The Court of Appeal in Prescott & Russell (United Counties) v. David S. Laflamme clarifies some interesting aspects of motions for to add a defendant after the presumptive expiry of the limitation period.
The motion judge held that the plaintiff could add the proposed defendant “as a party to the litigation since its actions to do so were within the limitation period” (presumably meaning that the plaintiff moved to add the proposed defendant within the limitation period). Like me, you might think this was a finding of timeliness precluding a limitations defence. Not so, held the Court of Appeal. The Order was without any language declaring the timeliness of the claims against the proposed defendant, and, notwithstanding the foregoing, the reasons were apparently without any language suggesting that the motion judge made a final determination regarding the limitations defence.
Because the Order did not preclude a limitations defence, it was not a final determination of the proposed defendant’s rights and therefore interlocutory.
These are the relevant paragraphs:
[7] The distinction between a final and interlocutory order for the purposes of determining the appropriate appellate forum is not always easy to make: see Salewski v. Lalonde, 2017 ONCA 515 (CanLII); Azzeh v. Legendre, 2017 ONCA 385 (CanLII). In the present context, the order will be said to be final if it deprives WSP of a substantive defence. If WSP can no longer rely on the Limitations Act defence, the order is final. However, if WSP can raise the Limitations Act defence at trial, the order is not final. To determine whether the order is final or interlocutory, one must examine the terms of the order, the motion judge’s reasons for the order, the nature of the proceedings giving rise to the order, and other contextual factors that may inform the nature of the order.
[8] Looking first at the order itself, there is nothing in the language to suggest that any final determination was made on theLimitations Act issue. The order, presumably drawn with the cooperation of counsel, makes no reference to the Limitations Act or any findings made in respect of that Act. The order simply allows the respondent to add WSP as a defendant.
[9] The motion judge’s reasons contain no language suggesting that any finding made in respect of the application of the Limitations Act had application beyond the motion itself. The motion judge did not purport to decide the issue for any purpose other than the determination of the motion to add WSP as a party.
[10] The nature of the motion is also relevant to the nature of the order arising from the motion. Some motions tend to generate final orders. For example, orders made on r. 21 motions brought to determine a question of law, will generally apply to the litigation as a whole. Depending on the question of law decided, the order may well be final. Motions to add parties that are successful, however, do not as a rule generate findings that are binding in the rest of the litigation.
[11] We also cannot accept the contention that because the motion judge was required to make a finding as to the application of the Limitations Act, her finding must be regarded as binding in the litigation and therefore final. Section 21 of the Limitations Actforbids adding a party where the limitation period has expired. It does not foreclose adding a party absent an affirmative finding that the limitation period has not expired.
[12] Having regard to the factors outlined above, we conclude that the trial judge’s determination that the action was brought within the limitation period was made for the purposes of the motion only. The motion judge was satisfied that, for the purposes of determining whether to add WSP as a party, the limitation period had not expired.
[13] The order under appeal is interlocutory. This court has no jurisdiction to hear the appeal. WSP may, if so advised, seek leave to appeal in the Divisional Court, or it may raise the limitations argument at trial.
I confess that I’m not entirely persuaded by the Court’s reasoning. It’s settled law (or at least was settled until this decision) that on a motion for leave to add a defendant, the court can determine the timeliness of the claim. That is, the court can find that the plaintiff has established that it discovered its claim against the proposed defendant within the limitation period. The court would then make the order denying the proposed defendant leave to plead a limitations defence.
I wonder whether the issue here was nothing more than the plaintiff neglecting to insist on such language in the order given the motion judge’s finding that the plaintiff brought the motion in time.
Lastly, I indulge some pedantry in regards of legal sloppiness:
[3] On the motion, the respondent contended that its claim against WSP was not reasonably discoverable until a date within the two year limitation period. WSP contended that the respondent had ample information upon which to base its claim years earlier. The motion judge accepted the respondent’s position, concluding, at para. 38:
Consequently, I find that the United Counties [respondent] can add WSP as a party to the litigation since its actions to do so were within the limitation period.
[4] WSP appeals claiming that the motion judge erred in concluding that the claim could not reasonably have been discovered at a point beyond the applicable time limit under the Act. The respondent argues that the motion judge was correct in her analysis of the Limitations Act provisions. The respondent also raises a preliminary jurisdictional point. Counsel argues that the order under appeal is interlocutory and not final, meaning that any appeal lies with leave to the Divisional Court.
[5] The respondent acknowledges that if the order is not final, the respondent cannot claim that the order is binding on the trial judge, meaning that WSP can re-litigate the limitation issue at trial. Counsel has raised the issue, however, because in his submission, the jurisprudence from this court dictates that the order is interlocutory and cannot be appealed to this court.
A claim is not discoverable within a limitation period. Pursuant to s. 4 of the Limitations Act, it is the discovery of a claim that causes the limitation period to run.
The proper question on these motions is whether the plaintiff discovered the claim within two years of the motion. This isn’t because the limitation period runs retrospectively two years from the date of the motion. Rather, it’s because discovery of the claim any earlier than two years from the motion means the limitation period commenced earlier than two years from the motion, and therefore expired before the motion.
