Ontario Superior Court of Justice
COURT FILE NO.: 10-48829A2
DATE: 2013/11/21
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
RONALD BOUTZ and ETHEL BOUTZ
Plaintiffs
– and –
DTE INDUSTRIES LIMITED, JOHN DOE c.o.b. NORTHERN ENERGY SYSTEMS, MACKEY AUTOMOTIVE a division of W.A. MACKEY FUELS LTD., BW FOUNDERS HOLDCO LTD. c.o.b. as BLUEWAVE ENERGY AND SHELL CANADA LIMITED
Defendants
– and –
CLARE PIPER ENTERPRISES LIMITED
Third Party
No one appearing for the Plaintiffs
David Powrie, acting as agent for Donald Dacquisto, Counsel for the Defendant, Mackey Automotive, a division of W.A. Mackey Fuels Ltd.
Jonathan A. Schwartzman, Counsel for the Third Party
HEARD: November 7, 2013 (Ottawa)
REASONS FOR decision
KERSHMAN J.
Background
[1] This action arises from an oil leak that occurred on or about July 20, 2008 at the Plaintiffs’ property. The Plaintiffs allege that this oil leak caused soil contamination that necessitated remediation and also diminished the value of their property.
[2] The claim was defended by various parties including the Defendant Mackey Automotive, a division of W.A. Mackey Fuels Ltd. (“Mackey”).
[3] A Third Party claim was brought by Mackey, claiming contribution and indemnity from Clare Piper Enterprises Limited (“Clare Piper”). Mackey alleges that Clare Piper sold the oil tank involved in the loss to them, which they in turn sold to the Plaintiffs. In the defence filed to the Third Party claim, Clare Piper denied that it sold the tank to Mackey.
[4] This motion is brought by Clare Piper for summary judgment dismissing the Third Party claim as against it with costs payable by the Defendant Mackey. In the motion for summary judgment, Clare Piper claims that there are no genuine issues requiring a trial as to whether or not the Third Party claim is barred by the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B. The Plaintiff took no position with respect to the motion.
Issue
Is there a genuine issue requiring a trial as to the Third Party claim being statute barred by the Limitations Act?
Clare Piper’s Position
[5] Clare Piper argues there is no genuine issue for trial and that summary judgment should be granted to it in relation to the Third Party claim.
[6] Clare Piper argues that it must put its best foot forward on a motion for summary judgment and satisfy the Court that there are no genuine issues requiring a trial for resolution of the Third Party claim. Once that has been established, the onus then shifts to Mackey who must then show that there are material factors to be tried to assess credibility, weigh evidence and draw factual inferences and that there is a real chance of success at trial: Bhattacherjee v. Marianayagam, 2013 ONSC 40, [2013] O.J No. 8 at para. 23.
[7] Clare Piper argues that there is no further evidence that would be put before the Court at a trial with respect to the limitation period issue under the Third Party claim.
[8] It relies on s. 18(1) of the Limitations Act, which pertains to claims of contribution and indemnity, and which reads:
- (1) For the purposes of subsection 5 (2) and section 15, in the case of a claim by one alleged wrongdoer against another for contribution and indemnity, the day on which the first alleged wrongdoer was served with the claim in respect of which contribution and indemnity is sought shall be deemed to be the day the act or omission on which that alleged wrongdoer's claim is based took place.
[9] Clare Piper relies on the case of Lilydale Cooperative Ltd. v. Meyn Canada Inc., 2010 ONSC 4114, [2010] O.J. No. 3142 (Sup. Crt). At para. 17, dealing with a claim for contribution and indemnity and the concept of discoverability, the Court held that the defendant had two years from the date on which it was served with a statement of claim to issue the Third Party claim for contribution and indemnity.
Mackey’s Position
[10] Mackey argues that this is a case where the Court would not have a full appreciation of the evidence on the motion for summary judgment because of the factual discrepancies between the parties and the absence of a cross‑examination of Mr. Mackey on his affidavit.
[11] In the alternative, Mackey argues that if there is a full appreciation of the evidence, the weight of the evidence shows that the claim against Clare Piper was not discovered until August 17, 2012 when the Plaintiffs produced a copy of Mackey’s invoice showing Mackey had sold and installed the oil tank.
[12] The Court notes that it was the Plaintiffs and not the Defendant Mackey that produced the invoice. Mackey said that it could not locate the invoice after a diligent search.
[13] Mackey argues pursuant to sections 4 and 5 of the Limitations Act and pursuant to the Sale of Goods Act, R.S.O. 1990, c. S.1, that there was no tenable claim against Clare Piper until it was discovered by Mackey that it had actually sold the tank to the Plaintiffs when the invoice was produced on August 17, 2012. It argues that without that nexus, Mackey cannot be said to have purchased the tank from Clare Piper, thereby creating a duty by Clare Piper to Mackey under the Sales of Goods Act.
Analysis
[14] The Court finds that the motion for summary judgment succeeds and that the Third Party claim is dismissed. The reasons for this decision are set out below.
[15] The amended Rule 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 allows a party to bring a motion for summary judgment. The application of the amended Rule 20 was discussed at length by the Court in the case of Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764, 108 O.R. (3d) 1 at paras. 40‑44 and 50‑56.
