SUPERIOR COURT OF JUSTICE - ONTARIO

Court File and Parties

COURT FILE NO.: 13-CV-471696

MOTION HEARD: February 19, 2015

Re: RAZINA PARVIN and SHAIKH HOSAIN

Plaintiffs

v.

JAMES RICHARDSON and VENETOR CRANE LIMITED

Defendants

BEFORE: Master Lou Ann M. Pope

APPEARANCES: Shannon Wood, Bell, Temple LLP for moving defendants

Fax: (416) 596-0952

Laura Brazil, for third party, Grove U.S. LLC

Fax: (416) 865-7048

Peter Henein and Chris Horkins, for proposed third party, Bendix Commercial Vehicle Systems LLC

Fax: (647) 259-7874

REASONS FOR ENDORSEMENT

[1] The defendants seek leave to issue a third party claim against Bendix Commercial Vehicle Systems LLC (“Bendix”). In the alternative, they seek to consolidate this action with a related action bearing court file number CV-14-511159. Bendix opposes the relief sought for leave to issue a third party claim. The plaintiff did not oppose this motion. The third party, Grove Crane Limited U.S. LLC, made no submissions at the hearing.

Background

[2] This action arises out of a motor vehicle accident that occurred on July 23, 2008. The statement of claim was issued on January 22, 2009. The defendants allege that a mechanical failure occurred when the defendant, James Richardson (“Richardson”) attempted to use the brake system on the crane involved in the accident. The defendants issued a third party claim against various parties, including Grove Crane Canada (“Grove Crane”) for manufacturing, supplying, causing, contributing or failing to warn about the defective brake system. All of the third party claims except the claim against Grove Crane were discontinued.

[3] Although the evidence does not disclose the date the statement of claim was served on the defendants, suffice it to say that a third party claim against Bendix had not been issued by the two-year anniversary date of the date of service. (s.18(1) The Limitations Act 2002, S.O. 2002, c. 24, Sched. B (“Limitations Act”)).

[4] During his examination for discovery on February 23, 2012, Eric Fidler of Grove Crane advised that the brake housing was the portion of the brake system that failed. He further advised that this part was manufactured by Bendix.

[5] Grove Crane subsequently commenced a separate action against Bendix on February 7, 2013 (“the Grove action”). In that action, Grove Crane seeks contribution and indemnity from Bendix for any damages Grove Crane may be required to pay as a third party defendant to Richardson and Venetor’s third party claim against Grove Crane in this action. In the Grove action, it is alleged that Bendix was the component manufacturer of the brake assembly in the subject mobile crane which is alleged to have been defective.

[6] In September 2013, the defendants herein consented to their third party action and the Grove action being consolidated or tried together.

[7] In two separate communications in January 2014, counsel for the defendants advised counsel for Bendix in the Grove action that if the said actions were consolidated, they intended to amend their statement of defence to include a crossclaim against Bendix. On the other hand, if the actions were ordered to be tried together, they were in the process of issuing a third party claim against Bendix.

[8] Also in January 2014, counsel for Bendix proposed a timetable for the Grove action. Defence counsel in this action consented to the proposed timetable.

[9] On February 3, 2014, on Grove Crane’s motion to consolidate or have the actions tried together, Master Dash declined to grant the order for consolidation due to issue regarding the names of the third parties. Ultimately on March 10, 2014, he granted an order that the actions be tried together on a without prejudice basis to bring a further motion to consolidate. Defence counsel was not advised that this Order had been made until late May 2014.

[10] In his letter of May 23, 2014, defence counsel requested that Grove Crane proceed to obtain a consolidation order rather than trial together to ensure that all parties have the right to crossclaim and avoid multiplicity of proceedings if further third party claims were necessary. Three days later on May 26, 2014, defence counsel learned of Master Dash’s March 10th order (that the actions to be tried together); however, he was not provided with a copy of that order until September 29, 2014. Immediately after learning of Master Dash’s order, on May 28, 2014, July 30, 2014 and September 4, 2014, defence counsel advised and sought the consent of counsel for the plaintiffs to the issuance of a third party claim against Bendix.

