CITATION: 2250898 Ontario Inc. v Mukelova, 2022 ONSC 6107
COURT FILE NO.: DC 312/22
DATE: 2022 10 28
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
2250898 ONTARIO INC. O/A FERRARI & ASSOCIATES INSURANCE AND FINANCIAL SERVICES
S.N. Zeitz, for the Plaintiff (Respondent)
Plaintiff (Respondent)
- and -
TAMILIA MUKELOVA, MARIANA MICHAEL, RAMI MICHAEL and TAMARA SERGIE
C.L. Spry and Z. Pringle, for the Defendants (Appellants)
Defendants (Appellants)
HEARD: September 29th, 2022 at Toronto (By ZOOM)
REASONS FOR JUDGMENT
[On appeal from a Decision of Associate Judge R. Frank dated July 5th 2022.]
LeMay J.
[1] The Appellants were the previous owners of an insurance brokerage based in the Greater Toronto Area and operating under the name Canfinse Group Inc. In July of 2018, the Appellants sold their business to the Respondent, 2250898 Ontario Inc., O/A Ferrari and Associates Insurance and Financial Services. The sale was effected by way of a Share Purchase Agreement (“SPA”).
[2] After the sale took place, the Respondent concluded that there had been a failure to transfer assets and goodwill to the Company as well as a failure to properly accrue the company’s tax liability. Therefore, the Respondent commenced a claim on May 7th, 2019. That claim had a general statement that the Appellants had breached the SPA. It went on to identify three specific breaches of the SPA, relating to the ownership of the book of business, the alleged failure to transfer Canfinse’s goodwill and claims in relation to Canfinse’s tax liabilities.
[3] On October 22nd, 2021, the Respondent brought a motion to amend its’ Statement of Claim to add a claim that the revenues of Canfinse were misrepresented at the time the business was sold (“the Revenue Misrepresentation Claim”). This motion was opposed by the Appellants and proceeded to a hearing before the Associate Judge on January 20th, 2022. The Appellants argued that the Revenue Misrepresentation Claim was a new claim and was therefore barred by the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B. In the alternative, the Appellants argued that the Revenue Misrepresentation Claim was barred by the terms of the SPA.
[4] The Associate Judge rejected the Appellants’ arguments and granted the motion to amend the Statement of Claim. In doing so, he found that the Revenue Misrepresentation Claim was a new claim when he considered only the pleadings. However, he went on to find that the Court of Appeal’s decision in Polla v. Croatian (Toronto) Credit Union Ltd., 2020 ONCA 818 was applicable to this case and that the Revenue Misrepresentation Claim had been sufficiently particularized during the discovery process such that the Revenue Misrepresentation Claim was not a new claim and a limitations issue did not arise.
[5] In the alternative, the Associate Judge determined that any limitations issue would have to be resolved at trial and could not be determined on a motion. He also determined that the SPA did not impose a limitations period on the action either. These decisions were appealed by the Appellants.
[6] For the reasons that follow, the appeal is allowed in part. Specifically, I have concluded that the Associate Judge’s conclusions in respect of whether the Revenue Misrepresentation Claim is a new claim are wrong as he misapplied Polla to the findings of fact that he made. I am not prepared to interfere with the Associate Judge’s findings that the limitations issue would have to be resolved at trial or his interpretation of the SPA.
Background
a) The Parties and the Transaction
[7] The Appellants were shareholders in a company known as Canfinse Group Inc. This company was engaged in the retail sale and servicing of property and casualty insurance in Ontario. They agreed with Mr. Enzo Ferrari to sell all the shares in their business to him by way of the SPA. This transaction closed on July 31st, 2018.
[8] The SPA covers numerous issues. In addition to the issues raised by the Respondent’s claim, there are provisions in respect of employment agreements for two of the shareholders, there is a requirement that the vendors enter into a non-solicitation and non-competition agreement and there were provisions addressing the errors and omissions insurance for the company just to name some of the issues that were covered in the agreement.
