Court File and Parties

COURT FILE NO.: CV-20-83178 DATE: 2024/03/18 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Essiembre Consultant Inc., Claudia Gauthier and Pascal Essiembre Plaintiffs – and – Gro-Net Financial Tax & Pension Planners Ltd., Plum Financial Planning Ltd., Cen-Ta Real Estate Ltd. and Jean Maisonneuve Defendants

Counsel: Stéphane Hutt and Emilie Leblanc Lacasse, for the Plaintiffs Howard Borlack, for the Defendants Gro-Net Financial Tax & Pension Planners Ltd. and Plum Financial Planning Ltd. Roberto Ghignone, for the Defendant Cen-Ta Real Estate Ltd. Jean-Simon Schoenholz, for the Defendant Jean Maisonneuve

HEARD: September 19, 2023

Reasons for Judgment

Rees J.

Overview

[1] The plaintiffs bought, as investments, rental properties from the defendant Gro-Net Financial Tax & Pension Planners Ltd. (“Gro-Net”), now known as Plum Financial Planning Ltd. They retained the defendant Cen-Ta Real Estate Ltd. (“Cen-Ta”) to manage the properties. The defendant Mr. Jean Maisonneuve was the plaintiffs’ former accountant and, later, was an employee of Gro-Net and Cen-Ta.

[2] Essentially, the plaintiffs allege that their investments did not perform as well as they were led to expect and that their properties were not adequately managed. They allege these losses were caused by the defendants. The plaintiffs commenced an action against the defendants for breach of contract, negligence, breach of fiduciary duty, and negligent or fraudulent misrepresentation. The Statement of Claim was issued on March 16, 2020 (the “Claim”).

[3] The defendants bring this motion for summary judgment. They argue that the Claim is time-barred and that the plaintiffs have not suffered any damages.

[4] I find the action is amenable to summary judgment and I grant summary judgment to the defendants. The Claim is time-barred. Therefore, I need not consider whether the plaintiffs have suffered any damages.

Background

The parties

[5] The plaintiffs are Pascal Essiembre, Claudia Gauthier, and Essiembre Consultant Inc. Mr. Essiembre and Ms. Gauthier are life partners. They are co-owners and directors of Essiembre Consultant. They own the properties at issue either personally or through Essiembre Consultant.

[6] Mr. Maisonneuve is a chartered accountant. He provided accounting services to the plaintiffs beginning in 2004. He later became an employee of Gro-Net and, subsequently, a shareholder. He was never a director or officer of Gro-Net.

[7] Gro-Net is a company that offers clients investment residential properties. It sells these properties to investors like the plaintiffs. The residential properties are then rented to tenants. The investment model relies on rental income, tax deductions, and anticipated capital appreciation.

[8] Cen-Ta is a company that is related to Gro-Net. It provides property management for the residential properties purchased by investors. Investors enter into a property management agreement with Cen-Ta. When retaining Cen-Ta, investors participate in a rental pool and a repair and maintenance pool, which share the costs of unit repair and unit vacancies among all investors in the pool.

Factual background

[9] In the early 2000s, the plaintiffs bought three investment properties from Gro-Net and retained Cen-Ta to manage the properties. Unsatisfied with Cen-Ta’s management of their properties and because they were experiencing cash flow problems that they attributed to Cen-Ta, the plaintiffs terminated their contract with Cen-Ta in 2006. As discussed below, this experience with Cen-Ta is relevant to the plaintiffs’ knowledge of the cause of the alleged loss in 2017.

[10] In 2012, the defendant Mr. Maisonneuve joined Gro-Net and Cen-Ta as an employee. Mr. Maisonneuve promoted further investments with Gro-Net to the plaintiffs.

[11] In 2013, the plaintiffs bought another 11 properties. The plaintiffs also entered into a property management agreement with Cen-Ta.

[12] According to the plaintiffs, they were induced to return to Gro-Net and Cen-Ta because Mr. Maisonneuve represented to them that the property management would improve given his involvement. The plaintiffs also allege that Mr. Maisonneuve persuaded them to invest in the additional properties by taking out higher interest rate mortgages that they could expect to refinance at a lower rate in the future.

[13] Mr. Maisonneuve left Gro-Net and Cen-Ta in May 2015. Gro-Net announced his departure to clients on November 22, 2016 and the plaintiffs became aware of this the same day.

