Author: Dan

Ontario: when it comes to a car accident, you can rely on the cops

In regards of discovering a claim for the purpose of the limitation period, a plaintiff can rely on the contents of a motor vehicle accident report prepared by the police at the scene of the accident.

In Lingard v. Milne-McIsaac, the plaintiff acted reasonably by relying on a statement in such a report that the defendant was insured.  It was reasonable for the plaintiff to assume that the police officer who completed the report asked the defendant for proof of insurance.  The Court of Appeal held that the plaintiff had no reason to treat insurance coverage as a live issue until he became aware that the defendant may not have coverage.

BC: demand loans v. contingent loans

Kong v. Saunders provides a helpful overview of the limitation periods applicable to demand loans and contingent loans under the previous Limitations Act.  While the new Limitations Act recently turned two years old, it will be some time before it applies to all new actions, so there remains value in reviewing these concepts.  These are relevant paragraphs:

[17]        The previous Limitation Act applies to this case because it was still in effect at all materials times prior to the commencement of the underlying action.  Under s. 3(5) of that Act, the residual six-year limitation period, which applies in this case, began to run on the date on which the right to bring the action arose.

[18]        The jurisprudence has established a distinction between demand loans and contingent loans in respect of the commencement of the running of the limitation period.  Demand loans are, of course, loans payable on demand.  Contingent loans are loans that are payable on a future date or upon the occurrence of a specified event.

[19]        The limitation period in respect of contingent loans begins to run on the repayment date or the occurrence of the contingency.  This is because an action for repayment of the loan cannot be brought prior to the repayment date or the occurrence of the contingency, as the case may be.

[20]        It may seem intuitive that the limitation period in respect of demand loans begins to run on the date of the demand for repayment, but this is not so.  The reason is that the law has developed in a manner that it is not necessary for demand to be made before action can be brought for repayment of the loan.  This means that an action may be brought at any time after the demand loan is made.  As a result, the limitation period begins to run on the day the loan is made.

[21]        The above principles have been previously accepted by this Court in one of the cases relied upon by Mr. and Mrs. Kong, Berry v. Page, where Mr. Justice Wallace said the following at 247 (B.C.L.R.):

            The characterization of the loan as either a contingent loan or a demand loan determines whether or not the action is statute barred under theLimitation Act. It is well established that the cause of action accrues, and the statute of limitations runs, from the earliest time at which repayment can be required (Chitty on Contracts, 25th ed. (1983), vol. I, para. 1843, p. 1024). For a demand loan, the statute of limitations runs as of the date of the advancement of the funds, and not from the date of the demand. No demand is necessary in order for the cause of action to arise: Barclay Const. Corp. v. Bank of Montreal (1988), 1988 CanLII 2898 (BC SC), 28 B.C.L.R. (2d) 376 at 381, [1988] 6 W.W.R. 707, 40 B.L.R. 150 (S.C.); Heubach v. Sprague, 41 Man. R. 292, [1933] 2 W.W.R. 99, [1933] 3 D.L.R. 647 (C.A.).

            Case law supports the proposition that if money is lent to be repaid at a particular time in the future, or upon the happening of a specified contingency, then the cause of action arises at the time specified or upon the happening of the contingency: Ingrebretsen v. Christensen, 37 Man. R. 93,[1927] 3 W.W.R. 135 (C.A.); Re Gould; Ex parte Garvey, 1940 CanLII 89 (ON CA), [1940] O.R. 250, [1940] 3 D.L.R. 12 (C.A.). In these circumstances, the cause of action does not arise, and the statute of limitations does not run until the contingency is satisfied.

[22]         A more recent decision of this Court, Ewachniuk Estate v. Ewachniuk, 2011 BCCA 510 (CanLII), has also acknowledged these principles.  In that case, the Court held that a loan payable one year after demand fell within the category of a contingent loan, with the result that the limitation period did not begin running on the day the loan was made.  The reason is that an action could not have been brought for repayment of the loan on the day the loan was made because the demand and the lapse of time after the demand were conditions precedent to the bringing of an action.

