Lundy v. Lundy is the most recent decision to consider the extension of the limitation period under the Family Law Act. Relatively few decisions consider this issue, and for that reason I bring it to your attention.
Author: Dan
Ontario: undertaking alternative remedial processes can delay discovery
Presidential MSH Corporation v. Marr Foster & Co. LLP is another excellent decision from the Court of Appeal applying s. 5(1)(a)(iv) of the Limitations Act. Where the plaintiff relies on an alternative process that would substantially eliminate its loss so that court proceedings would be unnecessary to remedy it, and the date the alternative process runs its course is reasonably ascertainable, a proceeding will not be an appropriate remedy until that alternative process concludes.
While this decision doesn’t break new ground, it clarifies the impact remedial measures can have on discovery of a claim. This is of particular consequence in professional negligence claims, which was the case in Presidential.
The respondents filed the appellant’s corporate tax returns after their due date. As a result, the CRA denied tax credits that would have been available had the returns been filed on time.
The appellant received the CRA’s Notices of Assessment disallowing each of the claimed credits on April 12, 2010. When the appellant received the notices, he immediately asked the respodnents what to do and how to fix the problem.
The motion judge inferred that the respondents advised the appellant to retain a tax lawyer to determine how to solve the tax problem but didn’t advise him to obtain legal advice about a professional negligence claim against the respondents.
The appellant did retain a tax lawyer on April 15, 2010, but there was no discussion of a possible action against the respondents. The tax lawyer filed a Notice of Objection to the CRA assessments, as well as an application for discretionary relief. The respondent helped the appellant prepare its appeals to the CRA by drafting the application for relief and helping the appellant and its lawyer with whatever else they needed, until at least November 2011.
By letter dated May 16, 2011, the CRA responded to the Notice of Objection advising that it intended to confirm the assessments. It did in fact confirm them on July 7, 2011.
The motion judge found that, as late as July 2011, there was still a reasonable chance that the application for discretionary relief would mitigate some or all of the appellant’s loss.
On August 1, 2012, the appellant issued its statement of claim against the respondents. This was more than two years after the initial denial by CRA of the credits, but within two years of CRA’s refusal to alter the assessments in response to the Notice of Objection.
The motion judge held that the appellants claim would have been appropriate while the CRA appeal was still ongoing because the appeal would not have fully eliminated the appellant’s claim against the respondents. In particular, it would not have eliminated the appellant’s claim for the costs of retaining a tax lawyer to prosecute it.
Justice Pardu rejected this reasoning. She summarised the applicable principles:
[20] First, the cases suggest that 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.
[…]
[26] Resort to legal action may be “inappropriate” in cases where the plaintiff is relying on the superior knowledge and expertise of the defendant, which often, although not exclusively, occurs in a professional relationship. Conversely, the mere existence of such a relationship may not be enough to render legal proceedings inappropriate, particularly where the defendant, to the knowledge of the plaintiff, is not engaged in good faith efforts to right the wrong it caused. 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.
[27] Finally, I note that cases in which a defendant who is an expert professional attempts to remedy a loss that a plaintiff has discovered and alleges was caused by the defendant (engaging the potential application of s. 5(1)(a)(iv)) are distinct from cases in which courts have held that a client has not discovered a potential claim for solicitor’s negligence until being advised by another legal professional about the claim: see Ferrara, at para. 70; and Lauesen v. Silverman, 2016 ONCA 327 (CanLII), 130 O.R. (3d) 665, at paras. 25-31. In the latter category of cases, the issue is whether the plaintiff knew or ought reasonably to have knowninjury, loss or damage had occurred (under s. 5(1)(a)(i)) that was caused by or contributed to by an act or omission of the defendant (under ss. 5(1)(a)(ii) and (iii)). Section 5(1)(a)(iv) comes into focus where the plaintiff knew or ought reasonably to have known of his or her loss and the defendant’s causal act or omission, but the plaintiff contends the limitation period was suspended because a proceeding would be premature. Although discoverability under more than one subsection of s. 5(1)(a) may be engaged in a single case, it is important not to collapse the analysis of discoverability of loss or damage and the defendant’s negligence or other wrong with the determination whether legal action is appropriate although other proceedings to deal with the loss may be relevant to both questions.
