COURT FILE AND PARTIES

COURT FILE NO.: CV-11-419636 00A1
COURT FILE NO.: CV-11-4196548

DATE: 20140221

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Marsh Canada Limited and Mercer (Canada) Limited, Plaintiffs

– AND –

Centennial Plumbing and Heating Limited carrying on business as Century Plumbing and Heating, Defendant

– AND –

Oxford Properties Group Inc., OPGI Management GP Inc. as general partner of the OPGI Management Limited Partnership, OMERS Realty Corporation, OMERS Realty CTT Holdings Inc. and OMERS Realty CTT Holdings Two Inc., and ADT Security Services Canada Inc./Intercon Security Limited, Third Parties

AND RE: Conundrum Capital Corporation, Plaintiff

– AND –

Century Plumbing and Heating and Oxford Properties Group and ADT Security Services Canada Inc./Intercon Security Limited and Brookfield Properties Ltd., Defendants

BEFORE: E.M. Morgan J.

COUNSEL:
Thomas Macmillan, for the Third Parties in Court File No. CV-11-419636 00A1, Oxford Properties Group Inc., OPGI Management GP Inc. as general partner of the OPGI Management Limited Partnership, OMERS Realty Corporation, OMERS Realty CTT Holdings Inc and OMERS Realty CTT Holdings Two Inc., and for the Defendant in Court File No. CV-11-419548, Oxford Properties Group

Joel Cormier, for the Defendant in Court File No. CV-11-419636 00A1 and in Court File No. CV-11-4196548, Centennial Plumbing and Heating Limited carrying on business as Century Plumbing and Heating

John Downing, for the Third Parties in Court File No. CV-11-419636 00A1 and the Defendants in Court File No. CV-11-419548, ADT Security Services Canada Inc./Intercon Security Limited

HEARD: February 3, 2014

ENDORSEMENT

[1] This is motion brought by Oxford Properties Group Inc., OPGI Management GP Inc. as general partner of the OPGI Management Limited Partnership, and Oxford Property Group (collectively “Oxford”) under Rule 20.01 of the Rules of Civil Procedure, seeking summary judgment dismissing the claims against them in two related actions. For the reasons that follow, I am confident that the dispute in respect of Oxford can be fairly resolved without the need for a trial. Hyrniak v Mauklin, 2014 SCC 7, at para 57.

[2] Oxford Properties Group Inc. and OPGI Management GP Inc. as general partner of the OPGI Management Limited Partnership (“Oxford Management”) are Third Parties and Defendants by cross-claim within the Third Party claim in Court File No. CV-11-419636 00A1 (the “Marsh Action”), while Oxford Property Group is a Defendant and Defendant by cross-claim in Court File No. CV-11-419548 (the “Conundrum Action”).

[3] Several other Third Parties in the Marsh Action, namely OMERS Realty Corporation and OMERS Realty CTT Holdings Inc. and OMERS Realty CTT Holdings Two Inc. (collectively “OMERS”), are represented by the same counsel as Oxford and are referred to as Oxford by some of the parties in the materials filed in the record. This labelling is apparently due to the common ownership of those parties with Oxford and, as will be seen below, has been the source of some confusion. OMERS has sought no relief and has played no role in the motions.

[4] Centennial Plumbing and Heating Limited carrying on business as Century Plumbing and Heating (“Century”) is a Defendant in both actions. It has brought the Third Party claim against Oxford Management in the Marsh Action and has cross-claimed against Oxford Property Group in the Conundrum Action. It opposes Oxford Management’s motion for summary judgment in the Marsh Action, but does not oppose Oxford Property Group’s motion in the Conundrum Action. In addition, Century seeks to amend its Third Party Claim in the Marsh Action, claiming that Oxford Management and OMERS owed it an independent duty in tort.

[5] ADT Security Services Canada Inc./Intercon Security Limited (“ADT”) are Third Parties in the Marsh Action and Defendants in the Conundrum Action. ADT has brought a cross-claim against Oxford Management within the Third party claim in the Marsh Action and has brought a cross-claim against Oxford Property Group in the Conundrum Action. ADT opposes summary judgment being granted to the Oxford entities in both actions.

[6] There is one other Defendant in the Conundrum Action, Brookfield Properties Ltd. (“Brookfield”), who has not participated in either of the motions. Likewise, the Plaintiffs in the Marsh Action and the Plaintiff in the Conundrum Action have not participated in the motions.