[23]        The common law is the same in other provinces: see, for example, Johnson v. Johnson, 2012 SKCA 87 (CanLII).  Interestingly, with the new Limitation Act, British Columbia has joined Alberta and Ontario in specifically addressing the limitation period for a demand obligation.  Section 14 of the newAct effectively provides that the limitation period does not begin running until demand is made.

Alberta: Limitations defences are only available to defendants

The Court of Appeal has confirmed that a third party cannot rely on a limitation defence unless the defendant to the main action has properly pleaded it.  A limitations defence is only available to the party against whom the plaintiff is seeking the remedial order–generally, the defendant—and only if the party expressly pleads it.

Ontario: a lawyer’s letter asserting an intention to sue doesn’t necessarily start the limitation period

Does a lawyer’s letter stating that his clients intend sue the recipient commence the applicable limitation period?  Not necessarily.

In Naipaul v. State Farm Mutual Insurance Company, the plaintiffs had a motor vehicle accident in which one of the drivers was uninsured.  The plaintiffs’ lawyer wrote to their insurer, the defendant, to advise that they would be claiming against it “for damages arising out of personal injuries sustained […] in the motor vehicle accident”.  Through inadvertence, the plaintiffs’ lawyer commenced the action against the defendant more than two years later.  The insurer moved for summary judgment to dismiss the claim as statute-barred

It’s long settled that when an insured motorist sues her insurance company for uninsured motorist coverage, the limitation period begins on the day that the insured motorist knew or ought to have known that she had a claim based on the fault of the uninsured motorist.

The insurer argued that the lawyer’s letter established that the plaintiffs knew that they had a claim against the uninsured driver, and so it commenced the limitation period.  The plaintiffs replied that at the time of the letter there was wasn’t enough medical evidence that in the lawyer’s opinion could meet the statutory threshold in section 267.5(5) of the Insurance Act.

Justice Perell agreed with the plaintiffs:

 [18]            In the circumstances of the case at bar, it does not follow that because Mr. Lofranco wrote letters indicating that his clients intended to sue State Farm that at the time of the writing of the letters, the Naipauls immediately knew or ought to have known that they actually had a claim that would satisfy the statutory threshold. It also does not follow that because Mr. Lofranco admitted that it was only through inadvertence that State Farm was not joined as a party defendant to what would have been a timely claim, that the claim that they did bring in September 2012 was untimely.

[19]            In bringing its summary judgment motion, in the case at bar, State Farm relied entirely on Mr. Lofranco’s letters as triggering the running of the limitation period, but at the time of writing of those letters, i.e. 89 days after the accident, there was not sufficient available evidence to be placed before a judge that, in counsel’s opinion, had a reasonable chance of persuading a judge on the balance of probabilities that the injury satisfied the threshold set by s. 267.5 (5) of the Insurance Act. The limitation period did not begin to run with the posting of Mr. Lofranco’s letters.

[…]

[32]           In Everding v. Skrijel, 2010 ONCA 437 (CanLII), approving Vosin v. Hartin, [2000] O.T.C. 931 (S.C.J.), the Court of Appeal held that in applying the discoverability principle of the Limitations Act, 2002, the court should consider the threshold requirements of the Insurance Act, and the Court of Appeal held that a plaintiff will not have discovered his or her claim before he or she knows they have a substantial chance to succeed in recovering a judgment for damages. A person cannot be expected to commence an action before he or she knows that the necessary elements as set out in the legislation can be established on the evidence: Hoffman v. Jekel, 2011 ONSC 1324 (CanLII) at para. 9.

Nova Scotia: It’s abusive to file a claim merely to toll a limitation period

It’s an abuse of process to file a statement of claim to toll a limitation period where there’s no intention to proceed with the claim.

In BCE Inc. v. Gillis, the same firm filed nine virtually identical national class actions brought on behalf of the same plaintiff.  The firm’s correspondence to a prothonotary indicated that it intended to pursue national certification in Saskatchewan.  The defendant moved to stay the claim commenced in Nova Scotia on the basis that, among things, the plaintiff had no intention of proceeding there.  The Nova Scotia Court of Appeal held that tolling the limitation period alone could not justify the Nova Scotia action:

[75]        Dr. Gillis submits that filing the statement of claim in Nova Scotia allowed the limitation period to toll.  I do not accept that it is appropriate to file an action for the sole purpose of tolling a limitation if there is no intention to prosecute the case.  I again refer to the MLG correspondence to the prothonotary.

