Court File and Parties

OSHAWA COURT FILE NO.: CV-17-1000 DATE: 2018-09-21 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Teresa Cote Plaintiff – and – Ivanhoe Cambridge I Inc./Ivanhoe Cambridge I8 Inc., 7503067 Canada Inc., Oshawa Centre Merchants’ Association and/or Oshawa Shopping Centre and Compass Group Canada Ltd. Groupe Compass Canada LTEE Defendants

COUNSEL: Ian Greenway, for the Plaintiff/Moving Party Eric Turkienicz, for the proposed Defendants, Paragon Protection Ltd.

HEARD: August 31, 2018

Reasons for Decision

CHARNEY J.:

Nature of the Motion

[1] On June 12, 2015 the plaintiff, Teresa Cote, slipped and fell on an unknown substance while walking in the main walkway at the Oshawa Centre.

[2] On March 31, 2017 she commenced a claim against the property owners and janitorial maintenance company alleged to be responsible for the condition, maintenance and repair of the property.

[3] The plaintiff moves under Rule 5.04(2) of the Rules of Civil Procedure for leave to amend the statement of claim to add a new defendant, Paragon Protection Ltd. (Paragon), the company responsible for security at the mall.

[4] The proposed defendant opposes the motion on the ground that the applicable limitation period had expired more than two years before the motion was served on their lawyers on August 9, 2018. If their position is correct, the proposed claim against Paragon is statute barred, and leave to amend should not be granted.

Analysis

[5] Subrule 5.04 (2) provides 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.

[6] Subsection 21(1) of the Limitations Act, 2002, S.O. 2002 c. 24, Sched. B, (the “Act”), is also relevant. This subsection provides as follows:

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.

[7] Section 4 of the Act sets out the two-year limitation period applicable to this action. Section 4 provides as follows:

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.

[8] The issue on this motion is whether the plaintiff’s claim against Paragon ought to have been discovered prior to June 2017 with due diligence. As the Court of Appeal asked in Zapfe v. Barnes; 66 O.R. (3d) 397 (C.A.) at para. 24: “when can it be said that the plaintiff knew, or by reasonable diligence could have discovered, the material facts on which to base a cause of action against the proposed defendant?”

[9] The plaintiff submits that she could not with due diligence have discovered the involvement of Paragon until advised of its responsibility for mall safety by the defendants on June 26, 2017.

[10] Section 5 of the Act sets out the principles governing the discoverability doctrine. Section 5 provides as follows.

(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 proved.

[11] Unlike amendments to pleading made under Rule 26.01, a motion under Rule 5.04(2) to add a party after the apparent expiration of a limitation period is discretionary. As the Court of Appeal stated in Pepper v. Zellers Inc. (2006), 83 O.R. (3d) 648 (C.A.) at para. 14:

Contrary to the appellants’ argument, the motion was not akin to a rule 26.01 motion to amend a pleading, which “shall” be granted absent compensable prejudice. Rather, a rule 5.04(2) motion to add parties and, in this case, to add parties after the apparent expiration of a limitation period, is discretionary. While the threshold on such a motion is low, the motion judge is entitled to consider the evidentiary record to determine whether there is a live issue of fact or credibility about the commencement date of the limitation period.

[12] In Wong v. Adler, 70 O.R. (3d) 460, aff’d [2005] O.J. 1399 (Div. Ct.), Master Dash explained how a court should approach this kind of question in a motion to add a defendant after the expiry of the limitation period. He stated, at para. 45:

What is the approach a judge or master should take on a motion to add a defendant where the plaintiff wishes to plead that the limitation period has not yet expired because she did not know of and could not with due diligence have discovered the existence of that defendant? In my view,…the motions court must examine the evidentiary record before it to determine if there is an issue of fact or of credibility on the discoverability allegation, which is a constituent element of the claim. If the court determines that there is such issue, the defendant should be added with leave to plead a limitations defence. If there is no such issue, as for example where the evidence before the motions court clearly indicates that the name of the tortfeasor and the essential facts that make up the cause of action against such tortfeasor, were actually known to the plaintiff or her solicitor more than two years before the motion to amend, the motion should be refused. If the issue is due diligence rather than actual knowledge, this is much more likely to involve issues of credibility requiring a trial or summary judgment motion, provided of course that the plaintiff gives a reasonable explanation on proper evidence as to why such information was not obtainable with due diligence. That is not to say that such motion could never be denied if the evidence is clear and uncontradicted that the plaintiff could have obtained the requisite information with due diligence such that there is no issue of fact or credibility.

