Ontario: Court of Appeal narrows the s. 5(1)(a)(iv) “alternative process” principle

The Court of Appeal decision in Beniuk v. Leamington (Municipality) is an important addition to s. 5(1)(a)(iv) appropriateness jurisprudence.

It has become popular to argue that an alternative dispute resolution process with a clear and identifiable conclusion delays the appropriateness of a civil proceeding as a remedy, and therefore discovery of a claim.  Beniuk holds that this isn’t the law: whether an alternative process impacts on appropriateness is a question of fact that the plaintiff must prove.

The appellant in Beniuk argued that the Court of Appeal’s decision in 407 ETR stands for the principle that when there is an alternative dispute resolution process, an action becomes an appropriate remedy only when the alternative process concludes.  It followed that that the limitation period or the appellant’s action didn’t not run until the OMB confirmed that it did not have jurisdiction over its cause of action: if the OMB assumed jurisdiction, there would have been no need for the action; therefore, the OMB hearing was an alternative process that until concluded rendered an action inappropriate.

Nope, held the court.

A limitation period doesn’t run whenever there is an ongoing alternative process.  Whether an alternative process delays the running of time turns on the particular facts of each case.  Evidence is necessary to explain the basis for pursuing the alternative process rather than commencing a proceeding.

[60]      407 ETR does not stand for a general principle that a limitation period will not begin to run whenever an alternative process that might resolve the matter has not yet run its course. It is a matter of evidence. Indeed, Laskin J.A. noted, at para. 34, that when an action is “appropriate” will depend on the specific factual or statutory setting of each individual case, and that case law applying s. 5(1)(a)(iv) is of limited assistance because each case will turn on its own facts. In 407 ETR, the court considered the evidence on the motion about the statutory scheme and the effectiveness of the administrative process before deciding that it would be reasonable for such a process to run its course before a civil proceeding was appropriate.

[61]      Recently, several cases considering the application of s. 5(1)(a)(iv) have come before this court. The court has emphasized, echoing the words of Laskin J.A. in 407 ETR, that when a proceeding is appropriate will turn on the facts of each case: see, for example, Nelson v. Lavoie2019 ONCA 43147 C.C.P.B. (2d) 1, at para. 25, and Ridel v. Goldberg, 2019 ONCA 636436 D.L.R. (4th) 453, at para. 71.

[62]      This case did not involve an alternative process available under a statutory scheme. It did, however, involve an alternative process that the appellants were pursuing, as in 407 ETR, against the same party.

[63]      The fact that a plaintiff chooses to pursue an alternative process does not in itself suspend the running of the limitation period under s. 5(1)(a)(iv). Whether an alternative process will have this effect will depend on the particular factual circumstances and the evidence before the court in determining the limitations issue. In this case, there was no evidence to explain why the appellants chose to pursue the OMB route rather than commencing both an OMB proceeding and a civil action.

[74]      As I have already observed, 407 ETR does not stand for the general principle that it will always be appropriate to wait until another process has run its course before commencing a civil action in respect of a claim which has otherwise been “discovered” under s. 5(1)(a)(i), (ii) and (iii). It is incumbent on a party asserting that it was reasonable to pursue a claim in another forum to explain why this approach was reasonable. That is what occurred, and was ultimately successful, in the 407 ETR case.

[75]      While one of the principles recognized in connection with s. 5(1)(a)(iv) is the deterrence of unnecessary litigation, a plaintiff is not entitled in all cases to pursue one route, and to expect the limitation period to be tolled in respect of any other claim it may have in respect of its loss or damage. Said another way, s. 5(1)(a)(iv) does not permit a party to engage in litigation in stages for the same wrong. An example is Lilydale Cooperative Limited v. Meyn Canada Inc.2019 ONCA 761439 D.L.R. (4th) 385, where this court considered the submission that a limitation period in respect of a third party claim in Ontario was suspended while the defendant was seeking to establish that Alberta was the correct forum for the litigation. Feldman J.A. rejected the argument that it was not legally appropriate to commence a legal proceeding while another resolution process that might resolve the matter was ongoing. She held that such an interpretation of “appropriate” was inconsistent with the purpose of the Limitations Act and could extend the limitation period well beyond the two-year threshold in an uncertain and unpredictable manner. There were also no significant savings to be achieved by not commencing the third party claim until the forum challenge was complete.

