Author: Dan

Ontario: s. 237 of the Municipal Act

The Court of Appeal’s decision in Foley v. St. Marys (Town) is one of the few cases that involve the limitation period in section 273(5) of the Municipal Act:

[28]      To summarize, a party may commence proceedings to quash a bylaw under s. 273 of the Municipal Act, 2001 by way of application. Such a proceeding is captured by the statutory one year limitation period. Alternatively, a party may commence an application or an action for declaratory relief. Such a proceeding is distinct from the statutory remedy of quashing a bylaw under s. 273, and as such, is not captured by the one year limitation period.

This is not particularly revelatory stuff, but it’s unusual enough issue to be of note.

Ontario: when no investigation is a reasonable investigation

 

Galota v. Festival Hall Developments Limited is a noteworthy, well-reasoned limitations decision from the Court of Appeal holding that in the circumstances, it was reasonable for the plaintiff to have taken no steps to discover her claim for about five years after her injury.

The plaintiff fell off a dance stage at a bar and broke her arm.  She sued the bar and its insurer defended.  The bar then closed, and the bar’s insurer became insolvent.

After learning of the insurer’s insolvency, the plaintiff sued the bar’s landlord.  She argued that she couldn’t have discovered her claim against the landlord until examination for discovery of the bar’s representative.  It was then that she learned the landlord participated in the design and construction of the dance stage from which she fell.

The bar moved for summary judgment to dismiss the action on the basis that it was statute-barred by the expiry of the limitation period.  The bar argued that the claim against it was discoverable well before examinations for discovery.

The motion judge agreed with the plaintiff.  He found that she wasn’t put on notice of the potential involvement of the landlord in the design and construction of the dance floor until examinations for discovery, and didn’t show a want of diligence in investigating the landlord’s potential involvement before then.

On appeal, the landlord challenged the motion judge’s finding that the plaintiff exercised sufficient due diligence on the basis that she took no steps at all to investigate her claim until three and a half years after her accident.  The landlord also challenged the trial judge’s call for expert evidence on the standard of care of a solicitor prosecuting an occupier’s liability claim.

The Court of Appeal upheld the motion judge’s decision.  The Court accepted the plaintiff’s position and held that the expert evidence was not material.

Justice Laskin cited the Court’s decision in Fennell for the principle that a plaintiff’s failure to take reasonable steps to investigate a claim is not a stand-alone or independent ground to find a claim out of time.  The reasonable steps a plaintiff ought to have taken to discover her claim is merely a consideration in deciding when a claim is discoverable under section 5(1)(b) of the Limitations Act.

The record supported the motion judge’s conclusion that there were no steps the plaintiff reasonably ought to have taken that would have enabled her to discover her claim against the Landlord before her lawyer examined the bar’s representative for discovery:

[24]      In substance, the motion judge found that there were no steps Ms. Galota reasonably ought to have taken that would have enabled her to discover her claim against Festival Hall before her lawyer examined a representative of Republik in November 2009. Some may view the motion judge’s finding to be questionable. But all these cases are very fact-specific. And the motion judge’s finding is a finding of fact, which in my opinion is well supported by the record, and therefore to which we should defer: Burtch, at para. 22; Longo, at para. 38.

Some aspects of Just Laskin’s analysis will be of interest, particularly to the personal injury bar:

  • The plaintiff had no need to pursue the landlord. Her claim against the bar was an insured claim.  The bar’s insurer responded to it and appointed an adjuster to investigate.  Accordingly, the plaintiff “had every reason to believe the insurer would settle her claim or pay any judgment she obtained after a trial […] the need to pursue another party would hardly have seemed reasonable.”  It would have been unreasonable for her to foresee the insurer’s insolvency.
  • While the bar and its insurer had no obligation to notify the plaintiff about the landlord’s potential liability, their failure to do so is a practical consideration in a section 5(1)(b) analysis. The insurer’s adjuster didn’t suggest that the landlord or any other party was potentially liable for her injury.  The bar didn’t allege that the landlord bore any responsibility or take third party proceedings against it.  Prior to examinations for discovery, neither the bar nor the adjuster suggested that there had been renovations to the bar and that the landlord had involvement in them.  The Court adopted Justice Lauwers’s point in Madrid v. Ivanhoe that a naked denial of liability doesn’t trigger a duty on the plaintiff to make further enquiries:

[27]      Second, the insurer’s adjuster never suggested that Festival Hall or any other party was potentially liable for Ms. Galota’s injury. Similarly, in its statement of defence, Republik did not allege Festival Hall bore any responsibility and Republik did not take third party proceedings against Festival Hall or anyone else. Indeed, before the examinations for discovery neither the adjuster nor Republik ever suggested there had been extensive renovations of the nightclub or that Festival Hall was involved in those renovations. I do not suggest either the insurer or Republik had any obligation to notify Ms. Galota about the potential liability of Festival Hall, but their failure to do so is a practical consideration supporting the motion judge’s finding. As Lauwers J. (as he was then) said in Madrid v. Ivanhoe, 2010 ONSC 2235(CanLII), 101 O.R. (3d) 553, at para. 17:

  • If Ivanhoe’s insurance adjuster had advised the plaintiff that liability was being denied because another party was liable, then the plaintiff’s duty to make further inquiries would have been triggered. But, on the actual facts of this case, a naked denial of liability should not trigger a duty on the plaintiff to make further inquiries.
  • On the date of her injury, the plaintiff couldn’t have known that the landlord was an “occupier” of the bar.  Perhaps the plaintiff’s lawyer should have obtained a title search early in the litigation, but this wouldn’t have determined whether the landlord was an occupier.  This would depend on the terms of its lease with the bar. The lease was not a public document, and the plaintiff had no automatic ability to require the landlord to produce it before litigation. Even if she had obtained the lease earlier in the litigation, she could only have discovered her claim against the landlord when she applied the lease to the facts that the landlord extensively renovated the bar, and the renovations might have breached the Building Code.  The plaintiff only learned of these facts after examinations for discovery.
  • Justice Laskin found that expert evidence is not needed to decide when a claim is discoverable under section 5(1)(b).

Curiously, Justice Laskin described the test in section 5(1)(b) as objective.  This is a departure from the Court’s more accurate description of it as “modified-objective” in Ridel and Ferrara. The “reasonable person” component of the test is modified by the subjective component of “with the abilities and in the circumstances of the claimant.”  Presumably, this was just inadvertence.

The Court’s decision also includes this potentially helpful summary of certain principles of discovery under section 5:

[15]      Three points about these provisions are relevant to the submissions on appeal:

  • Section 5(1)(b) codifies the common law rule of discoverability. If s. 5(1)(b) applies, the two year limitation period will run from a date later than the date the plaintiff was injured.
  • Under s. 5(1)(b), a plaintiff “first ought to have known” of the claim when the plaintiff has enough evidence or information to support an allegation of negligence, including facts about an act or omission that may give rise to a cause of action against a possible tortfeasor: Zapfe v. Barns (2003), 2003 CanLII 52159 (ON CA), 66 O.R. (3d) 397 (C.A.), at paras. 32-33; Burtch v. Barnes Estate (2006), 2006 CanLII 12955 (ON CA), 80 O.R. (3d) 365, at para. 24. The plaintiff cannot delay the start of the limitation period until he or she knows with certainty that a defendant’s act or omission caused the injury or damage: Longo v. MacLaren Art Centre Inc., 2014 ONCA 526 (CanLII),323 O.A.C. 246, at para.
  • The rebuttable presumption in s. 5(2) means that a plaintiff has the onus of showing that the rule of discoverability in s. 5(1)(b) applies: Fennell v. Deol, 2016 ONCA 249(CanLII), at para. 26

 

ONTARIO: The Limitations Act still has nothing to do with the Consumer Reporting Act

The plaintiff in Grant v. Equifax Canada Co advanced a quite clever, but entirely incorrect argument that the Limitations Act applies to the Consumer Reporting Act, which we wrote about here.

