COURT FILE NO.: CV-15-4041-00 DATE: 2016-05-20
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: FAHIMEH NAJAFI v. GARRY SHAPIRO and KAVEH NAJAFI
BEFORE: Emery J
COUNSEL: Fernand A. Majid, for the Plaintiff Adam Pantel, for the Defendant Garry Shapiro Eden Ifergan, for the Defendant Kaveh Najafi
HEARD: March 10 and April 6, 2016
E N D O R S E M E N T
[1] Each of the two defendants in this action has brought a motion to dispose of the plaintiff’s claim. The defendant Garry Shapiro seeks an order setting aside the noting of default against him, and for an order dismissing the action. The defendant Kaveh (“Kevin”) Najafi seeks an order striking the plaintiff’s statement of claim as against him, without leave to amend. The motions are brought under Rules 21 and 25.11.
[2] The motions of both defendants are based on the undisputed fact that the plaintiff brought an action against the defendant Shapiro in 2011 on essentially the same facts. The 2011 action was dismissed by a registrar’s order on December 18, 2013. The defendants submit that this action, commenced by a statement of claim issued on September 1, 2015, is therefore statute barred by Section 4 of the Limitations Act, 2002. The defendant Shapiro also submits that the action must be dismissed because it is an abuse of process to bring an action on claims that have already been adjudicated.
[3] Counsel for the plaintiff consents to an order setting aside the noting in default of the defendant Shapiro.
BACKGROUND
[4] The plaintiff and the defendant Najafi are former spouses.
[5] On or about February 6, 2009, at a time when the plaintiff and the defendant Najafi were having marriage difficulties, title to their matrimonial home at 16 Montressor Court in Richmond Hill, Ontario, was transferred from the plaintiff’s name alone into the names of both herself and the defendant Najafi, as joint tenants. The plaintiff alleges that immediately following the registration of the transfer, the defendant Najafi and his lawyer, the defendant Shapiro, arranged for the registration of a first charge in the amount of $546,000 against title to the Montressor property in favour of CIBC Mortgages Inc. The plaintiff alleges that her signature was forged on documents related to this transaction. It is the plaintiff’s evidence that the registration of those documents occurred without her authorization, knowledge or consent.
[6] The plaintiff and the defendant Najafi also owned a cottage property at 7244 Highway 35 Road North, in Laxton, Ontario. Prior to August of 2008, the plaintiff and the defendant Najafi held title to the cottage property in both names. On or about August 27, 2008, title to the cottage property was transferred into the name of the plaintiff alone. At the same time or immediately following the registration of the transfer, the plaintiff alleges that the defendant Najafi and the defendant Shapiro caused the registration of a first charge in favour of Concentra Financial Services Association (“Concentra”), and a second charge in favour of 2005374 Ontario Inc. against title to the cottage property. The plaintiff alleges that her signature was forged on documents related to these transactions. The plaintiff has given evidence that the registration of those documents occurred without her authorization, knowledge or consent.
[7] The plaintiff and the defendant Najafi separated in or around 2011.
The 2011 Action
[8] On August 3, 2011, the plaintiff commenced an action against the defendant Shapiro and his firm. In the Statement of Claim, the plaintiff alleges that they owed her a duty of care and a fiduciary duty to ensure that real estate transactions and documentation described in the statement of claim did not occur without the plaintiff’s authorization and consent.
[9] The plaintiff alleged in the 2011 action that she suffered damages as a result of the conduct of the named defendants as follows:
- As a result of the aforesaid conduct of the Defendants, the Plaintiff, FAHIMEH NAJAFI, has suffered and sustained, presently and continuing in the future, without limitation: (a) Certain special damages, loss and expense, particulars of which will be delivered as requested and available; (b) Loss of property interests; (c) Incurrence of financial liabilities and obligations; (d) Loss of credit and financial reputation; (e) Hardship, inconvenience, distress and aggravation.
[10] In para. 11 of the statement of claim, the plaintiff stated that:
- The Plaintiff, Fahima Najafi, first discovered and became aware of the forgeries specified in Paragraphs 8 of this Statement of Claim in or about March, 2011. The Plaintiff, Fahima Najafi, first discovered and became ware [sic] of the forgeries specified in paragraph 10 in or about February, 2011.
[11] The allegations in paragraph 8 of the 2011 Statement of Claim relate to the registration of the transfer and charge to the CIBC Mortgages Inc. against the title to the Montressor property.
