SUPERIOR COURT OF JUSTICE - ONTARIO
CITATION: ACIMOVIC v. 8174709 CANADA INC., 2015 ONSC 582
COURT FILE NO.: CV-14-502195
MOTION HEARD: JANUARY 23, 2015
RE: Yugo Acimovic
v.
8174709 Canada Inc. o/a Kevric Real Estate Corp.
BEFORE: MASTER R.A. MUIR
COUNSEL: Adrian Lomaga for the plaintiff
David Visschedyk for the proposed substituted defendants
REASONS FOR DECISION
[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 him leave to amend his statement of claim. The plaintiff seeks to substitute Menkes Consilium 200 Holdings Ltd. (“Menkes”) and AEW Capital Management, LP (“AEW”) in place of the named defendant 8174709 Canada Inc. o/a Kevric Real Estate Corp. on the basis of misnomer.
[2] The named defendant is not opposed to this motion and does not seek costs from the plaintiff. The proposed substituted defendants are opposed to the relief sought by the plaintiff.
BACKGROUND
[3] This action arises out of a trip and fall that took place on April 20, 2012. The plaintiff allegedly tripped on a portion of sidewalk in front of a building located at 200 Consilium Place in the City of Toronto and fell down two flights of exterior stairs. It is alleged that he suffered serious and permanent injuries as a result.
[4] The property on which the plaintiff fell was owned by Menkes at the time. However, Menkes sold the property to the named defendant in this action a few months later, on July 23, 2012.
[5] Mr. Lomaga was retained by the plaintiff on April 11, 2014, just a few days before the expiry of the presumptive limitation period as established by the Limitations Act, 2002, S.O. 2002, c. 24, Schedule B. The plaintiff instructed Mr. Lomaga to commence an action against the owner, occupier and manager of the premises on which he fell. Mr. Lomaga immediately conducted a title search and contacted the building’s management office in order to ascertain the correct names of any necessary defendants. Unfortunately, the title search was misinterpreted and Mr. Lomaga was given incorrect information by the building management company.
[6] The statement of claim in this action was issued on April 14, 2014. It mistakenly named and identified the current defendant as the owner, occupier and manager of the property at the time of the plaintiff’s fall.
[7] The statement of claim was served shortly after it was issued. A notice of intent to defend was filed on April 25, 2014. On May 13, 2014, the lawyer for the named defendant contacted Mr. Lomaga and advised him that her client did not own the property at the time of the plaintiff’s fall and that Menkes was the owner on the date in question.
[8] Mr. Lomaga then wrote to Menkes the same day. He asked for confirmation that Menkes was the owner of the property at the relevant time and sought its consent to an amendment of the statement of claim to correct the name of the defendant.
[9] On May 22, 2014, Mr. Lomaga was contacted by Doug Wagner, a representative of Menkes’ insurer. Mr. Wagner confirmed that Menkes was the owner at the time of the plaintiff’s fall and that AEW was probably the property manager at the time. Mr. Wagner also requested a copy of the amended statement of claim and appeared to consent to the requested amendments by stating that “we have no issue with that”.
[10] Unfortunately for the plaintiff, it appears that Menkes’ counsel did have an issue with the proposed amendments. Ultimately, Menkes declined to provide its consent. This motion was then served on August 13, 2014. Mr. Lomaga sought to have the motion heard on an urgent basis. Mr. Lomaga wanted the amendments made before the expiry of the time for service of the statement of claim in October 2014. However, the proposed substituted defendants agreed that they would not take the position that they have suffered any prejudice after August 13, 2014. On that basis, the motion was adjourned and ultimately heard by me on January 23, 2015.