The Court of Appeal upheld the motion judge’s decision rejecting the argument:

[5]         The CRA provides for a regulatory scheme for the fair reporting of information regarding an individual’s history of credit activities. The CRA requires the registration of consumer reporting agencies, permits consumer reporting information to be provided only for certain prescribed purposes, and sets out standards for consumer reporting.

[6]         The Limitations Act, 2002, by contrast, applies to bar “claims pursued in court proceedings” that are commenced outside the applicable limitation period. The Act does not apply to the CRA, whether expressly or by implication. Indeed, the CRA contains its own specific provisions prohibiting the inclusion of certain information in consumer reports, including debts or collections more than seven years old, unless confirmation that the debt or collection is not barred has been obtained. The CRA expressly contemplates that debts not reduced to judgment that are up to seven years old may be reported (see s. 9(3)(f)). This makes sense, as the passing of a limitation period does not extinguish a debt; it only precludes the commencement of a court proceeding for its enforcement. As such, the reporting of debts after a limitation period has passed, is not inconsistent with the purposes of the CRA, and is expressly contemplated by its terms.

 

Ontario: MVA litigation, lawyer’s letters, and the threshold

A lawyer’s letter stating that her plaintiff client has sustained permanent injuries is not, in the context of motor vehicle accident litigation, determinative of whether the plaintiff has discovered her claim within the meaning of the Limitations Act.

The plaintiff in Schaefer v. Ayeneababa suffered injuries in a motor vehicle accident.  The defendant moved for summary judgment dismissing the action as statute-barred by an expired limitation period.

The limitation period for a claim of permanent injury and impairment under section 276.5(5) of the Insurance Act doesn’t run until there’s a sufficient body evidence:

[4]              Both sides agree, as do I, that the limitations issue that is before me can be summarily adjudicated. Both sides also agree with the proposition set out in Ioannidis[2] – that in claims of permanent injury and impairment under s. 267.5(5) of the Insurance Act,[3] the court should grant “a degree of latitude to the plaintiff before declaring that the limitation period has begun to run.” A limitation period should not begin to run with regard to a serious and permanent impairment claim:

… until there is a sufficient body of evidence  available to be placed before a judge that, in counsel’s opinion, has a reasonable chance of persuading a judge on a balance of probabilities that the injury qualifies [as a serious permanent impairment].When such a body of material has been accumulated then and only then should the limitation begin to run.[4]

The defendant took the position that the plaintiff’s lawyer, by words and actions, “made clear to the insurer that the plaintiff’s injuries were permanent and that the limitation period would expire two years after the accident”.  The defendant relied on a letter from the lawyer to the insurer:

[11]         The defendant, however, points to a letter dated May 24, 2011 from the plaintiff’s lawyer to the insurer. The lawyer advises the insurer that as a result of the accident, the plaintiff suffered injuries to her neck, shoulders, back and hips and that the physical and psychological symptoms from these injuries (such as dizziness, headaches and acute depression) “are continuing up to the present.” The lawyer also notes that the limitation date is “fast approaching” and attaches a draft statement of claim. The draft statement of claim specifically pleads “permanent and serious impairments.” The lawyer then tries to file the claim by mail but the mailed-in claim is rejected by the court. The action is properly commenced on December 2, 2011.

The defendant argued that the letter was essentially an acknowledgement that the plaintiff’s injuries were permanent on the date of the accident.

Justice Belobaba correctly rejected this argument:

[12]         The defendant says that by these words and actions the plaintiff’s lawyer in essence acknowledged that his client’s injuries were indeed permanent and that he only had until June 24, 2011 (two years after the accident) to commence the action.

