ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
PETER DANOS, GRACE DANOS, and APRICOT CATERING 2001 INC.
Plaintiffs/Responding Parties
– and –
BMW GROUP FINANCIAL SERVICES CANADA, a division of BMW CANADA INC., BMW CANADA INC., SYDNEY P.H. ROBINSON, EDWARD A. ROBINSON, EBERHARD VON KUENHEIM, ADAM ZIMMERMAN, TOWN & COUNTRY MOTORS (1998) LIMITED, carrying on business as TOWN + COUNTRY BMW, JAMES H. COCHRANE and ROY C. FOSS
Defendants/Moving Parties
Wayne Laski, for the
Plaintiffs/Responding Parties
Ron Aisenberg, for BMW and Itzik Basman, for Town and County and Cochrane Defendants/Moving Parties
HEARD: Jan. 23, 2014 and Feb. 25, 2014
r.f. goldstein j.
1In 2006 Apricot Catering (2001) Inc. leased a very lovely vehicle from BMW Financial Services Canada Ltd. It was a black sapphire BMW X5 4.4i sport utility vehicle. Peter Danos and Grace Danos were listed as the co-lessees. They each signed the lease on behalf of Apricot. Town & Country Motors (1998) Limited was listed as the dealer. James H. Cochrane was the sales person.
2No doubt the Danos’s enjoyed driving it. Unfortunately, they allegedly stopped making the lease payments in 2007. BMW naturally took action to collect. BMW launched a lawsuit in the Superior Court in Brampton against the Danos’s and Apricot. The lawsuit claimed that when the vehicle was repossessed BMW suffered a loss of just under $21,000.00. The Danos’s and Apricot filed a defence arguing that Grace Danos was misled into signing the lease. Their defence also stated that BMW was not commercially reasonable and denied that BMW had suffered any loss.
3What started out as a garden-variety lawsuit morphed into a conspiracy investigation when the Danos’s received BMW’s productions. The Danos’s allege that Peter Danos’s signature was forged on the business and personal credit applications. The Danos’s also allege that Grace Danos’s signature was forged on the personal credit application. They say that they are the victims of a shocking fraud by the defendants. They launched a fresh lawsuit in Superior Court in Toronto claiming damages as a result of the alleged fraud. They say that BMW and Town and Country should be subject to damages of $1 million for the torts of fraud and fraudulent misrepresentation, and punitive damages of $1 million. Thus, there are now separate actions in Brampton and Toronto.
4The Defendants BMW, Town and Country, and James Cochrane in the Toronto fraud action now bring a motion for summary judgment. They say that the Toronto fraud action should be dismissed. In the alternative, they say that I should grant leave to the Danos’s and Apricot to file a counterclaim in the Brampton action. I agree with the Defendants. The evidence that there was a fraud is thin, at best. It is certainly not sufficient to prove fraud on a balance of probabilities. I am also very sceptical that the Danos’s suffered any damages even if there was a fraud. Finally, I am satisfied that the action is statute-barred. For the reasons that follow, the motion is granted and the action is dismissed as against the moving parties without leave to amend the pleadings or file a counter-claim in the Brampton action.
BACKGROUND
5On June 16, 2006 the BMW X5 was leased to Apricot Catering. The lease named Apricot Catering as the lessee, Peter Danos and Grace Danos as the co-lessees, and Town and Country BMW as the Retailer. The value of the X5 was listed as $76,300.00. The lease interest rate was 4.4%. The monthly payments were $1298.88. The term of the lease was 36 months. The buy-out price was $43,505.00. Peter Danos’s name is typed onto the front of the lease document. Grace Danos’s name is handwritten.
6As part of the lease, the Danos’s authorized the debit of the lease payment from their bank account. The lease indicates that Peter Danos and Grace Danos signed as account owners. Grace Danos recalls signing the lease in June 2006. There is no allegation that Peter Danos’s signature on the lease agreement is forged.