[76]        It is not unusual for courts to see statements of claim filed to meet the limitation periods pending ongoing investigation or settlement efforts. Those cases are distinct from this case where there never was any intention to proceed. It is an abuse of process to file a claim for the sole purpose of tolling the limitation period absent any intention to proceed.

Newfoundland and Labrador: The Commencement of the limitation period for breach of an insurance indemnity

In Tucker v. Unknown Person, the Court of Appeal held that in a claim for breach of indemnity pursuant to an insurance contract, the limitation period begins on the date of the insured’s loss of the right to be indemnified. This loss occurs when the insurer refuses to pay. Refusal occurs on the earlier of an express refusal or the day after the insured demands indemnification and does not receive it.

In arriving at its decision, the Court followed the Ontario Court of Appeal decisions in Markel and Schmitz. It’s notable that Ontario jurisprudence is influencing the direction of Newfoundland and Labrador’s limitations law because they have fundamentally different limitations regimes. Ontario is one of the “reformed” jurisdictions. Broadly speaking, these are jurisdictions with one general and ultimate limitation period and codified discovery rules. In Newfoundland and Labrador, it remains necessary to classify the action to determine the applicable limitation period and, where appropriate, to apply the common law principle of discoverability. Nevertheless, the Court’s adoption of Ontario limitation law indicates that reform, if only de facto, is at work.

Ontario: admitting liability on cross-examination doesn’t waive the limitation period

An admission of liability on a cross-examination is not a waiver of the limitation period that applies to the claim.

In Cross Bridges Inc. v. Z-Teca Foods Inc., the plaintiff moved for summary judgment for a declaration that it brought its claim in time. (Although not unprecedented, you’re in good company if this seems like an unusual tactic.  Justice Emery’s decision begins with this observation: “It is often said that the best defense is a good offense. The converse is seldom true. Rarely does a plaintiff in a civil action take defensive steps, particularly of a binding nature.”)

The defendant had admitted on cross-examination that it owed to the plaintiff an amount to be determined.  The plaintiff argued that this admission was a waiver of the limitation period. Justice Emery rejected this reasoning.  The admission came in the course of the motion, after the defendant had pleaded a limitations defence.   It could not resurrect the plaintiff’s right to its claim; otherwise, plaintiffs could resurrect statute-barred claims merely by asking the appropriate question of defendants on cross-examination (and receiving a truthful response). Actual waiver of the limitation period requires full knowledge of the legal rights a party holds, and an unequivocal intention to surrender those rights.

Update: the Court of Appeal upheld this decision.  Here are the key paragraphs:

[9]         Secondly, the appellant submits that the limitation defence should be unavailable because the respondent admitted his indebtedness in his cross-examination on his affidavit filed in the summary judgment proceedings.

[10]      We disagree.  Read in its totality, the admission of indebtedness by the respondent was qualified and stated to be subject to the limitation period defence.  In addition, under s. 13(9) of the Limitations Act, 2002, for an acknowledgement to reset the limitation clock, it must be made before the expiry of the limitation period applicable to the claim.  Here, the cross-examination occurred long after the expiry date.

Ontario: Justice Perell on the interaction of the Insurance Act and the Limitations Act

In Farhat v. Monteanu, Justice Perell provides a typically thorough analysis of the interaction between the Insurance Act‘s section 267.5 threshold provisions and the limitation period.

The plaintiff sued for damages for his non-pecuniary injuries from a motor vehicle accident. The defendant pleaded a limitations defence and the plaintiff moved for partial summary judgment to defeat it.

The defendant ventured a novel defence. She argued that pursuant to section 5(2) of the Limitations Act, there is a presumption that a claimant discovers a motor vehicle accident claim when the accident occurs.  Because the plaintiff’s lawyer stated that the plaintiff’s injuries were serious in correspondence to the defendant eight days after the accident, this presumption was rebuttable only by the lawyer’s direct evidence that he delayed issuing the claim within two years of the accident because he wanted medical confirmation that the serious injury met the section 267.5  threshold.

