Steinberg v. Toews Engineering Inc., 2017 ONSC 4002

CITATION: Steinberg v. Toews Engineering Inc., 2017 ONSC 4002

COURT FILE NO.: CV-13-482980

DATE: 2017-06-29

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Lewis Steinberg

Plaintiff/Responding Party

– and –

Toews Engineering Inc. and Frank Toews

Defendants/Moving Parties

Michael J. Reid, for the Plaintiff/Responding Party

Varoujan Arman, for the Defendants/Moving Parties

HEARD in Toronto: May 31, 2017

Decision on MOTION

r.d. gordon, r.s.j.

Overview

Overview

1The defendants seek summary judgment dismissing the plaintiff’s claim. They take the position that the action was started outside of the two-year limitation period provided in the Limitations Act, 2002, S.O. c. 24, Sched. B.

Background Facts

Background Facts

2This action relates to a contract between the plaintiff and the defendant Toews Engineering Ltd. (“Toews”) for the provision of mechanical engineering design services for five luxury homes built by the plaintiff for himself and his family in Toronto’s Bridle Path neighbourhood. Toews services were to include designs for the geo-thermal heating and cooling (for convenience referred to as “HVAC”) systems for the homes and intermittent supervision of the HVAC installation.

3The plaintiff moved into his completed home on September 18, 2007. His family had all moved into their homes by the end of 2009. According to the plaintiff, he and his family members noticed almost immediately upon moving in that the HVAC systems were not functioning properly.

4Following discovery of the alleged problems, the plaintiff brought his complaints to Frank Toews who had designed the systems. Mr. Toews attempted to correct the problems but those efforts did not meet with the plaintiff’s satisfaction. The plaintiff obtained a report from Automation Engineering Associates Limited (“Automation Engineering”) dated June 22, 2010. The plaintiff understood this report to identify mechanical issues that Toews should fix, or mechanical issues that were within Toews’ scope of work. Mr. Toews advised the plaintiff that the design was correct and that any difficulties experienced by the plaintiff were related to the equipment or its installation. Numerous efforts were made to correct the alleged deficiencies. The plaintiff became increasingly unhappy.

5By e-mail dated July 5, 2010, the plaintiff wrote to Mr. Toews as follows:

I have reached a point where I do not believe that the systems you designed for lots 1, 2 and 3 are correct. I know for a fact that they do not meet the expectations of my family who expected a system that when called for a particular temperature they expected that is what they would get. For the millions spent on the homes there is no way that we should continue to live with the rooms that are too hot or those that are too cold. When you were hired I was told that you were very qualified & experienced to design systems that would meet our normal expectations. This has not happened. You were supposed to be my expert. Either you can correct the faults in the systems or you cannot. I will be away until Thursday night so you will have time to meet with me on Friday to explain how you intend to design a corrected system, how you intend to pay for the corrections or you will hire at your expense a qualified engineer (subject to my approval) who will design a system that works for which you will pay for all the corrections. We have been very patient living with all the problems but it has reached a point where I do not believe my family has to live with the systems that do not work. We have met many times discussing the problem but you have not come up with the corrections to your faulty plans. I expect to meet with you on Friday with a complete plan of action. If you cannot do this then I will have to hire my experts to design and correct the systems all at your cost.

5The evidence of what transpired following the delivery of this email is not as fulsome as might be expected. Exhibit “B” to the affidavit of the plaintiff is a letter from the defendants to the plaintiff dated July 20, 2010, which the plaintiff says was in response to his email of July 5. Exhibit “B” references a meeting to take place on July 22 to review proposed remedial work. It also references a meeting held since July 10 with members of the plaintiff’s family and a letter dated July 16. There is no other evidence pertaining to any of these events.

6By letter dated August 29, 2010, Toews offered to perform further work to address the plaintiff’s concerns, conditional upon being provided with a full and final release. This letter references an on-site meeting on August 24, 2010, however there is no other evidence of what happened on August 24. Mr. Toews says he had no further dealings with plaintiff following this letter; however there are letters and emails between Toews and Urbacon (project consultants for the plaintiff) beginning October 4, 2010, dealing with the proposed replacement of certain wireless sensors. It is unclear if this work was ever agreed upon or completed. In any event, the plaintiff concedes that the defendants did no further work on the property after October of 2010. As was his custom, the plaintiff travelled to Florida in the fall of 2010 where he remained until the spring of 2011. In July of 2011 the plaintiff obtained an expert report that identified flaws in the design of the HVAC system.

