Court File and Parties
COURT FILE NO.: 11-52990 DATE: 2017/04/27 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
LOUIS SIROIS and CHANDRA MARTENS Plaintiffs – and – PAMELA ADRIANA WESTON in her capacity as power of attorney for property of RANDALYN LORRAINE WESTON, BRIAN WILSON and TANYA LEMCKE Defendants
COUNSEL: Christopher S. Spiteri, for the Plaintiffs Hans Engell, for the Defendant, Tanya Lemcke
HEARD: March 31, 2017
Ruling on motion for summary judgment
Toscano Roccamo J.
[1] This is a motion for summary judgment under Rule 20 of the Rules of Civil Procedure, brought by the defendant, Tanya Lemcke. Ms. Lemcke seeks to have the action against her dismissed on the basis that the limitation period expired prior to the order granting leave to add her as a defendant to the action.
Background
[2] Louis Sirois and Chandra Martens (the “Plaintiffs”) are spouses who entered into an Agreement of Purchase and Sale (the “Agreement”) with Pamela Weston (“Ms. Weston”), acting in her capacity as Power of Attorney for Property for her mother, Ms. Randalyn Weston. The Agreement, dated November 26, 2009, concerned the purchase of a $340,000 rural residential property in Tay Valley, Ontario (the “Property”). The transaction closed on December 18, 2009.
[3] The defendant, Brian Wilson, acted as the Plaintiffs’ real estate lawyer for the transaction and Ms. Lemcke acted as the Plaintiffs’ real estate agent.
[4] The Plaintiffs retained Ms. Lemcke to assist them based on her years of experience and knowledge of the properties in the area, her office having operated in the area for quite a number of years. They were planning to purchase a property as a post-retirement home that would provide a quiet, permanent home for their daughter who suffers from a neurological disorder requiring constant care and assistance. The Plaintiffs made these needs clear to Ms. Lemcke, along with their request to be far away from noisy roads and industries.
[5] On November 27, 2009, the day following the Agreement, a Notice of Option to Purchase was registered on title to the lands adjoining the Property in favour of Fresh Air Energy Inc., as was a Notice in favour of Northland Power Solar North Burgess GP Inc. (“Northland”). Soon after the closing date, the adjacent property was purchased by Northland for the installation and use of a solar farm.
[6] By their own admission, the Plaintiffs became aware of the option to purchase in or around January or February 2010, when a neighbour informed them that the energy company was intending to set up a solar farm on the property. They admit that they would not have purchased the Property had they known about the option to purchase the adjoining land. They subsequently turned their efforts to attempting to stop the project. These efforts continued in the years that followed.
[7] On June 19, 2010, Ms. Martens sent Mr. Wilson an email in which she expressed the Plaintiffs’ shock and disappointment regarding the proposed project. In his response of July 30, 2010, Mr. Wilson indicated that the option to purchase was indicated on the property abstract for the neighbouring property, but that he was not looking for what instruments were registered against it, only who owned them for possible Planning Act violations. Mr. Sirois attests in his July 19, 2016 affidavit that he and Mr. Wilson spoke shortly thereafter, when Mr. Wilson told Mr. Sirois, “You probably have to sue me. You’ve got two years to do that.”
[8] Toward the end of 2012, the Plaintiffs requested an opinion from Ms. Lemcke regarding the value of the Property. Her opinion confirmed what the Plaintiffs had already anticipated in respect of the effect on property value of land adjacent to the solar farm: that the construction of the solar farm would detrimentally affect quiet enjoyment of the property. Ms. Lemcke opined that the construction of the solar farm would lead to a drop in the value of the Property, from $439,000 to between $259,000 and $274,000.
[9] In June 2015, the Plaintiffs sold the Property for $365,000.
[10] The Plaintiffs seek damages in connection with the plans to build a solar farm on the adjacent property, including general damages for, inter alia, “hardship, inconvenience and loss of enjoyment of life”. It is their position that all other neighbours knew about the solar farm plans and the impending sale of land to the energy company. They allege that Ms. Lemcke failed or neglected to disclose these material facts to them prior to closing, despite being made aware of their needs for quiet enjoyment.
[11] The Plaintiffs also seek damages stemming from a May 7, 2009 Notice of Deficiency from the Electrical Safety Authority that the previous owner of the Property failed to address. The notice listed serious defects found in the wiring at the dwelling, posing serious life and/or fire hazards.
