



COURT OF APPEAL FOR ONTARIO

CITATION: Strathan Corporation v. Khan, 2019 ONCA 418

DATE: 20190522

DOCKET: C65444

Hoy A.C.J.O., Lauwers
    and Zarnett JJ.A.

BETWEEN

Strathan Corporation

Plaintiff/Moving Party
(Appellant)

and

Shahid Khan, Timothy
    Graham, Tony Pelle, Chromeshield Co.,
Chromecraft Corporation,
    FNG Corporation,
Flex-N-Gate Canada Company
    and Ventra Group Co.

Defendants/Responding Parties
(Respondents)

Raymond Colautti and Anita Landry, for the appellant

Sean Sullivan and Harry Dahme, for the respondents

Heard: May 6, 2019

On appeal from the order of Justice Paul Howard of the Superior
    Court of Justice, dated October 22, 2018, with reasons reported at 2018 ONSC
6278.

REASONS FOR DECISION

[1]

The appellant is the owner and
    landlord of a commercial property located in Windsor, Ontario. From 1998 to
    2010,
Chromeshield Co., Chromecraft Corporation, and FNG Corporation
    (Chromeshield)
were parties to a lease of a
    facility that plated metal components for the automobile industry on the
    property.

[2]

On November 1, 2010,
    Chromeshield abandoned the property without advance notice and surrendered the
    lease.

[3]

Several paragraphs of
    the motion judges decision capture well the legal landscape of the litigation
    between the parties. The appellant started two actions against Chromeshield and
    other parties, which the motion judge described in paras. 37 and 38 of his
    decision:

The First Strathan Action, bearing court file no. CV-09-12829CM,
    was commenced by way of notice of action issued March 27, 2009, with statement
    of claim delivered April 21, 2009, and amended statement of claim was delivered
    on November 10, 2011. The First Strathan Action advances claims for,
inter
    alia
, environmental contamination of the McDougall Property by the
    defendants, breach of the Lease by reason of the abandonment of the Premises,
    damages for arrears of rent, and damages for loss of rent over the balance of
    the term of the Lease. Neither Khan, Graham, Pelle, Flex-N-Gate, nor Ventra are
    parties to the First Strathan Action.

The Second Strathan Action,
    bearing court file no. CV-12-18686, was commenced by statement of claim issued
    November 21, 2012. In the Second Strathan Action, the plaintiff claims for,
inter
    alia
, conversion, breach of the Lease, negligent misrepresentation, deceit,
    fraud, unjust enrichment, and oppression remedies arising from the alleged
    wrongful removal of equipment and fixtures from the McDougall Property. The
    parties to the Second Strathan Action include all of the defendants to the
    First Strathan Action, as well as Flex-N-Gate, Ventra, Khan, Graham, and Pelle.

[4]

The motion judge heard the
    appellants motion for an order under r. 26 of the
Rules of Civil
    Procedure
, R.R.O. 1990, Reg. 194,
seeking
    leave to amend the statement of claim in the Second Strathan Action. The
    appellant wanted to add a claim for breach of a statutory duty under the
Environmental
    Protection Act
, R.S.O. 1990, c. E.19, causing
    environmental contamination to the property. The motion judge refused to grant
    leave on the basis that the proposed amendments were statute barred by
    operation of the
Limitations Act
, 2002
, S.O. 2002, c. 24, Sched.
    B, and also constituted an abuse of process.

[5]

The motion judge explained the connection
    between the appellants two actions, at para. 68:

[W]hile the proposed new claim for
    environmental contamination may not be new or unrelated to the causes of
    action advanced in the First Strathan Action, it certainly advances a new and
    unrelated cause of action for the purposes of the Second Strathan Action.
    Indeed, the proposed claim for environmental contamination in the Second
    Strathan Action is based on the same factual allegations already claimed in the
    First Strathan Action.

[6]

The appellant invoked s. 5 of the
Limitations
    Act, 2002
, arguing that the facts concerning the nature and the extent of
    the contamination underlying the proposed amendment were only recently
    discovered. The appellant also relied on s. 17 of the Act. The motion judge rejected
    this argument, noting at para. 74:

In my view, one cannot maintain
    that Strathan did not know or ought not to have known that it had a claim for
    environmental contamination in respect of the McDougall Property as of 2009
    when Strathan in fact commenced an action in 2009 specifically claiming
    environmental contamination in respect of the McDougall Property. The two
    positions cannot be reconciled.

