In Intact Insurance Company v. Lombard General Insurance, the Court of Appeal held that laches can’t defeat an otherwise timely claim.
The court reviewed the legislative history of the Limitations Act and concluded that the removal of the laches-saving provision was intentional, and the absence of this provision overrules any suggestion that laches might bar the commencement of a proceeding to pursue an unexpired legal claim. The court’s review of the legislative history is the most thorough since its decision in York Condominium Corporation No. 382 v. Jay-M Holdings Limited, and will be helpful whenever a consideration of the act’s legislative history is appropriate.
The comprehensiveness of the limitations scheme also informed the court’s decision:
[54] As I note above, the old Limitations Act applied only to a closed list of enumerated causes of action and not to civil actions in general. Equitable causes of action, with few exceptions, were outside of its scope. The Limitations Act, 2002 “represents a revised, comprehensive approach to the limitation of actions”: Joseph v. Paramount Canada’s Wonderland, 2008 ONCA 469 (CanLII), 90 O.R. (3d) 401, at para. 8. In Joseph, this court concluded that the common law doctrine of special circumstances had no application under the new, comprehensive Limitations Act, 2002. That doctrine had allowed a court to add or substitute a party or to add a cause of action after the expiry of a limitation period where special circumstances existed, unless the change would cause prejudice that could not be compensated for with either costs or an adjournment. Permitting a defendant to invoke the equitable doctrine of laches because a legal claim has an “equitable flavour” would be inconsistent with the comprehensive approach to the limitation of actions represented by the Limitations Act, 2002.
[55] Permitting a defendant to rely on the defence of laches where the claim is a legal claim and subject to and within the basic limitation period prescribed under the Limitations Act, 2002 would also be counter to the purpose of that Act of promoting certainty and clarity in the law of limitation periods: msi Spergel Inc. v. I.F. Propco Holdings (Ontario) 36 Ltd., 2013 ONCA 550, 117 O.R. (3d) 81, at para. 61.
The court was explicit in limiting the scope of its decision:
[57] I wish to make clear that this decision does not address the availability of equitable defences (such as waiver, estoppel and acquiescence) to the extent not founded solely on a plaintiff’s delay in initiating its claim. Nor do I suggest that delay in seeking equitable relief such as an injunction could not be a relevant factor in deciding whether such equitable relief should be granted. This decision considers whether a defendant seeking legal relief within the basic limitation period prescribed under the Limitations Act, 2002 can rely on the delay-based defence of laches.
This isn’t an especially surprising decision given the trend toward emphasising the comprehensive nature of the limitations regime. The alternative would have been a reversion to a classification of actions approach to limitation periods, where ascertaining the applicable limitation period would require first classifying the claim as equitable or legal, and then determining whether the limitation period in equity is shorter than in law.
I also note the decision’s helpful summary of laches jurisprudence at paragraphs eight through twelve.
