Court File and Parties

COURT FILE NO.: CV-12-3657-00

DATE: 2013 09 10

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: VASUKI KARUNAKARAN, Plaintiff

AND:

JOHN DOE and RBC INSURANCE, Defendants

BEFORE: Justice André

COUNSEL:
Faranaz Siganporia, for the Plaintiff

Julie Amourgis, for the Moving Parties, Tuo Tan and Michael King

George Nathanael, for the Defendant, RBC Insurance

HEARD: August 21, 2013

ENDORSEMENT

[1] The defendant moving parties seek leave to appeal the interlocutory order of Tzimas J. granting the plaintiff’s motion to amend his statement of claim by adding them as defendants. The defendants contend that Tzimas J. erred in law by adding their names after the expiration of the limitation period although the plaintiff offered no explanation why the moving parties had not initially been named in the plaintiff’s statement of claim.

[2] I am being asked to decide, pursuant to Rule 62.02(4) of the Rules of Civil Procedure, whether:

(1) Is there good reason to doubt the correctness of Tzimas J.’s order?

(2) Does the appeal involve matters of such importance that justify leave to appeal of Justice Tzimas’ order?

(3) If the moving parties are successful what quantum of costs would be considered fair and reasonable?

OVERVIEW

[3] Mr. Karunakaran’s vehicle was involved in an accident on August 27, 2010. The motor vehicle involved in the collision was driven by Tao Tan and owed by Michael Kung. A police officer prepared an accident report on the day of the accident.

[4] The plaintiff filed a statement of claim on August 21, 2012 but did not name the moving parties as defendants. The plaintiff brought a motion on December 12, 2012 seeking to add the moving parties as defendants. The plaintiff maintained that he only found out the identity of the owner and driver of the motor vehicle on December 11, 2012.

[5] The defendant Tao Tan deposed in his affidavit that the Motor Vehicle Accident Report which contained his name, Mr. Michael Kung’s name and their telephone numbers was faxed to the plaintiff’s first lawyer on July 11, 2011.

[6] No explanation was given by the plaintiff in his supporting documents what steps, if any, he took to ascertain the identity of the driver and vehicle owner prior to December, 2012.

[7] The defendant RBC Insurance has indicated that it intends to add the moving parties as third parties to the action, if the defendants’ motion succeeds.

TZIMAS J.’S DECISION

[8] Justice Tzimas held that the plaintiff met the requirements of the Rules for the addition of Tuo Tan and Michael King to his statement of claim. She held that her decision was without prejudice to the ability of the parties to adduce their defences including a limitations argument. She also opined that:

This is a motion that should not have had to be brought particularly since one way or another the two noted individuals are to be parties to this litigation, either as defendants, if this motion is granted, as it is, or as third parties, at the behest of RBC Insurance, if this motion were to fail.

LEGAL PRINCIPLES

[9] Rule 62.02(4)(b) provides that leave to appeal should be granted where there is good reason to doubt the correctness of the order in question and the appeal involves matters of such importance that justify the granting of leave to appeal.

[10] A moving party is not required to establish that the decision was wrong or probably wrong. All that is required is to establish that the correctness of the decision is open to very serious debate. Amato v. Welsh [2011] O.J. No. 2505 (ON. Div. Ct.).

[11] It is the correctness of the motion judge’s decision rather than the underlying reasons for the judge’s exercise of her discretion that is the proper subject of the leave application. Tarion Warranty Corp. v. Brookegreene Estates Inc., [2006] O.J. No. 1923 (Div. Ct.).

[12] The test to be applied in determining the start of a limitation period under the discoverability rule is when can it be said that the plaintiff knew, or by reasonable diligence could have discovered, the material facts on which to base a cause of action against the proposed defendant. Zapfe v. Barnes 66 O.R. (3d0 397, 2003 52159 (ON CA), [2003] O.J. No. 2856 (C.A.), para. 36.

[13] In seeking to add a defendant to an action after the expiration of the limitation period, the plaintiff must give a reasonable explanation on proper evidence as to why such information was not obtainable with due diligence. Wong v. Adler 2004 8228 (ON SC), [2004] O.J. No. 1575 (S.C.J.), affirmed 2004 73251 (ON SCDC), [2005] O.J. No. 1400 (Div. Ct.).

[14] As a general rule, amendments to pleadings outside the limitation period are not allowed. Mazzuca and Silvercreek Pharmacy Limited, unreported 27 November, 2001 (O.C.A.) para. 32.

