Court File and Parties
COURT FILE NO.: CV-17-574011 MOTION HEARD: 20220503 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Justin Gipson, Plaintiff AND: Kendell McCaugherty and Bermuda Limousine Services Inc., Defendants
BEFORE: Associate Justice L. La Horey
COUNSEL: Joseph Horvath, Counsel for the Moving Party Plaintiff Joseph Dart, Counsel for the Responding Party Proposed Defendant Tammy McCaugherty Kendell McCaugherty, Defendant in Person
HEARD: May 3, 2022 by videoconference
REASONS FOR DECISION
[1] The moving party plaintiff brings this motion for leave to amend the statement of claim to add Tammy McCaugherty, the wife of the defendant Kendell McCaugherty, as a party defendant to the action. Ms. McCaugherty opposes the motion.
[2] For the reasons that follow, I grant the plaintiff’s motion on the basis of the doctrine of misnomer.
[3] The plaintiff also seeks an order consolidating this action with his claim against his insurer, Echelon Insurance (“Echelon”), Court File No. CV-17-584186 and the third party action in that proceeding, Court File No. CV-17-584186-00A1. The consolidation order is not opposed.
BACKGROUND AND CHRONOLOGY
[4] This action arises out of an accident which is alleged to have occurred on or about January 6, 2016. In the action, the plaintiff alleges that he was in attendance at a work function at the Four Points Sheraton hotel in Kingston, Ontario. The plaintiff, who is in a wheelchair, arranged for transportation for himself and colleagues for the evening. The plaintiff alleges that he was injured after exiting the limousine driven by Mr. McCaugherty. He pleads that Mr. McCaugherty rapidly reversed the vehicle, colliding with him in his wheelchair and causing him to fly out of his wheelchair and land in the street.
[5] The statement of claim was issued on April 26, 2017, against Kendell McCaugherty as the operator of the limousine vehicle involved in the accident. The statement of claim also claims against Bermuda Limousine Services Inc. (“Bermuda Limousine”) as the “owner” of the vehicle involved in the accident.
[6] The defendants were noted in default on July 11, 2018, but the plaintiff has not moved for default judgment and no defence has been filed.
[7] The plaintiff has also brought an action against his own automobile insurer, Echelon, Court File No. CV-17-584186, seeking coverage for the January 6, 2016 accident (the “Coverage Action”). Echelon has defended the Coverage Action and issued a third party claim on September 14, 2018, seeking contribution and indemnity from Mr. McCaugherty and Bermuda Limousine.
[8] Mr. McCaugherty has served a defence to the third party claim in the Coverage Action dated October 5, 2018. He admits that he was an operator of the vehicle in which the plaintiff was previously a passenger. He denies the paragraph of the third party claim that asserts that Bermuda Limousine is the owner of the vehicle. He pleads that he was not in the course of his employment when driving the vehicle on the night of the accident and that he was a friend of the plaintiff. Rather, according to Mr. McCaugherty, he offered to drive the plaintiff and his colleagues, who he says were under the influence of alcohol, in his personal vehicle from the hotel to another venue to continue socializing. He pleads that the plaintiff’s injuries, if any, were caused by the plaintiff’s operation of his wheelchair and/or his state of intoxication.
[9] On July 15, 2019, Mr. McCaugherty was examined for discovery (on behalf of himself and his company) in the within action and in the Coverage Action. Mr. McCaugherty testified that he offered limousine services from August 2015 to January 2016. He was the only employee of Bermuda Limousine and would drive the limousine himself. He testified that the vehicle that he was driving on January 6, 2016, and that was involved in the accident was a white Lincoln Town Car limousine. He testified he was operating two white Lincoln Town Car limousines at the time, the business one was in his name and he was 95% sure that the personal one was in his wife’s name. He testified that as “as far as I know” the vehicle that he was driving the night of the accident was his “personal limousine” that was in his wife’s name.
