Court of Appeal for Ontario

Date: 2019-05-22

Docket: C65444

Judges: Hoy A.C.J.O., Lauwers and Zarnett JJ.A.

Between

Strathan Corporation Plaintiff/Moving Party (Appellant)

and

Shahid Khan, Timothy Graham, Tony Pelle, Chromeshield Co., Chromecraft Corporation, FNG Corporation, Flex-N-Gate Canada Company and Ventra Group Co. Defendants/Responding Parties (Respondents)

Counsel

Raymond Colautti and Anita Landry, for the appellant

Sean Sullivan and Harry Dahme, for the respondents

Heard: May 6, 2019

On appeal from: the order of Justice Paul Howard of the Superior Court of Justice, dated October 22, 2018, with reasons reported at 2018 ONSC 6278.

Reasons for Decision

Background

[1] The appellant is the owner and landlord of a commercial property located in Windsor, Ontario. From 1998 to 2010, Chromeshield Co., Chromecraft Corporation, and FNG Corporation ("Chromeshield") were parties to a lease of a facility that plated metal components for the automobile industry on the property.

[2] On November 1, 2010, Chromeshield abandoned the property without advance notice and surrendered the lease.

[3] Several paragraphs of the motion judge's decision capture well the legal landscape of the litigation between the parties. The appellant started two actions against Chromeshield and other parties, which the motion judge described in paras. 37 and 38 of his decision:

The First Strathan Action, bearing court file no. CV-09-12829CM, was commenced by way of notice of action issued March 27, 2009, with statement of claim delivered April 21, 2009, and amended statement of claim was delivered on November 10, 2011. The First Strathan Action advances claims for, inter alia, environmental contamination of the McDougall Property by the defendants, breach of the Lease by reason of the abandonment of the Premises, damages for arrears of rent, and damages for loss of rent over the balance of the term of the Lease. Neither Khan, Graham, Pelle, Flex-N-Gate, nor Ventra are parties to the First Strathan Action.

The Second Strathan Action, bearing court file no. CV-12-18686, was commenced by statement of claim issued November 21, 2012. In the Second Strathan Action, the plaintiff claims for, inter alia, conversion, breach of the Lease, negligent misrepresentation, deceit, fraud, unjust enrichment, and oppression remedies arising from the alleged wrongful removal of equipment and fixtures from the McDougall Property. The parties to the Second Strathan Action include all of the defendants to the First Strathan Action, as well as Flex-N-Gate, Ventra, Khan, Graham, and Pelle.

Motion Before the Motion Judge

[4] The motion judge heard the appellant's motion for an order under r. 26 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, seeking leave to amend the statement of claim in the Second Strathan Action. The appellant wanted to add a claim for breach of a statutory duty under the Environmental Protection Act, R.S.O. 1990, c. E.19, causing environmental contamination to the property. The motion judge refused to grant leave on the basis that the proposed amendments were statute barred by operation of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, and also constituted an abuse of process.

[5] The motion judge explained the connection between the appellant's two actions, at para. 68:

[W]hile the proposed new claim for environmental contamination may not be "new" or "unrelated" to the causes of action advanced in the First Strathan Action, it certainly advances a new and unrelated cause of action for the purposes of the Second Strathan Action. Indeed, the proposed claim for environmental contamination in the Second Strathan Action is based on the same factual allegations already claimed in the First Strathan Action.

[6] The appellant invoked s. 5 of the Limitations Act, 2002, arguing that the facts concerning the nature and the extent of the contamination underlying the proposed amendment were only recently discovered. The appellant also relied on s. 17 of the Act. The motion judge rejected this argument, noting at para. 74:

In my view, one cannot maintain that Strathan did not know or ought not to have known that it had a claim for environmental contamination in respect of the McDougall Property as of 2009 when Strathan in fact commenced an action in 2009 specifically claiming environmental contamination in respect of the McDougall Property. The two positions cannot be reconciled.

