SUPERIOR COURT OF JUSTICE - ONTARIO
RE: CHRIS EFTIMOVSKI AND CLE 72330 LIMITED (Plaintiffs, and Defendants by Counterclaim)
- and –
ROBERT FARIS
(Defendant, and Plaintiff by Counterclaim)
- and –
THREE SEASONS HOMES LIMITED
(Third Party to Counterclaim)
BEFORE: JUSTICE I. F. LEACH
COUNSEL: Mandy L. Seidenberg, for the moving Third Party
Peter C. Card, for the respondent Defendant
HEARD: April 11, 2014
E N D O R S E M E N T
(Third party motion for leave to appeal ruling on summary judgment motions)
1This is a motion brought by Three Seasons Homes Limited, (third party to the counterclaim initiated by the defendant Mr Faris against the plaintiffs), for leave to appeal certain aspects of an interlocutory order made herein by Justice Rady on November 5, 2013.
2Justice Rady’s decision has since been reported. See Eftimovski v. Faris, [2013] O.J. No. 5026 (S.C.J.).
Background to motion and ruling
3The origins and litigation of the parties’ various disagreements have an extended history, involving events dating back to at least 2001.
4That history was outlined in considerable detail by Justice Rady during the course of her reasons. However, in addition to copies of the underlying motion material, the parties also provided me with further detailed outlines of the background to the current motion.
5I have regard to all of that information, but by way of context and overview, key events leading to the motion before me are summarized in the following chronology:
In October of 2001, the defendant Robert Faris (“Faris”) owned a certain property in Bradford, Ontario.
On October 22, 2001, Faris mortgaged the property to Three Seasons Homes Limited, (“TSH”), now the third party in these proceedings. Terms of the mortgage confirmed a principal secured loan of $545,000, with interest at 8% per annum. The mortgage was for an original term of one year, with payment of principal and interest to be made yearly. An additional term, (which led to many of the disagreements herein), extended a “right of first refusal” to TSH, if Faris contemplated sale of the property.
On February 28, 2003, Chris Eftimovski (“Eftimovski”), now one of the plaintiffs to these proceedings, made an offer to purchase the property from Faris for $1.7 million. Faris, however, then allegedly advised TSH he had received offer for $2 million, in response to which TSH apparently did not seek, at least initially, to exercise its right of first refusal. (Eftimovski says he was unaware of the right of first refusal.) Eftimovski and Faris then entered an agreement of purchase and sale, with a scheduled closing date in June of 2003.
At some point prior to the scheduled closing of the transaction between Eftimovski and Faris in June of 2003, TSH then refused to discharge the existing mortgage, (then totalling $620,546 in debt), taking the position that it instead was entitled to exercise its ostensible right of first refusal and purchase the property for the purchase price offered by Eftimovski. As a result of TSH taking that position, Faris apparently refused to proceed with the scheduled closing of the sale to Eftimovski. Litigation then ensued regarding validity of the ostensible right of first refusal by TSH. (Various applications were brought by each party, and then consolidated.)
On August 17, 2004, Justice Cameron found that TSH’s ostensible right of first refusal was valid, that Faris was in breach of his agreement in that regard, and that TSH was entitled to an order of specific performance whereby it would become purchaser of the property. Justice Cameron’s order then was appealed.
On November 16, 2005, the Court of Appeal for Ontario reversed Justice Cameron’s decision, finding that TSH’s ostensible right of first refusal was not valid and binding so as to give it priority of purchase instead of Eftimovski. TSH sought leave to appeal the Court of Appeal’s decision to the Supreme Court of Canada.
On November 24, 2005, the plaintiffs to this proceeding, Eftimovski and “CLE 72330 Limited”, (“CLE”, a company of which Eftimovski was the sole officer and shareholder), then entered into a new/second agreement of purchase and sale with Faris in relation to property. Terms of the agreement included provisions indicating that the property would be sold and transferred to CLE for a purchase price of $1.7 million, provided on a “half cash and half mortgage” basis, with GST to be included in the purchase price if it applied. The agreement also allowed Faris to work the land for a further 5 years. (Faris says it also was agreed that he could reside on the property, and that he thereafter did so in a trailer purchased by Eftimovski.) Although the agreement stipulated an original closing date of November 25, 2005, (the next day), that was later extended to December 12, 2005.
