Court File and Parties

COURT FILE NOS.: CV-15-122102-00A1 CV-15-122102-00A2 DATE: 20181219 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: CV-15-122102-00Al Petro Panarites and Poli Lekas, Plaintiffs -and- Andrew Grant Design Group Ltd., Inspired Landscape Solutions Inc., Kevin MacDonald (c.o.b. "Landscape Solutions", "Inspired Landscape Solutions Pool & Spa'', "Inspired Landscape Solutions Inc." and "Greater Toronto Area Landscape Solutions Inc."), Nancy C. MacDonald (c.o.b. "Landscape Solutions " , " Inspired Landscape Solutions Pool & Spa'', "Inspired Landscape Solutions Inc." And "Greater Toronto Area Landscape Solutions Inc."), Robert Miller and Deborah Marie Miller, Defendants -and- Fire Magic Grills, John Doe Gasfitter, Rob Leblanc, John Doe Electrician and John Doe Manufacturer, Third Parties

Counsel: No one appearing for the plaintiffs Adam Bucci, for the defendant, Andrew Grant Design Group Ltd. Alexander Paul, for the defendants, Kevin McDonald and Inspired Landscape Solutions Inc. Daphne Hooper, for the third party, Fire Magic Grills Stephen Libin, for the proposed third party, Sunstone Metal Products Inc. No one appearing for the proposed third party, Ross Hammond

CV-15-122102-00A2 Petro Panarites and Poli Lekas, Plaintiffs -and- Andrew Grant Design Group Ltd., Inspired Landscape Solutions Inc., Kevin MacDonald (cob. " Landscape Solutions", "Inspired Landscape Solutions Pool & Spa", "Inspired Landscape Solutions Inc." and "Greater Toronto Area Landscape Solutions Inc."), Nancy C. MacDonald (cob. " Landscape Solutions " , "Inspired Landscape Solutions Pool &2 Spa" , "Inspired Landscape Solutions Inc." And " Greater Toronto Area Landscape Solutions Inc."), Robert Miller and Deborah Marie Miller, Defendants -and- Fire Magic Grills, John Doe Gasfitter, Rob Leblanc, and John Doe Manufacturer, Third Parties

HEARD: November 22, 2018

J. SPEYER J.

A. Introduction

[1] The plaintiff home-owners sued the defendants after their house was damaged by fire on December 12, 2013. The fire started in the area of a barbeque on their deck. The defendants are the previous owners of the house, Robert and Deborah Miller, who renovated the backyard, Andrew Grant Design Group, who designed the renovation, including the barbeque area, and Inspired Landscape Solutions Inc. and Kevin MacDonald, the contractors who carried out the backyard renovations.

[2] The defendants issued third party claims against Fire Magic Grills, John Doe Gas Fitter, Rob Leblanc and John Doe Manufacturer.

[3] The defendants now seek to claim against a different barbeque manufacturer, and a named gas fitter. Two related motions to add or substitute parties and to delete a party have been made under Rule 5.04(2) of the Rules of Civil Procedure. Inspired Landscape Solutions Inc. and Kevin MacDonald seek two amendments to the Third Party Claims:

(1) To substitute the name of "Ross Hammond" for "John Doe Gas Fitter", or to add "Ross Hammond" as a third party.

(2) To substitute "Sunstone Metal Products L.L.C." for "John Doe Manufacturer", or to add "Sunstone Metal Products L.L.C." as a third party. Related to this is a request to delete Fire Magic Grills as a third party.

Andrew Grant Design Group Ltd. moves for the same relief.

B. The history of the proceedings

[4] The statement of claim was issued on March 12, 2015. Andrew Grant Design Group Ltd. ("Grant") was served by mail sent on April 1, 2015, and issued a statement of defence and cross-claim on May 25, 2015. Inspired Landscape Solutions Inc. and Kevin McDonald ("Inspired") were served on March 25, 2015, and issued a statement of defence and cross-claim on August 10, 2015. Both Grant and Inspired issued their Third Party Claims in March, 2017.

