COURT FILE NO.: CV-14-00005128-00
DATE: 2021 07 02
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Omar Farooq Kalair
Plaintiff
- and -
KABIR UDDIN KABIR, ZEBINISA KABIR, SYMA KABIR, AMIR KABIR, ASHRAF CHATHA, ISHRAT CHATHA, MUNIR FERRIS, GELAREH JIN, HAIG DERUSHA, JULIAN B. KELLER, DR. ATIF KABIR, COLDWELL BANKER HARTLAND REALTY BROKERAGE, CARLOS RITES, AND ANTONIO VICOSO
Defendants
Counsel: Peter I. Waldmann, for the Plaintiff Mathieu Belanger, for the Defendant Haig DeRusha
HEARD: May 14, 2021
REASONS FOR DECISION
P.A. DALEY J.
Introduction:
[1] The plaintiff brought a motion for leave to amend his statement of claim and to serve a fresh as amended statement of claim restoring Haig DeRusha ("DeRusha") as a party defendant in the within action, after the apparent passage of the applicable limitation period.
[2] Only the proposed defendant DeRusha opposed this motion and no other parties or counsel appeared on the return of the motion before the court.
[3] For the reasons outlined below the plaintiff’s motion is dismissed.
Background & Evidentiary Record:
[4] This action has a long and tortured history involving the proposed defendant DeRusha, the plaintiff’s former counsel who represented him in matrimonial proceedings. He represented the plaintiff from September 2010 until he was removed as counsel of record in April 2013.
[5] In the statement of claim originally issued, following the filing of a notice of action by the plaintiff in November 2014, he sought a variety of relief from the defendants and specifically with respect to the defendant DeRusha he sought damages for professional negligence in the sum of $1 million.
[6] As to the claims made against the defendant DeRusha, in the original statement of claim, they included allegations that he, as the plaintiff’s solicitor, was negligent, breached a contract with him and that he failed to follow the plaintiff’s instructions. More particularly, in paragraph 23 of the statement of claim the plaintiff alleged:
- Haig was negligent and/or in breach of contract in that he failed to properly dispose of the marriage contract which was signed by the plaintiff under duress and not to have been treated as an enforceable contract.
[7] Further, in paragraph 25 of the statement of claim the plaintiff alleged:
- Haig failed to properly represent the plaintiff in his family proceeding in that: a. He did not follow the plaintiff’s instructions; b. He overbilled and/or billed for items for which he never worked; c. He performed tasks on behalf of the plaintiff without authorization.
[8] In May 2016 the defendant DeRusha brought a motion for summary judgment seeking an order dismissing the plaintiff’s action against him on the basis that there was no genuine issue requiring a trial and as the action was statute barred.
[9] The plaintiff brought a motion seeking leave to file a fresh as amended statement of claim at the same time as the defendant's motion for summary judgement.
[10] On consent of the plaintiff and the defendant DeRusha, Woollcombe J. granted an order on May 24, 2016, which read in part as follows:
This Court Orders that the motion for summary judgment is allowed and that the claims of the plaintiff against Haig DeRusha as set out in the statement of claim dated December 9, 2014, are hereby dismissed.
This Court Orders that the dismissal of the action against the moving party as set out in the statement of claim dated December 9, 2014, is without prejudice to the plaintiff’s right to continue with a motion to deliver a fresh as amended statement of claim to advance the claims made there in against the moving party.
[11] The consent order further provided that the plaintiff was to pay the moving defendant his costs of defending the action as originally framed and in respect of the motion brought fixed in the amount of $9,000, all-inclusive, which was payable by the plaintiff to the moving defendant within 30 days. Those costs remain unpaid.
[12] The record is clear, and counsel for the plaintiff acknowledged on this motion that the plaintiff’s counsel in attendance on the motion before Woollcombe J. was acting with the plaintiff’s instructions and authority to enter into this consent order on his behalf.