[9] As part of the closing documentation provided to the Respondent, there was a statement that set out the commissions earned by Canfinse for the period from September 1st, 2016 to August 31st, 2017. There was a similar statement that set out the commissions for the eleven-month period from September 1st, 2017 to the date of closing, being July 31st, 2018.
[10] The transaction duly closed on July 31st, 2018, and Mr. Ferrari began operating the business.
b) Events Subsequent to the Sale
[11] After the transaction closed in July of 2018, there were a series of communications from the Plaintiff’s principal, Mr. Ferrari, to the Defendants. A sampling of those will suffice to illustrate the scope of Mr. Ferrari’s concerns and the sequence of events that led to this lawsuit.
[12] On October 26th, 2018, Mr. Ferrari sent an e-mail to Ms. Marianna Michael showing the differences in the revenue between 2017 and 2018 and asking for clarification of this discrepancy. Mr. Ferrari followed up on this issue by writing to a Mr. Eric Walker, the Company’s CPA and asking him to review the numbers.
[13] A response was received to Mr. Ferrari’s concerns from the Defendant Marianna Michael on October 31st, 2018. However, Mr. Ferrari followed up with additional concerns on November 2nd, 2018. This back and forth continued for approximately two months. The e-mails from Mr. Ferrari raise concerns such as “we are missing hundreds of thousands of dollars in revenue to date” on December 19th, 2018. On cross-examination, Mr. Ferrari confirmed that he was generally not satisfied with the explanations he received from the Appellants.
[14] Then, on January 31st, 2019, Mr. Ferrari sent a final e-mail that reads as follows:
Marianna
Lets be clear, I never authorized you to file a tax return or approved those financial statements. If I did it would need to be in writing which I challenge you to provide.
Second, unless you provide me with a number $$$$$$ outlining compensation for all the issues discussed by 3 p.m. today, I would suggest that we stop going in circles and I will seek need [sic] recoup all the financial discrepancies in your business soperations.
I am not sure what game or if you think I am a dumb ass over here but your game is over.
3pm today is my deadline.
Mila please call me as I refuse to deal with Marianna any longer….it is embarrassing for you at this point. You spent 20 years building a business and this is what your legacy will be…..embarrassing.
Thank you
[15] On cross-examination, Mr. Ferrari agreed that, when he sent this e-mail, one of his concerns was the missing commission revenue that now forms the basis of the Revenue Misrepresentation Claim. After this e-mail, there were no further communications from either side that I was advised of.
c) The Litigation
[16] The Plaintiff (Respondent) commenced an action against the Defendants (Appellants) by way of a Statement of Claim on May 7th, 2019. Paragraph 9 of the Statement of Claim states that “The Defendants have breached the term [sic] of the SPA. Without limiting the generality of the foregoing, the Defendants have done so in the following ways.” Over the next sixteen paragraphs, the claim particularizes three breaches, as follows:
a) That the Company did not own its book of business.
b) That the Appellants failed to transfer or assist with the transfer of the goodwill of the business.
c) That the Company had not paid or properly accrued for taxes.
[17] All of these claims are said to be contrary to specific provisions of the SPA and the provisions of the SPA that the Respondent is relying on were specifically quoted in the Statement of Claim.
[18] The action proceeded slowly. Affidavits of Documents were exchanged in 2019. However, discoveries were not scheduled until August of 2021. On August 20th, 2021, Mr. Ferrari was examined for discovery by counsel for the Appellants. In that examination, Mr. Ferrari was asked whether there were any other allegations that he was making in respect of breaches of the SPA. At that point, he raised the Revenue Misrepresentation Claim.
[19] After these questions were asked, the Appellants sought an undertaking to amend the Statement of Claim. They also sought discovery in respect of the basis for the Revenue Misrepresentation Claim.
[20] Ultimately, a motion to amend the Statement of Claim to include the Revenue Misrepresentation Claim was served on October 20th, 2021 and was returnable on January 20th, 2022. It was argued on January 20th, 2022 and a decision was released by the Associate Judge on May 20th, 2022.
