Ontario: amendments are subject to time-bars

In Lucky Star Developments Inc. v. ABSA Canada International, the Court of Appeal rejected the doubtful argument that because the basic limitation period applies to the commencement of proceedings, it does not apply to proceedings that have already been commenced, and therefore does not bar amendments under r. 26.01:

[7]         In oral submissions, the appellant argued that s. 4 of the Limitations Act 2002, S.O. 2002, c. 24, Sched. B does not apply to proceedings that have already been commenced, and so does not bar amendments under r. 26.01. We disagree. As the court noted in Joseph, the rules must be read in light of the Act and its purpose in establishing a basic limitation period in s. 4. Amendments adding claims after the limitation period has expired constitute prejudice.

 

Though it’s  plain this argument was bound to fail—it would mean there is no limitation of new claims asserted in already-commenced proceedings—it’s a symptom of the conceptual difficulties that arises from the language “proceeding in respect of a claim”.

The jurisprudence seems to have settled on “proceeding” having the same meaning as it does under the Rules.   Rule 1.03 defines “proceeding” to include an action and an application, and the Court of Appeal has applied this definition to the term “proceeding” as used in the Limitations Act: see e.g. Giglio v. Peters, 2009 ONCA 681 at paras. 21-22 [“Giglio”]. See also Guillemette v. Doucet, 2007 ONCA 743 at para. 20.

Strictly applied, this means that s. 4 bars actions or applications commenced in respect of a claim.  A proposed amendment to add a claim to an existing action is of course not a proposal to commence a new action.  I’ve argued before that the solution to this tension is to abandon a narrow definition of “proceeding” and to define the commencement of a proceeding broadly enough to include amending a pleading to introduce a new claim.

 

Ontario: simplified procedure and summary judgment motions on limitations defences

Cornacchia v. Rubinoff illustrates the difficulties of moving for summary judgment on limitations defences in simplified procedure actions.  This is because there are no cross-examinations on affidavits under simplified procedure. The court denied the motion on the basis that the simplified procedure did not permit the findings of fact required by the limitations defence:

[3]               An important factor in the argument on the motion is that the underlying claim was commenced under the simplified procedure provided in rule 76.  As a result, pursuant to rule 76.04(1), cross-examination on the affidavits filed on the motion is not permitted.  A further implication of the fact that the underlying action is brought under the simplified procedure rules, is that it can be expected to be a relatively short trial.

[4]               For reasons that I will explain, I find that the combination of two procedural aspects of this motion lead me to conclude that the limitation period issue in this case is not an appropriate issue for summary judgment, either in favour of the defendant, or in favour of the plaintiff.  I find that in the absence of cross-examination on the affidavits filed on the motion, particularly the plaintiff’s affidavit, the record on this motion does not allow me to make the necessary findings of fact and credibility to fairly dispose of the motion.

[30]           I find that the absence of cross-examination on the affidavits filed in the motion, raises concerns for my ability to make the necessary findings of fact and credibility to dispose of the motion, for the following reasons.

[31]           In order to assess the subjective branch of the analysis – when the plaintiff first knew that the four criteria in s. 5(1)(a)(i) to (iv) were met – the court must make factual findings about what information the plaintiff knew when, and his subjective belief about that information in relation to the criteria in s. 5(1)(a)(i) to (iv).

[32]           This assessment involves making findings of credibility about the plaintiff’s evidence on the motion.  I note that counsel for the defendant was clear during the course of argument that she was relying on both the subjective and objective branches of the Limitations Act analysis.

[40]           Concept Plastics does not hold that summary judgment will never be available on a simplified procedure matter due to the unavailability of cross-examination on the affidavits filed for the motion.  Rather, in Concept Plastics the Court of Appeal signaled the need for caution in considering summary judgment motions in simplified procedure matters, due to the unavailability of cross-examination.  Where a motions judge is considering a summary judgment motion in a simplified procedure matter, the judge should consider if there is unfairness as a result of the unavailability of cross-examination.  If the motions judge grants the motion, the judge should explain why and how the potential unfairness due to the unavailability of cross-examination is addressed by the materials filed on the motion: see Concept Plastics at paragraphs 24-25.

