Author: Dan

Ontario: Under s. 138 of the OSA, each misrepresentation is a separate claim

There is a statutory cause of action in the Securities Act for misrepresentation in secondary market disclosure documents, which is subject to a three year limitation period:

[2]         Under s. 138.3(1) of Part XXIII.1, a person or company who acquires or disposes of an issuer’s security between a document’s release and public correction of a misrepresentation in the document has a right of action for damages, without regard to whether the person or company relied on the misrepresentation. However, in order to limit meritless litigation or “strike suits”[1], s. 138.8(1) of the OSA requires leave of the court to commence an action under s. 138.3. Section 138.14(1) also imposes a three-year limitation period for the commencement of the action, measured from the date the document containing the misrepresentation was first released.

In Drywall Acoustic Lathing and Insulation, Local 675 v. SNC-Lavalin Group, (quoted above),  the appellants argued that because they commenced their action and pleaded misrepresentations in the impugned documents within the limitation period, any related misrepresentation claim arising out of the same documents was not statute-barred.  In other words, “if a plaintiff commences an action asserting misrepresentation in a disclosure document within the limitation period, the plaintiff can, at any time thereafter, assert any related misrepresentation claims arising out of the same documents” (para. 73).

Note so, held the Court of Appeal:

[74]      The appellants were granted leave to commence a particular action, namely one asserting that representations in the impugned documents were false because of evidence that amounts had been paid to agents and that SNC was engaged in criminal activity with respect to the Padma Bridge Project in Bangladesh. As I concluded above, the appellants did not obtain leave to pursue claims founded on other misrepresentations, and therefore those other claims are not part of the action. As the impugned documents are now more than three years old, those claims are statute-barred.

[75]      If leave is required to advance further misrepresentation claims arising out of previously impugned documents, then those further misrepresentation claims are a different “action”, and are subject to the limitation period in s. 138.14(1).

Ontario: a rare and proper s. 5(1)(a)(iv) analysis

Chelli-Greco v. Rizk  includes a solid section 5(1)(a)(iv) discovery analysis (which appear in limitations jurisprudence quite infrequently).  Justice Hackland held that it did not become legally appropriate for the plaintiff to discover her claim against her dentist until their dentist-patient relationship ended:

[19]           In my view the present case is an equally compelling situation to support the proposition that the plaintiff’s action was not discovered until the dentist-patient relationship had ended.  It could not fairly be said that the plaintiff should have considered it appropriate to commence proceedings against her dentist while he was attempting to remediate her dental problems which she was given to understand arose from the poor health of her teeth which supported her bridge. As the plaintiff’s expert pointed out, a major problem for the plaintiff was the lack of an informed consent discussion surrounding the treatment she was receiving.  She remained under the defendant’s influence and professional guidance, without proper advice, for the duration of the dentist-patient relationship.  In these circumstances, I cannot be satisfied that it was appropriate for the plaintiff to opt for legal proceedings instead of seeking remediation by continuing to seek treatment form the defendant.

The situation that was equally compelling was that in Brown v. Baum, an excellent decision from Justice Mew that I wrote about here.

UPDATE: The Court of Appeal has upheld this decision.

Ontario: Don’t bring limitations motions under r. 21.01(3)(d)

Does the expiry of the limitation period entitle a party to move under rule 21.01(3)(d) for an order staying or dismissing an action on the basis that the action is frivolous or vexations or an abuse of process?

Almost certainly not.  Evidence-based motions are the appropriate procedure for addressing a limitations defence, and these are brought pursuant to rule 20.

This is Justice Faieta’s review of the relevant jurisprudence in Kantor v. Fry:

[41]           However, the Defendant did not provide any case law precedent that support the use of Rule 21.01(3)(d) to stay or dismiss a claim on the basis of an expired limitation period.  While Rule 21.01(3)(d) was not specifically addressed, it is doubtful that such authority exists given that in Beardsley v. Ontario Provincial Police (2001), 2001 CanLII 8621 (ON CA),57 O.R. (3d) 1 (C.A.) the Ontario Court of Appeal  stated, at para. 21, that:

The motion to strike based on the expiry of a limitation period could only be made pursuant to Rule 21.01(1)(a), which provides that a party may move for the determination of a question of law “raised by a pleading”. [Emphasis added.]

