Author: Dan

Ontario: the principles of misnomer

Master Muir’s decision in Martin v. Doe is worth reviewing for its summary of the principles of misnomer:

[26]      The plaintiff also relies on the doctrine of misnomer in support of the relief she is seeking on this motion.

[27]      The law relating to misnomer has been carefully considered in recent years by the Court of Appeal. See Ormerod (Litigation guardian of) v. Strathroy Middlesex General Hospital, 2009 ONCA 697 (CanLII) and Spirito v. Trillium Health Centre, 2008 ONCA 762 (CanLII). Misnomer requires a finding that the litigation finger be clearly pointed at the intended defendant. Would a reasonable person receiving and reviewing the statement of claim, in all the circumstances of the case, and looking at it as a whole, say to himself or herself “of course it must mean me, but they have got my name wrong”? The Court of Appeal adopts this test at paragraph 12 of Spirito, where the court states as follows:

12     In Dukoff et al. v. Toronto General Hospital et al. (1986), 1986 CanLII 2648 (ON SC), 54 OR (2d) 58 (HCJ), Saunders J. noted the practice, adopted in this case, of using fictitious names where the identity of the parties are unknown.  If it was a case of misnomer, the statement of claim could be corrected by replacing the fictitious name (John Doe in that case) for the correct name, even though the correction was sought after expiry of the limitation period.  He adopted the following test from Davies v. Elsby Brothers, Ltd., [1960] 3 All ER 672 (CA), at p. 676:

The test must be:  How would a reasonable person receiving the document take it?  If, in all the circumstances of the case and looking at the document as a whole, he would say to himself: “Of course it must mean me, but they have got my name wrong”. Then there is a case of mere misnomer.  If, on the other hand, he would say:  “I cannot tell from the document itself whether they mean me or not and I shall have to make inquiries”, then it seems to me that one is getting beyond the realm of misnomer.

[28]      It must also be noted that even if a plaintiff is successful in establishing misnomer, the court retains a residual discretion under Rule 5.04(2) to refuse the proposed substitutions. This part of court’s analysis on a motion like this one is described by the Court of Appeal in Ormerod at paragraphs 28 to 32 as follows:

28     The framework put forward by the appellants is correct. After finding there was a misnomer the motion judge had the discretion to refuse to permit its correction. The Rules make this apparent. Cronk J.A. in Mazzuca v. Silvercreek Pharmacy Ltd., 2001 CanLII 8620 (ON CA), 207 DLR (4th) 492, analyzed the wording of the two rules that deal with the court’s authority to permit amendment in detail — rules 5.04 and 26.01. She contrasted their wording to note that rule 5.04(2) uses the discretionary “may” unlike rule 26.01, which uses “shall”; she also considered the history and development of these two provisions. She said at para. 25:

        • Under both rules, a pleadings amendment is not to be made if non-compensable prejudice would result. In contrast to rule 26.01, however, the language of subrule 5.04(2) imports a discretionary power rather than a mandatory direction.

29     At para. 42 she added that “proof of the absence of prejudice will not guarantee an amendment”. She also cited the discussion of the inter-relationship of the two rules in Holmested and Watson, Ontario Civil Procedure, Vol. 2 (Toronto: Carswell, 1993). The current edition states at p. 5-34:

  •      the same threshold test applies to a motion to amend under either rule 26.01 or rule 5.04(2) and the moving party must demonstrate that no prejudice would result from the amendment that could not be compensated for by costs or an adjournment; once this threshold test is met, under rule 26.01 the granting of leave is mandatory; however, where it is sought to add parties under rule 5.04(2) the court has to discretion whether to allow the amendment, notwithstanding that the threshold test is satisfied.

30     While the authors refer only to “adding” parties, the permissive “may” in rule 5.04(2) grammatically applies to the correction of the name of a party incorrectly named in exactly the same way as it does to the addition, deletion, or substitution of a party.

31     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.

32     The factors the motion judge applied in this case, whether the defendant was misled or was unduly prejudiced, are undoubtedly deserving of the greatest weight. 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. It may well be that the motion judge took a narrow view of his residual discretion to refuse to permit the correction of the misnomer. However, I am satisfied he realized he had a residual discretion since the factors he applied are broader than the rule’s threshold of prejudice that cannot be compensated by costs or an adjournment. While the motion judge in this case might have inferred that the plaintiffs, after learning Dr. Graham’s identity, did not resolve to proceed against her until July 2008, he did not make that inference.

 [29]      Paragraph 32 of Ormerod makes it clear that prejudice to the proposed substituted defendants is the most important factor on this part of the analysis. Prejudice is also an important consideration based on the clear language of Rule 5.04(2).

