CITATION: Lilydale Cooperative Limited v. Meyn Canada Inc., 2017 ONSC 6983
COURT FILE NO.: 06-CV-304380-00A1
DATE: 20171122
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
LILYDALE COOPERATIVE LIMITED
Plaintiff
– and –
MEYN CANADA INC., MEY-CAN CANADA EQUIPMENT LTD., MEYN FOOD EQUIPMENT INC., EMK NV and ELBOMA MOORTGAG KONSTRUKTIE NV
Defendants
– and between –
ALLIED BOILER SERVICES INC. and WEISHAUPT CORPORATION
Third Parties
No one appearing for the Plaintiff
Daniel Bernstein and Sean Husband, Agents for the Defendants, Meyn Canada Inc., Mey-Can Canada Equipment Ltd. and Meyn Food Equipment Inc.
Christopher Reain and Christine Matthews, for the Defendants, Meyn Canada Inc., Mey-Can Equipment Ltd. and Meyn Food Equipment Inc.
Erin Hoult, for the Defendant, EMK NV and Elboma Moortgat Konstruktie NV
Kammy K. Digambar, for the Third Party, Weishaupt Corporation
HEARD: July 19 and 20, 2017
Cavanagh J.
REASONS FOR JUDGMENT
Introduction
[1] The Third Party Weishaupt Corporation (“Weishaupt”) moves for summary judgment dismissing the Third Party Claim of the defendants, Meyn Canada Inc., Mey-Can Equipment Ltd., and Meyn Food Equipment Inc. (collectively, “Meyn”) against Weishaupt as statute barred by the Ontario Limitations Act, 2002, S.O. 2002, c. 24, Schedule B (the “Limitations Act”), s. 18.
[2] For the following reasons, Weishaupt’s motion is granted and Meyn’s Third Party Claim against it is dismissed.
Background Facts
[3] This action arises from a fire at a poultry processing plant owned and operated by the plaintiff, Lilydale Cooperative Limited, now Sofina Foods Inc. (“Lilydale”), which occurred on January 29, 2004.
[4] Weishaupt is in the business of supplying commercial burners used in food processing equipment.
[5] Meyn, at the material times, was a supplier of food processing equipment.
[6] In 1994, Meyn sold a fryer and oven system to Lilydale that Meyn had designed.
[7] Weishaupt supplied a commercial burner to Meyn that was a component in the fryer and oven system that Meyn supplied to Lilydale.
[8] EMK NV and Elboma Moortgat Konstruktie NV (collectively, “EMK”) supplied another component, a thermal boiler, for the fryer and oven system supplied by Meyn to Lilydale.
[9] Allied Boiler Services Inc. (“Allied”) was involved in the assembly and installation of the fryer and oven system at Lilydale’s plant in Alberta.
[10] On December 22, 2004, Lilydale commenced an action in Alberta against Meyn and EMK alleging that the fire was caused by the negligence of Meyn and/or EMK, and/or a breach of contract by Meyn, in respect of the allegedly defective fryer and oven system that was purchased from Meyn.
[11] On January 19, 2006, Lilydale commenced the main action in Ontario against Meyn and EMK claiming substantially the same relief.
[12] On March 10, 2006, Lilydale served Meyn with the Statement of Claim in the Ontario action and in the Alberta action.
[13] On April 4, 2006, Lilydale served EMK with the Statement of Claim in the Ontario action and in the Alberta action.
[14] On November 14, 2006, Meyn moved to stay the Ontario action on the grounds that Alberta was the convenient forum and/or the Ontario action was an abuse of process because of the extant Alberta action. This motion was dismissed by Day J. on February 13, 2007. An appeal of the order of Day J. was dismissed by the Court of Appeal on February 14, 2008. On March 6, 2008, Meyn informed the other parties that it would not pursue a further appeal.
