada Ltd. v. Abe’s Door Service Ltd., 2006 ABCA 243, 273 D.L.R. (4th) 295
[^7]: Aram Systems Ltd. v. NovAtel Inc., 2008 ABQB 441, 449 A.R. 288.
[^8]: Ordon Estate v. Grail, [1998] 3 S.C.R. 437 (S.C.C.); Berardinelli v. Ontario Housing Corp. (1978), [1979] 1 S.C.R. 275 (S.C.C.).