Court File and Parties
COURT FILE NO.: 15-51430 (Hamilton) DATE: 2016-09-16 SUPERIOR COURT OF JUSTICE – ONTARIO
RE: David Sampson and Alison Sampson, Plaintiffs AND: Empire (Binbrook Estates) Ltd., Defendant
BEFORE: The Honourable Mr. Justice C.S. Glithero
COUNSEL: Peter Anderson, Counsel for the Plaintiffs/Respondents Jeffrey Kukla, Counsel for the Defendant/Moving Party
HEARD: September 8, 2016
Endorsement
[1] The defendant moves for a summary judgment dismissing the plaintiffs’ action as being statute-barred by the Limitations Act, 2002, S.O. 2002, c.24, Sched. B, s.4. (the Act). In the alternative, the defendant seeks a dismissal of the action by reason of an executed release.
[2] The action is based on alleged breaches of contract, misrepresentation, or negligence. They arise from an alleged defect in the basement cement floor slab in a new home purchased by the plaintiffs from the defendant. The purchase contract was dated May 3, 2007 in the amount of $256,490. The plaintiffs took possession on January 28, 2008.
[3] The Statement of Claim was issued on January 27, 2015. It claims general damages in the sum of $500,000, $100,000 for loss of income by the male plaintiff, as well as aggravated, punitive and exemplary damages in the amount of $50,000.
[4] The record before me indicates that the plaintiffs discovered several alleged defects in their new home and communicated with representatives of the defendant often, and regularly, in respect of these complaints. I am advised that the only remaining complaint that is material to this motion is an allegation of defects in the cement slab floor in the basement of the home. It is described in various ways as being areas of discolouration, black marks, or areas of moisture, mold, or mildew.
[5] Section 4 of the Act prohibits commencement of an action after the second anniversary of the discovery of the claim.
[6] Section 5 provides that 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 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).
[7] Section 5(2) presumes the claimant to have known of the matters listed in clause (a) on the day that the act or omission occurred, unless the contrary is proven.
[8] Section 11 of the legislation provides that if the parties have agreed to have an independent third party resolve the claim or assist them in resolving it, the limitation periods do not run from the date of such agreement until the claim is resolved, the attempted resolution process is terminated, or the date on which a party terminates or withdraws from the agreement.
[9] In their reply, the plaintiffs plead s.11. On the hearing of this motion however, the parties agreed that s.11 had no application to the facts of this case.
[10] The limitation period issue in this case is whether or not the plaintiffs had “discovered” the claim within the meaning of s.5 more than two years before the issuance of the statement of claim on January 27, 2015, as the defendant contends, or whether the plaintiffs discovered the claim within 2 years of that date.
The Relevant Chronology
[11] The materials filed on this motion contain an abundance of communications between the parties. As counsel agree that the only Limitation Act issue relates to the black marks or discolouration, or moisture or mold and mildew on the surface of the basement floor, I will refer to the evidence relating to that issue chronologically.
[12] The plaintiffs took possession of the home in January of 2008.
[13] On August 7, 2008 a representative of the defendant met with the plaintiffs to review several of their concerns, which included claims of dampness and mold in the basement. On that same date Mr. Sampson emailed the defendant claiming “there is now mold and mildew in the basement because of the damp, creating a health hazard.”
[14] On November 17, 2008, the plaintiffs first claimed that there was discolouration on their basement floor. The defendant investigated and consulted its engineers and advised the plaintiffs that the engineers indicate that there are no water table issues in the area of the house and explained that discolouration of a basement slab floor can occur for many reasons and that based on the photographs supplied by the plaintiffs, it appeared that areas of discolouration were occurring on the edges of numerous articles placed on the basement floor by the plaintiffs. The defendant suggested proper ventilation and dehumidification. The defendant also advised the plaintiffs that this is not a warrantable item under the Tarion Warranty Corporation (Tarion) program. On December 10, 2009 the plaintiffs emailed the defendant rejecting the defence information.
[15] On August 27, 2009 the plaintiffs submitted a second-year form to Tarion complaining of moisture or humidity in the basement.
[16] On November 25, 2009 Mr. Sampson emails the defendant demanding that the basement floor be cleaned to remove the black marks.
[17] By email dated November 25, 2009 Mr. Sampson advises the defendant that his basement floor has developed black marks “around the edges or mats or other items that are on the floor. We have had a professional person inspect the basement. Their information is the water table is high and moisture is wicking up through the cement and causing the problem.” He added that the plaintiffs would like the floor cleaned and waterproofed.
[18] On December 7, 2009 Mr. Sampson emailed the defendant to indicate he was still waiting to have the basement floor cleaned and sealed to stop the black disease on the floor.
