ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: C-10,384/07
DATE: 20121211

BETWEEN:

THE ESTATE OF JEFFREY EDWIN TIMBERS, by his Estate Trustee Without a Will, REBECCA GRAHAM
Plaintiff

– and –

THE BANK OF NOVA SCOTIA
Defendant

Marc A. J. Huneault, for the Plaintiff.

A. Nicole Westlake, for the Defendant.

HEARD: December 7, 2012

gauthier, j.

The Motion:

1The Plaintiff seeks to vary the Order of Gordon J. made on June 13, 2011. The Plaintiff wishes to amend its Statement of Claim (the “Fresh as Amended Statement of Claim”) for a second time, to allege breach of contract among other things, on the basis of “new evidence”.

Facts:

2I reproduce here paragraphs 9 to 17 of the Defendant’s Factum, which accurately describe the facts.

9. A motor vehicle accident occurred in October 1993 in which Jeffrey Edwin Timbers suffered a catastrophic head injury. Gordon Wood was appointed guardian of Mr. Timbers’ property.

10. The tort and accident benefits actions with respect to the motor vehicle accident were both settled and incorporated into Judgments dated October 15, 1996 and February 3, 2007 respectfully [sic] (the “Judgments”). The settlement contemplated, amongst other payments, monies to be paid to Mr. Timbers pursuant to structured settlements.

11. A term of the Judgments was the declaration that Mr. Timbers was a person incapable of managing property pursuant to the provisions of the Substitute Decisions Act and that his Litigation Guardian, Mr. Wood, was appointed as guardian of his property on the condition that he was to keep account of the income and expenditures.

12. This action was commenced by issuance of a Notice of Action on August 27, 2007. On or about September 24, 2007, the plaintiff served the Claim on Scotiabank. In the Claim, the plaintiff alleged, among other things, that the payments made to Mr. Timbers pursuant to structured settlements were misappropriated by Mr. Wood. The plaintiff claimed against Scotiabank for breach of trust. In essence, the plaintiff claims that Scotiabank participated in Mr. Wood’s breach of trust in that it permitted the breach of trust or was wilfully blind to it.

13. Scotiabank served its statement of defence on or about June 9, 2008.

14. On or about February 15, 2011, the plaintiff brought a motion for leave to amend the Claim in accordance with the draft “Fresh as Amended” Statement of Claim (previously defined as the “First Amending Motion”). The First Amending Motion was heard before the Honourable Justice Gordon on May 13 and 25, 2011.

15. The plaintiff brought the First Amending Motion to obtain leave to amend the statement of claim to allege, amongst other things, breach of contract , breach of fiduciary duty, conversion and conspiracy against Scotiabank.

16. Justice Gordon granted the plaintiff leave to amend its statement of claim as referenced in the “Fresh as Amended” Statement of Claim, with exception to the plaintiff’s claim for breach of contract and conspiracy.

17. The plaintiff brings the within motion to obtain leave to amend its claim against Scotiabank for the second time. Among other things, the plaintiff seeks to vary the Gordon Order. In the draft Amended “Fresh as Amended” Statement of Claim, the plaintiff pleads the same allegations that were denied by Justice Gordon.

3After conducting an examination of the original statement of claim to ascertain whether or not the facts in support of the proposed causes of action, including breach of contract, were substantially pleaded therein, Gordon J concluded that they were not. At paragraph 22 of his Decision on Motion, he concluded that the provisions of the original Statement of Claim did not establish an agreement between the Plaintiff and the Defendant. He said this:

What is pleaded is the existence of a trust account to be established with the bank and administered by Gordon Wood in his role as guardian of the property of Mr. Timbers, not an agreement entered into between Mr. Timbers (via his guardian of property Mr. Woods) and the bank. Although these two concepts may arise out of the same factual matrix involving Mr. Timbers, Mr. Wood and the Bank, they are fundamentally different allegations and were not pleaded by the plaintiff initially.

4Gordon J concluded that the amendment sought raised a new cause of action brought outside the limitation period and he denied the request for leave to amend to plead breach of contract.

Plaintiff’s Position:

5According to the Plaintiff’s factum,

This motion is based upon a single and isolated admission by the Defendant during the Defendant’s examination for discovery on February 7 th , 2012. The Defendant admitted that the contract had not been reduced to writing. To be precise, the Defendant has admitted that account opening documentation and debit card agreements are retained so long as the account remains open. The Defendant cannot locate any agreements. There are only two logical conclusions. Firstly, the documents have been destroyed or misplaced by the Defendant which begs an adverse inference (doctrine of spoliation). Secondly, the documents never existed in the first place.

