Author: Dan

Ontario: s. 5(1)(a)(iv) and the limitation of false arrest and imprisonment claims

Vu v. Attorney General of Canada considers the limitation of a claim arising from false arrest and imprisonment, and in particular the impact of s. 5(1)(a)(iv) of the Limitations Act on the analysis:

[30]           Not surprisingly, the defendant takes the position that the limitation period commenced when Vu was detained, on June 27, 2013.  At that time, they say, he must have known that his arrest and detention were wrongful.  Alternatively, the defendant argues that Vu would certainly have known it was wrongful by July 9, 2013, following the second detention hearing when the ID accepted the evidence contained in McNamara’s Statutory Declaration.

[31]           The plaintiff, on the other hand, asserts that the limitation period runs from the date of his release from detention in Vietnam, on October 8, 2014.  The plaintiff argues that he could not have initiated his claim for false imprisonment when first arrested and the act of wrongful detention was still ongoing. Plaintiff’s counsel analogized this to suing for battery while the knife is still in your arm. Further, the plaintiff claims that the CBSA represented to him many times that his release from immigration detention was “imminent,” yet he remained detained for a total of 15 months, without knowing or being able to know for how long he would remain in custody.

[32]           The defendant relies upon Kolosov v. Lowe’s Companies Inc., 2016 ONCA 973, O.J. No. 6702 (“Kolosov”), in which the Court of Appeal seems to accept that the limitation period commences on the first date of detention, stating at para. 11:

The law in relation to the commencement of the limitation period for the intentional torts of false arrest and imprisonment … is well-settled. As Chiapetta J. noted in Fournier-McGarry (Litigation Guardian of) v. Ontario, 2013 ONSC 2581 at para. 16,

 A claim for the common law torts of false arrest, false imprisonment and breach of Charter rights arising therefrom crystallizes on the date of arrest (see Nicely v. Waterloo Regional Police Force,  1991 CanLII 7338 (ON SC), [1991] O.J. No. 460 (Ont. Div. Ct.), at para. 14).

 [33]           The plaintiff, on the other hand, cites a conflicting Court of Appeal decision, Mackenzie v. Martin, 1952 CanLII 85 (ON CA), [1952] O.R. 849 (Ont. C.A.), at paras. 6-8, aff’d 1954 CanLII 10 (SCC), [1954] S.C.R. 361 (S.C.C.), which refers to case law dating back to the 18th century, and states that the limitation period for a false imprisonment claim commences upon the date of release. To my knowledge, while the case is dated, Mackenzie v. Martin has never been overturned.

[34]           The conflict is not easily resolved by the jurisprudence.  In Fournier-McGarry (Litigation Guardian of) v. Ontario, at para. 16, Chiapetta J. relied on Nicely v. Waterloo Regional Police Force (“Nicely”) in making her statement that the Court of Appeal subsequently adopted in Kolosov. However, while the Divisional Court held in Nicely, at para. 15, that the test “is as of the date of arrest and imprisonment,” it was discussing the question of liability and the grounds for arrest when the arrest took place, not the limitation period. This point was not addressed by Chiapetta J. in Fournier-McGarry, or by the Court of Appeal in Kolosov, both of which simply accept the statement as dealing with limitation periods. Elsewhere, the Divisional Court in Nicely suggested, at paras. 8-9, that the time period begins to run when the tort is “complete,” or upon release. In Nicely, however, the arrest, detention and release all occurred on the same day, as was also the case in Fournier-McGarry.

[35]           Ferri v. Root, 2007 ONCA 79, O.J. No. 397, leave to appeal refused, [2007] S.C.C.A. No. 175 (“Ferri”), is another, more recent, case in which the plaintiff was arrested and released on the same day. There, the Court of Appeal, at para. 102, reiterated the finding in Nicely that “the test for these torts is at the date of arrest and imprisonment,” but addressed the limitation period in the same context that it arose in Nicely, which was under s. 7 of the Public Authorities Protection Act, R.S.O. 1990, c. P.38. (“PAPA”). That Act required that an action be “commenced within six months next after the cause of action arose or in case of continuance of injury or damages within six months after the ceasing thereof” (emphasis added). Accordingly, the Court in Ferri, at para. 103, concluded that the injury of false imprisonment ceased when the plaintiff was released.

