Discovery

Ontario: The knowledge required for discovery

This is a post purely to indulge my pedantry.  In Reece v. Toronto (Police Services Board), the Court of Appeal said this about discovery:

[5]         The motion judge correctly found that discoverability for the purpose of limitations is based upon knowledge of the facts necessary to support a claim and does not require knowledge of the law that supports the claim.

This isn’t quite right.  Discoverability for the purpose of limitations–what other purpose to does the principle have?–is codified in s. 5 of the Limitations Act and requires knowledge of the four discovery matters.  The facts necessary to support a claim are, pursuant to the definition in the s. 1 of the Limitations Act, but only two: wrongful conduct and resulting loss.  The existence of a claim and the discovery of a claim are different issues.

Ontario: Appealing s. 5 analyses

Nicholson v. McDougall is a reminder that the omission of a s. 5 analysis isn’t necessarily a ground for appeal:

[31]           There is no reference to s. 5 at all, or any of its detailed requirements, in the Reasons for Decision.  I agree with the respondent that this omission from the Reasons for Decision is not sufficient to grant this appeal.  The Deputy Judge could have implicitly applied s. 5, including the presumption in s. 5(2), without expressly referring to it.  To assess whether the Deputy Judge did so and therefore complied with the Limitations Act requirements, I begin with the law regarding s. 5(2) and then I will move to how it applies in this case.

Ontario: the Court of Appeal on the evidence required for discovery

It sometimes happens that I miss notable decisions.  And so, better late than never, I draw Crombie Property Holdings Limited v. McColl-Frontenac Inc. to your attention.

These are the noteworthy aspects of the Court of Appeal decision:

1.  It recaps the standard of review for limitations analyses:

[31]      The Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7 (CanLII), [2014] 1. S.C.R. 87, at para. 81, established the standard of review on appeal of a summary judgment. The court stated that, “[w]hen the motion judge exercises her new fact-finding powers under Rule 20.04(2.1) and determines whether there is a genuine issue requiring a trial, this is a question of mixed fact and law”, reviewable only for a “palpable and overriding error”, unless there is an “extricable error in principle”. Further, the question whether a limitation period expired prior to the commencement of an action is typically a question of mixed fact and law and therefore subject to review on a “palpable and overriding error” standard: Longo v. MacLaren Art Centre Inc., 2014 ONCA 526(CanLII), 323 O.A.C. 246, at para. 38. A “palpable and overriding error” is “an obvious error that is sufficiently significant to vitiate the challenged finding of fact”: Longo, at para. 39.

2.  It succinctly summarises the evidentiary burden on a summary judgment motion to dismiss on the basis of an expired limitation period:

[33]      In order to obtain a summary dismissal of the action, the moving parties were required to establish that there was no issue requiring a trial about their limitation defence. The specific issue was whether Crombie’s claim in respect of the environmental contamination of its property was “discovered” within the meaning of s. 5 of the Limitations Act, 2002 before April 28, 2012.

3.  It cites Van Allen for the principle that it is reasonable discovery and not the mere possibility of discovery the causes the limitation period to commence: see para. 35
It inaccurately describes the knowledge necessary to cause discovery of a claim:

[35]      The limitation period runs from when the plaintiff is actually aware of the matters referred to in s. 5(1)(a)(i) to (iv) or when a reasonable person with the abilities and in the circumstances of the plaintiff first ought to have known of all of those matters: Longo, at para. 41. The knowledge sufficient to commence the limitations clock has been described as “subjective” knowledge or “objective” knowledge.

This paragraph appears to conflate the amount of knowledge required by s. 5 with the subjectivity of the knowledge.  A claimant requires prima facie knowledge.  This is knowledge that is greater than suspicion but less than certainty.  See for example Brown v. Wahl at 15.  Then there is question of whether the plaintiff subjectively or subjectively-objectively had this knowledge (not purely objectively, as the Court suggests in this decision, because the question asked in s. 5(1)(b) is a “modified objective” test as it doesn’t ask about the knowledge of a reasonable person, but a reasonable person with the abilities and in the circumstances of the claimant.

