CITATION: Kesian v. The City of Toronto, 2016 ONSC 6461
COURT FILE NO.: CV-14-506954
MOTION HEARD: 20160607
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: SEVAN KESIAN, Plaintiff
AND
THE CITY OF TORONTO, Defendant
BEFORE: Master Lou Ann M. Pope
COUNSEL: Counsel for plaintiff: Harlan A. Pottins, Barapp Law
Fax: 416-792-1737
Counsel for defendant: John M. Picone, Norton Rose Fullbright Canada LLP
Fax: 416-216-3930
REASONS FOR ENDORSEMENT
[1] The sole issue to be determined on this motion is whether the plaintiff is entitled to add three defendants to this action after the expiry of the limitation period.
[2] The plaintiff seeks to add the following entities as defendants: Toronto Hydro-Electric System Limited (“Hydro”), Ryerson Polytechnic University and Pennex Metropolis Limited. The motion to add Ryerson Polytechnic University is adjourned sine die. The motion to add Pennex Metropolis Limited did not proceed as it was not served with the motion material. Therefore, the motion proceeded to add Hydro only.
[3] Hydro opposed this motion on the basis that the motion was brought beyond the presumptive limitation period.
Background
[4] This action arises out of a slip and fall accident that occurred on or about June 23, 2012. The plaintiff was walking on the sidewalk just north of the northwest corner of Dundas Street East and Victoria Street. She fell on an uneven grate that was on the sidewalk. Ownership and responsibility for the grate gave rise to this motion. The presumptive two-year limitation period expired on June 23, 2014.
[5] The plaintiff sent a notice letter to the City of Toronto (“City”) on July 3, 2012. Shortly thereafter, on August 21, 2012, the plaintiff met with a representative of the City and gave a statement including a description of the fall. Thereafter, the City investigated the claim. The plaintiff provided the City with colour photographs of the location of her alleged fall.
[6] The statement of claim was issued on June 23, 2014 exactly two years from the date of the alleged fall.
[7] On September 9, 2014, the insurance adjuster who acted on behalf of the City and its liability insurers responded to Mr. Pottins’ notice letter to the City and advised that the grate was the responsibility of Hydro.
[8] However, on November 20, 2014, defence counsel requested clarification of the location of the plaintiff’s fall given the description of the location in the statement of claim. In that letter, defence counsel indicated that Hydro “may be” a proper party to the action and requested that the plaintiff mark the location of her fall on a photograph in order to properly identify which party or parties, if any, was responsible for the area of the alleged fall.
[9] On March 19, 2015, plaintiff’s counsel delivered the plaintiff’s affidavit of documents that included coloured photographs marked to delineate the precise location of the fall. Three months later on June 19, 2015, counsel for the City advised that Hydro was the owner of the grate, which was based on Hydro’s confirmation that it had a vault at or near the location of the fall.
[10] On August 25, 2015, plaintiff’s counsel scheduled this motion returnable November 13, 2015. The notice of motion was served on the City and Hydro on September 3, 2015. The notice of motion set out that the plaintiff intended to rely on the affidavit of Harlan Pottins.
[11] In late October 2015, Mr. Pottins, plaintiff’s counsel, left the law firm of Krylov and Company and started working at Barapp Law Firm. The evidence filed by the plaintiff herein provides that the change of firm delayed drafting of the motion material. He served the City only with a notice of change of lawyer on November 4, 2015. However, the oversight in not serving the notice of change of lawyer on Hydro was not discovered until November 9, 2015 after Hydro filed a motion confirmation form which set out that counsel for Hydro had been unable to contact plaintiff’s counsel.
[12] Also in late October and early November, 2015, counsel for Hydro wrote to Mr. Pottins requesting the plaintiff’s motion record. By November 3, 2015 when Mr. Picone, counsel for Hydro, had not received a response from Mr. Pottins, he wrote again and advised Mr. Pottins that Hydro would oppose the motion on the grounds that the relief sought was statute barred and it reserved its right to seek an adjournment. Hydro also sought to cross-examine Mr. Pottins on his affidavit on November 9, 2015 and a notice of examination was served. (It appears that the original notice of motion, which was subsequently amended, set out that the plaintiff intended to rely on the affidavit of Harlan Pottins. In the amended notice of motion, this was changed to the affidavit of Fahrin A. Jaffer.)