No case law supported the defendant’s argument, and Justice Perell held that the jurisprudence “about the effect of the threshold on the running of limitation periods stands strongly against” it:

[27]           There is no onus on a plaintiff to prove or show: (a) that the limitation period was considered and a conscious decision made not to commence an action; (b) that a procedure was put in place to review the conscious decision at some reasonable point in the future; and (c) that a decision was made when additional information was obtained and counsel moved expeditiously.

[28]           Whether all this demonstration of what the lawyer must show “ought” to be the case is neither here nor there, because what “is” the case under the law about the running of limitation periods is that when an action is not commenced within two years after the accident the only onus on the plaintiff is to show that he or she could not have discovered the case during the period of delay before commencing the action […].

[29]           Mr. Farhat’s claim is apparently based on chronic pain becoming a permanent serious impairment of an important physical, mental or psychological function. Much to the dismay of insurance companies of defendants, almost invariably, it will take several months to determine whether ongoing pain suffered as a result of an accident is a permanent serious impairment. It will typically, almost invariably, be the case that a plaintiff with only a chronic pain claim will not know that the claim surpasses the Insurance Act threshold until sometime after the date of the accident.

[…]

[31]           Given the statutory presumption that a limitation period begins to run from the date of the accident, the onus is on the plaintiff to persuade the court that the seriousness of his or her injury was not discoverable within the applicable limitation period and the plaintiff must also persuade the court that he or she acted with due diligence to discover if there was a cause of action: Yelda v. Vu, 2013 ONSC 4973 (CanLII) at paras. 29-30.

[32]           In Everding v. Skrijel, 2010 ONCA 437 (CanLII), approving Vosin v. Hartin, [2000] O.T.C. 931 (S.C.J.), the Court of Appeal held that in applying the discoverability principle of the Limitations Act, 2002, the court should consider the threshold requirements of the Insurance Act, and the Court of Appeal held that a plaintiff will not have discovered his or her claim before he or she knows they have a substantial chance to succeed in recovering a judgment for damages. A person cannot be expected to commence an action before he or she knows that the necessary elements as set out in the legislation can be established on the evidence: Hoffman v. Jekel, 2011 ONSC 1324 (CanLII) at para. 9.

[33]           In Lawless v. Anderson, 2011 ONCA 102 (CanLII), the Ontario Court of Appeal stated at para. 23:

  1. Determining whether a person has discovered a claim is a fact-based analysis. The question to be posed is whether the prospective plaintiff knows enough facts on which to base an allegation of negligence against the defendant. If the plaintiff does, then the claim has been “discovered”, and the limitation period begins to run: see Soper v. Southcott (1998), 1998 CanLII 5359 (ON CA), 39 O.R. (3d) 737 (C.A.) and McSween v. Louis (2000), 2000 CanLII 5744 (ON CA), 132 O.A.C. 304 (C.A.).

[34]           When a limitation period defence is raised, the onus is on the plaintiff to show that its claim is not statute-barred and that it behaved as a reasonable person in the same or similar circumstances using reasonable diligence in discovering the facts relating to the limitation issue: Durham (Regional Municipality) v. Oshawa (City), 2012 ONSC 5803 (CanLII) at paras. 35-41; Bolton Oak Inc. v. McColl-Frontenac Inc., 2011 ONSC 6657 (CanLII) at paras. 12-14; Bhaduria v. Persaud (1985), 1998 CanLII 14846 (ON SC), 40 O.R. (3d) 140 (Gen. Div.). The limitation period runs from when the prospective plaintiff has, or ought to have had, knowledge of a potential claim and the question is whether the prospective plaintiff knows enough facts to base a cause of action against the defendant, and, if so, then the claim has been discovered and the limitation period begins to run: Lawless v. Anderson, supra at para. 23; Soper v. Southcott (1998), 1998 CanLII 5359 (ON CA), 39 O.R. (3d) 737 (C.A.); McSween v. Louis, 2000 CanLII 5744 (ON CA), [2000] O.J. No. 2076 (C.A.); Gaudet v. Levy (1984), 1984 CanLII 2047 (ON SC), 47 O.R. (2d) 577 at p. 582 (H.C.J.).