(3) The effect of other processes which may eliminate the loss
[28] A second line of cases interpreting and applying s. 5(1)(a)(iv) of the Act involves a plaintiff’s pursuit of other processes having the potential to resolve the dispute between the parties and eliminate the plaintiff’s loss.
[29] This approach to discoverability is consistent with the rule in administrative law that it is premature for a party to bring a court proceeding to seek a remedy if a statutory dispute resolution process offers an adequate alternative remedy and that process has not fully run its course or been exhausted: see Volochay v. College of Massage Therapists of Ontario, 2012 ONCA 541 (CanLII), 111 O.R. (3d) 561, at paras. 61-70.
[…]
[39] Non-administrative, alternative processes have also been seen in other cases as having the potential to resolve a dispute, thus rendering a court proceeding inappropriate or unnecessary.
[…]
[45] Many of the cases dealing with the effect of alternative processes on the appropriateness of a court proceeding have applied the concept of a proceeding being “legally appropriate” articulated by this court in Markel. Markel involved a dispute between sophisticated insurers claiming indemnity under statutory loss transfer rules. The limitations issue that arose concerned whether a legal proceeding was “inappropriate” while settlement discussions between the parties were ongoing and thus, whether a claim was not discovered until these negotiations broke down.
[46] Recall that, in Markel, the court held that the term “appropriate” in s. 5(1)(a)(iv) means “legally appropriate”. This interpretation avoided entangling courts in the task of having to “assess [the] tone and tenor of communications in search of a clear denial” that would indicate the breakdown of negotiations between the parties. That would permit a plaintiff to delay the discoverability of a claim for “some tactical or other reason” and “inject an unacceptable element of uncertainty into the law of limitation of actions” (at para. 34).
[47] Similarly, in 407 ETR Concession Company, at para. 47, Laskin J.A. stated that the use of the term “legally appropriate” inMarkel “signified that a plaintiff could not claim it was appropriate to delay the start of the limitation period for tactical reasons, or in circumstances that would later require the court to decide when settlement discussions had become fruitless” (emphasis added).
[48] These cases instruct that if a plaintiff relies on the exhaustion of some alternative process, such as an administrative or other process, as suspending the discovery of its claim, the date on which that alternative process has run its course or is exhausted must be reasonably certain or ascertainable by a court.
Accordingly, the motion judge erred in holding that the appellant knew or ought to have known that its proceeding was appropriate as early as April 2010, when it received the CRA’s Notices of Assessment disallowing its tax credits. The proceeding was not appropriate, and the appellant’s underlying claim was not discovered, until May 2011, when the CRA responded to the appellant’s Notice of Objection and advised that it intended to confirm its initial assessments. The motion judge erred by equating knowledge that the respondents had caused a loss with a conclusion that a proceeding would be an appropriate means to seek a remedy for the loss.
Had the respondents together with the tax lawyer prosecuted the CRA appeal successfully, the appellant’s loss would have been substantially eliminated, and it would have been unnecessary to resort to court proceedings to remedy it. The fact that the appellant would have been unable to recover the fees it paid the tax lawyer, except through litigation, was inconsequential. It is the claim that is discoverable, not the full extent of damages the plaintiff may be able to recover. It would not have been appropriate under s. 5(1)(a)(iv) of the Act for the appellant to commence a proceeding until the respondents ameliorative efforts concluded.
The CRA appeal process had the potential to eliminate the appellant’s loss. As an alternative process to court proceedings, it could have resolved the dispute between the appellant and the respondents. These results would have made a proceeding unnecessary. It would not have been appropriate for the appellant to commence a proceeding until the CRA appeal process was exhausted in May 2011.
