ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 25219/10A
DATE: 2014-07-28
BETWEEN:
PETRA EVANS
Plaintiff
– and –
2911500 ONTARIO LIMITED O/A
NORTHERN CREDIT UNION
Defendant
-and-
PHARMX REXALL DRUG STORES LTD., MENDAR DRUGS LIMIED, TURCHET HOLDINGS INC., DEL & SONS JANITORIAL SERVICES INC., AND HAROLD PHILLIPS HAULAGE
Third Parties
Not appearing
Daniel C. Sirois, for the Defendant
Brian L. DeLorenzi for Delphis Guitard aka Del Guitard o/a Del & Sons Janitorial Service Industrial & Commercial
HEARD: June 26, 2014
reasons on motion
JUSTICE E. GAREAU
[1] Before the court is a notice of motion dated October 9, 2013 brought by defendant, 2011500 Ontario Limited, operating as Northern Credit Union.
[2] In that motion, Northern Credit Union seeks the following relief:
(a) an order granting leave to amend the third party claim to reflect the correct name of the third party claim to add Del Guitard o/a Del & Sons Janitorial Service Industrial & Commercial and remove the reference to Del & Sons Janitorial Services Inc.;
(b) costs of the motion if opposed;
(c) such further and other relief as to this Honourable Court may deem just.
FACTUAL BACKGROUND
[3] The factual background in this matter is as follows:
(a) this action arises from a slip and fall sustained by the plaintiff on March 30, 2009. The fall occurred at the Northern Credit Union at Sault Ste. Marie, Ontario;
(b) a statement of claim was issued on August 11, 2010 naming the Northern Credit Union as the sole defendant;
(c) the defendant filed a statement of defence on October 22, 2010;
(d) on October 29, 2010 the defendant issued a third-party claim against Pharmx Rexall Drug Stores Ltd., Mendar Drugs Limited, Turchet Holdings Inc., Del & Sons Janitorial and Harold Philips Haulage;
(e) the third party, Del & Sons Janitorial Services Inc. were allegedly the maintenance company contracted to do the maintenance where the slip and fall occurred;
(f) the named third party, Del & Sons Janitorial Services Inc. was incorporated on May 14, 2010, which is after the slip and fall which occurred on March 30, 2009;
(g) examinations for discovery of the plaintiff, the defendant and the third parties, Harold Philips Haulage and Pharmx Rexall Drug Stores were conducted on October 3, 2012. The named third party Del & Sons Janitorial Services Inc., were not examined for discovery;
(h) on December 8, 2010 the defendant contacted all parties to the litigation to request to amend the pleadings to properly name the third party now named as Del & Sons Janitorial Services Inc.;
(i) consent to the requested amendment by the defendant was provided as of December 15, 2010 by the third parties Harold Philips Haulage, Mendar Drugs Limited and Turchet Holdings Inc. The remaining third parties and the plaintiff have not consented to the proposed amendment;
(j) a further request to consent to the amendment proposed by the defendant was sent by the defendant’s solicitor on April 11, 2011;
(k) the motion brought by the defendant for the proposed amendment now before the court was brought on October 9, 2013 and first made returnable on October 24, 2013. On the first return date of the motion, The Honourable Mr. Justice Koke ordered that the sole proprietorship proposed to be named in the third party action be served with the motion being adjourned indefinitely to be brought back with proof of service both on the sole proprietorship, Del Guitard o/a Del & Sons Janitorial Service Industrial and Commercial and the existing named corporate third party, Del & Sons Janitorial Services Inc. Service was performed and the motion was ultimately heard by the court on June 26, 2014;
(l) the action against the third parties, Mendar Drugs Limited and Turchet Holdings Inc. were dismissed on consent by court order dated September 2, 2011;
(m) by letter dated December 13, 2013 from counsel for the defendant, Del Guitard was put on notice that the defendant was bringing a motion to amend the third-party proceeding from “Del & Sons Janitorial Services Inc.” to “Delphis Guitard also known as Del Guitard o/a Del & Sons Janitorial Service Industrial & Commercial”;
(n) the sole proprietor of the proposed third party, “Delphis Guitard also known as Del Guitard o/a Del & Sons Janitor Service Industrial & Commercial” is Mr. Delphis Guitard. He died on December 16, 2013.
