COURT FILE NO.: CV-15-536921-00A1

DATE: 20200214

SUPERIOR COURT OF JUSTICE – ONTA0RIO

RE: HARESH DURBEJAI, Plaintiff

AND:

TAJNAUGHT DURBEJAI and DMITRY KOLESNIK, Defendants/Respondent

AND:

CITY OF TORONTO and TORONTO HYDRO-ELECTRIC SYSTEM LIMITED, Third Parties/Appellant

BEFORE: R.F. Goldstein J.

COUNSEL: Ara Basmadjian, for Toronto Hydro, Appellant and proposed fourth party

Karen Klaiman, for Dmitry Kolesnik, Respondent

HEARD: January 24, 2020

ENDORSEMENT

[1] On October 12, 2013 Tajnaught Durbejai was driving a black Toyota near Keele Street and York Street in Toronto. Haresh Durbejai was in the passenger seat. Haresh owned the Toyota. At the same time and in the same area, Dmitry Kolesnik was driving a gray Mitsubishi. Both vehicles approached the intersection of Keele and York. The vehicles collided.

[2] Haresh Durbejai, the passenger in the Toyota, sued both drivers. He issued his statement of claim on September 22, 2015. He pleaded that both drivers negligently caused the collision. The two drivers were, therefore, joint and severally liable to him for his injuries.

[3] On October 27, 2015 Dmitry Kolesnik, driver of the Mitsubishi, filed his defence to the claim. On August 11, 2016, Tajnaught Durbejai filed his defence to the claim. The drivers crossclaimed against the other. Both pleaded the negligence of the other.

[4] On June 21, 2017 Kolesnik brought a third party claim against the City of Toronto. Kolesnik pleaded that at the time of the collision the traffic signals and lighting at the intersection of Keele and York were not working. The area was in complete darkness. The City had statutory responsibility for the highway conditions, traffic lights, and streetlights.

[5] On October 31, 2017 the City defended by pleading that the third party claim was statute-barred. The City also pleaded that it was not responsible for the failure of the traffic lights and the streetlights. It pleaded that Toronto Hydro was responsible for the supply of power. Just before the collision, the power supply failed. On November 3, 2017 the City filed a fourth party claim against Hydro. Hydro in turn filed its defence on April 11, 2018. It is important to note that in its defence Hydro denied that there was a power outage. I will return to that point.

[6] On September 21, 2018 the City’s fourth party claim against Hydro was dismissed on consent. Kolesnik, the driver of the Mitsubishi and one of the original defendants, then brought a motion to amend the third party claim and add Hydro as a third party. The motion was filed on January 21, 2019.

[7] Master Jolley heard the motion on April 23, 2019. On May 3, 2019 Master Jolley released her decision: Durbejai v. Durbejai, 2019 ONSC 2793. Master Jolley granted the motion, allowing Kolesnik leave to amend and add Hydro as a party.

[8] Toronto Hydro argued before the Master that Kolesnik knew that the traffic lights were not operating as of the day of the accident in 2013. Indeed, when Kolesnik third-partied the City in June 2017 he knew that the traffic signals and lighting were not operating. Alternatively, Kolesnik produced no evidence that he had done any due diligence to determine whether there was a claim against Hydro. He relied on the fourth party claim filed by the City. He did not anticipate that the claim would be dismissed due to a contractual term between the City and Hydro.

[9] Kolesnik argued before the Master that he could not have reasonably known until March 2017 that the lighting failures were the result of a power outage. That was when the police file was delivered to the parties pursuant to a Wagg motion. Kolesnik argued that he assumed – based on the City’s statutory responsibilities – that the City was responsible. That was why he issued his claim against the City in June 2017. It was not until the City’s defence to the third party claim – served in October 2017 – that Kolesnik learned that the City pleaded that the lighting outage Hydro’s contractual responsibility. On October 9, 2018 the City disclosed a report indicating that the streetlights and traffic lights were not operating due to a power failure. It was at that point that he knew he had a claim against Hydro. Kolesnik’s counsel advised the parties on November 14, 2018 that he would be seeking to add Hydro, although the Master found that it was more likely the dismissal of the City’s claim against Hydro that moved counsel to act.

[10] The crux of the Master’s decision was her finding that there was a distinction between “knowing that the traffic lights were not working, which Kolesnik clearly knew, and knowing why the traffic lights were not working as it is the why or cause of the traffic light malfunction that brought Toronto Hydro’s action into play.” She found that Kolesnik was aware that Hydro was responsible for the outage as of March 2017. Hydro’s position that public information about the power outage would have been available through internet searches. The Master found, however, that Hydro undercut its own position by pleading that there was no power outage. She found that the motion was brought within the limitation period.

[11] Hydro appeals. Mr. Basmadjian, for Toronto Hydro, argues that Master Jolley erred in in two respects: first, that she failed to properly apply s. 5(1)(b) and s. 18 of the Limitations Act; and second, that she misapprehended the evidence and failed to consider whether Kolesnik provided an explanation as to his due diligence.