[10] New counsel for the plaintiff, Mr. Rachlin, was retained in or around February 2020. On May 11, 2020, Mr. Rachlin’s office arranged for a plate search of the white limousine with license plate BHSY 878. The plate search disclosed that as at January 6, 2016, the vehicle was owned by Tammy McCaugherty.
[11] On September 17, 2020, a law clerk employed with Mr. Rachlin’s office wrote to counsel for Echelon, Mr. McCaugherty, Bermuda Limousine and Ms. McCaugherty advising of the plaintiff’s intention to bring a motion for a order consolidating the action and correcting a misnomer by substituting Tammy McCaugherty for the defendant Bermuda Limousine.
[12] The plaintiff served the motion record returnable November 18, 2021 on the proposed defendant on May 21, 2021. On the return of the motion on November 18, 2022, both Mr. McCaugherty and Ms. McCaugherty attended in person before Associate Justice Frank to oppose the motion to add Ms. McCaugherty as a defendant. Associate Justice Frank adjourned the motion. In his endorsement Associate Justice Frank stated that if Mr. or Ms. McCaugherty intended to make any submissions about the ownership of the vehicle in issue based on evidence, that evidence must be in affidavit form so that it is properly before the court.
[13] Thereafter Ms. McCaugherty retained counsel. She swore a responding affidavit on March 22, 2022 in which she deposed, inter alia, that:
a. She is the spouse of the defendant Kendell McCaugherty;
b. Her husband runs Bermuda Limousine Services Inc. and she does not have any active role in that business and did not have any active role in the business in January 2016;
c. She and her husband each own limousines along with other vehicles. She owns a white limousine with license plate BSHY 878, VIN# IL1FM81W6XY633210. It is used for “advertising purposes and is for non-business-related driving only”;
d. The vehicle that she owned was not involved in the alleged accident;
e. Her husband owns a similar looking white limousine bearing license plate BMNY 756 which he owned at the time of the subject collision;
f. “Mr. McCaugherty was driving his vehicle, bearing license plate BMNY 756, on the date of the alleged collision. Having reviewed the transcript of the examination for discovery on this point, I am unclear why he believed he was driving my vehicle when he was not. He was often confused as to who owned which vehicle. My vehicle, bearing license plate BSHY 878, was likely in our driveway”; and,
g. “My memory of the general time frame of this alleged collision is poor. The first time I learned that Mr. McCaugherty was being sued was in approximately May 2018.”
[14] Ms. McCaugherty has also submitted an affidavit of a law clerk, Kari Rollins, who deposes that upon opening a motor vehicle accident file they request a number of searches including a plate and VIN search of the at-fault vehicle which can be done on-line for a modest cost.
[15] Ms. Rollins swore a supplementary affidavit on April 26, 2022. This affidavit attaches an email from Mr. McCaugherty sent April 4, 2022 to plaintiff’s counsel and to Mr. Dart. The subject line of the email is “Reframing Statement – Kendall McCaugherty”. The email reads as follows:
“Reframing statements made during discovery on July 15, 2019, R. 31.09 of the Rules of Civil Procedure that Tammy McCaugherty vehicle was never used to transport plaintiff and she should not be added to the motion. The date of event presented by the plaintiff was unclear and incorrect. Provided prior to discovery
I recognized the vehicle that was operation on the alleged incident eve of 07 Jan 2016 to be a 1999 Lincoln Town Car VIN #1L1FM81WXY633210. However, during the evening, at no time, was there an accident or injury caused by myself or the operation of my vehicle.”
Kendall McCaugherty
Ceo Kendell McCaugherty
Bermuda Limousine Services Inc.
[phone number and email address omitted]
[16] Mr. McCaugherty did not swear an affidavit on the motion.
[17] None of the affiants were cross-examined on their affidavit(s).
POSITION OF THE PARTIES
[18] The plaintiff seeks to substitute Tammy McCaugherty for the defendant Bermuda Limousine on the basis of misnomer. The plaintiff says that the pleadings clearly indicate that the action was directed at the owner of the limousine involved in the accident. At the hearing, Mr. Horvath abandoned any claim to add Ms. McCaugherty as a defendant, in addition to Bermuda Limousine, on the basis of the discoverability doctrine.