[36]           There is also the concern that a false arrest and an unlawful imprisonment may not occur at the same time. One may be lawfully arrested but unlawfully detained, or a detention that is lawful at the outset may become unlawful at a subsequent point in time. For example, a lawful immigration detention can become unlawful due to its conditions, its length, procedural fairness, or if it is “no longer reasonably necessary to further the machinery of immigration control:” Chaudhary v. Canada (Minister of Public Safety & Emergency Preparedness), 2015 ONCA 700, 127 O.R. (3d) 401, at paras. 81, 86; Re Charkaoui, 2007 SCC 9, [2007] 1 S.C.R. 350, at para. 123; Scotland v. Canada (Attorney General), 2017 ONSC 4850, 139 O.R. (3d) 191.

[37]           The plaintiff submits that the approach in Mackenzie v. Martin is also consistent with the law in the United States, where time runs from the date of release, not the date of detention: Milliken v. City of South Pasadena, 158 Cal. Rptr. 409, 412 (Cal. Ct. App. 1979); Donaldson v. O’Connor, 493 F.2d 507, 529 (5th Cir. 1974).

[38]           While I have concerns with the broad application of Kolosov urged on me by the defendant, I do not need to resolve the conflict in the cases in this matter. This case does not arise under the PAPA, which would cause me to consider a continuing injury. Rather, since section 5(1)(a) of the Limitations Act establishes a four-part test, I regard Kolosov as simply setting up a presumption (which was not rebutted in that case) that the cause of action arose on the date of arrest and detention or, at latest, the date of the second detention hearing, but it does not address all four parts of the test. This means I must still consider when the plaintiff had sufficient facts on which to base an allegation of wrongful arrest and detention, and whether, “[h]aving regard to the nature of the loss or damage, a proceeding would have been an appropriate means to seek to remedy it.”

[46]           In this case, however, the plaintiff did not delay the bringing of his claim for reasons of strategy. Rather, in the absence of the memorandum disclosing that McNamara’s Statutory Declaration was incorrect, he simply had no claim to bring. At the ID hearing on July 9, 2013, Vu tried to persuade the tribunal that he was in compliance with his terms of release and that the CBSA was mistaken, but the tribunal preferred McNamara’s more detailed evidence and made a finding of fact against the plaintiff. The plaintiff was without any evidence to rebut that finding until the disclosure on June 10, 2015. At no point during the hearing on July 9, 2013, or at any subsequent hearing, did McNamara reveal that she had relied on an interpreter; rather, the evidence in her Statutory Declaration (which itself was only disclosed in January 2014) was that the she and the witness had spoken to each other in English.

 [47]           Further, prior to receiving the memorandum in June 2015, Vu was pursuing other, more pressing and appropriate remedies, including detention reviews, the spousal sponsorship application, and attempts to address living arrangements for his infant daughter.  I find, as the Court of Appeal did in Presidential MSH Corporation v. Marr, Foster & Co. LLP, 2017 ONCA 325, 135 O.R. (3d) 321 (“Presidential MSH Corporation”), at para. 32, that “it would have been inappropriate to require the plaintiff to prematurely resort to court proceedings while the statutory alternative process was ongoing, which might make the proceedings unnecessary.” Moreover, a lawsuit would not have achieved Vu’s objective of being released.
 [48]           Had Vu known of the evidence that McNamara’s Statutory Declaration was incorrect when he was in custody, he undoubtedly would have raised that before the ID. Although he did not seek to review the ID’s detention order in the Federal Court, as his counsel explained Vu had good reasons not to do so: he accepted the CBSA’s representations that his removal was “imminent,” and perceived that making an application would have been a waste of time and money and might have delayed his deportation due to the CBSA’s need to defend the claim.  Further, as the Supreme Court of Canada observed recently in Canada (Public Safety and Emergency Preparedness) v. China, 2019 SCC 29, 433 D.L.R. (4th) 381, at paras. 61-67, judicial review of an Immigration Division decision is challenging.  The onus is squarely on the applicant to establish the decision is unreasonable, leave is required, and remedies are limited. Instead of releasing an applicant, Karakatsanis J. noted, at para. 65 that even a successful judicial review “will generally result in an order for redetermination, requiring further hearings to obtain release and thereby extending detention” (emphasis added).