7The Danos’s took delivery of the vehicle and made 12 payments. BMW took steps to repossess it and on October 31, 2007 Peter Danos returned it to the dealership. BMW says that it sold the car at auction but suffered a loss of just under $21,000.00. BMW then launched the Brampton action to recover the loss. The Danos’s and Apricot Catering defended. The Danos’s said in their defence that BMW was not commercially reasonable in the way it dealt with Peter Danos and therefore failed to mitigate its damages. They also said that Grace Danos did not realize she was signing documents in her personal capacity. The defence claims that Grace Danos was misled by BMW’s representative. The Danos’s also pleaded that the BMW was outside the limitation period. Grace Danos pleaded that she did not receive copies of the lease documents.
8The BMW produced documents in the Brampton action. Grace Danos filed an affidavit on this motion. She states in her affidavit that one of the documents she received was a personal credit application. She says that although the signature looked like hers, she did not recall signing it. She also says that the signature of Peter Danos on the personal credit application is not his signature and is different from the signature of Peter Danos on the business credit application.
9She then began to look at her own signature and became suspicious, although she stated in her affidavit that she still believed the signature on the personal credit application to be hers.
10Mr. Laski, the lawyer for the Danos’s, brought what was believed to be a forgery to the attention of BMW and Town and Country. He was not satisfied with their failure to properly investigate, and so the Danos’s brought the Toronto action, claiming $2,000,000.00 in damages. BMW and Town and Country now bring this summary judgment motion to dismiss the action.
ISSUES
11In my view, there are five issues to be determined:
(1) Is this an appropriate case for summary judgment?
(2) Was there a fraud?
(3) If there were forgeries, did anyone suffer any damage as a result?
(4) Is the claim barred by a limitation period?
(5) Should leave be granted to file a counterclaim in the Brampton action?
ANALYSIS
1. Is this an appropriate case for summary judgment?
12The threshold issue in this case is whether this is an appropriate case for summary judgment. This case was argued on January 23 2014, the day that the Supreme Court of Canada released its judgment in Hryniak v. Mauldin 2014 SCC 7, and its companion case, Bruno Appliance and Furniture Inc. v. Hryniak 2014 SCC 8. The matter was briefly adjourned so that counsel could consider the Supreme Court’s decision. After a more leisurely perusal of the cases counsel jointly requested an opportunity to make further submissions in light of Hryniak. Further submissions were heard on February 25 2014.
13In Hryniak the Supreme Court considered the amendments that were made to the summary judgment provisions in the Rules of Civil Procedure. The amended Rule reads as follows:
20.04 (2) The court shall grant summary judgment if,
(a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence; or
(b) the parties agree to have all or part of the claim determined by a summary judgment and the court is satisfied that it is appropriate to grant summary judgment.
(2.1) Powers – In determining under clause (2) (a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:
Weighing the evidence.
Evaluating the credibility of a deponent.
Drawing any reasonable inference from the evidence.
(2.2) Oral Evidence (Mini-Trial) – A judge may, for the purposes of exercising any of the powers set out in subrule (2.1), order that oral evidence be presented by one or more parties, with or without time limits on its presentation.
14Karakatsanis J., for the Court, considered the amended rule in light of the well-known problems of access to justice for ordinary litigants. As a policy response, the new rules, she said, should facilitate speedy and fair results for litigants. Guided by this, she relaxed the “full appreciation” test set out by the Ontario Court of Appeal in Combined Air Mechanical Services v. Flesch, 2011 ONCA 764, [2011] O.J. No. 5431, 108 O.R. (3d) 1, 344 D.L.R. (4) 193, 10 C.L.R. (4) 17, (QL), 2011 CarswellOnt 13515 (C.A.).
4 In interpreting these provisions, the Ontario Court of Appeal placed too high a premium on the "full appreciation" of evidence that can be gained at a conventional trial, given that such a trial is not a realistic alternative for most litigants. In my view, a trial is not required if a summary judgment motion can achieve a fair and just adjudication, if it provides a process that allows the judge to make the necessary findings of fact, apply the law to those facts, and is a proportionate, more expeditious and less expensive means to achieve a just result than going to trial.
