Ontario: Section 18 supersedes the common law

Section 18 of the Limitations Act provides when the limitation period for a claim for contribution and indemnity commences:

Contribution and indemnity

18. (1) For the purposes of subsection 5 (2) and section 15, in the case of a claim by one alleged wrongdoer against another for contribution and indemnity, the day on which the first alleged wrongdoer was served with the claim in respect of which contribution and indemnity is sought shall be deemed to be the day the act or omission on which that alleged wrongdoer’s claim is based took place.

In the common law, where a party has protected itself from liability by contract from the plaintiff, the defendant can’t compel the protected party to share the burden of compensating the plaintiff.  Does section 18 of the Limitations Act supersede the common law?

In Weinbaum v. Weirdberg, Justice Dow held, correctly I think, that it does:

[8]               The source of the position taken by the third parties is the Supreme Court of Canada decision in Giffels Associates Ltd. v. Eastern Construction Co., 1978 CanLII 39 (SCC), [1978], 2 S.C.R. 1346, which reviewed a similar situation.  In its reasons, Chief Justice Laskin (at page 1355) assumed where a plaintiff chose to sue only one of two contractors that each had a separate contract with the plaintiff after the plaintiff suffers damages from concurrent breaches of those contracts, it would be inequitable for that one contractor to bear the entire brunt of the plaintiff’s loss.  However, the court accepted that it was open to one of the contractors to protect itself from liability by a term in its contact and, as a result, the other contractor could not assert a right which would go behind that agreement and force the protected contractor to share in compensating the plaintiff for its losses.

[9]               This principle has been accepted by the Supreme Court of Canada as recently as July 29, 2011 in R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42 (CanLII), [2011] 3 S.C.R. 45, at paragraph 29.  The principle has also been referred to in the decision of this court released November 24, 2011, Hiram Walker & Sons Ltd. v. Shaw Stone Webster Canada L.P.,2011 ONSC 6869 (CanLII), at paragraph 61.

[10]           This compares with the reasons of Justice Feldman on behalf of a five-member panel of the Court of Appeal inWaterloo Region District School Board et al. v. CRD Construction Ltd. et al., 2010 ONCA 838 (CanLII) where the defendant Truax Engineering Ltd. (“Truax”) provided engineering services in the rebuilding of a wall of a gymnasium of the plaintiff.  Truax completed its work by February 19, 2003 and (then) section 46(1) of the Professional Engineering Act,R.S.O. 1990, c.P.28, provided a 12-month limitation period for actions against it.  The plaintiff’s action was not commenced until June 23, 2008.  Defendants in the action crossclaimed against each other within the two years permitted by theLimitations Act, supra, and the motion by Truax for summary judgment dismissing the crossclaims was denied by the motions judge and on appeal.  No direct consideration was given to the principles enunciated in Giffels Associates Ltd. v. Eastern Construction Co., supra.

[11]           However, Justice Feldman did refer to the decision of HSBC Securities (Canada) Inc. v. Davies, Ward & Beck,2005 CanLII 1626 (ON CA), [2005] O.J. No. 277 (C.A.) which reviewed the Giffels decision (at paragraph 17).  The party in that case in the position of Weidberg submitted it preserved the integrity of the limitation regime and Justice Feldman ruled to the contrary.  As a result, I shall as well.  While the Giffels reasoning is logical and fair, it is also clear Justice Feldman accepted the intent of the legislature to alter the law so that, as indicated in paragraph 24 of her decision, “a claim for contribution and indemnity, whether in tort or otherwise, now has a two-year limitation period that is presumed to run from the date when the person who seeks contribution and indemnity is served with the plaintiff’s clam that gives rise to its claim over.”