THE MOTION TO AMEND THE THIRD-PARTY PROCEEDING:
[4] The authority of the court to amend a pleading is found in Rules 5.04(2) and 26.01 of the Rules of Civil Procedure. Those rules read as follows:
“5.04(2) At any stage of a proceeding, the court may by order add, delete, or substitute a party or correct the name of a party incorrectly named, on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.
26.01 On motion at any stage of an action, the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.”
[5] The defendant takes the position that given the wording of Rule 26.01, the amendment is to be granted unless prejudice would result. The wording of Rule 26.01 is mandatory, in that the amendment shall take place unless prejudice that cannot be compensated by costs or an adjournment.
[6] In this case, the defendant is doing more than amending a pleading. The defendant is adding a party that was not previously named in the proceeding. What the defendant is seeking to do is substitute one party for another and in the case at bar, substitute a limited corporation for a sole proprietorship business.
[7] Given this, in my view, the rule to be closely considered is Rule 5.04(2). This rule speaks of adding, deleting or substituting parties, which is essentially what the defendant is attempting to do in its motion before the court. Unlike Rule 26.01, Rule 5.04(2) is discretionary, with the wording “may” rather than “shall”. It is in the discretion of the court as to whether to allow a party to be added in substitution for another party in the litigation.
[8] Under Rule 5.02 the court may allow the substitution of one party for another on terms that are just, unless prejudice would result that could not be compensated for by costs or an adjournment.
[9] The defendant takes the position that the amendment sought is to simply correct a misnomer, in other words, to correct the misnaming or misdescription of the third party. In my view, this is not what is being asked of the court. The amendment being sought does not merely correct a name. Rather, the amendment being sought is bringing into the litigation an entirely new legal entity. The now named third party, Del & Sons Janitorial Services Inc., did not exist as a legal entity as of the date of this action arose (March 30, 2009). This corporation was incorporated well over a year after the claim arose, the date of incorporation being May 14, 2010. The party proposed to be substituted “Delphis Guitard aka Del Guitard o/a Del & Sons Janitorial Service Industrial & Commercial” is an unincorporated sole proprietorship business. It has an entirely different legal status than the corporation now named as the third party. This is not simply a case of correcting the name of a third party.
[10] A further troubling aspect of this case is the unexplained delay in rectifying the problem with the named third party once the defendant was made aware of the problem. Attached as Exhibit “A” to the affidavit of Jesse Cond sworn on June 17, 2014, is a letter dated November 19, 2010 from Greg J. McAuley, Secretary Treasurer of Del & Sons Janitorial Services Inc., the third party named in this proceeding to the solicitor for the defendant. The letter reads as follows:
“November 19, 2010 Weaver Simmons LLP Barristers and Solicitors 233 Brady St Sudbury, On P3B 4H5 Attn: Daniel Sirois CC: S. Vance Re: Ontario Court File 25219/10 Petra Evans vs 2011500 Ont Ltd., OA Northern Credit Union
In follow-up to our conversation today, as well as my previous Voice Mail of Nov. 3, 2010, that was not responded to
Please be advised the above referenced Statement of Claim was served to Del & Sons Janitorial Services Inc. This company was newly purchased and Incorporated on July 1, 2010.
The Company that was operational during the Date of Loss and should have been served is Del Guitard O/A Del and Sons Janitorial Service Industrial and Commercial. This company is correctly identified in your Statement of Defence Point #8.
All matters pertaining to this Statement of Claim need to be directed to the correct Company during the time period in which the incident occurred. Your client referred to as Northern Credit Union, is aware of the contract with Mr. Guitard and his company and can assist you in serving the correct Company.
Please consider this formal notice of our response of an intent to Defend this action within the prescribed time period. Should you fail to release Del & Sons Janitorial Services Inc. from this action, and serve notice upon the correct Company of: Del Guitard OA Del & Sons Janitorial Service Industrial & Commercial.
Any questions please contact the undersigned.
Greg J. JMcAuley, Secretary Treasurer, Del & Sons Janitorial Services Inc. 705-971-7158.
[11] That letter of November 19, 2010 from Mr. McAuley to Mr. Sirois clearly puts the defendant on notice that it has named the wrong party as a third party to the litigation. The defendant acknowledges receipt of this letter. There is no doubt that as of November 19, 2010 the defendant has specific knowledge that it has named the wrong party in the third-party claim.
