Court File and Parties
COURT FILE NO.: CV-13-00493236 DATE: 2016-06-03 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
DAVID TURTON Plaintiff – and – THE ESTATE OF NANCY GRASSO by its litigation administrator, CRYSTAL GRASSO and the ESTATE OF HENRY GRASSO by its Estate Trustee, CRYSTAL GRASSO Defendants
Counsel: Ian S. Epstein and Brendan Jones (as agents for Christopher Karpacz) for the Plaintiff Ashley P. Richards for the Defendants
HEARD: May 27, 2016
Endorsement
DIAMOND J.:
Overview
[1] On August 25, 2011, a fire and explosion occurred in the residential home of Nancy and Henry Grasso in Brantford, Ontario. Tragically, Mrs. Grasso died in the fire. Mr. Grasso has also since passed away.
[2] Several neighbouring homes, including the plaintiff’s, sustained property damage as a result of the fire and explosion.
[3] The plaintiff’s home was insured by Intact Insurance Company (“Intact”). After a resolution of the plaintiff’s insurance claim, Intact ultimately commenced this subrogated action on November 20, 2013. The claim seeks damages in the amount of $500,000.00 against the Grassos’ estates.
[4] As this proceeding was commenced more than two years after the date of the fire and explosion, the defendants have brought a motion for summary judgment seeking an order dismissing this claim on the grounds that it was commenced outside the two year period set out in the Limitations Act, 2002 S.O. 2002, c.24 (“the Act”).
Summary of Relevant Facts
[5] There is no dispute that the fire and explosion were reported in the news media, and that within days of the fire and explosion the plaintiff knew that the source was natural gas.
[6] While I will have more to say about the quality of the evidence filed in response to this motion, it is Intact’s position that shortly after the fire and explosion, Intact retained Cunningham Lindsey as its independent adjuster to “investigate the property damage claims as well as any potential subrogation claims that might be available”.
[7] It is also Intact’s position that in or around mid-November 2011, Cunningham Lindsey learned that a formal investigation into the fire and exposition had been initiated by the Ontario Fire Marshal’s office, and as the fire and explosion caused Mrs. Grasso’s death at the scene, that investigation also involved the Brantford Police department.
[8] According to Intact, there were no further developments with respect to the determination of the cause of the fire explosion for several months. In or around early July 2012, media reports began to surface indicating that the Brantford Police were of the view that the fire and explosion were caused by an “incendiary act” and had been ruled “non-accidental”.
[9] On or about October 1, 2012, Intact received a copy of the Ontario Fire Marshal’s Investigation Report from Cunningham Lindsey. The report concluded that the cause of the fire and explosion was “Incendiary – Arson – Intentional”.
[10] Intact was the insurer for several of the neighbouring homes. In early March 2013, Intact retained Miller Thomson LLP, and specifically Christopher Karpacz, (“Karpacz”), to pursue subrogated claims against the defendants’ estates.
[11] On July 2, 2013, a statement of claim was issued in action number CV-13-483864 (“the Hothi action”) in relation to damage caused to another neighbouring home. I note that the contents of the statements of claim in the Hothi action and this proceeding are identical.
[12] There is no dispute that the statement of claim in the Hothi action was commenced within the two year period following the date of the fire and explosion. The statement of claim in this proceeding was issued on November 20, 2013 which is outside the two year period from the date of the fire and explosion.
[13] Both this proceeding and the Hothi action were administratively dismissed by the registrar in 2014. In support of the motions to set aside those administrative dismissals, Karpacz swore an affidavit advising that he had mistakenly understood his instructions from Intact to only issue the Hothi claim, and that it “later became apparent that Intact intended to pursue claims on behalf of five other home owners”, including the plaintiff in this proceeding. The administrative dismissals were ultimately set aside on consent of the parties.