7The plaintiff began this action on June 19, 2013. The defendant says it is outside of the two year limitation period provided for in s. 4 of the Limitations Act, 2002, S.O. 2002, C. 24 Schedule B.

The Applicable Law

The Applicable Law

8The defendants’ motion is for summary judgment under Rule 20. The principles applicable to such motions are well known and arise out of the decision of the Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7. Summary judgment is to be granted whenever there is no genuine issue requiring a trial. There will be no genuine issue when the judge can reach a fair and just determination on the merits. This will be the case where the summary judgment process allows the judge to make the necessary findings of fact, allows the judge to apply the law to the facts, and is a proportionate, more expeditious and less expensive means to achieve a just result. In the circumstances of this case, the facts surrounding the discoverability of the claim are not in dispute. The law can be applied to those facts and allows for an expeditious and less expensive means of determining the validity of the defendants’ limitations defence.

9Section 5 of the Limitations Act, 2002 provides as follows:

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 proven.

10In the case of Tender Choice Foods Inc. v. Versacold Logistics Canada Inc. [2013] ONSC 80, Justice Perell provided a thorough and helpful summary of the principle of discoverability as it relates limitation periods:

52 The discoverability principle 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 (4^th) 641 (S.C.C.); Central Trust Co. v. Rafuse, 1986 CanLII 29 (SCC), [1986] 2 S.C.R. 147; Peixeiro v. Haberman, 1997 CanLII 325 (SCC), [1997] 3 S.C.R. 549.

53 The date upon which the plaintiff can be said to be in receipt of sufficient information to cause the limitation period to commence will depend on the circumstances of each particular case: Ferrara v. Lorenzetti, Wolfe Barristers and Solicitors, 2012 ONCA 851 at para. 71 (C.A.); Kenderry-Esprit (Receiver of) v. Burgess, MacDonald, Martin and Younger (2001), 2001 CanLII 28042 (ON SC), 53 O.R. (3d) 208 (S.C.J.) at para. 19.

54 With 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. The discoverability principle conforms with the idea of a cause of action being the fact or facts which give a person a right to judicial redress or relief against another: Lawless v. Anderson, 2011 ONCA 102 (C.A.) 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.

55 The plaintiff is required to act with due diligence in acquiring facts in order to be fully apprised of the material facts upon which a claim can be based: McSween v. Louis, 2000 CanLII 5744 (ON CA), [2000] O.J. 2076 (C.A.) at para 46; Soper v. Southcott (1998), 1998 CanLII 5359 (ON CA), 39 O.R. (3d) 737 (C.A.) at p. 744.

56 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.

57 The discoverability of a claim for relief involves not only the identification of the tortfeasor but also the discovery of an act or omission that constitute liability: Aguonie v. Galion Solid Waste Material Inc., (1998), 1998 CanLII 954 (ON CA), 38 O.R. (3d) 161 (C.A.). 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), 2010 ONSC 6034 (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.).

58 The question is whether the prospective plaintiff knows enough facts to base a cause of action against the defendant, and, if so, then the claim has been discovered and the limitation period begins to run: Lawless v. Anderson, 2011 ONCA 102 at para. 23; Soper v. Southcott supra; McSween v. Louis (2000), 2000 CanLII 5744 (ON CA), 132 O.A.C. 304 (C.A.); Gaudet v. Levy (1984), 1984 CanLII 2047 (ON SC), 47 O.R. (2d) 577 (H.C.J.) at p. 582.

59 However, the discovery of a claim does not depend upon the plaintiff knowing that his or her claim is likely to succeed; the limitation period runs from when the prospective plaintiff has or ought to have had, knowledge of a potential claim, and the later discovery of facts which change a borderline claim into a viable one does not postpone the discovery of the claim: Oakville Hydro Electricity Distribution Inc. v. Tyco Electronics Canada Ltd. (2004), 2004 CanLII 13633 (ON SC), 71 O.R. (3d) 330 (S.C.J.) at paras. 10-13; Giakoumakis v. Toronto (City), [2009] O.J. No. 55 at para 20 (S.C.J.).

