COURT FILE NO.: 4404-11

DATE: 2013/01/02

SUPERIOR COURT OF JUSTICE - ONTARIO

BETWEEN:

BERNICE PETRIE, JODI LYNN PETRIE, KORY JOSEPH PETRIE and QUINN PETRIE by her Litigation Guardian, Carl Allan Davidson (Plaintiffs)

-and-

STEVEN ANDREW MEEKES, THE OPTIMIST CLUB OF DOWNIE INC. and STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY (Defendants)

AND BETWEEN:

COURT FILE NO.: 3724-11

DATE: 2013/01/03

SUPERIOR COURT OF JUSTICE - ONTARIO

BETWEEN:

GREGORY ALAN TUFFNAIL, PATRICIA DIANE TUFFNAIL, DAVID ALAN TUFFNAIL and MICHAEL ALAN TUFFNAIL (Plaintiffs)

-and-

STEVEN ANDREW MEEKES, THE OPTIMIST CLUB OF DOWNIE INC., and STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY (Defendants)

BEFORE: JUSTICE H. A. RADY

COUNSEL: Douglas Bryce, for the Defendants Gregory Alan Tuffnail, Patricia Diane Tuffnail, David Alan Tuffnail and Michael Alan Tuffnail

Dan Mailer, for the Plaintiffs Bernice Petrie, Jodi Lynn Petrie, Kory Joseph Petrie and Quinn Petrie by her Litigation Guardian, Carl Alan Davidson

Kevin Bunt, for the Proposed Defendant, Tom Bolton

HEARD: December 19, 2012

ENDORSEMENT

The Facts

[1] These actions arise from a motor vehicle accident that occurred on September 13, 2009. Gregory Tuffnail and Kristopher Petrie were passengers in a vehicle driven by Steven Meekes. The three had left a wedding reception for a friend, Tom Bolton, held at the Optimist Club of Downie. As a result of a single car accident, Mr. Petrie was killed and Mr. Tuffnail was injured.

[2] A statement of claim was issued in the Tuffnail matter on March 18, 2011 and in the Petrie matter on June 30, 2011. Both actions named Mr. Meekes, The Optimist Club of Downie and State Farm as defendants.

[3] As against The Optimist Club, it was alleged that it carried on business as a liquor licensed establishment and it served alcohol to Mr. Meekes to the point of or beyond intoxication.

[4] The Optimist Club retained Mr. Wallace to defend the action although a Notice of Intent to Defend was not served until January 12, 2012.

[5] In the meantime, a statement of defence and cross-claim was filed on behalf of Mr. Meekes dated July 7, 2011. Mr. Meekes pleaded as follows:

This Defendant pleads that he was served alcohol to excess at [sic] the employees, agents or servants of the co-defendant The Optimist Club of Downie Inc. prior to the motor vehicle accident, and as a consequence of such over service his ability to operate a motor vehicle was impaired.

[6] In support of his cross-claim, he repeated and relied on the allegations against the Optimist Club set out in the statement of claim.

[7] Similarly, in its Statement of Defence and Cross-claim, dated April 6, 2011, State Farm alleged that:

“The Optimist Club of Downie Inc., contributed to the accident and alleged injuries by serving the Defendant, Steven Andrew Meekes, alcoholic beverages to the point of, or beyond intoxication, so that he was in danger of causing injury to other persons, in violation of s. 39 of the Liquor License Act of Ontario.”

[8] On February 21, 2012, more than two years after the accident, counsel for the Optimist Club wrote to plaintiffs’ counsel advising that for the night of the accident, it had rented the premises to one Tom Bolton who had obtained the liquor licence, purchased the alcohol and hired the bartenders.

[9] Motions were brought thereafter seeking to add Mr. Bolton as a defendant, on the basis that his potential liability was only discovered when counsel for the Optimist Club sent his correspondence in February, 2012.

[10] Mr. Bolton resists the motions on the basis that the plaintiffs knew or ought to have known with the exercise of reasonable diligence of Mr. Bolton’s possible involvement before the expiry of the limitation period.

The Evidence

[11] The Tuffnail plaintiffs have filed affidavits sworn by Mr. Virtue and Mr. Piekosz of the Siskinds firm and by their client Mr. Tuffnail. The Petrie plaintiffs rely on an affidavit sworn by Mr. Vandenbosch, an associate in their lawyer’s office.

[12] Mr. Bolton has filed an affidavit, as well, setting out his relationship with Mr. Tuffnail and Mr. Petrie and their presence at his wedding reception.

[13] There were no cross-examinations on the affidavits and as a result, the submission that the plaintiffs were not aware of Mr. Bolton’s potential liability until February, 2012 is essentially uncontroverted although I suppose that Mr. Bolton wishes the court to draw an inference that by virtue of the men’s friendship, the plaintiffs must have known about Mr. Bolton’s potential involvement at an early date.

The Parties’ Positions

[14] The plaintiffs submit that the amendment should be granted because of the application of discoverability.

[15] The essence of Mr. Bolton’s submission is that the plaintiffs knew the identity of Tom Bolton and the particulars that form the basis of their claim.

The Law

[16] The Limitations Act, 2002 provides as follows:

Basic limitation period

4. Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered. 2002, c. 24, Sched. B, s. 4.

Discovery

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). 2002, c. 24, Sched. B, s. 5 (1).

Presumption

(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. 2002, c. 24, Sched. B, s. 5 (2).

[17] The case law interpreting these provisions is well developed. I can do no better than to quote from the decision of Mulligan J. in Dalianes v. Town of Newmarket, 2010 ONSC 5316 who summarizes the applicable principles from earlier decisions.