[12] I respectfully disagree. I see no error by the Master.

[13] The standard of review for an appeal from a decision of a Master is that of correctness on questions of law; and “palpable and overriding error” on questions of fact: Housen v. Nikolaisen, 2002 SCC 33, paras. 8, 10. I disagree with Hydro that the standard of review for a master’s decision on the addition of a third party is correctness. In my respectful view, an appeal from a master on the issue of the discoverability of a limitation period is a question of mixed fact and law. The master was required to make findings of fact based on the evidence in order to determine the discoverability date: Morrison v. Barzo, 2018 ONCA 979; Scalabrini v. Khan, 2019 ONSC 5509. That means that absent a palpable and over-riding error, her findings of fact are owed deference. I do not agree that I can substitute my view of the facts: Hannan v. Toronto, 2015 ONSC 1875.

[14] I deal with Hydro’s first argument. Mr. Basmadjian argues that the Master failed to properly interpret the applicable provisions of the Limitations Act. While she quoted the first part of the test in Morrison v. Barzo, she failed to quote the second part of the test.

[15] I respectfully disagree with Hydro’s argument. The Master made no error in her interpretation of the Limitations Act.

[16] Sections s. 5(1) and 18 of the Limitations Act state:

5 (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)

(2) 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.

18 (1) For the purposes of subsection 5 (2) and section 15, in the case of a claim by one alleged wrongdoer against another for contribution and indemnity, the day on which the first alleged wrongdoer was served with the claim in respect of which contribution and indemnity is sought shall be deemed to be the day the act or omission on which that alleged wrongdoer’s claim is based took place.

[17] Section 18(1) creates a two-year limitation period for contribution and indemnity, subject to the discoverability principle. The provision works with other sections of the Limitations Act to create the statutory scheme for limitation periods: Mega International Commercial Bank (Canada) Ltd. v. Yung, 2018 ONCA 429. At para. 54 of that case Paciocco J.A. summarized the principle:

Properly interpreted, s. 18 works with other provisions of the Limitations Act, 2002 to create a presumed start date for the running of the limitation period. That presumed limitation period start date will result in a claim for contribution or indemnity being statute-barred two years after the party seeking contribution or indemnity is served with a claim in the proceeding in which contribution or indemnity is sought, 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.

[18] The Master set out the issue properly. She stated at para. 2 of her judgment:

The issue before the Court is when Kolesnik ought reasonably to have discovered that he had a claim against Toronto Hydro.

[19] The Master then quoted from Morrison v. Barzo at para. 32:

The evidentiary burden on a plaintiff seeking to add a defendant to an action after the apparent expiry of a limitation period is two-fold. First, the plaintiff must overcome the presumption in s. 5(2) that he or she knew of the matters referred to in s. 5(1)(a) on the day the act or omission on which the claim is based took place, by leading evidence as to the date the claim was actually discovered (which evidence can be tested and contradicted by the proposed defendant). The presumption is displaced by the court's finding as to when the plaintiff subjectively knew he had a claim against the defendants: Mancinelli, at para. 18. To overcome the presumption, the plaintiff needs to prove only that the actual discovery of the claim was not on the date the events giving rise to the claim took place. It is therefore wrong to say that a plaintiff has an onus to show due diligence to rebut the presumption under s. 5(2): Fennell, at para. 26.

[20] The Master then summarized the second part of the test:

Second, the plaintiff must offer a "reasonable explanation on proper evidence" as to why the claim could not have been discovered through the exercise of reasonable diligence. The evidentiary threshold here is low, and the plaintiff's explanation should be given a "generous reading", and considered in the context of the claim: Mancinelli, at paras. 20 and 24.

[21] I fail to see the error. The Master set out the test properly. Her first sentence in paragraph 2 (quoted above) set out the issue succinctly and accurately.

[22] Mr. Basmadjian’s second argument is that the Master made an error by misapprehending the evidence. Kolesnik was required to put forward some evidence of due diligence. He put forward none. He was under a duty to demonstrate that he acted with due diligence to discover whether he had a claim against Hydro. Kolesnik simply waited to see if information showed up: Laurent-Hippolyte v. Blasse et.al., 2018 ONSC 940 at para. 26

[23] Again, I respectfully disagree. The Master’s finding that the claim was not discoverable to Kolesnik until March 2017 was amply supported by the evidence. I see no error, let alone a palpable and over-riding error that would permit this court to intervene. Moreover, and to repeat, Hydro consistently denied that it was responsible for the power outage. Indeed, Hydro set out that denial in its pleadings. I agree with the Master that it seems a little rich for Hydro to argue that Kolesnik should have disregarded that denial and the pleadings and then discovered through due diligence that Hydro did, in fact have responsibility for the power outage.

DISPOSITION

[24] The appeal is dismissed. The parties each have 30 days from today’s date to make submissions of no more than two pages regarding costs.

R.F. Goldstein J.

Date: February 14, 2020