CITATION: Toronto Standard Condominium Corporation No. 2073 v. The Printing Factory Lofts Inc., 2017 ONSC 2908
DIVISIONAL COURT FILE NO.: 552/16
DATE: 20170511
SUPERIOR COURT OF JUSTICE – ONTARIO
DIVISIONAL COURT
RE: TORONTO STANDARD CONDOMINIUM CORPORATION NO. 2073 v. THE PRINTING FACTORY LOFTS INC. and others
BEFORE: NORDHEIMER J.
COUNSEL: D. Zacks & S. Khemras, for the appellant/plaintiff
G. Gibbs, for the respondent, Blackwell Bowick Partnership Limited
HEARD at Toronto: May 10, 2017
E N D O R S E M E N T
[1] The appellant, Toronto Standard Condominium Corporation No. 2703, appeals from the Order of Master Short, dated October 21, 2016, that denied the appellant leave to amend its Statement of Claim to add the respondent, Blackwell Bowick Partnership Limited, as a defendant. At the end of the hearing, and despite the able submissions of counsel for the appellant, I dismissed the appeal with reasons to follow. I now provide those reasons.
[2] The appellant is a residential condominium corporation in Toronto. The condominium is the result of the conversion of an industrial building into a residential condominium building (the "Conversion Project"). The respondent is a firm of structural engineers incorporated in Ontario that was involved in the Conversion Project.
[3] After the appellant came into being, it retained Construction Control Inc. ("CCI"), a firm of consulting engineers, to investigate the building for construction deficiencies related to the Conversion Project, and to conduct a construction performance audit. As part of its work, the appellant provided CCI with drawings prepared by the respondent.
[4] CCI issued its performance audit report on or about April 8, 2011. CCI concluded that the condominium had serious construction and restoration defects and deficiencies resulting from incomplete and inadequate work, including problems and deficiencies associated with the roof systems, exterior wall systems, structure/parking garage, and water, moisture, and air penetration.
[5] The appellant commenced this proceeding for damages arising from construction deficiencies in the Conversion Project by Notice of Action on May 11, 2012. A statement of claim was delivered on June 11, 2012. At that time, there were a number of named defendants, including the developer of the condominium, the City of Toronto, two firms of architects, and a consultant.
[6] On December 21, 2015, the appellant delivered a Notice of Motion for leave to amend its amended amended statement of claim in a number of ways, including the addition of the respondent as a defendant. The allegations against the respondent were contained in three paragraphs of the proposed amendments to the statement of claim and are essentially as follows:
(a) Blackwell were retained to design and supervise construction of foundations within the condominium to ensure that the foundations were watertight and that it was negligent in doing so;
(b) Blackwell designed waterproofing systems for the condominium that were deficient or incompetent with the result that they did not function as intended;
(c) Blackwell negligently signed off on the construction as being properly built when that was not the case.
[7] The Master dismissed the motion to add the respondent as a defendant on the basis that the applicable two year limitation period had expired. In reaching that conclusion, the appellant submits that the Master misapprehended the evidence, and applied the wrong legal test for determining whether the respondent should be added as a defendant.
[8] From the evidence filed on the motion, which was principally an agreed statement of facts, it is clear that the appellant knew about the respondent's involvement in the Conversion Project from at least May 2010. The appellant knew the role that the respondent played with specific reference to the design of waterproofing for the foundations. Indeed, the appellant provided copies of structural drawings done by the respondent to CCI as part of its original investigation.
[9] The appellant not only knew about the respondent's role in the Conversion Project in May 2010, it also knew from CCI, in April 2011, that the condominium had serious construction and restoration defects and deficiencies, including issues regarding water, moisture and air penetration. More specifically, the appellant knew that there were issues with water leakage in the foundations. However, the appellant did not take any steps to include the respondent as a defendant until December 2015.
[10] A party cannot be added as a defendant if the limitation period has expired. This is clear from s. 21(1) of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, which reads:
If 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.
[11] The issue as to when a claim is discovered for the purposes of the running of the limitation period is set out in s. 5(1) of the Limitations Act, 2002, which reads:
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).
[12] In my view, it is clear that the appellant knew in 2011, when CCI delivered its first report, that there were problems with water leakage in the foundations and it also knew that the respondent had been directly involved in the design of waterproofing for the foundations. The possible connection between the design and the problem ought to have been obvious.
[13] The Supreme Court of Canada, in Peixeiro v. Haberman, [1997] 3 S.C.R. 549, set out the basic test for when a limitation period begins to run, when Major J. said, 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, [citations omitted], the cause of action has accrued. Neither the extent of damage nor the type of damage need be known.
[14] In addition, a plaintiff also does not have to know with certainty that a proposed defendant is responsible. It is sufficient if there is some basis in fact to believe that the proposed defendant caused the loss. This point was made in Kowal v. Shyiak, 2012 ONCA 512, [2012] O.J. No. 3420 (C.A.) where Pepall J.A. said, at para. 18:
Certainty of a defendant's responsibility for the act or omission that caused or contributed to the loss is not a requirement. It is enough to have prima facie grounds to infer that the acts or omissions were caused by the party or parties identified: [citation omitted]
[15] Prior to commencing this action, the appellant had an obligation to consider the problems associated with the Conversion Project and to identify those parties who might be responsible for them. The appellant clearly did so to some extent because it named a number of different parties as defendants, including the City of Toronto. The appellant had the same obligation to consider the potential liability of the respondent for some of the issues identified by CCI since it knew that there were water leakage issues in the foundations and also knew that the respondent had been integrally involved in the design and implementation of the water proofing system.
[16] The appellant contends that it did not connect the appellant's liability to the water leakage problem because CCI, in its report, characterized the water leakage issue as a "construction" issue. There are two difficulties with that contention. One is that there is nothing in the CCI report that suggests that CCI, in labelling the various defects as it did, was purporting to identify the persons who might have liability for the problems identified. I do not accept the appellant's position that it was "implicit" in the report that CCI was doing so. The other is that the appellant acknowledges that there is nothing in the record that shows that the appellant made any such inquiries of CCI. In other words, having received the CCI report, and thus becoming aware of the problems with the Conversion Project, there is no evidence that the appellant ever inquired of CCI which parties involved in the Conversion Project might be responsible for the problems. There is, therefore, no evidence that the appellant took steps available to it to discover the potential liability of the respondent even though it had information, in its possession, that would have suggested the existence of that potential liability. The appellant cannot fail to make reasonable inquiries and then suggest that it could not have earlier discovered the facts upon which its claim is now advanced.
[17] The appellant also complains that the Master applied the wrong legal test, that is, that he applied summary judgment principles, rather than principles that are applicable to adding a party as part of amending a pleading under r. 26.01. I do not agree. The Master cited and applied the applicable principles, including the point made in Frohlick v. Pinkerton Canada Ltd. (2008), 2008 ONCA 3, 88 O.R. (3d) 401 (C.A.) where Rouleau J.A. said, at para. 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.
[18] The appellant's position also seems to ignore the mandatory language of 21(1) of the Limitations Act, 2002.
[19] It is for these reasons that I dismissed the appeal with costs fixed in the amount of $7,500 inclusive of disbursements and HST payable by the appellant to the respondent.
NORDHEIMER J.
DATE: May 11, 2017