Court File and Parties

Court File No.: CV-13-483539 Date: 2018-11-09 Superior Court of Justice - Ontario

Re: Toronto Arts Group (Toronto) Inc., Toronto Arts Group (Keele Street) Inc., Gerald Gayah, Alrick Daugherty, Plaintiffs And: Dean Antoniazzi, Regency Rehabilitation & Wellness / 1767439 Ontario Limited, Defendants

Before: Stewart J.

Counsel: Maurice Mattis, for the Plaintiffs Gordon A. Meiklejohn, for the Defendants

Heard: September 20, 2018

Endorsement

Nature of the Motion

[1] The Defendants have brought this motion for summary judgment dismissing this action as being statute-barred.

[2] It is agreed that the applicable limitation period requires that the action must have been started within two years of the date upon which the Plaintiffs discovered that they had claims against the Defendants. The Plaintiffs maintain that the very latest operative date for the commencement of the running of the limitation period is April 12, 2013 when one of the Plaintiffs, Gerald Gayah, accused the Defendant Dean Antoniazzi of swindling him.

[3] The action was not commenced until June 26, 2013. The Defendants assert that the limitation period had lapsed prior to the commencement of the action. They argue that there is no genuine issue requiring a trial and therefore the action should be summarily dismissed.

[4] The Plaintiffs take the position that the evidence on the motion establishes that they did not discover they had claims against the Defendants until August, 2011 when they realized that Antoniazzi was operating partnership assets for his own benefit. When they met with counsel in March of 2012, they say they discovered further evidence of their claims against the Defendants.

[5] Although they have not brought a cross-motion for summary judgment, the Plaintiffs submit that the evidence establishes that the action was commenced within the applicable limitation period and the issue therefore should be resolved in their favour.

[6] In the alternative, the Plaintiffs submit that the date upon which the limitation period began to run is an issue that requires a trial to determine.

Discussion

[7] This action involves allegations against the Defendants of breach of contract and misappropriation of certain partnership property and business opportunities involved in and connected with the establishment of rehabilitation clinics in the Toronto area which provide a variety of diagnostic and chiropractic and other therapy services to clients.

[8] Antoniazzi asserts that there was no partnership, and that no partnership agreement was ever signed.

[9] Apparent financial difficulties in 2007 to 2009 resulted in the assumption by Antoniazzi of lease payments for the clinic premises at 2737 Keele Street, Toronto. Antoniazzi says he took possession of leased equipment at those premises as well, and paid all leasing costs.

[10] Although Antoniazzi says he told Gayah that he was personally running one of the clinics, and that he would take over paying the lease for all the equipment in it, Gayah and Daugherty maintain that they were not aware that any purported change in ownership had occurred. They believed that Antoniazzi was simply managing the clinic on behalf of all of them.

[11] To the extent the Plaintiffs may have had any claims against them, the Defendants said these were known to the Plaintiffs at least by 2011.

[12] In support of their submissions as to the date of discovery by the Plaintiffs of the facts upon which the claims are based, the Defendants rely upon communications sent by Gayah to Antoniazzi between February and April of 2011. These communications are characterized by the Defendants as evidencing that Gayah was fully aware by that time of the claims he had against the Defendants.

[13] In February 2011, Gayah emailed Antoniazzi requesting to be paid a draw on the business. In that email, Gayah stated to ‘it’s not your clinic, you can’t call the shots because you are there.”

[14] On April 12, 2011, Gayah sent Antoniazzi a SMS text message as follows:

“Well Dean, you have shown your greedy intension (sic) and cannot confront me… I have extremely high blood pressure as a result of the stress and frustration that u put me thru and am now on ACE inhibitors. I truly (sic) can’t believe u swindled me like this … well, I intend on showing up at TAG this week and I want a cheque for the reimbursement of monies that I paid out at Your request. Plz have it ready for me tomorrow.”

[15] The Defendants characterized these communications as proof of knowledge by the Plaintiffs of the facts upon which their claims are based.

[16] Gayah swears in his affidavit filed in response to this motion that this SMS text message to Antoniazzi was in relation only to monies he had spent paying for marketing and wages and his unhappiness about not being reimbursed for these by Antoniazzi.

