Author: Dan

Ontario: the limitation of applications to recover real estate advances

In Scicluna v. Solstice Two Limited, the Court of Appeal reminds us that an application to recover monies advanced in a real estate purchase is subject to the Real Property Limitations Act:

[25]      Although the application judge should have responded overtly in her decision to Solstice’s limitation period defence, she was clearly correct to reject it. In my view, Yim v. Talon International Inc., 2017 ONCA 267 (CanLII), 137 O.R. (3d) 184 confirms that Ms. Scicluna’s claim is governed by the 10 year limitation period in s. 4 of the Real Property Limitations Act, R.S.O. 1990, c. L.15(“RPLA”), not by the Limitations Act. I reject Solstice’s attempt to distinguish this case based on the factual difference that Yim dealt with a deposit whereas the “forfeited money” claimed by Solstice is no longer a deposit. The RPLA governs actions to recover “land”, and “land” is defined in s. 1 as including “money to be laid out in the purchase of land”. Ms. Scicluna’s application to recover monies advanced in a real estate purchase falls under that definition regardless of whether it is properly characterized as a deposit.al

Federal: Where does a cause of action arise?

The limitation period in s. 39(2) of the Federal Courts Act applies when a cause of action arises otherwise than in a province:

(2) A proceeding in the Federal Court of Appeal or the Federal Court in respect of a cause of action arising otherwise than in a province shall be taken within six years after the cause of action arose.

When does a cause of action arise in a province? The Federal Court of Appeal’s decision in Canada (Attorney General) v. Liang clarifies:

[19]           A cause of action is a set of facts that provides the basis for an action in court: see Markevich, at paragraph 27. A cause of action arises in a province when all of the elements of the cause of action are present in that province: see Canada v. Canada Maritime Group (Canada) Inc., 1995 CanLII 3513 (FCA), [1995] 3 F.C. 124 at page 129, 185 N.R. 104; Apotex v. Sanofi-Aventis, 2013 FCA 186 (CanLII) at paragraph 105, [2015] 2 F.C.R. 644. The question as to which facts constitute the plaintiffs’ cause of action and where they arose does not appear to have been canvassed in the Federal Court and it was not debated on this appeal. Given the importance of the question for these litigants and for the jurisprudence, I would allow the appeal in part and return this question to the Federal Court, to be decided as directed by the case management judge.

Ontario: rectification is a “claim”

The Court of Appeal’s decision in Alguire v. The Manufacturers Life Insurance Company is noteworthy for the following points:

It affirms that a request for rectification is a “claim” within the meaning of the Limitations Act:

[26]      In my view, Manulife’s request for rectification is a claim. It is more than just a denial of Mr. Alguire’s claim; it is an independent claim. Even if Mr. Alguire had not brought this proceeding, Manulife would have been entitled to bring an application seeking rectification of the Policy. Consequently, Manulife’s request goes beyond a mere defence and qualifies as a claim for rectification, which is equitable relief: Fairmont, at para.12. The Limitations Act applies to equitable claims: McConnell v. Huxtable, 2014 ONCA 86 (CanLII), 118 O.R. (3d) 561, at paras. 48-49.

This may be the correct result, but the court didn’t arrive at it by asking the correct question (at least not explicitly).  Section 1 of the Limitations Act defines “claim”: a claim to remedy damage resulting from wrongful conduct.  Accordingly, whether there is a claim is a matter of whether there is wrongful conduct and resulting damage.  It does not necessarily follow from a party seeking an order or declaration that there is a claim.  There are circumstances where a party asks the court to do something—for example to order the passing of accounts—without there having been wrongful conduct.

There’s another instance of confusion about the nature of the “claim”:

[34]      […] A claim, however, requires an act or omission of the person against whom it is made: Limitations Act, s. 5(1)(a)(iii). In this case, it is Mr. Alguire’s resiling from the parties’ intended agreement that grounds the rectification claim. Even though Manulife discovered the error in the paid-up values in the Policy in 2007, it did not know, and could not reasonably ought to have known, that Mr. Alguire would seek to resile from the parties’ intended agreement at some point in the future. Manulife therefore cannot be faulted for failing to act with due diligence.