Ontario: Representation orders and misnomer

In Lawrence v. International Brotherhood of Electrical Workers (IBEW) Local 773, the Court of Appeal states that a request for a representation order to sue a trade union under r. 12.08 can be a request to correct a misnomer.  There was a dissent from Justice Hourigan:

[51]      Worse, the method chosen to achieve that result is ill-suited for its purpose. The motion judge found that the order the respondent sought was properly characterized as a motion to correct an error in the title of proceedings under r. 5.04(2). In my view, she erred in so finding. This is not a misnomer case, as there is no question that Local 773 was correctly named. This is a case where there has been non-compliance with a statutory requirement and a new party has been added. One need only look to the form of the order granted by the motion judge. She did not make an order under r. 5.04(2); rather she made a representation order.

Ontario: the Court of Appeal on the evidence required for discovery

It sometimes happens that I miss notable decisions.  And so, better late than never, I draw Crombie Property Holdings Limited v. McColl-Frontenac Inc. to your attention.

These are the noteworthy aspects of the Court of Appeal decision:

1.  It recaps the standard of review for limitations analyses:

[31]      The Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7 (CanLII), [2014] 1. S.C.R. 87, at para. 81, established the standard of review on appeal of a summary judgment. The court stated that, “[w]hen the motion judge exercises her new fact-finding powers under Rule 20.04(2.1) and determines whether there is a genuine issue requiring a trial, this is a question of mixed fact and law”, reviewable only for a “palpable and overriding error”, unless there is an “extricable error in principle”. Further, the question whether a limitation period expired prior to the commencement of an action is typically a question of mixed fact and law and therefore subject to review on a “palpable and overriding error” standard: Longo v. MacLaren Art Centre Inc., 2014 ONCA 526(CanLII), 323 O.A.C. 246, at para. 38. A “palpable and overriding error” is “an obvious error that is sufficiently significant to vitiate the challenged finding of fact”: Longo, at para. 39.

2.  It succinctly summarises the evidentiary burden on a summary judgment motion to dismiss on the basis of an expired limitation period:

[33]      In order to obtain a summary dismissal of the action, the moving parties were required to establish that there was no issue requiring a trial about their limitation defence. The specific issue was whether Crombie’s claim in respect of the environmental contamination of its property was “discovered” within the meaning of s. 5 of the Limitations Act, 2002 before April 28, 2012.

3.  It cites Van Allen for the principle that it is reasonable discovery and not the mere possibility of discovery the causes the limitation period to commence: see para. 35
It inaccurately describes the knowledge necessary to cause discovery of a claim:

[35]      The limitation period runs from when the plaintiff is actually aware of the matters referred to in s. 5(1)(a)(i) to (iv) or when a reasonable person with the abilities and in the circumstances of the plaintiff first ought to have known of all of those matters: Longo, at para. 41. The knowledge sufficient to commence the limitations clock has been described as “subjective” knowledge or “objective” knowledge.

This paragraph appears to conflate the amount of knowledge required by s. 5 with the subjectivity of the knowledge.  A claimant requires prima facie knowledge.  This is knowledge that is greater than suspicion but less than certainty.  See for example Brown v. Wahl at 15.  Then there is question of whether the plaintiff subjectively or subjectively-objectively had this knowledge (not purely objectively, as the Court suggests in this decision, because the question asked in s. 5(1)(b) is a “modified objective” test as it doesn’t ask about the knowledge of a reasonable person, but a reasonable person with the abilities and in the circumstances of the claimant.

Knowledge of a possible wrong (a mere suspicion) is insufficient for discovery of a claim; prima facie knowledge of an actual wrong is necessary:

[42]      That the motion judge equated Crombie’s knowledge of possible contamination with knowledge of actual contamination is apparent from her statement that “[a]ll the testing that followed simply confirmed [Crombie’s] suspicions about what had already been reported on” (at para. 31). It was not sufficient that Crombie had suspicions or that there was possible contamination. The issue under s. 5(1)(a) of the Limitations Act, 2002 for when a claim is discovered, is the plaintiff’s “actual” knowledge. The suspicion of certain facts or knowledge of a potential claim may be enough to put a plaintiff on inquiry and trigger a due diligence obligation, in which case the issue is whether a reasonable person with the abilities and in the circumstances of the plaintiff ought reasonably to have discovered the claim, under s. 5(1)(b). Here, while the suspicion of contamination was sufficient to give rise to a duty of inquiry, it was not sufficient to meet the requirement for actual knowledge. The subsurface testing, while confirmatory of the appellant’s suspicions, was the mechanism by which the appellant acquired actual knowledge of the contamination.

 

Ontario: More on adding defendants (and some pedantry)

Bhatt v. Doe has a good analysis of adding a defendant to proceeding after the presumptive expiry of the limitation period.  If you want to cite a recent decision, this is a good option.

