SUPERIOR COURT OF JUSTICE – ONTARIO
Court File and Parties
COURT FILE NO.: 59259
DATE: 2015/03/19
RE: Darryl Reddy (Plaintiff)
- and -
Freightliner Canada Inc. and Co-Operators Life Insurance Company (Defendants)
BEFORE: Justice J. N. Morissette
COUNSEL: Andrew Camman & Susan Toth, for the plaintiff
Keith Geurts, for the defendant Freightliner Canada Inc.
No one appearing, for the defendant Co-Operators Life Insurance Company
HEARD: March 18th, 2015
ENDORSEMENT
[1] The defendant Freightliner Canada Inc. (Daimler) seeks an order for summary judgment granting the following:
a. Strike out paragraphs 3 and 4 of the Plaintiff’s Reply on the basis that these paragraphs raise the “Dismissal Claim” as a new cause of action not pleaded in the statement of claim;
b. Declare that the plaintiff should not be granted leave to amend his statement of claim to plead the “Dismissal Claim”, as such an amendment (i) would be barred by the Limitations Act, 2002 and/or (ii) would result in prejudice to Daimler that could not be compensated for by costs or an adjournment; and
c. that the entire action as against Daimler be dismissed.
[2] At issue is whether the Reply raises a “new cause of action”.
Summary of procedure:
[3] The moving party terminated the employment of the plaintiff on January 8th, 2007. On January 19th, 2007, the plaintiff suffered a stroke rendering him permanently disabled. On January 31st, 2007, the plaintiff’s then counsel wrote Daimler seeking long term disability benefits due to the wrongful dismissal of the plaintiff.
[4] On August 18th, 2008, a statement of claim was issued. On December 14th, 2012, a statement of defence was filed and on December 21st, 2012, through new counsel, a Reply was filed.
[5] On January 19th, 2012, a solicitor’s negligence claim was issued against the original counsel for the plaintiff, who drafted the statement of claim. On June 11th, 2012, a statement of defence was filed and on September 27th, 2013, just days before the cross- examination of that counsel, an amended statement of defence was filed.
[6] Evidence before this Court demonstrates that the original intent by the original plaintiff’s counsel was to claim for breach of employment contract and failure to maintain the plaintiff on his benefits during a notice period that would have been available to the plaintiff.
Summary of the parties’ position:
[7] The moving party submits that the statement of claim does not plead in any way the plaintiff was “wrongfully dismissed” and as a result, cannot plead in Reply a “new cause of action” that is statute barred.
[8] The plaintiff submits that the statement of claim has sufficient factual matrix to include an alternative remedy as plead in the Reply. The plaintiff concedes that the statement of claim is not the best drafted pleading, but maintains that the following paragraphs are sufficient to allow leave to amend the statement of claim or not strike out the Reply:
In January 1998 the Plaintiff commenced employment with the Defendant Freightliner Canada Inc. at Sterling Truck Corporation in St. Thomas, Ontario as an Assembly Member.
In 2003 the Plaintiff applied for a supervisory position with Freightliner Canada Inc. In August 2003 he was successfully promoted to the position of Materials Supervisor.
As a term of his employment contract the Defendant Freightliner Canada Inc. provided to the Plaintiff a benefit package, including long term disability benefits. …
Prior to the summer of 2006 the Plaintiff had a consistent and satisfactory work performance record with the Defendant Freightliner Canada Inc.
In the summer of 2006 the Plaintiff began feeling unwell at work and this resulted in some inconsistency in his work performance. …
On January 8, 2007 the Plaintiff was terminated from his employment with the Defendant Freightliner Canada Inc. due to his continued failure to adequately perform his employment duties upon his return to work.
The Plaintiff’s performance following his return to work in December 2006 was not in keeping with his record of employment up until the summer of 2006; however, it was consistent with his unsatisfactory performance immediately preceding his medical leave in November 2006.
