Court File and Parties

COURT FILE NO.: CV-14-511904 CV-14-511904-00A1 DATE: 20170308 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: MICHAEL ARTHUR HAWKSHAW and KAREN E. TODD, Plaintiffs AND: BACHLY INVESTMENTS INC., DAVID BACHLY, 411931 ONTARIO LTD. O/A HEIGHTS OF MOONSTONE, and THE TOWNSHIP OF ORO-MEDONTE, Defendants AND: W.R. HODGSON OPERATING AS W.R. HODGSON & ASSOCIATES and AECOM CANADA LTD., Third Parties

BEFORE: Justice Glustein

COUNSEL: Oscar Strawczynski and Paul Neil Feldman, for the Plaintiffs Christopher Salazar, for the Defendants Bachly Investments Inc., David Bachly, and 411931 Ontario Ltd. o/a Heights of Moonstone Meredith E. Jones, for the Defendant The Township of Oro-Medonte Ron Bohm, for the Third Party W.R. Hodgson operating as W.R. Hodgson & Associates

HEARD: February 22, 2017

Reasons for Decision

Nature of Motions

[1] There are numerous summary judgment motions before the court:

(i) The third party, W.R. Hodgson operating as W.R. Hodgson & Associates (“Hodgson”), seeks to dismiss the third party claim against him by the defendants Bachly Investments Inc., David Bachly, and 411931 Ontario Ltd. o/a Heights of Moonstone (collectively, the “Bachly Defendants”);

(ii) The defendant David Bachly (“David”) seeks to dismiss the claim against him by the plaintiffs Michael Arthur Hawkshaw (“Hawkshaw”) and Karen E. Todd (“Todd”);

(iii) The defendants Bachly Investments Inc. (“Bachly Investments”) and 411931 Ontario Ltd. o/a Heights of Moonstone (“411”) seek to dismiss the claims against them in the action by the plaintiffs with respect to the allegations of lot grade deficiencies (the “grading claims”) set out at paragraphs 11, 12, 17, 20, 21, 22, 23, 24, 28 and 34 of the Amended Amended Statement of Claim (the “Claim”); and

(iv) The defendant The Township of Oro-Medonte (the “Township”) seeks the same relief as at subparagraph (iii) above.

[2] The Bachly Defendants also seek an order granting them leave to amend their pleadings set out at Tabs K to M of their motion record.

[3] At the outset of the hearing, the plaintiffs consented to (i) an order dismissing the action against David and (ii) an order granting leave to the Bachly Defendants to amend their pleadings.

[4] Consequently, the issues before the court arise from the motions for summary judgment in relation to the third party claim by the Bachly Defendants against Hodgson and the plaintiffs’ grading claims against the Bachly Defendants and the Township.

The Issues on These Motions

[5] All of the moving parties (including Hodgson who defended the main action as a third party) submit that the plaintiffs’ grading claims are statute-barred on the basis that they were brought more than two years after the claims were discovered or ought reasonably to have been discovered.

[6] Hodgson further submits that neither the Bachly Defendants nor the plaintiffs led evidence that Hodgson breached the standard of care of a professional engineer or that Hodgson’s conduct caused any damage to the plaintiffs.

[7] The Bachly Defendants also rely on a release signed by the plaintiffs dated December 20, 2011 (the “Release”), with respect to deficiencies set out in a Tarion Year-End Form dated June 13, 2011 (the “Tarion Form”).

Facts

[8] I review the facts relevant to the above issues.

a) Facts Relevant to the Limitation Period

[9] The plaintiffs are the owners of a property located in Moonstone, Ontario (the “Property”) in a subdivision known as the Heights of Moonstone.

[10] The Property was constructed by 411. The plaintiffs took possession of the Property on June 30, 2010.

[11] The Property was a “new build” and, as such, is subject to the Tarion New Home Warranty Program.

[12] Hodgson is a civil engineer who was retained by David on behalf of Bachly Investments for the limited purpose of (i) preparing a subdivision grading plan for submission to the Township and (ii) after construction of each house was completed, inspecting the grading and advising the Bachly Defendants of any grading issues requiring attention prior to inspection by the Township.

