March 2018 – Page 3 – Under the Limit

Ontario: the principles of misnomer

Master Muir’s decision in Martin v. Doe is worth reviewing for its summary of the principles of misnomer:

[26]      The plaintiff also relies on the doctrine of misnomer in support of the relief she is seeking on this motion.

[27]      The law relating to misnomer has been carefully considered in recent years by the Court of Appeal. See Ormerod (Litigation guardian of) v. Strathroy Middlesex General Hospital, 2009 ONCA 697 (CanLII) and Spirito v. Trillium Health Centre, 2008 ONCA 762 (CanLII). Misnomer requires a finding that the litigation finger be clearly pointed at the intended defendant. Would a reasonable person receiving and reviewing the statement of claim, in all the circumstances of the case, and looking at it as a whole, say to himself or herself “of course it must mean me, but they have got my name wrong”? The Court of Appeal adopts this test at paragraph 12 of Spirito, where the court states as follows:

12    In Dukoff et al. v. Toronto General Hospital et al. (1986), 1986 CanLII 2648 (ON SC), 54 OR (2d) 58 (HCJ), Saunders J. noted the practice, adopted in this case, of using fictitious names where the identity of the parties are unknown. If it was a case of misnomer, the statement of claim could be corrected by replacing the fictitious name (John Doe in that case) for the correct name, even though the correction was sought after expiry of the limitation period. He adopted the following test from Davies v. Elsby Brothers, Ltd., [1960] 3 All ER 672 (CA), at p. 676:

The test must be: How would a reasonable person receiving the document take it? If, in all the circumstances of the case and looking at the document as a whole, he would say to himself: “Of course it must mean me, but they have got my name wrong”. Then there is a case of mere misnomer. If, on the other hand, he would say: “I cannot tell from the document itself whether they mean me or not and I shall have to make inquiries”, then it seems to me that one is getting beyond the realm of misnomer.

[28]      It must also be noted that even if a plaintiff is successful in establishing misnomer, the court retains a residual discretion under Rule 5.04(2) to refuse the proposed substitutions. This part of court’s analysis on a motion like this one is described by the Court of Appeal in Ormerod at paragraphs 28 to 32 as follows:

28    The framework put forward by the appellants is correct. After finding there was a misnomer the motion judge had the discretion to refuse to permit its correction. The Rules make this apparent. Cronk J.A. in Mazzuca v. Silvercreek Pharmacy Ltd., 2001 CanLII 8620 (ON CA), 207 DLR (4th) 492, analyzed the wording of the two rules that deal with the court’s authority to permit amendment in detail — rules 5.04 and 26.01. She contrasted their wording to note that rule 5.04(2) uses the discretionary “may” unlike rule 26.01, which uses “shall”; she also considered the history and development of these two provisions. She said at para. 25:

Under both rules, a pleadings amendment is not to be made if non-compensable prejudice would result. In contrast to rule 26.01, however, the language of subrule 5.04(2) imports a discretionary power rather than a mandatory direction.

29    At para. 42 she added that “proof of the absence of prejudice will not guarantee an amendment”. She also cited the discussion of the inter-relationship of the two rules in Holmested and Watson, Ontario Civil Procedure, Vol. 2 (Toronto: Carswell, 1993). The current edition states at p. 5-34:

     the same threshold test applies to a motion to amend under either rule 26.01 or rule 5.04(2) and the moving party must demonstrate that no prejudice would result from the amendment that could not be compensated for by costs or an adjournment; once this threshold test is met, under rule 26.01 the granting of leave is mandatory; however, where it is sought to add parties under rule 5.04(2) the court has to discretion whether to allow the amendment, notwithstanding that the threshold test is satisfied.

30    While the authors refer only to “adding” parties, the permissive “may” in rule 5.04(2) grammatically applies to the correction of the name of a party incorrectly named in exactly the same way as it does to the addition, deletion, or substitution of a party.

31    As I see it, as the scope of what the courts treat as a misnomer broadens, it is appropriate to take a wider view of the court’s discretion to refuse the correction of a misnomer. A “classic” misnomer, one in which the claim contains a minor spelling error of the defendant’s name and is personally served upon the intended but misnamed defendant, prompts the application of a standard historically developed to remedy mere irregularities. Now 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.