[42]           In my view, where the determination of whether a claim is defeated by a limitation period turns on disputed facts, the better approach is a motion for a summary judgment using the tools that Rule 20.04 of the Rules of Civil Procedureprovides to resolve disputed facts.

[43]           In Boutin v. Co-operators Life Insurance Co. (1999), 1999 CanLII 2071 (ON CA), 42 O.R. (3d) 612 (C.A.), the Ontario Court of Appeal stated, at paras. 19-22:

To understand the scope of Rule 21, it is important to take into account the difference among Rules 20, 21 and 22, all of which seek to shorten or eliminate trials and thus reduce the cost of litigation. These rules are clearly related in their function, but they are not randomly interchangeable.

On a motion under Rule 20 the motions judge must determine that there is or is not a genuine issue for trial: see Irving Ungerman Ltd. v. Galanis (1991), 1991 CanLII 7275 (ON CA), 4 O.R. (3d) 545 (C.A.). That determination is based on the evidence filed on the motion. It is not based on the pleadings, apart from any admissions in the pleadings. Thus, a party responding to a summary judgment motion cannot sit back and rely on the pleadings. See 1061590 Ontario Ltd. v. Ontario Jockey Club (1995), 1995 CanLII 1686 (ON CA), 21 O.R. (3d) 547 (C.A.). Because of the provisions of Rule 20.04(4), if the only genuine issue for trial is a question of law, the motions judge may determine the question of law and grant judgment accordingly. Rule 20.04(4) provides that this will be done only where there are no facts in dispute which may give rise to a genuine issue for trial.

Motions under Rule 21 and 22 are different from summary judgment motions under Rule 20. Motions under Rules 21 and 22 focus on questions of law raised by the pleadings (Rule 21.01(1)(a)), or stated by agreement of the parties (Rule 22.01(1)). A Rule 22 motion brought by the agreement of the parties will, as a result of the provisions of Rule 22.04(a), be accompanied by an agreed statement of fact to the extent that facts are necessary “to enable the court to determine the question stated.” Rule 21.01(2) provides that there be no evidence on a motion under Rule 21.01(1)(a) “except with leave of a judge or on consent of the parties.” Since Rule 21.01(1)(a) requires that the question of law be raised by the pleadings there will generally be no need for evidence on a Rule 21.01(1)(a) motion. It seems clear to me that it was for this reason that the drafters of the Rules provided that there should be no evidence on a motion under Rule 21.01(1)(a), except for cases in which leave is granted or there is consent.

I do not think that the issue whether the policy limitation period is a bar to the appellant’s action is a question of law that should have been resolved on a Rule 21.01(1)(a) motion. As the motions judge’s endorsement indicates, the application of the limitation period in this case depends upon findings of fact for its resolution. This is also apparent from the appellant’s reply to the respondent’s statement of defence.  In my opinion, whether the respondent is entitled to rely on the limitation period in the policy has a significant factual component and is thus a matter which should be addressed at trial, not on a Rule 21.01(1)(a) motion. [emphasis added]

[44]           Finally, in Greatrek Trust S.A./Inc. v. Aurelian Resources Inc., [2009] O.J. No. 611, Justice D.M. Brown (as he then was) stated, at para. 19:

Further, an unhealthy devotion to Rule 21 motions exists at the present time in the Toronto Region. Too many parties regard Rule 21 motions as abbreviated surrogates for motions for summary judgment. Rule 21 motions are not even close cousins to motions for summary judgment. Summary judgment motions permit courts to review evidence in order to test the merits of a case – albeit a limited form of testing at present, but more robust testing will occur with the implementation of the improved Rule 20 on January 1, 2010: O. Reg 438/08. Rule 21 motions, by contrast, “focus on questions of law raised by the pleadings”: Boutin v. Co-operators Life Insurance Co. (1999), 1999 CanLII 2071 (ON CA), 42 O.R. (3d) 612 (C.A.), para. 21. As Osborne J.A. noted in Boutin, in most cases the application of a limitation period “depends upon findings of fact for its resolution”: para. 22. Evidence-based motions offer the more appropriate procedure by which to deal with the applicability of limitation defences. [Emphasis added.]

