Court File and Parties
COURT FILE NO.: CV-15-520311 MOTION HEARD: 20170508 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Selma Harcar, Plaintiff/Moving Party AND: WJ Properties and 655913 Ontario Limited AND: Safety First Services Inc., Third Party/Responding Party
BEFORE: Master P. T. Sugunasiri
COUNSEL: Y. Kozoronis, Counsel, for the Plaintiff/Moving Party N. Buhary, Counsel, for the Third Party/Responding Party
HEARD: May 8, 2017
Reasons for Decision
[1] This a motion brought by the Plaintiff to amend her pleading in a slip and fall action to add the Third Party, Safety First Services Inc. (“Safety First”) as a Defendant to the main action past the two-year limitation period set out in the Limitations Act, 2002. For the reasons set out below, I allow the motion and add Safety First as a Defendant, without prejudice to it pleading limitations in its defence.
Facts
[2] This action arises from a slip and fall that occurred on or about January 29, 2013. The Plaintiff alleges that she smelled smoke coming out of the apartment located directly beneath hers and she evacuated the apartment via the stairs. As she descended, she alleges that a security guard rushed her down the stairs, causing her to fall and land on her knees.
[3] A few days later, the Plaintiff retained counsel. Counsel determined that the building was managed by the Defendant WJ Properties (“WJ”) and put the company on notice in March and May of 2013. Aviva Canada Inc. responded in June of 2013, indicated that it was WJ’s insurer and that it had begun its investigation of the claim. By July of 2013, Aviva’s adjuster had taken a statement from the Plaintiff which included the allegation that a security guard rushed her down the stairs. Aviva continued to investigation throughout 2013 and 2014. The Plaintiff’s counsel provided documents to Aviva in the course of its investigation. On January 22, 2015, the Plaintiff issued a Statement of Claim naming the owner of her building as well as the WJ as the property manager. At this point, no one appeared to have any knowledge of Safety First. Plaintiff’s counsel served the Statement of Claim on February 3, 2015.
[4] Plaintiff’s counsel then received a letter on April 27, 2015 from counsel for WJ and the property owner (“the Defendants”) serving a Notice of Intent to Defend. Counsel subsequently served the Statement of Defence on May 22, 2015. It is of note that the Statement of Defence states at paragraph 7(a) that the Plaintiff “did not follow the instructions provided to her by the security guard.” In other words, at this point, it appears that no one knew that Safety First provided security services to the building -not even the Defendants who had an insurer that had been investigating the claim since 2013.
[5] On August 20, 2015, the Defendants served their Affidavit of Documents. Plaintiff’s counsel reviewed the documents on August 20, 2015. Schedule “A” described and attached a special incident report from the superintendent written on a Safety First incident report form. As a result of this realization, discoveries were postponed and Defendants ‘and Plaintiff’s counsel discussed adding Safety First as a party to the main action. On September 2, 2015, the Defendants issued a Third Party Claim against Safety First. Responding pleadings ensued. Discoveries occurred on December 15, 2015 after which Plaintiff’s counsel indicated her intention to add Safety First as a defendant to the main action and canvassed motions dates. The Plaintiff served her notice of motion on March 2, 2016.
Applicable Rules and General Legal Principles
[6] Rules 5.04(2) and 26.01 of the Rules of Civil Procedure essentially allow parties to amend their pleadings at any stage of the proceeding, with leave of the Court, and subject to some exceptions. The relevant provisions are as follows:
5.04 (2) 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 an adjournment.
26.01 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. R.R.O. 1990, Reg. 194, r. 26.01.
[7] The threshold to grant amendments is generally quite low. It is well established, however, that despite the mandatory language of Rule 26.01, in determining whether or not to grant an amendment, the Court must consider, among other things, whether or not the proposed claim is tenable: Marks v. Ottawa (City), 2011 ONCA 248; [2011] OJ No.1445 at para. 19 (CA). Included in that scrutiny is whether or not the proposed amendment runs afoul of any limitations periods. Adding an existing third party as a defendant to the main action is in essence, commencing a new action against that third party and this must be done within the permitted limitation period.
[8] Rule 26.01 also has a prejudice component. In other words, an amendment will not be allowed if the party opposing the amendment can show that there will be prejudice that cannot be compensated by costs or an adjournment. However, where there is a claim that the limitation period has expired, there is a presumption of prejudice that must be rebutted by the moving party. One way to rebut the presumption is to present evidence that the respondent knew of the claim. In such a case, the onus shifts back to the respondent to show actual prejudice: Deaville v. Boegeman, [1984] OJ No 3403, 48 OR (2d) 725 (CA).