In the spirit of pedantry I have two quibbles.  First, this:

[11]           The passing of a limitation period is fatal to a motion to add a party (Limitations Act, 2002, s. 21(1)). The doctrine of special circumstances is no longer applicable (Joseph v. Paramount Canada’s Wonderland, (2008), 2008 ONCA 469 (CanLII), 90 O.R. (3d) 401 at paras. 27 and 28 as cited in Parent v. Janandee Management Inc., [2009] O.J. No. 3763 (Master) at para. 29).

It’s now ten years since the Court of Appeal held that the special circumstances doctrine is no longer generally available.  Why do bar and bench feel compelled to make this point?   Who still argues special circumstances?

Second, this:

[12]           With respect to claims pursuant to the provisions of unidentified automobile coverage, discoverability is triggered when the insured knew or ought to have known about the material facts on which the claim is based. As stated by Justice Mackinnon in July v. Neal, 1986 CanLII 149 (ON CA), [1986] O.J. No. 1101 (C.A.) at para. 16:

…I have concluded that the time begins to run under such circumstances as the instant case, when the material facts on which the claim is based have been discovered or ought to have been discovered by the plaintiff by the exercise of reasonable diligence: Central Trust Co. v. Rafuse et al. [reported 1986 CanLII 29 (SCC), 31 D.L.R. (4th) 481], Supreme Court of Canada, released October 9 1986 – Le Dain J. (for the court) at p. 99 [p.535 D.L.R.].

See also July at para. 32, Hier v. Allstate Insurance Co. of Canada, 1988 CanLII 4741 (ON CA), [1988] O.J. No. 657 (C.A.) at para 35, Galego v. State Farm Mutual Automobile Insurance Co., 2005 CanLII 32932 (ON SCDC), [2005] O.J. No. 3866 (Div.Ct.) at paras. 8 and 9, Wilkinson v. Braithwaite, [2011] O.J. No. 1714 (S.C.J.) at paras. 31-35.

With respect to any claim, s. 5 of the Limitations Act determines discovery.  There is no “trigger” beyond knowledge of the discovery matters.  Cases decided under the former limitations scheme, and applying the common law discovery rule, are not helpful because, as here, they cause the court to frame the issue incorrectly.

Ontario: When a limitation period expires on a Sunday

What happens if the limitation period expires on a Sunday? The decision in Golberg v. North East Community Care Access Centre reminds us that it’s extended until Monday:

[12]           Bayshore first argues that the Plaintiff’s claims fall outside the two year limitations period prescribed by the Limitations Act, 2002.  In particular, it points out that Mr. Golberg admits to having been dismissed from his employment on March 20, 2014, but that his action was started on March 21, 2016.

[13]           What Bayshore has failed to realize is that March 20, 2016 was a Sunday.  Under the Legislation Act, 2006, section 89(1) provides that a limitation that expires on a holiday is extended to the following day.  Accordingly, Mr. Golberg started this action within the appropriate time.

Nice try, defendants.

Ontario: the CA on the impact of related criminal proceedings on the limitation of intentional torts

In Winmill v. Woodstock (Police Services Board), the Court of Appeal considered the appropriateness of a proceeding as a remedy to battery.  The decision is generally noteworthy for the quality of its s. 5(1)(a)(iv) analysis, but also of its application of s. 5 to the interaction between claims arising from intentional torts and related to criminal proceedings.  As the court’s dissent notes, the limitation of these claims is usually determined by the misapplication of common law principles, not s. 5.

The plaintiff sued the Woodstock police for negligent investigation and battery.  The police obtained summary judgment dismissing the claim arising from the battery as statute-barred, but not the claim arising from negligent investigation.  The plaintiff appealed successfully.

Justice MacPherson and Feldman undertook a refreshingly comprehensive and sound s. 5 analysis:

[18]      Turning to s. 5(1)(a) of the LA, in this case there is no issue with respect to the first three of the four factors set out in this clause. The appellant knew that he had been injured on June 1, 2014, that the injury was caused by physical blows to his body, and that at least some of the respondents administered those blows.

[19]      The crucial issue is the fourth factor: did the appellant know on June 1, 2016 that a legal proceeding would be an appropriate means to seek to remedy the injuries caused by the alleged battery committed against him?

The court summarised the principles of applicable to s. 5(1)(a)(iv) analyses:

[22]      First, the word “appropriate” means “legally appropriate”.

[…]

[23]      Second, this does not mean that determining whether a limitation period applies involves pulling two simple levers – date of injury and date of initiation of legal proceeding – and seeing whether the result is inside or outside the limitation period prescribed by the relevant statute. On the contrary, other important factors can come into play in the analysis.

[…]

[24]      Third, within the rubric of “the specific factual or statutory setting of each individual case”, s. 5(1)(b) of the LA requires that attention be paid to the abilities and circumstances of the person with the claim […]

Those principles applied to the plaintiff’s claim meant it was timely:

[25]      Against this background of general principles, I turn to the motion judge’s conclusion that the appellant’s battery claim was outside (by one day) the two year limitation period prescribed by s. 4 of the LA. With respect, I think that the motion judge erred, essentially for three reasons.