Issues
[21] This appeal requires me to resolve the following issues:
a) Whether the Associate Judge misapplied the reasoning in Polla by determining that the Revenue Misrepresentation Claim was not a new action.
b) Whether the Associate Judge erred in his determination that the Limitations Act issue had to be left to trial.
c) Whether the Associate Judge erred in his interpretation of the SPA.
The Standard of Review
[22] A decision of an Associate Judge is subject to the principles of review as set out in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 35. In other words, the decision will only be interfered with if the Associate Judge has made an error of law or has exercised his discretion on the wrong principles or, on factual issues, made a palpable and overriding error. Zeitoun v. Economical Insurance Group, 2008 20996 (ON SCDC), [2008] O.J. No. 1771, (2008) 91 O.R. (3d) 131, aff’d 2009 ONCA 415 (2009) 96 O.R. (3d) 639 at paras 40 and 41.
[23] If there is an error of law, however, it is reviewed on a standard of correctness. Housen, supra, Zeitoun, supra. Errors of law can be extricable. In Teal Cedar Products v. British Columbia, 2017 SCC 32, Gascon J. for the majority stated (at para. 44):
That said, while the application of a legal test to a set of facts is a mixed question, if, in the course of that application, the underlying legal test may have been altered, then a legal question arises. For example, if a party alleges that a judge (or arbitrator) while applying a legal test failed to consider a required element of that test, that party alleges that the judge (or arbitrator), in effect, deleted that element from the test and thus altered the legal test. As the Court explained in Southam, at para. 39:
. . . if a decision-maker says that the correct test requires him or her to consider A, B, C, and D, but in fact the decision-maker considers only A, B, and C, then the outcome is as if he or she had applied a law that required consideration of only A, B, and C. If the correct test requires him or her to consider D as well, then the decision-maker has in effect applied the wrong law, and so has made an error of law.
Such an allegation ultimately challenges whether the judge (or arbitrator) relied on the correct legal test, thus raising a question of law (Sattva, at para. 53; Housen, at paras. 31 and 34-35)
[24] This passage is important for my consideration of this appeal. The first issue I must determine is a question of law and my review is done on a correctness standard. Polla, supra at para. 31. The second and third questions are not questions of law.
Issue #1- Did the Associate Judge Misapply Polla?
[25] Yes.
[26] The Associate Judge began his reasons on this issue with a consideration of whether the Statement of Claim disclosed the Revenue Misrepresentation Claim. The Associate Judge reviewed a series of authorities and properly instructed himself on the law.
[27] In particular, the Associate Judge relied on passages of the Court of Appeal’s decision in Polla, supra. It is worth setting those passages out in detail. At paragraphs 37-39 and 42, van Rensburg J.A. stated:
[37] The necessary starting point is to consider the substance of the appellant’s claim before he sought the pleadings amendment. What acts or omissions that would give rise to the respondents’ liability were already at issue in the action? The court must determine whether the existing pleading already contains the factual matrix to support any claim to which the proposed amendment relates, or whether the amendment seeks to put forward additional facts that are necessary and material to a new and different claim.
[38] In conducting this assessment, the court must read the pleadings generously in favour of the proposed amendment: Klassen,at para. 30; Rabb Construction Ltd. v. MacEwen Petroleum Inc., 2018 ONCA 170, 29 C.P.C. (8th) 146, at para. 8. The existing pleadings, together with the proposed amendment, must be considered in a functional way – that is, keeping in mind that the role of pleadings is to give notice of the lis between the parties. As such, the question in this case is whether the respondents would reasonably have understood, from the Amended Statement of Claim and the particulars provided on discovery, that the appellant was pursuing a claim in respect of the matter addressed by the proposed amendment.
[39] The trial judge accepted that there was a connection between the facts pleaded in the Amended Statement of Claim and the proposed amendment, since the appellant was always pleading that there was a misrepresentation in the offering statement. As such the factual circumstances or “matrix” that were already pleaded provided the broad context in which the statutory misrepresentation referred to in the proposed amendment arose. The original pleading however alleged that the misrepresentation (by omission) was a failure to disclose frauds, while the proposed amendment was based on a different act of the respondents and a separate failure to disclose.
