DATE: 20060116

DOCKET: C43283

COURT OF APPEAL FOR ONTARIO

RE: PAUL JONES (Appellant) –and- WILLIAM P. FRIEDMAN, JACK DITKOFSKY, STEVEN P. JEFFERY, NEIL A. KAUFMAN, ARTHUR L. SHAPERO, JEFFREY P. SILVER, GARY E. SISKIND, JOSEPH JOHN O’DONOGHUE AND RONALD N. SIDDAL (Respondents)

BEFORE: FELDMAN, LANG AND LAFORME JJ.A.

COUNSEL: Joy Casey for the appellant Neil A. Kaufman for the respondents

HEARD & RELEASED ORALLY: January 10, 2006

On appeal from the judgment of Horkins J. of the Superior Court of Justice, dated February 21, 2005 made at Toronto, Ontario.

E N D O R S E M E N T

[1] This is an appeal from the rule 21.01(1)(a) order of Horkins J., which determined that the appellant’s wrongful dismissal claim was statute barred.

[2] Counsel agreed that, under the Limitations Act, R.S.O. 1990, C. L-15, s. 45(1)(g), the limitation period is six years. The issue before the motion judge was the commencement date of the limitation period.

[3] The employee was given notice of termination on December 12, 1994 with a termination date of January 31, 1995, the date that the employer was going out of business. The employer initially offered the employee, subject to mitigation, ongoing salary until August 11, 1995. This offer was put into writing and was rejected by the employee. The employee commenced this action on January 30, 2001.

[4] A limitation period commences when the cause of action arises. In a breach of contract, the cause of action arises when the contract was breached. For the purposes of a wrongful dismissal action, the employment contract is breached when the employer dismisses the employee without reasonable notice.

[5] In this case, the appellant argues that the motion judge erred in finding that the breach occurred on December 12 rather than on or after January 31, when the employer stopped paying the employee. We cannot agree.

[6] In his statement of claim, the appellant alleged that he was dismissed on December 12 when his employment was terminated without reasonable notice, which he considered to be 15 months. In his reply to the statement of defence, the appellant, for the first time, alleged that he “was promised that he would be paid an appropriate amount of money in lieu of reasonable notice.”

[7] This statement in his reply was contradictory to his statement of claim where he alleged he had not been given reasonable notice.

[8] Rule 25.06(5) provides:

An allegation that is inconsistent with an allegation made in a party’s previous pleading or that raises a new ground of claim shall not be made in a subsequent pleading but by way of amendment to the previous pleading. R.R.O. 1990, Reg. 194.

[9] The appellant did not seek leave to amend, which would have raised the issue of prejudice because of the passage of the limitation period. Indeed, he maintained that he did not rely upon any new cause of action raised in the reply. Appellant’s counsel takes the same position before this court.

[10] The appellant ties the reply into the allegation in para. 9 of the statement of claim that his employment was terminated without reasonable notice “or pay in lieu thereof.” That reference to “pay in lieu”, in our view, refers to the payment of 15 months’ notice claimed in the statement of claim, and not to the later failure by the employer to pay in accordance with the earlier offer of salary continuance.

[11] In these circumstances, the motion judge was correct when she found that the breach the appellant was relying on occurred on December 12, 1994, the date that the appellant alleged in the statement of claim that he was terminated without reasonable notice.

[12] Accordingly, on the pleadings before her, the motion judge correctly concluded that the limitation period had expired. For these reasons, we dismiss the appeal. Costs on a partial indemnity basis to the respondent fixed at $4,500, inclusive of disbursements and GST.