[13] Hodgson prepared a lot grade and drainage plan for the subdivision (the “Grading Plan”). In the Grading Plan, the Property driveway was to be located at a higher elevation than the base of the driveway (and, as such, higher than the road).

[14] The Township approved the Grading Plan.

[15] 411 built the subdivision. 411 determined the elevation of the house, footings, basement and garage floor. Hodgson was not involved with the construction of the Property.

[16] Hodgson inspected the Property on November 11, 2009, after the Bachly Defendants advised him the house and grading were complete.

[17] Hodgson found that “[a]side from a couple of very minor issues, the only significant issue that I found upon inspection of the completed grading was that the driveway grading needed to have some work done to get a slope away from the house”. Hodgson stated that “[i]n order to accomplish that, based on the as-built condition, I recommended the creation of a swale so that the final grading would have a negative slope away from the road to a certain point and then a negative slope away from the house garage also to that certain point”.

[18] Hodgson provided a Certificate of Substantial Performance based on the assurances of the Bachly Defendants that they had adjusted the final grading in accordance with his instructions.

[19] The Bachly Defendants made the change recommended by Hodgson.

[20] The plaintiffs moved into the Property on June 30, 2010.

[21] Days later, there was a heavy rainstorm. The rain ran down the driveway towards the garage causing water to (i) pool between the garage and the driveway and (ii) enter the garage.

[22] Hawkshaw was concerned that the driveway was not graded properly, so he attended at the offices of the Township to request copies of the Township’s “sign-off sheets for the construction” of the Property. Those documents would have included the Grading Plan as part of the “permit file and drawings” Hawkshaw had requested.

[23] Hawkshaw’s evidence is that the Township refused to provide the documents requested.

[24] Hawkshaw also spoke with David, who assured him that the Township had approved the grading.

[25] The plaintiffs decided to pave the driveway. They contacted Bill Wilson (“Wilson”), a paving contractor who had paved their driveway at their previous home. Hawkshaw’s evidence is that Wilson “informed us that the Home was built too low for the driveway”.

[26] Wilson also informed the plaintiffs that “the only way to divert the water which was running down the driveway into the garage was to move the culvert up the road in order to provide space to divert water through the front yard”.

[27] The plaintiffs hired a contractor to shift the driveway to the west, relocate the culvert, and pave the driveway. That work was done in July and August 2010, with final driveway grading and paving done by Wilson in October 2010.

[28] Since that time, the plaintiffs had no problems with rainwater running into the garage.

[29] Hawkshaw agreed that there were several other “grading or water-type issues” with the Property. He knew about these issues from the summer of 2010 when the plaintiffs moved into the Property.

[30] On the west side of the Property, “water migrates back to the side of the garage”. This problem existed “since [the plaintiffs] bought the house” and the plaintiffs have “been aware of that problem since the first heavy rain in July [2010] after [the plaintiffs] bought the house”.

[31] With respect to the back of the Property, the plaintiffs agreed that there is an “issue with respect to water or grading” in that “the water doesn’t run off” so that the back of the Property on the rear west side is “getting saturated”. Hawkshaw agreed that it was a “problem that [he was] aware of since the summer or fall of 2010 that didn’t change up until the spring of 2015” and “there’s water saturation and puddling … near the rear basement” which has “been an issue since the first summer and fall” and “really hasn’t changed since”.

[32] Hawkshaw’s evidence is that the pooling of water described above “did not cause us significant concern, because no water was running into our garage or the Home”. The plaintiffs “believed the water pooling was a natural and inevitable occurrence following heavy rains”, particularly as “we understood the Township to have passed the property grading, as Mr. Bachly had assured us”.

[33] Hawkshaw’s evidence is that in January 2013, “the vapour barrier in the cold storage room began to sag, with water accumulating on the top side. We also noticed a puddle of water on the concrete floor”. The plaintiffs then investigated that problem which led to them meeting with Ms. Bobbi Lovering (“Lovering”), the chief building inspector for the Township, in the summer of 2013. As a result of that meeting, the plaintiffs received the Grading Plan and drawings on July 30, 2013.

[34] The plaintiffs state that as a result of their discussions with Lovering and the receipt of the Grading Plan, “we realized that the grading at the basement walkout at the rear of the property was also improper”.