MISNOMER
[11] The plaintiff relies on the doctrine of misnomer in support of the relief he is seeking on this motion. The law relating to misnomer has been thoroughly reviewed in recent years by the Court of Appeal. See Ormerod (Litigation Guardian of) v. Strathroy Middlesex General Hospital, 2009 ONCA 697; Spirito Estate v. Trillium Health Centre, 2008 ONCA 762 and Lloyd v. Clark, 2008 ONCA 343. Misnomer requires a finding that the litigation finger be clearly pointed at the intended defendant. Would a reasonable person receiving and reviewing the statement of claim, in all the circumstances of the case, and looking at it as a whole, say to himself or herself “of course it must mean me, but they have got my name wrong”? The Court of Appeal adopts this test at paragraph 12 of Spirito, where the court states as follows:
- In Dukoff et al. v. Toronto General Hospital et al. (1986), 1986 2648 (ON SC), 54 O.R. (2d) 58 (H.C.J.), Saunders J. noted the practice, adopted in this case, of using fictitious names where the identity of the parties are unknown. If it was a case of misnomer, the statement of claim could be corrected by replacing the fictitious name (John Doe in that case) for the correct name, even though the correction was sought after expiry of the limitation period. He adopted the following test from Davies v. Elsby Brothers, Ltd., [1960] 3 All E.R. 672 (C.A.), at p. 676:
The test must be: How would a reasonable person receiving the document take it? If, in all the circumstances of the case and looking at the document as a whole, he would say to himself: “Of course it must mean me, but they have got my name wrong”. Then there is a case of mere misnomer. If, on the other hand, he would say: “I cannot tell from the document itself whether they mean me or not and I shall have to make inquiries”, then it seems to me that one is getting beyond the realm of misnomer.
[12] It is also important to note that even if a plaintiff is successful in establishing misnomer, the court retains a residual discretion under Rule 5.04 to refuse the proposed substitutions. This part of court’s analysis on a motion like this one is described by the Court of Appeal in Ormerod at paragraphs 28 to 32 as follows:
28 The framework put forward by the appellants is correct. After finding there was a misnomer the motion judge had the discretion to refuse to permit its correction. The Rules make this apparent. Cronk J.A. in Mazzuca v. Silvercreek Pharmacy Ltd., 2001 8620 (ON CA), 207 D.L.R. (4th) 492, analyzed the wording of the two rules that deal with the court's authority to permit amendment in detail -- rules 5.04 and 26.01. She contrasted their wording to note that rule 5.04(2) uses the discretionary "may" unlike rule 26.01, which uses "shall"; she also considered the history and development of these two provisions. She said at para. 25:
• Under both rules, a pleadings amendment is not to be made if non-compensable prejudice would result. In contrast to rule 26.01, however, the language of subrule 5.04(2) imports a discretionary power rather than a mandatory direction.
29 At para. 42 she added that "proof of the absence of prejudice will not guarantee an amendment". She also cited the discussion of the inter-relationship of the two rules in Holmested and Watson, Ontario Civil Procedure, Vol. 2 (Toronto: Carswell, 1993). The current edition states at p. 5-34:
• the same threshold test applies to a motion to amend under either rule 26.01 or rule 5.04(2) and the moving party must demonstrate that no prejudice would result from the amendment that could not be compensated for by costs or an adjournment; once this threshold test is met, under rule 26.01 the granting of leave is mandatory; however, where it is sought to add parties under rule 5.04(2) the court has to discretion whether to allow the amendment, notwithstanding that the threshold test is satisfied
30 While the authors refer only to "adding" parties, the permissive "may" in rule 5.04(2) grammatically applies to the correction of the name of a party incorrectly named in exactly the same way as it does to the addition, deletion, or substitution of a party.
31 As I see it, as the scope of what the courts treat as a misnomer broadens, it is appropriate to take a wider view of the court's discretion to refuse the correction of a misnomer. A "classic" misnomer, one in which the claim contains a minor spelling error of the defendant's name and is personally served upon the intended but misnamed defendant, prompts the application of a standard historically developed to remedy mere irregularities. Now that the concept of "misnomer" has been broadened to apply to a wider range of situations, the standard used to permit its correction should take into account the extent of its departure from mere irregularity in all the circumstances of the case.
