Fontanilla v. Thermo Cool Mechanical, 2016 ONSC 7023

Court File No.: CV-13-346-A1

Date: 2016-12-08

Superior Court of Justice – Ontario

Re: The Estate of Felisa Santillan Fontanilla et al, Plaintiffs

And:

Thermo Cool Mechanical et al, Defendants

And:

L. J. Redpath & Associates et al, Third Parties

Before: Emery J.

Counsel: David Shellnutt, Counsel for the Plaintiffs

Lindsay Lorimer & Samantha Gordon, Counsel for the proposed Defendant, Watts Water Technologies (Canada) Inc.

Heather Douglas for the proposed Defendant, Gayton Systems Development Inc. and

Kaleigh Nusbaum for the Defendant, 1343140 Ontario Inc. O/A Thermo Cool Mechanical

Heard: August 17 and September 22, 2016

Endorsement

[1] The plaintiff brings this motion to regularize the pleadings in this action, including an order granting leave to add defendants and to amend the statement of claim accordingly.

[2] The plaintiff’s motion is brought within an action arising from injuries suffered by the late Felisa Santillan Fontanilla. Mrs. Fontanilla was a resident of Living Waters Residence Inc., a retirement home. On January 31, 2011, Mrs. Fontanilla was preparing to take a bath in her apartment. When in the bathtub, she turned on the hot and cold water taps for bathwater. Suddenly and without warning, the chrome diverter spout of the bathtub faucet burst, spraying scalding water over her body. Mrs. Fontanilla suffered severe burns to sensitive parts of her body as a result.

[3] Mrs. Fontanilla passed away on October 6, 2011. The plaintiffs allege that her death was caused by or related to the injuries she suffered from the events on January 31, 2011.

[4] Mrs. Fontanilla’s estate commenced the action against 1343140 Ontario Inc. operating as Thermo Cool Mechanical (“Thermo Cool”), and Living Waters Residence Inc. (“Living Waters”) on January 25, 2013 for the pain she suffered before her death. Members of her family, including her husband, Ernesto Fontanilla, their children and grandchildren are the plaintiffs advancing claims under the Family Law Act.

[5] The proposed Defendants, L. J. Redpath & Associates, Michael West, T.O. Cool Mechanical and Almilli Mechanical Heating Air Conditioning & Refrigeration did not file responding material, or appear on the motion. An order shall go on an unopposed basis granting leave to add those parties as defendants and to amend the statement of claim accordingly.

[6] Justice Andre made an order on July 7, 2015 appointing Erneliza Curia as the litigation administrator for the estate of the plaintiff, Felisa Santillan Fontanilla. The title of proceedings shall therefore be amended to show that the Estate of Felisa Santillan Fontanilla is represented by its litigation administrator, Erneliza F. Coria. Justice Andre’s order contained an order to continue the action with respect to that plaintiff.

[7] The proposed defendants, Watts Water Technologies (Canada) Inc. (“Watts”) and Gayton Systems Development Inc. (“Gayton”) oppose the motion. For the reasons that follow, the motion is dismissed as against them.

Materials on the motion

[8] Tammy Ring, a lawyer at Lerners LLP having carriage of the plaintiff’s file, swore an affidavit on June 3 2015 in support of the motion to add the proposed defendants. Ms. Ring deposes that she spoke over the telephone on April 1, 2014 with Rob Mueller of Aviva Canada, and learned for the first time of other potential parties. Aviva Canada is the insurer of the defendant, Thermo Cool.

[9] Ms. Ring deposes that Mr. Mueller did not provide her with any specific names or companies, or contact information for those names or companies at that time.

[10] The statement of claim makes allegations that Living Waters failed to ensure that the premises were kept safe. The plaintiffs allege the equipment located on those premises was not installed and maintained in proper working condition, suitable for use by its tenants or the general public. The plaintiffs bring their action against Living Waters under the Occupiers Liability Act, and for breach of duty to hire or supervise employees or contractors properly.