[5] When the third party claims were issued, Grant and Inspired knew that the gas hook-up for the barbeque was done by a man named "Ross". They did not know his last name. They believed that the brand name of the barbeque, which had been consumed by the fire, was Fire Magic Grills. They later learned that "Ross" was Ross Hammond, and that the brand name of the barbeque was Sunstone Metal Products L.L.C. ("Sunstone"), rather than Fire Magic Grills.

[6] Grant and Inspired moved to amend the Third Party Claims by adding Ross Hammond and Sunstone Metal Products L.L.C. as third parties by Notices of Motion dated October 23, 2017 (Inspired) and November 23, 2017 (Grant).

C. The positions of the parties

[7] Ross Hammond was not represented by counsel, and did not appear at the hearing of the motion, though properly served.

[8] Sunstone opposes the motions on the basis that the limitation period prescribed by the Limitations Act, 2002, S.O. 2002, c. 24, has expired.

[9] Grant argues that the claim against Sunstone was not discoverable by him until October 23, 2017, when he received documents from the plaintiff that included a manual that identified the brand of the barbeque as Sunstone. Alternatively, Grant argues that the claim was discoverable, at the earliest, on March 17, 2017, when the plaintiff provided Grant with an expert's preliminary conclusion as to the origin and cause of the fire. In the further alternative, Grant invokes the doctrine of misnomer in aid of its position that Sunstone should be added as a third party.

[10] Inspired echoes the arguments made by Grant, but asserts that the third party claim against Sunstone was discoverable by Inspired only on December 23, 2016, when it received a photograph of the barbeque with Grant's affidavit of documents in which the brand of the barbeque is visible, though hard to read. Inspired elected to wait for the examinations for discovery to be conducted in January and February, 2017, to clarify the make of the barbeque. Clarity was not achieved because Grant testified, erroneously, that the barbeque was made by Fire Magic. Inspired says that it was not until the manual was received from the plaintiffs on October 23, 2017, that it was in a position to properly seek to add Sunstone as a third party.

D. The applicable principles

[11] The combined effect of ss. 4, 5(2), and 18 of the Limitations Act, 2002 is to impose a limitation period in relation to claims for contribution and indemnity by one alleged wrongdoer against another. That limitation period "presumptively begins on the date of service of a claim in respect of which contribution and indemnity is sought. This is not an absolute limitation period. That presumptive limitation period start date, however, can be rebutted by the discoverability principles prescribed in s. 5 of the Limitations Act, 2002": Mega International Commercial Bank (Canada), v. Yung, 2018 ONCA 429, at para. 74.

[12] A claim seeking contribution or indemnity is statute-barred two years after the party seeking contribution or indemnity is served with a claim, "unless that party proves that the claim for contribution or indemnity was not discovered and was not capable of being discovered through the exercise of due diligence until some later date": Mega, at paras. 54 and 66.

[13] The motions to amend the third party claims by adding Ross Hammond and Sunstone Metal Products as third parties were brought on October 23, 2017 (Inspired) and November 23, 2017 (Grant), more than two years after the moving parties were served with the statement of claim. Therefore, these claims are brought more than two years after the presumptive commencement date of the limitation period, and are statute-barred unless the moving parties demonstrate that their claims against these third parties were not discovered, and not capable of being discovered through the exercise of due diligence, until some later date less than two years before October 23, 2017 (Inspired) and November 23, 2017 (Grant).

[14] An action is discoverable when the party with the claim knows: 1) that the injury, loss or damage occurred; 2) that the injury, loss or damage was caused or contributed to by an act or omission; 3) that the act or omission was that of the person against whom the claim is made; and, 4) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it: Limitations Act, 2002, s. 5(1); Mega, at para. 80. Actual knowledge of these circumstances is not required. A claim is discoverable on 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 preceding four things: Limitations Act, 2002, s. 5(2).