[16] In the case of Panther Film Services Inc. v. Tayar, 2012 ONSC 7226. [2012] O.J. No. 6191, Allen J. deals with the issue of granting a motion for summary judgment in relation to a limitation issue at paras. 7‑10 which read as follows:
7 There are principles that guide the determination of when an order for summary judgment is appropriate when a limitation defence is raised. Applying the requirements of Rule 20, where a defendant moves for summary judgment in relation to a statutory limitation period, in order for the plaintiff to successfully resist the motion, they must adduce evidence of material facts related to the limitation period requiring a trial for determination. The defendant has the legal burden to prove there is no genuine issue requiring a trial. The evidentiary burden is then on the plaintiff to establish evidence of a triable issue. [Soper v. Southcott, 1998 5359 (ON CA), [1998] O.J. No. 2799 (Ont. C.A.) at para. 14].
8 The plaintiff must "lead trump or risk losing" and demonstrate their case has a real chance of success at trial. The motions court is entitled to assume the evidence contained in the record is all the evidence the parties would rely on if the matter proceeded to trial. [1061590 Ontario Limited v. Ontario Jockey Club (1995), 1995 1686 (ON CA), 21 O.R. (3d) 547 at 557 (Ont. C.A.), and Dawson v. Rexcraft Storage and Warehouse Inc. (1998), 1998 4831 (ON CA), 164 D.L.R. (4th) 257, at 265, (Ont. C.A.)].
9 If the defendant satisfies the court there are no issues of fact required to be tried in relation to the limitation period, the defendant will succeed in obtaining summary judgment. [Soper, supra, at para. 14]. Simply because the discoverability rule is raised does not, in itself, mean a genuine issue for trial exists precluding it from being decided on a motion for summary judgment. It is appropriate and necessary for the motions judge to consider facts contained in the record in order to decide whether a genuine issue requiring a trial exists. [Stell v. Obedkoff (1999), 1999 14815 (ON SC), 45 O.R. (3d) 120 (Ont. S.C.J.), at 123-124].
10 The Court of Appeal fashioned a new test to assess when an order for summary judgment under Rule 20.04 (2.1) is appropriate.
We find the passages set out in Housen, at paras. 14 and 18, such as "total familiarity with the case as a whole", "extensive exposure to the evidence" and "familiarity with the case as a whole", provide guidance as to when it is appropriate for the motion judge to exercise the powers in Rule 20.04(2.1). In deciding if these powers should be used to weed out a claim as having no chance of success or be used to resolve all or part of an action, the motion judge must ask the following question: can the full appreciation of the evidence and the issues that is required to make dispositive findings be achieved by way of summary judgment, or can this full appreciation only be achieved by way of a trial?
We think this "full appreciation test" provides a useful benchmark for deciding whether or not a trial is required in the interest of justice.[Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764, at paras. 50 and 51, (Ont. C.A.)]
[17] This Court agrees with the reasoning in the Panther case.
[18] In the present case, the Court finds that it does have a full appreciation of the evidence and the issues related to the limitation issue in the Third Party claim.
[19] The Statement of Claim was served on the Defendant Mackey on June 30, 2010. The Third Party claim was commenced on December 17, 2012. Mackey argues that it issued the Third Party claim within time because it only found out that it had supplied the oil tank to the Plaintiffs when it received a copy of the invoice from the Plaintiffs in August 2012.
[20] Mackey claims that even with diligent searching of its records, it could not find a copy of the invoice. Mackey argues that once the invoice was produced, it was clear that it had supplied and installed the tank and that once the invoice was produced, the limitation time period clock began to tick.
[21] The Court does not agree with that argument. Section 18 of the Limitations Act is clear when it states that for the purposes of s. 5(2) and s. 15 in relation to a claim for contribution and indemnity, that “the day on which the first alleged wrongdoer was served with the claim in respect of which contribution and indemnity is sought shall be deemed to be the day the act or omission on which that alleged wrongdoer's claim is based took place.”
[22] The Court agrees with the decision in Lilydale Cooperative case at para. 17 which made it clear that the Defendant had two years from the date that it was served with a Statement of Claim to issue the Third Party claim for contribution and indemnity. Furthermore, in the present case for the reasons that follow, this Court rejects Mackey’s argument regarding discoverability and finds that the start date for the limitation period was June 30, 2010.
[23] An examination for discovery of Mr. Mackey was held in April 2013. Several times during the examination for discovery (pages 53‑58 and 136‑139 of the transcript) Mr. Mackey said that the only supplier of that type of oil tank was Clare Piper. There was no suggestion by Mr. Mackey that his company had used several suppliers for that specific type of tank. Mr. Mackey’s evidence was clear – that Clare Piper was the only supplier of that type of oil tank.
[24] The issue of discoverability was discussed by the Ontario Court of Appeal in the case of Pepper v. Zellers Inc. (c.o.b. Zellers Pharmacy) (2006), 83 O.R. 3(d) 648 (C.A.). In that case, the Court of Appeal dismissed the plaintiff’s appeal of the motion judge’s decision not to allow the plaintiff to name an additional defendant. The Court discussed the law concerning the discoverability on a motion to add a party referring to Wong v. Adler and went on to discuss the evidentiary record that was put before the Court.
