The decision in Leon v. Volkswagen stands for the principle, potentially useful in jurisdictional disputes, that a foreign jurisdiction may be more appropriate than Ontario even if the proceding would be time-barred in the foeign jurisdiction:
[50] Indeed, Canadian courts have done exactly that. Even where the proposed Ontario action was time-barred in the foreign jurisdiction, our courts have deferred to comity and to the more appropriate (foreign) forum.
The Court of Appeal decision in Hunsinger v. Carter contains a statement of the principles of establishing an easement by prescription (which, as I like to point out, is a limitation issue):
(1) Establishment of an easement by prescription
[9] An easement by prescription can arise either under s. 31 of the Real Property Limitations Act, R.S.O. 1990, c. L.15, or pursuant to the doctrine of lost modern grant. Both have the same four requirements, which were properly recognized by the application judge: i) a dominant tenement that enjoys the benefit of the easement and a servient tenement whose owner suffers some use of its land; ii) the properties cannot be owned by the same person; iii) the benefit of the easement must be reasonably necessary for the enjoyment of the dominant tenement; and iv) there must be 20 or 40 years’ (see: Kaminskas v. Storm, 2009 ONCA 318 (CanLII), 95 O.R. (3d) 387, at paras. 31-36) continuous, uninterrupted, open, and peaceful use enjoyed without obtaining the permission of the servient tenement owner. See: Henderson et al. v. Volk et al. (1982), 1982 CanLII 1744 (ON CA), 35 O.R. (2d) 379 (C.A.).
[10] After a property has been registered under the Land Titles system, a pre-existing prescriptive easement over the land can be established if the four criteria can be proved to have been met before the land was transferred into Land Titles: Carpenter v. Doull-MacDonald, 2017 ONSC 7560 (CanLII), at paras. 54-55.
Can a party obtain a r. 12.08 representation order after the expiry of the limitation period? No, held the Court of Appeal in United Food and Commercial Workers Canada, Local 175, Region 6 v. Quality Meat Packers Holdings Limited.
If you’re unfamiliar with the rule, the court’s summary is helpful:
(i) Rule 12.08
[27] Rule 12.08 states:
Where numerous persons are members of an unincorporated association or trade union and a proceeding under the Class Proceedings Act, 1992 would be an unduly expensive or inconvenient means for determining their claims, one or more of them may be authorized by the court to bring a proceeding on behalf of or for the benefit of all.
[28] There is little reported case law dealing with the application of Rule 12.08. Indeed, the parties did not point to any cases that directly deal with the issue here, namely, whether a representation order can be obtained under Rule 12.08 following the expiry of a limitation period.
[29] However, there are several points worth mentioning about Rule 12.08.
[30] First, Rule 12.08 falls under Rule 12, which is entitled “Class Proceedings and Other Representative Proceedings”.
[31] Second, it is engaged where a person or persons seek to bring a claim on behalf of or for the benefit of all members of an unincorporated association or trade union. The rule addresses the problems facing unincorporated associations and trade unions seeking to sue in their own names.
[32] Third, Rule 12.08 is meant to provide for a less costly and more convenient procedure than the Class Proceedings Act, 1992, S.O. 1992, c. 6 (“CPA”). Indeed, in determining whether to authorize a representative action under Rule 12.08, the court will take a similar approach to that taken in determining whether a class action should be certified under the CPA: see Ginter v. Gardon (2001), 2001 CanLII 28052 (ON SC), 53 O.R. (3d) 489 (S.C.), at para. 14; Ottawa (City) Police Assn. v. Ottawa (City) Police Services Board, 2014 ONSC 1584 (CanLII), 55 C.P.C. (7th) 183, at para. 38 (Div. Ct.).
[33] Fourth, the rule is discretionary. One or more members of an unincorporated association or trade union “may be authorized by the court” to bring a proceeding on behalf of or for the benefit of all. Thus, unless and until authorization is granted, no representative proceeding may be brought.
[34] Fifth, the rule is silent on the question of limitation periods.