[19] On January 18, 2010 the plaintiffs submit a second-year form to Tarion advising that “the basement floor has black marks around the edges of mats and other items that are on the floor. We have had a professional person inspect the basement. They have informed us that the water table is high and moisture is wicking up through the cement and causing the problem. Water rises in the sump to within 10” of the basement floor slab.”
[20] On January 25, 2010 the defendant advised the plaintiffs that basement floor discolouration is not warrantied according to s.1.15 of the Tarion criteria. On January 29, 2010 Mr. Sampson responded to the defendant with respect to various claims, including the basement floor discolouration indicating “if these are not repaired in the next 60 days we will go to litigation, not conciliation.” Tarion subsequently dismissed the plaintiffs’ warranty claim.
[21] By email dated June 7, 2010 Mr. Sampson advised the defendant, in respect of this basement floor black mark complaint, that “Empire can clean it up as it should have been done or wait for it to become a civil court matter.”
[22] By email dated June 14, 2010 Mr. Sampson advised the defendant, amongst other complaints, that the black marks around objects placed on the basement floor creates an unacceptable condition.
[23] On July 18, 2011 by email, Mr. Sampson advised the defendant that unless he received a satisfactory commitment from Empire he will be turning over the matter to their lawyers. The prior email in the thread dated July 5, 2011 makes it clear that the damp floor and the floor discolouration are amongst the issues he is referring to. In that earlier email he also advised that the concrete expert retained by the defendant had failed to convince Mr. Sampson that the problem was not that of a high water table.
[24] By email dated August 19, 2011 Mr. Sampson advised the defendant that in the opinion of the plaintiffs, the defendant is in breach of contract.
[25] In January of 2012 the plaintiffs retained Landtek Limited Consulting Engineers (“Landtek”) to examine the issue, and the plaintiffs received Landtek’s report on January 10, 2012.
[26] By letter dated February 14, 2012 a lawyer representing the plaintiffs advised the defendant’s lawyers that the “general dampness of the basement floor” is still an issue, and advised that the exploratory holes bored into the basement floor in late October 2011 indicated that water “has pooled throughout the underside of the concrete floor slab.”
[27] The letter goes on to indicate that the Sampsons provided their lawyer with a copy of the defendant’s expert report from SPL Consultants Limited, dated December 15, 2011, which found the state of the basement floor and subfloor water levels to be acceptable. The letter further advises the defendant’s counsel of the differing interpretation of the problem reached by Landtek and encloses a copy of the Landtek report. The letter indicates that the plaintiffs’ expert is of the view that a video inspection of the perimeter drainage tile would be recommended, as would installation of underfloor drains connecting to an existing sump pump be recommended. It concludes by indicating that the plaintiffs’ position is that the basement floor problem goes beyond the Tarion warranty program and represents a violation of the Ontario Building Code.
[28] The plaintiffs obtained a second expert report from Landtek dated April 27, 2012. The stated purpose of the report was to report on efforts undertaken by the defendant. The report indicates that these experts found water present in the clear stone “just below the underside of the floor slab”. The letter “clearly states our findings and opinions with respect to the underfloor basement drainage water conditions”.
[29] On July 3, 2012 the plaintiffs submitted a warranty claim to Tarion claiming that “the basement floor has black marks around the edges of mats and other items that are on the floor. We have had professionals inspect the basement. They have informed us the water table is high and moisture is wicking up through the cement.”
[30] On July 9, 2012, a representative of the defendant met with the plaintiffs again and the plaintiffs indicated they wanted the defendant to take the house back, or otherwise compensate them in the amount of $100,000.
[31] By email dated September 18, 2012 Mr. Sampson advises the defendant that the results of the engineering reports has strengthened the plaintiffs case and he outlines what is required to be done, including the removal of the entire cement floor slab, installation of perimeter and interconnected weeping tiles below the granular level underneath the slab, additional granular material, a water barrier on top of the granular to stop capillary action into the floor slab, the pouring of a new floor slab, and removal and replacement of the items in the basement, together with suitable accommodation for the plaintiffs while the work is done.
[32] By email dated December 12, 2012, Mr. Sampson advises the defendant that these difficulties with the cement basement floor slab had been ongoing for 4 years and 9 months.
Motions for Summary Judgment
[33] Rule 20.04 calls on the court to grant summary judgment if satisfied there is “no genuine issue requiring a trial”. In determining that issue, the court must consider the evidence submitted by the parties and in so doing may now weigh the evidence, evaluate the credibility of a deponent, and draw any reasonable inferences from the evidence. The Supreme Court of Canada has held that the rule for summary judgment must be interpreted broadly, favouring proportionality and fair access to the affordable, timely and just adjudication of claims: Hryniak v. Mauldin, 2014 SCC 7.