[18] He notes the following:

In any motion to add non-party defendants based on discoverability principles in the Limitations Act, 2002 there are a number of tensions at play. These tensions were summarized in Madrid v. Ivanho Cambridge Inc., 2010 ONSC 2235, 2010 Carswell Ont. 2799. As Lauwers J. stated at para. 13:

The dominant policy thrust of the system of justice is that cases should be heard on the merits. Another policy thrust, found in the Limitations Act, 2002, is to encourage a plaintiff to commence an action as soon as possible. But a third and tempering policy thrust is found in s.5 of the Limitations, 2002, which codifies discoverability. …These policy thrusts are to be reasonably balanced.

As Lauwers J. further notes at para. 14:

It is not unusual for possible defendants to emerge as a result of information received during the opposite party’s document production or during the discovery process in an action. …In the absence of an unexpected or unusual trigger, there is little to be gained by imposing judicially a freestanding duty on plaintiffs to write pro forma letters to defendants inquiring about the identity of other possible defendants under the rubric of due diligence in s. 5 of the Limitations Act, 2002.

The plaintiff and the responding party, Roto-Mill, refer the court to that often cited case of Wong v. Adler, 2004 CanLII 8228 (ON SC), [2004] O.J. No. 1575, aff’d. 2004 CanLII 73251 (ON SCDC), 76 O.R. (3d) 237 (Ont. Div. Ct.). Master Dash outlined his view as to the proper approach for a motions judge on matters such as this at para. 45:

What is the approach a judge or master should take on a motion to add a defendant where the plaintiff wishes to plead that the limitation period has not yet expired because she did not know of, and could not with due diligence, have discovered the existence of that defendant? In my view, as is clearly implied in Zapfe, the motions court must examine the evidentiary record before it determines if there is an issue of fact or if credibility on the discoverability allegation, which is a constituent element of the claim. If the court determines that there is such an issue, the defendant should be added with leave to plead a limitations defence.

In Wakelin v. Gourley, 2005 CanLii 23123, Master Dash referred again to his decision in Wong v. Adler, and went on to indicate at para. 9: “It will be rare that the applicability of the discoverability principle based on due diligence will be determined on a motion to add a party.”

As to the amount of evidence required by a plaintiff on such a motion, Master Dash stated at para. 14:

The question is how much evidence must the plaintiff put in at the pleadings amendment stage to establish that the proposed defendants could not have been indemnified with due diligence within the limitation period? The short answer is: not very much. As stated by the Court of Appeal in Zapfe: In most cases, one would expect to find, as part of a solicitor’s affidavit, a list of the attempts made by the solicitor to obtain information to substantiate the assertion that the party was reasonably “diligent” and to provide “an explanation for why she was unable to determine the facts”.

In Wong v. Sherman, 1998 Carswell Ont. 1413, Wilkins J. dealt with a motion to add new defendants and had before him affidavit material by the plaintiff’s solicitor which indicated she had no knowledge of the proposed defendants until they came to her attention after the completion of the examination for discovery. Wilkins J. granted the motion to add the defendants and stated at para. 28:

In the case at bar, the issues related to both discoverability and the diligence of the plaintiff’s counsel, the material before me relates to credibility and, as such, would be better decided in the manner set out in the authorities cited above, that is to say, before a trial judge.

[19] To the foregoing I would add that the language of Rule 26 is mandatory although the proposed amendment must meet the threshold of tenability: Plante v. Industrial Alliance Life Insurance Co. (2003), 66 O.R. (rd) 74 (Master). Rule 5 confers a discretion to add parties on terms that are just unless there is non-compensable prejudice (as in Rule 26).

[20] Finally, I would observe that there is authority for the proposition that a limitation is not a defence unless pleaded: D.S. Park Waldheim Inc. v. Epping (1995), 1995 CanLII 7091 (ON SC), 24 O.R. (3d) 83 (Gen. Div.); Strong v. P. (M.M.) (2000), 50 O.R. (rd) 70 (C.A.); leave to appeal to S.C.C. refused.

Analysis

[21] I am satisfied that the plaintiffs should be granted leave to issue amended statements of claim adding Mr. Bolton as a defendant. Mr. Bolton is at liberty to raise the limitation period as an affirmative defence.

[22] The evidence suggests that the plaintiffs were not aware of the arrangements between The Optimist Club and Mr. Bolton. That the plaintiffs believed that the The Optimist Club was in charge of the wedding reception is strengthened by the fact that one of its members acted as bartender. The plaintiffs say they did not know that Mr. Bolton had arranged for the liquor licence and to hire the bartender. In other words, they were strangers to the contract between Mr. Bolton and the Club.

[23] The conclusion is even stronger for the Petrie plaintiffs because the source of the “knowledge” alleged by Mr. Bolton was that of Mr. Petrie, who perished in the accident. There is no evidence that his family possessed any information about Mr. Bolton’s possible involvement.

[24] To my mind, this is not one of those rare cases where a determination of the limitation issue should be made at this early stage of the proceedings. The issue of discoverability should be determined on a proper evidentiary record. I am not persuaded that there is any prejudice, at least not on the strength of the record before me. Certainly, there is nothing in Mr. Bolton’s affidavit suggesting prejudice. Indeed, his recollection of the night in question and the days following seems very vivid indeed.

[25] The motions are therefore granted. My preliminary view is that the plaintiffs are seeking an indulgence and that costs would not be ordered. However, if counsel wish to persuade me otherwise, I will receive brief written submissions from the plaintiffs by January 18, 2013 and the added defendant by February 1, 2013.

“Justice H. A. Rady”

Justice H. A. Rady

Date: January 2, 2013