Court File and Parties

Court File No.: CV-15-92647-00 Date: 2023-09-26 Superior Court of Justice – Ontario

Re: Orllyn Loney and Yvonne Prouty, Plaintiffs And: John Doe, ABC Corporation, and Intact Insurance Company carrying on business as Intact Insurance, Defendants

Counsel: B. Robin Moodie and Bronwyn Martin as agents for Daniel Balena, for the Plaintiffs Grant Bodnaryk, for proposed Defendants, Mills and 564242 Ontario Limited

Heard: June 2, 2023

Ruling on Motion

Healey J.:

Nature of the Motion

[1] On August 9, 2013, the plaintiff Orllyn Loney was involved in an accident while driving his motorcycle. It is his belief that the accident was caused by the driver of a tractor trailer, who Mr. Loney says veered onto the shoulder of the road, causing debris to fly at him and leading to his losing control of his motorcycle. The other plaintiff, Yvonne Prouty, is his spouse who asserts a Family Law Act claim.

[2] When the statement of claim was issued, the defendants were listed as John Doe, ABC Corporation and Mr. Loney’s own insurer, Intact Insurance Company (“Intact”). The motorcycle was insured under a motor vehicle insurance policy issued by Intact, containing an OPCF-44R Endorsement providing for unidentified automobile coverage.

[3] This is a motion pursuant to r. 48.04, Rules of Civil Procedure, R.R.O. 1990 Reg. 194, for an order granting leave to have the motion heard after setting the action down for trial, and for an order granting leave to the plaintiff to amend the statement of claim on the basis of misnomer pursuant to r. 5.04(2). The amendment sought is to change the names of John Doe and ABC Corporation to, respectively, Michael George Alexander Mills (“Mills”) and 564242 Ontario Limited, also known as Liftlock Fuels and Liftlock Coach Lines Limited (“Liftlock”), together the “proposed defendants”.

[4] A third party claim has been initiated against these same proposed defendants by Intact. Intact did not take a position on the motion and its counsel did not attend.

[5] The proposed defendants oppose all the relief sought by the plaintiffs.

Issues

[6] Issues to be determined:

1. Should leave be granted to bring this motion?
2. Have the plaintiffs satisfied the test to correct the name of the defendants John Doe and ABC Corporation on the basis of misnomer?
3. Will Mills and Liftlock be prejudiced by the relief sought?
4. Are there any reasons why the Court should deny the relief sought?

The Evidence

[7] The statement of claim was issued on August 6, 2015, almost two years after the accident occurred. The pleading alleges that on August 9, 2013 the plaintiff was riding his motorcycle behind a tractor trailer westbound on Highway 7 in the Township of Havelock, in the County of Peterborough when without warning the tractor-trailer veered onto the gravel shoulder of Highway 7, causing debris to strike the plaintiff. The plaintiff lost control of his motorcycle and fell to the pavement, resulting in serious personal injuries. Police attended on scene.

[8] The statement of claim also alleges that the defendant John Doe was at all material times the unidentified owner and operator of the unidentified tractor-trailer, and that the defendant ABC Corporation was at all material times, in the alternative, the owner of the unidentified tractor-trailer.

[9] On December 23, 2015, Intact delivered its statement of defence.

[10] On January 21, 2016 the plaintiffs delivered a Wagg motion for production of the OPP file, which order was granted on February 12, 2016. The plaintiffs’ counsel, Mr. Balena, has provided evidence for this motion by affidavit sworn November 28, 2022. When cross-examined on that affidavit he agreed that there was no reason why he could not have brought the motion sooner.

[11] The OPP file was received by Mr. Balena on March 29, 2016. The motor vehicle accident report lists one independent witness to the accident: Michael Wills. The accident is described as a “single motorbike MVC”. The file also contains the officer notes and phone number for “Michael Mills” and the handwritten statement of “Michael Mills” (emphasis added).

[12] On July 20, 2016, Mr. Balena wrote to Robin Barnett, a private investigator who performed work for him regularly, providing him with a type-written version of the witness’ handwritten statement. The typewritten version also says “Michael Mills” and contains Mills’ landline phone number on the top left-hand corner of that transcription. Mr. Balena reviewed the letter and transcribed statement before it was sent to Mr. Barnett.

[13] Robin Barnett has not provided evidence for this motion. There is no record of Mr. Barnett having called the phone number provided by the witness. There is only inadmissible hearsay from Mr. Balena that he was told by Mr. Barnett that he had called the number. Further, there is no evidence that Mr. Barnett ever attempted to contact the investigating police officer.