[7] While the parties and their respective roles in the motions present a seemingly elaborate picture, the underlying incident and legal issues are not overly complex. At 2:00 a.m. on February 11, 2009, a plumbing leak occurred in an office tower at 161 Bay Street, Toronto, causing damage to a number of units in the building. The tenants in the units where the damage took place are the two Plaintiffs in the Marsh Action and the Plaintiff in the Conundrum Action. The landlord of all three units is a company called CT Tower Investments Inc. (“CT Tower”). For reasons that will become apparent below, CT Tower is not a party to either of the actions.

[8] The Plaintiffs’ allegation against Century is that solder gave way on a plumbing pipe that Century had repaired, and the resulting rupture caused a flood. The Plaintiffs’ allegation against ADT is related to the Building Automation System (“BAS”). This system was apparently supplied by the owners of the building and maintained and monitored by ADT. The Plaintiffs claim that the BAS ought to have picked up a drop in water pressure which, in turn, should have signaled an alarm.

[9] At this stage discoveries are not yet entirely complete in the two actions, and it has yet to be determined precisely how and why the flood occurred, or whether the BAS failed or the monitoring of it failed. Accordingly, it is an open question as to which party, if any, was negligent. The question of fault, however, is not at issue in these motions.

[10] Turning first to the Conundrum Action, Oxford Property Group seeks summary judgment on the grounds that, quite simply, it has no involvement in the matters in issue. In fact, the uncontroverted affidavit evidence filed by Oxford indicates that “Oxford Property Group” is a trade name and is not a business or legal entity.

[11] The one party that opposes summary judgment dismissing the Conundrum Action as against Oxford Property Group is its co-Defendant, ADT, who has brought a cross-claim. ADT has provided an affidavit of its representative, Max Wormuth, but that affidavit makes no mention of Oxford Properties Group and gives no evidence to contradict the evidence of Oxford that Oxford Property Group is not a proper party. ADT makes claims against the building’s owners, and it simply assumes that Oxford Property Group fits that description.

[12] ADT’s contract is with Brookfield as a property manager of the Conundrum premises. Counsel for ADT submitted in argument that there can be no summary judgment since Brookfield has not yet been discovered and therefore it is unclear who the owner and ultimately responsible party might be.

[13] It is axiomatic, however, that if ADT had some evidence that Oxford Properties Group is an appropriate entity to have been sued – or an entity at all – it was incumbent on it to “put its best foot forward” on this motion. Rutherford v RBC Dominion Securities Inc., 2011 ONSC 6002, at para 9 (SCJ). It is “no longer entitled to sit back and rely on the possibility that more favorable facts may develop at trial.” Transamerica Life Insurance Co. of Canada v Canada Life Assurance Co., 1996 7979, at para 29 (SCJ).

[14] As it is, the record before me demonstrates conclusively that Oxford Property Group played no role in the ownership or management of the Conundrum premises. This is set out clearly in the affidavit evidence submitted by Oxford, and is nowhere contradicted by any other party. The Plaintiff in the Conundrum Action has no viable claim against Oxford Property Group, and neither ADT nor Century has a viable cross-claim against it.

[15] Turning to the Marsh Action, it is alleged by Century and ADT (but not by the Plaintiffs) that as the business-hours property manager and, ultimately, as owner of the two premises in issue, Oxford was responsible for the damage caused by the flood. It is apparent, however, that these Third Party claims and cross-claims are premised on a misapprehension of the roles played by the various Oxford entities.

[16] In the first place, the parties making these claims confuse the Oxford companies with each other and with the OMERS companies. This seems to be at least partly based on an incorrect statement made by counsel for one of the Oxford companies (not counsel for Oxford in these actions) during discoveries in a separate action involving the same flood. That mistake has now been cleared up by way of answer to an undertaking provided by present counsel for Oxford on January 28, 2014.

[17] ADT states in its factum that, “Oxford appears to be one of the Owners within the meaning of the Agreement”, while Century states, “Oxford Properties Group Inc. alleges that it was administrator of the premises.” The evidence before me proves both of those statements to be untrue. The record now establishes that OMERS (or possibly one of the OMERS companies) is owner of the building, Oxford Management is the business-hours property manager (Brookfield being the after-hours property manager), and, as indicated, Oxford Property Group is nothing.

[18] To the extent that there are claims by any party against the building owners, those claims will proceed as against OMERS. To the extent that there are claims against Oxford Management, those claims must be analyzed as claims against the property manager, not as claims against the owners. Oxford Management is not an owner of the building, and any claim against Oxford Management in the Marsh Action that is premised on that assumption cannot succeed.

