Ontario court rules against property maintenance firm over two-year limitation period

An Ontario judge recently ruled against a property maintenance firm which is being sued by a resident who slipped, fell and injured his back, noting the property manager’s insurer initially advised the plaintiff there were no potential defendants in the case, other than the condo corporation and the property manager.

Trevor Welch and Guylaine Dostie filed a lawsuit against Peel Standard Condominium Corp. No. 755 and Downing Street Property Management Inc. Welch had fallen and injured his back on “an icy sidewalk within the common area.”

One central issue in the case was discoverability under Ontario’s two-year limitation period. The accident took place Feb. 20, 2008 but the maintenance firm, Forest Contractors Inc., was not added as a defendant in the lawsuit until more than three years later.

The case has yet to go to trial but on Dec. 4, Madam Justice Deena F. Baltman of the Ontario Superior Court of Justice dismissed Forest Contractors’ motion to dismiss Welch’s claim against it.

Court records indicate that nine months after Welch fell, his lawyer spoke with an insurance adjuster for the defendants, asking whether “there was any maintenance company involved other than Downing, and was told there was not.”

But then on July 14, 2010 a defence lawyer “identified the contractor as Forest Contractors Ltd.,” according to background information provided in Justice Baltman’s ruling.

“Section 4 of the Ontario Limitations Act, 2002 prescribes that a proceeding shall be commenced within two years of the date on which ‘the claim was discovered,'” Justice Baltman wrote. “Section 5 of the Act provides that a claim is ‘discovered’ when someone knew or reasonably ought to have known that he suffered a loss due to the act or omission of another, and that a proceeding was the appropriate way to remedy the loss.”

Forest contended that “the plaintiffs must have known there was an entity, other than the defendants, that was responsible for the maintenance of the property,” according to the decision. “Alternatively, they argue that the plaintiffs ‘could have’, through reasonable inquiries or due diligence, ascertained the identity of Forest.”

But Justice Baltman disagreed with Forest.

“In this case not only did the defendants fail to mention Forest in the statement of defence or affidavit of documents, but when plaintiff’s counsel specifically enquired of their insurer about ‘other potential defendants’ that ‘should’ be sued, ING advised there were ‘none'” she wrote.

“In my view it would have been entirely reasonable for plaintiff’s counsel to accept that reply as correct; if anyone would or should have known about Forest’s existence, it would have been the defendants’ insurer. It was certainly in their interest to point to other potential tortfeasors who could absorb or at least share in any damages that might be awarded.”

She rejected Forest Contractors’ suggestion that the plaintiffs should have made further inquiries.

“At the very least there is a material issue that requires a trial, where a decision about the reasonableness of their efforts can be made based on a full record and oral testimony before the trier of fact.”

But she did dismiss the claims by Peel Standard Condominium Corp. No. 755 and Downing Street Property Management against Forest due to the limitation period.

“I agree with Forest that as the defendants were parties to the contract with Forest, they had actual knowledge of Forest’s involvement and therefore the two year limitation period for them runs from September 22, 2009, the day they were served with the statement of claim,” she wrote. “It is no answer for them to say they were relying on the plaintiffs to add Forest as a defendant to the main action; from the moment they were served they should have realized, from their own records, that Forest was the contractor at the time, and added Forest as a third party.”