Court File and Parties

COURT FILE NO.: CV-13-477628

DATE: 2018-01-30

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Loblaw Properties Limited and Choice Properties Limited

AND:

Turner Fleischer Architects Inc., CPE Structural Consultants Limited, Carwell Construction Limited, Metro Concrete Floors (1990) Inc., Innocon Inc., Holcim (Canada) Inc. c.o.b. Dufferin Concrete, Toronto Inspection & Testing Service Inc. and John Doe Nos. 1-10

BEFORE: Glustein J.

COUNSEL: Bronwyn Martin, for the Appellant Toronto Inspection Ltd.

Jonathan Lancaster and Nora Kharouba, for the respondent CRH Canada Group Inc. (formerly Holcim (Canada) Inc. c.o.b. Dufferin Concrete

HEARD: January 29, 2018

Reasons for Decision

[1] The appellant, Toronto Inspection Ltd. (“TIL”) appeals from the Master’s order dated October 13, 2017 (the “Decision”) pursuant to which the Master granted the motion of the defendant CRH Canada Group Inc. (formerly Holcim (Canada) Inc.) c.o.b. Dufferin Concrete (“DC”) to “specify the names of four John Does that have been identified”.

Standard of review

[2] The standard of review for a question of law is correctness. The standard of review for a question of fact or a question of mixed fact at law is whether there is a palpable and overriding error (Zeitoun v. Economical Insurance Group, (2008), 2008 CanLII 20996 (ON SCDC), 91 O.R. (3d) 131 (Div. Ct.) at paras. 40-41, aff’d 2009 ONCA 415).

[3] An error is overriding only if it is sufficiently significant to vitiate the alleged finding. Palpable error is that which is as “clear to the mind or plain to see” or “so obvious that it can easily be seen or known” (Zeitoun, at para 38, Waxman v. Waxman, (2004), 2004 CanLII 39040 (ON CA), 186 OAC 201 at para. 297).

Ground of appeal

[4] DC sought to have two of the “John Doe” defendants to be “specified” as TIL and Toronto Inspection & Engineering Services Inc. (“TIES”). The Master had to address several legal issues in relation to that motion, as well as make factual findings as to the relationship between the named defendant, Toronto Inspection & Testing Services Inc. (“Toronto Testing”) and Toronto Inspection & Engineering Services Inc. (“TIES”), the latter who was named to “correct” John Doe 2. TIES does not appeal the decision.

[5] Other factual issues related to the state of knowledge of TIL of the litigation and the state of knowledge of the plaintiff Loblaw Properties Limited (“LPL”) of whether TIL conducted inspection services.

[6] However, for the reasons I review below, I do not need to address whether there was any error with respect to the factual findings of the Master, let alone palpable or overriding error. The Master correctly applied the proper legal principles to the issue before him, which rendered any of these factual issues irrelevant.

[7] Consequently, I only address the two grounds of appeal that relate to alleged legal errors (i) standing and (ii) the test for misnomer.

Issue 1: Standing

[8] TIL submitted before the Master that DC had no standing to bring a misnomer motion since only the plaintiff LPL could seek to amend its claim. However, such an argument conflates an amendment under Rule 26 with misnomer under Rule 5.04, and the Master properly rejected this argument.

[9] Unlike Rule 26.02 which governs a party who seeks to amend pleadings, Rule 5.04 provides the court with the ability, “at any stage of a proceeding” to “add, delete or substitute a party or correct the name of a party improperly named”.

[10] Neither party had any case law addressing whether a defendant could ask the court to correct or substitute the proper name of a co-defendant incorrectly named. However, there is no principled basis to prevent a defendant from asking the court to do so.

[11] Unlike a motion to amend, a party is not seeking to amend a pleading under Rule 26.02 when it asks the court to apply the doctrine of misnomer. Instead, under Rule 5.04(2), the title of a proceeding is corrected. No changes to the pleadings need to be made.

