Court File and Parties
Court File No.: 07-CV-345642CP
Date: August 7, 2012
ONTARIO
SUPERIOR COURT OF JUSTICE
Between:
Jean-Marc Haddad and Robert Phippard
Plaintiffs
- and -
The Kaitlin Group Ltd and 1138337 Ontario Inc.
Defendants
Proceeding under the Class Proceedings Act, 1992
Counsel:
• Alan A. Farrer for the Plaintiffs
• Michael A. Cohen for the Defendants
Hearing Date: July 30, 2012
PERELL, J.
REASONS FOR DECISION
[ 1 ] This is a motion in a certified class action to have one of the claims advanced in the action dismissed against all or some of the class members for being statute-barred under the Limitations Act, 2002 , S.O. 2002, c.24, Sched. B.
[ 2 ] The Defendant 1138337 Ontario Inc. was the owner and developer of a subdivision known as the Port of Newcastle located in the City of Clarington. The Defendant Kaitlin Group Ltd., an associated developer, was the marketing agent for the subdivision.
[ 3 ] In this certified class action, the Representative Plaintiffs, Jean-Marc Haddad and Robert Phippard represent the class members, all of whom purchased homes in the subdivision.
[ 4 ] The essence of the class action is that the Defendants promoted the subdivision as a golf course community with a nine-hole executive golf course within the community and represented to purchasers that they would receive a free lifetime transferable membership to a recreational clubhouse. Mr. Haddad and Mr. Phippard allege that the representations about the golf course and the clubhouse were false, negligent, and deceitful.
[ 5 ] The Defendants bring this summary motion based on the argument that the misrepresentation claim about the golf course is out of time because the class action was commenced on December 17, 2007, but all or some of the class knew or ought to have discovered their claim by no later than around January 10, 2005, which means that suing in December 2007 was approximately 11 months too late.
[ 6 ] The Defendants submit that the limitation period for the misrepresentation claim began to run on January 10, 2005 because they announced at a public meeting of the Clarington Council at the Clarington Town Hall that no golf course would be built.
[ 7 ] The public meeting had been called because Kylemore Homes, another developer that was selling lots in the subdivision, wished to obtain a rezoning and to have the plan of subdivision amended. The City gave written notice of the public meeting to persons within 120 metres of Kylemore Home’s property and a sign was posted on that property about the rezoning. The written notice says nothing about the golf course.
[ 8 ] The written notice was not sent to Mr. Haddad or Mr. Phippard. They did not attend the public meeting. The late Maxine Hoos, who lived in the subdivision, attended the public meeting and complained about the elimination of the plans for a golf course. There is some evidence that Flo Shrives and her husband, other residents of the subdivision, were at the meeting but did not speak during the meeting.
[ 9 ] On January 12, 2005, the Orono Weekly Times , a local paper, published a front-page article reporting that Maxine Hoos in the Port of Newcastle spoke at Monday's public meeting, displeased with the elimination of the nine-hole golf course from the development. On January 19 th , 2005, another article described as "disappearing golf course" was published on the front page of the Orono Weekly Times . Mr.Haddad and Mr. Phippard were not readers of the Orono Weekly Times .
[ 10 ] The representative plaintiffs said that they did not learn about the cancellation of plans to build any golf course until June of 2007, when there were committee meetings and council meetings of the municipality .
[ 11 ] On June 18, 2007, Mr. Phippard and a group of Class Members attended a meeting of the General Purpose and Administration Committee of the Municipality of Clarington to discuss the development of a hotel on other lands in the community, and at this meeting, Kelvin Whelan of the Kaitlin Group advised City Council that the Defendants were no longer planning to develop a golf course within the community. Mr. Phippard said that this was the first time he became aware that a golf course would not be proceeding. The Statement of Claim in the proposed class action followed six months later.
[ 12 ] In my opinion, the Defendants’ motion for a summary judgment fails for two mutually independent reasons, one substantive and the other procedural.
[ 13 ] First, as a matter of substance, when a class member discovered or ought to have discovered that he or she had a misrepresentation claim is factually idiosyncratic to each class member, and the Defendants did not meet the burden of showing, as they must, on a motion for summary judgment, that there is no genuine issue for trial about when each and every class member discovered or ought to have discovered they had a misrepresentation claim.
