Court File and Parties

Court File No.: CV-15-543092 Date: 2018-11-26 Ontario Superior Court of Justice

Between: Dan Toker, Plaintiff – and – NCO Financial Services, Inc. and Deloitte and Touche, LLP, Defendants

Counsel: Tahir Khorasanee, agent for Delaram F. Saadi, for the Plaintiff Monty Verlint, for the Defendant, NCO Financial Services Inc.

Heard: November 5, 2018

Before: Kimmel, J.

[1] The moving party, NCO Financial Services, Inc. (“NCO”), brings this motion under Rule 20 of the Rules of Civil Procedure, R.R.O 1990, Reg. 194 (the “Rules”) for summary judgment dismissing the plaintiff’s action as against NCO on the basis that the limitation period had expired prior to the commencement of the action in December of 2015. The claims against the defendant Deloitte and Touche, LLP (“Deloitte”) have been previously resolved.

[2] In the action, the plaintiff claims that “unlawful and unauthorized wage deductions” in the amount of $39,039.90 were taken from his pay while he was employed by NCO in India from June of 2008 to December of 2009 (the “withheld funds”).

[3] The plaintiff’s responding motion record included a proposed cross-motion for leave to amend the statement of claim (in the proposed form also included in the responding record). The court was advised that the plaintiff was not pursuing this proposed cross-motion.

[4] For the reasons that follow, NCO’s motion for summary judgment is granted and this action is dismissed as against NCO.

Background

[5] The plaintiff became employed with NCO as the Assistant Vice President for India Operations pursuant to an employment agreement dated May 14, 2008. That contract required the plaintiff to participate in an Expatriate Tax Program that NCO had in place for its employees working offshore. Under this program, the tax disbursements for NCO’s expatriate employees were handled by an outside accounting firm engaged by NCO.

[6] The plaintiff attests to the following facts in his affidavit:

a. He first discovered the “purported deductions” on June 15, 2008 when he received his first pay cheque after moving to India. b. While he was working in India and employed with NCO, he felt vulnerable and was reluctant to raise concerns about the deductions from his salary. c. His employment with NCO was terminated in December of 2009. d. At this point, he did protest the deductions from his salary and engaged in negotiations with NCO and Deloitte (the accounting firm contracted by NCO to handle the tax deductions). e. The first time that he discovered that NCO had not remitted any of the withheld funds to the Canada Revenue Agency (“CRA”) was on February 27, 2010 when he received his T4. f. Although he initially believed that NCO or Deloitte had retained the withheld funds and would either remit them to the relevant authorities or return them to him, he was advised on March 22, 2010 that this was not the case. g. He continued to investigate and was eventually informed by CRA in February of 2011 that the withheld funds had not been remitted by NCO to CRA. h. In the course of February and March 2011, he was in contact with NCO, its legal counsel and Deloitte and he was advised that he should work with Deloitte under the tax program, but he was not willing to do so. i. He hoped that the CRA would find a technical error or that NCO would change its position and refund the withheld funds or remit them to CRA.

[7] The NCO lawyer who spoke to the plaintiff in March of 2011 has attested in his affidavit that the plaintiff was informed at that time that he should provide the requested information and cooperate with Deloitte. The lawyer also attested that he advised the plaintiff at that time that, if he did not wish to cooperate with Deloitte, then he should do what he has to do.

[8] Email correspondence appended to the plaintiff’s affidavit with the subject line “Your 2009 Hypo tax” was exchanged between the plaintiff and NCO and Deloitte representatives between approximately February 2010 and September 2011, in which the withheld amount was confirmed and the plaintiff made repeated demands for its return, noting that he had consulted with both accounting and legal professionals. The plaintiff has also appended his T4 and earnings statement that he received for 2009 which show the withheld amount was not included in the income tax deducted from the plaintiff’s employment income for remittance to CRA.

[9] On July 25, 2011, the plaintiff wrote to NCO’s and Deloitte’s representatives as follows:

“Please find attached draft claim to be filed on Monday Jul.31/2011 with the Ontario Superior Court of Justice, unless the full stolen funds in the amount of $39,039.00 are returned no later than Friday Jul.29/2011.

This communication is delivered for the continuing purpose to show the courts, and any arbitration and/or investigation parties that I had tried with earnest to resolve this matter amicably, while you used an equal amount of effort to avoid it.