Here, the OMB wasn’t an alternative process, but an alternative forum, and the availability of multiple forums doesn’t impact on discovery because the law deems a party to know the applicable legal principles (that is, which forum is correct):
[70]      While I can appreciate why the appellants may have thought they had a claim for injurious affection, it has always been a principle of limitations law that a plaintiff knows, or could by the exercise of reasonable diligence, determine what legal principles apply. See, for example, Boyce v. Toronto Police Services Board2011 ONSC 53, aff’d: 2012 ONCA 230, leave to appeal refused: [2012] S.C.C.A. No. 265, where Low J. stated, at para. 23:
Section 5(1)(a)(iv) does not import an idiosyncratic limitation period calibrated by the claimant’s familiarity with or ignorance of the law. The test is an objective one. While it is possible to envisage that a new kind of right might arise that has not been hitherto protected, thus making it arguable that a civil proceeding might not be seen objectively as an appropriate means to seek to remedy, a battery causing personal injury is a classic example of the kind of wrong that is appropriate for redress by court action. A citizen is presumed to know the law of the land. [Emphasis added.]

This strikes me as a material and reasonable narrowing of the s. 5(1)(a)(iv) “alternative dispute resolution process” principle.  Whether an alternative process impacts on discovery is a question of fact, and the plaintiff will need to establish that it was reasonable in the circumstances to allow the process to complete before commencing a proceeding.  This should discourage some of the more creative alternative process arguments, of which I see many.

Also noteworthy is the confirmation that an action in nuisance or negligence for damages relating to real property is “an action to recover land” for the purpose of RPLA and subject to its ten-year limitation period:

[42]      Subsection 2(1)(a) of the Limitations Act provides that the Limitations Act does not apply to proceedings to which the RPLA applies. Section 4 of the RPLA provides for a ten-year limitation period for an action to recover land:

 No person shall make an entry or distress, or bring an action to recover any land or rent, but within ten years next after the time at which the right to make such entry or distress, or to bring such action, first accrued to some person through whom the person making or bringing it claims, or if the right did not accrue to any person through whom that person claims, then within ten years next after the time at which the right to make such entry or distress, or to bring such action, first accrued to the person making or bringing it.

[43]      When the elements that do not apply to this case are removed, s. 4 provides that “no person shall bring an action to recover any land, but within ten years after the time at which the right to bring any such action first accrued to the person bringing it.” The issue here is whether the appellants’ claim is an “action to recover land” within the meaning of the RPLA.

 [44]      The appellants point to the definition of “land” in s. 1 of the RPLA:
 “land” includes messuages and all other hereditaments, whether corporeal or incorporeal, chattels and other personal property transmissible to heirs, money to be laid out in the purchase of land, and any share of the same hereditaments and properties or any of them, any estate of inheritance, or estate for any life or lives, or other estate transmissible to heirs, any possibility, right or title of entry or action, and any other interest capable of being inherited, whether the same estates, possibilities, rights, titles and interest or any of them, are in possession, reversion, remainder or contingency; [Emphasis added.]

[45]      They rely on the term “messuages”, which refers to a dwelling house, its outbuildings, the area immediately surrounding the dwelling, and the adjacent land appropriate to its use: McConnell v. Huxtable2014 ONCA 86118 O.R. (3d) 561, at para. 14. The appellants also parse out and rely on the phrase “any…right…of…action”. Putting these pieces together, the appellants submit that an “action to recover land” includes an action to recover rights that run with the land, and that a cause of action for nuisance is tied to and arises out of the right to use and enjoy land without substantial interference. Accordingly, the appellants submit that a cause of action for nuisance is an incorporeal or intangible right that runs with the property and is captured by the definition of “land” in the RPLA. They point to a passage in Equitable Trust Co. v. 2062277 Ontario Inc.2012 ONCA 235109 O.R. (3d) 561, where Perell J. (sitting on this court ad hoc) stated that the RPLA is intended to cover actions “affecting” land: Equitable Trust, at para. 28.