[15] On November 14, 2008, Meyn issued a Third Party Claim in the Ontario action against Weishaupt and Allied claiming contribution and indemnity from Weishaupt for breach of contract, and for contribution and indemnity from Allied for breach of contract and in tort.
[16] On November 27, 2008 EMK issued a Third Party Claim against Weishaupt and Allied claiming contribution and indemnity in tort.
[17] Allied moved to strike out both of the third party claims against it as being commenced outside of the applicable limitation period under s. 18 of the Limitations Act and, alternatively, for summary judgment dismissing the third party claims for the same reason.
[18] By Endorsement dated July 21, 2010, D. Wilson J. made an order dismissing EMK’s Third Party Claim and Meyn’s Third Party Claim against Allied as being statute barred. In her Endorsement, D. Wilson J. wrote, at para. 17:
In my view, the language of section 18(1) of the New Act is applicable to the facts of this case and there can be no doubt that EMK was served with the Statement of Claim in the Ontario action by April 2006 at the latest. Thus, it had two years from that date in which to issue its Third Party claim for contribution and indemnity from Allied. It is out of time on this analysis, having issued the proceedings in November 2008.
[19] D. Wilson J. also addressed the submission made by EMK that the discoverability principles in section 5 of the Limitations Act applied. D. Wilson J. also held that if they do apply, she would still find that EMK failed to issue its third party claim within two years from the discovery of the claim. D. Wilson J. did not accept the submission by EMK that the earliest date on which EMK could have discovered its claim against Allied was in March 2008 when the jurisdictional issue was resolved.
[20] D. Wilson J. held that regardless of which approach is taken on the limitation period issue, the Third Party Claims of EMK and Meyn were issued outside of the two year limitation period and she made an order dismissing the Third Party Claims against Allied.
[21] Meyn did not attend Allied’s motion that was heard and decided by D. Wilson J. and took no position on this motion.
Analysis
[22] The issue on this motion is whether Meyn’s Third Party Claim against Weishaupt for contribution and indemnity in respect of Lilydale’s claim is statute barred.
[23] The determination of this issue depends on the answers to the following questions:
a. Has Weishaupt established that it is entitled to summary judgment because there is no genuine issue requiring a trial on the question of whether Meyn is precluded by the doctrines of res judicata and issue estoppel from relitigating the issues decided by D. Wilson J. on Allied’s motions for summary judgment against Meyn and EMK?
b. If not, has Weishaupt established that, nevertheless, it is entitled to summary judgment because there is no genuine issue requiring a trial on the question of whether s. 18(1) of the Limitations Act establishes an absolute two year limitation period for Meyn’s Third Party Claim against Weishaupt for contribution and indemnity commencing on the day on which Meyn was served with Lilydale’s Statement of Claim?
c. If not, has Weishaupt established that, nevertheless, it is entitled to summary judgment because there is no genuine issue requiring a trial on the question of whether Meyn discovered its claim more than two years before its Third Party Claim against Weishaupt was issued?
Has Weishaupt established that it is entitled to summary judgment because there is no genuine issue requiring a trial on the question of whether Meyn is precluded by the doctrines of res judicata and issue estoppel from relitigating the issues decided by D. Wilson J. on Allied’s motions for summary judgment against Meyn and EMK?
[24] On Weishaupt’s motion for summary judgment dismissing Meyn’s Third Party Claim, it first submitted that this claim is statute barred because s. 18 of the Limitations Act establishes an absolute two year limitation period from the date of service of Lilydale’s statement of claim for commencement of a claim for contribution and indemnity. Meyn responded by submitting that claims for contribution and indemnity are subject to the principles of discoverability and that it was not legally appropriate for Meyn to pursue the claim against Weishaupt until March 2008, when the forum issue was finally decided.
