SUPERIOR COURT OF JUSTICE - ONTARIO
MOTION HEARD: February 16, June 1, October 12 and 19 and December 22, 2011
RE: 863880 Ontario Limited
v.
Canadian Pacific Railway Company and
Oxford Properties Group Inc.
BEFORE: Master Thomas Hawkins
COUNSEL: Kenneth Cancellara Q.C. and H. Richard Bennett
for moving plaintiff
Fax No.: 416-364-1697
Rosalind H. Cooper and Sarah Jane Turney
for responding defendant Canadian Pacific Railway Company
Fax No.: 416-364-7813
Julia E. Schatz for responding defendant
Oxford Properties Group Inc.
Fax No.: 416-863-1716
REASONS FOR DECISION
1In this action for damages and other relief arising out of the alleged chemical contamination of land the plaintiff brings this motion with two distinct parts.
2First, the plaintiff moves under subrule 37.14(1)(c) for an order setting aside the registrar’s order of July 7, 2010 dismissing this action for delay with costs.
3Secondly, the plaintiff moves under rule 26.01 for leave to amend the statement of claim in terms of a draft amended statement of claim which, in its final form, plaintiff’s counsel had served on defence counsel on or about December 23, 2011, following the conclusion of oral argument of this motion.
4The defendants Canadian Pacific Railway Company (“C.P.R.”) and Oxford Properties Group Inc. (“Oxford”) oppose both parts of this motion.
5I will first deal with that part of the plaintiff’s motion in which the plaintiff seeks to set aside the registar’s dismissal order of July 7, 2010.
6As I have said, the plaintiff brings this part of its motion under subrule 37.14(1)(c). Subrule 37.14(2) is related. These two subrules provide as follows.
- A party or other person who…..
(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.
- On a motion under subrule (1), the court may set aside or vary the order on such terms as are just.
7In Scaini v. Prochnicki , [2007] O.J. No. 299, 2007 ONCA 63 the Court of Appeal for Ontario considered the circumstances in which the court should set aside a registrar’s order dismissing an action for delay in failing to meet a deadline for setting an action down for trial laid down in a timetable order made at a status hearing. Subrule 48.14(5) directs the registrar to dismiss the action with costs in such circumstances.
8The motion judge whose order was under appeal in Scaini had refused to set aside the registrar’s dismissal order because the plaintiff had failed to meet one of four criteria for setting aside such an order which Dash M. had laid down in Reid v. Dow Corning Corp ., [2001] O.J. No. 2365 .
9Speaking for the Court of Appeal in Scaini , Goudge J.A. said the following (at paragraphs 23 and 24).
In my view, a contextual approach to this question is to be preferred to a rigid test requiring an appellant to satisfy each one of a fixed set of criteria. The latter approach is not mandated by the jurisprudence. On the other hand, the applicable rules clearly point to the former. In particular, the motion to set aside the registrar’s order dismissing the action for delay engages rule 37.14(1)(c) and (2). The latter invites the court to make the order that is just in the circumstances. A fixed formula like that applied by the motion judge is simply too inflexible to allow the court in each case to reach the just result contemplated by the rules.
That is not to say that there are no criteria to guide the court. Indeed I view the criteria used by the motion judge as likely to be of central importance in most cases. While there may be other relevant factors in any particular case, these will be the main ones. The key point is that the court consider and weigh all relevant factors to determine the order that is just in the circumstances of the particular case.
10Goudge J.A. viewed the four Reid criteria as likely to be of central importance in most cases. They have central importance here. I will now consider the four Reid criteria, using a contextual approach, while attempting to balance the interests of the parties.
11The first Reid criterion requires the moving party to provide an explanation for the litigation delay from the commencement of the action until the deadline for setting the action down for trial.
12This action began on January 28, 2004 when the plaintiff had the statement of claim issued. As the case management master managing this action, on December 22, 2009 I made a timetable order on consent providing that this action was to be set down for trial by June 30, 2010.
13On the evidence before me this action has been delayed for a number of reasons. The plaintiff and C.P.R. spent time on a mediation which ultimately failed in August 2004. Initially, for several years after the failed mediation, this action moved forward at a glacial pace, even allowing for the complexity of the action. The C.P.R. was delayed in preparing its affidavit of documents by a national labour disruption. Those responsible at C.P.R. for locating relevant documents were assigned to other duties during this disruption. The plaintiff and C.P.R. did not serve their affidavits of documents until 2007. The two defendants served supplementary affidavits of documents in 2008. Examinations for discovery of all three parties proceeded in October 2008. These examinations for discovery were delayed in part because Ash Olesen, the C.P.R. witness which the plaintiff wished to examine, was unavailable earlier, having taken an indefinite leave of absence. The plaintiff was unwilling to examine an alternant witness which C.P.R. proposed. The plaintiff’s explanation for the considerable delays in the prosecution of the action prior to the October 2008 examinations for discovery is thin at best.
14During the October 2008 examinations for discovery a great many undertakings to answer questions were given.
