COURT OF APPEAL FOR ONTARIO

CITATION: Buik v. Canasia Power Corp., 2015 ONCA 352

DATE: 20150515

DOCKET: C58918

Strathy C.J.O., LaForme and Tulloch JJ.A.

BETWEEN

Ann Buik, Sandra Buik and Catherine Buik, Trustees of the Estate of William Buik, Deceased

Plaintiffs (Respondents)

and

Canasia Power Corp.

Defendant (Appellant)

Hari Nesathurai and Glen M. Perinot, for the appellant

H. Michael Rosenberg and Christine Wadsworth, for the respondent

Heard: May 12, 2015

On appeal from the judgment of Justice Susan G. Himel of the Superior Court of Justice, dated May 16, 2014, with reasons reported at 2014 ONSC 2959 and reasons for costs reported at 2014 ONSC 4042.

ENDORSEMENT

[1] Mr. Buik made a number of loans to the appellant, Canasia, between May 2000 and April 2002. A promissory note, dated June 5, 2002, stated that the appellant owed $462,500 at 15% interest per annum, falling due on May 31, 2003. An additional unsigned promissory note, dated July 10, 2002, reflected a further loan of $4,000, bringing the total to $466,500.

[2] Mr. Buik died in December 2002 leaving his estate to his wife. Following his death, a number of documents revealed the loans to Canasia, and inquiries were made as to their status. The following subsequently occurred: (i) Canasia wrote to Ms. Buik on May 31, 2008, acknowledging the loans; (ii) Canasia wrote again on June 25, 2009, indicating the loans were for $344,000; and (iii) Canasia sent Ms. Buik two cheques, each for $5,000, in August 2010.

[3] On March 1, 2011, a written demand for payment was made to Canasia. No payments were received, an action was commenced and a trial ensued.

[4] The trial judge concluded that: (i) the cause of action arose when the debt became due; (ii) the Limitations Act, R.S.O. 1990, c. L.15 applied because the cause of action arose before the Limitations Act, 2002, S.O. 2002, c. 24 Sched. B came into force; (iii) there was a six-year limitation period for repayment of a debt; and (iv) the limitation period was re-started when Canasia acknowledged the debt in 2008, re-started again with the acknowledgement letter of June 25, 2009, and again with the partial repayments in August 2010. Therefore, the limitation defence was dismissed.

[5] The trial judge went on to hold that the estate was entitled to be paid approximately $2.3 million, representing the principal amounts owing and interest at the rate of 15% from the date the loans fell due until the date of trial. She awarded substantial indemnity costs in the amount of $105,051.08, because the promissory note provided for full reimbursement of enforcement costs and because the plaintiffs (respondents) had made a written offer to settle which was not accepted.

[6] Canasia does not take issue with the finding of fact that a debt was owed. It raises two discrete grounds of appeal. First, it asserts that the trial judge should have considered and applied s. 38(3) of the Trustee Act, R.S.O. 1990, c. T.23, even though it was neither pleaded nor raised at trial. Second, it argues that she erred in finding that the communications between Canasia and Ms. Buik restarted the limitation period.

[7] We reject both grounds of appeal.

1. Section 38(3) of the Trustee Act

[8] In this court, for the first time, Canasia submits that the action is statute-barred because it was not brought within two years of Mr. Buik’s death. For this argument, Canasia relies on s. 38(3) of the Trustee Act, which requires that all actions brought by an estate under s. 38(1) be commenced within two years of the death of the deceased.

[9] The appellant has given no satisfactory explanation for the failure to raise the Trustee Act in the court below. Although the appellant was self-represented at trial, the statement of defence was prepared by counsel and did not plead the Trustee Act.

[10] As a general rule, appellate courts will not entertain an entirely new issue on appeal, because it is unfair to advance a new argument where the other party did not have the opportunity to lead evidence on the issue: Kaiman v. Graham, 2009 ONCA 77, 245 O.A.C. 130, at para. 18. The appellant has not discharged the burden of persuading us that "all the facts necessary to address the point are before the court as fully as if the issue had been raised at trial". The respondent may well have adduced evidence to establish fraudulent concealment or to show that the case falls within the “special circumstances” doctrine, thereby making the two-year limitation period inapplicable. It would be unfair to permit the appellant to raise this new issue on appeal when the respondent would be prejudiced by the absence of an evidentiary foundation to respond.

[11] We agree, in any event, with the respondent. Section 38(3) is not applicable to the case at bar.

[12] The limitation period under the Trustee Act applies only to injuries to the deceased person. In this case, Mr. Buik died before the promissory note matured, before Canasia was obligated to pay its debt, and before the cause of action arose. Accordingly, the injury was to Mr. Buik’s estate and s. 38(3) of the Trustee Act does not apply: see Dundas v. Zurich Canada, 2012 ONCA 181, 109 O.R. (3d) 521, at paras. 57-59.

2. Restarting the limitation period

[13] The trial judge found the limitation period began to run on May 31, 2003, the date the note became payable: see Skuy v. Greennough Harbour Corporation, 2012 ONSC 6998, 10 B.L.R. (5th) 146, at paras. 42-43. She found that under the transition rules in the Limitations Act, 2002, specifically s. 24(5), the former six-year limitation period applied, because the claim was discovered before January 1, 2004. We see no error in this analysis.

[14] The appellant submits, however, that the trial judge erred in finding the limitation period was extended because the appellant acknowledged the debt before the expiry of the limitation period. It submits the acknowledgment was not clear and unequivocal.

[15] In the circumstances of this case we would not interfere with the conclusions of the trial judge that the limitation period was restarted as a result of Canasia’s actions. She found that Canasia both acknowledged the debt, and sufficiently identified it, through written correspondence and partial payment. The record fully supports her conclusions. On our review, it is clear that Canasia knew precisely what debt it was addressing with the respondent and what the partial payment was for.

[16] As the appellant has demonstrated no palpable and overriding error in the trial judge’s findings of fact with respect to the appellant’s acknowledgment of the debt, part payment of the loan and consequent extension of the limitation period, we dismiss this ground of appeal.

Costs of the trial

[17] Finally, Canasia also seeks to appeal the costs order made by the trial judge. It did not, however, address the leave requirement and made no oral submissions on this point. In any case, Canasia has not satisfied us that the trial judge made an error in principle or that the costs award is plainly wrong: see Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303, at para. 27. The costs award was within the discretion of the trial judge and was supported by the factors she considered.

Disposition

[18] For the foregoing reasons, we dismiss the appeal. Leave to appeal the costs award made by the trial judge is denied.

[19] The respondent has provided us with no authority for an award of full indemnity costs in this court, based on the provision of the promissory note. We fix costs to the respondent in the amount of $15,000.00, inclusive of disbursements and all applicable taxes, payable forthwith.

“G.R. Strathy C.J.O.”

“H.S. LaForme J.A.”

“M. Tulloch J.A.”