[26]      First, the appellant’s negligent investigation claim is proceeding. The parties agree that the discoverability date for this claim is February 17, 2016, the day the appellant was acquitted on the criminal charges against him. Factually, the negligent investigation claim covers almost precisely the same parties and events as the battery claim. There was virtually no investigation in this case. The police were called, they arrived and immediately entered the appellant’s home, and some kind of altercation quickly unfolded.

[27]      In my view, the appellant’s Amended Statement of Claim shows how inextricably intertwined are the two alleged torts:

14 e.  The Defendant officers were present and knew or ought to have known that the Plaintiff did not commit an assault against any police officer. There was no reasonable cause for the Defendant officers to arrest or charge the Plaintiff with assault of a police officer.

14 f.   As the Plaintiff stood motionless, he was pushed violently in the chest by the Defendant Dopf. He was then thrown to the floor. Knee strikes and punches were then delivered by both the Defendants Dopf and Campbell. He was handcuffed, removed from the house and taken to the police station.

[28]      Second, I agree with the appellant that, in the specific factual setting of this case (407 ETR), and bearing in mind the circumstances of the person with the claim (Novak), it made sense for him to postpose deciding whether to make a battery claim against the respondents until his criminal charges for assault and resisting arrest were resolved. The criminal charges of assault and resisting arrest against the appellant and his tort claim of battery against the respondents are, in reality, two sides of the same coin or mirror images of each other.

[…]

[31]      In a similar vein, it strikes me as obvious that the verdict in the appellant’s criminal trial, especially on the assault charge, would be a crucial, bordering on determinative, factor in the appellant’s calculation of whether to proceed with a civil action grounded in a battery claim against the respondents.

[32]      Third, and overlapping with the second reason, there is a case almost directly on point suggesting that the appellant was justified in waiting for the verdict in his criminal trial before commencing a civil claim against the respondents. In Chimienti v. Windsor (City), 2011 ONCA 16 (CanLII), the plaintiff was charged with assault following a tavern brawl. The charge was dropped. The plaintiff commenced a civil action with claims of negligent and malicious investigation. The motion judge dismissed the action on the basis of the relevant statutory limitation period. This court, although dismissing the appeal on other grounds, disagreed with the motion judge’s analysis of the discoverability issue. In doing so, the court said, at para. 15:

[T]here is something of a logical inconsistency in asking a civil court to rule on the propriety of a criminal prosecution before the criminal court has had the opportunity to assess the merits of the underlying charge.

[33]      In my view, this passage is particularly applicable to this appeal. As I said earlier, the criminal charges of assault and resisting arrest against the appellant and his tort claim of battery against the respondents are very close to being two sides of the same coin or mirror images of each other. Accordingly, it made sense for the appellant to focus on his criminal charges and deal with those before making a final decision about a civil action against the respondents.

Justice Hourigan dissented:

[40]      In my view, the decision of this court in Markel Insurance Company of Canada v. ING Insurance Company, 2012 ONCA 218(CanLII), 109 O.R. (3d) 652, is key to the correct outcome in this case. In that case, Sharpe J.A. explained that “appropriate” under s. 5(1)(a)(iv) of the Act must mean “legally appropriate”, and, at para. 34, admonished against giving the term a broad meaning:

To give “appropriate” an evaluative gloss, allowing a party to delay the commencement of proceedings for some tactical or other reason beyond two years from the date the claim is fully ripened … would, in my opinion, inject an unacceptable element of uncertainty into the law of limitation of actions.

[41]      My colleague acknowledges the authority of Markel, but in my view undermines it by emphasizing the need to attend to the factual circumstances of individual cases, drawing on this court’s subsequent decisions in 407 ETR Concession Co. v. Day, 2016 ONCA 709 (CanLII), 133 O.R. (3d) 762, and Brown v. Baum, 2016 ONCA 325 (CanLII), 397 D.L.R. (4th) 161. But both of these cases are clearly distinguishable. An action in 407 ETR was not “appropriate” at the time of the injury because an alternative administrative means of settling the dispute had not been completed. An action in Brown was not “appropriate” at the time of the injury because the defendant surgeon was providing further treatment in an attempt to rectify the harm he was alleged to have caused in the initial surgery.

[42]      There was no alternative means of resolving the appellant’s allegations in this case, nor were the defendants in a position to rectify the harm they were alleged to have caused. My colleague considers it obvious that the appellant should await the outcome of the criminal proceedings against him, relying on dicta from Chimienti v. Windsor (City), 2011 ONCA 16 (CanLII), 330 D.L.R. (4th) 148. But that case, too, is distinguishable, among other reasons because it concerned claims of negligent and malicious investigation – claims that depended on the completion of the relevant criminal proceedings on which they were based.

