One of the few really consequential unresolved limitations issues is whether the commencement of the limitation period for claims for contribution and indemnity commences always on the day of service of the statement of claim in the proceeding for which contribution and indemnity is sought, or on discovery of the claim for contribution and indemnity.<\/p>\n
I’ve long argued<\/a> that this was a silly debate, and notwithstanding a line of jurisprudence suggesting otherwise, there can be no serious question that s. 18<\/a> merely change the event that triggers the presumptive discovery of the limitation from the act or omission giving to the claim to the service of the statement of claim.<\/p>\n Two recent decisions have interpreted s. 18 this way.<\/p>\n In Murphy v. Hart<\/em><\/a>, Justice Monahan reviewed the leading decisions on both sides of the debate and then explains, persuasively, why Demide<\/em>‘s construction of s. 18 is correct:<\/p>\n [28]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0The Hart Defendants rely in particular on the judgment of Perell J. in\u00a0Miaskowski (Litigation Guardian of) v. Persaud.<\/em>[3]<\/a>\u00a0In\u00a0Miaskowski<\/em>, Perell J. was of the view that section 18 of the Act provides that a claim for contribution and indemnity is \u201cdeemed to be discovered\u201d on the date upon which the \u201cfirst alleged wrongdoer was served with the claim in respect of which contribution and indemnity is sought.\u201d Perell J. placed particular emphasis on the use of the word \u201cdeemed\u201d in section 18 which, he noted, was a \u201cdeclarative legal concept [that is] a firmer or more certain assertion of the discovery of a claim than the rebuttable presumption of discovery contemplated by\u00a0section 5<\/a>\u00a0of the\u00a0Limitations Act, 2002<\/a><\/em>.\u201d He further observed that\u00a0section 18<\/a>\u00a0did not contain the moderating language \u201cunless the contrary is proved\u201d that is found in section 5(2) of the Act. In his view, \u201cby using the language of a deeming provision without any reference to the deeming of discovery of the claim being rebuttable, the Legislature intended to impose an absolute two year limitation period with respect to claims for contribution and indemnity.\u201d<\/p>\n [29]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0In Perell J.\u2019s view, this approach would bring certainty and efficiency to the law of limitations, while remaining consistent with the policy purposes of the\u00a0Act<\/em>. He also noted that it would be a rare case where a defendant would not know whom to sue for contribution and indemnity, and the period of two years following service of the underlying claim would provide \u201cample time\u201d to exercise due diligence to determine against whom to claim.<\/p>\n [30]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0Perell J.\u2019s reasons in\u00a0Miaskowski<\/em>\u00a0have been followed in a number of subsequent decisions of this Court.[4]<\/a>\u00a0However it should also be noted that a different interpretation of the effect of section 18 was taken by Leach J. of this Court in\u00a0Demide v. Canada (Attorney General)<\/em>.[5]<\/a>\u00a0In\u00a0Demide<\/em>, Leach J. held that section 18 of the Act merely determines the relevant presumed starting point for the basic two year limitation period for purposes of section 5(2), a presumption that was still capable of being rebutted by proof to the contrary. Although section 18 does not include language referring to \u201cproof to the contrary\u201d, Leach J. observed that the inclusion of such wording in section 18 was unnecessary given that this wording was already found in section 5 (2). He also noted that interpreting section 18 as establishing an absolute two-year limitation period for claims for contribution and indemnity would make the ultimate limitation period in section 15 redundant.<\/p>\n [31]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0Leach J. accepted that an absolute two-year limitation period for contribution and indemnity claims would provide certainty and efficiency, which was one of the policies underlying the 2002 reforms to the\u00a0Act<\/em>. But, as he observed, the same could be said in relation to making any limitation period absolute. In Leach J.