32    The factors the motion judge applied in this case, whether the defendant was misled or was unduly prejudiced, are undoubtedly deserving of the greatest weight. As a general principle, these factors should be determinative. A general principle, however, is not an inflexible rule. Where the mistake in naming the defendant involves more than a mere irregularity or in any particular case with exceptional circumstances, the court may exercise its residual discretion under the rule to refuse to permit its correction. It may well be that the motion judge took a narrow view of his residual discretion to refuse to permit the correction of the misnomer. However, I am satisfied he realized he had a residual discretion since the factors he applied are broader than the rule’s threshold of prejudice that cannot be compensated by costs or an adjournment. While the motion judge in this case might have inferred that the plaintiffs, after learning Dr. Graham’s identity, did not resolve to proceed against her until July 2008, he did not make that inference.

[29]      Paragraph 32 of Ormerod makes it clear that prejudice to the proposed substituted defendants is the most important factor on this part of the analysis. Prejudice is also an important consideration based on the clear language of Rule 5.04(2).

Ontario: Representation orders and misnomer

In Lawrence v. International Brotherhood of Electrical Workers (IBEW) Local 773, the Court of Appeal states that a request for a representation order to sue a trade union under r. 12.08 can be a request to correct a misnomer. There was a dissent from Justice Hourigan:

[51] Worse, the method chosen to achieve that result is ill-suited for its purpose. The motion judge found that the order the respondent sought was properly characterized as a motion to correct an error in the title of proceedings under r. 5.04(2). In my view, she erred in so finding. This is not a misnomer case, as there is no question that Local 773 was correctly named. This is a case where there has been non-compliance with a statutory requirement and a new party has been added. One need only look to the form of the order granted by the motion judge. She did not make an order under r. 5.04(2); rather she made a representation order.

Ontario: the Court of Appeal on the evidence required for discovery

It sometimes happens that I miss notable decisions. And so, better late than never, I draw Crombie Property Holdings Limited v. McColl-Frontenac Inc. to your attention.

These are the noteworthy aspects of the Court of Appeal decision:

1. It recaps the standard of review for limitations analyses:

[31] The Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7 (CanLII), [2014] 1. S.C.R. 87, at para. 81, established the standard of review on appeal of a summary judgment. The court stated that, “[w]hen the motion judge exercises her new fact-finding powers under Rule 20.04(2.1) and determines whether there is a genuine issue requiring a trial, this is a question of mixed fact and law”, reviewable only for a “palpable and overriding error”, unless there is an “extricable error in principle”. Further, the question whether a limitation period expired prior to the commencement of an action is typically a question of mixed fact and law and therefore subject to review on a “palpable and overriding error” standard: Longo v. MacLaren Art Centre Inc., 2014 ONCA 526(CanLII), 323 O.A.C. 246, at para. 38. A “palpable and overriding error” is “an obvious error that is sufficiently significant to vitiate the challenged finding of fact”: Longo, at para. 39.

2. It succinctly summarises the evidentiary burden on a summary judgment motion to dismiss on the basis of an expired limitation period:

[33] In order to obtain a summary dismissal of the action, the moving parties were required to establish that there was no issue requiring a trial about their limitation defence. The specific issue was whether Crombie’s claim in respect of the environmental contamination of its property was “discovered” within the meaning of s. 5 of the Limitations Act, 2002 before April 28, 2012.

3. It cites Van Allen for the principle that it is reasonable discovery and not the mere possibility of discovery the causes the limitation period to commence: see para. 35
It inaccurately describes the knowledge necessary to cause discovery of a claim:

[35] The limitation period runs from when the plaintiff is actually aware of the matters referred to in s. 5(1)(a)(i) to (iv) or when a reasonable person with the abilities and in the circumstances of the plaintiff first ought to have known of all of those matters: Longo, at para. 41. The knowledge sufficient to commence the limitations clock has been described as “subjective” knowledge or “objective” knowledge.

This paragraph appears to conflate the amount of knowledge required by s. 5 with the subjectivity of the knowledge. A claimant requires prima facie knowledge. This is knowledge that is greater than suspicion but less than certainty. See for example Brown v. Wahl at 15. Then there is question of whether the plaintiff subjectively or subjectively-objectively had this knowledge (not purely objectively, as the Court suggests in this decision, because the question asked in s. 5(1)(b) is a “modified objective” test as it doesn’t ask about the knowledge of a reasonable person, but a reasonable person with the abilities and in the circumstances of the claimant.

