



COURT OF APPEAL FOR ONTARIO

CITATION: Brozmanova v. Tarshis, 2018 ONCA 523

DATE: 20180608

DOCKET: C64570

Brown, Huscroft and Trotter JJ.A.

BETWEEN

Eva Brozmanova

Plaintiff (Appellant)

and

Lorne Marvin Tarshis and Jennifer Brown

Defendants (Respondents)

Richard Parker, for the appellant

Andrew Kalamut, for the respondents

Heard: May 18, 2018

On appeal from the order of Justice Patrick J. Monahan of
    the Superior Court of Justice, dated November 1, 2017, with reasons reported at
    2017 ONSC 6559.


BROWN J.A.:

I.

OVERVIEW

[1]

The appellant, Eva Brozmanova, appeals from the order of the motion
    judge striking out her statement of claim, without leave to amend, on the basis
    that her action was commenced beyond the applicable limitation period and
    disclosed no reasonable cause of action.

[2]

In her statement of claim, Ms. Brozmanova sought damages of $1.1 million
    from the respondents, Dr. Lorne Tarshis, a plastic surgeon, and Jennifer Brown,
    the daughter of Dr. Tarshis and an employee in his medical practice. Ms.
    Brozmanova had been employed for several years as a laser technician in Dr.
    Tarshis practice.

[3]

Ms. Brozmanova pleads that Dr. Tarshis performed surgical procedures on
    her, for which she paid him directly as the services fell outside of those
    covered by the Ontario Health Insurance Plan (OHIP). However, she alleges that
    in 2009 she learned Dr. Tarshis had submitted to OHIP charges for treating her
    for two conditions: ataxia and ptosis. Ms. Brozmanova pleads that she never
    suffered from those conditions and the claims submitted by Dr. Tarshis for them
    were fraudulent. She contends that she contacted OHIP in 2009 and was told the entries
    for those conditions would be removed from her medical record.

[4]

According to the statement of claim, in April 2015 Ms. Brozmanova learned
    from OHIP that the two entries remained on her medical record. She pleads that
    as a result of Dr. Tarshis submitting these fraudulent claims sometime before
    2010, she has not been able to obtain health insurance to travel outside of
    Canada. She seeks damages for the resulting pain and suffering and punitive
    damages. Further, she alleges Ms. Brown aided and abetted Dr. Tarshis in filing
    the fraudulent charges with OHIP.

[5]

The respondents moved under rules 21.01(1)(a) and (b) to strike out the
    statement of claim. No evidence was filed on the motion.

[6]

The motion judge granted the motion to strike on two grounds: (i) under
    rule 21.01(1)(a), on the basis that the action was commenced outside the
    applicable limitation period, which began to run in 2009, and therefore had no
    chance of success should it proceed to trial; and (ii) under rule 21.01(1)(b),
    on the basis that the claim disclosed no reasonable cause of action because Ms.
    Brozmanova had failed to plead a constituent element of the tort of civil fraud
     i.e., that she had acted or failed to act on the basis of representations by
    Dr. Tarshis.

[7]

Ms. Brozmanova appeals. She submits that the motion judge erred in his
    assessment of the law of limitations and the test for civil fraud.

[8]

For the reasons that follow, I would dismiss the appeal.

II.

THE PROCESS ADOPTED BY THE RESPONDENTS

[9]

Before dealing with the merits of the appeal, some comments are in order
    about the procedure adopted by the respondents to strike out Ms. Brozmanovas
    claim under rules 21.01(1)(a) and (b).

[10]

The
Rules of Civil Procedure
make available two sets of procedural devices
    by which a party can seek to dispose finally of a proceeding on a contested
    basis.

[11]

One
    set is evidence-based, under which the parties adduce evidence by various means,
    on the basis of which the court decides whether to grant or dismiss a
    proceeding. The
Rules
permit or offer several standard evidence-based procedural
    devices by which to obtain such a final adjudication on the merits: (i) the
    conventional trial; (ii) the hybrid trial; (iii) two forms of summary judgment
     rules 20.04(2)(a) and 20.04(2)(b); and (iv) a rule 38 application.

[12]

The
    second set of procedural devices enables a party to ask the court to determine
    a question of law that may dispose of all or part of a proceeding. These
    law-based devices include: (i) a rule 22 special case; (ii) rule 21.01(1)(a),
    where a question of law is raised by a pleading; and (iii) rule 21.01(1)(b),
    where a pleading discloses no reasonable cause of action or defence.