It’s because of the s. 1 definition of “claim” that it requires wrongful conduct, not because s. 5(1)(iii) makes knowledge of the wrongful conduct the precondition of discovering a claim.

The Court follows Albertan authorities for the principle that s. 16(1)(a) should be narrowly construed:

[27]      The next issue is whether Manulife can rely on s. 16(1)(a) of the Limitations Act, which provides that there is no limitation period in respect of “a proceeding for a declaration if no consequential relief is sought.”

[28]      In the context of a limitation period analysis, declaratory relief should be narrowly construed so as to ensure that s. 16(1)(a) is not used as a means to circumvent applicable limitation periods: Joarcam, LLC v. Plains Midstream Canada ULC,2013 ABCA 118 (CanLII), 90 Alta. L.R. (5th) 208, at para. 7.

[29]       I conclude that this subsection is unavailable to Manulife in the circumstances of this case, as it is seeking consequential relief.  The remedy of rectification sought in this case has significant consequences for the parties and goes beyond clarifying the nature of a particular obligation. Mr. Alguire stands to receive significantly less money as a result of the rectification compared to what he argued he was entitled to on the Policy’s face.

The Court held that policy considerations cannot drive the results:

[33]      Finally, Mr. Alguire raises policy considerations in support of his submission that the claim for rectification is statute-barred.  Those considerations cannot, in the circumstances of this case, drive the result.  The Limitations Act was designed to promote certainty in the analysis of when claims are statute-barred.  The task of a reviewing court is to determine the applicable limitation period having regard to the legislation. A limitation period analysis is not a laches analysis where the court’s investigation is driven by the equities of the situation.

This prompts the obvious question: are there circumstances where policy considerations could inform a limitations analysis? I wouldn’t think so, and it seems like the real policy concern is avoiding the introduction of a new factor in the limitations analysis.  It’s easy to see how litigants might seize on this obiter as standing for the principle that there are circumstances where, in addition to the matters in s. 5(1), a court must consider the impact of policy on the commencement of time.

 

 

 

Ontario: Technicalities will not preclude misnomer relief

The plaintiffs in Galanis v. Kingston General Hospital commenced a proceeding by notice of action within the limitation period, and served the statement of claim outside the limitation period.  When the plaintiffs sought to add defendants on the basis of misnomer, the defendants took the novel position that the court could only look at the notice of action when applying the “litigation finger” test.  The court had none of this rather dubious argument:

[6]               The plaintiffs rely on the doctrine of misnomer. They allege that they did not know the names of the proposed defendants when the notice of action was issued. This evidence is uncontradicted.

[7]               Dr. Pattee does not oppose the motion nor does Ms. Rafuse. Drs. Dodge and Ali do, asserting that the doctrine of misnomer does not apply to them in the circumstances and that, because the limitation period had expired by the date the statement of claim was filed, they should not be added as defendants.

[8]               The short answer to this motion is found in the opening paragraph of Stechysyn v. Domljanovic, 2015 ONCA 889 (CanLII) :

On a motion to correct the name of the defendant on the basis of misnomer, as long as the true defendant would know on reading the statement of claim he was the intended defendant, a plaintiff need not establish due diligence in identifying the true defendant within the limitation period: Kitcher v. Queensway General Hospital(1997), 1997 CanLII 1931 (ON CA), 44 O.R. (3d) 589 (C.A.), at paras. 1 and 4; Lioyd v. Clark, 2008 ONCA 343 (CanLII), 44 M.P.L.R. (4th) 159, at para.4.

