Court File and Parties

COURT FILE NO.: CV-14-00498084 MOTION HEARD: 20170508 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Salvatore Antonio Galluzzi, Plaintiff AND: Pearlann Consulting Inc. o/a Fine & Company, Chartered Accountants, Defendant

BEFORE: Master B. McAfee

COUNSEL: James R. Olchowy for the Plaintiff, Moving Party Jordon Reiner for the Defendant and Proposed Defendant, Responding Parties

HEARD: May 8, 2017

REASONS FOR DECISION

[1] Further to my reasons for decision on the preliminary issue of privilege dated February 8, 2017, the plaintiff’s motion for leave to amend the statement of claim, for service of a further and better affidavit of documents and for a litigation timetable proceeded before me on May 8, 2017.

[2] This is an action for wrongful dismissal. The plaintiff, an accountant, was dismissed from his employment on December 17, 2012, after having been employed for 5 years and 10 months. Cause for dismissal is not alleged.

[3] The statement of claim was issued on February 7, 2014. A notice of intent to defend was delivered on or about March 5, 2014. A statement of defence was delivered on or about April 22, 2014.

Leave to Amend the Statement of Claim

[4] Rule 26.01 of the Rules of Civil Procedure provides:

On motion at any stage of an action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.

[5] Rule 5.04(2) of the Rules of Civil Procedure provides:

At any stage of a proceeding the court may by order add, delete or substitute a party or correct the name of a party incorrectly named, on such terms as are just, unless prejudice would result that could not be compensated for by costs or by an adjournment.

[6] Where an applicable limitation period has expired, a plaintiff cannot avoid the application of that limitation period by amending an existing claim to add a party or advance a new cause of action. Proposed amendments that constitute a new cause of action or the addition of a party after the expiry of the relevant limitation period will not be permitted. The common law doctrine of special circumstances is no longer applicable (see s. 21 of the Limitations Act, 2002, S.O. 2002, c. 24, as amended, and Joseph v. Paramount Canada’s Wonderland, 2008 ONCA 469 (Ont. C.A.) at paragraphs 13, 25-26).

[7] In Ascent Inc. v. Fox 40 International Inc., [2009] O.J. No. 2964 (Ont. Master), Master Dash describes a “cause of action” at paragraph 3:

A “cause of action” has been defined as a “factual situation the existence of which entitles one person to obtain from the court a remedy against another person. The key is whether substantially all of the material facts giving rise to the “new cause of action” have previously been pleaded or whether new facts are sought to be added that are relied upon to support a new cause of action. A new cause of action is not asserted if the amendments simply plead an alternative claim for relief arising out of the same facts previously pleaded and no new facts are relied upon, or amount simply to different legal conclusions drawn from the same set of facts, or simply provide particulars of an allegation already pled or additional facts upon which the original right of action is based.

[8] I will now turn to the proposed amendments. The proposed amendments can be grouped into two main categories: claims pursuant to the Ontario Human Rights Code, R.S.O. 1990, c.H.19, as amended, and the addition of David M. Fine as a defendant.

[9] I am satisfied that the proposed amendments relating to further claims for relief pursuant to the Human Rights Code as set out at paragraphs 1f, 1g and 78 of the proposed amended statement of claim do not constitute new causes of action. In the original statement of claim damages are sought pursuant to the Human Rights Code at paragraph 1e. In the original statement of claim the plaintiff pleads allegations concerning a poisoned work environment, although not using those specific words, at paragraphs 29-36 and 78 – 82. In the original statement of claim the plaintiff pleads allegations concerning a failure to properly investigate complaints at paragraphs 38 and 85-86. Substantially all of the material facts that give rise to the further remedies set forth at paragraphs 1f and 1g of the proposed amended statement of claim have been previously pleaded. In my view the amendments in this regard set out an alternative claim for relief arising out of the same general factual matrix previously pleaded and not a new cause of action. Leave is granted to amend the statement of claim in this regard.

[10] I decline to exercise my discretion to grant leave to amend the statement of claim to add David M. Fine as a defendant. The plaintiff seeks to amend the statement of claim to claim a declaration that the defendant and the proposed defendant David M. Fine were jointly the plaintiff’s employer (proposed amendments at paragraph 1, 1b, 7, 8a, and other proposed amendments referencing “the Employer”).

[11] Based on the evidence before me, the plaintiff knew at all times who David M. Fine was and knew David M. Fine’s role in the defendant. In his affidavit, the plaintiff states at paragraphs 23 and 24:

On a human level, I rightfully felt that David Fine, as the human face and directing mind of Pearlann, was my boss and employer. He controlled my work-flow and monitored my work as an accountant. He was more than an employee of Pearlann; he was the decision-maker.

On a technical level, I understood that Pearlann, a corporation, was paying my salary. When this litigation started, I further understood that Fine & Company was the business operating name for Pearlann, and that, as such Pearlann was the party with which I had entered into my written employment agreement. But at all times I understood, on a human and professional level, that David Fine was, in substance – through the daily control he had over my employment – my true employer.

[12] And at paragraph 39, the plaintiff states:

As the facts I have already pleaded in my original Statement of Claim make clear, David Fine and Pearlann, together, functioned as my employer. All of my personal dealings as an employee, aside from my receipt of paycheques from Pearlann, were directly with David Fine himself. My employment contract was specifically with Fine & Company, but the human reality of the situation was that my boss was David M. Fine and he was inseparable from Fine & Company and Pearlann.

