Slovenians may discover claims against each other more slowly than claims against people of other nationalities. In Miletic v. Jaksic, Justice Price inferred from the “power-distance index” that the Slovenian national culture created a relationship of dependency between two Slovenians , and that this dependency had an impact on when one discovered his claim against the other.
Justice Price’s decision summarises the general facts nicely:
[1] Bozidar Miletic emigrated from Slovenia to Canada in 1996. In 2002, he began working as a machinist for George and Nada Jaksic, also natives of Slovenia, at a machine shop that the Jaksics had owned and operated since 1984.
[2] On September 21, 2006, Mr. Miletic entered into an agreement with the Jaksics whereby he believed the machine shop business, Micro Precision Machining Limited, was sold to him. In fact, the shares of the business were never transferred to him, and the Jaksics continued to manage it.
[3] Mr. Miletic, believing that he now owned the machine shop business, and that the Jaksics worked for him, made payments to them as salary and/or installment payments of the purchase price for his shares. It wasn’t until Nada Jaksic died in February 2010 that Mr. Miletic first gained access to the business’ financial records, and learned that it had owed substantial tax arrears, even when he had entered into his agreement to buy it, and was in dire financial difficulty.
[4] When Mr. Miletic consulted James Wheeler, the lawyer he thought had acted for both him and the Jaksics in the sale of the business to him, he discovered that Mr. Wheeler had represented only the Jaksics, and was now not prepared to assist him. He therefore retained another lawyer, who began the present action on his behalf, to recover the funds he had paid to the Jaksics.
[5] Mr. Jaksic and his wife’s estate counterclaimed for the unpaid balance of the purchase price for the business. They now bring the present motion, pursuant to Rule 20.04 of the Rules of Civil Procedure, for summary judgment dismissing Mr. Miletic’s action against them on the ground that it is statute barred and discloses no cause of action. They also move for summary judgment against Mr. Miletic on their counterclaim
The Jaksics argued that the limitation period commenced in 2006 when Mr. Miletic purchased Micro Precision and ought to have discovered his claim. Justice Price rejected this argument and found that the claim was not discoverable until June 2010:
[93] Mr. Miletic’s relationship with the Jaksics did not break down until June 2010. In so far as his ownership of Micro Precision was concerned, Mr. Miletic had no reason to suspect foul play until after Ms. Jaksic died and he discovered that:
(1) Mr. Wheeler had not, in fact, been his lawyer;
(2) The shares were not transferred to him in 2006;
(3) The Jaksics had not resigned as directors at that time;
(4) The company had owed a substantial tax liability throughout the period from when the Agreement was signed until 2010.
[94] While Mr. Miletic would have liked to see the Jaksics leave the company, he did not consider it proper to force them out. He continued to pay Mr. Jaksic a salary until May 2010. Had he known that he had a claim against the Jaksics, he would have stopped paying their salaries. I find that that it was not until June 2010, when he retained Mr. Garvey, that Mr. Miletic knew that he had a cause of action against the Jaksics or Mr. Wheeler.
[95] Mr. Miletic’s relationships with Mr. Wheeler and the Jaksics were ones of dependence. The Jaksics were older than Mr. Miletic, they had been his employers, and had been officers and directors of Micro Precision, with intimate knowledge of its business, since 1984. Both Mr. Miletic and the Jaksics were Slovenian, and the evidence supports an inference that the Slovenian culture which they shared is high in the power-distance index [citation to http://geert-hofstede.com/slovenia.html].
[96] I find that, at the very least, Mr. Miletic relied heavily on the Jaksics to handle the financial affairs of the business, and that he relied on both them and Mr. Wheeler in concluding that he had become the owner of Micro Precision in 2006. This Court, in Sheeraz et al. v Kayani et al., found that s. 5 of the Limitations Act must be interpreted in a way that takes account of a relationship of dependence [quotation ommitted]
[97] I find, in all the circumstances, including Mr. Miletic’s dependence on the defendants, that his claim was not discoverable until June 2010.
What distinguishes this decision is Justice Price’s recognition of the power-distance index (curiously, apparently without the benefit of any expert evidence). A CanLII search suggests that this is a first in Canadian jurisprudence. Mr. Miletic’s counsel Anser Farooq deserves credit for a novel argument.
The index is a component of the cultural dimension theory developed by the Dutch social psychologist Geert Hofstede. This theory analyses systematic differences in national cultures on four primary dimensions: power distance (PDI), individualism (IDV), uncertainty avoidance (UAI) and masculinity (MAS).
The Hofstede Centre, which hosts the website cited by Justice Price, defines power distance:
Power distance deals with the fact that all individuals in societies are not equal – it expresses the attitude of the culture towards these inequalities amongst us. Power distance is defined as the extent to which the less powerful members of institutions and organisations within a country expect and accept that power is distributed unequally.
This is the Hofstede Centre’s power distance ranking for Slovenia:
Slovenia scores high on this dimension (score of 71) which means that people accept a hierarchical order in which everybody has a place and which needs no further justification. Hierarchy in an organization is seen as reflecting inherent inequalities, centralization is popular, subordinates expect to be told what to do and the ideal boss is a benevolent autocrat.
Should you be curious, Canada has a score of 39. Here, we are told, hierarchy exists for convenience.
It remains to be seen whether the cultural dimension theory gains traction as a factor in the discovery analysis. On its face, the theory is compelling. Any plaintiff would be pleased to envoke a high power-distance index to defeat a limitation defence (Malaysians take note: your national culture has the highest index at 104). Nevertheless, this case can only go so far as a precedent; it’s evident that the power index theory wasn’t determinative in the analysis. The facts were such that had the parties been native Canadians (or Austrians, with an index of 10) rather than Slovenians, Mr. Miletic would still have commenced the action in time.