[12] The allegations in paragraph 10 of the 2011 Statement of Claim relate to the registration of the transfer and charge to Concentra against title to the cottage property.
[13] The defendant Shapiro delivered a statement of defence on or about November 11, 2011 in the 2011 action.
[14] On August 1, 2012, the plaintiff changed lawyers.
[15] On August 24, 2012, the plaintiff served a Notice of Intention to Act in Person.
[16] On September 9, 2013, the court issued a status notice in respect of the 2011 action. The plaintiff failed to take any steps to set the action down for trial or to otherwise address the status notice. The court subsequently dismissed the 2011 action for delay on December 18, 2013.
[17] It would appear from the evidence that the plaintiff took no steps to set aside the dismissal order of the 2011 action.
The 2015 Action
[18] On September 1, 2015, the plaintiff commenced this action (the “2015 action”) by having a statement of claim issued in Brampton naming the defendant Shapiro as well as the defendant Najafi as party defendants.
[19] The plaintiff has given the following evidence of additional facts on this motion:
a) she became aware in February 2011 that title to the cottage property had been transferred into her name alone in August 2008 when she was contacted by Concentra to demand payment after the defendant Najafi had defaulted on payment under that charge. b) she also discovered that the matrimonial home had been transferred from her name alone into both her name and the name of the defendant Najafi as joint tenants shortly after learning of the transfer of title to the cottage property. c) The plaintiff commenced divorce proceedings against the defendant Najafi in 2011. Both the cottage property and the Montressor property were issues in the Family Law proceeding. d) On February 19, 2014, Justice Mullins of the Superior Court of Justice made an order in the Family Law proceedings (the “Family Order”). e) The Family Order provided, among other things, for the transfer of the cottage property from the plaintiff’s name into the defendant Najafi’s name immediately. The defendant Najafi was further ordered to pay out both the first charge held by Concentra and the private second charge against title to the cottage property. f) The defendant Najafi failed to comply with the Family Order and refused to facilitate the transfer of the cottage property into his name. He further failed or refused to pay out the first charge and the second charge against title to the cottage property. g) On or about September 2, 2014, Concentra sold the cottage property for significantly less than the amount owing under the first charge to Concentra. The outstanding amount owing to Concentra totalled $519,436.98 and the cottage property was sold for $414,529.70. A balance on account owing of $133,749.37 was claimed by Concentra after the sale. There was evidence before the court that the amount owing was made up of $104,907.28 for the shortfall, and $28,842.09 for interest. h) The Family Order further required the defendant Najafi to transfer his interest in the Montressor property to the plaintiff forthwith. The plaintiff was ordered to use her best efforts to release the defendant Najafi from the mortgage obligation against the Montressor property through refinancing. i) The Family Order required the defendant Najafi to act as guarantor on charges against the Montressor property until at least June 1, 2017. However, the defendant Najafi refused to transfer his interest in the Montressor property until such time as the plaintiff obtained refinancing in her name alone. j) In May 2015, the plaintiff learned that Concentra had obtained a judgment against her in November 2013 on the covenant under the first charge against the cottage property. k) The plaintiff was compelled to pay out the judgment obtained by Concentra to qualify in order to refinance the Montressor property. She could only arrange this financing at a substantial premium. Upon obtaining the lender’s release for the defendant Najafi’s obligations under the charge against the Montressor property, title was transferred into her name alone pursuant to the Family Order.
[20] The Plaintiff pleads the following allegations of material facts in the 2015 Statement of Claim:
The Defendant, Garry Shapiro, Barrister & Solicitor, ("Shapiro") owed the Plaintiff, Fahimeh, a duty of care and fiduciary duty to ensure that real estate transactions and documentation specified in this Statement Of Claim did not arise or occur without her authorization or consent.
The Defendant Shapiro, breached his duties pursuant to Paragraphs 12 of this Statement Of Claim by, without limitation: a) Failing to take proper and appropriate steps and inquiries to properly identify the Plaintiff and ensure the legitimacy of instructions and documents signed supposedly by her; b) Failing to ensure the registration of properly authorized documents only; c) Failing to witness or properly witness documents supposedly signed by the Plaintiff, d) Permitting unauthorized documents supposedly signed by the Plaintiff to be delivered to third parties; e) Permitting the unauthorized documents supposedly signed by the Plaintiff to be relied upon by third parties; f) Permitting the unauthorized signing of documents, supposedly by the Plaintiff, in circumstances whore they knew ought to have known of their illegitimacy; g) Failing to protect the interests of the Plaintiff; h) Generally failing to act in a proper, appropriate and prudent manner as a member of the legal profession.
