COURT FILE NOS.: CV-19-140743 and CV-23-2170 DATE: 20241217 SUPERIOR COURT OF JUSTICE – ONTARIO

COURT FILE NO.: CV-19-140743 RE: Daria Schinas, Plaintiff AND: Wal-Mart Canada Corp./La Compagnie Wal-Mart due Canada and Bequia Properties Inc., Defendants

COURT FILE NO.: CV-23-2170 AND RE: Daria Schinas, Plaintiff AND: Yonge Bayview Holdings Inc. and Metrus Properties II Inc., Defendants

BEFORE: The Honourable Justice S.E. Fraser

COUNSEL: Michael Connolly, for the Plaintiff Elizabeth Branopolski, for the Defendant, Wal-Mart Canada Corp./La Compagnie Wal-Mart due Canada No one appearing for the Defendants, Bequia Properties Inc., Yonge Bayview Holdings Inc., and Metrus Properties II Inc. Dylan Coady, for the Proposed Defendant, Modern Cleaning Concept Inc.

HEARD: October 30, 2024 (by videoconference)

ENDORSEMENT

I. Nature of the Motion

[1] The Plaintiff brings this motion for leave to issue the Fresh as Amended Statement of Claim, which involves a consolidation of two proceedings and the addition of Modern Cleaning Concept Inc., (“Modern Cleaning”) as a Defendant to the consolidated action, and to institute a timetable.

[2] The Defendants take no position on the motion. Modern Cleaning opposes the motion.

[3] Seven years have passed since the slip and fall giving rise to this action. Modern Cleaning is a cleaning and maintenance subcontractor. It argues that the Plaintiff did not exercise reasonable diligence and that it will be prejudiced in a manner that cannot be compensated by costs.

II. Issues

[4] As the Plaintiff seeks to add a party after the expiration of a limitation period, the issue on this motion is whether the Plaintiff has provided a reasonable explanation on proper evidence as to why the claim could not have been discovered through the exercise of reasonable diligence as required and set out in Morrison v. Barzo, 2018 ONCA 979, at paras. 31-32. The parties agree that I must decide this motion using the framework set out therein.

[5] The parties also agree that Rules 5.04(2) and 26.01 of the Rules of Civil Procedure require that I examine whether the proposed Defendant will be prejudiced in a manner that cannot be compensated by costs.

III. Analysis

A. Governing Principles

[6] Rule 5.04(2) of the Rules of Civil Procedure provides that 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.

[7] Rule 26.01 of the Rules of Civil Procedure provides that on motion at any stage of an action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.

[8] Section 21 of the Limitations Act, 2002 provides that, where a limitation period in respect of a claim has expired against a person, that person shall not be added as a party to an existing proceeding.

[9] Evidence of actual prejudice must be adduced. Speculation as to fading memories is not actual prejudice but a description of presumed prejudice. See 1588444 Ontario Ltd. v. State Farm Fire and Casualty Company, 2017 ONCA 42, at paras. 28-31.

[10] Under the Morrison v. Barzo framework, the test for adding a party after the expiration of the limitation period is:

The evidentiary burden on a plaintiff seeking to add a defendant to an action after the apparent expiry of a limitation period is two-fold. First, the plaintiff must overcome the presumption in s. 5(2) that he or she knew of the matters referred to in s. 5(1)(a) on the day the act or omission on which the claim is based took place, by leading evidence as to the date the claim was actually discovered (which evidence can be tested and contradicted by the proposed defendant). The presumption is displaced by the court’s finding as to when the plaintiff subjectively knew he had a claim against the defendants: Mancinelli, at para. 18. To overcome the presumption, the plaintiff needs to prove only that the actual discovery of the claim was not on the date the events giving rise to the claim took place. It is therefore wrong to say that a plaintiff has an onus to show due diligence to rebut the presumption under s. 5(2): Fennell, at para. 26.