The plaintiff argued that under the Limitations Act, the representative plaintiff need only have commenced a proceeding within two years of discovery, a representation motion is not a proceeding, and anyway the court can make a representation order nunc pro tunc. The court rejected these arguments:
[46] First, under Rule 12.08, authorization is required “to bring a proceeding on behalf of or for the benefit of all” members of a trade union or unincorporated association. As I noted earlier, under s. 4 of the Limitations Act, “a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.” Reading Rule 12.08 harmoniously with s. 4, the limitation period does not stop running for the claims of class members until a proceeding has been brought on their behalf and that does not happen unless and until court authorization has been granted under Rule 12.08.
[47] Second, Caetano is effectively arguing that Rule 12.08 suspends the limitation period – that once a proposed representative commences a proposed representative proceeding, the limitation period is suspended on behalf of all members of the trade union or unincorporated association. That, as explained above, is the situation under the CPA where s. 28 expressly suspends any limitation period applicable to a cause of action asserted in favour of class members on the commencement of a proceeding. In contrast, Rule 12.08 is silent on the question of limitation periods and does not purport to extend, suspend or otherwise vary any limitation period applicable to claims asserted in favour of class members.
[48] Third, the Supreme Court’s decision in Green supports the view that, without a tolling provision, any limitation period applicable to the claims advanced on behalf of class members continues to run until the court authorizes the claims to be brought by the representative plaintiff: Green, paras. 74, 174-175.
[49] Finally, I would reject the argument that a nunc pro tunc order would be available in the circumstances of this case where leave was not sought prior to the expiry of the limitation period: see Green, at paras. 94-111.
[50] I recognize that a representative action under Rule 12.08 is meant to provide a less onerous and less expensive alternative to bringing a class action and yet a proposed representative plaintiff may feel it is necessary to proceed under the CPA instead of Rule 12.08 to avoid any limitations problems even if it would be more expensive and less convenient to do so. My interpretation, therefore, may seem to be at odds with concerns about expense and convenience. However, as Côté J. observed in Green, at para. 75, “policy concerns, as compelling as they are, do not override the plain meaning of the text and the intent of the Ontario legislature.”
The court then considered another rather esoteric limitations issue: can the court make a representation order under r. 10.01 in respect of claims that are statute-barred? The answer: no.
Rule 10.01, for those who need a refresher, provides
[56] Rule 10.01 provides as follows:
In a proceeding concerning,
(a) the interpretation of a deed, will, contract or other instrument, or the interpretation of a statute, order in council, regulation or municipal by-law or resolution;
(b) the determination of a question arising in the administration of an estate or trust;
(c) the approval of a sale, purchase, settlement or other transaction;
(d) the approval of an arrangement under the Variation of Trusts Act;
(e) the administration of the estate of a deceased person; or
(f) any other matter where it appears necessary or desirable to make an order under this subrule,
a judge may by order appoint one or more persons to represent any person or class of persons who are unborn or unascertained or who have a present, future, contingent or unascertained interest in or may be affected by the proceeding and who cannot be readily ascertained, found or served.
The plaintiff argued that the because r. 10.01 representation orders are brought within an already commenced proceeding, if a representation order does not seek to add new parties, the Limitations Act does not bar the order. However, the court found that it seeks to add new claims, which engages the Limitations Act:
[61] While the Abreus do not seek to add parties to their action, the question is whether they can assert claims, through the device of a representation order, on behalf of persons who are not plaintiffs in the proceeding, after the limitation period in respect of such claims has already expired. The Abreus’ statement of claim seeks termination pay under the ESA and wrongful dismissal damages, as well as common employer and other declarations, and aggravated and punitive damages for themselves. It purports to assert claims for monetary amounts for approximately 125 other non-unionized former employees of the Defendants, relying on Rule 10.
[64] This court, however, has repeatedly held that parties cannot circumvent the Limitations Act by amending their pleadings to add additional claims: see Frohlick v. Pinkerton Canada Ltd. (2008), 2008 ONCA 3 (CanLII), 88 O.R. (3d) 401; Dee Ferraro Ltd. v. Pellizzari, 2012 ONCA 55 (CanLII), 346 D.L.R. (4th) 624; 1100997 Ontario Limited v. North Elgin Centre Inc., 2016 ONCA 848(CanLII), 409 D.L.R. (4th) 382. The addition of new statute-barred claims by way of an amendment to a statement of claim is conceptually no different than issuing a new and separate statement of claim that advances a statute-barred claim: Frohlick, at para. 24. An amendment will be statute-barred if, after the expiry of the limitation period, it seeks to advance “a fundamentally different claim based on facts not originally pleaded”: North Elgin Centre, at para. 23.