[52]           In this case, however, rather than the contents of the disclosure having a negligible impact on the reasonable and probable grounds for Vu’s arrest and detention, the revelation that McNamara had used an interpreter while interviewing the witness was not merely a finding of helpful evidence – it was a finding that turned the evidence against Vu on its head, as it threw doubt on the veracity of the testimony that was used to justify the arrest and detention. This was evidence upon which the Tribunal clearly relied during the July 9, 2013 hearing and throughout Vu’s fifteen months in detention. As a result, I do not accept the defendant’s submission that the disclosure of the memorandum in June 2015 was simply something that strengthened an already “discovered” claim: see, e.g., Sosnowski, at paras. 19, 27-29. The plaintiff’s affidavit might have invited this argument where he stated that only after the June 13, 2016 disclosure he became “confident that my detention had been unlawful.” However, that date was in fact when the government actually settled the bond litigation, one year after the memorandum was released to him in June 2015. In any event, in my view this statement was simply recognition that he now had a basis for a civil action for damages, something that, it is to be remembered, is not to be embarked upon lightly. As the Supreme Court stated in Novak v. Bond,  1999 CanLII 685 (SCC), [1999] 1 S.C.R. 808 (S.C.C.), at para. 85:

Litigation is never a process to be embarked upon casually and sometimes a plaintiff’s individual circumstances and interests may mean that he or she cannot reasonably bring an action at the time it first materializes. This approach makes good policy sense. To force a plaintiff to sue without having regard to his or her own circumstances may be unfair to the plaintiff and may also disserve the defendant by forcing him or her to meet an action pressed into court prematurely.

[55]           Applying these principles, in my view, a lawsuit for damages over Vu’s arrest and detention was not an “appropriate means” to redress the wrong done to him when he was arrested and held in custody until he obtained the disclosure in June 2015 that the CBSA had misled the ID. This was many months after he had been removed from Canada. Prior to receiving that information, Vu appropriately pursued other avenues to address his detention and removal, relied on the good faith of the CBSA and the ID process, and did not have grounds for suing for damages. A lawsuit would have been premature, and therefore was not an appropriate means under s. 5(1)(a)(iv) until June 2015.

Ontario: can you assess intersection design? (the dangers of aggressive limitations defences)

Ontario courts are filled with pro forma and ill-conceived limitations defences.  Sometimes these stand out, particularly when advanced by institutions that maybe shouldn’t be too creative with limitations defences.  Take Sun v. Ferreira as an example.  The Plaintiffs claimed that the City of Toronto and the TTC are laible for the location of a bus stop and a cross-walk.  The TTC and the City of Toronto moved for judgment on a limitations defence that would have required the court to find that the plaintiffs, through their observations, ought to have known that an intersection was defectively designed.  It strikes me as rather fraught to suggest that a reasonable person with the abilities and in the circumstances of someone who knows nothing about standards of intersection design could assess whether one was designed competently.  The court agreed:

[45]           The Claims, in these proceedings against the moving parties are that there was an alleged design deficiency with respect to the TTC bus stop, and the adjoining crosswalks. Were the Moving Parties, by designing  an allegedly inherently dangerous situation, involving passengers, many of which would be children exiting a TTC bus, and crossing a busy highway to get to school, negligent as they did not take the appropriate care required in designing and constructing and whether the Moving Parties failed to warn of the hazard their design and construction created.  The main argument of the moving parties is that the responding parties were familiar with the accident location, the location of the TTC stop and location of the cross-walks adjacent to the School, and the absence of a traffic light or cross-walks.

[46]            The moving parties submit that the fact that the City or the TTC or both changed the configuration of the intersection following the accident “is not actionable”. The respondents, however, submit that the change raised the question of whether the change was made to remedy the negligent design of the accident location, and if so, whether the City and the TTC were aware of this negligent design, or ought to have been aware of this negligent design, prior to the accident. If they were aware of the negligent design, what steps, if any, did the Moving Parties take to rectify this deficiency before the accident occurred.  These will be the issues at trial.

[47]           The issue for this court is when did the Plaintiffs or Defendant know or ought to have known of the alleged deficient design, and the consequent failure to warn of the deficiency on the date of the accident.

[48]           Applying the analysis of the court in the cases of Shukster and Frederick, I find that there is a genuine issue requiring a trial on when the alleged deficiency with the intersection was known or ought to have been known by the responding parties. They knew of the accident location, but did they have the knowledge required to question if the intersection was defectively designed?  Further, when did they know that it was appropriate to take legal action against the moving parties?

[49]            The position of the Moving Parties is that the Respondents should have concluded that legal action would be appropriate to commence an action on the basis of their own observations and opinions of the alleged negligent design of municipal infrastructure or the configuration of the street and without the benefit of expert advice and the knowledge that the alleged design defect of the accident location had been corrected.  I do not agree that such is a reasonable conclusion for the court to reach.  In my view, such personal observations would not be sufficient for the Respondents to conclude that legal action would be appropriate, especially in light of the position taken by the City of Toronto that the intersection did not meet its criteria for the installation of a traffic light.