Second, the plaintiff must offer a “reasonable explanation on proper evidence” as to why the claim could not have been discovered through the exercise of reasonable diligence. The evidentiary threshold here is low, and the plaintiff's explanation should be given a “generous reading”, and considered in the context of the claim: Mancinelli, at paras. 20 and 24.

[11] The evidentiary threshold on this type of motion is low. The Plaintiff’s explanation should be given a generous reading and whether the Plaintiff and her counsel acted with reasonable diligences must be considered in context. See Mancinelli v. Royal Bank of Canada, 2018 ONCA 544, at para. 24.

[12] A plaintiff is also not expected to conduct a pre-discovery. See Madrid v. Ivanhoe Cambridge Inc., et al., 2010 ONSC 2235, at para. 15.

[13] In respect of amendments to pleadings, in Iroquois Falls Power Corp. v. Jacobs Canada Inc., 2009 ONCA 517, the Court of Appeal stated that the party resisting the amendment must show that that non-compensable prejudice would result from the amendment. The Court held in that case that the prejudice complained of would have existed at the issuance of the claim. Modern Cleaning relies on the Court’s decision for the fact that the death of witnesses and relevant documents being destroyed are examples of non-compensable prejudice.

B. Facts giving rise to the discovery

[14] The Plaintiff slipped and fell inside a Richmond Hill Wal-Mart on August 3, 2017.

[15] The Statement of Claim was issued on June 10, 2019 naming Wal-Mart Canada Corp./La Compagnie Wal-Mart du Canada (“Wal-Mart”) and Bequia Properties Inc. (“Bequia”) as owners and occupiers of the premises where the slip and fall took place.

[16] On July 4, 2019, Wal-Mart’s adjuster told the Plaintiff that the accident happened well inside the store and that it appeared that no other Defendants were necessary.

[17] The Plaintiff initially waived the delivery of a Statement of Defence. Preliminary negotiations did not resolve the matter. On June 28, 2022, Wal-Mart delivered its defence. It did not plead that it hired a cleaning and maintenance contractor on the date of the Accident.

[18] On November 11, 2022, the Plaintiff delivered a Request to Admit which included a request to admit that Wal-Mart had sole responsibility for maintaining the premises. Wal-Mart responded denying that it has sole responsibility but did not name Modern Cleaning.

[19] Bequia delivered its Statement of Defence on February 15, 2023 and cross-claimed against Wal-Mart.

[20] The Plaintiff made three further inquiries of Wal-Mart on March 16, April 4, and April 17, 2023 about if there was a maintenance contractor and received no response.

[21] Wal-Mart’s affidavit of documents contained no documents about maintenance contractors.

[22] The Plaintiff served a further request to admit on July 17, 2023 asking further questions about the responsibility for cleaning and maintenance and again Wal-Mart denied that it was solely responsible without providing additional information.

[23] Examinations for discovery took place on January 9 and 10, 2024. The Wal-Mart representative testified that Wal-Mart was solely responsible for cleaning and maintenance of the floors on the date of the accident.

[24] On March 6, 2024, 57 days after producing its representative at examination for discovery, Wal-Mart advised:

... although we are aware that the Wal-Mart Representative indicated that there was no one else responsible for cleaning at the time of the incident we have been advised by our client that a cleaning company was contracted for cleaning. In this regard, please find the attached contract as received from our client.

[25] On July 29, 2024, Wal-Mart advised Plaintiff’s counsel that they would assert that another entity was responsible for the maintenance of its floors.

[26] The Plaintiff notified Modern Cleaning 49 days after it learned of its involvement that it intended to add them as a Defendant.

C. Application

[27] I address the Plaintiff’s diligence first and then turn to prejudice to the proposed Defendant.

(i) Diligence

[28] On Step 1 of the Barzo analysis, the Plaintiff has demonstrated that the day on which she fell is not the day upon which she learned of Modern Cleaning. I accept that she first discovered the claim against Modern Cleaning on March 6, 2024.

