Frederick v. Van Dusen, 2017 ONSC 7816

CITATION: Frederick v. Van Dusen, 2017 ONSC 7816

DIVISIONAL COURT FILE NO.: 17-0155

DATE: 2017/11/08

SUPERIOR COURT OF JUSTICE - ONTARIO

DIVISIONAL COURT

RE: Robert Frederick and Janice Presley, Plaintiffs (Appellants)

AND

Jack Van Dusen and Leeds, Grenville and Lanark District Health Unit, Defendants (Respondents)

BEFORE: Madam Justice R. Ryan Bell

COUNSEL: Matthew E. Wright, Counsel for the Plaintiffs (Appellants)

Zach Flemming-Giannotti, Counsel for the Defendant (Respondent) Jack Van Dusen

Alex Robineau, Counsel for the Defendant (Respondent) Leeds, Grenville and Lanark District Health Unit

HEARD: September 18, 2017

Reasons for Decision

Overview

[1] In August 2015, Robert Frederick and Janice Presley issued their claim against Jack Van Dusen, seeking damages for the premature failure of their residential septic system. Mr. Van Dusen was the installer of the septic system. Leeds, Grenville and Lanark District Health Unit was added as a defendant in January 2016.

[2] Following the close of Mr. Frederick’s and Ms. Presley’s case at trial, Mr. Van Dusen and the Health Unit moved to dismiss the action on the basis that it was statute-barred pursuant to the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B (“the Act”).

[3] The Deputy Judge found that the cause of action was discoverable in the spring of 2013. Relying on subsections 5(2) and 5(1)(b) of the Act, the Deputy Judge dismissed Mr. Frederick’s and Ms. Presley’s claim. Costs were awarded to Mr. Van Dusen and the Health Unit.

[4] The issue on the appeal is whether the Deputy Judge erred in not making an explicit finding pursuant to subsection 5(1)(a)(iv) of the Act as to whether a proceeding was an appropriate remedy in the spring of 2013. Mr. Frederick and Ms. Presley have not appealed the finding by the Deputy Judge that they were aware a loss had occurred in the spring of 2013.

[5] Mr. Van Dusen seeks leave to appeal the costs award against Mr. Frederick and Ms. Presley. The motion for leave and the merits of the proposed cross-appeal were argued together.

[6] For the following reasons, I find that the Deputy Judge applied the correct legal principles in determining that the claim is statute-barred. I also find that the test for granting leave to appeal the award of costs has not been met in this case.

The Ruling on Motion

[7] The Deputy Judge determined that Mr. Frederick and Ms. Presley were required by law to commence an action by the spring of 2015. In his ruling, the Deputy Judge made the following findings and reached the following conclusions:

• “I am left with just some general knowledge on [Mr. Frederick’s] part as an individual and as to the reasonableness of his actions.”

• “There is no evidence as to just what [Mr. Frederick’s] circumstances were in terms of his knowledge or the extent of his knowledge….”

• “It turns out that that smell has continued except for the summer and on an ongoing basis from year to year, in the spring and the fall.”

• “I have no hesitation in finding that, [Mr. Frederick] was aware that there was a loss and a loss had occurred in the spring of 2013.”

• “[A]s a result of seeing the effluent on the ground in the spring of 2013, that is prior to June 21 of 2013, that, in my view, constitutes and did constitute a significant material fact that brought home to [Mr. Frederick] the fact that there was something seriously wrong with the septic system and the operation of the septic system.”

• “I cannot imagine a more material fact than the discovery of effluent coming from a septic system and this being a fact that ought to have put [Mr. Presley] on notice as a reasonable person, as a reasonable homeowner … I am satisfied that the limitation period commenced as of that time.”

• “The fact that there would be smell problems in the fall and the spring and not in the summer, in my mind, ought to have triggered a perception on his part that there was something wrong.”

• “[E]ffluent on the ground and which subsequently results in the system being condemned, in my view, triggers to any reasonable person that those ‘leaking spots’ were a problem that is a very serious and material problem that has to be looked at immediately….”