[9]               Drs. Dodge and Ali advance the novel position that I can look only at the notice of action and, if I am restricted to that pleading, the requisite “litigation finger” points solely at Dr. Pattee. Alternatively, I should exercise my residual discretion and not allow the addition of Dr. Dodge because, at the time of the alleged malpractice, he was a resident in anesthesiology, acting under Dr. Pattee’s direction. Although this submission is not made on behalf of Dr. Ali in the factum, counsel urged me in oral submissions to do the same because of his limited involvement in the care of Ms. Galanis.

[10]           There is no reported decision that makes the distinction between a notice of action and statement of claim relied upon by the proposed defendants. The decisions in Stechysyn and Spirito Estate v. TrilliumHealth Centre, 2008 ONCA 762 (CanLII), both say that, as long as a litigation finger is pointing from the statement of claim, that is sufficient. I consider these decisions binding on me even when the proceeding is commenced by a notice of action.

The court also rejected the proposed defendants’ argument that the plaintiffs using a singular rather than plural pseudonym was of some consequence:

[12]           The fact that a singular, not plural, pseudonym was used is of no moment; to accede to the proposed defendants’ argument that only one party can be substituted if “Doe” rather than “Does” appears in the title of proceedings would be to allow form to triumph over substance.  In this regard, I rely on subrules 1.04(1) and 2.01(1)(a) of the Rules of Civil Procedure.

 

Ontario: Adding a party after the presumptive expiry of the limitation period requires evidence

The decision in Laurent-Hippolyte v. Blasse et al. is a reminder that on a motion to add a party after the presumptive expiry of the limitation period, the plaintiff needs to file evidence of due diligence:

[21]           TWD argues that the motion must be dismissed because the Plaintiff nor any other affiant has provided any evidence as to discoverability during the relevant time period – that being the two-year period after the date of loss. TWD asserts that the absence of any such evidence is fatal to the motion.

[22]           I agree with TWD. There is absolutely no evidence in this case as to what occurred between the date of loss and the time that the Statement of Claim was issued.  While I accept that Plaintiffs should not be required to send pro forma letters and that the expectations placed on unrepresented Plaintiffs to identify tortfeasors should be low, this does not mean that a Plaintiff can succeed on these motions with absolutely no evidence on the issue.

[23]           At the very least the Plaintiff, or other affiant, could have explained what was happening in the relevant two-year period and/or describe the abilities that the Plaintiff did or did not have in pursuing the Claim. Without any evidence to this effect, a Court cannot determine, as stated in section 5(1)(b), “the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).” I was provided with no evidence on the Plaintiff’s abilities or circumstances. I have no evidence of diligence or an explanation for any lack of diligence. When was counsel retained? What steps did counsel take if counsel was retained? If no steps were taken, why not?

Ontario: the impact of an appeal on the appropriateness of a proceeding

When the success of an appeal in a related but separate proceeding (involving the same defendants) will eliminate damage, is a proceeding to remedy that damage inappropriate until the appeal’s determination?  No, held the Court of Appeal in Tapak v. Non-Marine Underwriters, Lloyd’s of London:

[13]      The second is to submit that the appeal against the other defendants, if successful, might have eliminated their losses and thus the appellants did not know that this action was “an appropriate means” to seek to remedy its losses until the appeal was dismissed, relying on s. 5(1)(a)(iv) of the Limitations Act, 2002 and Presidential MSH Corp. v. Marr, Foster & Co. LLP (2017), 135 O.R. (3d) 321, 2017 ONCA 325 (CanLII). In our view, s. 5(1)(a)(iv) is not intended to be used to parse claims as between different defendants and thus permit one defendant to be pursued before turning to another defendant. Rather, it is intended to address the situation where there may be an avenue of relief outside of a court proceeding that a party can use to remedy their “injury, loss or damage” – see, for example, 407 ETR Concession Co. v. Day, 2016 ONCA 709 (CanLII), 133 O.R. (3d) 762.

