ONTARIO

SUPERIOR COURT OF JUSTICE

Court File No.: CV-06-0120
Date: 20130426

BETWEEN:

1326111 ONTARIO LIMITED operating as STEEL TILE CO.

Plaintiff

– and –

NORTH AMERICAN TRADE EXPRESS INC., NATE CONSULTANTS CANADA INC. and JAMES BERNARD DE LIVERA carrying on business as NORTH AMERICAN TRADE EXPRESS INC.

Defendants

M.J. Valente, for the Plaintiff

L.E. Lung, for the Defendants Nate Consultants Canada Inc. and James Bernard De Livera

North American Trade Express Inc. not participating in motion

Heard: April 3, 2013

RULING ON MOTION

MULLIGAN J.

[1] 1326111 Ontario Limited (“Steel Tile Co.”) bring a motion to strike out a portion of the Defendants’ Fresh as Amended Statement of Defence. The Defendants Nate Consultants Canada Inc. (“Nate”) and James Bernard De Livera (“De Livera”) oppose the relief sought. Default judgment has already been obtained against the Defendant North American Trade Express Inc. which did not participate in this motion.

[2] As the motion commenced, counsel for both sides indicated that certain items regarding undertakings and timetables had been agreed to on consent and that consent forms part of this endorsement.

[3] On the motion the thrust of the moving party’s argument was that para. 16 of the Defendants’ Fresh as Amended Statement of Defence ought to be struck. That paragraph provides as follows:

The Plaintiff’s Claim is Statute Barred

The Defendants’ pleading plead that the Plaintiff’s claim against them is more than two years old and statute barred for lateness. The Plaintiff’s claim was originally commenced on or about February 13, 2006. Nate and De Livera were not added as parties until April 4, 2011.

[4] The essence of Steel Tile’s claim is that the issue of the limitation period has already been adjudicated on a previous motion before Madam Justice Eberhard on October 4, 2011. Steel Tile submits that these Defendants are therefore estopped from raising this issue as an attempt to relitigate an issue already determined. The Defendants submit that Justice Eberhard did not specifically rule on this issue, it was outside of the scope of the relief sought and has not been finally determined.

[5] The following background will provide context for the discussion that follows.

[6] The Plaintiff originally commenced an action against a sole defendant North American Trade Express Inc. February 3, 2006.

[7] On February 15, 2011 Justice Edwards granted the Plaintiff leave to add Nate and De Livera as Defendants. Justice Edwards acknowledged that the new Defendants were at liberty to plead a limitation defence. He also struck out the Statement of Defence of North American Trade Express Inc. and subsequently granted default judgment against it for $122,156.25.

[8] The Plaintiff filed an amended Statement of Claim on April 4, 2011. These Defendants then brought a motion under Rule 21 to strike out the amended Statement of Claim for disclosing no reasonable cause of action. On October 4, 2011 Justice Eberhard dismissed the motion by way of a brief handwritten endorsement. No formal order has been taken out. After briefly reviewing the defence submissions Justice Eberhard stated:

I am persuaded by a single fact. De Livera sought and was granted leave to represent his corporation North American Trade. This purported to be in the context of settlement discussions. However, the company was dissolved by that time and De Livera had commenced to carry on the same business activities at Nate. That created a live issue of alter ego which was not discoverable until De Livera purported to represent a dissolved corporation.

[9] No formal order was taken out as a result of that endorsement. Thereafter, these Defendants filed a Fresh Amended Statement of Defence which included para. 16 above noted. The Plaintiff took a number of fresh steps thereafter. It served a Reply in January of 2012. It served an unsworn Affidavit of Documents November 2012 and took steps to schedule Examinations for Discovery which were to be held in January or February of 2013. Further, at a status hearing which occurred October 26, 2011, Justice Healey ordered that examinations for discovery be completed by April 30, 2012 and the action set down for trial by October 26, 2012 . Contrary to that order, the Plaintiff has not set the matter down for trial.

[10] The issue on this motion turns on an interpretation of the brief endorsement of Justice Eberhard which the Defendant submits is open for interpretation. As the Defendants set out in their factum at para. 51:

It is far from “plain and obvious” based only on a reading of Her Honour’s handwritten endorsement, whether it was Her Honour’s intention to finally determine if the Plaintiff’s action was commenced out of time, or if Her Honour merely decided that there was a live issue of discoverability that required further adjudication. No formal order was taken out.

[11] For the following reasons, I dismiss the Plaintiff’s motion to strike para. 16 of the Fresh as Amended Statement of Defence. First, the Plaintiff took significant fresh steps after receiving the defence. Second, the Plaintiff failed to comply with the order of Justice Healey as to the timelines set down. Third, it is not plain and obvious that Justice Eberhard made a final determination about a limitation period, when she simply and briefly dismissed the Defendants’ motion to strike the Amended Statement of Claim. It is not clear that she had a full evidentiary record before her, nor is it clear that she was asked to adjudicate on a question of law arising out of the limitation period.

[12] Under the circumstances it would be manifestly unfair to grant the relief sought by the Plaintiff at this step of the proceedings. The issues can be more fully canvassed on a summary judgment motion or a trial of the issue.

[13] The Plaintiff’s motion to strike para. 16 of the Fresh Amended Statement of Claim is dismissed.

[14] On a consent basis, the court orders that:

(1) De Livera answer the outstanding undertakings given at the examination in aid of execution of the judgment debtor, North American Trade Express Inc. on July 15, 2011 within 30 days of the date of this order;

(2) the parties shall serve their Affidavit of Documents or Supplementary Affidavits of Documents within two weeks of the release of the court’s decision on this motion;

(3) examination for discovery shall be completed by May 31, 2013 and will be held in Toronto;

(4) the Plaintiff shall set this action down for trial by July 31, 2013.

Costs

[15] The named defendants have achieved a level of success on this motion but the parties did arrive at a partial consent and by agreement, narrowed the issues to be argued. If the parties cannot reach agreement as to costs, then the Defendants may make written submissions within 20 days of the release of this order not exceeding three pages and the Plaintiff will have a further ten days to reply with submissions not exceeding three pages.

MULLIGAN J.

Released: April 26, 2013