15Instead, Karakatsanis J. held that the powers in Rule 20.04(2.1) and 20.04(2.2) permitted judges to weigh evidence, evaluate credibility, and draw reasonable inferences: Hryniak, para. 44. In other words, the default setting for litigation should not be a full trial with all of its ponderous procedures and complex rules that encourage tactical manoeuvres, but rather what is just and swift in the circumstances of each case.
16When is there a genuine issue that requires a trial? Karakatsanis J. described it in these terms:
49 There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.
17Karakatsanis J. then stated that where a judge on a summary judgment motion is able to make the necessary findings of fact and resolve the dispute, a trial is not a proportionate, timely, or cost effective procedure: Hryniak, para. 50.
18The evidence that will be necessary on a summary judgment motion is that which is necessary to give a judge confidence that he or she can fairly resolve the dispute. A documentary record is often enough, supplemented as necessary to resolve discrete issues: Hryniak para. 57. The power to hear oral evidence on a summary judgment should only be employed where it is necessary for a fair and expeditious adjudication: Hryniak, para. 63.
19Karakatsanis J. then provided a “road map” for summary judgment motions:
66 On a motion for summary judgment under Rule 20.04, the judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-finding powers. There will be no genuine issue requiring a trial if the summary judgment process provides her with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure, under Rule 20.04(2)(a). If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2). She may, at her discretion, use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.
20Since the decision in Hryniak there has been some consideration of its implications. For example, in Cochrane v. Kawartha Lakes (City) Police Services Board, [2014] O.J. No. 933 (Sup.Ct.) Marrocco ACJ commented:
23 Judges must actively manage the legal process in line with the principle of proportionality: Hryniak, at para. 32.
24 Proportionality is a comparative principle and it compels a motion judge to question whether the added expense and delay of fact finding at trial is necessary to a fair process and just adjudication between the parties: Hryniak, at para. 33.
25 The summary judgment motion can enhance access to justice because it can provide a cheaper, faster alternative to a full trial: Hryniak, at para. 34.
26 Summary judgment has evolved into a legitimate alternative means for adjudicating and resolving legal disputes: Hryniak, at para. 36.
27 A summary judgment motion judge is required to grant the motion where there is no genuine issue requiring a trial: Rule 20.04(2)(a). There is no genuine issue requiring a trial if the summary judgment process provides the court with the evidence necessary to fairly and justly adjudicate the dispute and it constitutes a timely, affordable and proportionate procedure.
21In Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200, [2014] O.J. No. 851 (Sup.Ct.) Corbett J. considered the evidence required on a summary judgment motion, particularly the Court of Appeal’s requirement in Combine Air that a party must put its “best foot forward”: it was his view that a court is entitled to assume that the record contains all of the evidence that a party would present at trial. He stated:
32 Summary judgment motions come in all shapes and sizes, and this is recognized in the Supreme Court of Canada's emphasis on "proportionality" as a controlling principle for summary judgment motions. This principle does not mean that large, complicated cases must go to trial, while small, single-issue cases should not. Nor does it mean that the "best foot forward" principle has been displaced; quite the reverse. If anything, this principle is even more important after Hryniak, because on an unsuccessful motion for summary judgment, the court will now rely on the record before it to decide what further steps will be necessary to bring the matter to a conclusion. To do this properly, the court will need to have the parties' cases before it.
22Corbett J. suggested that the appropriate analysis on a summary judgment motion after Hryniak is as follows:
33 As I read Hryniak, the court on a motion for summary judgment should undertake the following analysis:
The court will assume that the parties have placed before it, in some form, all of the evidence that will be available for trial;
On the basis of this record, the court decides whether it can make the necessary findings of fact, apply the law to the facts, and thereby achieve a fair and just adjudication of the case on the merits;
If the court cannot grant judgment on the motion, the court should:
(a) Decide those issues that can be decided in accordance with the principles described in 2), above;
(b) Identify the additional steps that will be required to complete the record to enable the court to decide any remaining issues;
(c) In the absence of compelling reasons to the contrary, the court should seize itself of the further steps required to bring the matter to a conclusion.