[13] Interestingly, on November 9, 2015, it was counsel for Hydro who confirmed the plaintiff’s motion on the basis that it was proceeding on November 13, 2015 as opposed for 30 minutes and that Hydro intended to rely on its responding motion record, factum and brief of authorities at the hearing. Mr. Picone also included a statement on the Confirmation Form that he had been unable to confirm with opposing counsel that the motion was proceeding on an opposed basis because they “failed or refused to respond to my last four letters.”
[14] Therefore, when Mr. Picone confirmed the motion on November 9, 2015, he had been served only with the plaintiff’s notice of motion and he had not received a response to his letters requesting the motion record. Further, Hydro served responding motion material before it received the plaintiff’s motion material.
[15] When Mr. Pottins and Mr. Picone communicated on November 9, 2016 regarding the motion, Mr. Pottins advised that he would be seeking an adjournment of the motion as he had been unable to prepare the motion material.
[16] The next day, on November 10, 2015, Hydro served its responding motion material.
[17] The motion scheduled for November 13, 2015 did not proceed. Therefore, on December 2, 2015, the plaintiff scheduled a new motion for March 24, 2015, a date available for all parties, and served and filed forthwith the notice of motion on both the City and Hydro. However, due to an administrative error at the court’s motion scheduling office, the notice of motion was not filed, thus the March 24, 2016 motion date was not scheduled by the court. This error was discovered by counsel for Hydro on January 26, 2016; however, it does not appear that they notified Mr. Pottins until after being served with the plaintiff’s motion material on or about March 10, 2016. Hydro’s evidence fails to explain why they did not notify Mr. Pottins upon learning of the error in late January 2016. Ultimately, the court agreed to reinstate the motion date of March 24, 2016 in order for counsel to adjourn it to another date. The motion was adjourned to May 3, 2016; however, due to the fact that Hydro’s responding material could not be located by the court, the motion was adjourned to June 7, 2016, when it proceeded.
[18] There was another development in late February 2016 when counsel for the City advised Mr. Pottins that the City had right-of-way agreements with Ryerson Polytechnic University (“Ryerson”) and Pennex Metropolis Ltd. (“Pennex”) for the purpose of pedestrian and vehicular traffic over the subject property whereby Pennex was responsible for maintaining the subject lands. As a result of this new information, the plaintiff amended the notice of motion to seek an order to amend the statement of claim to add Ryerson and Pennex as defendants.
Position of Parties
[19] It is the plaintiff’s position that he became aware of a claim against Hydro on June 19, 2015 when the City advised that Hydro was the owner of the grate. Prior to that time, the plaintiff was advised only that a potential claim may exist against Hydro when the City advised the plaintiff on November 20, 2014 that Hydro may be a proper party as the exact location of the plaintiff’s alleged fall was uncertain. The plaintiff submits further that he was not made aware that Hydro operated a vault underneath the loss location and that Hydro was responsible for the grate until the City’s letter dated June 19, 2015. As such, he submits that this motion was brought within the two-year limitation period from June 19, 2015.
[20] Hydro submits that an action against it is statute barred pursuant to section 4 of The Limitations Act, 2002, S.O. 2002, c. 24, Sched. B (“the Act”). Firstly, it submits that the two-year limitation period from the date of the alleged loss on June 23, 2012 had expired. Secondly, it submits that the plaintiff has not rebutted the presumption of knowledge that the claim was discovered on June 23, 2012 in order to satisfy section 5(2) of the Act. Hydro argues further that the plaintiff failed to perform due diligence to identify potential defendants even after being advised by the City on November 20, 2014 that Hydro may be a proper party.