[13] In Wakelin v. Gourley (2005), 76 O.R. (3d) 272 (Sup. Ct.) at para. 15 aff’d [2006] O.J. No. 1442 (Div. Ct.), Master Dash further clarified the evidentiary onus on a motion to add a defendant after the limitation period has expired, at para. 15:

Therefore, as long as the plaintiff puts in evidence as to steps taken to ascertain the identity of the tortfeasors and gives a reasonable explanation on proper evidence as to why such information was not obtainable with due diligence then that will be the end of the enquiry and the defendants will normally be added with leave to plead a limitations defence. This is not a high threshold. If the plaintiff fails to provide any reasonable explanation that could on a generous reading amount to due diligence the motion will be denied……The strength of the plaintiff's case on due diligence and the opinion of the master or judge hearing the motion whether the plaintiff will succeed at trial on the limitations issue is of little or no concern on the motion to add the defendants. The only concern is whether a reasonable explanation as to due diligence has been provided such as to raise a triable issue.

[14] Section 5(2) creates a presumption that a claimant acquired knowledge of his or her claim on the date the act or omission on which the claim is based took place. In this case, by reason of s. 5(2), in the absence of evidence to the contrary, Ms. Cote was presumed to have discovered the material facts on which her claim against Paragon was based on the day that the accident took place: Miaskowski v. Persaud, 2015 ONCA 758, at para. 24; Placzek v. Green, 2009 ONCA 83, at para. 23.

[15] The principle of discoverability applies to both the discoverability of facts and to the discoverability of the tortfeasor’s identity: Pepper v. Zellers Inc., at para. 17.

[16] The Court of Appeal discussed the application of the discoverability principle in Longo v. MacLaren Art Centre, 2014 ONCA 526, at para. 42:

A plaintiff is required to act with due diligence in determining if he has a claim. A limitation period will not be tolled while a plaintiff sits idle and takes no steps to investigate the matters referred to in s. 5(1)(a) [of the Limitations Act]. While some action must be taken, the nature and extent of the required action will depend on all of the circumstances of the case.

[17] In Lockett v. Boutin, 2011 ONSC 2098, aff’d 2011 ONCA 809, LaLonde J. states, at para. 36: “Waiting for someone to inform you does not satisfy due diligence. A list of attempts to obtain the information under the solicitor’s signature has to be provided and it was not done in this case.”

[18] See also Auger v. Wood, 2014 ONSC 5306, at para. 64: “Reasonable diligence requires some positive or active efforts to ascertain the identity of potential defendants or evidence explaining why no such steps were possible”.

[19] The plaintiff’s lawyer has provided two affidavits to provide an explanation as to why Paragon’s involvement could not have been known before June 2017.

[20] The plaintiff’s lawyer did serve a notice of claim on the Oshawa Centre on June 18, 2015. This letter was forwarded to the third party claims administrator for Compass Group Canada Ltd. (Compass), which is under contract to provide janitorial/cleaning services to Oshawa Centre, including the area where the fall allegedly occurred. There was no suggestion in this correspondence that any other party was responsible for maintenance at the mall.

[21] It appears that from June 26, 2015 until June 2017, the plaintiff’s lawyer focused exclusively on Compass as the party responsible for maintenance at the Oshawa Centre. Compass denied liability on the ground that the “sweep/clean logs” kept by its cleaning staff showed that its staff met the standard of care under the Occupiers’ Liability Act, RSO 1990, c O.2. The plaintiff’s lawyer requested the “sweep/clean logs” from Compass. Unsuccessful settlement discussions between the plaintiff and Compass occurred in March/April 2017.

[22] The Statement of Claim was issued on March 31, 2017, just two months shy of the two-year limitation period. Compass is one of the named defendants. The defendants were served in April and May of 2017.

