



COURT OF APPEAL FOR ONTARIO

CITATION: Dass v. Kay, 2021 ONCA 565

DATE: 20210811

DOCKET: C68041

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

BETWEEN

Paul Dass, 1218934 Ontario
    Limited and 2169460 Ontario Limited

Plaintiffs (Appellants)

and

Mark Kay & CFO Capital

Defendants (Respondents)

Osborne G. Barnwell, for the appellants

Kim T. Duong, for the respondents

Heard: February 10, 2021 by video conference

On appeal from the judgment of Justice Judy
    A. Fowler Byrne of the Superior Court of Justice, dated January 17, 2020.

B.W. Miller J.A.:

A.

Overview

[1]

The appellants appeal from the motion judges dismissal
    of their action on a motion for summary judgment. The motion judge concluded
    that the appellants claims were statute-barred under the
Limitations Act,
    2002
, S.O. 2002, c. 24, Sched. B. The appellants argue that in reaching
    that conclusion, the motion judge committed multiple errors of law and palpable
    and overriding errors of fact.

[2]

For the reasons that follow, I conclude that the
    motion judge did not err and that the appeal should be dismissed.

B.

Background

[3]

The appellant Paul Dass is the principal of the
    two corporate appellants, 1218934 Ontario Limited and 2169460 Ontario Limited.
    In these reasons, I will refer to Paul Dass as Mr. Dass, and Mr. Dass and the
    two corporate appellants as, collectively, the appellants.

[4]

The respondent Mark Kay is a mortgage broker and
    the principal of the respondent CFO Capital, which carries on business as a
    mortgage brokerage.

[5]

In early 2015, the respondents were asked
    by their client Jaswant Dass, brother of Mr. Dass, to secure financing for the $6
    million purchase of a commercial property on Drew Road in Toronto. The
    respondents submitted the loan application to Roynat Capital (Roynat), an
    affiliate of the Bank of Nova Scotia (Scotiabank). The loan application
    listed Mr. Dass and his company 1829131 Ontario Inc. (Teletime), which is not
    a party to this appeal, as guarantors. The loan application also indicated that
    Teletime would be the tenant and included Teletimes financial statements in
    support (the Drew Road Application).

[6]

Mr. Dass, however, knew nothing about the Drew
    Road Application. He had never agreed to guarantee the loan, was not involved
    in any way with the purchase, had no intention of leasing the property, and had
    not authorized the disclosure of the financial statements. Jaswant Dass was ultimately
    unsuccessful with the Drew Road Application.
[1]

[7]

Mr. Dass first learned about the Drew Road Application
    in July 2015, during his own negotiations with Roynat. He was seeking financing
    for the purchase of a commercial property on Wolfedale Road, Mississauga (the Wolfedale
    Application).

[8]

A financial officer at Roynat, Chad Pitre,
    brought the Drew Road Application to Mr. Dasss attention on July 24, 2015. Mr.
    Dass responded that he was not involved with the Drew Road Application and he had
    never agreed to guarantee the loan. Mr. Pitre provided Mr. Dass with the name
    of the brokerage that sent the Drew Road Application to Roynats office - the
    respondent CFO Capital.

[9]

Mr. Dass testified that from the time he first
    heard from Mr. Pitre about the Drew Road Application on July 24, he was
    concerned that it could interfere with the Wolfedale Application. He testified,
    however, that he thought he could manage the situation with Roynat.

[10]

Roynat later declined the Wolfedale Application.
    Mr. Dass testified that in August, Mr. Pitre told him that the Application was refused
    because Roynat no longer wanted to finance his type of business - not because
    of his association with the Drew Road Application.

[11]

Nevertheless, on August 21, 2015, after receiving
    the news, Mr. Dass sent an email to his lawyer, copying Mr. Pitre, a
    representative of CFO Capital, and others. In the email, he complained that the
    refusal was the result of improper action by the broker and Jaswant Dass that
    harmed his reputation in the eyes of Roynat. He expressed concern that he could
    lose millions of dollars in business as a result and asked his lawyers opinion
    as to whether he could pursue criminal charges against Jaswant Dass and CFO
    Capital. The email, in its entirety, read as follows:

Hi, Osborne

Please see attached fraud application filed to
    Roynat the lender by Broker called CFO GROUP, who were hired by Jaswant Dass
    for his business loan requisition. And my name is written the loan application
    without my authority and broker filed this application without my consent.