Ontario: Nice try, the but the Limitations Act doesn’t apply to the Consumer Reporting Act

The Limitations Act does not restrict the timeframe for reporting consumer debts under the Consumer Reporting Act (“CRA”).

The Applicant in Grant v. Equifax sought an order requiring two consumer reporting agencies to remove debts over two years old on his credit report pursuant to the Limitations Act.

The Applicant’s position was quite clever, especially for a self-represented litigant:

[10]           According to the Applicant, the two year limitation period for commencing an action under the Limitations Act should apply to the time frame for reporting consumer debts under the CRA. The applicant argues that the best evidence of the existence of a disputed debt is when judgment is obtained for that debt.

[11]           The Applicant explains that is unfair for consumer debts over two years old to be reported on consumer credit reports. This is because after the two year limitation period under the Limitations Act has expired, the debtor cannot bring an action to collect the debt. Therefore, a debt that can no longer be collected should not be reported on a credit report.

[12]           Section 9(1) of the CRA requires the consumer reporting agency to adopt procedures necessary to ensure accuracy and fairness in the contents of its consumer reports. The Applicant submits that since no court action can be commenced to recover debts over two years old, any disputed debts over two years old recorded on consumer reports are not the most accurate record of the debt. He explains that for reported debt over two years old, the most accurate record of such a debt is a debt that has been confirmed by an order of a court. Therefore, the Applicant argues that the consumer reporting agencies are not in compliance with s. 9(1) of the CRA when they report consumer debts over two years old which have not been confirmed by the order of a court.

What the Applicant failed to appreciate is that the Limitations Act has no application to the CRA.  The statutes have entirely different, unrelated purposes: the Limitations Act limits the commencement of proceedings in respect of claims; the CRA governs the reporting of debts on consumer reports.  As Justice Barnes noted, there is nothing in the Limitations Act that extends its application to the CRA, nor is there anything in the CRA which contemplates the application of the Limitations Act.  If it was the intention of the legislature that the provisions of the Limitations Act apply to the CRA, it would have expressly stated so.

 

Ontario: Laches can’t trump the Limitations Act

In Intact Insurance Company v. Lombard General Insurance, the Court of Appeal held that laches can’t defeat an otherwise timely claim.

The court reviewed the legislative history of the Limitations Act and concluded that the removal of the laches-saving provision was intentional, and the absence of this provision overrules any suggestion that laches might bar the commencement of a proceeding to pursue an unexpired legal claim.  The court’s review of the legislative history is the most thorough since its decision in York Condominium Corporation No. 382 v. Jay-M Holdings Limited, and will be helpful whenever a consideration of the act’s legislative history is appropriate.

The comprehensiveness of the limitations scheme also informed the court’s decision:

[54]      As I note above, the old Limitations Act applied only to a closed list of enumerated causes of action and not to civil actions in general. Equitable causes of action, with few exceptions, were outside of its scope. The Limitations Act, 2002 “represents a revised, comprehensive approach to the limitation of actions”: Joseph v. Paramount Canada’s Wonderland, 2008 ONCA 469 (CanLII), 90 O.R. (3d) 401, at para. 8. In Joseph, this court concluded that the common law doctrine of special circumstances had no application under the new, comprehensive Limitations Act, 2002. That doctrine had allowed a court to add or substitute a party or to add a cause of action after the expiry of a limitation period where special circumstances existed, unless the change would cause prejudice that could not be compensated for with either costs or an adjournment. Permitting a defendant to invoke the equitable doctrine of laches because a legal claim has an “equitable flavour” would be inconsistent with the comprehensive approach to the limitation of actions represented by the Limitations Act, 2002.

