SUPERIOR COURT OF JUSTICE - ONTARIO

Court File No.: 11-CV-436686

Motions Heard: February 12 and October 1, 2014
and March 11, 2015

Re: Bharath Sankreacha

Plaintiff

v.

Cameron J. and D. Beach Sales Ltd. and
John Cowan

Defendants

Before: Master Thomas Hawkins

Appearances:
James Jagtoo for moving plaintiff
F (416) 282-0295

Martin Smith for responding defendant
Cameron J. and D. Beach Sales Ltd. and
proposed defendant Rod Brennan
F (613) 569-3882

Andrew Graham for responding defendant
John Cowan and proposed defendant JMC Legal Services Inc.
F (519) 667-3362

REASONS FOR DECISION

Nature of Motion

[1] In this action for wrongful dismissal and other civil wrongs the plaintiff moves under rule 26.01 and subrule 5.04(2) for leave to amend the statement of claim in terms of the draft amended statement of claim found at tab B1 of the plaintiff’s motion record returnable December 10, 2012. The proposed amendments involve the addition of two new defendants, namely JMC Legal Services Inc. (“JMC”) and Rod Brennan (“Brennan”).

[2] Rule 26.01 provides as follows.

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.

[3] Subrule 5.04 (2) provides as follows.

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.

[4] The proposed new defendants oppose this motion primarily on the ground that the applicable limitation period had expired more than two years before the motion materials were served on their lawyers on November 5 and 6, 2011.

[5] If this position is correct, then the proposed claims against JMC and Brennan are statute barred and therefore untenable pleas. Leave to amend to raise an untenable plea should not be granted.

[6] Subsection 21(1) of the Limitations Act, 2002, S.O. 2002 c.24 Schedule B (the “Act”) is also relevant. This subsection provides as follows.

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.

[7] The plaintiff submits that the position of the proposed defendants JMC and Brennan that the limitation period had expired is not correct because of the discoverability doctrine found in sections 4 and 5 of the Act.

[8] Section 4 of the Act sets out the two year limitation period applicable to this action. Section 4 provides as follows.

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.

[9] Section 5 of the Act sets out the principles governing the discoverability doctrine. Section 5 provides as follows.

(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).

(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.

[10] Because of the presumption of knowledge set out in subsection 5(2) of the Act, the central issue on this motion may be expressed as follows. Did the plaintiff either know or ought the plaintiff to have known of the four matters set out in clause 5(1)(a) of the Act as regards the proposed defendants JMC and Brennan more than two years before the plaintiff’s motion record was served on the lawyers for JMC and Brennan on November 5 and 6, 2012?

[11] On Wong v. Adler, 2004 8228 (ON SC), [2004] O.J. No. 1575, 70 O.R. (3d) 460 Master Dash explained how a court should go about answering this kind of question. Master Dash expressed himself as follows (at paragraph 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.

[12] In the present case, the plaintiff has sworn three affidavits in support of his motion. For the most part, these affidavits do not deal with the subject of what the plaintiff knew or ought to have known about JMC and Brennan and their conduct as alleged in the proposed amendments to the statement of claim. (The plaintiff’s motion record also seeks relief independent of the motion for leave to amend the statement of claim.)

[13] To the extent that these affidavits do deal with the subject of what the plaintiff knew or ought to have known about JMC and Brennan from time to time, those affidavits are less than chrystal clear.

[14] Some background information is necessary in order to understand the limitation of action issue. The plaintiff was employed by the first defendant Cameron J. and D. Beach Sales Ltd. (“Cameron and Beach”) until June 21, 2010 when, the plaintiff alleges, he was wrongfully dismissed. Cameron and Beach operated a Canadian Tire store in Markham, Ontario as a franchisee. The existing defendant John Cowan (“Cowan”) provided security services to Cameron and Beach through his corporation, the proposed defendant JMC. The proposed defendant Brennan was the plaintiff’s manager at Cameron and Beach.

[15] The defendants allege that the plaintiff was dismissed for cause. They complain that the plaintiff used Brennan’s workplace computer to obtain and download Cameron and Beach employee and customer credit card and bank account information and used that information to withdraw fraudulently funds form the bank accounts of those employees and customers.

[16] Cowan called York Regional police with this information. The plaintiff was arrested and subsequently charged with fraudulent possession of credit card data contrary to the Criminal Code of Canada, R.S.C. 1985 c.C.45.

[17] In the amended statement of claim the plaintiff proposes to advance the following claims against both Brennan and JMC:

(a) punitive damages;

(b) past and future loss of income;

(c) injurious falsehood; and

(d) damages for mental distress.