Update: the Court of Appeal upheld the decision. The relevant paragraphs are 27-28.
Nelson v. Lavoie is a recent example of a s. 5(1)(a)(iv) appropriateness analysis in a claim against a financial planner. The plaintiff alleged that the defendant planner gave negligent advice regarding an Individual Pension Plan, which the CRA found did not meet the qualifications for registration.
The defendant argued that the plaintiff discovered her claim by the time she had seriously considered suing the defendant:
[22] On those facts, Ms. Nelson knew or ought to have known by August 2009 that she had a cause of action against the defendants. By then, she was aware that the monthly benefits were not what the defendants suggested. Further, her bookkeeper, two other accountants and one financial advisor informed her that the viability of the IPP was questionable. She had consulted with counsel. Her counsel had obtained an expert’s report that opined: “the IPP created for Ms. Nelson does not appear to meet the requirements for registration and is very likely to have its registration revoked by CRA.”
[23] Ms. Nelson admitted during discoveries that they seriously considered a lawsuit by August 23, 2009. She stated, “I’m not sure if it was already in the work, but we knew, yeah, we were going to have to, yeah.” Yet, she waited until June 20, 2012, to institute an action claiming some $3,000,000 in damages sustained because of negligent financial advice and misrepresentation.
The plaintiff didn’t dispute these facts, but argued that a proceeding wouldn’t be an appropriate remedy until the CRA’s final determination regarding the pension plan:
[28] Although she may have had suspicions on the validity of her IPP, she submits her claim did not materialize until the CRA deregistered her plan by notice dated September 28, 2011. Since the Statement of Claim was issued on June 20, 2012, it is well within the time prescribed by the Limitations Act, 2002. She submits it was not until that time that the essential elements of s. 5 of the Limitations Act, 2002, were met. At that point, she was aware that she would have to indemnify the CRA for back taxes, interest and any associated penalties.
After reviewing the s. 5(1)(a)(iv) jurisprudence, the court rejected the defendant’s argument:
[54] When applying these principles to this factual situation, it is clear that Ms. Nelson had some suspicions by the August of 2009 regarding the conformity of the IPP. The advice that she received from the accountants and financial planners she consulted was concerning. The defendants submit that these facts satisfy the test at s. 5(1)(a) of the Act. However, I am unable to accept this argument because it fails to satisfy the requirement of s. 5(1)(a)(i) and s. 5(1)(a)(iv).
[55] Firstly, the defendants’ reassurance prevented the plaintiff from discovering that loss or damage has occurred. The defendants, her financial advisors, insisted that the plan was not only acceptable to the CRA but it would be beneficial to her in the long-term. On at least two subsequent occasions, the defendants reassured her that the IPP complied with the Income Tax Act. This repeated advice casted doubts over the inadequacy of the IPP. In this light, Ms. Nelson could not conclude if damage had occurred.
[56] Secondly, I cannot accept the defendants’ position concerning the right time for the institution of appropriate proceedings. It would not have been appropriate for Ms. Nelson to institute an action without a final determination from the CRA. Her counsel started a review process by notifying the CRA that something may be amiss. The CRA did not make a final decision until September 2011. Until then, the IPP’s compliance with the regulation remained uncertain. Ms. Nelson could not know that the advice she received from the defendants was in fact wrong. On September 28, 2011, the CRA made the decision to deregister the plan. Her suspicions and doubts about the plan crystallized with that notice. There was no doubt, at that point, that she would be responsible for tax arrears and additional penalties. It is only at that time that it was appropriate to institute an action. Had Ms. Nelson instituted an action in the fall of 2009, she would have very likely faced a summary judgment application dismissing her claim.
This seems to very good limitations analysis, and worth reviewing when considering the limitation of professional negligence claims.
