COURT OF APPEAL FOR ONTARIO

CITATION: Kowal v. Shyiak, 2012 ONCA 512

DATE: 20120725

DOCKET: C54684

Rouleau, Watt and Pepall JJ.A.

BETWEEN

Henry Kowal and Julia Ciddio

Plaintiffs (Respondents)

and

Jerry Shyiak and Giant Builders (Thunder Bay) Inc.

Defendants (Appellants)

and

Ronald Bingham and Overall Plastering

Third Parties

Chantal M. Brochu, for the appellant Jerry Shyiak

W. Danial Newton and Tina M. Petrick, for the respondent Henry Kowal

David Scott, for the respondent Overall Plastering

Heard: June 28, 2012

On appeal from the order of Justice Shaw of the Superior Court of Justice, dated October 25, 2011.

Pepall J.A.:

[1] The appellants, Giant Builders (Thunder Bay) Inc. and its principal, Jerry Shytiak, appeal the October 25, 2011 decision of Shaw J. in which he dismissed their summary judgment motion and determined that the claim of the respondents, Henry Kowal and Julia Ciddio, was not barred by the two year limitation period prescribed by s. 4 of the Limitations Act, S.O. 2002,c. 24, Sch. B.

[2] The appellants constructed the respondents’ new house. The respondents contracted separately with the third parties, Overall Plastering and its principal, Ronald Bingham, to install stucco finishing on the exterior of the home. The respondents took possession of their newly constructed home on December 28, 2005.

[3] In the spring of 2006, the respondents observed water leakage around certain windows and doors and damage to their floors. By the fall of 2006, the house was leaking in four locations.

[4] To address the leakages, the respondents and the appellants met. On one occasion, the appellant Shyiak’s son attended at the home and suggested that the leaks could have been caused by the third parties. The appellants did some caulking and installed some flashing and, according to the respondent Kowal, the appellant Shyiak indicated that he was going to fix the problem.

[5] He did not. Ultimately, in a telephone conversation on August 31, 2007, the appellant Shytiak told the respondent Kowal, among other things, to fix the flooring himself to which the latter responded, “See you in court”. The respondent Kowal acknowledged that he knew that the situation would not be rectified by Giant Builders at that point and that he would have to resolve the problem through his lawyer by way of a claim under the new home warranty (under the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31) and/or a court action.

[6] On November 1, 2007, the respondent Kowal wrote to the appellants and copied the third parties. He indicated that he felt that the ongoing problems at their residence were the result of Giant Builder’s “insufficient supervision of the work as well as not responding to my request to correct the deficiencies” and he requested a planned repair schedule. In the letter, he also reported on a conversation he had had with the third party Bingham and stated that Bingham had indicated that he would be working with the appellants.

[7] Having received no response to his letter, the respondent Kowal wrote again on January 7, 2008, but still received no answer. He retained counsel on February 11, 2008.

[8] On February 21, 2008, counsel for the respondents wrote to the appellants advising that Giant Builders had until June 1, 2008 to rectify the leaking problems failing which the plaintiffs would make a claim under the new home warranty and commence civil proceedings in the Superior Court of Justice.

[9] The respondents retained Walter Kembel, a professional engineer, to examine the house. He concluded in a report dated August 20, 2008, that Giant Builders had been negligent and, among other things, had failed to construct a rain tight exterior envelope for the house.

[10] Tarion Warranty Corporation also arranged for an inspection of the home. The engineer who inspected the home concluded in his October 28, 2008 report, which was given to the respondents, that the problems arose from work done by the third parties.

[11] In 2009, the respondents retained another professional engineer, Gord Wickham. He provided them with a report dated October 22, 2009 in which he blamed the leaks on the work of Giant Builders.

[12] The respondents commenced their action against the appellants on November 17, 2009. They asserted a claim for damages in the estimated amount of $95,068 to $115,538 for breach of contract, breach of statutory warranty and negligence. Among other things, they pleaded that although they paid Overall Plastering directly, its work was completed under the direction and co-ordination of Giant Builders.

[13] In their statement of defence, the appellants pleaded the expiry of the two year limitation period. They also issued a third party claim against Overall Plastering and Ronald Bingham and brought a motion for summary judgment.

[14] The motions judge dismissed the summary judgment motion on the basis that the action was commenced within the limitation period. He determined that as of the “See you in court” August 31, 2007 telephone conversation or the November 1, 2007 letter, the respondents did not have sufficient knowledge as to whether the fault was reasonably that of the appellants or that of the third parties. The most a reasonably prudent person in the position of the respondents could say was that he or she had a claim against Giant Builders or the Overall Plastering but could not be sure which one was the tortfeasor. The respondents knew they had suffered damages, but did not know which of the two tortfeasors was responsible.

[15] The appellants submit that the motions judge erred and, in particular, with respect to his finding that the respondents must or should know with some certainty which of the two potential tortfeasors was responsible for their loss before the commencement of the limitation period is triggered.

[16] The respondents submit that the Act requires that damage be caused by or contributed to by an act or omission and that the act or omission be that of the person against whom the claim is made. The motions judge properly determined that the respondents did not know whether Giant Builders or Overall Plastering was responsible until the receipt of expert opinions.

[17] The relevant sections of the Act are as follows:

4. 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.

5. (1) 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).

(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1)(a) on the day the act or omission on which the claim is based took place, unless the contrary is proved.

[18] Certainty of a defendant’s responsibility for the act or omission that caused or contributed to the loss is not a requirement. It is enough to have prima facie grounds to infer that the acts or omissions were caused by the party or parties identified: Gaudet et al. v. Levy et al. (1984), 1984 CanLII 2047 (ON SC), 47 O.R. (2d) 577 (H.C.). Expert opinions are not required in all cases: McSween v. Louis (2000), 2000 CanLII 5744 (ON CA), 187 D.L.R. (4th) 446 (Ont. C.A.); and Lawless v. Anderson, 2011 ONCA 102, at para. 28.

[19] By August 31, 2007, and certainly by November 1, 2007, the respondents were familiar with all the material facts. They knew that they had contracted with both Giant Builders and Overall Plastering. They were aware who had done the work on their home. They knew they had suffered a loss and that the acts or omissions were caused by either the appellants, or the third parties, or both. This was confirmed by the motions judge. There was ample evidence on which to base a claim against the appellants without the necessity of obtaining any expert opinions. In our view, the motions judge erred in concluding that the respondents needed to obtain expert opinions before determining that they had a cause of action against the appellants. Indeed, cumulatively, the three reports were inconclusive. In any event, an element of the claim is that, as a general contractor, Giant Builders had a duty to oversee the third party’s work and Giant Builders is alleged to have breached that duty. No expert report was required in order to advance this claim.

[20] Although the respondents’ circumstances are unfortunate, the Act was not enacted to be ignored. The respondents’ action against the appellants was only commenced on November 17, 2009. It was therefore too late and is barred by s. 4 of the Act.

[21] The appeal is allowed. As agreed by the parties, the respondents shall pay the appellants’ costs fixed in the amount of $7000 inclusive of disbursements and all applicable taxes.

Released: July 25, 2012 “DW”

“S.E. Pepall J.A.”

“I agree Paul Rouleau J.A.”

“I agree David Watt J.A.”