COURT FILE NO.: 3904/19
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Jose Silva, Plaintiff
AND:
Mario Biasini and Fabio Soccol, Defendant
BEFORE: Kurz J.
COUNSEL: W. Alex Kyle, for the Plaintiff
Scott A. Rosen, for Mario Biasini
Michael R. Kestenberg, for Fabio Soccol
HEARD: December 14, 2020
ENDORSEMENT
Introduction
1Each of the two defendants brings a summary judgment motion against the plaintiff (“Silva”) to dismiss this action based on a limitation defence. They argue that the statement of claim, dated September 20, 2019, was issued more than two years after the cause of action it raised became discoverable.
2The cause of action in this proceeding can be described as slander of title and/or slander of credit arising from an allegedly improper registration of a $1/2 million financing change statement against Silva under the Personal Property Security Act (“the PPSA registration”). In his affidavit for this motion, Silva does not deny that he was aware of the PPSA registration more than two years prior to issuance of the statement of claim. Nonetheless, he argues that his injury was not discoverable until he was actually turned down for a mortgage. In his affidavit for this motion, Silva claims that this occurred at some point “shortly afterwards” from September 15, 2017. That indefinite date is when he states that his cause of action became discoverable. Of course, September 15, 2017 is more than two years prior to the date he issued the statement of claim in this action.
3For the reasons that follow, I find that this is an appropriate case for summary judgment. With a limitation defence raised, I also find that Silva fails to meet his onus of establishing that his claim is not statute-barred. As a result, I find that the defendants have met their burden in this motion of establishing that there is no issue requiring a trial about their limitation defence. I dismiss this action as statute-barred.
Note about the Tort of Slander of Title
4I note that in his factum, Mr. Kestenberg, counsel for Soccol, also contends that the elements of the tort of slander of title are not made out by Silva. However, the parties limited their oral arguments to the limitation issue. In response to my question, Mr. Kestenberg confirmed that the limitation defence is the only ground he is relying upon in this motion. Mr. Rosen later adopted Mr. Kestenberg’s oral arguments. Accordingly, my decision is made without reference to any arguments about the merits of any claims regarding slander of title.
Background
5Silva is the principal of the corporation, Vansan Properties Inc. (“Vansan”). Vansan owns two properties in Toronto, 115 Brooklawn Avenue and 28 Woodfield Road, Toronto (the “Properties”). The defendant Mario Biasini (“Biasini”) is a former shareholder of Vansan. The defendant Fabio Soccol (“Soccol”) is a lawyer. Biasini retained Soccol to assist him in legal proceedings against Silva and others for the recovery of his shares in Vansan and his interest in the Properties.
6On April 7, 2016, Soccol registered both a Caution on title to the Properties (the “Caution”) and the PPSA registration against Silva and Vansan. The defendants say that the PPSA registration was intended to protect Biasini’s interest in the Properties and to prevent anyone from dealing with the shares of Vansan without Biasini’s knowledge and consent.
7On about May 3, 2016, Soccol wrote to Silva enclosing, among other documents, copies of the Caution and the PPSA Registration. Silva claims not to have received that correspondence.
8On June 7, 2016, Soccol issued an amended statement of claim on behalf of Biasini to commence what I describe as “the 2016 action”. The defendants in the 2016 action included Silva, Vansan, Silva’s business partner, Vince Demasi (“Demasi”), a corporation controlled by Demasi (collectively the “2016 defendants”) and a numbered corporation.1 All of the 2016 defendants, including Silva, were represented by the same lawyer, W. Alex Kyle.2
9Biasini alleged that the 2016 defendants breached the trust whereby Biasini’s shares in Vansan were transferred to Silva. Biasini further claimed that the 2016 defendants misappropriated certain construction funds. He sought and obtained a certificate of pending litigation against the Properties.
10Soccol was unable to effect personal service of the statement of claim in the 2016 action on Silva. But that statement of claim, along with a motion record for a certificate of pending litigation that contained a copies of the PPSA financing change statement and the Caution (collectively “the documents”) were served on Demasi.
