2013 ONSC 4571
COURT FILE NO.: CV-10-406325
MOTION HEARD: JUNE 27, 2013
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Pro-Kyoto International Inc. and EcoMedia Direct Inc. v. City of Toronto
BEFORE: MASTER R.A. MUIR
COUNSEL:
T. Colleen Feehan for the plaintiffs
Darrel A. Smith for the defendant
REASONS FOR DECISION
[1] The plaintiffs bring this motion pursuant to Rule 26.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”) for an order granting them leave to amend their statement of claim. The defendant opposes certain of the requested amendments on the basis that they amount to an attempt by the plaintiffs to assert new causes of action after the expiry of the relevant limitation period.
BACKGROUND
[2] The plaintiffs’ claim is based on a series of agreements entered into with the defendant pursuant to which the plaintiffs were to supply waste bins to be installed on city streets. The agreements are described by the plaintiffs as the “Silver Bins Agreements”. Pursuant to the Silver Bins Agreements, the plaintiffs were permitted to sell and place advertising on waste bins installed at various locations throughout the city of Toronto. The waste bins, along with other similar items and structures, are commonly known as “street furniture”. The Silver Bins Agreements apparently expired on October 14, 2009.
[3] This action was commenced on July 7, 2010. The plaintiffs seek damages from the defendant in the amount of $20,000,000.00 for, among other things, breach of contract, fraudulent misrepresentation, negligent misrepresentation, negligence, trespass, breach of duty of good faith and unjust enrichment.
[4] In their statement of claim the plaintiffs allege, among other things, that in June and July 2006, the Toronto City Council adopted two staff recommendations described by the plaintiffs as the first and second advertising directives (the “Advertising Directives”). The plaintiffs allege that the Advertising Directives provided that all existing contracts of the nature the plaintiffs had with the defendant would be concluded on their expiry dates and that the total amount of advertising on street furniture located on city streets was to be reduced from its then current level. The plaintiffs allege that the Advertising Directives were not disclosed to them. The plaintiffs further allege that the non-disclosure of the Advertising Directives constituted a breach of the defendant’s good faith obligations to the plaintiffs.
THE OPPOSED AMENDMENTS AND THE POSITION OF THE PARTIES
[5] The amendments to which the defendant objects involve certain statements allegedly made by employees of the defendant in meetings with the plaintiffs’ representatives in September 2006 and March and April 2007. These proposed amendments are found at paragraphs 24, 25, 26, 28 and 29 of the proposed Fresh as Amended Statement of Claim. The relevant proposed amended paragraphs read as follows:
More particularly, during a meeting held on September 22, 2006, between EcoMedia and the City, in breach of its duty of good faith as aforesaid, to make the assumption of the reduced but still significant Eucan debt referred to in paragraph 19(a) acceptable and to avoid the consequences set out in paragraph 22 above, a senior City staff proposed various alternative methods (the “Proposals”) by which the parties could make the Silver Bin Agreements financially viable for EcoMedia.
These methods included the possibility of the City extending the Silver Bin Agreements for an additional 3 to 5 years and the City possibly purchasing or renting the Silver Bins following the Expiration Date defined below.
These proposals were made with the intent of keeping hidden from the Plaintiffs, the existence, import and effect of the First and Second Directive as such Directives clearly were inconsistent with the same.
Some of such requests were made during meetings with City representatives on March 21 and April 3, 2007. More particularly, during such meetings, EcoMedia was advised by City representatives that if it requested specific new locations, those requests would be granted. These specific locations were referred to by the City representatives as “Golden Box” placements.
On each occasion however, the City denied such requests, including those relating to “Golden Box” placements.
[6] The defendant takes the position that these proposed amendments refer to new oral promises relied upon by the plaintiffs. No mention of these meetings and “promises” can be found anywhere in the earlier versions of the statement of claim. The plaintiffs obviously knew about the statements when they were made in 2006 and 2007 and the time for the plaintiffs to make any claims arising from the alleged statements and promises has long since passed.
[7] The plaintiffs argue that these proposed amendments simply provide particulars of the causes of action that have previously been pleaded. No new causes of action are being advanced.