 [46]      I do not accept the appellants’ submission. There is no support in the jurisprudence that an action in nuisance or negligence for damages relating to real property is “an action to recover land” for the purposes of the RPLA. That land or real property is involved in an action does not mean that the RPLA applies: Harvey v. Talon International Inc.2017 ONCA 267137 O.R. (3d) 184, at paras. 51-52. Typically, actions to recover land seek to assert property rights. And Perell J.’s remark from Equitable Trust that the RPLA covers actions “affecting” land has been commented on specifically by this court, and later by Perell J. himself, as a statement that should be interpreted narrowly and not out of the context of that case.

Lastly, I note that the court stated the standard of review with respect to each limitations issue.  For whatever reason, the court frequently omits an explicit standard of review analysis when considering limitations issues.  This approach is helpful and I hope to see more of it.

[41]      The motion judge’s conclusion that s. 4 of the RPLA does not apply to the appellants’ civil action is reviewable on a standard of correctness: Housen v. Nikolaisen2002 SCC 33[2002] 2 S.C.R. 235, at para. 8. For the reasons that follow, I agree with the motion judge’s conclusion on this issue.

[53]      The question of whether a limitation period expired prior to the issuance of a statement of claim is a question of mixed fact and law and subject to review on the standard of palpable and overriding error: Longo v. MacLaren Art Centre Inc.2014 ONCA 526323 O.A.C. 246, at para. 38. However, where there is an extricable error of principle, the standard of review is correctness: Housen, at paras. 8 and 36.

[79]      The appellants contend that the motion judge made a palpable and overriding error when he concluded that their claim was statute-barred even on the basis of what he described as a “rolling limitation period”. A “palpable and overriding error” is “an obvious error that is sufficiently significant to vitiate the challenged finding of fact”: Longo, at para. 39.

Ontario: appealing from an arbitrator’s limitations decision

The decision in Tall Ships Landing Devt. Inc. v. City of Brockville is a rare example of an appeal to the court from an arbitrator’s limitations decision pursuant to ss. 45(2) and 46(1) of the Arbitation Act, 1991.  The arbitrator found the claim statute-barred without determining when the claims became discoverable or considering the claimant’s appropriateness argument. The application judge held that that the arbitrator’s reasons were inadequate, and asked for further submissions on the appropriate remedy:

[51]           In addition to finding that Tall Ships had waived its right to dispute the City’s determination of its remediation claims the Arbitrator also concluded that its claims were time-barred.  For Tall Ships to successfully challenge the dismissal of the claims, it must also show that he erred on the limitations issue.

[52]           In rejecting Tall Ships’ submissions on limitations, the Arbitrator stated summarily that the remediation claims “were certainly well beyond the two-year limitation period”.  He did not address Tall Ships’ argument that it would not have been legally appropriate for it to sue the City at the time. He did not make any finding about when the claims became discoverable.
[53]           The City contends that the Arbitrator’s failure to provide more detailed reasons is not an error of law.  It says that the Arbitrator did not need to elaborate on the limitations issue, because his conclusions on that issue were self-evident.  I disagree.
[54]           The Supreme Court has cautioned that adequacy (or rather inadequacy) of reasons is not, in of itself, a basis for quashing an arbitral award; Newfoundland and Labrador Nurses’ Union v. Newfoundland and Labrador (Treasury Board)2011 SCC 62[2011] 3 S.C.R. 708, at para. 14.
[55]           Tall Ships’ counsel points out that the decision in Newfoundland Nurses was not made in the context of an appeal from an arbitral award governed by the Arbitration Act, and that s. 38(1) of the Act explicitly requires that an arbitral award must state the reasons on which it is based.  It also relies on cases (Kalatzis v. Daniels2002 CarswellOnt 8527 (ONSC)Peters v. D’Antonio2016 ONSC 7141) where arbitrators provided no reasons at all.
[56]           In my view, s. 38(1) must be read in light of the principles articulated in Newfoundland Nurses, because the reasoning in that case is not at odds with the obligation to provide reasons.  The question explored by Justice Abella in that case was rather: when are the stated reasons sufficient?  The key passage in Newfoundland Nurses at para. 16 on this point applies equally in the context of a review under the Arbitration Act:
Reasons may not include all the arguments, statutory provisions, jurisprudence or other details the reviewing judge would have preferred, but that does not impugn the validity of either the reasons or the result under a reasonableness analysis.   A decision-maker is not required to make an explicit finding on each constituent element, however subordinate, leading to its final conclusion… .  [I]f the reasons allow the reviewing court to understand why the tribunal made its decision and permit it to determine whether the conclusion is within the range of acceptable outcomes, the Dunsmuir criteria are met.  [Internal citations omitted, emphasis added.]