Knowledge of a possible wrong (a mere suspicion) is insufficient for discovery of a claim; prima facie knowledge of an actual wrong is necessary:

[42]      That the motion judge equated Crombie’s knowledge of possible contamination with knowledge of actual contamination is apparent from her statement that “[a]ll the testing that followed simply confirmed [Crombie’s] suspicions about what had already been reported on” (at para. 31). It was not sufficient that Crombie had suspicions or that there was possible contamination. The issue under s. 5(1)(a) of the Limitations Act, 2002 for when a claim is discovered, is the plaintiff’s “actual” knowledge. The suspicion of certain facts or knowledge of a potential claim may be enough to put a plaintiff on inquiry and trigger a due diligence obligation, in which case the issue is whether a reasonable person with the abilities and in the circumstances of the plaintiff ought reasonably to have discovered the claim, under s. 5(1)(b). Here, while the suspicion of contamination was sufficient to give rise to a duty of inquiry, it was not sufficient to meet the requirement for actual knowledge. The subsurface testing, while confirmatory of the appellant’s suspicions, was the mechanism by which the appellant acquired actual knowledge of the contamination.

 

Ontario: More on adding defendants (and some pedantry)

Bhatt v. Doe has a good analysis of adding a defendant to proceeding after the presumptive expiry of the limitation period.  If you want to cite a recent decision, this is a good option.

In the spirit of pedantry I have two quibbles.  First, this:

[11]           The passing of a limitation period is fatal to a motion to add a party (Limitations Act, 2002, s. 21(1)). The doctrine of special circumstances is no longer applicable (Joseph v. Paramount Canada’s Wonderland, (2008), 2008 ONCA 469 (CanLII), 90 O.R. (3d) 401 at paras. 27 and 28 as cited in Parent v. Janandee Management Inc., [2009] O.J. No. 3763 (Master) at para. 29).

It’s now ten years since the Court of Appeal held that the special circumstances doctrine is no longer generally available.  Why do bar and bench feel compelled to make this point?   Who still argues special circumstances?

Second, this:

[12]           With respect to claims pursuant to the provisions of unidentified automobile coverage, discoverability is triggered when the insured knew or ought to have known about the material facts on which the claim is based. As stated by Justice Mackinnon in July v. Neal, 1986 CanLII 149 (ON CA), [1986] O.J. No. 1101 (C.A.) at para. 16:

…I have concluded that the time begins to run under such circumstances as the instant case, when the material facts on which the claim is based have been discovered or ought to have been discovered by the plaintiff by the exercise of reasonable diligence: Central Trust Co. v. Rafuse et al. [reported 1986 CanLII 29 (SCC), 31 D.L.R. (4th) 481], Supreme Court of Canada, released October 9 1986 – Le Dain J. (for the court) at p. 99 [p.535 D.L.R.].

See also July at para. 32, Hier v. Allstate Insurance Co. of Canada, 1988 CanLII 4741 (ON CA), [1988] O.J. No. 657 (C.A.) at para 35, Galego v. State Farm Mutual Automobile Insurance Co., 2005 CanLII 32932 (ON SCDC), [2005] O.J. No. 3866 (Div.Ct.) at paras. 8 and 9, Wilkinson v. Braithwaite, [2011] O.J. No. 1714 (S.C.J.) at paras. 31-35.

With respect to any claim, s. 5 of the Limitations Act determines discovery.  There is no “trigger” beyond knowledge of the discovery matters.  Cases decided under the former limitations scheme, and applying the common law discovery rule, are not helpful because, as here, they cause the court to frame the issue incorrectly.

Ontario: the great s. 18 debate

One of the few remaining unresolved limitation issues of real consequence is whether s. 18 is a deeming provision (it’s not) or merely alters the s. 5(2) presumption (it does).

Justice Charney’s decision in Gendron v. Thompson Fuels contains one paragraph (out of 431) the tends to support the latter interpretation:

[406]      I agree with Thompson’s position that the limitation period began to run on June 15, 2010, pursuant to s. 18 of the Limitations Act. At that point Mr. Gendron knew that he had a potential claim against Thompson Fuels for contribution and indemnity for the s.100.1 order made by the City. I do not accept the plaintiff’s argument that the limitation period did not begin to run until the ETR process had run its course. Section 18 specifically provides that the limitation period begins to run “the day on which the first alleged wrongdoer was served with the claim in respect of which contribution and indemnity is sought”, and there is no dispute that Mr. Gendron was served with the City’s order on June 15, 2010.

By this reasoning, it’s arguable that if Gendron had learned of the potential claim for contribution and indemnity on a date after service of the City’s order, then the s. 18 limitation period would have commenced after until that date.