23I respectfully adopt Corbett J.’s analysis and conclusions. I therefore assume that the parties have put forward the evidence that they have available to them for trial and that they are not holding anything back. Under the Combine Air test this means that each party would have been required to “put their best foot forward”. Setting out a proper record is no less important under the Hryniak test, as Corbett J. observed. Indeed, it is critical if the judge is to achieve a just and expeditious result.
24On the basis of this record, then, can I make the necessary findings of fact and apply the law to them in order to achieve a just result? In my view, I can. The evidence brought forward – and not brought forward – indicates that there is simply no genuine issue for trial. As I point out later in these reasons, it is noteworthy that Peter Danos has not filed an affidavit. I am, therefore, able to make the following findings:
There was no fraud;
An essential element of the tort of fraud, damages, has not been made out;
The claim is statute-barred.
25I am also able to say that it is not in the interests of justice to grant leave for the Brampton pleadings to be amended.
2. Was there a fraud?
26The heart of the plaintiff’s case is that their signatures have been forged. They append the expert report of Dr. Atukl K. Singla as an exhibit to Grace Danos’s affidavit. They rely on this expert report. The expert has not been cross-examined. There is no forensic evidence to refute the expert’s report.
27Dr. Singla was provided with two questioned documents. The first is the business credit application bearing the purported signature of Peter Danos. The second is the personal credit application bearing the purported signatures of Grace Danos and Peter Danos. It is these documents that the plaintiffs say are forged.
28Dr. Singla was provided with 14 documents with what he was told were known samples of the signatures of Grace Danos and Peter Danos. He gave three opinions: first, that it was highly probable that the questioned signature on the business credit application was not written by the writer (Peter Danos) of the known signatures; second, that the questioned signature of “Peter Danos” on the personal credit application was carefully overwritten and did not match the known signatures; and third, that it was highly probable that the questioned signature of “Grace Danos” on the personal credit application did not match the known signatures.
29BMW, Town and Country, and Cochrane argue that the report is inadmissible hearsay and no reliance can be placed on it. I agree. As Strathy J. (as he then was) stated in Toronto-Dominion Bank v. Schrage, [2009] O.J. No. 3636, 64 B.L.R. (4th) 277,2009 45444 (Sup.Ct.), “… the court is entitled to insist on sworn evidence and, in the case of experts, that the evidence be given by the expert and not filtered through the hearsay evidence of the party.” (para. 39). A party can either file an affidavit from an expert setting out the expert’s opinion, or file an affidavit from the expert with the report attached: Hiebert v. Lennox Canada Inc., [2007] O.J. No. 3079 (Sup.Ct.) at para. 17. The point is that the expert ought not to be shielded from cross-examination: Dutton v. Hospitality Equity Corp., [1994] O.J. No. 1071, 26 C.P.C. (3d) 209 (Sup.Ct.).
30Rejecting the expert report is enough to dispose of this issue. Without evidence of forgery there is no basis to claim fraud. For greater certainty, however, I will mention some of the issues I see in the report, leaving aside the question of admissibility.
31Rejecting an expert report because it is appended to someone else’s affidavit is not just a triumph of form over substance. Introducing the expert’s report in this way prevents meaningful cross-examination. Even if the expert were available for cross-examination, however (and there is no indication one way or the other as to whether the Defendants sought cross-examination), this particular expert report has two significant problems.
32The first problem is that there is no evidence at all that the “known” signature of Peter Danos relied on by the expert is actually the known signature of Peter Danos. The expert compared questioned signatures to known signatures. Ironically, the provenance of the questioned signatures is known but the provenance of the known signatures is unknown. In short, the Plaintiffs have, fatally, failed to provide any evidence that the known signature of Peter Danos is actually his own authentic signature.