11In a letter to Soccol of August 4, 2016, Mr. Kyle, acknowledged possession of the documents. He stated that they were served on one of Silva’s co-defendants in the 2016 action. With his letter, Mr. Kyle served a notice of intent to defend the 2016 action on behalf of all of the 2016 defendants. On August 22, 2016, Mr. Kyle served a statement of defence and counterclaim on all of the 2016 defendants’ behalf. As I state below, the knowledge of the lawyer can be ascribed to the client. The court has not been advised of the status or the ultimate result of the 2016 action.
12On September 20, 2019, Silva issued the statement of claim in this action. Among the passages of Silva’s pleading which the defendants rely upon in this motion are the following:
In or about July 2017 Silva attempted to purchase property known municipally as 1046 Highway 7, Oakwood, Ontario for development purposes (“the Oakwood property”).
To purchase the Oakwood property, Silva entered into an Agreement of Purchase and Sale with the vendor and paid a deposit of $2,500. Subject to obtaining satisfactory financing.
Silva was unable to obtain mortgage funds to purchase the Oakwood property as the proposed lender was concerned by the Biasini PPSA registration in the face amount of $1,200,000. Silva attempted to find alternative lenders, all of whom referred to the Biasini PPSA registration as the reason that they would not grant him a mortgage.
The credit report in regard to the purchase of the Oakwood property was the first notice to Silva of the PPSA registration naming Biasini as the creditor.
Since July 2017 Silva has been unable to obtain mortgage financing in the normal course of business and as a result, has lost his cottage property for the inability to refinance the same when the mortgage matured, and several business opportunities to build or renovate properties, particulars of which will be provided before any trial of this action.
[Emphasis added]
13The defendants say that the highlighted portions of the statement of claim and in particular, para. 29, are admissions that Silva was aware of the PPSA registration as early as July 2017. That is more than two years before the September 20, 2019 date that the statement of claim was issued. In their statements of defence, each of the defendants raised the limitation issue.
Issues:
14This motion raises the following issues:
Is this a case in which the summary judgment process allows the court to reach a fair and just determination on the merits?
Was this action commenced more than two years after the cause of action became discoverable?
Issue No. 1: Can the summary judgment process allow the court to reach a fair and just determination on the merits?
15This motion is brought under r. 20.01 of the Rules of Civil Procedure. The terms of r. 20.04 are mandatory: the court shall grant summary judgment if it is satisfied that there is no genuine issue for trial with respect to a claim or defence (see also Hryniak v. Mauldin, 2014 SCC 7 ("Hryniak") at para. 68 and Mega International Commercial Bank (Canada) v. Yung, 2018 ONCA 429 ("Mega International") at para. 83).
16The principles under which the court makes the determination of a genuine issue for trial are set out by the Supreme Court of Canada in paras. 44-45, 49-50 and 66 of Hryniak.
17There will be no genuine issue requiring a trial if the summary judgment process allows the court to reach a fair and just determination on the merits on a motion for summary judgment. That will be the case when the process (1) provides the court with the evidence required to fairly and justly adjudicate the dispute by making the necessary findings of fact, (2) allows the judge to apply the law to those facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result. (see Hryniak at para. 49 and 66).
18Each party to a motion for summary judgment has an obligation to "...'put its best foot forward' with respect to the existence or non-existence of material facts that have to be tried" (Ramdial v. Davis (Litigation Guardian of), 2015 ONCA 726, [2015] O.J. No. 5630 (O.C.A.) at para. 27, citing Papaschase Indian Band No. 136 v. Canada (A.G.), 2008 SCC 14, [2008] 1 S.C.R. 372, at para 11).
19The onus for proving that there is no genuine issue for trial rests with the moving party. However in response to the evidence of the moving party, the responding party may not rest on mere allegations or denials in the party's pleadings. That party must set out in affidavit material or other evidence, specific facts showing that there is a genuine issue requiring a trial. A self-serving affidavit is not sufficient itself to create a genuine issue for trial in the absence of detailed facts and supporting evidence. (see r. 20.01(2) and Guarantee Co. of North America v. Gordon Capital Corp., 1999 664, [1999] 3 S.C.R. 423, at para. 31).
