In Fercan Developments Inc. v. Canada (Attorney General), the Court of Appeal emphasizes the factual nature of the s. 5(1)(a)(iv) analysis. The decision is also an example of an appeal in related proceedings impacting on appropriateness.
The AGC brought an unsuccessful criminal forfeiture application against the plaintiffs. Then the AGO commenced unsuccessful forfeiture proceedings under the Civil Remedies Act. Leave to appeal was refused and an appeal from a costs award failed. The plaintiffs sued the AGC and the AGO alleging malicious prosecution, negligent investigation, misfeasance in public office, and civil conspiracy. The defendants moved for summary judgment on their limitations defence. The motion judge found the proceeding didn’t become an appropriate remedy for the loss until at least the civil forfeiture proceedings had concluded. This meant discovery occurred within two years of the plaintiffs commencing the action.
The defendants appealed. They argued that motion judge’s decision “significantly expands the application” of s. 5(1)(a)(iv) beyond the two circumstances the court has recognized might impact on the appropriates of a proceeding as a remedy:
[15] The appellants argue that the motion judge’s decision significantly expands the application of the “appropriate means” element of the discoverability test under s. 5(1)(a)(iv) beyond any previous jurisprudence from this court, and that it injects uncertainty into the law of limitations. They contend that the motion judge relied on irrelevant factors, and that she ought to have restricted her analysis to a consideration of whether the respondents were pursuing an alternative means of remedying their alleged losses, such that it was not yet appropriate for them to commence an action in respect of those losses.
[16] We disagree. Contrary to the submissions of the appellants, the motion judge properly recognized that there were not simply two categories of cases in which it might not be legally appropriate to start a proceeding despite the claim having been discovered, within the meaning of s. 5(1)(a)(i)-(iii): Nasr, at para. 51. The motion judge did not err when she considered all of the relevant circumstances and not simply whether the forfeiture proceedings provided an alternative means for the respondents to remedy their alleged losses. She was required to consider the “nature of the injury, loss or damage” under s. 5(1)(a)(iv), as well as, under s. 5(1)(b), using a “modified objective” test, what a reasonable person with the abilities and in the circumstances of the respondents ought to have known: Presidential, at para. 18; Service Mold + Aerospace Inc. v. Khalaf, 2019 ONCA 369, 146 O.R. (3d) 135, at para. 32. While previous cases can assist in identifying certain general principles, whether a proceeding would have been an appropriate means to seek to remedy a claimant’s damage, injury or loss will turn on the facts of each case and the abilities and circumstances of the particular claimant: Presidential, at para. 19; ETR Concession Company, at para. 34.
The Court cautioned against conflating the considerations in s. 5(1)(a)(i)-(iii) with those in s. 5(1)(a)(iv). Despite the plaintiffs’ knowledge of the first three discovery matters, it would have been premature for them to commence the action while responding to the state’s civil forfeiture proceedings. If the forfeiture proceedings had been successful, the defendants would have had a strong to defence to the plaintiffs’ action. Further, the costs decision implicated the defendants’ conduct, and the appeal from it challenged findings of the defendants’ misconduct:
[19] In concluding that the time for commencement of an action against the AGC began to run “at the earliest” on June 26, 2014, the motion judge relied on the civil forfeiture proceedings that were commenced and pursued by the appellants against the respondents. She observed that the appellants, in undertaking such proceedings, were pursuing a process that, if successful, could have left the respondents with little to no loss to claim. We agree with the motion judge’s observation that it is important not to conflate the considerations under the first three elements of the discoverability test with the appropriate means element set out in s. 5(1)(a)(iv). The question is not, as the appellants suggest, whether an action could have been brought by the respondents, but when it was appropriate to do so. While knowledge of the extent of a plaintiff’s damages is not required under (i) to (iii), the motion judge was entitled to take into consideration the ongoing forfeiture proceedings that the parties were engaged in, when determining under s. 5(1)(a)(iv) whether it was appropriate for the respondents to bring an action. She concluded that, in the particular circumstances, it would have been premature to require the respondents to launch a lawsuit, as they were embroiled in the civil forfeiture application, a related matter brought against them “by the state with all of its resources”, which could have rendered their lawsuit non-viable and unworthy of pursuing.
[20] We see no error in the motion judge’s determination that it was premature for the respondents to commence their action until after the civil forfeiture proceedings were completed on June 26, 2014. She came to this conclusion after considering all of the relevant circumstances. The facts were unusual. Despite the fact that the AGC was unsuccessful in obtaining an order for criminal forfeiture and was subject to an order for costs that was critical of its conduct, the provincial authorities commenced civil forfeiture proceedings with the same objective – to seize the proceeds of sale of the respondents’ properties. DC Hayhurst was involved in both sets of proceedings. If the civil forfeiture proceedings had been successful, no doubt all of the appellants would have had a strong defence to any action that was commenced by the respondents. The conclusion, on this record, that it was premature for the respondents to pursue a civil action while they were continuing to oppose the forfeiture proceedings, reveals no error.[23] The motion judge recognized that West J.’s costs decision “directly and explicitly addressed the conduct of the federal Crown”, and that he had determined that the Crown’s conduct “exhibited a marked and substantial departure from the reasonable standards expected of the Crown”. Nevertheless, she observed that costs against the Crown in such proceedings are a “rare and extraordinary remedy”, that the AGC’s appeal specifically sought to attack the findings of Crown misconduct, that there was precedent for this court taking a very different view, and accordingly, that there was a clear risk that West J.’s findings of misconduct might be rejected on appeal, which would have seriously undermined any action brought by the respondents. The fact that there was another ongoing proceeding – the appeal of West J.’s costs decision – that could have impacted the viability of the respondents’ action was relevant to the application of s. 5(1)(a)(iv) in the circumstances of this case.
[25] We see no palpable and overriding error in the motion judge’s conclusion that the time began to run under s. 5(1)(a)(iv) in respect of the claims against all appellants on April 14, 2016, when this court released its decision dismissing the appeal from West J.’s costs order. Again, the circumstances were highly unusual. The same parties were already involved in litigation commenced and pursued by the appellants, in which the appellants’ alleged misconduct had taken centre stage. In pursuing the appeal, the AGC did not accept and sought to overturn the findings of West J., ensuring that whether or not there was prosecutorial misconduct remained a live issue until it was determined by this court. As the motion judge reasonably observed, there was a clear risk of a successful appeal, which would have impacted the viability of an action based on the same allegations of prosecutorial misconduct.
[27] After assessing the claims against all parties, it was open to the motion judge to conclude, as she did, that a successful appeal of the costs decision would have undermined the claims against all of the appellants, including the OPP Defendants. This was not, as the appellants contend, a tactical decision on the part of the respondents, as in Markel, or simply a question of a plaintiff waiting until the end of other proceedings that might improve their chances of success in a civil action, as in Sosnowski v. MacEwen Petroleum Inc., 2019 ONCA 1005, 441 D.L.R. (4th) 393. Rather, as in Winmill v. Woodstock (Police Services Board), 2017 ONCA 962, 138 O.R. (3d) 641, at para. 31, leave to appeal refused, [2018] S.C.C.A. No. 39, the result of the proceedings in which the parties were already involved, including the determination by this court of the prosecutorial misconduct allegations, would have been a “crucial, bordering on determinative factor” in whether the respondents had a civil claim to pursue.
