Ontario: dubious equitable arguments won’t overcome the Trustee Act limitation period

The decision in Zacharias Estate v. Giannopoulos is an example of futile equitable arguments made to avoid the application of the Trustee Act limitation period.  The plaintiff estate commenced a proceeding to recover money from the defendant more than two years after the death.  The estate relied on the special circumstances doctrine; the court dismissed the argument because special circumstances applies only to the addition of a party to a proceeding:

[42]           Despina submits that the plaintiffs’ claim is barred by the limitations provision contained in s. 38 (3) of the Trustee Act, RSO 1990, c. T. 23 which states:

 “An action under this section shall not be brought after the expiration of two years from the death of the deceased.”

[43]           In other words, the limitation period begins to run at the time of that death, not from the time the estate trustee discovers the claim:  Levesque v Crampton Estate2017 ONCA 4552017 CarswellOnt 8319 at paras. 55-56Giroux Estate v Trillium Health Centre2005 CarswellOnt 241 at para. 28.

 [44]           While the rule may, at first blush, seem harsh, it was a specific policy choice.  At common law, any claim by the deceased would have been extinguished on death.  As a compromise to this draconian rule, the legislature provided a two-year limitation period which is not subject to the discoverability principle:  Giroux at para. 25.
 [45]           George died on February 19, 2015.  The claim was issued on December 29, 2017, 2 years and 10 months after George’s death.
 [46]           The Saccals admit they discovered the transfer to Despina between January and March 2016.  That left them approximately one year to commence an action within the limitation period.
 [47]           The plaintiffs resist the application of a limitation period by relying on doctrine of special circumstances.  That doctrine however, is limited to adding, after the expiry of a limitations period, a party or cause of action to a claim that was commenced within the limitations period.  The doctrine does not allow a party to commence a new proceeding after the expiry of the limitations period:  Graeme Mew, The Law of Limitations, 3d ed. (Toronto: LEXIS-NEXIS, 2016).

The estate also relied on the fraudulent concealment doctrine (because why not?).  The court set out the elements of the doctrine and found that none of them applied. There was no special relationship, there was no unconscionable conduct, and there was no concealment.  One wonders about the strategy that leads to making two limitations arguments plainly bound to fail; it will be interesting to see how the court awards costs.  These are the material fraudulent concealment arguments:

[48]           The plaintiffs also rely on the doctrine of fraudulent concealment to avoid the limitation period.  The doctrine of fraudulent concealment is an equitable principle:

“aimed at preventing a limitation period from ‘operating as an instrument of injustice.’ When applicable, it will ‘take a case out of the effect of the statute of limitation’ and suspend the running of the limitation clock until such time as the injured party can reasonably discover the cause of action”:  Giroux at para 28.

[49]           For the doctrine of fraudulent concealment to apply, the plaintiffs must establish that:

(a)               the defendants and plaintiffs had a special relationship with one another;

(b)               given the special or confidential nature of the relationship, the defendants’ conduct is unconscionable; and

(c)               the defendants concealed the plaintiffs’ right of action actively or the right of action is concealed by the manner of the defendants’ wrongdoing:  Estate of Graham v Southlake Regional Health Centre, 2019 ONSC 392, at para. 88.

[50]           As set out below, none of these elements apply.

(a)               No Special Relationship

[51]           The plaintiffs assert that Despina owes the estate $700,000 and that there is a special relationship between an estate trustee and debtor to the estate.

[52]           If the plaintiffs are correct, then a special relationship would, by definition, be created whenever estate trustees asserted that someone owed the estate money.  That would effectively put an end to the two-year limitation period in the Trustee Act.

[53]           In the alternative, the Saccals submit that Despina created a special relationship, by creating an extended parent-child relationship with them.  To support this extended parent-child relationship, the plaintiffs point to the fact that Despina arranged to let the Saccals know about their father’s condition.  In addition, the plaintiffs point to a number of other allegations to support the parent-child relationship including the following:  George told Despina that he wanted to leave money for his grandchildren.  Despina placed a note on the file at the funeral home not to permit the Saccals access.  Despina attended with the Saccals at George’s office and was present when they searched for the will.  Despina contacted an estates solicitor friend of the Deceased (James Daris) and told the Saccals that the Deceased did not have a will.