Law – Motion to Amend the Statement of Claim
[21] Rule 26.01 is the general rule regarding amendment of pleadings which states that:
On motion at any stage of an action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.
[22] Rule 5.04(2) provides that:
At any stage of a proceeding the court may by order add, delete or substitute a party or correct the name of a party incorrectly named, on such grounds as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.
[23] The authorities are clear that on a motion to add a party under rule 5.04, the moving party has the onus to demonstrate that no prejudice will result from the proposed amendment that could not be compensated for by costs or an adjournment. If this test is met, it is mandatory that the court grant leave to amend pursuant to rule 26.01. The test also involves a consideration of whether the proposed claim is legally tenable, that it is in compliance with the rules of pleading, and is not barred by operation of the Act. This is so because the use of the word “may” in rule 5.04 gives the court discretion to allow the amendment to join a party despite the absence of non-compensable prejudice. (A. Mantella & Sons Ltd. v. Ontario Realty Corp. (2008), 2008 CanLII 23953 (ON SC), 91 O.R. (3d) 449, aff’d 2009 ONCA 115, at para. 12; Mazzuca v. Silvercreek Pharmacy Ltd. (2001), 2001 CanLII 8620 (ON CA), 56 O.R. (3d) 768 (C.A.), at para. 25)
Limitation Period
[24] The presumptive limitation period is contained in section 4 of the Act, 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.
[25] Section 5(1) of the Act addresses the requirements that must be considered to determine when a claim is “discovered”:
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).
[26] Section 5(2) contains a presumption that a person with a claim is 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.
[27] Lastly, section 21 prohibits the addition of a new party to an existing action after the limitation period has expired.
[28] The authorities are clear that when a party is seeking to apply the discoverability rule, the court should afford a degree of latitude to that party before declaring that the limitation period has begun to run. In practical terms, the question is not whether the moving party believes, for example, that his injury meets the criteria but whether there is a sufficient body of evidence available to be placed before a judge that, in counsel’s opinion, has a reasonable chance of persuading a judge, on the balance of probabilities that the plaintiff discovered the claim on the date submitted. Therefore, when such a body of material has been accumulated, then and only then should the limitation begin to run. (Wong v. Adler (2004), 2004 CanLII 8228 (ON SC), 70 O.R. (3d) 460 (S.C.J.))
[29] The authorities are also clear that it is not appropriate for a motions judge or master to resolve a limitation issue where the application of the discoverability rule is central to its resolution, for the following reasons. It is a question of fact when the cause of action arose and thus when the limitation period commenced. The applicability of the discoverability rule is premised on the finding of these facts, in other words, when the plaintiff herein discovered he had a cause of action against Hydro or, when through the exercise of reasonable diligence, he ought to have known he had a cause of action against Hydro. These facts constitute genuine issues for trial and as such, it is not appropriate for a motions judge or master to assume the role of a trial judge by resolving them.
[30] The motions judge or master must examine the evidentiary record before it determines if there is an issue of fact or of credibility on the discoverability allegation. As long as the moving party puts in evidence of steps taken to ascertain the identity of the tortfeasor and gives a reasonable explanation on proper evidence as to why such information was not obtainable with due diligence, then that will be the end of the enquiry and the proposed party will normally be added with leave to plead a limitations defence. This is not a high threshold. If the moving party fails to provide any reasonable explanation that could on a generous reading amount to due diligence the motion will be denied. If the moving party puts in evidence of steps taken but the proposed party also provides evidence of further reasonable steps that the moving party could have taken to ascertain the information within the limitation period, then the court will have to consider whether the moving party’s explanation clearly does not amount to due diligence. If there is any doubt whether the steps taken by the moving party could not amount to due diligence then this is an issue that must be resolved on a full evidentiary record at trial or on summary judgment. The strength of the moving party’s case on due diligence and the opinion of the master or judge hearing the motion whether the moving party will succeed at trial on the limitations issue is of little or no concern on the motion to add the party. The only concern is whether a reasonable explanation as to due diligence has been provided such as to raise a triable issue. (Wakelin v. Gourley, [2006] O.J. No. 1442 (Ont. Div. Ct.))