[13]         I do not agree. The fact that the plaintiff’s injuries were described as “continuing” is not, in and of itself, an acknowledgement of permanency. Nor is the fact that the lawyer attaches a draft statement of claim that pleads “permanent and serious impairments.” This claim is made in almost every motor vehicle accident that results in significant injury. And, in any event, pleadings are not evidence.

[14]          The fact that the lawyer noted in his letter that the two-year limitation period is “fast approaching” says as much about his desire to file the claim within the presumptive two-year period just to be on the safe side, as it does about an admission that his client knew she sustained permanent soft-tissue injuries at the date of the accident – which is generally an impossibility and is here rebutted by the medical documentation that the lawyer reviewed.

[15]         In his affidavit, the lawyer lists the various clinical and psychological reports that he had reviewed (none of which describe the impairments as permanent) and explains that when he sent the May 24, 2011 letter to the insurer, he “did not have the necessary medical reports and records to prove [that the impairments were permanent].” It was only after requesting a medical opinion from Dr. Sequeira on October 20, 2011 and receiving the doctor’s report a month later that he “formed the opinion that the plaintiff had sustained an injury that met the requirements of s. 267.5(5) of the Insurance Act.” The lawyer commenced the action less than a month later on December 2, 2011.

Ontario: Ignorance is not bliss

In Unegbu v. WFG Securities of Canada, the Court of Appeal reminds us that ignorance of the law won’t stop the limitation period from running:

[4]         […] It is well-established that a lack of appreciation of the legal significance of the facts grounding a claim does not stop the limitation from running: Nicholas v. McCarthy Tetrault, [2008] O.J. No. 4258 at para. 27, aff’d 2009 ONCA 692 (CanLII).

 

Ontario: The Court of Appeal getting discovery right

In upholding the decision in Chelli-Greco v. Rizk, which we wrote about here, the Court of Appeal described when discovery of a claim occurs:

[3]         Under s. 5 (1)(a) of the Act, a claim is discovered on the date the claimant knew, or ought to have known, the material facts giving rise to the claim, and that a proceeding would be an appropriate means to seek to remedy the claim. The date is determined on a fact-based analysis.

This statement of law is deceptively significant.

Since its decision in Lawless, the Court of Appeal has often described discovery in terms of the old common law test—discovery occurs when the plaintiff reasonably ought to have knowledge of the material facts of her cause of action.  This is problematic because discovery under section 5 of the Limitations Act occurs not just when the claimant has knowledge of the material facts of the cause of action, but, pursuant to section 5(1)(a)(iv), when she knows that a proceeding is an appropriate remedy for her claim.  Using the common law test to determine discovery necessarily removes the section 5(1)(a)(iv) criterion from the analysis.  This is problematic, and I’ve written about it before.

The Court of Appeal’s explicit acknowledgement that discovery requires satisfaction of section 5(1)(a)(iv) is a departure from its jurisprudence that follows Lawless.  This is the decision you should cite when describing discovery under the Limitations Act.

This is the Court’s analysis:

[4]         The issue before the motion judge was when did the respondent know that a proceeding would be an appropriate means to seek a remedy. The motion judge accepted the respondent’s evidence that her decision to continue treatment with the appellant beyond September 21, 2011 was based on the appellant’s advice to her that “her failed bridge was not his fault and he would endeavour to repair and remediate the problem.”  . Given this finding, we see no error in the motion judge’s conclusion that the respondent’s action was not discovered until after the treatment and the dentist-patient relationship had ended and that her action was not statute barred as a result. See Brown v. Baum, 2016 ONCA 325(CanLII), at para. 18.