[35] The plaintiffs issued their statement of claim on September 10, 2014.

b) Facts Relevant to Hodgson’s Liability

[36] Hodgson’s retainer and the steps he took in accordance with his retainer are set out at paragraphs 12-13 and 16-18 above.

[37] Hodgson was not notified in 2010 when the plaintiffs complained about the grading of the Property. He was “not notified of any complaint or concern until after the third party claim was served upon me in late 2014”.

[38] David’s evidence is that he “thought everything was done properly” by Hodgson. David agreed that he had “no issues with his work in any respect”.

[39] Subsequent to the delivery of Hodgon’s summary judgment motion and the summary judgment motions of the other parties, the plaintiffs delivered an engineering report of Matthew Hartog (“Hartog”) dated December 30, 2016 (the “Hartog Report”).

[40] In his report, Hartog addresses the numerous deficiencies alleged by the plaintiffs. In paragraph 2 of his affidavit filed with the plaintiffs’ responding material, Hartog makes no reference to being retained to assess Hodgson’s conduct as a professional engineer. Hartog’s evidence is that he “was engaged by the Plaintiffs to assess the exterior site grading and comment on the reported deficiencies … which the municipal inspector should have observed and required to be corrected”.

[41] Hartog repeats the scope of his retainer at paragraph 3 of his affidavit, stating that he was assisted by another engineer “with respect to the deficiencies which the municipal inspector should have observed and required to be corrected”.

[42] With respect to grading issues, Hartog reviews the Grading Plan, noting that the Grading Plan provided that “the driveway should have been elevated 0.4 m (15.75 in.) above the base of the driveway near the ditch”. Hartog found that “however, the driveway sloped down towards the house by 0.3 m (12 in.), making the total elevation difference 0.7 m (2.29 ft.)”.

[43] Consequently, Hartog concluded that “[b]ased on our site evaluation, the existing site grading conditions do not match the approved lot grading plan” and “[t]herefore, the house was 0.7 m (2.29 ft) lower than the elevation approved by the Township of Oro-Medonte”.

[44] Hartog concluded that “[t]he differences in elevation make grading the property very difficult: the yard cannot simply be graded away from the house to the road-side ditch”.

[45] The only mention of Hodgson in the Hartog Report is that “the engineer [Hodgson] or the party responsible for inspecting the final grading [Aecom], did not verify that the final grade of the property met the approved grading plan”.

c) Facts Relevant to the Release

[46] In the Tarion Form signed by Todd on June 13, 2011, she was asked to list items “covered by the statutory warranty”. She listed the following claim:

Grading: Rainwater was running into our garage and up against the front of the house. We got the builder to come to the house when it was raining and he said that the grading was passed, then he drove away. We had no choice but to have it regraded to get the water away from our house. We are out of pocket $5,876 dollars [sic].

[47] On December 20, 2011, the plaintiffs executed the Release for the alleged deficiencies contained in the Tarion Form. Bachly Investments paid the plaintiffs $1,500 for the release of those claims.

Applicable Law

[48] I address the applicable law with respect to summary judgment, limitation periods, and the requirements to establish professional negligence.

a) Summary Judgment

[49] In Mayers v. Khan, 2017 ONSC 200 (“Mayers”), I summarized the applicable principles governing summary judgment arising out of Hryniak v. Mauldin, 2014 SCC 7 (“Hryniak”) and the applicable case law. I held (Mayers, at paras. 18-21):

Both parties rely on Hryniak. I summarize the Hryniak principles below:

i) Summary judgment must be interpreted broadly, favouring proportionality and fair access to the affordable, timely and just adjudication of claims. It is no longer merely a means to weed out unmeritorious claims but rather a “legitimate alternative means for adjudicating and resolving legal disputes” (Hryniak, at paras. 5 and 36);

ii) An issue should be resolved on a motion for summary judgment if the motion affords a process that allows the judge to make the necessary findings of fact, apply the law to those facts, and is a proportionate, more expeditious and less expensive process to achieve a just result than going to trial (Hryniak, at paras. 4 and 49);

iii) On a motion for summary judgment, the judge must first determine if there is a genuine issue requiring a trial based only on the evidence before the judge and without using the judge’s fact-finding powers. If there appears to be a genuine issue requiring a trial, the judge should then determine if the need for a trial can be avoided by using the powers under Rules 20.04(2.1) and (2.2) (Hryniak, at para. 66); and

iv) The standard for determining whether summary judgment will provide a fair and just adjudication is not whether the procedure is as exhaustive as a trial, but rather “whether it gives the judge confidence that [the judge] can find the necessary facts and apply the relevant legal principles so as to resolve the dispute” (Hryniak, at para. 50). A judge must be confident that he or she can fairly resolve the dispute (Hryniak, at para. 57).

In Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200 (“Sweda Farms”), affirmed 2014 ONCA 878, Corbett J. reviewed the process by which the court considers whether summary judgment is appropriate. He stated (Sweda Farms, at para. 33):

The court on a motion for summary judgment should undertake the following analysis:

1. The court will assume that the parties have placed before it, in some form, all of the evidence that will be available for trial;

2. On the basis of this record, the court decides whether it can make the necessary findings of fact, apply the law to the facts, and thereby achieve a fair and just adjudication of the case on the merits;

3. If the court cannot grant judgment on the motion, the court should:

a. Decide those issues that can be decided in accordance with the principles described in 2) above;

b. Identify the additional steps that will be required to complete the record to enable the court to decide any remaining issues;

c. In the absence of compelling reasons to the contrary, the court should seize itself of the further steps required to bring the matter to a conclusion.

The moving party bears the evidentiary burden of demonstrating that there is no genuine issue requiring a trial. Only after the moving party has discharged its evidentiary burden of proving that there is no genuine issue requiring trial for its resolution does the burden shift to the responding party to prove that its claim has a real chance of success (Sanzone v. Schechter, 2016 ONCA 566, at para. 30).

A court should (i) be cautious to ensure that affidavit evidence does not “obscure the affiant’s authentic voice” and (ii) take “great care” “to ensure that decontextualized affidavit and transcript evidence does not become the means by which substantive unfairness enters, in a way that would not likely occur in a full trial where the trial judge sees and hears it all” (Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, at para. 44 (“Baywood”)).

[50] I apply the same principles on this motion.

b) Limitation Periods

[51] Under section 4 of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B (the “Limitations Act, 2002”), no proceeding may be commenced more than two years after the claim is discovered.

[52] Under section 5(1) of the Limitations Act, 2002, a claim is discovered when a person knows or ought to know of the statutory requirements for discoverability. Section 5(1) 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 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). 2002, c. 24, Sched. B, s. 5 (1).

[53] In Sutton v. Balinsky, 2015 ONSC 3081 (“Sutton”), Dunphy J. reviewed the applicable law on section 5. He summarized the principles for discoverability (Sutton, at paras. 146-47):

Our courts have developed a considerable body of case law since 2002 under the new Limitations Act and the case law under the old still has application as regards many issues. Several themes that have consistently emerged from that jurisprudence that are of particular relevance here include:

a. it is not necessary to have all of the facts underlying the complete claim -- it is enough to have sufficient facts to bring a claim: Tender Choice Foods Inc. v. Versacold Logistics Canada Inc., 2013 ONSC 80 at para. 55-61;

b. It is enough that the plaintiff has prima facie grounds to infer that a defendant's actions caused or contributed to her loss even if the responsibility of each of multiple possible defendants is not yet known -- certainty is not a requirement: Longo v. MacLaren Art Centre Inc., 2014 ONCA 526 at para. 44 and Johnson v. Studley, 2014 ONSC 1732 at para. 61;

c. "Neither the extent of damage nor the type of damage need be known. To hold otherwise would inject too much uncertainty into cases where the full scope of the damages may not be ascertained for an extended time beyond the general limitation period": per Major J. in Peixero v. Haberman, [1997] 3 S.C.R. 549 at para. 18;

d. "error or ignorance of the law or legal consequences of the facts does not postpone the running of the limitation period": per Perell J. in Nicholas v. McCarthy at para. 27-29, aff'd 2009 ONCA 692, leave to appeal denied [2009] S.C.C.A. No. 476, ;

A corollary of these principles is the over-arching obligation of due diligence. Limitation periods are designed to incent claimants not to sleep on their rights. Ignorance of the law is not an excuse if the facts giving rise to legal claims are known. A party alerted to circumstances where a reasonably prudent person of similar abilities and in the same circumstances would seek professional advice must do so or risk having the claim struck as being out of time. Knowledge of the existence of damage, its source and a reasonable understanding of who is or might be expected to be responsible for some of it at least is enough.