[35]           In some limitation period summary judgment motions, it may be necessary to demonstrate the time at which a plaintiff acting reasonably knew about his or her claim, but this motion is not one of those motions. For the purposes of the motions in the case at bar, for Mr. Farhat to rebut the presumption found in s. 5(2) of the Limitations Act, he need only show that he could not have discovered his chronic pain claim during the period between the date of the accident, May 18, 2006 and June 18, 2006 (two years before the date the action was commenced), which I am satisfied he has done.

[36]           Perhaps ironically, because s. 267.5 (5) of the Insurance Act was introduced to eliminate minor personal injury claims, its effect has also been to protect such claims from the running of a limitation period for a period of time commensurate with how long it would take a reasonable person with the abilities and in the circumstances of the plaintiff to have discovered that the threshold for a claim has been surpassed.

[37]           A simple comparison between Mr. Farhat’s automobile accident claim and a slip and fall case demonstrates why the operation of s. 267.5 on limitation periods rankles the insurance defence bar. Visualize, if Mr. Farhat had gotten out of his parked van and slipped and fell on a sidewalk in disrepair, there would be no waiting for a medical report and the limitation period for his occupier’s liability claim would immediately have commenced to run.

[38]           The law, however, for the discovery of slip and fall claims is not affected by s. 267.5 of the Insurance Act. Section 267.5, however, does influence the running of limitation periods for motor vehicle accident non-pecuniary claims.

[39]           No doubt much to the chagrin of the defence bar, s. 267.5 (5) of the Insurance Act introduces some slack into the apparent rigidity of the presumption found in s. 5(2) of the Limitations Act, 2002. A plaintiff, and in some instances his or her negligent lawyer, can take comfort from this slack because the limitation period only begins to run when a sufficient body of information is available to determine whether the plaintiff has a claim that may meet the threshold. In this regard, I adopt the observations of Justice Langdon in Ioannidis v. Hawkings (1998), 1998 CanLII 14822 (ON SC), 39 O.R. (3d) 427 at pp. 433-434 (Gen. Div.), where he stated:

… [N]o one can seriously argue that the decision whether a particular injury meets the statutory criteria is an easy one or, perhaps more important, that it will be easy to predict the outcome of a motion to dismiss a claim which the defendant asserts is unworthy. Even in such a motion, the onus is upon the plaintiff to demonstrate that his or her injuries meet the statutory criteria. When one is seeking to apply the discoverability rule to the plaintiff in a case such as this, it behooves the court to grant a degree of latitude to a plaintiff before declaring that the limitation period has begun to run. … In practical terms, the question is not whether the plaintiff believes that her injury meets the criteria but whether 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 the balance of probabilities that the injury qualifies. When such a body of material has been accumulated, then and only then should the limitation begin to run. This is not to say that the plaintiff is entitled to wait until he or she has an overwhelming case. It is only to say that the court must afford a degree of latitude to a plaintiff in making this very individual and complicated determination.

I have one quibble with this otherwise excellent decision.  The statement in paragraph 34 that a plaintiff discovers her claim when she “knows enough facts to base a cause of action against the defendant” is incorrect. A plaintiff subjectively discovers her claim on the date she knows each of the facts listed in section 5(1)(a) of the Limitations Act, including that a proceeding is an appropriate remedy (which is not a fact that bases a cause of action).

For the same reason, while there is a presumption that the limitation period begins on the date of a slip and fall accident pursuant to section 5(2) of the Limitations Act, it doesn’t necessarily commence on that date. It may be that the plaintiff can only reasonably discover that the claim is the appropriate remedy on a later date, and because the section 5(1)(a) criteria are conjunctive, the limitation period will not commence until this later date.  It’s simply wrong to analyse the commencement of the limitation period based on the accrual of a cause of action. (Consider this a second salvo in my fight against on diminishing the impact of Lawless on limitations jurisprudence).

Ontario: Discoverability applies to the Competition Act

In Fanshaw College v. AU Optronics, Justice Grace held that the limitation period applicable to Competition Act claims is subject to discoverability. The opportunity for a successful limitation defence in a competition class action is now much diminished. An appeal from this decision will be no surprise.