The Court of Appeal’s decision in Filice v. Complex Services Inc. is a reminder of certain commonsense, probably generally self-evident principles about the timing of limitations defences. Raise a limitations defence in response to an amendment motion (if there is one to raise) on the motion, and when you raise a limitations defence generally, it shouldn’t for the first time on appeal:
[55] There is no information in the record whether the issue of the limitations period was argued when the respondent sought leave to amend his statement of claim. That is where it ought to have been argued but I have to assume it was not. If so, it is, in my view, again too late to raise the issue in this court. However, even if it were open to the appellant to raise the issue now, I would not give effect to it. The appellant was on notice of the respondent’s essential claim, that is, that his dismissal was improper. Whether the claim is styled as wrongful dismissal or constructive dismissal, the appellant was fully aware of the nature of the claim it was facing within the two year limitation period.
In Newman Bros. v. Universal Resource Recovery Inc., the defendant ventured a dubious limitations defence based on the argument that a plaintiff who delivers multiple invoices has to commence a separate action in regards of those invoices. The court rejected it:
[26] The defendants submit that the limitation period begins to run under this particular contract 16 days after the delivery of each invoice, and therefore separate actions would have to be commenced at different times whenever there was a delay in the payment of a particular invoice. I reject such an argument as not commercially reasonable, unduly onerous on the parties, and a potential waste of judicial resources.
[27] As was stated in 407 ETR at para. 39:
A civil action becomes appropriate when 407 ETR has reason to believe it will not otherwise be paid – in other words, when the usually effective license plate denial process has run its course. Thus the date when a vehicle permit expires for failure to pay a toll debt is the date a civil action is an appropriate means to recover a debt. This date starts the two-year limitation period.
[28] I accept the position of the plaintiff that it trusted the defendants, it did not want to jeopardize a long standing business relationship and it believed, from the promises made, that payment would be forthcoming and in fact some were. That in my view was a reasonable basis, and reasonable consideration to forebear on issuing the claim to see if further payments would be forth coming.
[29] I conclude that I have not been persuaded by the defendants, based on the record before me, that the legally appropriate time to sue was two years after the August 2009 payment. Indeed, I find the argument of the plaintiff has merit. It was promised further funds, there were no objections to the invoices submitted or the work done, and it received further funds in May 2011after receiving such promises of payment.
[31] Based on this record one would have difficulty thinking that the defendants thought the May 31, 2011 payment was all they potentially owed, or that, the plaintiff thought that that payment had satisfied the debt (see s. 13(1) of the Limitations Act, 2002; see also Buik Estate v. Canasia Power Corp., 2014 ONCA 2959 at paras. 13-15).
This seems like a sound analysis, and one which underscores that a plaintiff doesn’t necessarily discover a claim arising from unpaid invoices on the date the invoices become due and aren’t paid (though note that the impact of s. 13—an acknowledgment—is unrelated to discovery).
Karlovic v. Karlovic has a useful discussion of the impact of delay in bringing an application for spousal support:
Delay in Bringing an Application for Support
[56] It has been oft repeated that there is no limitation period for an application for spousal support. However extreme delay in bringing the application can defeat or diminish such a claim. As Chappel J. of this court put it in Fyfe v. Jouppien, following an exhaustive review of the relevant factors in determining whether delay should defeat or reduce a spousal support claim:
…excessive delay in seeking spousal support by a party may raise questions as to whether there was an ongoing reasonable expectation of support, and whether there was actual need on the part of the claimant spouse.
[57] Chappel J. set out a number of important factors that a court must consider in the face of extreme delay. They include financial need arising after separation, financial interdependence, both before and particularly after separation, and the length of the delay in making the claim.
[58] While delay may indicate that the parties have taken steps to unravel their financial interdependence, that is not always the case. As Chappel J. stated at para. 54(d):
On the other hand, the passage of time may be given less weight in the analysis of entitlement if, despite the passage of a number of years, the parties have not effected a clean break, and their relationship continues to be characterized by mutuality and interdependence. In such circumstances, an objective analysis of the situation may lead to the conclusion that the expectation of mutual support and dependency arising from the marriage relationship has continued.
[59] In Fyfe, Chappel J. found entitlement after a six year delay in seeking spousal support for three main reasons: the marriage was a long term one, the recipient had developed cancer following separation, and in the interim the parties were “quite simply, mutually working their affairs out.”[23]
[60] In two other cases that the husband relies upon, Kapunovic v. Cukotic- Kapunovic[24] and Phip v. Philp[25] a lengthy delay can also be explained by a serious mental illness, particularly in the absence of prejudice.