[17] Gayah stated that he was particularly upset because other partners had been reimbursed for funds paid to or on behalf of the clinics and he wanted reimbursement too.

[18] Specifically, Gayah swears that his use of the word “swindled” referred only to Antoniazzi’s failure to address and satisfy Gayah’s request for payment of $11,400.00 said to be owing to him as reimbursement for expenses paid by him and his perceived unfairness of Antoniazzi’s failure to pay him.

[19] Gayah admits that he stated that he could not believe that Antoniazzi had “swindled” him, but only out of this repayment. He says the Plaintiffs did not have or express any belief or awareness of the more extensive claims advanced by them in this action.

[20] Antoniazzi swears that, after having received this communication of April 12, 2011 from Gayah, he sent to him a letter dated April 13, 2011. That letter states:

Lets set the record straight. Therapy Arts Group (TAG) started the clinic at Keele in 2006. You made no payment of any kind at that time.

That clinic occupied space at 2737 Keele Street Suite 109. I made the banking arrangements at inception to get the clinic off the ground.

The clinic was closed by the Landlord, on two occasions, for the failure to pay rent. On both occasions the license agreement was cancelled and you were fully aware of this.

You were informed in February of 2009 that the landlord had approached me and that I had made a deal with the landlord, supported by my personal guarantee when the landlord advised TAG that it would not continue to deal with TAG in any way.

The landlord distrained the equipment and the leasehold improvements worth $150,000.00 for back rent. You were informed that I have signed a new lease and have made numerous banking arrangements to keep the clinic going with the support of my family. This does not make you a partner in my clinic.

You have no interest in Regency Rehabiliation and Wellness Center.

I really resent your letter and its tone. Please get a lawyer and have him speak to my lawyer.

[21] Gayah denies that the letter dated April 13, 2011 that Antoniazzi says he sent to him was ever, in fact, received by him or seen by Daugherty. Antoniazzi has provided no documentary or corroborative evidence on this motion to support his assertion that such letter was ever sent or delivered. There is no evidence of ensuing discussions between lawyers as the letter appears to invite.

[22] Gayah says that it was only when he attended the clinic in August 2011 to confront Antoniazzi about his non-responsiveness that he realized that Antoniazzi was operating the clinic for his own benefit.

[23] Gayah and Daugherty also swear that it was not until they met with counsel and obtained further information as to Antoniazzi’s conduct that they fully realized that they had tenable legal claims against him.

[24] As such, on this record there is a straight-forward issue of credibility on a very material fact that affects the proper determination of when the limitation period began to run.

Discussion

[25] Section 4 of the Limitations Act, 2002, S.O. 2002, c. 24 provides that a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.

[26] Section 5(1)(b) of that legislation provides that a limitation period will begin running, not from the date a cause of action was actually discovered, but rather from the date that it should reasonably have been discovered.

[27] The issue of whether a person did or ought to have discovered the material facts on which the claim is based by a particular date is a fact-based analysis.

[28] Summary judgement will be granted if the court is satisfied that there is or genuine issue requiring a trial. This embraces potential summary judgment on a limitation period issue.

[29] There will be no genuine issue requiring trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgement. This will be the case if the summary judgment motion it 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 of achieving a just result (see: Hryniak v. Mauldin, 2014 SCC 7).

[30] A determination of whether the motion meets these criteria depends on the nature of the issues and the strength of the evidence.

[31] In my view, the issue of when the limitation period commenced to run is one which, in these circumstances, requires a trial to determine. I arrive at this conclusion despite the Plaintiffs’ apparent first argument that the issue can be so determined should be resolved their favour. In my opinion, the issue cannot be determined on the present record in favour of any party. It will require determinations of credibility and fact following a thorough consideration of the attendant evidence in light of all of the history of dealing of the parties, including the significant factual issue as to whether the purported letter of April 13, 2011 was ever sent and received and the conduct of the parties after that purported exchange of correspondence.

[32] A trial, therefore, is required to achieve a fair and just result.

Conclusion

[33] For these reasons, the motion is dismissed.

[34] The parties have agreed that the successful parties on the motion should receive costs fixed in the all-inclusive amount of $25,000.00. I therefore order that the Defendants shall pay to the Plaintiffs costs of the motion in that amount within 60 days of the date of this endorsement.

Stewart J. Date: November 9, 2018