Author: Dan

Ontario: presumed prejudice from an expired limitation period

Justice Kurke’s decision in Trudeau v. Cavanagh has a helpful summary the principles of the presumption of prejudice arising from an expired limitation period:

[24]           A presumption of prejudice arises if the amendment is sought after the expiration of a relevant limitation period.  This presumption will be determinative unless the moving party can demonstrate, on the facts of the case, that there exist special circumstances to rebut the presumption that the responding party will suffer prejudice from the loss of a remedy as a result of the expiration of a limitation period: Frohlick v. Pinkerton Canada Ltd., 2008 ONCA 3 (CanLII), 88 O.R. (3d) 401 (C.A.), at paras. 17, 22, 28; Churly v. Budnick, 1997 CanLII 12260 (ON SC), [1997] O.J. No. 2909 (Master’s Ct.), at paras. 31, 34.

[25]           On the other hand, a court need not give effect to prejudice that may occur to a responding party that has arisen because of the responding party’s own failure to do something it reasonably could or ought to have done.  Thus, where prejudice is said to arise from expiration of a limitation period, if the responding party could or should have taken steps itself within the time frame of the limitation period, but failed to do so, it cannot complain of prejudice if the moving party seeks amendment after the limitation period has run.  Such “self-created prejudice” displaces the presumption: 2054509 Ontario Ltd. v. Corrent, [2012] O.J. No. 5810 (Master’s Ct.), at paras. 35-37; Desjardins v. Mooney, [2001] O.J. No. 697 (Sup. Ct.), at para 21; and cf. Chiarelli v. Wiens, 2000 CanLII 3904 (ON CA), 46 O.R. (3d) 780 (C.A.), at para. 15.

 

Ontario: Succession Law Reform Act limitations principles

Justice Lofchik’s decision in Habberfield v. Sciamonte et al. has a good summary of limitation principles under Part V of the Succession Law Reform Act:

[19]      The Applicant proposes that the application (for support), if permitted, would proceed under Part V of the Succession Law Reform Act (“SLRA”).  Section 57 ofSLRA defines a “dependent” as including a “spouse”, which includes a common law spouse (i.e. two persons who are not married to each other and have cohabited continuously for a period of not less than three years) to whom the Deceased was providing support or was under a legal obligation to provide support immediately before his death

[20]      Section 58 provides as follows: Where a deceased, whether testate or intestate, has not made adequate provision for the proper support of his dependents or any of them, the court, on application, may order that such provision as it considers adequate be made out of the estate of the deceased for the proper support of the dependents or any of them.

[21]      The limitation period is set out in section 61(1) of the SLRA:

(1)        Limitation Period- Subject to (2), no application for an order under section 58 may be made after six months from the grant of letters probate of the will or of letters of administration.

[22]      The court’s jurisdiction  to grant an extension derives from 61(2) of the SLRA:

(2)       Exception- The court, if it considers it proper, may allow an application to be made at any time as to any portion of the estate remaining undistributed at the date of the application.

[23]      The issue on this Application, therefore, is whether it would be, in these circumstances, proper to extend the limitation period.

[24]      The jurisprudence with respect to granting an extension – and Blatchford in particular – sets out the following principles in relation to an extension under section 61(2) of the SLRA:

(a) The Court has the discretion to allow the application to proceed at any time as to any portion of the estate remaining undistributed at the date of the application.

(b) The discretion of the Court under section 61(2) to allow an application to proceed although it is brought after the time limit has expired under theSLRA must be exercised judicially, with considerations of the delay involved, the reasons for the delay, and the extent of prejudice in the Estate’s defence of the claim.

(c) The Court’s discretion to extend the limitation period under section 61(2) is to be exercised in a broad and liberal manner.

(d) In deciding whether to grant the extension, the court must determine whether the situation bears review of whether or not the Deceased madeadequate provision in his Will for the proper maintenance and support of his dependents.

(e) The question is not whether the Deceased has in fact done so, but whether there is a sufficient basis for review.  This requires a consideration of what is equitable (in relation to the “proper” support of dependents as contemplated by the SLRA).

(f)  While delay (including the reason for delay) is a factor to consider, a request for an extension is not grounded solely in “good cause” being shown forthe delay. The discretion to extend or refuse is a question of what is equitable between the parties, in all the circumstances.

(g) In the absence of prejudice to the Estate, equity tends to favour granting an extension:

[…]

[26]      So far as granting an extension of the limitation period is concerned, the legislation was never intended to allow a court to rewrite the will of a testator in discharging its difficult task of correcting a breach of morality on a testator’s part.  The court must not, except in plain and definite cases, restrain a man’s right to dispose of his estate as he pleases.  But equally, it is fair to say that the legislation has by and large received a very liberal interpretation.  The attitude of the courts has been one of great flexibility.  Every case must of course be decided upon its own facts and circumstances.  Under the authority of the SLRA the court can and should take a look at the intentions of the testator who may have overlooked a legitimate interest and needs of a dependent.

