ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
UNICORR LIMITED, AS TRUSTEE FOR NORMAN JAMES GOTTLIEB and CONTAINER CORPORATION OF CANADA
Plaintiff
– and –
MINUK CONSTRUCTION & ENGINEERING LIMITED O/A MINUK CONTRACTING COMPANY, BEVMIN CONSTRUCTION LIMITED, BEVMIN CONSTRUCTION LIMITED O/A MINUK CONTRACTING COMPANY, FAMIN CONSTRUCTION LIMITED, FAMIN CONSTRUCTION LIMITED O/A MINUK CONTRACTING COMPANY, MINUK CONSTRUCTION & ENGINEERING LIMITED, MINUK CONTRACTING COMPANY LTD. and SANFORD EARL MINUK a.k.a. SANDY MINUK
Defendants
Alan B. Dryer and Orly Kahane-Rapport for the Plaintiff
Michael James Reid for the Defendants
AND BETWEEN:
UNICORR LIMITED, AS TRUSTEE FOR NORMAN JAMES GOTTLIEB and CONTAINER CORPORATION OF CANADA
Plaintiff
– and –
MALONE GIVEN PARSONS LTD.
Defendant
Alan B. Dryer and Orly Kahane-Rapport for the Plaintiff
David Winer for the Defendant
HEARD: October 17, 2016
PERELL, J.
REASONS FOR DECISION
A. INTRODUCTION
Introduction
1The Plaintiff, Unicorr Limited, as Trustee for Norman James Gottlieb and Container Corporation of Canada, which I shall refer to hereafter collectively as Mr. Gottlieb, sues Malone Given Parsons Ltd. (“MGP”), a land planning consulting firm. In a separate action, Mr. Gottlieb sues Minuk Construction & Engineering Limited, a general manager, project manager, and construction supervision firm.
2In both actions, Mr. Gottlieb alleges that the Defendants caused him to unnecessarily pay $266,157.22 in development charges to the Town of Richmond Hill and he claims damages.
3MGP and Minuk Construction each bring summary judgment motions to have Mr. Gottlieb’s claim dismissed as statute-barred under the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B.
4The parties agree that the limitation period issue is amenable to being resolved by a summary judgment. Mr. Gottlieb submits that the Defendants’ limitation period defences should be summarily dismissed and that the action should proceed to determine whether or not they are liable.
5For the reasons that follow, I grant MGP’s and Minuk Construction’s summary judgments. I conclude that Mr. Gottlieb’s claims are statute-barred and that there is no genuine issue requiring a trial.
B. EVIDENTIARY BACKGROUND
Evidentiary Background
6MGP supported its summary judgment motion with affidavits from James Kirk sworn on May 11, 2016 and August 3, 2016.
7Minuk Construction supported its summary judgment motion with an affidavit from Sanford Minuk sworn on May 13, 2016.
8Mr. Gottlieb defended the motions with his affidavit affirmed on July 4, 2016. Mr. Gottlieb was cross-examined.
C. FACTUAL BACKGROUND
Factual Background
9Mr. Gottlieb owns and controls the corporate plaintiffs, Unicorr Limited and Container Corporation of Canada. As noted above, I shall generally refer to them collectively as Mr. Gottlieb.
10Mr. Gottlieb, through Unicorr Limited, which acts as his trustee, is the owner of a property municipally known as 68 Leek Crescent, Richmond Hill, Ontario. There was a building on the property and, in 2004, Mr. Gottlieb decided to assemble adjoining lands and build a new 46,000 ft2commercial office and manufacturing and storage facility for Container Corporation of Canada. Mr. Gottlieb retained and instructed counsel throughout the development of the project.
11In 2004, Mr. Gottlieb retained Minuk Construction to build the facility and serve as general contractor and project manager.
12In October 2004, Mr. Gottlieb had conversations with Town officials and he began the application process, but progress was delayed when Orlando Corporation, a developer, purchased a neighboring property. This circumstance led to negotiations between the Town, Mr. Gottlieb, and Orlando for a three-way agreement to develop storm water management ponds to service the area.
13In 2005, Mr. Gottlieb hired MGP to provide land use planning services. James Kirk, a principal of MGP, now retired, a member of the Canadian Institute of Planners and the Ontario Professional Planners Institute, acted as MGP’s principal for the project.
14In the fall of 2007, Minuk Construction introduced Mr. Gottlieb to Eric Wormsbecker, Mr. Wormsbecker was the chief architect and a partner with Intra Architect Inc., which was hired by Minuk Construction to design and do the architectural work for the project.
15In April 2008, the assembly of lands for the project was completed, and it was around this time that, unknown to Mr. Gottlieb, Peter Broadbent, Minuk Construction’s project manager, ended his employment with Minuk Construction. His replacement, Lorenzo Papi, was not appointed until January 2010.
16Meanwhile, by June 12, 2008, MGP, along with Intra Architect Inc. and Minuk Construction, submitted pre-submission materials to the Town regarding site plan approval.
17On January 20, 2009, MGP applied for site plan approval.