The Defendant Kaveh, knowingly committed fraudulent acts in falsifying, or causing Fahimeh's signature to be falsified on various documents relating to both of the subject properties.
As a result of his conduct, the Defendant Kaveh was unjustly enriched by obtaining mortgages, without the knowledge, authorization, or consent of the Plaintiff, against both the Montressor property and the cottage property.
The Defendant Kaveh, knowingly and willfully failed to comply with the Order of Mullins, J. by failing to obtain a discharge of the Concentra mortgage of the cottage property, and failing to indemnity the Plaintiff for the penalties, interests, and costs that arose as a result of his failure to comply with the Order.
[21] As a result of the allegations against each of the defendants in the 2015 action, the plaintiff claims that she has suffered special damages in the amount of $300,000, and further or in the alternative, she claims general damages in the amount of $500,000 for the following loss:
a) Incurrence of financial liabilities and obligations; b) Loss of credit and financial reputation; c) Loss of trust, loss of self-esteem and loss of self-confidence; d) Mental distress, humiliation, fear of repetition, and aggravation.
ISSUES AND ANALYSIS
[22] The defendant Shapiro, who was also named as defendant in the 2011 action, brings this motion under Rule 21.01(3)(d) seeking an order dismissing the action for two reasons. First, he states that the 2015 action is an abuse of process as it relies upon the same facts as the plaintiff’s action that she commenced in 2011. Second, Mr. Pantel argues that the 2015 action was commenced more than two years after the plaintiff discovered the transfer of title to the cottage property into her name alone and the registration of the Concentra mortgage. He argues that the claims made in the 2015 action are therefore barred by the Limitations Act, 2002.
[23] The defendant Najafi brings his motion under Rules 21.01(1)(a) and (3)(d) and Rule 25.11. Although the defendant Najafi was not named as a defendant in the 2011 action, he relies upon the plaintiff’s allegation that she first became aware of the transfer of title to the cottage property and the registration of the Concentra charge in March 2011 to argue that the 2015 action against him is statute barred by operation of section 4 of the Limitations Act, 2002.
[24] The defendants specifically refer to paragraph 11 of the statement of claim in the 2011 action, and the plaintiff’s statement of fact that she “first discovered and became aware of the alleged forgeries of her signature on documents relating to the transactions at issue in March of 2011”. The defendants submit that statement answers any question about the discoverability of any cause of action the plaintiff might have had against the defendant Shapiro and may have had as against the defendant Najafi to start any limitation period to run.
[25] The moving parties bring their motions under Rule 21.01(1)(a) and Rule 21.01(3). For posterity, these rules state as follows:
21.01 (1) A party may move before a judge, (a) for the determination, before trial, of a question of law raised by a pleading in an action where the determination of the question may dispose of all or part of the action, substantially shorten the trial or result in a substantial saving of costs; or
21.01 (3) A defendant may move before a judge to have an action stayed or dismissed on the ground that, (d) the action is frivolous or vexatious or is otherwise an abuse of the process of the court, and the judge may make an order or grant judgment accordingly.
[26] A motion under Rule 21.01(1)(a) is often brought when there is an issue about a limitation period expiring and where the facts are considered to be plain and obvious. A motion under Rule 21 is often a fair and expeditious method for the determination of a legal question that may dispose of all or part of the action, substantially shorten the trial or result in a substantial saving of costs.
[27] The defendant Shapiro also relies upon Rule 25.11, which reads as follows:
25.11 The court may strike out or expunge all or part of a pleading or other document, with or without leave to amend, on the ground that the pleading or other document, (a) may prejudice or delay the fair trial of the action; (b) is scandalous, frivolous or vexatious; or (c) is an abuse of the process of the court. R.R.O. 1990, Reg. 194, r. 25.11.
[28] The defendant Shapiro and the defendant Najafi are in different positions in that the defendant Shapiro was named as a defendant in the 2011 action and the defendant Najafi was not. Their positions are also different as the defendant Najafi was a party to the family law proceeding commenced by the plaintiff in 2011 that resulted in the Family Order made in 2014. Therefore, the legal positions of the moving defendants is subject to different considerations. I will look first at whether the defendant Shapiro’s claim that the 2015 action is an abuse of process and then at the limitations issue raised by both defendants.