Knowledge of a possible wrong (a mere suspicion) is insufficient for discovery of a claim; prima facie knowledge of an actual wrong is necessary:

[42] That the motion judge equated Crombie’s knowledge of possible contamination with knowledge of actual contamination is apparent from her statement that “[a]ll the testing that followed simply confirmed [Crombie’s] suspicions about what had already been reported on” (at para. 31). It was not sufficient that Crombie had suspicions or that there was possible contamination. The issue under s. 5(1)(a) of the Limitations Act, 2002 for when a claim is discovered, is the plaintiff’s “actual” knowledge. The suspicion of certain facts or knowledge of a potential claim may be enough to put a plaintiff on inquiry and trigger a due diligence obligation, in which case the issue is whether a reasonable person with the abilities and in the circumstances of the plaintiff ought reasonably to have discovered the claim, under s. 5(1)(b). Here, while the suspicion of contamination was sufficient to give rise to a duty of inquiry, it was not sufficient to meet the requirement for actual knowledge. The subsurface testing, while confirmatory of the appellant’s suspicions, was the mechanism by which the appellant acquired actual knowledge of the contamination.

Ontario: More on adding defendants (and some pedantry)

Bhatt v. Doe has a good analysis of adding a defendant to proceeding after the presumptive expiry of the limitation period. If you want to cite a recent decision, this is a good option.

In the spirit of pedantry I have two quibbles. First, this:

[11] The passing of a limitation period is fatal to a motion to add a party (Limitations Act, 2002, s. 21(1)). The doctrine of special circumstances is no longer applicable (Joseph v. Paramount Canada’s Wonderland, (2008), 2008 ONCA 469 (CanLII), 90 O.R. (3d) 401 at paras. 27 and 28 as cited in Parent v. Janandee Management Inc., [2009] O.J. No. 3763 (Master) at para. 29).

It’s now ten years since the Court of Appeal held that the special circumstances doctrine is no longer generally available. Why do bar and bench feel compelled to make this point? Who still argues special circumstances?

Second, this:

[12] With respect to claims pursuant to the provisions of unidentified automobile coverage, discoverability is triggered when the insured knew or ought to have known about the material facts on which the claim is based. As stated by Justice Mackinnon in July v. Neal, 1986 CanLII 149 (ON CA), [1986] O.J. No. 1101 (C.A.) at para. 16:

…I have concluded that the time begins to run under such circumstances as the instant case, when the material facts on which the claim is based have been discovered or ought to have been discovered by the plaintiff by the exercise of reasonable diligence: Central Trust Co. v. Rafuse et al. [reported 1986 CanLII 29 (SCC), 31 D.L.R. (4th) 481], Supreme Court of Canada, released October 9 1986 – Le Dain J. (for the court) at p. 99 [p.535 D.L.R.].

See also July at para. 32, Hier v. Allstate Insurance Co. of Canada, 1988 CanLII 4741 (ON CA), [1988] O.J. No. 657 (C.A.) at para 35, Galego v. State Farm Mutual Automobile Insurance Co., 2005 CanLII 32932 (ON SCDC), [2005] O.J. No. 3866 (Div.Ct.) at paras. 8 and 9, Wilkinson v. Braithwaite, [2011] O.J. No. 1714 (S.C.J.) at paras. 31-35.

With respect to any claim, s. 5 of the Limitations Act determines discovery. There is no “trigger” beyond knowledge of the discovery matters. Cases decided under the former limitations scheme, and applying the common law discovery rule, are not helpful because, as here, they cause the court to frame the issue incorrectly.

Ontario: When a limitation period expires on a Sunday

What happens if the limitation period expires on a Sunday? The decision in Golberg v. North East Community Care Access Centre reminds us that it’s extended until Monday:

[12] Bayshore first argues that the Plaintiff’s claims fall outside the two year limitations period prescribed by the Limitations Act, 2002. In particular, it points out that Mr. Golberg admits to having been dismissed from his employment on March 20, 2014, but that his action was started on March 21, 2016.

[13] What Bayshore has failed to realize is that March 20, 2016 was a Sunday. Under the Legislation Act, 2006, section 89(1) provides that a limitation that expires on a holiday is extended to the following day. Accordingly, Mr. Golberg started this action within the appropriate time.

Nice try, defendants.