COURT FILE NO.: 12-55685

DATE: 2015/10/21

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Robert Schellings and Catherine Schellings, Plaintiffs

AND

DTE Industries Limited and W.O. Stinson & Son Limited, Defendants

BEFORE: Mr. Justice Pierre E. Roger

COUNSEL: Shane C. D’Souza, for the Plaintiffs

Pierre Champagne, for the Defendant W.O Stinson & Son Limited

HEARD: August 18, 2015 at Ottawa

ENDORSEMENT

[1] This motion seeks: (1) an order granting leave to the plaintiffs to amend the statement of claim in the form attached at Tab (1) (A) to the plaintiffs’ motion record; and (2) an order requiring the defendant W.O. Stinson & Son Limited to answer questions improperly refused at the examination for discovery of its representative, Mr. Bob Herres (“Mr. Herres”).

Factual Overview

[2] This is an action seeking $850,000 in damages for breach of contract and negligence. The action was issued on October 5, 2012 and relates to an oil leak that occurred at the plaintiffs’ residential property on or about June 1, 2011.

[3] The existing statement of claim alleges the following. In 2000, the plaintiffs became customers of W.O. Stinson & Son Limited (“Stinson”) for home heating services to their furnace and tank, together with the delivery of fuel oil. In June 2002, Stinson installed a new oil tank, which Stinson had purchased from DTE Industries Limited (“DTE”). The tank was thereafter serviced by Stinson on an automatic fill-basis. In 2005 and 2006, there were some problems when water got into the tank and Stinson responded to a service call. Services from Stinson are alleged to have continued up until April 2011 when Stinson filled the tank with oil. On June 1, 2011, the plaintiffs discovered a spill of about 700 litres of oil. Paragraph 15 of the original statement of claim alleges negligence of the defendants, with allegations against Stinson relating to: failing to properly inspect the tank for water, for defects or for damage; improperly installing the tank; and failing to warn the plaintiffs of the risks related to the tank and risk of build‑up of water. Paragraph 16 of the original statement of claim pleads that Stinson owed a duty of care in installing, servicing, inspecting the tank and providing furnace oil to the tank. Paragraph 18 of the original statement of claim (19 of the proposed amended), pleads that Stinson expressly or impliedly contracted with the plaintiffs to exercise due care and skill of a fuel supply and service company in terms of installing, inspecting, servicing and filling of the tank. Paragraph 19 of the original statement of claim (20 of the proposed amended) pleads and relies upon the breach of the aforesaid contracts with the following paragraph seeking resulting damages of $850,000 for the negligence and breach of contract of the defendants.

[4] The plaintiffs seek to amend the statement of claim essentially as follows:

a. To plead that the plaintiffs purchased the tank from Stinson prior to installation in June 2002.

b. To plead that: it failed to warn despite learning of these risks well in advance of the spill; it contravened the Sale of Goods Act, having knowingly sold a tank associated with risks despite learning of these risks before the spill; it failed to warn the plaintiffs of risks related to the tank despite having such knowledge from complaints or claims or industry knowledge.

c. To plead that Stinson contracted with the plaintiff to sell them a tank free of defect, and fit for its intended use of storing furnace oil.

[5] A statement of defence was delivered by Stinson on January 21, 2013. Stinson admits that it sold oil and carried on maintenance at the plaintiffs’ property at various points in time. Stinson admits that in 2002, it purchased a new oil tank from DTE and installed it at the plaintiffs’ property. Stinson pleads that in 2006, it recommended to the plaintiffs that an inside oil tank would be better and that the plaintiff should replace the outside tank (following water being found in the tank in October 2006). Stinson pleads that in April 2007, it advised the plaintiffs that Stinson could no longer deliver oil to the tank as the water issues with this steel tank made replacing it the best choice for the plaintiffs. Stinson nonetheless resumed deliveries of oil after being informed by the plaintiffs that the tank had been repaired and nonetheless continued to recommend that the tank be replaced. Stinson denies any liability to the plaintiffs in any way with respect to the oil tank or the delivery of oil to the oil tank, and pleads that it was properly installed, properly inspected, and pleads that Stinson did not have a duty to warn the plaintiffs of the risks related to the oil tank and risk of water in the tank, or alternatively, that it met its duty in this respect.