[11] In the meantime, Bendix issued a third party claim against the defendant, Venetor, in the Grove action. Venetor delivered a statement of defence and counterclaim in which it seeks contribution and indemnity for any sums it may be ordered to pay the plaintiff in that action and any parties in this action.

[12] This action, including the third party action, and the Grove action are scheduled for trial beginning February 16, 2016 for four weeks.

[13] The defendants’ proposed third party claim includes a claim for contribution and indemnity from Bendix for any amount that the defendants may have to pay to any party in this action and any companion actions.

[14] The notice of motion herein was filed on December 19, 2014.

Law

[15] Rule 29.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, permits a defendant to commence a third party claim against a non-party in the situations listed in the Rule. There is no issue between the parties that the defendants meet the criteria in this Rule.

[16] Subrule 29.02(1.2) contains mandatory language that requires the Court to grant leave to issue a third party claim at any time with the plaintiff’s consent or with leave, which shall be granted unless the plaintiff would be prejudiced.

[17] The defendants submit that their claim against Bendix was not discoverable against Bendix until the examination for discovery of Eric Fidler, the representative of Grove Crane, on February 23, 2012 when he stated that Bendix was the manufacturer of the brake housing. They further submit that Bendix had notice of the defendants’ intention to claim against them in January 2014 which was within two years of discovering that Bendix was the manufacturer in February 2012.

[18] The defendants further submit that prejudice is the only issue which the court is obligated to consider under rule 29.01. They submit that the plaintiffs will not be prejudiced if the relief sought is granted as this action will not be delayed. They contend that no additional discoveries will be required because the discoveries in the related action will be on the same issues as in this action.

[19] Bendix submits that the defendants’ claim was discoverable more than two years prior to this motion; therefore, the third party claim is statute-barred under the Limitations Act. They rely on section 18(1) of that Act which provides that where a third party claim is for contribution and indemnity, the limitation period is deemed to begin from the date that the defendant is served with the claim, subject only to discoverability. Bendix also submits that the plaintiff will suffer prejudice by virtue of the added complexity if this statute-barred third party claim is issued. It is further argued that Bendix will suffer prejudice in defending a third party claim due to loss of evidence because the brake assembly alleged to have failed was not preserved. Therefore, Bendix is unable to inspect the alleged defective part to determine whether and how it failed or whether it was, in fact, manufactured by Bendix.

[20] The relevant provisions of the Limitations Act are as follows:

Section 4 establishes the basic limitation period:

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.

Under Section 5, a claim is discovered on the earlier of:

(a) the day the person with the claim first knew,

(i) that the injury or loss had occurred,

(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,

(iii) that the act or omission was that of the person against whom the claim is made, and

(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek a remedy, and

(b) 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 referred to in clause (a).

By virtue of section 5(2), there is a presumption that the claimant knew of the matters referred to in clause (a) above on the day the act or omission on which the claim is based took place, unless the contrary is proved.

Section 18 relates to claims for contribution and indemnity:

18. (1) For the purposes of subsection 5(2) and section 15, in the case of a claim by one alleged wrongdoer against another for contribution and indemnity, the day on which the first alleged wrongdoer was served with the claim in respect of which contribution and indemnity is sought shall be deemed to be the day the act or omission on which the alleged wrongdoer’s claim is based took place.

(2) Subsection (1) applies whether the right to contribution and indemnity arises in respect of a tort or otherwise.

Section 21 specifically prohibits the addition of parties to an existing action after the expiry of the limitation period.

Analysis

[21] With respect, I reject that defendants’ argument that prejudice is the only issue which the court is obligated to consider under rule 29.01. It is well-settled law that the court has no authority to allow an action to be commenced after the expiry of a limitation period, subject to discoverability. (Joseph v. Paramount Canada’s Wonderland, 2008 CarswellOnt 349, 2008 ONCA 469, at para. 28) To permit such a claim would force the parties to a two-step process of issuance of a third party claim and then a subsequent motion for summary judgment to strike out the third party claim on the grounds that it is statute barred. (Trent University v. Nortex Roofing Ltd., 2009 CarswellOnt 5394, at para. 20, wherein Master Short concurred that on a motion to add a third party claim, the court has discretion to consider untenable claims or claims that are statute barred.)

[22] The defendants have the onus to demonstrate that the proposed third party claim is not statute barred.

