COURT FILE NO.: CV-20-640456 DATE: 20230621 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: RAUBVOGEL, Plaintiff AND: CAN-SURE UNDERWRITING, Defendant

BEFORE: Associate Justice Josefo

COUNSEL: I Sinke & A. Antonious, for the Plaintiff M. Barrett, for the Defendant

HEARD: June 15, 2023

Endorsement

Overview of the Case and the Two Motions

[1] A March 14, 2019 burst pipe in a rental property in Innisfil, Ontario led plaintiff to commence this action, purportedly suing his property insurer given an insurance coverage dispute for losses he allegedly sustained in the resulting flood. Yet plaintiff sued not his insurer but instead sued the “managing general agent” which issued the policy on behalf of the five insurers, called “subscribing insurers”, who each hold a 20% share of liability under the policy’s damage coverage. In July 2021, plaintiff discontinued the action against his insurance broker.

[2] Plaintiff’s motion is to correct what he asserts is misnomer. Pursuant to his Notice of Motion, plaintiff seeks to amend the Statement of Claim to “correct the name of the insurer defendants, incorrectly identified as ‘Can-Sure Underwriting’, to ‘Lloyd's Underwriters, Allianz Global Corporate & Specialty, and Everest Insurance Company of Canada’".

[3] Defendant’s motion for summary judgment, seeking to dismiss the plaintiff’s action against it “because there is no genuine issue for trial”, is brought for two reasons. The first asserted lack of a genuine issue for trial stems from the plaintiff missing a one-year contractual limitation period, or “statutory condition” as described in the policy of insurance. Plaintiff issued his claim on May 4, 2020, more than one year after the flood occurring on March 14, 2019, and within two years of the event. Condition 14 of the policy, however, provides that:

Every action or proceeding against the Insurer for the recovery of a claim under or by virtue of this contract shall be absolutely barred unless commenced within one (1) year * next after the loss or damage occurs [* two years in the province of Manitoba, the Yukon Territory and Nunavut].

[4] The policy identified, pursuant to the “Standard Lloyd’s Endorsement Schedule”, the “Lloyd’s Approved Coverholder” as Can-Sure Underwriting, the within defendant. Amongst other terms, the policy provides that, “Any notice to the Underwriters may be validly given to the Coverholder” (at item number three, “Identification of Insurer/Action against Insurer”, and repeated at the end of item number four).

[5] For the second reason to summarily dismiss the action against it, defendant asserts that, since it was not the insurer, it is not the correct defendant in this action. This, however, in my view bleeds into the misnomer argument, which I briefly address immediately below, as well as in more detail further below, in these reasons.

[6] Responding to the plaintiff’s misnomer motion, defendant asserts that the plaintiff’s attempt to correct misnomer is beyond not only the contractual limitation period, but even beyond the two-year statutory limitation period pursuant to the Limitations Act, 2002. It was submitted that plaintiff, despite knowing of its error in suing the wrong party, did nothing to correct it for far too long a time. Defendant thus opposes the plaintiff’s motion to correct misnomer, urging me to not exercise my discretion to grant the relief sought by plaintiff.

Communication with Counsel Before the Motion—"Setting the Table” Regarding the Issues

[7] On June 9, 2023, having begun my review of this matter, I sent the following message to counsel (omitting from it the discussion of some Caselines challenges):

… What I have seen so far is only a May 24th bundle, wherein:

• plaintiff was moving to correct misnomer and add as defendants to the action the insurers ostensibly behind the defendant Can-Sure (the “subscribing insurers/underwriters”), and,
• defendant Can-Sure was moving for summary judgment based on a missed (contractual) limitation period.

As to why I suspect that at least the defendant’s May 24th motion for summary judgment is not before me, the reasons are two-fold:

• Pursuant to the Notice of Motion, the motion is made to a “Judge”, not an “Associate Judge”.
• Moreover, while Associate Judges do have jurisdiction to hear Summary Judgment motions, it is very rare that one is brought before us. That is because, pursuant to Rule 20.04 (2.1) of the Rules, we do not have the enhanced powers of a Judge to weigh evidence, evaluate credibility, or draw reasonable inferences from the evidence. Those are, I suggest, significant practical limitations in our ability to hear and decide most summary judgment motions.