Should I be forced to take this action, and judging by your behavior thus far it is likely that I will, please be advised that the claim amount will increase to reflect the considerable damages you have caused me, and may have a lasting effect on both your future professional and personal dealings in an industry that is sensitive to this kind of activity by its members, as this matter will become public record upon filing.

Govern yourselves accordingly.”

[10] The plaintiff later wrote to Deloitte indicating that, as a courtesy, he would hold off until August 5, 2011 and suggested that he would file his claim on Monday, August 8, 2011. On September 13, 2011 a representative of Deloitte made the following statement in an email to the plaintiff:

“I have now had a chance to consider this matter. Based on our review it appears that your allegations against us are not justified.”

[11] After 2011, there is no record of any further communications from the plaintiff to either NCO or its external counsel until receipt of the Statement of Claim in this action, sometime after December 18, 2015 when it was issued.

Positions of the Parties

[12] NCO submits that, even on the most favourable assessment of the plaintiff’s own evidence, the limitation period in respect of the claims against NCO began to run in 2011, more than four years prior to the commencement of the action, and had thus expired long before the action was commenced.

[13] The plaintiff submits that the running of the limitation period was postponed to an unspecified date within two years of the commencement of the action, due to various circumstances in which courts have found in other cases that the date of discovery of a cause of action might be postponed. In oral argument, particular emphasis was placed on the ground of legal disability which, it was contended, prevented the plaintiff from appreciating the legal appropriateness of his cause of action until April of 2014.

Analysis

Test for Summary Judgment

[14] Rule 20.04(2) of the Rules of Civil Procedure provides that summary judgment shall be granted whenever there is no genuine issue requiring a trial.

[15] There will be no genuine issue requiring a trial when a motion judge can reach a “fair and just determination on the merits”. The Supreme Court of Canada has outlined that this will be the case when the process (1) allows for the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result. See Hyrniak v. Mauldin, 2014 SCC 7, at para. 49.

[16] In this case, the necessary findings of fact can be made from the factual background outlined above, they can be readily applied to the law and it is proportionate and more expeditious and less expensive for his claim to be dismissed now rather than allowing it to continue. Based on the factual chronology, the claim was clearly commenced after the expiry of the applicable limitation period. For the reasons explained herein, the plaintiff has not met the burden of establishing that the running of the limitation period (or its discoverability) was delayed.

[17] The relevant law to be applied to these facts is prescribed by sections 4 and 5 of the Limitations Act, S.O. 2002 c. 24 (the “Act”). Pursuant to section 4 of the Act, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.

[18] Section 5(1) of the Act prescribes that 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).

[19] Section 5(a) of the Act is based on actual knowledge and 5(b) is based on objective knowledge. Once a plaintiff knows that some damage has occurred at the hand of the defendant, the claim has been discovered. It is not required that the plaintiff know the full extent or the exact type of damage or to have amassed all of the evidence to support it. See Kennedy v. RBC, 2018 ONSC 2894 (Ont. S.C.J.) at para. 10 and NG v. Bank of Montreal, 2010 ONSC 5692 (Ont. S.C.J.), at para. 21.

[20] It is clear from the factual chronology in this case that the plaintiff had actual knowledge that NCO had the withheld funds and would not agree to remit them to the plaintiff or CRA by, at the latest, July 25, 2011 when the plaintiff sent a draft statement of claim and demand to NCO. The plaintiff likely had actual, or reasonably ought to have had the requisite, knowledge even earlier than that, but it is not necessary to pinpoint an exact earlier date for purposes of the outcome of this case, given that July 25, 2011 date is more than four years before the statement of claim was issued in this proceeding. Therefore, the claim, having been commenced after the second anniversary of its discovery, is barred by the Act.

[21] There is no act or omission on the part of NCO alleged to have occurred between 2011 and December 2015 when the statement of claim in this action was issued.

