





CITATION: Valesco v. North York Chevrolet Oldsmobile
      Ltd., 2011 ONCA 522



DATE: 20110719



DOCKET: C53267



COURT OF APPEAL FOR ONTARIO



Doherty, Laskin and Simmons JJ.A.



BETWEEN



Eliazbeth Velasco, Samuel Velasco, Angela Velasco,
          Samuel Velasco, Leticia Leano Cootauco, Cristano Cootauco, Ruel Cootauco, and
          Eden Cootauco Ilagen



Plaintiffs (Appellants)



and



North York Chevrolet Oldsmobile Ltd. and North York
          Chevrolet Ltd.



Defendants (Respondents)



William G. Scott for the appellants



Van Krkachachovski and Anthony Cole for the respondents



Heard: July 14, 2011



On appeal from the judgment of Justice Thomas J. McEwen of the
          Superior Court of Justice dated January 5, 2011



By the Court:



[1]

The appellant Elizabeth Velasco was seriously injured on
    July 23, 2005 after the car in which she was riding was struck by two other
    vehicles that may have been racing. Those two vehicles were driven by Steven
    Denyer and Douglas Coombs, respectively.

[2]

In issuing a statement of claim on March 15, 2006 in
    relation to the accident, counsel for the appellants relied on a statement in
    the police report that Steven Denyer was owner of the vehicle he was driving at
    the time of the accident (the Denyer vehicle).

[3]

Denyers insurer, the Royal & Sun Alliance
    Insurance Company, denied coverage to Denyer but added itself as a statutory third
    party to the action. In October 2006, Royal & Sun Alliance delivered a
    pleading admitting that Denyer was the owner of the Denyer vehicle.

[4]

In January 2007, counsel for the appellants
    received a 732 page Crown brief that contained a motor vehicle licence plate
    search disclosing that, in fact, it was the respondents who owned the Denyer vehicle
    at the time of the accident. Although a law clerk reviewed the Crown brief for
    the purpose of assessing whether Coombs and Denyer were racing, the law clerk
    did not notice what the licence plate search revealed about the ownership of the
    Denyer vehicle. The licence plate search did not come to the attention of
    counsel for the appellants until January 2009 when they were preparing for
    Denyer's discovery. In May 2009, the appellants issued a statement of claim
    against the respondents, asserting a claim against them on the basis of their
    ownership of the Denyer vehicle.

[5]

On a motion for summary judgment to dismiss the action
    against the respondents because of the expiry of the relevant limitation
    period, the motion judge said he could not conclude that counsel failed to
    exercise reasonable diligence in this case prior to receipt of the Crown brief
    given the combined information in the police report and the Royal and Sun
    Alliance pleading. However, the motion judge went on to hold that appellants counsel
    should not have closed their minds to the issue of ownership of the Denyer
    vehicle based on that information and should have reviewed the Crown brief promptly
    upon its receipt with a view to determining the ownership issue.

[6]

It is not disputed that appellants counsel did
    not actually know that the respondents were the owners of the Denyer vehicle
    until January 2009.

[7]

However under s. 4 of the
Limitations Act
,
    2002,
S.O. 2002, c. 24, a limitation period begins to run on the date a
    claim is discovered.  And under s.
s. 5(1) of the Act, a claim
    is discovered on the earlier of, (a) the day the person with the claim
    discovers [among other things, that the act or omission that caused injury,
    loss or damage was that of the person against whom the claim is made], and (b) the
    day on which a reasonable person with the abilities and in the circumstances of
    the person with the  claim ought to have known of the matters referred to in
    clause [5(1)]a.

[8]

Accordingly, the issue for the motion judge was
    whether the solicitors for the appellants ought to have known that the respondents
    were the owners of the Denyer vehicle shortly after they received the Crown
    brief.

[9]

In our view, having regard to the combination of
    information appellants counsel had indicating that Denyer was the owner of the
    Denyer vehicle, it was unreasonable for the motion judge  to conclude that appellants
    counsel should have treated the ownership issue as a live issue upon receiving
    the Crown brief. That combination of information led the motion judge to
    conclude that appellants counsel acted with reasonable diligence prior to
    receiving the Crown brief. In our opinion, counsel for the appellants acted
    with reasonable diligence in continuing to rely on that information until
    contrary information actually came to their attention.

[10]

The appeal is therefore allowed and the order of the motion judge
    dismissing the action is set aside. In accordance with the agreement of
    counsel, costs of the appeal are to the appellants on a partial indemnity scale
    fixed in the amount of $7500 inclusive of disbursements and applicable taxes.

Signed: Doherty J.A.

John Laskin J.A.

Janet Simmons J.A.

RELEASED: DD July 19, 2011



