COURT FILE NO.: CV – 12 - 463954

DATE: 20140225

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Du-Won Kim and New Seoul Insurance Corporation, Plaintiffs

AND:

The Manufacturers Life Insurance Company carrying on business as Manulife Financial, Defendant

BEFORE: Kiteley J.

COUNSEL: Plaintiff Du-Won Kim is self-represented

M. Blair Anderson, for the Defendant

HEARD: January 22, 2014

ENDORSEMENT

[1] This is a motion by the defendant pursuant to rule 20.01(3) and rule 21.01(1)(b) for an order dismissing the action. For the reasons that follow, I grant the motion.

Background

[2] New Seoul Insurance Corporation (New Seoul) had a standard Agent’s Agreement with Royal Life Insurance Company of Canada (Royal Life) effective January 12, 1994 and a standard Independent Agent contract with The Maritime Life Assurance Company (Maritime Life) effective November 19, 2001. Royal Life and New Seoul signed an addendum dated March 9, 1994 to the Agent’s Agreement which provided for additional compensation if certain production levels were met and maintained.

[3] Maritime Life was a successor to Royal Life, having acquired the shares of Royal Life and amalgamating with it. Manulife Financial was not a successor to the company which was continued as Maritime Life, instead assuming by transfer and assumption agreement with Maritime Life all of the policy liabilities and associated assets of Maritime Life, which ceased to operate as of December 31, 2004.

[4] Manulife Financial and New Seoul entered into a standard Producer’s Agreement – General Agent Broker dated August 16, 2004. Mr. Kim was the Key Representative under the GAB agreement.

[5] In 2005, Mr. Kim began communicating with Manulife alleging that New Seoul was not being properly paid commissions for its in-force block of insurance business placed with Manulife Financial and its predecessors. In a letter dated September 8, 2005 addressed to Dominic D’Alessandro (President and CEO), Mr. Kim pointed out that he had not received a majority of the renewal commissions since January 2005; he was extremely disappointed by the lack of accountability from Manulife; he believed it was a serious problem because of a system error which he believed could also affect the former Royal and SunAlliance brokers between 1996 and 2001; he had spent many hours trying to prove his point and his income had decreased by approximately 50% since March 2005; he observed that Manulife did not want to solve the problem; he asked Mr. D’Alessandro to appoint an independent person who would investigate the renewal commissions of former Royal and SunAlliance brokers between 1996 and 2001.

[6] In 2006, Mr. Kim separated from his wife. In 2007, Mr. Kim stopped recruiting new clients and focused only on maintaining existing clients. He said he stopped because of his mental health issues and because he was using all his available time to analyze Manulife documentation in pursuit of his claims of underpayment of commission.

[7] In 2006, 2007 and 2008, there were ongoing communications between Mr. Kim and Manulife Financial. On April 15, 2008, Mr. Kim met with senior members of Manulife Financial and with the principals of the Managing General Agency with a view to reviewing a detailed analysis that Manulife had done.

[8] On May 12, 2008, Mr. Kim wrote again to Mr. D’Alessandro continuing to allege that he had not been properly paid commissions and threatening to take his complaints to the media, the federal government, and the TSX and Dow Jones exchanges.

[9] In letter dated May 16, 2008, Manulife advised Mr. Kim and New Seoul that since there had been a discussion about conducting a policy-level review of compensation data from the period when Maritime Life acquired and administered the Royal and SunAlliance Financial business (namely 2002 and 2003), that that would be done however, the Senior Vice-President, Distribution advised as follows:

Finally, it is unfortunate you have chosen not to put this matter behind you and it is clear that our commercial relationship has now broken down fully – your lack of trust, negative statements, and lack of production under your producer agreement with Manulife provide little alternative but to terminate that relationship. As such this letter is notice of termination of your producer agreement with 30 days notice, in accordance with its terms. The effective date of this termination will be June 15, 2008. Please return all stationary, binders, software and any other property of the Company to Mr. Wiesenfeld at the above address.

The Company will continue to credit your account with those commissions that become payable under the terms of your Agreement or any previous Agreement with the Company. . . .