[6] The plaintiffs delivered their affidavit of documents in December 2013. Examinations for discovery were held on January 23, 2014 for the plaintiffs and on January 24, 2014 for Stinson.

[7] Seventy-seven undertakings were given at the examination of Stinson, all of which were answered by Stinson by January 2015. At the same time, Stinson confirmed that it maintained its earlier objections to questions objected to at discovery. It is interesting that at the time that this motion returned, the plaintiffs had not yet answered their undertakings – they undertook, during the course of arguing this motion, to do so as quickly as possible.

[8] On this motion, the plaintiffs did not swear an affidavit. The only evidence is from a law clerk, employed with the lawyers for the plaintiffs. She indicates, at paragraph 6 of her affidavit: “On page 148 (question 792) of the transcript, Mr. Herres admitted that Stinson sold the Tank to the Schellings and provided them with a bill of sale. As a result of this new information, the Plaintiffs now seek leave to amend and file an amended statement of claim, so as to plead that the Defendant, Stinson, was in breach of the Sale of Goods Act, R.S.O 1990, CHAPTER S.1….”

[9] The refusals may be divided into the following categories: (a) the nature of tanks sold to Stinson’s other customers, which were of the same or similar design as the tank sold to the plaintiffs; (b) possible defects that those tanks may contain; and (c) any legal actions, separate from the present, which may have resulted from defects in those tanks.

[10] Regarding the proposed amendments, the plaintiffs argue that they have pleaded breach of contract and negligence in the original statement of claim and that they are not pleading a new cause of action (they make reference to paragraphs 18 and 19 of the statement of claim). They argue that the proposed amendments are part of the factual matrix already disclosed by the statement of claim and that what is pleaded are particulars of how Stinson failed to warn or are additional facts or a different legal conclusion from the same facts. Alternatively, the plaintiffs argue that if any are new facts or new claims (which they say they are not), they were not discoverable prior to the examination for discovery of a representative of Stinson.

[11] Stinson argues that the proposed amendments are new causes of action discoverable outside the limitation period.

[12] On the refusals, the plaintiffs argue relevance to failure to warn and to Stinson’s knowledge of defects associated with this tank. The plaintiffs argue that it is integral to their case to know if similar tanks were sold to others before it was sold to the plaintiffs and whether such other customers encountered similar problems as the plaintiffs, as this relates to the knowledge of Stinson of similar problems and, consequently, to the extent of its duty to warn the plaintiffs.

Amendments to the Statement of Claim

[13] Rule 26.01 of the Rules of Civil Procedure, R.R.O. 1990, O. Reg. 194 makes granting leave to amend a pleading mandatory at any stage of an action, subject to the Court being satisfied that prejudice would not result that could not be compensated for by costs or an adjournment. However, a new cause of action cannot be added to a statement of claim by amendment if the limitation period has expired.

[14] Pleading a new cause of action after the expiry of a limitation period gives rise to a presumption of prejudice. The prejudice, in such a case, results from the loss of a limitation defence.[^1] The onus regarding prejudice then shifts to the moving party to show that the new cause of action could not be discovered before a certain date such that the amendment is not out of time. However, the Court should not, on a pleadings motion, engage in an assessment of credibility or weighing of evidence to resolve a discoverability issue; instead, when such an assessment or weighing of evidence would be required, if appropriate, allow the amendment subject to a limitation defence.[^2]

[15] This Court finds that the proposed amendments do not raise a new cause of action as substantially all of the material facts giving rise to the “new cause of action” have previously been pleaded in the original statement of claim. The proposed amendments: plead an alternative basis of relief on the same facts already plead; plead a different legal conclusion drawn from the same set of facts; plead additional facts upon which the original rights of action are based; or are particulars of the existing claims contained in the original statement of claim (see Muskoka Fuels v. Hassan Steel Fabricators Ltd. 2011 ONCA 355 at para. 16).