[13]

The
    law-based character of the devices available under rules 21.01(1)(a) and (b) is
    reinforced by the limits placed on the use of evidence on motions brought under
    those rules. No evidence is admissible on a no reasonable cause of action
    motion; nor is evidence admissible on a question of law motion, except with
    leave of the judge or on consent of the parties: rule 21.01(2).

[14]

The
    rationale for these prescriptions is a simple one: the allegations asserted in
    the pleading, which the court must accept as provable at trial, are sufficient
    to determine the question of law or whether the pleading discloses a cause of
    action or defence recognized by law: see
Hunt v. Carey Canada Inc.
,
    [1990] 2 S.C.R. 959, at pp. 980, 988 and 990-991. No further facts are required
    to determine the legal sufficiency of the claim.

[15]

In
    the present case, Dr. Tarshis was sued for conduct as a medical practitioner.
    He and Ms. Brown are represented by a law firm with long experience in
    representing medical practitioners. They sought to dismiss Ms. Brozmanovas
    action relying on two law-based rules: 21.01(1)(a) and (b).

The question of law under rule 21.01(1)(a)

[16]

The
    question of law the respondents raise under rule 21.01(1)(a) is that Ms.
    Brozmanova commenced her action outside of the two-year limitation period.

[17]

Relying
    on rule 21.01(1)(a) to advance a limitation period defence is a problematic use
    of the rule. Some decisions of this court characterize the issue of whether a plaintiff
    has commenced a proceeding within the limitation period as one involving a
    question of fact:
Pepper v. Zellers Inc.
(2006), 83 O.R. (3d) 648
    (C.A.), at para. 19; and
Arcari v. Dawson
, 2016 ONCA 715, 134 O.R.
    (3d) 36, at para. 9, leave to appeal refused, [2016] S.C.C.A. No. 522. Others
    describe it as involving a question of mixed fact and law:
Salewski v.
    Lalonde
, 2017 ONCA 515, 137 O.R. (3d) 762, at para. 45; and
Ridel v.
    Goldberg
, 2017 ONCA 739, at para. 12. Regardless, it does not involve a
    question of law.

[18]

In
    the basic case, the court must ascertain the day on which the claim was
    discovered:
Limitations Act, 2002
, S.O. 2002, c. 24, Sched. B, s. 4
    (the 
Limitations Act
). This, in turn, requires making two findings
    of fact: (i) the day on which the person first knew of the four elements
    identified by s. 5(1)(a)(i)-(iv) of the
Limitations Act
;
[1]
and (ii) under s. 5(1)(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 s. 5(1)(a). The earliest of the two
    dates is the date on which the claim is discovered: s. 5(1).

[19]

The
    analysis required under s. 5(1) of the
Limitations Act
generally
    requires evidence and findings of fact to determine. It does not involve a
    question of law within the meaning of rule 21.01(1)(a).

[20]

Yet,
    here the respondents invoked a law-based rule to establish a largely fact-based
    defence. I recognize, as respondents counsel submits, that some jurisprudence exists
    that has allowed a defendant to resort to rule 21.01(1)(a) to determine its
    limitations defence where it is plain and obvious from a review of a statement
    of claim that no additional facts could be asserted that would alter the
    conclusion that a limitation period had expired: see the commentary on rule
    21.01(1)(a) in Todd. L. Archibald, Gordon Killeen & James C. Morton,
Ontario
    Superior Court Practice, 2018
(Toronto: LexisNexis Canada, 2017), at p.
    1128. See also Paul M. Perell & John W. Morden,
The Law of Civil
    Procedure in Ontario
,

3d ed. (Toronto: LexisNexis Canada, 2017),
    at p. 611.

[21]

However,
    courts must always remember that permitting a defendant to move under
    21.01(1)(a) to establish a limitations defence could prove unfair to a
    plaintiff, especially a self-represented one. By selecting rule 21.01(1)(a) as
    the procedural means to adjudicate its fact-based limitations defence, a
    defendant puts a plaintiff in the position where she cannot, as of right, file
    evidence to explain when she discovered her claim. Instead, she must seek leave
    of the court.

[22]

A
    plaintiff who risks the dismissal of her action on the basis of a limitations
    defence should not have to ask a court for permission to file evidence on the
    issue of when she discovered her claim. She should be entitled to do so as of
    right. It is unfair for a defendant to attempt, tactically, to deprive her of
    that right and put her to the unnecessary expense (and risk) of asking
    permission to do so.

[23]

Notwithstanding
    the jurisprudence that opens the rule 21.01(1)(a) door to some efforts to prove
    a limitations defence, in my respectful view such an approach risks working an
    unfairness to a responding plaintiff. Requiring a defendant to move under an
    evidence-based rule  either rule 20 (summary judgment) or rule 51.06(2) (concerning
    admissions of the truth of facts in a pleading)  avoids such potential
    unfairness and is to be preferred.

