Lettieri v. CIBC Mortgages Inc. Trading as First Line Mortgages, 2016 ONSC 6380

CITATION: Lettieri v. CIBC Mortgages Inc. Trading as First Line Mortgages, 2016 ONSC 6380

DIVISIONAL COURT FILE NO.: 112/16 DATE: 20161012

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

BETWEEN:

RICCARDO PATRICK LETTIERI

Appellant (Plaintiff)

– and –

CIBC MORTGAGES INC. TRADING AS FIRST LINE MORTGAGES

Respondent (Defendant)

Joseph Lettieri, for the Appellant

James Riewald, for the Respondent

HEARD at Toronto: October 12, 2016

C. HORKINS J. (Orally)

1The appellant Riccardo Patrick Lettieri appeals the final judgment of Deputy Judge Clemenhagen dated February 9, 2016. After a full day trial, the Deputy Judge dismissed the appellant’s claim because it was statute barred and there was no basis in law for finding the defendant liable. The trial judge assessed damages at $5000.

Standard of Review

2The standard of review on an appeal from a judge’s order is set out in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235. On questions of law, the standard is correctness, on questions of fact, the standard is palpable and overriding error and on questions of mixed fact and law, there is a spectrum. Where there is an extricable legal principle, the standard of review is correctness. However, with respect to the application of the correct legal principles to the evidence, the standard is palpable and overriding error.

Background

3The background facts are as follows. The appellant along with his brother Joseph and two other family members, borrowed money from the respondent CIBC. There are three loans in issue. The appellant and his family defaulted on the three loans. As a result of these defaults, CIBC issued three actions, one for each loan. In each action, CIBC obtained a default judgment against the appellant and his family, for each loan that was in default. The judgments are dated November 17, 2004, July 19, 2006 and July 23, 2008.

4In each action, after the judgment was issued, the appellant paid what he owed CIBC. After payment was received, CIBC issued a Satisfaction Piece for each judgment and filed it with the court. These Satisfaction Pieces were issued on September 21, 2005, July 27, 2007 and August 23, 2013.

5The appellant commenced his Claim against CIBC in the Small Claims Court on July 24, 2013. In this Claim that was “revised” and then “amended”, he alleged that the judgments that CIBC obtained against him should never have been issued. He also alleged that because of CIBC’s actions he has been unable to obtain a credit card and has had to borrow money from lenders at high interest rates. In summary, he alleged that CIBC should be held responsible for his credit rating problem and the increased costs he has incurred to borrow money. He claimed $25,000.00 in damages flowing from a damaged credit rating, allegedly caused by CIBC’s failure to report the satisfaction of judgments to the credit bureau.

6In its statement of defence, CIBC pleaded that the Claim was statute barred because it was issued after the expiry of the two year limitation period.

7I pause to clarify that while CIBC obtained judgments against the appellant and his three family members for non-payment of the loans, the appellant alone commenced the Small Claims Court action in question.

8A trial of the Claim was first held in October 2014. On that occasion, the Deputy Judge decided to deal first with the limitation period issue. The judge dismissed the Claim because it was issued after the expiration of the two year limitation period and was therefore statute barred. The appellant appealed and his appeal was heard by Molloy J. on October 5, 2015. Molloy J. set aside the judgment and ordered a new trial (see 2015 ONSC 7265). The new trial was held before Deputy Judge Clemenhagen and it is this trial judgment that is before the court today.

9Molloy J. ordered a new trial because of the manner in which the limitation period issue was decided. Specifically it was decided in a “truncated fashion without the benefit of a full record”. I will return to Molloy J.’s reasons as the appellant relied on them during his submissions.

The Trial Decision

10Unlike the first trial, the second trial proceeded and the parties had a full opportunity to present their evidence. The limitation period was decided on the record that the parties presented during the trial. In addition to the facts set out above, the court had the following evidence.

11The appellant first knew that the judgments obtained by CIBC were affecting his ability to obtain credit, in the summer of 2006. Between 2009 and 2013, the appellant was actively pulling credit reports about his credit rating. This included reports obtained on July 21, 2009, August 13, 2009 and February 9, 2011. Well before March 2009, the appellant was aware of his poor credit rating, because his applications for loans were denied.

