T.W. Marsh Well Drilling & Service Inc. v. Ashburn
CITATION: T.W. Marsh Well Drilling & Service Inc. v. Ashburn, 2017 ONSC 2531
SUPERIOR COURT FILE NO.: CV-14-21112
DIVISIONAL COURT FILE NO.: DC-16-125-ML
DATE: 20170425
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
T.W. Marsh Well Drilling & Service Inc., Marsh Servicing Inc. and Marsh Drilling Inc.
Plaintiffs
– and –
Candice Ashburn, Cindy Fisher and Bank of Montreal
Defendants
Tim Gleason, agent for James Renaud, for the Plaintiffs
Michael A. Eizenga and Christiaan A. Jordaan, for the Defendants
HEARD: In writing
REASONS ON MOTION IN WRITING FOR LEAVE TO APPEAL TO DIVISIONAL COURT
Thomas J.:
[1] The defendants, Cindy Fisher and Bank of Montreal (BMO defendants), have moved for leave to appeal the decision of Campbell J. (the motions judge) released November 28, 2016.
[2] The motions judge dismissed the BMO defendants’ motion. The motion sought to dismiss the action pursuant to r. 20 and 21 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.
Background
[3] The plaintiffs, T.W. Marsh Well Drilling & Service Inc., Marsh Servicing Inc. and Marsh Drilling Inc. (the plaintiffs), operated a family business in the Village of Bothwell and employed Candice Ashburn as their bookkeeper. She was in their employ from November 2008 to August 2012.
[4] On August 10, 2012, the plaintiffs discovered Ms. Ashburn had been forging their names on company cheques and stealing their money. While the date of the discovery of this theft may be a trial issue, it is not part of my consideration of leave.
[5] Ms. Ashburn was arrested and her employment terminated on August 13, 2012. On March 27, 2014, she was convicted, sentenced, and ordered to pay restitution of $333,227.30.
[6] The defendant, Cindy Fisher, is the mother of Candice Ashburn and the manager of the Bothwell branch of Bank of Montreal. Many of the forged cheques were negotiated at this branch and it is alleged that Ms. Fisher was complicit in the theft or at least failed in her duty to take steps to remedy the situation.
[7] As Cindy Fisher’s employer, it is alleged BMO is vicariously liable and that it failed in its duty of care to the plaintiffs.
[8] It was conceded for the purpose of the motion that the plaintiffs had discovered all the elements of their claim by August 10, 2012.
[9] On August 8, 2014, this proceeding was sought to be commenced by notice of action. In totality, the notice of action naming these defendants consisted of the following:
The Plaintiffs claim damages against the Defendants, jointly and/or severally, for:
a) fraud;
b) breach of trust;
c) negligence;
d) breach of contract;
e) breach of fiduciary obligations;
f) conversion;
g) aggravated and punitive damages;
h) such further and other claims as will be revealed in the Statement of Claim.
[10] On September 8, 2014, a statement of claim was issued and in accordance with r. 14.03(4), was served with the notice of action. The statement of claim, in addition to the causes of action alleged in the notice of action, seeks damages for forgery, misappropriation and conspiracy.
[11] On September 15, 2016, the BMO defendants moved for an order dismissing this action under r. 20 and 21 of the Rules of Civil Procedure. The defendants contended that no valid action had been commenced before August 10, 2014, when the limitation period expired. In particular, the defendants asked the court to find that the notice of action was a nullity. Alternatively, the defendants argued that the plaintiffs ought to have discovered their claim more than two years before the notice of action was issued. The finding on discoverability is not before me for my consideration of leave.
[12] On November 28, 2016, the motions judge dismissed the motion. Of importance for the purposes of this application, he ruled that:
(a) Proceedings can be commenced by notice of action. Notices of action are not defined as a pleading by r. 25.01 of the Rules of Civil Procedure. Concerns about the sufficiency of pleadings therefore do not apply to notices of action.
(b) The notice of action here was sufficient as it set out the “inherent or essential character of the claims”. Any lack of detail was corrected by delivery of the statement of claim delivered in accordance with the Rules.
(c) Any concerns about the statement of claim adding causes of action are answered by the provisions of r. 14.03(5):
Statement of Claim may Alter or Extend Claim
(5) In an action commenced by the issuing of a notice of action, the statement of claim may alter or extend the claim stated in the notice of action.
(d) Any deficiency found in the notice of action would amount to a failure to comply with the Rules; an irregularity that could be corrected by r. 2.01(1):
2.01 (1) A failure to comply with these rules is an irregularity and does not render a proceeding or a step, document or order in a proceeding a nullity, and the court,
(a) may grant all necessary amendments or other relief, on such terms as are just, to secure the just determination of the real matters in dispute; or
(b) only where and as necessary in the interest of justice, may set aside the proceeding or a step, document or order in the proceeding in whole or in part.
Arguments on Leave
[13] The BMO defendants state quite bluntly that the decision of the motions judge misses the point. They argue that it is not simply an issue of whether the notice of action was a nullity but rather the essence of their argument rests with the provisions of s. 4 of the Ontario Limitations Act, 2002, S.O. 2002, c. 24, produced below:
Basic limitation period
- 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.
[14] A claim is defined by s. 1 of the Ontario Limitations Act as “a claim to remedy an injury, loss or damage that occurred as a result of an act or omission”. A claim has been judicially interpreted to mean “a cause of action, which is the fact or facts which give a person a right to judicial redress or relief against another…” (Unicorr Limited v. Minuk Construction & Engineering Ltd., 2016 ONSC 7350, at para. 69).