If, however, the May 24th bundle is indeed intended for me, including defendant’s cross-motion for summary judgment, defendant should consider whether, given those jurisdictional issues framed by the Rules, I am best placed to hear it. The plaintiff’s May 24th motion is properly before me, jurisdictionally, and preliminarily, it is seemingly sufficiently “stand-alone” so that I could determine it, without impacting the defendant’s motion. Yet if there is no agreement on procedure, this can be discussed at the outset on June 15, when it is your turn.

[8] Mr. Barrett, counsel for defendant, responded in part as follows on behalf of both parties:

The difficulty is that both motions need to be heard together. There are two issues in the Defendant’s motion: (1) Does the contractual 1-year limitation period apply (there is a question of estoppel); and if not (2) does the expiry of the 2-year limitation period bar the Plaintiff from adding the correct defendants. If the defendant succeeds on the first issue, we do not get to the Plaintiff’s motion, because the claim is simply barred, no matter who the defendants are. This is why the motions need to be heard together.

We were originally before Justice Ramsay on May 24th. Her Honour wanted to adjourn the Defendant’s motion sine die and direct that the Plaintiff’s motion proceed before an Associate Justice, despite counsels’ attempt to explain why they needed to be heard together, such that this did not make any sense. As counsel are in agreement that there are neither material facts in dispute, nor any issues of credibility, nor novel points of law, counsel considered that an Associate Justice could hear both motions and asked Justice Ramsay to order that they proceed before an Associate Justice. And counsel consider that we can do both motions in 2 hours [ underlining added ].

[9] Given that response, I agreed that I would hear the motion as scheduled.

Relevant Chronology and Summary of the Facts

[10] Following the March 14, 2019 flood, on June 27, 2019 plaintiff engaged Ajay Kapur as his counsel for this coverage dispute. Kapur wrote defendant on July 3, 2019, putting them on notice of a pending claim given the denial of coverage. A follow-up notice letter was sent on August 9, 2019. It is clear that these notice letters were received, not only by the defendant Can-Sure, but also by the subscribing insurers. See the affidavit of documents of the defendant which contained those letters, as well as the testimony to which I reference below.

[11] Before the claim was issued and served in early May 2020, Kapur received a response to his two notice letters from a claims adjuster engaged by Can-Sure, Ryan Lumbard. The second response from Lumbard is dated September 23, 2019. It references and attaches a July 22, 2019 response of Lumbard (often described herein as the “Lumbard letter”) sent directly to the plaintiff, yet which earlier response Lumbard acknowledges was not received by the plaintiff. The July 22, 2019 Lumbard letter to the plaintiff, subsequently sent to Kapur, reads in relevant part as follows:

Should you wish to dispute your Insurers' position, please note there is a two year limitation date from the date of loss. You therefore must issue your claim before March 14, 2021 to protect proscription and your interest.

[12] The Statement of Defence was served on July 16, 2020. In addition to denying entitlement to coverage, as it asserted that the damage was caused by pre-existing damage and construction deficiencies which are not insured, the defendant also at paragraph four pled that:

Cansure states that it is not an insurer. Cansure carries on business as a managing general agent authorized to underwrite policies of insurance on behalf of various insurance markets, including the subscribing insurers referred to below.

[13] Yet there was then no other pleading such that Can-Sure was not a proper party to the action, or that it owed no duty to the plaintiff, or that the action should be struck. Nor did defendant then bring a motion in that regard. Nor did it initiate a third-party action, naming who it asserted were the proper defendants.

[14] The original Statement of Defence also did not plead a limitation defence. It appears to me, accordingly, from the evidence that, at that time, all parties then were operating from a common understanding (better described, perhaps, as a common misunderstanding or mutual mistake) that the plaintiff indeed had, as the Lumbard letter represented to him, two years from the date of loss to initiate his lawsuit.

[15] The testimony of the defendant’s claims examiner Sarah Elliott at her cross-examination on her affidavit confirmed that she knew of the claim history as of Spring 2019, and that she handled the claim since the outset (Q. 9-10). Elliott also confirmed that the information was passed along to the subscribing insurers by placing the information “in our system which underwriters see every month” (Q. 17-19). Elliott also confirmed subsequently in her testimony that the subscribing insurers were “pretty well immediately made aware of the claim” once it was issued and served (Q. 39-41).