18While site plan approval was pending, on June 23, 2009, the Town passed By-Law 59-09, under the Development Charges Act, 1997, S.O. 1997, c. 27. Under By-Law 59-09, Mr. Gottlieb’s project was now subject to development charges.
19Although all required notices, including notices in local newspapers, were provided by the Town and notwithstanding that the background studies were made available to the public and notwithstanding that there were public meetings at Town Council in April and June 2009, and notwithstanding that he is a resident of the Town, Mr. Gottlieb was not aware of the passage of the development charges By-Law. He says that he did not learn about it for over two years.
20The Defendants did not make Mr. Gottlieb aware of the passage of the By-Law. Mr. Kirk testified that his planning work had more or less been completed, and he personally was not aware of By-Law 59-09 having been passed. Further, he said that in any event MGP’s mandate never included applying for building permits.
21Whether the Defendants ought to have alerted Mr. Gottlieb to the passage of the By-Law is an issue that I need not decide for the purposes of these motions. I will assume for the purposes of this motion that the Defendants ought to have alerted Mr. Gottlieb about By-Law 59-09.
22Mr. Gottlieb submits that had a building permit been applied for before June 23, 2009, his project would not have been subject to any development charge and he alleges that the Defendants ought to have known that the Town intended to pass the By-Law and ought to have notified him. He alleges that had he been aware of the Town’s intention to pass the By-Law, he would have taken steps to avoid the fee, either by submitting an application for a building permit before the passage of the By-Law or by appealing the By-Law after it was passed.
23In any event, in November 2009, Mr. Gottlieb, ignorant of the passage of By-Law 59-09 and its significance, received the Town’s comments about his draft site plan application. Although the Town’s comments noted that the project would be subject to development charges, Mr. Gottlieb took no notice of the comment, and he remained ignorant of the By-Law and to his exposure to development charges.
24In November 2010, unknown to Mr. Gottlieb, Mr. Wormsbecker suffered a serious and disabling stroke. Mr. Gottlieb also did not know that Intra Architects Inc. did not appoint a replacement architect or that Mr. Wormsbecker’s work was being carried on by others at Intra Architects.
25In December 2010, the Town approved the application for site plan approval, and Mr. Gottlieb entered into a standard agreement with the Town on December 23, 2010. The agreement amended a Site Plan Agreement dated September 5, 2000 and permitted construction of Mr. Gottlieb’s proposed building.
26On July 21, 2011, Mr. Gottlieb applied for a building permit. Upon filing the application, he was surprised to learn that for the permit to be issued, he would be required to pay development charges of $266,157.22. He had not budgeted for this payment, and it came as a complete surprise to him. Mr. Gottlieb immediately made inquiries with the Town as to why he had to pay the development charges. He thought his property was exempt because the property had paid for municipal services and because of conversations he had had with the Town in 2008. Mr. Gottlieb spoke to the Mayor, Dave Barrow, to seek an exemption to the development charges.
27On July 25, 2011, Mayor Barrow sent an email to Anna Romano, who was a Town employee. The Mayor advised her that Mr. Gottlieb was coming to meet with him on August 2, 2011. The Mayor asked her to provide him with background information.
28Earlier that day, Mr. Gottlieb also sent an email message to Ms. Romano. The email message stated:
Dear Anna,
Would you be kind enough to have a moment tomorrow afternoon to meet with me briefly? 1 believe there might be some confusion regarding our property of which most was acquired approximately 9 years ago when we bought 68 Leek Crescent and we built the current building that we are occupying in 2003, …
Keeping in mind that the site servicing was done many years ago for the previous owner to build three separate locations on the same property, it would stand to reason that there is no further site servicing outstanding issues on the property.
Therefore, with the above in mind, we hope that we have helped to shed a little more light on the subject ….
29To follow up on Mr. Gottlieb’s and the Mayor’s requests for information, Ms. Romano sent an email to Eileen Byrne, the Town’s Manager of Development Charges. Ms. Byrne replied on July 26, 2011 and sent an email message to Mayor Barrow, which stated:
Mayor Barrow,
Mr. Gottlieb is proposing to construct a 5,826.56 square meter industrial building.
While the Town-wide development charge by-law does have an exemption for enlargement of an existing industrial building, which is being built, the building here does not fall within that exemption. It is a completely new building.
Mr. Gottlieb has stated that services for this lot were always available. However, those services are the hard type that are covered by the Town’s area specific by-laws. There is no specific by-law applicable to these lands. There is no duplication.
What is applicable is the town-wide development charge by-law. …
Mr. Gottlieb has stated that he was told in 2004 that “no further servicing charges would apply.” I cannot comment on whether that is accurate.
However, I can advise that the Town-wide development charge by-law was revised in 2009 (five years after the alleged statement). The blanket exemption for properties included in existing subdivisions where the developers paid levies was removed. Any statutory entitlement to such an exemption was removed from the statute with the enactment of the Development Charge Act 1997….
…I have consulted with the Legal Division on this issue and was reminded that the Municipal Act prohibits the waiving of a fee or charge to a commercial enterprise.
