CITATION: Rundell v. Laslavic et al, 2016 ONSC 8059

NEWMARKET COURT FILE NO.: CV-13-112971-00

DATE: 20161221

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Carl Friedrich Rundell Plaintiff

– and –

John Daniel Laslavic and Productbase Inc. Defendants

David M. Sundin, for the Plaintiff

Gerard V. Thompson for the Defendants

HEARD: December 15, 2016

ENDORSEMENT

sutherland J.:

Overview

[1] The plaintiff has brought a motion requesting an order that the action not be administratively dismissed for delay, a timetable and leave to amend his Statement of Claim by seeking additional or alternative relief and add Worx Inc. as a named defendant given that Productbase Inc. amalgamated with Worx Inc.

[2] The additional and/or alternate relief amendment reads:

(b) in addition to and/or in the alternative an Order and/or Declaration that the Plaintiff is entitled to stock in the Corporate Defendant in the value of Canadian currency equivalent to the sum of Six Hundred and Ten Thousand, Eighty-Eight Dollars and Forty-Seven Cents ($610,088.47) U.S. Dollars.

[3] The amount claimed in the requested amendment is the same amount as being claimed by the plaintiff in his original statement of claim.

[4] The defendants oppose the request for the amendment for additional or alternative relief based on the Limitations Act, 2002[^1] that the requested amendment is statutorily barred but does not oppose the adding of Worx Inc. as a named defendant.

[5] The action arises from services provided by the plaintiff to the defendants from 2005 to in or about 2009 and from loans advanced in 2006 and 2007.

[6] The Statement of Claim was issued on June 30, 2010 in Welland, Ontario. The Statement of Defence was served on or about January 10, 2011. On or about March 2012, the plaintiff served and filed a Notice of Change of Lawyers.

[7] On January 13, 2013, a consent order was obtained transferring the action from Welland to Newmarket, Ontario.

[8] On March 10, 2013, an order of McDermot J. was obtained granting security for costs in favour of the defendants. The plaintiff was a resident of the State of Michigan.

[9] The first portion of the security for costs order, namely $5,000, was paid into court in order for examinations for discovery to be conducted.

[10] Examinations for discoveries took place on September 25 and 27, 2013.

[11] The plaintiff provided his answers to his undertakings on February 7, 2014.

[12] From February 2014 to May 2014 negotiations for settlement took place with no success.

[13] In 2013, the plaintiff’s father’s health declined due to cancer and he passed away in December 2013.

[14] In early 2014, the plaintiff’s mother was diagnosed with cancer and she passed away in or about August 2015. The plaintiff was taking care of his mother.

[15] On her passing, the plaintiff was entrusted with handling her estate, which was not completed until October 2016.

[16] In November 2016, the plaintiff seems to have decided to now put his attention to this proceeding. He reviewed his file, spoke with his lawyers, and discovered that a claim for shares in lieu of cash payments for services rendered and monies loaned was not in the Statement of Claim. He instructed his lawyers to seek the amendment of the Statement of Claim to include this claim for relief.

[17] From the evidence provided, emails were exchanged between the plaintiff and the defendants in May 2006 and November 2007. In those emails, the defendants proposed shares in lieu of payment for services rendered and monies loaned.

[18] The last payment received by the plaintiff from the defendants was on November 12, 2009.

Legal Principles

[19] Rule 26.01 of the Rules of Civil Procedure[^2] states that a court shall grant leave to amend a pleading unless prejudice would result that cannot be compensated for by costs or an adjournment.

[20] In reviewing the general rule that amendments are presumptively approved, the Ontario Court of Appeal in Marks v. Ottawa (City) found that “there is no absolute right to amend pleadings.” [^3] Factors for the court to consider are:

• An amendment should be allowed unless it would cause an injustice not compensable in costs.
• The proposed amendment must be shown to be an issue worthy of trial and prima facie meritorious.
• No amendments should be allowed which, if originally pleaded, would have been struck.
• The proposed amendment must contain sufficient particulars.[^4]

[21] The defendants’ originally took the position that factors in the second and fourth bullet points were not satisfied by the plaintiff. The plaintiff rectified the fourth bullet point factor by submitting to the court a proposed amended pleading that set out the particulars on the proposed amendment to the prayer for relief, which is found in the Supplementary Motion Record of the Plaintiff dated December 9, 2016.

Issue

[22] The issue that this court needs to determine is if the proposed amended claim for relief and particulars is a cause of action that is statutorily barred pursuant to s. 4 of the Limitations Act, 2002. In other words, is the proposed amendment worthy of trial and prima facie meritorious?

Analysis

[23] I will first deal with the issue of whether the requested amendment to claim an additional or alternate claim for the shares in lieu of payment is a “new cause of action” that is subject to the provisions of the Limitations Act, 2002.

Relevant Sections of the Limitations Act, 2002

[24] Sections 4, 20, and 21 of the Limitations Act, 2002 reads as follows:

Basic limitation period

4. 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. 2002, c. 24, Sched. B, s. 4.