[16] Six months after serving its Statement of Defence, on January 19, 2021, the defendant amended it so to raise the limitation defence given the existence of Condition 14 referenced above in these reasons.

[17] On April 22, 2022, examinations for discovery took place. Joanne Windley was the defendant’s witness. To synthesize, Windley confirmed that she represented the lead subscribing insurer (Q. 3) and she became aware of the claim once she took over the handling of the file in or about April 2021 (Q. 9). Windley confirmed that the defendant was tasked with collecting all the insurer’s responses to the litigation, as it evolved, and then conveying that collective position to the plaintiff (Q. 14-16).

[18] Elliot, in her subsequent cross-examination testimony, corroborated Windley’s discovery testimony, confirming that it was accurate in describing the process of how the information was gathered and shared amongst the subscribing insurers and the defendant. Elliot was also unable to name anything that would have been done differently in the handling of this claim if the subscribing insurers had been named as defendants (Q. 63-65).

The Defendant’s Summary Judgment Motion: What is the Test?

[19] Defendant moves for Summary Judgment primarily on the basis that the one-year contractual limitation applies. On that basis, defendant asserts that the claim is simply barred. Defendant asserts that no estoppel arises in this matter so to prevent application of that limitation. In response, plaintiff asserts that defendant, by its conduct and actions, is estopped from relying upon what it acknowledges is the contractual one-year limitation period.

[20] Pursuant to Rule 20.04(a), to grant defendant’s motion I must conclude that no genuine issue for trial regarding the contractual limitation or estoppel exists. Considering the test, at this stage I need not actually decide whether the plaintiff has established estoppel so that the contractual limitation does not apply. While plaintiff urged me to so conclude if the law and evidence takes me to that point, after consideration, I decline. In my view, my function at this motion stage is to carefully assess the case and evidence and apply the test delineated by the applicable Rule. If I find there is no genuine issue for trial on this point, the defendant prevails on its motion and the action is barred. Yet, if I find the plaintiff has met his onus and, putting his best foot forward, has raised genuine issues for trial, then the action may continue and both sides “live to fight another day”.

[21] Going beyond that, in my view, would usurp the function of a trial Judge ( if I conclude there remains a genuine issue for trial). Rather, pursuant to the applicable test under Rule 20.04, what plaintiff must convince me of is that there is at least a “genuine issue” for estoppel—that plaintiff has made at the least a solid and compelling argument that estoppel arises so to avoid the otherwise applicable contractual limitation.

[22] Pursuant to the email exchange reproduced above, both parties proceeded to address this as a question of the law of estoppel applied to the facts as I have summarized above, with some additional uncontested facts discussed below.

Brief Overview of the Law of Estoppel—Applying it to these Facts

[23] Both parties agreed that a key case addressing estoppel is the Supreme Court of Canada’s decision in Maracle v. Travellers Indemnity Co. of Canada, [1991] 2 SCR 90. That decision discusses the doctrine in part as follows:

11. The party relying on the doctrine must establish that the other party has, by words or conduct, made a promise or assurance which was intended to affect their legal relationship and to be acted on. Furthermore, the representee must establish that, in reliance on the representation, he acted on it or in some way changed his position. ...

The principles of promissory estoppel require that the promissor, by words or conduct, intend to affect legal relations. Accordingly, an admission of liability which is to be taken as a promise not to rely on the limitation period must be such that the trier of fact can infer from it that it was so intended. There must be words or conduct from which it can be inferred that the admission was to apply whether the case was settled or not, and that the only issue between the parties, should litigation ensue, is the issue of quantum. Whether this inference can be drawn is an issue of fact. If this finding is in favour of the plaintiff and the effect of the admission in the circumstances led the plaintiff to miss the limitation period, the elements of promissory estoppel have been established.

[24] In helpful and thorough submissions, Mr. Barrett highlighted that the Court made clear that, “there is no legal duty upon an insurer to advise an insured of the limitation period contained in the policy”. Given the lack of legal duty to so advise, he submitted that there can thus be no intention ascribed to the Defendant, when it sent the Lumbard letter advising the plaintiff that he had two years to sue, to affect the legal relationship.

