COURT OF APPEAL FOR ONTARIO

CITATION: 1003280 Ontario Inc. v. Canac, A Kohler Company, 2013 ONCA 69

DATE: 20130131

DOCKET: C55191

Epstein, Pepall and Tulloch JJ.A.

BETWEEN

1003280 Ontario Inc., o/a Canac Kitchens (Oakville) and 967655 Ontario Inc. o/a Canac Kitchens (Hamilton)

Plaintiffs (Appellants)

and

Canac, A Kohler Company

Defendant (Respondent)

Sergio Grillone, for the appellants

Yalda Riahi, for the respondent

Heard and released orally: January 25, 2013

On appeal from the order of Justice James W. Sloan of the Superior Court of Justice, dated February 15, 2012.

ENDORSEMENT

[1] The appellants are custom kitchen distributors. On July 29, 2011, they issued a statement of claim claiming damages for breach of contract by the respondent manufacturer and supplier of custom kitchens.

[2] The appellants pleaded that in or about the end of 2008, the respondent, without prior notice, advised that it was closing its business and would accept no new orders after October 2008.

[3] The respondent requested particulars of all of the terms of the agreement with the appellants and for the exact terms that were breached.

[4] In paragraph 1 of their response to the demand for particulars, the appellants stated that they had an exclusive contract with the respondent, whereby the appellants would secure orders for custom-made kitchens from builders and/or homeowners. The orders were written up on the respondent’s documents; the appellants then installed and distributed the respondent’s products. As the contracts were paid, the appellants were paid a commission. The agreement was entered into in or about the fall of 1987 between Brent Martin, on behalf of the appellants and Karl Markus on behalf of the respondent.

[5] Paragraph 2 of the response to the demand for particulars stated that the parties had an exclusive contract. The respondent failed to continue distribution of its products to the appellant without explanation and without proper notice. The appellants were advised that if the contract was to end, then the respondent would provide the appellants with enough notice to find an alternate supplier and they would be properly compensated for any losses resulting therefrom.

[6] The respondent filed a statement of defence and moved pursuant to Rule 21.01(1)(a) to dismiss the appellants’ claim on the ground that the action was barred by the two-year limitation period prescribed by s. 4 of the Limitations Act, 2002, S.O. 2002, c.24, Sch. B. On the motion, the parties agreed that two years was the applicable limitation period, but disagreed on when it started to run. The appellants argued that the limitation period issue should be addressed at trial.

[7] The motion judge, Sloan J., concluded that discoverability was not in issue and dismissed the appellants’ action on the grounds that it was commenced after the expiry of the two-year limitation period.

[8] The appellants appeal from that order. They submit that the motion judge erred in concluding that the appellants had admitted that the respondent had breached the contract in 2008 and in dismissing the action on the basis of the limitation period.

[9] We disagree.

[10] The statement of claim, read together with the demand and the response to the demand for particulars, supports the motion judge’s conclusion that the cause of action for breach of contract arose no later than the end of 2008. Given that the action was commenced more than two years later on July 29, 2011, the limitation period had expired.

[11] On the facts as pleaded, including the demand and the response to the demand for particulars, in our view discoverability was not an issue. The motion judge made no error in coming to that conclusion.

[12] The appeal is accordingly dismissed.

[13] The respondent is entitled to costs of the appeal in the agreed-upon amount of $4,000 inclusive of disbursements and applicable taxes.

“Gloria J. Epstein J.A.”

“S.E. Pepall J.A.”

“M.H. Tulloch J.A.”