[42] Having pursued an action in respect of a statutory misrepresentation in an offering statement, it was not open to the appellant to change course in the middle of the trial – to advance a claim in respect of a new and different misrepresentation regarding the failure to obtain appraisals – that had not been pursued up to that point in the action. The existing pleading did not contain the factual matrix that would support the claim asserted in the proposed amendment. The proposed amendment, although related to the same offering statement, alleged an entirely different misrepresentation from what had been pleaded in the Amended Statement of Claim and particularized during the discovery process. As such, the trial judge was correct in concluding that the misrepresentation relating to the basis on which the CCU made loans was based on a different act of the respondents, a separate alleged failure to disclose, and as such was not “part and parcel of” the claims the appellant was advancing in his Amended Statement of Claim.
[28] Based on these passages and other authorities that he cited, the Associate Judge concluded, correctly in my view, that the Revenue Misrepresentation Claim was a new cause of action at least based on the pleadings. The Statement of Claim asserts general breaches of the SPA. However, only three of those breaches are particularized in the pleadings and the Revenue Misrepresentation Claim was a very different claim.
[29] The Revenue Misrepresentation Claim is a claim about how much money Canfinse’s book of business generated. It references different provisions of the SPA than the other three claims and is based on the revenue flowing to the business. It is not a claim about the ownership of the book of business or the transfer of goodwill. Those claims are about assets and not about revenues. It is also unlike the claim for tax liabilities, which is a claim about expenses and not revenues.
[30] The Associate Judge correctly applied the reasoning in Fuda v. Jim McIntosh Petroleum Engineering Ltd., 2013 ONSC 2122 and concluded (at para. 20 of his reasons) that the Revenue Misrepresentation Claim was independent of the other claims and, therefore, was a new cause of action.
[31] However, the Associate Judge went on to consider Mr. Ferrari’s discovery evidence. At paragraph 25 of his reasons, the Associate Judge concluded:
[25] In summary, although I find that the current statement of claim does not plead the factual matrix necessary to support the Revenue Misrepresentation Claim to which the proposed amendments relate, that alleged misrepresentation was particularized during the discovery process. In other words, although the pleading did not allege sufficient material facts with respect to the Revenue Misrepresentation Claim, the Defendants asked questions through discovery that elicited the necessary material facts with respect to that cause of action. As a result, I find that the Revenue Misrepresentation Claim is not a new cause of action, and the Proposed Amendments should be permitted pursuant to Rule 26.01. To avoid any prejudice that could result from the proposed amendments, the parties will be permitted to conduct further examinations for discovery on matters arising out of the amendments. The costs of any such further examinations shall be determined by the ultimate trier, in the ordinary course.
[32] The Associate Judge made his determination based on a passage from the end of paragraph 38 of Polla. In that passage, van Rensburg J.A. references both the Statement of Claim and the discovery as sources from which a Court can determine whether a claim is a new claim. The Associate Judge’s reliance on discovery as a source of information for determining whether a claim was a new one was, in my view, an error of law for two reasons.
[33] First, I take a different view of the passage from Polla than the Associate Judge does. Polla was a case involving an amendment to a Statement of Claim that was sought in the middle of a trial. In analyzing whether the Defendants had knowledge of the claim that the Plaintiff was bringing when it arose in the middle of the trial, the trial judge (and the Court of Appeal) were required to consider all of the events before the trial to determine what the Defendants knew and when. In support of that conclusion, I would observe that van Rensburg J.A. begins the sentence that the Associate Judge relies upon with the words “[a]s such, the question in this case” (emphasis added). What is being discussed in this part of the reasons is a fact-specific determination. It is not a general statement of the law. The general statement of the law remains as set out at paragraph 27.
