CITATION: Christopher Callow v. Tammy Zollinger et al., 2017 ONSC 5992
COURT FILE NO.: 13-58903
DATE: 2017/10/06
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Christopher Callow
Plaintiff
– and –
Tammy Zollinger et al.
Defendants
Miriam Vale Peters for the Plaintiff
Rodrigue Escayola and Jocelyn Duquette for the Defendants
HEARD: September 29, 2017
REASONS FOR DECISION
o’bonsawin J.
Background
[1] Mr. Callow commenced an action against the Defendants, which consist of ten residential condominium corporations that are managed by Condominium Management Group and Ms. Tammy Zollinger (“Zollinger”). The claim relates to a breach of contract entered into by C.M. Callow Inc. and Zollinger in April 2012.
[2] Zollinger terminated the contract on September 12, 2013 and Mr. Callow commenced a claim in his personal capacity on September 24, 2013.
[3] On April 10, 2014, counsel for Mr. Callow advised of her intention to bring a motion to add C.M. Callow Inc. as a Plaintiff. On August 25, 2015, Mr. Callow refused to disclose his personal tax records and disclosed his corporate records instead. During examination for discovery on August 4, 2016, Mr. Callow stated under oath that the contract was entered into by the corporation and not by him personally. He and his counsel knew at that time that there was an error in the named Plaintiff.
[4] Four years after the cause of action occurred, Mr. Callow brings a motion to amend his Statement of Claim. He argues that the motion is to correct the name of the Plaintiff named as Christopher Callow and correctly replace it with C.M. Callow Inc.
[5] At the Pre-trial Conference on May 29, 2017, Master Champagne granted leave to bring a motion at the beginning of trial to amend the Statement of Claim and name C.M. Callow Inc. as the Plaintiff.
Nature of the Motion
[6] Mr. Callow brings this motion and seeks the following:
a) an Order to amend the Statement of Claim of this action to correct the name of the Plaintiff incorrectly named as Christopher Callow and correctly named as C.M. Callow Inc.;
b) an Order that the Statement of Claim attached hereto be amended and marked as Schedule “A” and that the title of proceedings in all documents issued, filed or served after the date of this Order be as listed therein; and
c) Costs of motion.
Positions of the Parties
[7] Mr. Callow argues:
• this is a contract dispute in which the contract was entered into by C.M. Callow Inc. and Zollinger;
• all of the statements in the pleadings refer to the contract between C.M. Callow Inc. and Zollinger;
• Zollinger knows that C.M. Callow Inc. is the intended Plaintiff in this action as they entered into the agreement with and received services from C.M. Callow Inc.;
• Zollinger defended the action for breach of contract entered into with C.M. Callow Inc.;
• naming the corporation as a party at an earlier stage would not have altered Zollinger’s position in the action as there are no other individuals who might have been a source of information or evidence in respect of the claim;
• this situation is the same whether the Plaintiff is Christopher Callow or C.M. Callow Inc.; and
• this is a situation of misnomer in the pleadings and it should be corrected.
[8] For its part, Zollinger argues:
• courts cannot add or substitute a party after the expiry of the limitation period;
• there has been undue delay in bringing this motion on behalf of Mr. Callow;
• this is not a case of misnomer;
• the Plaintiff is clearly identified in the pleadings as an individual;
• the wrong Plaintiff advanced the claim and failed to amend the pleadings in a timely manner or within the limitation period; and
• Mr. Callow’s motion should be dismissed and the Defendant’s cross-motion for Summary Judgment should be heard since the individual Plaintiff has no standing and no cause of action against Zollinger.
Issue
[9] The issue is whether the Plaintiff should be permitted to change the named Plaintiff from Mr. Callow to C.M. Callow Inc.
Analysis
[10] It is necessary to begin by reviewing the Rules. Rule 5.04(2) of the Rules deals with the addition, deletion, substitution of a party or correction to the name of the party. Rule 5.04(2) reads as follows:
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.
[11] Rule 26.01(1) deals with the amendments to pleadings and it states:
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.
[12] Zollinger argues that the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B (“Act”) applies in this matter. The basic limitation period is two years from the day on which the claim was discovered (s. 4). Limitation periods apply to adding a party. Sub-sections 21(1) and 21(2) of the Act state:
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.