Accordingly, development charges are payable in the amount of $266,157.22 … Had this development taken place and/or the building permit been issued prior to June 2009, the development charge would not have been payable; that did not occur.
30For reasons that I shall mention during the discussion portion of these Reasons for Decision, it shall be important to note that Ms. Byrne’s email observed that had Mr. Gottlieb received a building permit before June 23, 2009, there would have been no development charges.
31On August 2, 2011, Mr. Gottlieb received a copy of Ms. Byrne’s email to the Mayor. The email was forwarded by him by the Mayor, who invited Mr. Gottlieb to a meeting.
32On September 8, 2011, Mr. Gottlieb forward his exchange of emails with the Town to Mr. Kirk.
33On September 9, 2011, Mr. Gottlieb, along with Mr. Kirk, met with the Mayor and Town staff. At the meeting, Mr. Gottlieb again requested an exemption from By-Law 59-09, but the Town officials, however, reiterated that it could not exempt Mr. Gottlieb from payment of the development charge.
34After the meeting, on September 11, 2011, Mr. Gottlieb sent the following email to Mr. Kirk:
I want to thank you very much for attending the meeting on Friday specially because I know you had to juggle a lot of previous appointments in order to appear. While you may have zeroed in on a very salient point regarding timing, I think that they are adamant about receiving their enormous amount of $265,000! I guess in hindsight, there was nothing we could do, or were we able to have at least submitted our building permit application so as to have been grandfathered by this very unfortunate case of timing of the new legislation?
35On September 12, 2011, Mr. Kirk responded with the following email:
I’m happy to attend these meetings; always a pleasure to meet with the Mayor and CAO. Too bad the Town has no appetite to find a solution for this.
The Development Charge Bylaw, however, is quite clear: the charge is calculated on and payable at the date of issuance of a building permit. So even with perfect knowledge and if we filed a permit application before the June 23rd adoption date of the DC Bylaw, the Town would have:
a. Refused to accept the application because the site plan application had not been approved and [an] agreement executed;
b. Subsequently would have calculated the charge as it has done; i.e., upon issuance of building permit.
The Town would not have grandfathered us.
The only option would have been to appeal the DC Bylaw when it was enacted in June 2009; that perhaps would have given you some leverage to negotiate a charge. And of course an appeal would be possible only if you were notified of the Bylaw enactment. I expect ‘notification’ was at best a notice in the local newspaper, something which is arguably acceptable to residents in a town but not particularly useful for the business world. ….
36I pause here to note that, as discussed further below, Mr. Gottlieb’s case for delaying the running of the limitation periods for his claims against the Defendants is built upon the proposition that Mr. Kirk misled him in saying that the Town would have refused to accept the application because the site plan application had not been approved and a site plan agreement executed.
37No case law was cited to me by other side that supports or refutes the correctness of what Mr. Kirk told Mr. Gottlieb about the law with respect to the imposition of development charges. I cannot make a finding on this point. All I can say is that under s. 8(2) of the Building Code Act, 1992, S.O. 1992, c. 23, there is an argument that the chief building official is not obliged to issue a permit if the the proposed building will contravene applicable law. Obtaining site plan approval would arguably count as “applicable law” and, therefore, what Mr. Kirk told Mr. Gottlieb may have been correct. Nevertheless, as discussed further below, for the purposes of this summary judgment motion, I will assume that Mr. Kirk misinformed Mr. Gottlieb about the law associated with the interconnection between building permit applications and development charges.
38Returning to the narrative, as a result of the various communications and meetings, including his exchange of correspondence with Mr. Kirk, Mr. Gottlieb says that he concluded that the requirement to pay development charges was unavoidable and in particular that the charges could not have been avoided even if a building permit application been made before June 23, 2009. He deposed that he had no independent understanding of any of the legal technicalities that Mr. Kirk was addressing, and that he took Mr. Kirk at his word. He believed that nothing could have been done by the Defendants to avoid payment of the development charges.
39There were no further discussions between Mr. Kirk and Mr. Gottlieb about the matter of the development charges.
40On September 13, 2011, the Town issued the Building Permit.
41In 2014, Minuk Construction hired Tom Gluck Architects to replace Intra Architects Inc. to complete the project. In April, 2014, Mr. Gluck told Mr. Gottlieb that Intra Architects had been professionally negligent and that, among other things, the payment of the development charges could have been avoided had Intra Architects applied for a building permit for the project.
42Upon receiving this information from Mr. Gluck, Mr. Gottlieb decided to investigate the matter further, and he sent emails to Daniela Fiore, Executive Assistant to the Mayor, and to Ms. Romano. As a result of these renewed inquiries, Mr. Gottlieb believed that he had a claim against Intra Architects Inc.
43Mr. Gottlieb, who said that despite his many years in business he had no experience with litigation, deposed that before his conversation with Mr. Gluck, he had no information or awareness of any potential legal claim against any party.
44In May 2014, Mr. Gottlieb retained Michael Title of Steinberg Morton Hope & Israel LLP to sue Intra Architect Inc. for negligence.
