Court File and Parties

Court File No.: CV-16-564583 Date: 2020-07-08 Superior Court of Justice - Ontario

Re: Cameron Scace, Plaintiff And: Hugh Stephen Withers, Jeanne Irene Withers, XYZ Contracting Corporation and ABC Subcontracting Corporation, Defendants

Before: Master P. Tamara Sugunasiri

Counsel: P. Ezzatian, Counsel for Mr. Scace/Moving Party J. Frustaglio, Counsel, for the Proposed Defendants 2090990 Ontario Inc. (“Cezanne Homes”) C. Stewart, Counsel for the Proposed Defendant, Parkscape (watch brief)

Heard: October 7, 2019 and May 20, 2020

Reasons for Decision

Overview:

[1] Mr. Scace and the Withers are neighbours. In the fall of 2014, the Withers hired Cezanne Homes to renovate their home. The project ended in May of 2016. Scace alleges that the renovations caused structural damage to his property. After mutual attempts to resolve the issues, Scace sued the Withers and unnamed contractors by Notice of Action issued November 22, 2016. He now moves to correct his misnomer by substituting the XYZ contractor with 20969990 Ontario Inc. cob. as Cezanne Homes (“Cezanne Homes”). In the alternative, he wishes to add it as a defendant on discoverability principles. Initially Scace wished to also substitute the shoring contractor, Parkscape Ltd. for XYZ Contractor. That part of the motion was withdrawn without prejudice to resurrecting it at a later date. Parkscape did however provide an affidavit that Scace and Cezanne Homes rely on in their submissions.

[2] On a motion to correct the name of a defendant based on misnomer, if the plaintiff intended to correctly name the defendant within the limitation period and the true defendant would know on reading the claim that it was the intended defendant, the court can permit the substitution. This is the case even if the defendant’s true identity could be readily known.[^1]

[3] If the Plaintiff meets the misnomer threshold, the court may use its residual jurisdiction to deny a substitution where there is prejudice that cannot be compensated by costs or if it is fair and just to do so in the particular circumstances of the case.[^2]

[4] This motion raises the interesting question about the extent to which a plaintiff’s knowledge of the defendant’s identity negates intention. Cezanne Homes argues that Mr. Scace knew Cezanne Homes’ identity before issuing his Claim. He therefore could not possibly have had the intention to sue Cezanne Homes when he started his action because if he did, he would have named it as a defendant.

Brief Conclusion:

[5] Mr. Scace has met the misnomer threshold. A fair reading of the Claim demonstrates that he intended to sue Cezanne Homes for negligent construction. I am not persuaded on the facts of this case that his previous knowledge negates that intention. I also conclude that after reading the Claim, Cezanne Homes and Mr. Chan, acting reasonably, would know that it was an intended defendant. There is no basis to exercise my residual discretion to disallow the substitution.

[6] I explain my reasons below.

Background:

[7] Mr. Scace and the Withers Defendants are neighbours on Parkhurst Blvd in Toronto. Scace lives at 97 Parkhurst Blvd. (“Scace property”), and the Withers’ are a number 99. In the fall of 2014, Cezanne Homes and the Withers entered into an agreement to renovate their home. When demolition began in the fall of 2014, Cezanne erected its signage in front of No. 99 that included its name, website and business telephone number.

[8] The demolition consisted of tearing down the previous building structure including excavating and removing existing foundation and footings. As a result, there needed to be shoring and whalers to support the adjacent properties. After another company completed installing the shoring and whalers, Cezanne Homes began its reconstruction of the Withers’ home. This was in January and/or February of 2015.

[9] In March of 2015, Scace commissioned a structural inspection of his property. The report dated March 31, 2015 concluded that the Scace property had been damaged from the construction. Scace conveyed this information to Withers by email of April 9, 2015. Withers responded on the same day, copying Mr. Chan from Cezanne Homes. He indicated in that email that Chan was the principal of the builder whom he identified as Cezanne Homes. Chan’s email address was Simon.Chan@cezannehomes.com. Scace and Withers continued to discuss repairs to the Scace property and copied Chan on their email correspondence up until December 1, 2015. In April of 2015 Scace, Withers and Chan did a walk through of the Scace properties and Cezanne Homes also did some repairs in and around that time. Cezanne Homes completed its work in or around May of 2016.