[15] In Crombie Property Holdings Ltd v. McColl-Frontenac Inc., 2017 ONCA 16, at para. 42, van Rensberg J.A. stated:

The suspicion of certain facts or knowledge of a potential claim may be enough to put a plaintiff on inquiry and trigger a due diligence obligation, in which case the issue is whether a reasonable person with the abilities and in the circumstances of the plaintiff ought reasonably to have discovered the claim, under s. 5(1)(b).

[16] The approach to discoverability mandated by the Limitations Act, 2002, and the jurisprudence balances important and sometimes competing considerations. One of those considerations is the need for fairness to claimants, who may need some time to fully appreciate the nature and extent of wrongs done to them, and to discover the potential wrong-doers. On the other hand, finality and the need for closure and certainty demand that claimants act with reasonable dispatch in commencing litigation. Respect for limitation periods that reflect the will of the legislature should be encouraged. Also weighing into the mix are the interests of justice, which are not advanced by an uninformed shotgun approach to litigation where any and all possible parties are sued just in case. Decisions to sue must be made responsibly, on the basis of actual knowledge as to what is claimed, against whom, and on what cause of action.

[17] In Wong v. Adler (2004), 70 O.R. (3d) 460, aff’d [2005] O.J. No. 1399 (Div.Ct.), at para. 45: Master Dash explained how a court should approach a motion to add a defendant after the expiration of a 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, as is clearly implied in Zapfe, 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.

[18] Master Dash provided further clarification of the evidentiary burden on a motion to add a defendant after the expiration of a limitation period in Wakelin v. Gourley (2005), 76 O.R. (3d) 272, aff’d [2006] O.J. No. 1442 (Div.Ct.), 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. If the plaintiff puts in evidence of steps taken but the proposed defendant also provides evidence of further reasonable steps that the plaintiff could have taken to ascertain the information within the limitation period then the court will have to consider whether the plaintiff's explanation clearly does not amount to due diligence. If there is any doubt whether the steps taken by the plaintiff could not amount to due diligence then this is an issue that must be resolved on a full evidentiary record at trial or on summary judgment. 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.

[19] The discoverability principle applies to discoverability of the facts giving rise to potential liability and to discoverability of the identity of the potential tortfeasor: Zapfe v. Barnes (2003), 174 O.A.C. 211, at para. 32; Pepper v. Zellers (2006), 83 O.R. (3d) 648 (C.A.), at para. 17.

E. The principles applied

[20] Upon being served with the statement of claim, the moving parties took steps to determine whether to claim against third parties. Correspondence was exchanged between counsel for Grant, counsel for Inspired, and plaintiff's counsel in July, 2015 wherein counsel for Inspired advised plaintiffs' counsel of his tentative view that third party claims would be brought against the gas-fitter and the manufacturer of the barbeque. In November, 2015, counsel for Inspired noted that he did not have information as to the identity of the manufacturer and the gas-fitter, and believed that counsel for the former owners was trying to get that information. By February, 2016, counsel for Inspired wrote to counsel for the other defendants and told them that his client recalled the gas-fitter to be "Ross", a handyman who did work for the former owners, and that the barbeque was bought by the former owners in Aurora. Counsel for Grant advised the other counsel that his client believed the manufacturer to be Fire Magic, information that turned out to be wrong. In March, 2016, counsel for Inspired confirmed to counsel for the plaintiffs that he was considering possible third parties, and requested further information to assist his consideration.

[21] The former owner, Robert Miller died in February, 2016. He was the homeowner most involved in the backyard renovations, and the information he possessed died with him.