The court’s decision in Markel, as interpreted in 407 ETR Concession Company, about the meaning of the concept of a proceeding being “legally appropriate” under s. 5(1)(a)(iv) of the Act supported the appellant’s position. It was not a case where the appellant sought to toll the operation of the limitation period by relying on the continuation of an alternative process whose end date was uncertain or not reasonably ascertainable. It was clear that the end date of the CRA appeal was when the CRA responded to the appellant’s Notice of Objection advising that it intended to confirm the assessments. Thus the motion judge erred in invoking Markel to dismiss the appellant’s claim as time barred.
A last note: the Court of Appeal seems to still be ignoring its decision in Clarke where it held that the section 5(1)(a)(iv) discovery criterion requires the claimant to have “good reason to believe he or she has a legal claim for damages”. I don’t think any decision has followed this construction of the provision.
Ontario: CA confirms insurers have no duty to disclose limitation period
In Usanovic v. Penncorp Life Insurance Company (La Capitale Financial Security Insurance Company), Court of Appeal has confirmed that an insurer’s duty of good faith does not require it to give notice of the limitation period to its insured. While the legislatures of some provinces have imposed a statutory obligation to this effect on insurers, Ontario has not. Whether it should is a matter for the legislature.
We wrote about the lower court decision here.
This was the plaintiff’s argument on appeal:
[20] The appellant submits, however, that the insurer’s failure to inform him of the limitation period precludes it from relying on the limitation period to defend his claim. He submits that the insurer’s common law duty of good faith and fair dealing should require it to inform the insured of the existence of the limitation period.
[21] The appellant concedes that there is no statutory obligation to this effect in Ontario. He submits, however, that this obligation flows from the insurer’s duty to give the same consideration to the insured’s interest as it does to its own interests and can be imposed through the development of the common law and need not be based on statute.
Justice Strathy rejected this argument:
[45] The Ontario legislature might have gone further than it has, for example, by adopting the approach taken in Alberta or British Columbia. It presumably chose not to do so and, in my respectful view, the court should not impose consumer protection measures on insurers, outside the terms of their policies, that the legislature has not seen fit to require. A properly crafted regime, such as those in effect in Alberta and British Columbia, would not only have to specify the requirement to give notice, but also the consequences of failing to do so.
[46] The consequences of the appellant’s proposed expansion of the duty of good faith are significant. The appellant’s interpretation would effectively judicially overrule the provisions of the Limitations Act, 2002 by making notice given by an insurer to an insured the trigger for the limitation period, rather than discoverability of the underlying claim. This would defeat the purpose of the statute and bring ambiguity, rather than clarity, to the process.
Ontario: no limitation period for possessory liens
In Edan Agency Inc. v. Palinkas, the Court of Appeal held that limitation periods do not “generally” run against possessory liens. This is because such a lien is a defence, and defences are not subject to statutory limitation periods.
This is a settled point of law. Accordingly, it’s curious that the court should have used the qualifying language of “generally”. I’d like to know in what circumstance a possessory lien would be subject to a limitation period–I suspect there’s none.
Ontario: the Trustee Act limitation period trumps s. 18 of the Limitations Act
The Court of Appeal has held that when one joint tortfeasor has died and the other makes a crossclaim for indemnity against her estate, s. 38(3) of the Trustee Act limits the claim, not the Limitations Act’s s. 18 contribution and indemnity provision.
Justice Strathy’s decision in Levesque v. Crampton Estate is well-reasoned, and I think, correct.
Unfortunately, it missed an opportunity to resolve a limitations issue of more widespread application: whether the s. 5 discovery provisions apply to s. 18. In Miaskowski v. Persaud, the court concluded that s. 18 is a self-contained deeming provision that imposes an absolute two-year limitation period for claims for contribution and indemnity. The court’s analysis turns on the word “deemed” in s. 18, which, “as a declarative legal concept is a firmer or more certain assertion of the discovery of a claim than the rebuttable presumption of discovery contemplated by section 5”.
