SUPERIOR COURT OF JUSTICE – ONTARIO

COURT FILE NO.: CV-12-2603-00SR
DATE: 2014-03-05

RE: Advantage Electric Limited v. Cory Bentley and Steve Daly

BEFORE: Barnes J.

COUNSEL: Robert Kostyniuk, for the Plaintiff
Brendan Wong, for the Defendants

HEARD: October 07, 2013

E N D O R S E M E N T

INTRODUCTION

1The defendants (Bentley and Daly) seek an order dismissing the plaintiff’s (“Advantage Electric” or “Advantage Electric Limited”) action on the grounds that it has no legal capacity to commence or continue the action; in the alternative, an order that the action be transferred from Brampton, Ontario to Toronto, Ontario; and costs of this motion on a substantial indemnity basis against David Shwedyk.

2In a cross-motion, the plaintiff seeks the dismissal of the defendants motion and an order that a timetable be set.

3Upon reading all the material filed and after considering the submissions of counsel, I order that the name Advantage Electric or Advantage Electric Limited be amended to 1141002 Ontario Limited; the venue of the action is transferred from Brampton to Toronto; no weight shall be given to the affidavit of Donna Lambert, sworn July 26, 2013; the plaintiff shall provide the defendants with particulars; a timetable for the conduct of the action shall be set; and costs are awarded to the defendants.

BACKGROUND FACTS

4David Shwedyk operates an electrical supply and installation business in Ontario. He set up a company called 1141002 Ontario Limited, for that purpose and carries on business as Advantage Electric.

5The Defendants are the owners of the residential address, 38 Kings Lynn Road in Toronto. The defendants hired the plaintiff to perform some electrical services at the defendants’ home.

6The plaintiff claims that a series of invoices, totalling just over $72,000, were given to the defendants. The invoices were for electrical services rendered to the defendants. The plaintiff claims that $25,000 was paid by the defendants, leaving a balance of $47,022.77.

7The plaintiff has commenced an action to recover the said debt.

ISSUES

8I have reviewed the affidavit of Donna Lambert, sworn July 26, 2013. This affidavit is replete with hearsay references on several material points. For this reason, the defendants submit that this affidavit should be given no weight. I agree and the affidavit is given no weight by this court. The plaintiff has relied extensively on the supplementary affidavit of David Shwedyk, sworn September 4, 2013. Thus the following issues remain:

(a) Should this action be dismissed due to the plaintiff’s lack of capacity?

(b) Should this action be transferred to Toronto, Ontario?

(c) Should a timetable be set for this action?

Should this action be dismissed due to the plaintiff’s lack of capacity?

9In this action the plaintiff is listed as Advantage Electric. Advantage Electric is not a legally registered corporation in Ontario. The plaintiff submits that this action erroneously was commenced in the name Advantage Electric Limited. According to the plaintiff, the correct name is 1141002 Ontario Limited; operating as Advantage Electric. The letters of incorporation of 1141002 Ontario Limited make no reference to Advantage Electric as a business name. A certification from the Electrical Safety Authority of Ontario, identifying the plaintiff as Advantage Electric 1141002 Ontario Limited, does not remedy the fact that there is no corporation incorporated in Ontario as either Advantage Electric Limited or as Advantage Electric 1141002 Ontario Limited. Thus the plaintiff, as currently identified, has no legal capacity.

LAW

10The basis of the defendants’ motion to strike is grounded in rule 21.01(3)(b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194:

21.01(3) A defendant may move before a judge to have an action stayed or dismissed on the ground that . . . (b) the Plaintiff is without legal capacity to commence or continue the action or the defendant does not have legal capacity to be sued.

11There is a limitation period described in s. 4 of the Limitations Act, 2002, S.O. 2002, c. 24 Sch. B.

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.

12The defendants’ invoices are dated between September 23, 2010 and February 3, 2011. Thus the two-year limitation period has expired and the plaintiff cannot simply amend its claim.