[19] Ms. McCaugherty takes the position that because she has sworn an affidavit that her vehicle was not involved in the collision, “misnomer does not apply.” Even if it does apply, the respondent submits that I should exercise my discretion to refuse the correction in large part because of the significant time period between the accident and the date that this motion was served.
[20] Mr. McCaugherty did not make any submissions on the motion to add his wife as a party defendant at the hearing before me and did not file any responding materials.
LAW AND ANALYSIS
[21] Section 21 of the Limitations Act, 2002[^1] provides:
Adding party
21 (1) If a limitation period in respect of a claim against a person has expired, the claim shall not be pursued by adding the person as a party to any existing proceeding.
Misdescription
(2) Subsection (1) does not prevent the correction of a misnaming or misdescription of a party.
[22] Rule 5.04 of the Rules of Civil Procedure states:
Proceeding not to be Defeated
5.04 (1) No proceeding shall be defeated by reason of the misjoinder or non-joinder of any party and the court may, in a proceeding, determine the issues in dispute so far as they affect the rights of the parties to the proceeding and pronounce judgment without prejudice to the rights of all persons who are not parties.
Adding, Deleting or Substituting Parties
(2) At any stage of a proceeding the court may by order add, delete or substitute a party or correct the name of a party incorrectly named, on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.
[23] In a misnomer case, the court asks whether the plaintiff demonstrated an intention to sue the proposed defendants and the proposed defendants would know that the “litigating finger” was directed at them.[^2] Even after a finding of misnomer, the court retains a residual discretion to refuse to permit the correction.[^3]
[24] The law of misnomer is summarized in the oft-cited decision of Justice MacLeod in Loy-English v Ottawa Hospital as follows:[^4]
a. When a plaintiff does not know precisely who to name as defendants it is permissible to name unidentified defendants by way of a pseudonym. It would be better to bring transparency to this practice by naming them as "certain unidentified physicians collectively referred to as Dr. Doe" but the use of "Dr. Doe" or "Dr. X" is a practice that the courts have accepted as appropriate shorthand.
b. It is not necessary to name multiple Dr. Doe's and to precisely guess how many defendants to implicate. Providing the claim is drafted in a manner to identify what allegations are made against individuals filling specific roles, the "litigation finger is divisible" and may point at more than one unknown defendant.
c. Unlike a claim relying on discoverability to postpone the running of the limitation period, use of a pseudonym and subsequent correction of a misnomer is not subject to a due diligence requirement and will not be defeated by mere delay.
d. Use of a pseudonym does not give carte blanche to get around the limitation period. Although the Act does not narrow the common law understanding of misnomer and preserves the power of the court to correct it, it does prohibit addition of parties if the limitation period has expired. The distinction is critical. It is the difference between correcting the claim to properly name a party already included in the action and adding a new party.
e. To be a misnomer, the plaintiff must clearly have intended to sue the proposed defendant. The pleading must be drafted with sufficient particularity that an objective and generous reading of the pleading would demonstrate that the "litigation finger" is pointing at the proposed defendant. To put this another way, the pleading must be sufficiently clear that a properly informed defendant reading the allegation would be able to recognize that he or she was the target of the allegation. The allegation must be clear and definite on its face and not held together through a series of assumptions about what the person reading the statement of claim might know.
f. Notice to the defendant within the limitation period cannot be a factor in deciding whether or not misnomer applies for the simple reason that, as discussed earlier, there is no requirement to serve a defendant within the limitation period. The question is not whether the defendant did know he or she was being sued but whether on a fair reading of the claim he or she would have known.
g. Notice is relevant to the question of prejudice and the exercise of discretion. Actual notice to the proposed defendant will generally obviate any injustice in subsequently correcting the misnomer. Delay is also relevant to the issue of prejudice and to the exercise of discretion.
h. Notice may be sufficient if the claim against an unknown party has been brought to the attention of the named defendant and to an employer, organization or insurer with the means to determine who was involved in the alleged acts or omissions. In that case it may not be unfair to correct the misnomer once the identity of the other defendant is known even in the absence of actual notice.
i. It is not useful for misnomer motions to be decided based on technicalities or vagaries of pleading. The object of pleading analysis should not be one of looking for traps, tricks or loopholes. We should not be engaged in the legal equivalent of "whack a mole" or "gotcha". Rather, the question in every case should be whether it is reasonable and just to allow the pleading amendment and whether it is permitted by the governing legislation.