[54] I rely on the above principles in my analysis.

c) The Requirements to Establish Breach of Standard of Care and Causation

[55] In Larman v. Mount Sinai Hospital, 2014 ONCA 923 (“Larman”), the responding party on a motion for summary judgment filed an expert report which did not address whether the professional defendants had breached the standard of care or whether those defendants’ conduct had caused the injuries for which damages were claimed.

[56] The court affirmed the decision of the motion judge who had granted the motion for summary judgment and dismissed the action. The court held (Larman, at para. 4):

We agree with the specific findings of the motion judge that there was no evidence of causation put forward by the appellant in response to the motion and that there was no evidence in the expert report that the hospital and two of the doctors fell below the standard of care. The failure to put forward any evidence on these essential elements was fatal in this case.

[57] The court added that an expert report would have to address both standard of care and causation in order to demonstrate a genuine issue requiring trial. The court held (Larman, at para. 2):

It would have been apparent to the appellant that simply delivering an expert report, that is, any expert report, would not be sufficient to successfully resist the motion. [Italics in original]

Analysis

[58] The primary arguments of the moving parties relate to the limitation period issue. Hodgson also raises the additional argument arising out of the evidence as to his conduct. The Bachly Defendants rely on the Release. I address each of these issues below.

a) The Limitation Period

[59] The plaintiffs submit that even though they were aware as of the summer of 2010 that the Property was built too low for the driveway, discoverability for the grading claims does not run until the summer of 2013 when (i) they met with Lovering and (ii) they received the Grading Plan indicating that the Property was not constructed in accordance with the approved Grading Plan.

[60] I do not agree.

[61] The issue of discoverability is based on the facts of each case. I have set out the evidence above but restate the relevant facts to analyze whether the plaintiffs discovered or ought to have discovered the grading claims.

[62] The moving parties rely on the evidence that the plaintiffs knew by the summer of 2010 that:

(i) The rain ran down their driveway into their garage, causing water to (a) pool between the garage and the driveway and (b) enter the garage;

(ii) The reason for the pooling and water entering the garage was because there was a grading deficiency with respect to the Property;

(iii) The grading deficiency was caused by the home being built “too low for the driveway”, which was not proper;

(iv) The Township had the Grading Plan which would have indicated the planned elevations under the Grading Plan. Hawkshaw was concerned that the driveway was not graded properly and attended at the Township to obtain documents including the Grading Plan. However, the Township refused to provide the requested documents;

(v) Concurrent with the pooling problem with their driveway, they had other “grading or water-type issues” on both (a) the west side of the Property, as “water migrates back to the side of the garage” and (b) the back of the Property with the rear west side “getting saturated” and causing “water saturation and puddling … near the rear basement”; and

(vi) The grading issues on the west and back of the Property continued on an ongoing basis “since the summer or fall of 2010 that didn’t change up until the spring of 2015”.

[63] The plaintiffs rely on the following facts to submit that there is a genuine issue requiring trial with respect to discoverability:

(i) The pooling of the water in the other areas “did not cause us significant concern because no water was running into our garage or the home”;

(ii) The plaintiffs “believed the water pooling was a natural and inevitable occurrence following heavy rains”;

(iii) The plaintiffs “understood the Township to have passed the property grading, as Mr. Bachly had assured us”;

(iv) The plaintiffs did not receive the Grading Plan until July 30, 2013; and

(v) The plaintiffs only understood that “the grading at the basement walkout at the rear of the property was also improper” in the summer of 2013 as a result of their discussions with Lovering. The plaintiff state that “[w]e came to understand that the site grading was deficient when Ms. Lovering provided us with the site plans and when she explained to us how the engineered grading for the site was supposed to ensure proper drainage”.

[64] On the above facts, I find the requirements for discoverability are met, and, as such, the grading claims are statute-barred under s. 4 of the Limitations Act, 2002.

[65] I first address the plaintiffs’ arguments to extend discoverability to the summer of 2013.

