COURT FILE NO.: CV-11-00000030-00
DATE: 20120927
CORRIGENDA : 20121001
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: RUTH VANCE, BONNIE BROWN, BRIAN VANCE, MARGARET FAUST, KENNETH VANCE, by his Litigation Guardian RUTH VANCE, and KAREN OVERLAND, Plaintiffs
AND:
WAYNE VANCE in his capacity as Estate Trustee in the Estate of Noreen Margaret Vance, deceased, WAYNE VANCE, in his personal capacity and DIANE SUSAN BARKER, Defendants
BEFORE: THE HON. MADAM JUSTICE S.E. HEALEY
COUNSEL:
A. Chapman, for the Plaintiffs
J. Bennett, for the Defendants
HEARD: September 25, 2012
REVISED ENDORSEMENT
The text of the original decision has been corrected with text of corrigendum (released October 1, 2012) appended.
Nature of the Motion
[ 1 ] The defendant Diane Susan Barker (hereafter “Barker”) seeks to set aside the ex parte order of DiTomaso J. of April 18, 2012, which permitted an amendment to the claim to add Barker as a party. Barker was the estate solicitor for the estate of Noreen Margaret Vance between 1994 and 1999.
Facts
[ 2 ] Noreen Vance separated from her husband George Vance in 1981. The couple never divorced. They had ten children. In 1982 and 1983 County Court orders were made that had the effect of severing joint tenancies in various farm properties owned by the couple, granting a fifty percent interest to Noreen Vance, and charging support payments against the husband’s interest in certain lands (the “vesting orders”).
[ 3 ] Noreen Vance died intestate and her estate was administered by the parties’ eldest son, Wayne Vance. He retained Barker to handle the estate’s administration. Barker’s evidence is that she had no knowledge of the vesting orders during the period that she acted for the estate.
[ 4 ] In order to avoid a claim by George Vance for a preferential share in Noreen Vance’s estate, the trustee signed an authorization and release that had the effect of releasing George Vance from any claims by his wife’s estate. All of the plaintiffs, who are the other surviving children of Noreen and George Vance, signed releases in late 1998 in respect of her estate.
[ 5 ] George Vance died on February 15, 2007. Both Wayne and his brother Alexander were the executors of the estate under a will dated January 23, 2002. Wayne Vance did not treat all of his children equally under the terms of his will.
[ 6 ] The solicitor acting for George Vance’s estate was Barbara Hicks, who advised the beneficiaries of his estate by letter dated May 8, 2008 that:
(i) Barker had acted for Noreen Vance’s estate;
(ii) The estate of Noreen Vance was administered without specifically dealing with the properties affected by the vesting orders;
(iii) The net value of Noreen Vance’s estate at the time of death was unknown.
[ 7 ] This correspondence was also delivered to Wayne Vance in his capacity as trustee of his mother’s estate.
[ 8 ] In 2009, an action was started by the estate of George Vance against his wife’s estate in order that the husband’s estate could obtain title to the various properties, free and clear of the vesting orders.
[ 9 ] An order was made by Snowie J. in that action on June 17, 2009 (the “Snowie Order”), which order declared that Noreen Vance’s estate had no interest in various properties owned by George Vance’s estate, with the vesting orders being vacated from title. This order was made with the consent of Alexander Vance acting as trustee for his father’s estate, and Wayne Vance acting as trustee as his mother’s estate.
[ 10 ] Following the Snowie order, the beneficiaries of Noreen Vance’s estate, who are the same plaintiffs in this action, brought a motion to be added to the proceeding and sought a stay of the Snowie order pending a motion for further directions. The motion was granted by MacKenzie J. on November 25, 2009 (the “MacKenzie Order”).