Summary Judgment
[14] Rule 20.04(2)(a) of the Rules of Civil Procedure provides that the Court shall grant a summary judgment if the Court is satisfied that “there is no genuine issue requiring a trial with respect to a claim or defence”. As a result of the amendments to Rule 20 introduced in 2010, the powers of the Court to grant summary judgment have been enhanced to include, inter alia, weighing the evidence, evaluating the credibility of a deponent and drawing any reasonable inference from the evidence.
[15] In Hryniak v. Mauldin 2014 SCC 7, the Supreme Court of Canada held that on a motion for summary judgment the Court must first determine whether there is a genuine issue requiring a trial based only upon the record before the Court, without using the fact-finding powers set out in the 2010 amendments. The Court may only grant summary judgment if there is sufficient evidence to justly and fairly adjudicate the dispute, and if summary judgment would be an affordable, timely and proportionate procedure.
[16] The overarching principle is proportionality. Summary judgment ought to be granted unless the added expense and delay of a trial is necessary for a fair and just adjudication of the case.
[17] Nothing in Hryniak or the subsequent jurisprudence displaces the onus upon a party responding to a motion for summary judgment to “lead trump or risk losing”. The Court must assume that the parties have put their best foot forward and placed all relevant evidence in the record. If the Court determines that there is a genuine issue requiring a trial, the inquiry does not end there and the analysis proceeds to whether a Court can determine if the need for a trial may be avoided by use of the aforesaid fact-finding powers.
Information and Belief
[18] Rule 39.01(4) of the Rules of Civil Procedure provides that an affidavit for use on a motion may contain statements of the deponent’s information and belief, if the source of the information and the fact of the belief are specified in the affidavit.
[19] However, with respect to motions for summary judgment specifically, Rule 20.02(1) provides that an affidavit may be made on information and belief as provided in subrule 39.01(4) but, on the hearing of the motion, the court may, if appropriate, draw an adverse inference from the failure of a party to provide the evidence of any person having personal knowledge of contested facts.
Limitations Act, 2002
[20] Pursuant to Section 5(1)(a) of the Limitations Act, 2002, a claim is discovered on the earlier of the day upon which a person with the claim first knew, or a reasonable person with the abilities and in the circumstances of that person first ought to have known,
(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 a person against whom the claim was 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.
[21] Section 5(2) of the Limitations Act, 2002 and the jurisprudence developed thereunder is clear that a person with a claim shall be presumed to have known of the matters referred to above on the day the act or omission upon which the claim is based took place unless the contrary is proved. This is a presumption that can be rebutted by a plaintiff with necessary evidence.
[22] As the Court of Appeal for Ontario recently held in Miaskowski v. Persaud 2015 ONCA 758, a plaintiff is presumed to have discovered the material facts upon which his/her claim against a defendant is based on the day the accident took place. There is an obligation upon a plaintiff to act with due diligence in determining if he/she has a claim. No limitation period will be tolled while a plaintiff sits idle and takes no steps to investigate any of the matters referred to in section 5(1)(a) of the Act.
[23] A plaintiff is not required to possess a comprehensive understanding of his/her potential claim in order for the limitation period to commence. As held by the Court of Appeal for Ontario in Lawless v. Anderson 2011 ONCA 102, “the question to be posed is whether the prospective plaintiff knows enough facts on which to base an allegation of negligence against the defendant”.
[24] Discoverability is thus a fact-based analysis. The discovery of a claim does not depend upon a plaintiff’s knowledge that his/her claim is likely to succeed, or awareness of the totality of a defendant’s wrongdoing. Knowledge of the material facts, and not the elements of a cause of action, will inform the Court’s assessment of the commencement of a limitation period. A plaintiff must show that he/she was both not subjectively aware of the factors set out in section 5(1)(a) of the Act, and that a reasonable person “with the abilities and in the circumstances of the person with the claim” would also not have been aware of these factors.