[11] Thermo Cool was the contractor hired by Living Waters to replace the boiler and certain plumbing for the building in March 2010. The statement of claim alleges that Thermo Cool manufactured, installed, serviced and maintained the plumbing equipment and its parts in the retirement home where the incident occurred. Specifically, the plaintiffs allege that the chrome diverter spout had burst because it was defective. The action is therefore framed against Thermo Cool as both a product liability and a negligence case.

[12] Living Waters delivered its statement of defence and cross-claim dated May 22, 2014 on or about that date. Thermo Cool delivered its statement of defence and cross-claim dated June 11, 2014 on or about that date. On June 18, 2014, Thermo Cool issued a third party claim naming L. J. Redpath & Associates, Watts Water Technologies (Canada) Inc., Gayton Systems Development Inc., Michael West, T.O. Cool Mechanical and Almilli Mechanical Heating Air Conditioning & Refrigeration as third parties.

[13] In the third party claim, Thermo Cool alleges that it was an anti-scalding/ mixing valve in the faucet that failed on January 31, 2011. The anti-scalding/mixing valve in the spout for channeling water into Mrs. Fontanilla’s bathtub had been replaced at the same time as part of the boiler replacement at Living Waters in March 2010. The third party claim alleges that the valve had been manufactured by Watts and had been supplied by Gayton.

[14] Thermo Cool further pleads in the third party claim that Gayton had reviewed the system and had recommended, as well as provided the anti-scalding/mixing valve in issue.

[15] Watts and Gayton have each defended the third party claim. Watts has also served a statement of defence to the main action. The other third parties, Michael West and T.O. Cool Mechanical, have delivered a defence to the main action, and a defence to the third party claim. The third party L.J. Redpath & Associates has served a Notice of intent to defend in the main action and a Notice of Intent to defend against the third party claim.

[16] To date, there has been no response from Almilli Mechanical Heating Air Conditioning & Refrigeration.

[17] Tammy Ring deposes in her affidavit that the third party claim issued by Thermo Cool against Watts and Gayton and other third parties was the first time additional parties had been identified to the plaintiffs by name.

[18] Tammy Ring was cross-examined on her affidavit on November 20, 2015.

[19] The plaintiffs filed no other evidence in support of the motion.

Issues and Law

[20] The plaintiffs bring the motion to add each Watts and Gayton as defendants under rule 5.04. This order is discretionary in nature, and dependent upon any legal impediments to make that order at all. The plaintiffs’ further motion to amend the statement of claim would, in my view, automatically follow if the court were to make the first order to add those parties as defendants.

[21] The plaintiffs take the position that Watts and Gayton should be added as defendants to allow the plaintiffs a direct claim against those parties as the manufacturer and supplier of the anti-scalding/mixing valve. The plaintiffs further assert that neither Watts nor Gayton will suffer any prejudice from being joined as defendants as they are already third parties. The plaintiffs argue that joining Watts and Gayton is necessary for the court to make a fair and just adjudication of the issues in the action.

[22] Watts and Gayton each oppose the motion on two grounds. First, each of them argues that the plaintiffs or their counsel did not exercise reasonable diligence to discover the true nature of the cause of action or the identity of possible defendants to the action within the time prescribed by s.4 of the Limitations Act 2002. They argue that the time has come and gone to apply the discoverability principle under s. 5 of the Limitations Act 2002. As a result, the plaintiffs are now statute barred from joining them as defendants.

[23] Watts and Gayton each submit as a separate argument that they will suffer irreparable prejudice because the anti-scalding/mixing valve no longer exists, or cannot be located. Each of them claims that this fact causes prejudice that cannot be compensated by costs because they cannot test that valve or conduct the investigations they consider necessary to make full answer and defence to the claim.

Limitation Period

[24] Mrs. Fontanilla is not the person seeking to make a claim for the terrible incident that occurred on January 31, 2011. The statement of claim was issued on January 25, 2013, more than a year after her death in October 2011. This action has been brought by members of her family who grieve the loss of their mother and grandmother. This is clear from paragraphs 30 and 33 of the statement of claim where the family members claim damages under the Family Law Act as a result of her death.