[29] The motions proceeded with affidavit evidence in support of, and in response to the positions taken by the parties as there is no prohibition for affidavit evidence under any of those rules.
Abuse of Process
[30] The defendant Shapiro states that it is an abuse of process for the plaintiff to bring an action against him on the same facts and cause of action as the claim she brought against him in 2011. That action was subsequently dismissed. He relies upon Rule 21.01(3) to have the court dismiss the 2015 action as against him for being frivolous or vexatious or otherwise an abuse of process.
[31] In Canam Enterprises Inc. v. Coles, [2000] O.J. 4607, Justice Goudge defined the doctrine of abuse of process this way in a dissent that was subsequently adopted by the Supreme Court of Canada on the appeal of that case:
[55] The doctrine of abuse of process engages the inherent power of the court to prevent the misuse of its procedure, in a way that would be manifestly unfair to a party to the litigation before it or would in some other way bring the administration of justice into disrepute. It is a flexible doctrine unencumbered by the specific requirements of concepts such as issue estoppel. See House of Spring Gardens Ltd. v. Waite, [1990] 3 W.L.R. 347 at p. 358, [1990] 2 All E.R. 990 (C.A.).
[56] One circumstance in which abuse of process has been applied is where the litigation before the court is found to be in essence an attempt to relitigate a claim which the court has already determined. See Solomon v. Smith, supra. It is on that basis that Nordheimer J. found that this third party claim ought to be terminated as an abuse of process.
[57] I would disagree. As I have attempted to indicate, the issue in the third party claim is different from the issue already determined by Day J. The duty of care owed by the Realtors to Canam was simply not before Day J. This is not the relitigation of an issue already decided by the court. Hence, in my view, Nordheimer J. built his conclusion of an abuse of process on an erroneous foundation.
[61] In summary, the third party claim raises an issue not previously litigated. It is not manifestly unfair to allow Coles to bring the claim or to require the Realtors to defend it. In my view, it is not an abuse of process.
[32] The Court of Appeal in Currie v. Halton (Region) Police Services Board, [2003] O.J. 4516 confirmed the view that litigating a cause of action that has already been litigated is an abuse of process of the court. Justice Armstrong for the court also quoted from various authorities, including Canam Enterprises Inc. v. Coles, as to what it meant for an action to be frivolous, vexatious or an abuse of process. At paragraph 17, the court in Currie concluded that a common example of an action that is frivolous, vexatious or an abuse of process of the court or an overlap of the meanings between those terms would be a case where a plaintiff seeks to re-litigate a cause that has already been decided by a court of competent jurisdiction.
[33] I would also note that in paragraph 18 of the Currie case, Justice Armstrong notes that the court should invoke its authority under Rule 21.01(3)(d) or its inherent jurisdiction to dismiss or stay an action only in the clearest of cases.
[34] The causes of action alleged in the 2011 action by the plaintiff against the defendant Shapiro were not litigated or decided by a court of competent jurisdiction on its merits. Under the authorities from Canam Enterprises to Currie v. Halton (Region) Police Services Board, I do not consider that the plaintiff’s action commenced in 2015 is frivolous, vexatious or an abuse of process of the court for that reason.
The Running of a Limitation Period
[35] The moving defendants rely upon Section 4 and Section 5 of the Limitations Act, 2002 as the substantive law for the limitation defence they ask the court to apply to dismiss the 2015 action as against them. Section 4 of the Limitations Act, 2002, reads 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. 2002, c. 24, Sched. B, s. 4.
[36] On facts where discoverability is raised as an issue, Section 5 is applicable:
- (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). 2002, c. 24, Sched. B, s. 5 (1).
(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. 2002, c. 24, Sched. B, s. 5 (2).
[37] The moving defendants bring their respective motions under Rule 21.01(1)(a) on the basis that it is plain and obvious that the plaintiff’s claim cannot succeed because it is statute barred. They argue that there are no facts in dispute with respect to the time that the plaintiff became aware of the alleged claim. They argue that the date the limitation period began to run is therefore a legal question, and that the determination of when the limitation period expired is a pure question of law and appropriate for adjudication under Rule 21.
[38] Neither the defendant Shapiro nor the defendant Najafi have served a Statement of Defence to the 2015 action. The plaintiff submits that a defence based on a limitation period given by the Limitations Act, 2002 is a substantive defence that should be pleaded in a statement of defence before a motion to strike is brought.
