COURT FILE NO.: CV-09-093822-00

DATE: 20140630

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Computer Enhancement Corporation
Plaintiff

– and –

J.C. Options, Jeffrey Reia and
Crystal Delight Reia
Defendants

Antonio Conte, for the Plaintiff/ Respondent on the motion

Robert W. Dowhan, for the Defendants/ Applicant on the motion

HEARD: February 13, 2014

H.K. O’CONNELL J.

The Remedy Sought

[1] The defendants and the added party Mr. Jason Reia, seek leave to appeal to the Divisional Court from the Order of Justice Mark Edwards dated July 04, 2013. In his order Edwards J. allowed the plaintiffs to add Mr. Reia as party to the litigation, as well as J.C. Options Inc. It was conceded before Edwards J. that J.C. Options could be added as a party with leave to the defendants to plead the Limitations Act.

The Legal Principles with respect to the granting of leave

[2] The motion is brought pursuant to Rule 62.02(4) of the Rules of Civil Procedure. There it states:

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. R.R.O. 1990, Reg. 194, r. 62.02(4)

[3] The High Court of Justice in Greslik v. Ontario Legal Aid Plan (Div. Ct.) 1988 4842 (ON SCDC), 65 O.R. (2d) 110, per Callaghan A.C.J.H.C. noted that the conditions in paragraph 62.02(4)(b) are conjunctive, such that the judge hearing the application for leave, “must have good reason to doubt the correctness of the decision, but must also be satisfied that the matters involved are of “such importance” that in his opinion leave should be granted.”

Position of the Applicant/ Defendants

Rule 62.02(4)(a)

[4] Mr. Dowhan for the proposed appellant notes that in assessing the issue of conflicting decisions, the Divisional Court justice on the leave application must be satisfied that there is a difference in the principles chosen as a guide to the exercise of discretion.[^1]

[5] In this respect counsel excerpts in his factum a portion of the reasons of Edwards J. wherein Edwards J. referenced the decision of Justice M.S. James in Marks v. Ottawa 2013 ONSC 1089, [2013] O.J. No. 737 (S.C.J.) wherein James J. held that if a motion to add a third party was not argued before the expiration of the limitation period, the amendment requested should not be granted.

[6] Counsel Mr. Dowhan argues that the difference in the findings of Edwards J. and M.S. James J., illustrates “two distinct streams of jurisprudence in relation to motions to add parties after the expiry of the limitation period.”

Rule 62.02(4)(b)

[7] Mr. Dowhan reminds that the court need not be satisfied that the decision is wrong or even probably wrong, but must be satisfied that the correctness of the order is open to very serious debate.[^2]

[8] Edwards J. it is argued failed to consider the impact of Joseph v. Paramount Canada’s Wonderland 2008 ONCA 469, [2008] O.J. No. 2339 (Ont. C.A.). It is submitted that as Joseph was not properly applied by Justice Edwards, his reliance on Philippine v. Portugal 2010 ONSC 956 (Div. Ct.) was misplaced. This, it is said, makes the decision of Edwards J. “in direct contradiction to the decision in Joseph v. Paramount Canada’s Wonderland.”

[9] Moreover, section 21 of the Limitations Act is clear argues Mr. Dowhan, making an order to add a party a necessity before the expiration of a limitation period. Merely filing a motion does not suffice.

[10] Finally counsel argues that the issue is of such general importance to litigation in general that leave should be granted.

Position of the Respondent/ Plaintiff

Rule 62.02(4)(a)

[11] Mr. Conte submits that there is no reason upon which this court should grant leave to appeal. The motion to add Mr. Reia was originally returnable on June 24, 2009 and adjourned sine die. The motion was served within the 2 year limitation time frame.

[12] Before Edwards J. the issue was whether service of the motion to add another party must also be argued and decided before the expiration of the two year limitation period.

[13] When the matter was before Edwards J. for argument he was made privy to the decision in Marks, however he was not privy to the decision in Philippine. Of more significance, says Mr. Conte, is the fact that Marks does not make any reference to Philippine. Philippine would have been binding on James J.

[14] In essence provided that a motion to add a new defendant is brought within the Limitations Act period, the amendment should be deemed effective within that time period.