12On March 20, 2009, the appellant’s brother Joseph Lettieri called Karen Pagliaro, a law clerk at Gowlings, lawyers for CIBC, to advise that a Judgment was still showing against them. Ms. Pagliaro told him to show the credit bureau a copy of the Satisfaction Piece that was sent to them in 2007. Mr. Lettieri advised that he would be reviewing the matter with his lawyer to see whether he would be pursuing CIBC for all of his expenses over the last couple of years.

13On March 22, 2009, the appellant and his family wrote a letter to Gowlings in which they stated that the Judgment placed against them "caused severe hardship". The letter further stated: “We will be looking for compensation from whoever is responsible for it. We will also look to the CIBC who has their name on the judgment that was placed on us.”

14Over three years later, on November 29, 2012, Ms. Pagliaro received another call from Mr. Lettieri to advise that Equifax was still showing a Judgment against them and he wanted it removed. Ms. Pagliaro advised that she had provided a Satisfaction Piece to him in 2007 and that he should contact the credit bureau to have the Judgment removed.

15The appellant commenced his Small Claims Court claim on July 24, 2013.

16At trial, the appellant testified about his health problems. This evidence was offered to explain why he did not issue his Claim until July 2013. The appellant testified that he was hospitalized for 5-6 weeks in 2007. Further, in 2008 he received a liver transplant and was hospitalized for just over a month. In the years that followed, he was never hospitalized again although he continued to see his doctors for his condition. Aside from the appellant’s evidence about his health problems, no further evidence was available. He did not file any hospital or medical records and no doctors testified.

17The Deputy Judge accepted that through 2007 and 2008, the appellant was “quite seriously impaired in both judgment and physically” as a result of his liver condition and the aftermath of his transplant. However during 2009, the Deputy Judge found no reason why the appellant could not have started his Claim that year. The Deputy Judge stated as follows:

So I’m looking at 2009 to see if there is any reason why this action could not have started in 2009. While there is absolutely no doubt in my mind, based on both a letter and oral evidence, that the plaintiff was well aware of his damages and he was well aware of the fact that he was injured by the CIBC and their placing of the judgments which is what this case comes down to.

There is also at Tab 37 of trial brief, a letter of March 22, 2009 which says quite clearly; quote:

We will be looking for compensation from whoever is responsible for it. We will also look to the CIBC who has their name on the judgment that was placed upon us.

That was sent to the CIBC and to Gowlings. That letter makes it abundantly clear to me that the plaintiff was aware of the damage that he had suffered and was able at that point in time to bring a judgment if he so desired and realized that his damages had accrued and were accruing at point in time.

I’m satisfied that these damages accrued out of the incidence alleged in 2004, 2006, and 2007; and that at least by March 22nd, 2009 Mr. Lettieri was well aware of the effect of those events. He even wrote a letter essentially putting the defendants in this action on notice of his claims. In my opinion, therefore, his limitation period would have expired two years from the date of that letter in March 22, 2011.

18Since the appellant’s Claim was issued in July 2013, the Deputy Judge concluded based on the clear evidence before him that the Claim was statute barred. The Claim was discovered at least by March 22, 2009 ( the date of the appellant’s letter to Gowlings) and was therefore issued after the expiry of the two year limitation period.

19Although the finding that the Claim was statute barred ended the Claim, the Deputy Judge did consider CIBC’s alleged liability and the appellant’s claim for damages.

20On the issue of liability, the Deputy Judge found that CIBC had the right to issue the judgments. He found that there was no basis in law on the facts before him to hold CIBC liable.

21The facts demonstrated that the appellant was in default on the three loans and CIBC had the right to obtain the three default judgments. The judgments were then paid and CIBC filed a Satisfaction Piece in the court file to reflect payment of each judgment.

22CIBC does not report judgments directly to the various credit bureaus. Rather the credit bureaus obtain their data from the public court files. The credit reporting services that reported judgments and debts are independent of CIBC. The Deputy Judge concluded that there was no basis in law to hold CIBC liable for what this credit service reported. At page 136 of the transcript, the Deputy Judge stated as follows:

I can’t find that they are in breach of a legal duty to someone who isn’t their client; I can’t find that they acted in bad faith; and I can’t find that they breached any agreement or duty they might have otherwise assumed.

Therefore I can’t find any negligence or breach of agreement on behalf of the bank or their lawyers with regard to this matter. Therefore I cannot find that the problem with regard to the nature of the reporting is their problem.