15In late 2008 lead counsel for the plaintiff succumbed to a serious clinical depression. He has been on indefinite medical leave for most of the time since then. To deal with this, the plaintiff’s law firm assigned another senior partner to this file and arranged for two new lawyers to join the firm and prosecute this action. One of these new lawyers is now in charge of the prosecution of this action, assisted by the other new lawyer. It took time for these new lawyers to become familiar with this action. Yet another new lawyer joined the law firm representing the plaintiff in February 2010. He was hired primarily to work on this action.
16On November 26, 2009 counsel for all parties met and discussed (amongst other subjects) what procedural steps remained to be done before the action could be set down for trial, and the expected time frame for completion of those steps.
17There is a dispute between the parties as to whether all counsel reached an agreement at that time to the effect that if the set down deadline then discussed (June 30, 2010) could not be met, a reasonable extension of the deadline would be discussed and agreed upon. Plaintiff’s counsel say there was such an agreement. Defense counsel dispute this.
18In December 2009 counsel agreed upon a new litigation timetable which (as I have said) I approved by order made on December 22, 2009. This order provided that the plaintiff was to set this action down for trial by June 30, 2010.
19In January and March of 2010 plaintiff’s counsel obtained for the first time some 2,500 pages of documents as a result of a Freedom of Information Act inquiry. These documents (the “F.O.I. documents”) first came to the attention of plaintiff’s counsel after they had agreed to the timetable order which I made on December 22, 2009.
20The F.O.I. documents consist mainly of technical information about chemical contamination on C.P.R. lands to the northwest of the plaintiff’s lands. The F.O.I. documents also contained information about a civil action which the City of Toronto brought against C.P.R. and a C.P.R. tenant of part of the C.P.R. lands. In this action the City of Toronto alleged that chemical contaminants originating on the C.P.R. lands had migrated onto City lands including the land beneath King Street West. Part of King Street West separates the C.P.R. lands from the plaintiff’s lands.
21The plaintiff contends that the F.O.I. documents identify a significant source of the chemical contamination found on the plaintiff’s lands and that C.P.R. ought to have produced the F.O.I. documents in 2007 before examinations for discovery in this action were held.
22C.P.R. insists that the F.O.I. documents are not relevant to the issues in this action (and thus need not be produced) because they deal with contamination so geographically remote from the contaminated parts of the plaintiff’s lands that none of this contamination reached the plaintiff’s lands.
23The C.P.R. lands are quite extensive. A small part of the C.P.R. lands is about 30 meters from the plaintiff’s lands. That is the approximate width of King Street West in this area. Other parts of the C.P.R. lands are several hundred meters from the plaintiff’s lands.
24There was evidence before me that some ground water in this area tends to flow from the C.P.R. lands south to the plaintiff’s lands on its way to Lake Ontario. It is part of the case of the City of Toronto against C.P.R. that the chemical contamination described in the F.O.I. documents had reached that part of King Street West which separates the C.P.R. lands from the plaintiff’s lands. If those allegations by the City of Toronto are true, then it seems to me that C.P.R. ought to have produced at least some of the F.O.I. documents before examinations for discovery in this action took place.
25I do not know if the allegations in the City of Toronto action against C.P.R. are true.
26Parts of the C.P.R. lands to the north of King Street West extend a considerable distance to the west of the plaintiff’s lands. If all the chemical contamination discussed in the F.O.I. documents originated in the more westerly parts of the C.P.R. lands, then it is entirely possible that contaminated groundwater flowing from this westerly part of the C.P.R. lands south on its way to Lake Ontario would bypass the plaintiff’s lands. If that is the case (and I do not know that it is the case) then it seems to me that C.P.R. need not have produced the F.O.I. documents in this action. However, the plaintiff contends that at least some of the F.O.I. documents discuss contamination originating on lands the C.P.R. leased to Canada Colours and Chemicals Limited for some 50 years. These lands are located directly across King Street West from and just to the west of the plaintiff’s lands.
27In the end, I am unable to resolve this scope of documentary production dispute. While the plaintiff tabled a considerable number of the F.O.I. documents as part of the material it filed on this motion, time did not permit me to examine those documents item by item to determine whether C.P.R. ought to have earlier disclosed any of those documents in its affidavit of documents. This is not a motion for an order that C.P.R. serve a further and better affidavit of documents.
28The issue of whether or not the allegations by the City of Toronto against C.P.R. are true is not what determines whether C.P.R. ought to have produced at least some of the F.O.I. documents in this action. C.P.R. ought to have disclosed the existence of any F.O.I. document in its possession control or power that is “relating to any matter in issue” in this action at the time its affidavit of documents was sworn in 2007. See subrule 30.02 (1) as it read in 2007.
29During argument of this motion much emphasis was placed on the subject of proposed allegations that chemical contamination which originated on C.P.R. lands (including lands leased to Canada Colours and Chemicals Limited) had then migrated onto the plaintiff’s lands.