[25] In other words, in order to overcome the presumption in section 5(2) of the Act that the plaintiff was aware of the cause of action on the date of the fire and explosion, he bears the onus of leading evidence to displace both the objective and subjective components of the tests set out in section 5(1)(a) of the Act.
[26] As held in Miaskowski, a plaintiff has an obligation to establish why, with the exercise of reasonable diligence, he/she could not have discovered the necessary material facts prior to the expiry of the applicable limitation period.
Decision
[27] The plaintiff (and Intact which stands in the shoes of the plaintiff) is presumed to have discovered the material facts in support of this proceeding on the date of the fire and explosion (August 25, 2011). In responding to this motion for summary judgment, the plaintiff bore both an evidentiary onus to put its best foot forward, and a legal onus to prove that through the exercise of reasonable diligence it could not have discovered the necessary material facts prior to the expiry of the applicable limitation period.
[28] It is Intact’s position that while it knew that the source the fire and explosion was natural gas, it did not have knowledge of the material facts relating to the actual cause of the fire and explosion. Intact relies heavily upon the decision of Justice Pierce in Hansen v. Strone Corporation 2013 ONSC 713, appeal dismissed 2014 ONCA 385. In particular, Intact relies upon the following passage (my insertions for clarity):
“What information is required in order to discover a cause of action? Naturally, the cases are fact-driven. The Court of Appeal in Lawless v. Anderson, 2011 CarswellOnt 626 at para. 36 held that, in order to discover a claim, “the plaintiff need only have in her possession sufficient facts upon which she could allege negligence.”
In my view, the plaintiffs were not in a position to allege negligence until they knew the cause of the fire. It would be irresponsible to commence a claim alleging negligence until there were sufficient particulars to ground such a claim. The fire could have been accidental; it might have been caused by vandalism. As of August 30, 2008, the plaintiffs knew the source of the fire but not whether its origins could be characterized as tortious. The fire chief then described the cause of the fire as undetermined. More investigation was then required. The cause of the fire came to the plaintiffs’ attention on September 25, 2008 when Mr. MacKay (the insurance adjuster) concluded to Mr. Wood (the engineering expert), “It would appear safe to say the stain did it.” From that moment forward, the plaintiffs were on notice of the negligence they alleged in their statement of claim.”
[29] Intact thus takes the position that it (and the plaintiff) had no reasonable way to determine the cause of the fire and explosion (or that the cause of the fire and explosion was non-accidental) until October 1, 2012 when Intact received the conclusions of the Ontario Fire Marshal in its report.
[30] Regardless of the fact that Intact did not receive the Ontario Fire Marshal’s report until October 1, 2012, Intact must still discharge its onus to show that it (and the plaintiff) acted with reasonable diligence in seeking to determine the additional material facts necessary to discover the claim. Justice Pierce was alive to this requirement in Hansen when she stated (again, my insertions for clarity):
“Mr. MacKay (the insurance adjuster) re-interviewed Mr. Macciocchi (the defendant) on September 25, 2008 at which time smoking was eliminated as a cause of the fire. He brought to the interview cans of the varnish and stain he had used on the deck. The label on the stain warned that rags may burn spontaneously and should be soaked in water. Mr. MacKay advised Mr. Wood (the engineering expert) about the risk of spontaneous combustion identified on the label. He also advised that Mr. Macciocchi left the staining rag out overnight and didn’t use it the day of the fire, believing it was aired out and harmless. Mr. MacKay concluded to Mr. Wood, “It would appear safe to say the stain did it.”
[31] I find that the quality, and arguably the admissibility, of Intact’s evidence to be significantly lacking. Intact tendered the affidavit of Abu Sayeed Islam (“Islam”), a claim representative. Unfortunately, Islam was not the claims representative at the relevant time period during which the due diligence is alleged to have occurred (2011-2013).