[14] On January 10, 2019, Intact brought its own Wagg motion, requesting a copy of the unredacted witness statement. The unredacted statement, which included Mr. Wills’/Mills’ birthdate, was produced in February 2019. The birthdate was the only new information; his name and phone number continued to be visible. There is no evidence that Mr. Balena provided this second version of the statement to his investigator, and he conceded that any such evidence, if it existed, would have been included in his affidavit.

[15] On May 10, 2019, counsel for Intact, Ms. Culp, wrote to Mr. Balena with the phone number, date of birth and address for a “David Wills”, which did not match the birthdate contained in the statement provided to police. Mr Balena testified that he did not compare Ms. Culp’s letter with the statement typed by his clerk, but although he testified that he noticed the discrepancy, he still deferred to Ms. Culp and Intact to pursue “David Michael Wills”.

[16] On June 12, 2019, Mr. Balena delivered the trial record, which was 14 months before the 5-year anniversary on which the action could have been dismissed for delay pursuant to r. 48.14.

[17] On February 11, 2020, Mr. Balena wrote to Ms. Culp, responding to her letter from May 2019 and indicating that he would be adding David Michael Wills as a defendant but not substituting him for John Doe.

[18] The following day, Ms. Culp received an email from her investigator, Phil Gerrits, advising that David Wills was the wrong person. Ms. Culp asked Mr. Balena to hold off on adding Mr. Wills as a defendant.

[19] On February 20, 2020, Ms. Culp received an email from her investigator Phil Gerrits advising that Mr. Wills was in fact a “Michael Mills”. The investigator provided an address and stated that he had spoken to the investigating officer to confirm.

[20] On February 28, 2020, Michael Mills gave a statement to Phil Gerrits.

[21] On March 4, 2020, Ms. Culp wrote to Mr. Balena providing the names and addresses of Michael Mills and Liftlock Fuels, including the statement of Michael Mills taken by Mr. Gerrits confirming that he was the truck driver on the scene of the accident. Mr. Balena was also told that the owner of the tractor-trailer was Liftlock Fuels. Mr. Bodnaryk refers to this as the “silver platter letter”, arguing that upon its receipt there is no question that the plaintiffs knew the identities of the proposed defendants, even though he had had Michael Mills’ name and phone number ever since July, 2016.

[22] On July 28, 2020, Intact put Mr. Mills and Liftlock Fuels on notice of the claim. These letters were provided to Mr. Balena on September 22, 2020.

[23] On February 10, 2020, Ms. Culp provided Mr. Balena with an Autoplus report confirming Lifelock’s insurance particulars.

[24] Intact commenced its third party claim, which was served on Mills and Liftlock on November 29, 2021.

[25] Mills and Liftlock retained counsel, Ms. Anagnostakis, in December 2021.

[26] On February 3, 2022, Mr. Balena emailed Ms. Anagnostakis requesting information about the third parties and advising that he would be seeking to add Mills and Liftlock as defendants.

[27] On March 3, 2022, Mr. Balena sent the proposed amended statement of claim to Ms. Anagnostakis, requesting consent.

[28] Mr. Balena made inquiries with Ms. Anagnostakis as to the correct identity of the registered owner of the tractor-trailer, and on April 6, 2022 learned that the registered owner was Liftlock Coach Lines Limited and that 564242 Ontario Limited o/a Liftlock Fuels was the operator.

[29] On April 7, 2022, Mr. Balena advised counsel that he would be preparing this motion, which was served over seven months later, on November 29, 2022.

[30] To summarize, the accident occurred in August 2013 and the claim issued in August 2015. The examination for discovery of the plaintiff was completed in July 2016. Putting aside the nuances of what information was available to Mr. Balena before that date, the contents and delivery of the letter of March 4, 2020 leaves no doubt about the name and contact information of the driver of the truck. The first formal notice of a claim was delivered to the proposed defendants by Intact in July 2020, almost seven years after the accident. Intact’s third party claim was served over a year later. Mr. Balena provided his proposed amended statement of claim to counsel for the third parties in March 2022, requesting her consent. This motion was served almost nine months later, over nine years after the accident and over two years from the time that Mills and Liftlock had any idea that this lawsuit had been started.

Positions of the Parties

[31] It is the plaintiffs’ position that the proposed defendants have always known that the “litigating finger” was pointed at them, as they have had knowledge of this accident since the date that it occurred.