Misdescription
(2) Subsection (1) does not prevent the correction of a misnaming or misdescription of a party.
[13] Mr. Callow argues that a misnomer in the pleadings of an action may be made up for by actual knowledge of the Plaintiff’s claim on the part of the Defendants. He relies on McDonald v. Hoopp Realty Inc., 2014 ONSC 6089, to support this argument. McDonald involved a claim for damages related to a fall outside of a shopping mall. The Plaintiff named several corporations, including a John Doe Corporation, as Defendants in her Statement of Claim. The Plaintiff sought leave to amend her Statement of Claim to replace John Doe Corporation with G4S Solutions (Canada) Ltd.
[14] Mr. Callow points me to Ellies J.’s statement at paragraph 21 to support his claim that the actual knowledge of the Defendant in this matter permits the correction of the name of the Plaintiff: “it is my belief that the law in this area has recently developed such that shortcomings in the specificity of the pleadings may be made up for by actual knowledge of the plaintiff’s claim on the part of the intended defendant.” Ellies J. concluded that “the intended defendant was sufficiently identified, both directly and in the statement of claim, to bring this case within the category of misnomer” (para. 31). He granted the requested orders. I agree with Mr. Callow, that in this case, the Defendants were aware that the claim brought by Mr. Callow is set on the same facts as the claim by C.M. Callow Inc. Although the contract is in the name of C.M. Callow, it must be noted that the majority of the correspondence between the parties was to Mr. Callow.
[15] Mr. Callow also relies on Mazzuca v. Silvercreek Pharmacy Ltd. (2001), 2001 8620 (ON CA), 56 O.R. (3d) 768 (C.A.). In this case, the Plaintiff started an action in her own name for damages related to a fire at the Defendant’s premises. During examinations for discovery, it was confirmed that the damages in the fire were sustained not by the Plaintiff in her personal capacity but instead by her corporation. The Plaintiff brought a motion for an order to permit her to amend the Statement of Claim to substitute her corporation as the named Plaintiff. The motions judge concluded that the error in naming the Plaintiff in her personal capacity was a misnomer and the Defendant had not been misled as to the nature of the claim against it and it would not be prejudiced by an amendment to correct a simple error by counsel. The motion was granted and the Defendant appealed.
[16] Cronk J.A. of the Court of Appeal for Ontario reviewed the motions judge’s reasons for decision. She stated, at paragraphs 56-57:
In the case on appeal, the motions judge considered this caselaw and concluded:
In the case before me, the action was mistakenly brought in the name of Ms. Mazzuca. This is not a situation in which a conscious decision was made to sue in her name rather than in the name of her company, La Gondola [Ltd.]. It was simply an error. Counsel always intended, and indeed was instructed, to bring the action to recover damages sustained to the business. The defendant always understood that it was the owner of the business who was suing for damages and defended on that basis. Correcting the misnomer has no impact on the defendant. There is no new cause of action being asserted and no new facts are alleged. (Emphasis added by Cronk J.A.)
I agree with these conclusions by the motions judge. In my opinion, she considered and properly applied the governing principles in her assessment of these issues.
[17] Cronk J.A. also concluded that Rule 5.04(2) to add or substitute a new Plaintiff contemplates that the “existence or absence of special circumstances warranting the amendment should be considered as one of the factors to be taken into account in determining whether a discretionary amendment is to be permitted or denied after expiry of a relevant limitation period” (para. 40). Special circumstances includes a review of the knowledge of both parties regarding the nature of the true claim intended to be advanced (para. 42).
[18] Mazzuca also dealt with the involvement of counsel for the Plaintiff in the error of properly naming the Plaintiff. Laskin J.A., concurring with Cronk J.A., questioned whether it can be said that counsel’s error was deliberate. It was concluded that counsel’s error was not deliberate: “Holding that motions under rule 5.04(2) may turn on whether the lawyer’s mistake is deliberate or unintentional is bound to produce some unjust results, results that in my view would be inconsistent with the philosophy of our current rules” (para. 91). As in Mazzuca, Mr. Callow’s counsel caused the incorrect naming of the Plaintiff.