[31] As stated by the court in Sloan v. Sauve Heating Ltd., 2010 ONSC 3871, [2010] O.J. No. 3002 (Sup. Ct.), para. 16, varied as to costs only 2011 ONCA 91, [2011] O.J. No. 402 (C.A.), the concern is that plaintiffs not be forced to commence actions before they could reasonably know the essential facts of their claims. That interest must be weighed against the prospective party’s interest in being able to rely on the operation of limitations legislation to be secure from old claims where evidence might have become stale or outdated. (Peixeiro v. Haberman, 1997 CanLII 325 (S.C.C.))
[32] In 2003, the Court of Appeal in Zapfe v. Barnes, 2003 CanLII 52159 (ON CA), 66 O.R. (3d) 397, described the discoverability principle as:
an interpretive tool of general application which guides the interpretation of limitation statutes. Consideration of whether it applies in any given case is concerned with balancing fairness for both the plaintiff and the proposed defendant.
[33] The plaintiff relies on the decision in Madrid v. Ivanhoe Cambridge Inc., (2010), 2010 ONSC 2235, 101 O.R. (3d) 553 (S.C.J.), at paragraph 15, where the court allowed the plaintiff to add a defendant after the limitation period had expired. In that action, Ivanhoe advised plaintiff’s counsel several months after the statement of claim was issued and served, and after the expiry of the limitation period, that the Ivanhoe employee who was responsible for maintaining the washroom on the day of the plaintiff’s fall had called in sick and Unicco, the proposed defendant, had dispatched an employee to carry out the maintenance of the washroom. The court held that:
In the absence of an unexpected or unusual trigger, there is little to be gained by imposing judicially a free-standing duty on plaintiffs to write pro forma letters to defendants inquiring about the identity of other possible defendants under the rubric of due diligence in s. 5 of the Limitations Act, 2002. It would not be in the interests of justice to encourage an overly muscular development of the concept of pre-discovery due diligence. The burden of responding would immediately shift to defendants and add unproductive costs. The parties should not have to conduct a pre-discovery form of discovery.
[34] The jurisprudence refers to a “triggering event” on motions to add a party after the expiry of the limitation period. Regarding the triggering event, in Thompson v. Mungham, 2013 ONSC 4994, at paragraph 26, McCarthy J. stated that the following questions must be considered:
(a) Was there a triggering event which served to alert the plaintiffs that their conclusions were erroneous?
(b) If so, what was that triggering event?
(c) Did the plaintiffs then exercise sufficient due diligence to ascertain the actual location of the accident and the owner and occupier of the property upon which that location is found?
(d) Was leave to amend the pleading to add the proposed defendant sought within two years of the triggering event?
Analysis
[35] It is clear from the following evidence that there was uncertainty regarding the exact location of the plaintiff’s alleged fall.
[36] Plaintiff counsel’s notice letter of July 3, 2012 described the location of the fall as the “sidewalk at or near 21 Dundas Square . . . tripped on an uneven surface.” Some six weeks later on August 21, 2012 when the plaintiff gave a statement to City’s adjuster, he stated: “As I approached 21 Dundas Square there was a grate sticking out of the ground which caught my left foot . . . .” Thereafter on October 21, 2012, the City’s adjuster requested that the plaintiff provide a photograph of the location of the fall to complete their investigation. Three days later, plaintiff’s counsel sent colour photographs of the fall location to the adjuster. The photographs show two grates adjacent to each other with no visible writings or etchings that would indicate ownership or control of the grates.
[37] Plaintiff’s counsel heard nothing further from the City or its adjuster for some 20 months by the time the statement of claim was issued on June 23, 2014. In the statement of claim, the location of the fall was described as “she tripped and fell on an uneven grate.”
