Court File and Parties

COURT FILE NO.: CV-20-59 (Orangeville File) DATE: 2020 12 17 SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Gaspare Caruso, Plaintiff AND: Robert Bortolon, Dean Bortolon, John Hanna Nissan and Martin Citron, Defendants

BEFORE: Justice G.D. Lemon

COUNSEL: Gurmeet Singh Salooja, Counsel, for the Plaintiff Adam Jarvis, Counsel, for the Defendants

HEARD: November 30, 2020

Endorsement

The Issue

[1] The defendants bring this motion for summary judgment to dismiss the action brought by Mr. Caruso. At the end of argument, I granted the motion for written reasons to follow. These are those reasons.

Background

[2] Mr. Caruso alleges that the defendants defrauded him of shares that he owned in 1947755 Ontario Limited. He claims $750,000 for the loss of the value in those shares. He also seeks general damages in the amount of $500,000 and punitive damages in the amount of $250,000.

[3] In his Statement of Claim, Mr. Caruso pleads that he is the sole director and sole shareholder in 1947755. In particular, he pleads that the defendant Robert Bortolon, fraudulently executed documents that illegally stripped Mr. Caruso of his shares on January 25, 2017. His claim is issued April 23, 2020.

[4] In response, the defendants plead that Mr. Caruso was never a shareholder of 1947755 but instead, was only a first and temporary director of the corporation. He was then properly removed as a director on January 27, 2017, by shareholders resolution.

[5] The defendants say that since the time of that resolution, Mr. Caruso has had no involvement in the operation of the company. In the Statement of Defence, they plead that the action is statute barred by operations of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, as amended.

Authorities

Summary Judgment

[6] The relevant provisions of Rule 20 of the Rules of Civil Procedure are that a defendant may, after delivering a statement of defence, move with supporting affidavit material or other evidence for summary judgment dismissing all or part of the claim in the statement of claim.

[7] In response to affidavit material or other evidence supporting a motion for summary judgment, a responding party may not rest solely on the allegations or denials in the party’s pleadings but must set out, in affidavit material or other evidence, specific facts showing that there is a genuine issue requiring a trial.

[8] The court may only grant summary judgment if it is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence.

[9] In determining whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and a judge may weigh the evidence, evaluate the credibility of a deponent and draw reasonable inferences from the evidence unless it is in the interest of justice for such powers to be exercised only at a trial.

[10] In Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, the Supreme Court of Canada set out the proper approach on a motion for summary judgement under Rule 20.04. I should first determine if there is a genuine issue requiring a trial based only on the evidence before me without using the powers set out in the Rule. There will be no genuine issue requiring a trial if the summary judgment process provides me with the evidence required to fairly and justly adjudicate the dispute in a timely, affordable, and proportionate procedure.

[11] If there appears to be a genuine issue requiring a trial, I should then determine if the need for a trial can be avoided by using the powers under the Rule. I may, in my discretion, use those powers, provided that their use is not against the interests of justice. Their use will not be against the interests 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.

[12] There will be no genuine issue requiring a trial if I am able to reach a fair and just determination of the merits on the motion. This will be the case when the summary judgment process (i) allows me to make the necessary findings of fact, (ii) allows me to apply the law to the facts, and (iii) is a proportionate, more expeditious, and less expensive means to achieve a just result.

Limitation Period

[13] Section 4 of the Limitations Act sets out that, unless the Act provides otherwise, a proceeding shall not be commenced after the second anniversary of the day on which the claim was discovered.

[14] Section 5(1) sets out 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 those matters.

[15] A person with a claim is presumed to have known of those matters on the day the act or omission on which the claim is based took place, unless the contrary is proved: Limitations Act, s. 5(2).

[16] In Lawless v. Anderson, 2011 ONCA 102, 276 O.A.C. 75, Rouleau J.A. explained as follows:

22 The principle of discoverability provides that "a cause of action arises for the purposes of a limitation period when the material facts on which it is based have been discovered, or ought to have been discovered, by the plaintiff by the exercise of reasonable diligence. This principle conforms with the generally accepted definition of the term 'cause of action' - the fact or facts which give a person a right to judicial redress or relief against another.”