[13] The plaintiff agrees that David M. Fine could have been a defendant from the outset but argues that the addition of David M. Fine only became necessary when David M. Fine’s alleged improper action of divesting the defendant of assets was discovered on or about February 24, 2015 (see email of February 24, 2015). There is no proposed pleading that David M. Fine improperly divested the company of assets. David M. Fine is sought to be added on the basis of a common employer and the plaintiff’s evidence is that he always felt that David M. Fine was his employer.

[14] To the extent that the plaintiff also argues that limitation period as against David M. Fine has not expired based on section 16(1.1) and (1.2) of the Limitations Act, I was not referred to any claim or proposed claim as against David M. Fine personally for misconduct of a sexual nature or assault.

[15] The plaintiff’s employment was terminated on December 17, 2012. Section 21 of the Limitations Act precludes adding a party after a limitation period has expired. The limitation period with respect to the addition of David M. Fine has expired.

[16] The proposed amendment at paragraph 1e of the proposed amended statement of claim provides the complete citation for the Human Rights Code and corrects the applicable section number. This proposed amendment was not opposed.

[17] The proposed amendment at paragraph 52 of the proposed amended statement of claim adds the word “health” after mental. There is no non-compensable prejudice as a result of this proposed amendment that adds a missing word.

[18] The proposed amendment at paragraph 79 adds the words “mental disability.” Mental disability is pleaded in the original statement of claim (paragraph 78, 80, 87). There is no non-compensable prejudice relating to this proposed amendment.

[19] The proposed amendment at paragraph 92 updates the facts concerning mitigation. There is no non-compensable prejudice relating to this proposed amendment.

[20] Leave is granted to amend the statement of claim with respect to the proposed amendments at paragraphs 1f, 1g, 78, 1e, 52, 79 and 92 only.

Service of a further and better affidavit of documents of the defendant

[21] The defendant, a corporation, served an individual affidavit of documents. Schedule B is not itemized and Schedules C and D are blank. The defendant’s affidavit of documents is deficient in these respects.

[22] The plaintiff seeks an order that the defendant produce a further and better affidavit of documents that includes the documents in the classes of documents listed in the letter from plaintiff’s counsel dated September 14, 2014.

[23] To the extent that the succession arrangement and merger agreement with Rosenberg Smith & Partners LLP referred to at paragraph 3 of the statement of defence is in writing, the agreement(s) shall be listed in a further and better affidavit of documents. The document(s) are relevant based on that pleading.

[24] On the motion, defendant’s counsel stated that if there are specific documents that the plaintiff seeks, he has no difficulty recommending that the documents be produced.

[25] The evidence before me does not satisfy that the balance of the classes of records referred to in the letter are specific documents in existence that may have been omitted from the defendant’s affidavit of documents (Rule 30.06). The motion for production of the balance of the classes of records is dismissed, without prejudice to bring a further motion following examinations for discovery.

[26] A further and better affidavit of documents shall be served by the defendant that is in accordance with Form 30B, that contains an itemized schedule B, completed schedules C and D, and lists any written succession agreement or merger agreement as referred to in the statement of defence.

Timetable

[27] I am satisfied that the timetable proposed by the plaintiff in argument is reasonable. I also agree with the plaintiff’s submission that mediation ought to proceed before examinations for discovery in the circumstances of this case. The defendant did not make any submissions that the plaintiff’s proposal was unreasonable. The following timetable is ordered:

1. The amended statement of claim shall be served on or before 20 days from today’s date;
2. The amended statement of defence shall be served on or before 40 days from today’s date;
3. Any reply shall be served on or before 50 days from today’s date;
4. A further and better affidavit of documents of the defendant shall be served on or before 60 days from today’s date;
5. Mandatory mediation shall be conducted on or before 90 days from today’s date;
6. Examinations for discovery shall be conducted on or before 120 days from today’s date; and,
7. Any motions arising out of examinations for discovery shall be scheduled, not necessarily heard, on or before 180 days from today’s date.

Summary of Order

[28] Order to go as follows:

1. Leave is granted to amend the statement of claim with respect to the proposed amendments at paragraphs 1f, 1g, 78, 1e, 52, 79 and 92 of the proposed amended statement of claim only.
2. Leave to amend the statement of claim to add David M. Fine as a defendant is denied;
3. The defendant shall serve a further and better affidavit of documents that is in accordance with Form 30B, that contains an itemized schedule B, completed schedules C and D, and lists any written succession agreement or merger agreement as referred to in the statement of defence.
4. The following timetable is ordered for the balance of this proceeding: i. The amended statement of claim shall be served on or before 20 days from today’s date; ii. Any amended statement of defence shall be served on or before 40 days from today’s date; iii. Any reply shall be served on or before 50 days from today’s date; iv. The defendant’s further and better affidavit of documents shall be served on or before 60 days from today’s date; v. Mandatory mediation shall be conducted on or before 90 days from today’s date; vi. Examination for discovery shall be conducted on or before 120 days from today’s date; vii. Any motions arising out of examinations for discovery shall be scheduled, not necessarily heard, on or before 120 days from today’s date.

Costs

[29] If any party seeks costs and if after reasonable attempts to agree on costs the parties are unable to agree, the parties may re-attend before me to speak to the issue of costs. Any re-attendance to speak to costs shall be scheduled, not necessarily heard, on or before 120 days from today’s date.

Master B. McAfee Date: May 29, 2017