[9] The relevant sections of the Limitations Act, 2002 are 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.
Discovery
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).
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).
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).
[10] The Limitations Act, 2002 makes it clear that the basic limitation period to commence a proceeding is two years from the date it was discovered. As noted by Justice Weiler in York Condominium Corp. No. 382 v. Jay-M Holdings Ltd. (2007), 2007 ONCA 49, 84 OR (3d) 414 at para. 2 (CA), the purpose of the new Act is to “balance the right of claimants to sue with the right of the defendants to have some certainty and finality in managing their affairs.”
[11] In that vein, the Act protects the right to sue by incorporating common law discoverability principles. Subsection 5(2) of the Act presumes that the date of discovery is equivalent to the date of loss, unless a plaintiff can show that the cause of action could only be reasonably discovered at a later date. When, a reasonable person with the abilities and the circumstances of the plaintiff ought to have known of the loss or damage as described in 5(1) (a) of the Act, is a question of fact: Lima v. Moya, 2015 ONSC 324 (SCJ), [2015] OJ No 171 at para. 76, aff’d on appeal 2015 ONSC 3605 (DivCt), [2015] OJ No 3101 at para. 19; Arcari v. Dawson, 2016 ONCA 715; (2016), 134 OR (3d) 36 at para. 10. I am also guided by the Court of Appeal in Aguoni v. Galion Solid Waste Material Inc., [1998] OJ No 459 at para. 24 (CA) who held that “the discovery of a tortfeasor involves more than the identity of one who may be liable. It involves the discovery of his or her acts, or omissions, which constitute liability.”
[12] Finally, if a plaintiff does not raise any issue of credibility or issue of fact that would merit consideration on a summary judgment motion or at trial and there is no reasonable explanation on the evidence as to why the plaintiff could not have discovered the claim by exercising reasonable diligence, the Court may deny the motion. The reasonable explanation often appears in the form of a solicitor’s affidavit in which there is a list of attempts made to obtain information (Wakelin v. Gourley (Master), aff’d [2006] OJ No 1442 (DivCt)). However, if there is an issue of fact or credibility with respect to the Plaintiff’s discovery of her claim, the appropriate remedy is to allow the amendment without prejudice to the added party raising the limitations defence in its pleading: Pepper v. Zellers Inc., 2006 CarswellOnt 7985, [2006] OJ No 5042 at paras. 18, 19, 24 (CA).
Position of the Parties
[13] In the present case, the Plaintiff argues that she, or more particularly, her counsel could not have reasonably discovered the claim against Safety First until August of 2015, several months after the expiration of the limitation period. In her view, Aviva was involved in investigation the claim from the outset and the Plaintiff cooperated fully with any inquiries that Aviva made. Given Aviva’s involvement, Plaintiff’s counsel did not make any inquiries outside of a property search in evaluating the claim, especially since the Plaintiff had told Aviva about the security guard. In sum, the Plaintiff suggests that counsel was duly diligent as any reasonable counsel would have been in a similar situation and the claim could only have reasonably been discovered in August of 2015. Adding Safety First now is therefore within the two years from the date of discovery as required by the Limitations Act, 2002. With respect to prejudice, the Plaintiff claims there is no prejudice to Safety First as it is already involved in the action and that there is a serious impact on the Plaintiff should I not allow the amendment. Having contracted security of the building to Safety First, section 6 of the Occupier’s Liability Act may potentially absolve the existing Defendants of any liability, leaving the Plaintiff with no remedy.
[14] In contrast, Safety First argues that neither Plaintiff’s counsel nor the Plaintiff was diligent in discovering the corporate affiliation of the security guard in question. It suggests that the claim could have reasonably been discovered within the two years from the date of loss (January 29, 2013). Affidavit evidence tendered by Safety First indicated that all security guards are required to wear a uniform which has its company name clearly marked. Safety First emphasizes that the Plaintiff would have seen a security guard from Safety First every day or at least often since the alleged incident in January of 2013 and would have seen the clearly labelled uniform identifying Safety First as the company they worked for. Further, it is often the case in slip and fall accidents that there are outside contractors for maintenance and other services. It was incumbent on Plaintiff’s counsel to make such inquiries, which they did not. To support its position, Safety First referred in particular to two decisions of my colleague, Master Short, in which he held that the Plaintiff was not duly diligent in ascertaining the identity of a security company: Klein v. Stiller, 2015 ONSC 3705 (Master) and Wolkowicz v. Avignon Inc., 2011 ONSC 5899 (Master). Safety First also states that the Plaintiff has not rebutted the presumption of prejudice and provided evidence that its records from 2013 were destroyed because of a company policy of a two-year purge cycle.
