COURT OF APPEAL FOR ONTARIO

CITATION: Rajmohan v. Norman H. Solmon Family Trust, 2014 ONCA 352

DATE: 2014-05-05

DOCKET: C57972

Juriansz, Tulloch and Strathy JJ.A.

BETWEEN

Rajadurai Rajmohan

Plaintiff

and

Norman H. Solmon Family Trust and Norman Harry Solmon

Defendants (Appellant)

and

Dilani Gunarajah and Therese Selvamahal Edward Chandran as trustee of the Estate of Thambirajah Edward Chandran

Third Parties (Respondent)

Counsel:

Cameron J. Wetmore, for the appellant

Charles Sinclair, for respondent

Heard: April 28, 2014

On appeal from the order of Justice Victoria R. Chiappetta of the Superior Court of Justice, dated October 21, 2013.

ENDORSEMENT

[1] The appellant appeals from the order of the motion judge dismissing its third party claim against the respondent on a motion for summary judgment. The appellant is the assignee of mortgages that the plaintiff granted to the late Norman Solmon. The respondent is the estate trustee of the late Mr. Chandran, who acted for Mr. Solmon on the mortgages. Mr. Chandran also acted for the mortgagors on the transaction. More than two years after the death of Mr. Chandran, the appellant filed its third party claim alleging solicitor’s negligence. The motion judge dismissed that claim on the basis that it was time-barred by s. 38 (3) of the Trustee Act, R.S.O. 1990, c. T.23. Section 38 (3) of the Trustee Act provides that an action against an executor or administrator of a deceased person shall not be brought more than two years after the death of the deceased.

[2] Before the motion judge, the parties agreed that the Trustee Act would bar the appellant’s third party claim unless either of the doctrines of fraudulent concealment or special circumstances applied. The motion judge determined that neither of these doctrines applied. For the reasons that follow, we would dismiss the appeal.

A. Fraudulent concealment

[3] The motion judge carefully considered the rationale and requirements of the doctrine of fraudulent concealment as set out by this court in Giroux Estate v. Trillium Health Centre (2005), 2005 CanLII 1488 (ON CA), 74 O.R. (3d) 341 (C.A.), aff’g (2004), 2004 CanLII 18056 (ON SC), 69 O.R. (3d) 689 (S.C.). Justice Moldaver stated, at para. 29, that the doctrine prevents “unscrupulous defendants who stand in a special relationship with the injured party from using a limitation provision as an instrument of fraud”. As the motion judge observed in Giroux, three elements must be established to make out the doctrine:

a) the defendant and plaintiff are engaged in a special relationship with one another;

b) given the special or confidential nature of the relationship, the defendant’s conduct amounts to an unconscionable thing for the one to do to the other; and

c) the defendant conceals the plaintiff’s right of action (either actively, or as a result of the manner in which the act that gave rise to the right of action is performed).

[4] In the circumstances of the present case, the motion judge was satisfied that the solicitor-client relationship between Mr. Solmon and Mr. Chandran was sufficient to qualify as a “special relationship” within the meaning of Giroux. She also found that Mr. Chandran’s omissions were only apparent on a review of his file and so the concealment requirement was satisfied as well. However, she found the unconscionability requirement was not met because Mr. Chandan’s conduct was merely negligent and she would not characterize it as unconscionable.

[5] On appeal, the appellant submits that Mr. Chandran’s negligent conduct flowed from a breach of his fiduciary duties to Mr. Solmon, and the serious breach of his fiduciary duties rendered his conduct unconscionable. The appellant argues that Mr. Chandran breached his fiduciary duty to Mr. Solmon by failing to obtain his written consent to the dual retainer as well as to the advancement of the mortgage funds when the conditions stipulated in Mr. Solmon’s written instructions had not been satisfied.

[6] The argument, while effectively advanced, founders on the motion judge’s findings of fact. The motion judge found that Mr. Solmon probably gave verbal approval to both the dual retainer and the advancement of the funds. Given these findings of fact, the motion judge was entitled to characterize Mr. Chandran’s conduct in the circumstances as negligent, but not unconscionable.

[7] Further, we do not accept the appellant’s alternative argument that these findings of fact reflect overriding and palpable errors by the motion judge. We cannot interfere with the inferences that the motion judge drew from the manner in which Mr. Chandran and Mr. Solmon had worked together in earlier transactions, and Mr. Solmon’s considerable experience in the lending business. The Supreme Court, in Hryniak v. Mauldin, 2014 SCC 7, has recently stressed that deference is owed to a motion judge’s findings of fact as well as findings of mixed fact and law made on summary judgment.

[8] The appellant further submits that the delay it experienced in gaining access to Mr. Solmon’s client file constitutes a further breach of Mr. Chandran’s fiduciary duties. Counsel argued that Mr. Chandran failed to obtain Mr. Solmon’s written consent before leaving the file with the solicitor who took over Mr. Chandran’s practice upon his retirement. We agree with the motion judge that the delay in making the file available was occasioned by the new solicitor’s unilateral action. Neither Mr. Chandran nor the estate trustee caused that delay.

[9] We are not persuaded that the motion judge made any reversible error in concluding the doctrine of fraudulent concealment did not apply in the circumstances of this case.

B. Special circumstances

[10] The applicable limitation period is prescribed by the Trustee Act and not the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B. The appellant submits the doctrine of special circumstances continues to be available and permits the court to add parties to an existing action after the expiration of the limitation period. Thus, it argues that because the plaintiff’s action was commenced within two years of Mr. Chandran’s death, the court could allow it to institute its third party claim after the expiration of two years. We do not agree. A third party claim is itself an action under the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, s. 1.03(1). The doctrine of special circumstances, if it applies, does not allow a party to commence a third party claim after the expiration of a limitation period: Joseph v. Paramount Canada's Wonderland, 2008 ONCA 469, 90 O.R. (3d) 401, at para. 28.

C. Conclusion

[11] The appeal is dismissed. The respondent’s costs are fixed in the amount of $8000 all-inclusive, as agreed by counsel.

“R.G. Juriansz J.A.”

“M. Tulloch J.A.”

“G.R. Strathy J.A.”