[ 14 ] In the case at bar, the class members purchased their homes at different times, and the determination of when they discovered that they had a claim for misrepresentation against the Defendants cannot be determined all together.
[ 15 ] The fact that some members of the class received notice of the public meeting and that a rezoning sign was posted on Kylemore Homes lands would not alert class members that they had been deceived about the plans for a golf course. The fact that the rezoning application concerned lands originally selected for a golf course would not inform a class member that he or she had been deceived. If he or she thought about it at all, the class member might think that the golf course was going to be built somewhere else in the subdivision, and in any event, a class member was under no obligation to pursue a line of inquiry to satisfy himself or herself that the earlier alleged representations remained true.
[ 16 ] An individual class member who attended at the public meeting might know that he or she had a claim against the Defendants, but apart from Maxine Hoos and the Shrives it cannot be said who was at the public meeting. Similarly, it is not known who, if any, of the class members read the Orono Weekly Times . Put somewhat differently, there remains a genuine issue requiring a trial about when each class member knew about a misrepresentation claim. The Defendants have not proven on any class-wide basis that the class members’ claims are statute-barred. This is not a case like a train crash, where all the class members would know or ought to have known that they had a claim.
[ 17 ] Second, procedurally, the Defendants’ motion for a summary judgment against the class members is not available. The issue of whether the class members’ claims are statute-barred is not a certified common issue and, indeed, in the circumstances of this case, could never have been a common issue because it wants for commonality.
[ 18 ] Class members are not parties to litigation in the normal sense. Under s. 14 (1) of the Class Proceedings Act, 1992 , a class member may only participate in the proceeding with court permission. Under s. 15 (2) of the Act, they may only be examined for discovery, if the court grants leave. Under s. 31 (2), class members, other than the representative party, are not liable for costs except with respect to the determination of their own individual claims.
[ 19 ] Most significantly, a class member is not bound by the principles of res judicata or issue estoppel. Under s. 27 (3) of the Act, a class member is only bound by the judgment on the common issues set out in the certification order. Subsection 27 (3) states:
(3) A judgment on common issues of a class or subclass binds every class member who has not opted out of the class proceeding, but only to the extent that the judgment determines common issues that,
(a) are set out in the certification order;
(b) relate to claims or defences described in the certification order; and
(c) relate to relief sought by or from the class or subclass as stated in the certification order.
[ 20 ] Thus, in the case at bar, in addition to the Defendants’ evidentiary failure to prove that all the class members knew or ought to have known to bring actions against the Defendants, there is no jurisdiction for a summary judgment motion against the class members based on an limitation period defence. That defence is an individual issue to be resolved at an individual issues trial.
[ 21 ] The Defendants relied on sections 11 and 12 of the Act as the source of jurisdiction for their motion for summary jud g ment against the class. These sections state:
Stages of class proceedings
- (1) Subject to section 12, in a class proceeding,
(a) common issues for a class shall be determined together;
(b) common issues for a subclass shall be determined together; and
(c) individual issues that require the participation of individual class members shall be determined individually in accordance with sections 24 and 25.
Separate judgments
(2) The court may give judgment in respect of the common issues and separate judgments in respect of any other issue.
Court may determine conduct of proceeding
- The court, on the motion of a party or class member, may make any order it considers appropriate respecting the conduct of a class proceeding to ensure its fair and expeditious determination and, for the purpose, may impose such terms on the parties as it considers appropriate
[ 22 ] I do not read either section as providing the court with jurisdiction for a summary judgment motion binding against class members without the question having been certified. The interpretation sought by the Defendants is inconsistent with s. 27 (3) of the Act. The only binding judgments against a class member is a judgment at an individual issues trial or a judgment on a common issues set out in the certification order.
[ 23 ] It follows, therefore, that this summary judgment motion should be dismissed.
[ 24 ] If the parties cannot agree about the matter of costs, they may make submissions in writing beginning with the submissions of the Representative Plaintiffs within 20 days of the release of these Reasons for Decision followed by the Defendants’ submissions within a further 20 days.
Perell, J.
Released: August 7, 2012
COURT FILE NO.: 07-CV-345642CP
DATE: August 7, 2012
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Jean-Marc Haddad and Robert Phippard
Plaintiffs
‑ and ‑
The Kaitlin Group Ltd and 1138337 Ontario Inc.
Defendants
REASONS FOR DECISION
Perell, J.
Released : August 7, 2012.