[39] In Beardsley v. The Crown in Right of Ontario on behalf of the Ontario Provincial Police et al., 57 O.R. (3d) 1, the Court of Appeal confirmed that the expiry of a limitation period does not make a cause of action a nullity but rather it provides a defence that must be pleaded in a statement of claim. However, the court in Beardsley provided an exception to that rule. Where it would be unduly technical to require that a statement of defence be delivered in circumstances where it is plain and obvious from reviewing the statement of claim that there could be no additional facts ascertained to alter the conclusion that a limitation period had expired, it would be unduly technical to require that a statement of defence be delivered. See also Sugar v. National Dental Examining Board of Canada, [2004] O.J. 5259 and Teskey v. Gura [2009] O.J. 3730.
[40] The Court of Appeal in Collins v. Cortez, 2014 ONCA 685 recently observed that in the normal course, if a defence of a limitation period is raised, the plaintiff need only plead material facts relevant to discoverability in reply. This position was discussed in the context of whether or not it is necessary for the plaintiff to anticipate a limitations defence, and to address those material facts in the Statement of Claim.
[41] In the present case, that the defendants have not served any statement of defence pleading the limitation period as a defence is not fatal to either motion.
[42] The moving defendants rely upon the appeal decision in Hamilton (City) v. Metcalfe & Mansfield Capital Corporation, 2012 ONCA 156, for the proposition that for the purposes of discoverability, some damage suffered by and known to a plaintiff is sufficient for the cause of action to accrue, and to start a limitation period running. The court in Hamilton (City) v. Metcalfe & Mansfield Capital Corporation makes reference to a quote from Peixeiro v. Haberman, [1997] 3 S.C.R. 549 at paragraph 18 where the Supreme Court of Canada stated that:
18 It was conceded that at common law ignorance of or mistake as to the extent of damages does not delay time under a limitation period. The authorities are clear that the exact extent of the loss of the plaintiff need not be known for the cause of action to accrue. Once the plaintiff knows that some damage has occurred and has identified the tortfeasor (see Cartledge v. E. Jopling & Sons Ltd., [1963] A.C. 758 (H.L.), at p. 772 per Lord Reid, and July v. Neal (1986), 57 O.R. (2d) 129 (C.A.)), the cause of action has accrued. Neither the extent of damage nor the type of damage need be known. To hold otherwise would inject too much uncertainty into cases where the full scope of the damages may not be ascertained for an extended time beyond the general limitation period.
[43] The moving defendants have submitted that the concepts of “damage”, as that term is used in Section 5 of the Limitations Act, 2002, and “damages” as a remedy is a distinction with a difference. They argue it is the distinction that applies to determine when a claim is discovered for the purposes of Section 4 of the Limitations Act, 2002. The defendants state that neither the nature or extent of the loss or damage had to be known for the plaintiff to appreciate that she had a cause of action.
[44] The defendants make reference to Mortgage Investment Corp. of Eastern Ontario v. Szpivac [2014] O.J. 2284. In Szpivac, the defendants brought a motion for summary judgment alleging that a limitation period had expired. The plaintiffs had brought an action against those defendants for negligent misrepresentation relating to an appraisal of a specific property. The plaintiffs argued that the limitation period for bringing an action for negligent misrepresentation with respect to preparing an inaccurate appraisal of the property did not begin to run until they knew that the property would sell for a price that was less than the value of the charge against it.
[45] The court disagreed with the plaintiffs in Szpivac. It was held that the plaintiffs must have been aware of the cause of action when they received other valuations that were lower than the mortgage balance. The court on those facts allowed the defendant’s motion for summary judgment, stating that “the plaintiffs had sufficient knowledge of the damage incurred to trigger commencement of the limitation period.”
[46] The plaintiff relies upon a line of cases to refute the defendants’ position that the allegation of material fact contained in paragraph 11 of the 2011 Statement of Claim triggered the limitation period. She argues that although she knew that the transfers of title and the registration of the charges against both properties had caused her damage, that cause of action had not yet crystalized. She further argues that the loss or injury caused to her by the defendants’ conduct had not manifested itself in 2011. In Huang v. Mai, 2014 ONSC 1156, Justice Perell wrote about how the law recognizes that time is sometimes necessary to allow sufficient evidence to develop for the plaintiff’s cause of action to be discoverable before a limitation period begins to run. Justice Perell explained it this way at paragraphs 41 to 43:
[41] In the case at bar, Ms. Huang obviously believed that she had a claim that ought to be pursued when she retained a lawyer in the summer of 2009, but her lawyer’s professional opinion was that there was not sufficient medical evidence to have a reasonable chance of persuading a judge that the Plaintiff had sustained an injury that met the requirements of s. 267.5 (5) of the Insurance Act. Sufficient evidence was not obtained until the report of Dr. West dated August 30, 2011 was received.