[22] On December 23, 2016, Grant delivered its affidavit of documents, which included an untitled diagram and product description of a barbeque, together with a photograph of the barbeque, which displayed the brand name on the front of it, though the quality of the photograph was not good. From the perspective of Inspired, that was its first opportunity to discover that the barbeque was manufactured by Sunstone. Counsel for Inspired decided not to take further steps until completion of the examinations for discovery in January and February, 2017, to see what the parties knew about the photograph. As it turned out, they either did not know the identity of the manufacturer (Mrs. Miller and Mr. McDonald), or mistakenly believed and testified that it was a Fire Magic (Grant), even after he was shown a copy of the photograph. Counsel for Inspired argues that if December 23, 2016 is the date on which Inspired reasonably could have discovered that the barbeque was made by Sunstone, that his third party claim was initiated within two years of that date.

[23] On March 17, 2017, the plaintiffs provided to the defendants their expert's preliminary conclusions as to the origin and cause of the fire. Grant and Inspired argue that their claim against any third parties was not discoverable until they received this information because it enabled them to better understand the plaintiffs' position.

[24] On March 22, 2017, Inspired issued its third party claim against "Fire Magic Grills, John Doe Gas Fitter, Rob LeBlanc and John Doe Manufacturer''. On March 27, 2017, Grant issued its third party claim against the same parties.

[25] On May 24, 2017, counsel for Fire Magic Grills, after seeing the photograph of the barbeque, told counsel for Grant that the barbeque in question was not manufactured by Fire Magic. Thereafter, Grant took a closer look at the photograph of the barbeque, and discerned that it was likely a Sunstone brand barbeque.

[26] The defendants requested warranty information from the plaintiffs, but were not provided with that information until October 23, 2017, when the plaintiffs' counsel produced materials pursuant to undertakings given at the discoveries, that were provided by the Millers to the plaintiffs when the plaintiffs bought the house. Those documents included the use and care manual for the barbeque and identified the manufacturer as Sunstone. The documents also included the business card of Ross Hammond, providing a surname for the handyman known previously to the defendants only as "Ross".

[27] The present motions were initiated by Inspired on October 23, 2017, and by Grant on November 23, 2017.

[28] Grant argues that it exercised due diligence as it attempted to identify third parties. It argues that it repeatedly sought the information it needed from the plaintiffs, and could not have done more. It acknowledges that it had suspicions of potential claims, but no actual knowledge of material facts upon which to base a third party claim until October 23, 2017, and that this is the date on which its third parties claims against Sunstone and Hammond were discovered.

[29] Inspired asserts that the third party claim against Sunstone was discoverable by Inspired, at the earliest, only on December 23, 2016, when it received a photograph of the barbeque with Grant's affidavit of documents, in which the brand of the barbeque is visible, though hard to read. Inspired elected to wait for the examinations for discovery to be conducted in January and February, 2017, to clarify the make of the barbeque. Clarity was not achieved because Andrew Grant testified, erroneously, that the barbeque was a Fire Magic. Inspired says that it was not until the materials were received on October 23, 2017, that its claims against Sunstone and Hammond were discovered.

[30] It is the position of Sunstone that the moving parties turned their minds in July, 2015 to potential third parties, including the manufacturer of the barbeque. Sunstone points to email correspondence in November of 2015, in which counsel for Grant and Inspired communicate about adding the gas fitter and the manufacturer (apparently of the barbeque) as third parties. Those emails make it clear that at that time Grant and Inspired did not know the identities of those parties. Sunstone further argues that in 2011, Grant received an email that attached the specifications for the barbeque, which included a model description. While it appears that an associate of counsel for Sunstone was able, from that diagram, to learn in 30 minutes via an online search that the barbeque was a Sunstone brand, there is no evidence that Grant had any recollection of receiving that email four years earlier, or that he had the capability to conduct a similar online search.

[31] This is not a case where the moving parties did nothing to ascertain the existence and identity of third parties. The evidence establishes that they took steps to ascertain from the plaintiffs what they alleged as to the cause and origin of the fire. They took steps to identify feasible third party claims. They took steps to ascertain the brand of the barbeque, were initially mistaken about that, but continued to take steps to verify the brand, and when advised by Fire Magic that they were mistaken, took steps to clarify and then to correct the error.