[55]      Permitting a defendant to rely on the defence of laches where the claim is a legal claim and subject to and within the basic limitation period prescribed under the Limitations Act, 2002 would also be counter to the purpose of that Act of promoting certainty and clarity in the law of limitation periods: msi Spergel Inc. v. I.F. Propco Holdings (Ontario) 36 Ltd., 2013 ONCA 550, 117 O.R. (3d) 81, at para. 61.

The court was explicit in limiting the scope of its decision:

[57]      I wish to make clear that this decision does not address the availability of equitable defences (such as waiver, estoppel and acquiescence) to the extent not founded solely on a plaintiff’s delay in initiating its claim. Nor do I suggest that delay in seeking equitable relief such as an injunction could not be a relevant factor in deciding whether such equitable relief should be granted. This decision considers whether a defendant seeking legal relief within the basic limitation period prescribed under the Limitations Act, 2002 can rely on the delay-based defence of laches.

This isn’t an especially surprising decision given the trend toward emphasising the comprehensive nature of the limitations regime.  The alternative would have been a reversion to a classification of actions approach to limitation periods, where ascertaining the applicable limitation period would require first classifying the claim as equitable or legal, and then determining whether the limitation period in equity is shorter than in law.

I also note the decision’s helpful summary of laches jurisprudence at paragraphs eight through twelve.

Supreme Court says no, plaintiffs don’t need to control when they commence actions

In Canadian Imperial Bank of Commerce v. Green, the Supreme Court rejected a basic principle of limitations law: the plaintiff must always be in control of when it commences a proceeding.

This appeal concerned the interaction of the limitation period in section 138 of the Ontario Securities Act and section 28 of the Class Proceedings Act, which suspends the limitation period applicable to all the causes of action asserted in a class proceeding.

Section 138.3 creates a cause of action for misrepresentations regarding shares trading in the secondary market. A plaintiff, most often a representative plaintiff in a class proceeding, can only commence a section 138.3 claim with leave, and has three years from the date of the misrepresentation to obtain leave and do so.  In Sharma v. Timminco, the Court of Appeal held that a claim for damages under section 138.3 is statute-barred if the plaintiff does not obtain leave to commence it within the limitation period, and that section 28 of the Class Proceedings Act did not operate in respect of a 138.3 claim until leave is obtained.

The Timminco decision was problematic. Its effect was to require representative plaintiffs to move for and obtain leave to commence a section 138.3 claim within three years, but the plaintiffs could not control the timeliness. Obtaining leave within three years was challenging, if not impossible.  Even if a plaintiff brought the motion in good time, the defendant could initiate procedural steps resulting in delay, and court availability could affect the timing of the hearing and the rendering of the decision.  In the context of limitations jurisprudence, this was both novel and perverse: plaintiffs did not control whether they commenced their action in time.

In this action, the Court of Appeal reversed itelf and set aside Timminco’s interpretation of the Class Proceedings Act, holding instead that when a representative plaintiff brings a section 138.3 claim within the limitation period, pleads section 138.3 together with the facts that found the claim, and pleads an intent to seek leave to commence, the claim has been “asserted” for the purposes of the Class Proceedings Act, and the limitation period is thereby suspended for all class members.

Subsequently, the legislature amended the Securities Act so that the limitation period is suspended on the filing of a motion for leave.   However, the issue remained live for actions commenced before the amendments, and so the Supreme Court heard the appeal.  In a lengthy decision from a fractured court, it overturned the Court of Appeal’s decision.

From a limitations perspective, the noteworthy aspect of the decision is the court’s willingness to accept that a plaintiff will not in all circumstances retain control of bringing its action in time.  This was a foremost concern for the Court of Appeal.

Justice Côté stated that requiring the plaintiff to have unilateral control over whether a claim is brought in time is misplaced, and fails to acknowledge that “modern limitation periods” balance the rights of the plaintiffs and the defendants:

[79]                          The Court of Appeal wrote that the effect of Timminco, namely that a plaintiff does not unilaterally control whether his or her claim is brought within the limitation period (because of the starting point of the limitation period or because of delays caused by the defendant or the court), was “foreign to the concept of a limitation provision” (para. 27). In my view, the Court of Appeal failed to appreciate not only that modern limitation periods flow from an exercise in balancing the rights of plaintiffs and defendants, but also that the legislature undertook that balancing exercise in designing the limitation period in question. Section 138.14 OSA does not have an internal suspension mechanism, and the limitation period begins to run regardless of knowledge on the plaintiff’s part, be it on when a document containing a misrepresentation is released, when an oral statement containing a misrepresentation is made, or when there is a failure to make timely disclosure. The scheme is exacting and even harsh, but it is structured in this manner to balance the interests of plaintiffs, defendants and long-term shareholders.