[16] All proposed amendments are contained within the original factual matrix. The original factual matrix is simple: in 2002, the plaintiffs contracted with Stinson for the installation of a new oil tank; the tank was delivered and installed by Stinson; Stinson delivered oil and at different times inspected the tank; the tank leaked and damages are sought by the plaintiffs in negligence and breach of contract. It is obvious from Stinson’s statement of defence and crossclaim (see para. 6) and not disputed by Stinson, that Stinson knew all along that it sold the oil tank to the plaintiff. The addition of “products and” and the addition of “The Plaintiffs purchase the Tank from Stinson prior to installation in June of 2002” in the contemplated amended statement of claim do not change the existing factual matrix and do not change that substantially all of the material facts have previously been pleaded. Consequently, these contemplated additions and the contemplated addition of an alleged contravention of the Sale of Goods Act plead an alternate basis of relief on facts already pleaded. The other amendments at paragraph 15 simply provide particulars of existing allegations (including of failing to warn of the risks related to the tank and buildup of water already plead at para.15 (x) of the original statement of claim).

[17] The proposed amendments are therefore unaffected by any limitation period. They are not alleging new causes of action or do not amount to pleading a new cause of action. Generally, somewhat similar to the situation in Dee Ferraro v. Pellizzari[^3], the amendments arise from core facts already pleaded.

[18] A cause of action is the factual situation which entitles a party to seek a civil remedy from another party. As indicated:[^4]

The key is whether substantially all of the material facts giving rise to the "new cause of action" have previously been pleaded or whether new facts are sought to be added that are relied upon to support a new cause of action.

[19] The factual situation outlined in the existing statement of claim concerns a 2002 oil tank that Stinson installed, and Stinson’s contractual performance and alleged negligence/breach of contract in relation to this same oil tank. The factual matrix is unchanged and continues to relate to damages allegedly suffered as a result of Stinson’s negligence regarding its role with this tank and breach of contract again in relation to this same tank.

[20] As indicated in Bazkur v. Coore et al., at para. 13, citing Ascent,[^5], “A new cause of action is not asserted if the amendments simply plead an alternative claim for relief arising out of the same facts previously pleaded … or amounts simply to different legal conclusions, … or simply provide [particulars] of an allegation already pled or additional facts upon which the original right of action is based.”

[21] For reasons that are outlined in the above analysis, I do not accept the arguments of Stinson that pleading a breach of the Sale of Goods Act, on these facts, is pleading a new cause of action nor do I accept that insufficient particulars of the alleged breach of the Sale of Goods Act have been pleaded. Although this is not the best of pleadings, particulars are found at paragraphs 6 and 18 of the proposed amended statement of claim. Finally, I do not accept that the amendments sought at paragraph 15 plead evidence. These are quite typical of what is usually alleged in such an action and are properly limited to a concise statement of material facts relied upon. These amendments, including the Sale of Goods Act amendments, are legally tenable: assuming the facts pleaded as true, they are not clearly impossible of success and consequently must be allowed. As indicated by Master MacLeod in Plante v. Industrial Alliance Life Insurance Co. (2003), 2003 64295 (ON SC), 66 O.R. (3d) 74 (S.C.) at para. 21, for this purpose, amendments are to be read generously with allowance for deficiencies in drafting.

Ruling on refusals

[22] Rule 31.06 of the Rules of Civil Procedure R.R.O. 1990, Reg. 194 requires a person examined for discovery to answer, to the best of his or her knowledge, information and belief, any proper question relevant to any matter in issue in the action. Relevance is the test. Something is relevant if it tends to prove or disprove a fact that is material to a cause of action. The degree by which it tends to prove or disprove a material fact is generally not important to relevance but might, at this motion stage, be tempered by proportionality.

[23] Rule 29.2.03 (1) provides:

In making a determination as to whether a party or other person must answer a question or produce a document, the court shall consider whether,

(a) the time required for the party or other person to answer the question or produce the document would be unreasonable;

(b) the expense associated with answering the question or producing the document would be unjustified;

(c) requiring the party or other person to answer the question or produce the document would cause him or her undue prejudice;

(d) requiring the party or other person to answer the question or produce the document would unduly interfere with the orderly progress of the action; and

(e) the information or the document is readily available to the party requesting it from another source.

[24] Stinson argues that disproportionate efforts would be required to produce the information sought but has provided no evidence in support thereof.