[…]

[44]      Nor can a claimant delay the start of a limitation period for an intentional tort in order to await the outcome of related criminal proceedings. This approach has been followed by Ontario trial courts in many cases. For example, in Brown v. Becks, 2017 ONSC 4218 (CanLII), the court held that a limitation period involving various claims against police including battery during an arrest ran from the date of the plaintiff’s arrest, not the date of his acquittal on criminal charges; in Boyce v. Toronto (City) Police Services Board, 2011 ONSC 54 (CanLII), aff’d 2012 ONCA 230 (CanLII), the limitation period in a civil action against police ran from the date of the battery rather than the officers’ conviction on assault charges. See also EBF v. HMQ in Right of Ontario, et. al, 2013 ONSC 2581 (CanLII), and Wong v. Toronto Police Services Board, 2009 CanLII 66385 (ON SC), 2009 CarswellOnt 7412 (Ont. S.C.). Similarly, in Kolosov v. Lowe’s Companies Inc., 2016 ONCA 973 (CanLII), 34 C.C.L.T. (4th) 177, this court affirmed the trial judge’s decision that a limitation period involving intentional tortious conduct alleged to have occurred on arrest ran from the date of the arrest rather than the date of the withdrawal of the criminal charges. See also Roda v. Toronto Police Services Board, 2016 ONSC 743 (CanLII), aff’d 2017 ONCA 768 (CanLII). My colleague offers no reason to depart from this body of law.

I disagree with this reasoning particularly in regards of the jurisprudence holding that the limitation period commence always on a certain date, like the date of an arrest.  That jurisprudence misapplies common law principles of cause of action accrual to the Limitations Act’s discovery provisions.  As I have discussed many times [cite], it is not the case under the Limitations Act that all plaintiffs will discover a claim always on the happening of a particular event, like an arrest.

Lastly, I noted that the court cited its decision in West for the principle different limitation periods may apply to different torts:

[17]      I begin with a structural point. In a single case where a plaintiff alleges different torts, it is possible and permissible for different limitation periods to apply to the different torts: see West v. Ontario, 2015 ONCA 147 (CanLII), at paras. 2-3.

It’s not clear to me how there could be any uncertainty about this point.  The Limitations Act applies to “claims” pursued in court proceedings, that is, claims to remedy damage resulting from an act or omission.  There can only be one act or omission in a claim.  Discrete acts or omissions give rise to discrete claims.  A court may define an act expansively, so that, for example, one act of deceit is comprised of multiple unlawful acts, but an act could never be the actionable conduct in deceit and, say, negligent misrepresentation.  This applies equally to claims where the actionable conduct doesn’t sound in tort.

Ontario: Income tax limitation waivers

The Court of Appeal decision in Aubrey Dan Family Trust v. Ontario (Finance) considers whether a income tax limitation waiver form T2029 is a prescribed form under the federal Income Tax Act:

[3]         On its motion, the appellant asserted that the reassessment occurred after the limitation period for reassessing Ontario income tax had passed. The appellant argued that limitation waiver form T2029, which it had submitted for the 2007 taxation year, is a prescribed form under the federal Income Tax Act, R.S.C. 1985,  c. 1 (5th Supp.) (the “Federal Act”), but the form did not operate to waive the limitation period for reassessing income tax under the Ontario Act. That is because waiver form T2029 had never been “prescribed” for the purposes of the Ontario Act by means of an order of the Provincial Minister: s. 1(1) of the Ontario Act[2]. In any event, advice from government agencies that no order or other document exists that prescribed waiver form T2029 for the purposes of the Ontario Act “called in question” whether it had been prescribed for purposes of the Ontario Act: s. 48(15) of the Ontario Act.

The Court found that it was not a prescribed form:

[6]         We do not accept the appellant’s submissions.

[7]         The combined operation of s. 10 of the Ontario Act, which adopts certain provisions of the Federal Act, and s. 152(4) of the Federal Act permit reassessment of Ontario tax after a taxpayer’s normal reassessment period in respect of a taxation year where the taxpayer “has filed with the Minister a waiver in prescribed form within the normal reassessment period for the taxpayer in respect of the year”: s. 152(4)(a)(ii) of the Federal Act.

[8]         Section 48(15) of the Ontario Act states that “[e]very form purporting to be a form prescribed … by the Provincial Minister shall be deemed to be a form prescribed by order of the Provincial Minister under … [the Ontario] Act unless called in question by the Provincial Minister or by some person acting for the Provincial Minister or Her Majesty.”

[9]          As noted by the motion judge, given the existence of a long-standing collection agreement between the Ontario government and the Federal government, by operation of s. 1(1) of the Ontario Act, “Provincial Minister” in s. 48(15) of the Ontario Act means the Minister of National Revenue for Canada.