The problem with this analysis is that it fails to consider that s. 18 was expressly enacted “For the purposes of subsection 5(2) and section 15”, that is, to inform and dictate the meaning to be given to the concepts referred to in those sections when applying them.
This is the point made in detail by Justice Leach in Demide v. Attorney General of Canada et al. Justice Leach systematically analysed the flaws in Miaskowski’s reasoning. She concluded that the purpose of s. 18 is to provide when time begins to run for the basic and ultimate limitation periods in claims for contribution and indemnity. It deems the day of service of the statement of claim giving rise to the claim for contribution and indemnity to be the commencement of the ultimate limitation period and the presumptive commencement of the basic limitation period.
The language Justice Strathy uses could support either construction. He writes that s. 18 “provides that a claim for contribution and indemnity is ‘discovered’ and, therefore, the limitation period begin to run, on the day on which the wrongdoer seeking indemnity is served with the plaintiff’s claim.” Does this mean the limitation period begins to run presumptively, or begins to run in all circumstances?
Paragraph 17 tends to suggest that it runs in all circumstances:
[17] Thus, the general two-year limitation period runs from the date that the party claiming contribution and indemnity is served with the claim in respect of which contribution is sought.
My hope is that when the Court of Appeal directly considers the matter, Justice Leach’s analysis will prevail. Miaskowksi is at odds with a common sense reading of the Limitations Act as a whole, and introduces unnecessary and unhelpful complexity into the limitations scheme.
Ontario: Appointing a guardian of property doesn’t start the limitation period
In Shaw v. Barber, Justice McNamara held that the appointment of the Office of the Public Guardian and Trustee as guardian of property doesn’t cause a limitation period to commence:
[13] […] Where [the parties] disagree completely is when the six month limitation period for a claim for support under Section 61(1) of the Succession Law Reform Actbegins to run.
[14] The first point that needs to be made is that under the Limitations Act the six month limitation period under the Succession Law Reform Act is incorporated into the act by Section 19(1) of the Limitations Act. That section provides that any limitation period set out in or under another act applies as long as the provision establishing it is listed in the schedule to the Limitations Act. There is no issue that this particular limitation period is in that schedule.
[15] It is also common ground that the limitation period in question does not run in the circumstances set forth in Section 7(1) of the Limitations Act.That section provides:
7 (1) the limitation period established by section 4 does not run during any time in which the person with the claim,
(a) is incapable of commencing a proceeding in respect of the claim because of his or her physical, mental or psychological condition; and
(b) is not represented by a litigation guardian in relation to the claim. 2002, c. 24, Sched. B, s. 7 (1).
[16] The six month limitation, then, did not run while Ms. Shaw was incapable of commencing a proceeding because of a mental condition and was not represented by a litigation guardian in relation to the claim (emphasis added).
[17] The Estate argues that after its appointment as Ms. Shaw’s statutory guardian of property the OPGT had the authority to act as litigation guardian and were then under an obligation to advance a claim within a six month period of their appointment.
[18] That argument, in my view, is flawed.
[19] There is no mechanism in the Limitations Act for the self-appointment of a litigation guardian. To do that, regard must be had to the Rules of Civil Procedure. A number of provisions are relevant.
[20] First is Rule 7.01(1) which provides as follows:
7.01 (1) Unless the court orders or a statute provides otherwise, a proceeding shall be commenced, continued or defended on behalf of a party under disability by a litigation guardian. O. Reg. 69/95, s. 2.
A proceeding, then, which includes an application, must be commenced on behalf of a party under a disability by a litigation guardian.
[21] Next Rules 7.02(1) and 1.1(a) which provide:
7.02 (1) Any person who is not under disability may act, without being appointed by the court, as litigation guardian for a plaintiff or applicant who is under disability, subject to subrule (1.1). O. Reg. 69/95, s. 3 (1).