I had request filed to Roynat for my business
    requirements, this week i got call from Roynat officer that application is
    declined.

I had 3 loan requirements in last 3 years and
    Roynat full filled without problems.

My request with Roynat was submitted in May
    2015, Roynat officer gave me term sheet also gave me term sheet for loan with
    few pending items.

Roynat officer told me he spoke to the higher
    persons in-charge at Roynat all looks good, every thing changed when
    application was submitted by mortgage broker on behalf of Jaswant Dass to
    Roynat in July, since then all have changed i started to get calls from Roynat
    that the application sent by Jaswants broker might mess up my loan request.

And in my thinking mine and my companies image
    got deteriorated in the view of the lender Roynat due to improper action by the
    broker and Jaswant Dass.

Jaswant Dass lied to my accountant to take my
    financial information.

Due to this stupid action by broker and
    Jaswant could end up i lose the property required for my business expansion.
    And it will result in MILLIONS OF DOLLARS OF LOSS IN BUSINESS.

PLEASE ALSO ADVISE ME IF I CAN GO TO LOCAL
    POLICE STATION, IF POSSIBLE TO FILE FRAUDULENT CASE AGAINST THE BROKER INVOLVED
    AND JASWANT DASS

Paul Dass [
sic
]

[12]

Around this time, Mr. Dass was also attempting
    to finalize a loan from Scotiabank to refinance another property, located at
    Dixie Road, Mississauga (the Dixie Road Application).

[13]

When Roynat denied the Wolfedale Application, Mr.
    Dass turned to Scotiabank. Scotiabank ultimately denied both the Wolfedale
    Application and the Dixie Road Application.

[14]

Mr. Dass eventually secured financing for the Wolfedale
    property through other lenders, although at a higher interest rate than what was
    offered by Roynat, and completed the purchase. He also obtained financing for
    the Dixie Road property at a higher rate than what was initially offered by
    Scotiabank.

[15]

Mr. Dass stated that in January 2018, when it
    was time to renew the loan for the Wolfedale property, he approached Roynat and
    Scotiabank again. At this time, representatives of each allegedly explained that
    he had been blacklisted due to the Drew Road Application submitted by CFO
    Capital in 2015.

C.

Procedural history

[16]

The appellants statement of claim was
    issued on April 27, 2018. In it, the appellants described their claim as
    seeking damages for the reputational and commercial harm suffered by the appellants
    and caused by the respondents submission of the Drew Road Application:

The claim seeks damages for the unauthorized
    use of personal information by the defendants in a loan application put
    forward, seemingly, on behalf of the individual plaintiff and his corporate
    interests. The unauthorized loan application was made to the plaintiffs
    commercial lenders for financing. That unauthorized application caused the
    plaintiffs commercial lender to refuse to do business with them. Implicit in
    that refusal is the irreparable reputational injury to the individual
    plaintiff.

[17]

The respondents brought a motion for
    summary judgment on the basis that the appellants claim was statute-barred, having
    been brought outside the two-year limitation period established by s. 4 of the
Limitations
    Act, 2002
.

[18]

The motion judge accepted that the claim was
    suitable for summary judgment and dismissed the action as statute-barred.

[19]

The motion judge found that the appellants:

·

knew on July 24, 2015 of the unauthorized use of
    their information in the Drew Road Application;

·

knew on July 27, 2015 of the respondent CFO
    Capitals involvement; and

·

had concluded, by August 21, 2015, that Mr. Dass
    would suffer financial loss as a result of the Drew Road Application, as
    evidenced by Mr. Dasss email on that date to his counsel.

[20]

Accordingly, the motion judge found that by
    August 21, 2015, the appellants were aware of all of the material facts
    required to advance their claim. As the statement of claim was not issued until
    April 27, 2018, more than two years later, the action was statute-barred.

D.

Issues on appeal

[21]

The appellants raise two grounds of appeal,
    alleging: (i) the motion judge erred in law by misinterpreting s. 5 of the
Limitations
    Act, 2002
and (ii) the motion judge made palpable and overriding misapprehensions
    of fact.

E.

Analysis

(1)

The Law  The
Limitations
    Act, 2002

[22]

Section 4 of the
Limitations Act, 2002
states:
    [u]nless this Act provides otherwise, a proceeding shall not be commenced in
    respect of a claim after the second anniversary of the day on which the claim
    was discovered.