[34] It remains the law that on the determination of whether or not there is a genuine issue requiring a trial, the onus is on the moving party but there is an obligation on the responding party to put his or her best foot forward: Canadian Imperial Bank of Commerce v. Mitchell, 2010 ONSC 2227, [2010] O.J. No. 1502.
Analysis of the Limitations Act Issue
[35] Section 5(2) of the Act presumes a claimant to have known the matters listed in s.5(1) as of when they occurred, unless the contrary is proven, and thus creates an onus on the plaintiffs.
[36] The issue on this motion is whether or not there is a genuine issue requiring a trial as to whether the plaintiffs “discovered” their claim before or during the 2 year period preceding the issuance of the statement of claim on January 27, 2015. To determine when the claim was “discovered” within the meaning of s. 5(1) of the act, the factors enumerated therein must be considered.
[37] The first factor relating to the discovery of a claim commences on the day on which the person with the claim first knew that the “injury, loss or damage had occurred”. Once a plaintiff knows that some damage has occurred then the claim has been discovered and it is not required that the plaintiff know the extent of the damage or the exact type of damage: Peixeiro v. Haberman, [1997] 3 S.C.R. 549 at para. 18.
[38] It is sufficient if the plaintiff knows “enough facts on which to base an allegation of negligence”, or I would add breach of contract, and the plaintiff is not required to know all the facts supporting the claim in order for it to be discovered: Lawless v. Anderson, 2011 ONCA 102 at para. 23. That case also stands for the proposition that the plaintiff need not know the precise cause of the damage. Rather, additional information supporting the claim may be useful in assessing whether or not to proceed, but is not necessary in order to “discover” the claim: see also Howden Power North America Inc. v. A. Swent & Sons Ltd. at paras. 50-51.
[39] There is also an obligation of due diligence on a plaintiff who, when alerted to the circumstances which would cause a reasonably prudent person of similar ability in those same circumstances to seek professional advice, then the plaintiff must do so or bear the risk of the claim being struck out by application of the Limitations Act: Sutton v. Balinsky, 2015 ONSC 3081 at para. 147.
[40] Here the evidence indicates that the plaintiffs were aware shortly after taking possession of the house of their claim of moisture, black marks, mold, mildew or humidity with respect to the basement cement slab floor. As to the second requirement under s.5(1)(a)(ii), it is clear from the plaintiffs’ own correspondence, from the reports of experts obtained by the plaintiffs, and by the plaintiffs’ lawyer’s correspondence that the plaintiffs understood that the complaint of deficiencies in the basement floor were believed to have resulted from an act or an omission in the construction of that portion of the home.
[41] As to ss. (iii), the statute does not require certainty of the defendant’s responsibility for the act or omission giving rise to the claim, and rather it is sufficient if there be shown prima facie grounds to infer the act or omission to be that of the other party: Gaudet v. Levy (1984), 47 O.R. (2d) 577 (H.C.); Kowal v. Shyiak, 2012 ONCA 512 at para. 18.
[42] Similarly, it is clear from the plaintiffs’ own communications that the act or omission complained of was believed to be that of Empire, as all complaints were directed towards Empire, and it was Empire that was threatened with a lawsuit.
[43] As to the fourth requirement under the section, namely that “having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it”, here the evidence demonstrates the plaintiffs to have been aware of these matters. The plaintiffs threatened legal action, or a lawsuit, explicitly on two occasions, and indirectly on others. The plaintiffs also retained counsel with respect to the very subject matter of this claim and to enunciate their position to the defendant.
[44] The jurisprudence also establishes that ongoing communications or further investigations as between the parties do not extend a limitation period. Future negotiations do not deflect the application of a limitation period, once the claim has been discovered, even if they serve to discourage the plaintiff from commencing an action, provided that the plaintiff is not prevented from starting an action. The fact that a defendant assists in attempting to rectify a problem does not postpone the running of the limitation period: Four Seasons Site Development v. City of Toronto, 2015 ONSC 2293 at para. 13; Chang v. Boulet, 2012 ONSC 6382 at para. 59; Hamilton (City) v. Metcalfe & Mansfield Capital Corporation, 2012 ONCA 156; Cargojet Airways v. Aveiro et al, 2016 ONSC 2356 at paras. 40-43; Markel Insurance Company of Canada v. ING Insurance Company of Canada, 2012 ONCA 218 at para. 34.
[45] In my estimation it is clear that the plaintiff was actually aware of all four of the factors enumerated in the section, and hence had “discovered the claim”, well before the limitation period commenced on January 27, 2013.