 

 

Ontario: undertaking alternative remedial processes can delay discovery

Presidential MSH Corporation v. Marr Foster & Co. LLP is another excellent decision from the Court of Appeal applying s. 5(1)(a)(iv) of the Limitations Act.  Where the plaintiff relies on an alternative process that would substantially eliminate its loss so that court proceedings would be unnecessary to remedy it, and the date the alternative process runs its course is reasonably ascertainable, a proceeding will not be an appropriate remedy until that alternative process concludes.

While this decision doesn’t break new ground, it clarifies the impact remedial measures can have on discovery of a claim.  This is of particular consequence in professional negligence claims, which was the case in Presidential.

The respondents filed the appellant’s corporate tax returns after their due date. As a result, the CRA denied tax credits that would have been available had the returns been filed on time.

The appellant received the CRA’s Notices of Assessment disallowing each of the claimed credits on April 12, 2010. When the appellant received the notices, he immediately asked the respodnents what to do and how to fix the problem.

The motion judge inferred that the respondents advised the appellant to retain a tax lawyer to determine how to solve the tax problem but didn’t advise him to obtain legal advice about a professional negligence claim against the respondents.

The appellant did retain a tax lawyer on April 15, 2010, but there was no discussion of a possible action against the respondents. The tax lawyer filed a Notice of Objection to the CRA assessments, as well as an application for discretionary relief. The respondent helped the appellant prepare its appeals to the CRA by drafting the application for relief and helping the appellant and its lawyer with whatever else they needed, until at least November 2011.

By letter dated May 16, 2011, the CRA responded to the Notice of Objection advising that it intended to confirm the assessments. It did in fact confirm them on July 7, 2011.

The motion judge found that, as late as July 2011, there was still a reasonable chance that the application for discretionary relief would mitigate some or all of the appellant’s loss.

On August 1, 2012, the appellant issued its statement of claim against the respondents. This was more than two years after the initial denial by CRA of the credits, but within two years of CRA’s refusal to alter the assessments in response to the Notice of Objection.

The motion judge held that the appellants claim would have been appropriate while the CRA appeal was still ongoing because the appeal would not have fully eliminated the appellant’s claim against the respondents.  In particular, it would not have eliminated the appellant’s claim for the costs of retaining a tax lawyer to prosecute it.

Justice Pardu rejected this reasoning.  She summarised the applicable principles:

[20]      First, the cases suggest that a legal proceeding against an expert professional may not be appropriate if the claim arose out of the professional’s alleged wrongdoing but may be resolved by the professional himself or herself without recourse to the courts, rendering the proceeding unnecessary.

[…]

[26]      Resort to legal action may be “inappropriate” in cases where the plaintiff is relying on the superior knowledge and expertise of the defendant, which often, although not exclusively, occurs in a professional relationship. Conversely, the mere existence of such a relationship may not be enough to render legal proceedings inappropriate, particularly where the defendant, to the knowledge of the plaintiff, is not engaged in good faith efforts to right the wrong it caused. The defendant’s ameliorative efforts and the plaintiff’s reasonable reliance on such efforts to remedy its loss are what may render the proceeding premature.

[27]      Finally, I note that cases in which a defendant who is an expert professional attempts to remedy a loss that a plaintiff has discovered and alleges was caused by the defendant (engaging the potential application of s. 5(1)(a)(iv)) are distinct from  cases in which courts have held that  a client has not discovered a potential claim for solicitor’s negligence until being advised by another legal professional about the claim: see Ferrara, at para. 70; and Lauesen v. Silverman, 2016 ONCA 327 (CanLII), 130 O.R. (3d) 665, at paras. 25-31. In the latter category of cases, the issue is whether the plaintiff knew or ought reasonably to have knowninjury, loss or damage had occurred (under s. 5(1)(a)(i)) that was caused by or contributed to by an act or omission of the defendant (under ss. 5(1)(a)(ii) and (iii)). Section 5(1)(a)(iv) comes into focus where the plaintiff knew or ought reasonably to have known of his or her loss and the defendant’s causal act or omission, but the plaintiff contends the limitation period was suspended because a proceeding would be premature. Although discoverability under more than one subsection of s. 5(1)(a) may be engaged in a single case, it is important not to collapse the analysis of discoverability of loss or damage and the defendant’s negligence or other wrong with the determination whether legal action is appropriate although other proceedings to deal with the loss may be relevant to both questions.