30The statement of claim in effect when C.P.R.’s affidavit of documents was due was the original statement of claim. That pleading complained mostly about chemical contamination which originated on what is now the plaintiff’s lands.
31However there is one allegation in the original statement of claim that alleges chemical contamination originating on C.P.R. lands had migrated onto what is now the plaintiff’s lands. I refer to paragraph 25 of the original statement of claim. There the plaintiff alleges as follows.
The Defendants are further liable under the principle in Rylands v. Fletcher to compensate the Plaintiff for the loss and damage that the Plaintiff has incurred and is continuing to incur through the contamination of the Project Lands caused by the Underground Drains, because the Defendants, in bringing onto, or keeping, one or more noxious, hazardous substances, including TCE, on the Galt Subdivision, made a non-natural use of such land.
32This statement of claim uses terminology different from what I have used in these reasons for decision. The Project Lands are what I have called the plaintiff’s lands. The Galt Subdivision lands are what I have called the C.P.R. lands or the Parkdale Yard lands. The Underground Drains are described in paragraph 18 of the statement of claim as running along the south side of the Galt Subdivision lands (that is the C.P.R. lands or the Parkdale Yard lands) and as containing water contaminated with TCE (that is trichloroethylene) which was causing contamination of the Project Lands (that is the plaintiff’s lands).
33In any event, in the first half of 2010 the plaintiff’s lawyers spent a great deal of time analyzing the F.O.I. documents and drafting an amended statement of claim incorporating information gleaned from these documents. In its current form the draft amended statement of claim is almost entirely new. The original statement of claim was eight pages long. The draft amended statement of claim is 50 pages long.
34During the first half of 2010 the plaintiff’s lawyers also considered at length whether the information in the F.O.I. documents made it necessary to revise draft answers to undertakings which the plaintiff’s discovery witness gave in 2008. This took time.
35Regardless of who is right on the issue of whether C.P.R. ought to have produced some or all of the F.O.I. documents before examinations for discovery were held in 2008, the fact remains that the plaintiff’s lawyers spent a great deal of time in the first half of 2010 assessing the impact on this action of the information found in the F.O.I. documents, revising draft undertakings answers and drafting an amended statement of claim.
36While it may well have appeared to defence counsel that this action had become dormant after December 2009, in fact the plaintiff’s lawyers were busy working on this action.
37This action has taken much longer than most to get to its current state. However this action is far more complex than most actions and is hotly contested.
38I have reviewed the many reasons for the delays that have occurred in this action thus far. Any blame does not lie entirely on one side. All in all, this much is clear. The plaintiff has always intended to proceed with this action. There have been periods of time, particularly prior to October 2008, when there appears to have been delay in the prosecution of this action. I find the plaintiff’s explanation for these periods of delay inadequate.
39Because of my conclusion on the subject of prejudice to the defendants (discussed below) and the need to balance the interests of the parties, I am not prepared to dismiss this motion on the ground of inadequately explained delay.
40I now turn to the second Reid criterion, namely whether the moving party failed to meet the deadline for setting the action down for trial through inadvertence or for some other reason. This criterion is intended to identify those situations in which a litigant or counsel is deliberately flouting orders of the court or the Rules of Civil Procedure.
41Here, a few days before the June 30, 2010 deadline for setting this action down for trial, plaintiff’s counsel wrote both defense counsel enclosing a draft amended statement of claim. Plaintiff’s counsel asked defence counsel to extend the set down deadline and to consent to the delivery of the amended statement of claim.
42Both defence counsel promptly rejected this request. I am not surprised that they did so.
43By then, plaintiff’s counsel did not have sufficient time to bring a motion to extend the set down deadline or a motion for that relief plus an order granting leave to amend the statement of claim before the registrar dismissed this action for delay on July 7, 2010.
44I frequently hear motions to set aside registrars’ dismissal orders where plaintiff’s counsel has failed to diarize the set down deadline and forgotten that deadline. I agree with defence counsel that this is not such a case. Plaintiff’s counsel were aware beforehand of the set down deadline of June 30, 2010 and nevertheless missed the deadline. Defence counsel submit that this is not a case of inadvertence with the result, they submit, that the plaintiff has failed to meet the second Reid criterion. I disagree.
45Here there was inadvertence that did not take the form of forgetting the June 30, 2010 deadline.
46As the June 30, 2010 set down deadline approached, plaintiff’s counsel took comfort from the fact that (according to them) there was an agreement amongst counsel reached in November 2009 that if that deadline could not be met counsel would discuss the situation and agree upon a reasonable extension of the set down deadline. As I have said, defence counsel do not agree that such an agreement was reached.
47Defence counsel submit that the defendants were not under any obligation to agree to a litigation timetable extension or to consent to the amendment of the statement of claim.
48In my view, the conduct of plaintiff’s counsel in the first half of 2010 amounts to inadvertence. That inadvertence took a number of forms. First, plaintiff’s counsel seem to have overlooked the fact that because this action has been under Rule 77 case management, the court rather than the parties or their counsel has the final say as to whether a litigation timetable should be amended. While the fact that counsel have agreed to a timetable extension is an important consideration, the court nevertheless has the authority to reject an agreed upon timetable extension as, for example, setting too leisurely a place for the litigation.