60 Discovery does not depend upon awareness of the totality of the defendant’s wrongdoing. Section 5(1)(a) of the Limitations Act, 2002 prescribes that discovery occurs when the plaintiff knows or ought to know of an injury caused by an act or omission of the defendant and having regard to the nature of the injury legal proceedings would be an appropriate way to seek a remedy. For 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; Gaudet v. Levy, supra.

11To this I would add the requirement in s. 5(1)(a)(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek a remedy. In Markel Insurance Company of Canada v. ING Insurance Company of Canada, 2012 ONCA 218 the Court of Appeal held that the word “appropriate” must mean legally appropriate.

Analysis

Analysis

12The plaintiff essentially concedes that he knew well before June 19, 2011, that there was loss or damage associated with the improper operation of the HVAC system and that the loss or damage was caused by an act or omission. However, he is of the view that the claim against the defendants was not discovered until after that date because: (1) The defendants continued to assure him that the problems did not arise from the design of the system and the defendants’ liability was not apparent until he received his expert report; and (2) Having regard to the defendants’ assurances and their efforts to resolve the issues, a proceeding was not an appropriate means to seek a remedy.

13Certain facts are abundantly clear from the evidence that is before me. To begin with, Toews was responsible for the design of the HVAC systems and to provide intermittent onsite supervision of its installation. Second, Mr. Steinberg had problems with the HVAC systems from the time he moved in in 2007 and by July of 2010 had given the defendants a number of opportunities to address the problems. Third, Mr. Steinberg understood from the report of Automation Engineering in June of 2010, that there continued to be issues with the HVAC systems that needed to be corrected and which were attributable to the work of the defendants. Fourth, in his email of July 5, 2010, Mr. Steinberg placed the blame for the HVAC problems on the defendants and believed that the systems had design faults. Fifth, Mr. Steinberg refused to sign the release proposed by Mr. Toews in August of 2010 because he was of the view that the problems he was experiencing with the HVAC systems were the fault of Toews. Indeed, Mr. Steinberg was insulted and irritated by the letter.

14From these facts, it is readily apparent that even if Mr. Toews had consistently taken the position with Mr. Steinberg that Toews was not responsible for the HVAC problems, by the end of August 2010 Mr. Steinberg did not believe what he was being told. He felt insulted by Mr. Toews. He believed the problems were the responsibility of Toews and he was not willing to sign the release required by for it to continue its efforts at correction.

15By October of 2010 there were no longer any significant efforts by Toews to address the problems and little, if any, communication between the parties. Mr. Steinberg had suffered a loss or damage, he was aware that it had been caused by or contributed to by an act or omission of the defendants, and there was nothing in their relationship that would make a legal proceeding against the defendants inappropriate. That Mr. Steinberg wintered in Florida cannot be a legitimate excuse for the delay in bringing this action.

16From the evidence before me, Mr. Steinberg is an honourable and well-intentioned gentleman. It may well be that he has suffered a wrong. That he should be deprived of his right to have this wrong addressed is a regrettable but necessary consequence of failing to pursue that right in a diligent manner.

Conclusion

Conclusion

17The plaintiff did not begin this proceeding within two years of when the claim was discovered. It follows that the defendants’ motion for summary judgment is granted and the action dismissed.

18With respect to costs, I have considered the costs outlines filed by the parties. I have also taken into account the factors enumerated under Rule 57, including the time spent, the result achieved, and the complexity of the matters, as well as the application of the principle of proportionality: Rule 1.04(1). In addition, I have considered the principles set forth by the Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.) and Davies v. Clarington (Municipality) (2009), 2009 ONCA 722, 100 O.R. (3d) 66 (C.A.), specifically that the overall objective of fixing costs is to fix an amount that is fair and reasonable for an unsuccessful party to pay in the particular circumstances, rather than an amount fixed by actual costs incurred by the successful litigant. In the circumstances of this case an appropriate award of costs is $19,000 all-inclusive which includes reasonable partial indemnity costs for both the motion for summary judgment and the defense of the action.

R.D. Gordon, R.S.J.