[57]           Applying this test, I must consider whether the Arbitrator’s reasons permit me to understand why he concluded that Tall Ships’ remediation claims were time-barred.

[58]           Section 4 of the Limitations Act, 2002, SO 2002, c 24, Sch B. (the “Limitations Act”) provides that the applicable limitation period begins to run only when a claim is discoverable.  In its written submissions to the Arbitrator, Tall Ships argued that discoverability did not begin to run when it received the City’s responses to its claims, because it did not suffer any immediate loss.   It further argued that it would have been inappropriate for it to initiate a legal proceeding against the City at the time.
[59]           The Ontario Court of Appeal has consistently held that consideration of when a proceeding was an appropriate means to remedy a claim is an essential element in the discoverability analysis.  Failure to consider s. 5(1)(a)(iv) of the Limitations Act is an error of law: Presley v. Van Dusen2019 ONCA 66, at para. 15, and the decisions cited therein.
[60]           I infer, based on the Arbitrator’s summary handling of this issue, that he agreed with the City’s submission that the starting point for the two-year limitation period was Tall Ships’ receipt of the City’s responses to the claims.   There is nothing in the reasons, however, that allows me to understand, or even speculate, as to why the Arbitrator concluded that the claims were discoverable at that time.  He does not indicate any basis for finding that Tall Ships sustained a loss, as required under s. 5(1)(a)(i) of the Limitations Act, or that it was appropriate for it to begin legal proceedings at the time, as required under s. 5(1)(a)(iv).  As aptly noted by counsel for Tall Ships, a judge may be required to connect the dots but there must be dots to connect, and there are none here.
[61]           I conclude that the Arbitrator failed to provide any meaningful reasons for the rejection of Tall Ships’ limitation argument, and that there is nothing to indicate that he turned his mind to the discoverability issue.  His failure to comply with s. 38(1) of the Arbitration Act permits the court to set the award aside under s. 46(1)(7).  This was not a mere technical noncompliance with the Act, but an error which undermines the fairness of the arbitral process and the ability of the court to ascertain whether the Arbitrator’s award falls within the range of reasonable outcomes.

[187]      The Arbitrator’s errors were not trivial. They had a clear impact on the outcome of the arbitration. The Awards therefore cannot stand. I am not however in a position to vary the Awards.

[188]      Recognizing this, counsel for both parties at the hearing before me agreed that, if I concluded that the Arbitrator had made serious, reversible errors, I should solicit further submissions from them on the appropriate remedy. This would give the parties the opportunity to assess the best course of action in light of my reasons.  I expect that the parties will also wish to make submissions on costs.
[189]      I accordingly direct the parties, through counsel, to contact the trial management office in Ottawa to schedule a case management conference before me as soon as reasonably possible, so that a timetable for submissions on remedy and costs may be ordered. I encourage counsel to communicate with each other in advance of the case conference to see if they are able to agree on a timetable and cost order for my review and endorsement.

Ontario: A defendant’s expertise can impact on discovery even when the defendant isn’t a professional


The Court of Appeal’s decision in Presley v. Van Dusen is a reminder that a s. 5 analysis requires making findings with respect to each s. 5(1) discovery matter, and reliance on a defendant’s expertise may delay the appropriateness of a proceeding even when the defendant is not a professional.

This was an appeal from an appeal from a Small Claims Court trial decision.  The trial judge found that he could determine the commencement of the limitation period without considering s. 5(1)(a)(iv):

[9]         The trial judge did not consider the s. 5(1)(a)(iv) criterion as to when the appellants did know or should have known that a proceeding would be an appropriate means to remedy their claim. He gave the following reason for not considering s. 5(1)(a)(iv): “It is not necessary for me to make any determination under that subsection and I do not do so as I only have to find the earliest date and I have no difficulty, as I have said, in finding that that date was the spring of 2013.”