49In other words, even if plaintiff’s counsel is right that defense counsel were obliged to agree to a reasonable timetable extension, there remained the possibility that court would not approve the timetable extension agreed upon. Further, even on the view of things held by plaintiff’s counsel, defence counsel were not under any obligation to agree to any particular timetable extension. There might well be a good faith disagreement as to how long a reasonable timetable extension should be.
50The inadvertence of plaintiff’s counsel also took the form of failing to leave themselves enough time to bring a motion for a timetable extension if defense counsel would not agree to a sufficient extension. I agree with defence counsel that plaintiff’s counsel waited far too long to approach defence counsel and request both a timetable extension and their consent to the extensive amendments to the statement of claim. Plaintiff’s counsel waited until the June 30, 2010 set down deadline was only days away before contacting defence counsel.
51It should have been clear to plaintiff’s counsel by late April or early May 2010 that the proposed amendments to the statement of claim were so extensive that the plaintiff was not going to meet the June 30, 2010 set down deadline. What plaintiff’s counsel should have done in late April or early May 2010 was to have requested a case conference with me in order to discuss a timetable extension, why one was needed, and whether defence counsel would agree to an extension.
52If plaintiff’s counsel had done so, I would have granted a timetable extension at the case conference if defence counsel consented to it and if plaintiff’s counsel had a reasonable explanation as to why the existing timetable could not be met. If defence counsel would not consent to an extension at the case conference, I would have directed plaintiff’s counsel to bring a formal motion for a timetable extension and directed the registrar not to dismiss the action for delay until after the final disposition of the plaintiff’s motion for a timetable extension, provided the plaintiff’s motion was brought promptly. My direction to the registrar not to dismiss the action for delay would not prevent the defendants from arguing that no time extension should be granted. It would simply prevent an automatic administrative dismissal of the action.
53I recognize that in late April and early May of 2010, plaintiff’s counsel were still in the process of drafting amendments to the statement of claim. It would be completely unreasonable to expect defence counsel to consent at a case conference held at that time to amendments to the statement of claim which they had yet to see. However, plaintiff’s counsel could include in the affidavit material filed in support of the time extension motion information as to when plaintiff’s counsel would be able to serve defence counsel with the final draft of the amended statement of claim. The relief sought on the time extension motion could include an order directing the registrar not to dismiss this action for delay until after the final disposition of any motion for leave to amend the statement of claim.
54In my view plaintiff’s counsel acted inadvertently in failing to take timely advantage of case management by requesting a case conference far enough in advance of June 30, 2010 that plaintiff’s counsel would have time to bring before June 30, 2010 a formal motion for a time extension if the case conference did not resolve matters to the satisfaction of plaintiff’s counsel.
55It is clear to me that plaintiff’s counsel were not, in the months leading up to June 30, 2010, deliberately flouting my timetable order of December 22, 2009 or the Rules of Civil Procedure.
56Certainly, plaintiff’s counsel could have kept defence counsel better informed in a timely way of what they (plaintiff’s counsel) were doing in the first half of 2010. However, this failure to communicate is not contumacious behavior or a reason for dismissing this part of the plaintiff’s motion.
57The inadvertent failure of plaintiff’s counsel to request an early case conference to discuss a time extension and to bring before June 30, 2010 a formal motion for a time extension and for leave to amend the statement of claim has not caused the defendants any prejudice.
58Because I am of the view that the conduct of plaintiff’s counsel in the months leading up to the plaintiff’s failure to meet the June 30, 2010 set down deadline amounts to inadvertence and nothing worse, I conclude that the plaintiff has met the second Reid criterion.
59I turn now to the third Reid criterion, namely whether the plaintiff has promptly brought the motion to set aside the registrar’s dismissal order of July 7, 2010.
60By the end of June 2010 plaintiff’s counsel was fully aware of the fact that it would be necessary to bring a formal motion to deal with the looming failure of the plaintiff to meet the June 30, 2010 set down deadline, and with the need to obtain leave of the court to amend the statement of claim.
61On July 6, 2010 plaintiff’s counsel contacted the motions scheduling unit and booked a two hour motion date of September 21, 2010.
62On July 7, 2010 the registrar issued an order under what is now subrule 48.14(5) dismissing this action for delay with costs.
63Over the next few weeks plaintiff’s counsel prepared extensive motion materials. These materials were served on defence counsel on August 27, 2010.
64The motion did not proceed on September 21, 2010 because defence counsel requested an adjournment to complete preparation of responding material and in order to cross-examine on the plaintiff’s material.
65The motion was then adjourned to November 30, 2010. However, it soon became clear to all counsel that the motion could not be argued within two hours. At the request of counsel, and as the master managing this action, I convened a telephone case conference for November 29, 2010 in order to set a timetable for this motion as a long motion.
