



COURT OF APPEAL FOR ONTARIO

CITATION: Davies v. Davies Smith Developments Partnership,
    2018 ONCA 550

DATE: 20180615

DOCKET: C64009

Strathy C.J.O., Feldman and Brown JJ.A.

BETWEEN

Walter Davies
and
CityGate (WD) Management Corp.

Plaintiffs
(Appellants/Respondents in Cross-Appeal)

and

Davies Smith Developments
    Partnership
Nelson Reis and PM Construct Inc.

Defendant
(Respondent/Appellant in Cross-Appeal)

John E.F. Gibson and Paul Bates, for the appellants

Evan L. Tingley, for the respondent

Heard: June 11, 2018

On appeal from the judgment of Justice Peter J. Cavanagh of
    the Superior Court of Justice, dated June 19, 2017, with reasons reported at
    2017 ONSC 3796.

REASONS FOR DECISION

[1]

The appellant Walter Davies retired from a partnership that carried on a
    construction business. The partners signed an agreement in June 2005, which
    called for his equity and his share in the profits of various projects to be
    paid to him between June 2005 and June 2008. The agreement included a schedule
    of payments to be made and the dates on which they were to be made.

[2]

The payments were not made at the times set out in the schedule, because
    the respondent did not have sufficient funds to make them.

[3]

There were disagreements over the quantification of the appellants
    share of the profits. He commenced litigation in September 2012, some four
    years after the date the payments were to have been made.

[4]

The trial judge found that the appellants action was time-barred. His
    equity and share of the profits were due to him by June 2008. His claim was
    discovered, within the meaning of s. 5 of the
Limitations Act, 2002
,
    S.O. 2002, c. 24, Sched. B, when he did not receive the payments. This was more
    than four years before the action was commenced.

[5]

The judge noted that the appellants claim was based entirely on the
    respondents breach of the June 2005 agreement. The statement of claim and the
    appellants evidence were consistent in asserting that the monies owing to him
    were to be paid by June 2008.

[6]

With knowledge that he had a cause of action against the respondent for
    breach of the agreement, instead of taking action to enforce payment, the
    appellant was content to receive draws against his share of the profits and to
    earn interest on the indebtedness.

[7]

The trial judge found as a fact that the appellant knew by July 2008
    that he had suffered injury, loss or damage; that the damage was caused by the
    failure of the respondent to make the payments set out in the agreement; and
    that it was legally appropriate for an action to be commenced. For his own
    reasons, he did not do so.

[8]

Accordingly, the trial judge dismissed the appellants action.

[9]

We dismiss the appeal, substantially for the thorough and compelling
    reasons of the trial judge. His interpretation of the agreement  finding that
    it called for payment by the end of June 2008  was based on the language of
    the agreement, interpreted in light of the factual matrix, and is entitled to
    deference. While it was agreed that the amounts set out in the agreement were
    estimates, the evidence does not support the appellants submission that the
    payment dates set out in the schedule to the agreement were simply estimated
    dates. The appellants own evidence is inconsistent with this assertion.

[10]

Nor
    has the appellant demonstrated a palpable and overriding error in the trial
    judges conclusion that the claim was discovered in July 2008.

[11]

In
    asserting that the limitation period had not expired, the appellant submits
    that: (a) the amount owing to the appellant was in dispute; (b) the profits
    could not be ascertained until the partnerships projects had been completed;
    (c) an action was not an appropriate means to remedy the appellants loss
    because he knew the partnership did not have funds; and (d) there had been
    forbearance or novation, making it inappropriate to commence an action. The
    appellant submits that the claim was not discovered until 2011, when he
    realized that the respondent had made improper charges to his capital account.

[12]

We
    agree with the respondent that the first two submissions confuse damage with
    damages. The appellant knew by the end of June 2008 that he had suffered
damage
, even though the amount of his
damages
was a matter of dispute and had not been
    quantified: see
Hamilton (City) v. Metcalfe & Mansfield Capital
    Corporation
, 2012 ONCA 156, 347 D.L.R. (4th) 657, at paras. 54 and 58.

[13]

The
    third submission that the respondent did not have the funds to pay, while
    perhaps explaining the appellants conduct, did not stop the limitation period
    from running. The appellants claim was fully ripened by July 2008. The word appropriate,
    as it appears in s. 5 of the
Limitations Act
, means legally
    appropriate. The appellant cannot rely on his own tactical reasons for
    delaying the commencement of legal proceedings: see
Markel Insurance
    Company of Canada v. ING Insurance Company of Canada
, 2012 ONCA 218, 348
    D.L.R. (4th) 744, at para. 34.

[14]

As
    to the fourth submission, the appellant claims there was a novation of the
    agreement, whereby he agreed to postpone his claim in exchange for receipt of
    draws and accrual of interest. In effect, the appellant argues that the
    agreement was amended. The answer to this submission is: (a) it was not
    pleaded; (b) because it was not pleaded, no evidence was adduced with respect
    to it; and (c) the issue was not argued in the court below. In any event, there
    is no evidence that the parties agreed to amend the agreement or to replace it with
    a new agreement. Nor is there any evidence to support the argument that the
    appellant agreed to forbear from commencing an action in a way that would have
    suspended the operation of the limitation period: see
Hamilton (City) v.
    Metcalfe & Mansfield
, at paras. 74 and 75.

[15]

For
    these reasons, the appeal is dismissed, with costs of $20,000, inclusive of
    disbursements and all applicable taxes. The cross-appeal is dismissed as moot.
    That said, it is our view that the cross-appeal had no merit, inasmuch as it
    challenged the trial judges factual findings without demonstrating palpable
    and overriding error in the assessment of the evidence. We therefore award
    costs of the cross-appeal to the appellants (respondents on the cross-appeal),
    in the amount of $10,000, all-inclusive. That amount may be set off against the
    costs awarded on the appeal.

G.R. Strathy C.J.O.

K. Feldman J.A.

David Brown J.A.