• “[A]ny reasonable thinking individual or homeowner [would have known] with both the smells which were occurring, the…alleged lack of additional work by the defendant, Van Dusen, to clear up the problem and, in particular, the effluent may have amounted to acts or omissions [that] could only have been by Van Dusen and/or the Health Unit.”

• “It is not necessary for me to make any determination under that subsection [5(1)(a)(iv)] and I do not do so as I only have to find the earliest date and I have no difficulty, as I have said, in finding that that date was in the spring of 2013.”

• “[T]here is not sufficient evidence and [the plaintiffs] did not establish that by the production of sufficient evidence to satisfy me, at least on a balance of probabilities, to be contrary and therefore that [subsection 5(2)] has not been met.”

Standard of Review

[8] The standard of review on an appeal from the order of a judge is correctness for a question of law and palpable and overriding error for findings of fact. A question of mixed fact and law is subject to a standard of palpable and overriding error unless it is clear that the trial judge made some extricable error in principle which may amount to an error of law (Housen v. Nikolaisen, 2002 SCC 33).

[9] The correctness standard of review is engaged on this appeal. The plaintiffs have not appealed the findings of fact of the Deputy Judge. The question of discoverability is a question of mixed fact and law; however, the narrow issue before me is whether the Deputy Judge erred in law or applied an incorrect legal principle in not making an explicit finding under subsection 5(1)(a)(iv) of the Act (Longo v. MacLaren Art Centre Inc., 2014 ONCA 526, at para. 38).

Analysis - [Limitations Act, 2002](https://www.canlii.org/en/on/laws/stat/so-2002-c-24-sch-b/latest/so-2002-c-24-sch-b.html)

[10] The essence of Mr. Frederick’s and Ms. Presley’s argument is that the Deputy Judge was required to consider and make determinations with respect to each branch of the discoverability provision set out in subsection 5(1)(a) of the Act. I reject this argument given the Deputy Judge’s findings and determinations in relation to subsections 5(1)(b) and 5(2) of the Act.

[11] Subsection 5(1) of the Act provides:

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] Subsection 5(1) provides that a claim is discovered on the earlier of the day on which the plaintiff first knew of the matters set out in subsection 5(1)(a) and the day on which a reasonable person with the abilities and in the circumstances of the plaintiff ought to have known of the matters referred to in subsection 5(1)(a). The Deputy Judge found that the date on which the reasonable person with the abilities and in the circumstances of Mr. Frederick ought to have known of the matters set out in subsection 5(1)(a) was the spring of 2013. Having made this determination under subsection 5(1)(b) of the Act, there was no requirement for the Deputy Judge to make an explicit finding as to what Mr. Frederick and Ms. Presley actually knew in relation to subsection 5(1)(a)(iv).

[13] In determining that the date under subsection 5(1)(b) of the Act was the spring of 2013, the Deputy Judge considered Mr. Frederick’s and Ms. Presley’s circumstances. The Deputy Judge noted that “the onus in this case is on the plaintiff to establish his reasonableness.… It is not up to the defendants to raise the extent of his knowledge rather it is up to the plaintiffs to have established the requirements under Section 5.” Apart from “some general knowledge” as to the reasonableness of Mr. Frederick’s actions, there was no evidence as to what his circumstances were in terms of the extent of his knowledge. I find no error by the Deputy Judge in this regard.

[14] The Deputy Judge also considered and applied subsection 5(2) of the Act. The presumption in subsection 5(2) provides that a person with a claim shall be presumed to have known of the matters referred to in subsection 5(1)(a) on the day the act or omission on which the claim is based took place, unless the contrary is proved. Mr. Frederick and Ms. Presley bore the onus of leading evidence to displace the statutory presumption of the date on which they discovered their claim against Mr. Van Dusen and the Health Unit.

[15] The threshold to displace the statutory presumption in subsection 5(2) is relatively low; in this case, Mr. Frederick and Ms. Presley were required to show that they could not, through reasonable diligence, have discovered their claim on the day the act or omission on which the claim is based took place (Miaskowski (Litigation guardian of) v. Persaud, 2015 ONCA 758, at paras. 27-28).