[32] Sunstone argues that the moving parties did not take steps they could have taken to identify feasible third party claims, such as hiring their own expert to determine the origin and cause of the fire, rather than attempting to get that information from the plaintiffs. The Limitations Act, 2002, does not require litigants to take all possible steps in order to benefit from discoverability principles. Rather, the legislation requires an inquiry into whether a reasonable person with the abilities and in the circumstances of the plaintiffs ought reasonably to have discovered the claim. It is not reasonable to require a litigant to incur the expense of retaining an expert to inquire into something where the evidence has largely been consumed by fire, when the plaintiff who has the burden of proving the claim has already retained an expert. In any event, information as to the origin and cause of the fire did not enable Grant and Inspired to identify the proper third parties.

[33] Sunstone does not take issue with Inspired's position that it could not have done more to identify Sunstone before December, 2016, when it received the untitled diagram and product description of a barbeque, together with a photograph of the barbeque.

[34] The record establishes that shortly after Grant and Inspired were served with the statement of claim, they were aware that they may have claims against third parties. They took steps to discover whether those claims were viable, and to discover the identities of the parties against whom viable claims might be made. It may be that Grant could have done more to identify Sunstone as the manufacturer of the barbeque. Inspired is in a different position, and while it may have been more aggressive in pursuing the plaintiffs' answers to their undertakings, it is only with the benefit of hindsight that it is clear that the answers were in the plaintiffs’ possession. Grant and Inspired moved promptly, after receiving the plaintiffs' answers to their undertakings that clearly revealed the identities of Sunstone and Ross Hammond, to bring this motion to add or substitute these third parties.

[35] This is not a case where the defendants did nothing to acquire the information that they needed to make an informed decision about whether to pursue third party claims, and against which third parties to pursue those claims. The defendants have provided reasonable explanations as to due diligence such as to raise a triable issue.

[36] The defendants will be permitted to file amended third party claims, substituting Sunstone Metal Products L.L.C. for John Doe Manufacturer, substituting Ross Hammond for John Doe Gas Fitter, and deleting Fire Magic Grills. Leave is granted to Sunstone Metal Products L.L.C. and to Ross Hammond to plead a limitations defence at trial.

F. The misnomer argument

[37] The moving parties argue, in the alternative, that if their third party claim is barred by the limitation period, that Sunstone and Hammond should be substituted as parties pursuant to a misnomer argument. Having regard to my decision to permit the defendants to amend their third party claims, it is not necessary to address this argument.

G. Order

[38] Leave is granted to Grant and Inspired to file amended third party claims, substituting Sunstone Metal Products L.L.C. for John Doe Manufacturer, substituting Ross Hammond for John Doe Gas Fitter, and deleting Fire Magic Grills.

[39] Leave is granted to Sunstone Metal Products L.L.C. and to Ross Hammond to plead a limitations defence at trial.

[40] As to costs, if the parties are unable to agree on costs, I will receive written submissions from them, not to exceed two pages in addition to a bill of costs. Grant and Inspired are to file their submissions by January 11, 2019. Sunstone is to file its submissions by January 18, 2019.

[41] There will be no costs ordered against Ross Hammond.

The Honourable Justice J. Speyer J. Released: December 19, 2018

Reasons for Judgment

COURT FILE NOS.: CV-15-122102-00Al CV-15-122102-00A2 DATE: 20181219 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: Petro Panarites, et al., Plaintiffs v. Andrew Grant Design, et al., Defendants v. Fire Magic Grills, et al., Third Parties

-and-

Petro Panarites, et al., Plaintiffs v. Andrew Grant Design, et al., Defendants v. Fire Magic Grills, et al., Third Parties

REASONS FOR JUDGMENT J. Speyer J. Released: December 19, 2018