In the recent Court of Appeal decision of Cipponeri Construction Services Inc. v. Orsi, 2023 ONCA 296, the Court of Appeal grappled with whether it was an abuse of process to commence a new action, in the face of a fast approaching limitation deadline, when there was an existing action already commenced, or whether the proper approach was to seek leave to amend the Statement of Claim in the existing action to add the new claim.
The Facts and Background
In 2018 an action was commenced by the Respondent on the appeal, Michael Orsi along with his corporation Bearus Holdings ULC against Vito Cipponeri, his corporation 2599109 Ontario Inc (259) and Westin Homes Ltd. (Westin).
Mr. Cipponeri and 259 counterclaimed in the 2018 action against Mr. Orsi, Bearus and Westin for, amongst other claims, a payment of money allegedly owing by Westin to the appellant, Cipponeri Construction Services Inc. (CCSI)
CCSI was not made a party to the 2018 action, as part of the defence to the counterclaim it was asserted that none of the Plaintiff’s by counterclaim had standing to assert the claim for money owing by Westin to CCSI. As a result of this, a concern arose that CCSI’s claim had not been properly made and the limitation period continued to run.
CCSI then commenced the action that is the subject of the appeal on March 16, 2020 to ensure the claim was brought within the limitation period. CCSI’s counsel wrote to the respondents’ counsel suggesting that the claims should be consolidated or tried together.
The Lower Court Ruling
Mr. Orsi brought a motion to dismiss the 2020 action as an abuse of process pursuant to r. 21.01(3)(d) of the Rules of Civil Procedure, arguing that to commence a separate action which created a multiplicity of proceedings was an abuse of process, and that the correct process was to seek leave to add CCSI as a plaintiff by counterclaim in the original 2018 Action. The learned motions judge dismissed the action on this basis without prejudice to CCSI, Mr. Cipponeri or 259 seeking leave under r. 26.92(c) to add CCSI as a party in the 2018 Action.
The Appeal Court Ruling
The Court of Appeal held that although amending the claim is preferrable, it was an error for the learned motions judge to dismiss the 2020 Action as an abuse of process. The 2020 Action was commenced to preserve the limitation period for CCSI, who was not a party to the original proceedings, and it did not necessarily create a multiplicity of proceedings so long as appropriate steps are taken to ensure the proceedings did not advance separately. The Court of Appeal varied the Order to allow CCSI to promptly bring a motion to be added as a Plaintiff by counterclaim to the 2018 action. The Court of Appeal ordered that the Respondent shall agree to the amendment and that no limitation defence to the claim by CCSI shall be asserted other than a defence that the limitation period expired before the date the 2020 Action was commenced, which was March 16, 2020. The Court ordered that upon completion of the amendment, the 2020 Action would be dismissed.
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