20In the oft-repeated maxim of Justice Coulter Osborne, then of the Ontario Court of Appeal, the responding party to a motion for summary judgment must "lead trump or risk losing" (106150 Ontario Ltd. v. Ontario Jockey Club, 1995 1686 (ON CA), [1995] O.J. No. 132 (Ont. C.A.), at para. 35, the principle was reaffirmed in Ramdial v. Davis (Litigation Guardian of), supra, at para. 28).
21The court is entitled to assume that the record before it is complete, that it contains all of the evidence that a party would present if there were a trial. (Broadgrain Commodities Inc. v. Continental Casualty Company (CNA Canada), 2018 ONCA 438, at para. 8, citing Dawson v. Rexcraft Storage & Warehouse Inc., 1998 4831 (Ont. C.A.), 111 O.A.C. 201, at para. 17; Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200, at paras. 27, 33-34, aff'd 2014 ONCA 878, leave to appeal to S.C.C. refused, [2015] S.C.C.A. No. 97; and Tim Ludwig Professional Corporation v. BDO Canada LLP, 2017 ONCA 292, at para. 54).
22Once the moving party discharges the burden of showing that there is no genuine issue for trial, the onus shifts to the responding party. That party must then provide evidence of specific facts showing that there is a genuine issue requiring a trial (Ramdial v. Davis (Litigation Guardian of), at para. 30). An adverse inference may be drawn from a failure to support the allegations or denials in a party's pleadings (Pearson v. Poulin, 2016 ONSC 3707, at para. 40).
23Under r. 20.04(2.1) the court may exercise enhanced powers on the motion unless it is in the interest of justice to do so at trial. Those enhanced powers allow the court to weigh the evidence, evaluate the credibility of a deponent, and draw any reasonable inference from the evidence. As Paciocco J.A. wrote for the Ontario Court of Appeal at para. 83 of Mega International, those powers "...are presumptively available to a summary judgment motion judge to use to fairly and justly adjudicate a claim at a motion for summary judgment" (Hryniak, at para. 45). However, the court is not required to resort to those powers to make up for a party's evidentiary shortcomings (see Broadgrain Commodities Inc. v. Continental Casualty Company (CNA Canada), 2018 ONCA 438 at para. 8).
24Silva does not argue that the summary judgment process prevents the court from reaching a fair and just determination of the issue of discoverability on the merits. The issue is one of mixed fact and law (Polla v Croatian (Toronto) Credit Union Limited, 2020 ONCA 818, at para. 32). There appear to be no issues of credibility that require a trial to resolve. However it is helpful to my determination to weigh and draw reasonable inferences from the evidence, as set out below. In doing so, I find that the discoverability issue raised in this proceeding is amenable to the summary judgment process in reaching a fair and just determination of this action on its merits.
Issue No. 2: Was this action commenced more than two years after the cause of action became discoverable?
The Limitations Act, 2002
25Section 4 of the Limitations Act, 2002 (“the Act”), sets out its basic limitation period. Under that provision, “unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.”
26The definition of discoverability under the Act is set out in s. 5(1). It states 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).
27Sub-section 5(2) of the Act deals with the subjective nature of the principle of discoverability by enacting a presumption of knowledge. It states that “[a] person with a claim shall be presumed to have known of the matters referred to in clause (1)(a) on the day the act or omission on which the claim is based took place, unless the contrary is proved”. In other words, the onus is on the person who alleges delayed discoverability, past the date of the alleged tortious or contract-breaching act. That person must prove that they only discovered the matters set out in s. 5(1)(a) after that date.
When is a Cause of Action Discoverable under the Limitations Act, 2002?