33All experts must have a foundation for their opinion. Where expert handwriting evidence is sought to be admitted, the party calling the expert is required to show in some way that the “known” handwriting is a person’s actual handwriting. This could be done in any number of ways. The person with the known signature could testify as to the authenticity of his own signature. Known samples could be seized or obtained from reasonably reliable sources, such as bank signature cards, provided the conditions for admissibility are met. Alternatively, a party could call someone familiar with a person’s handwriting (such as an assistant or a business partner) to show that a known handwriting sample is actually known. All of that evidence would have to actually be admitted before the trier of fact as a foundation for the expert’s opinion. If a party can’t prove the provenance of the known signatures, there is no foundation for the expert’s opinion.
34That is what has happened in this case. The Danos’s have submitted an expert report attached to Grace Danos’s affidavit. The expert, in his report, indicates that he was supplied with 14 documents containing known handwriting samples of Grace and Peter Danos. The expert took it for granted that the “known” signatures were those of Grace Danos and Peter Danos. That may be fine for him, but the Court cannot do so in the absence of evidence. Two of those documents are original BMW documents. The first, the BMW Group Financial Services Canada Delivery Certificate and Declaration, bears six signatures of Grace Danos. Nowhere in her affidavit does Grace Danos specifically assert that she signed the Delivery Certificate although she does indicate that she recalls signing documents upon taking possession of the car. The second, the BMW Group Financial Services Canada Lease Agreement bears four signatures of Grace Danos and two signatures of Peter Danos. In her affidavit, Grace Danos says that she signed the Lease Agreement. Thus, there is only evidence that the expert had four and probably ten known signatures of Grace Danos to work with and compare to the questioned signatures.
35There is, however, no evidentiary foundation for the assertion that the known signatures are those of Peter Danos. Peter Danos did not provide an affidavit. Grace Danos does not assert anywhere in her affidavit that the known samples of Peter Danos’s handwriting are actually his handwriting. In other words, there may be a basis upon which the expert concluded that the writer of the known signatures did not write the questioned signatures (although that too would have been vulnerable to cross-examination, as I suggest below) but there is no basis at all to conclude that the writer of the known signatures was Peter Danos.
36Furthermore, nowhere does Grace Danos state that the signatures on the other “known” documents are hers. There are twelve other signatures purporting to be those of Grace Danos (some of which are photocopies rather than originals) that the expert took as known.
37Thus, there is no proper evidentiary foundation for the expert’s opinion regarding Peter Danos. That is yet another basis upon which the expert’s report can be discounted.
38The second problem is that Dr. Singla never indicates whether or not he had enough known samples upon which to make a comparison. For example, his report indicates that he was working with six signatures of Peter Danos. Two of these signatures were photocopies. Again, not being an expert myself, I have no idea whether six signatures is enough to provide a basis of comparison; as well, I have no idea whether the fact that two of those signatures is a photocopy provides enough of a basis for an expert to make a comparison. I would have thought that that the sufficiency of the known signatures would have been an area that an opposing party would have wanted to test through cross-examination, had the expert sworn his report directly. Leaving aside the problems with the expert report, there is a very practical problem associated with the claim of fraud. Even if the expert is correct that Grace Danos did not sign the personal credit application, I cannot draw the inference that a BMW representative forged her signature. Peter Danos was part of the negotiating process. Indeed, judging by the pleadings and the evidence, he was the driving force behind the lease negotiations. Where is his evidence regarding that process? How do I know he is not the person who signed his wife’s signature (which would not be the first time something like that has happened in the history of matrimonial relations)? Based on the evidence before me, that inference is plausible. Peter Danos’ failure to file an affidavit does not assist.
39Having rejected the expert report, is there other evidence of forgery? A close examination of the affidavit of Grace Danos indicates that there is very little evidence that the signatures of Peter Danos were forged. She states at paragraph 10:
- I then noted that the signatures of Peter Danos as the applicant on the Personal Credit was not his signature. As well, the signature on the Personal Credit Application of Peter Danos was different from the signature of Peter Danos on the Business Credit Application (dated May 31, 2006) and it also did not appear to be his signature.