[66] While the plaintiffs may not have been concerned because water was not running into the garage or the home, the plaintiffs knew of the damage caused by the grading issues. The plaintiffs had sufficient facts to bring a claim. The plaintiffs knew and appreciated that they had pooling issues. To discover a claim, it is not necessary to know the extent of damage, which “may not be ascertained for an extended time beyond the general limitation period” (Sutton, at para. 146).

[67] The plaintiffs’ belief that the pooling was “natural and inevitable” is a subjective belief, and does not address the objective nature of the test under s. 5(1)(b) of the Limitations Act, 2002. “A reasonably prudent person of similar abilities and in the same circumstances would seek professional advice … or risk having the claim struck as being out of time” (Sutton, at para. 147).

[68] Given the past pooling issues with the driveway and garage, and the plaintiffs’ knowledge that the house was built too low for the driveway, a reasonable person would not have considered pooling water and a constantly soaked garden area as “natural and inevitable” and then stood on their rights.

[69] The plaintiffs’ understanding that the Township had approved the property grading does not delay discoverability. Regardless of whether the Township had approved the grading, the plaintiffs knew that they had pooling issues in the past and that the reason for the pooling issues was that the home was built too low for the driveway. If they had obtained the Grading Plan when first requested, they would have seen nothing different, i.e. the Township had approved the Grading Plan and that Grading Plan specified that the home should have been built above the road and the base of the driveway elevation (which the plaintiffs knew or ought to have known since the summer of 2010 was not the case).

[70] Consequently, regardless of any assurances from David about the Township approving the grading, the plaintiffs knew that pooling was taking place in the driveway because the house was too low, and were reasonably “alerted to circumstances” in which they ought to have sought professional advice just as they did when the water pooled from the driveway into the garage.

[71] The plaintiffs had prima facie grounds to infer that those defendants’ actions caused or contributed to their loss even if the responsibility of each of those multiple defendants was not known. Certainty is not a requirement (Sutton, at para. 146).

[72] As I discuss above, the fact that the plaintiffs did not receive the Grading Plan until July 30, 2013 does not stop the limitation period from running. To the contrary, the plaintiffs’ request for the Grading Plan demonstrates a concern that the home might not have been built in accordance with the Grading Plan which was consistent with what they learned from Wilson when he attended at the Property.

[73] The plaintiffs cannot extend their discoverability period by making a request for the Grading Plan and then not pursuing it, especially in light of the other pooling problems. Otherwise, the plaintiffs could theoretically have brought their grading claims any time before obtaining the Grading Plan (up to the 15-year maximum under s. 15 of the Limitations Act, 2002).

[74] Further, as I note above, if they had obtained the Grading Plan when first requested, they would have seen nothing different, i.e. the Township had approved the Grading Plan and that Grading Plan contemplated the home being built above the road and base of driveway elevation.

[75] Finally, the plaintiffs’ discussions with Lovering do not extend discoverability.

[76] Lovering’s explanation of how the “engineered grading for the site was supposed to ensure proper drainage” does not extend discoverability. As Dunphy J. held in Sutton, the plaintiffs have an “over-arching obligation of due diligence” and cannot “sleep on their rights”. The plaintiffs were alerted that the source of garage pooling was that the Property was lower than it was supposed to be.

[77] Just as they did with respect to garage pooling issues, the plaintiffs could have sought professional advice to determine whether the other pooling issues were caused by grading deficiencies. By choosing to do nothing and assuming that the other pooling was “natural and inevitable” without seeking professional advice, the plaintiffs ran the “risk [of] having the claim struck as being out of time” (Sutton, at para. 147). The fact that the plaintiffs were told by Lovering about grading deficiencies in the summer of 2013 does not excuse the plaintiffs from their “over-arching obligation of due diligence”.

[78] As Dunphy J. stated in Sutton, “[a]ction on possible claims is not optional but imperative and the price of inaction can be severe” (Sutton, at para. 156).

[79] The plaintiffs rely on the decision of the Court of Appeal in 407 ETR Concession Co. v. Day, 2016 ONCA 709 (“407”), in which the court held that the discoverability requirement that “a proceeding would be an appropriate means to seek to remedy [the damage]” (under s. 5(a)(iv) of the Limitations Act, 2002), could be extended when the plaintiff first exercised a statutory remedy that proved to be ineffective.