[23]

The determination of when a claim was discovered
    is governed by s. 5:

5 (1) A claim is discovered on the
    earlier of,

(a)  the day on which the person with
    the claim first knew,

(i)  that
    the injury, loss or damage had occurred,

(ii)  that
    the injury, loss or damage was caused by or contributed to by an act or
    omission,

(iii)  that
    the act or omission was that of the person against whom the claim is made, and

(iv)  that,
    having regard to the nature of the injury, loss or damage, a proceeding would
    be an appropriate means to seek to remedy it; and

(b)  the day on which a reasonable
    person with the abilities and in the circumstances of the person with the claim
    first ought to have known of the matters referred to in clause (a).  2002,
    c. 24, Sched. B, s. 5 (1).

Presumption

(2) A person with a claim shall be
    presumed to have known of the matters referred to in clause (1) (a) on the day
    the act or omission on which the claim is based took place, unless the contrary
    is proved.  2002, c. 24, Sched. B, s. 5 (2).

[24]

Although the
Limitations Act, 2002
essentially codified the existing discoverability principle (
Grant Thornton
    LLP v. New Brunswick
, 2021 SCC 31, at para. 35), s. 5(1)(a)(iv) added a
    new factor to that analysis  the appropriateness of bringing a proceeding. This
    factor is central to this appeal.

[25]

This courts jurisprudence interpreting s.
    5(1)(a)(iv) was recently distilled into three principles by Hourigan J.A. in
Sosnowski
    v. MacEwan Petroleum Inc.
, 2019 ONCA 1005, 441 D.L.R. (4th) 393, at paras.
    16-19.

[26]

First, the determination of whether a
    proceeding is an appropriate means to seek to remedy an injury, loss, or damage
    depends on the factual and statutory context of each case:
Sosnowski
,
    at para. 16.

[27]

Second, this court has recognized two
    non-exclusive factors that can operate to delay the date on which a claimant
    would know that a proceeding would be an appropriate means to remedy a loss: (i)
    when the plaintiff relied on the defendants superior knowledge and expertise,
    particularly where the defendant has taken steps to ameliorate the plaintiffs
    loss; and (ii) where an alternative dispute resolution process offers an
    adequate remedy, and it has not been completed:
Sosnowski
, at para.
    17.

[28]

Third, appropriate means that it is legally
    appropriate to bring a proceeding, rather than practically advantageous. This
    third principle excludes from consideration many practical and tactical reasons
    a claimant might have for not commencing a proceeding at an earlier time when
    it was legally appropriate to do so, such as the belief that the claim might be
    difficult to prove. Put differently, [a]ppropriate does not include an
    evaluation of whether a civil proceeding will succeed:
Sosnowski
, at
    paras. 18-19.

(2)

Standard of Review

[29]

The determination of whether a limitation
    period has expired is a question of mixed fact and law and the motion judges
    conclusion is entitled to deference in the absence of a palpable and overriding
    error in her assessment of the evidence:
Longo v.
    MacLaren Art Centre Inc.
,
    2014 ONCA 526 at para. 38.

(3)

Issue 1: The Motion Judge Did Not Err in Law in
    Her Analysis under s. 5 of the
Limitations
    Act, 2002

(i)

The Appellants Argument

[30]

The appellants argue that the motion judge erred
    in her interpretation of s. 5 of the
Limitations Act, 2002
. They allege
    that she erred in her understanding of what it means for a person to have discovered
    that damage has occurred and that, pursuant to s. 5(1)(a)(iv), a proceeding
    would be an appropriate means to seek to remedy it, including by: (i) unreasonably
    restricting her analysis to whether the appellants had knowledge of the facts
    that established the cause of action; (ii) overlooking the additional
    requirement in s. 5 that a complainant know that the defendant caused the
    complainant damage or loss; and (iii) improperly concluding that Mr. Dass had
    assumed he would suffer financial loss.

[31]

In particular, the appellants argue that they did
    not know that CFO Capitols actions had resulted in any loss worth pursuing until
    2018, when they were advised by Roynat that the appellants had been blacklisted
    due to the Drew Road Application.

[32]

The appellants claimed that Mr. Dass knew in
    2015 that Jaswant Dass and CFO Capital had submitted a fraudulent loan
    application falsely claiming that Mr. Dass and his company agreed to guarantee
    the loan. Mr. Dasss evidence was that he believed his reputation was tarnished
    by the Drew Road Application and that he would face a significant financial
    loss as a result. That loss would be the lost opportunity to expand his
    business and the loss resulting from higher financing costs.