[23] The basic limitation period as provided in section 4 of the Limitations Act expired on July 23, 2010, two years after the date of the subject motor vehicle accident. The defendants take the position that they first discovered that Bendix was the manufacturer of the brake housing which allegedly failed on February 23, 2012 at the examination for discovery of the defendant, Grove Crane. On the other hand, Bendix’s evidence is that the defendants discovered that Bendix was the manufacturer as early as February 22, 2012, one day prior, when Venetor’s road technician answered the following question at examination for discovery:

Q. My question is more, was there any thought given to, you know, getting somebody like, you know, Bendix who was the brake manufacturer or Grove or, you know, Traction, if they know something about brake parts to look at them?

A. I have no idea.

[24] Whether I find that February 22, 2012 or February 23, 2012 was the date the defendants discovered that Bendix was the manufacturer, it will not change the fact that this motion was not brought within two years of either date, the motion being filed on December 19, 2014.

[25] The defendants have advanced no evidence to refute that the claim was discoverable within two years prior to advancing the claim.

[26] It is recognized that Bendix has been aware of the facts giving rise to the subject motor vehicle accident since early 2013, particularly because the Grove action was commenced on February 7, 2013 and presumably served on Bendix shortly thereafter. It is also highly likely that Bendix anticipated that the defendants in this action would make a claim against it as the evidence reveals that in January 2014, counsel for Bendix proposed a timetable for the Grove action and sought the approval of the defendants in this action.

[27] It is also recognized that in September 2013, the defendants consented to its third party action herein being consolidated or tried together with the Grove action and the subsequent communications by defendants’ counsel regarding its options to either commence a third party action if the actions were ordered to be tried together or to amend its statement of defence to include a crossclaim against Bendix if the actions were to be consolidated.

[28] There is also evidence that the defendants gave notice to Bendix of their intention to bring a claim in January 2014.

[29] It is noteworthy that in defence counsels’ letter of January 2014, it was stated that the defendants were in the process of issuing a third party claim against Bendix. Had the defendants issued its third party claim at that time, it is reasonable to conclude that there would have been no issue regarding the limitation period assuming, of course, it was accepted that the date of discoverability was February 23, 2012, less than two years from issuance of the third party claim.

[30] The defendants’ explanation for why the third party claim was not issued in January 2014 is that they were waiting to hear from plaintiffs’ counsel regarding the outcome of the motion to consolidate or be tried together in order to take its next step.

[31] However, section 5 of the Limitations Act is clear and unequivocal -- based on the discoverability principle, an action is required to be commenced within two years of the date the claim was discovered. I find that the defendants discovered their claim against Bendix at the latest on February 23, 2012. As this motion was brought on December 19, 2014, more than two years from February 23, 2012, it is statute barred.

[32] The defendants have provided no viable argument that would permit this court to grant leave to commence the third party claim against Bendix after the expiration of the limitation period. Section 21 of the Limitations Act specifically prohibits the addition of parties to an existing action after the expiry of the limitation period. Further, as noted above in the case of Joseph, supra, the court of appeal held that the court has no authority to allow an action to be commenced after the expiry of a limitation period, subject to discoverability.

[33] Given my findings above, it is my view that it is not necessary to address the issue of prejudice. However, as rule 29.02(1.2) specifically provides that prejudice to the plaintiff is a consideration in granting leave, I will address it.

[34] The plaintiffs bear the onus of demonstrating prejudice. The plaintiffs have not opposed this motion; therefore, it is my view that the plaintiffs would suffer no prejudice if leave were granted.

[35] In conclusion, the defendants’ motion for leave to issue a third party claim against Bendix is hereby dismissed.

Consolidation

[36] The defendants seek an order to consolidate this action with the Grove action (CV-14-511159) pursuant to rule 6.01. None of the existing parties to this action and the Grove action oppose this relief.

[37] Rule 6.01 allows the court to consolidate an action if there are common questions of law or fact, the relief claimed arises out of the same transaction or occurrence, or any other reasons that the court may order.

[38] Master Dash’s order of March 25, 2014 provided that the Grove action and the defendants’ third party action herein be tried together, made on consent of all parties.