[25] Relying on the Newfoundland court’s decision in Ring v. St. John's (City), Defendant further submitted that one party being mistaken about a limitation period is not sufficient for estoppel to arise. In Ring, the Court stated thusly:

An erroneous reference to a limitation period does not readily fit within the elements of promissory estoppel. My understanding is that promissory estoppel more properly arises when both parties are aware of the parameters of their legal relationship, be it contractual or otherwise, and one party promises not to enforce or rely on one aspect of that relationship. An erroneous statement may be more comfortably considered in the context of misrepresentation.

[26] It is not clear to me that Ring accurately describes Estoppel, rather than what is required for Waiver—where, in that latter doctrine, both sides are aware of their strict contractual or other rights, with one party deliberately choosing not to rely on them. Certainly, Ring, in that regard of a deliberate choice to not enforce a right, goes further than does the SCC in discussing estoppel.

[27] In a more recent case, Dunn v. Vicars, 2009 BCCA 477, the British Columbia Court of Appeal came to a different conclusion then in Ring. Noting at paragraph 21 that, as the trial Judge found, the respondent had not shown an “unequivocal intention” to relinquish their rights, the Court of Appeal stated at paragraph 71:

In my view, in the language of Maracle the conduct of the respondents was intended to affect the legal relationship of the parties and was intended to be acted on. The appellant altered her position based on that conduct [ ... ] I conclude it would be unconscionable to allow the respondents to resile from the implications of their conduct.

[28] As quoted by Dunn at paragraph 60, a helpful description of Estoppel comes from Lord Denning in Crabb v. Arun District Council, [1975] 3 All E.R. 865 at 871. After reviewing how the doctrine evolved, he neatly sums it up as follows:

When the parties to a transaction proceed on the basis of an underlying assumption (either of fact or of law, and whether due to misrepresentation or mistake, makes no difference ), on which they have conducted the dealings between them, neither of them will be allowed to go back on that assumption when it would be unfair or unjust to allow him to do so. If one of them does seek to go back on it, the courts will give the other such remedy as the equity of the case demands [ underlining added ].

[29] In an Ontario decision, the undisputed fact that two parties conducted their relationship based on a common mistake of them both being able to enter into a contract did not give the party which subsequently realized that it lacked jurisdiction to do so an excuse to avoid its contractual obligations. In Re Ontario Medical Association and Workers' Compensation Board the High Court stated in that regard as follows:

It is plainly obvious that both parties, at the time of the agreement, assumed that they were capable of entering into such an agreement. They have conducted dealings on the basis of this agreement for two years without complaint. Now the Workers' Compensation Board seeks to deny its own jurisdiction to enter the agreement. The simple answer to this denial is that it cannot. It is estopped.

[30] An Ontario court decision by a Justice of this Court is clearly binding on me, let alone that I find the ratio in that above decision persuasive. Moreover, the decision of a Canadian appellate court is also strongly persuasive, again, leaving aside that I agree with the ratio found in Dunn. Lord Denning makes the point, reiterated all the years later in Dunn, that the basic issue is really one of fairness. Fairness, what is equitable and fair, is discerned from the facts of the individual case. Of course, fairness cannot be an arbitrary concept. Rather, in this case concerning the doctrine of estoppel, such must be applied in a principled way, to promote equity and avoid injustice to both sides.

[31] In this case, I agree with Mr. Barrett that the defendant had no obligation to remind the plaintiff of the limitation period. Indeed, if defendant had not herein attempted to do so, and if the plaintiff had commenced his action beyond the one-year contractual time-limit, the outcome of defendant’s motion would likely be very different.

[32] Having told the plaintiff, however, of what the defendant and, as the evidence describes, everyone at the Subscribing Insurers who reviewed the Lumbard letter, then believed was a two-year limitation by when he must sue, the defendant arguably is estopped from trying later to strictly rely on the contractual terms when it belatedly re-discovered them. In this case, it is at least quite arguable that the defendant intended the plaintiff to rely on that statement in the Lumbard letter (or else, why would it have put such a statement in the letter?). Moreover, the evidence is unequivocal that Kapur, plaintiff’s lawyer did rely on it. He was clear in that regard in his cross-examination testimony.

