Court File and Parties
COURT FILE NO.: CV-15-0311-00A1 DATE: 20190624 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN: Stonequest Management Inc., Applicant Counsel: J. Bosch, for the Applicant
- and -
Andritz va Tech Hydro Limited, Respondent Counsel: G. Splawski, for the Respondent
- and -
J.P. Rowland Construction Company Ltd., and Cremer Brothers Electric Ltd., Third Parties
Heard: May 23, 2019
Reasons FOR JUDGMENT
C.M. SMITH, J
Overview
[1] This is a Motion for Summary Judgment on a Contract Law issue. This Motion is brought by the Respondent, Andritz va Tech Hydro Limited, pursuant to Rule 20 for summary judgment. The Respondent claims that the Plaintiffs are statute barred from proceeding with this matter by operation of the Limitations Act, R.S.O. 2002, S.O. 2002 c. 24 and by operation of the Real Property Limitations Act, R.S.O. 1990, c. L.15.
[2] The Applicant disputes the Respondent's claim that they are statute barred and seeks an Order directing a trial be held herein.
Issues
- Is the Applicant statute barred by operation of the Limitations Act and the Real Property Limitations Act?
- Is the Respondent entitled to summary judgment?
The Facts
[3] The Applicant, Stonequest Management Inc., (Stonequest) was at all material times the landlord of the premises known municipally at 2015 Fischer Drive, Peterborough, Ontario (the premises). The premises contained multiple commercial rental units.
[4] The Respondent, Andritz, currently known as Andritz Hydro Canada Inc., designs and supplies hydroelectric turbines, generators and related equipment.
[5] Andritz and Stonequest were parties to a conditional offer to lease in a lease agreement dated August 12th, 2008 and revised October 1st, 2008 and November 12th, 2008 (the lease) pursuant to which Andritz leased a portion of the premises. Andritz elected not to renew the lease at the end of its term and provided vacant possession to Stonequest on December 31st, 2013.
[6] Pursuant to s. 6.01 of the lease, Andritz was required to "pay promptly all of its separate accounts for gas, water and electricity". The same section also provides that there be separate meters.
[7] The Peterborough Utilities Commission, hereafter PUC, supplied the electricity for the premises with the electricity flow being tracked through a central panel of meters with one meter for each rental unit and another for the common elements.
[8] It is common ground between the parties hereto that Stonequest was contacted by the PUC in September of 2011 and was advised by PUC that there appeared to be a problem with respect to unlabelled or mislabelled meters at the property. This caused concern about whether the tenants of the property were receiving the wrong electrical bills each month. PUC issued a check meter service order on September 8th, 2011 as a result of which an inspection was done which apparently found that none of the meters were labelled. It would appear that none of the parties hereto took any further action regarding this issue until October 30th, 2013 when Mr. Gibson, the principle for the Applicant, demanded payment from the Defendants for what was perceived to be an outstanding hydro bill.
[9] The documentary record shows that the parties continued an exchange of correspondence about this issue through December 20th, 2013. Representatives of all of the parties, including PUC, the Respondent, the Applicant and the Third Party, Cremers, met together at the property on November 28th, 2013, at which time "a load check" was done by PUC and the various meters were correctly identified. According to an e-mail dated November 28, 2013 directed to the parties from the Applicant, "It appears that it was an honest mistake and nothing intentional has occurred." Correspondence continued to be exchanged between the parties, including an e-mail from the Applicant to the Respondent, as late as December 12th, 2013 wherein the Applicant indicated that he preferred "to negotiate as opposed to litigate". The Respondent sent Stonequest a letter dated December 9th, 2013 wherein they made it clear they were denying the Applicant's claim and advised the Applicant that they believed that the Applicant might be foreclosed from asserting any claim he may have on the basis of "statutory time bars" among other reasons.