Ontario: the limitation of new causes of action

In David v. Easte Side Mario’s Barrie, the Court of Appeal quotes from The Law of Civil Procedure in Ontario for the principle that an alternative claim for relief arising out of the same facts is not a new cause of action for limitations purposes:

[32]      And, quoting from Paul M. Perell & John W. Morden, The Law of Civil Procedure in Ontario, 3d ed. (Toronto: LexisNexis Canada, 2017), at p. 186:

A new cause of action is not asserted if the amendment pleads an alternative claim for relief out of the same facts previously pleaded and no new facts are relied upon, or amount simply to different legal conclusions drawn from the same set of facts, or simply provide particulars of an allegation already pled or additional facts upon [which] the original right of action is based.

See also 1100997 Ontario Limited, at para. 20.

Ultimately, the Court applied the “fundamentally different claim” test to conclude that the plaintiff wasn’t entitled to the amendment.

As I discussed when the Court of Appeal last addressed this issue, the “fundamentally different claim” test makes a lot of sense.

My complaint, which I recognise verges on pedantry, is that a cause of action analysis, and the casual use of the word “claim”, is problematic in the limitations context.  The Limitations Act has nothing to do with causes of action, and, as I often note, does not appear in the Act.  This is because the Act uses the language of “claim”, which reflects an intentional break with cause of action accrual as determinative of the commencement of time.  Claims are not causes of action, and causes of action have very little do with the operation of the current limitations scheme.  It’s unhelpful when the Court fails to account for this.

Ontario: The Court of Appeal reminds that limitations defences are affirmative

 

Two aspects of the Court of Appeal decision in Abrahamovitz v. Berens are noteworthy.

First, the court explains why the expiry of the limitation period is a defence that must be pleaded in enough detail to makes this a candidate for leading decision on the principle:

[30]      This court explained in Beardsley v. Ontario (2001), 2001 CanLII 8621 (ON CA)57 O.R. (3d) 1 (C.A.), at para. 21 that “the expiry of a limitation period does not render a cause of action a nullity; rather, it is a defence and must be pleaded”. See also:Strong v. Paquet Estate (2000), 2000 CanLII 16831 (ON CA)50 O.R. (3d) 70 (C.A.), at paras. 35-37Tran v. University of Western Ontario2016 ONCA 978 (CanLII)410 D.L.R. (4th) 527, at para. 18; and Salewski v. Lalonde2017 ONCA 515 (CanLII)137 O.R. (3d) 750, at para. 43.

[31]      There are two aspects to the statement from Beardsley. One is that from a procedural fairness point of view, a plaintiff is entitled to plead in response to a limitations defence, so that if a motion is brought to dismiss the claim, the court will have all the facts relied on to assess discoverability, or whatever other factors a plaintiff may wish to raise in response: Beardsley, at para. 22;Strong Estate, at para. 38Metropolitan Toronto Condominium Corp. No. 1352 v. Newport Beach Development Inc.2012 ONCA 850 (CanLII)113 O.R. (3d) 673, at paras. 115-116; and Greatrek Trust S.A./Inc. v. Aurelian Resources Inc.[2009] O.J. No. 611 (Ont. S.C.J.), at para. 18.

[32]      The requirement that an affirmative defence, including a limitations defense, be pleaded to avoid surprise to the opposite party is reflected in r. 25.07(4) of the Rules of Civil Procedure, which provides:

In a defence, a party shall plead any matter on which the party intends to rely to defeat the claim of the opposite party and which, if not specifically pleaded, might take the opposite party by surprise or raise an issue that has not been raised in the opposite party’s pleading.