[61] In Walker v. Greer,[26] Tucker J. of this court gave little effect to a ten year delay in seeking support. He stated, without reference to any authorities that:
The law provides time delay does not bar a claim for support provided that there is reason for the delay and the events that have transpired since the delay.
[62] That statement appears to imply that as long as there is a reason for the delay or the events since the delay occurred, the delay will not affect the claim. While the effect of delay on a spousal support claim is a discretionary decision, the case law shows that the applicant for support must offer more than a reason for the delay. That party must offer a compelling reason for the delay.
[63] In Walker v. Greer, each party had a high school education and each was very involved with their children. However the court found that the mother was the child’s primary caregiver. Each had the children stay with him for an extended period following separation. The factors that appear to have most influenced the court to grant spousal support after a ten year delay were:
- An implicit judicial notice that women in our society earn less than men,
- The fact that the husband made a fair bit more than the mother. But as the court pointed out, that was in part because she made voluntary lifestyle choices that adversely affected her income but reduced her expenses. She moved out of Toronto but could have earned more had she stayed there.
- The wife feared that the Husband would make an equalization claim if she sought spousal support, and
- The wife she wanted to “make it” on her own.
[64] This case points out the extent to which the exercise of discretion can influence the issue of entitlement in a delayed claim for spousal support. Having said that, the court ordered very limited lump sum retroactive support and what appears to be a significantly reduced amount of prospective spousal support.
[65] In van Rythoven v. van Rythoven,[27] Gray J., of this court granted the wife spousal support twelve years after the expiration date for limited term support set out in their separation agreement. Gray J.’s order came eleven years after the dismissal of a motion to vary the separation agreement’s termination date. The agreement called for a total of four years of support after a thirteen year marriage in which the parties had two children. Gray J. found that the delay was only one factor to be considered in the context of factors set out in s. 15.2 of the Divorce Act.
[66] In van Rythoven, the wife’s physical and mental condition following the separation agreement drastically and unexpectedly worsened. At the time of the motion, she was living in poverty, surviving on less than $8,000 per year in ODSP payments. At the time, the husband earned $95,000 per year.
[67] Critically, Gray J. found that the separation agreement did not meet the Miglin[28] test, particularly the second stage of that test. That stage required Gray J. to determine, as he put it, whether “… the substance of the agreement remains in conformity with the principles of s. 15.2 of the Divorce Act today.”
[68] Gray J. made a prospective order at the upper end of the SSAG range. But because of the delay, he chose not to make his order retroactive.
[69] In Howe v. Howe,[29] the wife was unable to offer a satisfactory explanation for a 24-year delay in seeking spousal support after a 13-year marriage. W.J. MacPherson J. found that the wife’s inability to become fully self-sufficient was not a result of the marriage. Her alcoholism was not accepted as an appropriate explanation, particularly in light of her failure to take steps to confront and ameliorate it.
[70] In trying to discern a consistent pattern in the case law, it seems that the determination of entitlement to support after a significant delay involves a discretionary balancing of the length of the delay and the reasons for it. The longer the delay, the greater the need to offer a compelling explanation for the delay because of the increasing presumption of financial independence and clean break.
[71] On the other hand, the more likely that the recipient was physically or emotionally unable to make an application for their support, or the greater the post separation financial interdependence, the more likely it is that the applicant will be entitled to make the claim.
[72] Even if entitlement is found, a long delay can affect quantum. That was the result in Walker v. Greer, and with regard to retroactivity, van Rythoven. In Quackenbush v. Quackenbush,[30] MacKinnon J. of this court granted spousal support after a ten-year delay but reduced the quantum by 52 – 64% because of the delay. In that case there was a long marriage with financial dependency. The applicant wife offered a compelling explanation for her delay. She suffered from depression following the death of a child. She then subsisted on social assistance.