[50]           Rather, I am of the view that I can not make the findings that would be required to satisfy the test set out in Hryniak by our Supreme Court of Canada, namely, does the evidence allow me to fairly and justly adjudicate this dispute?

[51]           I find that following the guidance of our Courts, which I have referred to above, the respondents have established that there is a genuine issue requiring a trial on the discoverability of these causes of action, as it may not have been legally appropriate for the responding parties to commence litigation without any evidentiary basis, other than their own observations and opinions.  This issue requires a trial and for this reason, the motions must be dismissed

This decision is a reminder of the importance of considering the question asked by s. 5(1)(b) when advancing (and responding to) limitations defences.

Ontario: a pleading read generously

When considering whether an amendment raises a fundamentally new claim and is therefore statute-barred, the court must read the pleading generously.  The decision in Virji v. Kotton is an example of what this generosity looks like.  The court “teased out” the necessary causes of action in a pleading drafted with “understatement”:

[26]           Accordingly, if the amended pleading is not to be seen as putting forward a new cause of action, an existing claim in fraud and conspiracy would have to be teased out of the language in paragraphs 35 and 50. Both of those suggest that the false representations of value issued by Bosley Farr were knowingly done. Knowledge, of course, is generally considered to be distinct from intention, and so it is questionable whether these two paragraphs really set out something like the causes of action that Plaintiff counsel attributes to them.

[27]           That said, context is everything when it comes to matters of interpretation. Under the circumstances, I do not think that what the Plaintiff meant by alleging that Bosley Farr “knowingly” made false representations is that Bosley Farr knew it was making representations of value; rather, I assume that what the Plaintiff meant was that Bosley Farr knew of the falsehood of the representations it was making but made them anyway. Read in this way, there is an element of intentionality embedded in the allegation of “knowingly”.
[28]           In addition, in the context of Bosley Farr having been retained to do a valuation by Kotton, the suggestion behind the value having been knowingly misrepresented is that it was done for Kotton’s benefit. While this is only indicated in an oblique fashion, nothing else would really make sense. I cannot assume that the Plaintiff meant to allege that Bosley Farr knowingly misrepresented the value of an investment property just for the sake of doing so. Instead, I understand the allegation to be that it did so for the purpose of collaborating with the party that retained it and that would stand to benefit from the misrepresented value – i.e. Kotton.
[29]           With all due respect, there is good reason that the Plaintiffs have sought to amend the Statement of Claim. As originally drafted, it does not convey its own meaning very well. However, if one brings a generous attitude to the task of deciphering it, and one digs deep enough into its barely stated implications, one can see that there is a glimmer of a fraud and conspiracy allegation peeking through the fog.
[30]           As Perell J. stated in Kaynes v. BP, PLC, 2019 ONSC 6464, at para 87, where a pleading is sought to be amended after the limitation period has expired, the key to the analysis is “whether substantially all of the material facts of the tendered cause of action have already been pleaded, in which case, the amendment will be allowed, or whether new material facts are sought to be added to support the cause of action, in which case, the amendment will not be allowed or if already pleaded, it will be struck.” The present pleading meets the test of the material facts of fraud and conspiracy having already been pleaded, but just barely.
[31]           It is safe to say that had counsel for the Plaintiffs not gone to some effort in this motion to point out the fact that the basic elements of fraud and conspiracy – intentionality and collusion – were already pleaded, I would have missed them. I assume most other readers, including the Defendants, might have missed them as well.
 [32]           I do not know whether the Statement of Claim was deliberately drafted with this level of understatement or whether the intentionality and collusion ingredients made their way into a couple of paragraphs by chance; however, I do see that now that my attention has been fully drawn to them and to the context in which they are stated. Given this recognition, I am compelled to conclude that the proposed amendments represent embellishments on causes of action that were already contained in the Statement of Claim.

 

Ontario: different limitation periods apply to different claims

Kinectrics Inc. v. FCL Fisker Custome & Logistics Inc. contains the clearest statement of the principle that different claims are subject to different limitations analyses even when they arise out of similar circumstances:

[78]           […] Different causes of action can attract a different limitations analysis even where the claims arose out of common circumstances: Winmill v. Woodstock (Police Services Board), 2017 ONCA 962, 138 O.R. (3d) 641, at paras. 17, 43, citing West v. Ontario, 2015 ONCA 147, at paras. 2-3; Fantl v. Transamerica Life Canada, 2013 ONSC 2298, 21 C.C.L.I. (5th) 175, at paras. 180-181, varied on other grounds, 2015 ONSC 1367, 125 O.R. (3d) 230 (Div. Ct.), 2016 ONCA 633, 133 O.R. (3d) 422. Even if the cargo claim does not involve a discoverability analysis as contended by Anderson Haulage, the negligence and contract claims that have been pleaded do give rise to an assessment of discoverability.