\u2019s view, the overall goal of the legislation was to strike a balance between a defendant\u2019s need for certainty with the plaintiff\u2019s right to sue. The legislature generally tried to strike that balance by imposing a presumptive two-year limitation period, capable of extension by demonstrable lack of discovery, proof of which was the obligation of the claimant. While it might be a rare case that a defendant, exercising due diligence within two years of being served with the claim, would not know against whom to bring a claim for contribution and indemnity, rarity is not impossibility. In fact, the rarity of such a possibility underscored for Leach J. the somewhat modest concession to fairness of making the limitation period for contribution and indemnity claims subject to discoverability.<\/p>\n [32]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0With due respect to the contrary view, I prefer the interpretation adopted by Leach J.<\/p>\n [33]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0First, this interpretation is consistent with the plain meaning of the relevant provisions. As discussed earlier, section 18 is merely an interpretive provision. It specifies the date upon which the act or omission on which a claim for contribution and indemnity is deemed to have taken place. But section 18 is not a substantive provision purporting to limit the commencement of legal proceedings and, as such, it cannot operate as a \u201cstand-alone\u201d limitation period.<\/p>\n [34]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0It is true that section 18 utilizes the term \u201cdeemed\u201d rather than language referring to a rebuttable presumption or the possibility of \u201cproof to the contrary\u201d. But it is important to be clear about what is being \u201cdeemed\u201d through this provision. As discussed earlier, section 18 does not deem a claim to have been \u201cdiscovered\u201d on the date of service of the underlying statement of claim; rather it deems the \u201cdate of the act or omission upon which the claim is based\u201d to be the date of service of the underlying statement of claim. While the \u201cdate of the act or omission upon which the claim is based\u201d is certainly a key date in the determination of the date upon which a claim is \u201cdiscovered\u201d, that determination can only be made through the application and operation of sections 5(1)(a), (1)(b) and 5(2) of the\u00a0Act<\/em>, which would necessarily include consideration of the qualifying language \u201cunless the contrary is proved\u201d as found in section 5(2).<\/p>\n [35]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0Presumably, the legislature did not include language referring to \u201cproof to the contrary\u201d in section 18 because it did not want to leave any room for argument or doubt on the question of the date upon which the presumption in section 5 (2) have effect in cases of claims for contribution and indemnity. But the absence of any reference to a \u201crebuttable presumption\u201d in section 18 does not in any way suggest that the presumption in section 5(2) should be ignored or read out of the\u00a0Act<\/em>.<\/p>\n [36]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0As Leach J. pointed out in\u00a0Demide<\/em>, if section 18 is interpreted as creating an absolute two-year limitation period for claims for contribution and indemnity, section 15 of the Act is thereby rendered redundant. Yet this could not have been the intention underlying section 18 since it expressly referred to section 15. Unlike section 5(2), section 15 does not make reference to a rebuttable presumption or provide the possibility of proof to the contrary. Therefore, the effect of section 18 in relation to section 15 is to provide an absolute 15 year limitation period for claims for contribution and indemnity, commencing on the date of the service of the statement of claim against the first alleged wrongdoer.<\/p>\n [37]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0It is a well-established principle of statutory interpretation that the legislature does not intend to produce consequences which would render a statute illogical or incoherent, or which render some aspects of it pointless or futile.[6]<\/a>\u00a0In my view, it would be illogical and incoherent for the legislature to provide that claims for contribution and indemnity are subject to an absolute two-year limitation period, while simultaneously providing that the same claims are subject to an absolute 15 year limitation period. The legislature cannot have intended to say \u201cX\u201d and \u201cnot-X\u201d at the same time.