[25] In its reply factum, Weishaupt submits that D. Wilson J. decided that the discoverability principles in s. 5 of the Limitations Act do not apply to claims subject to s. 18 of the Limitations Act and that EMK had two years from the date that it was served with Lilydale’s Statement of Claim in which to issue its Third Party Claim for contribution and indemnity from Allied, another alleged wrongdoer. Weishaupt submits that Meyn is precluded by the doctrine of issue estoppel from relitigating the decision of D. Wilson J. on this issue.
[26] If Meyn is precluded from relitigating the issue decided by D. Wilson J. because of res judicata and issue estoppel, Weishaupt’s motion must be granted, regardless of whether another court on another occasion has reached, or may reach, a different conclusion on whether s. 18 incorporates the discoverability principles in s. 5 of the Limitations Act. For this reason, I first address the question of whether the doctrine of issue estoppel operates to preclude Meyn from relitigating the decision of D. Wilson J. on this issue.
[27] Weishaupt relies on the following passage from the decision of Cartwright J. of the Supreme Court of Canada in Maynard v. Maynard, 1950 CanLII 3 (SCC), [1951] S.C.R. 346 at paras. 32 and 33, citing the statement of the law by Wigram V.C. in case of Henderson v. Henderson, as quoted in Green v. Weatherill, [1929] 2 Ch. 213 at 221, 222:
Where a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matters which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject litigation, in which the parties, exercising reasonable diligence, might have brought forward at the time.
[28] Cartwright J. in Maynard, at para. 33, also quoted the following passages from the judgment in Hoystead v. Commissioner of Taxation, 1925 CanLII 607 (UK JCPC), [1926] A.C. 155 at p. 165:
Parties are not permitted to begin fresh litigations because of new views they may entertain of the law of the case, or new versions which they present as to what should be a proper apprehension by the Court of the legal result either of the construction of the documents or the weight of certain circumstances.
If this were permitted litigation would have no end, except when legal ingenuity is exhausted. It is a principle of law that this cannot be permitted, and there is abundant authority reiterating that principle.
[29] In Angle v. Minister of National Revenue, 1974 CanLII 168 (SCC), 1974 CarswellNat 375, the Supreme Court of Canada, at para. 3, identified the requirements of issue estoppel as (1) that the same question has been decided; (2) that the judicial decision which is said to create the estoppel was final; and (3) that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised.
[30] The question decided in the earlier proceeding on which the estoppel is founded must by so fundamental to the substantive decision that the latter cannot stand without the former: Angle, at para. 3.
[31] D. Wilson J. also decided, alternatively, that if the discoverability principles apply, EMK failed to issue its third party claims within two years from discovery of the claim, and for EMK to wait for the determination of the motion to stay the Ontario proceedings does not constitute a reasonable approach to the litigation.
[32] Meyn submits that (a) it is clear that claims for contribution and indemnity are subject to principles of discoverability, and (b) it was not legally appropriate for Meyn to pursue the claim against Weishaupt before the forum issue was decided as that issue had the potential to eliminate the need for the claim. Meyn submits that it is now clear from Court of Appeal decisions that were released after the decision of D. Wilson J. that she was in error in her determination that discoverability does not apply to claims for contribution and indemnity, and that these Court of Appeal decisions are binding appellate authorities which dictate a different result.
[33] Meyn submits that the doctrine of issue estoppel does not apply because the requirement of mutuality, the third requirement in Angle, has not been satisfied since Weishaupt did not itself move to dismiss Meyn’s third party claim when Allied’s motion was bought. Meyn submits that, by waiting, Weishaupt took the risk that new judicial decisions could be released that may affect the question that D. Wilson J. decided. I disagree with Meyn’s submission. Weishaupt was a party to the proceeding in which the decision of D. Wilson J. was made and would be affected by her decision. The decision of D. Wilson J. on an issue that affected EMK and Meyn, as claimants, and Allied and Weishaupt, as third parties, was binding on these parties.