66At that time I gave the parties an all day special appointment to argue this motion for February 16, 2011. Argument of the motion began that day but was not then completed. In the result it took me five days to hear argument on both parts of this motion, ending on December 22, 2011.
67The materials filed by all parties for use on this motion are voluminous. If these materials were stacked in a single pile that pile would be over two metres high.
68This motion is of critical importance to all three parties. I intend no criticism of anyone in observing that over two metres of materials were filed on this motion. All counsel realized the importance of preparing materials that were thorough. The motion as a whole raises many issues.
69This motion took far longer than most motions to prepare and argue. However, considering the issues raised, the extent of materials filed and the need for cross examination and a special appointment, I have concluded that the plaintiff has brought this motion reasonably promptly.
70I therefore find that the plaintiff has met the third Reid criterion.
71I turn now to the fourth Reid criterion, namely whether the moving plaintiff has persuaded the court that the defendants have not demonstrated any significant prejudice in presenting their case at trial as a result of the plaintiff’s delay or as a result of steps taken following the dismissal of the action.
72To my mind this is the most important Reid factor.
73I will deal first with the prejudice arguments of C.P.R. There are several of them.
74First, C.P.R. complains that the plaintiff removed contaminated soil from its lands beginning in 2002. The plaintiff did so without prior notice to C.P.R. As a result, C.P.R. could not have independent tests conducted to determine the source of the contamination.
75This conduct seems at least in part to predate any delay in the prosecution of this action. Such conduct by the plaintiff may form a basis for the trial judge to draw evidentiary inferences adverse to the plaintiff. It is not a basis upon which I can dismiss this motion. In the end if leave to amend the statement of claim is granted, it is up to the plaintiff to prove that at least some of the contamination complained of came from the lands or former lands of the defendants or one of them. It is not up to the defendants to prove that such contamination did not come from their lands, or their former lands.
76Next, C.P.R. complains that Ash Olesen, the C.P.R. discovery witness in 2008 no longer works for C.P.R. There is no evidence that Mr. Olesen now refuses to assist C.P.R. in its defence of this action or that he has disappeared.
77Thirdly, C.P.R. complains that it will now be difficult to locate relevant documents owing to the long passage of time since the events giving rise to this action occurred. Since there was already production of documents in this action, this argument seems to me to be relevant to the plaintiff’s motion for leave to amend the statement of claim which, if granted, may well require the production of additional documents. Because there has already been production of documents in this action, this argument is not a basis for dismissing the plaintiff’s motion to set aside the registrar’s dismissal order.
78I regard this argument as speculative. There is no evidence that C.P.R. has searched without success for documents relevant to the existing issues in this action or documents relevant to the proposed amendments and determined that while such documents did exist in the past, they no longer exist. Similarly, there is no evidence that any location where additional relevant documents might be found has been subject to a fire or flood which destroyed such documents. Finally, there is no evidence that C.P.R. has discarded or destroyed any such documents in the mistaken belief, held prior to the plaintiff’s motion for leave to amend the statement of claim, that such documents were not relevant.
79I now turn to Oxford’s prejudice due to delay arguments.
80First, Oxford says that unnamed witnesses have dispersed and are largely no longer in Oxford’s employ. Oxford gives no indication of what helpful evidence these unnamed witnesses would give.
81Oxford does identify one witness as J. Wayne Rogers. Mr. Rogers was the real estate broker who represented the defendants in the 1990 sale by the defendants to the plaintiff of part of what is now the plaintiff’s lands. Oxford complains that Mr. Rogers is now retired and travels outside of Canada for much of the year, beyond the reach of a summons to witness. Oxford gives no indication that it has ever interviewed Mr. Rogers as a potential witness or tried to do so without success. Oxford similarly gives no indication of what helpful evidence, if any, Mr. Rogers would give.
82It seems to me that any anticipated difficulties in securing Mr. Rogers’ evidence for trial can be addressed by a motion under Rule 36 respecting the taking before trial of the evidence of a witness for use at the trial. The possibility of a witness being beyond the jurisdiction of the court at the time of trial is one basis upon which the court can make an order under Rule 36.
83That being so, this argument is not a basis for dismissing the plaintiff’s motion.
84Next, Oxford says that it will be prejudiced because of the difficulty it will have in locating documents owing to the passage of time and the departure of John Wallace, its former C.E.O., and of Devon Jones, its former general counsel.
85This prejudice argument is all but identical to the prejudice argument by C.P.R. which I have discussed in paragraph [77] above. I reject this Oxford argument for the reasons set out in paragraph [78] above. Those reasons apply to Oxford as well.
86Finally, I find it significant that the timetable order which I made on December 22, 2009 was made on a consent basis. To my mind, the defendants would not have given their consent if they believed that they had suffered any material prejudice owing to delay up to that time. The plaintiff has explained any delay since then and has brought this motion reasonably promptly.
87I therefore conclude that the plaintiff has met the fourth Reid criterion.