[19] CT Tower, as Landlord, entered into leases with the Plaintiffs in the Marsh and Conundrum Actions, as Tenants. Those leases included the identical limitation of liability clause, as follows:

Section 9.05 – Limitations of Landlord’s Liability

The Landlord, its agents, officers, employees and other Persons for whom the Landlord is legally responsible shall not be liable for:

(a) Damage to or destruction or loss of (i) any property of the Tenant entrusted to the care or control of the Landlord, or any of them, or (ii) the Premises (including Leasehold Improvements) or any property in or upon the Premises; …

Whether or not caused by (i) the negligence of the Landlord, its agents, officers, employees or other Persons for whom the Landlord is legally responsible, (ii) the operation, faulty operation, interruption or breakdown of any of the Building Systems or services to be provided by the Landlord under Article 6 including, without limitation, electricity interruption, ‘brown-outs’ or surges, or (iii) any act or omission of any other tenant or occupant of space in the Development.

[20] This clause makes it obvious why CT Towers has not been named as a Defendant in either action. The clause makes it equally clear why Oxford Management has not been named as a Defendant in either action. The Plaintiffs, who are the Tenants under these leases, all understand that neither the Landlord from whom they leased their premises nor any agent of that Landlord, is liable for the damage they claim to have suffered.

[21] Oxford Management, as business-hours property manager of the leased premises, falls into the category of agent of the Landlord. It is therefore immune from liability under the lease. As a matter of law, it is also immune from liability on a contribution and indemnity basis to third parties such as Century and ADT. The Supreme Court of Canada made it clear in Giffles Associates Ltd. v Eastern Construction, 1978 39 (SCC), [1978] 2 SCR 1346, at para 12, that “it is a precondition of the right to resort to contribution that there be liability to the plaintiff.”

[22] Century submits that the fact that it does not have a direct contract with Oxford Management does not matter, as Oxford Management owed it a direct duty in tort. It relies on Chinook Group Ltd. v Foamex International Inc., [2004] CarswellOnt 4295 (Ont Master), for the proposition that a duty to warn might exist in these circumstances. However, in the pleadings as they currently stand, Century has not claimed that Oxford Management breached an independent duty in tort. Moreover, there is no evidentiary foundation that might explain how or why a duty of care was owed by Oxford Management.

[23] Instead of filing evidence supporting the existence, and breach, of a duty of care, Century has sought to amend its Third Party claim to make new allegations of negligence and failure to warn. Bringing a motion to add new claims, however, is not the same as submitting evidence that support those claims; in fact, it almost supports Oxford Management’s contention that the current Third Party claim against it is not sustainable.

[24] Moreover, regardless of its being dressed up as an “independent tort”, there is no logical explanation as to how Oxford Management, as a property manager, could have caused damage to Century, as plumbing contractor, other than by way of contribution with respect to injury suffered by the Plaintiffs as tenants. Such an allegation, even if there were evidence to support it, would not support an independent damages claim by Century since Century did not suffer independent damages; rather it could only support a claim for contribution and indemnity with respect to losses suffered by the Plaintiffs.

[25] Century’s proposed independent tort is, in fact, precisely the type of claim that cannot be brought against Oxford Management. As the Supreme Court stated in Giffels, supra, at para 14, and as Iacobucci J. reiterated in Bow Valley Husky (Bermuda) Ltd. v Saint John Shipbuilding Ltd., 1997 307 (SCC), [1997] 3 SCR 1210, at para 123, “[t]he contractor which has so protected itself [with a limitation of liability clause] cannot be said to have contributed to any actionable loss by the plaintiff.” Not only is there no evidence to support Century’s existing Third Party claim against Oxford Management, there is no possibility that its proposed amendment will contain a viable claim as against Oxford Management.

[26] Furthermore, Century has provided no evidence to suggest that Oxford Management actually breached any duty to warn. Accordingly, its claim would fail regardless of whether it can rely on the Chinook Group case to establish that in theory there might be a duty to warn under these circumstances.

[27] Oxford Management has brought a summary judgment motion, and a responding party cannot rely on a pleading rather than evidence – let alone a proposed amended pleading – to keep its case alive. Rule 20.02(2) explicitly addresses Century’s type of response by providing that, “[i]n response to affidavit material or other evidence supporting a motion for summary judgment, a responding party may not rest solely on the allegations or denials in the party’s pleadings, but must set out, in affidavit material or other evidence, specific facts showing that there is a genuine issue requiring a trial.”

[28] In any case, Oxford Management has immunized itself from precisely the type of claim brought against it, or sought to be brought against it, by Century. As the Supreme Court of Canada said in Attorney General of Canada v Lameman, 2008 SCC 14, [2008] 1 SCR 372, at para. 10, “[t]rying unmeritorious claims imposes a heavy price in terms of time and cost on the parties to the litigation and on the justice system.” There is no genuine issue requiring a trial of Century’s claim since it cannot possibly succeed given the limitation of liability enjoyed by Oxford Management.