Blatchford v. Gardiner supra at para 23

R. v. Barr et al. [1972] 2 W.W.R.A. 346

[27]      The discretion under s. 61(2) should be exercised judicially in a broad and liberal manner mandated by the statutory use of “may” in both s. 58(1) and 61(2) of theAct as well as the use of the term “proper”.  The word “proper” according to Black’s Law Dictionary, 6th Edition, means “fit, suitable, appropriate, adapted, correct”.  These words incorporate the concept of reasonableness which includes a determination of whether the testator acted as a morally responsible person in the circumstances.

[28]      In deciding whether to grant an extension the court must determine whether the situation bears review of whether or not the testator made adequate provision in his will for the proper maintenance and support of the dependents.

Blatchford, supra, para’s 22 and 23

The judge is thus given a  discretion to be exercised on the principle of promoting justice between those interested in the estate. It is clear that hemust refuse an application if the delay in applying would work an injustice. Further than that it would seem that he must find that justice, insofar as the principle of the Act defines the kind of justice that the Legislature had in mind, requires that the application should be heard.

Blatchford v. Gardiner, 1999 CanLII 15091 (ON SC), [1999] O.J. No. 3748 (S.C.J.)

Re Assaf, 2007 CanLII 50869 (ON SC), 2007 CanLII 50869 (S.C.J.)

Weigand v. Weigand Estate [2016] O.J. No. 5096 (S.C.J.)

In this case, Justice Lofchik granted the application:

[29]      The bulk of the estate (some $2 million in assets – the two properties) remains undistributed.  In fact, it cannot be distributed until such time as the Applicant dies, moves or desires to sell the properties or either of them.  Accordingly, while there has been a delay in bringing the application, I find there is no prejudice to the estate (or its beneficiaries) occasioned by the delay.  The situation is the same now as it was prior to the expiry of the limitation period.

[30]      I accept the Applicant’s position that this is a “situation which bears review of whether or not the deceased made adequate provision in his will for the proper maintenance and support of his dependents”, namely the Applicant.

[31]      I deem it proper in that it is suitable and correct, based upon all the circumstances to allow the application to be made now as to any portion of the estate remaining undistributed at the time of the application.  The application is not frivolous or vexatious and the case has been made to exercise my discretion to allow the application to proceed.  Order to go that the Applicant be allowed to proceed with this Application.

Ontario: the running of the notice period for libel

Section 5(1) of the Libel and Slander Act provides the notice requirement for an action in libel in a newspaper:

No action for libel in a newspaper or in a broadcast lies unless the plaintiff has, within six weeks after the alleged libel has come to the plaintiff’s knowledge, given to the defendant notice in writing, specifying the matter complained of, which shall be served in the same manner as a statement of claim or by delivering it to a grown-up person at the chief office of the defendant.

In John v. Ballingall, the Court reiterated that the day on which a plaintiff must give notice under s. 5(1) and bring an action under s. 6 begins to run when the libel comes to the knowledge of the person defamed.

 

Ontario: Briefly, the principles of s. 5(1)(a)(iv)

In Velgakis v. Servinis, the Court of Appeal conveniently reduced the s. 5(1)(a)(iv) discovery principles in Presidential to two points:

[6]         In Presidential MSH, at paras. 17-20, this court clarified certain principles governing cases such as the one before us on the issue of discoverability:

1.      A legal proceeding against an expert professional may not be appropriate if the claim arose out of the professional’s alleged wrongdoing but may be resolved by the professional himself or herself without recourse to the courts, rendering the proceeding unnecessary.

2.       The defendant’s ameliorative efforts and the plaintiff’s reasonable reliance on such efforts to remedy its loss are what may render the proceeding premature. The plaintiff and defendant must have engaged in good faith efforts to right the wrong it caused.

Furthering the interested of brevity, in Tracy v. Iran (Information and Security),  the Court reduced the purpose of that provision to a sentence 2017 ONCA 549:

[79]      The purpose of the appropriateness criterion in s. 5(1)(iv) of the Limitations Act, 2002 is to deter needless litigation: Presidential MSH Corp. v. Marr, Foster & Co. LLP, 2017 ONCA 325 (CanLII), at para. 17. Given that a stay of the respondents’ proceedings on the U.S. judgments would be inevitable if they were brought at common law, it would have been fruitless to commence them before 2012 when the JVTA and SIA carved out an exception to Iran’s immunity. They were therefore not appropriate or discoverable before 2012.