<\/p>\n [38]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0While there have been differing views expressed regarding the effect of section 18 in relation to section 5(2), a recent decision of the Court of Appeal suggests that the principle of discoverability does in fact apply to claims for contribution and indemnity, although the Court did not expressly deal with that issue in its reasons. In\u00a0Fennell v. Deol<\/em>,[7]<\/a>\u00a0a driver in a four vehicle accident had commenced a personal injury claim against one of the other drivers (\u201cShergill\u201d) on August 16, 2012. On October 20, 2014, Shergill served a statement of defence and cross-claim, asserting a claim for contribution and indemnity against a third driver involved in the accident. Shergill\u2019s claim for contribution and indemnity was commenced more than two years from the date he was served with the original statement of claim. The Court of Appeal noted that the two-year limitation period presumptively ran from the date Shergill was served with the statement of claim. Nevertheless, because Shergill neither knew nor ought to have known of the facts necessary for his cross-claim prior to October 20, 2012, his cross-claim was timely for purposes of the Act.<\/p>\n [39]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0Further support for this approach to section 18 is provided by comments made by Simmons J.A. in Placzek v. Green,[8]<\/a>\u00a0where she observed that, when read in combination with section 4 and section 15, section 18 \u201cestablishes the date of service of the injured party\u2019s statement of claim as the presumed commencement date for the basic two-year limitation period in the actual commencement date for the ultimate 15 year limitation period with respect to contribution and indemnity claims.\u201d The use of the word \u201cpresumed\u201d is significant, since it suggests that the combined effect of section 18 and section 5 (2) is to create a rebuttable presumption, capable of being displaced by lack of actual knowledge.<\/p>\n [40]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0In short, I conclude that the principle of discoverability does apply to claims for contribution and indemnity under the Act.<\/p>\n<\/blockquote>\n In Marjadsingh v. Toronto Transit Commission v. Kahlon<\/em><\/a>, Master Jolley took a similar approach:<\/p>\n [17]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0While most cases have found that the limitation period for contribution claims is not extended by the discovery principle, the court requires more than a tallying up of the number of decisions for and against that proposition to make such a determination.<\/p>\n [18]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0The two divergent lines of authority are found in\u00a0Miaskowski v Persaud<\/i>2015 ONSC 1654 (CanLII)<\/span><\/a><\/span>\u00a0on the one hand and\u00a0Demide v. Canada<\/i>2015 ONSC 3000 (CanLII)<\/span><\/a><\/span>\u00a0on the other.\u00a0 In\u00a0Miaskowski,<\/i>\u00a0the court held that the discoverability principle does not apply to\u00a0section 18<\/a>\u00a0of the\u00a0Limitations Act, 2002<\/a>.<\/i>Demide<\/i>\u00a0took the contrary position.<\/p>\n [19]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0The preamble to\u00a0subsection 18(1)<\/a>\u00a0of the\u00a0Limitations Act, 2002<\/a><\/i>\u00a0states that the section is \u201cfor the purposes of\u00a0subsection 5(2)<\/a>\u00a0and\u00a0section 15<\/a>\u201d.\u00a0\u00a0Subsection 5(2)<\/a>\u00a0legislates a presumption about when a party had knowledge of the events giving rise to a claim.\u00a0 It provides that a party is presumed to know the elements in\u00a0subsection 5(1)<\/a>\u00a0on the date they occurred (the \u201cpresumed discovery date\u201d).\u00a0\u00a0Subsection 18(1)<\/a>\u00a0then deals with the presumed discovery date for contribution claims.\u00a0 It provides that the presumed discovery date for a claim for contribution is the date when the party first had knowledge or was aware it was being sued, i.e. the date it was served with the claim.\u00a0 In either case, the purpose of the section is to set a presumed discovery date.<\/p>\n [21]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0Two earlier Court of Appeal decisions that discussed\u00a0subsection 18(1)<\/a>\u00a0spoke in terms of the limitation period being \u201cpresumed\u201d to run from service to the statement of claim.\u00a0 (Waterloo Region District School Board v. CRD Construction Ltd.<\/i>2010 ONCA 838<\/span>\u00a0(CanLII)<\/a>\u00a0at paragraphs 23-24<\/span>;\u00a0Placzek v. Green<\/i>2009 ONCA 83 (CanLII)<\/a>,\u00a0[2009] O.J. No. 326<\/span>\u00a0at paragraph 24 (C.A.)<\/span>).\u00a0 They did not directly address whether the presumption was conclusive or rebuttable.