[10] The court was also supplied with copies of a printout from PUC records showing an account history for the subject property. That document reveals that the PUC billing for each month in 2013 occurred somewhere between the 12th and 15th of each month, with the last entry being November 13th, 2013. A spreadsheet, which I understand to have been prepared by the Applicant, showing the history of hydro billings for the subject property ends with the entry of December 13th, 2013.
[11] The Respondent elected not to renew their lease with the Applicant and supplied vacant possession of the property to the satisfaction of the Applicant on or about December 31st 2013.
[12] It is common ground of all parties that the matter lay dormant from that point until the Notice of Application was issued on December 22nd, 2015. I am told by the Applicant's counsel that the Statement of Claim itself was issued in January of 2016. The Statement of Defence was served and filed on or before February 24th, 2016. Thereafter, the matter appears to have languished until the fall of 2018 when the Respondent filed their Motion for Summary Judgment. That motion was originally scheduled to be heard on October 23rd, 2018, however, it was adjourned, apparently on the consent of all parties on that date in order that each party could deliver further materials, including factums and in order that cross-examinations on the affidavits could be completed.
[13] The matter was subsequently heard by me on May 23rd, 2019.
Position of the Parties
[14] The Respondent asserts that it is entitled to summary judgment based on the facts herein, including the dates when the record shows the parties became aware of the claim, the dates of the utility accounts and the provisions of the Limitations Act, 2002, S.O. 2002 c.24 Schedule B, and further, on the provisions of the Real Property Limitations Act.
[15] The Applicant takes the position that the Respondent is not entitled to summary judgment as there is insufficient evidence before the court to allow the court to make a determination for that request and further, denies the Respondent's claim that the Applicant is statute barred by the Limitations Act or the Real Property Limitations Act.
[16] Both parties are ad idem that a finding that the Applicant is statute barred from proceeding with this claim pursuant to the provisions of the Limitations Act and the Real Property Limitations Act would be completely dispositive of this action.
Test for Summary Judgment
[17] Rule 20 of the Rules of Civil Procedure, R.R.O. 1990 Reg. 194, outlines when a court may grant summary judgment. In the case of Hyrniak v. Mauldin, 2014 SCC 7, [2014] 1 SCR 87, the Supreme Court of Canada held at paragraph 23 that the "civil justice system is premised upon the value that process of adjudication must be fair and just". At paragraphs 27 and 28 the court further held as follows:
There is growing support for alternative adjudication of disputes and a developing consensus that the traditional balance struck by extensive pre-trial processes and the conventional trial no longer reflects the modern reality and needs to be re-adjusted. A proper balance requires simplified and proportionate procedures for adjudication, and impacts the role of counsel and judges. This balance must recognize that a process can be fair and just, without the expense and delay of a trial, and that alternative models of adjudication are no less legitimate than the conventional trial.
This requires a shift in culture. The principal goal remains the same: a fair process that results in a just adjudication of disputes. A fair and just process must permit a judge to find the facts necessary to resolve the dispute and to apply the relevant legal principles to the facts as found. However, that process is illusory unless it is also accessible — proportionate, timely and affordable. The proportionality principle means that the best forum for resolving a dispute is not always that with the most painstaking procedure.
[18] At paragraph 49, Karakatsanis, J held as follows:
There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process (1) allows 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.
[19] At paragraph 57, the court held that,
On a summary judgment motion, the evidence need not be equivalent to that at trial, but must be such that the judge is confident that she can fairly resolve the dispute. A documentary record, particularly when supplemented by the new fact- finding tools, including ordering oral testimony, is often sufficient to resolve material issues fairly and justly. The powers provided in Rules 20.04(2.1) and (2.2) can provide an equally valid, if less extensive, manner of fact finding.
[20] The court, in Hyrniak, went on to develop a "road map/approach" to the Motion for Summary Judgment and held as follows as paragraph 66,
On a motion for summary judgment under Rule 20.04, the judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-finding powers. There will be no genuine issue requiring a trial if the summary judgment process provides her with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure, under Rule 20.04(2)(a). If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2). She may, at her discretion, use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.
