Ontario: Limitations Act applies to Federal entities

In Amir-Afzal v. ICC, the applicant sought an order under s. 253 of the Canada Not-For-Profit Corporation Act declaring a by-law of the Immigration Consultants of Canada Regulatory Counsel (“ICC”) oppressive.  The ICC raised a limitations defence.  The applicant argued that the Limitations Act did not apply to the proceeding on the basis of inter-jurisdictional immunity:

[31]           Before the Court was asked to determine whether the provisions of the Limitations Act applied to the specific facts in this application, the Applicant took the position that the Limitations Act does not apply in law to an application under section 253 of the Act because the Act is legislation enacted by the federal government to regulate corporation with national objects, and the provincial Limitations Act operates in conflict with the Act.  Specifically, the Applicant argued that the inter-jurisdictional immunity doctrine prevents the Limitations Act – as provincial legislation of general application – from regulating entities that fall within matters exclusively assigned to the federal government.

Justice Diamond rejected this argument in a well-reasoned decision:

[37]           Turning to the Act itself, there is no explicit or implicit limitation period contained therein relating to the right to bring an oppression remedy application under section 253.  In argument, it was pointed out that there are other types of limitation periods within the Act such as the following:

Section Limitation
145(5) An action to enforce the liability of a director for any payments contrary to the Act may not be commenced after two years from the date of the resolution authorizing the payment.
146(3) An action against a director for an employee’s wages may not be commenced after two years of the director ceasing to hold the position of director.
263(2) No prosecution for an offence under the Act may be instituted later than two years after a time when the subject matter of the complaint arose.

[38]           The Applicant argues that by prescribing the above limitations within the Act, and leaving the oppression remedy section silent on the issue of the limitation periods, the federal government explicitly or implicitly chose not to impose any time limit upon commencing oppression remedy actions under section 253 of the Act.  In my view, this is a far too simplistic approach to the issue, as the net result of the Applicant’s argument would be that there is no limitation period upon the right to bring an oppression remedy action under section 253.  A closer look at the test for inter-jurisdictional immunity must thus be undertaken.

[39]           Does the Limitations Act trench into key aspects of a federal undertaking, namely not-for-profit corporations?  In my view, it does not.  Even if it did, the Limitations Act certainly does not impair the exercise of the subject federal power, let alone in any serious or significant way.

[40]           The “core” of the Act is not tied to the regulation of rights and obligation of corporation members.  The Applicant’s right to pursue a statutory remedy under the Act against ICC is not an essential part of the law governing not-for-profit corporations.  The purpose of the Act is to allow the incorporation of, or continuance of bodies corporate as, corporations without share capital for the purpose of carrying on legal activities throughout Canada.  The Applicant has taken a far too narrow view of the Act in order to render its application to the lowest, individual/member level.  The Limitations Act does not, directly or indirectly, regulate any issues under federal jurisdiction.

[41]           If anything, the application of the Limitations Act to section 253 of the Act creates a defence for non-for-profit corporations that it otherwise would not have under the Act itself.  How can providing a not-for-profit corporation with a defence amount to an impairment?  In my view, and in furtherance of the administration of justice in this province, the Ontario legislature can determine the time limits within which Ontario courts can consider legal proceedings even if it regulates the procedure applicable to a cause of action under the Act.

[42]           Finally, to the extent that the Applicant advanced a paramountcy argument in support of his position, the Limitations Act does not frustrate the purpose of the Act in any way.  As such, I do not find the presence of any operational conflict between the provisions of the Act and the Limitations Act.