[19] Both parties referred me to the case of Ormerod v. Strathroy Middlesex General Hospital, 2009 ONCA 697. The Court of Appeal for Ontario confirmed the trial judge’s decision to grant the Plaintiffs leave to amend the Statement of Claim to substitute the name of one physician and replace it with another on the basis of misnomer. The Appellant argued that the motion was not one to correct a misnomer but one to add a physician after the expiration of the limitation period. The Court of Appeal referred to its decision in Lloyd v. Clark, 2008 ONCA 343, [2008] O.J. No. 1682, and reproduced a passage of the decision in paragraph 21:
The case law amply supports the proposition that where there is a coincidence between the plaintiff’s intention to name a party and the intended party’s knowledge that it was the intended defendant, an amendment may be made despite the passage of the limitation period to correct the misdescription or misnomer. See Ladouceur v. Howarth, 1973 30 (SCC), [1973] S.C.J. 120 (S.C.C.); Kitcher v. Queensway General Hospital, 1997 1931 (ON CA), [1997] O.J. No. 3305 (C.A.) and J.R. Sheet Metal & Manufacturing Ltd. v. Prairie Rose Wood Products, 1986 ABCA 4, [1986] A.J. No. 7 (C.A.).
[20] The Court of Appeal also reviewed the judge’s discretion to permit a correction. If a judge finds that there was a misnomer, he/she has the discretion to refuse to permit its correction. The Court cited Cronk J.A. in Mazzuca v. Silvercreek Pharmacy Ltd., which the Court reproduced at paragraph 28:
Under both rules, a pleadings amendment is not to be made if non-compensable prejudice would result. In contrast to rule 26.01, however, the language of subrule 5.04(2) imports a discretionary power rather than a mandatory direction.
[21] The Court of Appeal also finds that the scope of what the courts treat as a misnomer has broadened: “Now that the concept of ‘misnomer’ has been broadened to apply to a wider range of situations, the standard used to permit its correction should take into account the extent of its departure from mere irregularity in all the circumstances of the case” (para. 31). An important question to ask is whether Zollinger have been misled or were unduly prejudiced. During his submissions, counsel for Zollinger stated that it does not matter if the Defendants do not suffer prejudice. I specifically asked him afterwards: if Zollinger suffered any prejudice, what would it be? He responded to me that the delay in itself causes a prejudice. He also stated that the prejudice is significant, because if in fact Mr. Callow is successful, this claim would not have occurred unless I had exercised my discretion. I disagree. These situations do not equate to prejudice suffered by Zollinger if the requested orders are granted.
[22] Zollinger urges me to be mindful of Herman J.’s comments in Streamline Foods Ltd. v. Jantz Canada Corp., 2011 ONSC 1630, where he states: “The principles articulated in the cases prior to the passage of the Limitations Act, 2002 should be treated with caution. It is no longer possible to add parties after the expiry of a limitation period even in the face of special circumstances” (para. 34). Consequently, Zollinger argues that Mazzuca is no longer applicable because it dates before the amended Limitations Act, 2002. As seen in Ormerod, this approach is incorrect since the Court of Appeal still relies on this decision after the amendments to the Limitations Act, 2002.
[23] To support its position, Zollinger refers me to the case of Veerella v. Khan, [2009] O.J. No. 6347 (S.C.), aff’d [2009] O.J. No. 4111 (Div. Ct.). In this matter, the Plaintiff brought a motion for leave to amend the Statement of Claim by substituting the corporate entity, Veerella Trading Inc., in place of the individual named Plaintiff. Master Sproat indicates at paragraph 12 that Mr. Veerella wants to substitute the name of the Plaintiff because the claim is otherwise statute barred: “This is in essence no different than issuing a new claim in the name of VTI, which claim could not proceed by virtue of section 4 of the Limitations Act, 2002.” Master Sproat finds that a motion framed to substitute the plaintiff is in essence a motion to delete the individual Plaintiff and to add the corporate entity, and is not a case involving a misnomer (para. 20).