[Footnotes omitted]
Whether this is a case of misnomer
[25] It is clear from the statement of claim that the plaintiff intended to sue the owner of the vehicle driven by the defendant Kendell McCaugherty on the evening of January 6, 2016, in which the plaintiff was a passenger and which allegedly struck the plaintiff after he had exited the vehicle.
[26] Mr. Dart submits that this not a true case of misnomer. He submits that the requirements of a misnomer as articulated in Loy-English in paragraph 21e (quoted above) are not met in this case. Ms. McCaugherty would not have known that the litigating finger was pointed at her, because her car was not involved in the accident.
[27] There is a factual issue as to which of two 1999 white Lincoln Town Car limousines was involved in the accident. There is no dispute that the registered owner of one of the vehicles was Mr. McCaugherty and that Ms. McCaugherty was the registered owner of the other vehicle. The registered address for both vehicles is the same.
[28] Mr. McCaugherty’s sworn discovery testimony on July 15, 2019 suggests that his wife’s vehicle was involved in the accident. He testified as follows:
- Q. Okay. What vehicle were you driving?
A. A Lincoln Town Car.
- Q. Okay. The white one?
A. Correct.
- Q. Well, sorry.
A. Yeah
- Q. In fairness, there’s two white ones?
A. It would have been, as far as I know, like the vehicle I was driving that night was my personal limousine and that was my, in my wife’s name. Now I really don’t want to get her involved in this, that’s why I’m hesitant to – because it was her car, not mine.
[29] In response to the motion, Ms. McCaugherty has sworn an affidavit saying her husband was mistaken in his discovery evidence.
[30] There is thus a dispute between Mr. McCaugherty’s sworn discovery evidence and Ms. McCaugherty’s sworn affidavit.
[31] Ms. McCaugherty tendered an affidavit sworn by a law clerk on April 26, 2022 attaching Mr. McCaugherty’s April 4, 2022 email that is said to be provided as a Rule 31.09 correction to a discovery answer. Mr. McCaugherty did not swear an affidavit on this motion.
[32] The pleading is clear that the litigating finger is pointed at the owner of the vehicle involved in the accident.
[33] Ms. McCaugherty’s denial that her vehicle was involved in the accident is a defence to the action. There is some evidence that her vehicle was involved in the accident in the form of her husband’s sworn examination for discovery. There is a factual issue as to which of two similar vehicles Mr. McCaugherty was driving on the night that the plaintiff was injured. The determination of this issue depends on an assessment of credibility and an evaluation of whatever other evidence may be forthcoming in the litigation and cannot be resolved on this motion.
[34] Mr. Dart submitted that the plaintiff has to at least make an effort at identifying the correct party in order for there to be a true misnomer. However, unlike a claim relying on discoverability, due diligence is not a requirement.[^5]
[35] I thus conclude that this is a case of misnomer.
Whether the correction should be refused
[36] As noted above, the court retains a discretion to refuse the correction of a misnomer.
[37] The Court of Appeal explained the discretion in Omerod v Strathroy Middlesex General Hospital[^6] as follows:
[31] As I see it, as the scope of what the courts treat as a misnomer broadens, it is appropriate to take a wider view of the court's discretion to refuse the correction of a misnomer. A "classic" misnomer, one in which the claim contains a minor spelling error of the defendant's name and is personally served upon the intended but misnamed defendant, prompts the application of a standard historically developed to remedy mere irregularities. Now that the concept of "misnomer" has been broadened to apply to a wider range of situations, the standard used to permit its correction should take into account the extent of its departure from mere irregularity in all the circumstances of the case.
