Ontario: can you assess intersection design? (the dangers of aggressive limitations defences)

Ontario courts are filled with pro forma and ill-conceived limitations defences.  Sometimes these stand out, particularly when advanced by institutions that maybe shouldn’t be too creative with limitations defences.  Take Sun v. Ferreira as an example.  The Plaintiffs claimed that the City of Toronto and the TTC are laible for the location of a bus stop and a cross-walk.  The TTC and the City of Toronto moved for judgment on a limitations defence that would have required the court to find that the plaintiffs, through their observations, ought to have known that an intersection was defectively designed.  It strikes me as rather fraught to suggest that a reasonable person with the abilities and in the circumstances of someone who knows nothing about standards of intersection design could assess whether one was designed competently.  The court agreed:

[45]           The Claims, in these proceedings against the moving parties are that there was an alleged design deficiency with respect to the TTC bus stop, and the adjoining crosswalks. Were the Moving Parties, by designing  an allegedly inherently dangerous situation, involving passengers, many of which would be children exiting a TTC bus, and crossing a busy highway to get to school, negligent as they did not take the appropriate care required in designing and constructing and whether the Moving Parties failed to warn of the hazard their design and construction created.  The main argument of the moving parties is that the responding parties were familiar with the accident location, the location of the TTC stop and location of the cross-walks adjacent to the School, and the absence of a traffic light or cross-walks.

[46]            The moving parties submit that the fact that the City or the TTC or both changed the configuration of the intersection following the accident “is not actionable”. The respondents, however, submit that the change raised the question of whether the change was made to remedy the negligent design of the accident location, and if so, whether the City and the TTC were aware of this negligent design, or ought to have been aware of this negligent design, prior to the accident. If they were aware of the negligent design, what steps, if any, did the Moving Parties take to rectify this deficiency before the accident occurred.  These will be the issues at trial.

[47]           The issue for this court is when did the Plaintiffs or Defendant know or ought to have known of the alleged deficient design, and the consequent failure to warn of the deficiency on the date of the accident.

[48]           Applying the analysis of the court in the cases of Shukster and Frederick, I find that there is a genuine issue requiring a trial on when the alleged deficiency with the intersection was known or ought to have been known by the responding parties. They knew of the accident location, but did they have the knowledge required to question if the intersection was defectively designed?  Further, when did they know that it was appropriate to take legal action against the moving parties?

[49]            The position of the Moving Parties is that the Respondents should have concluded that legal action would be appropriate to commence an action on the basis of their own observations and opinions of the alleged negligent design of municipal infrastructure or the configuration of the street and without the benefit of expert advice and the knowledge that the alleged design defect of the accident location had been corrected.  I do not agree that such is a reasonable conclusion for the court to reach.  In my view, such personal observations would not be sufficient for the Respondents to conclude that legal action would be appropriate, especially in light of the position taken by the City of Toronto that the intersection did not meet its criteria for the installation of a traffic light.

[50]           Rather, I am of the view that I can not make the findings that would be required to satisfy the test set out in Hryniak by our Supreme Court of Canada, namely, does the evidence allow me to fairly and justly adjudicate this dispute?

[51]           I find that following the guidance of our Courts, which I have referred to above, the respondents have established that there is a genuine issue requiring a trial on the discoverability of these causes of action, as it may not have been legally appropriate for the responding parties to commence litigation without any evidentiary basis, other than their own observations and opinions.  This issue requires a trial and for this reason, the motions must be dismissed

This decision is a reminder of the importance of considering the question asked by s. 5(1)(b) when advancing (and responding to) limitations defences.

Ontario: whose knowledge binds a corporation?

Whose knowledge binds a corporation for the purpose of a s. 5 discovery analysis?

The Superior Court decision in 1511419 Ontario Inc. v. KPMG considers this issue:

[91]           The Defendants dispute that the Minutes of the Board are in fact the “best evidence” of what the Board knew in or around the time of the January 2012 Transaction.

