In Dealer’s Choice Preferred Collision Centre Inc. v. Kircher, 2021 ONSC 8261 (“Kircher”), the Divisional Court upheld the decision of the associate judge to deny a motion to correct the name of the plaintiff in a breach of contract case where the defendant had expressly refused to contract with the proposed substituted plaintiff. Kircher provides a summary of the key principles in a misnomer analysis and confirms that the court will not correct an alleged misnomer simply because the named plaintiff has no legal status.
On May 6, 2013, John Keen and Dealer’s Choice Preferred Collision Centre Inc. (“Dealer’s Choice”) entered into a contract with Dr. Peter Kircher, 918402 Ontario Inc. (“918 Ontario”), and Downtown Fine Cars Inc. (“DFC”) pursuant to which 918 Ontario agreed to refer all customers requiring body and collision services for damaged Porsche and Audi vehicles to Dealer’s Choice for a ten-year period (the “Agreement”).
The plaintiff, Dealer’s Choice, commenced an action against the defendants, Dr. Kircher, 918 Ontario, and DFC, on July 11, 2017 for breach of the Agreement. Dr. Kircher, 918 Ontario, and DFC defended the action and, in turn, counterclaimed against Dealer’s Choice and Mr. Keen alleging breach of the Agreement.
As it turns out, Dealer’s Choice (i.e., the party named in the Agreement and as the plaintiff in the lawsuit) is not an incorporated entity and has no other legal status. Dealer’s Choice, therefore, brought a motion to amend the title of proceedings to correct an alleged misnomer by substituting “Downtown Auto Collision Centre Inc. o/a Dealer’s Choice Preferred Collision Centre Inc.” (“Downtown Auto”) for the current plaintiff, Dealer’s Choice. The business name “Dealer’s Choice Preferred Collision Centre” was not registered by Downtown Auto for the period between March 6, 2012 and March 5, 2017.
The Ontario Superior Court of Justice dismissed the plaintiff’s motion in Dealer’s Choice Preferred Collision Centre Inc. v. Kircher, 2020 ONSC 7557. As held by Associate Justice Graham, “[t]he fact that the named plaintiff […] has no legal status […] does not justify an order correcting a misnomer.” My case comment on Associate Justice Graham’s decision can be found here.
Governing Principles in a Misnomer Analysis
Rule 5.04(2) of the Rules of Civil Procedure, RRO 1990, Reg 194 states that the court may add, delete, or substitute a party to correct the name of a party incorrectly named, unless prejudice would result that could not be compensated for by costs or an adjournment.
The Divisional Court determined that the associate judge’s summary of the applicable misnomer principles was correct: “Where, as in this case, a plaintiff seeks to amend or substitute another entity for itself, the issue is whether the ‘new’ plaintiff was an intended plaintiff when the action was commenced and the defendant reasonably ought to have been aware of which entity was pointing its litigating finger in its direction […] [emphasis in original].”
The Divisional Court went on to identify the key findings of fact made by the associate judge; namely, that the defendants had no reason to believe that anyone other than Dealer’s Choice was pointing the “litigating finger” at them because the action was based on breach of the Agreement and the evidentiary record established the negotiated exclusion of Downtown Auto from the contract.
Questions of fact and questions of mixed fact and law are reviewed on the standard of “palpable and overriding error,” which grants deference to the lower court’s findings in this regard. Indeed, “[a]n appeal […] is not a re-hearing of the motion below, but rather a review of the decision below based on the record.”
The Divisional Court held that the evidentiary record supported the factual findings of the associate judge and dismissed the appeal.
On a motion to correct the name of a plaintiff on the basis of misnomer, the moving party must establish, on a balance of probabilities, that the proposed substituted plaintiff was the intended plaintiff when the action was commenced, and that the defendant knew, or reasonably ought to have known, that the proposed substituted plaintiff was the one pointing its “litigating finger” in the defendant’s direction. The decision in Kircher demonstrates that the misnomer test will not be satisfied in a breach of contract case where the evidence establishes that the defendant expressly declined to contract with the proposed substituted plaintiff.