[25] I also note that the action was commenced 6 days before the second anniversary of the date the incident occurred.

[26] The main question I must address when determining if a limitation period has expired to bar the plaintiffs from joining Watts and Gayton as defendants is whether there is evidence before the court that the plaintiffs or their lawyer exercised reasonable diligence to identify Watts and Gayton as defendants within the applicable limitation period. In order to make this determination, it is necessary to determine when that limitation period began to run.

[27] It is just as important to determine whether the ability to bring an action has expired under s. 4 of the Limitations Act 2002 when adding defendants as it is for bringing a separate action against those parties. In Frohlick v. Pinkerton Canada Ltd., 2008 ONCA 3, the Court of Appeal, speaking in the context of an appeal from an order dismissing a motion for leave to amend an existing statement of claim to add a new claim, stated that “conceptually, this should be treated no differently than the issuance of a new and separate statement of claim that advances a statute barred claim.”

[28] For the purposes of the analysis, s. 5(1) and (2) of the Limitations Act 2002 read as follows:

5. (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).

Presumption

(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).

[29] The plaintiffs rely upon the decision of the Court of Appeal in Galota v. Festival Hall Developments Ltd., 2016 ONCA 585. They take the position that Galota sets out the current law on the discoverability of prospective defendants. They also rely on Galota for the test of what the law expects of plaintiffs to exercise reasonable diligence for the discoverability of claims and the naming of defendants to the action.

[30] In Galota, the Court of Appeal considered the findings of a motions judge on a motion for summary judgment that the plaintiff was not required to conduct pre-action discovery under the circumstances to learn the identity of the landlord and possible defendant in an occupiers liability case. The plaintiff did not learn of that party until it was disclosed at the examination for discovery of the tenant’s representative.

[31] The plaintiff in Galota had been injured while dancing on an elevated dance floor located in premises leased and operated by Republik, the tenant in the building and operator of the dance club. The plaintiff had commenced her action against Republik, believing the claim to be insured.

[32] Ultimately, Republik went out of business and the insurer became insolvent. At Republik’s examination for discovery, the plaintiff learned that the premises were owned at all material times by Festival Hall Developments Ltd. Festival Hall was subsequently added as a defendant.

[33] Festival Hall brought its motion for summary judgment to dismiss the action on the ground that Ms. Galota’s claim was started more than two years after her claim against Festival Hall was discovered, and therefore barred by s. 4 of the Limitations Act 2002. The motions judge found on the evidence that the plaintiff was not required to take steps that were beyond reasonable diligence to determine the identity of the owner of the premises. It was found that the facts giving rise to her claim against Festival Hall were only discoverable when she learned of Festival Hall’s existence some three and a half years later. The motions judge therefore dismissed the motion for summary judgment of Festival Hall on the basis that any exercise of reasonable diligence on the part of the plaintiff to identify Festival Hall would not have been expected under the circumstances.

[34] The Court of Appeal agreed. Galota does not change the law regarding the expectation that a party will exercise reasonable diligence to determine the facts that would support a claim for which a proceeding may be brought to seek a remedy. The court in Galota relied on the decision of Justice Van Rensburg in Fennell v. Deol, 2016 ONCA 249. The court in Fennell recognized that, although due diligence is a factor that the court must consider at the time a claim ought reasonably to have been discovered, lack of due diligence is not in and of itself a reason for dismissing a plaintiff’s claim as statute barred.

[35] Instead, due diligence must be considered a part of the analytical process to determine on an objective basis the day on which a reasonable person with abilities and in circumstances of the person affected by the claim first would have known of the matters referred to in s. 5(1)(a) to bring an action. As Justice Van Rensburg explained in Fennell at paragraph 24:

[24] Due diligence is part of the evaluation of s. 5(1)(b). In deciding when a person in the plaintiff’s circumstances and with his abilities ought reasonably to have discovered the elements of the claim, it is relevant to consider what reasonable steps the plaintiff ought to have taken. Again, whether a party acts with due diligence is a relevant consideration, but it is not a separate basis for determining whether a limitation period has expired.