[10] In a letter dated September 9, 2008, counsel for Manulife advised Mr. Kim that the policy level review of compensation data for 2002 and 2003 that had been mentioned in the May 16, 2008 letter had been done. Counsel provided a copy of the 62 page analysis which indicated that Manulife had overpaid $30,779.99. Counsel asked for repayment by October 6, 2008. No repayment has been made.

[11] Mr. Kim did not accept that analysis. In a letter dated September 28, 2008, he wrote to Mr. D’Alessandro demanding a policy level review of compensation from 1994 to 2007. He insisted that Manulife should follow the contract. He summarized his calculations. His closing sentence was that this was his final analysis and conclusion and he hoped Manulife would “understand and follow the contract and the obligation”.

[12] In June, 2010, Mr. Kim served a notice of motion in the divorce proceedings in which he asked that the court find that Manulife and its CEO were in contempt. In the notice of motion, the following request was asserted:

The Applicant has notified Manulife more than 30 times since 2005 and Mr. Donald Guloien & Manulife “Please provide each client policy number, each client name, each client monthly premium, each client lapse (then) (if there is lapse), How much system paid each client & How much adjusted each client from 1996 (then) to 2008”. I really want to receive client information to audit the contractual obligations of Manulife to Du-Won, Kim.

[13] Justice K. van Rensburg (as she then was) made this endorsement dated June 11, 2010:

Contempt motion by Mr. Kim against Manulife Financial and its CEO. There are a number of problems with this motion. First, it was not personally served on the respondents. More importantly, however, Mr. Kim seeks a contempt order against two non-parties against whom there are no existing orders in these proceedings. It appears that Mr. Kim’s complaint against Manulife Financial and its CEO are with respect to commissions over a number of years and alleged damage to his reputation through certain communications. These complaints are not suitable to be pursued in this matrimonial litigation. If Mr. Kim wishes to pursue a claim against Manulife Financial he will need to do so through separate civil proceedings – that is through a new action to be commenced against those parties and not involving Mrs. Kim or the issues in their matrimonial proceedings. Mr. Burley has indicated that he will accept service of any such claim on behalf of Manulife Financial and its employees. Also I am not granting leave to add those respondents as parties to this proceeding.

Accordingly, this motion is dismissed. Costs fixed at $500 payable by Mr. Kim to Manulife Financial. Mr. Kim’s approval of draft order is dispensed with. (emphasis added)

[14] In a letter dated October 7, 2010, counsel for Manulife acknowledged receipt of payment of the costs and provided a copy of the formal order as issued and entered. Counsel also confirmed that Mr. Kim had been told of the results of the review and that he owed Manulife $30,779.99.

Legal Proceedings

[15] The statement of claim was issued September 21, 2012. The original defendant was Manulife Financial Corporation. In paragraph 1, the following claims were asserted:

(a) “damages in amount of $4 million dollars for Mental and Psychological:

(b) damages in amount of $1 millions dollars for Punitive damages;

(c) damages in amount of $500,000 dollars for breach of Duty of good faith;

(d) damages in amount of $500,000 dollars for breach of Fiduciary duty;

(e) special damages in amount of $1.5 millions dollars for loss business and opportunities;

(f) interest and prejudgment interest on all damages assessed in favour of the Plaintiff;

(g) the costs of this proceeding and

(h) such further and other relief as to this Honourable Court seems just.”

[16] Paragraph 28 of the statement of claim is as follows:

The Plaintiff was not certifiable according to Ontario Mental Health Act but time to time the Plaintiff was incapable and there were so many different problems dispute with Manulife until this time. Limitation Act, 2002, c. 24, Sched. B.

[17] The statement of defence is dated October 22, 2010 and it included the following:

(a) An assertion that Manulife Financial Corporation is a holding company that owns the shares of Manufacturers Life Insurance Company and Manulife Financial has no contractual or other relationship with the plaintiffs.

(b) An admission that New Seoul had a standard Agent’s Agreement with Royal Life effective January 12, 1994 and a standard Independent Agent contract with Maritime Life effective November 19, 2001 and New Seoul had an addendum to the Agent’s Agreement with Royal Life, namely a Compensation Agreement dated March 9, 1994.

(c) An admission that Manulife Financial did enter into a standard Producer’s Agreement – General Agent Broker with New Seoul dated August 16, 2004 and that it relied on the terms of that Agreement.