(3)         The effect of other processes which may eliminate the loss

[28]      A second line of cases interpreting and applying s. 5(1)(a)(iv) of the Act involves a plaintiff’s pursuit of other processes having the potential to resolve the dispute between the parties and eliminate the plaintiff’s loss.

[29]      This approach to discoverability is consistent with  the rule in administrative law that it is premature for a party to bring a court proceeding to seek a remedy if a statutory dispute resolution process offers an adequate alternative remedy and that process has not fully run its course or been exhausted: see Volochay v. College of Massage Therapists of Ontario, 2012 ONCA 541 (CanLII), 111 O.R. (3d) 561, at paras. 61-70.

[…]

[39]      Non-administrative, alternative processes have also been seen in other cases as having the potential to resolve a dispute, thus rendering a court proceeding inappropriate or unnecessary.

[…]

[45]      Many of the cases dealing with the effect of alternative processes on the appropriateness of a court proceeding have applied the concept of a proceeding being “legally appropriate” articulated by this court in Markel. Markel involved a dispute between sophisticated insurers claiming indemnity under statutory loss transfer rules. The limitations issue that arose concerned whether a legal proceeding was “inappropriate” while settlement discussions between the parties were ongoing and thus, whether a claim was not discovered until these negotiations broke down.

[46]      Recall that, in Markel, the court held that the term “appropriate” in s. 5(1)(a)(iv) means “legally appropriate”. This interpretation avoided entangling courts in the task of having to “assess [the] tone and tenor of communications in search of a clear denial” that would indicate the breakdown of negotiations between the parties. That would permit a plaintiff to delay the discoverability of a claim for “some tactical or other reason” and “inject an unacceptable element of uncertainty into the law of limitation of actions” (at para. 34).

[47]      Similarly, in 407 ETR Concession Company, at para. 47, Laskin J.A. stated that the use of the term “legally appropriate” inMarkel “signified that a plaintiff could not claim it was appropriate to delay the start of the limitation period for tactical reasons, or in circumstances that would later require the court to decide when settlement discussions had become fruitless” (emphasis added).

[48]      These cases instruct that if a plaintiff relies on the exhaustion of some alternative process, such as an administrative or other process, as suspending the discovery of  its claim, the date on which that alternative process has run its course or is exhausted must be reasonably certain or ascertainable by a court.

Accordingly, the motion judge erred in holding that the appellant knew or ought to have known that its proceeding was appropriate as early as April 2010, when it received the CRA’s Notices of Assessment disallowing its tax credits. The proceeding was not appropriate, and the appellant’s underlying claim was not discovered, until May 2011, when the CRA responded to the appellant’s Notice of Objection and advised that it intended to confirm its initial assessments. The motion judge erred by equating knowledge that the respondents had caused a loss with a conclusion that a proceeding would be an appropriate means to seek a remedy for the loss.

Had the respondents together with the tax lawyer prosecuted the CRA appeal successfully, the appellant’s loss would have been substantially eliminated, and it would have been unnecessary to resort to court proceedings to remedy it. The fact that the appellant would have been unable to recover the fees it paid the tax lawyer, except through litigation, was inconsequential. It is the claim that is discoverable, not the full extent of damages the plaintiff may be able to recover. It would not have been appropriate under s. 5(1)(a)(iv) of the Act for the appellant to commence a proceeding until the respondents ameliorative efforts concluded.

The CRA appeal process had the potential to eliminate the appellant’s loss. As an alternative process to court proceedings, it could have resolved the dispute between the appellant and the respondents. These results would have made a proceeding unnecessary. It would not have been appropriate for the appellant to commence a proceeding until the CRA appeal process was exhausted in May 2011.

The court’s decision in Markel, as interpreted in 407 ETR Concession Company, about the meaning of the concept of a proceeding being “legally appropriate” under s. 5(1)(a)(iv) of the Act supported the appellant’s position. It was not a case where the appellant sought to toll the operation of the limitation period by relying on the continuation of an alternative process whose end date was uncertain or not reasonably ascertainable. It was clear that the end date of the CRA appeal was when the CRA responded to the appellant’s Notice of Objection advising that it intended to confirm the assessments. Thus the motion judge erred in invoking Markel to dismiss the appellant’s claim as time barred.

A last note: the Court of Appeal seems to still be ignoring its decision in Clarke where it held that  the section 5(1)(a)(iv) discovery criterion requires the claimant to have “good reason to believe he or she has a legal claim for damages”.  I don’t think any decision has followed this construction of the provision.