Ontario: Section 5 of the Limitations Act always applies

 

The decision in Najafi v. Shapiro provides a teachable moment.  The decision implies that the precondition for the application of section 5 of the Limitations Act is the plaintiff raising discoverability:

[35]        The moving defendants rely upon Section 4 and Section 5 of the Limitations Act, 2002 as the substantive law for the limitation defence they ask the court to apply to dismiss the 2015 action as against them. Section 4 of the Limitations Act, 2002, reads as follows […]

[36]        On facts where discoverability is raised as an issue, Section 5 is applicable […]

This is wrong.  There’s no precondition to the application of section 5, which is a necessary part of a limitations analysis.  Section 4 links the commencement of the basic limitation period to the discovery of a claim.  Section 5 provides when discovery of a claim occurs.  Accordingly, it’s impossible to determine when a limitation period commences without applying section 5.

Here’s the language of section 4 and 5(1)-(2):

Basic limitation period

4. Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.  2002, c. 24, Sched. B, s. 4.

Discovery

5. (1) A claim is discovered on the earlier of,

(a) the day on which the person with the claim first knew,

(i) that the injury, loss or damage had occurred,

(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,

(iii) that the act or omission was that of the person against whom the claim is made, and

(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and

(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).  2002, c. 24, Sched. B, s. 5 (1).

Presumption

(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1) (a) on the day the act or omission on which the claim is based took place, unless the contrary is proved.  2002, c. 24, Sched. B, s. 5 (2).

 

Ontario: A Trustee Act Refresher

Justice Newbould’s decision in John C. Chapling v. First Associates Investments Inc. et al. provides a useful summary of the limitation of actions under the section 38 of the Trustee Act:

[10]           First Associates relies on the two year limitation period contained in the Trustee Act, RSO 1990, c T.23:

38. (1) Except in cases of libel and slander, the executor or administrator of any deceased person may maintain an action for all torts or injuries to the person or to the property of the deceased in the same manner and with the same rights and remedies as the deceased would, if living, have been entitled to do, and the damages when recovered shall form part of the personal estate of the deceased; but, if death results from such injuries, no damages shall be allowed for the death or for the loss of the expectation of life, but this proviso is not in derogation of any rights conferred by Part V of the Family Law Act.

 (2) Except in cases of libel and slander, if a deceased person committed or is by law liable for a wrong to another in respect of his or her person or to another person’s property, the person wronged may maintain an action against the executor or administrator of the person who committed or is by law liable for the wrong.

 (3) An action under this section shall not be brought after the expiration of two years from the death of the deceased.

[11]           This limitation period is a strict one and the discoverability rule has no application. See Ryan v. Moore 2005 SCC 38 (CanLII), [2005] 2 S.C.R. 53 at para. 31:

31     In my view, the case that best assists this Court in the present matter is the one giving rise to the Ontario Court of Appeal’s decision in Waschkowski v. Hopkinson Estate (2000), 2000 CanLII 5646 (ON CA), 47 O.R. (3d) 370. The court had to determine the possible application of the discoverability rule to s. 38(3) of theTrustee Act, R.S.O. 1990, c. T.23, the statutory provision in Ontario permitting an action in tort by or against the estate of a deceased person and limiting the period during which such actions may be commenced. Abella J.A., as she then was, concluded, at para. 16, that the discoverability rule did not apply to the section since the state of actual or attributed knowledge of an injured person in a tort claim is not germane when a death has occurred. She explained at paras. 8-9:

 In s. 38(3) of the Trustee Act, the limitation period runs from a death. Unlike cases where the wording of the limitation period permits the time to run, for example, from “when the damage was sustained” (Peixeiro) or when the cause of action arose (Kamloops), there is no temporal elasticity possible when the pivotal event is the date of a death. Regardless of when the injuries occurred or matured into an actionable wrong, s. 38(3) of the Trustee Act prevents their transformation into a legal claim unless that claim is brought within two years of the death of the wrongdoer or the person wronged.