88Finally, I must balance the interests of the parties. I am firmly of the view that on the evidence before me the prejudice to the plaintiff in allowing the registrar’s dismissal order of July 7, 2010 to stand far outweighs any prejudice that would possibly befall the defendants if the registrar’s order is set aside.
89For all the above reasons, I order that the registrar’s dismissal order of July 7, 2010 be set aside. The registrar is not to dismiss this action for delay prior to 45 days after the final disposition of this motion. Within that 45 day period any party may write me requesting a case conference at which time I will set a new timetable for this action.
90I now turn to the second part of the plaintiff’s motion, that is the motion under rule 26.01 for leave to amend the statement of claim in terms of the draft amended statement of claim served on defence counsel on or about December 23, 2011.
91Rule 26.01 provides as follows:
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.
92Rule 26.01 contains a reverse onus in favour of granting leave to amend a pleading.
93The defendants raise several objections to the proposed amendments to the statement of claim. However there was only one objection to the form of the proposed amendments.
94Oxford submits that the claim for punitive damages is flawed because the plaintiff does not base that claim on any independent actionable wrong allegedly committed by one or both of the defendants. However, in its factum Oxford submits, correctly, that the court may make an award of punitive damages based on intentional torts that also form the basis for an award of general and special damages.
95Here the plaintiff proposes to allege in paragraph 127 of the amended statement of claim that the defendants engaged in willful and wrongful conduct in breaching their various contractual, common law and statutory duties. In my view this is an allegation that the defendants committed one or more intentional torts. That being so, the proposed punitive damages claim is properly pleaded.
96The defendants’ main objection to the proposed amendments is that they amount to untenable pleas. The defendants submit that the amended allegations of fact respecting the alleged source of the contamination of which the plaintiff complains are untenable because the plaintiff currently lacks the evidence to prove the truth of those allegations and will never succeed in proving those allegations of fact. The distance between the contaminated areas of the plaintiff’s lands and the defendants’ lands is simply too great for the defendants’ lands to be the source of that contamination, they submit.
97This is not a trial or a summary judgment motion. It is a motion for leave to amend a pleading. On such a motion the court is not concerned with the truth or falsity of the proposed pleading. As Clark M. observed in A.H.A. Automotive Technologies Corp v. 589348 Ontario Ltd ., (1985), 3 C.P.C. (2d) 9 at paragraph 12 , if every party had to prove the truth of the allegations in his or her pleading at the pleadings stage, there would be no need for trials. Of course a party need not do so at the pleadings stage. We still need trials and summary judgment motions to determine the truth. I therefore reject this defence argument.
98Next, the defendants submit that the proposed amendments raise a number of new causes of action which are untenable because they are barred by the limitation of action provisions of the Limitations Act, R.S.O. 1990 ch. L.15 or the provisions of the Limitations Act, 2002, S.O. 2002 ch. 24 Schedule B . Leave to amend to raise an untenable plea should not be granted.
99In response, the plaintiff submits that the proposed amended statement of claim does not raise any new cause of action. It simply claims additional relief arising out of the same alleged factual matrix which has existed from the commencement of this action.
100This makes relevant the decision of J.M. Wilson J. in Gladstone v. Canadian National Transportation Ltd. (2009), 2009 38789 (ON SCDC) , 82 C.P.C. (6 th ) 38 (Div. Ct.). J.M. Wilson J. said the following (at paragraphs 39 to 44).
39 There are cases relevant to the issue of what constitutes a new cause of action, as opposed to pleading an alternative theory of liability based upon the same factual nexus.
40 Jenkins J. in Fitzpatrick Estate v. Medtronic Inc. , 1996 8118 (ON SC) , [1996] O.J. No. 2439 (Ct.J. (Gen. Div.)) where he states:
I conclude that the modern approach is when substantially all of the material facts giving rise to “the new cause of action,” have been pleaded then there is in fact no new cause of action being added.
41 The decision of Lane J. echoes this approach in Randolph v. Graye , [1995] O.J. No. 777 (Ct. J. (Gen. Div.)) dated March 24, 1995. Lane J. allowed an amendment alleging negligence, in a claim originally based on breach of fiduciary duty. He states that “the new plea is of different legal conclusions drawn from the same set of facts.”
42 The decision of Denton v. Denton (1977), 1976 831 (ON SC) , 14 O.R. (2d) 382 (H.C.) is very helpful. Grange J. allowed an amendment on the basis that the proposed amendments pleaded legal consequences that flowed from the facts as opposed to a new cause of action. He allowed the appeal from the master’s refusal to amend the pleading. Grange J. said:
I am not sure that the mere pleading of an alternative ground for relief arising out of the same facts constitutes the raising of a new cause of action – see Canadian Industries Ltd. V. Canadian National R. Co ., 1940 346 (ON CA) , [1940] O.J. No. 266, [1940] O.W.N. 452 … affirmed 1941 16 (SCC) , [1941] S.C.R. 591 …, where an amendment in a contract action was permitted to claim relief in negligence based upon the same facts upon the ground that such new claim did not create a new cause of action, but merely an alternative claim with respect to the same cause.