(d) A chronology of some of the events arising from Mr. Kim’s allegations that commissions had not been properly paid.

(e) In a letter dated May 16, 2008, Manulife Financial gave notice of termination of the General Agent Broker agreement, effective June 15, 2008.

(f) A description of the contempt motion in 2010 and the endorsement of Justice K. van Rensburg dated June 11, 2010.

(g) Reference to the letter dated September 9, 2008 in which counsel advised the plaintiffs that as a result of the policy review, Manulife had overpaid New Seoul in the amount of $30,779.99.

(h) Since the action was commenced on September 21, 2012, more than 4 years after the letter dated September 9, 2008, and more than 27 months after the June 11, 2010 order of Justice van Rensburg, it is out of time and is absolutely barred under the express provisions of the Limitations Act, S.O. 2002, c. 24 Schedule B.

(i) The damages claimed are remote, excessive, unmaintainable in fact and in law and were caused by the plaintiff’s own negligence.

[18] The plaintiffs brought a motion which was heard by Stinson J. on Feb 8, 2013. In his endorsement, he indicated that the title of proceedings would be changed on consent to correctly name the defendant. He also dismissed the request by the plaintiffs for an order that the “defendant provide records disclosing the client name, policy number, monthly premium, client lapse date (if there is lapse), how much system paid each client and how much adjusted each client by the Manulife between 1994 (then) and 2001 (then)” for three reasons: it was premature since pleadings were not yet closed; based on the pleadings at that time in which there was no claim for unpaid commissions, the records did not appear relevant; the defendant had arranged to obtain a date for a long motion for summary judgment which had the potential to bring the litigation to an end. He reserved costs of the motion to the trial judge or the judge who decides the summary judgment motion.

[19] At Motions Scheduling Court on February 19, 2013 the defendant obtained the date of January 21, 2014 for this motion for summary judgment.

[20] The Statement of Claim was amended on March 12, 2013 pursuant to the order of Stinson J. On March 20, 2013, the Amended Statement of Defence was served to address the change to the title of proceedings. In addition, the defendant added its assertion that the Amended Statement of Claim failed to disclose a reasonable cause of action.

[21] The motion for summary judgment and the affidavit of Julie Martin, Assistant Vice-President, sworn January 21, 2013 were served on March 25, 2013. The affidavit attaches 24 exhibits that relate to the history of the relationship between the plaintiffs and the defendant.

[22] The plaintiff brought a motion which was heard April 17, 2013 in which he again asked for the commission records that he had sought on February 8, 2013. He filed an affidavit sworn April 3, 2013 in support in which he noted that pleadings were closed and he offered what he described as new evidence and supporting data. Manulife served an affidavit of Julie Martin sworn April 10, 2013. She dealt with the issue raised by Mr. Kim about disclosure of documents. She said that it was not possible to generate the commissions information to the level of detail asked by Mr. Kim for the period prior to 2004. She also dealt with the communications that had been exchanged to establish a timetable for the steps necessary to prepare for the long motion.

[23] In his endorsement dated April 17, 2013, Aston J. observed that the motion should have been before a Master but he dealt with it in the interests of keeping costs to a minimum. He noted that there had been no material change since Mr. Kim had sought the identical relief in his motion that had been dismissed on February 8th. He adopted the same reasons for coming to the same conclusion as had Stinson J. He dismissed the motion with costs fixed at $1,577.90 payable within six months.

[24] The plaintiffs brought a third motion which was heard by Master Dash on June 13, 2013 in which he again asked for production of client information from 1994 to 2001. In addition, he asked for an order for a litigation timetable and a discovery plan. Master Dash dismissed the motion for production of client information for four reasons. First, there is no claim for the recovery of unpaid commissions. He summarized the claims for damages as arising out of two events, namely the alleged treatment by Manulife of the plaintiff’s concerns starting in or about February 2005 and the family problems and anxiety that arose out of the alleged ill treatment by Manulife. The second event was the termination of the contract in 2008 and the loss of income as a result. He pointed out that just because the information had been requested did not make it relevant.

[25] The second reason was that this was a “third kick at the can” and had already been decided by two Superior Court Judges. There was no change since the decision of Aston J. other than the plaintiffs had served an affidavit of documents that included 9,000 documents.