32 The factors the motion judge applied in this case, whether the defendant was misled or was unduly prejudiced, are undoubtedly deserving of the greatest weight. As a general principle, these factors should be determinative. A general principle, however, is not an inflexible rule. Where the mistake in naming the defendant involves more than a mere irregularity or in any particular case with exceptional circumstances, the court may exercise its residual discretion under the rule to refuse to permit its correction. It may well be that the motion judge took a narrow view of his residual discretion to refuse to permit the correction of the misnomer. However, I am satisfied he realized he had a residual discretion since the factors he applied are broader than the rule's threshold of prejudice that cannot be compensated by costs or an adjournment. While the motion judge in this case might have inferred that the plaintiffs, after learning Dr. Graham's identity, did not resolve to proceed against her until July 2008, he did not make that inference.
[13] Paragraph 32 of Ormerod makes it clear that prejudice to the proposed substituted defendants is the most important factor on this part of the analysis. However, the court may consider other factors when exercising its discretion, such as significant unexplained delay in moving to amend, the public policy reasons supporting adherence to established limitation periods and the lack of notice to proposed substituted defendants. See O’Sullivan v. Hamilton Health Sciences Corp., 2011 ONCA 507 at paragraph 3.
ANALYSIS
[14] I have applied the factors and principles set out above to the facts before me on this motion. In my view, this is a case of misnomer and the proposed amendments should be allowed.
[15] The plaintiff has met the initial test for establishing misnomer. The statement of claim includes specific details of how, when and where the trip and fall happened. The date of the fall and a brief description of how it happened are found in paragraph 5 of the statement of claim. The correct municipal street address is set out in paragraph 3 of the statement of claim. At paragraphs 3, 4, 7, 8 and 9 of the statement of claim of claim the plaintiff asserts liability on the part of the defendant on the basis of it being the owner, occupier and manager of the property at the time of his fall. In my view, upon reviewing the statement of claim the proposed substituted defendants would have to say “of course it must mean me, but they have got my name wrong”. This conclusion is reinforced by Mr. Wagner’s email message of May 22, 2014 in which he acknowledged that the property was owned by Menkes and most likely managed by AEW at the time of the plaintiff’s fall.
[16] Counsel for the proposed substituted defendants argued that in order for the doctrine of misnomer to apply there must be some notice to a proposed defendant or its agent before the expiry of the applicable limitation period. Here, there was no such notice to Menkes or AEW. The proposed substituted defendants rely on Ormerod in support of this argument.
[17] I do not view the Court of Appeal’s misnomer decisions as limiting the misnomer doctrine in such a way. Although it appears that Ormerod involved a situation where the insurer for the proposed defendant was aware of the plaintiffs’ claim before the expiry of any limitation period, the Court of Appeal did not reach its finding of misnomer on the basis of such early notice. The knowledge of the insurer was simply used as a basis for inferring certain knowledge on the part of the proposed substituted defendant himself, based on the knowledge of his representative. See Ormerod at paragraph 24.
[18] In my view, the facts before the court on this motion cannot be distinguished from the facts considered by the Court of Appeal in Lloyd.[^1] That decision involved a situation where the plaintiffs had been involved in a motor vehicle accident on a road owned by the Regional Municipality of Durham (“Durham”).[^2] The plaintiffs sought to make allegations of negligence against the owner of the road. However, the plaintiffs failed to name Durham as a defendant. Instead, the plaintiffs named the province, the Town of Ajax and the Town of Whitby as defendants. The statement of claim was then issued on the last possible day before the expiry of the presumptive limitation period. The statement of claim was served very soon after it was issued and came to the attention of the insurer for Ajax and Whitby about 10 days later. The insurer for Ajax and Whitby was also the insurer for Durham but there is no indication that any of the municipalities or their insurer were aware of the potential claim before service of the statement of claim or prior to the expiry of the limitation period. Nevertheless, the Court of Appeal allowed the appeal from the motion judge’s decision and applied the doctrine of misnomer. In doing so, the Court of Appeal relied, in part, on evidence that Durham’s insurance adjuster immediately knew that Durham was the intended defendant.