[10]      Further, waiver form T2029 “bears the insignia of the … [Canada Revenue Agency (“CRA”)] and the Government of Canada and … is regularly used by the CRA.” In the motion judge’s words, “[i]n this way, it implies or purports to be a prescribed form.” Moreover, “[e]xplicit wording on the form that it purports to be a form prescribed under the Ontario Act is not required for subsection 48(15) to apply.”

[11]       We agree with the motion judge that Murphy does not assist the appellant. In that case, it was held that a deeming provision in the Federal Act (s. 244(13)) could not assist where a document was signed and issued by a CRA official who lacked the statutory authority to do so. Here, no delegated statutory authority is required to authorize any signatures on waiver form T2029.

[12]      As the motion judge observed, this case is more akin to the decisions of the British Columbia Court of Appeal in R. v. Point,119 C.C.C. 117; R. v. Watson, 2006 BCCA 233 (CanLII), [2006] 4 C.T.C. 61; and R. v. Smith, 2007 BCCA 499 (CanLII), [2007] 1 C.T.C. 147, in which that court relied on deeming provisions in the Federal Act (s. 244(16) or a predecessor thereof), which is akin to s. 48(15) of the Ontario Act, to find that forms were prescribed forms under the Federal Act.

[13]      The scope of s. 48(15) is to be determined based on a proper interpretation of the Ontario Act. While “all statutes … must be interpreted in a textual, contextual and purposive way”, the context of an income tax statute may lead to “an emphasis on textual interpretation”: Canada Trustco Mortgage Co. v. R., 2005 SCC 54 (CanLII), [2005] 2 S.C.R. 601, at para. 11. Section 48(15) deems waiver form T2029 to be a prescribed form.

[14]      We agree with the motion judge that s. 48(15) avoids the necessity of formal proof of an order of the Minister of National Revenue and that “[t]he prescription imposed by the Minister [of National Revenue] is sufficiently evidenced by the aforesaid indicia on the form.” Further, as we have said, the appellant does not dispute that waiver form T2029 is a prescribed form for the purposes of the Federal Act.

[15]      Accordingly, under the first part of s. 48(15) of the Ontario Act, waiver form T2029 clearly purports “to be a form prescribed or authorized by the [Minister of National Revenue]”. Further, on a proper reading of the second part of s. 48(15), waiver form T2029 “shall be deemed to be a form prescribed by order of the [Minister of National Revenue] under this Act”. The meaning is clear. This form purporting to be “prescribed or authorized by the [Minister of National Revenue] shall be deemed to be … prescribed by order of the [Minister of National Revenue]” under the Ontario Act.

Frankly, I’ve included this decision because I think it might be a limitations issue, albeit an esoteric one, but I’m not sure.

Ontario: in an MVA claim, obtaining an accident report isn’t necessarily sufficient due diligence

 

Obtaining a motor vehcile accident report is not in all circumstances sufficient due diligence in identifying a potential defendant.  In Harold v. Quigley, Justice Broad held that there was no evidence to suggest that the police officer who completed the MVAR had investigated whether the proposed defendant had maintained and kept the highway in repair as the plaintiff proposed to plead.  The plaintiff was not entitled to assume that the officer had done so.  These are the relevant paragraphs:

[17]         There is nothing in the motion material which would suggest that the plaintiff’s abilities and circumstances affected her ability to investigate and understand the facts upon which the claim might be based.

[18]         The affidavit of George B. Dietrich, the managing lawyer at the Dietrich Law Office, did not disclose any steps taken by the plaintiff or her lawyers to discover the identity of all responsible parties within the two-year limitation period following the accident other than to obtain the MVAR. The plaintiff argues that nothing further was required in the exercise of due diligence. Mr. Dietrich stated that his firm relied upon the MVAR which reported that the defendant Quigley hit an icy spot, left the road into the median and flipped over and that he was driving too fast for the conditions. No enquiries were initiated on behalf of the plaintiff respecting the nature and extent of the winter road maintenance carried out by the Crown and Carillion in the period leading up to the accident.

[19]         The plaintiff relies upon the Court of Appeal decision in Lingard v. Milne-McIssac (2015), 2015 ONCA 213 (CanLII), 125 O.R. (3d) 118 (C.A.) for the proposition that “reliance on the information contained in a motor vehicle accident report is reasonable and sufficient and constitutes due diligence.” She also points to the case of Todhunter v. Owles, 2015 ONSC 5656 (CanLII), 2015 ONSC 5656 (S.C.J.) in which Tausendfreund, J. referred to Linguard  and rejected the proposition that “each action arising out of an MVA in winter conditions would require the addition of municipalities as defendants to address the standard of care regarding winter maintenance.”