[92]           They submit that a full meeting of the Board is not required for a corporation to acquire knowledge that it would otherwise obtain through its directing minds such as officers or directors: DBDC Spadina Ltd. v. Walton2018 ONCA 60 (CanLII)419 D.L.R. (4th) 409, at paras. 59-60, leave to appeal to S.C.C. allowed, 2018 CarswellOnt 19181Canadian Dredge and Dock Company Limited v. R.1985 CanLII 32 (SCC)[1985] 1 S.C.R. 662, at pp. 679-685, 707-709, 713-714, and 717-718.

[93]           They further go on to submit that it is also not clear what was recorded in the Board or Audit Committee Minutes, and overall the Minutes are not reliable.

[94]           Cash Store responds by submitting that, as a matter of law, the directing mind of a public corporation is its board of directors, acting as a collective: Stern v. Imasco Ltd. (1999), 1999 CanLII 14934 (ON SC)1 B.L.R. (3d) 198 (Ont. S.C.), at paras. 98-113.

[95]           I do not propose to determine this dispute on this motion. I am prepared to accept that the Board Minutes are, at the very least, some evidence of what Cash Store knew at the relevant time periods.

Surprisingly, this significant limitations question remains to my knowledge unanswered.  It seems to me that the answer will be, as it usually is in the context of discovery arguments, “it depends on the facts”.

However, I am also mindful of the policy implications of the issue.  It’s problematic to deem the knowledge of directing minds to be the knowledge of a corporation for discovery purposes.  If an employee discovers a claim, and that discovery does not bind the corporation, the employee could determine when the limitation period commences by determining when to disclose her knowledge of the discovery matters to a directing mind.  This risks encouraging corporations to sit on their rights until they consider it most advantageous to exercise them. A directing mind of a corporation might advise an employee to refrain from disclosing any fraud allegations until confident in the success of a claim arising from them. This would be antithetical to the basic purpose of the limitations scheme to encourage the diligent and timely prosecution of claims.

Lastly, the decision is a warning against asking the court to decide a too-complicated limitations defence on summary judgment:

[113]      I cannot determine this matter in a fair and just manner by way of summary judgment. A review of the aforementioned affidavits and voluminous yet limited record do not provide the adequate context to determine the limitation period dispute. Particularly, I have no meaningful understanding as to the interaction between the parties in and around the time of the January 2012 Transaction that would assist me in determining the limitation issue. I also have no meaningful understanding of the assistance, or lack thereof, the Defendants rendered to Cash Store before, during, or after the January 2012 Transaction closed. The actions involve a complicated factual matrix involving professional negligence and a significant damages claim. In my view, the usual rule enunciated by Nordheimer J.A. in Mason should be followed. A full evidentiary record including viva voce evidence of the parties is required to achieve a fair and just result.

 

Ontario: An insurer’s denial has to be (really) explicit to trigger discovery

The Divisional Court decision in Western Life Assurance Company v. Penttila demonstrates that if an insurer intends for a denial to commence a limitation period for a coverage proceeding, that denial needs to be as explicit as explicit can be.

The insurer, Western, denied its insured Penttila’s claim for LTD benefits in February 2013, and told her that she could appeal the denial within 60 days by written request.  At the same time, Western stated explicitly that it wasn’t waiving its right to rely on any “time limitations”.

Penttila initiated an appeal within the prescribed time.  Western wrote to Penttila in October 2014 that its position “remained unchanged”.  Pentilla didn’t understand this to mean Western had denied her appeal.  She wrote to Western in May 2015 asking about the decision in her appeal.  Western responded in June 2015 by confirming that benefits remained declined.  Penttila commenced a proceeding in June 2016.  Western defended, pleaded a limitations defence, and moved for judgment on it.  The motion judge held that a trial was necessary to determine the defence.

Penttila’s evidence was that she believed Western continued to consider appeal June 2015.  She didn’t understand Western October 2013 correspondence to be determinative of her appeal.

Western appealed. It argued that the Penttila should have known that a proceeding was an appropriate remedy for her loss once it terminated her LTD benefits.