[15] Mr. Conte argues that Marks must be considered to be clearly wrong and is not therefore a “conflicting decision”. Indeed Edwards J. dealt with this very issue in his reasons wherein he stated: “In coming to the conclusion that he did, M.S. James J. did not have the benefit of counsel referring him to a decision (Philippine) of the Divisional Court that may have led him to a different conclusion.”

[16] It is submitted that Justice Edwards was therefore correct in finding that the decision of James J. was not a conflicting decision. It is also noted by Mr. Conte that the Divisional Court “will ordinarily follow its previous judgments unless they have been overruled by a higher authority.”[^3]

[17] In addition counsel argues that leave to appeal is otherwise not desirable as there is no need for clarity from the Divisional Court in respect to this area of the law. Mr. Conte submits, “it is not necessary or desirable for the Divisional Court to clear up this apparent contradictory case (Marks), because it has already determined the precise same issue (Philippine).

Rule 62.02(4)(b)

[18] Counsel submits that the reasons of Edwards J. do not provide good reason to doubt the correctness of his decision nor that the matters are of such general importance that leave should be granted.

[19] General importance is a matter of public importance and relates to matters relevant to the development of the law and the administration of justice. The Divisional Court has already weighed in on the same issue, and therefore there is no public importance to this proposed appeal.

Joseph and its impact

[20] Finally in relation to the decision in Joseph, Mr. Conte reminds that the same issue was before Edwards J.

[21] Joseph speaks to the proposition of the special circumstances doctrine no longer applying to extending a limitations period, and nothing else. The case at bar is not a special circumstances case.

The Reasons of Edwards J. : July 04, 2013

[22] Edwards J. crafted 6 pages of detailed reasons for allowing for the adding of the two additional party defendants. As noted, the only added defendant Mr. Jason Reia, seeks leave to appeal from the order of Edwards J.

[23] Edwards J. defined the issue that was before him in the following terms: “This motion raises the question of whether a motion to add a party must not only be served, but also argued and a decision rendered prior to the expiry of the limitation period.” (emphasis in original)

[24] He then overviewed the history of the litigation from its commencement to the adding of the additional parties. Edwards J. noted that the original motion to add the party Jason Reia was before the court on May 06, 2009, but it was adjourned. Subsequent to that date, various motions and examinations for discovery had taken place. Edwards J. overviewed the positions of Mr. Dowhan and Mr. Conte.

[25] I note here that nothing in the recitation of the history of the case by Edwards J. is argued to be in error or otherwise infected by any misunderstanding by the court of the respective positions of the parties on the motion.

[26] Edwards J. referenced the very recent decision of Marks. Justice Edwards extracted from the reasons of James J. the reference to Joseph v. Paramount as well as James J.’s ultimate finding that, “The delivery of the motion, standing alone, does not stop the clock. Motions must be successfully argued in order to claim the benefit of the relief sought.”

As a consequence Justice James reasoned that the proposed addition of a party to the litigation could not be granted.

[27] Edwards J. further noted that Mr. Conte, counsel for the plaintiff, brought the decision of Philippine to his attention after the motion was argued before him. Mr. Dowhan then responded with supplementary submissions that related to the applicability of Philippine to the case at bar.

[28] Justice Edwards sets out in his reasons the argument of Mr. Dowhan that Philippine is an anomaly; that Philippine had not been considered by any other court since its release; and that Marks is the correct application of the law for adding parties to litigation.

[29] Edwards J. then noted that Philippine was not considered by Justice James. This “may have lead him to a different result”. As Edwards J. noted, one of the issues that Justice Ferrier had to deal with in Philippine, “was whether the rights of the parties should be determined as of the date of the service of the motion, which would have been within the limitation period, or as of the date of the hearing of the motion, which would have been after the limitation period.”

[30] Ferrier J. in turn had held that the rights of the parties should be determined as of the date of the service of the motion, not the hearing of the motion. Ferrier J. held that any delay in bringing the motion goes to the issue of prejudice under Rule 26.01 of the Rules of Civil Procedure and not to whether the limitation period defence barred an amendment.

[31] Edwards J. further ruled that contrary to Mr. Dowhan’s submission that Philippine had not been considered, it had indeed been considered by Lauwers J. (as he then was) in Sweda Farms. Ltd. v. Ontario Egg Producers, 2011 ONSC 6146 , wherein Lauwers J. stated:

The limitation issue crystallizes as of the date of service of the notice of motion, which had to be on or before April 30, 2010, when it was filed with the court: Philippine v. Portugal, 2010 ONSC 956.