[39] The following is the background that led to the order of March 25, 2014. When the motion was before Master Dash for the first time on February 3, 2014, he did not outright refuse to grant a consolidation order. He raised issues regarding the content of the draft order. The last paragraph of the endorsement states: “In either case a new consent and order is required”.

[40] Master Dash’s subsequent endorsement of March 10, 2014 states: “No response having been received to my endorsement of February 3, 2014, the motion to consolidate the actions and move the 1st named action to Toronto is dismissed without prejudice to moving again with an appropriate order as to particulars of the consolidated action.” (my emphasis)

[41] Having considered Master Dash’s two endorsements, it is my view that the issue of consolidation is not res judicata and; therefore, it is properly before this court at this time.

[42] Stewart J. in Paglia v. Favot, 2014 ONSC 230, at para. 23, followed the existing case law which held that the “fundamental rule relating to consolidation is that, as far as possible, all matters in controversy between the parties should be determined in one proceeding”.

[43] Master Graham in 7744455 Canada Inc. v. Lick’s Franchising Inc. 2013 ONSC 6967, at para. 18, on a motion for consolidation of two actions, considered a list of factors set out by Master Dash in 1014864 Ontario Ltd. v. 1721789 Ontario Inc., 2010 ONSC 3306, 2010 CarswellOnt 4183, as follows:

A non-exhaustive list of some of the considerations on ordering trial together may, depending on the circumstances, include:

(a) the extent to which the issues in each action are interwoven;

(b) whether the same damages are sought in both actions, in whole or in part;

(c) whether damages overlap and whether a global assessment of damages is required;

(d) whether there is expected to be a significant overlap of evidence or of witnesses among the various actions;

(e) whether the parties the same;

(f) whether the lawyers are the same;

(g) whether there is a risk of inconsistent findings or judgment if the actions are not joined;

(h) whether the issues in one action are relatively straightforward compared to the complexity of the other actions;

(i) whether a decision in one action, if kept separate and tried first would likely put an end to the other actions or significantly narrow the issues for the other actions or significantly increase the likelihood of settlement;

(j) the litigation status of each action;

(k) whether there is a jury notice in one or more but not all of the actions;

(l) whether, if the actions are combined, certain interlocutory steps not yet taken in some of the actions, such as examinations for discovery, may be avoided by relying on transcripts from the more advanced action;

(m) the timing of the motion and the possibility of delay;

(n) whether any of the parties will save costs or alternatively have their costs increased if the actions are tried together;

(o) any advantage or prejudice the parties are likely to experience if the actions are kept separate or if they are to be tried together;

(p) whether trial together of all of the actions would result in undue procedural complexities that cannot easily be dealt with by the trial judge;

(q) whether the motion is brought on consent or over the objection of one or more parties.

[44] I accept that subsections 6.01(1) (a) and (b) are applicable; namely, that the actions have a question of fact and law in common regarding the cause and liability for the accident, and the relief claimed in all actions arise out of the same accident.

[45] The issues in this action, being liability for the accident against the owner and operator of the crane and the plaintiffs’ damages, are different from the issues in the third party action and the Grove action, being claims for contribution and indemnity. As such, the issues in this action must be determined before the issues in the third party action and the Grove action can be determined. For those reasons, the existing order of trial together is appropriate.

[46] Further, there is no evidence that there will be an overlap of evidence or of witnesses.

[47] As all the actions will be tried together, and in fact have been scheduled for trial for four weeks commencing February 16, 2016, there will be no likelihood of inconsistent judicial findings or multiplicity of proceedings.

[48] However, if the actions were consolidated at this time, in my view, there will likely be added costs of having to deliver consolidated pleadings.

[49] For those reasons and given that all the actions have been scheduled for trial at the same time and that the third party action and the Grove action will be tried together, the result is that all the matters in issue will be determined by the same trier of fact and in the proper order given the claims.

[50] Therefore, although none of the parties object to the order to consolidate, I find no valid reason to consolidate the actions.

[51] In conclusion, the defendants’ motion to consolidate the actions is hereby dismissed.

Costs

[52] Bendix shall be entitled to its costs of this motion on a partial indemnity scale in the amount of $4,750 payable within 30 days.

March 19, 2015 (original signed)_

Master Lou Ann M. Pope