The action centres on LCD products. Fanshaw College alleges that the defendants unlawfully conspired to fix or artificially inflate the price of LCD products they purchased. The defendants moved for summary judgment on the basis that section 36(4) of the Competition Act bars the statutory claim and the expiry of the limitation period bars the conspiracy claim.

Section 36(4) imposes a two-year limitation period on claims for recovery of damages under the Act:

 (4) No action may be brought under subsection (1),

(a) in the case of an action based on conduct that is contrary to any provision of Part VI, after two years from

(i) a day on which the conduct was engaged in, or

(ii) the day on which any criminal proceedings relating thereto were finally disposed of,

whichever is the later […]

The defendants argued that the section 36(4) is not subject to discoverability. A line of jurisprudence originating from the Federal Court supported this position. Discoverability would not apply because the limitation period is linked to a fixed event unrelated to the claimant’s knowledge—”the day on which the conduct was engaged in”. Justice Grace rejected this rationale:

[117]     It seems obvious that participants in a price-fixing scheme would attempt to conceal their activities. It is impossible to say categorically when those affected will learn or have the means of learning of the offending conduct. It will depend on the circumstances of each case.

[118]     Unless the discoverability principle applies, strict application of s. 36(4)(a) might well result in a claim being statute-barred before a person affected could possibly have known of the illegal activity. The right of action would only be resurrected if criminal proceedings – initiated by the state – ensued. As a matter of construction it does not seem possible that Parliament intended the right of action to be illusory. I am not satisfied that the rights conferred by s. 36(1) should be restricted in the fashion AU and Hannstar advocate.

Though sound, this reasoning has problematic implications. If it’s impossible to say that in all circumstances an affected person will learn of the illegal activity within two years of the date it was engaged in, the equivalent is true of other limitation periods that commence on fixed dates. Section 38(3) of the Trustee Act is an example. This limitation period commences on the death of the plaintiff or defendant, and death being a fixed event, it’s not subject to discoverability. Nevertheless, there are surely circumstances where the limitation period will expire before a person affected could have known of the death that triggered it.

The two limitations periods are perhaps distinguishable. The Competition Act resurrects a right of action in the event of a criminal proceeding. There is a greater likelihood of concealment regarding a price-fixing agreement than a death. Neither distinction is especially compelling. Should there be an appeal, it will be interesting to see how the Court of Appeal addresses this issue.

The other noteworthy aspect of the limitations defence was the defendants’ argument that the plaintiff through its reasonable diligence ought to have discovered the conspiracy claim as a result of the media’s coverage of the probe into the LCD industry and the commencement of proceeding:

 [65]     It is acknowledged that there was extensive media coverage concerning probes into the LCD industry starting in December 2006.

[66]     Several articles were published in Ontario. On December 13, 2006, the Globe reported that European and U.S. regulators had announced an ongoing investigation of “a possible cartel involving makers of liquid crystal display monitors” and of “the possibility of anti-competitive practices in the LCD industry.”

[67]     On the same day the Star reported that “[l]iquid crystal display makers in Japan, Taiwan and South Korea are facing probes by trade watchdogs as a widening price-fixing investigation” in the LCD industry. Falling share prices of various companies were reported, including L.G. Philips and Samsung. The Star noted that LCDs were “the displays used in flat-panel televisions and personal computers.”

[68]     Mr. Smith acknowledged that Fanshawe was a Globe and Star subscriber at the time. At paragraph 6 of his affidavit, Mr. Smith deposed that:

To my knowledge, no member of Fanshawe brought the articles to the attention of Fanshawe’s Board of Directors or senior management.

[69]     In cross-examination, Mr. Smith agreed that from 2006 to 2009 he did not speak with board members or senior managers about articles concerning the LCD industry except those he described as “direct report”. No other details were requested or given.

[70]     The December 13, 2006 edition of the Citizen included a report concerning the LCD industry. It also noted that “AU Optronics plans to co-operate with the Justice Department and Japan’s antitrust regulator”. AU Optronics was one of several companies involved in the LCD industry mentioned in an article appearing on the Canadian Press Newswire that day.