45In his Statement of Claim, as an example of negligence, Mr. Gottlieb alleged that Intra Architect did not promptly apply for the building permit for the project. Paragraph 13 of the Statement of Claim states:
- The plaintiffs concede that this fee (of $266,157.22) is not recoverable from the defendant solely as a result of the Limitations Act, 2002. However it is demonstrative of a persistent pattern of actionable negligence, as hereinafter set out.
46Although Mr. Gottlieb reviewed the Statement of Claim before it was issued and he also reviewed a subsequent amended claim, he says that he had no understanding of the operation of limitation statutes and that Mr. Title’s pleading about the Limitations Act, 2002 was made without Mr. Gottlieb’s informed consent and without authority to do so.
47After commencing his action against Intra Architects Inc., Mr. Gottlieb learned that it had gone bankrupt. Intra Architects did not have meaningful insurance coverage and thus there was no purpose to be served by pursuing a claim against it.
48In mid-January 2015, Mr. Gottlieb had a conversation with Joan Anderton, the former Chief Administrative Officer with the Town. She told him that his professional consultants had let him down. She said that Mr. Kirk and MGP, as professional urban planners, should have been aware starting in around January of 2009 that the Town was discussing bringing in a new Development Charges By-Law and that had a building permit application been made before June 2009, the development charges could have been avoided.
49On February 4, 2015, Mr. Gottlieb commenced his action against Minuk Construction.
50On April 13, 2015, Mr. Gottlieb commenced his action against MGP.
D. DISCUSSION AND ANALYSIS
Discussion and Analysis
51As a preliminary matter before explaining why, in my opinion, Mr. Gottlieb’s claims are statute-barred, I note that I do not rely on the acknowledgement in paragraph 13 of Mr. Gottlieb’s Statement of Claim against Intra Architects that the $266,157.22 was not recoverable because the claim would have been statute-barred under the Limitations Act, 2002. Mr. Gottlieb has disavowed this acknowledgement, and I shall simply ignore it.
52Turning to the analysis, it is very important to keep three factual points in mind.
53The first point is that the gravamen of the complaint against Minuk Construction and MGP is that they respectively did not apply for a building permit in a timely way or they did not advise Mr. Gottlieb to apply for a building permit in a timely way so as to avoid the application of By-Law 59-09. This complaint of not applying for a building permit before June 23, 2009 is the act or omission that constitutes Minuk Construction’s and MGP’s respective wrongdoing.
54A significant aspect of the first factual point is that the alleged misconduct obviously occurred before June 23, 2009.
55As foreshadowed above, the second important factual point to note is that in August 2011, Ms. Byrne informed Mr. Gottlieb that had he received a building permit before June 23, 2009, there would have been no development charges. This matter of the timeliness of obtaining a building permit and its effect on liability for development charges was discussed at the September 9, 2011 meeting between Mr. Gottlieb and the Mayor and Town officials.
56With respect to the second point, for the purposes of the immediate case, I will assume that as a legal proposition - and as noted above, it is a debatable legal proposition - that a landowner can be issued a building permit even though the landowner does not have a required site plan approval, and I will assume that the Defendants’ failure to advise Mr. Gottlieb to apply for a permit was actionable with the consequent damages of having to pay $266,157.22 in development charges to the Town of Richmond Hill.
57A significant aspect of the second factual point is that as of September 2011, Mr. Gottlieb knew the gravamen of the problem was that he had not applied for a building permit in a timely way so as to avoid the application of By-Law 59-09 when it came into force in June 2009.
58The third factual point to keep in mind, is that for purposes of these summary judgment motions, what Mr. Kirk told Mr. Gottlieb in September 2011 is relevant to the matter of discoverability but what Mr. Kirk told Mr. Gottlieb is not the gravamen of Mr. Gottlieb’s complaint which is that a timely building permit application was not made by the Defendants before June 2009.
59A significant aspect of the third factual point was that Mr. Kirk was describing the legal consequences of not applying for a building permit before June 23, 2009. He was not describing the material facts but rather one legal consequence from those facts.
60With respect to the third point, the fact that in September 2011, Mr. Kirk told Mr. Gottlieb that the Town would have refused to accept the building permit application because the site plan had not been approved (which may have been correct advice, but which I will assume was incorrect advice), goes only to the discoverability of the alleged wrongdoing. In still other words, whatever Mr. Kirk may have said in 2011 does not change the fact that before June of 2009, no one had thought to apply for a building permit and that is the predicate wrongdoing in the immediate case. The Defendants are not being sued about what Mr. Kirk correctly or incorrectly told Mr. Gottlieb in September 2011.
61Keeping those three factual points in mind, for present purposes, the relevant provisions of the Limitations Act, 2002 are sections 1, 4, and 5, which state:
Definitions
- In this Act,
“claim” means a claim to remedy an injury, loss or damage that occurred as a result of an act or omission; ….
BASIC LIMITATION PERIOD
Basic limitation period
- 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.
Discovery
- (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
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.