[ 11 ] The motion came before Thompson J. on April 26, 2010, seeking to set aside the Snowie order, for directions, and an order removing Wayne Vance as estate trustee for his mother’s estate. Again, the respondents were the same individuals who are the plaintiffs in the present action. Thompson J. dismissed the motion (the “Thompson Order”). In his endorsement Thompson J. indicated that any remedy to be had by the respondents was against Wayne Vance as administrator of Noreen Vance’s estate, and not against George Vance’s estate. He noted that any potential merit to their claim could not be resolved in the respondents favour because there was no evidence that the net value of Noreen Vance’s estate would be greater than her husband’s preferential share of $75,000 plus one third of any residue.
[ 12 ] On January 12, 2011, the plaintiffs commenced this action against Wayne Vance, both personally and as trustee of Noreen Vance’s estate. On April 17, 2012, the motion came before DiTomaso J. to amend the claim to add Barker as a defendant. Barker was not served with the motion. As against Barker, the amended statement of claim alleges negligence, breach of contract, breach of trust and breach of her professional obligations in relation to the estate of Noreen Vance and the plaintiffs’ interests.
[ 13 ] The affidavit of Amanda Chapman sworn April 18, 2012 in support of the motion (the “Chapman Affidavit”) provides:
[3] …when this action was commenced I was of the belief that the defendant, Wayne Vance, would add Ms. Barker as a third party to this action. He has refused to do so, however he has, through his counsel Mr. Leitch, consented to her being added as a defendant to this action and leaving it to the plaintiffs to pursue her.
[8] I am of the belief that the plaintiffs will have a limitation issue if they are not able to add Ms. Barker as a party defendant on or before April 26, 2012. This is the date upon which the two years will have run from the final order of Justice Thompson, wherein it was found that the 1983 orders could be vacated from the family farm properties.
[ 14 ] Mr. Bennett presents two grounds for setting aside the order of DiTomaso J.:
(i) The failure of the moving parties to make full and fair disclosure in the material filed for the motion;
(ii) Adding Barker as a party is barred by s. 21(2) of the Limitations Act , 2002 S.O. 2002 c.24 (the “ Limitations Act ”)
Material Non-Disclosure
[ 15 ] On the first ground, Mr. Bennett argues that both the Chapman affidavit and the affidavit filed in the name of a law clerk failed to disclose:
(i) The fact that Barker was uninvolved in the estate of Noreen Vance after 1999;
(ii) That the beneficiaries had released Wayne Vance from any claims made by the estate in 1998;
(iii) That by 2008, the beneficiaries of George Vance’s estate were aware, by Barbara Hicks’ letter of May 8, 2008, that Barker had acted for Noreen Vance’s estate;
(iv) Fred Leitch, not Barker, acted for the estate at the time of the Snowie order;
(v) That the Snowie order was made with the consent of both estate trustees;
(vi) That on November 25, 2009, the current plaintiffs sought to be added as respondents to that proceeding, and obtained the MacKenzie Order.
(vii) That the MacKenzie Order permitted them to be added, and that they were also successful in obtaining a stay of the Snowie Order.
[ 16 ] The Chapman affidavit suggests that the Thompson Order tolls the running of the limitation period, and therefore the claim had to be amended by April 22, 2012 in order not to be statute barred. Mr. Bennett argues that, given the other non-disclosure, such statement could have misled DiTomaso J. into believing that there was urgency to making the order that he did.
[ 17 ] The rules applicable to this motion are Rules 37.14(1) and 39.01(6) which provide:
37.14(1) A party or other person who,
(a) is affected by an order obtained on motion without notice;
(b) fails to appear on a motion through accident, mistake or insufficient notice; or
(c) is affected by an order of a registrar, may move to set aside or vary the order, by a notice of motion that is served forthwith after the order comes to the person’s attention and names the first available hearing date that is at least three days after service of the notice of motion.
39.01(6) Where a motion or application is made without notice, the moving party or applicant shall make full and fair disclosure of all material facts, and failure to do so is in itself sufficient ground for setting aside any order obtained on the motion or application.