13In Mazzuca v. Silvercreek Pharmacy Ltd. (2001), 2001 8620 (ON CA), 56 O. R. (3d) 768 (C.A.), the Court of Appeal for Ontario held that a plaintiff may amend his or her pleading after a limitation period has expired, if the plaintiff can demonstrate the absence of prejudice to the defendant and the existence of special circumstances. This remedy was discretionary and dependent on the particular facts of each case.

14Mazzuca was decided before the Limitations Act, 2002, which changed the law. Subsection 21(1) of the Limitations Act, 2002 makes this clear:

21(1) If a limitation period in respect of a claim against a person has expired, the claim shall not be pursued by adding the person as a party to any existing proceeding.

15Subsection 21(2) creates an exception in the case of a misnomer:

21(2) Subsection (1) does not prevent the correction of a misnaming or misdescription of a party.

16A misnomer is a circumstance in which a party to an action, who knows about the action, has simply been misnamed. The test is aptly described in Spirito v. Trillium Health Centre, 2008 ONCA 762, 302 D.L.R. (4th) 654, at para. 12, where the court cited Dukoff et al. v. Toronto General Hospital et al. (1986), 1986 2648 (ON SC), 54 O.R. (2d) 58 (H.C.) and Davies v. Elsby Brothers, Ltd., [1960] 3 All E.R. 672 (C.A.):

The test must be: How would a reasonable person receiving the document take it? If in all the circumstances of the case and looking at the document as a whole he would say to himself: “Of course it must mean me, but they have got my name wrong”. Then there is a case of mere misnomer. If, on the other hand, he would say: “I cannot tell from the document itself whether they mean me or not and I shall have to make inquiries”, then it seems to me that one is getting beyond the realm of misnomer.

17A court that determines that there has been a misnomer retains the residual discretion to refuse the amendment where there is prejudice to the defendant that cannot be effectively remedied by costs or an adjournment: see Ormerod v. Strathroy Middlesex General Hospital (2009), 2009 ONCA 697, 97 O.R. (3d) 321 (C.A.), at paras. 28-33.

18On these facts, I conclude that this is a case of misnomer and any prejudice to the defendant can be remedied by a cost award.

19The name Advantage Electric is very familiar to the defendants’. There is no dispute that the defendants, at all times, dealt with David Schwedyk who conducted business as Advantage Electric; the invoices rendered by the plaintiff, were for renovation services conducted at the defendants’ residential premises; and there is no dispute that the work was rendered and completed. What is in dispute is the quantum of the amounts outstanding.

20In all the circumstances, it is reasonable to expect that when the defendants received the invoices, they knew who Advantage Electric was; who was behind Advantage Electric; which renovation services were referred to; where it was rendered; why they were being sued; and what they were being sued for. Under all these circumstances, the test for misnomer is satisfied.

21In circumstances where the test for misnomer is met, a party can commence an action using a fictitious name to preserve their rights to sue within the limitation period. The fictitious name can be corrected even after the limitation period is passed: see Spirito. Therefore, in circumstances such as the present case, where the test for misnomer has been met, an action that is commenced in the name of a party with no legal capacity is similar to commencing an action in the name of a fictitious person.

22This action was commenced in June 2012. The defendants were served with the statement of claim on July 22, 2012. The defendants’ counsel wrote to plaintiff’s counsel on August 7, 2012. In this letter, the defendants advised that there was no corporation in Ontario under the name “Advantage Electric Limited”. Counsel requested that the appropriate plaintiff should be named or the action should be discontinued. No response was received to this request.

23On May 7, 2013, the defendants’ counsel wrote a follow-up letter and again, there was no response. In the May 7, 2013 letter, counsel for the defendants sought dates, from counsel for the plaintiff, for a motion in July 2013 to resolve the issue.