28In Tender Choice Foods Inc. v. Versacold Logistics Canada Inc., 2013 ONSC 80, at paras. 56-59, aff’d 2013 ONCA 474 Perell J. sets out the following principles regarding the application of limitation periods and discoverability at para, as follows:
A limitation period commences when the plaintiff discovers the underlying material facts or, alternatively, when the plaintiff ought to have discovered those facts by the exercise of reasonable diligence [para. 56];
The discoverability of a claim for relief involves not only the identification of the tortfeasor but also the discovery of an act or omission that constitute liability [para. 57];
It is not enough that the plaintiff has suffered a loss and has knowledge that someone might be responsible; the identity and culpable acts of the wrongdoer must be known or knowable with reasonable diligence; [ibid];
The question is whether the prospective plaintiff knows enough facts to base a cause of action against the defendant, and, if so, then the claim has been discovered and the limitation period begins to run [para 58];
However, the discovery of a claim does not depend upon the plaintiff knowing that his or her claim is likely to succeed; the limitation period runs from when the prospective plaintiff has or ought to have had, knowledge of a potential claim, and the later discovery of facts which change a borderline claim into a viable one does not postpone the discovery of the claim [para. 59].
[citations relied upon by Perell J. omitted]
29In its appellate decision in Tender Choice, the Court of Appeal for Ontario found at para. 1 that discoverability under s. 5 of the Act does not require knowledge of the full extent of the damages pleaded.
Onus of Proving Discoverability in a Summary Judgment Motion
30In Verbeek v Liebs-Benke, 2017 ONSC 151, Pollak J. considered the relevant authorities regarding the burden of proof in summary judgment motions. She wrote:
23 In the case of Shukster v. Young et al., 2012 ONSC 4807 at para. 19, the court summarized the law with respect to the burden of proof on summary judgment motions on limitations issues as follows:
"Subsection 5(1)(a) contains a subjective test that focuses on the Plaintiff's actual knowledge of the types of facts enumerated under that provision. Evidence that the Plaintiff had actual knowledge of such matters will trigger operation of the limitation period. However, a lack of such evidence and/or a denial of such actual knowledge will not suffice to prevent a finding that operation of the limitation period was triggered, if other provisions of section 5 indicate that such a finding is appropriate.
In particular, subsection 5(1)(b) contains a second test that is objective, and requires the Plaintiff's knowledge to be assessed in relation to a standard asking when a reasonable person, with the Plaintiff's abilities and in the Plaintiff's circumstances, ought to have had knowledge of the matters enumerated in subsection 5(1)(b). This in turn usually leads to a consideration of the steps such a person would have taken to acquire such knowledge. In effect, the question becomes one of determining when the Plaintiff, in the particular circumstances of the case, ought to have learned of such matters. One must ask why the Plaintiff and his/her solicitor were unaware of such matters until some later point. The applicable standard is that of a "reasonably prudent person in pursuing the facts".
Moreover, subsection 5(2) goes further, and establishes a rebuttable presumption that the Plaintiff did know of such matters on the day the underlying act or omission took place. The burden is on the Plaintiff to rebut that presumption. In other words, once a Defendant has pleaded a limitations defence, the evidentiary burden is on the Plaintiff to prove that the claim was issued within the limitation period.
Pursuant to Rule 20, a party moving for summary judgment retains the overall burden of showing that there is no genuine issue requiring trial. However, where a Defendant moves for summary judgment in relation to a statutory limitation period, the evidentiary burden as to the discoverability issue and under Rule 20 effectively shifts to the responding party under section 5(2). In particular, the Plaintiff must adduce evidence sufficient to demonstrate that there is a genuine issue, requiring trial, concerning operation of the limitation period pursuant to subsections 5(1) and 5(2). In particular, a Plaintiff seeking to defeat operation of the limitation period on such a motion has the onus to rebut the presumption in s.5(2), or at least demonstrate that there is a genuine issue requiring trial as to whether that presumption is rebutted.
Such determinations are fact driven, and must be decided based on the particular circumstances of each case.
[Emphasis added.]
