Reconsidering mistakes of law and discoverability

Samuel Beswick, a Harvard legal scholar, studies the impact a mistake of law has on the discovery of a claim.  In Under the Limit‘s first guest post, he makes a compelling argument for reconsidering how Canadian limitations law might alter its approach to mistakes of law in the discovery analysis.

Mistake of law as a basis for extending the limitation period?

Common law countries have long determined that discoverability governs limitation on actions “grounded on” mistake (as the former Alberta statute put it) or that seek “relief from the consequences of” mistake (as the English Limitation Act provides). Back when the law of unjust enrichment was thought to allow restitution only for mistakes of fact, discoverability provisions had not much to do with mistakes of law. Now that the mistake-of-law bar has been abandoned, it is apt to ask: when can a mistake of law be discovered?

In England, this problem has driven multi-billion-pound-sterling unjust enrichment litigation, spurring private law scholars and confounding courts. The answer that the English courts have given, succinctly put in FII Test Claimants v HMRC, is that:

[372] … [I]n the case of a point of law which is being actively disputed in current litigation the true position is only discoverable … when the point has been authoritatively resolved by a final court.

I have recently sought to show that England’s answer to the discoverability of mistakes of law is arbitrary, jurisprudentially strained, internally inconsistent, and effects bad policy.

What’s remarkable (albeit it hasn’t to date been remarked on) is that this doctrine is also totally contradictory to Canadian precedent on this issue. The position in Canada, summarized in Hill v Alberta, is that:

[9] … Discoverability refers to facts, not law. Error or ignorance of the law, or uncertainty of the law, does not postpone any limitation period.

In Canada, time runs on mistake-of-law claims whether or not a claimant has discovered their mistake. This causes other problems, which I have endeavoured to draw out in a recent paper.

There is, however, a middle ground between England’s “authoritative judgment” understanding of limitation on mistakes of law and Canada’s “exception” to the discoverability principle, a full account of which will be appearing in the LQR. The short answer, though, is this: mistakes as to the law should be considered discoverable once a claimant is in a position to plead them in a statement of claim. Discoverability is not about finding out one’s legal position from a court. It is about having adequate time to be able to plead one’s case to a court.


Saskatchewan: statutory time limits aren’t necessarily limitation periods

A statutory limit on when something must be done is not necessarily a limitation period or subject to the common law discoverability principle.

LeCaine v. Registrar of Indian and Northern Affairs concerned an entitlement to be a member of the Wood Mountain Lakota Nation.  The appellants filed a protest with the Registrar of Indian Affairs against the inclusion of certain individuals on the Band List of the Nation and as Indians under the Indian Act.  The Registrar refused to consider the protests on the basis that they were filed out of time.

Section 14.2 of the Indian Act permits the filing of a protest within three years after the addition of the name of a person to a Band List:

(1)  A protest may be made in respect of the inclusion or addition of the name of a person in, or the omission or deletion of the name of a person from, the Indian Register, or a Band List maintained in the Department, within three years after the inclusion or addition, or omission or deletion, as the case may be, by notice in writing to the Registrar, containing a brief statement of the grounds therefor.

The appellants took the position that section 14.2 is a limitation period to which the discoverability principle should apply.

The Court of Appeal found that the this position assumed that only if section 14 is a limitation period must the appellants comply with it, and then they would have the benefit of the discoverability principle.  Justice Jackson rejected this reasoning:

[28]   […] Not every time period in legislation creates a limitation of action to which limitations legislation applies. Further, if a statute provides that an action may be done within a certain time, it does not necessarily mean that the action may be done at a later time. The true issue is whether s. 14.2 of the Indian Act permits a protest to be “made” after the expiry of the three-year period.

The Court answered the “true” issue by holding that the section “permits or empowers a person to protest but only insofar as he or she acts within three years of the event complained.  If the protest is not filed within three years, there is no right to make a protest.”

Accordingly, it was not a limitation period:

[49]   Whenever Parliament or a legislature prescribes a time period within which something must be done, the time period is not automatically a “limitation period.” In order for the time period to be considered a “limitation period,” the legislation in question must impose a limit on the bringing of a claim with respect to a cause of action or other claim for injury, loss or damage or tie the bringing of a claim to an event that is dependent on the claimant’s knowledge.

Discoverability does not apply to the section in any event because the time to commence the protest begins to run on a fixed date.  It’s long settled that  discoverability will not extend a limitation period when it runs from an event that occurs without regard to the injured party’s knowledge.

[50]        Subsection 14.2(1) prescribes a time period for the doing of something, i.e., for the filing of a protest, but the commencement of the time period is not dependent on when the protestor learns about the act leading to the protest. Time begins to run from the moment the Registrar makes an addition to, or deletion from, the Indian Register. This is a time period linked to a fixed event that is unrelated to and not dependent upon the protestor’s knowledge. Further, a protestor’s claim is not the same as a claim for injury, loss or damage. It cannot be said that a protestor under s. 14.2(1) is an injured party in the sense of having suffered compensable tortious harm.

[51]   If Parliament had intended s. 14.2(1) to be subject to the discoverability principle, the Indian Act would have been drafted to indicate that the time limit would begin to run when the potential protestor became aware of the addition, omission or deletion from the Register.