[21] There can be no doubt that it is in the interest of justice and of all parties to a dispute that the matter be resolved on the most timely, cost effective basis which the summary judgment process can provide. That said, any process that does not give the presiding judge confidence in his or her conclusions can never be the appropriate or indeed proportionate way to resolve a dispute.
[22] In my view, the focus should be on whether or not a trial is required, as opposed to what kind of evidence might conceivably be introduced at trial. In other words, is the evidence before me at this point such that I can be confident that I can decide the matter fairly and justly?
[23] In this particular case, given the factual matrix underlying the limitations issue, given the documentary evidence that has been filed by the parties and given the admissions of the parties, I am confident that I can fairly and justly resolve this dispute at this stage of the proceedings and that there is no genuine issue requiring a trial.
Law and Analysis
[24] The Respondent asserts that the Applicant is statute barred from proceeding with this claim by virtue of the provisions of the Limitations Act, R.S.O. 2002, S.O. 2002 c. 24 and the Real Property Limitations Act, R.S.O. 1990 c. L.15. I will turn first to a consideration of the issues arising out of the provisions of the Limitations Act.
"A Discovery of the Claim"
In the absence of any other express limitation, either contractual or legislated, the applicable limitation period in the Province of Ontario is the two year general limitation period provided in s. 4 of the Limitations Act, 2002, which runs from the day on which the claim was discovered.
[25] Section 5 of the Limitations Act 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).
[26] I turn now to a consideration of each of those factors.
(a) the day on which the person with the claim first knew,
(i) that the injury, loss or damage had occurred.
[27] On the evidence before me, arguably the Applicant could have known that there was a potential claim as early as September of 2011 when they were first contacted by the PUC about their being a potential problem with confusion involving the hydro meters at the property. That position was not seriously advanced by counsel. On the record before me it is clear that the plaintiff had at least an inkling of the problem when they forwarded a demand for payment for hydro arrears to the defendant by e-mail on October 31st, 2013. Indeed, this could also be the date contemplated by s. 5(b) of the Limitations Act being 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.
Section 5(1)(a)(ii) through (iv)
[28] There can be no doubt based on the materials before me that as of December 1st, 2013, Stonequest knew about the alleged injury underlying its claim. On December 1st, 2013, Stonequest demanded payment from Andritz in respect of the electricity used by Andritz on multiple occasions, and specifically stated "I need to know immediately if Andritz is going to pay for the hydro they have consumed or will I have to contact the Ministry of Energy [sic]…if a speedy payment is received I will agree to a calculation, et cetera."
[29] Further, on December 4th, 2013, Stonequest sent the defendant the summary of electricity used described above and demanded that Andritz pay for its electricity usage. That was the letter in which Stonequest indicated "I prefer to negotiate as opposed to litigate - YOU are responsible for the power you have consumed…". Additional demands for payment were made by Stonequest on December 5th, December 9th, December 12th and culminated with a public e-mail through Andritz's website on December 20th, 2013.
[30] I note, as well, that the Respondent made it very clear by letter dated December 9th, 2013 that they were denying the Applicant's claim, and furthermore, "We are open to discussing this matter with you, under no admission or obligation, with a view to achieving a mutually satisfactory resolution. However, should you elect to pursue this matter before the courts, we will explore all of our legal defences and recourses against you."
[31] From this exchange of correspondence, there can be no doubt that the Applicant knew that an injury, loss or damage had occurred, that that injury, loss or damage was caused by or contributed to by an act or omission, that the act or omission was that of the Respondent, and lastly, 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 that the Applicant had that knowledge, arguably as early as December 1st, 2013, but certainly no later than December 9th, 2013 when they received the aforesaid letter from the Respondent denying their claim.
[32] I note that both parties are corporate bodies who are each party to a commercial lease, so there can be no suggestion of unsophisticated parties.