[26] The third reason arose from a concern about proportionality pursuant to rule 29.2.03. He noted the evidence of Martin that the documents sought did not exist. He observed that that did not mean that they could not be recreated but the evidence was that any attempt to recreate those documents would be onerous and expensive and would do little to advance the plaintiff’s claims.

[27] The fourth reason was that the summary judgment motion might bring the litigation to an end. If the defendant was not successful on that motion, the plaintiffs would still have to establish relevance.

[28] Master Dash dismissed the motion for a discovery plan without prejudice to renewal if the summary judgment motion is dismissed.

[29] The plaintiff brought a fourth motion on July 24, 2013 in which he asked for leave to amend the Amended Statement of Claim by adding the following claim:

1(e) damages for vanishing client (missing), incorrect client information (incorrect annual premium) and missing 3% commission amounts owed to Plaintiff resulting from Defendant’s commission calculation errors from 1994 (then) to 2007 (then).

[30] The plaintiff also asked for directions for examinations, cross-examinations, discovery and responding motion record. The grounds for the motion included the following: he inadvertently omitted referencing the claim; he forgot to amend due to concentration and memory problems; he had requested this information more than 40 times; Manulife produced client information for the period 2002 to 2007; Manulife produced an affidavit of documents that consisted of 4 boxes and almost 10,000 pages of documents; the plaintiff needed more time to digest what he had been given. The plaintiff’s affidavit sworn July 10, 2013 was filed in support of the motion.

[31] In his endorsement dated July 24, 2013, Master Glustein noted that Mr. Kim had not brought a claim for lost commissions in his statement of claim and the proposed amendments were a claim for commissions for the period 1994-2007 which he said were statute barred. He pointed out that Mr. Kim relied on the incapacity section 7 of the Limitations Act but the only evidence was in the period September 2008 to September 2010 (which he did not decide was sufficient evidence) and would be 3½ years from the latest date of March 2005 when Mr. Kim had raised the issue of outstanding commissions and as such knew or ought to have known of the cause of action. He concluded that an incapacity argument does not assist Mr. Kim. Master Glustein noted that Mr. Kim relied on s. 15(6)(a) and argued that the failure to pay commissions was a “continuous act”. He held that the failure to pay specified contractual amounts is not a continuous act and the exception did not apply. He concluded that the proposed amendment was statute barred and he dismissed the motion to amend. As for the timetable, Master Glustein pointed out that he could not alter the timetable set by the judge. He made an order requiring the plaintiffs to pay costs fixed at $2,000 payable in any event of the cause.

[32] Mr. Anderson cross-examined Mr. Kim on July 23, 2013 at which time he gave undertakings that enabled counsel to obtain extensive clinical notes and records with respect to Mr. Kim and his mental health and the period during which he had received disability insurance.

Attempt to Amend Amended Statement of Claim

[33] Mr. Kim served and filed a supplemental affidavit sworn December 18, 2013 in which he asserted the following: Manulife breached the contract and breached its fiduciary duty; he had inadvertently omitted referencing the claim due to psychiatric illness including severe anxiety and depression; he wished to make further amendments to the pleading to support a claim for breach of contract against Manulife including addition of client information records from 1994 to 2001. Attached to that affidavit was a document called “Further Amended Statement of Claim” in which he proposed to amend the prayer for relief as follows:

(a) add a claim for damages in the amount of $1 million dollars for breach of contract;

(b) delete the claim for damages in the amount of $4 million dollars for mental and psychological and substitute a claim for damages in the same amount for intentional infliction of mental suffering;

(c) delete the claim for damages in the amount of $500,000 dollars for breach of duty of good faith;

(d) delete the claim in the amount of $500,000 for breach of fiduciary duty.

[34] The proposed Further Amended Statement of Claim contained many other paragraphs of deletions or amendments.

[35] Mr. Kim said that in late 2013, he had received free legal advice that encouraged him to amend the statement of claim to plead breach of contract. Mr. Anderson agreed that this would be treated as a motion for leave to amend even though no notice of motion had been served and filed.

[36] I heard submissions from Mr. Kim and Mr. Anderson and gave an oral ruling dismissing the motion for leave to amend.