ANALYSIS
[8] Rule 26.01 provides as follows:
26.01 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.
[9] Rule 26.01 is mandatory unless a responding party can demonstrate non-compensable prejudice. The Court of Appeal has held that where an applicable limitation period has expired, a plaintiff cannot avoid the application of that limitation period by amending an existing claim to add a new party or to advance a new cause of action. The common law doctrine of special circumstances, which was previously used by the courts to extend limitation periods, no longer applies. See Joseph v. Paramount Canada’s Wonderland, 2008 ONCA 469 at paragraphs 16 and 25-27. Therefore, to the extent that the proposed amendments constitute new causes of action being advanced after the expiry of the relevant limitation period, they will not be permitted.
[10] The question of what constitutes a “new cause of action” in connection with a motion of this nature was summarized by Master Dash in Ascent Inc. v. Fox 40 International Inc., [2009] O.J. No. 2964 (S.C.J. – Master). At paragraph 3 of that decision, Master Dash states as follows:
A "cause of action" has been defined as a "factual situation the existence of which entitles one person to obtain from the court a remedy against another person." The key is whether substantially all of the material facts giving rise to the "new cause of action" have previously been pleaded or whether new facts are sought to be added that are relied upon to support a new cause of action. A new cause of action is not asserted if the amendments simply plead an alternative claim for relief arising out of the same facts previously pleaded and no new facts are relied upon, or amount simply to different legal conclusions drawn from the same set of facts, or simply provide particulars of an allegation already pled or additional facts upon which the original right of action is based.
[Footnotes omitted]
[11] I have reviewed the pleadings and the proposed amendments with these principles in mind. I have come to the conclusion that the proposed amendments to which the defendant objects do not amount to new causes of action. In my view, they are properly viewed as providing particulars of allegations already pleaded and additional facts upon which the plaintiffs’ original right of action is based.
[12] The proposed amendments at paragraphs 24, 25 and 26 of the proposed Fresh as Amended Statement of Claim deal with the September 22, 2006 meeting. In my view, it is clear that the references in these proposed amendments to oral statements and proposals made by the defendant’s staff members are being pleaded only in connection with the plaintiffs’ existing breach of good faith claim in relation to the alleged non-disclosure of the Advertising Directives. Proposed paragraph 26 makes it clear that the plaintiffs are alleging that the alleged proposals were made by the defendant’s employees “with the intent of keeping hidden from the Plaintiffs, the existence, import and effect of the First and Second Directive”. In my view, this sentence makes it clear that these allegations relate to and flesh out the existing claim for breach of good faith in connection with the non-disclosure of the Advertising Directives. They do not amount to a new cause of action.
[13] The proposed amendments at paragraphs 28 and 29 of the proposed Fresh as Amended Statement of Claim deal with the March and April 2007 meetings and the plaintiffs’ requests of the defendant for more locations at which it could install its waste bins. In my view, these paragraphs also simply provide particulars and supporting facts in relation to the plaintiffs’ existing allegations that the defendant had failed to disclose the existence of the Advertising Directives in breach of its alleged duty of good faith. They provide additional detail and expand upon the narrative of events leading up to what the plaintiffs allege was the defendant’s disclosure of the existence of the Advertising Directives for the first time in February 2009. In my view, they do not amount to a new cause of action.
[14] Finally, I note that the plaintiffs’ proposed fresh pleading does not state that they relied on any of these alleged statements or proposals to their detriment and have suffered damages as result.
[15] For the reasons set out above, I have concluded that the plaintiffs should be granted leave to amend their statement of claim as requested in their notice of motion. Given this conclusion, it is not necessary that I deal with the plaintiffs’ proposed amendments to its reply and defence to counterclaim.
ORDER
[16] I therefore order as follows:
(a) the plaintiffs are hereby granted leave to amend their statement of claim in accordance with the proposed Fresh as Amended Statement of Claim at Tab 1A of the plaintiffs’ motion record; and,
(b) if the parties are unable to reach an agreement on the issue of costs, they shall make brief submissions in writing by no later than July 26, 2013.
Master R.A. Muir
DATE: July 4, 2013