SUPERIOR COURT OF JUSTICE – ONTARIO

Court File No.: CV-09-4189-00
Date: 2013-02-07

RE: Samir Ali v. O-Two Medical Technologies Inc

Before: Donohue J.

Counsel:
D. Mills, for the Applicant Defendant
R. Barrett, for the Respondent Plaintiff

Dated: January 29, 2013

E N D O R S E M E N T

Amendment of the Claim

1The defendant moved to seek leave of the Court to amend their Statement of Defence to plead a defence pursuant to the Limitations Act.

2The plaintiff does not oppose that relief. Order to Go granting leave to the defendant to serve and file the Statement of Defence, as amended in the motion record.

Summary Judgment Motion

3The defendant further moves to have the Court dismiss the plaintiff’s claim as being statute barred by the two year limitation in the Limitations Act. The Statement of Claim was issued on September 16, 2009.

Background

4The plaintiff was an employee of the defendant as a mechanical engineer. In addition to those duties, he did some commission sales for the defendant company of medical supplies.

5A dispute arose over what commission was payable for a sale the plaintiff made to the Iraqi Ministry of Health. The plaintiff alleges in the Statement of Claim that he understood the agreement would be a commission of at least 7% or more.

6The plaintiff claims that on December 12, 2006, the defendant purported to unilaterally reconstruct the commission agreement to a much lower amount.

7The Iraqi Ministry of Health completed the contract terms in March 2007.

8The Statement of Claim relies on an agreement for commissions of 4% on disposables and 8% on non-disposables. This commission statement was dated March 13, 2004.

9In the alternative, the plaintiff makes a claim on the basis of quantum meruit seeking reasonable remuneration for the services he rendered.

10The contract that the plaintiff worked on with the Ministry of Health was signed March 6, 2007, but he deposes that negotiated it on December 5, 2006 (as alleged in the Statement of Claim).

11The evidence shows that following a meeting in July of 2007, the plaintiff wrote a clear letter stating his position that his commission should be more than 7%.

12The defendant wrote back on August 1, 2007 very clearly relying on the commission formula of December 12, 2006.

13The plaintiff retained counsel to write a letter on August 28, 2007 demanding that the defendant acknowledge they owed commission of 7% on August 28, 2007.

14By letter dated September 7, 2007, the defendant reiterated what they will pay based on the commission formula earlier referred to.

15In November of 2007, the defendant advised that the commission according to the December 12, 2006 formula was $19,751.

16The Statement of Claim was issued September 16, 2009 which was more than two years after the commission formula of December 12, 2006 was imposed on the defendant; more than two years after the sale was made; and more than two years after the defendant confirmed their position that they intended to pay the lower commission set out in the December 12, 2006 formula.

17The claim was issued within two years of the defendant’s letter calculating the commission using the December 12, 2006 formula.

18The Statement of Claim reads clearly that the dispute stems from the unilateral decision of the defendant to impose a new and much lower commission formula.

19The plaintiff objected to it himself, and by counsel in July and August of 2007. The response by the defendant was unequivocal that they were relying on the December 12, 2006 formula they had imposed.

Analysis

20The Limitations Act s. 4, provides that the proceeding must not be commenced after the two year anniversary of the day which the claim was discovered.

21The day on which it was discovered is defined as the day on which the person with the claim first knew that the injury, loss or damage had occurred.

Discoverability

22Justice Ducharme noted in Caglar v. Gregory Moore et al. 2005, the Discoverability Rule applies to claims in contract and in tort. He stated, “Thus an action for breach of contract commences when the plaintiff has sufficient facts to recognize that the contract has been breached.”

23The plaintiff here wishes to rely on the commission formula from 2004 which he argues could not be altered or ought not to be altered by the December 12, 2006 formula.

24The defence argued that the injury, loss or damage had not occurred until the defendant did their calculations of the commission in November 2007.

25The plaintiff knew or ought to have known that the defendant was relying on its 2006 formula by the clear letters of August 1st and September 7, 2007.

26There was no need to know the exact commission margins to determine that losses would potentially flow.

27The Court of Appeal noted in City of Hamilton v. Metcalfe and Mansfield Capital Corp., 2012 ONCA 156, that “Some damage is sufficient for the cause of action to accrue and to start the limitation.”

28I am satisfied that the plaintiff could be in no doubt that some damage and losses had occurred by the commission formula given to him December 12, 2006, if not by the two letters (August 1st and September 7, 2007) confirming the defendant’s position.

29The plaintiff argued that this was a case of anticipatory repudiation where one party manifests an intention not to perform by provisions of the agreement that require performance in the future.

30I cannot see how that is appropriate to these facts. The plaintiff was handed the commission formula by the defendant on December 12, 2006 and the defendant honoured it.

31In previous years, the defendant had behaved in a similar fashion. The plaintiff in his own affidavit stated, “These corporate positions were handed down to me, by which I mean that they were not negotiated with me.”

32Further, the plaintiff in his affidavit, dates the issue as arising even earlier stating, “aside from the defendant’s conduct, it is the final written position between the parties prior to the 2006 contract in dispute.”

33The plaintiff states, “The issue in this action is to request a court to determine what ought to be the commission paid to me on the 2006 project.”

34The focus is on the quantum meruit claim which the evidence shows the plaintiff discovered in December 2006 and was reaffirmed in the August 1st and September 7, 2007 letters.

35The claim then issued more than two years after all three of these dates.

36I conclude that the claim was brought outside the requisite limitation period.

37Accordingly, summary judgment shall be granted to the defendants, and the plaintiff’s claim shall be dismissed.

38The parties may make written submissions of three pages or less within 14 days of this order.