Penttila’s position was that a proceeding wasn’t appropriate as of that date:

[24]           Ms. Penttila takes the position that it was not appropriate for her to file a claim as of March 7, 2013, as her appeal had not yet been finally determined by Western because:

a)   She was told she had a right to appeal provided she took certain steps which she did.  It was therefore not clear that the process had run its course;

 b)   There was no denial of the appeal or any reason to believe that the matter would not be amicably resolved;

 c)   She was not represented by legal counsel;

 d)   There was no clear reference to the fact that the limitation period was running in the communications from the insurer.  The insurer said only that “the limit”, whatever it was, was not being waived;

 e)   She made concessions and repaid monies paid pursuant to her CPP disability setoff, believing that she was engaging in an attempt at dispute resolution.  This was done at the request of the insurer;

 f)     There was no reason for her to do this except to attempt to resolve the claim instead of litigating; and

 g)   There is no suggestion that the delay was a tactical decision to delay the proceeding.

[25]           Moreover, the courts have recognized that there is a clear policy objective to encourage parties to resolve matters instead of going directly to litigation.  Waiting for the appeal to be determined is consistent with that important policy objective.

The Divisional Court rejected Western’s argument:

[50]           For the reasons set out herein, we find that the motion judge was correct to hold that the triggering event for the commencement of the two-year limitation period was the date upon which it would be legally appropriate to commence legal proceedings to seek payment of long-term disability benefits that the insurer refused to pay.

[51]           We further find that the motion judge made no palpable and overriding error in dismissing the motion for summary judgment on the basis that Western had not established that the claim was statute-barred.  We come to this conclusion for the following reasons:

(i)                 Right of Appeal

[52]           Before March 7, 2013, Ms. Penttila was advised that as of March 7, her benefits would no longer be paid by the insurer but that, “you may appeal this claim decision by sending your written request for review to our office within 60 days from the date of this letter.”

[53]           On April 8, 2013, Ms. Penttila advised that, “I wish to appeal this claim.”

[54]           On November 13, 2013, Western wrote her to advise that: “[u]pon receipt of all the above requested information, we will complete our review of your appeal and advise you of the decision.”

[55]           Ms. Penttila thereby accepted a clear offer to allow her to appeal the denial of her claim for benefits.  A process was established, and her appeal was determined by the insurer.  She was advised by letter dated October 21, 2014, of the decision that her appeal had been rejected.  (Ms. Penttila says she did not receive written confirmation until June 15, 2015.)

[56]           The right to appeal was not simply part of an insurer’s general obligation to accept any material; it was a specific and agreed right of appeal, a clear articulation of the process to be followed, and a specific decision in respect of the appeal.

[57]           A reasonable person in Ms. Penttila’s position would have pursued her right of appeal.  Until that process ran its course, it would be premature to commence legal proceedings against the insurer.

(ii)               No Need to Review the Tone and Tenor of Discussions

[58]           The court was not required to assess the “tone and tenor” of communications between the parties as there was a clear beginning and end to the process.  Western told Ms. Penttila that she had a right to appeal and that a decision would be rendered, and it was.

(iii)            No Litigation Counsel Engaged

[59]           Ms. Penttila did not retain counsel while the appeal was ongoing. This fact does not “[belie] any suggestion of a lack of awareness of the appropriateness of commencing a lawsuit at that point in time”: Pepper, at para. 1.

[60]           The words “in offering to review additional evidence we are not waiving our right to rely on any statutory or policy provisions including any time limitations”, in this factual context, were not sufficiently clear to demonstrate to Ms. Penttila that the insurer intended to rely on the fact that the limitation period was running before the appeal had been decided.

(iv)            Ms. Penttila’s Evidence as to Her Belief

[61]           On the contrary, Ms. Penttila’s uncontradicted sworn evidence was that she at all times believed that, from the time the initial benefits were denied (in the letter dated February 19, 2013), to the time she received the final decision on appeal, Western was considering her appeal.

[62]           This belief is supported by the fact that, on November 13, 2013, Western advised that: “[u]pon receipt of all the above requested information, we will complete our review of your appeal and advise you of the decision.”  There was no statement in respect of time limitations.

[63]           Lastly, unlike Nasr, Ms. Penttila never conceded that the insurer never told her that it would not be relying on a limitations defence.