[54]           I cannot see how these additional allegations amount to creating a parent-child relationship between Despina and the Saccals.  The essence of a special relationship is one of closeness, trust or dependence.

[55]           Despina was a stranger to the Saccals.  She had never met them until they appeared at the hospital a couple of days before George died.  The plaintiffs have introduced no evidence to suggest that there was any type of relationship of particular trust or confidence between them and Despina.  If the plaintiffs are correct and they were aware that Despina had left some type of note at the funeral home to restrict the Saccals access, that would belie any type of special relationship.

[56]           Moreover, the Saccals’ own conduct belies any special relationship.  On April 28, 2015 their lawyer wrote to Despina saying:

“… You have taken upon yourself to represent to the public that you are a common-law spouse of the Deceased, our clients strongly dispute and deny that status.  You are hereby forbidden to approach any persons with which the Deceased had any business dealings or other relationships and make any further misleading or inappropriate representations or warranties to the effect that you have any relationship with the Deceased, beyond having had normal social interaction or friendship with the Deceased.  Any communication that you intend to make regarding your relationship to the Deceased or viz the Estate should be made only through this office.”

[57]           “Forbidding” Despina to have any contact with anyone who had any relationship with George and demanding that Despina make any statement about her relationship with George only through counsel to the Saccals would appear to belie any special relationship.  It is noteworthy that the letter was sent at least 8 months before the Saccals became aware of the $700,000 transfer to Despina.

(b)               Defendant’s Conduct Is Not Unconscionable

[58]           The plaintiffs have not established that Despina’s conduct was unconscionable.

[59]           In their factum, the plaintiffs make bald allegations that Despina was deceitful towards them but do not say how.

[60]           They have pointed to no instance in which they asked a question of Despina to which she gave a false or misleading answer.  Their real complaint appears to be that Despina did not volunteer that she had received a $700,000 payment from George.  I do not find Despina’s failure to volunteer that information to be unconscionable.  At the time of the interactions, Despina was clearly grief stricken.  She had no knowledge of George’s financial affairs and no knowledge of whether he had a will, what the terms of the will might be and who the executor might be.  She did not know the Saccals and knew only that George had been estranged from them for over 20 years and did not want to see them.  In those circumstances it cannot be said that the failure to volunteer, out of the blue, that George had given her $700,000 is unconscionable.

[61]           As noted earlier, the plaintiffs merely point to a series of suspicions they have.  In paragraph 26 of their factum, the plaintiffs begin seven successive sentences with the word “suspiciously” followed by a circumstance that the plaintiffs deem to be questionable.  By way of example they state:  “Suspiciously, no power of attorney or will were located.”  It is not particularly suspicious to fail to locate a will if none exists. That people die without a will is not, in itself suspicious.  It is a common occurrence.

[62]           Beginning a series of sentences with the adjective “suspiciously” does not convert mistrust on the plaintiffs’ part into unconscionable conduct on the defendant’s part.

(c)               No Fraudulent Concealment 

[63]           The third element of the doctrine of fraudulent concealment is that the defendant have concealed the plaintiffs’ right of action either actively or by the manner of the defendant’s wrongdoing:  Estate of Graham v Southlake Regional Health Centre2019 ONSC 392, at para. 88.

[64]           There was no active concealment on Despina’s part.  The plaintiffs have pointed to no conduct that made it more difficult for them to discover their alleged cause of action apart from the fact that Despina did not volunteer the receipt of a payment from George.  There was no duty on her to volunteer that information.  As noted above, her lack of disclosure was understandable and acceptable.

[65]           Despina’s uncontradicted evidence is that she had no information about George’s estate, assets, liabilities or general financial matters while alive or after his death.  In those circumstances she could not have hidden anything from the Saccals.