[32] Mr. Mills has given his recollections of the accident in his statements to the OPP, Mr. Gerrits, an adjuster David O’Neill and in his affidavit in response to this motion. Each of those documents reveals that he was the driver of the transport truck and has a good recollection of the accident. Mr. Mills also told Mr. Gerrits that the vehicle was owned by Liftlock Fuels. On his cross-examination, Mr. Mills said that he gave a statement to the OPP partly to help with the investigation, and “the other part is that I was driving a truck, and somebody was liable to try to make it my fault.” He also confirmed that he was able to refresh his memory by using the police report as the most correct version of events.

[33] Liftlock has also filed an affidavit from Robb Bennett, the VP of operations. He was cross-examined on his affidavit, and gave the following evidence:

(a) There are a number of different entities that operated under 564242, including two companies that have the name “Liftlock” in their titles; (b) He recalled that on the day of the accident, Mr. Mills told him he had witnessed an accident involving a motorcycle; and (c) When he received the notice letter and statement of claim from Intact on July 28, 2020, he called a former co-worker and in speaking with her realized that the letter referred to the August 2013 incident that Mr. Mills had told him about.

[34] The plaintiffs maintain that at the time that the trial record was passed, they did not know the identity of John Doe or ABC Corporation. They submit that they meet the test for leave to bring this motion, and also meet the test for misnomer.

[35] The proposed defendants’ position is that there has been no substantial or unexpected change in circumstances since the trial record was filed that would justify granting leave to the plaintiff to bring this motion.

[36] Further, the proposed defendants submit that the plaintiffs have delayed in investigating this matter and in bringing this motion in a timely manner. Even if it can be said that a reasonable person in the position of the proposed defendants should have known that the litigating finger was pointing in their direction, which they dispute, the proposed defendants and their insurers did not learn of the pending litigation until Mills was contacted by Intact’s investigator five years after the statement of claim was issued. The court should exercise its discretion to deny the motion on the basis of delay.

Leave to Bring this Motion

[37] Rule 48.04(1) directs that a “party who has set an action down for trial shall not initiate or continue any motion or form of discovery without leave of the court”.

[38] The onus is on the plaintiffs to satisfy the court as to why it should exercise its discretion to allow the plaintiffs to bring this motion to substitute the proposed defendants for John Doe and ABC Corporation.

[39] In Horani v. Manulife Financial Corporation, 2023 ONCA 51, [2023] O.J. No. 338, at paras. 17 and 18, the Court of Appeal noted that there are two lines of cases setting out the test for granting leave pursuant to r. 48.04(1). The first requires the moving party to show “a substantial or unexpected change in circumstances such that a refusal to make an order under r. 48.04(1) would be manifestly unjust”. The second requires the moving party to demonstrate that “the interlocutory step is necessary in the interests of justice”. The court declined to determine the appropriate test.

[40] By setting the action down for trial, Mr. Balena was confirming that the action was ready to be tried, meaning that the pleadings were in order and that there were no interlocutory steps yet to be completed before a trial date could be set. As stated by Perell J. in Fulop v. Corrigan, 2020 ONSC 1648, [2020] ONSC 1227, at para. 76:

the setting down for trial is not a mere technicality, and there must be a justification for permitting further discovery or any other interlocutory step, such as a substantial or unexpected change in circumstances or the necessity of the step in the interests of justice.

[41] During argument, counsel for both sides considered the various factors outlined in Fulop that the court may consider when deciding whether there is justification for granting leave: para. 77. The non-exhaustive list set out by Perell J. includes:

(1) what the party seeking leave knew at the time of the passing of the trial record; (2) whether there has been a substantial or unexpected change in the circumstances since the action was set down for trial; (3) the purpose of the request for leave; (4) the nature of the relief being requested; (5) whether the party opposing the relief would suffer any prejudice; and (6) whether the relief sought would likely be granted if leave or given to bring the motion.

What the Plaintiffs Knew When the Trial Record was Passed

[42] The plaintiffs submit that they did not have enough information at the time that the trial record was passed to know the names of the operator and owner of the defendant vehicle.

[43] I reject this submission. The name of Michael “Wills” on the police report should not have stalled Mr. Balena for long. From March 29, 2016, the date that he received the OPP file, Mr. Balena had the name and phone number of the witness, his “John Doe”. From that point on, he disregarded information that was directly in front of him and left it to his private investigator to take whatever steps that he may have taken, none of which is properly in evidence on this motion. His own failure to pay attention to the information in his file allowed him to be led astray by Intact’s investigation, which led them down the path of a “David Michael Wills”. None of that changes the fact that the witness statement that was in Mr. Balena’s hands in March 2016 was all that he needed to begin to take steps to confirm the driver of the vehicle, find the owner of the vehicle and correct the misnomer.