40Ms. Danos does allege that another document, received after the expert report was completed, was also forged. She states:
- … This is a new document, not before provided to the Plaintiffs, and it contains a signature of Peter Danos, which is the same or similar to an already analyzed signature, which has been proven to be a forgery. This is the first time this document has been provided to the plaintiffs. THIS IS A NEW FOUND FORGERY.
41I am prepared to assume that Grace Danos is married to Peter Danos since they reside at the same address and share a last name (if there is actual evidence that they are married it is buried deep in the record) although, for all I know, they could be brother and sister given the paucity of evidence. I am also prepared to assume that Grace Danos likely knows her husband’s signature, although there is no evidence of that: R. v. Graat, 1982 33 (SCC), [1982] 2 S.C.R. 819, 144 D.L.R. (3d) 267, 2 C.C.C. (3d) 365. Unfortunately, Ms. Danos does not go beyond simply uttering words to the effect that “they’re not the same”. What is it about the signatures that are not the same? If this were a preliminary inquiry in a criminal fraud case, it may well be that that evidence would be enough to show that there was some evidence upon which a reasonable jury could convict. It is not enough to prove, on a balance of probabilities, that Peter Danos’s signature was in fact forged. I am also not prepared to assume is that she is qualified to state that signatures are similar and conclude that they are forged. Accordingly, I can give this evidence little weight as well.
42What about the signature of Grace Danos? Is there any other evidence that it was forged? Nowhere in her affidavit does she actually say that the signature on the personal credit application is not her signature. At its highest, she states that “in the circumstances, it was likely possible that my signature was a forgery as well.” In other words, she bootstraps her claim of fraud on the already dubious claim of fraud in relation to Peter Danos. She also relies on the fact that she did not attend the dealership in May, which is the date on the personal credit application. In my view, that is not enough evidence upon which I can make a finding of fact that she did not sign the personal credit application.
43The Plaintiffs have made much of the fact that the Defendants have done nothing to refute the expert report and the claim of forgery. With respect, they don’t have to. The expert report is not admissible on this motion. Even if it were admissible it does not have a proper evidentiary foundation and I could give it little or no weight (and that is before cross-examination). It would have been very easy for the Peter Danos to file an affidavit indicating that the known signatures in the expert report are actually his signatures. He did not.
44There are other significant problems with the allegation of fraud. In the Brampton action Grace Danos pleaded that she did not receive the lease documents. She repeated that allegation in her affidavit. But what about Peter Danos? Did he receive the documents? Since he chose not to swear an affidavit, I have no idea.
45It is true that in their statement of claim the Danos’s have denied that their signatures on the business credit application and the personal credit application are theirs. Crucially, however, Grace Danos in her affidavit does not deny that she or her husband applied for credit from BMW although, in fairness, she does plead the tort of misrepresentation. Moreover, the personal credit application bears the names, addresses, and social insurance numbers of Grace Danos and Peter Danos. Given the commercial reality that the Danos’s would have had to submit some kind of credit application, somebody gave BMW the Danos’s social insurance numbers, information that is not readily available. Surely whether or not Grace and Peter Danos applied for credit is the critical issue. They obviously did receive credit from BMW, because a lease was signed. As noted, Peter Danos could have filed an affidavit setting out the circumstances under which he applied for credit. Or, if he denies that he ever submitted a credit application he could have filed an affidavit saying that.
46Under the circumstances, it is, to be frank, just as plausible that Peter Danos signed Grace Danos’s name on the personal credit application without her knowledge (again, not the first time such a thing has happened in matrimonial history) as it is that a BMW representative did (if indeed there was a forgery). Obviously there is no evidence to support making that evidentiary finding and to do so would be to speculate, but to assume that the signatures of Grace and Peter Danos were forged also calls for speculation. It is possible that Peter Danos did not file an affidavit because he wanted to be shielded from the possibility of being cross-examined and exposed on that and other points. I cannot make that finding but the lack of evidence from him does nothing to assist his cause.