[34] Meyn also submits that Meyn and EMK were co-defendants in the Lilydale action, and that different conditions apply in order for issue estoppel to apply as between co-defendants. In support of this submission, Meyn relies upon North Waterloo Farmers Mutual Insurance Co. v. Wylie, 1989 CarswellOnt 662. In North Waterloo, in the first action, the plaintiffs sued their five insurers and the insurance agent and the insurers were held liable for a loss caused by fire where the insurers had denied liability claiming that the insured had not disclosed a material fact. After being found liable, some of the insurers sued the insurance agent for negligence for non-disclosure. The plaintiff insurers relied upon the doctrine of issue estoppel to preclude the insurance agent from relitigating the fact found in the first action, that the agent had knowledge of the material fact.
[35] The trial judge in North Waterloo, at p. 253, cited 16 Hals., 4th ed. at 1044-5 which identified the requirements of establishing issue estoppel as between co-defendants:
In order to create a res judicata as between co-defendants, three conditions are requisite: (1) there must be a conflict of interest between the defendants concern; (2) it must be necessary to decide this conflict in order to give the plaintiff the relief he claim; and (3) the question between the defendants must have been finally decided.
Meyn submits that EMK and Meyn are co-defendants and that their interests were identical on the Allied motion. Meyn submits that, therefore, there was no conflict between them and a requirement for establishing issue estoppel as between co-defendants was not satisfied.
[36] The rationale for the requirements for issue estoppel as between co-defendants was described by the trial judge in North Waterloo, at para. 93, citing the following passage from Bibi v. Nath (1931), Indian Appeals 158, vol. LVIII, at p. 165:
That there may be res judicata as between co-defendants has been recognized by the English courts and a long line of Indian decisions. The conditions under which this branch of the doctrine should be applied are the stated by Wigram V.-C in Cottingham v. Earl of Shrewsbury, 3 Ha. 627, 638: ‘If a plaintiff cannot get at his right without trying and deciding a case between co-defendants the court will try and decide that case and the co-defendants will be bound; but if the relief given to the plaintiff does not require or involve a decision of any case between co-defendants, the co-defendants will not be bound as between each other by any proceeding which may be necessary only to the degree the plaintiff obtains’.
[37] I do not agree with Meyn that Weishaupt is relying upon the doctrine of issue estoppel as it applies as between co-defendants. Meyn and Weishaupt are not co-defendants. Meyn and EMK were each a claimant against Allied and Weishaupt in separate third party actions. Allied brought a motion as a third party in each third party action. The decision of D. Wilson J. is not a decision in respect of which either Meyn or EMK seek to bind each other as co-defendants to the action brought by Lilydale. Weishaupt, a third party to Meyn’s Third Party Claim, seeks to bind Meyn, the claimant, to the decision made by D. Wilson J. in Meyn’s third party action against Allied and Weishaupt, to which they were both parties.
[38] Meyn submits that because there was an absence of mutuality, the doctrine of issue estoppel does not apply. Meyn submits that the doctrine of abuse of process could apply, but that it should not be applied in these circumstances. In support of this submission, Meyn relies upon the following passage from the decision of the Supreme Court of Canada in Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63 at para. 43:
In all of its applications, the primary focus of the doctrine of abuse of process is the integrity of the adjudicative functions of courts. Whether it serves to disentitle the Crown from proceeding because of undue delays [citation omitted], or whether it prevents a civil party from using the courts for an improper purpose [citations omitted] the focus is less on the interest of parties and more on the integrity of judicial decision making as a branch of the administration of justice.
Meyn submits that to preclude it from opposing Weishaupt’s motion based upon the doctrine of issue estoppel would bring the administration of justice into disrepute because the effect would be to give effect to the decision of D. Wilson J. which, Meyn submits, applied the law incorrectly.