18 The motion judge referred to the proper approach to discoverability on a motion to add a party, which was concisely and clearly set out by Master Dash in Wong v. Adler, (2004), 2004 8228 (ON SC), 70 O.R. (3d) 460 (S.C.J.) at para. 45, aff'd 2004 73251 (ON SCDC), [2005] O.J. No. 1400 (Div. Ct.):
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 to determine if there is an issue of fact or of credibility on the discoverability allegation, which is a constituent element of the claim. If the court determines that there is such issue, the defendant should be added with leave to plead a limitations defence. If there is no such issue, as for example where the evidence before the motions court clearly indicates that the name of the tortfeasor and the essential facts that make up the cause of action against such tortfeasor, were actually known to the plaintiff or her solicitor more than two years before the motion to amend, the motion should be refused. If the issue is due diligence rather than actual knowledge, this is much more likely to involve issues of credibility requiring a trial or summary judgment motion, provided of course that the plaintiff gives a reasonable explanation on proper evidence as to why such information was not obtainable with due diligence. That is not to say that such motion could never be denied if the evidence is clear and uncontradicted that the plaintiff could have obtained the requisite information with due diligence such that there is no issue of fact or credibility.
19 I agree with Master Dash that the motion judge was entitled to assess the record to determine, as a question of fact, whether there was "a reasonable explanation" on the evidence demonstrating why Ms. Aube's identity could not have been determined through the exercise of reasonable diligence. See also Zapfe, supra at para. 31.
20 An examination of the evidentiary record in this case shows that the appellants' material failed entirely to address whether they ought to have known Ms. Aube's identity and what, if any, steps they took to determine that identity. Indeed, the appellants offer no explanation other than to say that no one gave them the information.
[25] The Court adopts the reasoning in the Pepper case. The Court finds that the Defendant has not provided a reasonable explanation on the evidence as to why Clare Piper would not have been identified as the supplier of the tank once the action has started.
[26] Once Mackey had been served with the Statement of Claim, it was aware that there was a potential for liability. That is so, notwithstanding the claim that it had no knowledge that it had installed the oil tank at the Plaintiffs’ residence. As the Defendant had knowledge of its potential liability from the date that the Statement of Claim was served, it cannot now claim that it could not have discovered its potential liability (and in turn the basis for the Third Party claim) until the invoice was produced by the Plaintiffs. The Court does not accept that the start date for the purpose of the Limitations Act commenced on the date that the invoice was produced by the Plaintiffs.
[27] Once the Defendant knew of the potential liability, the time clock started ticking and ran for two years.
[28] Mackey knew that its only supplier of the tank type in question was Clare Piper and thus Mackey’s argument that, only after the production of the invoice did Mackey discover that it had in fact sold the tank to the Plaintiffs and only then did it discover that it had bought the tank from Clare Piper, is not accepted by the Court. This Defendant knew or ought to have known that Clare Piper was the only tank supplier at the time that it was served with the Statement of Claim. The production of the invoice was irrelevant to that knowledge.
[29] Mackey should have turned its mind as to who supplied the tank when it was served with the Statement of Claim. Instead, Mackey waited until it received the invoice to turn its mind as to who had supplied the tank. That was too late.
[30] Subsections 5(1) and (2) of the Limitations Act stipulate when a claim is considered to be discovered for the purpose of the two‑year limitation:
- (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).
(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.
[31] Applying subsections 5(1) and (2) of the Limitations Act to the facts of this case, the limitations period expired on June 30, 2012. The Third Party claim was brought on December 17, 2012, more than five months outside the limitation period.
[32] Based on the aforesaid reasoning, the Court is satisfied that it has a full appreciation of the issues and the evidence related to the limitation issue to make a finding that the motion for summary judgment should be granted.
[33] The Court is satisfied that there is no genuine issue requiring a trial as it relates to the limitation issue. As such, the motion for summary judgment is allowed.
Costs
[34] The parties were asked for Costs Outlines at the hearing of the motion. Counsel advised the Court that they should be able to resolve the issue of costs as between themselves. In the event that the parties are unable to resolve the issue of costs within the next 20 days, they are each to provide written Costs Outlines only to the Court within the next 30 days.
[35] Order accordingly.
Mr. Justice Stanley J. Kershman
Released: November 21, 2013
COURT FILE NO.: 10-48829A2
DATE: 2013/11/21
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
RONALD BOUTZ and ETHEL BOUTZ
Plaintiffs
– and –
DTE INDUSTRIES LIMITED, JOHN DOE c.o.b. NORTHERN ENERGY SYSTEMS, MACKEY AUTOMOTIVE a division of W.A. MACKEY FUELS LTD., BW FOUNDERS HOLDCO LTD. c.o.b. as BLUEWAVE ENERGY AND SHELL CANADA LIMITED
Defendants
– and –
CLARE PIPER ENTERPRISES LIMITED
Third Party
REASONS FOR DECISION
Kershman J.
Released: November 21, 2013