CITATION: Giglio v. Peters, 2009 ONCA 681
DATE: 20090925
DOCKET: C49882
COURT OF APPEAL FOR ONTARIO
Laskin, Feldman and LaForme JJ.A.
BETWEEN
Albert Giglio, Audubon Transport Limited, Alcar Holdings Limited
Plaintiffs
and
Victor Peters, Wilfred Goldlust, Frank Lecce, Universal Disposal Services Limited, Vesdar Invesments Limited, Essential Holdings Limited, Ontario Material Recycling Centre Inc., Universal Environmental Enterprises Inc., 170 Clairville Properties Limited, Tory, Tory, Deslauriers & Bunnington
Defendants (Respondent)
AND BETWEEN
Victor Peters, Universal Disposal Services Limited, Vesdar Investments Limited, Essential Holdings Inc., Ontario Material Recovery Centre Inc., Universal Environmental Enterprises Inc. and 170 Clairville Properties Limited
Plaintiffs by Counterclaim (Respondent)
and
Albert Giglio, Audubon Transport Limited, Alcar Holdings Limited, Nick Giglio, Carla Giglio, Hytec Recycling and Waste Systems Inc., Preferred Recycling Inc., Cam Tenaglia and Giglio's Fruit and Garden Centre Limited
Defendants by Counterclaim
Alfred J. Esterbauer and Jeff Van Bakel, for the appellant, Eddy Joseph Battiston, a non-party
Terrence J. O'Sullivan and Tracy L. Wynne, for the respondent
Heard: May 22, 2009
On appeal from the order of Justice Geoffrey B. Morawetz of the Superior Court of Justice dated December 15, 2008.
Laskin J.A.:
A. INTRODUCTION
[1] The respondent Victor Peters and Albert Giglio were business partners. They had a falling-out, which led to litigation between them. For part of the litigation, Giglio was represented by the appellant Eddy Joseph Battiston. Peters and Giglio eventually settled their dispute. After the settlement was concluded, Peters brought a motion under r. 57.07(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 for an order that Battiston personally pay his costs of the litigation.
[2] Battiston then brought his own motion,[^1] which is the subject of this appeal, for an order striking out Peters’ r. 57.07 motion. Battiston put forward two grounds for his motion: Peters’ r. 57.07 motion is barred by the two-year limitation period in s. 4 of the Limitations Act, 2002, S.O. 2002 c. 24, Sched. B.; and Peters’ motion is an abuse of process.
[3] Morawetz J. rejected both grounds and dismissed Battiston’s motion. Battiston now appeals to this court. For the reasons that follow, I agree with the motion judge’s decision and would therefore dismiss Battiston’s appeal.
B. BACKGROUND FACTS
1) Business dealings between Peters and Giglio
[4] Peters is a lawyer. In the early 1990s, he and Giglio were each involved in the waste disposal business. In 1993, they and others combined their businesses in a company named Universal. By 1995, however, Peters and Giglio decided that they no longer wanted to be in business together. In December 1995, they reached an agreement whereby Peters bought Giglio’s interests in Universal. The agreement included a covenant by Giglio not to compete with Universal.
2) The litigation between Peters and Giglio
[5] By 1997, each side claimed that the other had breached the 1995 agreement. Giglio sued Peters for damages for breach of contract, breach of fiduciary duty, negligence, misrepresentation, conspiracy and oppression. Peters defended the action and counterclaimed against Giglio, Cam Tenaglia and others. Peters alleged that Giglio and Tenaglia owned and operated a waste disposal business called Preferred Recycling Inc. He claimed that by doing so, Giglio had breached his non-competition covenant in the 1995 agreement and that Tenaglia had induced the breach. Giglio’s action and Peters’ counterclaim were started within the limitation period.
[6] Both Giglio and Tenaglia retained Battiston to act for them. In their reply and defence to counterclaim, both Giglio and Tenaglia denied that Giglio had an interest in Preferred.
3) Giglio and Tenaglia change their evidence
[7] Between 1997 and 2001 the parties exchanged documents and conducted examinations for discovery. In the initial discoveries, Giglio and Tenaglia continued to deny that Giglio had an interest in Preferred.
[8] In the fall of 2001, Tenaglia retained new counsel and in early 2002, Giglio did the same. From then on Battiston had no role in the litigation.
[9] Shortly after Giglio and Tenaglia had retained new lawyers, they produced documents showing that Giglio had a 50 per cent interest in Preferred. They each gave further evidence on discovery correcting their earlier denials.
4) Settlement of the litigation
[10] In November 2005, Peters and Giglio settled their litigation. Minutes of Settlement were signed in January 2006. Under the settlement, Giglio paid Peters $150,000. Another term of the settlement required Giglio and Tenaglia to provide an affidavit in support of Peters’ contemplated r. 57.07 motion seeking costs from Battiston and any Law Society complaint filed again Battiston. Because the settlement contemplated Peters’ motion, the action itself, though resolved, remains outstanding. It has not been dismissed.