Analysis

The law of summary judgment

[14] The court shall grant summary judgment if it “is satisfied that there is no genuine issue requiring a trial with respect to the claim or the defence”, or “the parties agree to have all or part of the claim determined by a summary judgment and the court is satisfied that it is appropriate to grant summary judgment”: r. 20.04(2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[15] There will be no genuine issue requiring a trial when the motion judge is able to reach a fair and just determination of the action during the motion. This is the case when summary judgment allows the judge to make the necessary findings of fact; allows the judge to apply the law to the facts; and is a proportionate, more expeditious and less expensive means to achieve a just result than a trial: Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 49.

[16] The motion judge must determine if there is a genuine issue requiring a trial based only on the evidence filed on the motion, without relying on the enhanced fact-finding powers under r. 20.04(2.1). If, however, the motion judge concludes that a genuine issue for trial exists, the motion judge must go on to consider whether the need for a trial may be avoided by resorting to the enhanced fact-finding powers set out in rr. 20.04(2.1) and (2.2). The motions judge may use those powers, in his or her discretion, unless doing so would be contrary to the interests of justice. Using the enhanced powers will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole: Hryniak, at para. 66.

[17] On a motion for summary judgment, the moving party has the onus to establish a prima facie case that there is no genuine issue requiring a trial. The onus then shifts to the responding party. To successfully resist a summary judgment motion, a responding party must set out sufficient facts to show that there is a genuine issue requiring a trial. The responding party must “lead trump or risk losing” and put their “best foot forward”: BNS v. Compas, 2018 ONSC 3262, at para. 9. A responding party “may not rest solely on the allegations or denials in the party’s pleadings, but must set out, in affidavit material or other evidence, specific facts showing that there is a genuine issue requiring a trial”: r. 20.02(2).

Issue 1: Is the action amenable to summary judgment?

[18] I am satisfied that this action is amenable to summary judgment. Specifically, the record before me permits me to make all the necessary findings of fact on the limitation period issue, and to apply the law to those facts. Further, if the defendants are successful on this issue, then it will dispose of the action. Thus, a summary judgment motion on the limitation period issue is a proportionate, more expeditious and less expensive means to achieve a just result than a trial. I need not rely on the enhanced fact-finding powers under rr. 20.04(2.1) and (2.2). I can fairly resolve this on the record before me.

[19] Courts will decide limitation period issues by way of summary judgment where, as here, the record is sufficient to fairly resolve the dispute: see e.g. Rajmohan v. Norman H. Solmon Family Trust, 2014 ONCA 352, 96 E.T.R. (3d) 1, leave to appeal refused, 2014 CarswellOnt 16349 (S.C.C.); Kassburg v. Sun Life Assurance Co. of Canada, 2014 ONCA 922, 124 O.R. (3d) 171, at para. 52; Landrie v. Congregation of the Most Holy Redeemer, 2014 ONSC 4008, 120 O.R. (3d) 768; Maxwell v. Altberg, 2023 ONCA 305.

[20] The plaintiffs say that there are 18 issues requiring a trial. But none of these issues require a trial if the defendants are successful on the limitation period issue. The issues raised by the plaintiff would fall away. As such, they do not stand in the way of this summary judgment motion.

Issue 2: Is the Claim time-barred?

[21] The defendants argue that the Claim exceeds the basic limitation period found in s. 4 of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B.

The Law

[22] Section 4 provides that “[u]nless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.”

[23] Section 5 of the Limitations Act, 2002 provides the rules for when a claim is discovered for the purpose of the basic limitation period. The relevant provisions provide as follows:

5 (1) A claim is discovered on the earlier of,

(a) the day on which the person with the claim first knew,

(i) that the injury, loss or damage had occurred,

(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,

(iii) that the act or omission was that of the person against whom the claim is made, and

(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and

(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).

(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1) (a) on the day the act or omission on which the claim is based took place, unless the contrary is proved.

[24] The analysis is a fact-based one. Did the plaintiffs know enough facts on which to base their allegations against the defendants? See Lawless v. Anderson, 2011 ONCA 102, 81 C.C.L.T. (3d) 220, at para. 28. In other words, did the plaintiffs have actual or constructive knowledge on which a plausible inference of the defendants’ liability could be drawn? See Grant Thornton LLP v. New Brunswick, 2021 SCC 31, at paras. 3, 42.

The Claim is time-barred

[25] The plaintiffs had the requisite knowledge to discover their claims against the defendants by December 12, 2017, at the latest, when they terminated their property management agreement with Cen-Ta.