<\/p>\n [22]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0As a policy matter, the courts accept that parties should not be deprived of their right to sue before they know, or reasonably should know, they have a claim.\u00a0 I would find it as problematic to deprive a third party who did not and could not have discovered its claim for contribution and indemnity within two years of the claim being served on it as it would be to deprive a plaintiff of the right to pursue a claim that it did not or could not discovered within the two year presumptive limitation period, unless the legislation clearly dictated that result.<\/p>\n [23]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0The courts have accepted that\u00a0subsection 18(1)<\/a>\u00a0can just as easily be read to include a discoverability period as read to mean a fixed limitation period (for instance,\u00a0Hughes v. Dyck<\/i>2016 ONSC 901<\/span>\u00a0(CanLII)<\/a>\u00a0at para 37<\/span>).\u00a0 Absent a determination by the Court of Appeal that\u00a0section 18(1)<\/a>\u00a0is to be read as an absolute limitation period that is not subject to the principle of discoverability, I would interpret the section, as did Mr. Justice Leach, as providing a rebuttable presumption.\u00a0 I do not see this interpretation to undermine the principles of efficiency and certainty underlying the\u00a0Limitations Act<\/i>\u00a0any more than does the recognition of the discoverability principle to a main claim. I find it to be consistent with the policy of not depriving parties of their claims before they are even aware of them.\u00a0 I adopt the following language from\u00a0Demide<\/i>:<\/p>\n 88.\u00a0 As Justice Sharpe emphasized in\u00a0Canaccord Capital Corp. v. Roscoe<\/i>, [2013 ONCA 378] at paragraph 17, the overall goal of the legislation was the creation of a clear and comprehensive scheme for addressing limitation issues that would\u00a0balance<\/i>\u00a0a defendant\u2019s need for certainty with the plaintiff\u2019s right to sue.\u00a0 A review of the legislation suggests that, with indicated exceptions, the Legislature generally tried to strike that balance by imposition of a presumptive two year limitation period, capable of extension by demonstrable lack of discovery, (proof of which was the obligation of the claimant).\u00a0 Although the legislature clearly felt that claims for contribution and indemnity warranted a measure of exceptional treatment, to encourage resolution of all claims arising from the wrong at the same time, it seems to me that the approach chosen by the legislature in that regard was the introduction of a modified presumption; i.e., one that moved the presumed starting date of the basic two year limitation period forward considerably, (from the much later starting dates permitted under the previous legislation), to the date on which the party seeking contribution and indemnity was served with the claim in respect of which contribution and indemnity is sought.\u00a0 Such a party, who fails to approach the possibility of contribution and indemnity claims with due diligence during that ensuing presumptive two year limitation period, from that much earlier date, does so at that party\u2019s considerable peril.\u00a0 However, I see nothing in the legislation that suggests the legislature intended to go an extra step; i.e., by absolutely precluding any possibility whatsoever of an extension of time for a party capable of providing that a contemplated claim for contribution and indemnity was indeed incapable of being discovered, even with reasonable due diligence, within two years of the party being served with a statement of claim.\u00a0 As emphasized by our Court of Appeal in\u00a0Pepper v. Zellers Inc<\/i>.,\u00a02006 CanLII 42355 (ON CA)<\/a>,\u00a0[2006] O.J. No. 5042 (C.A.)<\/span><\/span>, the discoverability principle ensures that a person \u201cis not unjustly precluded from litigation before he or she has the information to commence an action provided that the person can demonstrate he or she exercised reasonable or due diligence to discover the information\u201d.\u00a0 In my view, the court should be reluctant to adopt a legislative interpretation that effectively permits the possibility of such an injustice, unless that is the outcome clearly indicated by the legislation.<\/p>\n [24]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0A number of the cases on this issue, including\u00a0Miaskowski<\/i>, have noted that it would be a \u201crare case\u201d where a defendant would not know the parties against whom to claim contribution and indemnity within the limitation period.\u00a0 Those cases rely on that rarity as a basis for finding the limitation period to be absolute.