[44] The “silver platter letter” of March 4, 2020 added nothing to Mr. Balena’s knowledge other than Mills’ date of birth.

[45] There is no good explanation given by Mr. Balena as to why he made no efforts to act on the information prior to passing the trial record in June 2019, or explanation as to why, despite knowing the implications of r. 48.04(1), he did not try to resolve the issue before that date.

[46] This is not a matter of discoverability. With respect to Mr. Balena, it is an unfortunate matter of uncareful file review.

[47] I find that the plaintiffs have not offered a reasonable explanation for the extraordinary delay in bringing this motion.

Whether There Has Been an Unexpected Change Since the Record was Passed

[48] The same answer applies. An unexpected or sudden change implies something outside the plaintiffs’ knowledge or control, something that could not have been foreseen, something that, absent the court’s intervention, would work an injustice if not remedied.

[49] The only change has occurred is that Intact decided to do Mr. Balena’s work, and through their investigator contacted Michael Mills and confirmed that Liftlock is the owner of the defendant vehicle.

Purpose of the Request for Relief

[50] The purpose of inserting “John Doe” and “ABC Corporation” in the statement of claim was to preserve the limitation period against those parties. The plaintiffs are attempting to replace those placeholder names with the proposed defendants long after any limitation period has expired. However, as the plaintiffs submit, there is no obligation on them to establish due diligence in identifying the true defendant within the limitation period on a misnomer motion, provided that the true defendant would know on reading the statement of claim that he was the intended defendant: Stechyshyn v. Domljanovic, 2015 ONCA 889, [2015] O.J. No. 6633, at para. 1. I will return to the test for misnomer later in these reasons.

[51] The plaintiffs argue that the motion under r. 5.04 focuses on substantial rights and ensures that the proper parties are before the court. The relief claimed protects the rights of Intact and protects the rights of the plaintiffs by allowing them to seek compensation from the proper tortfeasor. It also allows the court to make a proper determination with respect to liability.

[52] While those submissions are accurate, they ignore that the purpose of r. 5.04 was originally to correct misspelled names. As stated by the Court of Appeal in Ormerod (Litigation guardian of) v. Strathroy Middlesex General Hospital, 2009 ONCA 697, [2009] O.J. No. 4071 at para. 31, “[n]ow 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.”

[53] Significant, unexplained delay in bringing a misnomer motion long past the expiry of a limitation period has been the basis for courts to deny the motion: Mohabir v. Mohabir, 2014 ONSC 5485, [2014] O.J. No. 4440; Brown-Vidal v. Doe, 2015 ONSC 3362, [2015] O.J. No. 2682; Abramov v. Doe, 2023 ONSC 1232, [2023] O.J. No. 795. Each of these cases involve timelines similar to or shorter than the timeline in this action.

[54] The comments of Master Muir in Mohabir at para. 25 are applicable here:

In my view, the very purpose of limitation periods would be seriously undermined by allowing a plaintiff to simply name John Doe defendants as part of a claim issued on the eve of the expiry of the limitation period and then do nothing to identify those defendants for several years thereafter. The proposed substituted defendants knew nothing of this claim for nearly five years after the events in question and for nearly three years after the presumptive expiry of the limitation period. An order adding those parties to this action at this time is not in keeping with the policy objectives of the limitations laws of this province.

The Nature of the Relief Requested

[55] The effect of granting the relief sought in this case would be to add the proposed defendants to a lawsuit that, at least in the case of Michael Mills, he did not know was occurring until almost seven years after the accident, when Mills gave his statement to Intact’s investigator. The only evidence of when Liftlock became aware was when it received a notice letter and the third party claim from Intact in July 2020. The relief claimed will make them defend an action that has been proceeding in their absence for over eight years.

Whether the Proposed Defendants Would Suffer Any Prejudice

[56] Rule 5.04 provides that the court may substitute a party or correct the name of a party incorrectly named, provided there is an absence of non-compensable prejudice. Like a pleading amendment under r. 26.01, the moving party must demonstrate that no prejudice would result from the amendment that would not be compensated for by costs or an adjournment: Mazzuca v. Silver Creek Pharmacy Ltd., [2001] O.J. No. 4567 (Ont. C.A.), at para. 42.

[57] I find that the proposed defendants have led evidence of both actual non-compensable prejudice caused by the lengthy delay in bringing this motion, and have raised a presumption of prejudice due to the passage of time.