47A party on a summary judgment motion cannot just sit back and wait for more favourable evidence to develop at trial. I am entitled to assume that the evidence filed by the Danos’s is as good as it gets. I can and do draw an adverse inference from Peter Danos’s failure to put forward any evidence whatsoever in relation to the critical issues in the case. Assuming that there is no better evidence available, as I am entitled to do, it would be unjust to force the Defendants to carry on with this litigation to trial.
48Thus, I cannot make a finding of fact that anyone’s signature was forged. This is enough to dispose of the action, but for the sake of completeness I will consider the other issues.
3. If there were forgeries, did anyone suffer any damage as a result?
49The Plaintiffs have pleaded the tort of civil fraud. The Supreme Court of Canada has recently revisited the elements of the tort. In the Bruno Appliance and Furniture case, mentioned earlier, Karakatsanis J. stated:
21 From this jurisprudential history, I summarize the following four elements of the tort of civil fraud: (1) a false representation made by the defendant; (2) some level of knowledge of the falsehood of the representation on the part of the defendant (whether through knowledge or recklessness); (3) the false representation caused the plaintiff to act; and (4) the plaintiff's actions resulted in a loss.
50Civil fraud is different from criminal fraud, where the Crown need not show that a victim has been deprived of something, merely that the economic interests of the victim have been put at risk: R. v. Olan, Hudson, and Hartnett, 1978 9 (SCC), [1978] 2 S.C.R. 1175. The social harm occasioned by fraud is enough to bring the machinery of the state into action, which is the policy reason for not requiring the Crown to show actual deprivation. The Crown brings prosecutions for fraud in the public interest. A civil plaintiff brings a claim to recover actual loss without regard to the public interest.
51In their statement of claim, the Plaintiffs state the following:
- As a result of the Defendant’s actions, the Plaintiffs have suffered damages. In addition, the Plaintiffs state that they have sustained stress and anxiety, humiliation, embarrassment, shame, anger, irritability and a sense of violation. The Plaintiff, Grace Danos, is a paralegal and, as such, the actions of the Defendants have caused her embarrassment and stress in her office. Fearing that the Brampton Action had affected her credit, in February 2011, the term of her mortgage was at an end and rather than negotiate a mortgage with another lender, she renewed with the same lender for fear of not being accepted by another lender as a result of the Defendants’ actions.
52Peter Danos has not filed any evidence of actual damages. In her affidavit, Grace Danos confines her particularization of damages to the following:
- By their acts of forgery, they have affected my credit ability…
53There is simply no evidence that the Plaintiffs have suffered any damages. Ms. Danos claims that her “credit ability” has been affected, but how has that deprived her of anything of monetary value? In her statement of claim, she says that she had to renew her mortgage with the same lender and could not negotiate with a different lender. I might have expected to see some evidence, for example, that absent the effect on her credit ability she would have been able to negotiate more favourable terms with a different lender. There is no such evidence.
54Mr. Laski, on behalf of the Danos’s, relies on Sweet Factory Inc. v. Hudson’s Bay Co, 1999 14298, 86 C.P.R. (3d) 417 (Sup.Ct.) for the proposition that no proof of loss is required in order to obtain punitive or exemplary damages. While that may be correct, the same case also notes that it is essential that there still be an independent cause of action or else a person entirely unaffected by the defendant’s conduct could sue for exemplary damages. In other words, there is no freestanding independent right for bystanders to sue on the basis that someone has done something bad and is therefore deserving of punishment even if nobody was harmed. Only the Crown, for the policy reasons I have mentioned, can do that. I also note that the damages in the Sweet Factory case were premised on a breach of contract and a breach of fiduciary duty. There has been nothing like that in this case.