[16] The Deputy Judge considered the statutory presumption and determined that Mr. Frederick and Ms. Presley had not produced sufficient evidence to satisfy the court that the presumption did not apply. In light of this determination, the Deputy Judge concluded that in the spring of 2013, “the plaintiff in this case is presumed to have known of all those matters referred to [in subsection] 5(1)(a).” In my view, the Deputy Judge’s decision in relation to subsection 5(2) is also correct.

Ruling on Costs

[17] In determining the costs to be awarded to Mr. Van Dusen, the Deputy Judge considered the following factors:

• The parties prepared a joint document brief for use at trial;

• The trial lasted approximately half a day and then proceeded by way of motion;

• Had there been a procedure available to the parties to have brought a summary judgment motion prior to trial, the matter probably would have been dealt with under a Rule 15 motion in which case the maximum costs that could have been awarded would have been $100, subject to discretionary increases;

• The issues on the motion were straightforward and not complex; and

• Although three expert reports were prepared, none were tendered at trial and they were not used on the motion.

[18] The Deputy Judge concluded that $750 is a fair and reasonable amount for a representation fee payable by the plaintiff to each of the defendants. The Deputy Judge then considered the offers of settlement and doubled the representation fee for each defendant to $1,500.

[19] The Deputy Judge allowed only a partial recovery of the experts’ reports, finding that only 25 per cent of the reports were used in relation to the defence of the claim. With respect to the expert report obtained by Mr. Van Dusen, the Deputy Judge allowed the amount of $1,410.

Analysis - Costs

[20] Awards of costs, while a matter of judicial discretion, can be reviewed by an appellate court on the basis that the award is made on a wrong principle, on a misapprehension of significant facts, or in a non-judicial manner. The party seeking leave to appeal an order for costs faces a heavy onus requiring strong grounds. Leave to appeal will be granted if (a) the discretion is not exercised on the facts of the case; (b) the discretion is exercised on facts wholly unconnected with the cause of action; or (c) the judgment has proceeded on some erroneous principle (Johanns v. Fulford, 2011 ONSC 5268, at para. 2, citing Children’s Aid Society of Niagara Region v. D.(W.) (2005), 2005 11187 (ON SCDC), 15 R.F.L. (6th) 117 (Ont. Div. Ct.), at para. 12).

[21] Leave to appeal a costs order should be granted sparingly. In addition to an error in principle or an award that is clearly wrong, the proposed appeal should raise an issue of some importance to the administration of justice that goes beyond the interests of the parties (Bougadis Chang LLP v. 1231238 Ontario Inc., 2012 ONSC 6409, at para. 2).

[22] I find no error in principle in the Deputy Judge’s costs order in favour of Mr. Van Dusen. The award is not clearly wrong. In any event, I find that the proposed cross-appeal does not raise an issue of importance to the administration of justice that goes beyond the interests of the parties.

Disposition

[23] The appeal is dismissed. The motion by Mr. Van Dusen for leave to appeal the costs award is also dismissed.

[24] In the event that the parties are unable to agree upon costs of the appeal and the motion for leave and the proposed cross-appeal, they may make written submissions limited to a maximum of five pages, double-paced, exclusive of a bill of costs. Written submissions shall be delivered within fifteen days of the date on which this decision is released.

Madam Justice R. Ryan Bell

Date: November 8, 2017

CITATION: Frederick v. Van Dusen, 2017 ONSC 7816

DIVISIONAL COURT FILE NO.: 17-0155

DATE: 2017/11/08

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

RE: Robert Frederick and Janice Presley, Plaintiffs (Appellants)

AND

Jack Van Dusen and Leeds, Grenville and Lanark District Health Unit, Defendants (Respondents)

BEFORE: Madam Justice R. Ryan Bell

COUNSEL: Matthew E. Wright, Counsel for the Plaintiffs (Appellants)

Zach Flemming-Giannotti, Counsel for the Defendant (Respondent) Jack Van Dusen

Alex Robineau, Counsel for the Defendant (Respondent) Leeds, Grenville and Lanark District Health Unit

Reasons for Decision

Justice Ryan Bell

Released: November 8, 2017