Court of Appeal for Ontario

Date: 2017-03-23 Docket: C62485

Panel: Hoy A.C.J.O., Gillese and Brown JJ.A.

Between

David Cardenas, a minor under the age of eighteen years represented by his Litigation Guardian, Carmen Victoria Cardenas, Evelyne Cardenas and Carmen Victoria Cardenas, personally

Plaintiffs

and

Eugenio Sallese

Defendant (Appellant)

and

City of Toronto, Rodrigo Cardenas, The Estate of Francesco Cavallo, and Rosa Cavallo

Third Parties (Respondents)

Counsel

Todd J. McCarthy and Jean-Claude J. Rioux, for the appellant

David Bierstone, for the respondents

Heard

March 10, 2017

On Appeal

On appeal from the order of Justice Robert F. Goldstein of the Superior Court of Justice, dated June 23, 2016, with reasons reported at 2016 ONSC 4178.

ENDORSEMENT

OVERVIEW

[1] Almost nine years ago, in June 2008, the plaintiff, seven-year-old David Cardenas, was struck when riding his bicycle on Neames Crescent, Toronto, by a car driven by the appellant, Eugenio Sallese. An action was commenced by the Cardenas family in February 2012.

[2] Rosa Cavallo and her husband, Francesco, owned a house on Neames Crescent. In June 2012, Sallese issued a Third Party Claim against Rosa Cavallo and the estate of her late husband, alleging that foliage on their property had created a hazard to motorists driving on the street where young David was struck.

[3] Acting under the mistaken belief that the Third Party Claim had been served on the Cavallos, their insurer, Economical Insurance, filed a defence to the Third Party Claim in March 2013. When the insurer realized its mistake, it moved to set aside the defence in 2014. By that time, Rosa had sold the house and moved to Italy. Her exact whereabouts was unknown.

[4] By order dated June 19, 2014, B. O'Marra J. set aside the defence and permitted Sallese six months to attempt personal service of the Third Party Claim on Rosa.

[5] Sallese then began efforts to locate and serve Rosa in Italy. He did not do so within the six months stipulated by B. O'Marra J.

[6] About two years later, in June 2016, Sallese moved for an order seeking an extension of time for service of the Third Party Claim on Rosa nunc pro tunc, together with an order validating service of the pleading on Rosa on the basis the pleading had come to her attention. The motion was supported by hearsay evidence describing the attempts that had been made to locate and serve Rosa.

[7] The motion judge dismissed the motion. He observed most of the information concerning Rosa's Italian address came "from sources that are unidentified." He questioned the reliability of the information based on the hearsay and concluded "there is a real question as to whether a Rosa Cavallo has been served, let alone the correct Rosa Cavallo." He decided he was "not satisfied that the statement of claim has come to the attention of Rosa Cavallo."

[8] The motion judge also refused to dispense with personal service on Rosa. He held that as her potential liability far exceeded the limits of her policy, the potential prejudice against Rosa was great, whereas the case against her was "on its face, quite weak".

[9] Sallese appeals. He submits the decision of the motion judge was an unfair triumph of form over substance. He argues the evidence that was before the motion judge clearly demonstrated Rosa knew Sallese was making a claim against her and the pleadings had come to Rosa's attention and asks this court to dispense with service. Sallese also contends the motion judge erred by failing to give effect to an oral undertaking given by his counsel that Sallese would limit the amount of his Third Party Claim against Rosa to the limits of her insurance policy. Alternatively, Sallese requests this court grant a further extension of time to effect personal service on Rosa.

ANALYSIS

[10] Although an affidavit on a motion may contain statements made on information and belief, the affidavit must specify the source of the information: r. 39.01(4) of the Rules of Civil Procedure. The affidavit filed by Sallese on the motion did not identify the source of key facts. The motion judge noted "the sources of the information in this case are second or even third hand hearsay." That led the motion judge to question the reliability of the evidence filed regarding attempts to serve Rosa and to conclude the pleading had not come to Rosa's attention.

[11] We see no error with that conclusion. The requirements of r. 39.01(4) are clear, and Sallese did not adduce any evidence to support an argument that necessity required the admission of impermissible hearsay evidence. Accordingly, we see no basis for appellate interference with the motion judge's refusal to validate service on Rosa.

[12] Sallese submits this court should dispense with service on Rosa because he had undertaken to cap his claim against her at the limits of her policy. Although there was not clear agreement between counsel that such an undertaking had been given before the motion judge, we accept that Sallese's counsel did give an oral undertaking. However, that was not the appropriate way in which to provide a formal undertaking to the court. Such an undertaking should be reduced to writing, preferably by way of an affidavit or, at a minimum, should be included in the recitals to the resulting order.

[13] In any event, we are not persuaded that in the circumstances of this case the motion judge was required to conclude such an undertaking was sufficient, in itself, to dispense with service. Sallese's counsel advised that Sallese had also orally undertaken to B. O'Marra J. to cap his claim against Rosa at the limits of her policy. The order of B. O'Marra J. nonetheless required that Sallese effect personal service on Rosa. That order was not appealed. Although it lay within Sallese's power to place admissible evidence before the motion judge about his efforts to serve Rosa, he failed to do so. Nor did Sallese seek leave on this appeal to file fresh evidence that contained admissible information demonstrating the pleading had come to Rosa's attention. Accordingly, we see no basis to interfere with the motion judge's conclusion that in this case the interests of justice do not require dispensing with personal service.

DISPOSITION

[14] The appeal is dismissed. However, if Sallese is later able to demonstrate on fresh, cogent and admissible evidence that he has located Rosa, the dismissal of this appeal does not prejudice his ability to move before the court below for further relief.

[15] The respondents are entitled to their costs of this appeal fixed at $7,500, inclusive of HST and disbursements.

"Alexandra Hoy A.C.J.O."

"E.E. Gillese J.A."

"David Brown J.A."