[15] In response, the Plaintiff contends that English is not her first language, having emigrated from Turkey, and that in any event tenants of the building always dealt with the property manager/superintendent and would not have known that security was provided by a different company. Second, she states that security was not formalized in the sense that the security “post” was in the lounge of the lobby and there would be no reason to think that security was not part of the operation of the building. Finally, the Plaintiff relies on the decision of Justice Lauwers (as he then was) in Madrid v. Ivanhoe Cambridge Inc., 2010 ONSC 2235, 101 OR (3d) 553 who held that absent a trigger, plaintiffs do not have a free-standing duty to write pro forma letters to defendants inquiring about the possibility of defendants under the rubric of due diligence. In this case, they claim that there was no such trigger. Incidentally, Master Short relies on this decision in Klein, supra.
Analysis
[16] This motion turns on whether or not the Plaintiff, and/or her counsel, ought to have discovered the claim against Safety First prior to the expiration of two-years from the alleged date of loss. If so, then the Plaintiff is out of time to add Safety First as a third party. The onus is on the Plaintiff to demonstrate delayed discoverability and to rebut the presumption of prejudice that arises when a limitation period expires. The threshold that the Plaintiff must cross in her is not a high one. Each case involving an amendment of pleadings must be decided on its unique facts. While I find Master Short’s decisions instructive, I am not bound by them. Further, as indicated by Justice Lauwers (as he then was) in Madrid, supra, whether or not to add a party is governed by a balancing of three “policy thrusts”: a) that cases should be heard on their merits; b) that the Limitations Act, 2002 encourages a plaintiff to commence an action as soon as possible; and c) that discoverability is codified in the Limitations Act, 2002 to avoid the injustice of precluding an action before a person is able to raise it.
[17] In applying the legal principles noted above and balancing these policy thrusts, I find that the Plaintiff has raised an issue of fact as to the discoverability of the claim against Safety First. There is a triable issue on whether the Plaintiff had the ability to ascertain that the security guard in question worked for a different company, and whether it was reasonable for Plaintiff’s counsel to rely on Aviva and not make any further inquiry. The latter questions turns on the conversations or interactions Plaintiff’s counsel would have had with Aviva. This is best resolved with the benefit of a full record before a trier of fact.
[18] Given my finding above, I need not consider prejudice in as fulsome a manner as otherwise required under the test. That can be left to the trier of fact should Safety First choose to include a limitations defence in its defence as a Defendant. I will say however that on the record before me, it is difficult to see what prejudice Safety First would suffer that could not be compensated by costs. In its defence as a third party to the main action, it pleads an alternate version of the facts to those plead by the Plaintiff. It is, in other words, more than a blanket denial.
[19] In paragraph 7 for example, Safety First pleads: “On or about January 30, 2013, an employee of the Third Party was in the process of conducting a routine patrol of the building when he was approached by the Plaintiff, a tenant, on the stairway and was informed by the Plaintiff of smoke on the third floor. In accordance with protocol, the Third Party’s employee advised the Plaintiff that he would address the situation and requested her to return to her apartment. The Third Party’s employee then attended the third floor and upon observing smoke in the hallway contacted the building superintendent and the Toronto Fire Department at which time the fire alarm was activated.” In paragraph 8, Safety First denies that its employee gave any instruction to the Plaintiff.
[20] Such pleadings suggest that Safety First appears to have detailed information about the incident. Having to now defend as a main Defendant would only likely require minor adjustments to Safety First’s existing pleading. The nature of Safety First’s existing defence also suggests that it may have known about this incident well within the limitation period. This could mean that the presumption of prejudice is rebutted as per Deaville, supra. In any event, I need not resolve this issue now having found that the Plaintiffs have raised at triable issue on discoverability.
Order
[21] Given the foregoing, I order as follows:
a. The Plaintiff is granted leave to amend her Statement of Claim to add Safety First as a named Defendant in the form of amendment attached as Schedule “A” to these reasons, without prejudice to Safety First relying on limitations as a defence; and
b. If the parties cannot agree on costs, they may provide me with brief costs submissions of no more than two pages plus costs outlines.
“Master P. Tamara Sugunasiri”