[10] In September of 2016, Scace retained counsel to represent him. In September and October of 2016 counsel engaged solely with Withers about repairs and the payment of various invoices. On November 7, 2016, Scace made a claim to his property insurer. He then issued a Notice of Action dated November 22, 2016 naming the Withers, XYZ Contractors and ABC Subcontractors as defendants. Scace issued the Statement of Claim on December 22, 2016.

Issues:

Does Mr. Scace meet the threshold for misnomer such that he can substitute Cezanne Homes for XYZ Contracting?

Yes

Is there a reason to deny the substitution based no the court’s residual discretion?

No

Law and Analysis:

[11] The motion proceeds pursuant to Rules 5.04, 26.01 of the Rules of Civil Procedure and sections 4 and 5 of the Limitations Act.

[12] Sub rule 5.04(2) gives the court discretion to substitute a party under the doctrine of misnomer. Even if the Plaintiff meets the threshold, the court retains residual discretion to decline the request. Rule 26 requires the court to allow an amendment (including adding a party) unless it causes non-compensable prejudice, or the claim is untenable.[^3] As I allow the motion pursuant to Rule 5.04(2), I need not consider r. 26.01 nor sections 4 and 5 of the Limitations Act, 2002.

The Doctrine of Misnomer

[13] Traditionally, the law of misnomer was quite narrow, permitting a plaintiff to correct minor spelling errors in a defendant’s name as long as the defendant had been served with the claim. The original law of misnomer is reflected in section 21 of the Limitations Act, 2002 which states that if a limitation period in respect of a claim against a person has expired, the claim shall not be pursued against that person by adding her to an existing proceeding. The rule does not prevent the correction of a misnaming or misdescription of a party. The policy behind the rule was clearly that a plaintiff should not be precluded from pursuing a claim due to typographical or other minor error. If the defendant knew that he was being sued notwithstanding the error, form should not triumph over substance.

[14] The law has evolved significantly since then. Plaintiffs can now rely on misnomer to substitute the names of defendants who are known, or can readily be known to the plaintiffs, and who have no idea that they have been sued until the plaintiff serves them with the misnomer motion, subject to the existence of non-compensable prejudice or other factors that warrant the court’s protection.[^4]

[15] Most recently the test is whether within the limitation period, Mr. Scace has demonstrated an intention to sue Cezanne Homes, and whether a reasonable principal of Cezanne Homes, with all of his knowledge and in all of the circumstances of the case, would know from reading the Claim that Cezanne Homes is an intended defendant.[^5] This second portion is often described as the “litigation finger test”. Even if a plaintiff meets this test, the court retains residual discretion to deny the relief having regard to all the circumstances of the case.

Mr. Scace had an intention, within the limitation period, to sue Cezanne Homes

[16] The parties dispute when the limitation period began to run. Scace argues that at the earliest it started when repair discussions with Withers broke down in October of 2016. At the latest it started on February 21, 2017 when the Withers’ then counsel advised Scace of Cezanne Homes’ identity and address. Cezanne Homes argues that it started to run on March 31, 2015 when Scace received the structural damage report.

[17] I need not resolve this dispute. Even on Cezanne Homes’ timeline, Scace commenced his action against XYZ Contractor within two years of March 31, 2015. He issued his Notice of Action on November 22, 2016. Despite counsel’s able arguments, I also accept that at the time he commenced the action, Scace intended to sue Cezanne Homes even though he did not name them.

[18] Cezanne Homes argues that Scace could not have intended to sue Cezanne Homes because he knew of Cezanne’s identity and yet chose to sue XYZ Contractor. That must mean that his intention was to sue entities other than Cezanne Homes.

