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January 25, 2012

Advancing a claim for Contribution and Indemnity as Equitable Set-off

Goma v. Raghunanan [2011] O.J. No. 4916

Motion to amend Statement of Defence

This was a very clever motion by defendant’s counsel to add a claim for contribution and indemnity where the limitation period to start a counterclaim had passed.

This case involves a motor vehicle accident where there were two injured plaintiffs, the driver and a passenger. The defendants pleaded contributory negligence against the driver but neglected to counterclaim for contribution and indemnity against the passenger for her injuries.

When they realized the oversight, the plaintiff’s refused to consent to adding a counterclaim; the limitation period to counterclaim had passed.

The defendants decided to bring a motion to amend the statement of defence to add a claim for equitable set-off against the plaintiff. They assert that the s.18(1) Limitations Act limitation period does not apply.

Master Dash was bound by the decisive statements of a superior court, which held that claims for equitable set-off are not subject to limitation periods. See Canada Trustco Mortgage Co. v. Pierce Estate, [2005] O.J. No. 1886, 197 O.A.C. (C.A.) and Spiral Aviation Training Co. v. Attorney General of Canada, 2010 ONSC 2581.

However, after examining the test for equitable set-off and the case law presented by counsel, Master Dash held that the defendant’s could not meet the test. Specifically, the claim for contribution does not go to the root of the plaintiff’s claim for damages.

He concluded that a defendant cannot claim contribution and indemnity against one plaintiff for damages awarded to another plaintiff by pleading equitable set-off in the statement of defence; this must be done by counterclaim, and the defendants were out of time to advance a counterclaim.

Rule 26.01 allows for amendments that are “legally tenable”. Amendments must be granted “unless the claim is clearly impossible of success”. Master Dash determined that because the claim for equitable set-off cannot succeed, the motion must be denied.

- Alison McBurney

January 18, 2012

Limitation Period Expired – Discoverability Principle Not Applicable

In Muirhead v. Coulas [2011] OJ No. 4908 (S.C.J.), the defendants moved for summary judgment dismissing the action as statute barred. The action arose from a slip and fall in July 2005 and a claim was not commenced until July 2010.

The plaintiffs took the position that the limitation period did not begin to run until June or November 2009 when two medical opinions were received following another slip and fall in February 2006 when the plaintiff injured her same knee. They claimed that it was not until they received these reports that they discovered the 2005 injuries were ongoing and permanent.

The defendants took the position that there was no issue with respect to discoverability as the plaintiff knew she hurt her knee and she underwent surgery on her knee three days later and was unable to work for several months following.

Justice Mackinnon held that the defendants met their initial burden as they had led evidence that the plaintiff knew of her injury, it was serious enough to require surgery, she could not walk for two months after, she still had pain and restriction in movement six months later and had not been able to return to work by then. Justice Mackinnon also relied on section 5(2) of the Limitations Act , 2002 which sets out a presumption that a plaintiff has the requisite knowledge as of the day the act took place, “unless the contrary is proved”.

Addressing the plaintiffs’ submission that a proceeding would not have been an appropriate means to remedy the injury sustained as the plaintiff believed her injuries were resolving and would not be permanent, Justice Mackinnon stated that section 5(1)(a)(iv) “does not amount to a bar to an action for recovery in tort” and held that the cause of action was complete, even if the complete extent of damages was not fully known.

Justice Mackinnon agreed with the plaintiffs’ submission that an individual should not be required to commence an action where there is no reasonable prospect of recovery, but found there to be no such facts in the case at hand.
In response to the plaintiffs’ submission that the true nature of the loss from the 2005 slip and fall was not knowable until after the second incident, Justice Mackinnon held that the plaintiff clearly had a claim arising from the first incident and “the facts learned subsequently that the injury was permanent and contributed to her current severe condition may have been a basis to increase the quantum of damages sought but is not a new or different claim”.

Lastly, the plaintiffs attempted to rely on cases that extended the running of the limitation period because a medical opinion was required in order to know whether a cause of action existed. Justice Mackinnon pointed out that in all of these cases, the court had referred to the requirement that the plaintiff acted with due diligence in acquiring facts in order to be fully apprised of all material facts upon which a negligence claim can be based, including being diligent in requesting and receiving a medical opinion, if required. The plaintiffs in this case did not provide evidence as to why they did not seek out the medical reports sooner that were ultimately obtained in 2009. Also, there was evidence to suggest that there was an operative report available in March of 2007 that the plaintiffs did not request until later.

It was held that there was no genuine issue requiring a trial.

- Kristen Dearlove, Student-at-Law

January 11, 2012

Summary Judgment - Costs

We continue our discussion of the Court of Appeal's decision in Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764.

The former r. 20 provided that a party that was unsuccessful on a summary judgment motion was liable to pay substantial indemnity costs. The 2010 amendments eliminated the presumption of substantial indemnity costs.

The Court of Appeal commented on the costs rule as follows:

[67] As a result of the amendments to rule 20.06, the onus is now on the party seeking substantial indemnity costs to convince the court that the other side acted unreasonably or in bad faith for the purpose of delay in bringing or responding to a motion for summary judgment. This amendment removes a disincentive to litigants from using Rule 20 by eliminating the presumption that they will face substantial indemnity costs for bringing an unsuccessful motion for summary judgment. However, as the jurisprudence becomes more settled on when it is appropriate to move for summary judgment, the reasonableness of the decision to move for summary judgment or to resist such a motion will be more closely scrutinized by the court in imposing cost orders under rule 20.06.

It seems that this paragraph suggests that courts will revert back to substantial indemnity costs as a body of case law develops. This will be an important consideration when deciding whether to bring a summary judgment motion or not.

- Tara Pollitt

January 4, 2012

Summary Judgment - Simplified Rules

This is our third post on the Court of Appeal's decision in Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764.

The Court seems to suggest that summary judgment may not be appropriate generally in Simplified Rules actions. The Court stated that although in appropriate cases, a motion for summary judgment in a r. 76 action may be a useful tool to promote the efficient disposition of cases, "it will often be the case that bringing a motion for summary judgment will conflict with the efficiency that can be achieved by simply following the abridged procedures in Rule 76." The Court held that summary judgment in r. 76 cases should be discouraged where there is competing evidence from multiple witnesses, the evaluation of which would benefit from cross-examination, or where oral evidence is clearly needed to decide certain issues. In many cases, the better course is to proceed to a speedy trial.

The Court did qualify its comments by indicating that it was not stating that summary judgment could never be used in Simplified Rules actions; in a document driven case, or in a case where there is limited contested evidence, both the full appreciation test and the efficiency rationale may be served by granting summary judgment in a simplified procedure action.

Given the Court's comments, it would seem that few summary judgment motions will be brought in Simplified Procedure actions.

- Tara Pollitt