[32] The factors the motion judge applied in this case, whether the defendant was misled or was unduly prejudiced, are undoubtedly deserving of the greatest weight. As a general principle, these factors should be determinative. A general principle, however, is not an inflexible rule. Where the mistake in naming the defendant involves more than a mere irregularity or in any particular case with exceptional circumstances, the court may exercise its residual discretion under the rule to refuse to permit its correction. It may well be that the motion judge took a narrow view of his residual discretion to refuse to permit the correction of the misnomer. However, I am satisfied he realized he had a residual discretion since the factors he applied are broader than the rule's threshold of prejudice that cannot be compensated by costs or an adjournment. While the motion judge in this case might have inferred that the plaintiffs, after learning Dr. Graham's identity, did not resolve to proceed against her until July 2008, he did not make that inference.
[38] The respondent relies on Mohabir v Mohabir, where Master Muir listed other factors that a court may consider in the exercise of discretion.[^7] These factors include: significant unexplained delay in moving to amend; the public policy reasons supporting the adherence to established limitation periods; and the lack of notice to the proposed substituted defendants.
[39] The respondent submits that if I find that this is a true misnomer, I should exercise my discretion to refuse to allow the correction. In oral submissions, counsel emphasized the unexplained delay of the plaintiff in taking steps to identify the owner of the vehicle (which could have been done utilizing routine searches) and the delay in bringing the motion.
[40] The statement of claim was issued on April 26, 2017, about 15 months after the accident. Ms. McCaugherty’ s evidence was that she only became aware that her husband was being sued in approximately May 2018. If the plaintiff had issued the claim just prior to the expiry of the two year limitation period, i.e. around January 5, 2018, and if the plaintiff took the full six months to serve the statement of claim allowed under the Rules of Civil Procedure, the defendants would have become aware of the lawsuit around July 5, 2018. Therefore, Ms. McCaugherty was aware of the lawsuit within the outside time allowed under the limitations legislation and the rules. Whether and when the proposed defendant has notice of the litigation prior to the motion is a relevant factor in the exercise of my discretion.[^8] This factor favours permitting the correction.
[41] Nowhere in her affidavit does Ms. McCaugherty explicitly say that she would be prejudiced in a non-compensable way. The closest she comes to alleging prejudice is when she says: “My memory of the general time frame of this alleged collision is poor. The first time I learned that Mr. McCaugherty was being sued was in approximately May 2018.”
[42] It is noteworthy that Ms. McCaugherty says when she learned of the lawsuit, but she does not say when she learned of the collision. It is reasonable to infer in these circumstances that if she was not advised of the accident by her husband on the evening of the accident or shortly thereafter, she would have said so.
[43] The statement that her memory of the “general time frame of this alleged collision is poor” is vague. She does not say that she has a poor memory of the night of the alleged collision or that she has no memory of being advised of the alleged collision around the time that her husband drove the plaintiff. Indeed, she says in her affidavit that her husband was driving his vehicle on the night of the collision which suggests that she has a recollection of the evening in question, or she has a way of knowing whether or not she was the owner of the vehicle involved in the accident, independent of a specific memory, e.g. she knows which spouse drove which vehicle as a matter of habit or agreement.
[44] The respondent submits that the plaintiff’s delay is a relevant factor. I agree that the plaintiff delayed in bringing on the motion and I agree that delay is a relevant factor for me to consider in the exercise of my discretion.