[18] In addition, the plaintiff proposes to advance a claim for civil conspiracy to injure him against Brennan and Cowan but not JMC.

[19] I have mentioned that the plaintiff has sworn three affidavits on support of this motion. The plaintiff’s second affidavit (sworn January 10, 2013) does deal with the subject of what the plaintiff knew about Brennan and JMC from time to time.

[20] In an exhibit to this affidavit Mr. Jagtoo states that he first learned of the existence of JMC when he received Cowan’s statement of defence on December 2, 2011. Paragraph three of this pleading makes express reference to JMC. I infer from this that the plaintiff did not tell Mr. Jagtoo about JMC when the two of them were discussing whom to sue and were drafting the original statement of claim. Cowan has been a named defendant from the beginning and is a prominent figure in the events originally alleged to have occurred. If the plaintiff knew about the existence of JMC as the vehicle through which Cowan supplied security services to Cameron and Beach when the plaintiff and Mr. Jagtoo were discussing whom to sue, I assume, as a matter of common sense, that he would have told Mr. Jagtoo about JMC.

[21] I infer that he did not do so because he too did not know about JMC and its role as the vehicle through which Cowan provided servicers until December 2, 2011.

[22] This is less than two years before the plaintiff served his motion record. In my view, the plaintiff ought not to have known about the fact that Cowan supplied security services through JMC because the plaintiff’s duties at Cameron and Beach as alleged in the original statement of claim had nothing to do with security at Cameron and Beach.

[23] The original statement of claim simply alleges that Cowan is an employee, associate or independent contractor at Cameron and Beach who oversees security at Cameron and Beach. These allegations are inconsistent with JMC being the entity which supplied security services to Cameron and Beach.

[24] There remains the issue of whether the plaintiff could have discovered the existence of JMC and its role in providing security services at Cameron and Beach sooner through the exercise of due diligence. The record before me is too incomplete for me to decide this issue.

[25] An order will therefore issue granting the plaintiff leave to amend the statement of claim as asked as regards the allegations against JMC and granting JMC leave to plead a limitations defence.

[26] The plaintiff has known about the existence of Brennan for years. What he neither knew nor ought to have known when he was dismissed (and later when, the original statement of claim was being drafted) was what role if, if any, Brennan played in his dismissal from Cameron and Beach. The original statement of claim contains several references to Brennan, including references to what Brennan did on the day the plaintiff was dismissed, but no allegation that Brennan committed any civil wrong against the plaintiff. To me, having read the original statement of claim, it is inconceivable that the plaintiff would have known that Brennan committed a civil wrong against him in connection with his dismissal and yet fail to allege this against Brennan in the original statement of claim.

[27] The plaintiff first got some information about Brennan’s role in his dismissal when he received the crown disclosure brief on the charges against him at some point after January 27, 2011. Again, this is less than two years before the plaintiff served his motion record. He got further information about Brennan’s role in his dismissal when Cowan was examined for discovery on July 30, 2012.

[28] Once again, there is an issue as to whether the plaintiff could have discovered Brannan’s alleged role in his dismissal sooner through the exercise of due diligence. I am unable to decide this issue either way on the evidentiary record before me.

[29] Defence counsel also submitted that this is not a proper case for the joinder of the various causes of action set out in the draft amended statement of claim. I do not agree.

[30] The acts and omissions set out in the draft amended statement of claim are not separated from one another either in time or in place. This is a proper case for joinder of these causes of action.

[31] Subrule 1.04(1) instructs me to construe the Rules of Civil Procedure liberally “to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits”. Requiring the plaintiff to commence a second action rather than granting leave to amend as asked does not strike me as the most expeditious and least expensive way to determine the matters in issue between the parties.

[32] An order will therefore issue granting the plaintiff leave to amend the statement of claim as asked as regards the proposed allegations against Brennan and granting Brennan leave to raise a limitations defence.

[33] These undecided issues will have to be resolved at trial or on a motion for summary judgment with a fuller record than the one before me.

Conclusion

[34] In conclusion, I grant the plaintiff leave to amend the statement of claim as asked.

Costs

[35] Because I have been unable to decide the discoverability issue either way on the record before me, I decline to award the costs of this motion to either side. Instead, I reserve the costs of this motion to the judge hearing a summary judgment motion to resolve the limitation of action defence, if there is such a motion. Failing that, I reserve the costs of this motion to the trial judge.

(original signed)

Date: July 21, 2015
Master Thomas Hawkins