Mentally Incapable Person or Absentee
(1.1) unless the court orders otherwise, where a plaintiff or applicant,
(a) is mentally incapable and has a guardian with authority to act as litigation guardian in the proceeding, the guardian shall act as litigation guardian;
[22] It is important to note that while the above section directs that the guardian shall act as litigation guardian, it does not dictate when that authority is to be exercised. That, in my view, occurs once the guardian of property has determined there is a basis for exercising their authority as litigation guardian.
[23] Surely that is appropriate. As the affidavit of counsel at the Office of the Public Guardian and Trustee discloses, once they are appointed statutory guardian of property in a factual situation such as existed here, they begin an investigation into the entire matter. That can be, as the affidavit discloses, a time consuming process because there are usually information gaps because of the client’s incapacity which require the OPGT to be reliant on third party information with a need to be verified. The initial investigation is done by a client representative and if the situation warrants it, the matter is then referred to counsel in the OPGT’s office which in this case occurred in October of 2015. According to the evidence, further investigation continued under counsel’s direction exploring options available. Outside counsel was formally retained by the OPGT on May 6, 2016. The application was brought in August.
[24] Moving carefully and cautiously prior to commencing litigation at public expense would require a thorough investigation of the facts and legal options available. As counsel in his affidavit points out, the client they act for has little capacity to properly advise them of her circumstances, so they have to rely on third party information which may support or not support or be neutral towards the incapable person’s position. I agree with counsel that imposing a limitation period commencing as of the OPGT’s appointment as guardian of property is not only contrary the wording of the Limitations Act, but would also create impossible timelines thus creating the potential for injustice being done to vulnerable individuals.
Ontario: parties may exclude contribution and indemnity claims despite s. 18 of Limitations Act
In Weinbaum v. Weidberg, the Divisional Court held that s. 18 of the Limitations Act, which prescribes the limitation of claims for contribution and indemnity, does not apply to contractual limitation periods. It remains available to contracting parties to limit the scope of liability in a contract. The right of a party to claim contribution and indemnity against another party is lost where a contract extinguishes a plaintiff’s right to advance a claim.
Ontario: claims for the return of condo deposits subject to ten year limitation period
The Court of Appeal has held that a claim for the return of deposits advanced toward the purchase of a condo unit is subject to the ten year limitation period in s. 4 of the Real Property Limitations Act.
Justice Epstein’s analysis in Harvey v. Talon International Inc. is refreshingly methodical and lucid. It begins with the governing principle of statutory interpretation:
[40] This is a matter of statutory interpretation. Statutory interpretation is governed by the approach described in Elmer Driedger,Construction of Statutes, 2nd ed. (Toronto: Butterworths, 1983), at p. 87, and adopted by the Supreme Court of Canada in Re Rizzo & Rizzo Shoes Ltd., 1998 CanLII 837 (SCC), [1998] 1 S.C.R. 27, at para. 21:
Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.
Principles Applied
[41] Section 4 of the RPLA provides as follows:
No person shall make an entry or distress, or bring an action to recover any land or rent, but within ten years next after the time at which the right to make such entry or distress, or to bring such action, first accrued to some person through whom the person making or bringing it claims, or if the right did not accrue to any person through whom that person claims, then within ten years next after the time at which the right to make such entry or distress, or to bring such action, first accrued to the person making or bringing it.
[42] When those aspects of s. 4 of the RPLA that do not apply to this case are removed, it provides that:
No person shall bring an action to recover any land, but within ten years after the time at which the right to bring any such action first accrued to the person bringing it
[43] Thus, there are 3 requirements in s. 4: an “action”, to “recover” and what must be recovered is “land”.
[44] An action is defined in s. 1 of the RPLA to include “any civil proceeding”.