[34] My conclusion in this respect is fortified when I consider the final words of paragraph 42 of Polla, which address the question of whether the claims were “part and parcel” of the claims the Plaintiff was advancing in the Statement of Claim. The purpose of a Statement of Claim is to provide the other side with notice of the “lis” between the parties. The Defendants had no reasonable basis to assume that they would be dealing with the Revenue Misrepresentation Claim from the Statement of Claim alone. I would note that, in some cases, it might be possible to use the discovery evidence to confirm whether a claim was a new claim or not. However, discovery evidence does not convert a clearly new claim into one that was somehow encompassed in the original Statement of Claim.
[35] Put another way, the “particulars” provided on discovery help fill in an existing claim. They are not the “material facts” that are required in pleadings to identify a claim. In this case, the Associate Judge’s reasons conflate the two.
[36] Second, the effect of the test that the Associate Judge adopted in this case would be to render the limitations periods under the Limitations Act nullities, at least in some circumstances. For example, in the case at bar, the claim was not raised until discoveries that took place almost three years after the agreement closed. The Associate Judge’s interpretation allows for a Plaintiff to advance what was, on the pleadings, a completely new claim simply by disclosing it at discoveries.
[37] Carried to its’ logical conclusion, the test adopted by the Associate Judge could permit a Plaintiff’s own counsel to re-examine the Plaintiff under Rule 34.11(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 and then, because a new claim had been particularized by the Plaintiff’s counsel on discovery, avoid the application of a relevant limitations period under the Limitations Act.
[38] Once the Associate Judge determined that the Revenue Misrepresentation Claim was a new claim based on his review of the original Statement of Claim, then the issue of whether the claim was barred under the Limitations Act had to be considered because the claim was brought more than two years after the transaction closed.
[39] Counsel for the Respondent argued that “the Appellants failed to produce sufficient evidence to establish that the amendments to the Respondent’s pleading should be denied because it would result in non-compensable prejudice.” In support of this argument, counsel referenced the Court of Appeal’s decision in Klassen v. Beausoleil, 2019 ONCA 407, (2019) 34 C.P.C. (8th) 180.
[40] While Klassen clearly stands for the proposition that the Appellants have an obligation to show non-compensable prejudice, the Court of Appeal has also been clear that the loss of a limitations defence gives rise to prejudice. Frohlick v. Pinkerton Canada Ltd., 2008 ONCA 3, (2008) 88 O.R. (3d) 401, Cosentino v. Dominaco Developments Inc., 2019 ONCA 426.
[41] In this case, the Revenue Misrepresentation Claim is a completely new claim and the Associate Judge’s conclusion to the contrary must be set aside.
[42] Based on the facts set out above, there are certainly grounds to believe that allowing the Plaintiff to proceed with this claim would deny the Defendant a limitations defence. I now turn to the question of whether the Revenue Misrepresentation Claim is barred under the Limitations Act.
Issue #2- Was the Claim Barred Under the Limitations Act?
[43] The Associate Judge considered, in the alternative, the question of whether the claim would be statute barred. He noted the principles set out in Grant Thornton LLP v. New Brunswick, 2021 SCC 31, (2021) 461 D.L.R. (4th) 613. The Plaintiff is required to have either actual or constructive knowledge of the “material facts upon which a plausible inference of liability on the defendant’s part can be drawn.”
[44] The Associate Judge went on to consider the evidence he had before him on this point. He has set this evidence out at paragraphs 30 and 31 of his reasons and concluded (at paragraph 32):
[32] I have considered the evidence filed on this motion with respect to discoverability of the Revenue Misrepresentation Claim. Given that there is conflicting evidence on this point, I find that the facts regarding discoverability are not sufficiently clear for me to determine on this pleadings motion whether the proposed amendments relate to a claim that was discoverable more than two years prior to service of the notice of motion.
[45] Counsel for the Appellants disputes this conclusion and argues that the facts before the Associate Judge are clear. Counsel asserts that Mr. Ferrari knew, probably sometime in December of 2018 but certainly no later than his e-mail of January 31st, 2019, of the underlying facts in respect of the Revenue Misrepresentation Claim and at least of the basis for the Plaintiff’s claim. Counsel correctly observes that all that is required is a plausible inference of liability, and not certainty of liability or perfect knowledge.