24 In the case of Sabourin v. Proulx, 2011 ONSC 4099, 2012 ONSC 4099, 17 C.L.R. (4th) 178 at para. 22 the test to determine the limitation issue was summarized as follows:
What facts did the Plaintiffs know and when did they know them?
What facts existed that the Plaintiffs were unaware of and when did they acquire knowledge of them?
Is this a case where an expert's report is required to institute a claim?
Did the Plaintiffs act with reasonable diligence?
25 Applying the principles discussed above, I must ask: just on the basis of the evidentiary record alone, are there genuine issues that require a trial? I must also ask: does the evidentiary record before me provide me with the evidence I need to "fairly and justly adjudicate the dispute" in the context of litigation as a whole?
[31] The issue of onus in the context of a summary judgment motion was neatly summarized by Sanfilippo J. in Kinectrics Inc. v. FCL Fisker Customs & Logistics Inc. 2020 ONSC 6748, as follows:
37 When a limitation defence is raised, the onus rests with Kinectrics, as plaintiff, to establish that its claim is not statute-barred in that it acted on its claims when it actually discovered the claim or when a reasonable person in the same or similar circumstances using reasonable diligence would have discovered the facts upon which the claim is based ...
38 However, a defendant moving for summary dismissal based on a limitation defence has the burden of establishing that there is no issue requiring trial about its limitation defence…
[Citations omitted]
Analysis
32The Defendants have raised a limitation defence in their pleadings and in this motion. While the ultimate onus in this summary judgment motion rests on the defendants as moving parties, the raising of a limitation defence shifts the onus of proving at least a triable issue regarding discoverability onto Silva. Here, I find that Silva failed to meet that onus because:
By August 4, 2016, Silva’s lawyer was in possession of the documents, including the PPSA registration document. While the documents were formally served on Silva’s co-defendant in the 2016 action, Demasi, he and Silva shared the same lawyer, Mr. Kyle. While acknowledging possession of the documents, Mr. Kyle served a notice of intent to defend on behalf of all of the 2016 defendants on August 4, 2016, including Silva.
As the Alberta Court of Appeal recently concluded after a review of numerous authorities in HOOPP Realty Inc. v. Emery Jamieson LLP 2020 ABCA 159 at para 71 - 72, “[t]he common law has long held that notice to a solicitor is considered notice to their client…[a] number of cases have also held that knowledge of a solicitor may be imputed to their client for the purpose of calculating limitations periods”. In other words, Mr. Kyle’s knowledge of the PPSA registration is Silva’s knowledge. Accordingly, the limitation clock can be said to have started on August 4, 2016.
Then on August 22, 2016, Kyle served the statement of defence in the 2016 action on behalf of the 2016 defendants. If the limitation clock did not commence on August 4, 2016, it can be said to have started on August 22, 2016.
Silva’s central claim in this action is his inability to obtain a mortgage because of the improper PPSA registration. His statement of claim sets out when that alleged inability began. It states that “[s]ince July 2017 Silva has been unable to obtain mortgage financing in the normal course of business.” That pleading is an admission as to the date in which the harm he alleges commenced. That pleading can only be withdrawn on consent or with leave (r. 51.05). Neither has occurred. Recall that under 5(2) of the Act, the onus is on Silva to prove any delayed discovery of his cause of action. He fails to do so. If the limitation clock did not start on either August 4 or August 22, 2016, Silva’s statement of claim can be said to have started the clock in July 2017 and in any event, no later than August 1, 2017;
In his affidavit of December 4, 2020, Silva deposes:
The damage from the PPSA registration first came to my attention after I applied for and was conditionally granted, a mortgage commitment for the purchase of a new house on September 15, 2017 …
Shortly afterwards I was informed by the mortgage broker that my application was denied because there was an entry of a $1.2 million secured liability. Attached as Exhibit “E” to this affidavit is a true copy of my Equifax report, undated, but obtained sometime after July 2017.