[37] Following the morning recess, Mr. Kim asked to make further submissions with respect to his request for leave to amend and to focus on his position that, having been psychotic since 2006, he was entitled to an exception to the Limitations Act, by which I understood him to refer to the capacity issues. I declined to permit him to re-open his submissions.

Positions taken by Kim

[38] In his written material and in his submissions, Mr. Kim made the following submissions. First, he argued that he had been incompetent and unable to deal with starting legal proceedings until mid 2012. His incapacity was a defence to the passage of the limitation period.

[39] Second, Mr. Kim has asked over 40 times for Manulife to produce information for the period 1996 to 2008. In order that Mr. Kim can conduct his own audit, he has demanded information by each client policy number, name, monthly premium, date of lapse if any, payments made by clients. He does not acknowledge the disclosure that he has received. He insists that Manulife has failed to comply with its duty to disclose.

[40] Third, Mr. Kim relied on the decision in Ward v. Manufacturers Life Insurance Company.[^1]

[41] Fourth, Mr. Kim took the position that Manulife is morally corrupt. He insists that he only wants to fight for justice. As Master Dash observed, Mr. Kim believes he is taking a very principled approach to preventing what he says is an injustice on the part of what Manulife is doing, not just to him but to other people as well.

Personal and corporate plaintiffs

[42] As indicated above, New Seoul Insurance Corporation was a party to the contracts. For purposes of this motion, I am assuming that Mr. Kim is the controlling shareholder if not the sole shareholder.

[43] Rule 15.01(2) provides that a party to a proceeding that is a corporation shall be represented by a lawyer, except with leave of the court. It does not appear that leave was ever obtained or granted to enable Mr. Kim to represent New Seoul. Counsel for Manulife did not raise that as an issue.

Motion to dismiss pursuant to rule 20.01(3) based on limitation period

[44] For purposes of this motion, I rely on the statement of claim as amended pursuant to the order of Stinson J. dated February 8, 2013 with respect to the title of proceedings only.

[45] S. 4 of the Limitations Act establishes the basic limitation period and s. 5 creates the framework for discovery of a cause of action:

4. Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.

5. (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.

[46] Counsel on behalf of Manulife takes the position that the limitation period started running as follows:

(a) as early as September 8, 2005, the date of the letter that Mr. Kim wrote to Mr. D’Alessandro in which he makes it clear that he believes he has a cause of action against Manulife.

(b) Alternatively, as a result of the letter dated September 9, 2008 in which Manulife advised that the result of their policy level review was that Mr. Kim had been overpaid by $30,779.99 and a demand for repayment was made.

(c) In the further alternative, as a result of the letter dated September 28, 2008 in which Mr. Kim made what he described as his final demand.

(d) Finally, as a result of the endorsement of Justice van Rensburg dated June 11, 2010, when she dismissed the motion he had brought in the divorce proceeding and directed him to commence a fresh action.

[47] The statement of claim was issued on September 21, 2012 which is more than two years from any of those dates.

[48] Taking the case most favourably to Mr. Kim, all of the ingredients for discoverability existed no later than September 28, 2008. While he did not refer to the letter dated September 9, 2008, the analysis that he provided in his letter is clearly in response to the September 9th letter. He demanded a response by October 24, 2008 including an explanation of the difference in the calculations. He noted that it was his final analysis and conclusion and he hoped Manulife would understand and follow the contract and the obligation. In summary, when he sent that letter, he knew that loss or damage had occurred; he knew the loss or damage was caused by or contributed to by an act or omission of Manulife; he was making his final analysis and demand, from which I infer that he knew that a court proceeding would be an appropriate means to seek to remedy the loss or damage. Mr. Kim is in the category of reasonable persons with the abilities and in the circumstances such that he ought to have known of these matters at that time. Pursuant to s. 5(1)(b), Mr. Kim is presumed to have known of those matters no later than September 28, 2008. The onus is on Mr. Kim to prove otherwise and he has not done so.