[15] However, in special circumstances courts have a discretion to permit an amendment to add defendants despite the expiry of a limitation period. Swain Estate v. Lake of The Woods Hospital (1992), 9 O.R. (3d) (C.A.) (leave to appeal to SCC denied (1993)).

[16] Proof of the absence of prejudice will not guarantee an amendment to a statement of claim after the expiry of a limitation period. When a change of the parties is sought in those circumstances, the circumstances of all affected parties must be assessed to determine whether or not sufficient special circumstances exist to support the requested amendment. Mazzuca v. Silvercreek Pharmacy Limited, unreported, supra, para. 42.

ANALYSIS

[17] Following the accident on August 27, 2010, the investigating police officer prepared a report in which he identified the moving parties as having been involved in the accident. The report has the caption: “Detach and Give to Person Involved”.

[18] Counsel for the moving parties has construed this caption as proof that the plaintiff knew the identity of the moving parties on the very day of the accident.

[19] I disagree. This document cannot be regarded as proof that the plaintiff knew the identities of the moving parties on August 27, 2010. Additional information is required, such as affidavit evidence from an officer involved in the investigation, to establish that the plaintiff knew the identity of the moving parties on August 27, 2010.

[20] It is uncontested that the plaintiff filed his statement of claim after the expiration of the limitation period. The established case law states that the adding of parties to an action after the expiration of the limitation is not automatic nor is it contingent on the absence or presence of prejudice to the parties sought to be added. The plaintiff had the onus of providing a reasonable explanation or proper evidence why the information regarding the moving parties’ identity was not obtainable with due diligence.

[21] In this case, the plaintiff presented no evidence to Tzimas J. regarding any attempts made by him to ascertain the identity of the moving parties before the expiration of the limitation period.

[22] At the very minimum it was incumbent upon the plaintiff to include affidavit evidence in support of his motion to amend his statement of claim after the expiry of the limitation period, which revealed the steps taken by his solicitor to obtain information to support his position that he was reasonably diligent and provide an explanation for why he was unable to obtain the information in question: Wakelin v. Gourley et al. 2005 23123 (ONSC), para. 14.

[23] The plaintiff submits that even if the court finds that he did not provide a reasonable explanation or proper evidence why this information was not obtainable with due diligence, the court may nevertheless, in special circumstances, exercise its discretion to add the names of the moving parties after the expiration of the limitation period.

[24] The plaintiff however, presented no evidence regarding any special circumstances that may have justified a decision to amend his statement of claim after the expiry of the limitation period. He gave no reason why his first lawyer did not determine the identity of the moving parties before the expiration of the limitation period. He presented no evidence that the limitation period was missed because of the inadvertence of his lawyer, whether he has no other source of recovery or whether he may have full recourse against other parties.

[25] There is no question that the discoverability of the information was on the date of the accident. Given the uncontested fact that the limitation period commenced to run on that date and the absence of any evidence concerning any due diligence in affirming the identity of the moving parties, or any special circumstances that may have justified an amendment to the pleadings, the plaintiff’s motion should have been denied.

[26] In my view there are reasons to doubt the correctness of Justice Tzimas’ order.

[27] The question of the limitation period and the amendment of pleadings after its expiration is a matter the significance of which transcends this case.

[28] Accordingly, leave is granted to the moving parties to file an appeal to the Divisional Court.

COSTS

[29] The propriety of awarding costs in a matter is guided by s. 131 of the Courts of Justice Act, s. 57.01 of the Rules of Civil Procedure and the applicable jurisprudence. Costs should generally follow the cause and it is generally appropriate that the losing party should be responsible for the costs of the successful party.

[30] The award of costs should not so much reflect the actual costs claimed but what can be considered fair and reasonable. Zesta Engineering Ltd. v. Cloutier 2002 45084 (ON CA), [2002] O.J. No. 3738 (Ont. C.A.).

[31] The moving party seeks costs of $6,327.00 on a substantial indemnity basis. This amount is based on 12 hours of preparation and an hourly rate of $400.00. Counsel for the moving parties has in excess of 20 years’ experience.

[32] The number of hours spent on this matter and the hourly rate charged by counsel are reasonable. The matter is moderately complex and is obviously important to the moving parties, although they will be added as third parties if the court rules in favour of the defendants.

[33] Based on the above, costs are fixed at $5,000 inclusive, payable by the applicant, Mr. Karunakaran, to the defendant moving parties, within 90 days of today’s date.

André J.

Date: September 10, 2013