This is a significant development is [sic] that the Plaintiff did not know or could not have known the terms or conditions of the contract between the Plaintiff and the Defendant. Jeffrey Timbers could not possibly have opened the account or be deemed to have knowledge of the opening of this bank account...

6The factum goes on to say that the fact that there was no written agreement between the Plaintiff and the Defendant arose or became known only after Gordon J’s Order. Specifically, “the Plaintiff had no means of ascertaining that there was no agreement. This information was solely in the possession of the Defendant which was first disclosed in February 2012.”

7At paragraph 19 of the Plaintiff’s factum, the following is described as “new evidence”:

a. The customer’s name was Jeffrey Edwin Timbers. The monies in the account were for the benefit of Jeffrey Timbers but he was not able to manage his affairs and that Gordon Wood was appointed to look after the affairs of Jeffery[sic] Timbers.

b. The Defendant’s document retrieval policy is six years plus the current year. Account opening information is retained.

c. The Defendant was not able to locate the account opening agreement or the debit card agreement.

8Paragraph 30 of the Plaintiff’s factum sets out the following:

In 2007, the Plaintiff could not have known of the terms of the contract as the Plaintiff had been in a coma and the guardian of property refuses to account. All documents are in the hands of the defendant Bank or the defendant guardian of property. The standard form account agreements are contracts of adhesion and generally place the entire risk of loss on the customer. In the absence of any agreement the Bank no longer has the protection of these terms and this only came to the plaintiff’s attention this February.

9Finally, the factum says this at paragraph 35:

The evidence is material in that it raises the issue of discoverability. The law in Ontario is clear that the limitation period does not begin to run until the Plaintiff knows the material facts in order to arrive at a determination.

Defendant’s Position:

10The Plaintiff should not be granted leave to amend the “Fresh as Amended” Statement of Claim because:

(a) the proposed amendments allege a cause of action for breach of contract after the expiry of the limitation period;

(b) the proposed amendments are a repetition of the allegations already contained in the “Fresh as Amended” Statement of Claim and result in a prolix pleading;

(c) the motion is a collateral attack on the Order of Gordon J, and therefore an abuse of process; and

(d) to grant the relief would result in prejudice that cannot be compensated by costs.

Analysis:

11I need only address the Defendant’s position that what the Plaintiff is trying to do is plead a new cause of action after the expiry of the limitation period.

12Firstly, the “new evidence” referred to by counsel is not new evidence at all. The Affidavit of Rose Muscolino, sworn April 25, 2011, and filed in support of the first motion to amend, contains the following statement at paragraph 10:

By letter dated December 13, 2006, the Defendant acknowledged that account number 30882-1138227 was owned by Jeffrey Edwin Timbers.”

13As early as April 2011, Plaintiff’s counsel was aware that the account in question was in the name of Jeffrey Edwin Timbers.

14Secondly, it is also incorrect to characterize the lack of a written agreement between the Plaintiff and the Defendant as new evidence. The Notice of Motion dated February 15, 2011, for leave to amend the Statement of Claim, ultimately dealt with by Gordon J in June, 2011, has attached to it a draft “Fresh as Amended” Statement of Claim.

15At paragraph 39 of the draft, one can read the following:

There is no written agreement between Jeffrey and BNS. Jeffrey pleads that in the absence of a written agreement, the parties have agreed to the following implied terms...

16The above statement is virtually identical to the submission made by Plaintiff’s counsel at paragraph 27 of his factum for the motion before me. Clearly, the lack of a written agreement between the Plaintiff and the Defendant was known to counsel before Justice Gordon heard the motion for the leave to amend the Statement of Claim.

17The proposed amendments raise a new cause of action after the expiry of a limitation period, just like they did in 2011.

18Further, the Plaintiff has very obviously failed to establish that the facts he relies upon in his request to vary Gordon J’s Order are facts which have arisen after the Order and which could not have discovered prior to the Order.

19I do not believe that it is necessary for me to address any further submissions of either the Plaintiff or the Defendant on this motion.

20The motion is dismissed. If the parties are unable to agree on costs, they are to communicate with the Trial Coordinator within thirty (30) days of this Ruling, in order to set a date and time to argue costs.