43 Another case on point that is relevant is the decision of Hoy J. in Phommachanh v. Toronto Transit Commission, 2002 49427 (ON SC) , [2002] O.J. No. 1166:
As to special circumstances, to the extent required, I believe they exist. No alteration of the nature of the claim against the TTC (negligence) is proposed, no new relief is requested and no new parties are sought to be added. Moreover, I do not believe the amendment constitutes adding a new cause of action. The expanded particulars arise out of the same occurrence. They may relate to the manner in which the streetcar was operated, which was initially pleaded. I do not accept that the proposed amendments constitute a new cause of action because the streetcar and the Spadina line were designed before the accident occurred. Any claim of negligence by [the plaintiff] and his family against the TTC arising out of the alleged unsafe design of the streetcar and the Spadina line necessarily arises out of the accident in question.
44 I conclude that the amendments sought by the plaintiffs were not advancing a new and discrete cause of action, but arose from the core factual nexus as the facts and circumstances of the case became clearer and matured. The amendments sought fall squarely within the contemplated amendments permitted routinely pursuant to Rule 26 of the Rules of Civil Procedure .
101I have carefully read both the original statement of claim and the proposed amended statement of claim and compared them. Both pleadings allege the same basic complaint: contaminants originating on and in lands which the plaintiff bought from the defendants and contaminants originating in the defendants’ lands have migrated to the plaintiff’s lands causing loss and damage to the plaintiff. The two pleadings each allege breach of a contractual duty to disclose contamination to the plaintiff, nuisance, misrepresentation and strict liability for non-natural use of land.
102While the proposed amended statement of claim places more emphasis on migrating contaminants and contains a great many more details and background information than the original statement of claim, it tells the same basic story as the original statement of claim.
103It is true that the proposed amended statement of claim seeks injunctive relief, punitive damages and claims that there has been unjust enrichment and that these are remedies which were not sought in the original statement of claim. However, a plaintiff who seeks to claim additional relief in an amended pleading arising out of the same basic facts is not seeking to raise a new cause of action.
104It is also true that the proposed amended statement of claim alleges that the plaintiff’s losses are greater than originally pleaded. For example, the losses alleged in paragraphs 77 to 83 of the proposed amended statement of claim, referred to as the “Ledcor claim”, were not previously claimed. That said, a plaintiff who seeks to amend a pleading to allege that the losses which the defendant has caused as a result of the same wrongful acts or omissions originally alleged are more extensive or serious than originally pleaded does not seek to raise a new cause of action.
105I therefore conclude that the proposed amended statement of claim does not raise any new cause of action. It therefore follows that the proposed amended statement of claim does not contain any pleas that are untenable because they are barred by limitation of action legislation.
106In the alternative, if I am wrong and the proposed amended statement of claim does raise one or more new causes of action, the plaintiff submits that no limitation period had expired when this motion was brought because of the operation of the discoverability doctrine, either in its common law form applicable for the period prior to 2004 or its statutory form applicable for the period after 2003.
107I shall assume for the purposes of these reasons for decision that the proposed amendments do raise one or more new causes of action. That being so, this is not a situation where it is clear that a limitation period has or has not expired. In the context of this motion, the discoverability doctrine is largely a question of whether or not the plaintiff ought to have discovered the F.O.I. documents and brought this motion to amend much sooner. This is complicated by the issue of whether C.P.R. ought to have disclosed at least some of those documents years ago, before the 2008 examinations for discovery.
108In order to resolve the discoverability issue in the context of the facts underlying this action it would be necessary for me to weigh the evidence and make findings of fact. That is something which the court should not do on a pleadings motion. See Andersen Consulting Ltd. v. Canada (Attorney General) (2001), 2001 8587 (ON CA) , 13 C.P.C. (5 th ) 251 (Ont. C.A.) per Moldaver J.A. at paragraph 35.
109In conclusion, I grant the plaintiff leave to amend as asked subject to the term that the defendants may raise any limitation of action defence they are advised to raise. I note that both defendants have already raised a limitation of action defence. However they may wish to amplify or expand upon this existing defence.
110At the conclusion of argument counsel asked that I not rule on the costs of this motion until after I released my reasons for decision. Any party may now write me requesting a case conference at which time I will receive submissions on how best to rule upon the costs of this motion.
111I have now read and considered the costs submissions of the parties. All the parties submitted that I should award costs now and fix them. In the alternative, both the plaintiff and C.P.R. submitted that I should reserve the costs of this motion to the trial judge.
112I will deal first with the subject of costs as between the plaintiff and Oxford because that subject is less complicated than the subject of costs as between the plaintiff and C.P.R.
113In my view, given my finding that Oxford would not suffer prejudice if I set aside the registrar’s dismissal order and my view that once Oxford was served with the plaintiff’s motion materials, it should have been clear to Oxford that the plaintiff had not abandoned this action, Oxford should not have opposed this motion from that point onwards. That motion material showed that plaintiff’s counsel were, in the weeks and months leading up to June 30, 2010, busily working on this action.