No reasonable cause of action under rule 21.01(1)(b)

[24]

The
    respondents also invoked rule 21.01(1)(b) to dismiss Ms. Brozmanovas claim. As
    noted, the motion judge accepted their submission that Ms. Brozmanova had
    failed to plead a constituent element of the tort of civil fraud  i.e., that
    she had acted or failed to act on the basis of representations by Dr. Tarshis.

[25]

Rule 21.01(1)(b) focuses on the
legal
sufficiency of a plaintiffs pleading. As described
    by Perell & Morden
,
at p. 614:

The focus of the motion is the substantive legal adequacy of
    the claim or defence. The essence of the motion is that the defendants
    wrongdoing as described in the statement of claim is not a violation of the
    plaintiffs legal rights, with the result that the plaintiff is not entitled to
    a remedy even if he or she were able to prove all the material facts set out in
    the statement of claim. [Footnotes omitted.]

[26]

Put
    another way, rule 21.01(1)(b) enables a defendant, before pleading over, to
    move to strike out a claim on the basis that it is plain and obvious that the
    plaintiff is not advancing a legally sufficient claim, even if all the facts
    she pleads can be proved at trial. As a result, the appropriate time for a
    defendant to move under the rule usually is before filing its statement of
    defence. That is because by filing a statement of defence, a defendant usually
    signals that the plaintiff has advanced a legally sufficient claim which the
    defendant intends to resist on the grounds set out in the statement of defence.
[2]

[27]

In
    the present case, the respondents delivered a statement of defence, to which
    Ms. Brozmanova replied. In their defence, the respondents denied, at some
    length and in considerable detail, Ms. Brozmanovas allegations of fraud.

[28]

The
    respondents did not plead that Ms. Brozmanova had failed to allege a
    constituent element of the tort of civil fraud. On the contrary, in paras. 23
    and 24 of the statement of defence, Dr. Tarshis denied that he made any representation
    to Ms. Brozmanova or that he intended for her to act upon or otherwise rely on
    any of the billing forms submitted to OHIP. That is to say, the respondents
    joined issue with Ms. Brozmanova on the allegations she asserted and denied
    them, as a matter of fact. Their statement of defence did not call into
    question the legal sufficiency of her pleading.

[29]

In
    those circumstances, the respondents reliance on rule 21.01(1)(b) was
    inappropriate  they were disputing the material facts alleged by Ms.
    Brozmanova, not the legal sufficiency of her claim.

III.

ANALYSIS

[30]

Given
    that the respondents joined issue with Ms. Brozmanova in their pleading and
    advanced fact-based, not law-based, arguments to dismiss her claim, their
    selection of rule 21.01(1) procedural devices was misplaced. The respondents
    were essentially seeking summary judgment dismissing the action without
    resorting to rule 20, which would have required them to file some evidence and
    allowed Ms. Brozmanova to file her own in response.

[31]

That
    said, Ms. Brozmanova was represented by counsel on the motion. Although Ms.
    Brozmanova raises some concerns about the process below, she does not advance
    as a stand-alone ground of appeal any irregularity in the respondents use of
    rule 21.01(1) to strike out her statement of claim. In those circumstances and
    given the content of her statement of claim, I see no substantial wrong or
    miscarriage of justice resulting from the respondents reliance on rule
    21.01(1) to challenge Ms. Brozmanovas claim.

[32]

I
    reach that conclusion because in her statement of claim, Ms. Brozmanova
    pleaded, at paras. 8-9 and 15-16:

In 2009, as a result of a fractured ankle, the Plaintiff was
    contacted by her Insurance company who wanted her medical history.

Upon obtaining her medical history, she found that charges had
    been submitted to OHIP claiming that she had Ataxia and Ptosis and was treated
    for [same] by Tarshis.



When the Plaintiffs insurance company learned of these two
    conditions, they claimed that her broken ankle was caused due to her droopy
    eyes and inability to walk properly. This was not true.

The Plaintiff immediately contacted OHIP to complain to this
    and to ask that these conditions be removed from her record at which time that
    OHIP said that they would do so.

[33]

In
    addition, she pleaded, at para. 12, that [t]he Defendant Tarshis fraudulently
    submitted claims to OHIP for treating these conditions and was paid for same by
    OHIP while knowing that he was committing fraud by so doing.