5) Peters’ rule 57.07 motion
[11] Peters brought his motion in the action in June 2008. He attributed the delay to the difficulty in obtaining affidavits from Giglio and Tenaglia. Peters relies on r. 57.07(1)(c), which provides that a court may make an order requiring the lawyer personally to pay the costs of another party to the litigation. Rule 57.07(1) states in its entirety the following:
57.07(1) Where a lawyer for a party has caused costs to be incurred without reasonable cause or to be wasted by undue delay, negligence or other default, the court may make an order,
(a) disallowing costs between the lawyer and client or directing the lawyer to repay to the client money paid on account of costs;
(b) directing the lawyer to reimburse the client for any costs that the client has been ordered to pay to any other party; and
(c) requiring the lawyer personally to pay the costs of any party.
[12] Orders under this rule are understandably rarely made. In this case, Peters alleges, among other things, that Battiston caused costs to be incurred without reasonable cause by advising Giglio to bring unfounded claims, by knowingly participating in the giving of false testimony, and by encouraging his clients to be dishonest. The validity of these allegations remains to be determined on the motion itself.
C. ANALYSIS
First Issue: Is Peters’ rule 57.07 motion barred by s. 4 of the Limitations Act, 2002?
[13] Section 4 of Ontario’s Limitations Act, 2002 provides:
- Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.
[14] Peters “discovered” the basis for the costs order he seeks against Battiston in late 2001 and early 2002 when Giglio and Tenaglia changed their evidence. He did not bring his motion until 2008. Therefore, if his motion is subject to s. 4, it is well beyond the two-year prescription period and would be statute-barred.
[15] The resolution of this issue turns on whether Peters’ motion is a “proceeding … in respect of a claim”. Thus, we must decide whether Peters’ motion is a “proceeding” and if it is, whether it is in respect of a “claim”. For the reasons set out below, I have concluded that Peters’ motion is not a “proceeding”. That conclusion is supported by recent case law from our court, and by the context and legislative purpose of the statute. It is therefore not necessary to decide whether Peters’ motion is in respect of a “claim”.
[16] The word “proceeding” is not defined in the Limitations Act, 2002. Battiston submits that it should be given a very broad meaning, which would encompass Peters’ motion, in order to achieve the overriding purpose of the statute: to prevent stale claims from going forward. Battiston notes that he was not a party to the litigation and ceased to have any role in it after 2002. Yet six years later, Peters seeks a costs order against him.
[17] In support of his submission, Battiston relies on the definition of “proceeding” in Black’s Law Dictionary, and on cases in the Superior Court such as Imoney Corp. v. Quebecor Communications Inc., [2002] O.T.C. 486 (S.C.), aff’d [2002] O.S. No. 4447 (C.A.) defining “proceeding” in other contexts. Black’s Law Dictionary, 9th ed., defines “proceeding” as “an act or step that is part of a larger action”. On its face, this definition is broad enough to include a motion in an action.
[18] In the Imoney case the defendant brought a motion under s. 106 of the Courts of Justice Act, R.S.O. 1990 c. C.43 to stay the plaintiff’s summary judgment motion. Section 106 gives the court discretion to “stay any proceeding”. Although she declined to grant the stay, Hoy J. held that she had jurisdiction to do so. Relying on the definition in Black’s Law Dictionary she held that a motion for summary judgment is a “proceeding” under s. 106.
[19] The meaning of “proceeding” in s. 4 of the Limitations Act, 2002 is a question of statutory interpretation. As with any question of statutory interpretation, context and legislative purpose are paramount considerations. In the well-known and often quoted words of the late Professor John Willis, “words, like people, take their colour from their surroundings” (“Statute Interpretation in a Nutshell” (1938), 16 Can. Bar. Rev. 1 at 6). Neither a dictionary meaning of a word nor the meaning of that word in a different statutory context is determinative.
[20] Here the word “proceeding” appears in a statute that, as Battiston points out, seeks to bar stale claims. However, in the context of a prescriptive statute, the legislation seeks to bar the commencement of stale litigation, not steps within litigation that has been commenced within the statutory time period.
[21] In the light of this context and the statute’s purpose, and in the absence of any definition of “proceeding” in the statute itself, successive panels of this court have turned to the definition of “proceeding” in the Rules of Civil Procedure. Both Feldman J.A. in Meady v. Greyhound Canada Transportation Corp. (2008), 2008 ONCA 468, 90 O.R. (3d) 774 (C.A.), and later Simmons J.A. in Placzek v. Green (2009), 2009 ONCA 83, 245 O.A.C. 220 (C.A.), have held that the word “proceeding” in s. 4 of the Limitations Act, 2002 has the same meaning as “proceeding” in r. 1.03 of the Rules of Civil Procedure.