The underlying policy considerations of this clear time limit are not difficult to understand. The draconian legal impact of the common law was that death terminated any possible redress for negligent conduct. On the other hand, there was a benefit to disposing of estate matters with finality. The legislative compromise in s. 38 of the Trustee Act was to open a two-year window, making access to a remedy available for a limited time without creating indefinite fiscal vulnerability for an estate. [Emphasis in original.]

[12]           Section 38(1) refers to “an action for all torts or injuries to the person or to the property of the deceased”. It has been held that this language covers claims in tort, contract and breach of fiduciary duty. See Lafrance Estate v Canada (Attorney General) (2003), 2003 CanLII 40016 (ON CA), 64 OR (3d) 1 (C.A.) in which claims were made by native persons who when children were sent to residential schools in Northern Ontario. Some of the persons had died and claims were made by their estates. Some of the claims made were for unpaid wages caused by forced labour. It was argued on behalf of the estates that these claims were contractual in nature and that as a claim for breach of contract could be sustained at common law, such claims did not depend upon the existence of the Trustee Act and, therefore, were not statute-barred. That argument did not succeed. The Court stated:

[54]   In determining whether the estate claims fall within the scope of s. 38(1) of the Trustee Act, the focus is not upon the form of the action but, rather, the nature of the injury. The question to be asked in determining its applicability is whether the alleged wrong constituted an injury to the deceased person. See Smallman v. Moore, 1948 CanLII 4 (SCC), [1948] S.C.R. 295, [1948] 3 D.L.R. 657, and Roth v. Weston Estate (1997),1997 CanLII 1125 (ON CA), 36 O.R. (3d) 513, 20 E.T.R. (2d) 69 (C.A.).

[55]   Whether the claim for forced labour is framed in tort, contract, quasi-contract or breach of fiduciary duty, the claim is for injury of a personal nature. The core of the alleged wrongdoing is the failure of those running the residential schools to compensate the deceased persons for the work they were forced to perform. In other words, the claims arise out of the treatment that the deceased plaintiffs endured at the residential schools. As such, the claims for forced labour are within the meaning of “injuries to the person”. Accordingly, they fall squarely within the provisions of s. 38(1) of the Trustee Act and are subject to the applicable two-year limitation period in s. 38(3).

[56]   The same analytical approach applies to the estate claims for breach of fiduciary duty. Again, the focus is not upon the form of the action but whether the alleged wrong constitutes an injury to the person. It is apparent that the alleged breaches of fiduciary duty are said to have inflicted injury upon the deceased persons and therefore the claims for breach of fiduciary duty are within the ambit of s. 38(1).

Justice Newbould also rejected the argument that the word “injury” in section 38(1) does not apply to claims for pure economic loss.

 [14]           The plaintiff relies on the case of English Estate v. Tregal Holdings Ltd. [2004] OJ No 2853 in which a deceased had transferred shares in one company to another and a claim had been made by her estate against the two companies and several officers for oppression and fraud. Pepall J. (as she then was), held that the word “injury” in section 38(1) of theTrustee Act did not apply to claims for pure economic loss. She stated:

[23]   Counsel were unable to locate any Ontario cases that were precisely on point. Adopting the British Columbia Court of Appeal decision in Alberni District Credit Union v. Cambridge Properties Ltd., 1985 CanLII 567 (BC CA), [1985] B.C.J. No. 1829, the Alberta Court of Appeal in Guest v. Bonderove & Co.[1988] A.J. No. 323 held that the word “injury” imported something in the nature of physical injury or damage and pure economic loss was not included.

[24]   In examining the nature of the injury, I am unable to conclude that the wrongs alleged constitute an injury to Ms. English or her property of the type contemplated by section 38(1) of the Act. In my view the claims in this action are not for injury of a personal nature. They therefore are not captured by section 38(1) of the Act and hence are not barred by section 38(3).