[33] All parties agree that no further action was taken by Stonequest regarding this matter from that point, being December 9th, 2013, until the Notice of Action was issued on December 22nd, 2015. That is, of course, two years and 13 days, which exceeds the limitation period set out in the Limitations Act. In considering the question of whether or not there might be special circumstances of some kind which might justify an extension of the limitation period in favour of the plaintiff herein, I have given consideration to the decision of the Ontario Court of Appeal in the case of Joseph v. Paramount Canada's Wonderland, 2008 ONCA 469. In that case, at paragraph 13, K. Feldman, J concluded that there was no doctrine of special circumstances available under the new Act.
The question to be answered now is whether the legislature intended to preserve the courts common law discretion to extend limitation periods under the new Act by applying the doctrine of special circumstances. As a matter of statutory interpretation, I have concluded the answer must be no.
Further, at paragraph 15,
Because s. 4 of the new Act mandates a two-year limitation period "[u]nless this Act provides otherwise", the court must look in the Act for the authority to derogate from the application of the two-year limitation period. These opening words compel the conclusion that the new Act is intended to be comprehensive.
[34] I find therefore that the Applicant in this case is statute barred pursuant to the provisions of the Limitation Act, 2002 by virtue of the fact that the litigation was commenced two years and 13 days after the claim was readily discoverable, which is something 13 days in excess of the two year limitation period.
Real Property Limitation Act
[35] I turn now to the Applicant's alternate argument that if they are statute barred under the Limitations Act their action is saved by operation of the Real Property Limitation Act, s. 17 of the Act reads as follows;
Maximum of arrears of rent or interest recoverable
17 (1) No arrears of rent, or of interest in respect of any sum of money charged upon or payable out of any land or rent, or in respect of any legacy, whether it is or is not charged upon land, or any damages in respect of such arrears of rent or interest, shall be recovered by any distress or action but within six years next after the same respectively has become due, or next after any acknowledgment in writing of the same has been given to the person entitled thereto or the person’s agent, signed by the person by whom the same was payable or that person’s agent. R.S.O. 1990, c. L.15, s. 17 (1).
[36] The Applicant asserts that the six year limitation period available pursuant to the provisions of the Real Property Limitation Act applies in this case because, the alleged outstanding utilities in question fall under the rubric of the "additional rent" clause set out in clause 3.03 of the lease in question. It says,
Section 3.03. Additional Rent.
Any and all sums of money or charges required to be paid by the tenant under this lease shall be deemed and paid as additional rent, whether or not the same be designated "additional rent" hereunder, or whether or not the same be paid to the landlord or otherwise, and all such sums shall be payable in lawful money of Canada without any deduction, setoff, or abatement whatsoever. Any additional rent provided for in this lease, unless otherwise provided herein, shall become due with the next instalment of fixed minimum monthly rent.
The clause then sets out the agreed amounts for anticipated costs of property taxes and anticipated costs for maintenance, grass and snow removal.
The meaning of the word "rent" in this context was considered by Mew, J in the case of Pickering Square Inc. v. Trillium College Inc., 2014 ONSC 2629. That case involved a claim for rent arrears and a consideration of the limitation period issues on a Motion for Summary Judgment. In the course of his analysis, Mew J. entered into a consideration of the understanding of the Real Property Limitation Act, and in particular, the meaning of the word "rent". Mew J. started with a general observation about the Real Property Limitation Act at paragraph 27.
With the enactment of the Limitations Act, the legislature created a single, comprehensive general limitations law that is to apply to all claims for injury, loss or damage except, in relevant part, when the RPLA specifically applies: see McConnell v. Huxtable, 2013 ONSC 948 at para. 72. Thus, the application of the Limitations Act should be construed broadly and the RPLA narrowly.