[32] There is no evidence on this motion from Intact’s original claim representatives (Sandra Freeman and Denise Gray) or a representative from Cunningham Lindsey (Robert Smith). Intact’s version of events is premised upon hearsay, and on occasion double hearsay. The decision to curb the investigation until after the Ontario Fire Marshal and Brantford police concluded their own investigations is not fully explained in Islam’s affidavit, and to the extent that the decision is explained, it is based upon information from Robert Smith imparted to Sandra Freeman.
[33] As the contents of the claim in this proceeding are identical to the one issued in the Hothi action (i.e. a boiler plate negligence cause of action with an alternative theory of arson), the defendants submit that it cannot lie in Intact’s mouth to state that it was waiting for the release of the Ontario Fire Marshal’s report before learning of the material facts necessary to support the causes of action advanced in this proceeding. I do note that the claim in the Hothi action was also issued after the receipt of the Ontario Fire Marshal’s report.
[34] The defendants submit that Intact has failed to discharge its onus to prove it acted with reasonable diligence, and as such the Hansen decision is distinguishable and not applicable.
[35] In my view, the purpose of the enhanced powers under Rule 20.04(2.1) and (2.2) should not typically allow a party to buttress a deficient evidentiary record through the use of a mini-trial. That power is reserved for the Court once it is satisfied that a party has adduced a sufficient record to establish the existence of a genuine issue requiring a trial.
[36] If such an issue exists, it then may require additional evidence or findings to be considered under the enhanced powers as the Court climbs the ladder of available options to determine if a full trial may be avoidable as discussed in Hryniak. A responding party may not ask the Court to utilize its enhanced powers in order to create a genuine issue for that party. Rather, a responding party must adduce sufficient evidence for the Court to conclude that (a) there may well be a genuine issue requiring a trial, but (b) to make such a determination the Court may best resolve that issue through the use of the enhanced powers.
[37] Accordingly, and with some reluctance, I believe that in the unique circumstances of this case, a mini-trial of the issue of Intact’s alleged due diligence ought to be ordered. I say this for the following reasons:
a) On this motion for summary judgment, my ultimate disposition will be to either grant the motion and dismiss the plaintiff’s claim, or find that the plaintiff’s claim was commenced within the time provisions of the Act. The issue of the limitation period defence will be foreclosed one way or the other, and thus in order to fairly resolve this dispute (as required by Hryniak) the use of the expanded fact-finding powers is appropriate.
b) Rule 20.04(2.1) permits me to exercise the enhanced fact-finding powers for the purpose of, inter alia, “drawing any reasonable inference from the evidence”. While the quality of Intact’s evidence is lacking, there is at least some evidence in the record which could support its position in response to the defendant’s motion for summary judgment. As such, there may be a genuine issue for trial based on the plaintiff’s evidence, as weak as it may be, and I am not prepared to make a determination to the contrary on the record before the Court.
c) As the Ontario Fire Marshal’s office and the Brantford Police conducted their own investigations into the fire and explosion, what constitutes reasonable diligence on the part of Intact is a matter which, in my view, may need to be determined. Although I make no express finding at this stage, it is certainly arguable that holding the plaintiff and Intact to a standard of having to conduct their own, independent examination in the face of the two, pending official investigations would place too high an onus upon an insurer.
Conclusion
[38] In summary, I am ordering a mini-trial with respect to the issue of Intact’s alleged reasonable diligence.
[39] Counsel for the parties may contact my assistant Michelle Giordano at michelle.giordano@ontario.ca to arrange a telephone case conference forthwith for the purpose of scheduling the mini-trial and a timetable for any interim steps leading up to that hearing.
[40] In the circumstances, and subject to hearing from counsel during that telephone case conference, (a) I would expect to hear viva voce evidence from Ms. Freeman, Mr. Gray and Mr. Smith, and (b) I consider documentary disclosure of the Cunningham Lindsey and Intact files during the relevant time period to be appropriate.
Costs
[41] The costs of this motion shall be reserved to me as the judge hearing the mini-trial to be scheduled.
Diamond J. Released: June 3, 2016