[15]           I have difficulty with this decision and would not follow it. The Guest case referred to in English Estate dealt with the limitations legislation in Alberta that provided a two year limitation period for an action “for trespass or injury to real property or chattels”. It was held that these words did not encompass an action alleging pure economic loss without injury to the real property in question. That language is not the language of section 38(1) of our Trustee Act. The Alberni case referred to involved British Columbia legislation providing for a two year limitation period “for damages in respect of injury to person or property, including economic loss arising from the injury” and a claim relating to damaged property. It was held that “injury” imported something in the nature of physical injury or damage and as the building had not been injured, the limitation period did not apply. There was no discussion of whether pure economic loss would constitute an injury to the person. The case did to raise the issue raised in this case.

[16]           Section 38(1) of the Trustee Act does not contain any language that suggests that the claims made in this case are not actions “for all torts or injuries to the person or to the property of the deceased”. The property of the deceased, being her money, was allegedly destroyed in value due to the wrongful acts of Mr. Monaghan. Black’s Law Dictionary includes in the definition of “injury” the “violation of another’s legal right, for which the law provides a remedy; a wrong or injustice” and “any harm or damage”. That is broad enough to include the claims here for damages arising from the actions of Mr. Monaghan who was a registered investment advisor with First Associates.

[17]           In Lafrance Estate it was held that the claim for unpaid wages fell within section 38(1) of the Trustee Act. I recognize the claim as pleaded arose from being required to perform forced labour, but it was a claim for economic damages.

[18]           Section 38(2) of the Trustee Act applies to claims against the estate of a deceased who committed “a wrong to another in respect of his or her person or to another person’s property”. Bikur Cholim Jewish Volunteer Services v. Penna Estate 2009 ONCA 196 (CanLII) involved a claim against a deceased’s estate arising out of economic loss allegedly caused to the plaintiff. It was held that section 38(3) applied to bar the claim. The point as to whether the claim involved a “wrong to another in respect of his person or another person’s property” was not an issue directly raised, but the premise of the decision was that causing an economic loss was a “wrong”. While section 38(2) of the Trustee Act does not include the word “injury” and section 38(1) does not include the word “wrong”, in principle there is no reason why the two should be treated differently. As stated in Black’s Law Dictionary, injury includes a wrong.

[19]            I conclude that the claims asserted in this case fall within the language of section 38(1) of the Trustee Act, and are statute barred under section 38(3) unless there is reason otherwise as claimed by the plaintiff.

 

Ontario: Acknowledgments of liability must be clear, unequivocal

Section 13(1) of the Limitations Act applies to acknowledgments of liability:

Acknowledgments

13. (1) If a person acknowledges liability in respect of a claim for payment of a liquidated sum, the recovery of personal property, the enforcement of a charge on personal property or relief from enforcement of a charge on personal property, the act or omission on which the claim is based shall be deemed to have taken place on the day on which the acknowledgment was made.  2002, c. 24, Sched. B, s. 13 (1).

What type of acknowledgement will engage this provision? One that is clear and unequivocal.  A mere proposal for a settlement plan that doesn’t acknowledge an amount owing won’t suffice.  The Court of Appeal decision in 1702108 Ontario Inc. v. 328331 Canada Inc. reiterates the principle:

[5]         The language of the statute sets out the applicable test: s. 13(1) is engaged when a person acknowledges liability in respect of a claim for payment of a liquidated amount. In Middleton v. Aboutown Enterprises Inc., 2009 ONCA 466 (CanLII), this court held, at para. 1, that s. 13(1) requires a “clear and unequivocal acknowledgement of the debt claimed.” In that case, the court upheld the motion judge’s finding that a mere offer to settle a claim, without acknowledging that any amount remained owing, did not amount to an acknowledgement of liability for the purposes of s. 13(1).

[6]         In the present case, Mr. Durrani’s March 14 email did not acknowledge liability for the liquidated sum of $296,700 demanded by the appellant in its March 14 correspondence. At most, the respondent’s March 14 email proposed negotiating a settlement plan, without acknowledging that any amount remained owing. When the appellant subsequently pressed for an acknowledgement of liability for the liquidated sum, the respondent refused to give one. Accordingly, we see no basis to interfere with the motion judge’s conclusion that the March 14, 2013 email was not an acknowledgement. We would not give effect to this ground of appeal.