[71]     A day earlier, a class proceeding had been commenced in the United States. AU Optronics, AU Optronics Corporation America and Hannstar were included in the long list of defendants.[18]

[72]     The B.C. action was commenced on March 6, 2007.

[73]     The First Ontario action followed on May 2, 2007. Michael Harris was named as the representative plaintiff. Siskinds has acted throughout. On the same day that law firm posted a notice on www.classaction.ca bearing the heading “Liquid Crystal Display”. The notice said in part:

This class action alleges that the Defendants unlawfully conspired to fix, increase, and/or maintain prices at which LCD or products containing LCD were sold in Canada.

The plaintiff alleges that from at least January 1, 1998 through to the present, the defendants and their senior executives participated in illegal and secretive meetings and made agreements relating to price targets, specific price increases, market share divisions and production capacity for LCD.

LCD is a thin, flat display device made of numbers of pixels arrayed in front of a light source or reflector. LCD is used in television screens, computer monitors (both desktop and notebook), mobile phones, personal digital assistants, digital cameras and other devices.

[74]     A link to the statement of claim was provided as were contact details for those seeking more information. AU and Hannstar were mentioned but not named as defendants.

[75]     On May 23, 2007, the Star reported that LCD market participant LG Philips “is one target of an investigation into anticompetitive practices in the industry by U.S. and Asian regulators.”

[76]     A class proceeding was commenced in the Province of Quebec the following month.[19]

[77]     All of these facts pre-date July 20, 2007. The moving parties submit that they support the conclusion that Fanshawe ought to have discovered the claim more than two years before it was commenced. Alternatively, AU and Hannstar maintain that Fanshawe has failed to prove that it acted with due diligence in determining if it had a cause of action.

Justice Grace disagreed. He couldn’t conclude on the evidence that the plaintiff ought to have known the section 5(1)(a) facts based on media reports. Nor did the commencement of the class action necessarily crystalise the plaintiff’s discovery of the claim. The commencement of a class action does not fix all members of the putative class with knowledge of the cause of action (in contrast to a conventional action, the commencement of which means that the plaintiff has discovered the claim even if the plaintiff lacks knowledge of the section 5(1)(a) facts):

 [79]       Fanshawe is a large educational institution. It might well be appropriate to conclude that a reasonable person in its position would have read and fully digested the reports appearing in Canadian publications. However, on the evidence introduced so far, it is a distant and unwarranted stretch to conclude Fanshawe ought to have known of any of the items listed in s. 5(1)(a), let alone all four of them as the subsection requires.

[80]     According to the press, a price-fixing investigation was underway involving a component used in flat-panel televisions and personal computers. No conclusions had been reached, even on a tentative basis. The possible implications were unaddressed beyond declining prices of the shares of some of the participants in the LCD industry. None of the defendants in this action were mentioned in the two publications to which Fanshawe subscribed; the Globe and the Star. The Citizen mentioned AU Optronics but Fanshawe was not a subscriber. In any event, that article simply indicated that AU planned to cooperate in the investigation.

[81]     Class proceedings were commenced in various jurisdictions including Ontario. A short notice was posted by Siskinds on one website concerning the First Ontario action. There was no evidence that anyone from Fanshawe accessed the website or saw the notice.

[82]     Nothing else was done that I recollect seeing or hearing about. There were no press releases. There were no media reports of any of the proposed class proceedings. Notices do not appear to have been created, let alone disseminated.

[83]     Hannstar noted that Mr. Harris, initially the representative plaintiff in the First Ontario action, was a consumer. In its factum Hannstar submitted that:

It defies logic to suggest that a large academic institution like Fanshawe was less capable of ascertaining the facts giving rise to the claim than individual consumers.

[84]     I disagree. I have no knowledge of Mr. Harris. I do not know how he came to be a representative plaintiff. Did he approach Siskinds? Mr. Smith deposed that Siskinds approached Fanshawe. Was Mr. Harris in the same position? I simply do not know. It is not self-evident to me that a high level of sophistication necessarily leads to greater knowledge about a particular topic. It would be folly to equate Fanshawe and Mr. Harris simply because Fanshawe is a large academic institution and Mr. Harris is an individual.