Mew J. then went on to a lengthy consideration of the historical meaning of the word "rent" which included a review of Halsbury's Laws of England, Bruce Ziff, Principles of Property Law, 5th ed. (Toronto: Carswell, 2010), the Real Property Limitation Act itself and, as well, the Canadian Oxford Dictionary, 2 ed., the Dictionary of Canadian Law, 4th ed., and Osborne’s Concise Law Dictionary, 12th ed. Having reviewed all of those authorities, Justice Mew held as follows at para. 36,
From these authorities, and in light of the history, context, and legislative scheme for the law of limitations in Ontario, I conclude that “rent” in s. 17 of the RPLA, as it applies to rent service or rent reserved, means the payment due under a lease between a tenant and landlord as compensation for the use of land or premises.
[37] In the case before me, the Applicant argues that the alleged underpayment of the utility bill each month by the Respondent should be recoverable by the Applicant under the additional rent clause of their lease. I believe this to be an overly broad interpretation of s. 17 of the Real Property Limitation Act. As Mew J. held in Pickering Square at para. 40,
To interpret the word in that manner…"would defeat the legislative purpose behind the Limitations Act, which is intended to establish a broad comprehensive set of rules for all claims for injury, loss or damage except those falling under specified exceptions. It would be inconsistent with this structure to permit the parties to shelter a claim under the RPLA simply by designating the disputed amount as “rent” under a lease. For example, the landlord could not ask the tenant to babysit her children and include the remuneration for those services in the contractual definition of “rent” to avoid application of the shorter limitation period in the Limitations Act. The word “rent” in the RPLA has an objective meaning that the parties cannot nullify by contract. It is telling in this regard that s. 17(1) of the RPLA does not apply to all actions under a lease but more narrowly to actions for arrears of rent.
Mr. Bosch, for the Applicant herein, points me to para. 46 of the decision of Mew, J. in Pickering Square where reference is made to "utilities" inter alia, as an item that is identified as additional rent. In my view, that classification is based on the wording of the particular lease in the Pickering Square case. Moreover, as Mew J. points out at para. 46,
[The] "as Additional Rent” language would be superfluous if the definition sections were interpreted to mean that literally every sum payable as a result of the lease contract constituted Additional Rent.
[41] I also note on this point that the Plaintiffs's representative, Mr. Gibson, testified under oath at his Examination for Discovery to the effect that the tenants of the property were expected to pay their monthly utility bills directly to the Public Utilities Commission.
[42] The fact that an item does not fall within the ambit of the additional rent clause of a lease does not in any way preclude the landlord, in this case Stonequest, from pursuing appropriate available remedies to collect an amount owed. As Mew J. held further in Pickering Square at para. 52,
Nevertheless, as stated above, the word “rent” in the RPLA is not an empty vessel that the parties may fill at their discretion. It must be interpreted in light of the context, scheme, and object of that statute and the law of limitations in Ontario. Moreover, limiting the RPLA definition of “rent” as I have done above does not deny the landlord the right to seek any particular form of remedy for sums not ordinarily defined as “rent”. It only affects the time period in which the claim must be brought.
Conclusion
[43] I find the alleged underpayment of the utility costs herein does not fall within the ambit of the additional rent clause of the lease herein. That being the case, the six year limitation period contained in the Real Property Limitation Act is not available to the Applicant in the case before me.
[44] As noted above, both the Applicant and the Respondent are ad idem that the limitation issues herein are dispositive of this claim. I have made a finding that the Applicant commenced their action outside the two year limitation period set out in the Limitations Act. I have also found that the six year limitation period available under the provisions of the Real Property Limitation Act is not available to the Applicant. The Applicant is therefore statute barred from bringing this claim. The Respondent's Summary Judgment Motion is granted. The action is dismissed.
[45] I invite counsel to make written submissions as to costs. I would suggest that the successful party, the Respondent (moving party), make submissions in writing no longer than three pages double spaced and that those submissions be supplied to the Applicant's counsel and to the Court, on or before July 15th, 2019. Thereafter, the Applicant shall have until July 25th, 2019 to file their own written submissions on the issue of costs, again limited to three pages double spaced. In the event that I do not receive any written submissions, I will make what feel is the appropriate Order.