[20]         The Crown and Carillion argue that the plaintiff’s motion material does not contain evidence of any due diligence to displace the presumption in s. 5(2) of the Limitations Act, 2002. They say that certainty of a defendant’s responsibility for the act or omission that caused or contributed to the loss is not a requirement for discoverability, citing the case of Kowal v. Shyiak, 2012 ONCA 512 (CanLII), 2012 ONCA 512 (C.A.) at para. 18-19, and that neither is knowledge of the standard of care or whether conduct fell below it, citing Cassidy v. Belleville (Police Service), 2015 ONCA 794 (CanLII), 2015 ONCA 794 (C.A.) at para. 13.

[21]         In my view the Lingard and Todhunter decisions are not determinative of the question as to whether the plaintiff has provided a reasonable explanation as to why information was not obtainable with respect to the possible claims against the Crown and Carillion within the limitation period. The Court of Appeal in Pepper v. Zellers Inc.  2006 CanLII 42355 (ON CA), [2006] O.J. No. 5042 (C.A.) at para. 14 confirmed that a motion under rule 5.04(2) to add parties after the apparent expiration of a limitation period is discretionary and involves a fact-based inquiry. The court observed that, while the threshold of such a motion is low, the motion judge is entitled to consider the evidentiary record to determine whether there is a live issue of fact or credibility about the commencement date of the limitation period.

[22]          Lingard dealt with information set forth on a MVAR with respect to insurance coverage of the defendant driver, holding that it was reasonable for the plaintiff to assume that the police officer who completed the report asked the defendant for proof of insurance and that the plaintiff was justified in relying upon the motor vehicle accident report for that information.

[23]         In the present case, there is nothing to suggest that the police officer who completed the MVAR conducted an investigation into whether the Ministry of Transportation and its contractor had maintained and kept the highway in repair, nor that the plaintiff was entitled to assume that the police officer had done so. Although the MVAC identified that the road was icy, it did not comment on whether the icy condition was connected to a failure of the Ministry and its contractor to keep the highway in a reasonable state of repair.

[24]         Teusendfreund, J. in Todhunter was considering a motion for leave to appeal to the Divisional Court from a decision of Tranmer, J. to grant leave to the plaintiff to amend to add two municipalities as defendants. Tranmer, J. found that the plaintiff had demonstrated due diligence in determining the parties liable for the accident by obtaining the MVAR, by moving to discovery and in bringing the motion shortly thereafter. He found that the MVAR did not suggest negligence on the part of either municipality with regard to road maintenance and it was not until the defendant’s examination for discovery that any issue with respect to the existence of black ice was identified.

[25]         As indicated above, Teusendfreund, J. rejected the proposition that each action arising out of an MVA in winter conditions would require the addition of municipalities as defendants. However, he did not hold that plaintiffs should be relieved in all circumstances from any obligation to carry out due diligence on whether the relevant authority had failed to maintain and keep the subject highway or road in repair, particularly when she or he is in possession of information that such may be the case.

[26]         In the present case the MVAR noted that the road was icy. The plaintiff has led no evidence that, armed with this information, she took any steps to attempt to ascertain whether the icy condition may have been a result of a failure of the authority having responsibility to maintain and repair the highway to the requisite standard. As indicated by the Court of Appeal in Kowal at para. 18, certainty of a party’s responsibility for an act or omission that caused or contributed to the loss is not a requirement and that it is enough to have prima facie grounds to infer that the acts or omissions were caused or contributed to by the party or parties identified. In Cassidy, at para. 13, the Court of Appeal held that discovery of sufficient material facts to trigger the commencement of a limitation period does not depend on precise knowledge of the applicable standard of care and whether the party’s conduct fell below it.

[27]         In contrast the situation in Todhunter, the plaintiff in the present case had knowledge of the existence of an icy road surface which contributed to the accident.  In her application for statutory accident benefits dated February 27, 2014, the plaintiff described the mechanism of the accident as involving the vehicle hitting black ice on Highway 11. As indicated above, the MVAR, received by the plaintiff’s counsel on January 9, 2015, had noted the presence of black ice on the highway.

[28]         It is noteworthy that counsel for the plaintiff requested the consent of Crown and Carillion to the amendment to add them as defendants prior to receipt of any documentation or records from their counsel respecting maintenance of the highway during the relevant time period. No new facts were discovered by counsel for the plaintiff prior to making the determination to amend her pleading.

[29]         In Wong v Adler, 2004 CanLII 8228 (ON SC), [2004] O.J. No. 1575 (Master) aff’d 2004 CanLII 73251 (ON SCDC), [2005] O.J. No. 1400 (Div. Ct.) Master Dash stated, at para. 45, that if the court determines that there is an issue of fact or credibility on a discoverability allegation the defendant should be added with leave to plead a limitations defence, whereas, if there is no such issue, the motion should be refused. In my view there is no issue of credibility on the question of whether simply obtaining the MVAR constituted sufficient due diligence on the part of the plaintiff in the circumstances. The court on this motion is in as good a position to determine that issue as would a judge on a summary judgment motion or at trial.