(v)               No Tactical Delay

[64]           Ms. Penttila made good faith efforts to avoid unnecessary litigation believing Western was considering her appeal. There is no suggestion that Ms. Penttila engaged in a tactical delay of the proceeding.

(vi)            Meets the Policy Objectives

[65]           The motion judge’s decision is consistent with the policy objective of avoiding unnecessary litigation and discouraging parties from rushing to litigation, provided there is no tactical delay.

The court also provided a good summary of the principles for assessing the appropriateness of a proceeding against an insurer:

[35]           In assessing when it is legally “appropriate” to bring a proceeding within the meaning of s. 5(1)(a)(iv) of the Limitations Act, 2002, the courts have articulated the following guidelines:

a)      The determination of whether legal action is “legally appropriate” takes into account what a reasonable person with the abilities and in the circumstances of the plaintiff ought to have known: Presidential, at para. 18.

b)      Parties should be discouraged from rushing to litigation or arbitration.  Rather, they should be encouraged to resolve claims as courts take a dim view of unnecessary litigation: Markel Insurance Company of Canada v. ING Insurance Company of Canada2012 ONCA 218 (CanLII)109 O.R. (3d) 652, at para. 34; and 407 ETR, at para. 48.

c)      It is premature for a party to bring a court proceeding to seek a remedy if a statutory dispute resolution process offers an adequate alternative remedy and that process has not fully run its course or been exhaustive: Volochay v. College of Massage Therapists of Ontario2012 ONCA 541 (CanLII)111 O.R. (3d) 561, at paras. 61-70.

d)      However, where the insurer has been clear that it intends to rely on the limitation period, and the claim has “ripened”, the court should be wary of getting involved in assessing the “tone and tenor of communications” to determine where and when there was a denial of the claim by the insurer as this would inject an undesirable element of uncertainty into the law of limitation of actions: Markel, at para. 34.

e)      The courts should also be wary of allowing a party to delay the commencement of proceedings simply for tactical reasons: 407ETR, at para. 47; and Markel, at para. 34.

f)        It is appropriate for the court to consider what was communicated to the insured and whether the claim was clearly and unequivocally denied: Kassburg v. Sun Life Assurance Company of Canada2014 ONCA 922 (CanLII)124 O.R. (3d) 171, at para. 42.

g)      The courts have specifically recognized two circumstances in which the issue of “appropriate means” may delay the date on which a claim was discovered.

•         First, where the insured relies on the superior knowledge and expertise of the insurer, especially where the insurer made efforts to ameliorate the loss.

•         Second, where other proceedings remain ongoing (such as criminal proceedings or arbitration): Presidential, at paras. 28-48.

h)      Where an insured seeks to preclude an insurer from relying on a limitations defence on the basis of promissory estoppel, the insurer’s conduct must amount to a promise on which the insured acted to its detriment: Maracle v. Travellers Indemnity Co. of Canada, 1991 CanLII 58 (SCC)[1991] 2 S.C.R. 50; and Marchischuk v. Dominion Industrial Supplies Ltd., 1991 CanLII 59 (SCC)[1991] 2 S.C.R. 61.

 

Ontario: the denial of summary judgment on a limitations defence isn’t necessarily determinative of the defence

 

The Divisional Court’s decision in Barrs v. Trapeze Capital Corp. is a reminder that when the court denies a summary judgment motion on a limitations defence, the order isn’t determinative of the limitations defence absent explicit language to that effect:

[36]           And in Skunk, at para. 60, the Court of Appeal stated that in the absence of an express indication by the motion judge that his or her determination is to be binding on the parties at trial, it should be presumed that in expressing a conclusion on a point of law when dismissing a summary judgment motion she is simply explaining why she concluded that there is a genuine issue requiring a trial, and did not intend her determination to be binding on the parties.

[37]           Our reading of the reasons of the motions judge leaves us uncertain about whether he intended to make final and binding findings of fact and conclusions on the legal consequences of those facts. The parties evidently see things the same way, having pursued an appeal route applicable to interlocutory rather than final orders.

[38]           Given the absence of an express determination of this issue, we are of the view that the motion judge did not intend his conclusions to be binding on the parties.