On November 25, 2005, counsel then representing Faris wrote to TSH counsel requesting a mortgage discharge statement, and indicating a desire to pay off the existing mortgage and receive a discharge.
On December 7, 2005, TSH delivered a mortgage discharge statement to Faris, (which was copied to CLE), including its calculation of accrued interest. The total effectively demanded by TSH for discharge of its mortgage was $788,381. This included the interest which had accrued since June of 2003, (when the first sale transaction between Eftimovski and Faris was to close, but was aborted owing to TSH’s refusal to discharge its mortgage and its assertion of a right of first refusal).
On December 9, 2005, CLE and Faris then allegedly entered into another agreement, (called “the TSH adjustment agreement” by Faris), prior to the sale closing, with Eftimovski signing as a guarantor. In broad terms, the agreement allegedly sought to address the additional interest TSH was seeking to charge on its mortgage after June of 2003; i.e., during the period when the parties were litigating validity of the right of first refusal being asserted by TSH and, in effect, the propriety of the TSH refusal to discharge its mortgage so as to allow completion of the contemplated sale between Faris and Eftimovski. In particular, according to Faris, the TSH adjustment agreement contemplated that the complications and additional accumulated interest being demanded by TSH would be addressed by CLE paying the TSH mortgage principal and interest accrued to June 2, 2003, (as demanded), but that any additional amount required by TSH to discharge the mortgage was to be paid under protest and litigated by CLE. Faris says he expected payment back from CLE of $160,000-170,000, (described as “the difference between the amount Faris gave CLE as a credit on the closing for the TSH mortgage, and the amount Faris believed was properly owing), within 6-12 months.
On December 12, 2005, the property was transferred from Faris to CLE, with the transfer being registered on title, and CLE assuming responsibility for the full amount of the existing mortgage.
On December 13, 2005, CLE’s lawyer sent TSH a cheque for the full amount being demanded on the mortgage by TSH, ($789,245.18), along with a request that the mortgage be discharged. Contrary to the TSH adjustment agreement alleged by Faris, the payment by CLE to TSH was not sent under protest, or with any other indication of objection.
On June 22, 2006, TSH’s application for leave to appeal the Court of Appeal’s decision to the Supreme Court of Canada was denied, and a discharge of the TSH mortgage was registered on title.
In October of 2006, according to Faris, CLE then gave him 10 days to vacate the property, after which it destroyed the trailer, removing his personal belongings.
On February 13, 2007, the plaintiffs then commenced this action against Faris. The statement of claim seeks damages for breach of contract, including the legal fees incurred by the plaintiffs in dealing with complications stemming from the THS mortgage and alleged right of first refusal, (which Faris allegedly did not disclose to the plaintiffs), and the alleged failure of Faris to remit GST on the sale transaction that eventually was completed, (although Faris claims he provided a certificate confirming that GST was not applicable).
In June of 2007, the plaintiffs obtained default judgment against Faris in this action.
In November of 2007, according to TSH, (relying on information obtained during litigation), a lawyer retained by Faris to investigate a possible claim against the plaintiffs performed a title search on the property, discovered discharge of the mortgage, and knew that a further inquiry into the circumstances of the mortgage being discharged was required at that time. However, as noted below, Faris says he first learned of the circumstances of the mortgage discharge, (e.g., payment of the full amount without protest), in February 2010, during cross-examinations associated with the motion brought by Faris to set aside the plaintiffs’ default judgment in this proceeding.
On December 12, 2007, by way of a notice of action, Faris commenced a separate action in Barrie against the plaintiffs and others, (including his former lawyer and real estate agents), but not against TSH. In his claim, Faris took issue with the amount credited to CLE in relation to the TSH mortgage. Faris followed up on his notice of action by filing the requisite statement of claim on January 11, 2008.