To my knowledge, that principle isn’t stated elsewhere so succinctly. The appellate decisions cited aren’t quite as explicit about the point as you’d like.

 

Ontario: evidentiary considerations in a motion to add after the limitation period’s presumptive expiry

Ali v. City of Toronto is a good example of an issue with the law of adding a party to a proceeding after the presumptive expiry of the limitation period.

The Court held that there are circumstances where a plaintiff has a positive obligation to make inquiries or risk the court finding that the failure to do shows a lack of due diligence:

[22]              More recent case law has clarified that the principles in Madrid do not release plaintiffs or their counsel from their obligations to make any inquiries at all (Cote v. Ivanhoe Cambridge I Inc., 2018 ONSC 5588 at para. 33). There are circumstances where a plaintiff is expected to make inquiries or risk that the court may find that their failure to do so constitutes a lack of due diligence causing their motion to fail (Cote at paras 33 and 35; Laurent-Hippolyte v. Blasse, 2018 ONSC 940 at paras. 26-27).  In recent cases, the courts have consistently held that requiring plaintiffs injured in slip and falls and other accidents involving snow and ice to inquire into the possible existence of winter maintenance contractors does not constitute a “pro forma” letter as described in Madrid. Further, a plaintiff’s failure to make these inquiries has been consistently found to constitute a lack of reasonable diligence ultimately leading to the denial of leave to amend.

This reasoning is not uncommon, as the citations indicate, but I think it’s fundamentally flawed.  Essentially, the reasoning is this: a reasonable person would have asked a question the plaintiff did not, and therefore a reasonable person would have discovered the claim earlier than the plaintiff.

The problem is that it’s not the question which matters, but the answer—specifically, whether the answer would have provided the plaintiff with knowledge of the discovery matters.  Had the reasonable person asked the question on some earlier date would it have resulted in discovery of the claim? Without evidence of the date and content of the answer had the question been asked, the court can’t make the findings necessary to determine discovery, and whether asking the question would have resulted in discovery is purely speculative.  And so the court risks finding a proceeding statute-barred for want of due diligence per se, not because a reasonable person would have asked the question and, having done so, discovered the claim earlier than the plaintiff discovered it.

The court made this point explicitly in Ledoux v. Lee:

40.            Uber also argued that Mr. Ledoux’s lawyer should have served Co-operators with a formal notice of his claim against Mr. Lee after getting the police report. Mr. Giugaru contended that this is a standard practice because it allows a plaintiff to claim pre-judgement interest from the date of the notice.  Had Mr. Ledoux’s counsel put Co-Operators on formal notice of a potential claim, he argued, the insurer might have advised the plaintiff of the coverage issue and disclosed Mr. Lee’s activity as an Uber driver.

41.            This argument is speculative.  I could not conclude, on the evidence before me, that it is standard practice for plaintiff’s counsel in MVA claims to formally notify the defendant motorist’s insurer of a potential claim. Even if I had been able to, I could not infer that a formal notice letter to Co-Operators would have yielded information about its position on coverage.  Mr. Ledoux’s lawyers were in communication with Co-Operators from September 2017 forward, providing it with a copy of the police report and Mr. Ledoux’s hospital record.  There is no evidence that, in the course of this correspondence, the adjuster ever so much as hinted that it might deny coverage or disclosed that Mr. Lee was participating in the gig economy, even though it notified the insured of its denial of coverage on this basis two weeks after the accident.

The interesting complication is that when moving to add a party after the presumptive expiry of the limitation period, the plaintiff needs to show enough due diligence to found a prima facie discovery argument.  The courts consistently find that this can require sending letters of enquiry, a point the court made explicitly:

[30]              I also reject the Plaintiff’s argument that there is no guarantee that she would have received a response from the City had she made these inquires. The relevant issue is the absence of evidence demonstrating effort and diligence on the part of the Plaintiff, not speculation as to the likelihood of a response. As the courts have held in previous cases, had the Plaintiff asked and not received a response, the efforts would have been evidence of diligence.