[45] “Recover” is defined in legal dictionaries as “gaining through a judgment or order”. This was the definition adopted for the use of “recover” in s. 4 in McConnell v. Huxtable, 2014 ONCA 86 (CanLII), 118 O.R. (3d) 561, at paras. 16-20, specifically, at para. 17, where this Court noted that the English Court of Appeal has held that the expression “to recover any land” in comparable legislation “is not limited to obtaining possession of the land, nor does it mean to regain something that the plaintiff had and lost. Rather, “recover” means to ‘obtain any land by judgment of the Court’”
[46] I agree with the application judge’s approach on this point. This is clearly an action to recover.
[47] The remaining question is whether what Ms. Yim seeks to recover – her deposit – is “land”. The definition of land in s. 1 of the RPLA is as follows:
“land” includes messuages and all other hereditaments, whether corporeal or incorporeal, chattels and other personal property transmissible to heirs, money to be laid out in the purchase of land, and any share of the same hereditaments and properties or any of them, any estate of inheritance, or estate for any life or lives, or other estate transmissible to heirs, any possibility, right or title of entry or action, and any other interest capable of being inherited, whether the same estates, possibilities, rights, titles and interest or any of them, are in possession, reversion, remainder or contingency;
[48] In my view, the application judge was also correct in concluding that an application for the return of the deposit was an action for the recovery of “land”; specifically the recovery of “money to be laid out in the purchase of land”.
[…]
[51] In support of this conclusion, I note that several cases have clarified the relationship between claims for damages and claims covered by the RPLA. The Supreme Court in Canson Enterprises Ltd. v. Boughton & Co., 1991 CanLII 52 (SCC), [1991] 3 S.C.R. 534, defined damages as “a monetary payment for the invasion of a right at common law”. In Toronto Standard Condominium Corp. No. 1487 v. Market Lofts Inc., 2015 ONSC 1067 (CanLII), the plaintiff sought damages based off the defendant’s failure to meet its obligations under a Shared Services Agreement. Perell J., beginning at para. 49, noted that the fact that real property is incidentally involved in an action does not necessarily mean that the action is governed by the RPLA. Among the cases he cited was Metropolitan Toronto Condominium Corp. No. 1067 v. L. Chung Development Co., 2012 ONCA 845 (CanLII). In that case, this Court made the following comment, at para. 7:
Finally, we do not think that the [RPLA] applies to the case as framed by the appellant. In its Statement of Claim, the appellant frames its action as one for damages flowing from the respondents’ negligence, breach of contract, conflict of interest, and breach of duty of care, fiduciary duty and statutory duty. None of these relates to the categories of actions encompassed by the [RPLA].
[52] Thus, had Ms. Yim’s claim been one primarily seeking damages, for example breach of contract, her application would be statute-barred. This would be true even if the claim for damages incidentally related to real property, specifically the condominium that was the subject of her APS. Claims for damages do not fit within the definition of “land” in the RPLA.
[53] However, Ms. Yim is not seeking damages. She advances a specific claim under a provision in the Act, a provision that only allows for the return of her deposit and interest, not damages. The Tax Court defined a deposit in Casa Blanca Homes Ltd. v. R., 2013 TCC 338 (CanLII), as “a pool of money retained until such time as it is applied in partial payment or forfeited”. As noted by the Alberta Court of Appeal in Lozcal Holdings Ltd. v. Brassos Development Ltd. (1980), 1980 ABCA 72 (CanLII), 111 D.L.R. (3d) 598, “a genuine deposit ordinarily has nothing to do with damages, except that credit must be given for the amount of the deposit in calculating damages”.
[54] This leads me to the consideration of “money to be laid out in the purchase of land”, a phrase on which there is scant jurisprudence. However, in my view an action for the return of a deposit fits comfortably within its plain meaning. Frankly, I struggle to understand what would fit within this phrase if not an action such as this.
[55] On the basis of the foregoing analysis, I conclude that Ms. Yim’s application is not statute-barred. This is also true of the amendment of her initial application to specifically claim statutory rescission. As her application is covered by s. 4 of the RPLA, the applicable limitation period is ten years. The application is an action, which is defined as any civil action. She seeks “recovery”, which has been defined as “gaining through a judgment or order”. And the recovery she seeks is of “land”; namely, her deposit, which is money laid out in the purchase of land.