[42] If Mr. Lee’s view is correct, which is a genuine issue requiring a trial, then Ms. Huang’s action commenced in 2009 was not late but rather premature until perhaps as long as 2011.
[43] In Phung v. Mais, supra, Justice Morgan dismissed a summary judgment motion because there was a genuine issue requiring a trial about whether the plaintiff’s claim was statute-barred, and he noted the problem of prematurity posed by the discoverability rule where there is no cause of action until the threshold conditions could be satisfied. He stated at para. 14:
- I am conscious of the difficulties that the "discoverability" rule poses for a plaintiff and his counsel. As has been noted in other cases, "if the plaintiff issues suit prematurely, he or she may be faced with an almost immediate motion to dismiss the claim...On the other hand, the longer the plaintiff waits, the greater is the risk that he or she will wait too long and the action will be statute-barred." Ioannidis v. Hawkings (1998), 39 OR (3d) 427, at para. 35 (SCJ). Plaintiff and his counsel must be confident of credibly "assessing the medical and other evidence" as to whether the injured person has sustained permanent impairment, whether the impaired bodily function is an important one, and whether the impairment is a serious one. Meyer v. Bright (1993), 15 OR (3d)
[47] The plaintiff also relies on the Court of Appeal in Everding v. Skrijel, 2010 ONCA 437, where the court referred with approval to the decision of Justice Gillese, as she then was, in Voisin v. Hartin [2000] O.J. 5009 concerning the rationale behind the discoverability principle. In Voisin, Justice Gillese stated that the law ought not to preclude an action before a person is able to make legal claim on the basis that it would be fundamentally unfair to require the plaintiff to bring an action where he could not expect to recover an amount net of a deductible or exemption, in that case $10,000. The court in Everding agreed with this analysis, stating that it is not the policy of the law or the intent of the legislation to require people to bring actions before they know they have a substantial chance of success to recover a judgment for damages.
[48] The limitation period issue in each of the above cases arose within the context of an action involving a personal injury caused by the use or operation of a motor vehicle. In each case, the deductible at the material time under section 267.5 of the Insurance Act was a material consideration for a plaintiff to know that he or she had suffered a loss or injury for which a remedy would be available through the courts. The cases allow the necessary time for the circumstances of a plaintiff’s injury or loss to mature to the extent required to meet a legal requirement in order for the plaintiff to know if he or she has, on a credible assessment of the evidence, a cause of action to pursue a remedy.
[49] These cases are quite different from the case at hand. Here, the plaintiff by her own allegation of material fact in paragraph 11 of the 2011 Statement of Claim states that she knew of the transactions giving rise to the cause of action and her claim for damage caused by those transactions. I consider cases such as Huang, Everding and Voisin that involved the uncertainty of injuries or loss suffered under circumstances covered by the motor vehicle insurance regime in place from time to time to be different.
[50] The moving defendants have advanced their positions as united front to seek the dismissal of the 2015 action. United, they argue that the plaintiff’s claims for damage caused by the subject transactions as against the defendant Shapiro and the defendant Najafi would have expired on the second anniversary of March 2011 as the month and year in which the plaintiff stated in paragraph 11 of the 2011 statement of claim she became aware of the subject transfers and registrations. However, that is not the end of the story.
[51] Just as the moving parties submit that the plaintiff has opposed their motions to dismiss as though she had brought no action in 2011, the moving defendants have advanced their motions as though Justice Mullins had not made the Family Order on February 19, 2014. This is significant to the motions of the defendants for three reasons.
[52] First, the plaintiff submits that under section 11 of the Limitations Act, 2002, any limitation period did not begin to run until an independent third-party agreed upon by the parties had resolved the claim or assisted them in resolving it. Section 11 of the Limitations Act, 2002, reads as follows:
- (1) If a person with a claim and a person against whom the claim is made have agreed to have an independent third party resolve the claim or assist them in resolving it, the limitation periods established by sections 4 and 15 do not run from the date the agreement is made until, (a) the date the claim is resolved; (b) the date the attempted resolution process is terminated; or (c) the date a party terminates or withdraws from the agreement. 2002, c. 24, Sched. B, s. 11.