This reasoning is hard to understand.  The very nature of limitation periods requires a balancing of plaintiff and defendant rights, and the courts engaged with this balance frequently under the pre-modern legislation (that is, the former Limitations Act).  See for example the Supreme Court decision in Peixeiro v. Haberman (1997): “Whatever interest a defendant may have in the universal application of a limitation period must be balanced against the concerns of fairness to the plaintiff who was unaware that his injuries met the conditions precedent to commencing an action”.

 In any event, this balance between plaintiff and defendant rights is normally a matter of the length of a limitation period—allow the plaintiff sufficient time to commence her claim, but not so much time that the defendant will suffer prejudice. Here it seems that the balance means taking some control over the running of time and handing it the defendant.  Perversely, this gives the defendant an incentive to delay the commencement of the claim (in this case, by delaying the application for leave).

It seems Justice Côté understood the perversion, because he dismisses it:

[81]                          Like Goudge J.A in Timminco, I am unwilling to rely upon an isolated purpose of limitation periods, taken out of context, in order to give priority to one stakeholder over others, particularly where the legislature was so clearly alive to these considerations in making the choices it made generally for Part XXIII.1 OSA, and more specifically for s. 138.14.

His solution to potential injustice is a nunc pro tunc order.  An order granting leave to proceed with an action is available nunc pro tunc where leave is sought prior to the expiry of the limitation period.

[85]                          The courts have inherent jurisdiction to issue orders nunc pro tunc. In common parlance, it would simply be said that a court has the power to backdate its orders. This power is implied by rule 59.01 of the Rules of Civil Procedure: “An order is effective from the date on which it is made, unless it provides otherwise”.

 

[90]                          In fact, beyond cases involving the death of a party or a slip, the courts have identified the following non-exhaustive factors in determining whether to exercise their inherent jurisdiction to grant such an order: (1) the opposing party will not be prejudiced by the order; (2) the order would have been granted had it been sought at the appropriate time, such that the timing of the order is merely an irregularity; (3) the irregularity is not intentional; (4) the order will effectively achieve the relief sought or cure the irregularity; (5) the delay has been caused by an act of the court; and (6) the order would facilitate access to [citations omitted[. None of these factors is determinative.

 

[93]                          Thus, subject to the equitable factors mentioned above, an order granting leave to proceed with an action can theoretically be made nunc pro tunc where leave is sought prior to the expiry of the limitation period. One very important caveat, identified by Strathy J., is that a court should not exercise its inherent jurisdiction where this would undermine the purpose of the limitation period or the legislation at issue.

 

[94]                          This is because, as with all common law doctrines and rules, the inherent jurisdiction to grant nunc pro tuncorders is circumscribed by legislative intent. Given the long pedigree of the doctrine and of rule 59.01, to which I have referred, it has been held that the legislature is presumed to have contemplated the possibility of a nunc pro tunc order:McKenna, at para. 27; Parker, at pp. 286-87; New Alger Mines, at pp. 570‑71. However, nunc pro tunc orders will not be available if they are precluded by either the language or the purpose of a statute. None of the other equitable factors listed above, including the delay being caused by an act of the court, can be relied on to effectively circumvent or defeat the express will of the legislature.

The practical reality is that there are very few circumstances in which plaintiff won’t be fully in control of when it commences its action.  Nevertheless, the court’s willingness to depart from this basic, common sense limitations principle on rather dubious grounds is troubling.

You may find the decision helpful for its high-level summaries of the doctrine of special circumstances (paras. 112-113) and the purpose of limitation periods (paras. 57-58).