[12] To conflate Rule 26.02 and Rule 5.04(2) is contrary to the principles in Mazzuca v. Silvercreek Pharmacy Ltd, 2001 CanLII 8620 (ON CA), 2001 CarswellOnt 4133 (Ont. CA). Cronk J.A. referred to “the difference in language between the two rules [which] suggest that the drafters of the rules intended to preserve for the courts under subrule 5.04(2) a discretion to permit or deny amendments relating to a change of parties” (at para. 26).

[13] The distinction between Rule 5.04(2) and Rule 26.02 is further demonstrated by the settled law that limitation period defences do not apply to a motion to correct a misnomer. Due diligence of the plaintiff (or a defendant) would be irrelevant. Even if a party knew of the existence of the proper name of the defendant, an incorrect name or a John Doe pleading based on no pleaded knowledge of the defendant can still be cured at any time provided the “litigating finger” test is met and there is no non-compensable prejudice arising from the misnomer (Stechyshyn v. Domljanovic, 2015 ONCA 889 at paras. 1, 17, 19; Skribans v. Nowek, 2012 ONSC 532 at paras 30, 34, 41).

[14] If the Rules Committee intended that Rule 26.02 was to apply to correct a misnomer, there would have been no need for Rule 5.04(2) (see Mazzuca). Also, if the Rules Committee intended correction to a misnomer to be done only by the plaintiff, it would have required it to be brought by a “party” as is required under Rule 26.02. Consequently, I do not accept TIL’s submission that an interpretation of the Rules or the case law supports a “standing” requirement that only the plaintiff can rely on Rule 5.04(2) to correct, or substitute a party’s name based on misnomer.

[15] Also, the TIL position leads to illogical consequences. A plaintiff who misnames a defendant (or names a defendant as a John Doe) would be able to come to the court at any time to correct the misnomer (assuming no non-compensable prejudice, which is not at issue in this case). A co-defendant, however, who may not have had any direct dealings with another co-defendant, would be precluded under TIL’s approach from the same relief, and instead have to independently review each co-defendant’s name to ensure accuracy, or find unnamed John Doe co-defendants, all within limitation periods as TIL’s position is that a defendant can only protect itself by bringing a third party claim even against an incorrectly named defendant. Such a position is contrary to the analysis of misnomer as a separate regime in Mazzuca, and to both procedural and substantive fairness.

[16] Misnomer is not the same as seeking to add a party not named (as opposed to being incorrectly named or named as a John Doe). In the former case, defendants who seek to add a new party must comply with rules of pleading and case law to add parties by third party claims (including limitation periods). However, when a co-defendant is incorrectly named or named as a John Doe, a defendant who seeks Negligence Act contribution and indemnity by crossclaim under Rule 28 should not be in a worse position on misnomer than the plaintiff.

[17] Any party under Rule 5.04(2) can move to correct the names of other parties or its own name. If a defendant is not able to correct the title of a proceeding to reflect the identities of parties, then a defendant cannot execute on an order against that party in a claim over for contribution and indemnity or costs.

[18] If the “litigating finger” test is met and there is no non-compensable prejudice, Rule 5 serves to correct styles of causes so that there are no technical objections and the claim can proceed on its merits. DC properly claimed over against the John Doe defendants for contribution and indemnity, and sought to correct those names under Rule 5.04. Requiring a third party claim with governing limitation periods is not only unfair to DC (as I discuss above), it would create a multiplicity of proceedings and is inconsistent with Rule 1.04(1) which provides that the “rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits”.

[19] The Master was aware of the standing issue and properly considered all of the relevant Rules. He found (at para. 41) that (i) “the wording of Rule 5.04(2) does not restrict the ability to bring a misnomer motion to any specific party nor does it prevent a party other than a plaintiff from bringing such a motion”, (ii) “A plain reading of Rule 5.04(2) and the liberal interpretation required by Rule 1.04(1) leads to the conclusion that Dufferin should not be prevented from bringing this motion”. Those reasons are correct, and consistent with all of the principles I rely upon above.