114I do not consider that in granting the plaintiff leave to amend its statement of claim on this motion, I was granting the plaintiff an indulgence. Rule 26.01 makes it clear that absent prejudice to the responding party the court shall grant leave to amend a pleading. That is the reverse onus I referred to in paragraph [92] above. I have rejected Oxford’s prejudice arguments.
115The motion for leave to amend the statement of claim was primarily a fight between the plaintiff and C.P.R. The main subject of the amendments is the allegations that contaminants migrated from the C.P.R. or Parkdale Yard lands to the north of King Street West southwards and eastwards to the plaintiff’s lands. One position Oxford takes in response to those amendments is that Oxford and its predecessor Marathon Realty Company Limited never had an interest in the Parkdale Yard lands. If this is true (and it would not surprise me if it is true) that is all the more reason for Oxford not to oppose the motion for leave to amend the statement of claim.
116In my experience too many defendants fight motions to set aside registrar’s orders dismissing an action for delay even when there is no evidence that the plaintiff or its counsel are flouting orders of the court or abusing the Rules of Civil Procedure, and no evidence of real prejudice to the defendant. Such defendants feel they have little to lose in fighting such motions. In so doing, such defendants consume scarce judicial resources to no worthwhile end. If I were to award costs to defendants in these circumstances it would only encourage such conduct.
117I am not accusing Oxford or its counsel of acting in bad faith in resisting this motion. However, I do feel (as I have already said) that once Oxford received the plaintiff’s motion material Oxford should have ceased to oppose this motion.
118The whole motion took five days to argue. However the Oxford part of this motion took considerably less than half of this time. The amount of costs I am awarding reflects this.
119I fix the costs of this motion as between the plaintiff and Oxford at $20,000 and order Oxford to pay such costs to the plaintiff within 30 days. I consider this to be the fair and reasonable amount which Oxford ought to pay in costs.
120I now turn to the subject of the costs of this motion as between the plaintiff and C.P.R. Both the plaintiff and C.P.R. asked that I award the costs of this motion now and fix those costs. In the alternative they both asked that I reserve the costs of this motion to the trial judge because I was unable to resolve the issue of whether C.P.R. ought to have produced at least some of the F.O.I. documents before the examinations for discovery in this action were held in 2008. I agree. So ordered.
121Whatever view one takes of whether the issues on this action before this motion was brought were such that at least some of the F.O.I. documents ought to have been produced, the issues now have a different emphasis. The issue of whether contaminants migrated from the C.P.R.’s Parkdale Yard lands south and southeast across King Street West to what are now the plaintiff’s lands has become a significant part of this action. Any F.O.I. document which discusses the migration of contaminants in this manner or the subject that they did not so migrate is relevant and should be produced. The issue of migrating contaminants was a minor part of this litigation before this motion was brought. It is now a major issue in this action.
122The trial judge will therefore be in a position to review the F.O.I. documents as tendered in evidence and to assess whether they or some of them ought to have been produced before the 2008 examinations for discovery, and to assess how significant they are to this litigation.
123The issue of costs as between the plaintiff and C.P.R. is complicated by one other factor. The plaintiff’s written costs submissions accuse counsel for C.P.R. of abusive conduct more than once. In oral argument before me Mr. Cancellara criticized Ms. Cooper’s handling of the subject of production of the F.O.I. documents. There was no reporter present and I did not make a note of the exact words he used. No affidavit evidence on this subject was filed as part of the costs submissions to me. In substance Mr. Cancellara said that Ms. Cooper’s handling of the subject of production of the F.O.I. documents was so seriously flawed as to amount to professional misconduct.
124In their costs submissions plaintiff’s counsel argue that both C.P.R. and Ms. Cooper had an obligation to disclose relevant F.O.I. documents. I disagree in part. Ms. Cooper is not a party to this action and does not have a personal obligation to disclose relevant documents. C.P.R. is a party to this action and does have an obligation to disclose non-privileged documents in its possession control or power that are relevant to any matter in issue in this action. Ms. Cooper’s obligation in 2007 was to explain to the person signing C.P.R.’s affidavit of documents (a) the necessity of making full disclosure of all documents relating to any matter then in issue in this action and (b) what kinds of documents were likely to be relevant to the allegations then made in the pleadings. If Ms. Cooper did not do this herself, then as lead counsel for C.P.R. she had an obligation to ensure that some other lawyer did so.
125The trial judge should be aware of one other factor relevant to the subject of the costs of this motion as between the plaintiff and C.P.R. Ms. Cooper spent a great deal of time in a vain attempt to persuade me that many of the proposed amendments were untenable pleas in that the plaintiff will never succeed in proving that these proposed amendments are true. My repeated admonitions to Ms. Cooper that on a motion for leave to amend a pleading, the court is not concerned with the truth or falsity of proposed amendments that are not absurd went unheeded.
Master Thomas Hawkins
DATE: October 1, 2012