23 Determining whether a person has discovered a claim is a fact-based analysis. The question to be posed is whether the prospective plaintiff knows enough facts on which to base an allegation of negligence against the defendant. If the plaintiff does, then the claim has been "discovered", and the limitation begins to run. [Citations and emphasis removed]

Analysis

Adjournment

[17] At the outset of the motion before me, counsel for Mr. Caruso requested an adjournment or the opportunity to file a further document relating to the January 2017 resolution. He submitted that it would show that there was fraudulent activity in January of 2017. For the following reasons, I denied both requests.

[18] The materials already filed by Mr. Caruso described conduct on behalf of the defendants that he deposed unnecessarily and improperly rushed his ability to respond to the motion. While that may or may not have been the situation in the summer of 2020, by the time the matter was set to be heard on November 30, 2020, Mr. Caruso and his counsel would have had plenty of time to prepare for the motion. Indeed, the date was set on consent.

[19] Further, the matter had already been adjourned a number of times. In particular, on August 24, 2020, counsel for both parties confirmed that they were ready to proceed but the motion did not proceed at the instance of the motions judge who properly pointed out a conflict of interest for Mr. Caruso’s counsel. As part of a lengthy endorsement, Kumaranayake J ordered:

Subject to the discretion of the judge hearing the Defendants’ motion for summary judgment and save and except for the Plaintiff’s revised factum (if any) and transcripts of cross-examinations (if any), the parties shall not file any other materials in relation to the Defendants’ motion for summary judgment.

[20] The matter came back to court on September 25, 2020. At that time, Miller J ordered:

Today, I heard submissions from counsel on the issue of urgency. I am satisfied that the Defendants have good reason to wish the matter heard as soon as possible given the financial pressures on the Defendant Nissan related to the Plaintiff’s claim.

[21] Miller J. also made orders to allow the matter to proceed expeditiously. She was not persuaded to move as expeditiously as the defendant wanted as Mr. Salooja had only recently been retained by Mr. Caruso as a result of the conflict issue pointed out on August 24, 2020.

[22] However, the matter came back to court on October 19, 2020 when Mr. Salooja brought a motion for examinations for discovery. That motion was dismissed but it shows that Mr. Salooja had the file well in hand in October. He then confirmed on both November 16 and 26, 2020 that the matter was ready to proceed before me. Given the delays, it was necessary that the matter go forward.

[23] In any event, such further evidence would not be of assistance to me or Mr. Caruso. The issue for the motion is not whether Mr. Caruso was deprived of his shares in September of 2017. The issue is whether he should have brought the action before it was commenced in April of 2020.

Summary Judgment Motion

Documents

[24] From the documents filed, the chronology of events is clear. 1947755 was incorporated December 31, 2015 and Mr. Caruso was shown as a director.

[25] On January 18, 2017, Mr. Caruso executed his “consent to act as temporary officer of 1947755 Ontario Limited for the exclusive limited purpose of closing the purchase and opening a bank account for 1947755 Ontario Limited…”.

[26] The documentation further confirms that on January 27, 2017, Mr. Caruso was removed as a director for the corporation.

[27] On February 12, 2017, Mr. Caruso sent a text to Robert Bortolon objecting to his conduct. While the complaint is unclear, it was followed up by a letter from counsel, David Pomer. That letter starts with “Please be advised that I act for Gaspare Caruso” and goes on for five pages objecting to the steps taken by 1947755. In particular,

It is clear that the only officer and director is Gaspare Caruso and he advises me that there is 100 shares in his name only. Obviously he must now have the minute book to take to his accountant to file the proper tax returns as required by law.

[28] On February 17, 2017, Mr. Bortolon wrote to Mr. Pomer and confirmed that, in Mr. Bortolon’s view, Mr. Caruso was never a shareholder.

[29] This group of documents show that Mr. Caruso was aware of his alleged injury, loss or damage by February 17, 2017.