24The prejudice suffered by the defendants does not affect their ability to mount a defence on the merits, but rather, the additional cost incurred preparing for and arguing this motion. This type of prejudice can be effectively addressed by a cost award. Therefore, the name of the plaintiff in this action is amended from “Advantage Electric Limited” to “1141002 Ontario Limited”.

25After assessing the bill of costs, the defendants are awarded costs in the amount of $6,611 at a rate of two per cent interest per annum. Since the plaintiff is now a legal entity, it is premature to order costs against David Schwedyk this early in the action.

Should this action be transferred to Toronto, Ontario?

26I have concluded that this action should be transferred from Brampton, Ontario to Toronto, Ontario.

27Rule 13.1.02(2)(b) of the Rules of Civil Procedure provides:

(2) . . . the court may, on any party’s motion, make an order to transfer the proceeding to a country other than the one where it was commenced, if the court is satisfied . . .

(b) that a transfer is desirable in the interest of justice, having regard to,

(i) where a substantial part of the events or omissions that gave rise to the claim occurred,

(ii) where a substantial part of the damages were sustained,

(iii) where the subject-matter of the proceeding is or was located,

(iv) any local community’s interest in the subject-matter of the proceeding,

(v) the convenience of the parties, the witnesses and the court,

(vi) whether there are counterclaims, crossclaims, or third or subsequent party claims,

(vii) any advantages or disadvantages of a particular place with respect to securing the just, most expeditious and least expensive determination of the proceeding on its merits,

(viii) whether judges and court facilities are available at the other county, and

(ix) any other relevant matter.

28The burden is on the moving party (the defendants) to demonstrate that the plaintiff’s choice of venue is unreasonable or that the transfer is in the interests of justice: see Siemens Canada Ltd. v. Ottawa (City) (2008), 2008 48152 (ON SC), 93 O.R. (3d) 220 (S.C.). The plaintiff’s witnesses are in Hamilton. The primary witness, the project construction manager, is from Oakville. The defendants are in Toronto and Brampton is a central location for the plaintiff’s and defendants’ witnesses.

29There is no apparent local or community interest in this action. It is a private debt collection matter. There are sufficient judges and court facilities in Toronto and Brampton; no financial advantages or disadvantages are apparent and none were explicitly identified; there is no evidence presented of a more expeditious resolution of the action in one jurisdiction versus the other; nor are there any current counterclaims, cross-claims, or third or subsequent party claims.

30All the material events that give rise to the claim occurred in Toronto; the plaintiff carries on business in Ancaster, Ontario, which is where a substantial part of the damages were sustained; the defendants reside in Toronto. I conclude that the best connection to the City of Brampton is that this is where the plaintiff’s counsel’s office is located.

31On an overall assessment of the circumstances of this case, and this is a close one, I conclude that the balance of convenience favours transferring this action to Toronto. This action shall be transferred to Toronto, Ontario.

Should a timetable be set for this action?

32The plaintiff submits that a timetable should be set in order to advance these proceedings. The defendants’ position is that a timetable is premature because the plaintiff has failed to respond to their letter for particulars, dated August 7, 2012.

33It is desirable to set a timetable to enable this matter to proceed along in a timely and orderly manner. The concerns raised by the defendants can be addressed by including their request for particulars in the timetable. Therefore, the parties shall follow the following timetable:

(a) The plaintiff shall respond to the defendants’ request for particulars as set out in the plaintiff’s letter, dated August7, 2012. These particulars shall be provided by March 15, 2014;

(b) The defendants shall deliver their Statement of Defence within 15 days of March 15, 2014;

(c) The parties shall deliver affidavits of documents within 30 days thereafter;

(d) The parties shall conduct examinations for discovery within 30 days after the delivery of affidavits of documents;

(e) Motions arising from examinations are to be filed within 30 days of completing the discoveries; and

(f) Should the matter not resolve, a pretrial shall be held and a trial date shall be selected, in consultation with the trial coordinator, within 60 days thereafter.

Barnes J.