Ontario: the Court of Appeal can’t let go of the cause of action

The Court of Appeal’s endorsement in Kolosov v. Lowe’s Companies Inc. reads as if it were delivered 15 years ago when the former Limitations Act was still in force.

The Court of Appeal states the following about the law of the limitation of the intentional torts of false arrest and false imprisonment:

[11]      The law in relation to the commencement of the limitation period for the intentional torts of false arrest and false imprisonment, and associated Charter breaches, is well settled. As Chiappetta J. noted in Fournier-McGarry (Litigation Guardian of) v. Ontario, 2013 ONSC 2581 (CanLII), at para. 16:

A claim for the common law torts of false arrest, false imprisonment and breach of Charter rights arising there-from crystallizes on the date of arrest (see, Nicely v. Waterloo Regional Police Force, 1991 CanLII 7338 (ON SC), [1991] O.J. No. 460 (Ont. Div. Ct.), para. 14; Fern v. Root, 2007 ONCA 79 (CanLII),[2007] O.J. No. 397 (Ont. C.A.), para. 102).

In other words, the Court is stating that the limitation period commences when the cause of action accrues, the cause of action in question accrued on the date of the arrest, and so this is when the limitation period commenced, and no fact (such as when full police disclosure occurred), could alter this analysis.

This is plainly wrong.  Where to begin? Let’s try first principles:

  1. The Limitations Act applies to all claims pursued in court proceedings.
  2. The Limitations Act applies to claims, not causes of action. The language “cause of action” does not appear in the Limitations Act.  The accrual of a cause of action hasn’t determined the commencement of limitation period since 2004 when the Limitations Act came into force.
  3. Section 5 determines the commencement of the limitation period. It’s a factual analysis.  A fact such as when full police disclosure occurs may well have an impact on the discovery analysis.

This kind of anachronistic analysis does the law no favours.  The limitations scheme is confusing enough ; wonky outlier decisions like this aren’t helpful.

Ontario: discovery doesn’t require knowledge of culpability

Update: The Supreme Court denied leave to appeal.

In Dale v. Frank, the Court of Appeal reiterated that discovery of a claim doesn’t require knowledge that the defendant’s act or omission was culpable.  To require a plaintiff to know with certainty that the defendant’s wrongful conduct caused her injuries would require her to come to a legal conclusion as to the defendant’s liability.  This is too a high a bar, and not what s. 5(1) of the Limitations Act requires.

The Appellants also argued that the motion judge erred by failing to consider s. 5(1)(a)(iv) of the Limitations Act in her analysis. The Court of Appeal rejected this argument.  The reasons permitted the inference that the motion judge considered this discovery matter:

[9]         We are not persuaded by this submission. Although the motion judge did not undertake a distinct analysis under this provision, her conclusion that each of the appellants knew or ought to have known of the other elements in s. 5(1)(a) was sufficient to infer that she also concluded that the appellants knew or ought to have known that a proceeding would be an appropriate means to seek a remedy for their losses even before the 2011 press release about Dr. Frank.

Unfortunately, in making this point the Court quoted its decision in Lawless for the principle that discovery requires the prospective plaintiff to know the material facts necessary to make a claim.  Knowledge of the material facts of the claim does not include knowledge of the matter in s. 5(1)(a)(iv)—that a claim is an appropriate remedy to the loss.  It’s disappointing to see the Court of Appeal continuing to rely on Lawless, given the mischief it causes.

 

Ontario: due diligence and motions to add a defendant

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.

Ontario: bad limitations analyses are why we can’t have nice things

Two recent decisions contain limitations analyses sufficiently flawed for me to ask that you indulge my pedantry.  This lesson is titled A bad limitations analysis makes everyone lose.   

 In Lawyers’ Professional Indemnity Company v. Lloyd’s Underwriters, the analysis begins with a flawed premise resulting in more questions than the decision answers.

LawPro applied for a declaration that Lloyd’s was obliged to contribute to the defence costs of a common insured.  Lloyd’s took the position that the LawPro’s claim for contribution was statute-barred.  Justice James considered the issue:

 

[18]           On the facts present here, the entitlement of the applicant to seek a contribution from the respondent has not proscribed. I base this view on my reading of section 5(1) of the Limitations Act and in particular sub-clause 5(1)(a)(iv). There is no mandated single point in time for the applicant to request a contribution from the respondent. For the LimitationsAct to apply, it would be necessary to conclude that the claim, having been “discovered” and the request for compensation having been rejected by the opposing party, “a proceeding would be the appropriate means to seek a remedy”. Put another way, when the applicant requested a contribution from the respondent and the respondent declined the request, was it appropriate for the applicant to respond by commencing an action? I would say not. Not enough was known to say that the claim had been discovered. It could equally be appropriate to await further developments in the claim against the insured and to defer bringing the matter to a head until more information is known and the facts had emerged with greater clarity.