[13] The fresh as amended statement of claim that the plaintiff now seeks leave to file on this motion is the same one that that was filed in the plaintiff's motion to amend in May 2016. Leave to file the amended pleading was never sought following the order of Woollcombe J until five years later upon the return of this motion.
[14] In the plaintiff's statement of claim as originally filed, he alleged that DeRusha had "designed" the marriage contract and that he was negligent for failing to set it aside and failed to prevent the sale of the matrimonial home.
[15] DeRusha filed a statement of defence to the statement of claim and asserted that he had provided competent representation of the plaintiff and pleaded that the plaintiff's claims against him were statute barred on the basis that the plaintiff had discovered any claims being advanced more than two years prior to the commencement of the action by the notice of action filed in November 2014.
[16] DeRusha instituted a motion for summary judgment in November 2015, which was ultimately returnable in May 2016 on the basis that there was no genuine issue requiring a trial against him and further on the basis that the plaintiff's claim was statute barred.
[17] On December 17, 2019, the parties in this action appeared before Baltman J. on the return of the plaintiff's motion for a status hearing. The plaintiff's status hearing motion was adjourned, and the court directed that the plaintiff's motion to amend his pleading was to be addressed on a long motion date.
[18] In support of the plaintiff's motion for leave to file his amended pleading, he filed affidavit evidence offering explanations for the delay in bringing the motion seeking the amendment following the consent order of Woollcombe J. of May 24, 2016.
[19] The plaintiff states in his supporting affidavit that the fresh as amended statement of claim, which was dated May 2, 2016, was to have been filed by his former lawyer, however as he was subject to a suspension from practising law and a contempt order, the plaintiff's motion seeking leave to file his amended pleading did not proceed at that time and he did not become aware of this fact until the end of 2019.
[20] The plaintiff also cited several other facts which his counsel on this motion characterized as "special circumstances" for the purpose of explaining the delay in proceeding with a motion to amend his pleading.
[21] Some of these circumstances included the fact that he did not receive his former lawyer's file in respect of this action until December 2019 at which time he learned that the motion to amend his pleading had not proceeded.
[22] Further, he was involved as an accused in a lengthy criminal proceeding which concluded in June 2019 when charges brought against him were dismissed.
[23] Also, he was involved in a motor vehicle accident in 2017 where he sustained injuries which have resulted in him being eligible to receive benefits under the Ontario Disability Support Program.
Legal Framework:
[24] On this motion the plaintiff seeks leave to file a fresh as amended statement of claim, however the action as against the defendant DeRusha was dismissed on consent by the order of Woollcombe J. on May 24, 2016, and as a result on the return of this motion before the court, there is no extant action against DeRusha. Despite this fact, the plaintiff's motion is framed within the court's jurisdiction to amend a pleading.
[25] Thus, the plaintiff's motion is effectively a motion to restore DeRusha as a defendant in an outstanding action.
[26] Considering that the plaintiff's motion as one simply to amend his pleading by adding DeRusha as a party defendant, rule 26.01 of the Rules of Civil Procedure provides that a court shall grant leave to amend pleading in terms that are just at any stage of an action unless it would result in prejudice that could not be compensated by costs or an adjournment.
[27] The general principles which govern a motion for leave to amend a pleading are as follows:
(1) Rule 26.01 requires the court to grant leave to amend unless the responding party would suffer non-compensable prejudice; amended pleadings are scandalous, frivolous, vexatious or an abuse of the court's process; or the pleading discloses no reasonable cause of action;
(2) the amendment may be permitted at any stage of the action;
(3) there must be a causal connection between the non-compensable prejudice and the amendment. The prejudice must flow from the amendments and not from some other source;
(4) the non-compensable prejudice may be actual prejudice and where such prejudice is alleged particulars must be provided;
(5) non-compensable prejudice does not include prejudice resulting from the potential success of the plea or the fact that it the amended plea may increase the length or complexity of a trial;
(6) delay in seeking amendment may be so lengthy and the justification so inadequate that prejudice to the responding party will be presumed;
(7) the onus to prove actual prejudice lies with the responding party;
(8) the onus to rebut presumed prejudice lies with the moving party: 1588444 Ontario Ltd. v. State Farm Fire and Casualty Company, 2017 ONCA 42 at para 25.
