Source: https://www.hughesamys.com/blawg/blawg-post/blog/2019/01/25/ont.-c.a.-by-a-2-1-majority-upholds-dismissal-of-hvac-installation-claim-as-limitation-barred-addressing-inter-alia-issues-of-discoverability-appropriate-remedy-and-fraudulent-concealment
Timestamp: 2019-04-19 14:27:32+00:00

Document:
Further to the previous Blawg post, pasted below, in Zeppa v. Woodbridge Heating & Air Conditioning Ltd., an action alleging faulty installation of a HVAC system, the Ontario Court of Appeal, in 42 pages of reasons released on January 25th, 2019, upheld the motion judge's finding that this action is limitation-barred, by a 2-1 margin.
The majority (Brown J.A. and Strathy C.J.O.) found that the motion judge "did not err in holding that: (i) the Zeppas did not need to know the reason why their HVAC system was not working in order to discover their claim against Woodbridge; (ii) by the fall of 2009, the Zeppas were no longer relying on Woodbridge’s expertise, so at that point a proceeding would be an appropriate means to remedy the problem; and (iii) Woodbridge’s concealment of information about the improper installation of the system it allegedly had received from the manufacturer did not, in the specific circumstances of the case, postpone the commencement of the limitation period.".
The dissenting Justice, Feldman J.A., while agreeing with Brown J.A. that the central issue on this appeal concerns the motion judge’s determination of when time began to run for the appellants’ action against the respondent, was of the view that "the motion judge erred in fact and in law by finding that the appellants did not need to know that the respondent had done anything to cause them damage in order to know that they had a claim in negligence, breach of contract and misrepresentation, and by finding that the fact that the respondent fraudulently concealed its wrongdoing from the appellants did not toll the running of the basic two-year limitation period.".
[I]t has been recognized that discoverability means knowledge of the facts that may give rise to the claim. The knowledge required to start the limitation running is more than suspicion and less than perfect knowledge. Or, to put it another way, the plaintiff need not be certain that the defendant’s act or omission caused or contributed to the loss in order for the limitation period to begin to run. The limitation begins to run from when the plaintiff had, or ought to have had, sufficient facts to have prima facie grounds to infer the defendant’s acts or omissions caused or contributed to the loss. It is reasonable discoverability – rather than the mere possibility of discovery – that triggers a limitation period. See also: Lawless v. Anderson, 2011 ONCA 102, 276 O.A.C. 75, at paras. 22-23; Kowal v. Shyiak, 2012 ONCA 512, 296 O.A.C. 352, at para. 18; Lochner v. Toronto (Police Services), 2015 ONCA 626, 128 O.R. (3d) 318, at para. 7; Beaton v. Scotia iTrade and Scotia Capital, 2012 ONSC 7063, at para. 13, affirmed, 2013 ONCA 554.
To say that a plaintiff must know the precise cause of her injury before the limitation period starts to run, in my view places the bar too high. Both the one year limitation period itself [in s. 17 of the Health Disciplines Act, R.S.O. 1990, c. H.4], as well as the production and discovery process and obtaining expert reports after acquiring knowledge through that process, are litigation procedures commonly used by a plaintiff to learn the details of how the injury was caused, or even about the existence of other possible causes and other potential defendants.
 Given that jurisprudence, I see no error in the motion judge’s statement, at para. 26 of his reasons, of the applicable principles of law concerning s. 5(1) of the Act, including that “the question of ‘how it happened’” will be revealed through the legal proceeding and need not be known in advance for limitations purposes: Beaton, ONSC, at para. 13.
 Unlike my colleague, I see no error in the factual findings that would justify appellate intervention. The motion judge did not misapprehend the evidence. His findings were solidly grounded in the record before him. Accordingly, I would not give effect to this ground of appeal.
[T]he parties entered into a two-year maintenance contract in May of 2007. During this period, the Plaintiffs could reasonably maintain that they were relying on the superior knowledge and expertise of Woodbridge, and on the fact that Woodbridge was engaged in good faith efforts to remedy the concerns with the HVAC system. Based on the reasoning in Presidential MSH Corp. v. Marr, Foster & Co. LLP (“Presidential MSH Corp.”), it is possible that litigation was not then an “appropriate means” to address the concerns.
1. In his affidavit in response to the summary judgment motion, Mr. Zeppa appears to place this conversation at the end of 2010: at para. 13. However, throughout his examination for discovery, he repeatedly gave evidence that the conversation and meeting took place in mid to late 2009. He also stated that by November 2010, he was not talking to Mr. LaPosta anymore.