[34]

The
    material facts pleaded by Ms. Brozmanova at paras. 8-9 and 15-16 of her
    statement of claim were admissions of the truth of certain facts. She clearly
    pleaded that in 2009, as a result of dealing with an insurance company on a
    matter regarding her ankle injury, she discovered that her OHIP record
    contained entries for billings by Dr. Tarshis, which she alleges were
    fraudulent.

[35]

Given
    the admissions in her pleading, it would have been open to the respondents to
    move on those admitted material facts to dismiss the claim on the basis that
    Ms. Brozmanova had discovered it in 2009 and therefore the action was
    statute-barred: rules 20 or 51.06(2).
[3]
In 2009, she knew that some damage had occurred within the meaning of s.
    5(1)(a) of the
Limitations Act
because she knew that her actual
    position was worse than her position before:
Hamilton (City) v. Metcalfe
    & Mansfield Capital Corporation
, 2012 ONCA 156, 290 O.A.C. 42, at
    para. 42. That the damage she discovered in 2009 was not the same damage for
    which she sought recovery in her action  her alleged inability in 2015 to
    purchase travel insurance  does not matter. Knowledge of some damage is
    sufficient for the cause of action to accrue and to start the limitation
    period:
Hamilton
, at para. 61.

[36]

In
    this regard, I see no error in the following conclusions of the motion judge expressed
    at paras. 13-14 of his reasons:

In my view, the
    Claim expressly pleads that Ms. Brozmanova was aware in 2009 of any alleged
    fraud committed by Dr. Tarshis. As the Claim states, she was made aware in 2009
    that Dr. Tarshis had submitted claims to OHIP for reimbursement for procedures
    that had allegedly been performed for her benefit and that, as a result,
    certain medical conditions were identified on her medical record. She was
    further aware of the fact that the identification of these medical conditions
    on her record could impede her ability to obtain benefits or services,
    including insurance services. Indeed, the information regarding the claims
    submitted by Dr. Tarshis was brought to her attention in 2009 following an
    inquiry from her own insurance company. Thus, as Ms. Brozmanova pleads in her
    factum submitted on this motion, any fraud committed by Dr. Tarshis had
    crystallized by 2009.

Nor can Ms. Brozmanovas reliance on OHIPs representations
    regarding the removal of the conditions, or OHIPs failure or inability to act
    on those representations, create, or recreate, a cause of action against Dr.
    Tarshis. Those representations were made by OHIP, not Dr. Tarshis. Nor does the
    timing of Ms. Brozmanovas application for travel insurance create, or recreate,
    a cause of action against Dr. Tarshis. As Ms. Brozmanova pleads in her factum,
    any loss resulting from Dr. Tarshis actions consisted of the listing of
    certain medical conditions on her medical history. This loss occurred at the
    time the claims for reimbursement were submitted to and paid by OHIP, and Ms.
    Brozmanova was aware of these facts in 2009.

[37]

That
    was a sufficient basis to strike Ms. Brozmanovas statement of claim on the
    admitted facts contained in her pleading.

[38]

Ms.
    Brozmanova submits that the motion judge erred in not permitting her to amend
    her statement of claim. I am not persuaded by her submission. Ms. Brozmanova
    does not argue that she was mistaken in pleading the facts contained in paras.
    8-9 and 15-16 of her statement of claim. She does not seek to withdraw them.
    Instead, she argues the events in 2009 did not amount to knowledge by her of an
    injury, loss or damage within the meaning of s. 5(1)(a) of the
Limitations
    Act
. As noted, the motion judge rejected that submission and I see no
    error in him so doing. Consequently, no amendment to her pleading could cure
    that defect in the tenability of her action.

IV.

DISPOSITION

[39]

For
    the reasons set out above, I would dismiss the appeal.

[40]

In
    accordance with the agreement of the parties on costs, the respondents are
    entitled to their costs of the appeal in the amount of $10,000, inclusive of
    disbursements and applicable taxes.

Released: DB Jun 8 2018

David Brown J.A.
I agree. Grant Huscroft J.A.
I agree. G.T. Trotter J.A.





[1]
Section 5(1) states: 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).



[2]

See also rule 2.02(b), which
    states: A motion to attack a proceeding or a step, document or order in a
    proceeding for irregularity shall not be made, except with leave of the court 
    (b) if the moving party has taken any further step in the proceeding after
    obtaining knowledge of the irregularity.




[3]
Rule

51.06(2) states: Where
    an admission of the truth of a fact or the authenticity of a document is made
    by a party in a pleading or is made or deemed to be made by a party in response
    to a request to admit, any party may make a motion in the same proceeding to a
    judge for such order as the party may be entitled to on the admission without
    waiting for the determination of any question between the parties, and the
    judge may make such order as is just.


