Court of Appeal for Ontario

Citation: Richmond Hill (Town), 2018 ONCA 511

Date: 2018-05-31

Docket: C64671

Judges: Feldman, MacPherson and Rouleau JJ.A.

Between

York Region Standard Condominium Corporation No. 1039 Appellant (Plaintiff)

and

The Corporation of the Town of Richmond Hill, Rosehill Suites Inc., Tarion Warranty Corporation, Dean Artenosi, Joseph Battaglia Architect, Arten Developments Inc., The Arten Group Inc., Principally Green Limited, 1041549 Ontario Limited carrying on business under the firm name and style Tristar Engineering, Arten Developments carrying on business under the firm name and style The Manners of Roseview Grand, Arten Developments carrying on business under the firm name and style The Rosehill, Socia Engineering Limited, John Doe Bricklayers, Jane Doe, Adam Doe, Andrew Doe, Anthony Doe, Alex Doe, Adrian Doe, Anna Doe, Alicia Doe, Alice Doe, Amy Doe and Amanda Doe

Respondents (Defendants)

Counsel

Patrick Di Monte, for the appellant

Kevin Sherkin and Ryan Wozniak, for the respondents

Heard

May 28, 2018

Appeal

On appeal from the order of Justice S.J. Woodley of the Superior Court of Justice, dated September 1, 2017, with reasons reported at 2017 ONSC 6868.

Reasons for Decision

[1] At the conclusion of the appeal, the court allowed the appeal with reasons to follow. These are those reasons.

[2] The appeal is from an order dismissing the appellant's claim against the respondents for delay. The claim involved allegations of negligence in the construction of a condominium built in 2004, resulting in defects that were discovered on August 5, 2012. A number of defendants were named in the Statement of Claim: several individuals and corporations, as well as the Corporation of the Town of Richmond Hill ("Richmond Hill") and Tarion Warranty Corporation ("Tarion").

[3] The claim was issued on August 1, 2014, but was not served on the defendants within the six months provided in the Rules of Civil Procedure. Some of the defendants – the respondents in this appeal – brought a motion for dismissal of the claim against them for delay.

[4] The motion was heard by a master. The appellant explained that it had encountered problems locating and serving the respondents due to inaccurate information filed in the respondents' corporation profile reports. The master determined, however, that even if this were true, there was no evidence that the appellant had followed up or pursued any investigation once it became aware the respondents had not been located. Nor had the appellant brought a motion to extend the time for service or to validate service effected to the registered addresses.

[5] The respondents learned of the claim in June 2015, when they were served with the cross-claims of Richmond Hill and Tarion. The respondents invited the appellant to bring a motion to extend the time for service and indicated that they would oppose such a motion. The appellant did not bring a motion to extend time or validate service and, on February 13, 2017, the respondents brought their motion for dismissal of the claim for delay.

[6] In support of the motion, the respondents filed an affidavit to the effect that the documents related to the condominium project had been purged in the normal course of business and, as far as the principal of the respondent corporations was aware, this documentation was no longer available.

[7] In his reasons, the master correctly stated that the onus was on the appellant to explain the delay and establish that the respondents had suffered no prejudice. The appellant bore the onus because the limitation period had expired during the period of delay. He also observed that prejudice was the key consideration in this case. We agree. The master noted that while the respondents no longer had their documents, the affidavit did not specify when the documents had been destroyed. He went on to infer from the various materials filed that the appellant's documents were available and that the documents of the institutional defendants had also been preserved. We take the master's reference to "institutional" defendants to be a reference to Tarion and Richmond Hill. The master concluded that the appellant had met its onus, although barely so, and dismissed the motion.

[8] On appeal to the Superior Court, the judge allowed the appeal and dismissed the claim as against the respondents. She found that the master had committed palpable and overriding errors of fact and errors of law.

[9] A central error of fact identified by the appeal judge was the master's finding that the "documents of the individual Defendants have been preserved". As she correctly noted, this finding contradicted the respondents' evidence that the records had been purged. Unfortunately, however, the typed version of the master's handwritten reasons presented to and relied upon by the appeal judge contained an error. As we note above, the master's reasons indicated that the documents of the "institutional" defendants were preserved. The typed version appears to have incorrectly transcribed "institutional" as "individual". There was therefore no inconsistency in the master's finding. This unfortunate error in transcription played a significant role in the appeal judge's decision to allow the appeal.

[10] As for the errors of law identified by the appeal judge, she explained that the master failed to apply the proper legal principles and, in particular, that "there is a strong presumption of prejudice given the expiration of the limitation period and the passage of time since the events occurred" and that "the Appellants provided evidence of specific prejudice (purging of documents and unavailability of witnesses) which evidence was not considered." In our view these criticisms of the master's decision are in error.

[11] As the appeal judge properly noted at para. 21 of her reasons, the delay that is to be considered in the circumstances of this case is "measured by reference to the length of time from the commencement of the proceeding to the motion to dismiss." It is in relation to this period of delay that the appellant bore the onus of rebutting prejudice. However, when the appeal judge came to apply this principle, she implied that the appellant was required to rebut the presumption of prejudice for the entire 13 year period since the construction of the condominium. Further, the master was well aware of the evidence that the respondents had purged their documents. However, as indicated by the master, the respondents did not indicate when their documents were destroyed. It was open to the master to infer that they had in fact been destroyed well before the claim was issued, such that the delay in service of the claim engendered little or no prejudice.

[12] The master's decision was entitled to deference, as were the inferences that the master drew from the record as a whole. In our view, the appeal ought to be allowed and the master's decision restored. We agree with the appellant that there should be no costs in this court or in the courts below.

"K. Feldman J.A."

"J.C. MacPherson J.A."

"Paul Rouleau J.A."