This is plainly an error of law; you can’t determine discovery without considering all four discovery matters.

The Divisional Court nevertheless upheld the trial judge’s decision.  Having determined when a reasonable person ought to have known of the discovery matters pursuant to s. 5(1)(b), it found that there was no requirement for the trial judge to make an explicit finding as to when the plaintiff ought to have known the matter in s. 5(1)(a)(iv).

The Court of Appeal overturned the Divisional Court’s order.  It was an error for the trial judge not to consider s. 5(1)(a)(iv).  The law required the trial judge to consider all four discovery matters:

[14]      The analysis of both the trial judge and the Divisional Court judge of ss. 5(1)(a)(iv), 5(1)(b) and s. 5(2) of the Limitations Act is flawed. The trial judge explicitly stated that he was not considering s. 5(1)(a)(iv). A determination under s. 5(1)(b) as to the date a reasonable person would have discovered the claim requires consideration of all four “matters referred to in clause (a)”. Similarly, the finding that there was insufficient evidence to rebut the presumption under s. 5(2) that the plaintiff knew all the matters referred to in s. 5(1)(a) cannot stand as there was no consideration of s. 5(1)(a)(iv).

[15]      This court has repeatedly held that consideration of when a proceeding was an appropriate means to remedy a claim is an essential element in the discoverability analysis and that failure to consider s. 5(1)(a)(iv) is an error of law: Gillham v. Lake of Bays (Township)2018 ONCA 667 (CanLII)425 D.L.R. (4th) 178, at paras. 33-34Kudwah v. Centennial Apartments2012 ONCA 777(CanLII), at paras. 1-2Har Jo Management Services Canada Ltd. v. York (Regional Municipality)2018 ONCA 469 (CanLII)91 R.P.R. (5th) 1, at paras. 21 and 35.

It’s common for the court to making a determination under s. 5(1)(b) without making explicit findings as to the plaintiff’s knowledge of the discovery matters (though I think everyone benefits from explicit findings).  What makes this case unusual, and something of an outlier, is that the trial judge made this s. 5(1)(b) determination while finding that it was unnecessary to consider one of the discovery matters.  That’s the kind of error that seems especially prevalent in the Small Claims Court.

The Court of Appeal undertook its own s. 5(1)(a)(iv) analysis, which is noteworthy for emphasising that the superior knowledge and expertise that might engage s. 5(1)(a)(iv) is not restricted to strictly professional relationships.  Accordingly, the plaintiffs could reasonably rely on the expertise of a person licensed to install septic systems:

[21]      These principles are applicable to the facts of this case. Van Dusen is licenced to install septic systems. The appellants contracted with him because of his special training and expertise. While the respondents argue he may not qualify as “an expert professional”, there can be no question he did have expertise upon which the appellants reasonably relied.

[22]      Moreover, reliance on superior knowledge and expertise sufficient to delay commencing proceedings is not restricted to strictly professional relationships: Presidential, at para. 26. I acknowledge that the previous cases where this court has made a finding that it was reasonable for the plaintiff to rely on the defendant’s superior knowledge and expertise have concerned defendants belonging to traditional expert professions. For instance, Brown v. Baum2016 ONCA 325 (CanLII)397 D.L.R. (4th) 161, involved a physician, Chelli-Greco v. Rizk2016 ONCA 489 (CanLII), involved a dentist, and Presidential MSH involved an accountant. However, recent Superior Court decisions have applied the superior knowledge and expertise prong of Presidential MSH to persons who are members of non-traditional professions or who are not professionals at all. For instance, in YESCO Franchising LLC v. 2261116 Ontario Inc.2017 ONSC 4273 (CanLII), the court found that s. 5(1)(a)(iv) applied in a franchisor-franchisee relationship where the franchisees relied on the franchisor’s superior knowledge and expertise, even though the franchisor was not a member of an expert profession. Similarly, in Barrs v. Trapeze Capital Corp., 2017 ONSC 5466 (CanLII), aff’d 2019 ONSC 67 (Div. Ct.) (CanLII), the Superior Court and the Divisional Court found that s. 5(1)(a)(iv) applied to investors who relied on the superior knowledge and expertise of their investment portfolio managers.