[38] Following service of the statement of claim on the City, the City’s adjuster advised Mr. Pottins by letter dated September 9, 2014 that the subject grate was the responsibility of Hydro. The City delivered a notice of intent to defend dated September 12, 2014 and thereafter the plaintiff attempted to schedule examinations for discovery.
[39] However, despite the adjuster’s advice on September 9, 2014 that the subject grate was the responsibility of Hydro, counsel for the City again raised the issue of the location of the fall in her letter of November 20, 2014. She stated that the location remained “unclear” as to which grate the plaintiff allegedly tripped over and on which side of the street the plaintiff fell given the description of the location of the fall in the statement of claim as opposed to the photographs. As such, she requested that the plaintiff mark a photograph with an “X” to indicate the location of her fall. Counsel for the City stated further that she believed Hydro “may be” a proper party to the action and that the requested particulars will assist the City to identify the proper parties.
[40] Mr. Pottins took four months to respond to the City’s letter when on March 19, 2015, he produced the plaintiff’s draft affidavit of documents, schedule “A” documents as well as colour copies of the grate with the location of the fall circled.
[41] Three months later on June 19, 2015, counsel for the City advised Mr. Pottins that the subject grate was owned by Hydro based on confirmation from Hydro that it has a vault at or near the location of the fall.
[42] In summarizing the above evidence, it is noteworthy that the City’s adjuster commenced its investigation into this alleged loss in or about late August 2012 when the adjuster took a written statement from the plaintiff. The adjuster followed up a few months later in October 2012 when she inquired from plaintiff’s counsel regarding the exact location of the alleged fall, to which plaintiff’s counsel responded promptly by providing colour photographs. However, the plaintiff heard nothing further from the City or its adjuster as a result of its investigation for some two years when on September 9, 2014, the adjuster advised that Hydro was responsible for the grate, but shortly after on November 20, 2014, counsel for the City’s information was that Hydro “may be” a proper party to the action. Then it was not until June 19, 2015 that counsel for the City confirmed that the subject grate was owned by Hydro. She stated also in that letter that there were “various maintenance grates and chambers” located in the area of the alleged fall.
[43] The law is clear that as long as the moving party puts in evidence of steps taken to ascertain the identity of the tortfeasor and gives a reasonable explanation on proper evidence as to why such information was not obtainable with due diligence, then that will be the end of the enquiry and the proposed party will normally be added with leave to plead a limitations defence. This is not a high threshold.
[44] It is my conclusion based on the evidence that the plaintiff has given a reasonable explanation as to why she was unable to ascertain that Hydro owned the grate where she fell. Hydro submits there is no evidence that the plaintiff took any steps to ascertain the ownership of the grate. Hydro submits that given the issues raised by the City’s adjuster and its counsel, the plaintiff ought to have made inquiries regarding ownership of the subject grate. With respect, I disagree, as in my view, to place such an onus on a plaintiff in these circumstances would be tantamount to doing what was discouraged by the court in Madrid by “imposing judicially a free-standing duty on plaintiffs to write pro forma letters to defendants inquiring about the identity of other possible defendants under the rubric of due diligence in s. 5 of the Limitations Act, 2002.” The court in Madrid went on to state that it would not be in the interests of justice to encourage an overly muscular development of the concept of pre-discovery due diligence. Further, it stated that the burden of responding would immediately shift to defendants and add unproductive costs. The parties should not have to conduct a pre-discovery form of discovery.
[45] The evidence from the photographs of the subject grate is that there were no writing or markings on it that would indicate the grate was owned or operated by an entity other than the City. Further, the City’s adjuster did not raise any issue regarding ownership of the grate; rather, she only inquired about the location of the fall. Plaintiff’s counsel heard nothing further from the adjuster despite the fact that she was investigating the claim in the Fall of 2012 until after the statement of claim was issued. Even in the City’s letter of November 20, 2014, she does not state explicitly that there was an issue as to ownership or control of the grates in the area of the fall. She stated merely that “. . . it is unclear from the Plaintiff’s photos which grate Ms. Kesian allegedly tripped over,” (emphasis added) and that Hydro “may be” a proper party. Therefore, in my view, there was no basis for the plaintiff to investigate other possible defendants.