In Canada v. Milne, the Federal Court of Appeal held that no limitation period applies to an action under s. 31(1)(a)(i) of the Expropriation Act:
[3] The central issue before the motion judge was the proper interpretation of subparagraph 31(1)(a)(i) of the Expropriation Act – whether it provides that there is no limitation period, and thus ousts the operation of subsection 39(1) of the Federal Courts Act, or merely establishes a point in time after which an action may be commenced, subject to the limitation period determined in accordance with subsection 39(1) (in this case the limitation period prescribed by the Ontario Act). Paragraph 31(1)(a) of the Expropriation Act reads as follows (underlining added):
31 (1) Subject to section 30, 31 (1) Sous réserve de l’article 30: (a) a person entitled to compensation in respect of an expropriated interest or right may, a) une personne qui a droit à une indemnité pour un droit ou intérêt exproprié peut: (i) at any time after the registration of the notice of confirmation, if no offer under section 16 has been accepted by him, and (i) après l’enregistrement de l’avis de confirmation, si elle n’a accepté aucune offre faite en vertu de l’article 16, (ii) within one year after the acceptance of the offer, in any other case, (ii) dans un délai d’un an à compter de l’acceptation de l’offre, dans tout autre cas, commence proceedings in the Court by statement of claim for the recovery of the amount of the compensation to which he is then entitled; or engager des procédures devant le tribunal par voie d’exposé de la demande pour le recouvrement du montant de l’indemnité à laquelle elle a alors droit; [4] The motion judge applied the “modern approach” to statutory interpretation endorsed by the Supreme Court in Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27 at para. 21, 1998 CanLII 837 (SCC), 1998 CanLII 837. He read the words used in subparagraph 31(1)(a)(i) – “at any time after” – in their statutory context and in light of the object and purpose of expropriation legislation.
[5] Applying this approach, he found the words to be clear and unambiguous. He noted the Supreme Court’s holding in Toronto Area Transit Operating Authority v. Dell Holdings Ltd., [1997] 1 S.C.R. 32 at 46, 1997 CanLII 400 (SCC), 1997 CanLII 400, that expropriation legislation (there the Ontario statute) “should be read in a broad and purposive manner in order to comply with the aim of the Act to fully compensate a land owner whose property has been taken,” and observed that if accepted, the Crown’s position could deprive a land owner of compensation. He interpreted the provision as expressly stating that no limitation period applies, so that subsection 39(1) of the Federal Courts Act does not incorporate Ontario limitations legislation by reference. He also took into account the decision of the Alberta Court of Appeal in Calgary (City) v. Lafarge Canada Inc., 1995 ABCA 313 (CanLII) at para. 15, 169 A.R. 363, in which the Court gave the same meaning to the phrase “at any time” as it appeared in Alberta expropriation legislation. He therefore determined that the action was not statute-barred.
[6] In addition, the motion judge considered whether there is a discrepancy between the English text of subparagraph 31(1)(a)(i), which uses the phrase “at any time after,” and the French text, which uses “après.” Relying on dictionary definitions, he concluded that there is no discrepancy: both texts convey the meaning of “whatever time.” He therefore found it unnecessary to apply the rules, set out in R. v. Daoust, 2004 SCC 6 (CanLII) at paras. 26-31, [2004] 1 S.C.R. 217, that govern the interpretation of bilingual legislation where the two versions are discordant.
[7] The Crown now appeals to this Court, submitting that the motion judge erred in interpreting subparagraph 31(1)(a)(i) as providing that there is no limitation period, and in failing to interpret it as merely establishing the point after which an action for compensation may be commenced, subject to the limitation period incorporated by subsection 39(1) of the Federal Courts Act. The issue of statutory interpretation raised by the appeal is an issue of law, subject to the correctness standard of appellate review.
[8] In my view the conclusion of the motion judge was correct, substantially for the reasons that he gave. I will briefly address only one element of his reasons, as well as one aspect of the Crown’s submissions in this Court that represents a change in position from that argued before the motion judge.
The Superior Court decision in Tsui-Wong v. Xiao contains a good summary of the principles of laches and acquiescence:
The Test for the Doctrine of Laches
[222] I adopt the comments of Penny, J. in Indcondo v. Sloan, 2014 ONSC 4018 (CanLII), 121 O.R. (3d) 160, at paras. 157-159 as a succinct and current formulation for the defence of laches:
Laches is an equitable doctrine, akin to estoppel, founded on the principle that one is obliged to assert legal rights in a timely way or risk losing them. Laches is a form of equitable limitation period. Two factors dominate the consideration of this doctrine:
(1) delay and its circumstances; and
(2) prejudice resulting from that delay.
In Lindsay Petroleum Co. v. Hurd (1874), L.R. 5 P.C. 221 (Ontario P.C.), at 239 -240 the principle was stated as follows:
…[it] is not an arbitrary or technical doctrine… Two circumstances, always important in such cases, are, the length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance of justice or injustice in taking the one course or the other, so far as relates to the remedy.