 

 

Ontario: limitation defences and r. 21

In Salewski v. Lalonde, the Court of Appeal casts doubt on whether there is any circumstance where r. 21.01(1)(a) is appropriate for determining a limitations issue except where pleadings have closed and the facts are undisputed:

[45]      However, the basic limitation period established by the Limitations Act, 2002 is now premised on the discoverability rule. The discoverability rule raises issues of mixed fact and law: Longo v. MacLaren Art Centre, 2014 ONCA 526 (CanLII), 323 O.A.C. 246, at para. 38. We therefore question whether there is now any circumstance in which a limitation issue under the Act can properly be determined under rule 21.01(1)(a) unless pleadings are closed and it is clear the facts are undisputed. Absent such circumstances, we are sceptical that any proposed limitation defence under the Act will involve “a question of law raised by a pleading” as required under rule 21.01(1)(a).

Ontario: RPLA applies to all claims to obtain land

After a prolonged summer break, Under the Limit returns!

In Waterstone Properties v. Caledon (Town), the Court of Appeal reminds us that s. 4 of the Real Property Limitations Act applies to any court proceeding to obtain land by court judgment:

[32]      The words “action to recover any land” in s. 4 of the RPLA are not limited to claims for possession of land or to regain something a plaintiff has lost.  Rather, “to recover any land” means simply “to obtain any land by judgment of the Court” and thus these words also encompass claims for a declaration in respect of land and claims to the ownership of land advanced by way of resulting or constructive trust:  Hartman Estate v. Hartfam Holdings Ltd., 2006 CanLII 266 (ON CA), [2006] O.J. No. 69, at para. 56; McConnell v. Huxtable, 2014 ONCA 86 (CanLII), 118 O.R. (3d) 561, at paras. 38-39.

As to what it means to obtain land by court judgment, some direction comes from Justice Faieta’s decision in Wilfert v. McCallum from June 2017.  The prospect that a financial benefit may accrue to a plaintiff/judgment creditor resulting from a declaration to set aside a transfer of land under the Fraudulent Conveyances Act does not result in the the plaintiff obtaining land by court judgment.

[26]           With the greatest of respect for the views expressed by my colleague in Conde v. Ripley, 2015 ONSC 3342 (CanLII) at para. 48, the prospect that a financial benefit may accrue to a plaintiff/judgment creditor resulting from a declaration to set aside the transfer of land under the FCA does not result in the plaintiff “obtaining land by judgment of the Court”.  Accordingly, an action to set aside a fraudulent conveyance of land is not an action to recover land.

Ontario: no discovery for Public Hospitals Act limitation period

The decision in Rawsthorne v. Marotta confirms that s. 31 of the Public Hospitals Act is not subject to the common law principle of discovery:

[30]         The case law is clear that the s. 31 limitation period is not subject to the principle of discoverability. The provision is mandatory in its wording and it runs from the day the patient ceases to receive treatment at the hospital or from the patient’s discharge from the Hospital.[11]

As this limitation period is no longer in force, this point is largely (but, as the decision demonstrates, not entirely) academic.

Ontario: CA on adding a party outside of presumptive limitation period

We overlooked this 2016 Court of Appeal decision in Arcari v. Dawson that considers adding a party to a proceeding after the presumptive expiry of the limitation period.

The Court described the relevant principles:

[10]      When a plaintiff’s motion to add a defendant is opposed on the basis that her claim is statute-barred, the motion judge is entitled to assess the record to determine whether, as a question of fact, there is a reasonable explanation on proper evidence as to why she could not have discovered the claim through the exercise of reasonable diligence. If the plaintiff does not raise any credibility issue or issue of fact that would merit consideration on a summary judgment motion or at trial and there is no reasonable explanation on the evidence as to why the plaintiff could not have discovered the claim through the exercise of reasonable diligence, the motion judge may deny the plaintiff’s motion (Pepper v. Zellers Inc. (2006), 2006 CanLII 42355 (ON CA), 83 O.R. (3d) 648 (C.A.), at paras. 18, 19, 24).

[…]

[15]      There is no evidence to support this submission, such as evidence from the engineer explaining why the issue was not clear to him. As is stated in Paul M. Perell & John W. Morden, The Law of Civil Procedure in Ontario, 2d ed. (Markham, Ont.: LexisNexis, 2014), at para. 2.284: “it is incumbent upon the plaintiff to lead some evidence of the steps he or she took to ascertain the identity of the responsible party and provide some explanation as to why the information was not obtainable with due diligence before the expiry of the limitations period.” We also reject the appellant’s submission that merely retaining an engineer was sufficient to discharge the due diligence responsibility and postpone the limitation period indefinitely.