[19] These facts are very similar to the facts on this motion. No notice was provided to Menkes and AEW until Mr. Lomaga sent the claim to Menkes on May 13, 2014. The presumptive limitation period had expired on April 22, 2014. The proposed substituted defendants’ insurance representative immediately recognized and confirmed that the wrong defendant had been named in the statement of claim. In my view, a fair reading of the statement of claim in this action makes it clear that the plaintiff intended to name the owner, occupier and property manager in place at the time of the plaintiff’s fall. However, the plaintiff simply got the name wrong.
[20] I do agree with the proposed substituted defendants that there may be situations where lack of notice may be a relevant consideration on motions of this nature. However, it is my view that notice is more properly a matter to be considered when it comes to the exercise of the court’s discretion under Rule 5.04, as discussed in Ormerod and O’Sullivan.
[21] On these facts, however, I can see no basis for refusing the relief requested. The proposed substituted defendants learned of this claim just a few weeks after the expiry of the presumptive limitation period and well before the time for service of the statement of claim had lapsed. There was no significant delay on the part of the plaintiff in bringing this motion. The proposed substituted defendants have not provided any evidence of actual prejudice or argue that they have been misled in any way. They have also not suggested that they were unaware of the trip and fall itself prior to receiving the statement of claim. They simply state that they were unaware of this claim until after the expiry of the presumptive limitation period.
[22] The proposed substituted defendants make a number of other arguments in their factum and in their responding evidence. They submit that the plaintiff and his lawyer knew, or should have known with reasonable diligence, the names of the proper defendants before the statement of claim was issued. While that may be true, I do not view such an argument as particularly persuasive on motions of this nature. Misnomer motions almost always involve a mistake of some kind. In a situation of misnomer, it is simply not an answer for a proposed substituted party to assert that the plaintiff could have discovered the proper name of the defendant with the exercise of reasonable diligence. See Skribans v. Nowek, 2012 ONSC 532 (SCJ – Master) at paragraphs 37-43 and 54-59.
[23] The proposed substituted defendants also made reference in their materials to discoverability and special circumstances. Again, it is my view that discoverability is not germane to the determination of whether the doctrine of misnomer applies. It is relevant to a consideration of whether a party should be added to an existing action after the expiry of the presumptive limitation period. However, misnomer is about correcting a misdescription. It is not about adding new parties. Finally, the plaintiff did not argue special circumstances and, in any event, it is doubtful that the doctrine of special circumstances continues to apply given the decision of the Court of Appeal in Joseph v. Paramount Canada's Wonderland, 2008 ONCA 469.
CONCLUSION
[24] For these reasons, I have concluded that the plaintiff has met the applicable test and the doctrine of misnomer should be applied to correct the name of the defendant as requested by the plaintiff. In addition, there is no basis for the court to exercise its discretion to refuse the proposed corrections.
COSTS
[25] The plaintiff has been successful and ordinarily would be entitled to costs in accordance with the court’s usual practice. However, it is my view that the plaintiff has been afforded an indulgence and should be denied costs. An error was made in drafting the statement of claim and in naming the proper defendants. The plaintiff waited until just a few days before the expiry of the presumptive limitation period before he retained a lawyer to commence this action. It was reasonable for the proposed substituted defendants to oppose this motion and to insist that the plaintiff provide evidence in support of the relief sought. In my view, it is fair and reasonable that there be no order with respect to the costs of this motion.
ORDER
[26] I therefore order as follows:
(a) the plaintiff is hereby granted leave to correct the name of the named defendant and to substitute Menkes Consilium 200 Holdings Ltd. and AEW Capital Management, LP in place of the named defendant;
(b) the plaintiff is hereby granted leave to amend his statement of claim in the form of the draft amended statement of claim at Tab 2 of the plaintiff’s motion record dated August 11, 2014; and,
(c) there shall be no order with respect to the costs of this motion.
Master R.A. Muir
DATE: January 26, 2015
[^1]: I note that the Lloyd decision is specifically cited by the Court of Appeal in Ormerod at paragraph 21.
[^2]: The endorsement of the Court of Appeal in Lloyd is very brief. The factual background is fully set out in the decision of the motion judge reported at [2006] O.J. No. 5004 (SCJ).