[30]         In my view the plaintiff has failed to discharge the onus on her show, by evidence, that discoverability delayed the commencement of the running of the limitation period. Her motion to amend the Statement of Claim to add the Crown and Carillion as defendants must therefore be dismissed.

 

Ontario: the misapplication of common law limitations principles

In Bailey v. Milo-Food & Agricultural Infrastructure & Services Inc., the Court of Appeal held that in a wrongful dismissal action, the cause of action for wrongful dismissal arises on the date of the termination notice:

[5]         The appellant submits that the motion judge erred in concluding that his cause of action for wrongful dismissal arose on the date he was provided notice and not on the last day he worked for Milo-FAIS. He argues that the motion judge’s reliance on Jones v. Friedman, 2006 CanLII 580 (ON CA), 2006 CarswellOnt 120 (C.A.) in this regard was misplaced. His submission is that the motion judge erred by conflating actual dismissal with notice of future dismissal, since in Jones the date of dismissal, as pleaded, coincided with the date of notice. According to the appellant, subsequent trial decisions relying on Jones have continued to conflate these dates.

[6]         We do not give effect to this submission and decline to adopt the restrictive interpretation of Jones urged upon us by the appellant. In Jones the notice of termination was given on December 12, 1994 and the employment ended on January 31, 1995. The breach the appellant relied on occurred on December 12, 1994 when his employment was terminated without reasonable notice. This court fully appreciated the context, and decided the date of notice of termination was when the limitation period began. Jones stands for the principle that a cause of action for wrongful dismissal arises on the date of notice of termination. The motion judge made no error in his reliance on that case or in striking the wrongful dismissal claim.

This is an example of the misapplication of common law principles to a Limitations Act analysis.  Limitation periods under the Act commence on discovery of a claim, not the accrual of a cause of action.

The words “cause of action” do not appear in the Limitations Act.  It is the discovery of a “claim”, not a cause of action, that commences time.  This is by design.  Cause of action accrual was a leading grievance in the movement to reform the former limitations scheme; it required a confounding, even esoteric analysis that resulted in ambiguity and confusion.  Here are the essential differences between a “claim” and a cause of action:

  1. A “claim” as defined by the Limitations Act is materially different than a cause of action. A “claim” is purely a limitations concept, whereas a cause of action is what entitles a plaintiff to relief from the court.  A claim has only two factual components (wrongful conduct and resulting damage), whereas a cause of action may have multiple factual components (like negligent misrepresentation, which has five).  Damage is always a component of a “claim”, whereas it is not always a component of a cause of action (such as breach of contract).
  2. Discovery of a “claim” is materially different from discovery of a cause of action. Discovery of a “claim” requires knowledge that a proceeding is an appropriate remedy, whereas at common law, discovery of a cause of action requires knowledge of its material facts.  The appropriateness of a proceeding as a remedy is not a material fact of any cause of action.
  3. “Claims” and causes of action are connected. The cause of action informs the content of the “claim”.  The wrongful conduct in the cause of action is the wrongful conduct in the Claim.  The damage that is relevant to the wrongful conduct, whether it forms part of the cause of action or not, is the damage in the Claim.

Ontario: the Court of Appeal on the limitation of unpaid invoice claims

In Collins Barrow Toronto LLP v. August Industries Inc., the Court of Appeal has held that the limitation period for a claim arising from an unpaid invoice does not run until a reasonable period of time has expired for payment of the invoice:

[5]         The other two invoices in dispute are dated April 9, 2014 and April 11, 2014.  The application judge pointed out that the engagement letters expressly provided that invoices only became delinquent once 45 days had expired from their delivery.  The application judge concluded that the limitation period for these two invoices did not commence until 45 days after they were delivered.  We agree with her conclusion in that regard.  It is consistent with the express wording of the engagement letters and also with existing case law that provides that the limitation period on an invoice does not begin to run until a reasonable period of time has expired for payment of the invoice:  see, for example, G.J. White Construction Ltd. v. Palermo, [1999] O.J. No. 5563 (S.C.J.).

The decision cited by the Court was decided under the former Limitations Act, in which the accrual of the cause of action determined the commencement of time.  In contrast, time commences under the Limitations Act on discovery of the claim.  It would have been more helpful had the Court explained what impact the passage of a reasonable amount of time has on the plaintiff’s discovery of the claim, and framed the analysis in the language of Limitations Act.  In the absence of such a s. 5 analysis, I assume the principle is that a plaintiff cannot really know that she has suffered a loss until a period of time expires after payment became due.