[19] The evidence on what Scace knew and intended at the time he commenced his action, is incomplete, to say the least. Scace relies on the file review of a law clerk at his lawyer’s office to state that counsel was not aware of Cezanne Homes’ identity at the time the Claim was issued. Ms. Yarotskaya made this statement in the face of: a) the emails involving Mr. Scace, Withers and Chan (Principal of Cezanne Homes) up until December of 2015; b) an email from Withers to Scace advising him that Cezanne Homes was the builder, and c) Chan’s evidence that he completed the job in May of 2016 with clearly visible company signage for the duration. There is no direct evidence on why Scace chose to sue XYZ when he had interacted with Chan in the year prior. Given the materiality of the issue, I give no weight to Ms. Yarotskaya nor Ms. Kaake’s evidence on the point. That leaves me with a gap in evidence as to what Scace knew in November of 2016. Cezanne Homes asks me to draw an adverse inference.

[20] Cezanne Homes submits an interesting argument that has some logic to it. However, it requires me to presume that the Plaintiff and/or his counsel knew of Cezanne Homes’ identity at the time they issued the Notice of Action and draw an adverse inference against Scace. I prefer to rely on the record before me and the evidence that is available and admissible. Intention is not only gleaned from evidence but also from the Claim itself. For example, in Lloyd v Clark, supra, the Ontario Court of Appeal simply looked to a fair reading of the statement of claim to determine intention.[^6]

[21] In my view, a fair reading of the Claim and the evidence on the record (excluding that of the law clerks with respect to Scace’s knowledge) leads to the conclusion that Scace intended to sue the contractors responsible for the home renovation project. By Chan’s own evidence, there were only two contractors involved – Cezanne Homes as the overall builder, and a shoring contractor. There is nothing in the Claim to suggest that it is aimed only at the shoring contractor. For example, at paragraph 12, Scace states: The Plaintiff claims that the Defendants, or any of them, constructed the improvement at the Withers Property, or caused the Withers Property to be so improved, in a negligent, unworkmanlike and deficient manner…”

[22] Other paragraphs of the Claim also make it clear that Scace intended to sue the contractor or contractors retained to complete the Withers’ renovation:

a. In the fall of 2014, the Withers commenced an improvement to the Withers’ Property which required significant excavation along the common property line… (para. 4);

b. Withers directly or indirectly retained professional contractors, sub-contractors, and/or consultants, XYZ Contraction Corporation…to complete the improvement to the Withers’ Property… (para.5);

c. The Withers and the contractors and subcontractors completed the Project by the Autumn of 2015 (para. 6);

d. In or around March of 2015, Scace became aware of damages to the barbecue area and landscaping during construction (para. 7);

e. In September of 2016 Scace became aware of foundation wall and other structural damage to his property;

f. The Plaintiff claims that the Defendants, or any of them, constructed the improvement at the Withers’ Property, or caused the Withers Property to be so improved, in a negligent manner… (para.12);

g. The Defendants knew or ought to have known that the construction at the Withers’ Property caused damage to the Scace Property.

[23] The fact that the Claim refers to potentially more than one contractor does not negate the Plaintiff’s intention to sue Cezanne Homes as one of the tortfeasors. As Justice McLeod notes in Loy-English supra, the litigation finger is divisible.[^7]

[24] Despite the lack of direct evidence from Scace on his intentions, I am satisfied from reading the Claim and considering the totality of the admissible evidence that he formed the intention to sue Cezanne Homes (as one of the contractors responsible for the renovations) within the limitation period.

Cezanne Homes would know from reading the Claim that the litigation finger was pointing at it

[25] I am also satisfied that acting reasonably, Chan would know when he reads the Claim that Cezanne Homes is at least one of the intended defendants. In addition to Chan’s evidence that Cezanne Homes was the contractor in charge of the Withers’ renovation (with a separate shoring contractor), the Claim mentions damage that Chan was specifically privy to in the email exchanges between Scace and Withers. Up until December of 2015 Chan was copied on ongoing discussions of repairs to damage to the Scace property. This was shortly before Chan and Cezanne Homes completed the project in May of 2016. The timelines and details of the alleged damage in Chan’s affidavit match the timelines set out in the Claim. Most revealing is the symmetry between Scace’s allegations of BBQ area damage in paragraph 7 of his Claim and Chan’s admission in his affidavit that he was aware of Scace’s complaints of damages to his BBQ area. Chan may not agree that Cezanne Homes caused this damage, but he certainly could reasonably conclude that the Claim was pointing at Cezanne Homes as at least one of the potential tortfeasors.