[28] On motions to amend a statement of claim a question arises as to whether the defendant will be presumed to suffer prejudice. Circumstances where prejudice may be presumed include where there is an unexplained and inordinately lengthy delay or where the responding party would face the loss of the benefit of a limitation period: Family Delicatessen Ltd. v. London (City), 2006 CanLII 5135 (ON CA) at paras. 6, and 8.
[29] As to the purposes of statutes of limitation, three broad policy justifications for limitation statutes have been identified:
(1) First, they promote finality and certainty in legal affairs by ensuring that potential defendants are not exposed to indefinite liability for past acts. They reflect a policy that, after a reasonable time, people should be entitled to put their business and personal pasts behind them and should not be troubled by the possibility of "stale" claims emerging from the woodwork;
(2) Second, they ensure the reliability of evidence. It is inefficient and unfair to try old claims because evidence becomes unreliable with the passage of time. Memories fade, witnesses die, and evidence gets lost. After a reasonable time, people should not have to worry about the preservation of evidence;
(3) Third, and related to this, limitation periods promote diligence because they encourage litigants to pursue claims with reasonable dispatch: Independent Plaza 1 Associates LLC v. Figlioni , 2017 ONCA 44 at para 19.
[30] Proceedings in respect of a claim shall not be commenced "after the second anniversary of the day on which the claim was discovered": Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, s. 4 (the "Act")
[31] Further, section 21 of the Act, provides that a claim against a party cannot be pursued by adding a party to an existing proceeding after the limitation period has expired.
[32] The common law discretion that allowed the court to extend limitation periods pursuant to the doctrine of special circumstances has been expressly excluded in the Act, which came into force in 2002 and no specific provision in the new legislation refers to the doctrine of special circumstances or expressly allows a court to extend or suspend the running of a limitation period based on special circumstances. Similarly, the rules relating to adding, deleting or substituting parties and amending pleadings such as rules 5.04 and 26.01 do not allow for the application of common law principles such as the doctrine of special circumstances: Joseph v. Paramount Canada's Wonderland, 2008 ONCA 469.
[33] Section 22 of the Act provides that a limitation period under the Act applies despite agreements between the parties to vary or exclude it, except in specified circumstances identified in subsections 22(2) to (6) and only in the clearest circumstances where the agreement to suspend or extend a limitation period is described, identifying the scope of the application of that limitation period and excluding the operation of other limitation periods: Boyce v. The Co-operators General Insurance Co., 2013 ONCA 298, at para. 20.
[34] Whether a plaintiff has a legally tenable claim against a proposed defendant turns on whether their claim was commenced within the applicable limitation period and where the applicable limitation period has expired, there is an absolute bar to the addition of a party to an already existing action: Arcari v. Dawson, 2016 ONCA 715, at para. 7, leave to appeal to SCC refused, [2016] SCCA No. 522.
[35] Where a plaintiff seeks to add a party to an action after the apparent expiry of a limitation period the plaintiff bears the evidentiary burden to establish two things, firstly when they acquired the subjective knowledge of their claim against the proposed defendant and secondly that the date, they acquired their subjective knowledge was objectively reasonable: Zimmerman v. McNaull, 2021 ONSC 3436, at paras. 19 – 20.
[36] In Morrison v. Brazo, 2018 ONCA 979, at paras. 31 – 32, the Court of Appeal described the evidentiary burden on the moving plaintiff as follows:
[31] 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.
[32] 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.
[37] Section 21 of the Act expressly provides that if a limitation period in respect of a claim against a person has expired a "claim shall not be pursued by adding the person as a party to an existing proceeding".