 Also by that time, based on the information Mr. LaPosta provided, Mr. Zeppa knew he would have to “revamp the whole system”.
 Given that evidence from Mr. Zeppa, it was certainly open to the motion judge to conclude that “by the fall of 2009 the Plaintiffs were no longer relying on good faith efforts of Woodbridge to remedy the concerns.” I see no palpable and overriding error in that finding. Accordingly, I would not give effect to this ground of appeal.
 The decisions in Dhaliwal and Kim, together with the plain language of ss. 4 and 5 of the Act, support the conclusion that there is no independent work for the principle of fraudulent concealment to perform in assessing whether a plaintiff has commenced a proceeding within the basic two-year limitation period. That is because the elements of the discoverability test set out in ss. 5(1)(a) and (b) address the situation where a defendant has concealed its wrong-doing. If a defendant conceals that an injury has occurred, or was caused by or contributed to by its act or omission, or that a proceeding would be an appropriate means to seek to remedy it, then it will be difficult for the defendant to argue that the plaintiff had actual knowledge of those facts until the concealed facts are revealed. Whether the plaintiff ought to have known of those matters, given their concealment, is a matter for inquiry under s. 5(1)(b).
 If the defendant’s concealment of facts results in a lack of actual or objective knowledge by the plaintiff of the elements set out in s. 5(1)(a) of the Act, then the plaintiff does not discover his or her claim until the date the concealed facts are revealed to or known by the plaintiff, at which point time begins to run. That is to say, the analysis required by s. 5(1) of the Act captures the effect of a defendant’s concealment of facts material to the discovery of a claim.
The Plaintiffs further argued that Woodbridge had been told by Quietside that the HVAC system had been installed improperly and had chosen to conceal such information. Even assuming this to be the case, it would not postpone the running of the limitations period. All that is required is that the Plaintiffs have discovered their claim and, as noted above, it is not necessary that they know why or how the claim arose. Thus even if Woodbridge had withheld information about the underlying cause of the claim, such withholding would not postpone the commencement of the limitation period.
 I see no error in the motion judge’s analysis. It is consistent with the legal principles applied by this court in Dhaliwal and Kim concerning the interplay between the principle of discoverability in s. 5 of the Act and that of fraudulent concealment. Also, it rests on reasonable factual findings made by the motion judge about when the Zeppas discovered their claim: see paras. 45 and 46 above. Accordingly, I would not give effect to this ground of appeal.
In Zeppa v. Woodbridge Heating & Air Conditioning Ltd., a claim for the alleged negligent installation of a HVAC system in the plaintiffs' home, (the work was completed around 2006), Ontario Superior Court Justice Monahan summarily dismissed this action as limitation-barred.
 The Plaintiffs commenced the present action on February 21, 2012. This means that in order to overcome the limitations defence raised by Woodbridge, the Plaintiffs’ claim must not have been discovered or discoverable prior to February 21, 2010.
 It would appear that the Plaintiffs discovered their claim well prior to February of 2010. As noted above, the Plaintiffs began experiencing significant problems with the HVAC system almost immediately after it was installed in late 2006 or early 2007. Christopher reported that they were regularly without heat or hot water, the air conditioning system did not function properly, and they were unable to use the indoor pool. It was clear that these problems were caused by acts or omissions of Woodbridge, since they were responsible for the installation of the HVAC system.
 But two years of regular maintenance did not resolve the problems and the maintenance contract was not renewed upon its termination in May 2009. Sometime in the summer of 2009 Christopher told the senior Woodbridge representative that he no longer believed that the problems were due to maintenance and that Woodbridge had been “lying to me from day one…about maintenance”. Indeed, by the fall of 2009 the Plaintiffs were consulting with other HVAC service providers as to how to address the ongoing problems with the HVAC system which, by then, had been known to the Plaintiffs for close to three years. In short, it seems clear that by the fall of 2009 the Plaintiffs were no longer relying on good faith efforts of Woodbridge to remedy the concerns, which clearly distinguishes the present circumstances from those in Presidential MSH Corp.