[49] Mr. Kim appears to concede that whenever the limitation period started to run, the two years had elapsed before September 21, 2012. Mr. Kim takes the position that while he was not certifiable according to the Ontario Mental Health Act, he was incompetent or substantially impeded in the management of his own affairs and he was not capable of exercising any reasonable judgment prior to the middle of 2012. His position is that until the middle of 2012, he was incapable of commencing a proceeding. He relies on s. 7, which is as follows:

7(1) The limitation period established by section 4 does not run during any time in which the person with the claim,

(a) is incapable of commencing a proceeding in respect of the claim because of his or her physical, mental or psychological condition; and

(b) is not represented by a litigation guardian in relation to the claim.

(2) A person shall be presumed to have been capable of commencing a proceeding in respect of a claim at all times unless the contrary is proved.

(3) If the running of a limitation period is postponed or suspended under this section and the period has less than six months to run when the postponement or suspension ends, the period is extended to include the day that is six months after the day on which the postponement or suspension ends.

[50] There is no question that Mr. Kim has had some health challenges. In the cross-examination which was held on July 23, 2013, Mr. Kim gave undertakings and as a result, Mr. Anderson obtained a variety of documents including clinical notes and records from University Health Network in May, 2010 and the contents of the file of his psychiatrist, Dr. Lalani commencing November 2007 which consist of over 250 pages. In the context of the divorce proceedings, a judge before whom he had appeared had suggested that Mr. Kim obtain an assessment. Mr. Kim accepted that suggestion and was assessed by Dr. Hae R. Kim, a consultant psychiatrist and a psychotherapist in May 2009. A copy of his report was provided. Mr. Kim was in receipt of residual disability benefits under a Manulife policy of insurance over the five year period between November 19, 2007 and May 17, 2012.

[51] Mr. Kim was in hospital on the following dates:

September 12, 2008 to September 26, 2008 14 days

November 6, 2008 to November 11, 2008 5 days

June 29, 2009 to July 9, 2009 10 days

May 6, 2010 emergency department

September 7, 2010 to September 25, 2010 19 days

[52] Mr. Kim was hospitalized for 14 days at about the time he would have received the letter dated September 9th but he sent a letter dated September 28, 2008 within two days of his discharge. The letter makes no reference to his hospitalization or his emotional or psychological problems. Rather, as indicated above, it contains his “final analysis and conclusion”.

[53] The evidence does not support a finding that during those periods of hospitalization, Mr. Kim was incapable of commencing a proceeding in respect of the claim because of his mental or psychological condition. However, taking the evidence most favourably to Mr. Kim, the total of those dates of hospitalization is approximately 48 days. Assuming that s. 7(3) applies and the running of the limitation period is suspended for that period of time, it would serve only to extend the limitation period from September 28, 2008 to no later than on or about November 15, 2008.

[54] Mr. Kim paid $2,000 to obtain the independent psychiatric assessment of Dr. Hae R. Kim dated May 11, 2009. Dr. Kim had access to Dr. Lalani’s clinical notes and records and he conducted comprehensive psychological testing. He concluded that Mr. Kim had been suffering from several psychiatric disorders for more than three years due to the ongoing high level of stress in his daily living mainly due to the ongoing marital disharmony and legal disputes through the court over the past three years. His psychiatric condition had not improved in spite of treatments. Mr. Kim was carrying a high risk of committing suicide. He wrote the following:

Mr. Kim is not certifiable according to Ontario Mental Health Act. Also, he is capable of managing his own personal affairs, financial matters and making decisions for himself.

[55] Mr. Kim continued to act for himself in the divorce proceedings. Between January 1, 2005 and August 31, 2012, he attended court on his own behalf more than ten times.

[56] Mr. Kim’s driver’s license was suspended for medical reasons from September 20, 2010 to May 26, 2011. Suspension for medical reasons does not warrant a conclusion of incapacity.

[57] As of September, 2007, Mr. Kim was limited in his ability to work to about 20 hours per week. However, none of the medical records contained in the disability claims file indicate that Mr. Kim was incapable of commencing a proceeding during the period November 2007 to May 2012 during which he received disability insurance.

[58] During the cross-examination, Mr. Anderson asked Mr. Kim whether he was competent and capable at the time of writing letters and he agreed he was with respect to 19 letters including his letter dated September 28, 2008 and ending with his letter dated August 9, 2012. With respect to his letter dated April 12, 2010, he said he felt that Manulife was responsible and liable for his anxiety and depression.