62When a limitation period defence is raised, the onus is on the plaintiff to show that its claim is not statute-barred and that it behaved as a reasonable person in the same or similar circumstances using reasonable diligence in discovering the facts relating to the wrongdoing: Soper v. Southcott (1998), 1998 CanLII 5359 (ON CA), 39 O.R. (3d) 737 (C.A.) at para. 13; Bolton Oak Inc. v. McColl-Frontenac Inc., 2011 ONSC 6657 at paras. 12-14; Durham (Regional Municipality) v. Oshawa (City), 2012 ONSC 5803 at paras. 35-41. That the onus is on the plaintiff accords with the presumption in s. 5(2) of the Act that a person with a claim shall be presumed to have discovered the claim on the day the act or omission on which the claim is based took place, unless the contrary is proved.
63Mr. Gottlieb suffered his loss in the summer of 2011 when he paid the development charges for his building project. The act or omission that caused that loss was the failure of the Defendants to have applied for or their failure to advise Mr. Gottlieb to apply for a building permit before June 23, 2009. Pursuant to s. 5(2) of the Limitations Act, 2002, Mr. Gottlieb is presumed to have discovered his claim on the day the act or omission on which the claim is based took place, unless the contrary is proved. Pursuant to s. 4, unless the 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. Applying sections 4 and 5(2) of the Act to the facts of the immediate case, unless the contrary is proven, Mr. Gottlieb’s claim was discovered in June 2009 and given that he commenced his actions in 2015, approximately six years’ later, his actions are presumptively statute-barred.
64Mr. Gottlieb, however, relies on the discoverability principle to argue that the limitation period did not begin to run until, at the earliest, when he had his conversation with Mr. Gluck in April 2014 or, at its latest in January 2015, when he had his conversation with Ms. Anderton. Either date of discovery would make his 2015 Statements of Claim timely.
65The discoverability principle, which has been largely codified by s. 5 of the Limitations Act, 2002, governs the commencement of a limitation period and stipulates that a limitation period begins to run only after the plaintiff has the knowledge, or the means of acquiring the knowledge, of the existence of the facts that would support a claim for relief: Kamloops v. Nielson (1984), 1984 CanLII 21 (SCC), 10 DLR (4th) 641 (S.C.C.); Central Trust Co. v. Rafuse (1986), 1986 CanLII 29 (SCC), 31 DLR (4th) 481 (S.C.C.); Peixeiro v. Haberman, 1997 CanLII 325 (SCC), [1997] 3 S.C.R. 549. Thus, a limitation period commences when the plaintiff discovers the underlying material facts or, alternatively, when the plaintiff ought to have discovered those facts by the exercise of reasonable diligence.
66For the immediate case, the point to emphasize is that it is the discovery of the facts – not the discovery of the legal consequences of those facts – that is critical.
67The circumstance that a potential claimant may not appreciate the legal significance of the facts does not postpone the commencement of the limitation period if he or she knows or ought to know the existence of the material facts, which is to say the constitute elements of his or her cause of action. Error or ignorance of the law or legal consequences of the facts does not postpone the running of the limitation period: Nicholas v. McCarthy Tétrault, 2008 CanLII 54974 (ON SC), [2008] O.J. No. 4258 (S.C.J.), aff’d 2009 ONCA 692, [2009] O.J. No. 4061 (C.A.), leave to appeal refused [2009] S.C.C.A. No. 476; Coutanche v. Napoleon Delicatessen (2004), 2004 CanLII 10091 (ON CA), 72 O.R. (3d) 122 (C.A.); Calgar v. Moore, [2005] O.J. No. 4606 (S.C.J.).
68The factual gravamen of Mr. Gottlieb’s causes of actions is that his land planner and his building contractor did not apply for a building permit before June 23, 2009 and as a result he was unnecessarily charged development charges. Mr. Gottlieb knew the factual elements of his causes of action in 2011. Taking him at his word that he did not appreciate the significance of the material facts until his conversations with Mr. Gluck and Ms. Anderton is an ignorance of law that does not postpone the running of the limitation period.
69Section 1 of the Limitations Act, 2002 defines "claim" to mean: "a claim to remedy an injury, loss or damage that occurred as a result of an act or omission." A claim is a cause of action, which is the fact or facts which give a person a right to judicial redress or relief against another. See Lawless v. Anderson, 2011 ONCA 102 at para. 22; Aguonie v. Galion Solid Waste Material Inc. (1998), 1998 CanLII 954 (ON CA), 38 O.R. (3d) 161 (C.A.) at p. 170. In Lawless v. Anderson, supra, the Court of Appeal stated at paras. 22-23:
The principle of discoverability provides that "a cause of action arises for the purposes of a limitation period when the material facts on which it is based have been discovered, or ought to have been discovered, by the plaintiff by the exercise of reasonable diligence. This principle conforms with the generally accepted definition of the term 'cause of action' -- the fact or facts which give a person a right to judicial redress or relief against another"....