The Court also included a reminder that seeking a declaration in addition to consequential relief will not avoid a limitations defence by engaging s. 16(1)(a) of the Limitations Act:

[14]      The third is the argument that the appellants only sought declaratory relief and therefore, under s. 16(1)(a) of the Limitations Act, 2002, the two year limitation period does not apply. That argument cannot succeed because the claim in this action was not limited to declaratory relief. The claim also sought consequential relief, namely damages, so s. 16(1)(a) does not apply.

Ontario: the scope of the sexual assault/misconduct exceptions

Jane Doe v. Weinstein considers the scope of s. 16(h) and (h.1) of the Limitations Act, which provides that there is no limitation period in respect of a proceeding based on a sexual assault, and misconduct of a sexual nature:

16 (1) There is no limitation period in respect of,

[…]

(h) a proceeding based on a sexual assault;

(h.1) a proceeding based on any other misconduct of a sexual nature if, at the time of the misconduct, the person with the claim was a minor or any of the following applied with respect to the relationship between the person with the claim and the person who committed the misconduct:

(i) the other person had charge of the person with the claim,

(ii) the other person was in a position of trust or authority in relation to the person with the claim,

(iii) the person with the claim was financially, emotionally, physically or otherwise dependent on the other person;

[…]

Same

(1.1) Clauses (1) (h), (h.1) and (h.2) apply to a proceeding whenever the act on which the claim is based occurred and regardless of the expiry of any previously applicable limitation period, subject to subsection (1.2). 2016, c. 2, Sched. 2, s. 4 (2).

[…]

Same

(1.3) For greater certainty, clauses (1) (h), (h.1) and (h.2) are not limited in any way with respect to the claims that may be made in the proceeding in relation to the applicable act, which may include claims for negligence, for breach of fiduciary or any other duty or for vicarious liability. 2016, c. 2, Sched. 2, s. 4 (2).

A defendant in Jane Doe argued that because the claims against her were not based on the sexual assaults themselves, they fell outside the scope of the s. 16(1)(h.1) exception.  The court rejected this argument:

[26]           With that context in mind, in my view the purpose of section 16 (1.3) is to ensure that, where a proceeding involves a claim for civil liability arising from or relating to a sexual assault, that proceeding cannot be barred by the Act. This encompasses proceedings against third parties (i.e. persons other than the perpetrator of the sexual assault) regardless of the nature of the claim, whether for breach of duty, vicarious liability or otherwise, provided that the connection with a sexual assault is established.

[27]           Viewed in this light, all of the claims against Schneeweiss fall within the umbrella of s. 16 (1.3). Although the claims against Schneeweiss are not for the sexual assaults themselves, they all involve civil liability for actions that relate directly to Weinstein’s sexual assaults on Doe. Schneeweiss is said to have facilitated the assaults, with knowledge, recklessness or indifference to the consequences for Doe. Thus all of the allegations against Schneeweiss in the Claim are “in relation to” Weinstein’s assaults and are not statute barred.

This is sensible and well-reasoned, and the construction of the provisions seems correct to me. I expect this will become a leading decision on the scope of the sexual misconduct exception,  Meanwhile, the context the court refers to is as follows:

[18]           The limitations issue raised by Schneeweiss turns on the proper interpretation of the phrase “in relation to the applicable act” in s. 16 (1.3). Are the claims against Schneeweiss claims “in relation to” the sexual assaults by Weinstein (in which case no limitations period would apply), or are they claims in relation to “other acts” (in which case they remain subject to the normal and ultimate limitation periods in the Act)?

[19]           Schneeweiss argues that the 2016 amendments to s. 16 are to be construed strictly because they create an exception to a general rule and have the effect of taking away an existing limitations defence which had already accrued to Schneeweiss. Schneeweiss argues that at least some of the claims against her, including claims for negligent failure to warn, negligent misrepresentation and negligent infliction of nervous shock, are not claims “in relation to sexual assault” since they are based on separate acts or breaches of duty by Schneeweiss.