[223] The Supreme Court of Canada discussed these critical factors in M. (K.) v. M. (H.), 1992 CanLII 31 (SCC), [1992] 3 S.C.R. 6 (S.C.C.), at pp. 77-78:
What is immediately obvious from all of the authorities is that mere delay is insufficient to trigger laches… Rather, the doctrine considers whether the delay of the plaintiff constitutes acquiescence or results in circumstances that make the prosecution of the action unreasonable. Ultimately, laches must be resolved as a matter of justice as between the parties, as is the case with any equitable doctrine.
[224] The doctrine of laches can be used to defend a claim under the Fraudulent Conveyances Act, R.S.O. 1990, c. F. 29.[5]
[225] As confirmed in M.(K.), laches must be resolved as a matter of justice between the parties, as in any equitable doctrine.
Acquiescence
[226] The Defendants argue first, that the Plaintiff has acquiesced to the claim being dismissed.
[227] There is a lengthy consideration by Spence, J. in 392278 Ont. Ltd. v. Miletich Estate (2001), 38 R.P.R. (3d) 239, at para. 71, as to the meaning of laches, and acquiescence). The case law confirms that acquiescence must be equivalent of waiver, and is more than simply the passage of time: in that case 43 years.
[228] Spence, J. cited with approval a decision of the British Columbia Court of Appeal in Irvine v. Irvine, [1977] 3 W.W.R. 37 (B.C.C.A), at para. 13,adopting Halsbury’s formulation :
The nature of laches. The legislature, in enacting a statute of limitation, specifies fixed periods after which claims are barred; equity does not fix a specific limit, but considers the circumstances of each case: Smith v. Clay (1767), 3 Bro. C.C. 639, 27 E.R. 419. In determining whether there has been such delay as to amount to laches the chief points to be considered are (1) acquiescence on the plaintiff’s part, and (2) any change of position that has occurred on the defendant’s part. Acquiescence in this sense does not mean standing by while the violation of a right is in progress, but assent after the violation has been completed and the plaintiff has become aware of it. It is unjust to give the plaintiff a remedy where he has by his conduct done that which might fairly be regarded as equivalent to a waiver of it; or where by his conduct and neglect he has, though not waiving the remedy, put the other party in a position in which it would not be reasonable to place him if the remedy were afterwards to be asserted. In such cases lapse of time and delay are most material. Upon these conditions rests the doctrine of laches: Lindsay Petroleum Co. v. Hurd (1874), L.R. 5 P.C. 221 at 239, per Lord Selborne.
[229] The Court in 392278 Ont. Ltd. concluded that the defendant remained in residence throughout the 43-year period. There was no evidence that she passed up opportunities or changed her position over the years. The delay was long, but did not constitute acquiescence. There was no evidence that the plaintiff had waived her rights.
[230] The trial judge’s findings were upheld by the Court of Appeal in 392278 Ont. Ltd. v. Miletich Estate, [2002] O.J. No. 3795.
[231] I find that the Defendants cannot rely upon the Plaintiff’s acquiescence. Admittedly, there is a significant delay of nine years of inactivity. Had the Plaintiff searched in 2005, she would have found out that June was residing in Ontario. Even after locating the Defendants, and in particular June, the Plaintiff did not commence the second Fraudulent Conveyance Action for almost two years after she located June.
[232] The Plaintiff testified that she was always hopeful that Daniel would surface, and that she could pursue her judgment against him. The Plaintiff was litigation weary and for a period of time was ill and preoccupied by her children pursuing their studies. I accept that the Plaintiff always intended to pursue the Defendants once she was able to locate them, and once she determined that there may be assets to realize upon.
Lofranco v. Azevedo considers the limitation period applicable to claims arising from solicitor’s undertakings.