[59] Clearly the relevant limitation period elapsed no later than 2 years after September 28, 2008 or September 27, 2010 with a possible suspension of 48 days, extending the limitation period to on or about November 14, 2010. The Statement of Claim was issued on September 21, 2012, approximately 22 months after that period ended.

[60] Pursuant to s. 7(2), Mr. Kim is presumed to have been capable of commencing a proceeding in respect of a claim at all times unless the contrary is proven. The onus is on him to so prove and he has not done so. There is no merit to the defence that the limitation period continued to run until September 21, 2012.[^2]

[61] Furthermore, I agree with counsel for Manulife that New Seoul cannot rely on the exclusion set out in s. 7 of the Limitations Act which is only available to persons, not corporations. Taking the evidence most favourably to New Seoul, the limitation period expired no later than September 27, 2010 and must be struck as being out of time.

[62] The Amended Statement of Claim must be dismissed on the basis that there is no merit to the defence that the limitation period continued to run until September 21, 2012.

Motion to dismiss for failure to disclose a reasonable cause of action pursuant to Rule 21.01(1)(b)

[63] Having found that the claims on behalf of both plaintiffs are barred by limitation period, I need not address the alternate submissions on behalf of Manulife but having heard comprehensive submissions I will do so.

[64] The Amended Statement of Claim includes a claim for damages for “mental and Psychological”. Taking that as favourably as possible to the plaintiffs, that might be considered to be a claim for mental distress damages. As indicated above, the contracts were only with New Seoul. There is no evidence or allegation of any contract between Mr. Kim and Manulife. In the absence of a claim for breach of contract, such damages are not available. Furthermore, a claim for damages for mental distress is not available to a corporation. That claim does not disclose a reasonable cause of action.[^3]

[65] The Amended Statement of Claim also seeks punitive damages and damages for breach of the duty of good faith. The plaintiff must establish three elements: that the defendant had a duty of good faith to both plaintiffs; that the impugned conduct toward both plaintiffs departed markedly from the ordinary standards of decency, being malicious, oppressive or high handed such as to offend the court’s sense of decency; and lastly, that the impugned conduct was separately actionable by each plaintiff.[^4] I agree with counsel for Manulife that the Amended Statement of Claim sets out the impugned conduct at paragraphs 20 to 23, but it does not include an allegation that Manulife owed a duty of good faith to either plaintiff. Nor does it include allegations of facts, which, if proven, would be the basis upon which a court could find that the impugned conduct toward the plaintiffs departed markedly from ordinary standards or that the impugned conduct was separately actionable. Without establishing the duty of good faith, there can be no basis for an award of punitive damages. Those claims do not disclose a reasonable cause of action.

[66] The Amended Statement of Claim also seeks damages for breach of fiduciary duty. However, there are no facts pleaded which, if proven, would establish that Manulife owed either Mr. Kim or New Seoul a fiduciary duty, how that duty was breached, and that either suffered damages that were caused as a result of the breach. That claim does not disclose a reasonable cause of action.

[67] The Amended Statement of Claim includes a request for special damages for “loss business and opportunities”. There is no allegation of a breach of contract either with respect to Mr. Kim or New Seoul. The Amended Statement of Claim does not include allegations of facts, which, if proven, would be the basis upon which a court could find Manulife liable either in contract or in tort for the alleged decline in New Seoul’s business. That claim does not disclose a reasonable cause of action.

[68] As indicated above, the claims are also barred by limitation period. That too constitutes a failure to disclose a reasonable cause of action.[^5]

[69] The Statement of Claim must be dismissed pursuant to rule 21.01(1)(b) on the basis that it fails to disclose a reasonable cause of action.

Motion to dismiss pursuant to rule 20.04(2)(a)

[70] The onus is on the defendant to satisfy the court that there is no genuine issue requiring a trial with respect to the Amended Statement of Claim.

[71] I agree with the submission on behalf of Manulife that the fact that there is a dispute as to when the claim was discovered does not in and of itself mean there is a genuine issue requiring a trial.[^6] As indicated above, Mr. Kim focused his submissions on the limitation period extension, rather than on the date of discovery of the claim. Counsel for Manulife advanced several possibilities. I did not accept the submission that the limitation period began to run no later than September 9, 2008, which was the date of Manulife’s letter. I have found that the limitation period began to run no later than September 28, 2008 (subject to the extension discussed earlier) which was the date of Mr. Kim’s own letter written on his behalf and on behalf of New Seoul. Given the contents of that letter, there is no genuine issue for trial as to the date of discovery of the claim.