 In response to the Woodbridge motion for summary judgment, the Plaintiffs filed a further report from Pinchin dated June 21, 2017 (the “Pinchin 2017 Report”). The Pinchin 2017 Report noted that the installation of HVAC equipment is performed by licensed professional tradespersons. Therefore, it is not reasonable to expect an ordinary homeowner without specialized training or knowledge to know that the Quietside boilers had been installed improperly. Pinchin further advised that it is reasonable to conclude that an ordinary person would not become aware of the improper HVAC installation unless he or she received official notice from a licensed professional or the manufacturer. Thus, in Pinchin’s opinion, it is entirely possible that Christopher only became aware of the improper installation of the boiler units and the HVAC system upon receipt of the letter from Quietside on November 1, 2010.
 The simple answer to the Pinchin 2017 Report is that it was not necessary for Christopher to have knowledge of the fact that the Quietside boilers were installed improperly in order for the limitation period to commence running. What was needed was knowledge, actual or imputed, that he had a “claim” against Woodbridge.
 The fact that Christopher had such knowledge well before November 2010 is confirmed by the other expert reports commissioned by the Plaintiffs. For example, the Pinchin Mould Report from November 2010 indicates that Christopher had reported that the house “has experienced mechanical problems since occupancy”; Christopher further advised Pinchin that “[d]ue to humid conditions over long periods of time, [the] house has shifted throughout”, resulting in cupped floors throughout the house, and separation of crown mouldings, kitchen millwork and columns. The Pinchin Mould Report from November 2010 states that “[t]he Client [Christopher] indicated that he had been experiencing heating failures over the last 5 years.” The Kern Report prepared in December 2010 indicates that “the boilers have not operated reliably since the start-up of the system [in 2006-07]”.
 It is crystal clear from these reports, as well as Christopher’s Examination, that the Plaintiffs knew long before February 2010 that the HVAC system was not functioning properly. Woodbridge was clearly responsible since they had installed the system. Moreover, by late 2009, Christopher was no longer looking to Woodbridge to remedy the situation; by this time there was no question but that a legal proceeding was an ‘appropriate means’ to remedy the loss or damage. These are the elements sufficient to cause the limitation period to commence running. Although it is entirely possible, as stated by the Pinchin 2017 Report, that the Plaintiffs did not know why the system was not functioning properly until they received the November 1, 2010 letter from Quietside, such knowledge is not required for limitations purposes. As Belobaba J. noted in Beaton, the question of “how it happened’ need not be known in advance for a limitation period to run.
 In any event, even if it were assumed that knowledge of the improper installation of the Quietside boilers was a necessary element of discovery of the claim, such knowledge was discoverable by the Plaintiffs prior to February 2010. Christopher had been advised by other HVAC service providers with whom he had consulted in late 2009 that the boilers had been installed improperly. It would have been a straightforward matter for Christopher to have contacted the manufacturer at that time, at which point he would have been advised of the improper installation by Quietside.
 The Plaintiffs further argued that Woodbridge had been told by Quietside that the HVAC system had been installed improperly and had chosen to conceal such information.15 Even assuming this to be the case, it would not postpone the running of the limitations period. All that is required is that the Plaintiffs have discovered their claim and, as noted above, it is not necessary that they know why or how the claim arose. Thus even if Woodbridge had withheld information about the underlying cause of the claim, such withholding would not postpone the commencement of the limitation period.
15 See the November 1, 2010 letter from Quietside, reporting that they had received calls over the years from the service company that had installed the system (presumably Woodbridge).
 The facts here bear some considerable resemblance to those considered by R.D. Gordon R.S.J. in Steinberg v. Toews Engineering Inc., (“Steinberg”).16 In Steinberg, the defendant Toews had installed HVAC systems in a number of homes being constructed by the plaintiff Steinberg. The plaintiff and his family members had moved into their homes by the end of 2009 and noticed almost immediately that the HVAC systems were not operating properly. The plaintiff brought his concerns to the attention of the defendant, who provided assurances that the problems did not arise from improper installation. The plaintiff commissioned an expert report but did not commence proceedings against the defendant until June of 2013. Gordon R.S.J. found the plaintiff to be honourable and well-intentioned, and that he may well have suffered a wrong. However he had failed to pursue his claim within the applicable limitation period and therefore the claim was dismissed.
 So too, here. The record before me indicates that there were serious and sustained problems with the HVAC system from the time it was installed. The Plaintiffs were well aware of these problems from the time they occupied the house. It is evident that the Plaintiffs have a claim against Woodbridge. The difficulty is that they failed to commence proceedings seeking redress for that claim within two years of having discovered it. Therefore the Plaintiffs’ action against Woodbridge is dismissed.

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