SUPERIOR COURT OF JUSTICE

Woodstock Small Claims Court

Woodstock Claim No. 481-12

415 Hunter Street, Woodstock, Ontario

B E T W E E N:

1535323 ONTARIO LTD., o/a
JEASNIC ENTERPRISES

Plaintiff

• and -

ALLEN VAN RAVENSWAAY

Defendant

(Motion Heard: January 15, 2013)

Appearances:

Counsel for the Plaintiff: D. Wozniak
Counsel for the Defendant: E. Van Drunen, Student-at-law

REASONS

I - BACKGROUND

[1] This is a motion by the Plaintiff for an order adding Nature Pork Systems Inc. as a Defendant to this action or in the alternative to replace the named Defendant, Allen Van Ravenswaay with Nature Pork Systems Inc.

II - FACTS

[2] The facts underlying in this motion are fairly simple. On May 8, 2008 the Plaintiff Corporation entered into a production contract with a Corporation, Nature Pork Systems Inc. Essentially Nature Pork Systems Inc. was to supply hogs and maintain them in the facilities owned by the Plaintiff Corporation. Pursuant to the production contract the hogs were shipped out in "turns" from the facilities owned by the Plaintiff and pursuant to the contract Nature Pork Systems Inc. was to pay for each hog shipped out as well as a bonus. There were a total of 5 turns. The payment owing for the last turn was paid on or about June 18, 2010. The contract states "The Producer agrees to a 2 year contract". As indicated there were a total of 5 turns. It is undisputed that the bonuses owing for turns 1, 2 and 5 were paid however no bonuses were paid for turns 3 and 4.

III - ISSUES

[3] The following issues are raised by this motion and must be determined by the Court:

i) On what date did the limitations period commence?

ii) Related to the first issue on what date did the limitation period expire?

iii) Is the Plaintiff entitled to add a party as a defendant if the limitation period has expired as of the date the motion was first brought before the Court?

IV - ANALYSIS

[4] It is the Plaintiff's position that, while the contract was made May 8, 2008 and was for a stated 2 year period, it is not correct to say that the limitation period started May 8, 2010. The Plaintiff's position is that the limitation period did not commence until a reasonable time to submit the invoice by the Plaintiff and a reasonable time to pay the invoice had expired. In support of that proposition the Plaintiff's counsel cites the decision of Hugh Munro Construction Ltd. and Moschuk, 2011 ONSC 3271. Shaw J. cites the decision of G.J. White Construction Ltd. v. Palermo (1999), 2 C.P.C. (5th) 110 (S.C.J.), a decision of Nordheimer J.

[5] Nordheimer J. in G.J. White Construction Ltd. and Palermo stated:

"I have therefore concluded that the cause of action in this particular case arose from the time after two events took place - the expiration of a reasonable period of time for the plaintiff to deliver an invoice to the defendants, and the expiration of a reasonable time for the defendants to pay that invoice."

[6] Nordheimer J.'s reasoning has been adopted in East-West Disposal Service Ltd. v. Jerudan Developments Ltd. 2003 Carswell Ont. 855 (S.C.J.) and Delmar Construction Inc. v. Toronto (City) [2008] O.J. No. 1623 (S.C.J.).

[7] What, then, in this case is the expiration of a reasonable period of time for the Plaintiff to deliver an invoice to the Defendant and the expiration of a reasonable time for the Defendant to pay that invoice? There is no evidence before me as to when the invoices for turns 1 and 2 or rendered or paid nor is there any evidence as to the usual commercial practice as to the rendering of invoices or the payment of those invoices as between the Plaintiff and Nature Pork Systems Inc. with respect to this particular contract. What is set out in the Affidavits as evidence before me is that the contract was commenced May 8, 2008 and it was a 2 year contract. In addition the evidence is that the payment owing for the last turn (turn number 5) was paid on or about June 18, 2010. I therefore conclude on balance that 30 days to render the invoice and 30 days to pay the invoice were reasonable times and therefore the limitation period, for the purposes of this motion commenced July 8, 2010. It therefore follows that the limitation period expired July 8, 2012.

[8] I am unable to conclude, as urged by Ms. Wozniak on behalf of the Plaintiff that, because the invoice was sent by the Plaintiff to Nature Pork Systems Inc. on December 31, 2010 that this is the commencement date of the limitation period. As Nordheimer J. stated in G.J. White Construction Ltd. v. Palermo at paragraph 20:

"In my view it is neither the time that the work was done nor is it the time when the invoice was delivered. To select the latter date would allow the plaintiff to effectively toll the limitation period for as long as it wished by simply withholding delivery of an invoice..."