“For the Limitations Act to apply…?”.  This is a bad start.  The Limitations Act applies to all claims pursued in court proceedings (subject to the s. 2 exceptions), not merely those that have been discovered.

The analysis ought to have begun with the the first question in any limitations analysis:  is there claim?  Limitation periods apply to proceedings commenced in respect of a claim. If a proceeding doesn’t advance a claim, it’s not subject to a limitation period.

Assuming LawPro did have a claim, the next question ought to have been determining the act or omission that the claim seeks to remedy.  The date of the act or omission is when the presumptive limitation period commences.

If LawPro brought the application within two years of that date, its application was timely.  If not, the next question ought to have been when a reasonable person with LawPro’s abilities and in its circumstances ought to have discovered the claim.  For its application to be timely, LawPro would have needed to file it within two years of this date.

When LawPro ought to have discovered its claim required asking when it ought to have known of its loss, that wrongful conduct caused the loss, and that it was Lloyd’s wrongful conduct.  It seems likely that it ought to have known all of this on the day of Lloyd’s refusal.  We can’t be sure, because the limitations analysis doesn’t determine this.

Instead, there are conclusions without explanation.  Not enough was known at the time of the refusal for the claim to have been discovered.  What did LawPro not yet know?  It was appropriate for LawPro to await further developments that would provide more information and greater factual clarity.  What information and factual clarity did LawPro require? Why was it inappropriate for LawPro within the meaning of s. 5(1)(a)(iv) to use a proceeding as remedy for its loss on the date of Lloyd’s refusal?  The analysis answers none of these questions.  Perhaps it’s correct, but it’s impossible for the reader to know.

In Leblanc v. Glass, the plaintiff Leblanc claimed that the defendants Glass and Vitiello conspired to deprive her of properties and committed breach of trust.  Vitiello moved for summary judgment on the basis that Leblanc’s claim was statute-barred.

Justice Hennessy framed the issue:

[9]               In order to determine the issue of discoverability, the following questions must be addressed. The answers will come from the pleadings, the productions or the examinations:

a.      What did Jonathan A. Glass tell Marie Leblanc?  What did Marie Leblanc discover in Feb 2014?

b.      What did Jonathan A. Glass disclose that Marie Leblanc did not already know or could have known?

c.      Did the contents of Jonathan A. Glass’ disclosure amount to evidence of fraud, conspiracy or breach of trust against Civita Vitiello?

The discovery analysis may require answering these questions, but they are not the questions that determine discovery.  Discovery, as we know, turns on knowledge of the matters in s. 5 of the Limitations Act.  Again, to determine the date of discovery you ask, in this order, what is the act or omission that is the basis of the claim, and when would a reasonable person with the abilities and in the circumstances of the plaintiff have known of her loss, that an act or omission caused the loss, that the defendant caused the act or omission, and that a proceeding was an appropriate remedy for the loss.

Importantly, the common law discovery principle does not determine discovery within the meaning of the Limitations Act:

 

[21]           The obligation is on the plaintiff is to use reasonable diligence in discovering the material facts in relation to the claim. The limitation period will run once the plaintiff knows the identity of the tortfeasor and that some damage has occurred. (Peixeiro v Haberman 1997 CanLII 325 (SCC), [1997] 3 S.C.R. 549, at para 18) The plaintiff is then required to lead sufficient evidence before the court showing that they exercised this reasonable diligence.

A plaintiff does not discovery her claim under the Limitations Act when she knows the identity of the wrongdoer and that some damage has occurred.  She must also know that a proceeding is an appropriate remedy for her loss.

Lastly, it is long settled that the doctrine of special circumstances does not apply to the Limitations Act:

[34]           The limitation period under s. 4 of the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B applies. There are no special circumstances justifying an extension of the limitation.There is no reason to consider special circumstances, because the principle of special circumstances is of no application.

Muddled limitations analyses like these are not helpful to the parties or the jurisprudence.