Determining whether a person has discovered a claim is a fact-based analysis. The question to be posed is whether the prospective plaintiff knows enough facts on which to base an allegation of negligence against the defendant. If the plaintiff does, then the claim has been "discovered", and the limitation period begins to run: see Soper v. Southcott (1998), 1998 CanLII 5359 (ON CA), 39 O.R. (3d) 737 (C.A.) and McSween v. Louis (2000), 2000 CanLII 5744 (ON CA), 132 O.A.C. 304 (C.A.).
70For the limitation period to begin to run, it is enough for the plaintiff to have prima facie grounds to infer that the defendant caused him or her harm, and certainty of a defendant's responsibility for the act or omission that caused or contributed to the loss is not a requirement: Kowal v. Shyiak, 2012 ONCA 512 at para. 18; Duchesne v. St-Denis, 2012 ONCA 699 at paras. 24-27; Barry v. Pye, 2014 ONSC 1937 at para. 14.
71In Beaton v. Scotia iTrade, 2012 ONSC 7063, affd. 2013 ONCA 4095, Justice Belobaba stated at para. 13:
- The claimant only has to know enough material facts on which to base a legal allegation. Once the plaintiff knows that some damage has occurred and has identified the alleged wrongdoer, "the cause of action has accrued". Neither the extent nor the type of damage need be known. The claimant also need not know the details of the wrongdoer's conduct or how the wrongdoer caused the loss. The question of "how it happened" will be revealed through the legal proceeding.
72The question in the immediate case is whether Mr. Gottlieb knew enough facts to base a cause of action against the defendants. If so, then the claim was discovered and the limitation period begins to run: Lawless v. Anderson, supra at para. 23; Soper v. Southcott, supra; McSween v. Louis, 2000 CanLII 5744 (ON CA), [2000] O.J. No. 2076 (C.A.); Gaudet v. Levy (1984), 1984 CanLII 2047 (ON SC), 47 O.R. (2d) 577 (H.C.J.) at p. 582.
73In my opinion, Mr. Gottlieb knew all the material facts that he needed to know to base an allegation against the Defendants in the fall of 2011.
74With respect to the basic limitation period of two years under the Limitations Act, 2002, a claim is “discovered” on the earlier of the date the claimant knew — a subjective criterion — or ought to have known — an objective criterion — about the claim: Ferrara v. Lorenzetti, Wolfe Barristers and Solicitors, 2012 ONCA 851 at paras. 33 and 70.
75The discoverability of a claim for relief involves the identification of the wrongdoer and also the discovery of his or her acts or omissions that constitute liability: Aguonie v. Galion Solid Waste Material Inc., supra; Ladd v. Brantford General Hospital (2007), 2007 CanLII 45921 (ON SC), 88 O.R. (3d) 124 (S.C.J.). It is not enough that the plaintiff has suffered a loss and has knowledge that someone might be responsible; the identity and culpable acts of the wrongdoer must be known or knowable with reasonable diligence: Mark v. Guelph (City) (2011), 2010 ONSC 6034, 104 O.R. (3d) 471 (S.C.J.); Zurba v. Lakeridge Health Corp. (2010), 2010 ONSC 318, 99 O.R. (3d) 596 (S.C.J.); Greenway v. Ontario (Minister of Transportation) (1999), 1999 CanLII 14797 (ON SC), 44 O.R. (3d) 296 (Gen. Div.).
76In 2011, Mr. Gottlieb knew that the payment of development charges, which had come as such a surprise, could have been avoided had a timely application for a building permit been made and that the responsibility for applying for a building permit (which is actually a disputed point) was on the Defendants. In 2011, Mr. Gottlieb knew the identities of the wrongdoers and he knew the nature of their culpable acts or omissions, which was the failure to obtain a timely building permit. He knew enough material facts to infer that the Defendants had caused him harm.
77I will grant that, subjectively, Mr. Gottlieb did not know the legal significance of what he knew, but objectively, a reasonable person acting diligently ought to have known that there was a claim against the persons charged with the responsibility of obtaining a timely building permit. A reasonable person, particularly one who has legal advice available to him for his construction project, would not have asked Mr. Kirk for legal advice about the operation of municipal by-laws.
78Relying on s. 5(1)(a)(iv) of the Limitations Act, 2002, Mr. Gottlieb argues that his claim against the Defendants was not discovered until his conversation with Mr. Gluck. Section 5(1)(a)(iv), which is a change from the common law of about discoverability, specified that for the limitation period to begin to run, the circumstances must be such as to make resort to court proceedings “appropriate.” In the immediate case, Mr. Gottlieb submits that legal proceedings were not appropriate until he had his conversation with Mr. Gluck. Mr. Gottlieb, who said he had no independent understanding of any of the legal technicalities, was relying on what Mr. Kirk told him. Because of what he was told, Mr. Gottlieb believed the payment of development charges had been unavoidable and, in particular, he believed that the charges could not have been avoided even if a building permit application been made before June 23, 2009.
79The question in the immediate case thus becomes whether Mr. Gottlieb is right in asserting that in these circumstances a legal proceeding was not appropriate until after his March 2014 conversation with Mr. Gluck.
