Court of Appeal for Ontario

Date: 20220413 Docket: C69434

Judges: MacPherson, Paciocco and George JJ.A.

Between:

George Taylor Plaintiff

and

Sean Mayes and Diana Story Defendants (Respondents)

and

Her Majesty the Queen, in Right of the Province of Ontario, Represented by the Ministry of Transportation of Ontario Third Party

Counsel:

Robert Moss and Anna Dylewski, for the proposed third party (appellant), Cruickshank Construction Limited R. Steven Baldwin, for the respondents Casey Dorey, for George Taylor [1] Andrew Choi, for Her Majesty the Queen, in Right of Ontario, Represented by the Ministry of Transportation of Ontario [2]

Heard: April 6, 2022

On appeal from the order of Justice Kristin Muszynski of the Superior Court of Justice, dated March 24, 2021, with reasons at 2021 ONSC 2239.

Reasons for Decision

[1] Sean Mayes’ vehicle rear-ended George Taylor’s vehicle on Highway 401 in February 2013. Taylor commenced a lawsuit against the defendants.

[2] The defendants, in turn, filed a Statement of Defence in which they blamed the accident on the condition of snow and slush on Highway 401 owned by Her Majesty the Queen, in Right of the Province of Ontario, as Represented by the Ministry of Transportation of Ontario (“MTO”). The defendants issued a third-party claim against MTO on November 10, 2016.

[3] MTO refused to attend examinations for discovery or deliver productions after initially agreeing to do so. On October 1, 2019, the defendants obtained an order from Justice Ryan Bell of the Superior Court of Justice compelling MTO to attend discoveries and deliver productions.

[4] During the examination for discovery of MTO on November 19, 2019, MTO identified Cruickshank Construction Limited (“Cruickshank”) as the contractor responsible for the relevant winter maintenance of the section of Highway 401 where the accident occurred.

[5] The defendants brought a motion to add Cruickshank as a party. Cruickshank and MTO opposed the motion on the basis that the proposed claim against Cruickshank was statute barred by virtue of the Limitations Act 2002, S.O. 2002, c. 24, Sch. B.

[6] The motion judge dismissed the motion. She applied the two-stage test, essentially mirroring the wording of sections 5(1)(a) and 5(1)(b) of the Limitations Act, enunciated by this court in Morrison v. Barzo, 2018 ONCA 979, at paras. 31-32:

The evidentiary burden on a plaintiff seeking to add a defendant to an action after the apparent expiry of a limitation period is two-fold. First, the plaintiff must overcome the presumption in s. 5(2) that he or she knew of the matters referred to in s. 5(1)(a) on the day the act or omission on which the claim is based took place, by leading evidence as to the date the claim was actually discovered (which evidence can be tested and contradicted by the proposed defendant). The presumption is displaced by the court’s finding as to when the plaintiff subjectively knew he had a claim against the defendants. To overcome the presumption, the plaintiff needs to prove only that the actual discovery of the claim was not on the date the events giving rise to the claim took place. It is therefore wrong to say that a plaintiff has an onus to show due diligence to rebut the presumption under s. 5(2).

Second, the plaintiff must offer a “reasonable explanation on proper evidence” as to why the claim could not have been discovered through the exercise of reasonable diligence. The evidentiary threshold here is low, and the plaintiff’s explanation should be given a “generous reading”, and considered in the context of the claim. [Citation omitted.]

[7] Against the backdrop of this test, the motion judge carefully reviewed the factual background involving all the parties and reached this two-part conclusion:

I find that the defendants’ third party claim against Cruickshank is not statute barred by virtue of the Limitations Act. Consequently, Cruickshank is not at liberty to plead a limitation defence to the third party claim.

[8] Cruickshank appeals from both components of this conclusion.

(1) The statute barred issue

[9] Cruickshank concedes that the standard of review on this issue is palpable and overriding error. As expressed in its factum:

The Learned Judge’s finding of fact that the Defendants had a reasonable explanation as to why they could not have discovered the Appellants in the two years after service of the Statement of Claim is entitled to deference. This finding of fact was not reasonably supported by the evidence and was a palpable an overriding error. [Emphasis in original.]

[10] Cruickshank’s principal submission is that the motion judge erred by not concluding that the defendants ought to have known of the potential claim against Cruickshank once it was served with the Statement of Claim. After that happened, says Cruickshank, the defendants offered no evidence or explanation to articulate why it took no steps in the relevant (for limitation purposes) two-year period.

[11] We do not accept this submission. The motion judge pointed out that MTO’s “defence to third party claim makes no mention of an independent contractor whatsoever.” Moreover, MTO completely refused to participate in the proceedings for a very long period of time (for reasons not connected to the legal issues in this appeal). This led the motion judge to conclude:

By the time [MTO] delivered its defence to third party claim, on January 6, 2017, I find that it was reasonable for the defendants to assume that [MTO] was responsible for the winter maintenance of this section of Highway 401 at the material time. The failure of [MTO] to plead any material facts regarding the involvement of an independent contractor should not be to the detriment of the defendants.

If [MTO] had made timely documentary disclosure in accordance with its obligations, the Defendants would have had an opportunity to inspect the patrol records and identify that an independent contractor was involved in maintaining this section of Highway 401 at the material time. The failure of [MTO] to make timely and appropriate documentary disclosure and [MTO’s] initial refusal to produce a representative for an examination for discovery should not be to the detriment of the defendants.

[12] In our view, this is an entirely fair analysis and conclusion. In any event, it is far removed from the labels ‘unreasonable’ and ‘palpable and overriding error’. Accordingly, we uphold the motion judge’s decision to add Cruickshank as a third party in the action.

(2) The ‘second kick at the can’ issue

[13] If unsuccessful on the first issue (which we have found to be the case), Cruickshank submits that it should have been added to the action as a third party but with leave to plead a limitations defence. Accordingly, the motion judge erred by saying: “Consequently, Cruickshank is not at liberty to plead a limitation defence to the third party claim.”

[14] We do not agree with this submission. The motion was brought under Rule 26.01 of the Rules of Civil Procedure, RRO 1990, Reg 194, which provides:

On motion at any stage of an action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment. [Emphasis added.]

[15] In an appropriate case, a motion judge can make a final determination on a limitation issue: see Azzeh (Litigation Guardian of) v. Legendre, 2017 ONCA 385, at para. 38. In our view, it was just for the motion judge to do so. The parties provided a comprehensive record and made full submissions on the limitation issue. The litigation is now on the cusp of being seven years old. The motion judge’s legal analysis in support of her decision to add Cruickshank as a third party is sound. Taking these points together, what this seven-year-old litigation does not need is a second round in the ring on the limitation issue.

[16] The appeal is dismissed. The respondents are entitled to their costs of the appeal fixed at $10,000 inclusive of disbursements and HST.

“J.C. MacPherson J.A.”

“David M. Paciocco J.A.”

“J. George J.A.”

[1] George Taylor was not named as a respondent in this appeal. Counsel for Mr. Taylor appeared at the appeal hearing, but made no submissions.

[2] Her Majesty the Queen, in Right of the Province of Ontario, Represented by the Ministry of Transportation of Ontario, was not named as a respondent in this appeal. Counsel for Her Majesty the Queen appeared at the appeal hearing, but made no submissions.