Ontario: the limitation of subrogated claims

Subrogation is the right of a party that has indemnified another to stand in its shoes, to exercise any rights that the indemnified party had against third parties in order to reduce the loss that the indemnifying party has sustained.  It’s long settled that the subrogating party stands in no different position relative to the indemnified with respect to rights against third parties.  It necessarily follows that limitation periods which apply to the indemnified party apply to the indem­nifying party’s subrogated claim, or so it was generally understood.

In CMHC v. Greenspoon, Justice Perell found that the limitation period commenced at different times for the indemnified party’s claim and its subrogated claim.

The plaintiff CMHC had a subrogated claim to that of lenders whose mortgages had gone into default.  CMHC sued the defendant solicitor that acted on the mortgages for failure to disclose material facts to the lenders before they advanced CMHC insured loans.  Because the lenders had mortgage insurance, a proceeding against the defendant could not be an appropriate means to seek a remedy for their loss (CHMC would make them whole):

[44]           Since CMHC’s claim was a subrogated claim to that of the approved lenders, Mr. Greenspoon argued that the limitation period of the negligence claim began to run when the approved lenders objectively ought to have known that they had a solicitor’s negligence claim against him. I disagree, because given that the approved lenders had obtained mortgage default insurance and having regard to the nature of their loss, i.e., a deficiency in recovery on the mortgage security, a proceeding against Mr. Greenspoon would not be an appropriate means to seek a remedy for the deficiency, precisely because the approved lenders had insurance for the eventuality of a deficient recovery on the defaulted mortgage.

 

[45]           In other words, the benefits and burdens of discovering a claim moved from the approved lenders to their insurer, CMHC, which had a subrogated action in its own name pursuant to the National Housing Act.

[46]           This analysis of who must discover the subrogated claim avoids the peculiar result that if the running of the limitation period for claims against Mr. Greenspoon was based on the knowledge of the approved lenders, then their insurer’s subrogated claim could be statutorily barred before the CMHC could bring an action in its own name.

[47]           In my opinion, there is no genuine issue for trial that acting reasonably and using reasonable diligence, CMHC ought to have discovered its subrogated claim against Mr. Greenspoon around the time that it paid the approved lenders for the deficiency in the mortgage recovery. It was at that time that CMHC could have made inquiries of the approved lenders and required them to obtain Mr. Greenspoon’s report and conveyancing file material and anything else that it might require to follow-up on its own RFFI.

 

I don’t think the court got this right.  It seems to me that you can arrive at the same result–ensuring CMHC’s claim isn’t statute-barred before it has the opportunity to commence it–without departing from the principles of subrogation.

The crux of the issue is Justice Perell’s finding that a claim against the defendant was not an appropriate means to seek a remedy for the lenders.  This means that the lenders couldn’t discover their claim within the meaning of section 5(1)(a) of the Limitations Act (because they couldn’t know the section 5(1)(a)(iv) criterion that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it”).  If the lenders couldn’t discover their claim, the basic two year limitation period couldn’t commence, and the claim would be subject only to the 15 year ultimate limitation period.  Once CMHC stands in the lenders’ shoes, the appropriateness of a proceeding becomes knowable and time can begin to run.  Meanwhile, there is no real risk of the limitation period expiring beforehand.

It will be interesting to see whether this decision is followed.

 

 

 

Ontario: There’s no special discovery test for professional malpractice

In March, I wrote approvingly of Justice Stinson’s discovery analysis in Brown v. Wahl.  The Court of Appeal recently upheld the decision.

The Court of Appeal’s decision is noteworthy for two reasons. First, the Court rejected the appellant’s argument that Lawless v. Anderson created a four-part test for discoverability in respect of professional malpractice claims:

[3]         Lawless was a medical malpractice case.  In describing when the plaintiff knew all the material facts required to discover her claim against the defendant, this court stated, at para. 30:

It was clear to the appellant at this point that she had suffered more than an unfortunate and unsatisfactory outcome.  She was aware of what was wrong, why it was wrong, what would have to be done to correct it and who was responsible.  In other words, the appellant had all of the material facts necessary to determine that she had prima facie grounds for inferring that the respondent had been negligent.