[33]      The second aspect of the statement from Beardsley, however, is more germane to this case. A limitations defence is “just that, a defence”: Lacroix (Litigation Guardian of) v. Dominique2001 MBCA 122 (CanLII)202 D.L.R. (4th) 121, at para. 18. A defendant chooses whether or not to rely on a limitations defence, but is not obliged to do so: Graeme Mew, Debra Rolph, & Daniel Zacks, The Law of Limitations, 3rd ed. (Toronto: LexisNexis Canada Inc., 2016) p.166. See e.g.: Strong Estate, at paras. 35-40; and Girsberger v. Kresz (2000), 2000 CanLII 22406 (ON SC)50 O.R. (3d) 157 (C.A.), at para. 13.

[34]      The fact that the choice belongs to the defendant is codified in s. 22 of the Limitations Act, 2002, which allows a limitation period to be suspended or extended by agreement.

[35]      This is a very important and useful provision that allows parties to a potential claim to suspend the running of a limitation (toll the limitation period) to allow them to conduct investigations or settlement discussions, without pressure on the claimant to commence the action unnecessarily. It promotes judicial economy and is cost-effective for the parties.

[36]      Obviously, this provision would be ineffective if another party could assert the limitation period in spite of the defendant’s agreement to toll the limitation period, or if the action became a nullity on the expiry of the limitation period. See for example, Schreiber v. Lavoie (2002), 2002 CanLII 49430 (ON SC)59 O.R. (3d) 130 (S.C.J.), where a third party was not entitled to rely on r. 29.05(1) (a rule which allows a third party to plead a defence not raised by the defendant) to assert a limitations defense that the defendant had expressly agreed it would not rely on.

Second, there is a reminder that special circumstances doctrine is of no application:

[24]      I would not accept this argument for two reasons. First, the Estate has not commenced any proceeding or claimed any relief. The essence of this argument amounts to invocation of the old common law doctrine of special circumstances that no longer applies under the Limitations Act, 2002. See: Joseph v. Paramount Canada’s Wonderland2008 ONCA 469 (CanLII)90 O.R. (3d) 401. The Estate is essentially saying that because all of the facts have already been pleaded in the action, there is no surprise and no prejudice to the defendants (or other parties) to allow the Estate to be added as a party now, even though the limitation period has expired.

Ontario: Adding a party after the presumptive expiry of the limitation period requires evidence

The decision in Laurent-Hippolyte v. Blasse et al. is a reminder that on a motion to add a party after the presumptive expiry of the limitation period, the plaintiff needs to file evidence of due diligence:

[21]           TWD argues that the motion must be dismissed because the Plaintiff nor any other affiant has provided any evidence as to discoverability during the relevant time period – that being the two-year period after the date of loss. TWD asserts that the absence of any such evidence is fatal to the motion.

[22]           I agree with TWD. There is absolutely no evidence in this case as to what occurred between the date of loss and the time that the Statement of Claim was issued.  While I accept that Plaintiffs should not be required to send pro forma letters and that the expectations placed on unrepresented Plaintiffs to identify tortfeasors should be low, this does not mean that a Plaintiff can succeed on these motions with absolutely no evidence on the issue.

[23]           At the very least the Plaintiff, or other affiant, could have explained what was happening in the relevant two-year period and/or describe the abilities that the Plaintiff did or did not have in pursuing the Claim. Without any evidence to this effect, a Court cannot determine, as stated in section 5(1)(b), “the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).” I was provided with no evidence on the Plaintiff’s abilities or circumstances. I have no evidence of diligence or an explanation for any lack of diligence. When was counsel retained? What steps did counsel take if counsel was retained? If no steps were taken, why not?

Ontario: technicalities aren’t your friend

Here we have yet another example of the principle that relying on technicalities will rarely carry the day.

In Daly Square Inc. v. 1786097 Ontario Inc., the plaintiff moved for summary judgment dismissing a counterclaim as statute-barred.  The plaintiff had not requested this relief in its notice of motion, but did provide the expiry of a limitation period as a ground for relief.  The defendant (and plaintiff by counterclaim) relied on the notice of motion to argue that the motion to dismiss the counterclaim was not properly before the court.