[20] I note that TIL challenges the Master’s reliance on what he found to be the submission of “Loblaw’s counsel [who] advised the court that Loblaw supports Dufferin’s motion and is satisfied that with the naming of the Proposed Defendants, all of the required Defendants in the Main Action will have been named and identified” (at para. 40). TIL challenges this reliance given cross-examination evidence of Loblaw’s representative.

[21] However, the submission of Loblaw’s counsel or a statement in cross-examination cannot constitute an overriding error, even if it was a error, which I do not need to address. The issue of standing is based on the applicable Rules and case law, and for the reasons I discuss above, the Master’s decision in law was correct.

[22] Finally, on this issue, I note that it is important to keep the distinction between misnomer and amendment, so that a misnomer motion does not yield carte blanche to raise new causes of action or seek to add parties not incorrectly named. The Master properly restricted his order to changing the names of John Doe 1 and 2 to TIL and TIES, changing DC’s own corporate names, and amending the statement of defence and crossclaim to reflect its name change and particularize its crossclaims.

Issue 2: The proper test for misnomer

[23] In Ormerod (Litigation guardian of) v. Strathroy Middlesex General Hospital, 2009 ONCA 697, the court set out (i) the doctrine applies “despite the passage of the limitation period” (at para. 21) and (ii) applies whether a defendant is wrongly named or named pursuant to a pseudonym (at para. 22). Consequently, as long as a defendant reasonably would have understood that the “litigating finger pointed at them”, the doctrine applies (Ormerod, at paras. 21-22).

[24] Consequently, even if the plaintiff knew the identity of the defendant (e.g. the name of the emergency room as in Ormerod or the proper municipality as in Lloyd v. Clark, 2008 ONCA 343, 2008 OJ No. 1682 (CA)), the plaintiff (or the defendant, as I discussed above) could still substitute the proper name of the defendant despite the passage of the limitation period. Knowledge of the defendant or discoverability does not impact the analysis on misnomer, subject to the courts’ discretion (Skribans v. Nowek, 2012 ONSC 532 (Mast.), at para. 37).

[25] TIL does not submit any error of the Master in failing to take into account the type of discretionary factors the court might consider (see Skribans, at par. 47). Those factors do not appear to have been raised before the Master nor on this appeal.

[26] TIL submits that the Master erred in applying the “litigating finger” test. In essence, TIL’s position is that the statement of claim is not sufficient to reasonably know that the litigating finger was pointed at TIL. The Master did not accept that submission based on settled law. I find that he was correct in his conclusion, for the reasons I discuss below.

[27] TIL submits that the allegations in the claim are general, failing to address with any specificity the position of TIL as a defendant. The Master correctly considered the claim. At paragraph 18, LPL pleaded that the John Doe Defendants were all involved with the Distribution Centre project, and in particular “were … inspectors… responsible for the… inspection… for the construction of the Design Centre, including without limitation work related to the concrete slab”. At paragraph 55, the John Doe Defendants are alleged to have “each owed an independent duty of care to Loblaw to use all skill, care, diligence and competence in performing its work”. At paragraph 56, LPL, plead that “the Concrete Slab was inadequately inspected”. LPL sought damages arising from the alleged breach at paragraph 75 to 77 of the claim.

[28] At paragraph 13, 14 and 53 of the Decision, the Master reviewed the relevant paragraphs in the statement of claim. The Master considered several relevant “litigating finger” authorities in his thorough analysis (see par. 37, 38 of the Decision) and concluded (at par 54 of the Decision), “In my view, reading the Statement of Claim, TIL and TIES would conclude, considering all of the circumstances, that, the “litigating finger” was pointed at them”. While the Master then considered the factual evidence to the relationship between the parties, his conclusion was properly based on the statement of claim.

[29] TIL relies on Urie v. Peterborough General Health Centre, 2010 ONSC 4226 (“Urie”), in which the court did not find the “litigating finger” was pointed at a particular doctor, but rather was a “wavering hand of purported inclusion of generalized parties within the nomenclature of John Does” (Urie, at par 116).