Ontario: Section 18 supersedes the common law

Section 18 of the Limitations Act provides when the limitation period for a claim for contribution and indemnity commences:

Contribution and indemnity

18. (1) For the purposes of subsection 5 (2) and section 15, in the case of a claim by one alleged wrongdoer against another for contribution and indemnity, the day on which the first alleged wrongdoer was served with the claim in respect of which contribution and indemnity is sought shall be deemed to be the day the act or omission on which that alleged wrongdoer’s claim is based took place.

In the common law, where a party has protected itself from liability by contract from the plaintiff, the defendant can’t compel the protected party to share the burden of compensating the plaintiff.  Does section 18 of the Limitations Act supersede the common law?

In Weinbaum v. Weirdberg, Justice Dow held, correctly I think, that it does:

[8]               The source of the position taken by the third parties is the Supreme Court of Canada decision in Giffels Associates Ltd. v. Eastern Construction Co., 1978 CanLII 39 (SCC), [1978], 2 S.C.R. 1346, which reviewed a similar situation.  In its reasons, Chief Justice Laskin (at page 1355) assumed where a plaintiff chose to sue only one of two contractors that each had a separate contract with the plaintiff after the plaintiff suffers damages from concurrent breaches of those contracts, it would be inequitable for that one contractor to bear the entire brunt of the plaintiff’s loss.  However, the court accepted that it was open to one of the contractors to protect itself from liability by a term in its contact and, as a result, the other contractor could not assert a right which would go behind that agreement and force the protected contractor to share in compensating the plaintiff for its losses.

[9]               This principle has been accepted by the Supreme Court of Canada as recently as July 29, 2011 in R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42 (CanLII), [2011] 3 S.C.R. 45, at paragraph 29.  The principle has also been referred to in the decision of this court released November 24, 2011, Hiram Walker & Sons Ltd. v. Shaw Stone Webster Canada L.P.,2011 ONSC 6869 (CanLII), at paragraph 61.

[10]           This compares with the reasons of Justice Feldman on behalf of a five-member panel of the Court of Appeal inWaterloo Region District School Board et al. v. CRD Construction Ltd. et al., 2010 ONCA 838 (CanLII) where the defendant Truax Engineering Ltd. (“Truax”) provided engineering services in the rebuilding of a wall of a gymnasium of the plaintiff.  Truax completed its work by February 19, 2003 and (then) section 46(1) of the Professional Engineering Act,R.S.O. 1990, c.P.28, provided a 12-month limitation period for actions against it.  The plaintiff’s action was not commenced until June 23, 2008.  Defendants in the action crossclaimed against each other within the two years permitted by theLimitations Act, supra, and the motion by Truax for summary judgment dismissing the crossclaims was denied by the motions judge and on appeal.  No direct consideration was given to the principles enunciated in Giffels Associates Ltd. v. Eastern Construction Co., supra.

[11]           However, Justice Feldman did refer to the decision of HSBC Securities (Canada) Inc. v. Davies, Ward & Beck,2005 CanLII 1626 (ON CA), [2005] O.J. No. 277 (C.A.) which reviewed the Giffels decision (at paragraph 17).  The party in that case in the position of Weidberg submitted it preserved the integrity of the limitation regime and Justice Feldman ruled to the contrary.  As a result, I shall as well.  While the Giffels reasoning is logical and fair, it is also clear Justice Feldman accepted the intent of the legislature to alter the law so that, as indicated in paragraph 24 of her decision, “a claim for contribution and indemnity, whether in tort or otherwise, now has a two-year limitation period that is presumed to run from the date when the person who seeks contribution and indemnity is served with the plaintiff’s clam that gives rise to its claim over.”