He added, at para. 76:

On the instant motion, Strathan must be taken to have acknowledged that it knew it had a cause of action for environmental contamination at the time it commenced the First Strathan Action in the spring of 2009.

[7] The motion judge's conclusions are set out at paras. 100 and 101:

In my view, the plaintiff should not be permitted to amend its statement of claim in the Second Strathan Action because the proposed amendments are statute-barred by the Limitations Act, 2002 and, if permitted, would give rise to an abuse of process.

It bears emphasizing that this decision does not leave Strathan without any remedy at all. If Strathan wishes to assert a cause of action based on breach of statutory duty under the EPA, it is open to Strathan to seek leave to amend its statement of claim in the First Strathan Action. The defendants themselves have acknowledged this option.

Court of Appeal Decision

[8] In our view, the motion judge made no error of law in reaching his decision. In fact, we agree with it. As this court held in Joseph v. Paramount Canada's Wonderland, 2008 ONCA 469, 90 O.R. (3d) 401, the Limitations Act, 2002 abolished the common law "special circumstances" exception, which permitted the court to extend or suspend the running of a limitation period based on special circumstances. The assertion of a new cause of action in the Second Strathan Action is clearly statute barred.

[9] We reject the appellant's argument that the claim for breach of a statutory duty under the Environmental Protection Act causing environmental contamination to the property simply provides more particulars of an environmental claim mentioned in the statement of claim in the Second Strathan Action. In that pleading the mention of a clause in the lease about Chromeshield's responsibility for environmental damage and the appellant's concern that Chromeshield breached the clause (which is the claim in the First Strathan Action) appear only as part of the narrative. There is no claim concerning those matters in the Second Strathan Action against the respondents who are not parties to the first action. The amendments sought within the Second Strathan Action would constitute an entirely new cause of action.

[10] The appellant's argument that the consolidation of the two actions or their trial together means that for practical purposes the distinctions between the two pleadings can be ignored must also be rejected. There are different parties to each action who have distinct rights that must be respected.

[11] The motion judge pointed to the possible propriety of amending the statement of claim in the First Strathan Action by adding the claim for breach of a statutory duty to it. This observation is sound.

[12] Finally, in our view, the motion judge did not engage in fact finding of a nature that would be inappropriate on a r. 26.01 motion. Here the fact that the claim was statute barred in respect of the Second Strathan Action was grounded in the appellant's own pleading in the First Strathan Action. We do not accept the appellant's argument that the claim was only discoverable after 2013 as against individuals named in the Second Strathan Action on the basis that they were controlling minds of Chromeshield. The appellant had pleaded that very allegation when it started the Second Strathan Action in 2012.

[13] The appeal is therefore dismissed.

Costs Decision

[14] The appellant also seeks leave to appeal the motion judge's costs decision in which he awarded the respondents $30,000 inclusive of fees, disbursements and HST. We dismiss the appellant's motion for leave to appeal costs.

[15] The appellant argues that "[t]his award is patently unreasonable and is an error in principle as it is prima facie disproportionate." The appellant asserts that the costs award violates the fundamental principle of access to justice. The respondents claimed $73,486.77 on a partial indemnity basis for the motion. The appellant argues that the amount of time spent by respondents' counsel is disproportionate to the work required in what turned out to be effectively a motion in writing, although there was an oral component.

[16] We see no reason to interfere with the motion judge's exercise of discretion in awarding costs. The appellant's costs submissions carried some weight with him, since he awarded less than half the partial indemnity costs sought by the respondents. The appellant's submission implicitly is that written argument takes less lawyer time than oral argument. Experience suggests otherwise.

[17] We see no reason to award costs for the appeal in excess of those awarded by the motion judge for the motion under appeal. Costs of the appeal and the motion for leave to appeal costs are fixed in the amount of $30,000 inclusive of fees, disbursements and HST payable by the appellant to the respondents.

Alexandra Hoy A.C.J.O.

P. Lauwers J.A.

B. Zarnett J.A.