[30] However, in Urie, the plaintiff named as a John Doe a doctor described as a “specialist in neurosurgery or head trauma” when Dr. Houpt (sought to be the “misnamed” defendant), “is actually an emergency physician who did not examine Mr. Urie at any point during his admission on June 17/18, 2003” (at par 119). The other reference to the doctor was “a haematologist or blood specialist who examined tests that were allegedly performed on Mr. Urie”, when “Dr. Houpt is neither a hematologist nor a blood specialist” and “never cared for Mr. Urie” (Urie, at par 119).

[31] The lack of a litigating finger in Urie must be contrasted with the present case. The John Doe named by LPL specifically refer to “inspectors” “responsible for the” “inspection” of the “concrete slab”. The litigating finger in the present case points directly at TIL, in sharp contrast to Urie.

[32] TIL also submits that because LPL pleaded that the inspectors, “identities and addresses are currently unknown to Loblaw”, the litigating finger could not be pointed at TIL because it had worked for LPL for 20 years and knew TIL was one of its inspectors. There were factual findings of the Master on this issue, which I do not address since the legal argument of TIL was properly rejected by the Master.

[33] Regardless of whether LPL knew that TIL was one of its inspectors, the doctrine of misnomer obviates the issue of knowledge. Even if a plaintiff knows the precise identity of a defendant, if the plaintiff incorrectly names the defendant or pleads a pseudonym on the basis that the defendant’s identity (or address) is unknown, misnomer still applies if the pleading contains a litigating hand. There is no dispute that TIL conducted concrete inspection testing on the project. On the pleadings, TIL reasonably would have known the litigating finger was pointed at it as an inspector responsible for inspection of the concrete slab.

[34] If TIL’s submission was accepted, each time a pseudonym defendant was named (as unknown identity or address), the defendant who was “pointed at” could say that it could not have been that defendant since the defendant’s identity was known to the plaintiff. Such a submission would subvert the settled law that knowledge of the defendant is irrelevant to the doctrine of misnomer.

[35] The Master fully understood and correctly applied the misnomer test. He set out the applicable principles at paragraphs 29 to 35 of his decision. He then considered case law at paragraphs 37 and 38 of his reasons where the litigating finger was pointed at the proposed defendant. The Master reviewed the allegations in the statement of claim (see paragraph 13 and 14 of the Decision).

[36] For the reasons I discuss above, the Master’s consideration of the misnomer law and application to the pleadings was thorough and correct. I reject this ground of appeal raised by TIL.

[37] The remaining grounds of appeal in the TIL factum relate to the Master (i) accepting the submissions of counsel as evidence and (ii) misapprehending the relationship between the parties.

[38] However, neither submission could alter the correctness of the decision review if TIL were correct about the error.

[39] I do not find that the Master accepted the submissions of counsel as evidence. Counsel did not appear to provide evidence but instead made a submission. Even if the Master so erred in law, LPL’s intention as to whether it had named all relevant defendants has no bearing on whether the pleadings pointed a litigating finger at TIL. Similarly, even if the Master erred in fact in finding that the TIL, TIES and Toronto Inspection were related (which would need to be a palpable error and I note there was evidence to support his findings), again, the issue of whether the entities were related would have no relevance to the misnomer test, since TIL did conduct the inspection of the concrete slab regardless of its connections to TIES or Toronto Inspection.

[40] Consequently, I do not need to make any findings on these last grounds of appeal.

Conclusion

[41] For the above reasons, I dismiss the appeal. TIL’s counsel submitted that costs should be fixed at $8,000 while DC sought costs of $15,000. Given that the law and evidence was not excessively complicated, but considering the extensive factums and briefs of authorities submitted and the importance of the appeal, I find that the costs an unsuccessful party would reasonably expect to pay are $10,000. Consequently, I order TIL to pay costs to DC in the amount of $10,000 (inclusive of taxes and disbursements) within 30 days of this order.

[42] I thank counsel for their thorough submissions which were of great assistance to the court.

Glustein J.

Date: January 30, 2018