Two points emerge from those two paragraphs of Silva’s affidavit. First, even knowing that he was facing a limitation defence, Silva is unable to delineate a discoverability date that saves this action from being statute-barred. Silva fails to articulate the date that the mortgage broker informed him that his mortgage application was denied. He certainly provides no proof of that date. The only date he offers in that regard is September 15, 2017, still more than two years prior to the issuance of the statement of claim. Further, that date is at least a month and a half after the “July 2017” date he was “unable to obtain mortgage financing in the normal course of business”. He fails to explain the discrepancy. Again, the onus is on Silva to prove any delayed discovery of his claim.
Second, the undated Equifax report contains a record of credit checks of Silva that began in October 2014 and ended on July 20, 2017. On the top of the second page of that report is a “SUMMARY”. It shows that the search was from “01/17-07/17” or January through July 2017. There is no reason for so limited a search parameter unless the search was conducted in July or August 2017. If there is such an explanation, Silva fails to provide it. Thus, Silva’s own evidence points to knowledge of the alleged credit problem by August 2017.
Silva further deposes in his December 4, 2020 affidavit that:
I have no doubt that Soccol, an experienced lawyer, and Biasini, an experienced businessman, knew the PPSA registration would eventually hit the credit reporting services and my credit report.
My damages flow from the improper registration of the alleged “claim for lien” of April 7, 2016 and subsequent reporting of same to the credit reporting services. The reporting of the registration to the Ministry of Government and Consumer Services was entirely foreseeable by an experienced lawyer and an experienced businessman.
[Emphasis added.]
Two additional points emerge from these two paragraphs. First, if the credit reporting following a PPSA registration was “entirely foreseeable” to an “experienced businessman” like Mario Biasini, why was it not equally foreseeable and thus discoverable to Silva? That question is particularly apt in light of the fact that Silva’s own lawyer was aware of the PPSA registration by August 4, 2016. As set out above, the lawyer’s knowledge applies to the client. Silva fails to explain the different foreseeability for himself and his lawyer on one hand and the defendants on the other.
Second, Silva states that his damages flow from a PPSA registration and subsequent credit report. As set out above, that registration likely came to his attention by August 2017. At that time, its consequences would have been as foreseeable to him and his lawyer as it allegedly was to the defendants.
Conclusion
33Based on my findings above and the analytic framework set out in Tender Choice Foods Inc. v. Versacold Logistics Canada Inc., I find that more than two years before he issued the statement of claim in this action, Silva:
had or ought to have discovered the underlying material facts to his claim, namely the PPSA registration whose alleged impropriety is the ultimate subject of this action;
knew or ought to have known the identities of the alleged tortfeasors, the defendants, and their culpable act, the PPSA registration;
knew or ought to have known enough facts to base a claim against the defendants for that allegedly improper PPSA registration.
may not have known of the full extent of damages that would accrue from that registration or the likely success of his potential action. But he did not have to know all of that for the claim to have been discoverable; and
knew or ought to have had knowledge of his potential claim, as articulated in this action.
34For those reasons, I conclude that Silva has failed to meet his onus of proving that this action is not statute-barred or that the issue requires a trial. As a result, the defendants have met their onus of proof in this motion, establishing that there is no issue requiring a trial about their limitation defence. I find that Silva commenced this action more than two years after discovery of the cause of action in this proceeding. Accordingly, I dismiss this action.
Costs
35The parties should attempt to resolve the issue of costs on their own. If they are unable to do so, the Defendants may submit their costs submissions of up to three pages, double-spaced, one-inch margins plus a bill of costs/costs outline and offers to settle within 21 days of release of this endorsement (I have granted them additional time because of the upcoming holidays). They need not include the authorities upon which they rely so long as they are found in the commonly referenced reporting services (i.e. , LexisNexis Quicklaw, or WestlawNext) and the relevant paragraph references are included. Silva may respond in kind within a further 14 days. No reply submission will be accepted unless I request it. If I have not received any submissions within the time frames set out above, I will assume that the parties have resolved the issue and make no costs order.
“Marvin Kurz J.”
Electronic signature of Justice Marvin Kurz,
Original will be placed in court file
Date: December 23, 2020