In February of 2010, as part of his ongoing efforts to set aside default judgment in this proceeding, Faris was cross-examined on the affidavit filed with his motion material, and Eftimovski underwent a similar cross-examination. According to Faris, (and as noted above), it was then that Faris first learned of the manner in which the THS mortgage was discharged by full and immediate payment of the demanded balance without any dispute, objection or follow up proceedings.
On August 25, 2010, Faris succeeded in having default judgment in this action set aside.
On August 31, 2010, Faris delivered his statement of defence and counterclaim in this action alleging, inter alia, breach of contract by the plaintiffs, (for their failure to dispute the amount owing under the TSH mortgage), misappropriation, conversion, and failure to deal fairly and in good faith with Faris. Remedies sought include damages as well as an accounting, in relation to the amounts paid to discharge the TSH mortgage. (As noted by Justice Rady, the counterclaim against the plaintiff raises claims similar to those advanced by Faris in his “Barrie action”, although a claim for an accounting has been added.)
On August 22, 2011, the plaintiffs, (in their capacity as defendants to the counterclaim advanced by Faris), issued their third party claim against TSH, seeking contribution and indemnity, (grounded in alleged unjust enrichment), for any amount they may be ordered to pay Faris by reason of their alleged failure to obtain a reduction of the TSH mortgage.
On September 6, 2011, THS delivered a notice of intent to defend the third party claim. This was followed by delivery of its defence to third party claim, and a defence to the main action (the Faris counterclaim) on October 31, 2011.
On February 2, 2012, the Barrie action commenced by Faris was dismissed, for delay, by Justice Healey.
On April 15, 2013, Justice Rady heard a number of motions in this proceeding, including:
motions by the plaintiffs and Faris seeking leave to amend their respective pleadings;
a motion by the plaintiffs Eftimovski and CLE for summary judgment dismissing the counterclaim by Faris as being statute-barred pursuant to the Limitations Act, 2002, S.O. 2002, c.24; and
a similar motion by the third party TSH for summary judgment dismissing not only the counterclaim of Faris, (which the third party also formally is defending, as noted above), but the plaintiffs’ third party claim against TSH as well, on the basis both were statute-barred pursuant to the Limitations Act, 2002, supra.
On June 4, 2013, the dismissal for delay of the Barrie action, commenced by Faris, was upheld by Court of Appeal.
On November 5, 2013, Justice Rady released her endorsement and orders giving rise to the current motion for leave to appeal. In the result, Justice Rady granted leave as requested in relation to the desired pleading amendments but dismissed the motions for summary judgment brought by the plaintiffs and the third party.
6The motion currently before me is that of the third party alone. (Despite being served with the third party’s motion material, and their interest in the outcome of this motion and any resulting appeal, the plaintiffs have chosen not to participate in the third party’s motion, or to bring their own similar motion.)
7Moreover, the third party’s motion now seeks leave to appeal only the aspects of Justice Rady’s order refusing to grant summary judgment dismissing the defendant’s counterclaim against the plaintiffs. (Although the motion material served by the third party initially also sought leave to appeal Justice Rady’s refusal to summarily dismiss the third party claim, that aspect of the motion was formally abandoned prior to the hearing before me.)
8In her extended endorsement, Justice Rady gave numerous reasons, (some independent and some inter-related), for her decision not to grant summary judgment dismissing the defendant’s counterclaim based on the Limitations Act, 2002, supra. I obviously have regard to the entirety of those reasons and their original text, but believe they may be summarized as follows:
Justice Rady noted that Faris unquestionably had taken steps within the relevant limitation period to formally advance his relevant claims against Eftimovski and CLE – albeit via the collateral action commenced by Faris in Barrie, (which would never be determined on its merits owing to its dismissal for delay).
Justice Rady felt there was some doubt as to whether the limitation period set forth in the Limitations Act, 2002, supra, applied to such a counterclaim. (In particular, Justice Rady noted that the legislation focused on commencement of a “proceeding”, and that the definition of “originating process” in Rule 1.03 did not include a counterclaim.) Justice Rady thought resolution of that question of law was “best left” for determination at trial, (i.e., against the backdrop of a full factual record), “or perhaps a Rule 21 motion”.