[12] The Plaintiffs originally commenced the action by statement of claim issued on November 30, 2011 against all defendants save for Ms. Lemcke. The Plaintiffs sought leave to amend their statement of claim to add Ms. Lemcke as a defendant late in October 2013. By order of Master McLeod (as he then was) issued on November 1, 2013 and entered on November 4, 2013, the Plaintiffs were granted leave. They amended their statement of claim to add Ms. Lemcke on November 30, 2013.
[13] However, the motion before the Master was brought ex parte vis à vis Ms. Lemcke and on consent of all parties except Ms. Lemcke. The motion material before the Master was not provided to this Court and was only provided upon my request.
[14] In her affidavit filed in support of that motion, sworn September 26, 2013, Ms. Martens deposed that it was not until September 2013 that the Plaintiffs “realized the magnitude of the project, what it entailed and the prejudice that [they] would suffer” and “realized that [Ms.] Lemcke must have been aware of this big solar farm prior to our purchase, given her expertise, knowledge and familiarity with the area.”
[15] On December 14, 2014, Ms. Weston’s statement of defence was struck by order of Master Roger (as he then was) for her failure to attend at her examination for discovery.
[16] Relying on the two-year limitation period under the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B., Ms. Lemcke moves for summary judgment, seeking dismissal of the action as against her.
Law of Motions for Summary Judgment
[17] Rule 20.04(2)(a) of the Rules of Civil Procedure provides that the court shall grant summary judgment if “the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence.”
[18] With amendments to Rule 20 introduced in 2010, the powers of the court to grant summary judgment have been enhanced: under rules 20.04(2.1), the Court now has the power to weigh the evidence, evaluate the credibility of a deponent, and draw any reasonable inference from the evidence.
[19] In Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, the Supreme Court of Canada held that on a motion for summary judgment under Rule 20, the court should first determine if there is a genuine issue requiring trial based only on the evidence in the motion record, without using the fact-finding powers enacted when Rule 20 was amended in 2010. The analysis of whether there is a genuine issue requiring a trial should be done by reviewing the factual record and granting a summary judgment if there is sufficient evidence to fairly and justly adjudicate the dispute and a summary judgment would be a timely, affordable and proportionate procedure.
[20] If, however, there appears to be a genuine issue requiring a trial, then the court should determine if the need for a trial can be avoided by using the powers under rules 20.04(2.1) and (2.2). As a matter of discretion, the motions judge may use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if their use will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.
[21] Justice Corbett provided a useful summary of the Hryniak v. Mauldin approach in Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200, where he stated at paras. 33 and 34:
As I read Hryniak, the court on a motion for summary judgment should undertake the following analysis:
The court will assume that the parties have placed before it, in some form, all of the evidence that will be available for trial;
On the basis of this record, the court decides whether it can make the necessary findings of fact, apply the law to the facts, and thereby achieve a fair and just adjudication of the case on the merits;
If the court cannot grant judgment on the motion, the court should:
a. Decide those issues that can be decided in accordance with the principles described in 2), above;
b. Identify the additional steps that will be required to complete the record to enable the court to decide any remaining issues;
c. In the absence of compelling reasons to the contrary, the court should seize itself of the further steps required to bring the matter to a conclusion.
The Supreme Court is clear in rejecting the traditional trial as the measure of when a judge may obtain a “full appreciation” of a case necessary to grant judgment. Obviously greater procedural rigour should bring with it a greater immersion in a case, and consequently a more profound understanding of it. But the test is now whether the court's appreciation of the case is sufficient to rule on the merits fairly and justly without a trial, rather than the formal trial being the yardstick by which the requirements of fairness and justice are measured.
[22] Discoverability issues often lend themselves to determination on a motion for summary judgment (see Chang v. Boulet, 2012 ONSC 6382, 113 O.R. (3d) 518, at para. 67).
Issues
[23] To resolve the question of whether there is a genuine issue requiring a trial, the Court must determine the following:
a. Did the Plaintiffs fail to bring their motion to amend their pleadings, adding Ms. Lemcke as a defendant, within the two-year limitation period under the Limitations Act, 2002?