Ontario: some self-evident points on the timing of limitations defences

The Court of Appeal’s decision in Filice v. Complex Services Inc. is a reminder of certain commonsense, probably generally self-evident principles about the timing of limitations defences.  Raise a limitations defence in response to an amendment motion (if there is one to raise) on the motion, and when you raise a limitations defence generally, it shouldn’t for the first time on appeal:

[55]      There is no information in the record whether the issue of the limitations period was argued when the respondent sought leave to amend his statement of claim.  That is where it ought to have been argued but I have to assume it was not. If so, it is, in my view, again too late to raise the issue in this court.  However, even if it were open to the appellant to raise the issue now, I would not give effect to it.  The appellant was on notice of the respondent’s essential claim, that is, that his dismissal was improper.  Whether the claim is styled as wrongful dismissal or constructive dismissal, the appellant was fully aware of the nature of the claim it was facing within the two year limitation period.

Ontario: The finality of motions to add defendants

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. Lalonde2017 ONCA 515 (CanLII)Azzeh v. Legendre2017 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.

Ontario: the impact of an appeal on the appropriateness of a proceeding

When the success of an appeal in a related but separate proceeding (involving the same defendants) will eliminate damage, is a proceeding to remedy that damage inappropriate until the appeal’s determination?  No, held the Court of Appeal in Tapak v. Non-Marine Underwriters, Lloyd’s of London:

[13]      The second is to submit that the appeal against the other defendants, if successful, might have eliminated their losses and thus the appellants did not know that this action was “an appropriate means” to seek to remedy its losses until the appeal was dismissed, relying on s. 5(1)(a)(iv) of the Limitations Act, 2002 and Presidential MSH Corp. v. Marr, Foster & Co. LLP (2017), 135 O.R. (3d) 3212017 ONCA 325 (CanLII). In our view, s. 5(1)(a)(iv) is not intended to be used to parse claims as between different defendants and thus permit one defendant to be pursued before turning to another defendant. Rather, it is intended to address the situation where there may be an avenue of relief outside of a court proceeding that a party can use to remedy their “injury, loss or damage” – see, for example, 407 ETR Concession Co. v. Day2016 ONCA 709 (CanLII)133 O.R. (3d) 762.

The Court also included a reminder that seeking a declaration in addition to consequential relief will not avoid a limitations defence by engaging s. 16(1)(a) of the Limitations Act:

[14]      The third is the argument that the appellants only sought declaratory relief and therefore, under s. 16(1)(a) of the Limitations Act, 2002, the two year limitation period does not apply. That argument cannot succeed because the claim in this action was not limited to declaratory relief. The claim also sought consequential relief, namely damages, so s. 16(1)(a) does not apply.

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: challenging discovery analyses on appeal

In Frederick v. Van Dusen, the Divisional Court reminds us that the court (in this case, a deputy judge of the Small Claims Court) need not make explicit findings with respect to the discovery matters:

[12]           Subsection 5(1) provides that a claim is discovered on the earlier of the day on which the plaintiff first knew of the matters set out in subsection 5(1)(a) and the day on which a reasonable person with the abilities and in the circumstances of the plaintiff ought to have known of the matters referred to in subsection 5(1)(a).  The Deputy Judge found that the date on which the reasonable person with the abilities and in the circumstances of Mr. Frederick ought to have known of the matters set out in subsection 5(1)(a) was the spring of 2013.  Having made this determination under subsection 5(1)(b) of the Act, there was no requirement for the Deputy Judge to make an explicit finding as to what Mr. Frederick and Ms. Presley actually knew in relation to subsection 5(1)(a)(iv).

Ontario: The impact of a lost SJM on a limitations defence

A defendant moves for summary judgment on the basis of an expired limitation period.  The motion judge dismisses the motion.  What impact does the dismissal have on the defendant’s limitations defence?

The answer, according to the Court of Appeal in Vanden Bussche Irrigation & Equipment Limited v. Kejay Investments Inc., is that an order dismissing the motion and nothing more has no impact on the defendant’s limitations defence:

[8]         In Ashak v. Ontario (Family Responsibility Office), 2013 ONCA 375 (CanLII), this court, based on identical wording in the order, held at para. 7, that the order was not a final order because, “a decision under Rule 20 determines only that a genuine issue requiring a trial exists. Accordingly to the extent that a motion judge may purport to make findings of fact in reasons for judgment dismissing a Rule 20 motion, such findings do not have binding effect.”