[33] In other words, the parties both conducted their affairs for a period of time as if there was a two year, not a one-year, contractual limitation period. Only when defendant finally re-discovered the more onerous contractual terms did defendant change its position (when it amended its Statement of Defence to plead the limitation).

[34] The Ring decision I find differs from the other decisions as to the test for Estoppel. It seems to conflate Waiver with Estoppel. I find that decision less persuasive than the others herein addressed, which focus on the principle of fairness in the particular case, using estoppel as the proverbial shield. Yet, again, I remind myself of my limited task on this motion: I need not reconcile all the case-law. Nor should I make a final decision regarding the issue. Rather, I must determine if the plaintiff has at least raised a genuine issue for trial that an estoppel in these circumstances arises. In my view, I find that the plaintiff has met his high onus under the applicable Rule. There is, at the least, a genuine issue for trial that an estoppel in these circumstances arise. Thus, for all these reasons, I dismiss the defendant’s motion for summary judgment.

The Plaintiff’s Motion to Correct Misnomer

[35] Prior to the hearing of the motion, to make oral submissions more efficient I referred counsel to Cuff v. Toronto Community Care Access Centre, 2022 ONSC 1177. Therein I distilled, from other decisions, the salient points of Misnomer. This allowed counsel to concentrate on the application of this legal doctrine to the facts of this case. Heavily borrowing from an earlier decision by RSJ MacLeod, in Cuff I summarized the doctrine thusly:

[11] As discussed by RSJ MacLeod in Loy-English v. The Ottawa Hospital et al, 2019 ONSC 6075, the test has over the years evolved and, in Ontario, it has been broadened. RSJ MacLeod stated in that regard the following:

15. Although a passage from the English decision of Davies v. Elsby Brothers Ltd. is frequently cited in misnomer cases, the law of Ontario has evolved since that case was decided. In Davies the test was described in objective terms as whether a reasonable person looking at the statement of claim would realize that the allegation was directed at him or her but the Davies test also stated that the target of the allegation must be evident without the need to make further inquiries. The law in Ontario is broader than this.

[12] RSJ MacLeod, while addressing in particular the use of pseudonyms such as “Jane Doe” used as place-holders for various physicians in the Loy-English case, also helpfully sets out various general legal principles pertaining to misnomer. As this within case does not concern pseudonyms, I only excerpt those what I believe are relevant for this matter, as follows:

21. As with most discretionary remedies, results are fact driven and case specific. Despite, this, a number of principles may be derived from the jurisprudence. It is useful to summarize these as follows:

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 [ all underlining added as relevant to the within case ].

[36] Counsel for defendant only pursued in his submissions on misnomer the issue of whether I should exercise my residual discretion to not allow the correction of the misnomer. Tacitly acknowledging that the doctrine of misnomer herein applies, Mr. Barrett nevertheless urged that I deny the plaintiff leave to add the insurer defendants after the passage of not only the contractual limitation, but after the passage of the statutory two-year limitation period.

[37] He submitted that in this case there was no genuine mistake—plaintiff just sued the wrong party and, despite being put on early notice to correct that error, plaintiff failed to do so, absent the requisite reasonable explanation for the failure to act. Counsel relies on Arcari v. Dawson, 2016 ONCA 715 at para. 10, to assert the need for a reasonable explanation.

[38] Counsel further relied on S. 5(2) of the Limitations Act, 2002, in essence submitting that in this case of a straight-forward insurance coverage dispute, the plaintiff and his counsel had the insurance policy which clearly identified the subscribing insurers and how they were to be served. Counsel asserted that the Statement of Defence clearly described that the defendant was not the proper party, and it identified those that were the proper defendants. Moreover, at examinations for discovery, the defendant put forward as its witness the earlier described Ms. Windley, an employee of one of the subscribing insurers who noted that her testimony was on behalf of all the five insurers. Yet even then, counsel for defendant submitted, plaintiff still did not seek to amend the claim to correct misnomer. A failure of basic due diligence on the part of plaintiff’s original counsel (not the agent-counsel arguing the motion), it was, in essence, argued, is not a reasonable explanation which should lead me to exercising my discretion favourably for the plaintiff.