[4]         The appellant submits that, in the above-quoted passage, the Lawless court established a four-part test for determining when a prospective plaintiff may be said to have known the material facts necessary for bringing a negligence claim against a medical practitioner in a cosmetic surgery action.  This test establishes, according to the appellant, that such a claim is discovered by the prospective plaintiff only when he or she knows: i) of the harm alleged; ii) why it was wrong; iii) what action is required to correct the wrong; and iv) who was responsible.

[5]         Based on this suggested four-part test, the appellant argues that the motion judge erred by failing to properly or adequately analyze the evidence and apply it to the questions of when the appellant was positioned to determine “why” her dental treatment by the respondents was “wrong” and “what would have to be done to correct it”.

[6]         We reject this argument.

[7]         First, Lawless does not create a new four-part test for discoverability in respect of professional malpractice claims.  To the contrary, Lawless confirms, at para. 30, that the test for discoverability is when a prospective plaintiff “had all of the material facts necessary to determine that she had prima facie grounds for inferring that the respondent had been negligent”.  The Lawlesscourt’s reference, immediately preceding this comment, to the four factors relied on by the appellant reflects the application of this test to the evidence before the court in Lawless.

This was the correct response to a dubious argument.  Whatever the Ontario limitations regime may need, it’s not new discovery tests for specific claims.

Second, the Court followed its description of discoverability in Lawless.  This is problematic because it’s a description of the common law discoverability test, rather than the section 5 test in the Limitations Act.  I describe the mischief resulting from this confusion here.

Ontario: no, Schmitz v. Lombard hasn’t been overturned

For the insurance bar, two points are worth noting in Justice Faieta’s decision in Buurman v. The Dominion of Canada General Insurance Company.

First, the limitation periods in section 5.9.3 of OAP 1, section 8(3) of the Schedule to Ontario Regulation 676, and section 17 of OPCF 44R don’t trump the basic section 4 limitation period in the Limitations Act.  This is because these limitation periods are not included in the Limitations Act’s section 19 schedule.  This seems self-evident, but the defendant apparently thought it was an argument worth venturing.

Second, unsurprisingly, Justice Faieta found that the Court of Appeal decision in Lingard v. Milne-McIsaac didn’t overturn its decision Schmitz v. Lombard, which remains binding:   

[17]           Dominion submits that the last sentence of paragraph 11 of the Lingard decision should be read as deciding that the limitation period for a claim for indemnity against an insurer under OCPF 44R begins when the insured discovers that the other vehicle was uninsured …

[18]           It is my view that Schmitz was not overturned in Lingard for at least two reasons.  First, the focus of the Lingard decision was not whether the limitation period had expired.  The issue before the Court was whether the Plaintiff had acted diligently in seeking to add its insurer as a Defendant.  Accordingly, the Court’s findings regarding the commencement of the limitation period appear to be obiter.  On the other hand, in Schmitz the sole issue before the Court was the time at which the limitation period begins to run for an indemnity claim under OCPF 44R.  Second, unlike Schmitz, in Lingard the Court’s finding regarding the commencement of the limitation period is unsupported by any analysis.  Nor does it appear that Schmitz was drawn to the Court’s attention in Lingard.

Ontario: Is it really a new cause of action?

You can’t amend a claim to assert a new cause of action if the cause of action is statute-barred.  The question is, when’s an amendment a new cause of action?

In Beauchamp v. Gervais, Justice Dunphy sets out the following test:

[23]           The preceding authorities establish that in order to qualify as something other than a new cause of action the proposed amendments must, in substance, be: (i) an alternative claim for relief, or a statement of different legal conclusions based on no new facts or not going beyond the factual matrix from which the original claim arose; (ii) better particulars of the claims already made; (iii) a correction of errors in the original pleading; or (iv) the assertion of a new head of damage arising from the same facts. If the amendments cannot be characterized in one of these ways, the amendments should not be permitted, in order to not deny a defendant the right to rely upon a limitations statute.

This paragraph follows a lengthy summary of the relevant jurisprudence that’s worth reading if you’re considering the issue.