The Plaintiff’s Submissions on Discoverability

[22] In his factum, the plaintiff quoted at some length from various cases which appear to be directed to delaying the date for the discoverability of a claim. I will deal briefly with the general propositions that the plaintiff appears to be citing these cases. In my view and in the circumstances of this case, none of the principles in the cases cited could, even if applicable, have the effect of postponing the commencement of the running of the limitation period in this case beyond July 25, 2011. The principles cited are that:

a. the plaintiff must know that litigation is a “legally appropriate” means to vindicate his rights (in this case, he clearly did by the time he sent his July 25, 2011 email with the draft statement of claim); b. a civil action only becomes legally appropriate when the plaintiff has reason to believe he will not otherwise be paid (in this case, that belief is also apparent from the plaintiff’s July 25, 2011 email); c. the plaintiff needs to have a sufficient body of evidence and the factual underpinnings in order to make an informed assessment of his claims (this is also clear from the materials in the plaintiff’s possession at the time of his July 25, 2011 email and draft statement of claim, and is reflected in the exchange of emails and documents preceding it); d. the plaintiff needs to have not only the factual foundation but also an appreciation of the legal significance of the acts or omissions (once again, clearly evident by the July 25, 2011 demands and draft statement of claim); e. the plaintiff may establish that his or her interests and circumstances were so pressing that a reasonable person would conclude, that in light of them, the plaintiff could not reasonably bring an action at the time his or her bare legal rights crystalized, such as evidence of trauma, death threats, dominant relationship, medical condition and the like (the only direct evidence of this nature is tied to the time prior to December 2009 when his employment with NCO was terminated; the absence of any clear and cogent evidence of any such special circumstances in this case after that time is addressed in more detail in the next section below); f. the plaintiff may establish that he was led to believe that time was not running on the limitation period while engaged in ongoing investigations or dealings with the defendant(s) (in this case, there is no alleged promise or representation of continuing investigation or anticipated response from NCO or its representatives or counsel at all - plaintiff’s counsel was asked if he had any submissions on this and none were made; but, more to the point, to the extent that the parties were engaged in some discussions, those clearly ended in 2011); g. the plaintiff may await the outcome of a CRA investigation or assessment (there is no evidence of such in this case); h. the plaintiff may establish that he cannot be expected to have done further external diligence to “discover” the claim earlier (but here, none was required – in fact, there is no evidence of any new information having been discovered by the plaintiff between July 2011, when the plaintiff initially provided a draft statement of claim, and December 2015 when this proceeding was commenced); i. the plaintiff may establish that he cannot be expected to have known about the identity of other possible defendants (but in this case, the same defendants against whom demand was made in July 2011 were named in the action eventually commenced in December 2015); j. a mere suspicion on the part of the plaintiff does not on its own trigger the running of a limitation period (the plaintiff in this case clearly had more than a suspicion by the time he wrote his July 25, 2011 email and draft statement of claim, having regard to the documents in his possession and exchange of emails and correspondence that preceded that email); k. the plaintiff may establish that a defendant has willfully concealed information from the plaintiff that would have allowed him to discover his claim (there is no evidence or even assertion of that in this case); l. there may be issues of credibility that need to be resolved in order to decide when the limitation period began to run (there are none in this case, where the factual chronology to decide the limitations question comes from the plaintiff’s own evidence).

[23] None of this “shopping list” of possible grounds on which a limitations defence might be defeated canvassed through the various cases cited by the plaintiff are supported by the evidentiary record in this case. Once a limitation defence is raised, the plaintiff has the onus to show that the claim is not statute barred. See Ryan v. Peel District School Board, 2017 ONSC 2331 (Ont. S.C.J.) at para. 7.

[24] It was submitted on behalf of the plaintiff during the hearing that the plaintiff would have a better evidentiary basis to postpone the discoverability of the claim after the discoveries, if the claim is allowed to proceed. However, it is expected, and the court is entitled to presume, that the respondent to a motion for summary judgment will put its best foot forward and that the court will have all of the evidence that will be available for trial before it. The plaintiff is not entitled to sit back and rely on the possibility that more favourable facts may develop at trial. See Wadsworth v. RBC Dominion Securities Inc. at para. 14, varied at 2007 ONCA 409.

The Plaintiff’s Claim of Legal “Disability”

[25] The theoretical grounds upon which a limitations defence might be defeated, such as were outlined in the plaintiff’s factum and above, were not the focus of the submissions made on behalf of the plaintiff at the hearing. At the hearing, the focus was on the argument, of “legal disability”, that the plaintiff asserts prevented him from appreciating the legal appropriateness of his cause of action until April 2014. It was noted by counsel for NCO that this was a new argument that was neither supported by the evidentiary record nor the legal authorities cited in the plaintiff’s factum.