[36] According to the court in Fennell and later in Galota, reasonable diligence is only one factor to take into consideration on a motion to add parties where a limitation period is an issue. In Galota, the other factors, all of which are fact driven and particular to the circumstances of each case, include the following:

a. That the plaintiffs have sued the parties occupying the premises and their claim was an insured claim,

b. No one has alleged any other party is potentially liable,

c. The potential liability of the proposed defendant is not obvious; and

d. The steps suggested by an expert of the proposed defendants would not have alerted the plaintiffs to a claim against them.

[37] I consider those other factors to favour the proposed defendants Watts and Gayton on the evidence before me on this motion. The plaintiffs have brought their action against the owners of the building and the contractor who installed the boiler replacement system. There is no evidence to indicate that there is no insurance policy responding to those claims.

[38] The identity and role of Watts and Gayton as the manufacturer and supplier of the valve was not obvious to the plaintiffs. However, by naming Thermo Cool as the mechanical contractor who coordinated the boiler replacement at Living Waters in the spring of 2010, the plaintiffs indicated that they were aware that the malfunction of the plumbing in Mrs. Fontanilla’s bathroom and possibly within the building itself. The plaintiffs were therefore on notice that a further inquiry was necessary to determine the actual manufacturer and supplier of any of the inner workings of the boiler replacement systems, or the program to replace faucets within residential units.

[39] There was no expert evidence tendered on the motion before me with respect to prudent steps that a “wise” solicitor ought to have taken. I therefore make no finding of what a prudent solicitor ought to have done to hire an expert to learn the identity and role of each Watts and Gayton within the relevant limitation period.

[40] Although due diligence on the part of a person in the plaintiffs circumstances to determine the elements of a claim is but one factor in the evaluation of when a limitation period begins, it is an important factor. Where from outward appearances a limitation period has expired, or where discoverability under s. 5 (1) of the Act is raised, the court is put on inquiry to determine whether a party has acted with reasonable diligence to learn the identity and role of a prospective defendant to extend the start and end date of a limitation period. However, the court requires evidence of the steps taken to meet the obligation to act with reasonable diligence. The Court of Appeal confirmed the importance of this evidentiary requirement in Pepper v. Zellers Inc. (2006), 2006 CanLII 42355 (ON CA), 83 O.R. (3d) 648 (Ont. C.A.) at paragraph 20 to 22:

[20] An examination of the evidentiary record in this case shows that the appellants' material failed entirely to address whether they ought to have known Ms. Aube's identity and what, if any, steps they took to determine that identity. Indeed, the appellants offer no explanation other than to say that no one gave them the information.

[21] Importantly, there was no affidavit from the appellants' lawyer, only one from the lawyer's law clerk, which provided no particulars of any steps taken to obtain information and did not explain why no steps were taken. For example, there was no reference to any inquiry of Zellers or of Messrs. [Youssuf] or Shenouda about the name of the dispensing pharmacist and no explanation about why the two pharmacy operators were not [page656] sued until long after the expiration of the limitation period. As this court said in Zapfe, supra, at para. 35: "In most cases one would expect to find, as part of a solicitor's affidavit, a list of the attempts made by the solicitor to obtain information to substantiate the assertion that the party was reasonably diligent."

[22] The motion judge's reasons reflect the absence of this critical evidence:

As it seems to me, the grave weakness in all this affidavit evidence proffered by the plaintiffs is that there is no evidence at all from the solicitor or solicitors who handled Ms. Pepper's case from the outset about the inquiries and investigation, if any, that were made to ascertain all potentially liable parties for Ms. Pepper's illness.

