TORONTO STANDARD CONDOMINIUM CORPORATION NO. 1901 v. DAVLAN CONSTRUCTION CORPORATION

CV-12-455271

2015 ONSC 1956

MOTION HEARD: MARCH 25, 2015

ENDORSEMENT

Master R.A. Muir –

[1] The plaintiff brings this motion pursuant to Rules 5.04(2) and 26.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”) for an order granting it leave to amend its statement of claim to add three new defendants. The new defendants are the alleged suppliers and manufacturer of certain plumbing parts.

[2] The existing defendants and the proposed defendant Wolseley Canada Inc. (“Wolseley”) are not opposed. The proposed defendants Masco Canada Limited (“Masco”) and Emco Corporation (“Emco”) are opposed to the relief sought by the plaintiff.

[3] This action arises out of incidents of water damage that occurred on June 7 and June 11, 2010 at a condominium property located at 34 Foundry Avenue, Toronto.

[4] Although the plaintiff’s notice of motion seeks to substitute the proposed new defendants for the named John Doe defendants, this motion was not argued on the basis of misnomer. Instead, the plaintiff argues that the two year limitation period set out in the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B (the “Limitations Act”) has not yet expired based on the doctrine of discoverability. It submits that it only discovered the identity of the proposed defendants when advised of the names by counsel for Wolseley and for the defendant Associated Mechanical Trades in January and August of 2014.

[5] The relevant provisions of the Limitations Act provide as follows:

1. In this Act,

“claim” means a claim to remedy an injury, loss or damage that occurred as a result of an act or omission;

Basic limitation period

4. 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.

Discovery

5. (1) A claim is discovered on the earlier of,

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

(i) that the injury, loss or damage 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 to remedy it; 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).

Presumption

(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1) (a) on the day the act or omission on which the claim is based took place, unless the contrary is proved.

[6] Rule 5.04(2) provides as follows:

(2) Adding, Deleting or Substituting Parties - 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.

[7] The principles applicable to motions to add parties in circumstances such as those before the court on this motion are set out in the decision of Master Dash in Wong v. Adler, [2004] O.J. No. 1575 (S.C.J. – Master); affirmed, [2005] O.J. No. 1400 (Div. Ct.).

[8] At paragraph 45 of Wong, Master Dash states as follows:

45 What is the approach a judge or master should take on a motion to add a defendant where the plaintiff wishes to plead that the limitation period has not yet expired because she did not know of and could not with due diligence have discovered the existence of that defendant? In my view, as is clearly implied in Zapfe, the motions court must examine the evidentiary record before it to determine if there is an issue of fact or of credibility on the discoverability allegation, which is a constituent element of the claim. If the court determines that there is such issue, the defendant should be added with leave to plead a limitations defence. If there is no such issue, as for example where the evidence before the motions court clearly indicates that the name of the tortfeasor and the essential facts that make up the cause of action against such tortfeasor, were actually known to the plaintiff or her solicitor more than two years before the motion to amend, the motion should be refused. If the issue is due diligence rather than actual knowledge, this is much more likely to involve issues of credibility requiring a trial or summary judgment motion, provided of course that the plaintiff gives a reasonable explanation on proper evidence as to why such information was not obtainable with due diligence. That is not to say that such motion could never be denied if the evidence is clear and uncontradicted that the plaintiff could have obtained the requisite information with due diligence such that there is no issue of fact or credibility.

[9] It should also be noted that the Court of Appeal has held that the passing of a limitation period is fatal to a motion under Rule 5.04(2). See Joseph v. Paramount Canada's Wonderland, 2008 ONCA 469 at paragraphs 23 and 25. The former doctrine of special circumstances no longer applies. A party cannot be added to an existing action after the expiry of the applicable limitation period.

[10] I have considered and applied these principles to the evidence before me on this motion. I accept, based on the evidence before me, that the plaintiff did not have actual knowledge of the identities of Masco and Emco prior to the expiration of the presumptive limitation period in June 2012. However, I am not satisfied that the plaintiff has met the onus placed upon it to satisfy the court that it could not have learned the identities of these proposed defendants prior to that date, with the exercise of reasonable diligence.

[11] The only evidence on this motion that addresses the question of reasonable diligence prior to the expiration of the presumed limitation period comes from the plaintiff’s former lawyer, Sabrina Lucibello. Ms. Lucibello deposes that prior to her involvement with this matter the plaintiff’s insurer retained an independent adjuster to investigate and an expert engineer to examine the allegedly faulty parts. The engineer was unable to determine the identity of the manufacturer of the flex hose. There is simply no other evidence of any other steps taken by the plaintiff, or its representatives, to determine the identity of Masco and Emco prior to the expiry of the presumptive limitation period. Moreover, the plaintiff has not provided any details of the adjuster’s investigation or the work undertaken by the engineer. There is no direct evidence from these individuals and no reports or other documents from their files have been put in evidence on this motion. The plaintiff takes the position that it wishes to retain its claim to privilege over those materials. The plaintiff is obviously entitled to do so. However, the plaintiff must then live with the consequences of such non-disclosure when the court assesses the sufficiency of the evidence filed in support of the relief the plaintiff is requesting. It is not an answer for the plaintiff to argue that it exercised reasonable diligence but is not prepared to provide the particulars in order to maintain a claim of privilege.

[12] I agree with the observation of Master Dash in Wakelin v. Gourley, [2005] O.J. No. 2746 (S.C.J. – Master) when he states that not much evidence is required for a plaintiff to meet the reasonable diligence requirement on a motion such as this. However, it is my view that the minimal evidence put forward on this motion is simply not sufficient to meet this test. The evidence is second hand and lacking in specifics. Obvious steps that could have been taken, such as making inquiries of the plaintiff’s contractor or mechanical sub-contractor are simply not addressed in the evidence. It is simply not enough for a plaintiff to take a look at the faulty part and thereafter do nothing to identify the proper parties for many months and until long after the expiry of the presumptive limitation period. As the Court of Appeal has stated, “limitation periods are not enacted to be ignored”. See Soper v. Southcott, [1998] O.J. No. 2799 (C.A.) at paragraph 21. It is not too much to ask for a plaintiff to exercise at least some reasonable degree of diligence when it seeks to rely on the discoverability provisions of the Limitations Act.

[13] For these reasons the plaintiff’s motion is dismissed except for the relief in respect of Wolseley. An order shall issue granting the plaintiff leave to amend its amended statement of claim to add Wolseley as a defendant.

[14] Masco and Emco have been entirely successful on this motion. They are entitled to costs. Emco seeks partial indemnity costs of $2,000.00. Masco seeks partial indemnity costs of approximately $4,500.00. In my view, $2,000.00 is fair and reasonable for a motion of this nature. I note that Masco did not serve any responding evidence. I have also taken into account Masco’s appearance on December 3, 2014. The plaintiff shall pay the costs of Masco and Emco on a partial indemnity basis fixed in the amount of $2,000.00 each, for a total of $4,000.00. These costs shall be paid by April 24, 2015.

[15] The existing parties and Wolseley shall adhere to the timetable attached as Schedule A. This action shall be set down or otherwise disposed of by April 30, 2016 failing which it shall be dismissed for delay.

March 25, 2015

Master R. A. Muir