[46] Further, although the adjuster advised plaintiff’s counsel in September 2014 that the subject grate was the responsibility of Hydro, the City’s letter of November 20, 2014 appears to contradict, or at least place doubt, as to the location of the fall and which grate she tripped over. Again, it is my view that at this point in time there was no basis for the plaintiff to investigate other possible defendants.
[47] It was not until the City’s letter of June 19, 2015 that counsel confirmed that the grate in question was not owned by the City, nor was it under the care and or control of the City.
[48] Therefore, for the above reasons, I find that the plaintiff has demonstrated based on the evidence filed herein that she has a reasonable chance of persuading the trial judge, on the balance of probabilities that the limitation period with respect to her claim against Hydro commenced on or about June 19, 2015 and that this motion was brought within two years thereafter. As such, the plaintiff’s motion is allowed and leave is granted to the plaintiff to amend the statement of claim to add Toronto Hydro-Electric System Limited as a defendant to this action without prejudice to Hydro to plead any defence open to it including the limitation period.
Costs of Abandoned Motion
[49] Hydro seeks its costs of the plaintiff’s first motion returnable November 13, 2015 pursuant to rule 37.09 which provides that a responding party on whom a notice of motion was served is entitled to the costs of the motion where it was abandoned or deemed to have been abandoned.
[50] The plaintiff served and filed the notice of motion which referenced reliance on an affidavit of Harlan Pottins and the amended statement of claim. The motion did not proceed as the plaintiff did not deliver motion material and a new motion date had to be scheduled.
[51] Hydro seeks its partial indemnity costs of $5,247.20, including disbursements, which includes attendance at a cross-examination of Mr. Pottins that did not proceed.
[52] In my view, it was not reasonable for Hydro to schedule and attend at the cross-examination of Mr. Pottins when the plaintiff had not served his motion material. Simply put, there was nothing upon which to cross-examine.
[53] Hydro’s disbursements were some $400 for this abandoned motion. In my view, these costs are not substantiated, and for the reasons above, it is not entitled to recover the examiner’s fee.
[54] It is also my view that not only was it was not reasonable for Hydro to file a confirmation form for the plaintiff’s motion, it was contrary to rule 37.10.01(1) which requires the moving party to confirm a motion. Furthermore, in my view it was precipitous for Hydro to prepare and deliver responding material as they had not been served with the plaintiff’s motion material.
[55] Therefore, I decline to order Hydro’s costs of preparing, serving and filing responding material, notice of cross-examination, and conducting legal research and preparing a factum.
[56] However, Hydro is entitled to its costs thrown away as the notice of motion was served and filed which necessitated counsel’s involvement by way of communication with plaintiff’s counsel and a search of the court file to determine whether the motion was scheduled and/or proceeding. Therefore, the plaintiff shall pay Hydro’s costs thrown away for the November 13, 2015 motion fixed in the amount of $500 inclusive, payable forthwith.
Costs of the Motion
[57] Given that the plaintiff was successful, she would typically be entitled to her costs. However, she did not seek costs in the notice of motion. The amended notice of motion includes relief for such other order as counsel may advise and this Honourable Court may permit. The plaintiff filed a costs outline and requests costs of the motion.
[58] The fact that the notice of motion fails to seek costs, yet the plaintiff is seeking costs is, in my view, an irregularity and pursuant to rule 2.01(1)(a) the court has discretion to grant all necessary amendments or other relief on such terms as are just. Therefore, the plaintiff is hereby granted relief under this rule to amend the amended notice of motion to add a claim for costs.
[59] The plaintiff’s costs are hereby fixed in the amount of $4,750 inclusive, payable by Hydro within 30 days. From this amount owing, Hydro may deduct the $500 which the plaintiff owes for the abandoned motion, with the net amount owing to the plaintiff of $4,250.
____(original signed) __
Master Lou Ann M. Pope
Released: October 19, 2016