Cross-referencing her reasons for granting leave permitting amendment of the defendant’s pleading, so as to advance a defence of equitable set-off and request for a corresponding accounting to determine the merits and extent of that defence, Justice Rady alluded to her earlier acceptance of the defendant’s argument that a limitation period could not bar assertion of a defence or court consideration of the necessary accounting that would go hand-in-hand with determination of whether such a defence applied in the circumstances.
Justice Rady noted that there were various circumstances, relied upon by Faris, offering possible legitimate explanations for the delay in delivery of his statement of defence and counterclaim herein. They included the reality that Faris had been noted in default in June of 2007, (during the time in which the third party says the limitation period applicable to the counterclaim was running), and that efforts by Faris to set aside that default were vigorously opposed. (As noted above, it was not until August of 2010 that Faris succeeded in having the default set aside, after which he delivered his statement of defence and counterclaim within a week.) Justice Rady felt that such circumstances, and the extent to which the court was entitled to consider them in determining whether the applicable limitation period had expired, raised “a genuine issue for trial” that prevented the granting of summary judgment dismissing the counterclaim.
Finally, Justice Rady found that the issue of discoverability also presented “a genuine issue for trial”, preventing summary judgment dismissing the counterclaim. In particular, Justice Rady made express reference to the wording of section 5 of the Limitations Act, 2002, supra, providing that a claim is discovered on “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 outlined in s.5(1)(a) of the legislation. [Original emphasis of Justice Rady.] Having regard to the factual background of the case, including allegations of the defendant’s impecuniosity, Justice Rady was of the view that a full trial was required, in the interests of justice, “to fully explore when Faris knew or ought to have known of his claim”.
Test for leave to appeal
9Rule 62.02(4) sets out two independent grounds on which leave to appeal to the Divisional Court may be granted, in relation to an interlocutory order, and reads as follows:
62.02 (4) Leave to appeal shall not be granted unless,
(a) there is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal and it is, in the opinion of the judge hearing the motion, desirable that leave to appeal be granted; or
(b) there appears to the judge hearing the motion good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted.
[Emphasis added.]
10As indicated by the wording emphasized above, leave to appeal may be granted if either of the above grounds is satisfied. In other words, Rule 62.02(4) contains two disjunctive branches – although each branch then has two conjunctive requirements.
11The wording of these provisions makes clear “the Legislature’s intent to discourage the appeal of interim orders except in extraordinary circumstances”. The test therefore is regarded as “onerous”, and the burden of demonstrating its satisfaction lies on the would-be appellant. See Bullock v. Bullock, 2007 59150 (ON SCDC), [2007] O.J. No. 5225 (Div.Ct.), at paragraphs 15-16, and Bell ExpressVu Limited Partnership v. Morgan, 2008 63136 (ON SCDC), [2008] O.J. No. 4758 (Div.Ct.).
Analysis
12In relation to the motion before me, the third party formally relied on both branches of the Rule 62.02(4) test set forth above.
13With respect, I nevertheless think that reliance on the first branch of the test is inappropriate in the particular circumstances of this case.
14When considering Rule 62.02(4)(a), it is not enough to show that two courts have exercised their discretion to produce different results. It must instead be demonstrated that different courts have chosen different principles to guide the exercise of discretion. See, for example: Comtrade Petroleum Inc. v. 490300 Ontario Ltd. (1992), 1992 7405 (ON SC), 7 O.R. (3d) 542 (Div.Ct.), at paragraph 7; Brownhall v. Canada (Minister of Defence), 2006 7505 (ON SC), [2006] O.J. No. 672 (S.C.J.), at paragraph 27; Kassian Estate v. Canada, 2013 ONSC 892, [2013] O.J. No. 846 (S.C.J.), at paragraph 6; and Stamatopoulous v. Harris, 2013 ONSC 7844, [2013] O.J. No. 5813 (Div.Ct.), at paragraph 18.