[22] “Proceeding” under r. 1.03 refers to the commencement of litigation either by action or application; it does not refer to a motion within an action. Thus, under r. 1.03(1):
• “Proceeding” means an action or application;
• “Action” means a proceeding that is not an application and includes a proceeding commenced by statement of claim, notice of action, counterclaim, cross-claim, or third or subsequent party claim; and
• “Application” means a proceeding commenced by notice of application.
[23] Under these definitions, a motion within an action is not a “proceeding”. Indeed, “motion” is defined in r. 1.03(1) to mean “a motion in a proceeding or an intended proceeding”. Peters’ motion under r. 57.07 is an unusual kind of motion because it is brought against a non-party. Yet our rules provide for just such a motion. But it remains a motion, and, moreover, a motion in the existing action between Peters and Giglio and other parties. It is not a “proceeding” under s. 4 of the Limitations Act, 2002.
[24] To give effect to Battiston’s submission would mean that the two-year limitation period in s. 4 would govern many steps in the litigation. Many motions in the litigation – for example, a summary judgment motion – would each have its own two-year limitation period. This would make litigation, as we know it, unworkable.
[25] I also note that r. 57.07(2) provides that the court on its own initiative can make an order for costs against a lawyer. Again, if we were to give effect to Battiston’s submission, the court itself would be subject to the two-year limitation prescription period, a proposition that, in my view, is untenable.
[26] Peters and Battiston also disagreed on whether the order Peters seeks is a “claim” under s. 4 of the Limitations Act, 2002. Claim is defined in s. 1 of the Act to mean “a claim to remedy an injury, loss or damage that occurred as a result of an act or omission”. Battiston argues that this definition is broad enough to cover the relief Peters seeks. Peters argues to the contrary. As I have said, it is unnecessary to resolve this debate because even if Peters’ motion is in respect of a claim, it is not a proceeding in respect of a claim.
[27] I would not give effect to this ground of appeal.
Second Issue: Is Peters’ rule 57.07 motion an abuse of process?
[28] The motion judge ruled that Peters’ motion did not constitute an abuse of process. Battiston submits that the motion judge erred in his ruling, and advances three arguments to support his submission. First, he contends that the motion judge made no finding that Battiston incurred costs needlessly. Second, he contends that Peters’ real motive for bringing this motion is not to recover his costs, but for the improper purpose of punishing Battiston. Third, he contends that Peters recovered his costs as part of his settlement with Giglio and therefore would be overcompensated if the court ordered costs against Battiston.
[29] I do not accept these arguments. Battiston’s contentions may well be live issues on the r. 57.07 motion itself, but none afford a basis to prevent that motion from being heard on its merits.
[30] On Battiston’s first contention, it is true the motion judge made no finding that Battiston had incurred costs needlessly or “without reasonable cause”. Whether that finding ought to be made is an issue for the motion judge on the r. 57.07 motion. Indeed, unless the court makes that finding, it cannot make a costs order against Battiston. That the motion judge did not make this finding does not transform Peters’ r. 57.07 motion into an abuse of process. It simply means that the merits have yet to be heard.
[31] Battiston’s second contention, that Peters brought his motion for an improper motive, fails for lack of any supporting evidence. Battiston chose not to cross-examine Peters, Giglio or Tenaglia on their affidavits filed on the r. 57.07 motion, and chose not to file his own affidavit evidence.
[32] Instead, Battiston points to the two-year delay before Peters brought his motion and to the Law Society complaint Peters filed against Battiston contemporaneously with his motion as some evidence of improper motive. Standing alone, however, without any other evidence, neither the delay nor the Law Society complaint credibly sustains a finding of improper motive. On the record before the motion judge, the claim of improper motive was entirely speculative.
[33] On Battiston’s third contention, under the terms of the settlement agreement between Peters and Giglio, Peters received no payment for costs. The agreement expressly provided that the $150,000 Peters did receive was for damages. Whether, as Battiston claims, this characterization of the $150,000 was contrived to permit Peters to bring his r. 57.07 motion is an issue to be resolved on the hearing of the motion.
[34] For these reasons I would not give effect to Battiston’s claim of abuse of process.
D. CONCLUSION
[35] I agree with the motion judge that Peters’ motion under r. 57.07 seeking costs of the litigation from Battiston is not barred by s. 4 of the Limitations Act, 2002, and it is not an abuse of process.
[36] I would therefore dismiss Battiston’s appeal with costs in the amount of $10,000, inclusive of disbursements and GST.
[37] Battiston’s alternative request for the trial of the issue is a matter best dealt with by the judge hearing the r. 57.07 motion.
RELEASED: September 25, 2009 “John Laskin J.A.”
“JL” “I agree K. Feldman J.A.”
“I agree H.S. LaForme J.A.”
[^1]: Under r. 21 of the Rules of Civil Procedure.