[33]

However, Mr. Dass testified that in August 2015,
    he had no evidence to prove his suspicion that his inability to obtain financing
    was the result of the respondents conduct. He believed it to be the case, but the
    lenders denied it. This created an evidential problem. He sought counsel from
    his lawyer, who advised him that an action against the respondents would be
    unlikely to succeed given the absence of evidence that the respondents had
    caused his loss. He was told that an action was therefore inadvisable.

[34]

On Mr. Dass evidence, it was not until 2018,
    when he approached Roynat for the renewal of the mortgage for Wolfedale, that
    he knew he had suffered any loss. At that time, a representative of Roynat told
    him that he had been blacklisted in 2015 because of the Drew Road Application. Armed
    with that knowledge, he commenced his action.

(ii)

The Motion Judge Did Not Err

[35]

The motion judge did not err in her articulation
    or application of the discoverability principle as codified in s. 5(1). As
    recently restated by the Supreme Court, a claim is discovered when the material
    facts that are actually or constructively known by a plaintiff enable the
    plaintiff to determine that it has
prima facie
grounds to infer
    liability on the part of the defendant or, equivalently, enable the plaintiff to
    draw a plausible inference of liability on the part of the defendant:
Grant
    Thornton
, para. 45. The motion judge found, largely on the strength of the
    August 21, 2015 email, that Mr. Dass had the requisite knowledge by that date. The
    email speaks for itself, and the motion judge made no error in finding that the
    claim was discovered by that date.

[36]

Section 5(1)(a)(iv), as the appellants note,
    postpones the start of the limitation period until a claimant knows that a
    proceeding would be an appropriate means to seek to remedy an injury, loss, or
    damage.

[37]

The appellants argue that the motion judge erred
    by rejecting the proposition that an assessment of the appropriateness of
    litigation, within the meaning of 5(1)(a)(iv), includes an assessment of the prospect
    of the success of litigation, particularly where the party has relied on an
    assessment of merits by legal counsel.

[38]

For the reasons given below, I do not agree that
    the motion judge erred.

[39]

First, as explained above, the case law
    interpreting s. 5(1)(a)(iv) has, to date, recognized two situations delaying
    the start of the limitation period: (i) where a plaintiff relied on a
    defendants superior knowledge and expertise, especially where the defendant
    took steps to ameliorate the loss; and (ii) where the parties have engaged an
    alternative dispute resolution process offering an adequate remedy and it has
    not been completed. The appellants do not come within either situation.

[40]

Claimants such as the appellants who have relied
    on the advice of their legal counsel are not in an analogous position to
    claimants who have relied on the assessment of their situation provided by defendants.
    The case law recognizes that it would be unreasonable to discourage claimants
    from reasonably relying on a defendants good-faith efforts to remedy an issue
    and thereby potentially avoiding the need for a lawsuit:
Brown v. Baum
,
    2016 ONCA 325, 397 D.L.R. (4th) 161, at paras. 18, 24;
Presidential MSH
    Corp. v. Marr, Foster & Co. LLP
, 2017 ONCA 325, 135 O.R. (3d) 321, at
    paras. 20, 26. Here, the appellants have been in no way dependent on the
    respondents for information, an understanding of their position in relation to
    Roynat or any other lender, or efforts to remedy the damage they claim to have
    suffered. The appellants accordingly never delayed bringing an action on that
    basis.

[41]

Neither have the appellants engaged in an
    alternative dispute resolution process with the respondents, such that it would
    be unfair not to take that process into account under s. 5(1)(a)(iv):
407
    ETR Concession Co. Ltd. v. Day
, 2016 ONCA 709, 133 O.R. (3d) 762, at para.
    40, leave to appeal refused, [2016] S.C.C.A. No. 509;
Presidential
,
    at paras. 28-29.

[42]

The appellants are not, of course, restricted to
    the two categories of cases identified to date that delay the start of the
    limitation period. But if they cannot bring themselves within those two
    categories they must propose another set of circumstances in which it could be
    said, on a principled basis, that a person with a claim could not have known that
    an action would be an appropriate means to remedy the injury, loss, or damage.

[43]

What the appellants have proposed is, in effect,
    an expansion of the class of matters under s. 5(1)(a)(iv) to include any
    situation where plaintiffs know they have been wronged or suffered damage at
    the hands of the defendants, but doubt they will be able to marshal the
    evidence to prove the claim and are unsure whether the scale of the eventual
    commercial loss will make an action remunerative.