[66]           The plaintiffs have not brought themselves within any exception to s. 38 (3) of the Trustee Act, as a result of which the limitation period contained in s. 38 (3) of that statute applies and the action should be dismissed as statute barred.

Ontario: special circumstances apply to construction lien actions

In Pryers Construction Ltd. v. MVMB Holdings Inc., the Divisional Court holds that the special circumstances doctrine is not available to a plaintiff in an action to enforce a construction lien.

[14]           In the present case, Riverside was an “owner” within the meaning of s. 1 of the CLA. As a result, Pryers was entitled to a lien on Riverside’s interest in the premises. As that interest was leasehold, Pryers’ ultimate remedy under the Act would have been a sale of the remaining term of the lease, if any. However, Pryers failed to preserve its lien against Riverside’s interest, and as a result, it expired in July 2016.

 [15]           The trial judge held, and Pryers argues, that the “special circumstances” doctrine was available, that such circumstances existed, and that as a result, Pryers was entitled to enforce its lien against Riverside as an “owner” of the property. This was an error of law.
 [16]           Where the “special circumstances” doctrine is available, the court has discretion to add new parties or new causes of action, following the expiry of a limitation period. With respect to actions governed by the LA2002, this doctrine was abolished by s. 21 of that statute: Joseph v. Paramount Canada’s Wonderland (2008), 90 O.R. (3d) 301 (C.A.), at paras. 16 and 25. However, with respect to actions where the applicable limitation period is prescribed by a statute other than the LA2002, the “special circumstances” doctrine may remain available: Bikur Cholim Jewish Volunteer Services v. Langston (2009), 2009 ONCA 196 (CanLII)94 O.R. (3d) 401 (C.A.), at para. 51.
 [17]           Relying upon Bikur Cholim, Pryers argues that the “special circumstances” doctrine is available to a plaintiff in a construction lien action, and that the trial judge was therefore correct in allowing Riverside to be added as a party defendant, for the purpose of enforcing a lien against it as an “owner”, notwithstanding that the lien was neither preserved nor perfected. I disagree for the following reasons.
 [18]           It does not follow from the decision in Bikur Cholim that all limitation or other time periods, contained in statutes other than the LA2002, may be extended based upon the “special circumstances” doctrine. In that case, the court referred to its decision in Swain Estate v. Lake of the Woods District Hospital (1992), 1992 CanLII 7601 (ON CA)9 O.R. (3d) 74 (C.A.) where the doctrine was held to apply to an action governed by s. 38(3) of the Trustee Act, R.S.O. 1990, c. T.23, and went on to say that the doctrine survived in relation to such actions, despite the fact that it had been abolished for cases governed by the LA2002. However, the doctrine has never been held to apply in an action to enforce a construction lien.
 [19]           In Delview Construction Ltd. v. Meringolo (2004), 2004 CanLII 11188 (ON CA)71 O.R. (3d) 1 (C.A.), at para. 11, the court said the following:
 [T]he courts have noted that unlike limitation periods where there is a discretion to extend under the Basarsky v. Quinlan, 1971 CanLII 5 (SCC)[1972] S.C.R. 380 line of cases, the time limits set out in the CLA are prescribed by statute and “[leave] no room for judicial discretion”.

Basarsky is one of the sources of the “special circumstances” doctrine.

[20]           In K.H. Custom Homes Ltd. v. Smiley, 2015 ONSC 6037 (Div. Ct.), at paras. 4f, this court said the following about the statutory deadlines in the CLA:

 These requirements are statutory. They are mandatory. The court has no discretion to relieve from them. The language of the CLA is clear on this point, as is consistent appellate authority.

This conclusion is consistent with the scheme of the CLA. The first two requirements [time limits for preservation and perfection of liens] are essential to the timely flow of funds on construction sites: persons advancing money to pay for construction may rely upon the state of title before making an advance. This reliance would be compromised if late liens could be placed on title as a result of the court’s exercise of discretion after-the-fact. [Footnotes omitted.]