[25] Considering the above and the information contained in Schedule “B”, attached to Stinson’s factum, this is my ruling on the refusals:

a. 1209 is to be answered on a best effort basis: to provide an approximation of the number of customers Stinson had in 2011 is relevant to Stinson’s knowledge and duty to warn and is not a disproportionate effort (to paras. 15 (b) (vi), (vii) and (x) of the original statement of claim) – I do not see how 2005 is relevant as the tank was installed in 2002 and the leak occurred in 2011.

b. 1210 and 1211 are to be answered on a best effort basis: to advise how many steel tanks were in Stinson’s customer base in 2002 and 2011 is relevant to Stinson’s knowledge and duty to warn at the time of delivery of the tank and just prior to the leak in June 2011 (to paras. 15 (b) (vi), (vii) and (x) of the original statement of claim). No evidence has been provided that this would require disproportionate efforts. Stinson might have access to this information or to some of it via technology or via some other means or systems that do not involve looking at each file. Best efforts are to be made to provide what is available but if this is not available via some reasonable system, then particulars and information in support that it is not available but by disproportionate efforts are to be provide to the plaintiffs and this may then return if the parties are unable to find a solution.

c. 1131 is not to be answered: this is not relevant as the question as formulated is too broad to be relevant to the pleadings (to advise if, up to the time Stinson installed the tank in June 2002, Stinson ever had a tank that had leaked. Had one of their customers’ tanks leaked).

d. 1153 is not to be answered: this is not relevant as the question as formulated is too broad to be relevant to the pleadings (to find out if, as of the date that Stinson put the Schellings’ tank in, Stinson had any situation where one of its customers had had a leaking tank as a result of internal corrosion).

e. 1186 is to be answered: Mr. Herres is a long‑serving manager of Stinson and his knowledge of problems with corroding tanks is relevant to the allegations made at paras. 15 (b) (vi), (vii) and (x) of the original statement of claim.

f. 1212 is to be answered: Stinson’s knowledge of problems with corroding tanks (from its customers) is relevant to the allegations made at paras. 15 (b) (vi), (vii) and (x) of the original statement of claim.

g. 1186 is to be answered: the knowledge of Stinson (and Herres) about relevant claims against Stinson is relevant to the allegations made at paras. 15 (b) (vi), (vii) and (x) of the original statement of claim, however this is to be limited to relevant claims in the five years before 2011and relevant claims would involve a steel tank leaking because of corrosion to the tank.

h. Best efforts are to be made to provide what is available to answer what has been ordered above but if this is not available via some reasonable system, then particulars and information in support that it is not available but by disproportionate efforts are to be provided to the plaintiffs and if the parties are unable to find a solution, this may return to court to be addressed.

Disposition

[26] The following is therefore ordered:

a. Leave is granted to the plaintiffs to amend the statement of claim in the form attached at Tab 1 (a) to the motion record.

b. Ruling on refusals as per the above.

c. If the parties cannot agree on costs for this motion, they may then provide to this Court brief written submissions of no more than three pages on the following schedule: by the plaintiffs within the next five business days and by the defendant Stinson within five business days of receiving the plaintiffs’ costs submissions [The parties’ bills of costs are already with the court]. If submissions on costs are not provided to this Court by November 10, 2015, it will be assumed that the parties have resolved the issue of costs.

Roger J.

Date: October 21, 2015

COURT FILE NO.: 12-55685

DATE: 2015/10/21

ONTARIO

SUPERIOR COURT OF JUSTICE

RE: Robert Schellings and Catherine Schellings, Plaintiffs

AND

DTE Industries and W.O. Stinson & Son Limited, Defendants

BEFORE: Mr. Justice Pierre E. Roger

COUNSEL: Shane C. D’Souza, for the Plaintiffs

Pierre Champagne, for the Defendant W.O Stinson & Son Limited

ENDORSEMENT

Roger J.

Released: October 21, 2015

[^1]: Dee Ferraro Ltd. v. Pellizzari, 2012 ONCA 55 at para. 5.

[^2]: 863880 Ontario Ltd. v. Canadian Pacific Railway et al., 2012 CarswellOnt 12098 at para. 108 and Andersen Consulting v. Canada (Attorney General), 2001 8587 (ON CA), 2001 CarswellOnt 3139 (CA) at paras. 34-35.

[^3]: supra at note 1.

[^4]: Ascent Inc. v. Fox 40 International Inc., 2009 CarswellOnt 4118 at para. 3.

[^5]: 2012 ONSC 3468, [2012] O.J. No. 2654.