80Section 5(1)(a)(iv) of the Limitations Act, 2002 can have the effect of delaying the commencement of the running of limitation period. Where a person knows that he or she has suffered harm; i.e., when the plaintiff knows the elements of s. 5(1)(a)(i), (ii) and (iii), the delay lasts until the day when a proceeding would be an “appropriate” means to remedy the harm having regard to the nature of the injury, loss or damage.
81However, to have this delaying effect, there must be a juridical reason for the person to wait; i.e., there must be an explanation rooted in law as to why commencing a proceeding is not yet appropriate. The Court of Appeal’s decision in Markel Insurance Co. of Canada v. ING Insurance Co. of Canada; Federation Insurance Co. of Canada v. Kingsway General Insurance Co., 2012 ONCA 218 demonstrates this point.
82In Markel Insurance Co. of Canada, under the statutory benefits scheme of the Insurance Act, R.S.O. 1990, c. I.8, an insurer was required to pay accident benefits but it claimed an entitlement to be indemnified by another insurer in accordance with loss transfer rules. The issue in Markel Insurance Co. of Canada was when did the two-year limitation period of the Limitations Act, 2002 commence to run for loss transfer claims between insurers. The Court of Appeal concluded that the limitation period began to run from the date that the insurer had a perfected claim for indemnification and not from the date when a demand for reimbursement was refused or from the date when the insurers disagreed about who was responsible to pay the statutory benefits. In the course of his analysis of when the limitation period began to run, Justice Sharpe discussed the operation of s. 5(1)(a)(iv) and stated:
- This brings me to the question of when it would be "appropriate" to bring a proceeding within the meaning of s. 5(1)(a)(iv) of the Limitations Act. Here as well, I fully accept that parties should be discouraged from rushing to litigation or arbitration and encouraged to discuss and negotiate claims. In my view, when s.5(1)(a)(iv) states that a claim is "discovered" only when "having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it", the word "appropriate" must mean legally appropriate. To give "appropriate" an evaluative gloss, allowing a party to delay the commencement of proceedings for some tactical or other reason beyond two years from the date the claim is fully ripened and requiring the court to assess to tone and tenor of communications in search of a clear denial would, in my opinion, inject an unacceptable element of uncertainty into the law of limitation of actions.
83In my opinion, in the immediate case, a legal proceeding was always legally appropriate for Mr. Gottlieb. To accept his reason for delaying to bring his fully ripened claim would inject an unacceptable element of uncertainty into the law of limitations of actions.
84In 407 ETR Concession Co. v. Day, 2016 ONCA 709, rev’g 2014 ONSC 6409, the Court of Appeal considered the operation of s. 5(1)(a)(iv) of the Limitations Act, 2002. The facts were that 407 ETR Concession Co., which pursuant to special legislation was the operator of a public toll highway, sued Mr. Day for approximately $14,000 for unpaid tolls. Mr. Day argued that 407 ETR’s claim was statute-barred. One of the issues for the Court was when had 407 ETR discovered its claim so as to trigger the running of the limitation period. Five dates were suggested, and in the result, the Court of Appeal picked a date that responded to the imperatives of the statutory scheme under which 407 ETR operated.
85Justice Laskin, who wrote the judgment for the Court (Justices MacFarland and Roberts concurring) noted that s. 5(1)(a)(iv) altered the operation of the common law discovery principle and might have the effect of delaying the commencement of the running of a limitation period. The commencement of the running of the limitation period might be delayed because there might be a lag between the time when the plaintiff discovered the material facts of his or her cause ofaction and when “having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it.”
86Justice Laskin observed that when resort to litigation would be appropriate depends on the specific factual or statutory setting of each individual case, including taking into account the particular interests and circumstances of the plaintiff.
87Applying s. 5(1)(a)(iv) to the circumstances of 407 ETR, Justice Laskin concluded that the limitation period for suing Mr. Day, essentially collection litigation, should be postponed until the alternative and highly effective enforcement procedure of denying motorists a renewal of their vehicle’s permit had been tried. Having the limitation period commence after the better collection method had failed was consistent with the statutory scheme, it avoided forcing 407 ETR to commence thousands of Small Claims Court actions to collect unpaid tolls, and it would be unfair to force 407 ETR to sue prematurely when it had a better, more efficient remedy available to it.
88Returning to the case at bar, unlike the situation in 407 ETR Concession Co. v. Day, where there were alternative remedies, the only meaningful remedy to recover the lost $266,157.22 was to sue the Defendants. In the case at bar, there was no alternative to litigation. In my opinion, having regard to the particular facts of this case and the particular circumstances and interests of Mr. Gottlieb and having regard to his injury of having to pay development charges and knowing all the material facts for a claim against the Defendants, in my opinion, commencing a lawsuit was immediately appropriate and the limitation period began to run in 2011 and it tolled before the commencement of the actions now before the court.
89In the immediate case, but for his conversation with Mr. Kirk, of which I will say more below, knowing what he knew at the time, the fall of 2011 was the appropriate time for Mr. Gottlieb to identify the blameworthy and to sue them. It is not as if the material facts were unknown or the full extent of his damages was unknown to him and he had to wait for this information in order to determine whether it was worthwhile to sue.