[58] The very real prejudice is that the proposed defendants have been denied the opportunity to conduct an examination for discovery of the plaintiff within a reasonable time frame. This is important in this case because the plaintiffs allege, and Mr. Balena referenced during his cross-examination, that Mr. Loney sustained a head injury in this accident. If that is the case, the proposed defendants will be in the compromised position of having to elicit testimony from a plaintiff who may have cognitive impairments, over 10 years after the accident.

[59] The proposed defendants rely on Lyman v. Chan, 2018 ONSC 4037, [2018] O.J. No. 3468, in which the court accepted the following as examples of non-compensable prejudice caused by delay in a personal injury action:

(a) the inability to conduct a timely investigation into the circumstances of the incident; (b) the inability to take contemporaneous witness statements and preserve evidence; (c) the inability to conduct early surveillance; (d) the inability to obtain a timely defence medical assessment; and (e) diminished witness recollection and memory.

[60] I agree with the proposed defendants that they have been deprived of each of these things due to the plaintiffs’ unexplained delay.

[61] Where a respondent pleads that there is presumed prejudice due to the passage of time, the moving party may rebut the presumption by providing an adequate explanation for the delay and evidence that there is no non-compensable prejudice: 1588444 Ontario Ltd. v. State Farm Fire and Casualty Company, 2017 ONCA 42, [2017] O.J. No. 241, at paras. 31 and 36.

[62] The plaintiffs’ case fails on the first branch of this test, as they have not provided adequate explanation for the delay from March 2016 onward.

Whether the relief sought would likely be granted

[63] The leading case setting out the test to amend a pleading to correct an alleged misnomer in the naming of a defendant is as set out in Ormerod, at paras. 20 to 21.

[64] The law relating to misnomer was summarized by Master Muir at paras. 13 and 14 of Mohabir. Misnomer requires a finding that the “litigating finger” be clearly pointed at the proposed defendant, such that a reasonable person receiving and reviewing the claim, in all of the circumstances of the case, would say to himself or herself “of course it must be me, but they have got my name wrong”.

[65] In Loy-English v. The Ottawa Hospital et. al, 2019 ONSC 6075, [2019] O.J. No. 5324 at para. 21 (e), Master MacLeod (as he then was) noted that 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.

[66] I agree with the plaintiffs’ position that on a fair reading of the claim, the respondents would know that they were the intended target of the lawsuit. Michael Mills was aware that the accident occurred on the date and on the highway identified, and knew that it involved a motorcyclist. No other vehicle was mentioned in the claim other than the tractor trailer. His statement to the police and to Mr. Gerrits show that he knew his direction of travel and that a motorcyclist was initially following his vehicle. He was aware that the motorcyclist lost control, and he reported these facts to the police. He also mentioned the incident to his employer. Further, once Mr. Bennett received the notice letter from Intact and the claim in July 2020, he understood that it was in relation to the accident that Mills had discussed with him back in 2013. The fact that Mills did not mention the mechanism of the accident as described in the claim ie. that his tractor trailer “veered onto the gravel shoulder of Highway 7, propelling debris etc…”, does little to alter the crucial “who, what, where, when” aspects of the pleading.

[67] Yet even where the test for misnomer is met, the court has a residual discretion not to grant the relief if it would be unjust to do so: Mazzuca, at paras. 30-31; O’Sullivan v. Hamilton Health Sciences Corp., 2011 ONCA 507, [2011] O.J. No. 3161; Ormerod, at paras. 28 and 32.

[68] It would be unjust to grant the relief in this case because of the unexplained, significant delay in moving to amend the pleading after learning of the correct name of Mills in March 2016, and taking into account the public policy reasons for adhering to limitation periods. The facts in this case show that the failure to correct the name of the defendants for over seven years after Mr. Balena knew or should have known their identity is more than a mere irregularity, and causes prejudice to the proposed defendants that is impossible to remedy after this passage of time.

[69] Accordingly, it cannot be said that the relief sought on the motion would likely be granted.

Conclusion

[70] Considering all of the evidence on this motion and balancing the parties’ interests and the issue of trial fairness, I conclude that leave should not be granted to the plaintiffs to bring this motion.

[71] This court orders that the motion is dismissed.

[72] I have reviewed the parties’ cost outlines. While this was a pleadings motion, the issue was relatively complex and required substantial work on the part of counsel to put the applicable law and facts before the motion judge. This court orders that the plaintiffs shall pay the costs of this motion to the proposed defendants fixed in the amount of $12,000 inclusive and payable in 30 days.

Released: September 26, 2023 S.E. Healey J.