CITATION: OPPEDISANO v. VITULLO BROS. PLUMBING CO. LTD., 2015 ONSC 4021

COURT FILE NO.: CV-11-432508 MOTION HEARD: JUNE 17, 2015

ONTARIO – SUPERIOR COURT OF JUSTICE

COUNSEL: Cameron Grant for the defendant Bermetal S.A. de C.V. Jeff Van Bakel, counsel to the lawyers for the plaintiffs

ENDORSEMENT

Master R. A. Muir -

1. The defendant Bermetal S.A. de C.V. (“Bermetal”) brings this motion for an order setting aside the order of Master Dash of April 11, 2013, without prejudice to the right of the plaintiffs to seek the same order again by way of a further motion. The order of Master Dash was made without notice to Bermetal and granted the plaintiffs leave to amend their statement of claim to add Bermetal as a defendant to this action.

2. The plaintiffs are claiming damages as a result of losses arising from the alleged failure of certain plumbing parts. This action is one of several dozen similar claims that I am case managing pursuant to Rule 77 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”).

3. The plumbing parts at issue in this action had apparently been installed in the plaintiffs’ home at some point in 2000. The event giving rise to the claim took place on February 11, 2011. Bermetal was the manufacturer of the allegedly defective parts.

4. The amended statement of claim was issued on May 27, 2013 and was served on Bermetal on October 15, 2013 in accordance with the Rules and the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters signed at The Hague on November 15, 1965 (the “Hague Convention”). It appears that the delay in serving Bermetal with the statement of claim can be attributed to the service requirements associated with the Hague Convention.

5. Bermetal quickly retained Ontario counsel and on November 19, 2013 its lawyer wrote to the plaintiffs’ lawyer (not Mr. Van Bakel). In that letter, Bermetal’s lawyer clearly advised the plaintiffs’ lawyer that Bermetal was not provided with notice of the motion before Master Dash and raised the issue of a potential limitation period defence. Bermetal’s lawyer also requested a copy of the motion materials that were before Master Dash. For some reason, the plaintiffs’ lawyers failed to provide Bermetal’s lawyer with a copy of the motion record until August 5, 2014. This motion was then brought promptly in the circumstances, given the schedules of counsel and the availability of the court.[^1]

6. Bermetal has framed this motion as being brought pursuant to Rule 39.01(6), which reads as follows:

Where a motion or application is made without notice, the moving party or applicant shall make full and fair disclosure of all material facts, and failure to do so is in itself sufficient ground for setting aside any order obtained on the motion or application.

7. However, it is my view that this rule simply deals with the rules of evidence on motions and the potential consequences when those rules are not followed. Rule 39.01(6) does not mandate that the order be set aside. The court retains a discretion whether or not to do so having regard to the circumstances of each particular case. See the decision of Master Dash in Mosregion Investments Corp. v. Ukraine International Airlines, 2009 CarswellOnt 1899 (SCJ – Master) at paragraph 22.

8. The authority to bring this motion is found in Rule 37.14(1) which allows a person affected by an order obtained without notice to bring a motion to have that order set aside. It is the test under that Rule that must be applied on this motion. Of course, any alleged material non-disclosure will form part of the court’s consideration on this motion.

9. The applicable test is set out in the decision of Master Dash in Mosregion at paragraph 23. The question is not whether the order should have been made based on the material before the court on the motion without notice but whether, having been made, the order should now be set aside. This will involve a consideration of the evidence before the court on the original motion as well as a consideration of the evidence on the motion to set aside the original order. In my view, it is incumbent on the party seeking to set aside the original order to put forward the evidence it would have relied upon had it been provided with proper notice. This requirement allows the court to properly exercise its discretion. Moreover, it makes no practical sense to argue a motion to set aside an order made without notice and then re-argue the same issues again on another motion. Such a practice would not promote the just, most expeditious and least expensive determination of proceedings as mandated by Rule 1.04(1). These observations are particularly germane to this simplified procedure action in which the plaintiffs are seeking damages of $64,000.00. The principle of proportionality militates in favour of these issues being argued once and only once.

10. My consideration of the evidence before me on this motion leads me to conclude that the order of Master Dash should not be set aside. It is my view that nothing before me now would have changed the outcome of that motion.

11. Adding an additional party to an existing action is governed by Rule 5.04(2) which 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.

12. The court may deny leave to add an additional party under this rule where an applicable limitation period has expired.

13. The relevant provisions of the Limitations Act 2002, S.O. 2002, c. 24, Sch. B (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.

14. The applicable principles on a motion to add a party pursuant to Rule 5.04(2) are set out in the decision of Justice Then in Skrobacky (Litigation Guardian of) v. Frymer, 2014 ONSC 4544 at paragraphs 9 to 26. At paragraph 9 of Skrobacky, Justice Then stated as follows:

My general conclusion is that the case law cited by the moving party involves motions to add parties pursuant to rule 5.04. The language under that rule is discretionary, whereas the language of rule 26.01 is mandatory. Under both rules, however, leave to amend is not absolute. A court may refuse to amend pleadings where the defendant demonstrates prejudice that cannot be compensated by costs, or where the proposed claim is untenable at law. Prejudice is presumed where the claim is brought beyond the expiry of the limitation period. However, where there is an issue of fact or credibility relating to the discoverability of the proposed claim, the matter will usually be left to the trial judge to determine.

15. Justice Then went on to observe that the amount of evidence required on a motion under Rule 5.04(2) was “not very much”. The threshold is low. “If a plaintiff provides a reasonable explanation as to why the facts were not known or obtainable with due diligence within two years of moving to amend such that the motion judge determines there is a triable issue of fact or credibility, the court will normally permit the amendments with leave to plead a limitations defence”. See Skrobacky at paragraphs 24 and 26.

