Clever but futile arguments

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.

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.

Ontario: If you sue, you’ve discovered your claim

Limitations issues have a way of encouraging creative but hopeless arguments.

Take for example Richards v. Sun Life Assurance Company of Canada.  The plaintiff argued that the first clear and unequivocal denial of his benefits claim was contained in the defendant insurer’s statement of defence.  Justice Bale had none of this:

[19]           As previously noted, the plaintiff argued that the first clear and unequivocal denial of his claim was contained in Sun Life’s statement of defence. Assuming this to be the case, “clear and unequivocal denial” cannot be the applicable test, since the plaintiff would then have commenced his action prior to discovering his claim, a logically inconsistent result.

By commencing a proceeding in respect of a claim, a claimant necessarily acknowledges discovery of the claim.  It is, as Justice Bale put it, logically fraught to both assert a claim and an argument that you have yet to discover it.

Justice Bale’s decision also contains a helpful discussion of rolling limitation periods:

[25]           The plaintiff argues that a rolling limitation period applies, and that the plaintiff is only barred from claiming the disability benefits that would have been payable more than two years before the action was commenced. I disagree.

[26]           A rolling limitation period may apply to claims for periodic payments, in cases where the issue is whether certain payments to which the plaintiff is entitled have been made (e.g. payments of rent), as opposed to cases where the issue is whether the plaintiff was entitled to the periodic payments in the first place. In the former type of case, the material facts will have arisen on a periodic basis, and it will not be unfair to require a defendant to litigate those facts during the applicable limitation period following the date upon which an individual payment became due. However, in the latter type of case, the material facts will have arisen at the time that the plaintiff alleges he or she first became entitled to periodic payments, and it would be unfair to require the defendant to litigate those facts, for a potentially unlimited period of time.

[27]           In the present case, the issue is whether the plaintiff was entitled to disability benefits, at the time of his application to Sun Life, and the concept of a rolling limitation period does not apply.

ONTARIO: The Limitations Act still has nothing to do with the Consumer Reporting Act

The plaintiff in Grant v. Equifax Canada Co advanced a quite clever, but entirely incorrect argument that the Limitations Act applies to the Consumer Reporting Act, which we wrote about here.

The Court of Appeal upheld the motion judge’s decision rejecting the argument:

[5]         The CRA provides for a regulatory scheme for the fair reporting of information regarding an individual’s history of credit activities. The CRA requires the registration of consumer reporting agencies, permits consumer reporting information to be provided only for certain prescribed purposes, and sets out standards for consumer reporting.

[6]         The Limitations Act, 2002, by contrast, applies to bar “claims pursued in court proceedings” that are commenced outside the applicable limitation period. The Act does not apply to the CRA, whether expressly or by implication. Indeed, the CRA contains its own specific provisions prohibiting the inclusion of certain information in consumer reports, including debts or collections more than seven years old, unless confirmation that the debt or collection is not barred has been obtained. The CRA expressly contemplates that debts not reduced to judgment that are up to seven years old may be reported (see s. 9(3)(f)). This makes sense, as the passing of a limitation period does not extinguish a debt; it only precludes the commencement of a court proceeding for its enforcement. As such, the reporting of debts after a limitation period has passed, is not inconsistent with the purposes of the CRA, and is expressly contemplated by its terms.

 

Ontario: Nice try, the but the Limitations Act doesn’t apply to the Consumer Reporting Act

The Limitations Act does not restrict the timeframe for reporting consumer debts under the Consumer Reporting Act (“CRA”).

The Applicant in Grant v. Equifax sought an order requiring two consumer reporting agencies to remove debts over two years old on his credit report pursuant to the Limitations Act.

The Applicant’s position was quite clever, especially for a self-represented litigant:

[10]           According to the Applicant, the two year limitation period for commencing an action under the Limitations Act should apply to the time frame for reporting consumer debts under the CRA. The applicant argues that the best evidence of the existence of a disputed debt is when judgment is obtained for that debt.

[11]           The Applicant explains that is unfair for consumer debts over two years old to be reported on consumer credit reports. This is because after the two year limitation period under the Limitations Act has expired, the debtor cannot bring an action to collect the debt. Therefore, a debt that can no longer be collected should not be reported on a credit report.

[12]           Section 9(1) of the CRA requires the consumer reporting agency to adopt procedures necessary to ensure accuracy and fairness in the contents of its consumer reports. The Applicant submits that since no court action can be commenced to recover debts over two years old, any disputed debts over two years old recorded on consumer reports are not the most accurate record of the debt. He explains that for reported debt over two years old, the most accurate record of such a debt is a debt that has been confirmed by an order of a court. Therefore, the Applicant argues that the consumer reporting agencies are not in compliance with s. 9(1) of the CRA when they report consumer debts over two years old which have not been confirmed by the order of a court.

What the Applicant failed to appreciate is that the Limitations Act has no application to the CRA.  The statutes have entirely different, unrelated purposes: the Limitations Act limits the commencement of proceedings in respect of claims; the CRA governs the reporting of debts on consumer reports.  As Justice Barnes noted, there is nothing in the Limitations Act that extends its application to the CRA, nor is there anything in the CRA which contemplates the application of the Limitations Act.  If it was the intention of the legislature that the provisions of the Limitations Act apply to the CRA, it would have expressly stated so.