There is no basis to refuse the misnomer correction

[26] On the facts of this case, there is no basis to refuse the requested correction to the Claim. Cezanne Homes has not tendered any direct evidence of prejudice. I accept that this is a non-classic misnomer and the court therefore has wide discretion to refuse the amendment.[^8] Cezanne Homes submits that Scace has manipulated the doctrine of misnomer for strategic reasons and should not benefit from its abuse. I see no such abuse nor have evidence of material advantage to Scace in delaying naming Cezanne Homes.

[27] Cezanne Homes claims prejudice based on Parkscape’s evidence that the geological engineer who approved the shoring work has since passed away. This does not preclude the proposed substitution. Parkscape admits to doing the shoring work. The deceased engineer was responsible for the review and approval of that work. The absence of the engineer does not prevent Cezanne Homes from defending itself as the non-shoring contractor. In any event, all parties will suffer the same consequences of the evidentiary deficit. Further, Parkscape does not suggest that the late Mr. Osafo’s drawings and plans could not be interpreted and discussed by another engineer.

[28] Sometimes delay in bringing the misnomer motion causes non-compensable prejudice and warrants the court’s protection of the proposed defendant. In this case, I find no significant delay nor delay that would prejudice Cezanne Homes. Plaintiff’s initial counsel was provided with information about Cezanne Homes in February of 2017. He brought this motion in October of the same year. It was then adjourned due to actions of all parties until it came before me in 2019 with further submission in 2020. Chan and Cezanne Homes knew since October of 2017 that Scace was seeking this amendment. Chan would have had time to preserve documents and indeed during the construction he had an opportunity to inspect the alleged damage. There is also an independent inspection report that is in the hands of the parties.

[29] I am not persuaded that I should exercise my residual discretion to prevent the proposed substitution.

Disposition:

[30] I allow the motion and substitute 20969990 Ontario Inc. cob. as Cezanne Homes for XYZ Contracting Corporation.

Costs:

[31] I strongly urge the parties to agree on costs. If they are unable, they may contact Christine.Meditskos@ontario.ca to convene a 30-minute hearing on costs, either by Zoom or in-person.

Master P.T.Sugunasiri

Date: July 8, 2020

[^1]: Stechyshyn v Domljanovic, 2015 ONCA 889 at para. 19 citing Kitcher v Queensway General Hospital (1997), 1997 CanLII 1931 (ON CA), 44 OR (3d) 589 at paras. 1 and 4 (CA). See also Glustein, J.’s decision in Loblaw Properties Limited v. Turner Fleischer Architects Inc., 2018 ONSC 1376 at paras. 13 and 24.

[^2]: Patrick v Southwest Middlesex (Municipality), 2017 ONSC 17 at paras.27-31; Omerod v Ferner, 2009 ONCA 697 at para.s 26-32.

[^3]: Mazzuca v. Silvercreek Pharmacy Ltd., 2001 CanLII 8620 (ON CA), [2001] OJ No 4567 at para. 42; Marks v City of Ottawa, 2011 ONCA 248 at para. 19.

[^4]: Stechyshyn v Domljanovic, 2015 ONCA 889; Lloyd v Clark, 2008 ONCA 343; Omerod v Ferner, 2009 ONCA 697; Kitcher v Queensway General Hospital (1997), 1997 CanLII 1931 (ON CA), 44 OR (3d) 589; and Skribans v Nowek, 2012 ONSC 532.

[^5]: Justices Corkery and McLeod provide an excellent summary of the law in Sora et al v. Emerson Electrical Co. et al, 2020 ONSC 1374 at paras. 20 22 and Loy-English v. Ottawa Hospital, 2019 ONSC 6075 at para. 21. I adopt and apply their principles.

[^6]: Lloyd supra note 4 at para. 3. See also Stekel v Toyota Canada Inc., 2011 ONSC 6507 at para. 27.

[^7]: Loy-English, supra note 5 at para.20(b).

[^8]: Omerod v Ferner, 2009 ONCA 697 at paras. 31-32.