[ 18 ] On an ex parte motion, it is the obligation of the moving party to make sure that the rights of the absent party are fairly addressed by ensuring full and fair disclosure of the principle issues and the material facts affecting those issues: McGrath v. B.G. Schickedanz Homes Inc. (2000), 11 C.P.C. (5 th ) 235 (S.C.J.) , leave to appeal refused, [2000] O.J. No. 5363 (QL) (S.C.J.) .
[ 19 ] Where facts that were not disclosed would not have affected the outcome in any event, the court has the discretion to refuse to set aside the order obtained without notice, even where some facts have been omitted: Bronfman v. Bronfman (2000), 2000 22710 (ON SC) , 51 O.R. (3d) 336 (S.C.J.); Bell Expressvu Limited Partnership v. Rogers (2007), 52 C.P.C. (6 th ) 312 (S.C.J.) (Comm. List) .
[ 20 ] In this case the facts that were not disclosed were germane to the issue of the running of the limitation period for any action commenced against Barker. As will be discussed more fully in the following section, the affidavits provided to the court did not present the evidence necessary for the court to have fully considered whether an action should be permitted to be pursued against Barker at this time. The involvement of new counsel, Mr. Leitch, the full circumstances around the consent order of Justice Snowie, the applicable time period during which Barker acted, and the information provided in a letter delivered by Barbara Hicks in May 2008, were all significant facts that would impact upon a judge’s consideration of the order that was sought. Even more compelling, however, is the omission of all events relating to the MacKenzie Order, as explained below.
[ 21 ] Accordingly the order of DiTomaso J. should be set aside pursuant to Rule 39.01(6).
Limitation Period
[ 22 ] It is the position of the plaintiffs that the limitation period for any claim against Barker began to run when Thompson J. delivered his ruling, which confirmed that the plaintiffs had no claim against their father’s estate. Ms. Chapman argues that it was only then that their cause of action crystalized, because prior to that they were able to rely on the vesting orders registered against title to the farm properties. The Snowie Order, it is submitted, was entered into without their knowledge or involvement, and it was only when Thompson J. pronounced the termination of their rights that the damages caused by Barker’s alleged failure to complete the administration of their mother’s estate became known.
[ 23 ] The relevant evidence regarding the limitation period is as follows:
(i) In the affidavit of the plaintiff Ruth Vance sworn September 12, 2012, at paragraph 5, she deposes that it was “sometime after he passed away in 2007, and his estate was being administered, that we learned that there were property and support orders registered on title, that continued to exist, and affect the land.”;
(ii) Ruth Vance also states, at paragraph 8, that she became aware that her mother had an interest in the farm properties at the time that a court application was commenced on or about March 11, 2009;
(iii) Correspondence exists from 2008 from lawyers representing various of the beneficiaries and trustees of the two estates, which shows that by 2008 the factions had become embroiled in a dispute about the vesting orders on the properties;
(iv) In 2009 Barker was informed that the matter would be proceeding to court and she retained her current counsel through LawPro to assist her. Various parties to that litigation expressed an interest in examining her, but ultimately she was informed that the issues between the beneficiaries of the two estates were fully resolved;
(v) The trustees for the two respective estates, through their counsel, consented to the Snowie Order on June 17, 2009 in actions 16/09.
(vi) The beneficiaries of Noreen Vance’s estate (the current plaintiffs) came before MacKenzie J. on November 25, 2009 and obtained an order that they all be added to the application heard by Snowie J., and obtained a stay of her order;
(vii) Any claim to be made by the beneficiaries of Noreen Vance’s estate against George Vance’s estate were dismissed by the Thompson Order on April 22, 2010;
(viii) This action was commenced on January 12, 2011;
(ix) Barker was added as a party on April 18, 2012. Ms. Chapman indicates that one reason for this was that she believed that Wayne Vance would add Barker and in argument she also referred to the difficulties in obtaining instructions from multiple plaintiffs.
[ 24 ] Although Rule 26.02 permits an amendment at any stage of the proceeding unless prejudice would result that could not be compensated for by costs and/or an adjournment, the court is still required to deny amendments that give rise an untenable plea at law. The claim against Barker is not a tenable plea because it is barred by s. 4 of the Limitations Act , which provides that unless otherwise provided in the Limitations Act , proceedings shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.