The court, not surprisingly, had none of it:

[15]           It seems that this problem could have been avoided if the parties had clarified the issue and agreed to adjourn the motion, if necessary. The defendants were obviously aware before they prepared their factum that the limitation period applicable to the counterclaim was an issue. They responded to the issue in their factum and did not request an adjournment. Nonetheless, in these circumstances, I do not feel that it would be “just” to consider the request to dismiss the counterclaim when the request was not made in the notice of motion and the defendants are saying that they would have responded differently if it had been. However, it would not an “expeditious” or the “least expensive” approach simply to refuse to consider the limitation period when both parties have now devoted considerable time to the issue; doing so would likely prompt the plaintiff to bring a further motion, resulting in more expense and delay.

Ontario: the court will rarely consider limitations defences before pleadings clsoe

In Taylor v. Workplace Safety & Insurance Board, the Court of Appeal emphasised that only in rare cases will the court hear a motion to dismiss an action as statute-barred prior to the delivery of a defence:

[22]      Thus, it is not necessary to decide whether the motion judge was correct in holding that Taylor’s claim would be barred by the two year limitation period in the Limitations Act. We do note, however, that neither defendant has delivered a statement of defence. This court has held consistently that only in rare cases, if any, will we entertain a motion to dismiss an action as statute barred under the Limitations Act in the absence of a statement of defence. See Salewski v. Lalonde2017 ONCA 515 (CanLII)137 O.R. (3d) 750, at paras. 42-46.

Ontario: The potential consequence of serving a Statement of Claim out-of-time

Scenario: A plaintiff pursues a claim by statement of claim issued within the limitation period, fails to serve the statement of claim within the time prescribed by the rules, the court refuses leave for late service, and if the plaintiff were to reissue the statement of claim the claim pursued in it would be statute-barred.  Is the claim out of time?  According to the Court of Appeal in Sultan v. Hurst, yes:

[1]         The appellant appeals the decision of the motion judge refusing to validate the late service of the statement of claim. The claim was issued within the two year limitation period following the accident, but was served more than two years after the expiry of the six month limit to serve a statement of claim set out in r. 14.08(1) of the Rules of Civil Procedure. By the time the claim was served, the limitation period had expired. Therefore, the practical effect of the motion judge’s order was to prevent the plaintiff from pursuing his claim.

I have trouble with this reasoning.  The proceeding in respect of the claim was commenced in time, which means there can be no limitations defence.  I gather that the motion judge found late service rendered the proceeding a nullity (or struck out the statement of claim?).  The motion judge’s decision isn’t available, so we can only speculate.  Either way, the impact of the decision was evidently that there was no longer a proceeding, and so it became necessary for the plaintiff to commence a new proceeding in respect of the same claim, but this new proceeding was out of time.

The Court of Appeal seems to have taken for granted that non-compliance with r. 14.08(1) nullifies (practically, if not technically) a proceeding.  I’m not sure this is necessarily so.

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 Act2002, 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. Neal1986 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 Canada1988 CanLII 4741 (ON CA)[1988] O.J. No. 657 (C.A.) at para 35Galego v. State Farm Mutual Automobile Insurance Co.2005 CanLII 32932 (ON SCDC)[2005] O.J. No. 3866 (Div.Ct.) at paras. 8 and 9Wilkinson 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: When a limitation period expires on a Sunday

What happens if the limitation period expires on a Sunday? The decision in Golberg v. North East Community Care Access Centre reminds us that it’s extended until Monday:

[12]           Bayshore first argues that the Plaintiff’s claims fall outside the two year limitations period prescribed by the Limitations Act, 2002.  In particular, it points out that Mr. Golberg admits to having been dismissed from his employment on March 20, 2014, but that his action was started on March 21, 2016.

[13]           What Bayshore has failed to realize is that March 20, 2016 was a Sunday.  Under the Legislation Act, 2006, section 89(1) provides that a limitation that expires on a holiday is extended to the following day.  Accordingly, Mr. Golberg started this action within the appropriate time.

Nice try, defendants.