[39] I conclude that Weishaupt has shown that the following requirements for the application of the doctrine of issue estoppel have been satisfied:
a. The question that was decided by D. Wilson J. that is said to create the estoppel, that the discoverability principles in s. 5 of the Limitations Act do not apply to claims subject to section 18 of the Limitations Act and each of EMK and Meyn had two years from the date of service of Lilydale’s Statement of Claim in which to issue its Third Party Claim, is the same question that is before me.
b. The decision of D. Wilson J. is final.
c. Both Weishaupt and Meyn are parties on the motion before me in which issue estoppel is raised, and both were parties to Meyn’s third party action in which the decision of D. Wilson J. was made.
d. The question decided by D. Wilson J. on the application of the discoverability principles in s. 5 of the Limitations Act to a claim for contribution and indemnity that is subject to s. 18 was fundamental to the substantive decision to dismiss Meyn’s Third Party Claim against Allied.
[40] The fact that Meyn took no position on the motions heard by D. Wilson J. does not affect whether issue estoppel applies. It was open to Meyn to participate on the motions heard by D. Wilson J. and to appeal her decision if, in Meyn’s judgment, it was made in error. Meyn may have had sound tactical reasons for its decision not to oppose Allied’s motion. EMK made submissions that, had they been accepted, would also have benefited Meyn. Meyn, by choosing not to take a position on Allied’s motion, is in no different a position than if it had participated fully.
[41] I do not agree with Meyn that if I were to apply the doctrine of issue estoppel (or, had there been a lack of mutuality, the doctrine of abuse of process) in this case, this would bring the administration of justice into disrepute. The fact that additional judicial decisions on the question decided by D. Wilson J. have been released since she made her decision does not undermine the rationale for the application of the doctrines of issue estoppel or abuse of process that are based upon such principles as judicial economy, consistency, finality and the integrity of the administration of justice: see C.U.P.E. at paras. 37, 38, 42, 43, 44, 46, 51, 52, 53, and 55.
[42] If parties were permitted to relitigate questions that were finally decided because of new views they may later take of the law that applies in a given case, whether based upon new judicial decisions or other considerations, litigation would have no end: Hoystead, at p. 165.
[43] I therefore conclude that Meyn is precluded by the doctrine of issue estoppel or, if I am in error in concluding that the requirement for mutuality is satisfied, the doctrine of abuse of process, from relitigating the question that was decided by D. Wilson J. that Meyn had two years from the date of service of Lilydale’s Statement of Claim to issue a Third Party Claim seeking contribution and indemnity from another alleged wrongdoer.
[44] Meyn’s Third Party Claim against Weishaupt was issued more than two years after Meyn was served with Lilydale’s Statement of Claim and, therefore, it is statute barred.
[45] Because of my conclusion on the application of the doctrine of issue estoppel, I do not find it to be necessary for me to decide the other questions on this motion that arise only if the doctrine of issue estoppel does not apply. Specifically, I do not need to decide whether, as Meyn submits, D. Wilson J. was incorrect in her determination that the principles of discoverability do not apply to claims for contribution and indemnity.
Disposition
[46] For the foregoing reasons, Weishaupt’s motion for summary judgment is granted. Meyn’s Third Party Claim against Weishaupt is dismissed.
[47] If the parties are unable to resolve costs, Weishaupt may make written submissions within 20 days and Meyn may make responding submissions within 15 days of receipt of Weishaupt’s submissions. If so advised, Weishaupt may make brief reply submissions within 5 days thereafter.
Cavanagh J.
Released: November 22, 2017
CITATION: Lilydale Cooperative Limited v. Meyn Canada Inc., 2017 ONSC 6983
COURT FILE NO.: 06-CV-304380-00A1
DATE: 20171122
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
LILYDALE COOPERATIVE LIMITED
Plaintiff
MEYN CANADA INC., MEY-CAN CANADA EQUIPMENT LTD., MEYN FOOD EQUIPMENT INC., EMK NV and ELBOMA MOORTGAG KONSTRUKTIE NV
Defendants
ALLIED BOILER SERVICES INC. and WEISHAUPT CORPORATION
Third Parties
REASONS FOR JUDGMENT
Cavanagh J.
Released: November 22, 2017