Statutory variation of time limits

20. This Act does not affect the extension, suspension or other variation of a limitation period or other time limit by or under another Act. 2002, c. 24, Sched. B, s. 20.

Adding party

21. (1) If a limitation period in respect of a claim against a person has expired, the claim shall not be pursued by adding the person as a party to any existing proceeding. 2002, c. 24, Sched. B, s. 21 (1).

[25] In Joseph v. Paramount Canada’s Wonderland,[^5] the Court of Appeal concluded that s. 20 of the Limitations Act, 2002 precludes the common law from extending the limitation period. Any extension must be granted by statute.[^6]

Applicability of the Limitations Act, 2002

[26] A limitation period’s applicability is defined by statute. As Mew J. wrote in The Law of Limitations, “The law of limitations is wholly a creature of statute. Limitation periods were unknown to the common law.”[^7]

Section 4 and New Causes of Action

[27] Courts have held that s. 4 of the Limitations Act, 2002 bars a claimant from pursuing a new cause of action outside of the limitation period, even in the midst of an ongoing proceeding.[^8] In Letang v. Cooper, Lord Diplock defined a “cause of action” as “a factual situation the existence of which entitles one person to obtain from the court a remedy against another person.”[^9] In Fitzpatrick Estate v. Medtronic, Jenkins J. wrote, “I conclude that the modern approach is when substantially all of the material facts giving rise to the “new cause of action” have been pleaded then there is in fact no new cause of action being added.”[^10]

[28] On the other hand, the basic limitation period is inapplicable to a novel claim arising from an already pursued cause of action.[^11] In Ridel v. Cassin, for example, the Ontario Court of Appeal held that the limitation period did not bar an additional damages claim that arose from the same wrongful and unauthorized trading activity that grounded the initial claim.[^12]

[29] Thus, as additional legal claims arising from the same factual situation do not fall within the scope of s. 44, as these claims are not “new causes of action”. Consequently, I do not find that the Limitations Act, 2002 bars claiming the additional or alternative claim of relief requested by the plaintiff, for these claims are not “new causes of action”.

[30] The question then becomes whether the amendment should be denied according to Rule 26.01 of the Rules of Civil Procedure.

[31] The defendants’ only argument for opposing the amendment is that it is unworthy for trial due to the claim being statutorily barred.

[32] The defendants did not provide any evidence that they would suffer prejudice that could not be compensated for in costs. Accordingly, I find that that there is no prejudice suffered by the defendants and that there is no reason [as to] why the proposed amendment should not be granted.

[33] Therefore, I am exercising my discretion and permitting the proposed amendments requested by the plaintiff in Exhibit “C” of the affidavit of M. Claire Bebbington sworn the 12th day of December, 2016.

Disposition

[34] I therefore order that:

(a) The plaintiff is granted the liberty to amend his Statement of Claim as set out in the proposed amended Statement of Claim set out in Exhibit “C” of the affidavit of M. Claire Bebbington sworn the 12th day of December, 2016.

(b) The plaintiff to provide this court with an agreed upon timetable and order within seven days from this decision for review and signature.

(c) If the parties cannot agree on costs of this motion, the plaintiff to serve and file his submissions of costs within twenty-one days from the date of this decision, and the defendants will have twenty-one days thereafter to serve and file their submissions. The submission to be no more than three pages, double spaced, exclusive of any cost outline, case law and offers to settle. Submissions are to be filed with the court. If no submissions are received within the time period set out herein, an order will be made that there will be no costs.

Justice P.W. Sutherland

Released: December 21, 2016

[^1]: S.O. 2002, c. 24, Sched. B [^2]: R.R.O. 1990, Reg.194 [^3]: 2011 ONCA 248, 280 O.A.C. 251, at para. 19 [^4]: Ibid [^5]: 2008 ONCA 469, 90 O.R. (3d) 401, at para. 21 [^6]: Ibid [^7]: Graeme Mew, The Law of Limitations, 3rd Ed. (Toronto: LexisNexis Canada, 2016) at p. 31. See also Hare v. Hare, 2006 41650 (ON CA), at para. 66 [^8]: See Ridel v. Cassin, 2014 ONCA 763, at para. 10; and Frohlick v. Pinkerton Canada Ltd., 2008 ONCA 3, 88 O.R. (3d) 401, at para. 8 [^9]: [1965] 1 Q.B. 232 (Eng. C.A.), at pp. 242-243. This quote was adopted by the Ontario Court of Appeal in Dilollo Re, 2013 ONCA 550, 117 O.R. (3d) 81, at para. 43; and July et al. v. Neal, 1986 149 (ON CA) [^10]: 1996 8118 (ON SC) at para. 22. See also Gladstone v. Canadian National Transportation Ltd., 2009 38789 (ON SCDC), at para. 40 [^11]: Ridel, supra note 8, at para. 10; and Gladstone, supra note 12, at para. 44 [^12]: Ridel, supra note 8, at para. 10