Introduction

It is not uncommon for a plaintiff to be uncertain about a defendant’s correct legal name. Despite searches and inquiries, the ignorance may continue with the defendant being improperly named in the Statement of Claim. What happens then when the claim is served on the right person but has incorrectly spelled or identified the defendant’s correct legal name?

The court, on being asked to correct the name, must determine whether a reasonable defendant in looking at the document as a whole, and in all the circumstances, would conclude that they were, in fact, the defendant. If the answer is yes, then the misspelling is known as a misnomer. If, on the other hand, the conclusion reached is that the defendant would not reasonably be able to conclude it was meant for them and would need to make other enquiries, then the mistake is more than a misnomer and would be a misdescription.

The “Litigation Finger” Test

This test was first developed by the English Court of Appeal in Davies v. Elsby Bros. Ltd. and became known as the “litigation finger test”. Did the Statement of Claim point the litigation finger at the right defendant, such that they would know it was meant for them despite the naming error?

The litigation finger test may assist the plaintiff in such cases.  If the test is satisfied, then the plaintiff will be permitted to correct the mistake as a misnomer. This would be done by amending the Statement of Claim. The effect would be to substitute the proper defendant’s name in place of the incorrectly named defendant. If the test is not satisfied, the amendment would not be permitted as the error would be considered a misdescription. The plaintiff would then have to move to add the proper defendant to the action as a new defendant. Where the limitation period has passed, this may be a useless step.

The test has been adopted in Ontario.  The test has been summarized by the Court of Appeal in Ormerod et al. v. Strathroy Middlesex General Hospital as follows:

The case law amply supports the proposition that where there is a coincidence between the plaintiff’s intention to name a party and the intended party’s knowledge that it was the intended defendant, an amendment may be made despite the passage of the limitation period to correct the misdescription or misnomer.

Expansion of the Test

In applying the litigation finger test in Ontario, the court is not limited to considering what the receiving defendant would know, but may, in addition, consider the knowledge of the intended party’s representatives. This would include the knowledge or powers of their insurer, their lawyer and their superiors when they received and reviewed the statement of claim.

Further Hurdle

If the test is satisfied, the court retains a further discretion as set out in Rule 5.04(2) of the Rules of Civil Procedure to refuse to permit the correction of the misnomer. That rule reads as follows:

At any stage of a proceeding the court may by order add, delete or substitute a party or correct the name of a party incorrectly named, on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.

The ONCA in Ormerod explained the court’s residual discretion in Rule 5.04(2) as follows:`

As I see it, as the scope of what the courts treat as a misnomer broadens, it is appropriate to take a wider view of the court’s discretion to refuse the correction of a misnomer. A “classic” misnomer, one in which the claim contains a minor spelling error of the defendant’s name and is personally served upon the intended but misnamed defendant, prompts the application of a standard historically developed to remedy mere irregularities. Now that the concept of “misnomer” has been broadened to apply to a wider range of situations, the standard used to permit its correction should take into account the extent of its departure from mere irregularity in all the circumstances of the case.

The court must consider whether the defendant was misled or was unduly prejudiced. As a general principle, these factors should be determinative. A general principle, however, is not an inflexible rule. Where the mistake in naming the defendant involves more than a mere irregularity or in any particular case with exceptional circumstances, the court may exercise its residual discretion under the rule to refuse to permit its correction.

Takeaways

1. Plaintiffs need to be as precise as possible in naming their defendants. Where mistaken or incorrect names are used they should be corrected as soon as possible after learning the correct name;
2. Plaintiffs need to include as much information as possible about the defendant(s) in their Statement of Claim, including their role and position, what they did, and when in order to ensure they have a good litigation finger argument;
3. Defendants must consider whether to wait in the weeds for the limitation period to expire or alert the plaintiff immediately. Alerting the plaintiff likely makes the mistake a misnomer, but may help to create a case of prejudice down the road if and when the plaintiff moves to correct. Waiting in the weeds may do the same thing but will not be looked at favourably by the courts;
4. The litigation finger test is meant to ensure fairness. It only applies where a person knew that she was the intended defendant;
5. The court can exercise its residual discretion to refuse the correction of a misnomer under Rule 5.04(2) if the intended defendant can demonstrate prejudice or if allowing the correction would lead to an unfair result.

At Milosevic & Associates, our team of Toronto corporate commercial lawyers regularly represent clients in complex commercial and real estate litigation matters, class actions, and appeals. Over the years, our team of exceptional litigators has seen it all and has successfully fought for our clients’ rights. Our impressive track record speaks for itself.  Call us at 416-916-1387 or contact us online for a consultation