[ 25 ] As stated by the Ontario Court of Appeal in Frolhlick v. Pinkerton Canada Limited , (2008 ONCA), , at para. 20:
[20] Rule 26.01 is an enactment that allows a court to relieve against the harshness of an expired limitation period in certain circumstances. It would be wrong, however, to view Rule 26.01 as allowing a party to use the existence of an outstanding claim, and nothing more, to defeat the protection of relevant limitation periods.
[ 26 ] The plaintiffs’ argument is that they could not have discovered their claim against Barker until April 22, 2010. Arguments surrounding when a claim was discovered are statutorily grounded in s. 5 of the Limitations Act , which provides:
5.1 A claim is discovered on the earlier of,
(a) the day on which the person with the claim first knew,
(i) that the injury, loss or damage had occurred,
(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,
(iii) that the act or omission was that of the person against whom the claim is made, and
(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and
(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).
5.2 A person with a claim shall be presumed to have known of the matters referred to in clause (1) (a) on the day the act or omission on which the claim is based took place, unless the contrary is proved.
[ 27 ] Also applicable to this motion is s. 21(1) of the Limitations Act , which prohibits the addition of a party to an existing proceeding in these circumstances as follows:
21(1) If a limitation period in respect of a claim against a person has expired, the claim shall not be pursued by adding the person as a party to any existing proceeding.
[ 28 ] This is not a case where the issue of discoverability warrants a trial or further investigation. It is not a case where due diligence is at issue, where the court is required to examine the steps taken by the plaintiffs to discover the underlying facts on which their claim is based. The cases relied on by the plaintiffs deal with this latter scenario. The evidence exists in this case for the court to make a finding with respect to when the limitation period began to run, at the very latest, against these plaintiffs in respect of a claim against Barker. That date was the date that they asked to be added as parties to the 16/09 action, resulting in the MacKenzie Order, which was on November 25, 2009. While there is evidence suggesting that the running of the limitation period could start much earlier, as of November 25, 2009 they:
(i) Knew of the vesting orders;
(ii) Knew that any rights they had with respect to those vesting orders had been extinguished by the Snowie order; and
(iii) Knew that Barker had acted for the estate of Noreen Vance while the vesting orders remained on title.
[ 29 ] All of these facts, which were known to them in November 2009, form the basis for their current claim against Barker. They cannot then rely on the later Thompson Order, as it adds nothing the already existing proposed cause of action. The fact that the plaintiffs did not know of the finality of their alleged loss until Thompson , J. released his decision does not prevent their cause of action from having accrued when the material facts were known to them at the earlier date: Mansoori v. Liang , CV-08-11132CM at paras. 21 and 22, unreported (OSCJ); Hamilton (City) v. Metcalfe & Mansfield Capital Corp. , 2010 ONSC 7184 () , [2010] O.J. No. 5696 at para. 29 ; Isailovic et al v. Vojvodic , 2011 ONSC 5854 (S.C.J.) at para. 36 .
[ 30 ] Accordingly, the claim against Barker is barred by the Limitations Act and is an untenable plea. Any claim against her expired at the latest on November 25, 2011 and therefore s. 21(1) of the Limitation Act applies.
[ 31 ] For the reasons set out above this court orders that the order of DiTomaso J. dated April 18, 2012 shall be set aside.
[ 32 ] This order also orders that Barker shall have her costs of this motion paid by the plaintiffs on a partial indemnity basis fixed in the amount of $5,118 and payable in 30 days.
HEALEY J.
Date: October 1, 2012
CORRIGENDA
Page 7, para. 29, line 2 now reads: They cannot then rely on the later Thompson Order,…
Page 7, para. 29, line 4 now reads: The fact that the plaintiffs did not know of the finality of their alleged loss until Thompson , J. released his decision…