[80] In 407, the plaintiff brought the action more than two years from the outstanding invoice for non-payment of tolls. However, the action was brought within two years after the plaintiff completed its attempt to collect outstanding amounts pursuant to statutory recovery rights on the renewal of the defendant’s driver’s licence. The plaintiff was not able to collect the debt through the statutory regime since the defendant did not renew his licence.

[81] The court held that in those circumstances, the discoverability principle requiring that a party know that “a proceeding would be an appropriate means to seek to remedy [the damage]” was extended as the plaintiff had first attempted collection under the statutory remedy for non-payment of tolls. Laskin J.A. held (407, at para. 40):

First, under s. 5(1)(a)(iv) of the Limitations Act, 2002, the date a proceeding would be an appropriate means to recover a loss must have "regard to the nature of the ... loss". So, in fixing the appropriate date, it may not be enough that the loss exists and the claim is actionable. If the claim is the kind of claim that can be remedied by another and more effective method provided for in the statute, then a civil action will not be appropriate until that other method has been used. Here, a claim will not be appropriate until 407 ETR has used that other method, without success.

[82] The plaintiffs submit that their limitation period can be extended because they could have made a claim under the Tarion warranty. However, unlike in 407, Hawkshaw and Todd did not pursue their statutory remedy for a Tarion warranty claim for the other pooling damages.

[83] Only the driveway pooling issue was addressed (and resolved) through the Tarion warranty process (and even then, more than two years before the action was brought). The other pooling claims were never brought to Tarion. To the contrary, it is the plaintiffs who submit that they did not release the grading claims in the Release. The plaintiffs cannot have it both ways: if the grading claims are not covered by the Release (which I accept for the reasons I discuss below), they cannot submit that the limitation period was tolled because they pursued statutory Tarion relief.

[84] It is not sufficient to submit that the Tarion process was available to the plaintiffs and as such tolled the limitation period. I do not read 407 as establishing that principle. The plaintiff must participate in the statutory process in order to benefit from tolling the two-year limitation period.

[85] With the knowledge of the facts set out at paragraph 62 above, the plaintiffs knew that they had pooling problems with the driveway because the house was built too low and they suspected that the Property might not be built in accordance with the Grading Plan. In light of that knowledge, it was not reasonable for the plaintiffs to assume that the other pooling issues were “natural and inevitable”, to not seek professional advice, or to decide not to follow up on obtaining the Grading Plan.

[86] The plaintiffs knew about the grading claims since the summer or fall of 2010 and those issues continued unabated until 2015.

[87] The plaintiffs had sufficient facts to bring a claim and had prima facie grounds to infer that, at a minimum, those claims were caused by 411 for building the Property too low and by the Township for approving the grading of the Property. The plaintiffs knew of the damages caused by the pooling and chose to “sleep on their rights”.

[88] This is an appropriate case for summary judgment. The court is entitled to assume that all of the evidence relevant to discoverability is before it. In the present case, there are no issues of credibility that create a concern that “decontextualized affidavit and transcript evidence” would “become the means by which substantive unfairness enters, in a way that would not likely occur in a full trial where the trial judge sees and hears it all”.

[89] For the above reasons, I find that the plaintiffs’ grading claims are statute-barred since they were brought more than two-years after they were discovered or could reasonably have been discovered.

Issue 2: Liability of Hodgson

[90] As I discuss at paragraph 38 above, the Bachly Defendants led no evidence to establish Hodgson’s liability. To the contrary, David’s evidence is that he “thought everything was done properly” by Hodgson. David agreed that he had “no issues with his work in any respect”.

[91] The plaintiffs submit that the Hartog Report raises a genuine issue requiring trial as to whether Hodgson breached his standard of care as an engineer.

[92] The plaintiffs submit that the court can imply from the Hartog Report that (i) Hodgson breached a professional obligation by not verifying that the final grade of the Property met the approved Grading Plan and (ii) such a breach caused the grading claims damages.

[93] I do not agree. The Hartog Report does not address either requirement for liability as set out by the court in Larman.