A party that wants the limitations defence determined should ask the court to do so explicitly.

Ontario: summary judgment on a partial limitations defence denied

In Lyall v. Whitehead the court denied summary judgment on a limitations defence because it would only partially dispose of the action. The limitations defence was not readily bifurcated from the merits.  This gave rise to the potential for duplicative results and credibility issues:

[13]           In an attempt to persuade me that partial summary judgment is appropriate the defendant relies upon the decision of Justice Myers in Mason v. Perras Mogenais2018 ONSC 1477 (CanLII) (“Mason”). Justice Myers held that discrete issues, like limitation periods, which do not overlap with the merits that are left for trial, are suitable for partial summary judgment motions. I do not read Mason to stand for the proposition that partial summary judgment motions are appropriate in each and every case that involves a limitation period issue. In Mason, partial summary judgment was granted in circumstances where the case was brought to an early end, in totality, against one of the defendants. In my view, that situation is more akin to a summary judgment motion than a partial summary judgment motion since the action was brought to an end against that defendant. That is certainly not the case here. As discussed below, the clear potential for duplicative results and major credibility issues in this case are outside the realm of what Justice Myers considered appropriate in Mason.

[14]           I agree with the plaintiffs that, whether the action succeeds or not, the dominant narrative of the broader underlying claim concerns the defendant’s conduct as Estate trustee and whether he breached his fiduciary duties to the plaintiffs. Even if the partial summary judgment motion was successful, the matter would move on to trial with several other significant issues and claims in play which raises the legitimate specter of inconsistent decisions. The facts underpinning the allegations the defendant seeks to dismiss are too deeply intertwined with the facts underpinning the remaining causes of action. It is not appropriate to grant summary judgment in this type of situation.

[15]           This case falls entirely within the ambit of cases discussed in Baywood and Butera. In this regard I am mindful of the reasoning in Butera, which makes it clear that a motion for partial summary judgment should be considered a rare procedure that is reserved for an issue or issues that may be readily bifurcated from those in the main action and may be dealt with expeditiously and in a cost effective matter. As stated in Butera, such an approach is entirely consistent with the objectives set out by the Supreme Court in Hryniak v. Mauldin2014 SCC 7 (CanLII). I entirely agree, and in any event, the decision is binding upon me.

[…]

[19]           In my view, this is exact type of case warned against by the Court of Appeal in Baywood. In this case, credibility is extremely important. As stated in Baywood, voluminous affidavit evidence can obscure the affiant’s authentic voice. That has happened here. I received the evidence in a decontextualized manner and to make any findings on credibility in this fashion would result in fundamental unfairness in a way it will not likely occur at trial where the trial judge will see all of the evidence. Put another way, I cannot make credibility findings on the issues before me without also impacting the trial judge’s ability to independently assess the facts at trial. The trial judge’s credibility findings will be based on a set of facts broader than mine, but will also inherently include those that the defendant has put before me. They are not readily bifurcated from the broader underlying claim.

Ontario: Put that best foot forward (or else)

Bergen v. Fast Estate is a reminder from the Court of Appeal that in a summary judgment motion on a limitations defence, the plaintiff needs to put her best evidentiary foot forward, or lose:

[11]      In response to Aviva’s motion for summary judgment, no evidence was filed that had the effect of rebutting the presumption that as at the date of his accident, the appellant knew he was not the owner of the motor vehicle but his father was. In particular, there was no evidence from either the appellant or his father, Johan Bergen Sr., both of whom were clients of the law firm when the appellant’s claim was issued. Given the appellant’s obligation to put his “best foot forward” in response to Aviva’s motion for summary judgment and his onus to rebut the presumption under s. 5(2), the motion judge was entitled to assume that there would be no additional evidence at trial to assist the appellant on these issues.

[12]      Absent any evidence rebutting the presumption, the appellant and his counsel (as the appellant’s agent) were presumed to know who owned the vehicle prior to the issuance of the statement of claim. Accordingly, they were also presumed to know at that time that the owner was a potential defendant and that an action against the owner would therefore be an appropriate remedy to recover damages for the appellant’s injuries. That it was not strictly necessary to add the owner of the vehicle as a defendant at the time the statement of claim was issued does not determine whether an action against the owner was an appropriate remedy. As the motion judge stated, “[t]here could never be an argument that the appropriate remedy against the owner of the vehicle was anything other than to include him as a defendant in the action when the Statement of Claim was issued”.