[46] The evidence provided by the plaintiffs essentially suggests that they could not be sure of the cause of their problem because the experts retained by them and the defendant did not agree as to the causation. The plaintiffs’ evidence also indicates that they believe that they and Empire were working together to try and find a mutually satisfactory resolution to the problem. With respect, a review of the materials put forth by both parties, with the materials of each party containing many communications by the plaintiffs, shows that the plaintiffs believed that they knew the cause of the problem, that they did not accept the defendant’s explanation as to the cause of any problem, and clearly showed that the plaintiffs threatened civil proceedings and made clear their rejection of remedial efforts and suggestions by the defendant. Consensus as between experts is not required before a limitation period begins to run. Indeed, a lack of consensus as between experts often persists throughout a trial.
[47] The plaintiffs rely on C.H. Clement Construction v. Seguin Racine Architectes et Associes Inc., [2013] O.J. No. 5397 where a motion for summary judgment was dismissed in a case where it was found that the plaintiff knew it had water leaks but did not have “sufficient material facts” to establish whether the cause of the water leaks was that of work done by the defendant, or rather work done by the plaintiff itself. In my opinion no such confusion arises on the evidence put forth in this case as the communications of the plaintiffs demonstrate throughout a belief that the acts or omissions were those of the defendant. Unlike in Clement, here the plaintiffs had the expert reports of both parties well before the commencement of the limitation period.
[48] The plaintiffs also cite K.M. v. H. M. and Women’s Legal Education and Action Fund, Intervener, [1992] 3 S.C.R. 6, which speaks of concerns about preserving evidence and the foreclosure of cases based on stale evidence as aims of a limitation act. The other factor identified in that case however is whether the plaintiff has acted diligently in bringing the action. In my opinion the chronology outlined earlier makes it clear that the action had been discovered years before the statement of claim was issued.
[49] The plaintiffs also rely on the case of Gateman Milloy Inc. v. Brownstone Masonry, [2013] O.J. No. 979 which held that in a case of two diametrically opposing experts’ reports, that not all the facts necessary to commence an action would have been known. With respect, that case does not cite some of the authorities to which I referred, which reach an opposite position, some of which decisions are binding on me.
[50] Lastly, the plaintiff relies on York Condominium Corp. Number 382 v. Jay-M Holdings Ltd., 2007 ONCA 49, [2007] O.J. No. 240, where at para. 26 the Court of Appeal indicated that the Limitation Act provisions ought to be “liberally construed in favour of the individual whose right to sue for compensation is in question”, and that “access to justice should not be frustrated except in clear cases”. In that case, there seems to be little factual dispute that while the acts or omissions occurred long before, the plaintiffs were unaware of them until after the commencement of the relevant limitation period in that case. In my view that case is readily distinguishable. The issue there was primarily one of statutory interpretation.
[51] In my opinion the defendant has met its onus on a summary judgment motion, and the plaintiffs have failed to meet their onus in establishing that the claim was not discovered until less than 2 years before the issuance of the Statement of Claim. In my opinion there is no genuine issue requiring a trial as to whether the plaintiffs’ claim is statute-barred.
The Release Issue
[52] By letter dated July 21, 2010 the defendant reiterated an agreement whereby the defendant would extend the warranty on the leaks in the back wall and foundation area to June 30, 2011 and would do some unrelated painting, and the plaintiffs in return would provide a full and final “sign off” in respect of items complained of in various Tarion deficiency claim forms. The basement floor discolouration, black mark, moisture, mold and mildew complaints of the plaintiffs are contained in those Tarion forms. At the bottom of the letter was a space for the plaintiffs to sign and thereby “sign off” on those issues. The plaintiffs each signed the letter on July 23, 2010.
[53] The plaintiffs rely on the submissions in their factum, which claims that they signed the letter based on a misrepresentation in the letter as to its meaning. I don’t agree. In return for an extended warranty on other matters, the plaintiffs were giving up their claims on other items as described by them in their own documentation. A consideration of the entirety of the communications in this case leads me to conclude that the plaintiffs were well aware of and very conversant as to the various issues and the Tarion forms.
[54] The plaintiffs further argue that following the signing of the release agreement the defendant continued to try and reach a resolution with them on the basement floor issues, and that accordingly the rights and obligations in the release were effectively discharged. I don’t agree. I have no evidence that the defendant did not extend the warranty as agreed upon.
Result
[55] For these reasons I find that there is no issue requiring a trial in this matter, the motion is allowed, and that the plaintiffs’ action should be dismissed as being both statute-barred and estopped by virtue of the release.
Costs
[56] If the parties are unable to agree on the issue of costs, written submissions may be made by the defendant within 21 days of the release of this endorsement, and those of the plaintiffs within 14 days of the receipt of defence submissions. Such submissions are not to exceed 5 typewritten pages, exclusive of bills of costs, any offers of settlement, and relevant authorities. Such submissions are to be sent to my chambers in Kitchener at 85 Frederick Street, 7th floor, Kitchener, Ontario, N2H 0A7. If no submissions are received within these time restrictions, or such extensions as may be sought and granted, there will be no order as to costs.