In its termination letter dated January 8, 2007 the Defendant Freightliner Canada Inc. referenced the fact that the Plaintiff was placed on thirty (30) days notice of inconsistent performance on September 15, 2006 and that, following his return to work in December 2006, this inconsistent performance continued. This was the grounds upon which the Plaintiff was terminated on January 8, 2007. …
The Plaintiff’s sickness and disability was ongoing and continuous throughout the brief period in which he returned to work in December 2006, prior to his termination on January 8, 2007 as evidenced by his continuing unsatisfactory performance following his return to his employment. …
The Plaintiff states that he was and is totally disabled in accordance with the terms of the insurance policy in that he has been physically unable to perform the essential duties of his normal occupation since in or about November 2006. The Plaintiff states that his total disability continues to the present time. …
The Plaintiff states that the Defendants have breached the terms of the insurance policy and/or the Plaintiff’s contract of employment in wrongfully denying the Plaintiff’s disability benefit payments under the terms of the insurance policy and he claims damages equal to the amount payable to him pursuant to the insurance policy.
[9] The plaintiff further submits that the intent of the original counsel for the plaintiff to claim for benefits is irrelevant to the test before this Court. He further submits that if this Court finds that the pleading is a “new cause of action” then he concedes the limitation does apply.
The law and analysis:
[10] In wrongful dismissal pleadings, the plaintiff must allege that he/she was in an employment contract, which the plaintiff here does. He/she further must allege damages in two forms: (i) wages in lieu of notice; or (ii) if a plaintiff has a disability, then he must claim damages from the disability policy; which the plaintiff did.
[11] This is not a claim for wages in lieu of notice, but rather a claim for loss of disability payments due to the alleged breach of the employment contract.
[12] In the Reply, the plaintiff submits that it simply responded to the statement of defence that raised the issue of being terminated for “various misconduct”. Rule 25.06(5) states an allegation that raises a new ground of claim shall not be made in a subsequent pleading, such as a Reply, but rather by way of an amendment to the statement of claim.
[13] Do the following paragraphs in the Reply raise a new cause of action?
With respect to paragraph 4, the plaintiff repeats and relies upon paragraph 39 of the statement of claim. More specifically, the plaintiff claims that the defendant Freightliner Canada Inc. (hereinafter “Daimler”) breached the terms of his employment contract by wrongfully terminating him. The plaintiff dutifully, and to the best of his abilities, fulfilled the requirements of his position while in the employ of the defendants.
With respect to paragraphs 6 and 13, the plaintiff repeats and relies upon paragraph 39 of the statement of claim. More specifically, the plaintiff claims that liability for the loss of long term disability benefits will be that of the defendant Daimler should it be found that Daimler breached the employment contract by wrongfully terminating the plaintiff.
[14] This Court must approach this question by assessing the facts in a contextual orientation as to what will be considered a new ground of claim. In addition, Rule 25.08(2) states that a Reply is only subject to Rule 25.06(5), where, the matter might, if not specifically pleaded, take the opposite party by surprise or raise an issue that has not been raised by a previous pleading.
[15] Is the failure to specifically title a claim “wrongful dismissal” fatal to a wrongful dismissal claim? Does the pleading in the Reply come as a shock or surprise to the defendant?
[16] The Divisional Court case of Municipality of Greenstone v. Marshall Macklin Monaghan Limited [1] found that the meaning of cause of action is:
When the defendant’s claim is that the amendment raises a new cause of action after the limitation period has expired, then the court’s usual analytical approach is to consider the constituent elements of the alleged new cause of action to see if the facts as originally pleaded, or as better particularized in the proposed new pleading, could technically sustain that cause of action….