[38] As already noted, section 22 of the Act provides that a limitation period under the Act applies "despite any agreement to vary or exclude it" except where such an agreement is of the type referenced r in subsections (2) – (6) of section 22.
Analysis:
[39] It is not disputed that the plaintiff had determined that he had a cause of action relating to DeRusha and that such a claim was discovered by him within the context of section 5 of the Act, prior to his institution of the action by the issuance of a notice of action in November 2014, followed by the filing of his statement of claim in December 2014.
[40] There is no evidence whatsoever that in consenting to the order dismissing the action as against the defendant DeRusha in May 2016, on a without prejudice basis as stated in the order of Woollcombe J., that there was any agreement between the plaintiff and that defendant extending or tolling the applicable limitation period. Furthermore, there is no evidence of any other facts surrounding the terms as agreed to which were incorporated into the consent order.
[41] It was urged on behalf of the plaintiff that the terms of the consent order must be construed as a contract and that the court must endeavour to reconcile any inconsistency within the terms of the agreement which was incorporated into that order. Notably, there is no evidence as to the terms of any agreement between these parties other than as included in the consent order.
[42] The terms of the order are plain on the face of the order in that they simply provided for the dismissal of the action as against the defendant DeRusha without prejudice to the plaintiff's right to continue with the motion "to deliver a fresh amended statement of claim to advance the claims made therein against the moving party."
[43] Whether such a motion seeking leave to deliver a fresh as amended statement of claim against DeRusha would be timely in terms of any applicable limitation is not addressed by the order. Again, there is no evidence of any form of agreement or waiver by the defendant with respect to the applicable limitation period. In fact, the defendant DeRusha’s summary judgment motion, which resulted in the consent order, sought to have the action dismissed on two grounds, one of which was that the action was statute barred from the outset. The reference in the order that it is "without prejudice", based on the record before this court, cannot reasonably be construed as constituting any form of agreement to toll or waive an applicable limitation period.
[44] Thus, I find that none of the exceptions listed in s. 22 (2) to (6) of the Act have any application to the facts of this case, as there is no evidence of any form of agreement between these parties apart from that which was incorporated into the consent order.
[45] Having commenced this action in 2014 against DeRusha, I find is a fact that the plaintiff was possessed of all the necessary knowledge and information at that time as to the nature of his cause of action against DeRusha in accordance with section 5 of the Act.
[46] The effect of the consent order from May 24, 2016, whereby this action was dismissed as against DeRusha, is that as of that date there remained no viable claim or action against that party and as such any attempt by the plaintiff at this late stage to restore DeRusha as a defendant in the same action would involve a determination as to whether a limitation period had expired.
[47] Given my finding of fact that the plaintiff possessed all of the requisite knowledge and information set forth in s. 5(1)(a) in November 2014, and that he did in fact act on that information by instituting this action against DeRusha, I find that in his present motion the plaintiff is simply seeking to restore that party to the action as a defendant after the passage of a limitation period of two years, contrary to s. 21(1) of the Act, and as a result the plaintiff's motion must be dismissed.
[48] As to costs of this motion, counsel for DeRusha shall deliver submissions as to costs of no longer than two pages, along with a costs outline within 15 days, followed by similar submissions on behalf of the plaintiff within 15 days thereafter. No reply submissions are to be filed.
DALEY J.
DATE: July 2, 2021
COURT FILE NO.: CV-14-00005128-00
DATE: 2021 07 02
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Omar Farooq Kalair -and- Kabir Uddin Kabir, Zebinisa Kabir, Syma Kabir, Amir Kabir, Ashraf Chatha, Ishrat Chatha, Munir Ferris, Gelareh Jin, Haig DeRusha, Julian B. Keller, Dr. Atif Kabir, Coldwell Banker Hartland Realty Brokerage, Carlos Rites, and Antonio Vicoso
REASONS FOR DECISION
DALEY J.
DATE: July 2, 2021