The Court of Appeal recently held in Fennell and Galota that the plaintiff’s due diligence is only factor in the discovery analysis. This introduced some uncertainty into the test for determining whether to add a defendant after the presumptive expiry of the limitation period, which is, essentially, whether the plaintiff exercised sufficient due diligence to found a discovery argument.
Last June, in Wong v. Salivan Landscape Ltd., Master Haberman held that due diligence is no longer a consideration in determining whether to add a defendant.
[31] The Court of Appeal has recently asked similar questions in Fennell v. Deol, 2016 ONCA 249 (CanLII). There, Stewart J. concluded that while due diligence is a factor that informs the analysis of when a claim ought to have been reasonably discovered, lack of due diligence is not a separate and independent reason for dismissing a plaintiff’s claim as statue-barred.
[32] Though the issue arose in Fennel in the context of an appeal from a summary judgment motion dismissing the claim against Deol, in my view, a similar approach should be taken in the context of a motion to add a party after the expiry of the presumptive limitation period. A motion should not be dismissed on the basis of a lack of diligence.
[33] Even before Fennell, the court had already sought to dilute the somewhat heavy onus that some case law had thrust on plaintiffs as a means of demonstrating their due diligence. As Baltman J. noted (in Welsch v. Peel Standard Condominium Corp. No. 755, 2013 ONSC 7611 (CanLII)),Lauwers J. (as he then was) stated in Madrid v. Ivanhoe Cambridge Inc. 2010 ONSC 2235 (CanLII), that it is not in the interests of justice to impose an overly muscular level of pre-discovery due diligence; the parties should not have to conduct a pre-discovery form of discovery. Baltman J. confirmed that as each case is unique and will turn on its own facts, whether the steps taken in each case will be sufficient will also vary.
Arguably, this rejects about twelve years of jurisprudence beginning with Master Dash’s decision in Wong v. Adler. That’s problematic. The purpose of Master Dash’s test is to require something more of a plaintiff than a mere invocation of discoverability to obtain leave to add a defendant after the presumptive expiry of the limitation period. Master Dash required the plaintiff to establish reasonable due diligence to ensure there would be some substance to the discoverability argument. It’s not clear what test Master Haberman proposed to use, if any, instead.
I don’t think that the Court of Appeal intended to change. I agree with Justice Emery’s analysis in Fontanilla v. Thermo Cool Mechanical:
[34] The Court of Appeal agreed. Galota does not change the law regarding the expectation that a party will exercise reasonable diligence to determine the facts that would support a claim for which a proceeding may be brought to seek a remedy. The court inGalota relied on the decision of Justice Van Rensburg in Fennell v. Deol,2016 ONCA 249 (CanLII). The court in Fennellrecognized that, although due diligence is a factor that the court must consider at the time a claim ought reasonably to have been discovered, lack of due diligence is not in and of itself a reason for dismissing a plaintiff’s claim as statute barred.
[35] Instead, due diligence must be considered a part of the analytical process to determine on an objective basis the day on which a reasonable person with abilities and in circumstances of the person affected by the claim first would have known of the matters referred to in s. 5(1)(a) to bring an action. As Justice Van Rensburg explained in Fennell at paragraph 24:
[24] Due diligence is part of the evaluation of s. 5(1)(b). In deciding when a person in the plaintiff’s circumstances and with his abilities ought reasonably to have discovered the elements of the claim, it is relevant to consider what reasonable steps the plaintiff ought to have taken. Again, whether a party acts with due diligence is a relevant consideration, but it is not a separate basis for determining whether a limitation period has expired.
I expect the courts will prefer Justice Emery’s approach.