[…]

[92]     I do not understand why commencement of an action would fix all members of the putative class with knowledge of the cause of action. As noted, aside from one short notice on a website created by Siskinds, the proceeding was not publicized.

[93]     In Lipson v. Cassels Brock & Blackwell LLP (2013), 2013 ONCA 165 (CanLII), 114 O.R. (3d) 481 (C.A.) at para. 84, the Court of Appeal noted that the commencement of a limitation period “may be an issue that must be determined individually for each class member, depending on what individual class members were told and when.”

[94]       Determining that the commencement of a proposed class proceeding serves as the last possible day for the commencement of a limitation period would be arbitrary. It would not be based on the evidence in this case. It would be a legal fiction. A procedural vehicle would be converted into something more.[21] I decline the invitation to be its creator.

[95]     At this stage I am not satisfied that Fanshawe knew or ought to have known of the elements set forth in s. 5(1)(a) of the Limitations Act. I simply cannot make dispositive findings based on the evidence before me.

 

 

 

 

Ontario: The oppression remedy and the limitation period

In Maurice v. Alles et al., Justice Patillo provides a helpful summary of the principles governing the commencement of the limitation period in an oppression claim. It commences on the date the oppression first arises; the fact that the oppression is continuing will not delay commencement:

[54]        In Fracassi v. Cascioli, 2011 ONSC 178 (CanLII), 2011 ONSC 178 (Ont. S.C.), Pepall J., as she then was, held that pursuant to the Limitations Act, the applicable limitation period for an oppression claim begins two years after the day on which the claim for oppression was discovered. In reaching that conclusion, the learned judge relied on the following passage from Professor Koehnen’s text at p. 57:

 

Ordinarily, limitation periods begin from the time the plaintiff knows or ought to know of his cause of action. The fact that certain types of oppression continue until they are rectified has given rise to unusual results with respect to limitation periods. In Hart Estate v. Legacy Farms Inc., [1999] B.C.J. No. 312, the plaintiff complained of oppression in respect of a share issue that was completed more than six years before the action was commenced. The plaintiff knew about the share issue when it occurred. The British Columbia Supreme Court held that the claim was not caught by the Limitations Act because oppression continues until it is rectified. Manitoba courts have reached the opposite conclusion and have held that limitation periods do apply even to continuing conduct. This is generally the preferable approach. The concept that the limitation period does not begin to run until the oppression is remedied is counter-intuitive. Limitation periods begin when the cause of action arises, not when it is remedied. A limitation period for a breach of contract begins when the contract is breached, not when the breach is corrected. The idea that limitation periods begin to run when the oppression stops makes even less sense given the requirement of some courts that the oppression continue until the action is commenced. The combination of these two rules would result in an absurd situation. In essence, the limitation period does not begin to run until the oppression stops. But once the oppression stops, the plaintiff has no cause of action.

 

[55]        While at first blush, the above two excerpts from Professor Koehnen’s text appear contradictory, in my view they are not. The examples in the excerpt relied upon by Robert presuppose that the aggrieved shareholder was not aware of the oppressive conduct giving rise to the damage until sometime later. In that regard, the conduct is continuing. While the act of oppression may be ongoing, I agree with Pepall J. that such continuation does not operate to extend the limitation period beyond the time of two years from discovery.

[56]        There is no question that there are cases where the court has referred to the “ongoing” or “continuing” nature of the conduct to defeat a limitation period argument. See: Waxman v. Waxman, 2004 ONCA 39040 (C.A.) at paras. 534-536; Metcalfe v. Anobile, 2010 ONSC 5087 (CanLII), 2010 ONSC 5087 (Ont. S.C.). When the facts of those cases are viewed closely, however, it is discoverability that is the key factor in determining when the limitation period begins to run.

[57]        A claim for oppression can arise from many different factual situations. It is not until the plaintiff becomes aware of the material facts upon which a claim for oppression can be based that the limitation period will begin to run in respect of that claim. Similarly, if at some later point the plaintiff learns of other oppressive conduct that he or she was not otherwise aware of, the limitation period in respect of a claim for oppression relating to that conduct would only begin to run from the time the material facts giving rise to that claim became known.