[21]           The CLA does not contain a limitation period applicable to claims for breach of contract joined with actions to enforce claims for lien, and there is no conflict between the provisions of the CLA and the LA2002 in relation to such claims. Accordingly, the two-year limitation period under the LA2002 applies to contractual claims joined with lien claims: see LA2002, s. 19. In the present case, that limitation period had expired in March of 2018, approximately eight months before the motion to add Riverside was made.

Ontario: special circumstances applies to Construction Act limitation periods

Pryers Construction LTD. v. MVMB is a reminder that parties in a lien action may be added after the 90 day limitation period in the Construction Act at any stage of the proceeding if there are special circumstances.

Update: this was overturned by the Divisional Court.

Ontario: prejudice from an expired limitation period, and special circumstances

Estate of John Edward Graham v. Southlake Regional Health Centre is a medmal decision noteworthy for its consideration of prejudice arising from the expiry of a limitation period, and a rare application of the special circumstances doctrine to the Trustee Act limitation period.

The parties agreed that the two-year limitation period in s. 38(3) of the Trustee Act applied to the proceeding and had expired.  The plaintiffs relied on special circumstances to overcome its expiry.  The defendant argued that the plaintiffs had failed to rebut the presumption of prejudice arising from the expiry of a limitation period, and that there were no special circumstances.

The court found that the plaintiff had rebutted the presumption of prejudice.  The consideration that informed this finding are worth noting:

[59]           As the Court of Appeal in Mazzuca summarized:

Both the related jurisprudence and the rules themselves thus underscore a simple, common-sense proposition:  that a party to litigation is not to be taken by surprise or prejudiced in non-compensable ways by late, material amendments after the expiry of a limitation period.  If such surprise or actual prejudice is demonstrated on the record, an amendment generally will be denied.[10]

[60]           The Court of Appeal has repeatedly confirmed that the loss of a limitation defence gives rise to a presumption of prejudice.[11]

[61]           In our case, Dr. Law had no notice of the litigation prior to the expiration of the litigation period.  I find an inference of prejudice to him is warranted.

[62]           I accept Dr. Law had no knowledge of this action or that any issue had been raised concerning the case until February 15, 2017 when he was contacted by Scott Graham – approximately six years after the expiration of the limitation period (February 9, 2011).

[63]           Dr. Law submits that prejudice does arise from such a long delay and an inference of prejudice is warranted.  It is submitted the plaintiffs’ motion must fail on the basis of the plaintiffs’ failure to rebut the presumption of prejudice.

[64]           I disagree.  Notwithstanding the long passage of time and the inference raised in favour of Dr. Law, I find the plaintiffs have rebutted the presumption of prejudice.  I do not agree that the presumption of prejudice is unassailable solely due to the passage of time.  There are other factors to be weighed.  Dr. Law has not offered any evidence to show any non-compensable prejudice if the amendment is granted.  Rather, the evidentiary record on this motion establishes the following:

  •     Medical records from Southlake, including x-ray imaging are preserved by Southlake and remain in each of the parties’ legal files;
  •     Counsel for the proposed defendant, Dr. Law, has collaborated with counsel for the defendant, Dr. Gannage, in accessing pleadings and documents;
  •     The claim against Dr. Gannage (ER physician), for negligently reading the x-ray is the same as the claim against the proposed defendant radiologist, Dr. Law;
  •     This case does not have a complicated or highly contentious factual matrix.  The critical issue is whether the proposed defendant, Dr. Law, negligently missed a retained medical sponge when reviewing the x-ray.  No new cause of action or relief is being raised;
  •     The same medical evidence to be relied on by the plaintiffs to prove their claims remains in the possession of the defendants to defend the action.  The defendants are compellable witnesses to attend for trial;
  •     All defendants continue to practice health care in Ontario;
  •     The action against Dr. Law is tenable in law;
  •     Dr. Law is a proper defendant to be added, since there are multiple expert reports indicating he was responsible for negligently misreading the x-rays and not seeing the radiopaque surgical sponge;
  •     No trial date has been set;
  •     All defendants will have sufficient time to prepare their defences;
  •     Dr. Law will have the benefit of the work and investigation done by his co-defendants; and,
  •     There are no steps in the prosecution or defence of this action that will be thwarted through lack of evidence or information.