[29] The Plaintiff has demonstrated on the evidence that she did not learn of Modern Cleaning’s work as a sub-contractor until Wal-Mart disclosed it.

[30] On Step 2, the Plaintiff has demonstrated they exercised reasonable diligence and did not discover the involvement of Modern Cleaning. Modern Cleaning argues that they did not exercise the necessary diligence because of the waiver of defence.

[31] The Plaintiff relied on the representation made by Wal-Mart that no other defendants were necessary and made inquiries. There was no trigger that alerted her to someone other than Wal-Mart being responsible for the maintenance of the floors.

[32] Modern Cleaning argues that the Plaintiff made no effort prior to the issuance of the claim to learn about the existence of a cleaning contractor. I reject this argument as the Plaintiff is not required to conduct a pre-discovery as the court set out in Madrid v. Ivanhoe. I also find that the Plaintiff cannot be faulted by taking the adjuster’s words “no other defendant needed to be added to the claim” as meaning there are no other defendants.

[33] Modern Cleaning also asserts that the Plaintiff’s waiver of defence is evidence that it did not act diligently. I do not agree because the Plaintiff had the advice of the adjuster that it did not appear that other defendants were necessary.

[34] The delay here is different from that in O’Sullivan v. Hamilton Health Sciences Corporation (Hamilton General Hospital Division), 2011 ONCA 507, where the plaintiff had an unexplained delay in moving to amend after the discovery of the correct corporate name.

[35] The Plaintiff has met the two-part test under Morrison v. Barzo.

(ii) Prejudice to Modern Cleaning

[36] Modern Cleaning argues that it has been prejudiced by the Plaintiff’s delay. It was served with the Notice of Motion on May 7, 2024. It terminated its franchise with the franchisee responsible for the premises in August, 2021. Wal-Mart failed to bring a third-party claim as against it.

[37] Modern Cleaning argues that Wal-Mart will be rewarded for its significant delay in disclosing Modern Cleaning’s involvement.

[38] Modern Cleaning can identify the franchisee and has some documents relating to the operation of the store in question at the time in question but not all the documents that one would expect. The former franchisee initially responded to inquiries before he stopped responding.

[39] In support of its claim of prejudice, Modern Cleaning has tendered the affidavit of Liam Walmsley, a lawyer which is informed in part by Mr. Coady, the lawyer on the motion which is not an acceptable practice. See Premanathan v. Kandasamy, 2021 ONSC 3207, at para. 27.

[40] Some parts of the affidavit are not objectionable. However, in my view, the evidence does not establish that the state of Modern Cleaning’s records is a result of the delay.

[41] This is a unique case. In my view, Modern Cleaning will not suffer non-compensable prejudice. Should this action proceed to trial, this decision does not prevent Modern Cleaning from arguing that how the delay by Wal-Mart and the Plaintiff impacted its ability to defend the action.

IV. Conclusion

[42] The motion is granted. Order to go in accordance with paragraphs 1 to 6 of the draft order filed in the Plaintiff’s motion record.

[43] With respect to paragraph 7, I urge the parties to resolve costs.

[44] If the parties cannot agree, I will receive written submissions first from the Plaintiff by December 23, 2024, followed by responding submissions by January 12, 2025. Costs submissions shall be no more than two double-spaced pages in length, exclusive of any costs outline or offers to settle. All costs submissions shall be filed with the Court through the JSO portal, followed by a copy delivered by email to my Judicial Assistant, Robyn Pope at: Robyn.Pope@ontario.ca.

[45] If no costs submissions are received within 28 days from the date of release of this Endorsement, the issue of costs will be deemed to have been settled between the parties.

[46] One final note, the parties on this motion did not hyperlink their materials. I allowed the motion to proceed because of the delay already occasioned in this matter and that the matter had already been adjourned once. However, non-compliance with the Consolidated Civil Practice Direction and Central East Notice to the Profession can result in the matter not being heard.

Justice S.E. Fraser Date: December 17, 2024