[46] Counsel for the Appellants goes on to point out that the facts in support of their position that Mr. Ferrari knew about this claim are all particularized and specifically reference documents. The assertions of the Respondent that it did not know about these claims (set out at paragraph 31 of the Associate Judge’s reasons) are all general statements. Further, none of these general statements are supported by any of the specific documents or testimony in this case. As a result, the Appellants argue that the Associate Judge made a palpable and overriding error by not concluding that the Limitations Act barred the Respondent’s Revenue Misrepresentation Claim and instead concluding, in the alternative, that this issue had to go to trial.
[47] I appreciate the Appellants’ argument that it is difficult to square the Associate Judge’s conclusion that there is “conflicting evidence” on the limitations issue with Mr. Ferrari’s January 31st, 2019 e-mail reproduced at paragraph 14, above. That difficulty is exacerbated by Mr. Ferrari’s discovery testimony, which also supports the view that Mr. Ferrari was well aware of the Revenue Misrepresentation Claim by no later than January of 2019, more than two years before he raised it at discoveries.
[48] However, my role on appeal is not to re-hear this motion. My role is to determine whether there was a palpable and overriding error in the Associate Judge’s reasons on the Limitations Act issue. I am of the view that no such error exists. The determinations that the Associate Judge made on this point were factual determinations and are entitled to deference on appeal. The Affidavits and examinations that the Associate Judge had before him did contain discrepancies. It was within the Associate Judge’s ambit to determine that those factual discrepancies could not be resolved without a trial. As a result, the Associate Judge’s decision on the Limitations Act issue stands, and the matter of whether the Limitations Act is a bar to the Revenue Misrepresentation Claim is left to trial. I will return to the effect of this determination below together with my conclusion that the Revenue Misrepresentation Claim was a new claim below.
Issue #3- Does the SPA Impose a Limitations Period on a Claim?
[49] Article 6.3 of the SPA reads as follows:
6.3 Representations and Warranties Surviving Closing – The representations, warranties and covenants of the Purchaser and the Vendors in Articles 6.1 and 6.2 hereof shall survive Closing and, notwithstanding the closing of the transaction herein provided for, shall continue in full force and effect for a period of two (2) years following Closing, except that those covenants, representations and warranties of the Vendors relating to the tax or source deduction liability of the Corporation… In addition, notwithstanding the limitations set out above, any claim which is based on title to the Purchased Shares, ownership of the Business at the Closing Date pursuant to section 6.15 above or fraud may be brought at any time.
[50] The Appellants refer to this provision as the Survival Clause. Counsel for the Appellants argue that the plain and ordinary meaning of the Survival Clause is that the representations and warranties given under the SPA will be “in full force and effect” for only two years. After two years, counsel argues that the representations will cease to be legally enforceable.
[51] In support of this position, counsel relies upon a series of cases including CIT Financial Ltd. v. Canadian Imperial Bank of Commerce et. al., 2017 ONSC 38, NFC Acquisition v. Centennial, 2000 Inc 2010 ONSC 733, aff’d 2011 ONCA 43, NOV Enerflow ULC (NOV Pressure Pumping ULC) v. Enerflow Industries Inc., 2020 ABQB 347, NOV Enefvlow ULC v. Enerflow Industries Inc., 2015 ABQB 759, Edmonton (City) v. Transalta Energy Marketing Corporation, 2008 ABQB 426, (2008) 96 Alta.L.R. (4th) 292, and Jones v. Temple Real Estate Investment Trust, 2018 ABQB 606.
[52] In my review of the cases relied upon by the Appellants, they are all distinguishable from the language in this case. In each of the cases relied upon by the Appellants there are specific provisions requiring the claims to be brought within the warranty period. In this case, the SPA does not specify any such requirement either in the Survival Clause or elsewhere in the agreement.