[72] Mr. Kim sought to extend the limitation period to September 21, 2012. It was incumbent on him that he provide affidavit material or other evidence to show facts that demonstrate a genuine issue for trial. His position that he is entitled to the exclusion pursuant to s. 7(2) is not borne out by the affidavits he has filed. In fact, the voluminous documents including clinical notes and records that were produced on his written authorizations indicate the contrary. The psychiatrist whom he engaged and whose report he submitted to the court dealing with the divorce proceeding, indicates clearly that as of May 2009, Mr. Kim was “capable of managing his own personal affairs, financial matters and making decisions for himself”. There is no genuine issue for trial as to the extension of the limitation period vis-à-vis Mr. Kim. There is no genuine issue for trial vis-à-vis New Seoul because no issue of capacity can be raised with respect to a corporation.

[73] After the motion was heard on January 22, 2014, the Supreme Court released reasons for decision that dealt with rule 20.04(2) (a) and related rules.[^7] Those reasons for decision reinforce the conclusions I have reached above that in the circumstances of this case, the motion for summary judgment was the most proportionate way to dispose of the action.

Action dismissed without leave to amend the Statement of Claim

[74] As indicated above, Mr. Kim had issued the Statement of Claim on September 21, 2012. On consent, he was permitted to amend the title of proceedings pursuant to the order made February 8, 2013. Following the amendment, the Amended Statement of Defence was served and filed. Aside from the amendment to the title of proceedings, Mr. Kim brought three motions to amend and on each occasion his motion was dismissed. He made another attempt at the outset of the motion before me.

[75] Rule 26.01 provides, in part, that the court shall grant leave to amend a pleading on such terms as are just. Any claims which the plaintiffs might assert, and particularly a claim for breach of contract, attract a two year limitation period. As indicated above, that had elapsed almost two years before the Statement of Claim was issued. It would not be just to afford the plaintiffs any further opportunities to amend when the claims are barred by the limitation period.

Motion to dismiss pursuant to rule 21.01(3)(d)

[76] In the notice of motion and in the factum, counsel for Manulife sought an order dismissing the Amended Statement of Claim on the basis that the action is frivolous or vexatious or otherwise an abuse of process of the court. During submissions, counsel advised that he would not be making submissions on that issue.

Applicability of Ward v. Manufacturers Life Insurance Company

[77] As indicated above, Mr. Kim relied heavily on the reasons for decision both by the trial judge and by the Court of Appeal. In that case, Mr. Ward had sold life insurance for thirty years. His agreement was terminated on 30 days’ notice. After a five week trial, the trial judge awarded substantial damages including damages for breach of fiduciary duty and punitive damages. That case has no application to this motion.

ORDER TO GO AS FOLLOWS:

[78] The request by the plaintiffs to amend the Amended Statement of Claim is dismissed without leave to further amend.

[79] The motion brought by the defendant is granted. The Amended Statement of Claim is dismissed.

[80] By March 7, 2014, counsel for Manulife shall make written submissions as to costs not exceeding 3 pages plus bill of costs plus offers to settle, if any.

[81] By March 24, 2014, Mr. Kim shall make written submissions as to costs not exceeding 3 pages plus offers to settle, if any.

Kiteley J.

Date: February 25, 2014

[^1]: 2006 18527 (ON SC); 2007 ONCA 881

[^2]: Combined Air Mechanical Services Inc. v. Flesch 2011 ONCA 764

[^3]: Fidler v. Sun Life Assurance Co. of Canada [2006] SCC 30

[^4]: Ibid para 61-63

[^5]: Coulson v. Citigroup Global Markets Canada Inc. 2010 ONSC 1596

[^6]: Liu v. Silver 2010 ONSC 2218; affirmed 2010 ONCA 731

[^7]: Hryniak v. Mauldin [2014] SCC 7 and Bruno Appliance and Furniture Inc, v. Hryniak [2014] SCC 8