[23] On June 26, 2017 (two weeks after the limitation period had expired), the plaintiff’s lawyer received an email from Zurich Insurance Company Ltd., on behalf of the defendant Ivanhoe Cambridge I Inc. (Ivanhoe), indicating that Paragon was the security company for the Oshawa Centre. The email further indicated that the Paragon contract requires that Paragon “assist to maintain a safe and neat work environment” and that, based on the contract between Ivanhoe and Paragon, Paragon may share responsibility for the loss. This was the first mention of Paragon in any correspondence with the defendants.

[24] The plaintiff’s lawyer conducted a corporate search of Paragon on June 20, 2018 (almost one year after being advised of Paragon) to determine its correct corporate name.

[25] The plaintiff argues that, given the circumstances of this claim, she could not have known that the firm responsible for mall security might also be responsible for maintaining a safe environment. No steps were taken to ascertain the identity of other potential defendants because the correspondence from both Oshawa Centre and Compass’ insurer led the plaintiff to believe that only Compass was responsible for maintenance and cleaning at the Oshawa Centre. There was no suggestion from Compass that they were denying liability because someone else was responsible. She thought that she had the proper party, and there was no need to make any additional inquiries until after she was advised by Ivanhoe of the specific contractual terms with Paragon in June 2017.

[26] The plaintiff relies on the decision of Lauwers J., as he then was, in Madrid v. Ivanhoe Cambridge Inc., 2010 ONSC 2235, 101 O.R. (3d) 553; 2010 ONSC 2235. In that case the plaintiff alleged that she was injured when she slipped and fell in the washroom of a building owned by the defendant. She put the defendant on notice of a claim a month later, and seven months later was advised by the adjuster appointed by the defendant’s insurer that the claim was denied. She commenced an action against the defendant within the two-year limitation period. Four months after the limitation period expired, counsel for the defendant advised the plaintiff for the first time that the employee who was responsible for maintaining the washroom on the day of the fall had called in sick and that a replacement employee had been dispatched by another company, Unicco. The plaintiff brought a motion for leave to amend the statement of claim to add Unicco as a party/defendant even though the limitation period had expired. Unicco opposed on the basis that a plaintiff seeking to rely on the discoverability must demonstrate due diligence in determining the identity of the tortfeasor and that the plaintiff failed to do so.

[27] Lauwers J. allowed the motion to amend in that case, stating, at paras. 15 and 16:

In the absence of an unexpected or unusual trigger, there is little to be gained by imposing judicially a free- standing duty on plaintiffs to write pro forma letters to defendants inquiring about the identity of other possible defendants under the rubric of due diligence in s. 5 of the Limitations Act, 2002. It would not be in the interests of justice to encourage an overly muscular development of the concept of pre-discovery due diligence. The burden of responding would immediately shift to defendants and add unproductive costs. The parties should not have to conduct a pre-discovery form of discovery.

If Ivanhoe’s insurance adjuster had advised the plaintiff that liability was being denied because another party was liable, then the plaintiff’s duty to make further inquiries would have been triggered. But, on the actual facts of this case, a naked denial of liability should not trigger a duty on the plaintiff to make further inquiries. I therefore grant leave to the plaintiff to amend the Statement of Claim to add Unicco as a defendant, but reluctantly and because I feel bound by the Court of Appeal’s decision in Zapfe v. Barnes, supra, I do so without prejudice to the right of Unicco to plead any defence open to it, including a limitation defence.

[28] Lauwers J.’s approach to this issue was approved by the Ontario Court of Appeal in Galota v. Festival Hall Developments Limited, 2016 ONCA 585, at para. 27. See also: Erin Bailey v. Canadian Athletes, 2012 ONSC 4955, at paras. 8 – 9.

[29] In response, the proposed defendant argues that the plaintiff was aware of Paragon’s involvement with Oshawa Centre immediately after she fell, because a security guard employed by Paragon attended the scene of the accident and asked the plaintiff if she required emergency medical services, a wheelchair or an ice pack. The security guard spent considerable time with the plaintiff after the fall, walking with her to a store in the mall to exchange an item and waiting with the plaintiff until her husband arrived to pick her up. Paragon staff at the mall are all outfitted with a Paragon security uniform, which includes a patch to identify the guard as an employee of Paragon.