[26] In January 2017, the plaintiffs contacted Mr. Maisonneuve to refinance the mortgages for three of their properties. By this time the plaintiffs knew that Mr. Maisonneuve was no longer employed with Gro-Net and Cen-Ta. Mr. Maisonneuve helped the plaintiffs seek refinancing through Desjardins. As part of the refinancing, Desjardins required the plaintiffs to retain an appraiser and obtain appraisals for the properties.

[27] Following the appraisals, Desjardins told the plaintiffs in March 2017 that the refinancing could only be offered at a lower amount than anticipated. The plaintiffs therefore renewed their mortgage with their existing lender in April 2017.

[28] At this point, the plaintiffs had lost confidence in Mr. Maisonneuve. They asked their accountant to assist them in the summer and fall of 2017 to address the cash flow and property management issues with all their properties. Their accountant advised them at the time that they would have been better off investing in an RRSP than in Gro-Net. Their accountant recommended that the plaintiffs replace Cen-Ta with a new property management company to address the cash flow and property management problems.

[29] The plaintiffs followed this advice. On December 12, 2017, they wrote to Cen-Ta to terminate their property management agreement. The plaintiffs informed Cen-Ta that they had retained another property management company to replace Cen-Ta for all the plaintiffs’ properties. The new property management company took over management of the plaintiffs’ properties on April 1, 2018.

[30] The plaintiffs admitted that they decided to switch property management companies because of their accountant’s advice and because they perceived that the same problems that led them to terminate their agreement with Cen-Ta in 2006 – cash flow and poor property management – were repeating themselves.

[31] Together, this establishes conclusively that the plaintiffs discovered, or ought to have discovered, their claims against the defendants by December 12, 2017, at the latest. But their Claim was only issued on March 16, 2020. They were out of time.

[32] The plaintiffs argue that time did not begin to run until they were able to enter the properties to inspect them. They say that they were unable to confirm that they suffered a loss and to quantify that loss until they inspected the properties in April 2018. They say that before they inspected the properties, they would not have known the cause of the cash flow issues and would not have been able to fully know whether there had been a loss with respect to their investments.

[33] I disagree that time only ran from when the plaintiffs entered the properties to inspect them. The plaintiffs conflate when they first knew that the injury, loss or damage had occurred with the quantification or knowledge of the extent of the damages. For the purpose of the limitation period, it is when they first knew of the loss or damage that matters.

[34] The Court of Appeal for Ontario draws the following distinction: “Damage is the loss needed to make out the cause of action.… Damages, on the other hand, is the monetary measure of the extent of that loss” (emphasis in original): Hamilton (City) v. Metcalfe & Mansfield Capital Corp., 2012 ONCA 156, 347 D.L.R. (4th) 657, at para. 54. All the plaintiffs had to discover to start the limitation period was that there was damage or loss. Knowledge of some loss is sufficient: Hamilton, at para. 61.

[35] By their own admission, inspecting the properties in April 2018 simply led the plaintiffs to realise that the extent of the loss was greater than what they believed by December 12, 2017. What they knew by December 12, 2017 was more than speculation: they had enough knowledge on which a plausible inference of the defendants’ liability could be drawn.

[36] The plaintiffs argue that the version of Ms. Gauthier’s evidence in French together with the simultaneous translation supports their position that the plaintiffs only had a suspicion before inspecting the properties, rather than knowledge. I disagree. Having considered the bilingual version of the transcript that the plaintiffs rely on, I conclude that Ms. Gauthier admits to believing in 2017 that the management of the units was not going well and that the plaintiffs also believed in 2017 that they had been misled by the defendants regarding the investment properties. In other words, the plaintiffs knew in 2017 they had suffered a loss and they knew in 2017 the cause of the loss.

[37] In any event, I come to my conclusion on the limitation period based on the totality of the evidence, not only based on the admissions of Ms. Gauthier.

[38] Thus, I find that the Claim is time-barred, and it ought to be dismissed. Given this, I need not consider whether the plaintiffs suffered any damages.

Disposition

[39] Judgment is granted to the defendants and the action is dismissed.

[40] If the parties cannot agree on costs, they can each make written submissions to me of no more than 1,000 words, accompanied by bills of costs and any Rule 49 offers, within two weeks of the release of these reasons for judgment. These are to be sent by email to scj.assistants@ontario.ca to my attention.

Justice Owen Rees Released: March 18, 2024