[65]           For these reasons, I find the plaintiffs have met their onus and have rebutted the presumption of prejudice.

The court also found special circumstances:

[66]           Dr. Law submits that the plaintiffs have not established special circumstances.  I disagree.  Where the presumption of prejudice has been rebutted, as in this case, the plaintiffs still bear the onus to demonstrate that there are special circumstances which justify the addition of Dr. Law as a party defendant.

[67]           Dr. Law submits that no special circumstances exist in this case to justify this court exercising its power to set aside the functioning of an applicable limitation period.

[68]           The special circumstances doctrine was considered in Wisniewski v. Wismer and Wohlgemut, a decision of Edwards J. for oral reasons given on February 1, 2018.

[69]           In Wisniewski, as in our case, the plaintiffs sought to add the proposed defendants (radiologists) after the expiration of the limitation period set out in s. 38(3) of the Trustee Act.  The parties agreed that the discoverability principle did not apply to this limitation period, as they did in our case.  Further, the parties agreed that the limitation period had expired.

[70]           As in our case, the plaintiffs submitted that the proposed defendants be added and pleadings be amended, all after the expiration of the limitation period on the basis of the Doctrine of Special Circumstances.

[71]           Dr. Law submits there are no special circumstances here to warrant the exercise of the court’s discretion.

[72]           In Wisniewski, Edwards J. was not satisfied that the plaintiffs had rebutted the presumption of prejudice.  Further, he also found there was no evidence to suggest the plaintiffs and their counsel were precluded from commencing a claim against the proposed defendants within the applicable limitation period due to a lack of information.

[73]           The key finding in Wisniewski was that almost five months prior to the expiry of the limitation period, the plaintiffs were in possession of x-ray reports and that plaintiffs’ counsel had the necessary information to conclude the proposed defendants should be added as defendants.  Edwards J. found there were no special circumstances that would justify the exercise of the extraordinary remedy to add a party after the expiry of the limitation period and he dismissed the motion to add the proposed defendants to amend the statement of claim.

[74]           I am of the view that Wisniewski is distinguishable from our case.  In Wisniewski, the plaintiffs knew the deceased had been radiographed before the limitation period expired.  In our case, the radiographs were provided to the plaintiffs, not at the outset, but approximately six and a half years later.

[75]           The plaintiffs in our case were precluded from commencing an action against Dr. Law, since they never knew any radiograph existed or that Dr. Law interpreted such a radiograph.

[76]           I find there was no knowledge Dr. Law took a radiograph or radiographs of Mr. Graham and interpreted those images until the plaintiffs were advised by counsel for Southlake, provided to Scott Graham with the CD under cover of the letter dated February 23, 2015, which Scott Graham reviewed on April 12, 2015.  This critical disclosure occurred over four years after the expiration of the limitation period being two years after the date of Mr. Graham’s death on February 8, 2009.

[77]           This disclosure by Southlake came “out of the blue”.  No explanation was provided to this court by anyone, especially by the defendants for such late production.  This disclosure was critical as it enabled Scott Graham to see the radiograph for the first time and connect what he viewed with what he was subsequently told about the Clinical Consultation Report during his conversation with Southlake’s counsel on July 20, 2015.  All of this concerned the possible involvement of Dr. Law.

[78]           Contrary to the findings in Wisniewski, in our case it cannot be said that the plaintiffs had been “handicapped” by their own “inaction”.  In our case, the plaintiffs not only requisitioned a care conference to identify the parties responsible for the critical choking incident, but also they quickly sought to obtain and assess all relevant medical records through submitting a timely records request at the outset and well within the limitation period.