[53] The moving parties take the position that the plaintiff was aware of both transfers and the registration of the first charges against each property in March 2011. They argue that the plaintiff brought an action in 2011 with respect to damage that she alleges those transfers and the registration of those charges caused to her. The moving parties submit that the knowledge of the plaintiff of those transactions, together with bringing the action against the defendant Shapiro in 2011, equate to facts that now bar the 2015 action.
[54] Although the plaintiff brought an action in 2011 with respect to the transfers and the registration of the charges, Concentra obtained judgment in the amount of $133,749.37 against her in November 2013 under its charge against the cottage property. The plaintiff states in the 2015 Statement of Claim that she did not learn of this judgment until March 2015. The plaintiff therefore submits that she did not know of the measure of the damages to seek against the defendants until that information was known to her, and that the limitation period did not begin to run until the damages for the loss she had been caused to suffer was first discovered in March 2015.
[55] It is necessary to consider whether the Family Order constitutes a means by which the plaintiff’s cause of action remained alive, notwithstanding the running of calendar time, for Section 11 to apply. If available, Section 11 operates as a legal basis to invoke a statutory suspension of the limitation periods established by Sections 4 and 15. Under Section 11, the following elements must be found:
a) There must be a person with a claim; b) There must be a person against whom the claim is made; c) The person with the claim and the person against whom the claim is made must agree to have an independent third party resolve the claim or assist them in resolving it; d) The limitation periods established by Section 4 and 15 do not run from the date the agreement is made until either the date the claim is resolved, the date the attempted resolution process is terminated or the date a party terminates or withdraws from the agreement.
[56] Section 11(2) provides that the third party or entity to which the parties agree to resolve or to assist with resolving claims, on an impartial basis, is an independent third party no matter how it is funded.
[57] The plaintiff relies upon the decision of the Court of Appeal in Sandro Steel Fabrication Ltd. v. Chiesa, 2013 ONCA 434. In Sandro the court held that there need not be any express written agreement referencing the specific claim for Section 11 to apply. The plaintiff commenced her application to initiate the family law proceedings against the defendant Najafi in 2011, well within any limitation period material to the 2011 statement of claim.
[58] There is no suggestion by either moving defendant that the plaintiff knew of either transfer of title or registration of a charge against the Montressor property or the cottage property prior to March 2011 on this motion. Therefore, at the time of the commencement of the family law proceeding, the plaintiff had parallel legal proceedings in place against each moving party, namely the family law proceeding against the defendant Najafi, and the 2011 action against the defendant Shapiro.
[59] The plaintiff as the applicant in the family law proceeding was a person with a claim, and the defendant Najafi as the respondent in the family law proceedings was a person against whom the claim was made having regard to the very transactions and the charges registered against each of the two properties at issue in this action. Once the defendant Najafi as the respondent in the family law proceeding filed an answer, I consider each of the parties to have agreed to have the Superior Court of Justice as an independent third party resolve the issues relating to the two properties. By virtue of Section 11, the limitation period did not begin to run until the plaintiff and the defendant Najafi gave their consent to the Family Order issued on February 19, 2014. The causes of action against both of the defendants did not start to run until February 19, 2014 as a result. The Statement of Claim in this action was issued on September 1, 2015, well within time.
[60] Second, the Family Order adjudicated the rights and obligations of the plaintiff and the defendant Najafi with respect to the two properties. The Family Order granted by Justice Mullins gave rise to facts not known to the plaintiff until it was granted:
- the order required corrective transfers of the matrimonial home on Montressor Court and the cottage property in 2014;
- when the defendant Najafi failed to comply with the Family Order that required him to pay the Concentra charge, that failure to comply led to the Concentra judgment the plaintiff only learned about in 2015; and
- the plaintiff was required to refinance the property on Montressor Court at a premium in order to pay the Concentra judgment and to comply with her own obligations under the Family Order.
[61] In my view, the terms of the Family Order give rise to new rights and obligations of each the plaintiff and the defendant Najafi with respect to those properties. Because the plaintiff paid the Concentra judgment to comply with her part of the Family Order, she paid out the balance owing, plus interest under the Concentra charge that the Family Order required the defendant Najafi to pay. These new rights and obligations started the time running under the Limitation Act, 2002 all over again. The 2015 action is in a very real sense an enforcement action against the defendant Najafi either directly or indirectly to enforce compliance with the Family Order, or for contribution and indemnity.