[30] Further, the proposed defendant notes that the plaintiff’s lawyer served a notice of claim on the Oshawa Centre on June 18, 2015. This letter stated: “Our review of the circumstances surrounding this incident reveals that you are entirely responsible for the injuries sustained by our client…” and made no request for information about the identity of the security guard or other possible defendants or who was responsible for inspection/maintenance or safety at the property. The proposed defendant argues that at no time prior to the issuance of the Statement of Claim did the plaintiff’s solicitors request or seek out any information regarding other potential defendants in this action, and therefore failed to act with due diligence.

[31] Finally, the proposed defendant takes the position that it will be prejudiced by its late addition to the action since the security guard who assisted the plaintiff is no longer employed by Paragon.

[32] In my view, this is not a case like Madrid, in which the plaintiff could not have been expected to identify or even contemplate the proposed defendant until “an unexpected or unusual trigger” propelled the plaintiff into action. In Madrid the plaintiff could not have known or be expected to know that on the day of her accident the employee responsible for maintenance was away and replaced by an employee who had been dispatched by another company. Nor would that be a pro forma inquiry counsel would be expected to make.

[33] But the principle stated in Madrid does not release the plaintiff or her counsel from the obligation to make any inquiries whatsoever. There are certain cases or circumstances in which plaintiffs are expected to make inquiries. See for example Laurent-Hippolyte v. Blasse et al., 2018 ONSC 940, where Master Sugunasiri states, at paras. 26 – 27:

Due diligence is not about information arriving on one’s doorstep – it is about actively taking steps outside the door.

If there is snow and ice, it is reasonable to expect that a plaintiff or her counsel would ask the known tortfeasor (HMQ in this case) whether or not there was a snow removal subcontractor. There are ample slip and fall, and motor vehicle cases naming third party snow removal contractors to make it reasonable in the present day to expect plaintiffs to make a simple inquiry. If no answer is given or the information is not forthcoming within the limitation period, at least the inquiry was made and would speak to diligence.

[34] In this case, the plaintiff argues that the “trigger” giving rise to the identity of Paragon was the clause in the contract between Ivanhoe and Paragon that was brought to the attention of the plaintiff’s counsel after the expiry of the limitation period. But the terms of Ivanhoe’s contract with Paragon are really a red herring unless Ivanhoe brings a claim against Paragon for contribution and indemnity. There is no contract between Paragon and the plaintiff. If the plaintiff has a claim against Paragon it is not based on contract; it is based on negligence and the Occupiers’ Liability Act, R.S.O. 1990, c. O.2. If the plaintiff has a cause of action against Paragon, it is because Paragon, as the security provider at the mall, owes a private law duty of care to mall customers under s. 1 (b) of the Occupiers’ Liability Act, which defines “occupier” as including “a person who has responsibility for and control over the condition of premises or the activities there carried on, or control over persons allowed to enter the premises”. This, arguably, includes Paragon or any security company.

[35] In this case, the evidence confirms that the plaintiff knew that there was a security guard on the premises immediately after she fell. Accordingly, the plaintiff’s claim against Paragon was immediately discoverable. The reason Paragon was not named is because counsel did not consider whether a claim could be brought against the security guard or its employer under the Occupiers’ Liability Act. The failure to add the security guard or its employer as a defendant was based on a lack of due diligence rather than the failure of Ivanhoe to “trigger” the inquiry by advising the plaintiff of the terms of its contract with Paragon.

Conclusion

[36] On the evidence, I conclude that the plaintiff has failed to establish that a reasonably diligent party would not have or could not have discovered the identity and the acts of the proposed defendant within the limitation period. The motion is therefore dismissed.

[37] If the parties are unable to agree on costs, the responding party may make written submissions as to costs within 20 days of the release of these Reasons. Such submissions are limited to three pages plus costs outline and any offers to settle. The plaintiff will have 10 days after receipt of the responding parties’ submissions to respond. If no submissions are received within this time frame, the parties will be deemed to have settled the issue of costs as between themselves.

Justice R.E. Charney Released: September 21, 2018