\u00a0 If indeed it would be a \u201crare case\u201d, then I would posit that the risk of wreaking havoc on a statutory regime by allowing the third party in those few cases to rebut the presumption is slight.<\/p>\n [25]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0Miaskowski\u00a0<\/i>was influenced by the fact that\u00a0subsection 18(1)<\/a>\u00a0does not refer to the presumption being rebuttable but uses deeming language to determine when the limitation period runs.\u00a0 Absent mention of the presumption being rebuttable, Perell, J. was of the view that the limitation period was absolute.\u00a0 The court in\u00a0Demide\u00a0<\/i>also considered the fact that\u00a0subsection 18(1)<\/a>\u00a0did not reference the limitation period being rebuttable.\u00a0 I agree with Mr. Justice Leach\u2019s analysis at paragraph 87 in\u00a0Demide\u00a0<\/i>that there was no need to provide for the rebuttal language in\u00a0subsection 18(1)<\/a>\u00a0as it is already present in subsection 5(2).<\/p>\n [26]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0Subsection 5(2) provides a presumed discovery date for non-contribution claims, the date of the occurrence.\u00a0\u00a0Subsection 18(1)<\/a>\u00a0changes only the meaning of the presumed discovery date in subsection 5(2) to the date on which a claim was served, in the case of contribution claims.\u00a0 On my reading, I see nothing that would remove from subsection 5(2), and therefore\u00a0subsection 18(1)<\/a>, the last part of the subsection, the ability of a party to \u201cprove to the contrary\u201d that the presumed discovery date was a different date. \u00a0The ability to rebut the \u201cpresumed discovery date\u201d, whether it be the date of the occurrence under subsection 5(2) or the date of service of the claim under\u00a0section 18<\/a>, remains intact.<\/p>\n [27]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0As to section 15, it provides an ultimate limitation period whereby no proceeding shall be commenced in respect of a claim after the 15th<\/sup>anniversary of the day on which the act or omission on which the claim is based took place.\u00a0 For contribution and indemnity claims,\u00a0subsection 18(1)<\/a>\u00a0deems the date on which \u201cthe act or omission took place\u201d to be the date of service of the claim on the third party, as opposed to the \u201cact or omission\u201d that set the litigation wheels in motion.\u00a0 I agree with Leach, J. that there would be no reason to reference section 15 in the preamble to\u00a0subsection 18(1)<\/a>\u00a0if claims for contribution and indemnity were invariably barred two years after the date of service of the claim.\u00a0 The ultimate 15 year limitation period and the reference to section 15 would be redundant.<\/p>\n [28]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0For these reasons, I find the limitation period in\u00a0subsection 18(1)<\/a>\u00a0of the\u00a0Limitations Act, 2002<\/a><\/i>\u00a0to be rebuttable rather than conclusive.<\/p>\n<\/blockquote>\n I understand that Marjadsingh <\/em>is under appeal.\u00a0 I am hopeful the Court of Appeal will uphold it and bring some certainty (and common sense) to the issue.<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" One of the few really consequential unresolved limitations issues is whether the commencement of the limitation period for claims for contribution and indemnity commences always on the day of service of the statement of claim in the proceeding for which contribution and indemnity is sought, or on discovery of the claim for contribution and indemnity. … Continue reading Ontario: two common sense constructions of s. 18<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[119,118,120,243],"class_list":["post-748","post","type-post","status-publish","format-standard","hentry","category-ontario","tag-contribution-and-indemnity","tag-crossclaim","tag-is-it-hard-to-discover-a-crossclaim","tag-ontario-act-s-18"],"_links":{"self":[{"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts\/748","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=748"}],"version-history":[{"count":1,"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts\/748\/revisions"}],"predecessor-version":[{"id":749,"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts\/748\/revisions\/749"}],"wp:attachment":[{"href":"http:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=748"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=748"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=748"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n