[39] I begin my analysis by noting that the missing of a limitation period, as discussed in the above excerpt from Loy-English, is not a factor to decide if misnomer exists. If it exists, and if in my discretion the doctrine should be applied, then that is a complete answer to Mr. Barrett’s earlier argument that the plaintiff’s motion to correct misnomer is brought outside of the two-year statutory limitation period, so should lead to the summary dismissal of the plaintiff’s action. Again, however, it appears no longer in dispute that there was misnomer on the part of the plaintiff. The sole issue pursued by counsel for defendant is the exercise of my residual discretion to permit the correction.

[40] I return to the Lumbard letter sent to plaintiff and, later on, sent to counsel for plaintiff. That letter begins as follows:

As you are aware, we are the independent Insurance Adjusters acting on behalf of your Insurers, Can-Sure Underwriting [ underlining added ].

[41] Thus, the first response from the defendant’s agent, sent to both plaintiff and his counsel, is that the defendant is the insurer. Again, if such a letter is sent, informing of the limitation period and identifying the defendant party, in my view the persons receiving such a letter would reasonably rely upon it.

[42] The Statement of Defence, which came after the Lumbard letter, seemingly contradicts that previous, and unambiguous, statement. The Statement of Defence reads, in relevant part, as follows:

4. Cansure states that it is not an insurer. Cansure carries on business as a managing general agent authorized to underwrite policies of insurance on behalf of various insurance markets, including the subscribing insurers referred to below.

5. Cansure states that on the instructions of the co-defendant insurance broker on the plaintiff's behalf, Cansure arranged for the subscribing insurers referred to below to issue policy number CS5447047 to the plaintiff as Named Insured for the policy period August 4, 2018 to August 4, 2019 (the "Policy").

6. Cansure pleads and relies upon all of the terms and conditions of the Policy without limitation or qualification.

7. Cansure states that, as reflected on the Policy Declarations, the subscribing insurers (the "Underwriters") to the first party property coverages under the Policy are as follows: · Certain Lloyd's Underwriters under contract B1306C500351800 20% . Certain Lloyd's Underwriters under contract B0572NA18BC02 20% . Certain Lloyd's Underwriters under contract B0572NA18BC02 20% Allianz Global Corporate & Specialty under contract OC17226651 20% Everest Insurance Company of Canada 20%

[43] The Statement of Defence does plead that defendant is not the insurer. It also names those who it states are the insurers. Yet that would hardly be the first time that a party named as a defendant in an action pleaded, in essence, “it’s not me”. Many a defendant would seek to avoid liability, by pointing the finger elsewhere.

[44] Moreover, that pleaded denial contradicts the prior position of the defendant (in the Lumbard letter) acknowledging that it was the insurer. Defendant also defended the action in detail, pleading on the merits in the Statement of Defence. Given its position that it was not the proper defendant, defending the action on the merits of it strikes me as, if not unusual, then at least contradictory to its position that it was the wrong party.

[45] Defendant also took no other steps to remove itself from the within action. It did not bring a motion in that regard (at least, not until the within motion brought only after what it acknowledges is the expiry of the two-year limitation period). It did not third party the insurers whom it asserts are the proper defendants, and it produced a witness for discovery who, in any event, clearly spoke for and bound the subscribing underwriters.

[46] Adding to all of this, is the Notice provision in the policy of insurance, which provides that notice to the underwriters can be provided to the defendant. The notice provisions of the policy, which I reviewed early in these reasons, I find are also relevant to my consideration of whether the misnomer deserves correction. In two places, at the end of item number three, and also within item number four, “Identification of Insurer/Action Against Insurer”, the policy provides that as follows:

“Any notice to the Underwriters may be validly given to the Coverholder”.

[47] Again, the coverholder is the named defendant. Thus, by providing notice to it, the plaintiff was acting in accordance with the policy provisions, and thus, I find, acting reasonably in these circumstances.