15The only such “conflicting decisions” suggested and relied upon by the third party, in support of its Rule 62.02(4)(a) arguments, were two decisions of the Ontario Court of Appeal; two decisions which, TSH says, were binding on Justice Rady and should have precluded at least some of her proffered reasons for dismissing the third party’s motion for summary judgment. In particular:
i. Insofar as Justice Rady felt that application of the relevant limitation period to counterclaims was an open and unsettled question, (based on her use of the definition of “originating process” set forth in the Rules of Civil Procedure to assist with interpretation of the word “proceeding” used in the Limitations Act, 2002, supra), this was said to conflict with the Court of Appeal’s decision in Giglio v. Peters, 2009 ONCA 681, [2009] O.J. No. 3945 (C.A.); and
ii. Justice Rady’s reference to certain circumstances of the case was said to reflect her application of the common law doctrine of “special circumstances”, which in turn was said to conflict with the Court of Appeal’s decision in Joseph v. Paramount Canada’s Wonderland, 2008 ONCA 469, [2008] O.J. No. 2339 (C.A.), confirming that the doctrine did not survive enactment of the Limitations Act, 2002, supra.
16I will return to the substantive merit of those suggestions below, when considering whether the third party has satisfied the second branch of the test for granting leave to appeal, set forth in Rule 62.02(4)(b).
17For present purposes, as indicated above, I do not think it appropriate to apply Rule 62.02(4)(a) to address such a situation; i.e., where reliance on the first branch of the test is based exclusively on arguments that the decision to be appealed conflicts, in the sense required, only with binding decisions of our Court of Appeal; decisions which in turn are said to have settled the guiding principles of law that should have been applied by the judge who made the interlocutory order.
18To me, this is really just another way of saying that there is “good reason to doubt the correctness” of the relevant interlocutory order; a consideration which, according to the Legislature, is to receive separate and distinct treatment in the context of Rule 62.02(4)(b).
19In my view, the first branch of the test for leave was intended to address and promote eventual resolution of situations where the litigants and courts of Ontario are presented with two seemingly open but divergent jurisprudential paths on an important issue.
20For example, two or more appellate decisions, equally binding on a court of first instance, may appear to point in different directions.
21Alternatively, a court of first instance may be confronted by a number of apparently conflicting decisions from other judges or courts at concurrent levels of authority, and/or from other jurisdictions, any of which the court is free to follow or reject.
22Such situations foster uncertainty which in turn promotes litigation, thereby making it advisable to have the issue considered by an appellate court to secure an authoritative end to the jurisprudential debate.
23The same cannot be said of a situation where the basis of an intended appeal is said to be an isolated first instance deviation from guiding principles of law which, according to the would-be appellant, already have been the subject of relevant and authoritative resolution by our Court of Appeal.
24Again, it seems to me that, in such situations, the real issue is not one of “conflicting decisions” requiring resolution by an appellate court, but concern that there is good reason to doubt the correctness of the first instance decision the party wishes to appeal.
25If so, the applicable test is found in Rule 62.02(4)(b), and not Rule 62.02(4)(a).
26In the alternative, (and approaching the first branch of the test from a slightly different perspective), in my opinion as the judge hearing this motion, I do not find it “desirable”, within the meaning of Rule 62.02(4)(a), that TCH be granted leave to appeal based on the suggested conflicts between Justice Rady’s decision and the cited decisions of the Court of Appeal.
27In particular, if TCH is correct that the relevant guiding principles of law already have been conclusively established by our Court of Appeal, then I find it difficult to see what “jurisprudential mileage” of broad significance would be gained from having those guiding principles revisited by our Divisional Court. That court, bound by the same Court of Appeal decisions, essentially could only focus on whether or not Justice Rady deviated improperly from application of the guiding principles mandated by the Court of Appeal.
28This once again suggests that the true focus should be on whether or not there is “good reason to doubt the correctness” of Justice Rady’s interlocutory order; i.e., on the second branch of the test for granting leave.
