



COURT OF APPEAL FOR ONTARIO

CITATION: Collins Barrow Toronto LLP v.
    Augusta Industries Inc., 2017 ONCA 883

DATE: 201711
20

DOCKET: C63720

Cronk, Huscroft and Nordheimer
    JJ.A.

BETWEEN

Collins Barrow Toronto LLP

Applicant (Respondent)

and

Augusta Industries Inc.

Respondent (Appellant)

Leo Klug, for the appellant

Elliot S. Birnboim and Bettina Xue
    Griffin, for the respondent

Heard and released orally: November
    17, 2017

On appeal from the judgment of Justice
    Jasmine Akbarali of the Superior Court of Justice, dated March 30, 2017.

REASONS FOR DECISION


[1]



[1]

Augusta Industries Inc. appeals from the
    judgment awarded in favour of Collins Barrow Toronto LLP on invoices delivered
    for services rendered as the auditors for Augusta Industries Inc.  The
    appellant submits that the application judge ought to have converted the
    application into an action because the appellant alleged that the respondent
    had been negligent in the provision of its services.  There is also a secondary
    argument that certain of the outstanding invoices are barred through expiration
    of the applicable two-year limitation period:
Limitations Act, 2002
, S.O. 2002, c. 24,
    Sched. B.

[2]

The application judge concluded that it was open
    to her to determine the respondents claim under r. 14.05(3)(d) of the
Rules of Civil Procedure
,
    R.R.O. 1990, Reg. 194 on the basis that the claim arose from the determination
    of rights that depend on the interpretation of a contract.  While we note that
    the formal Notice of Application refers to r. 14.05(3)(h), that did not
    preclude the application judge from relying on the sub-rule that she did to
    determine the matter.  In both subject years, the respondent had been engaged
    by the appellant pursuant to terms of written engagement letters.  We see no
    error in the application judges conclusion in that regard.

[3]

The application judge also concluded that the
    reasons advanced by the appellant to convert the application into an action
    were insufficient.  In particular, she noted that the appellant had not adduced
    any expert evidence supporting its allegation of negligence; much of the
    appellants evidence was hearsay (or double hearsay); and that there was no
    reliable evidence that the appellant had suffered any damages.  In light of
    these deficiencies, the application judge concluded that there was no reason to
    postpone the determination whether the appellant was liable to the respondent
    on the unpaid invoices.  Again, we see no error in the application judges
    ruling on this issue.

[4]

Finally, in terms of the limitation period, the
    application was launched on April 14, 2016.  The application judge concluded
    that the first two invoices in dispute were the subject of an express agreement
    in the January 2014 engagement letter that they would be settled by April 15,
    2014.  As a consequence, claims on those two invoices were not barred by the
    two-year limitation period.  This interpretation was both available and
    reasonable on the language of the engagement letter.  The application judges
    interpretation of the engagement letter is owed deference by this court.

[5]

The other two invoices in dispute are dated
    April 9, 2014 and April 11, 2014.  The application judge pointed out that the
    engagement letters expressly provided that invoices only became delinquent once
    45 days had expired from their delivery.  The application judge concluded that
    the limitation period for these two invoices did not commence until 45 days
    after they were delivered.  We agree with her conclusion in that regard.  It is
    consistent with the express wording of the engagement letters and also with
    existing case law that provides that the limitation period on an invoice does
    not begin to run until a reasonable period of time has expired for payment of
    the invoice:  see, for example,
G.J.
    White Construction Ltd. v. Palermo
, [1999] O.J. No. 5563 (S.C.J.).

[6]

In our view, this conclusion is not inconsistent
    with the recent decision in
Pellerin
    Savitz LLP v. Serge Guindon
, 2017 SCC 29, in which Gascon J. makes
    it very clear that the conclusion on the commencement of a limitations period
    is highly fact-specific and that a judges conclusion in that regard is
    entitled to great deference (para. 11).  In addition, we note that
Pellerin
was concerned
    with the interpretation of the
Civil
    Code of Quebec
.

[7]

We also agree with the application judge that
    determining the issue of the appellants liability for the unpaid invoices did
    not prevent the appellant from commencing a claim in negligence.  Indeed, the
    appellant advises that it has now done precisely that.  In the interests of
    expediency, there was no reason to delay the determination of liability on the
    unpaid invoices pending any determination of the negligence claim.

[8]

Accordingly, the appeal is dismissed.  The
    respondent is entitled to its costs of the appeal fixed in the amount of $   5,000,
    inclusive of disbursements and HST.

E.A. Cronk J.A.

Grant Huscroft J.A.

I.V.B. Nordheimer J.A.