[48] Unlike in the application of the Misnomer test, in this case with the “litigation finger” clearly and unequivocally pointing to the proposed new insurer defendants, the issue of who to sue or if the right party was sued by the plaintiff is wavering, equivocal, and unclear. With the benefit of hindsight, in my view, plaintiff could have sued both Can-Sure and the other proposed defendants. Once it learned that Can-Sure was seemingly not a proper defendant, plaintiff could have let them out of the action, as it did the insurance broker.

[49] Yet, I can easily see why, in this case, given the contradictory information provided and actions taken (or not taken) by the defendant, including defending the claim on its merits and putting forward for discovery a witness whose testimony was to bind the subscribing underwriters, that did not happen sooner. I can see, given the contradictory and ambiguous information from defendant, why only Can-Sure was initially sued. Without the benefit of hindsight, given the contradictory information, it was not unreasonable that Can-Sure only be sued, and the delay to correct that misnomer I do not find to be either inordinate or unexplained.

[50] When considering my discretion to grant or refuse the relief the plaintiff seeks, I flag that this is not the perhaps more common type of case involving misnomer wherein the proposed new defendant was unaware of the lawsuit or unaware that it might be a defendant (until, when it reads the claim, it does or reasonably ought to then so realize its predicament). In this case, the subscribing insurers were indisputably aware of, and formulating their responses to, the litigation from its inception, and were doing so through Can-Sure, the party, after all, to whom the insurance policy provided that notice could be given.

[51] As RSJ MacLeod held in the Loy-English case referenced above:

“ 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.

[52] In this within matter, there is no doubt that on a reading of the Claim the proposed defendants would have known. There is also, perhaps more atypically as contrasted with other misnomer cases, in this case no doubt that the proposed defendants had actual knowledge of the claim and were from the outset participating in the defence of the action. In short, they knew. Thus, there can be no prejudice. Moreover, the defendant’s witness could not identify doing anything differently had the proposed defendants been parties from the outset.

[53] Referring again to RSJ MacLeod in the Loy-English decision;

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".

[54] In my view, what defendants are seeking to do in this matter strikes me very much as “gotcha”.

[55] In Winogron (Estate of) v. Revera, 2022 ONSC 5532 at paras. 36-46, the Court wrestled with the notion of adding Revera despite some unexplained delay in bringing the motion to correct misnomer, and the important fact that, as Winogran was deceased, there was no ability to question her, leading to alleged prejudice. Ultimately the Court concluded:

[46] I am not satisfied that the nature and extent of procedural delay in this particular case is sufficient to warrant denying the amendment. In my view, this is a proper case of misnomer where no non-compensable prejudice to Revera Alta Vista has been demonstrated. In my view, modest procedural delay should not be a bar to the plaintiffs' claim against the owner/licensee of the nursing home at which Ms. Winogron is alleged to have suffered abuse and mistreatment. In these circumstances, I find no basis upon which to refuse the amendment.

[56] I find that the facts of the within matter are much stronger in support of my exercising my discretion to allow the amendments to the claim so to add the proposed defendants than in Winogron. In this within case, witnesses have not been lost; nor is there evidence of documents gone missing, nor of any inability of the proposed defendants to gather (additional, if such exists) evidence so to be able to fully defend the matter. There is thus no prejudice to them in allowing them to be “officially” named as defendants, so to regularize their status in that regard, given that they have been acting as defendants throughout despite not being formally named as such until now. I find that the modest delay in the plaintiff taking this step to regularize matters has been sufficiently explained in the context of the ambiguous and contradictory stances and information emanating from the defendant, as described herein.

[57] Accordingly, the plaintiff’s motion to correct misnomer is granted. The Statement of Claim may be amended to add the subscribing insurers (“underwriters”) described in the Notice of Motion, and as at paragraph eight of the Statement of Defence.

Summary and Conclusion

[58] The plaintiff’s motion is thus granted.

[59] The defendant’s motion is thus dismissed.

Costs and an Order

[60] I expect that the parties will be able to agree on costs. Costs, after all, follow the event. If the parties cannot agree, however, a tele-case-conference with me may be scheduled through ATC Ms. Sharma. Short submissions on costs of up to three pages, using normal font and formatting, may be delivered along with respective costs outlines.

[61] An Order, once approved, may also be sent to me through Ms. Sharma.

Associate Justice Josefo Date: June 21, 2023