[41] Master Dash put it this way in Wong v. Adler, 2004 CanLII 8228 (ON SC), [2004] O.J. No. 1575, affirmed at [2005] O.J. No. 1399 (Div. Ct.):

[45] What is the approach a judge or master should take on a motion to add a defendant where the plaintiff wishes to plead that the limitation period has not yet expired because she did not know of and could not with due diligence have discovered the existence of that defendant? In my view, as is clearly implied in Zapfe, the motions court must examine the evidentiary record before it to determine if there is an issue of fact or of credibility on the discoverability allegation, which is a constituent element of the claim. If the court determines that there is such issue, the defendant should be added with leave to plead a limitations defence. If there is no such issue, as for example where the evidence before the motions court clearly indicates that the name of the tortfeasor and the essential facts that make up the cause of action against such tortfeasor, were actually known to the plaintiff [page477] or her solicitor more than two years before the motion to amend, the motion should be refused. If the issue is due diligence rather than actual knowledge, this is much more likely to involve issues of credibility requiring a trial or summary judgment motion, provided of course that the plaintiff gives a reasonable explanation on proper evidence as to why such information was not obtainable with due diligence. That is not to say that such motion could never be denied if the evidence is clear and uncontradicted that the plaintiff could have obtained the requisite information with due diligence such that there is no issue of fact or credibility.

[42] The action was commenced when the statement of claim was issued on January 25, 2013. There is no evidence before the court about when the statement of claim was actually served on Living Waters and Thermo Cool. However, it was within the plaintiff’s power and control to have the statement of claim served on those defendants forthwith after the action was commenced. It was further within the power and control of the plaintiffs to require each of those defendants to deliver a statement of defence within a reasonable time, and certainly before June of 2013.

[43] Tammy Ring has deposed that the plaintiffs did not learn of the identity or role of Watts and Gayton until Thermo Cool issued its third party claim naming them and others as third parties. This is not an accurate statement. The statement of defence of Thermo Cool dated June 11, 2014 contain the following allegations:

a. In paragraph 4, how the anti-scalding/ mixing valve was replaced at the same time as part of the boiler replacement contract with Living Waters,

b. In paragraph 5, Thermo Cool pleads that the valve was manufactured by Watts and supplied to Thermo Cool by Gayton; and

c. In paragraph 8, that Gayton reviewed the system and recommended, as well as provided, the valve at issue.

[44] The statement of defence goes on to make allegations of negligence against Gayton and Watts and others later named as third parties.

[45] When the statement of claim was issued, the precise reason for the failure of the spout to Mrs. Fontanilla’s bathtub that controlled the hot water was not known. However, the moving parties have provided no evidence of the steps taken before or since that time to recover the plumbing pieces or any records of those parts that would have informed them that it was an anti-scalding/mixing valve in the faucet that failed. This in turn could have informed them that Watts manufactured that valve, and that Gayton supplied it for installation. The absence of this evidence creates a factual vacuum for the assessment of what reasonable diligence the plaintiffs exercised to discover the identities and roles of possible defendants.

[46] Mr. Mueller suggested to Ms. Ring during the call on April 1, 2014 that there were other parties who may be potentially liable. However, Ms. Ring communicated with Mr. Mueller by telephone to learn of those parties, but not their names, after the second anniversary of the date the incident had occurred. Had counsel for the plaintiffs served the statement of claim and required the delivery of statement of defence from Thermo Cool before June 2013, the identity of Watts and Gayton and their function would have been disclosed in the statement of defence then as it was later. The telephone conversation with Mr. Mueller would therefore be redundant.

[47] In my view, the plaintiffs ought to have served the statement of claim on Living Waters and Thermo Cool forthwith after the action was commenced in January 2013. It was entirely within the power and control of the plaintiffs to call for the statements of defence from each of them before June 2013. If they had done so, the plaintiff’s would have received the statement of defence from Thermo Cool with the allegations of material fact disclosing the identities and roles of Watts and Gayton. That would have been the time when the respective identities and roles of Watts and Gayton would have been discoverable to start the limitation period running.

[48] The request by a defendant or an insurer to waive delivery of a statement of defence is not unusual, nor is the agreement of a plaintiff to that request. Indeed, waiver of the requirement of a defence for a specified time or until required is a professional courtesy, and permits the defendant time to investigate the claim. However, the circumstances of a waiver, when timing or its terms are put in issue, is case specific and evidence of whatever agreement was agreed upon between the parties is necessary to give it effect. It is unfortunate in this case that there is no evidence before the court to explain the passage of time, or why a waiver or any extension of time was granted by the plaintiffs for delivery of a statement of defence from Thermo Cool.