29I therefore now turn to consideration of whether TCH has satisfied me that the conjunctive requirements of Rule 62.02(4)(b) are met in this case.
30In that regard, I am mindful of numerous principles governing interpretation and application of that second branch of the test for leave to appeal an interlocutory order. These include the following:
In dealing with the first component of the Rule 62.02(4)(b) test, it is not necessary for the moving party, seeking leave to appeal, to convince the court that the order in question is wrong or even probably wrong, or that the judge hearing the leave motion would have come to a different decision. It need only be established that there is “good reason to doubt the correctness of the order in question”, in the sense that the decision is open to “very serious debate”. See, for example: Ash v. Corp. of Lloyd’s (1992), 1992 7652 (ON SC), 8 O.R. (3d) 282 (Gen.Div.), at paragraph 2; Brownhall v. Canada (Ministry of Defence), supra, at paragraph 30; and Judson v. Mitchele, 2011 ONSC 6004, [2011] O.J. No. 4914 (S.C.J.), at paragraph 15.
In dealing with the second component of the Rule 62.02(4)(b) test, leave to appeal will be granted where the appeal involves matters that transcend the interests of the immediate parties, and deal with issues of broader significance, general application, or public importance that are relevant to the development of the law and the administration of justice, thereby warranting resolution of the “very serious debate” by a higher level of judicial authority. See, for example: Rank v. McLeod, Young, Weir Ltd. (1986), 1986 2749 (ON SC), 57 O.R. (2d) 569 (H.C.J.), at pp.573-575; Greslik v. Ont. Legal Aid Plan (1988), 1988 4842 (ON SCDC), 65 O.R. (2d) 110 (Div.Ct.), at paragraph 7; and Kassian Estate v. Canada, 2013 ONSC 892, [2013] O.J. No. 846 (S.C.J.), at paragraph 8.
31In this case, I am satisfied that there are at least some aspects of Justice Rady’s reasons that are open to “very serious debate” in the sense required.
32For example, I am persuaded that there are grounds for “very serious debate” concerning Justice Rady’s apparent suggestion that commencement of a separate earlier but similar proceeding, (dismissed for delay), might postpone or suspend operation of a limitation period otherwise applicable to a later and separate proceeding.
33In that regard, I do not say that Justice Rady’s suggestion is necessarily incorrect. However, I do note the following:
Section 4 of the Limitations Act, 2002, supra, which introduces the “basic limitation period”, reads as follows: “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.” To me, that wording suggests that the basic limitation period prohibition generally was to apply to the commencement of any and all proceedings without exception, (and the counterclaim advanced by Faris is such a “proceeding” for the reasons outlined below), unless there was some express provision or mechanism in the legislation itself to dictate a different result.
A review of the Limitations Act, 2002, supra, reveals numerous instances where the Legislature made express provision to postpone or suspend operation of the section 4 “basic limitation period” prohibition, in certain specified situations. (See, for example: the provisions in section 7 dealing with incapable persons; the provisions in section10 dealing with assaults and sexual assaults where a claimant is incapable of commencing a proceeding for various indicated reasons; and the provisions of section 11, dealing with situations where the parties “have agreed to have an independent third party resolve the claim or assist them in resolving it”.) There appears to be no similar provision in the legislation postponing or suspending application of the s.4 basic limitation period prohibition to a particular proceeding simply because the claimant may have commenced another separate but similar proceeding in the Superior Court of Justice.1
As demonstrated by ss.7, 10 and 11 of the Limitations Act, 2002, the Legislature appears to recognize that postponement or suspension of an applicable limitation period raises numerous collateral issues that need to be specifically considered and addressed; e.g., as to the particular circumstances sufficient to trigger such a postponement or suspension, as well as the circumstances that will bring the postponement or suspension to an end and reactivate running of the limitation period. The same approach is evidenced in other contexts; e.g., s.28(1) of the Class Proceedings Act, 1992, S.O. 1992, c.6, which makes detailed provision concerning the manner in which commencement of an uncertified class proceeding may suspend operation of limitation periods otherwise applicable to similar claims by other putative class members, and the circumstances in which such limitation periods may resume running against particular class members. (Such provisions effectively are referenced within the Limitations Act, 2002, supra, by the provisions of s.20 of that legislation, which makes it clear that the Act “does not affect the extension, suspension or other variation of a limitation period or other time limit by or under another Act”.) Having regard to these various examples, it seems unlikely that the Legislature contemplated any unspecified and unlegislated/unregulated residual basis for postponement or suspension of the basic limitation period prohibition in s.4 of the Limitations Act, 2002, based on a claimant’s commencement of a separate but similar proceeding in the Superior Court of Justice. (If legislation exists permitting and/or dictating such an effect, it was not drawn to my attention.)