[20]           The parties are agreed that the 2016 amendments to s. 16 have retroactive effect since s. 16 (1.1) expressly provides that the 2016 amendments apply to proceedings “whenever the act on which the claim is based occurred and regardless of the expiry of any previously applicable limitation period…”

[21]           Further, the parties are agreed, in accordance with the analysis of Lederer J. in Fox Estate v. Narine,[5] that s. 16 (1.3) encompasses proceedings against persons other than those who actually perpetrate sexual assaults. Lederer J. noted that s. 16 (1.3) references proceedings involving claims for negligence, breach of fiduciary duty or for vicarious liability. He reasoned that this must necessarily include proceedings involving third parties:

Neither party disputed the idea that this sub-clause was pointed at parties other than the perpetrator. A sexual assault is a criminal act. It cannot reasonably be proposed that before a person who carries out such an act can be civilly liable, he or she must have been negligent, in a fiduciary relationship with the victim, or owed the victim a duty. A perpetrator is directly involved and so cannot be vicariously liable for his or her own acts. It is when a third party stands in such a relationship to the victim that s. 16 (1)(h) is extended such that there is no limitation period that applies.

[22]           In interpreting the scope of s. 16 (1.3), it is helpful to have reference to the context in which it was enacted as well as its legislative history. The preamble to Bill 132 (which added the new provisions to s. 16) notes that on March 6, 2015, the Government of Ontario announced “It’s Never Okay: An Action Plan to Stop Sexual Violence and Harassment” (the “Action Plan”). The preamble to Bill 132 further stated:

The Government will not tolerate sexual violence, sexual harassment or domestic violence. Protecting all Ontarians from their devastating impact is a top Government priority and is essential for the achievement of a fair and equitable society.

All Ontarians would benefit from living without the threat and experience of sexual violence, sexual harassment, domestic violence and other forms of abuse, and all Ontarians have a role to play in stopping them.

[23]           During the legislative debate on Bill 132, the Honourable Tracy MacCharles, the Minister Responsible for Women’s Issues, noted that s. 16 (1.3) had been added to the Bill in committee on the basis that the original draft “did not make it clear enough that there would be no limitation period for civil claims against institutional defendants.” The Minister indicated that she was “pleased that the committee passed amendments to make it absolutely clear that there will be no limitation period for civil claims against institutional claimants.” She further observed that “we believe that time should be on the side of the survivors, not the perpetrators. Survivors would be able to seek compensation regardless of when the crime occurred.”[6]

[24]           What this indicates, amongst other things, is that the amendments to the Limitations Act contained in Bill 132 are remedial, addressing broad systemic problems relating to sexual harassment and assault. Consistent with s. 64(1) of the Legislation Act, they “shall be interpreted as being remedial and be given such fair, large and liberal interpretation as best suits the attainment of its objects.”

[25]           I note that the wording of s. 16 (1.3) includes expansive language to the effect that the elimination of the limitations period for sexual assaults is “not limited in any way with respect to the claims that may be made in the proceeding in relation to the applicable act”. The clear objective of this provision is to ensure that victims of sexual assault may pursue civil claims, not just against the perpetrators of the assaults but also against others who may be civilly liable in connection with the assaults, regardless of when the claim is commenced. Moreover, although Minister MacCharles referred in her remarks to claims against institutional defendants, the reference in s. 16 (1.3) to there being no limit “in any way with respect to the claims that may be made” indicates that claims may also be pursued against individuals who may be civilly liable in connection with a sexual assault.