[49] There is absolutely no evidence before me to explain the delay, or to provide any reason why the plaintiff or their lawyers did not insist upon the timely delivery of each statement of defence before June 2013. If I am correct in this analysis, that limitation period would have expired as early as February 25, 2015. Therefore, the notice of motion of the plaintiffs to add Watts and Gayton as defendants dated June 2, 2015 and initially returnable on July 7, 2015 was out of time.

Prejudice

[50] The responding parties also oppose the motion to add them as defendants on the basis of non-compensable prejudice. Rule 5.04(2) states that the court may add defendants where it will not cause prejudice that cannot be compensated by way of costs or an adjournment.

[51] In Frohlick, the Court of Appeal endorsed the finding of the motion judge that the burden of showing prejudice to oppose the requested amendment rests with the responding party and that the same could be said of a motion under Rule 5.04(2).

[52] The defendants state that they will suffer prejudice because a limitation period has expired. At paragraph 28 of Frohlick, Justice Rouleau stated that, in summary, the loss of a limitation defence gives rise of a presumption of prejudice. The responding parties also state that they suffer a prejudice that cannot be compensated by way of costs or an adjournment because Ms. Ring conceded on her cross examination that the spout and other apparatus from Mrs. Fontanilla’s bathtub at the time of the injury was not preserved and no longer exists. That means the apparatus is no longer available for Watts, Gayton or any of the other parties to the action or to the third party claim to inspect, have tested or available to conduct their investigations.

[53] The plaintiffs argue that they did not have access to Mrs. Fontanilla’s room to obtain the plumbing fixtures, internal pieces or other bathtub hardware after January 31, 2011. However, the material filed by the plaintiffs on the motion did not provide any evidence of:

a. Specific steps taken by Mrs. Fontanilla, her family or their counsel to make inquiries about, to give notice of or to otherwise preserve the plumbing parts;

b. Any fact that the plaintiffs or their counsel did not have access to Mrs. Fontanilla’s unit; or

c. The legal practise or customary steps that counsel for a plaintiff would take in similar situations and circumstances to preserve evidence.

[54] I therefore find as a fact that Watts and Gayton will suffer prejudice that cannot be compensated by way of costs or an adjournment if they are added as defendants to the action. Even though they are already third parties, Watts and Gayton are currently protected by the intervening layer of defendants that serve as the first line of defence. The plaintiffs must establish liability against those defendants in order for the defendants to have a claim against the third parties. In the event that the plaintiffs bring a motion for summary judgment, the motion could involve Watts and Gayton as responding parties if they were defendants, something they are not currently exposed to as third parties.

[55] The plaintiffs’ motion is therefore dismissed.

Costs

[56] If any party seeks costs on this motion, they may file written submissions consisting of no more than three pages, not including a bill of costs, offer to settle or other attachment, by December 16, 2016. The other parties shall then have until December 23, 2016 to file responding materials limited to the same extent. No reply submissions are permitted without leave. All written materials may be sent by fax to my judicial assistant, Ms. Priscilla Gutierrez, at 905-456-4834 in Brampton.

Emery J.

Date: December 8, 2016

CITATION: Fontanilla v. Thermo Cool Mechanical, 2016 ONSC 7023

COURT FILE NO.: CV-13-346-A1

DATE: 20161208

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: The Estate of Felisa Santillan Fontanilla et al, Plaintiffs

AND: Thermo Cool Mechanical et al, Defendants

AND: L. J. Redpath & Associates et al, Third Parties

BEFORE: EMERY J.

COUNSEL: David Shellnutt Counsel, for the Plaintiffs

Lindsay Lorimer & Samantha Gordon, Counsel for the proposed Defendant, Watts Water Technologies (Canada) Inc.

Heather Douglas for the proposed Defendant, Gayton Systems Development Inc. and

Kaleigh Nusbaum for the Defendant, 1343140 Ontario Inc. O/A Thermo Cool Mechanical

ENDORSEMENT

Emery J.

DATE: December 8, 2016