Request to Admit

[30] In order to prepare for the motion, the defendants served a Request to Admit in July of 2020. Among other things, it set out that Mr. Caruso was “never issued any shares certificates in 1947755 Ontario Limited”. Further, it requested Mr. Caruso to admit that he “executed a Resolution of the Sole Director of 194 Limited, dated December 2, 2016, issuing 500 shares of 194 Limited to Dean Bortolon”, and, finally, it requested Mr. Caruso to admit “David Pomer acted as agent and counsel for Caruso in February and March 2017.”

[31] There has been no reply to that Request to Admit and accordingly, pursuant to r. 51.03(2) of the Rules of Civil Procedure, Mr. Caruso is deemed to have admitted that he issued the shares as a director and that he had counsel at the relevant time.

[32] This document deems Mr. Caruso to be aware of his alleged injury, loss or damage by February or March of 2017.

Evidence of Mr. Caruso

[33] In his responding materials, Mr. Caruso says that he retained Mr. Pomer only in May 2019. He submits that only then was he aware of what had occurred in 2017. He denies any knowledge of a variety of emails set out in the motion material that was sent to Mr. Pomer by the defendants.

[34] This is, of course, refuted by the above but also from Mr. Caruso’s own evidence.

[35] There are a number of related actions between these parties. In affidavits filed in those actions, Mr. Caruso confirms that Mr. Pomer was in fact his counsel in March of 2017. His affidavit states:

Attached hereto and marked as Exhibit P is an email dated March 4th, 2017 and an email date March 17, 2017 whereby my solicitor, Mr. David M. Pomer, requested Robert to provide corporate paperwork to evidence how I was removed as an owner and director of 194. Robert refused to provide the paperwork, information as he had no intention of showing to me at that time how anyone could be the owner and director of 194 other than myself.

[36] Later in his cross-examination, Mr. Caruso also confirmed that he was aware in February 2017 that Mr. Bortolon was holding himself out as the sole shareholder and that was “a total fraud.”

[37] In other cross-examination, Mr. Caruso confirmed that in May and June of 2017, Mr. Palmer represented him.

[38] Mr. Pomer was cross-examined and confirmed that in February 2017, he represented Mr. Caruso, “to investigate Caruso’s position as to officer director and owner of 194”.

[39] Mr. Caruso’s evidence shows that Mr. Caruso was aware of his alleged injury, loss or damage by February of 2017.

Result

[40] Given the totality of the evidence, I find that there is no genuine issue for trial. On this record, it is obvious that Mr. Caruso discovered the material facts upon which he bases his claim by February 2017, more than two years before his claim was issued.

[41] Even if I were to entertain Mr. Caruso’s evidence put before the court in this motion that he was not aware of the claim until this year, the balance of the evidence confirms that Mr. Caruso was well aware of what he alleges is a fraud. Whether it was a fraud or not, Mr. Caruso has failed to bring his action within the appropriate time. Accordingly, the motion is granted, and the action is dismissed.

Costs

[42] I was advised by the defendants that they sought costs against Mr. Salooja personally. The history of the litigation shows that the various judges that dealt with the adjournments left the issue of costs to me as the judge hearing the motion. Given the significance of those costs, I invited written submissions upon receipt of these reasons.

[43] Accordingly, if costs cannot be agreed upon, the defendants shall provide their costs submissions within the next 20 days. The plaintiff shall provide a response within 20 days thereafter. No reply submissions shall be filed unless I request them.

[44] Each submission shall be no more than five pages, not including any Bills of Costs or Offers to Settle.

[45] Neither party need include the authorities upon which they rely so long as they are found in and the relevant paragraph references are included.

[46] Any costs submissions shall be forwarded to my office in Guelph by electronic transfer to GuelphOffice.SCJ@ontario.ca or by mail to Guelph Superior Courthouse, 74 Woolwich St., Guelph, N1H 3T9.

“Justice Lemon” Justice G.D. Lemon Date: December 17, 2020