[79]           In our case, the CD and program to access the CD, and disclosure of the x-ray or x-rays were inexplicably not produced until well after the limitation period had expired.  There is no question that the defendants failed to disclose at the care conference that radiographs of Mr. Graham were taken by Dr. Law and that Southlake, despite receiving a records request in 2008, failed to disclose the key x-ray until 2015.

[80]           While Dr. Law was unaware of this action until he was contacted by Scott Graham in February 2017, the chronology of events provides a satisfactory explanation as to what was done after February 2017, including some unnecessary and mistaken proceedings, the delivery of a draft amended statement of claim, the request for consent adding Dr. Law as a party defendant and the plaintiffs’ ultimately being compelled to bring this motion.

[81]           I find the plaintiffs have established special circumstances which are exceptional in nature.  The late, critical and unexplained disclosure by Southlake in 2015, well after the expiration of the limitation period provided the plaintiffs with the revelation of Dr. Law’s involvement in the treatment of Mr. Graham.  I find the facts establish that the plaintiffs were unaware of Dr. Law’s involvement until April and again in July 2015.

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: 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: Remember, the Trustee Act doesn’t supersede the Limitations Act

The Plaintiffs in Kakinoki et al. v. Islam et alsought leave to add a defendant notwithstanding the expiry of the presumptive limitation period.  They submitted that the limitation period in section 38(3) of the Trustee Act excludes the application of the section 4 general limitation period in the Limitations Act.  However, it’s settled law that the Trustee Act doesn’t  supersede the Limitations Act.  That the doctrine of special circumstances applies to the Trustee Act but not the Limitation Act is of no consequence.

Justice Dunphy helpfully summarised the interaction between the Limitations Act and the Trustee Act:

[25]           The relief sought by the plaintiffs, ostensibly grounded in s. 38 of the Trustee Act, would produce an outcome diametrically opposite to one that a straightforward reading of s. 38 would lead one to suppose.  Section 38(1) of the Trustee Act modifies the rule of the common law which had the sometimes harsh effect of making a defendant better off should an injured person succumb to his or her injuries.  As a result of s. 38, their claim can be taken up by the executor or trustee “in the same manner and with the same rights and remedies as the deceased would, if living, have been entitled to do”.  I have already found that Mr. Kur, who survived the accident, lost the right to pursue the Township of King by reason of s. 4 of the Limitations Act.  It would be anomalous indeed if s. 38 of the Trustee Act, while purporting only to vest in the executor the same rights as the deceased Mr. Kakinoki would have had if he had survived the tragedy, instead potentially vested higher rights in his estate and those claiming thought it.  Such a reading would turn s. 38 on its ear and is not one which the plain wording of s. 38 compels.  It does not purport to exclude the operation of other limitation periods, but imposes another limitation period which may well prove shorter in some cases.


[26]           In the case of Camarata, supra, the Court of Appeal found (at para. 8):


“Section 38(3) of the Trustee Act does not have the effect of tolling a limitation period that excludes the limitation period made applicable to the action by ss. 4 and 5 of the Limitations Act.  Section 38(3) creates a second limitation period that operates in addition to any limitation period that would have applied had the deceased been able to carry on with the action.  In some circumstances s. 38(3) will effectively shorten what would otherwise be the applicable limitation period….Section 38(3) cannot extend the limitation period what would have been applicable had the deceased not died and been able to carry on with his action” (emphasis added).


[27]           Camarata has found that both limitation periods must be applied and that the Trustee Act does not supercede the Limitations Act.  This is consistent not only with precedent but with the plain words of the statute and common sense.  Thus, even if I were to be moved to exercise discretion to soften the application of the Trustee Act, I can do nothing to mitigate the application of the Limitations Act.


[28]           Section 20 and 21 of the Limitations Act also demand this same conclusion and preclude me from granting the requested amendment adding the Township of King to the Kakinoki action:


“20. This Act does not affect the extension, suspension or other variation of a limitation period or other time limit by or under another Act.


  1. (1) If a limitation period in respect of a claim against a person has expired, the claim shall not be pursued by adding the person as a party to any existing proceeding.”