I think the plaintiff’s argument was correct for the purposes of a s. 5 analysis: absent any evidence as to the response to the inquiry, whether it would have resulted in discovery is speculative. But in the context of a motion where the plaintiff had an obligation to show evidence of due diligence, the failure to make the inquiry was fatal.  From a limitations perspective, the plaintiff probably would have been better suing the City in a new action where its evidentiary argument might have prevailed.

The takeaway is twofold: first, personal injury lawyers should always send pro forma letters of this kind to avoid these arguments; and second, this is an area of limitations law that could use a little rationalising. It’s probably my least favourite corner of the limitations scheme, but plainly I’m due to give it more consideration.

 

Ontario: confusion in the Court of Appeal on the historical limitation of demand obligations

The Court of Appeal decision in Michel v. Spirit Financial Inc. includes the following paragraph that compels me to pedantry:

[14]      The trial judge made a finding of fact that all the advances made by Michel to Kramer and Spirit were loans. The loans were advanced from 2000 to 2009, during which time the Limitations Act, R.S.O. 1990, c. L.15 was largely replaced by the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B. On January 1, 2004 the basic limitation period for demand loans was changed from six years from the date of the loan to two years from the date of the demand: Hare v. Hare, 2006 CanLII 41650 (ON CA), 83 O.R. (3d) 766 (C.A.), at para. 11 and Limitations Act, 2002, at s. 5.

Here are the issues:

  1. The Limitations Act didn’t change the limitation of demand loans when it came into force on January 1, 2004. Section 5(3) wasn’t present in the initial version of the Limitations Act, which didn’t address the discovery of a claim arising from demand obligations at all.The Court cites Hare, but Hare actually holds that, under the version of the Limitations Act in force when it was decided, a demand obligation was actionable as of the funds being advanced and not the date of the demand.  This was manageable under the Former Act, which applied a six-year limitation period, but it’s problematic with a two-year limitation period.  This caused the Legislature to amend the Limitations Act in 2008 to add s. 5(3), which makes presumptive discovery of a claim arising from a demand loan the date of the demand for repayment.

    Frankly, it’s surprising that the Court would misstate the development of the law so materially.

  1. It’s misleading to say that the Limitations Act “largely” replaced the Former Act. The Limitations Act and the RPLA together entirely replaced the Former Act.  To be fair, the RPLA is Part I of the Former Act repackaged, and in that sense the Limitations Act only partially replaced the Former Act.  Nevertheless, this statement suggests that some part of the Former Act remains in force.  It doesn’t.

Ontario: the dangers of arguing a particular step would have caused discovery

I often see defendants argue that if a plaintiff had undertaken a certain step, discovery would have occurred on an earlier date.  Without evidence that the plaintiff taking this step on a specific date would have resulted in the plaintiff learning on another specific date the facts necessary for discovery, this argument is purely hypothetical and can’t succeed.  The court in Ledoux v. Lee makes the point:

40.              Uber also argued that Mr. Ledoux’s lawyer should have served Co-operators with a formal notice of his claim against Mr. Lee after getting the police report. Mr. Giugaru contended that this is a standard practice because it allows a plaintiff to claim pre-judgement interest from the date of the notice.  Had Mr. Ledoux’s counsel put Co-Operators on formal notice of a potential claim, he argued, the insurer might have advised the plaintiff of the coverage issue and disclosed Mr. Lee’s activity as an Uber driver.

41.              This argument is speculative.  I could not conclude, on the evidence before me, that it is standard practice for plaintiff’s counsel in MVA claims to formally notify the defendant motorist’s insurer of a potential claim. Even if I had been able to, I could not infer that a formal notice letter to Co-Operators would have yielded information about its position on coverage.  Mr. Ledoux’s lawyers were in communication with Co-Operators from September 2017 forward, providing it with a copy of the police report and Mr. Ledoux’s hospital record.  There is no evidence that, in the course of this correspondence, the adjuster ever so much as hinted that it might deny coverage or disclosed that Mr. Lee was participating in the gig economy, even though it notified the insured of its denial of coverage on this basis two weeks after the accident.

Ontario: notice to the crown doesn’t toll the limitation period

Francis v. Ontario is a remainder that giving notice under the Proceedings Against the Crown Act (now replaced by the Crown Liability and Proceedings Act, which has similar notice requirements in s. 18) doesn’t toll the limitation period:

[273]    I agree with Ontario’s submission that that the limitation period in this proceeding was not tolled as soon as Mr. Francis filed the notice of his claim. It continued to run against claimants until the Statement of Claim was issued. Under s. 7(1) of the Proceedings Against the Crown Act, a claimant must serve notice of the claim at least 60 days before commencing a claim against the Crown (Ontario). However, the notice itself does not effect the limitation period, and there is nothing in the Act that suggests that the notice has this effect. Indeed, what is in the Act suggests the opposite, i.e., that the giving of the notice does not end the running of the limitation period.