16. In my view, the plaintiffs in this action have provided a reasonable explanation for why the identity of the manufacturer was not known until September 2012. This action is one of many involving allegedly faulty plumbing parts. At the relevant time, the plaintiffs' lawyers were handling approximately 60 such matters. Many different suppliers, installers and manufacturers were involved. The assumption made by the plaintiffs’ lawyer that the BM marking on the subject part referred to Brass-Craft Manufacturing Company (“Brass-Craft”) was not unreasonable given that company’s involvement in many of the other claims. The plaintiffs’ investigator delivered a report on April 20, 2011 in which he stated that he was unable to identify the producer of the hose in question despite the BM mark. It was reasonable for the plaintiffs and their lawyers to rely on this report.

17. In September 2012, the plaintiffs’ lawyers were advised by Brass-Craft’s lawyers that Brass-Craft was not the manufacturer of the allegedly defective part. Upon receiving this information, the plaintiffs’ lawyers immediately began an investigation and by October 2012 they had learned that Bermetal was the manufacturer of the part in issue. The motion ultimately heard by Master Dash was then scheduled for April 11, 2013, well within two years of the alleged date of discovery.

18. I agree that there may be an issue about whether the plaintiffs ought to have done more at an earlier date in order to confirm the identity of manufacturer. However, I am satisfied that the plaintiffs have met the low evidentiary burden to establish a genuine issue with respect to discoverability. For this reason, it is my view that the order of Master Dash of April 11, 2013 should not be set aside.

19. Bermetal argued that it should be allowed an opportunity to present a full evidentiary record concerning the issue of prejudice. In my view, setting aside the order of Master Dash in order to permit such an analysis would not be in the interest of justice. First, the issue of prejudice plays a very narrow role on a motion to add a defendant based on discoverability. The theory behind discoverability is that the applicable limitation period has not expired. The plaintiffs could have simply chosen to commence a separate proceeding against Bermetal and the issue of prejudice would form no part of that proceeding. The limitation issue would be decided on the basis of discoverability. The only real issue regarding prejudice on the motion before Master Dash would have been in relation to Bermetal being joined in with an action already underway. No evidence of any such prejudice has been provided as part of this motion. This action has not been set down for trial. Any procedural unfairness can be addressed by me in my capacity as case management master. In any event, the alleged actual prejudice relied upon by Bermetal did not arise as a result of any delay on the part of the plaintiffs. The non-party that Bermetal alleges may have been partly responsible for the plaintiffs’ losses ceased operations in 2011, long before the expiry of even the presumptive limitation period.

20. Bermetal also argued that the affidavit used in support of the motion before Master Dash contained an admission that the applicable limitation period had expired on February 11, 2013 and his order should be set aside for that reason. In my view, that statement must be read in context. When the material before Master Dash is read as a whole, it is clear to me that the reference to the expiry of the limitation period is really a reference to the expiry of the presumptive limitation period established by the Limitations Act. I would not give effect to this argument.

21. Bermetal made the further submission that the materials before Master Dash were misleading in terms of notice to Bermetal. I do not agree. The notice of motion stated that the motion was being brought on notice to all “parties”. The preamble to the order signed by Master Dash stated that counsel for the “other defendants” were not opposed to the order. At the time of the motion before Master Dash Bermetal was not a party or a defendant. I do not view those documents as misleading.

22. Bermetal also submitted that Master Dash did not have jurisdiction to make the April 11, 2013 order because I had previously made an order assigning this matter to case management to be case managed by me. I agree with Bermetal that the usual practice of this court is for the master case managing an action to be seized of all interlocutory motions. However, there is nothing in my case management order or in Rule 77 that requires me to hear all such motions. There may be practical reason for someone else to hear certain matters in the event of a particular master’s absence or other scheduling difficulties. In my view, Master Dash had full authority to make the order he did.

23. Finally, Bermetal takes issue with a consent filed with the court in support of a timetable order made by Master McAfee on May 29, 2014. I agree with Bermetal that it was obviously inappropriate to present an order to the court as being on consent of all parties when Bermetal had not provided its consent. However, I view that matter as a separate issue. I do not see how it is relevant to the question of whether the order of Master Dash should be set aside.

24. Bermetal’s motion is therefore dismissed. This order should not be taken as signifying the court’s approval of the actions taken by the plaintiffs and their former lawyers. The motion before Master Dash should not have been made without notice to Bermetal. Rule 37.07(4) should have been complied with. The plaintiffs’ lawyers should have immediately responded to a simple request from Bermetal’s lawyer for a copy of the motion materials that were before Master Dash. Master McAfee should not have been advised that the timetable order was on consent when it was not.

25. Moreover, it appears that further amendments to the amended statement of claim will be necessary. Discoverability has not been pleaded. Inexplicably, the paragraph of the statement of claim with respect to service outside Ontario was removed when the statement of claim was amended. Rule 17.04 needs to be complied with.

26. All of these issues can be addressed as part of the parties’ costs considerations and submissions. If the parties are unable to agree on the issue of costs, they shall make brief written submissions by July 24, 2015.

27. As with all of the other related actions I am case managing, the registrar shall not dismiss this action without further order of the court.

June 22, 2015

Master R. A. Muir

[^1]: Counsel to the lawyers for the plaintiffs suggested in argument that this motion was not brought promptly. As set out above, it is my view that it was. However, even if there was some delay in scheduling this motion it is important to note that the plaintiffs and their lawyers took no steps whatsoever to comply with Rule 37.07(4) which requires service on affected parties of all evidence used in support of a without notice motion.