[26] Counsel appearing on the motion for the plaintiff asked for leave to provide additional legal authorities for this proposition. Leave was granted, with an opportunity for NCO’s counsel to do so as well. These additional authorities have been reviewed and considered.

[27] The authorities provided after the hearing on behalf of the plaintiff on this topic fall under section 7 of the Act (or predecessor or equivalent sections from other limitations acts). This section provides that the limitation period established by section 4 does not run during any time in which the person with the claim,

a. is incapable of commencing a proceeding in respect of a claim because of his or her physical, mental or psychological condition; …

[28] Section 7(2) provides that a person shall be presumed to have been capable of commencing a proceeding in respect of a claim at all times unless the contrary is proved.

[29] The authorities cited by the plaintiff are all cases in which there was medical evidence of a condition or alleged condition that the court could consider in determining the issue of capacity to commence the claim. See Veilleux v. ING Halifax Insurance Co., [2002] O.F.S.C.I.D. No. 24, Bisoukis et al v. Corporation of the City of Brampton et al, 46 O.R. (3d) 417; and Andriano v. Napa Valley Plaza Inc., 2010 ONSC 4951.

[30] The cases that I was referred to by NCO’s counsel were ones in which the court declined to make such a finding based on the insufficiency of the evidence in the record, including the absence of medical evidence, to support a finding of incapacity such that section 7 would apply. See Deck International Inc. v. Manufacturers Life Insurance, 2012 ONCA 309; Reid v. Crest Support Services (Meadowcrest) Inc., 2013 ONSC 6264; and Aletkina v. Hospital for Sick Children, 2014 ONSC 6263.

[31] The plaintiff relies on para. 4 of his affidavit. It was submitted this establishes that he was:

a. vulnerable when he was working for NCO (sub-paragraph (d)); b. fragile when his employment was terminated (sub-paragraph (e)); c. desperate when he was sending his emails in February and March 2011 (sub-paragraph (o)); and d. without the psychological or mental capacity to deal with the claim while at the same time dealing with the CRA in 2011 (sub-paragraph (p)).

[32] The plaintiff asserts that he did not have the ability to appreciate his claims and pursue them. However, this is not stated clearly anywhere by the plaintiff in his affidavit, and would, thus, have to be inferred. In my view, this is not a reasonable inference to draw having regard to the plaintiff’s July 25, 2011 email and draft statement of claim, which suggest a clear appreciation of both his claims and an intention to pursue them. Nor do the statements relied on in the plaintiff’s affidavit account for the period of more than four years after the dealings that took place in 2011 between the plaintiff and the CRA (and others) had ceased. When asked to reconcile this apparent inconsistency and the time gap, plaintiff’s counsel was not able to assist.

[33] In this case, the evidentiary record does not support a finding of any period of incapacity of the plaintiff to commence this proceeding, and certainly not one that persisted until sometime within the two years of December 18, 2015 when the statement of claim was issued. There is no medical evidence (although the plaintiff has had plenty of time to get this evidence) and the comments in the cited paragraphs of the plaintiff’s affidavit are not sufficient to rebut the presumption of capacity under the Act. The plaintiff has not met his burden.

Disposition and Order

[34] Accordingly, NCO’s motion for summary judgment is granted and the action is hereby dismissed against it. Given the prior resolution of the claims against Deloitte, this will put an end to the action.

[35] At the conclusion of the hearing, counsel provided basic information about the amount of costs incurred by both parties. NCO’s counsel advised that there had been some offers to settle that might be relevant to the ultimate determination of costs. There was an objection to the court being provided with those offers before I had made my decision on the motion. Now that the decision on the motion has been rendered, I encourage the parties to try to reach an agreement on costs.

[36] If the parties have not reached an agreement on costs and advised the court of such by December 3, 2018, each may deliver a costs outline and brief submissions on costs that may include reference to any offers to settle (of no more than 5 pages double spaced) on or before December 10, 2018, and each may deliver a brief reply to the other’s submission (of no more than 2.5 pages double spaced) on or before December 14, 2018. These materials, once served, should be sent to Judges’ Administration, Room 170 - 361 University Avenue, Toronto, Ontario.

Kimmel, J. Released: November 26, 2018