[12] There is time to rectify the problem. The slip and fall occurred on March 30, 2009. The limitation period does not expire until March 30, 2011. This affords the defendant an opportunity to add the proper third party “Delphis Guitard also known as Del Guitard o/a Del & Sons Janitor Service Industrial & Commercial” within the limitation period and in a timely fashion, thereby eliminating all possibility of prejudice to the newly-named third party.
[13] Rather than adding the proper third party, the defendant conducts examinations for discovery almost a year later, on October 3, 2012 and does not bring the motion now before the court until October 9, 2013, which is almost three years from the date the defendant receives notification from Greg McAuley that it has named the wrong third party in the proceeding.
[14] The limitation period expired for an action against the proposed third party “Delphis Guitard also known as Del Guitard o/a Del & Sons Janitor Service Industrial & Commercial.” on March 30, 2011, two years after the action arose. Even applying the discoverability rule, the defendant knew on November 19, 2010 that they had named the wrong defendant. Even if the two-year limitation period ran from that date, it expires well before the motion before the court was brought on October 9, 2013. In my view, this is not rectified by the provisions of s. 21 (2) of the Limitations Act, 2002, S.O. 2002 c. 24 Sch B. Section 21(1) and (2) read as follows:
“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;
(2) Subsection (1) does not prevent the correction of a misnaming or misdescription of a party.”
[15] As I indicated earlier, the defendant is not simply trying to correct a misnaming or misdescription of a party.
[16] As I indicated earlier, the defendant is not simply trying to correct a misnaming or misdescription of a party in its motion to the court. In reality, the defendant is seeking to bring into the litigation an entirely new legal entity and party.
[17] This matter is further complicated by the death of Delphis Guitard on December 16, 2013. His death obviously denies him the opportunity to participate in the litigation. He cannot be interviewed. He cannot be examined for discovery. He cannot participate in the trial process. This is especially problematic given the fact he ran a sole proprietorship where he oversaw the operation. While it is true records, such as maintenance records, can still be produced by his business in his absence, there is the possibility that there are aspects to the defence of the third-party claim that only Delphis Guitard could offer and the defence of the third-party claim has been denied this as a result of his death.
[18] Rule 5.04(2) of the Rules of Civil Procedure provides that at any stage of a proceeding parties may be added, deleted or substituted unless prejudice results that cannot be compensated for by costs or an adjournment. In my view, this is a case where prejudice would result to the third party if the order requested was made. If adding as a party to litigation a sole proprietorship where the sole proprietor is dead and not available as a witness or to direct the litigation in a situation where he could have been added to the litigation well before his death, thereby making the information he had available in the litigation is not prejudicial to the proposed third party, then I don’t know what would be prejudicial in a litigation matter.
[19] This motion does not need to be decided on the basis of a limitation period missed if the proposed third party were added to the litigation at this stage. It is sufficient to arrive at the inescapable conclusion on the evidence that the defendant was not reasonably diligent in its response and in adding the proposed third party in a timely fashion after it was notified of the problem by the letter dated November 19, 2010 from the Secretary of the named third party. This delay has undoubtedly resulted in prejudice to the proposed third party, whose principal in the sole proprietorship has died and is therefore unable to give evidence or assist in the litigation. Such prejudice cannot be compensated for in costs.
[20] For the aforegoing reasons, the motion of the defendant for an order to amend the third-party claim to name the third party as “Delphis Guitard also known as Del Guitard o/a Del & Sons Janitor Service Industrial & Commercial” and to remove “Del & Sons Janitorial Service” is dismissed.
[21] Costs of this motion are to be paid by the moving party (2011500 Ontario Limited operating as Northern Credit Union) to the responding party fixed in the amount of $5,000.00 inclusive of disbursements and HST.
Justice E. Gareau
Released: July 28. 2014
COURT FILE NO.: 25219/10A
DATE: 2014-07-28
PETRA EVANS
Plaintiff
– and –
2911500 ONTARIO LIMITED O/A
NORTHERN CREDIT UNION
Defendant
-and-
PHARMX REXALL DRUG STORES LTD., MENDAR DRUGS LIMIED, TURCHET HOLDINGS INC., DEL & SONS JANITORIAL SERVICES INC., AND HAROLD PHILLIPS HAULAGE
Third Parties
Released: July 28, 2014