[9]         The court in Ashak further noted at paras. 8-11 that while a court has the power to make binding determinations of fact under rule 20.05 when dismissing a motion for summary judgment if a court proposes to exercise that power the motion judge should say so and the formal order should reflect that. A similar power to make a binding determination of law likely exists under rule 20.04(4), but again, if the motion judge purports to exercise that power, the judge should specifically invoke and reference the rule and the legal determination made should form part of the formal order.

The order taken out from the summary judgment motion stated: “THIS COURT ORDERS that the Defendant’s motion is hereby dismissed.”  Accordingly, it could have no impact on the defendant’s limitations defence at trial:

[11]      In this case, the motion judge did not specifically invoke and reference the rule giving him the power to make a binding determination nor does the order taken out reflect any determination on the issue of the limitation period. Although the limitation period defence was the only issue before the motion judge and he purported to decide it, he also refused to grant summary judgment on the claim to the plaintiff and sent the matter on for trial. It does not appear that there would be any reason for him to do so unless he was of the opinion that there was a genuine issue requiring a trial respecting the limitation period.

[12]      In the result, I have concluded that the motion judge’s determination that the limitation period had not run is not binding and is not a final order. Accordingly, were I to grant leave to file a notice of appeal, this court would not have jurisdiction to entertain the appeal and for this reason the motion is dismissed.

Ontario: Condo owners take note, a special assessment may not be a demand obligation

Valentina Vasilescu Tarko et al. v. Metropolitan Toronto Condominium Corporation 626 (MTC 626) et al. holds that a special assessment levied on a condo owner is not a demand obligation within the meaning of section 5(3) of the Limitations Act, 2002. The section provides as follows:

Demand obligations

For the purposes of subclause (1) (a) (i), the day on which injury, loss or damage occurs in relation to a demand obligation is the first day on which there is a failure to perform the obligation, once a demand for the performance is made.

Because the assessment provided a date for repayment, it wasn’t a demand obligation:

The appellants suggested that the Special Assessment was subject to s. 5(3) of the Limitations Act concerning demand obligations. A debt obligation that does not specify a date for repayment is a demand obligation. See Skuy v. Greenough Harbour Corp., 2012 ONSC 6998 (CanLII), 10 B.L.R. (5th) 146, at para. 31. The 2011 Special Assessment was made payable in three instalments, the first of which was July 1, 2011. Accordingly, the Special Assessment was an obligation which did specify a date when it was payable and it is not therefore a demand obligation. Section 5(3) of the Limitations Act has no application.

In his decision, Justice Marrocco also emphasised that there is no requirement for a limitations decision to refer to the specific wording of the Limitations Act,2002:

The appellants argued that the Deputy Judge’s oral reasons did not refer to the specific wording of the Limitations Act. The Deputy Judge was not required to refer to the specific wording of the Limitations Act.  A review of the oral reasons reveals that the Deputy Judge considered the relevant factors set out in s. 5(1) of the Limitations Act in deciding to stay the appellants’ claim. The Court of Appeal in Ali v. Triple 3 Holdings Inc., 2002 CanLII 45126, at para. 4,¸stated that “an appellate court should not presume that the judge of first instance was not aware of or failed to apply the appropriate legal test merely because the test is not explicitly set out in the judge’s reasons.” A judge’s reasons are adequate if they demonstrate that judge has considered the relevant factors and important issues in the case. In R. v. Sheppard, 2002 SCC 26 (CanLII), [2002] 1 S.C.R. 869, at para. 42, the Supreme Court quoted with approval the words of Major J. in R. v. R.(D.), [1996[ 2 S.C.R. 191: “where the reasons demonstrate that the trial judge has considered the important issues in a case, or where the record clearly reveals the trial judge’s reasons, or where the evidence is such that no reasons are necessary, appellate courts will not interfere.”

This is a point that bears remembering when considering whether to appeal from a limitations judgment, particularly from a judgment of the Small Claims Court.