[32] Edwards J. went on to find that Joseph had no application to the motion before him. He said, “This is not a situation where the special circumstances doctrine, which has now been laid to rest by Joseph, is any way applicable to the facts that this court is called upon to determine.”

[33] Justice Edwards opined that the suggestion that a motion to add a party requires service, argument on the point, and a court order, prior to the expiration of a limitation period, “lacks common sense” and is an “absurdity.” He gave examples as to why this would be so.

[34] Finally Edwards J., applying “common sense” noted:

Where a motion is brought prior to the expiry of limitation period to add a party defendant, and where through no fault of the moving party, there is an inherent delay in the hearing of that motion caused as a result of a backlog in the hearing of interlocutory motions, the moving party should not be prejudiced.

Should Leave be Granted?

[35] I have carefully considered the positions of counsel. I conclude that there is no reason to grant leave from the reasons of Edwards J.

i) Rule 62.02(4)(a)

[36] I agree that this is not a case that raises the spectre of conflicting decisions that require appellate determination. The decision of James J. is not conflicting with that of Edwards J., as the decision of James J. did not contemplate the impact of Philippine on the issue of adding a party and the impact of the Limitations Act. Indeed as Edwards J. notes, James J. did not have the benefit of the decision of Philippine for his consideration as it does not appear to have been brought to his attention.

[37] Philippine is, as noted, a decision of the Divisional Court, and addresses the very issue of when the proposed addition of a third party is to be considered in the context of the limitation period. As such it is an appellate decision on point.

[38] Edwards J. followed Philippine, as he was obliged to do. Philippine was released in December 2010. Furthermore he cited the case of Sweda Farms Ltd., which followed Philippine. The decision in Sweda was rendered in 2011. As with Philippine, Sweda was not considered by James J.

[39] There cannot therefore be said, in the case at bar, to be a conflicting decision as that term is defined. There is therefore no need for the Divisional Court to clarify the law as the decision in the case at bar and that of Marks do not, with the consideration of Philippine, contradict each other on a matter of legal principle.

[40] Nonetheless to be clear it is not enough for there to be a conflicting decision. It must also be desirable that leave to appeal be granted. I likewise do not find that this is such a desirable case in any event.

[41] The application for leave to appeal therefore fails under Rule 62.02(4)(a).

ii) Rule 62.02(4)(b)

[42] There is, as can be seen, therefore no reason to doubt the correctness of the order of Edwards J., nor does the appeal involve matters of such importance that leave should be granted. In this regard as Callaghan A.C.J.H.C. noted in Greslik, such importance is referable to the general importance of the issue, not simply to an issue between the parties. The application for leave cannot be said to involve matters of general importance to the legal profession given the application and binding nature of Philippine.

[43] The application for leave to appeal therefore fails under Rule 62.02(4)(b).

iii) Is the case at bar in conflict with Joseph v Paramount

[44] Finally there is nothing in the reasons of Edwards J. that would lead me to find that Rule 62.04(4)(a) or (b) should be engaged because of a purported Joseph issue. To the contrary, as Edwards J. stated: “This is not a situation where the special circumstances doctrine, which has now been laid to rest by Joseph, is in any way applicable to the facts that this court is called upon to determine.”

[45] As a consequence there is no conflict between the decision rendered by Edwards J. and the appellate decision in Joseph, nor is there any reason to doubt the correctness of the order of Edwards J. in this respect.

Conclusion

[46] Leave to appeal is therefore refused. If the parties cannot agree on costs, the respondent is to file costs submissions not to exceed 5 pages in total by July 14, 2014, to the attention of Ms. Joan Russell, via fax: 905 743 2801. The applicant to respond within 7 days of receipt of the respondent’s submissions, on the same terms.

The Honourable Mr. Justice H.K. O’Connell

Released: June 30, 2014

[^1]: Bell Expressvu Ltd. Partnership v. Tedmonds & Co. Inc., 2001 28350 (ON SC), [2001] O.J. No. 1801 (S.C.J.)

[^2]: Kraft Canada Inc. v. Menkes Lakeshore Ltd., 2007 65611 (ON SCDC), [2007] O.J. No. 2834 ( Div. Ct.)

[^3]: Kovach v. Kovach [2009] 722 at parag.42.