Two facts are noteworthy:

  1. The Court left open the possibility that it will revisit the rule in favour of committing the issue of discoverability to trial:

[17]      Although a motion to add defendants is not a motion for summary judgment, the goal of “a fair process that results in just adjudication of disputes” that is “proportionate, timely and affordable” is relevant in this context as well: Hryniak v. Mauldin, 2014 SCC 7 (CanLII), [2014] 1 S.C.R. 87, at para. 28. It may well be that this court should interpret Pepper in light of Hryniak and re-evaluate the suggestion that Pepper sets a strong default rule in favour of committing the issue of discoverability to trial.  We leave that matter for another day.

2.  The plaintiff claimed based on injuries resulting from being hit by a car. The plaintiff retained an accident reconstruction expert to produce a report about the cause of the accident.  This engineer found that the driver’s speed was the cause.  The plaintiff subsequently learned that the design of the crosswalk where she was hit may also have contributed to her accident and sought to sue the parties who owned it.  The Court rejected the plaintiff’s submission that merely retaining an engineer to determine the cause was sufficient to discharge the due diligence responsibility.  Arguably, this heightens the responsibility.

Ontario: claims raised in a Notice of Objection subject to Limitations Act

In Bank of Nova Scotia Trust Company v. Iaboni, Justice Mullins held that claims asserted in a Notice of Objection filed in an application to pass account are statute-barred:

[32]           The objections of Mr. C. Iaboni that the trustee ‘excluded’ many valuable assets such as a mortgage, two businesses, a condo and life insurance policy from the estate of Lidia Iaboni and that when Lidia Iaboni became disabled, her husband’s wealth evaporated and the applicant has no interest in marshalling this wealth is, in part, a complaint about the administration of Umberto Iaboni’s affairs, between the onset of his disability in 2006 and his death in 2010 and latterly a complaint about the administration of his mother’s affairs between the onset of her disability in 2006/2007 and before her death in 2012. His allegations in the Notice of Objection filed in his mother’s estate, as outlined above were in substance the same as those made in the litigation he initiated on December 15, 2010.  All of the transactions about which he complains were disclosed to him no later than the accounting delivered on behalf of his siblings pursuant to the Minutes of Settlement, with the possible exception of the discharge of the mortgage on his sister’s home, which was a matter of public record.  His civil action was dismissed on May 15, 2013.

[33]           It appears, therefore, that Mr. C. Iaboni’s Notice of Objection raises issues as particularized above that are outside of the 2-year period within which they may have been pursued.

This is noteworthy because it takes for granted that the Limitations Act applies to claims asserted in a Notice of Objection.   Whether this is so remains the subject of debate.  I’ve argued that the Limitations Act does apply, and so am pleased to see a decision that moves the law in that direction.

Ontario: limitation period in Teacher’s Life policy invalid

In Parmar v. Teachers Life, Justice Faieta held that the limitation period in Teachers Life’s “Educators Income Protection Plan and Policy” doesn’t apply to a claim for denial of coverage under the policy.  Instead, the Limitation Act‘s basic two-year limitation applies:

[32]           The defendant submits that this action is barred by the two-year limitation period found in Policy.  The relevant provision, at p. 50 of the Policy, states:

In the case where benefits have not been paid or have been paid on a without prejudice basis, a legal proceeding shall not be commenced in respect to a claim under this policy after the second anniversary of the day the claim was discovered.  Discovery of a claim shall be defined as the earlier of the date a claim was first filed with Teachers Life, or the day a reasonable person ought to have known that a claim for benefits should have been filed with Teachers Life. [Emphasis added.]

[33]           However, the Act provides that a limitation period under the Act applies despite any agreement to vary or exclude it unless (1) such agreement was made before January 1, 2004; or (2) it is a “business agreement”, among other exceptions: see s. 22 of the Act.  I find that neither exception applies.

[34]           First, the Policy states that it was revised September 1, 2009 and “replaces all previous polices issued for Plan holders who are not currently receiving Disability Benefits”: see Policy, at p. 2.  Accordingly, I find that the Policy was not made before January 1, 2004.

[35]           Second, the Policy names (1) the defendant as the insurer; (2) the Ontario Secondary School Teachers’ Federation, District 12, as the Plan Sponsor; and (3) the individual member as the Policyholder.  I find that the Policy is not a “business agreement” because (1) the plaintiff is a party to the Policy; and (2) the Policy was made for “personal, family or household purposes”: see Kassburg v. Sun Life Assurance Company of Canada, 2014 ONCA 922 (CanLII), at paras. 58-61.  Accordingly, the limitation period provision found in the Policy, including the trigger for the discovery of a claim, has no effect.