[62] Similarly, the new rights and obligations from the Family Order dated February 19, 2014 give rights and fresh causes of action to the plaintiff against the defendant Shapiro.
[63] It is unclear from the plaintiff’s 2015 statement of claim or from the motion materials as to which of the parties the defendant Shapiro represented on the transactions at issue, or if and to whom he owed a duty of care. The defendant Shapiro did not argue other grounds for how the court should consider there to be no cause of action against him. I have therefore not considered any other grounds for dismissal of the 2015 action except for the defendant Shapiro’s argument that the action be dismissed as being statute barred or for being an abuse of process. Without further evidence, it is open for the court to infer the possibility that the plaintiff discovered her cause of action against the defendant Shapiro when the Family Order required the transfer of the Montressor Court property and the cottage property, and the payment of the charges against each one of them. The Family Order was the earliest time for the plaintiff to discover the possible malfeasance of the defendant the Najafi and the possible negligence or breach of fiduciary duty of the defendant Shapiro. The plaintiff’s cause of action in tort may not have been discoverable before the Family Order through no fault or lack of reasonable diligence on the part of the plaintiff: See Central Trust v. Rafuse, [1986] 2 S.C.R. 147 (SCC) at paras. 223 and 224.
[64] This is not a case with facts similar to De Faveri v. Toronto Dominion Bank, [1988] O.J. No. 2741. In that case, the court held that a subsequent action was barred by issue estoppel because the same cause of action could have been pursued in a previous proceeding. I say this case is different because the 2015 action flows from the defendant Najafi’s breach of the Family Order which preceded it.
[65] Third, there is an argument to be made that the Real Property Limitations Act, and not the Limitations Act, 2002, provides a ten year limitation period for the plaintiff to bring the 2015 action. While neither of the parties made this argument on the motions, just because the argument was not made does not mean that the correct limitation period under another statute may apply to the causes of action alleged. In particular, I refer to section 4 of the Real Property Limitations Act, that reads as follows:
- No person shall make an entry or distress, or bring an action to recover any land or rent, but within ten years next after the time at which the right to make such entry or distress, or to bring such action, first accrued to some person through whom the person making or bringing it claims, or if the right did not accrue to any person through whom that person claims, then within ten years next after the time at which the right to make such entry or distress, or to bring such action, first accrued to the person making or bringing it. R.S.O. 1990, c. L.15, s. 4.
[66] I have identified the possibility that another limitation period might apply because of the allegations of material fact, general as they may be, in paragraph 33 of the 2015 Statement of Claim. Those allegations flow from the alleged breach of the Family Order by the defendant Najafi. The cause of action asserted in the 2011 statement of claim for “loss of property rights” is sufficient to raise the possibility that a ten year limitation period may apply. I echo the directive of the Court of Appeal in Currie that the court should invoke its authority under Rule 21.01(3)(d) to dismiss an action only in the clearest of cases.
[67] I therefore conclude on the evidence before the court that the defendants have not succeeded in establishing that the 2015 action is statute barred. The motion of each moving defendant is therefore dismissed, except that an order shall go on consent setting aside the noting in default of the defendant Shapiro. The defendants shall have until June 17, 2016 to deliver their statements of defence.
[68] If counsel cannot agree on costs, Mr. Majid is invited to make written costs submissions by May 31, 2016. Counsel for each of the moving defendants shall then have until June 14, 2016 to make written submissions in response. No written submission in reply shall be granted without leave. All written submissions shall consist of no more than two pages, not including dockets, and may be sent by fax or email to my judicial assistant, Mr. Christopher Charles, at 905-456-4834 or Christopher.charles@ontario.ca in Brampton.
Emery, J
DATE: May 20, 2016
COURT FILE NO.: CV-15-4041-00 DATE: 2016-05-20 SUPERIOR COURT OF JUSTICE – ONTARIO RE: FAHIMEH NAJAFI v. GARRY SHAPIRO and KAVEH NAJAFI BEFORE: Emery, J. COUNSEL: Fernand A. Majid, for the Plaintiff Adam Pantel, for the Defendant Garry Shapiro Eden Ifergan, for the Defendant Kaveh Najafi ENDORSEMENT Emery, J. DATE: May 20, 2016