Position of Ms. Lemcke
[24] Ms. Lemcke argues that the two-year limitation period expired in February 2012 at the latest, which occurred prior to her being added as a defendant to the action. She submits that, as soon as the Plaintiffs knew of the plans for a solar farm in January or February 2010, they knew that they had a cause of action against her, even if there had been a remote chance that the solar farm would not receive the necessary approvals.
[25] To her, the fact that the original statement of claim was issued in 2011 is strong evidence that the Plaintiffs were aware that they had sustained a loss and that they had a cause of action. Nothing transpired between November 30, 2011 and late October 2013, regarding their cause of action against her, which they could not have known about when their statement of claim was originally issued.
Position of the Plaintiffs
[26] The Plaintiffs argue that the limitation period did not begin to run until February 2013, when the construction of the solar farm was finally approved and construction commenced. While they became aware of the possibility of a solar farm being built on the adjacent property sometime in 2010, this was by no means a foregone conclusion.
[27] The Plaintiffs point to public consultation meetings held by Northland in August 2010 to gather input regarding the possible development of a solar farm, and they say that the issue of a solar farm was just beginning to be debated at township meetings.
[28] The Plaintiffs maintain that, had they stopped the construction of the solar farm or had they convinced the energy company to minimize the impact of the project, there may have been no damage and, therefore, no claim against the defendants. They suggest that it may have been premature to file their statement of claim in 2011, since they were not sure they were going to suffer a loss until construction began around February 2013.
Analysis
[29] The relevant portions of the Limitations Act, 2002, provide as follows:
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.
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).
(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.
[30] The Ontario Court of Appeal analyzed in detail the concept of “discovery” under the Limitations Act, 2002, in Hamilton (City) v. Metcalfe & Mansfield Capital Corp., 2012 ONCA 156, 347 D.L.R. (4th) 657. The Court upheld a ruling on a motion for summary judgment wherein certain of the City of Hamilton’s claims were dismissed on the basis of an expired limitation period. Based on misrepresentations regarding the asset structure of a particular debt instrument offered, the City purchased $10 million in notes from the defendant bank. Shortly thereafter, the market collapsed. The City received no payment on the notes and commenced an action to recover its losses, arguing that it had not “discovered” its loss until the notes matured, when default on the notes occurred.
[31] The Court rejected that contention. Given that the City’s action was based on the defendants’ negligent misrepresentations, and not their failure to repay the notes, the City suffered damage at the time of the misrepresentations. The Court held, at para. 32, the following:
[F]or the purpose of negligent misrepresentation claims, damage is the condition of being worse off than if the defendant had not made the misrepresentation. In cases where a plaintiff is induced to enter into a transaction in reliance on a misrepresentation and fails to get what he was entitled to…, the plaintiff suffers damage sufficient to complete the cause of action when he enters into the transaction, not when the loss is monetized into a specific amount.
[32] In its reasons, the Court of Appeal also made the following important distinction between “damage” and “damages”:
Damage is the loss needed to make out the cause of action. Insofar as it relates to a transaction induced by wrongful conduct, as I have explained, damage is the condition of being worse off than before entering into the transaction. Damages, on the other hand, is the monetary measure of the extent of that loss. All that the City had to discover to start the limitation period was damage (at para. 54).
[33] Further, the Court made clear that “‘some damage’ is sufficient for the cause of action to accrue and to start the limitation period” (at para. 61), citing the following passage:
Once the plaintiff knows that some damage has occurred and has identified the tortfeasor, the cause of action has accrued. Neither the extent of damage nor the type of damage need be known. To hold otherwise would inject too much uncertainty into cases where the full scope of the damages may not be ascertained for an extended time beyond the general limitation period (Peixeiro v. Haberman, [1997] 3 S.C.R. 549, at para. 18). [References omitted.]
[34] This line of reasoning was adopted in Mortgage Investment Corp. of Eastern Ontario v. Szpivak, 2014 ONSC 2261, on a motion for summary judgment brought by licensed real estate appraisers, as defendants, on the grounds that the plaintiffs’ claim was not initiated prior to the expiry of the two-year limitation period.