[44]

This proposal has been considered and rejected by
    courts repeatedly:
Sosnowski
, at para. 19;
Peixeiro v. Haberman
,
    [1997] 3 S.C.R. 549, at para. 18. The motion judge made no error in not
    accepting it. To give s. 5(1)(a)(iv) the meaning that the appellants propose
    would substantially reduce the certainty the
Limitations Act, 2002
is intended
    to provide.

[45]

Second, as the respondents argue, the
    appellants argument conflates the concepts of damage and damages. The
    difference has been explained by the Nova Scotia Court of Appeal in
Smith
    v. Union of Icelandic Fish Producers Ltd.
, 2005 NSCA 145, 238 N.S.R. (2d)
    145, at para. 119, adopting A.I. Ogus explanation given in
The Law of
    Damages
(London, Butterworths, 1973), at p. 2: damages should connote the
sum of money payable by way of compensation
, while the use of
    damage is best confined to instances where it refers to the
injury
    inflicted
by the tort or breach of contract (emphasis in original). See
    also
Hamilton (City) v. Metcalfe & Mansfield Capital Corporation
,
    2012 ONCA 156, 347 D.L.R. (4th) 657, at para. 55;
Brozmanova v. Tarshis
,
    2018 ONCA 523, at para. 35.

[46]

The limitation period does not commence only
    when one can ascertain what damages one would be entitled to as a remedy, such
    that one would be better able to assess whether litigation would be an
    attractive option.

[47]

Accordingly, I reject the appellants arguments
    under this ground of appeal. The motion judge did not err in law in her
    interpretation of the
Limitations Act, 2002.

(4)

Issue 2: The Motion Judge Did Not Commit Any
    Palpable and Overriding Errors in Her Analysis Under s. 5 of the
Limitations Act, 2002

[48]

The appellants argue that the motion judge made palpable
    and overriding errors of fact in her characterization of the loss that the
    appellants claim to have suffered.

[49]

The appellants argue that there were two
    separate claims: (i) damages for Mr. Dass loss of reputation, quantified at $200,000
    and (ii) damages for the higher interest costs payable by the appellant
    corporations, quantified at $500,000. The appellants argue that the motion
    judge only considered the latter.

[50]

They further argue that the motion judge erred
    in finding that the appellants knew they had suffered damage in July 2015, and by
    ignoring the fact that Mr. Dass sought legal advice to determine whether he
    should commence an action.

[51]

I do not agree that the motion judge made any
    error.

[52]

The motion judge made no error in finding that Mr.
    Dass knew in July 2015 that his reputation had been damaged by the actions of CFO
    Capital and that a proceeding was an appropriate means of seeking a remedy. The
    losses incurred by the corporate appellants as a result of having to pay
    disadvantageous interest rates were a direct consequence of Mr. Dass loss of
    reputation caused by the Drew Road Application. The motion judge found that Mr.
    Dass knew this in July 2015. That finding was open to her.

[53]

Similarly, the motion judge did not overlook any
    aspect of the appellants claim. She linked Mr. Dass alleged loss of
    reputation and the increased cost of borrowing incurred by the corporate
    appellants because they were, in fact, linked. The loss of reputation resulted
    in the increased carrying costs.

[54]

Finally, the suggestion that the motion
    judge overlooked the argument that the appellants relied on the advice of legal
    counsel, and that this reliance should have been considered under s. 5(1)(b) as
    a matter of when a reasonable person with the abilities and in the
    circumstances of the person with the claim first ought to have known, is of no
    assistance. On appeal, the issue is not what a reasonable person would have
    known, but what Mr. Dass in fact knew. That the appellants relied on the advice
    of legal counsel is not relevant to any matter in issue.

F.

DISPOSITION

[55]

I would dismiss the appeal and award the
    respondents costs of the appeal in the amount of $18,000, inclusive of HST and
    disbursements.

Released: August 11, 2021 G.R.S.

B.W.
    Miller J.A.

I
    agree. G.R. Strathy C.J.O.

I
    agree. David Brown J.A.





[1]
CFO Capital eventually submitted another loan application on behalf
    of Jaswant Dass to the Royal Bank of Canada. This application, which did not
    name the appellants or Mr. Dass non-party company in any capacity, was
    approved and the purchase of the Drew Road property closed on November 4, 2015.