The plaintiff’s new personal injury lawyer undertook to protect the former lawyer’s reasonable account. The limitation period for the claim to remedy the breach of the undertaking (that is, the failure to pay out the reasonable account) would commence only when the undertaking was revoked:
[40] In my view, it is not open to the Estate to argue that the limitation period runs against the applicant. Given my finding that there was a valid undertaking given on behalf of Mr. Pereira, as recently discussed by Quigley J. in Cozzi, at para. 62, the limitation period stops running once the undertaking is given, unless the undertaking is revoked:
63 First, Mr. Cozzi tries to counter that proposition by noting that Kilian D.J. correctly adopted the law that a personal undertaking from a solicitor is not discharged by notification. I agree. Moreover, I agree with the appellant on the general proposition that a solicitor’s undertaking and a client’s undertaking will continue to be enforceable without the interference of a limitation period: Sokoloff v. Mahoney. The Deputy Judge specifically recognized this in para. 17 when he quoted from para. 15 of Sokoloff as follows:
15 There is also clear case law that a solicitor’s undertaking as well as a client’s undertaking is enforceable, can be relied upon, and stops the clock running for the purpose of a limitation defence unless revoked. In Tembec Industries Inc. v. Lumberman’s Underwriting Alliance, (2001) 2001 CanLII 28252 (ON SC), 52 O.R. (3d) 334, [2001] O.J. No. 72 at paras 21-22, Ground J. held that an undertaking to pay a specified amount in damages gives rise to promissory estoppel where the recipient of the undertaking relied on it. Such reliance is expressly contemplated by a solicitor who gives an undertaking, as Wilton-Siegel J. held in Bogoroch & Associates v. Sternberg, [2005] O.J. No. 2522 at para 38.
The former lawyer also had “a charging lien” under the Solicitor’s Act to which no limitation period applied:
[42] Another basis on which I would find that the limitation period does not run against the applicant is the nature of its interest in the funds held by the Azevedo Firm. In Thomas Gold Pettinghill LLP, at paras. 88 and 89. Perell J. explained that, besides charging orders that can be made under the Solicitor’s Act, the Court has inherent jurisdiction “to charge assets recovered or preserved through the instrumentality of a lawyer for a client”.
[43] Perell J. also noted, at para. 101, that, in circumstances where the Court is satisfied that the preconditions are met for a charging lien, the limitation periods in the Limitations Act, 2002, do not apply:
For present purposes, the three points to note from Justice Henry’s decision in Re Tots and Teens Sault Ste. Marie about a charging lien made under the court’s inherent jurisdiction are: first, the charging lien creates the proprietary interest of a secured creditor; second, subject to being declared, the charging lien is an inchoate interest that pre-dates the court’s declaration; and third, the charging lien is intrinsically declaratory in nature. The last point supports Cassel Brock’s argument that a charging lien comes within s. 16 (1) (a) of the Limitations Act, 2002 and is not subject to any limitation period.
[44] I am satisfied that the applicant is entitled to a charging lien. In Thomas Gold Pettinghill LLP, at para. 88, Perell J. explained that the preconditions for a charging lien are that “(a) the fund, or property, is in existence at the time the order is granted; (b) the property was recovered or preserved through the instrumentality of the lawyer; and (c) there must be some evidence that the client cannot or will not pay the lawyer’s fees”.
(a) the funds held in trust by the Azevedo constitute the fund;
(b) the Lofranco Firm did some work on Mr. Pereira’s file. While there is a dispute about the extent of the work done, there is no dispute that the firm was involved in moving the matter forward; and
(c) It is evident from the position taken by the Estate on this application that it will not agree to pay the fees claimed by the Lofranco Firm.
[46] Looking at the matter from a different perspective, both the Solicitor’s Act and the common law provide special protection to lawyers in recovering their fees in circumstances in which a plaintiff is successful, either through a settlement or by obtaining judgment. The undertaking Mr. Azevedo gave on Mr. Pereira’s behalf and the fact that Mr. Pereira consented to the money being held in trust by the Azevedo Firm once settlement was reached, in my view, constitute an acknowledgement by Mr. Pereira that he understood the Lofranco Firm’s proprietary interest in the funds. However, as discussed below, given that the undertaking was subject to the fees being reasonable and Mr. Pereira’s ability to assess the account, the issue remains whether the applicant is entitled to payment of its full account or whether the Estate is entitled to assess the account.
I’m not familiar with the jurisprudence cited for this conclusion. A charging lien may well be declaratory, but surely here it would result in the consequential relief of the former lawyer being entitled to the disputed funds?
A declaration that results in consequential relief doesn’t fall within s. 16(1)(a).