[15] They argue that no cause of action was asserted in the notice of action and thus the operation of the two-year limitation period extinguished the claim before the statement of claim was delivered. They suggest the notice of action is completely absent material facts and that, at the very least, it must minimally identify a factual situation that gives rise to the claim (Ascent Inc. v. Fox 40 International Inc. (2009), 178 A.C.W.S. (3d) 907 (Master), at para. 21; GMIC Inc. v. Ola (2010), 202 A.C.W.S. (3d) 43 (Sup. Ct.); Gu v. Asmar, 2014 ONSC 1028, at para. 23 (Sup. Ct.)).
[16] The BMO defendants bring to my attention the decision in Titizian v. Walker (2001), 104 A.C.W.S. (3d) 37 (Sup. Ct.) (Titizian), at paras. 13 and 20, which held a similar notice of action deficient as not disclosing a short statement of the nature of the claim and, therefore, not disclosing a cause of action.
[17] The defendants argue that r. 2.01 cannot be used to manipulate and extend a limitation period and that the two-year limitation period was meant to bring certainty and finality (Joseph v. Paramount Canada’s Wonderland, 2008 ONCA 469, at paras. 22-23 (Joseph)).
[18] Finally, they suggest the statement of claim delivered here does not vary or alter the claims made in the notice of action as contemplated by r. 14.03(5) but rather seeking to add additional causes of action after the expiration of the limitation period. McKinlay Transport Ltd. v. Motor Transport Industrial Relations Bureau of Ontario (Inc.) (1988), 65 O.R. (2d) (H.C.J.), at paras. 14, 15 and 18, a decision which considered the expiration of a limitation period between the issuance of a writ of summons and the delivery of a statement of claim, is offered as authority for striking out those claims as no facts are included in this notice of action.
[19] The plaintiffs respond that there are no grounds to grant leave. They suggest that any differences in the decisions amount to those courts coming to different results based on different circumstances which is in the discretion of the court. They say a conflicting decision must reflect differences in principle (Comrade Petroleum Inc. v. 490300 Ontario Ltd., 1992 7405 (Div. Ct.)).
[20] They argue that Titizian is different on its facts in that the notice of action there simply sought general and special damages in stated amounts without providing any causes of action. They rely instead upon Thode v. University of Ottawa, 2012 ONSC 7284 (Thode). In Thode, the notice of action sought damages from each defendant in a form as set out below:
(a) damages in the amount of $100,000.00 for defamation;
(b) damages in the amount of $100,000.00 for negligence and breach of duty of care;
(c) damages of $100,000.00 for loss of opportunity;
(d) damages for negligent investigation in the amount of $100,000.00;
(e) punitive damages in the amount of $100,000.00;
[21] In Thode, McNamara J. held, at para. 19, that:
The Notice in para. 3 clearly states it seeks damages against the defendant University for defamation, negligence, and punitive damages. As against the defendant McLellan, it seeks damages for defamation and punitive damages. That is the inherent or essential character of the claims. It is true that it does not mention the specific events that led to the claims being advanced, but that was remedied by the Statement of Claim filed well within the 30 days required under rule 14.03(3).
[22] In Thode, I recognize there was no intervening limitation period.
[23] The plaintiffs suggest that Joseph has no application here. They rely upon the distinction that r. 2.01 provides the ability to relieve against the strict application of the Rules. They point out that, in fact, the court in Titizian allowed for the possibility of rectifying deficiencies in the notice of action to secure the just determination of the real matters in dispute between the parties. It is also clear that Titizian was decided before the changes to the Ontario Limitations Act.
Analysis
[24] Leave to appeal to the Divisional Court is governed by the test set out in r. 62.02(4) set out below:
(4) Leave to appeal shall not be granted unless,
(a) there is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal and it is, in the opinion of the judge hearing the motion, desirable that leave to appeal be granted; or
(b) there appears to the judge hearing the motion good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted.
[25] I have come to the conclusion that leave must be granted here. The decisions cited above in Titizian and Thode are clearly in conflict and the decision here by the motions judge falls into that conflicted area. The details contained in the notices of action in Titizian and Thode and in the case at bar are not so different so as to resolve the conflict on the facts that confronted the respective courts.
[26] Day J. in Titizian found the notice of action deficient. McNamara J. finds a similar notice of action sufficient. The motions judge here chose to follow Thode. In my opinion, it is desirable to have the Divisional Court render an opinion.
[27] The absence of an intervening limitation period in Thode does not change the nature of the decision or the principle upon which it is founded.
[28] I think it important to note that there are no decisions but the one before me that considers the meaning of s. 14.03(5) and the extent to which the plaintiff can vary and alter the claims in its notice of action, particularly after the expiration of the limitation period. Nor do I believe there is a definitive position on the powers of relief contained in r. 2.01 in this context.
[29] As a result of the above, I need not consider the correctness of the decision before me. Of interest, I note that in both Titizian and Thode, the court found a reason to uphold the validity of the process.
Costs
[30] The BMO defendants claim costs of this application for leave. I point out this is a leave application considering technical issues with limited jurisprudence. If I need to provide an endorsement regarding costs, I will consider the parties’ written positions limited to five (5) typed pages and delivered to the trial coordinator of this court in Windsor within 30 days of the release of these reasons.
Original signed by Justice Bruce Thomas
Bruce Thomas
Justice
Released: April 25, 2017
CITATION: T.W. Marsh Well Drilling & Service Inc. v. Ashburn, 2017 ONSC 2531
SUPERIOR COURT FILE NO.: CV-14-21112
DIVISIONAL COURT FILE NO.: DC-16-125-ML
DATE: 20170425
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
T.W. Marsh Well Drilling & Service Inc., Marsh Servicing Inc. and Marsh Drilling Inc.
Plaintiffs
– and –
Candice Ashburn, Cindy Fisher and Bank of Montreal
Defendants
REASONS on motion in writing for leave to appeal
Thomas J.
Released: April 25, 2017