[274]     In one circumstance, the delivery of the notice may extend the limitation period, but the notice does not toll the limitation period, which continues to run and to bar claims. An extension of the limitation period is provided for in s. 7(2) of Act which states:

Limitation period extended

(2) Where a notice of a claim is served under subsection (1) before the expiration of the limitation period applying to the commencement of an action for the claim and the sixty-day period referred to in subsection (1) expires after the expiration of the limitation period, the limitation period is extended to the end of seven days after the expiration of the sixty-day period.

[275]    Section 7(2) does not apply in the circumstances of the immediate case.

Ontario: the limitation of uninsured motorist proceedings

Sarokin v. Zhang has a comprehensive summary of the limitation of uninsured motorist proceedings. It’s a good resource if you practice in the area:

[28]              Section 265 (1) of the Insurance Act (Ontario) sets out the mandatory provisions for uninsured automobile coverage to be contained in all Ontario automobile insurance policies:

 265 (1) Every contract evidenced by a motor vehicle liability policy shall provide for payment of all sums that,

(a) a person insured under the contract is legally entitled to recover from the owner or driver of an uninsured automobile or unidentified automobile as damages for bodily injuries resulting from an accident involving an automobile;

(b) any person is legally entitled to recover from the owner or driver of an uninsured automobile or unidentified automobile as damages for bodily injury to or the death of a person insured under the contract resulting from an accident involving an automobile; and

(c) a person insured under the contract is legally entitled to recover from the identified owner or driver of an uninsured automobile as damages for accidental damage to the insured automobile or its contents, or to both the insured automobile and its contents, resulting from an accident involving an automobile,

subject to the terms, conditions, provisions, exclusions and limits as are prescribed by the regulations.

 [29]              Regulation 676 under the Insurance Act sets out the applicable terms, conditions, provisions, exclusions and limits to payments under an automobile insurance policy pursuant to s. 265(1) of the Insurance Act. Section 6 of Regulation 676 sets out the mandatory notice provisions for claims made under s. 265(1) of the Insurance Act:

 (1) A person entitled to make a claim in respect of the bodily injury or death of a person insured under the contract shall do so in accordance with this section.

(2) The claimant shall give the insurer written notice of the claim within thirty days after the accident or as soon as is practicable after that date.

(3) The claimant shall give the insurer, within ninety days after the accident or as soon as is practicable after that date, such proof as is reasonably possible in the circumstances of the accident, the resulting loss and the claim.

(4) The claimant shall provide the insurer upon request with a certificate of the medical or psychological advisor of the person insured under the contract stating the cause of the injury or death and, if applicable, the nature of the injury and the expected duration of any disability.

 [30]              The applicable limitation periods for claims under s. 265(1) are set out in section 8 of Regulation 676:

 (1) No person is entitled to bring an action to recover an amount provided for under the contract, as required by subsection 265 (1) of the Act, unless the requirements of this Schedule with respect to the claim have been complied with.

(2) An action or proceeding against an insurer in respect of loss or damage to the insured automobile or its contents shall be commenced within one year after the loss or damage occurs.

(3) An action or proceeding against an insurer in respect of bodily injury or death, or in respect of loss or damage to property other than the insured automobile or its contents, shall be commenced within two years after the cause of action arises.

 [31]              The leading case with respect the application of the Limitations Act to claims under OPCF 44R is Schmitz v. Lombard General Insurance Company of Canada, 2014 ONCA 86. Following its decision in Markel Insurance Co. of Canada v. ING Insurance Co. of Canada, 2012 ONCA 218, the Court of Appeal held that the limitation period for claims under OPCF 44R starts to run on the day after a demand for indemnity is made:

“[20] ….Once a legally valid claim for indemnification under the OPCF 44R is asserted, the underinsured coverage insurer is under a legal obligation to respond to it. To paraphrase and adapt Sharpe J.A.’s observations, at para. 27 of Markel, the claimant for indemnity under the OPCF 44R “suffers a loss from the moment [the insurer] can be said to have failed to satisfy its legal obligation [under the OPCF 44R]”. Thus, the claimant suffers a loss “caused by” the underinsured [page700] coverage insurer’s omission in failing to satisfy the claim for indemnity the day after the demand for indemnification is made.” (Schmitz at paras. 20 and 26)

[32]              Unlike the claim of an injured party against a tortfeasor, the cause of action for an insured’s claim against his or her own insurer for the insurer’s failure to indemnify pursuant to the unidentified motorist endorsement is for breach of contract which does not arise until the insurer breaches its insurance contract to indemnify by failing or refusing to pay the insured’s claim (Jones v. Doe et al, 2018 ONSC 4780 at paras. 25-26; Chahine v. Grybas, 2014 ONSC 4698 at paras. 34-35; Tucker v. Unknown Persons, 2015 NLCA 21 at paras. 38-39).