[24] However, I prefer the case provided to me at the start of the hearing by counsel for Mr. Callow. She provided me with Greater Toronto Airports Authority Assn. Inc. v. Foster Wheeler Ltd., 2010 ONSC 5891. This case is more on point than Veerella since it deals with the issues of counsel’s error. In this matter, the Plaintiff sought to change the name of the Plaintiff to Greater Toronto Airports Authority. For unknown reasons, counsel for the Plaintiff did not conduct a corporate search and used the wrong corporate name when commencing the claim. On many occasions, counsel for the Defendant raised concerns regarding whether the Plaintiff had been correctly named. A corporate search was finally conducted and it was determined that there were two active corporations. For an unknown reasons, counsel for the Plaintiff did not name the proper party of his own client. The Defendant conceded in this matter that it would not suffer any prejudice that is not compensable in damages. It was aware of the event from day one and was served with the Statement of Claim which it defended. The Plaintiff claimed that this is a case of misnomer and in the absence of prejudice, the amendment should be granted. It is to be noted that Sproat J. based his decision primarily on Mazzuca, and at paragraph 15 quoted Cronk J.A.’s statement referring to Rule 5.04(2): “This is not a case of misnomer in the narrow sense of a misdescription of the person suing, but rather, is a mistake as to the identity of the person who brought the suit”.
[25] Sproat J. concluded that since there is an absence of prejudice, the motion should be granted. He did, however, continue to address the issue of whether special circumstances exist which would justify granting the motion (para. 19). Sproat J. listed the special circumstances as follows (para. 20):
(a) no alteration of the nature of the claim is proposed;
(b) no new facts are alleged;
(c) no new causes of action are sought to be added;
(d) no new relief is requested; and
(e) the Defendants were immediately aware of and able to investigate the situation.
[26] As in Greater Toronto Airports Authority Assn. Inc., the same special circumstances exist in Mr. Callow’s case: there is no alteration of the nature of the claim, there are no new facts alleged, there is no new cause of action sought to be added, there is no new relief requested and Zollinger was aware of the situation (early termination of the contract) which led to the claim. Consequently, there are special circumstances in this case.
[27] Furthermore, in Greater Toronto Airports Authority Assn. Inc., the issue of counsel’s role in the error was also reviewed by Sproat J. He gave little weight to the argument that a party can sue its counsel and recover. Sproat J. concluded: “It would give such a person cold comfort to have to retain new counsel, return to square one in the litigation process and incur duplicative costs. Further, the effect of denying a meritorious claim to proceed provides a windfall to the defendant who escapes liability and imposes the costs on lawyers generally” (para. 22). Sproat J. was satisfied that special circumstances existed to justify granting the amendment sought by the Plaintiff. The same can be said in Mr. Callow’s case. The possibility of suing his counsel would not benefit anyone and possibly have the effect of denying a meritorious claim and provide a windfall to Zollinger.
[28] Based on my reasoning above, I find that in Mr. Callow’s case, it is a situation of misnomer where there was an error in properly naming the Plaintiff. There is no evidence that Zollinger will suffer any prejudice. In addition, the amendment to the name of the Plaintiff will not lead to an alteration of the nature of the claim, there are no new facts alleged, there are no new causes of action sought to be added, there is no new relief requested and Zollinger was aware of the situation (early termination of the contract) which led to the claim. Consequently, I grant the orders requested by Mr. Callow.
Conclusion
[29] For the reasons noted previously, I provide following:
(a) an Order to amend the Statement of Claim of this action to correct the name of the Plaintiff incorrectly named as Christopher Callow and correctly named as C.M. Callow Inc.; and
(b) an Order that the title of proceedings in all documents issued, filed or served after the date of this Order be as listed therein.
Costs
Mr. Callow is the successful party on this motion. If the parties cannot agree as to costs, Mr. Callow may serve and file written submissions on costs not exceeding three pages, exclusive of the Bill of Costs within ten days of these Reasons for Decision. Zollinger will have ten days to provide its written submissions (with the same restrictions) from the date that Mr. Callow provides his written submissions. Mr. Callow will be allowed a brief reply if deemed necessary, of no more than one page, which shall be provided within five days after he receives Zollinger’s written submissions.
Justice M. O’Bonsawin
Released: October 06, 2017
CITATION: Christopher Callow v. Tammy Zollinger et al., 2017 ONSC 5992
COURT FILE NO.: 13-58903
DATE: 2017/10/06
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Christopher Callow
Plaintiff
– and –
Tammy Zollinger et al.
Defendants
REASONS FOR DECISION
O’Bonsawin J.
Released: October 06, 2017