He added, at para. 76:

On the instant motion, Strathan
    must be taken to have acknowledged that it knew it had a cause of action for
    environmental contamination at the time it commenced the First Strathan Action
    in the spring of 2009.

[7]

The motion judge's
    conclusions are set out at paras. 100 and 101:

In my view, the plaintiff should not be permitted to amend its
    statement of claim in the Second Strathan Action because the proposed
    amendments are statute-barred by the
Limitations Act, 2002
and, if permitted, would give rise to an abuse of process.

It bears emphasizing that this
    decision does not leave Strathan without any remedy at all. If Strathan wishes
    to assert a cause of action based on breach of statutory duty under the
EPA
,
    it is open to Strathan to seek leave to amend its statement of claim in the
    First Strathan Action. The defendants themselves have acknowledged this option.

[8]

In our view, the motion judge made no error of law in reaching his
    decision. In fact, we agree with it. As this court held in
Joseph v.
    Paramount Canadas Wonderland
,
2008 ONCA
    469, 90 O.R. (3d) 401
, the
Limitations Act, 2002
abolished the common
    law special circumstances exception, which permitted the court to extend or
    suspend the running of a limitation period based on special circumstances. The
    assertion of a new cause of action in the Second Strathan Action is clearly
    statute barred.

[9]

We reject the appellants argument that the claim for breach of a
    statutory duty under the
Environmental Protection Act
causing
    environmental contamination to the property simply provides more particulars of
    an environmental claim mentioned in the statement of claim in the Second
    Strathan Action. In that pleading the mention of a clause in the lease about
    Chromeshields responsibility for environmental damage and the appellants
    concern that Chromeshield breached the clause (which is the claim in the First
    Strathan Action) appear only as part of the narrative. There is no claim
    concerning those matters in the Second Strathan Action against the respondents
    who are not parties to the first action. The amendments sought within the
    Second Strathan Action would constitute an entirely new cause of action.

[10]

The appellants argument that the
    consolidation of the two actions or their trial together means that for
    practical purposes the distinctions between the two pleadings can be ignored
    must also be rejected. There are different parties to each action who have
    distinct rights that must be respected.

[11]

The
    motion judge pointed to the possible propriety of amending the statement of claim
    in the First Strathan Action by adding the claim for breach of a statutory duty
    to it. This observation is sound.

[12]

Finally, in our view, the motion
    judge did not engage in fact finding of a nature that would be inappropriate on
    a r. 26.01 motion. Here the fact that the claim was statute barred in respect
    of the Second Strathan Action was grounded in the appellants own pleading in
    the First Strathan Action. We do not accept the appellants argument that the
    claim was only discoverable after 2013 as against individuals named in the
    Second Strathan Action on the basis that they were controlling minds of
    Chromeshield. The appellant had pleaded that very allegation when it started
    the Second Strathan Action in 2012.

[13]

The appeal is therefore dismissed.

[14]

The appellant also seeks leave to
    appeal the motion judges costs decision in which he awarded the respondents
    $30,000 inclusive of fees, disbursements and HST. We dismiss the appellants
    motion for leave to appeal costs.

[15]

The appellant argues that [t]his
    award is patently unreasonable and is an error in principle as it is
prima facie
disproportionate. The appellant asserts that the costs award violates the
    fundamental principle of access to justice.
The respondents claimed $73,486.77 on a partial indemnity basis
    for the motion. The appellant argues that the amount of time spent by respondents
    counsel is disproportionate to the work required in what turned out to be
    effectively a motion in writing, although there was an oral component.

[16]

We see no reason to
    interfere with the motion judges exercise of discretion in awarding costs. The
    appellants costs submissions carried some weight with him, since he awarded
    less than half the partial indemnity costs sought by the respondents. The
    appellants submission implicitly is that written argument takes less lawyer time
    than oral argument. Experience suggests otherwise.

[17]

We see no reason to award costs
    for the appeal in excess of those awarded by the motion judge for the motion
    under appeal. Costs of the appeal and the motion for leave to appeal costs are
    fixed in the amount of $30,000 inclusive of fees, disbursements and HST payable
    by the appellant to the respondents.

Alexandra Hoy A.C.J.O.

P.
    Lauwers J.A.

B.
    Zarnett J.A.