[33]              In Schmitz, the Court of Appeal rejected the insurer’s submission that the definition of discoverability in s. 17 of OPCF 44R applies, holding that both ss. 4-5 of the Limitations Act apply to determine the commencement of the limitation period for an OPCF 44R claim (Schmitz at para. 16). The Court of Appeal also held that insurers are not prejudiced as they could require that insureds provide timely notice pursuant to other provisions in OPCF 44R and other insurance contracts (Schmitz at para. 22). The Court of Appeal also rejected the insurer’s arguments that the limitation period should begin to run on the day a claimant accumulates a body of evidence that would permit it a reasonable chance of persuading a Judge that his or her claims will exceed the limits of their policy and that starting the limitation period when a demand for indemnification is made does not limit when the demand could or should be made such that an insured does not need to wait until the outcome of the trial is known (Schmitz at paras. 23-24).

[34]              Markel arose from a loss transfer claim made by one insurer against another seeking indemnification for statutory accident benefits paid to an insured. The Court of Appeal held that the earliest the limitation period can start to run is the date the first party insurer demands indemnification from the second party insurer (Markel at para. 36). However, the Court also held that a claim cannot be delayed for tactical or other reasons and must be commenced when it is “legally appropriate”:

“[34] This brings me to the question of when it would be “appropriate” to bring a proceeding within the meaning of s. 5(1)(a)(iv) of the Limitations Act. Here as well, I fully accept that parties should be discouraged from rushing to litigation or arbitration and encouraged to discuss and negotiate claims. In my view, when s. 5(1)(a)(iv) states that a claim is “discovered” only when “having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it”, the word “appropriate” must mean legally appropriate. To give “appropriate” an evaluative gloss, allowing a party to delay the commencement of proceedings for some tactical or other reason beyond two years from the date the claim is fully ripened and requiring the court to assess to tone and tenor of communications in search of a clear denial would, in my opinion, inject an unacceptable element of uncertainty into the law of limitation of actions.” (Markel at para. 34)

[35]              These issues were considered more recently by Justice LeMay in Howell v. Jatheeskumar, 2016 ONSC 1381, a case decided in the context of an OPCF 44R claim similar to the present case. In Howell, plaintiff’s counsel sent a third party notice letter to the defendant’s presumptive insurer 7.5 months after the accident. Plaintiff’s counsel did not follow up with the presumptive insurer for 2 years and 4 months. At that time, the presumptive insurer advised that it was not the defendant’s insurer. Five months later, the plaintiff brought a motion to add the plaintiff’s own automobile insurer, TD.

[36]              LeMay J. held that that there were 3 possible outcomes. The court could determine that: i.) there was insufficient due diligence on the part of the Plaintiff and no other reason to extend the time limits thereby defeating any claim the plaintiff may have to extend the time limits as a result of the principles of discoverability; ii.) there was a triable issue about the issues of discovery and whether the claim was timely as a result of the application of the discoverability principles which could include whether there was any other statute under which the limitations period could be extended; or iii.) on the materials filed there was clearly an issue of discoverability that made the claim timely (Howell at para. 35).

 [37]              LeMay J. concluded that it was clear from Schmitz and Markel that there were good arguments available to the plaintiff to defeat any limitations defence advanced by TD:

37  In this case, the Plaintiff has a reasonable argument that the claim against TD General Insurance was not discoverable until August of 2015. However, there may be issues relating to the Plaintiff’s due diligence that TD General Insurance may wish to raise. As a result, I am prepared to find that this claim falls at least into the second category, that there was a triable issue about discovery. As a result, the claim should be amended.

38  The Plaintiff is not required to plead any discoverability issues at this stage (see Collins v. Cortez, supra at paragraph 15). Instead, if TD General Insurance raises a Limitations Act issue in its defence, then the Plaintiff will be required to plead the relevant facts on discoverability in reply to TD’s defence. (Howell at paras. 37-38)