[94] First, as I discuss above, Hartog does not state that he was retained to consider Hodgson’s conduct as an engineer. To the contrary, his report is limited to what “the municipal inspector should have observed and required to be corrected”.

[95] Further, even in his limited comments on the grading deficiencies, Hartog’s only reference to Hodgson is that Hodgson “did not verify that the final grade of the property met the approved grading plan”. However, Hartog does not state that this was a duty of Hodgson as a professional engineer.

[96] Hartog does not address Hodgson’s limited retainer, nor whether the steps Hodgson proposed to correct the grading deficiencies, i.e. building a swale, would have resolved the issue.

[97] In his unchallenged affidavit evidence, Hodgson stated that to address the driveway grading issue and to create a slope away from the house, “based on the as-built condition, I recommended the creation of a swale so that the final grading would have a negative slope away from the road to a certain point and then a negative slope away from the house garage also to the certain point.”

[98] There is no evidence that Hodgson’s approach was in breach of his professional duties.

[99] It is not enough to say that a professional did not perform a certain task. In the face of evidence from Hodgson that he took steps to address the grading concerns, a plaintiff must lead trump on standard of care and causation.

[100] Without an opinion that Hodgson ought to have verified that the final grade of the Property met the approved Grading Plan, or that his approach was improper, the court cannot make a finding of professional liability. Consequently, there is no genuine issue requiring trial.

[101] Further, Hartog does not state that the pooling damages would not have occurred if Hodgson had identified the grading issue. This is a matter of expert opinion which is not before the court in the Hartog Report.

[102] It is not sufficient to submit, as the plaintiffs do, that Hartog’s statement that “the differences in elevation make grading the property very difficult: the yard cannot simply be graded away from the house to the road-side ditch” is an “implicit” causation opinion. Hodgon was not responsible for building the Property or creating any difference in elevation. Hodgson’s Grading Plan is not challenged.

[103] The court cannot “imply” that, even if Hodgson had a professional duty to find that the final grading was not in accordance with the Grading Plan, such a breach caused the damage.

[104] As in Larman, it is the plaintiffs’ obligation to lead evidence to establish a breach of duty of care and causation due to professional negligence, and as in Larman, the plaintiffs in the present case failed to do so.

[105] On a motion for summary judgment, the court is entitled to assume that all of the evidence that would be available at trial is before the court and that the parties have put their best foot forward. On that basis, the Hartog Report does not raise a genuine issue requiring trial that Hodgson is liable.

Issue 3: The Release

[106] On a review of the terms of the Release, I do not find that the plaintiffs released the grading claims raised in their action.

[107] The reference to “grading” in the Tarion Form describes the nature of the problem. It is found in the “room/location” column and is not stated to be a general release of all grading claims.

[108] The limit of the Release to the driveway issue is confirmed in the “description” column of the Release, which refers only to the driveway pooling problem which was resolved since “[w]e had no choice but to have it regraded to get the water away from our house. We are out of pocket $5,876 dollars [sic]”.

[109] Consequently, I find that the claim for defective grading under the Release did not release the other grading claims that are at issue in this action. Such an interpretation is consistent with the plaintiffs’ evidence that they thought the other pooling was a “natural and inevitable” occurrence.

[110] However, the limited scope of the Release does not postpone discoverability for the reasons I discuss at paragraph 83 above.

Order and Costs

[111] For the above reasons, I grant (i) the motions by the Bachly Defendants and the Township to dismiss the grading claims of the plaintiffs and (ii) the motion by Hodgson to dismiss the third party claim of the Bachly Defendants.

[112] On consent, (i) I dismiss the plaintiffs’ claim against David and (ii) I grant the motion of the Bachly Defendants to amend their pleadings.

[113] If the parties cannot agree as to costs, the parties shall participate in a telephone case conference to be scheduled no later than March 31, 2017.

[114] It was not raised in the parties’ materials or at the hearing whether the successful third party defendant Hodgson is seeking his costs from the Bachly Defendants as third party plaintiffs who brought the third party claim, or from the plaintiffs, or from both of them on a joint and several basis. That issue will affect how costs submissions are to proceed.

[115] I thank counsel for their thorough oral and written submission which were of great assistance to the court.

GLUSTEIN J. Date: 20170308