I think that the problem may well rest with the reporting agencies but they are not before me.

23On the issue of damages, the Deputy Judge stated that the evidence “was thin”. There was evidence that the appellant had difficulty getting a credit card and had problems obtaining “business financing” but the exact amount of his loss was never quantified because the appellant did not present the evidence. Nevertheless, the Deputy Judge accepted that he had suffered a loss and arbitrarily quantified it at $5,000.

Analysis

24The appellant raises two grounds of appeal. In his notice of appeal he states that the limitation issue was not properly argued and the damages were “understated”. Both grounds of appeal fail.

Damages

25I will deal first with the damages. The appellant did not quantify his loss and offered no evidence aside from the vague reference to his trouble obtaining credit. The appellant has the burden of proving his claim on a balance of probabilities and in this case he failed to do so. The Deputy Judge assessed damages based on the thin evidence that was provided. The appellant must demonstrate that the Deputy Judge made an error of law or a palpable and overriding error of fact. He has failed to do so. Based on the lack of evidence, the Deputy Judge could have concluded that there was no evidence before him to quantify the damages. Instead he accepted that some unquantified amount was incurred and fixed the damages at $5,000.

Limitation Period

26Turning to the limitation period, the appellant argues that a two year limitation period is not realistic for his Claim. He submits that the limitation period should not start to run until all of his losses from his credit rating problem come to an end. The appellant argues that the Deputy Judge failed to follow the direction of Molly J. He argues that Molloy J.’s judgment supports his position that the limitation period should not start to run until he has stopped incurring losses as a result of his bad credit rating.

27The reasons of Molly J. do not assist the appellant. On this appeal before Molly J., the appellant argued that the trial judge erred by failing to take into account the fact that his cause of action was ongoing with recurring damage. Molloy J. ordered a new trial because the trial judge made a decision on the limitation period without the benefit of a full record. In the reasons Molly J. raised the question of whether s. 15(6) of the Limitations Act applied. The judge did not say that it applied and she did not determine the nature of the appellant’s cause of action. Her concern was simply that the limitation period was decided without a “proper evidentiary base”.

28The Deputy Judge was aware of the decision of Molly J. It is referenced in his reasons and CIBC counsel brought it to his attention.

29While there is no analysis in the Deputy Judge’s reasons concerning s. 15(6) of the Limitations Act, this is not an error since the facts of this case do not engage this section in any way. This is a straightforward case where the usual two year limitation period is engaged.

30Section 15(6) states as follows:

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;

31In Hare v. Hare, (2006), 2006 41650 (ON CA), 83 O.R. (3d) 766 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, [2008] O.J. 1441, 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 under 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.

32Section 15 does not assist the appellant. This is not a case of an alleged continuous act or omission or a series or acts or omissions. CIBC issued three separate loans. The appellant defaulted on each one at different points in time. CIBC obtained separate default judgments and issued separate Satisfaction Pieces as the judgments were paid in full.

33The issue before the Deputy Judge was the date that the appellant discovered the Claim. The appellant was given the opportunity to explain why he did not issue his Claim until July 2013. The record does not support the appellant’s argument that the limitation issue was not properly argued. The Deputy Judge made findings of fact, as set out above, based on the evidence that the appellant presented. This was the appellant’s own evidence and it was not in dispute. The appellant’s March 22, 2009 letter clearly revealed that he knew as of that date that he had incurred a loss.

34The Deputy Judge correctly found that the two year limitation period applied. The facts demonstrated that by March 22, 2009, the appellant was well aware of his credit problems. The Deputy Judge fixed this as the date on which the limitation period started to run. As a result the Claim issued on July 24, 2013 was statute barred.

35In summary the Deputy Judge correctly applied the two year limitation period. He made no palpable and overriding errors or fact and no errors of law.

Conclusion

36The appeal is dismissed.

COSTS

37I have endorsed the Appeal Book as follows: “The Appellant’s appeal is dismissed for reasons delivered orally today. The Appellant shall pay CIBC its costs of this appeal fixed at $1,500.00 all inclusive. This is a significant reduction from what CIBC requested and accordingly is fair and reasonable.”

___________________________ C. HORKINS J.

Date of Reasons for Judgment: October 12, 2016

Date of Release: October 17, 2016

2016 ONSC 6380

DIVISIONAL COURT FILE NO.: 112/16 DATE: 20161012