[45] The plaintiff was alerted to the ownership issue in July 2019, when Mr. McCaugherty was examined for discovery. Following the discovery there was a change of plaintiff’s counsel which would account for some, but not all of the delay. The respondent emphasized the delay from the date that the plaintiff’s new lawyer did a plate search (May 20, 2020) to the date that the motion was first served (May 21, 2021). Some of this delay is explained by the plaintiff’s lawyer writing to Ms. McCaugherty in September 2020, stating their intention to bring a motion for consolidation and to correct the misnomer and indicating that if they do not hear otherwise in 30 days, they will assume that the motion is not opposed. There is no evidence before me that Ms. McCaugherty responded to this letter advising that she was going to oppose the motion. I agree with the respondent that the plaintiff has delayed. However, the delay in this case is not egregious in context and there are explanations for some of the delay.
[46] The respondent argues that the litigation is at an advanced stage and that this is a factor which should cause me to refuse the correction. The respondent relies on Mohabir, where the fact that the litigation was at an advanced stage was a factor in Master Muir’s refusal to correct the misnomer. However, in that case there was an order that the matter be set down about three months after the hearing of the motion. I am not aware of any such order in this case. The respondent notes that discoveries have taken place. The defendant has been examined for discovery, however, he would be subject to further discovery in any event on his answers to undertakings and the Rule 31.09 correction. I am not aware of whether or not the plaintiff has been examined for discovery. If the plaintiff has been examined for discovery, a term of a order allowing the amendment could require the plaintiff to attend to be discovered by the respondent at his own expense to address this concern.
[47] Following the principles set out in the cases referred to above, I would not exercise my residual discretion to refuse the relief sought. I cannot conclude that Ms. McCaugherty would suffer any non-compensable prejudice if she is substituted as a defendant. The respondent was aware of the litigation at an early stage through her husband. The delay in seeking leave was not inordinate. It is in the interests of justice that the proposed amendment be allowed, provided that the plaintiff shall submit to discovery by the respondent at his own expense, whether or not the plaintiff has already been examined for discovery.
COSTS
[48] The parties addressed costs at the conclusion of the hearing. The parties are agreed that the appropriate quantum of costs for this motion on a partial indemnity basis is $5,000. The plaintiff and respondent both seek costs if successful.
[49] Mr. Dart submitted that if the plaintiff was successful, there should be no costs or costs in the cause, as a result of the plaintiff’s “profound lack of diligence”. In this case, the plaintiff is seeking an indulgence.
[50] The plaintiff also presented the respondent with something of a moving target in that it moved on the basis of discoverability but abandoned that argument at the hearing. The respondent’s factum was directed at this argument and thus there was wasted effort in preparing a large section of the respondent’s factum.
[51] In all of the circumstances, and having regard to the factors in Rule 57, I find that it is just that there be no costs of the motion.
CONSOLIDATION MOTION
[52] The plaintiff also seeks an order consolidating this action with his claim against his insurer, Echelon, Court File No. CV-17-584186 and the third party action in that proceeding, Court File No. CV-17-584186-00A1. I was advised that Echelon takes no position on the motion. Ms. McCaugherty does not oppose the motion, if added as a party. Mr. McCaugherty, who is self-represented and attended to observe the motion to add Ms. McCaugherty as a party, advised that he consents to the consolidation motion.
[53] The plaintiff shall prepare and circulate a draft order to the parties that includes terms in respect of the consolidation. If there is no issue as to form and content, it may be submitted to me on an unopposed basis via my Assistant Trial Co-ordinator. If there any issue as to terms, a case conference may be requested.
DISPOSITION
[54] The plaintiff’s motion to amend the statement of claim to substitute Tammy McCaugherty as a defendant in place of Bermuda Limousine is granted with a term that the plaintiff shall attend to be examined for discovery by the respondent at his own expense.
L. La Horey, A.J.
Date: June 21, 2022
[^1]: S.O. 2002, c. 24 [^2]: Omerod v Strathroy, 2009 ONCA 697 at paras 21 - 22 [^3]: Omerod at paras 28 - 32 [^4]: Loy-English v Ottawa Hospital, 2019 ONSC 6075 at para 21 [^5]: Loy-English at para 21 (c) [^6]: 2009, ONCA 697 at paras 31, 32 [^7]: 2014 ONSC 5484 [^8]: Loy-English at para 20; Mohabir at para 20-21