If one accepts, as I do, that the broader, factually-oriented approach to the meaning of ‘cause of action’ in interpreting and applying rule 26.01 is the correct approach, and one also assumes that a similar definition must be used when applying rule 21.01(1)(b), then the defendant’s basic entitlement is to have notice of the factual matrix out of which the claim for relief arises.”[2]
[17] This approach is the broader, factually-oriented approach in A1 Pressure Sensitive Products Inc. v. Bostik, Inc..[3] In that case, the plaintiff brought an action for breach of contract and breach of warranty and fitness. It sought to amend its pleading to include claims for negligence and negligent misrepresentation. A Master had dismissed the plaintiff’s motion to amend on the basis that the proposed amendments sought to assert a new cause of action after the limitation period expired. The Divisional Court allowed the plaintiff’s appeal, holding that the amendments simply sought to claim alternative remedies based on the same facts.
[18] In 1309489 Ontario Inc. v. BMO Bank of Montreal,[4] Lauwers J. (as he then was) described the analysis as a functional and purposive approach. He allowed the amendments finding that, while the pleading could have been considerably clearer, the defendant “BMO knew without doubt that the ‘litigation finger’ was pointing at it”. Before the expiry of the limitation period, the defendant had received notice of the factual matrix out of which the claims for relief arose.
[19] The trend in the case law since the beginning of this decade seems to apply a broader, factually-oriented, functional and purposive approach in determining whether the amendment sought or the pleading in Reply, is a “new cause of action” or simply an alternative remedy based on the factual matrix of the original statement of claim.
[20] In Kawartha Lakes (City) v. Gendron,[5] MacDougall J. endorsed another quotation from Lauwers J.’s decision in BMO case when he held that the broad fact-based approach is consistent with the purposive approach to the interpretation of limitation periods:
‘Cause of action’ can mean the factual matrix out of which the claim arises, or the legal nature of the claim. The trend of the cases favours the broader, factually oriented approach to the meaning of “cause of action”. This is a more functional approach that is also consistent with a purposive approach to the interpretation of limitations legislation.
[21] Daimler insists that because the intent of plaintiff’s counsel when filing the statement of claim was not to claim a “wrongful dismissal”, that the intent of counsel should prevail to demonstrate that the pleading in the Reply is now a “new cause of action”. Daimler further submits that due to the time lapsed, it is prejudiced because many of the witnesses to the termination are either deceased or location unknown. Further, the plant closed in 2009.
[22] In my view, the intent of counsel when drafting the statement of claim is irrelevant to the analysis required by this Court. One must review the statement of claim and its factual matrix to ascertain whether or not failing to specifically label a claim “wrongful dismissal” will be fatal.
[23] In this case, the statement of defence of Daimler demonstrates that it knew full well such was being pleaded as it denied liability for the elements of wrongful dismissal. It plead at para. 4 the following:
The plaintiff was employed by Daimler at its St. Thomas, Ontario plant from January 1998 to January 2007, when his employment was terminated for various misconduct. The St. Thomas plant was later closed in 2009.
[24] The Reply simply answers the allegation in the statement of defence that he was dismissed for cause.
[25] In my view, the lack of labelling “wrongful dismissal” in the statement of claim is not fatal because notice of the claim was made under the factual matrix that the defendant is allegedly in breach of the employment contract for “wrongfully” denying the plaintiff his disability payments. The only reason why the plaintiff’s disability benefits were denied is because the plaintiff was terminated from his employment.
[26] For these reasons, the motion for summary judgment is dismissed.
[27] Should the parties be unable to reach an agreement on costs, I may review brief costs submissions within 30 days hereof by the plaintiff and within 30 days thereafter by the moving party and within 15 days thereafter a reply, if any.
“Justice J. N. Morissette”
Justice J. N. Morissette
Date: March 19, 2015
[1] [2013] ONSC 7058 (Div. Ct.)
[2] Ibid, at para. 27
[3] 2013 ONSC 4734, [2013] O.J. No. 3248 (Div. Ct.)
[4] 2011 ONSC 5505
[5] [2012] ONSC 2035 at pp. 6-7