90If Mr. Gottlieb’s concept of how s. 5(1)(a)(iv) operates is correct, then despite the circumstance that he knew all the material facts to commence an action and despite knowing the identity of the wrongdoers and despite no alternative to litigation as a way to a remedy, the commencement of a limitation period would become an entirely subjective matter depending on when he came to believe that litigation was appropriate. Putting aside the Limitation Acts absolute 15-year limitation period, but for the happenstance of a conversation with Mr. Gluck or Ms. Atherton, the limitation period would never have run even to this day. The case law, however, imposes an objective test to go along with the subjective test of discovery with the onus on Mr. Gottlieb to rebut that presumption of discovery found in the Act. In my opinion, Mr. Gottlieb has failed to do so.
91The case at bar, is not like Ferrara v. Lorenzetti, Wolfe Barristers and Solicitors, supra, where a lawyer erred in his calculation of a statement of adjustments, leaving his client liable for a deficiency to a third party, and during the ensuing litigation between the client and the third party, the lawyer assured his client that there was no error and the client would be successful. It turned out that the lawyer had indeed made an error in the statement of adjustments, and after that had been determined, he was sued for solicitor’s negligence. The Court of Appeal held that the limitation period in the professional negligence claim began to run only after it was determined that the lawyer had indeed made an error.
92In contrast, in the immediate case, whether the Defendants made an error did not depend upon the outcome of other litigation. In the immediate case, Mr. Kirk was never asked whether MGP had erred and in the immediate case Mr. Kirk never denied negligence, because up until Mr. Gluck and Ms. Atherton offered their opinions on the subject, MGP had no clue that it had might have erred and, moreover, its position is that it never had any responsibility to advise Mr. Gottlieb about how to avoid the payment of development charges.
93Mr. Kirk’s comments in the fall of 2011 did not obscure the appropriateness of Mr. Gottlieb resorting to litigation. Mr. Gottlieb never directly accused the Defendants of wrongdoing, and Mr. Kirk was responding to a vague inquiry about his understanding of the legal situation and he was not covering up the Defendants’ culpability. It was clear that the municipality was insisting that the development charges would not be refunded. It’s not as if Mr. Kirk was dissuading Mr. Gottlieb from commencing a lawsuit against those responsible for not avoiding the imposition of the development charges; Mr. Kirk had no idea that his employer was in the gun sight of a potential claim. The case at bar is not like the cases where the defendant could be accused of fraudulent concealment of a claim or of denying an express allegation of culpability. In the immediate case, Mr. Kirk was simply commiserating with Mr. Gottlieb and Mr. Kirk had no clue of the allegation that applying for a building permit would have avoided the imposition of development charges.
94Moreover, and in any event, error or ignorance of the law or legal consequences of the facts does not postpone the running of the limitation period and so Mr. Gottlieb cannot postpone the running of the limitation period because he was mistaken about the legal consequences of the known facts. As noted above, for the limitation period to begin to run, it was enough for Mr. Gottlieb to have prima facie grounds to infer that the Defendants caused him harm, and certainty of the Defendants’ responsibility for the act or omission that caused or contributed to the loss was not a requirement.
95For the above reasons, I conclude that Mr. Gottlieb’s claim is statute-barred.
E. CONCLUSION
Conclusion
96For the above reasons, I grant the summary judgment motions of the Defendants.
97If the parties cannot agree about the matter of costs, they may make submissions in writing beginning with the Defendants’ submissions within 20 days of the release of these Reasons for Decision followed by Mr. Gottlieb’s submissions within a further 20 days.
Perell, J.
Released: November 28, 2016
CITATION: Unicorr Limited v. Minuk Construction & Engineering Limited, 2016 ONSC 7350
COURT FILE NO.: CV-15-521323
COURT FILE NO.: CV-15-525883
DATE: 20161128
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
UNICORR LIMITED, AS TRUSTEE FOR NORMAN JAMES GOTTLIEB and CONTAINER CORPORATION OF CANADA
Plaintiff
– and –
MINUK CONSTRUCTION & ENGINEERING LIMITED O/A MINUK CONTRACTING COMPANY, BEVMIN CONSTRUCTION LIMITED, BEVMIN CONSTRUCTION LIMITED O/A MINUK CONTRACTING COMPANY, FAMIN CONSTRUCTION LIMITED, FAMIN CONSTRUCTION LIMITED O/A MINUK CONTRACTING COMPANY, MINUK CONSTRUCTION & ENGINEERING LIMITED, MINUK CONTRACTING COMPANY LTD. and SANFORD EARL MINUK a.k.a. SANDY MINUK
Defendants
AND BETWEEN:
UNICORR LIMITED, AS TRUSTEE FOR NORMAN JAMES GOTTLIEB and CONTAINER CORPORATION OF CANADA
Plaintiff
– and –
MALONE GIVEN PARSONS LTD.
Defendant
REASONS FOR DECISION
PERELL J.
Released: November 28, 2016