[29] Counsel for Oxford Management also submits that, as a separate matter, in seeking to now add new claims Century is out of time under the Limitations Act, 2002, SO 2002, c 24, section 4. More than two years has passed since the incident in question, and there is no issue of discoverability addressed in Century’s proposed amendment that would explain the late issuance of the new claim. Indeed, it is difficult to imagine what it is that Century could have discovered now that it did not know just after the flood occurred in 2009.

[30] Counsel for Oxford Management appears to be correct in his limitation period argument, and counsel for Century has offered no real argument in response. As indicated, the expiry of the limitation period is yet another ground for denying Century’s desire to respond to Oxford Management’s summary judgment motion by amending its Third Party claim to add a new cause of action.

[31] ADT’s cross-claim against Oxford Management in the Marsh Action is also not viable. ADT, as the security company that monitored the BAS in the Plaintiffs’ premises, had a contractual relationship with Brookfield as the after-hours property manager. There is no evidence, and ADT does not contend, that it had any direct contract with Oxford Management.

[32] Rather, what ADT submits is that Brookfield contracted with it as agent on Oxford’s behalf and that, therefore, Oxford had a form of contractual relationship with ADT “that is independent of Oxford’s relationship with the plaintiff.” This alleged independent contractual relationship, in turn, is characterized by counsel for ADT in his factum as premised on the belief that Oxford is one of the owners of the building.

[33] As indicated, the evidence establishes that it is OMERS, or at least one of the OMERS companies, and not Oxford Management, that are the owners. Accordingly, to the extent that ADT has cross-claimed against Oxford Management on the grounds that it is an owner and that Brookfield as agent contracted on its behalf, that cross-claim is premised on a proven factual error.

[34] ADT’s counsel also submits in his factum that Oxford owed a duty of care at common law – i.e. in tort rather than in contract – to ADT. This duty of care, as described by ADT’s counsel, encompasses the obligation “to provide a BAS that was fit for the purposes for which Intercon [ADT] was contracted to use it.”

[35] Again, insofar as this claim by ADT is directed at Oxford Management, it is founded upon the mistaken identification of Oxford Management as an owner of the building. There is no evidence that suggests that Oxford Management supplied the BAS – this is a system built into the owners’ building and is unrelated to Oxford Management’s duties as business-hours property manager of the Plaintiffs’ premises. The affidavit submitted by Oxford Management states that it had nothing to do with the BAS, and there is nothing in the record to counter that evidence.

[36] There is therefore no genuine issue requiring a trial of ADT’s cross-claim against Oxford Management. Rather, a trial of those issues will ensue against OMERS.

[37] As described by the Supreme Court in Hyrniak, supra, at para 49, the evidentiary record in these motions permits me to (a) make the findings of fact necessary to determine the outcome of the claims against Oxford, (b) apply the law to those facts, and (c) come to a result that is a proportionate and more expeditious means of achieving a just result than a trial. A trial will proceed as against the other parties, but Oxford, as moving parties, have established on the evidence that there are no viable claims, Third Party claims, or cross-claims against them in either the Marsh Action or the Conundrum Action.

[38] In the result, summary judgment is granted dismissing the Third Party claim by Century against Oxford Management and the cross-claim by ADT against Oxford Management in the Marsh Action, and dismissing the Plaintiff’s claim against Oxford Property Group and the cross-claims by Century and ADT against Oxford Property Group in the Conundrum Action.

[39] Century’s motion to amend its Third Party claim in the Marsh Action is also denied. As indicated, it contains no viable cause of action against Oxford Management and, in any case, is out of time with respect to any other party. Although OMERS did not respond to the motion to amend, Oxford Management’s response and the evidentiary record before me makes it clear that the new cause of action is limitation barred.

[40] Oxford deserves its costs on a partial indemnity basis. Its counsel has submitted a Costs Outline requesting a total of $6,711.70 in costs. Given that these are summary judgment motions which will effectively end the actions against the moving parties, they are entitled to their costs of the actions to date. Counsel for Oxford indicated at trial that he was nevertheless restricting his costs requests to the motion alone.

[41] In my view, Oxford’s request for costs is a reasonable one in view of the factors set out in Rule 57.01(1) for exercising the discretion in awarding costs. I note that Oxford’s request is particularly appropriate given the complexity of the proceedings and the amount that the unsuccessful parties could reasonably expect to pay in respect of these proceedings.

[42] ACT and Century are each to pay Oxford $3,355.85 in costs, for a total award of $6,711.70.

Morgan J.

Date: February 21, 2014