[53] The Associate Judge explains this distinguishing feature and provides a detailed reference to the Jones decision in support of his analysis. Having determined that there was nothing in the SPA that required a claim to be brought within two years, the Associate Judge dismissed the Appellants’ argument on this point. I see nothing in his analysis that would justify appellate intervention. His decision is based on the language of the SPA and its distinguishing features from the cases cited by the Appellants.
Conclusion and Costs
[54] There are a number of consequences that flow from my decision. First, the Plaintiff continues to have leave to amend his Statement of Claim to plead the Revenue Misrepresentation Claim.
[55] Second, the Defendants are now given the right to plead the Limitations Act as a defence to the Revenue Misrepresentation Claim. This is the consequence of the finding, made by the Associate Judge and upheld on this appeal, that the Limitations Act issue must be left to trial. Zapfe v. Barnes, (2003) 66 O.R. (3d) 397 (Ont. C.A.), 2003 52159, Frohlick, supra at para 32, Austin v. Overs Estate, 2010 ONSC 7194 and 4197658 Holdings Ltd. v. The Atlas Corporation, 2021 ONSC 1659 at para. 55.
[56] I would note that the significance of this change to this case should not be understated. Counsel for the Respondent seemed to suggest that the change to a finding on the limitations issue was not significant. I disagree. The Appellants now have the right to plead a viable limitations defence to the Respondent’s Revenue Misrepresentation Claim. They did not have any right to plead the Limitations Act based on the Associate Judge’s decision as he had determined that the Revenue Misrepresentation Claim was encompassed within the original Statement of Claim.
[57] Therefore, an Order is to go as follows:
a) The Plaintiff shall have leave to serve and file an Amended Statement of Claim in the form attached to the original motion record.
b) The Defendants shall have leave to Amend their Statement of Defence to address the allegations in the Plaintiff’s Amended Statement of Claim, including the right to plead the Limitations Act.
c) The issue of whether the Limitations Act precludes the Plaintiffs from advancing the Revenue Misrepresentation Claim is left to the trial judge.
[58] Third, there are issues in respect of both the costs submissions here and in the Court below. The parties are encouraged to agree on the disposition of costs in both places. The appeal has been allowed in part. The parties had agreed that costs would be payable to the successful party in the sum of $20,000.00 all inclusive. I am not sure that this agreement will still stand given that the appeal has been allowed in part. As a result, I am prepared to permit costs submissions if the parties cannot agree on the issue of costs.
[59] However, in making their costs submissions, the parties should consider the significance (if any) of my disposition of the limitations issue on the question of costs both here and at the hearing of the original motion.
[60] If the parties are unable to agree on costs, then both sides are to serve and file their costs submissions within fourteen (14) calendar days of today’s date. Those submissions are not to exceed three (3) single-spaced pages, exclusive of bills of costs and offers to settle.
[61] Each party shall have seven (7) calendar days thereafter to provide any reply costs submissions. Those costs submissions are to be no more than two (2) single-spaced pages, exclusive of case-law.
The parties are advised that costs submissions must be uploaded to CaseLines. A copy of the submissions must also be provided to my judicial assistant at zoe.chen@ontario.ca. Both methods of filing are required in order for the costs submissions to be properly filed.
[62] Finally, I would be remiss if I did not thank all counsel for their helpful submissions on this matter. They were of considerable assistance in grappling with the legal issues in this case.
___________________________
LeMay J.
Released: October 28, 2022
CITATION: 2250898 Ontario Inc. v Mukelova, 2022 ONSC 6107
COURT FILE NO.: DC 312/22
DATE: 2022 10 28
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
2250898 ONTARIO INC. O/A FERRARI & ASSOCIATES INSURANCE AND FINANCIAL SERVICES
Plaintiff (Respondent)
- and –
TAMILIA MUKELOVA, MARIANA MICHAEL, RAMI MICHAEL and TAMARA SERGIE
Defendants (Appellants)
REASONS FOR JUDGMENT
LeMay J.
Released: October 28, 2022