[29]           Section 38(3) of the Trustee Act and Section 4 of the Limitations Act both provide for a two year limitation period which, given the death of Mr. Kakinoki on the day of the accident, happen to coincide with each other precisely (subject to extensions of the latter limitation due to possible discoverability issues which do not apply to Trustee Act claims).  The Trustee Act by its terms does not purport to extend, vary or suspend the Limitations Act.  To the contrary, they both apply a two year period.   The doctrine of special circumstances allowing what is, in effect, a nunc pro tunc amendment to pleadings to avoid the application of the Trustee Act can hardly be characterized as an extension, variation or suspension under another Act as referred to in s. 20 of the Limitations Act and, accordingly, s. 21 thereof precludes me from adding the Township of King to this existing proceeding as requested in this motion.


[30]           Accordingly, on the basis of Camarata, supra, and s. 21 of the Limitations Act, I must dismiss the plaintiffs’ motion to add Township of King as a defendant at this stage in the proceedings given the passage of the limitation period under s. 4 of the Limitations Act.


Ontario: limitation period applies to adding third party defendants to a main claim

Klein v. Stiller considers whether the plaintiff undertook sufficient due diligence to discover her slip and fall claim against a security firm.  What makes this otherwise standard limitations issue noteworthy is Master Dash’s commentary on the potential implication of the Occupiers’ Liability Act on a statute-barred claim.

The plaintiff argued that there would be no harm in adding the security firm to her action despite the expiry of the presumptive limitation period because it was already a third party defendant.  Master Dash was not satisfied that this was a valid justification to add the firm (it’s not), but considered the practicalities of adding the firm.

He noted that section 6 of the Occupiers’ Liability Act exempts occupiers from liability for damage caused by work they reasonably entrusted to an independent contractor.  It could potentially  exempt the defendants to the main claim from liability; if so, they would have no reason to seek indemnity  from the security firm by third party proceeding.  There would then be no third party claim against the security firm, and so the third party claim against the security firm couldn’t be a reason to allow the plaintiff to add it to the main action.

This makes sense.  The problem is that its premise is invalid.  The analysis assumes that there could be a circumstance where a plaintiff could add a party to a claim despite the expiry of the limitation period, in this case because of the Occupiers Liability Act or the fact of third party claim.  Not so: with the abolition of the the doctrine of special circumstances (for claims subject to the Limitations Act, but maybe not for claims subject to the Trustee Act), without exception a plaintiff cannot add a party to an action once the claim is statute-barred .



Alberta: Are there special circumstances?

In RVB Managements Ltd. V. Rocky Mountain House (Town), the Court of Appeal set out the special circumstances exception to statute-barred causes of action:

[21]           Under the analytical approach, the court presumes that amendments adding a new cause of action after the expiry of the limitation period will not be allowed, even in the absence of prejudice, unless the party seeking amendment can show special circumstances (see Graeme Mew, The Law of Limitations, 2nd ed. (Markham: Lexis Nexis, 2004) at 69). Courts have interpreted special circumstances to mean circumstances where all the facts required to support the claim had already been pled, there is no need to reopen discoveries, and most importantly, there is no possibility that the defendant would be prejudiced (Mew at 76).

[22]           In the case at bar “special circumstances” are not made out. When a trial has unfolded on the basis of evidence preferred in respect of issues set out in the pleadings, a new issue that sees the light of day for the first time in written argument post-trial, will almost inevitably operate prejudicially.  (See the general rule in Cels v. Railway Passenger Assurance Co. (1909), 11 WLR 706, at page 711-712, cited in Litemor Distributors (Edmonton) Ltd. v. Midwest Furnishings & Supplies Ltd., 2005 ABQB 520 (CanLII) at paras 19-21). It follows that if, as the appellants maintain, a functional rather than an analytical approach is warranted in this case, the trial judge did not err by dismissing the appellants’ application to amend their pleadings.

Curiously, the special circumstances exception no longer exists in Ontario, though its reformed limitation regime is similar to Alberta’s.