 

 

 

Ontario: the limitation of human rights claims pursued in court

An issue in Torres v. Export Packers was whether the Limitations Act or the Human Rights code applies to a human rights claim in a civil action.  It arose in the context of a motion to strike paragraphs from a pleading, and because the court found the question undecided, it denied the relief:

[24]           There can be no doubt that the law is unsettled as to which limitation applies.  The Defendant’s own factum, under the heading “Ontario Superior Court’s Inconsistent Application of the Limitations Act and the Code“, refers to a number of cases where Superior Court Judges have applied both the Code and the Limitation Act limitation period in an action.   I should note that it does not appear that the issue was squarely before those courts as it is in this motion.

I have trouble finding any uncertainty, especially subsequent to the Court of Appeal decision in Letestu Estate.  The limitation period in the Human Rights Code applies explicitly to applications to the Human Rights Tribunal.   The Limitations Act applies to claims pursued in court proceedings. If you are suing in court, and if your suit involves a “claim” as defined by the Limitations Act, its provisions apply.

 

Ontario: the principles of misnomer

 

The decision in Corp. of Township of North Shore v. Grant has a helpful summary of misnomer principles:

[18]           Nonetheless, motions to correct misnomer or misdescription are still permitted pursuant to s. 21 of the Limitations Act, 2002, which provides:

(1)   If a limitation period in respect of a claim against the person has expired, the claim shall not be pursued by adding the person as a party to any existing proceeding.

 (2)   Subsection (1) does not prevent the correction of a misnaming or misdescription of a party.

 [19]           Section 21 has been held to apply equally to motions in which a plaintiff seeks to substitute a plaintiff in an action, notwithstanding language that appears to refer only to defendants being substituted:  Horgan v. Tanktek Environmental Services Ltd. (2009), 178 A.C.W.S. (3d) 87 (Ont. S.C.), aff’d 2009 ONCA 820 (CanLII).

[20]           There is a debate in the jurisprudence as to whether a request to amend a pleading by adding a party who was omitted altogether from the style of cause is properly characterized as a request to correct a misnomer or misdescription.  Some cases have held that it is not and, instead, have allowed the amendment using the court’s power to cure a “technical irregularity”:  see Hastings v. Halton Condo Corp. to 324 et al., 2012 ONSC 175 (CanLII); Toronto Standard Condominium Corporation No. 810 v. King Spadina Development Corporation, 2014 ONSC 5560 (CanLII), 2014 ONSC 5560 (Master).

[21]           Regardless of the manner in which a request to substitute a plaintiff is characterized, the jurisprudence is clear that an amendment will be permitted where there is a “coincidence” between a plaintiff’s intention to sue and the intended defendant’s knowledge of the plaintiff’s intention.  In Lloyd v. Clark, 2008 ONCA 343 (CanLII), the plaintiff was denied leave by the motion judge to name the Regional Municipality of Durham as a defendant in place of the Town of Ajax and the Corporation of the Town of Whitby.  In a brief endorsement allowing the appeal, the Court of Appeal held:

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.  [Citations omitted.]

 [22]           Although Lloyd was a case in which a plaintiff sought to substitute a defendant, it has frequently been applied in cases in which a plaintiff seeks to substitute or add a plaintiff: see, for e.g., Streamline Foods Ltd. v. Jantz Canada Corp., 2010 ONSC 6393 (CanLII), aff’d 2011 ONSC 1630 (CanLII), 2011 ONSC 1630 (Div. Ct.), 2012 ONCA 174; Tetreault v. Nussbaum, 2015 ONSC 6226 (CanLII); Asset Strategy Corp. v. Rodinia Lithium Inc., 2016 ONSC 5337 (CanLII) .

[23]           Thus, an amendment to add the name of one or more plaintiffs to a statement of claim should be permitted notwithstanding the expiry of a limitation period where the court is satisfied that the plaintiffs sought to be added to an action were intended plaintiffs prior to the expiration of the limitation period, that the defendant knew that they were intended plaintiffs, and where no prejudice arises that cannot be compensated for in costs.

[24]           I am satisfied that this is the situation here.  There is ample evidence in this case both of the intentions of the Council Members to claim against the defendant and of the defendant’s knowledge of those intentions.