[56] I would therefore not give effect to this ground of appeal.
Ontario: a claim for common area fees is subject to the RPLA
In 2373322 Ontario Inc. v. Nolis, Justice Broad held that a claim by a landlord against a tenant for failure to pay common area maintenance charges under a commercial lease is subject to the six year limitation period in s. 17 of the Real Property Limitations Act.
The decision includes a useful summary of the relevant principles:
[57] The tenant submits that all or a portion of the landlords’ claim for arrears of additional rent is barred by the Limitations Act, 2002 S.O. 2002 c. 24, Sch. B, which provides for a two year limitation period for bringing action for an injury, loss or damage that occurred as a result of an act or omission. The tenant submits that the Limitations Act, 2002 applies to the landlords’ claim and not the Real Property Limitations Act R.S.O. 1990, c. L.15 (the “RPLA”) as it does not constitute a claim for “rent” under the RPLA.
[58] It is noted that, pursuant to ss. 2 (1)(a) of the Limitations Act, 2002, that Act applies to any claim to which the RPLA does not apply.
[59] In the case of Pickering Square Inc. v. Trillium College Inc. 2014 ONSC 69 (S.C.J.) Mew, J. held, at para. 27, that with the enactment of theLimitations Act, the Legislature created a single, comprehensive general limitations law that is to apply to all claims for injury, loss or damage except, in relevant part, when the RPLA specifically applies, and that accordingly, the application of the Limitations Act should be construed broadly and the RPLAnarrowly.
[60] Justice Mew conducted a careful review of the historical and current meanings of “rent” and concluded that “rent” in s. 17 of the RPLA means “the payment due under a lease between a tenant and landlord as compensation for the use of land or premises.”
[61] S. 17 of the RPLA provides as follows:
17. (1) No arrears of rent, or of interest in respect of any sum of money charged upon or payable out of any land or rent, or in respect of any legacy, whether it is or is not charged upon land, or any damages in respect of such arrears of rent or interest, shall be recovered by any distress or action but within six years next after the same respectively has become due, or next after any acknowledgment in writing of the same has been given to the person entitled thereto or the person’s agent, signed by the person by whom the same was payable or that person’s agent. R.S.O. 1990, c. L.15, s. 17 (1).
[62] None of the cases cited by the tenant in the case at bar, in support of its submission that the landlords’ claim in this case does not constitute “rent”, dealt with claims for common area maintenance charges of the nature claimed by the landlords in this case. The claims under consideration in Pickering Square were for damages for the tenant’s failure to occupy and carry on business at the premises and resulting from the tenant’s failure to restore the premises to the required condition at the end of the lease term. The claims in Bill Co. v. Yellowstone Property Consultants Corp. 2012 ONSC 5116 (CanLII), 2012 ONSC 5116 (S.C.J.) similarly constituted claims for damages. The claim in Coffee Culture Systems Inc. v. Krukowski 013 ONSC 1588 (S.C.J.) (S.C.J.) was by the tenant against the landlord for breach of the lease.
[63] In Toronto Standard Condominium Corporation No. 1487 v. Market Lofts Inc. 2015 ONSC 1067 (CanLII), 2015 ONSC 1067 (S.C.J.) Perell J. stated at para. 58 “that the parties to a lease described a payment as rent or additional rent is not determinative of whether the charge is a rent charge, and if it is just a contractual charge it will be governed by the Limitations Act, 2002.”
[64] In contrast to the cases cited by the tenant, common area charges of the nature claimed by the landlords in the present case were found to constitute “rent” for the purpose of the RPLA in the case of Ayerswood Development Corp. v. Western Proresp Inc. 2011 ONSC 1399 (CanLII), at para. 31.