[9] My conclusion is supported by the Ontario Court of Appeal decision of Hare v. Hare 2006 41650 (ON CA), [2006] O.J. No. 4955 at paragraph 41 where the Court states "If a demand for repayment must be made before the limitation period would begin to run and no demand is made, the limitation period would never begin to run and the claim would exist in perpetuity."

[9] In conclusion I find that the limitation period commenced July 8, 2010 and expired July 8, 2012.

[11] Ms. Wozniak, on behalf of the Plaintiff cites section 21 of the Limitations Act, 2002 as a fall back position in that while section 21 precludes the addition of a party after the expiration of a limitation period, it does not however prevent the correction of a misnaming or misdescription of a party i.e. a party's name may only be changed if there is a misnomer. A new party cannot be added.

[12] It is clear from the decision of the Ontario Court of Appeal in Joseph v. Paramount Canada's Wonderland, 2008 ONCA 469 that a Court's common law discretion to extend limitation periods under the new Limitations Act by applying the doctrine of special circumstances has been extinguished.

[13] There is however faint hope for the Plaintiff's position and that is the "litigating finger" test referred to in Sorokataya v. Keith [2010] O.J. No. 3429 at paragraph 9. The Court stated:

"This test is know as the litigating finger test. In other words, would a reasonable person, upon reading the document, know that she is the intended recipient (or that the litigating finger was pointed at her)? The Ontario Court of Appeal has suggested that there are two main elements at play with regard to the litigating finger test.

1. First the plaintiff must intend from the beginning to name the correct party.

2. Second the intend defendant must have notice of the claim ...."

The Ontario Court of Appeal in Lloyd v. Clark, 2008 ONCA 343 at paragraph 4 states:

"The case law amply supports the proposition that where there is a coincidence between the plaintiff's intention to name a party and the intended party's knowledge that it was the intended defendant, an amendment may be made despite the passage of the limitation period to correct the misdescription or misnomer ..."

[15] It is important to note that the Claim was issued April 27, 2012. According to the defence it was delivered to the named Defendant, Allen Van Ravenswaay on May 7, 2012. The Defence was filed with the Court May 31, 2012. There is no Affidavit of Service on the Plaintiff of the Defence, however Bruce Herlick, an officer and director of the Plaintiff, Corporation at paragraph 12 states:

"I erroneously named Allen [Van Ravenswaay] as the sole defendant in this action. This was first brought to my attention when the Defence was received, and the error was later confirmed at the settlement conference of this action on August 14, 2012. I understand now that I ought to have named Nature Pork Systems Inc. as a defendant."

[16] It is significant to note that the Defence, paragraphs 2 and 3, states as follows:

"The Defendant [Allen Van Ravenswaay] further claims that there is no privity of contact between the Plaintiff and the Defendant. The contract the Plaintiff has attempted to ground this action on is clearly between the Plaintiff and Nature Pork Systems Inc., not the Plaintiff and the Defendant. This is further evidenced by the invoice the Plaintiff included in the Plaintiff's Claim.

As the Plaintiff has filed a claim against the Defendant, and Nature Pork Systems Inc. is not named as an additional defendant, the claim is without merit."

By delivery of the Defence by Mr. Van Ravenswaay, the Plaintiff was put on actual notice that the correct Defendant, the Corporation, Nature Pork Systems Inc. had not been named as a Defendant. I conclude on a balance of probabilities that the Plaintiff had notice of this significant omission i.e. not naming the Corporation, Nature Pork Systems Inc. as a Defendant, before the expiration of the limitation period and yet the Plaintiff failed to bring a motion to add Nature Pork Systems Inc. as a Defendant. Although having had actual notice of the omission of the proper party prior to the expiration, the Plaintiff took no steps to remedy this deficiency.

[18] For these reasons I dismiss the Plaintiff's motion. I wish to thank counsel for their thoughtful, thorough, and able submissions. Submissions on costs of the motion may be made in writing. The Defendant has 15 days to make costs submissions not to exceed two pages in length. The Plaintiff has 10 days to respond and the Defendant has 7 days after that to make any reply.

Dated this ____ day of January, 2013.

A.P. Parlee, DJ