[35] In Szpivak, the plaintiffs advanced $279,500 in mortgage funds to the defendants based on a $430,000 property appraisal transmitted by the defendants to the plaintiffs in June 2008. The mortgagor defaulted on the mortgage in May 2009 and power of sale proceedings subsequently commenced. For the purposes of listing the property, the plaintiffs obtained an opinion from a realtor in December 2009 that the value of the property was between $210,000 and $230,000.
[36] The plaintiffs sued for damages, alleging that the defendants negligently overvalued the subject property and that, but for the misrepresentation, they would not have granted the mortgage they did to the borrower. Where the zoning of the property only permitted a wood working business, the plaintiffs specifically alleged that the appraiser ought to have taken into consideration the property’s restricted use. However, the plaintiffs did not commence the action until November 2012.
[37] In granting the motion for summary judgment, Johnson J. found no genuine issue requiring a trial. He concluded that the plaintiffs either knew or objectively ought to have known that they sustained loss or damage caused by the negligent misrepresentation by no later than June 2010, when they received a second appraisal for the purposes of the power of sale. This was based on the plaintiffs suffering “damage” when they entered into the mortgage transaction with the borrower. Accordingly, the claim was commenced outside the two-year limitation period.
[38] Hamilton (City) and Szpivak were recently considered by Justice Emery in Najafi v. Shapiro, 2016 ONSC 3318. In that case, the wife commenced an action in 2011 against her husband’s lawyer for breach of a duty of care and fiduciary duty. The allegations concerned his failure to ensure that mortgages registered against her and her husband’s matrimonial home and her cottage property did not occur without her authorization and consent. The action was dismissed for delay in 2013.
[39] The wife brought a second action against both the lawyer and her husband in 2015, reiterating her claims against the lawyer and alleging that her husband forged her signature on documents causing these mortgages to be registered without her knowledge or consent. She gave evidence that, stemming from separate divorce proceedings, the husband failed to comply with a 2014 family order requiring corrective transfers of the properties, resulting in the wife having to pay out the mortgage on the cottage property.
[40] The defendants moved under Rules 21 and 25.11 to have the wife’s action dismissed as statute-barred and an abuse of process. They argued that the wife, by her own allegation of material facts in the 2011 statement of claim, first discovered and became aware of the alleged forgeries at that time, causing the limitation period to run. In response, the wife argued that her cause of action had not yet crystallized in 2011 and that the loss or injury caused to her by the defendants’ conduct had not manifested itself.
[41] Emery J. ultimately dismissed the defendants’ motion on the basis that the family order suspended the two-year limitation period under s. 11 of the Limitations Act, 2002. Nonetheless, he found that the wife knew of the transactions giving rise to the cause of action and her claim for damage caused by those transactions in 2011.
[42] Emery J. distinguished the line of cases relied upon by the wife, considering that such cases “involv[ing] the uncertainty of injuries or loss suffered under circumstances covered by the motor vehicle insurance regime in place from time to time to be different” (at para. 49).
[43] I find the reasoning of Szpivak and Najafi, consistent with the direction offered by the Court of Appeal in Hamilton (City), applies equally in the facts before me.
Conclusion
[44] I find that the Plaintiffs discovered their cause of action against Ms. Lemcke by February 2010. Although the extent of the damages was still unknown, they knew at that time that they had suffered damage. The fact that the Plaintiffs chose to wait does not take away from the fact that they knew or ought to have known, at that time, that they had a cause of action in negligence against Ms. Lemcke.
[45] The Plaintiffs’ claims for damage as against Ms. Lemcke expired on the second anniversary of that date, being February 2012. The motion to add Ms. Lemcke was brought in late October 2013, and an order issued adding Ms. Lemcke on November 1, 2013.
[46] Thus, I find that the Plaintiffs failed to bring their motion to amend their pleadings, adding Ms. Lemcke as a defendant, within the two-year limitation period under the Limitations Act, 2002.
Disposition
[47] For the reasons set out above, I find that there is no genuine issue requiring a trial. Therefore, there is no need to exercise the fact finding powers set out in rr. 20.04(2.1)–(2.2). Granting summary judgment would be a proportionate, more expeditious, and less expensive means to achieve a just result in this case.
[48] The motion for summary judgment is accordingly granted, with costs fixed and payable forthwith by the Plaintiffs to Ms. Lemcke in the amount of $5,000, all inclusive, as agreed between the parties.
Toscano Roccamo J.
Released: April 27, 2017