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: 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 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: Determining limitations defences before trial advances justice

In Sutton v. Balinsky, Justice Dunphy, who’s delivering consistently excellent limitations decisions, eloquently describes the policy goals advanced by determining limitations defences prior to trial:

[113]      The Limitations Act is a statute of repose and the policy of the Act is that claims barred by it should not be subject to further inquiry.  By its very nature, a limitation period bids the meritorious claim to sleep undisturbed alongside the meritless.  Reserving judgment on a limitations defence until after a full trial has subjected the parties to a thorough investigation into the merits of a claim that the Limitations Act has decreed should be allowed to rest undisturbed defeats the policy of the Limitations Act to a degree.  If the facts underlying an allegation that an action is barred under the Limitations Act can properly be brought as a summary judgment motion under Rule 20.04 of the Rules of Civil Procedure, it seems to me to advance the policy of the Act to do so and the interests of justice will tend to weigh against requiring a trial in such circumstances.  That is not to say that every such case should necessarily proceed by way of summary judgment without first ascertaining whether justice can be done in doing so or whether a trial is necessary.  I do however suggest that it is appropriate to recognize the public policy underlying the Limitations Act when making the decision as to whether the interests of justice require a trial and consider it as a factor to be weighed.  A factor to be considered does not rise to the level of presumption.  Neither plaintiff nor defendant interests are served by undergoing a lengthy trial on numerous issues when the entire matter could potentially be resolved by a consideration of only a few.  The policy of the Limitations Act is thus a factor but cannot be presumed to be the controlling one in considering the requirements of justice in a particular case.

Justice Dunphy also conveniently summarises the major principles of discoverability under the Limitations Act.  Notably, the summary is untainted by principles applicable to common law discoverability only.

[146]      Our courts have developed a considerable body of case law since 2002 under the new Limitations Act and the case law under the old still has application as regards many issues.  Several themes that have consistently emerged from that jurisprudence that are of particular relevance here include:

a.      it is not necessary to have all of the facts underlying the complete claim – it is enough to have sufficient facts to bring a claim: Tender Choice Foods Inc. v. Versacold Logistics Canada Inc., 2013 ONSC 80 (CanLII) at para. 55-61;

b.      It is enough that the plaintiff has prima facie grounds to infer that a defendant’s actions caused or contributed to her loss even if the responsibility of each of multiple possible defendants is not yet known – certainty is not a requirement: Longo v. MacLaren Art Centre Inc.,2014 ONCA 526 (CanLII) at para. 44 and Johnson v. Studley, 2014 ONSC 1732 (CanLII) at para. 61;

c.      “Neither the extent of damage nor the type of damage need be known.  To hold otherwise would inject too much uncertainty into cases where the full scope of the damages may not be ascertained for an extended time beyond the general limitation period”:  per Major J. in Peixero v. Haberman, 1997 CanLII 325 (SCC), 1997 3 S.C.R. 549 at para. 18;

d.       “error or ignorance of the law or legal consequences of the facts does not postpone the running of the limitation period”:  per Perell J. inNicholas v. McCarthy, 2008 CanLII 54974 (ON SC), 2008 CanLII 54974 (Ont. S.C.) at para. 27-29, aff’d 2009 ONCA 692 (CanLII), leave to appeal denied 2010 CanLII 12967 (SCC);

[147]      A corollary of these principles is the over-arching obligation of due diligence.  Limitation periods are designed to incent claimants not to sleep on their rights.  Ignorance of the law is not an excuse if the facts giving rise to legal claims are known.  A party alerted to circumstances where a reasonably prudent person of similar abilities and in the same circumstances would seek professional advice must do so or risk having the claim struck as being out of time.  Knowledge of the existence of damage, its source and a reasonable understanding of who is or might be expected to be responsible for some of it at least is enough.