55Accordingly, I find that the plaintiffs cannot show that this element of the tort has been made out. The action can be dismissed on that basis alone.
4. Is the claim barred by a limitation period?
56In her affidavit, Grace Danos states that she received the affidavit of documents from BMW in February 2010, although she certainly knew in November 2009, as a result of the statement of claim in the Brampton action, that it was alleged that she had signed the lease. She argued in her statement of defence in December 2009 that there was a misrepresentation. She says that when she first received the BMW productions she did not recall signing the credit application but that the signature looked like hers. She says that she found that her signature had been forged only in September 2010, when she made a high-resolution copy of the documents. The statement of claim was filed in May, 2012. If I accept that Grace Danos knew or should have known that her signature was forged in February 2010, then the limitation period applies: see s. 4 of the Limitations Act. If I accept that September 2010 is the operative date, her claim is within the limitation period.
57Assuming for the purposes of determining this issue that Grace Danos’s signature was forged, I find that she clearly ought to have known as soon as she received the productions. If not suspicious, she questioned whether she had signed the credit application. In fact, one of the reasons she requested a better copy was because she did have suspicions.
58As I have already noted, the other plaintiff, Peter Danos, has not filed any evidence. Did he receive the questioned documents when the Danos’s received the car? If not, when did he notice that his signature was forged? There is no evidence on the point, and under those circumstances I draw an adverse interest against him.
59Mr. Laski, on behalf of the plaintiffs, argues that fraud tolls the limitation period: 799168 Ontario Ltd. v. 179066 Ontario Inc., 2013 ONSC 5557, [2013] O.J. No. 4345 (Sup.Ct.). That proposition of law is correct, but I disagree that fraud has been shown.
60Mr. Laski also argues that limitation defences are not suitable for summary judgment: Vine Hotels v. Frumcor Investments Inc., 2004 45966 (ON SCDC), [2004] O.J. No. 4997, 73 O.R. (3d) 374 (Div.Ct.).
61I disagree. Certainly there is authority for the proposition that that case was superseded by the 2010 amendments to the Rules of Civil Procedure and by the Court of Appeal’s decision in Combined Air Mechanical. I see nothing in Hryniak to suggest that certain types of cases are suitable for summary judgment, and others are not. In fact, Karakatsanis J. suggests otherwise: see para. 48. It would be dangerous to build a hierarchy of suitability. It would also be contrary to the policy articulated by the Court in Hryniak.
5. Should leave to file a counterclaim be granted in the Brampton action?
62I would not grant leave, simply because the Plaintiffs have failed to show an essential element of the tort of fraud: that they have suffered damages. As I have already noted, there is no evidence at all of any damage suffered by Peter Danos or Apricot Catering. There is only very scant evidence of any damage suffered by Grace Danos. There is no reason to suppose that the evidence would be any better at trial. It would not be a just and expeditious result to force the Defendants to defend a counterclaim that does not raise a genuine issue requiring a trial.
DISPOSITION
63The motion is granted. The action is dismissed as against the moving parties.
COSTS
64I have received costs outlines from all of the parties. I invite the parties make costs submissions of no more than two pages, to be sent to my assistant within 30 days of the release of these reasons.
R.F. Goldstein J.
Released: April 7, 2014
COURT FILE NO.: CV-12-454619
DATE: 20140407
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
PETER DANOS, GRACE DANOS, and APRICOT CATERING 2001 INC.
Plaintiffs/Responding Parties
– and –
BMW GROUP FINANCIAL SERVICES CANADA, a division of BMW CANADA INC., BMW CANADA INC., SYDNEY P.H. ROBINSON, EDWARD A. ROBINSON, EBERHARD VON KUENHEIM, ADAM ZIMMERMAN, TOWN & COUNTRY MOTORS (1998) LIMITED, carrying on business as TOWN + COUNTRY BMW, JAMES H. COCHRANE and ROY C. FOSS
Defendants/Moving Parties
REASONS FOR JUDGMENT
R.F. Goldstein J.