34Such considerations provide sufficient grounds, I think, to doubt the correctness, in the sense required, of any suggestion that operation of the basic limitation period prohibition vis-à-vis this proceeding, (the defendant’s counterclaim advanced in this action), was somehow affected by the defendant’s commencement of his Barrie action, now dismissed for delay.
35Similarly, insofar as Justice Rady expressed doubt as to whether the relevant limitation period applied to the defendant’s counterclaim, (based on her use of the Rule 1.03 definition of “originating process” to interpret whether a counterclaim fell within the reference to commencement of a “proceeding” in section 4 of the Limitations Act, 2002, supra), it seems to me that such doubts arguably are precluded by a number of Court of Appeal decisions, including Giglio v. Peters, supra.
36In particular, as emphasized at paragraphs 19-22 of that decision, successive panels of the Court of Appeal have held that the term “proceeding”, as used in section 4 of the Limitations Act, 2002, supra, should be interpreted by reference to the definition of “proceeding” in Rule 1.03, (rather than the definition therein of “originating process”), and that definition clearly includes reference to counterclaims such as that advanced by the defendant in this case.
37In that regard, paragraphs 19-22 of the Court of Appeal’s Giglio decision read, in part, as follows:
The meaning of “proceeding” in s.4 of the Limitations Act, 2002, is a question of statutory interpretation. As with any question of statutory interpretation, context and legislative purpose are paramount considerations. …
Here the word “proceeding” appears in a statute that … seeks to bar stale claims. …
In the light of this context and the statute’s purpose, and in the absence of any definition of “proceeding” in the statute itself, successive panels of this court have turned to the definition of “proceeding” in the Rules of Civil Procedure. Both Feldman J.A. in Meady v. Greyhound Canada Transportation Corp. (2008), 2008 ONCA 468, 90 O.R. (3d) 774 (C.A.), and later Simmons J.A. in Placzek v. Green (2009), 2009 ONCA 83, 245 O.A.C. 220 (C.A.), have held that the word “proceeding” in s.4 of the Limitations Act has the same meaning as “proceeding” in r.1.03 of the Rules of Civil Procedure.
“Proceeding” under r.1.03 refers to the commencement of litigation either by action or application. … Thus, under r.1.03(1):
o “Proceeding” means an action or application; [and]
o “Action” means a proceeding that is not an application and includes a proceeding commenced by statement of claim, notice of action, counterclaim, cross-claim, or third or subsequent party claim. …
[Emphasis added.]
38With great respect to Justice Rady, I find it impossible to read these comments of the Court of Appeal without concluding that the provisions of s.4 of the Limitations Act, 2002, supra, clearly apply to the commencement of a counterclaim.
39Such a conclusion is reinforced, I think, by various decisions which regularly apply the provisions of the Limitation Act, 2002, supra, to counterclaims. See, for example, Sandro Steel Fabrication Ltd. v. Chiesa, [2013] O.J. No. 477 (S.C.J.), affirmed [2013] O.J. No. 2926 (C.A.).
40As the above comments demonstrate, there accordingly may be “good reason to doubt the correctness” of certain aspects of the reasons, offered by Justice Rady, for her order refusing to grant summary judgment dismissing the defendant’s counterclaim.
41However, it must be remembered that the first component of Rule 62.02(4)(b) does not focus on whether or not certain reasons offered for a decision may be correct. Rather, the test for leave expressly requires “good reason