[65] Although the characterization by the parties of “additional rent” as” rent” in the lease, as amended, is not determinative, I find that the additional rent, constituting “CAM charges” is properly characterized as “payments due under a lease between a tenant and landlord as compensation for the use of land or premises” and therefore constitutes “rent” for the purposes of the RPLA, which provides for a six year limitation period. Conversely, even if my conclusion, as set forth above, that the parties did not intend, by the amendment agreement, to exclude “additional rent” from “rent” under the lease is wrong, the landlords’ claim for additional rent would still constitute “rent” for the purposes of the RPLA.
Ontario: the application of s. 11 of the Limitations Act
In Victory v. Sattar, the court held that a formal agreement is unnecessary to engage s. 11 of the Limitations Act. Agreement is inferable from the parties’ conduct.
Section 11 provides that if a claimant and the party against whom the claim is made agree to the assistance of an independent third party in resolving the claim, the limitation period doesn’t run until the date the claim is resolved, the resolution process ends, or one party withdraws or terminates the agreement.
The conduct of the parties in Victory demonstrated their agreement to obtain the assistance of an independent third party, the Baha’i National Spiritual Assembly and the Universal House of Justice. This engaged s. 11:
[51] Section 11 provides that if a claimant and the one against who the claim is made have agreed to have an independent third party assist them in resolving the claim, then the limitation period does not begin to run until the date when the claim is resolved, the attempted resolution process is terminated, or one party withdraws or terminates the agreement. Here, there is no resolution. While the letter itself is not in evidence, it is clear that on July 19, 2012 Sattar indicated he was no longer prepared to take part in the process. Accordingly, the limitation period begins to run again from that date. It is just over six months from July 19, 2012 to January 24, 2013 when the claim was issued.
[52] Parviz argues that the limitation period initially started on July 7, 2010 when Sattar made his last payment to him pursuant to the Toronto agreement. Sattar does not strenuously disagree. Even if the limitation period was to initially start on May 20, 2010 it would not change the result. Parviz argues that the limitation period stopped running on August 14, 2011 when Sattar sent his defence and claim letter to the Assembly. Sattar argues that for s. 11 of the Act to apply there must be a specific agreement of a more formal nature made between the parties. He further argues that he was coerced into participating in the process and was an unwilling participant who never agreed to having the Assembly resolve the claim or assist in resolving it.
[53] The purpose of s. 11 is to encourage efforts to settle by providing that there is no limitation period penalty for plaintiffs who agree to enter into third party resolution processes. Accordingly the section is to be interpreted broadly: (see Sandro Steel Fabrication Ltd. v. Chiesa, 2013 ONSC 658(CanLII), at para. 69). There is no requirement that there be a specific express agreement incorporating s. 11 of the Act. Nor is there a requirement for a specific express agreement to have a third party assist in resolving the claim. There can be an agreement inferred from the parties’ conduct. That is the case here. Not only did Sattar respond to Parviz’s claim to the Assembly, he asked the Assembly to address his own claim in his letter of August 14, 2011. When the decision of the Assembly was made, Sattar then appealed it. I find that Sattar agreed to have the Baha’i Assembly assist him and Parviz in resolving the claim between them.
[54] It would be completely unfair for Sattar to now argue that, having been unsuccessful before the Assembly and the Universal House of Justice, his involvement in the process was as an unwilling participant. If he was in fact a coerced unwilling participant, he should have made this clear right from the beginning when he received the letter of July 7, 2011 from the Assembly rather than going through the process, and, when unsuccessful, arguing that he did not agree to do so. If he had in fact been an unwilling coerced participant, he should have made this clear so that Parviz could have considered his options.
[55] However, I find that Sattar was not coerced. He was not unwilling. Rather he agreed to the process thus extending the limitation period during the period of August 14, 2011, when he agreed to have the Assembly assist them in resolving their claim, to July 19, 2012, when he withdrew from the process. May 20, 2010 to August 14, 2011 is approximately 15 months and July 19, 2012 to January 24, 2013 is approximately six months. Together the two time periods are less than two years. The Parviz claim is not statute-barred.