Court of Appeal for Ontario

Date: 2018-02-21 Docket: C64223

Judges: Hourigan, Roberts and Nordheimer JJ.A.

Between

Rabb Construction Ltd. Plaintiff (Appellant)

and

MacEwen Petroleum Inc. and Greenland Corporation Defendant (Respondent)

Counsel

William G. Scott, for the appellant

Michael L. Kennedy and David Elmaleh, for the respondent, Greenland Corporation

Heard: February 16, 2018

On Appeal

On appeal from the order of Justice A.K. Mitchell of the Superior Court of Justice, dated July 17, 2017, with reasons reported at 2017 ONSC 4353.

Reasons for Decision

[1] The appellant appeals from the dismissal of its motion to amend its amended statement of claim.

[2] At the end of the hearing of the appeal, we allowed the appeal with reasons to follow. These are those reasons.

[3] The appellant's action arises out of the damage to its equipment that it alleges was caused by defective hydraulic lubricant manufactured by the respondent, Greenland Corporation[1].

[4] In paras. 5 and 6 of its original statement of claim, the appellant pleaded that damage had been caused to three excavators by the use of Greenland's hydraulic lubricant. The appellant subsequently sought to add two additional paragraphs[2] by way of amendment to particularize other pieces of equipment alleged to have been damaged by Greenland's hydraulic lubricant.

[5] Greenland opposed the addition of these proposed paragraphs. The motion judge accepted Greenland's submissions and did not permit the appellant to add these paragraphs for the reason that they purported to add new causes of action that she found were statute-barred.

[6] The appellant submits that the motion judge erred in failing to treat the reference to the three excavators in the original statement of claim and the proposed reference to the additional equipment as particulars of the appellant's claim for damages against Greenland, rather than as individual causes of action for each piece of equipment damaged by the allegedly defective hydraulic lubricant.

[7] We agree.

The Motion Judge's Error

[8] First, the motion judge erred in misinterpreting the plain meaning of the proposed amendments and the amended statement of claim, which should have been read generously in favour of the amendments: Farmers Oil and Gas Inc. v. Ontario (Natural Resources), 2016 ONSC 6359 (Div.Ct.), leave to appeal to ONCA refused, February 24, 2017 (M47111), at para. 31. Specifically, she erred in restricting the appellant's claim to its three excavators.

[9] Paragraph 11 of the amended statement of claim clearly reads as a general summary of the appellant's claim against the respondents. It references the preceding paras. 9 and 10, which state general particulars of the alleged negligence of the respondents, without restricting the application of these allegations to any particular piece of equipment:

As a result of the aforesaid negligence and/or breach of contract of the Defendants, the Plaintiff sustained severe and extensive damages to the Plaintiff's equipment. Extensive repairs and preventative maintenance efforts were required. Full particulars of these damages will be provided to the Defendants prior to trial. [Emphasis added.]

[10] Although paras. 5, 6 and 7 refer to specific pieces of equipment (excavators), it is clear that those paragraphs do no more than set out as narrative how and when the appellant discovered the alleged problems with the use of Greenland's hydraulic lubricant.

[11] Further, the motion judge erred in concluding that "[t]he only logical inference to be drawn from the facts pleaded in para. 7 is that, other than the original equipment, no equipment of the plaintiff was affected by the use of the hydraulic lubricant supplied by Greenland. This paragraph contains the plaintiff's admission that the hydraulic lubricant supplied by Greenland worked properly and without incident in all of the other equipment of the plaintiff".

[12] Contrary to the motion judge's interpretation, para. 7 does not contain any such admission. Paragraph 7 reads as follows: "The Plaintiff has purchased environmentally friendly lubricant from the Defendants for a number of years prior to the subject incidents of mechanical failure without issue" [emphasis added]. This paragraph must be read in conjunction with the other paragraphs of the claim, including para. 11. The only limitation expressly pleaded is one of time, namely, that prior to the discovery of the defectiveness of Greenland's hydraulic lubricant in 2012, the appellant experienced no issue with the lubricants manufactured by Greenland.

Distinguishing Grey Condominium

[13] Finally, we are of the view that the motion judge erred in relying on Grey Condominium Corp. No. 27 v. Blue Mountain Resorts Ltd., 2008 ONCA 384, 90 O.R. (3d) 321, which is readily distinguishable from the present case. In Grey Condominium, there were discrete, separate construction deficiencies arising from different and unrelated factual causes. Moreover, the discovery of one of the construction deficiencies would not give rise to the discovery of the others. As a result, the court in that case concluded that each of the construction deficiencies constituted a separate cause of action, subject to separate limitation periods, not because there were separate and distinct injuries, but because the deficiencies in question were distinct.

[14] Here, by contrast, the sole cause of the same damage to all of the appellant's affected equipment is alleged to be the hydraulic lubricant manufactured by Greenland, which the appellant has pleaded is defective. As the motion judge correctly noted, discoverability of the cause of the damage was not in issue: by March 2014, the appellant discovered its claim that the hydraulic lubricant was defective and caused damage.

Discoverability and Limitation Periods

[15] For the purpose of assessing the issue of discoverability, it is the claim that is discoverable and not the full extent of the damages that the appellant may be able to recover as a result of pursuing that claim; the exact extent of the loss need not be known: Peixeiro v. Haberman, [1997] 3 S.C.R. 549, at p. 557.

[16] As a result, the appellant's discovery of each additional piece of damaged equipment is the discovery of the extent or the amount of the damages to be claimed as a result of Greenland's alleged negligence in manufacturing defective hydraulic lubricant. The discovery of each piece of damaged equipment does not amount to the discovery of a separate cause of action. The sole alleged cause of the damage is the same: Greenland's hydraulic lubricant that the appellant pleads was defective and negligently manufactured. The motion judge erred in conflating the discovery of the claim with the discovery of the extent of the damages, and then concluding that the proposed amendments were statute-barred.

Disposition

[17] Accordingly, the appeal and the appellant's proposed amendments are allowed. The appellants shall have 30 days from the release of these reasons to amend, file and serve their amended amended statement of claim. The respondents shall have 30 days from service to respond to the amended amended statement of claim.

[18] The parties have agreed that the appellant is entitled to its costs of the appeal in the amount of $7,500 and to the costs of the motion to amend in the amount of $8,000, which are inclusive of disbursements and applicable taxes.

"C.W. Hourigan J.A."

"L.B. Roberts J.A"

"I.V.B. Nordheimer J.A."

Footnotes

[1] The hydraulic lubricant was supplied to the appellant by the respondent, MacEwen Petroleum Inc. This respondent took no position on the amendment motion.

[2] The appellants' other amendments were not opposed.